Steve Bandrowczak, former CIO at DHL, Lenovo and, most recently, Nortel, knows what IT leaders can learn from sales and vice versa because he has recently made the transition into a sales leadership role himself. As vice president of global sales at Avaya after that company's acquisition of Nortel, Steve leads sales, marketing, channel strategy, services and service strategy for Avaya's data business. I spoke with him recently. This is the third in a series.
Abbie Lundberg: You've made the shift from CIO to leading a global sales and marketing organization. What are the differences and similarities of those two roles?
Steve Bandrowczak: Sales & IT have a lot in common. The thing that you learn from sales and can take back into the IT world is that every customer is different. Every customer has a unique set of challenges in terms of how you communicate, how you work with that individual company or customer.
To be an effective CIO leader, you must understand the different parts of the various groups you serve. The way you speak to the head of sales is different from the way you speak to the head of operations, the CFO or the head of R&D. In order to be effective leading IT, business transformation and change, you have to understand what various leaders are trying to do within their own business area, align with that, and then communicate the value that IT brings.
If you start talking to the head of sales about IT or operational metrics, they'll glaze over very quickly. If you go in talking to them about how am I going to help you drive sales, how am I going to help you drive sales productivity or lead management, you'll have a much better reception than if you go in there and simply say we're going to implement Salesforce.com and give them a project plan. You need to show them you understand their challenges as well as the value proposition of what IT can bring.
Where a lot of IT guys get hung up is they talk about “the data center is up 7/24" and “I've got five nines reliability" or “I can role out projects..." But you know what? That's a commodity these days. The real value that you have is where you understand a business unit and its key metrics. I'll just take a real simple example: If you're going to roll out a CRM project, the sales team, in general, is looking for... well, they'd say it's really about lead management, it's about getting my contacts in a single database, it's about making my day easier. No it's not! It's about sales productivity and driving revenue.
And oh, by the way, if I don't understand where my baseline is today and where my competition is – meaning the best in the industry – then I don't know what gap I'm trying to close and how I'm going to improve it. One of the things the CIO brings is understanding the baseline of what that business is doing. So very simply, in sale, if you know that the average revenue per head in your company is, say, $1 million per head, and you know the best in the industry is $4 million, then your CRM goal should be, how do I triple my productivity, not how do I implement CRM. Big difference.
The more that IT executives understand those business goals and metrics and then can bring successful programs to close that gap – that's where they're hitting home runs. What we've seen through the years is that, from an IT perspective, people focus on: I hit every single milestone – SAP was in on time, on budget. Then five months later, the company's going out of business.
A lot of IT professionals are uncomfortable with the idea of “selling" or “marketing" IT to their colleagues in other parts of the business. Is this really necessary?
What you're talking about is communicating the value that IT brings to the business, and that's absolutely essential. If the only thing the IT organization is doing is the same thing that an EDS or IBM Consulting Services or Accenture is doing, the reality is they can be outsourced. And because external companies are variable in cost, they become more attractive. The difference between the two options becomes variable versus fixed cost, and am I lowest cost versus an external provider.
Where I bring value and why we need to communicate about the value that we bring, lies in understanding the business and being able to communicate about the value IT brings to the business and how IT helps to drive that business transformation. That's where the uniqueness and the challenges come in. CIOs today – and it's not just CIOs, it's the whole IT community – need to communicate the value in a business-centric set of communications. That's where you become much more effective and much more valuable.
Communicating that value is necessary, and it needs to be frequent. We used to do an annual newsletter. We used to do a monthly achievements memo. Whether it's in staff meetings, one-on-one, big presentations to groups, newsletters, an annual report... there's never, ever enough communication.
The key there is it's not just IT communication – it's we rolled out with the sales force and achieved these things, we rolled out with finance and achieved these things, as opposed to we did an SAP system, and we did it on time, on budget. No, we worked with the finance community, we redesigned the receivables, the payables, collections, and here are the end business targets that we're going to achieve and the timeframe in which we're going to achieve it, and by the way, we'll give you updates on a monthly basis. Much different than you're tooting your own horn.
What separates a good communication program from a bad one?
If somebody doesn't understand what I am saying, it's my fault, not theirs. I have to take ownership that if somebody doesn't understand something, it's because I have not communicated effectively.
Bad communication is when you have sent out a monthly communication or whatever it is, and the business is still shaking their head or they don't understand it or they just haven't paid attention. If that happens, you haven't done your job. And you see that from a lot of IT organizations. All too often, IT says, “I've communicate that 100 times. Why doesn't the stupid business understand it?" You know, “we tell them what we're doing; what's wrong with them?"
The reality is, everybody is different. Every CEO is different. Some CEOs have a sales background, some have an operations background, some have a finance background. Each CEO likes to be communicated to differently, and you've got to be able to communicate the way the business units want to be communicated to.
Each level is different too. The way you communicate to a senior VP is different from the way you communicate with someone inside a call center or warehouse, but equally important. Everyone is important.
