Tests of Leadership

Tough-as-nails IT leaders have managed to move their companies and their IT agendas ahead despite budget battles, aggressive adversaries and sagging staff morale.

Viruses, hackers, unrest in outsourcing locations, employee apathy, a jobless economic recovery and stagnant budgets -- these are the challenges that try IT leaders' souls. While 2003 brought a glimpse of economic recovery, few IT leaders felt a positive impact on technology budgets or staff size. The mantra remains the same: Do more with less.

"This is our third year in a row of flat budgets," says Brian Leinbach, senior vice president of operations at Delta Technology Inc. in Atlanta. "That puts a lot of pressure on [IT] because we can't renew enough technology to continue to drive down costs. I've borne the brunt of that -- trying to find out how to get the last drop of blood out of the turnip."

At the same time, many leaders saw technology's role grow in developing business strategy. Chief technology officers and CIOs face a series of dilemmas that look like a catch-22: Continue to innovate, protect data and maintain systems, but do it with fewer staffers and smaller budgets. Outsource to save money, but beware of volatile geographic areas. Give customers greater access to data, but prevent hackers from getting in. Push technology forward, but don't take unnecessary risks. What's more, they're challenged to motivate staffs that often lack innovative projects and performance-based rewards.

But this year's Premier 100 IT Leaders forged ahead with steely determination, creativity and a renewed emphasis on staff mentoring and development. These successful technology leaders have close relationships with executives, actively communicate with business units and consider themselves bilingual, fluent in the vernacular of both business and technology. They anticipate problems that could occur 10 steps down the road and have solutions in mind. They put the success of the company first, often letting others take credit for moving technology forward so that they, too, will defend the decision.

It's all in a day's work when you're helming an IT operation. Several of this year's honorees shared their tests of leadership with Computerworld.

Disheartened Employees

Tough times have brought many IT leaders closer to their team members. "As we are continually asked to do more with less, the relationship that you create with members of your team allows you to ask for greater commitments," says Mark F. Hedley, senior vice president and chief technology officer at Wyndham International Inc. in Dallas. As the travel industry hit rock bottom in late 2001, the $1.6 billion hotel chain laid off 37% of its IT staff and halted many technology projects, leaving the remaining IT staff stymied. Hedley was challenged to create a stimulating environment for his top technologists. So in December 2002, he came up with what he called an "impossible game" -- to earn CMMI (Capability Maturity Model Integration) certification in two years, a feat that usually takes five years.

The certification, which verifies methods of IT development and systems integration, was developed by Carnegie Mellon University and its Software Engineering Institute. Only 23 U.S. companies currently hold the certification, and no hotel IT organization had achieved the designation. The team had reached Level 3 by the end of 2003. "That stimulated the group," Hedley says.

Delta Technology keeps employees motivated by coming up with innovative ideas that might be implemented down the road. "We realize we have to keep the pipeline filled with new ideas. If a good idea is going to more than pay for itself in less than a year, we can make the money available," says Leinbach.

Universal Health Services Inc., a $3.2 billion hospital management company in King of Prussia, Pa., took advantage of downtime to step up its mentoring program. "I often think employees are set up for failure" by not being told what is expected of them, says CIO Linda L.E. Reino, who makes sure all IT employees know they play an important role, whether they're flipping the switch on a new system or holding down the fort back at the office.

Managing Risky Situations

Tenacious network viruses and the threat of terrorist hackers kept IT leaders on alert in 2003. "The Blaster worm virus was a huge wakeup call for all of us, because that was the first virus that was delivered through a network pipe" rather than via an e-mail attachment, says Jeffrey Campbell, vice president of technology services and CIO at The Burlington Northern and Santa Fe Railway Co. in Fort Worth, Texas. "It cost us hundreds of man-hours. We had to issue patches and send troops into the field to download to our field devices."

Campbell says virus prevention and maintenance drain dollars away from innovation and delivery of new products, but it's an expense the railroad won't skimp on.

Concerns about instability in many popular offshore outsourcing locales are also demanding more resources, time and attention than ever before.

"I have 40% of my applications development and maintenance being built or delivered offshore in India. There are ongoing pressures about that region," says Campbell, referring to the country's conflict with Pakistan over Kashmir. To manage risk, Campbell has backup centers outside that region, and he has taken other precautions as well. "We're ensuring that all of our contractors go through intensive security background checks, making sure our QA and test teams can adequately test for back doors," he says.

Capital One Financial Corp. CTO Roy E. Lowrance believes in the financial and staffing advantages of outsourcing but says it took three months of debate before the financial services firm agreed to send some of its work to India, after addressing concerns about the security of its data. "We're proceeding slowly and carefully," he says.

Domestically, keeping networks free from intruders while expanding Web-based access to information presents new challenges for CIOs.

Lockheed Martin Corp. spent the past decade fortressing its IT perimeter against intruders. Now CIO Joseph Cleveland's team is finding new ways to let some external users inside as part of its secure collaboration efforts with other Lockheed business units and with the Defense Department and other federal agencies.

"Instead of keeping people out, you have to let the right people in for the right information, limit what they should see, then almost in a dynamic way be able to eliminate those privileges when you need to," Cleveland explains. "It's a huge challenge in terms of [creating] all of the process and getting the technology and tools that are scalable to achieve that in a $27 billion corporation."

Collaboration can also bring some opposition from business units that are reluctant to relinquish IT control. But Cleveland is winning supporters and has earned the trust of executives with his track record of successfully combining other IT business processes, beginning in 1995 when Lockheed merged with Martin Marietta. "To get a seat at the table, you need to be viewed as someone who handles the tough problems," Cleveland says.

Always Moving Forward

Beyond handling damage control and treading through stagnant budgets, Premier 100 honorees are called upon to lead their companies into the future -- by centralizing processes, upgrading technology and exploring new innovations. Sometimes that requires making risky decisions that are mitigated by experience.

"The CIO has to be that cheerleader, that visionary, that driver who has the confidence that things can be done, but also makes sure that resources are brought such that it can be successful," says Christopher Kowalsky, senior vice president and CIO at Education Management Corp., a $500 million provider of postsecondary education based in Pittsburgh. "They also must identify and communicate the risks, because there are risks and there is no hiding them. You need to communicate them at all levels of the organization."

When all is said and done, these IT executives agree that communication, motivation, business acumen and a compelling vision for change are the characteristics that IT leaders need now and in the future.

Collett is a freelance writer in Chicago. Contact her at stcollett@aol.com.


Copyright © 2004 IDG Communications, Inc.

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