So what makes effective communication? When you talk to the business and they understand the last 10 projects you rolled out and how you did it and what the value was. And you've got to keep checking that communication vehicle that you're sending.
Does it mean you do one-on-ones and staff meetings? Yup. Does it mean you do town halls with business units? Yup. We used to have something we called breakfast with Steve and meet your customer where I'd talk to the IT community about a particular function – this is what's going on with sales, this is what's going on with supply chain, this is what's going on with the finance community. Meet your customer. Someone from that function would come in, explain from their perspective what their top 10 challenges were and why they needed IT and how important IT was. That's the way you close the gap and eliminate this Chinese firewall where they do the requirements and throw it over the wall, you do something, you implement it and hopefully it works for them.
How do you check the fidelity of your message? How do you make sure that the message you intended to communicate actually got through?
There are a number of things. We used to do quarterly surveys – that's one mechanism. Also, spending one-on-one time with the senior management team and just getting a feel for, OK, what can we do better? Do you know where we are with this rollout?
I used to have one person on my staff sit in with each business unit/function. My head of operations would sit in with their head of sales, and sit in on their staff meetings and global communications meetings. So we had someone inside the function, understanding what the function was doing, who would bring that back to the IT executive leadership team.
What's the role of effective communication in change management?
It's huge. It's huge in establishing the right set of goals, showing how you're doing along the path, and when you finish a project, seeing the benefits post implementation. It has to be a running track alongside any transformation initiative.
Describe a change effort and how you used communication to make things go more smoothly.
When DHL acquired Airborne, we had a significant external set of eyes on the integration. FedEx and UPS were just sitting there waiting for the integration to fail, and it would have cost us significant market share. When you do large integrations like that, you tend to do some unnatural things in terms of timelines and the way you put things together. So the communication aspect of that is very important, in terms of why you're doing it this quickly, with this kind of 7/24, 15-week effort. In that particular one, we were going to lose something like $10 million per day for every day we couldn't integrate.
When you communicate in that perspective and set that kind of burning bridge, teams understand why the pressure, why you're making the decisions you are, why you're taking some risk. If you don't communicate the reasons, that sense of urgency is just not there, and that's important when you do large-scale transformation programs like that.
I always pick what I call the top-five burning bridge things. What are the top five things that, when any other question comes up, you raise them against those five goals. So a simple example: Many people do SAP implementations and say, “I need this report before I go live." So we would say, what is the value of going live? Whatever it is, let's just make up a fictitious number and say I'm going to gain $5 million per week operational savings. Which means that for every day I don't go live, I basically waste a million dollars. When someone says, “I need this report before we go live," you simple say, “OK, where's the million dollars?" “Well, I don't have a million dollars." “Then you're not getting the report." It puts the conversation in perspective and gives it a definitive metric and focus so for every single question that comes up, you can target against a broader set of objectives.
Why do IT professionals often have trouble communicating with business colleagues?
We teach IT as a science, not an art. That touchy-feely soft stuff we've learned through the years around program management, change management, training – that's not taught in the schools today. Everything is black and white, ones and zeros, on and off – they don't really get that communication set of skills. And by the way, many of them don't have the business set of skills either. What you're starting to see now is people from the business who have worked on a project coming over and having some of those skills get into the DNA of IT.
When I got to Nortel, they had just completed an evaluation of the entire staff, and they ranked them for me, one through seven, with one being the best. After my own two-week evaluation, the order was completely flip-flopped. The quote/unquote “best" IT person was my worst. Why? Because the best IT person, the way it was ranked, was the best technical person – no business skills, no transformation skills, no leadership skills. Tremendous technically – but I can go buy that. The person who was ranked the lowest was the one who was touchy feely – focused on training, worried about employee sat, retention, customer sat, communications, business value. She didn't know anything about IT operations, networks, the technical side of it, and that's what I loved about her. She turned out to be one of my top leaders.
What are some classic communication mistakes IT professionals make, and what can a CIO do about them?
The first thing is putting out a status report that doesn't have any business impact in it. Focusing on the top 10 IT accomplishments – we implemented a local area network, we had five nines reliability, the data center had zero down time – being too IT centric and not realizing the business doesn't give a hoot about those things.
The second thing is one size doesn't fit all. Whatever the format, each function needs to be communicated to in a different way.
Most IT organizations tend to have one or two people who can do that, but it tends not to be widely shared across the organization. The also don't focus on it, don't measure it. One thing IT people are good at: when they have a clear set of metrics and goals, they tend to get things done. But go survey the top 100 IT organizations and ask them how they measure the effectiveness of communications. You'll get blank stares – what do you mean?
What's the most important thing you've learned about communication in the course of your career?
There tends to be a certain arrogance around the CIO role. That's partly because they got where they are because they've been successful, and they think they understand. But when you start with, “I don't know anything, I'm humble, and each business day is something I can learn from customers, employees," that's when you really understand the art of communication and can be most effective. When you have arrogance around, “I've said it, therefore everyone must understand it," you've got nothing but a lose/lose.