ATK CIO says metrics-driven IT paves the way for innovation

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Kubacki: It helped a lot as we were doing consolidation, centralization and standardization. As we moved to two ERP systems instead of eight, as we consolidated small computer rooms into the corporate data centers, as we were able to add services that they hadn't seen before, operating availability and on-time delivery were important metrics to communicate to IT as well as to the business. We could demonstrate that our plans were working and that, although there was perhaps a perceived loss of control at the division level, we were delivering better service at a lower cost in most cases than what they were doing locally.

Once you show them the metrics plus what it was doing on our financial run rates people got more interested in the conversation. Let's talk about that conversation. How did this metrics focus change the relationship and the conversations with the business side?

Kubacki: One of the key things we do, in terms of not only cross-IT communications but IT business partner communications, is an IT monthly report that gets sent to the CEO and the executive staff, a few of our board members, all of IT, the GMs, as many people that wanted to sign up for the report as possible.

The first page is the CIO corner where I talk about things that I think the overall enterprise is going to be interested in hearing about. The next page is all around the details of our IT financials, so that we're providing transparency to our expense capital and head count numbers. There's no surprise what we're spending on IT. Then each of my direct reports writes a section about what's going on in aerospace, in defense, sporting and the corporate functions in business terms, not that we installed 17 new virtual servers. Nobody cares about that, but they want to know what new things are coming that are going to make their life better and more productive. We use that mechanism as one of our key communication tools.

Then on a quarterly basis I have to do an IT business update with the CEO and the rest of the executive staff and we go into a little bit more detail on our strategy deployment process again, those objectives and metrics. Annually I do an update with the board which the executive team sits on so they're also hearing what I'm telling the board. There's a fair amount of communication with the business side. At the end of the day it's about delivering value to the business every day and it's through those mechanisms that we attempt to demonstrate that we are in fact delivering that value. That touches on a point I really wanted to dig into, which is one of the challenges that a lot of IT folks face. Communicating the value of IT is always challenging because people have heard the story that investments will help but primarily that's communicated in soft terms. How does this metrics-driven approach make it more efficient or easier, whichever is the right word, to show that the things you want to move toward, the things that you want to invest in, will actually deliver what you say they'll deliver?

Kubacki: Certainly the metrics play a key role in that but I also like to stress that the business had an opportunity to buy off on the IT strategic plan. They knew where we were going. A lot of business partners were on the strategic planning team so we got their perspectives on things as well, which certainly helped with buy-in and support. Then I presented it to the group president and the rest of the staff even before I ever presented it to the CEO or to the board. I needed broad support of that plan and then by providing updates on a regular basis they know that we've made very significant progress on implementing that plan.

My last update was just with the board at the end of July and I used some Harvey balls to visually show progress on those key objectives I talked about. Some of those Harvey balls are filled in 100%, some maybe only 75%, but at least we could show, from my perspective, that we had made significant progress. The strategic plan was important, the set of annual objectives and budgets, achievement of budgets.

You don't just set a budget, you've got to hit the budget or beat it. We put significant management challenges in those, certainly in the corporate IT budget each year. So you find a way to save another 'X' million dollars each year. I challenged my direct reports to come up with creative ways to deliver everything we said we were going to deliver but for a million dollars less, as an example, than what we told them we were going to spend. That's built into their objectives and incentive plans, etc. Then the metrics certainly helped too. I'm going to switch gears and talk about a couple of other things specific to your role. There hadn't been a CIO for some time prior to you. That's a tough situation to come into. How did you navigate that?

Kubacki: I was very fortunate that Mark was a new CEO. He'd been in his job about a year, I think, before he hired me. Mark has been with the company, though, for a very long time and had moved into the CEO role and decided that he wanted to do some things differently. IT was one of those areas that we felt we were sub-optimizing by having it be so division-focused and managed because, again, we lacked standards and consolidation and we weren't looking at things broadly.

I've told Mark publicly and privately that he is the most supportive CEO I've ever worked for in my 30-plus years of doing this, which helps a tremendous amount. You can't monetize that. It's huge. Then we have the support of the board and there are several board members who like to get very personally involved in what's going on in IT. I love that involvement and getting their thoughts on our strategy and ways to tweak it a bit to make it even more meaningful. Again, that's great advice and counsel that I enjoy getting.

With that air cover, then, of course, it was up to us to execute. The CEO clearly articulated to all of my peers on the executive team his expectations around me in the CIO role and IT in total and so that, again, was a huge help. He has continued to be a very vocal and visible supporter of IT and the implementation of our strategic plan over the last three or four years and that's just huge. With all that, how did you have to change the IT organization? Were there different kinds of roles that were needed or different kinds of executives that were needed to make this work?

Kubacki: I have a process I've used at several companies to come in and assess what's going on. Generally, I've been hired to fix something.

That just seems to be the way it's worked out over the last 15 or 20 years: I was hired to fix something for a variety of different reasons. And I love doing that kind of work.

You can pretty quickly assess the leadership team that you've inherited just by how they choose to communicate what they do on a day-to- day basis and how they approach their job, how they lead their teams and how they interact with the business partners. You learn a lot in the first couple of conversations. You develop a perception about whether they are going to be the right people to have on the bus as we moved forward with a pretty significant IT transformation at ATK. I did have to make some changes. I wanted to have infrastructure and operations.

There was a lot of opportunity there for consolidation and centralization and a huge opportunity to drive out cost and I went with somebody who I've known for 10 years and who had a track record of doing this at large companies. We get along great, so it was: Hey, would you like to join me? Here's the problem we need to solve together. He couldn't wait to start.

I needed a chief information security officer. We didn't have one when I got here. Somebody was doing it on a part-time basis and we have a lot of data that needs to be protected. It's called ITAR-controlled data (International Traffic in Arms Regulations). You can't have it fall into the wrong hands. I wanted to spend more money in that area and improve our maturity and I felt I needed an experienced leader to help me with that. I hired someone that I had worked with in the past and I think he started here the same day that my infrastructure guy did. It made for a pretty strong team.

We made some changes out in the groups and even in some of the divisions, but the first thing I wanted to do was get my corporate team in order because, again, corporate was going to provide more services to the company than what he had done historically. When you think about the organization moving forward and the things that are critical to address, what are the skill sets that you think will be increasingly in demand in your organization for the future?

Kubacki: A long time ago, [I knew the] CFO of a company and he was recruiting a new CIO. He said there are three key characteristics of a CIO that he's focused on seeing: business acumen, leadership and technical skills, in that priority order. He needed someone that could think, act and communicate like a business person and that you're not leading in talking about server virtualization or the ERP system or this data center or that. That's a yawner for most business partners. Find someone who can understand the business and the challenges and then come forward with creative solutions to those challenges. Once we all agree on what those things are, do you have the leadership skills you need to be able to get up in front of a group of people and motivate them to get on the bus with you? This is going to be exciting. I want to be part of that journey. You need to motivate them and have a certain amount of charisma and get people excited about what you're trying to do.

Lastly, you need some technical skills. You have to be able to challenge your team when it comes to architecture or networking, that you've had experience in applications and infrastructure and security so that you can provide strong guidance, that you have an educated voice in that discussion. When I interview people for my direct reports or even their direct reports, I look for that same set of three skills. I'm hiring today the future leaders and I want to make sure that business acumen and leadership are core competencies that they have, not that they just bring a nice portfolio of technical skills. Are there particular areas or skills sets around, say, cloud or big data or mobile or BYOD that you're looking to add in coming years?

Kubacki: Our sporting business is going to be spun off as a stand-alone public company. As a stand-alone public company, that business is going to be able to enjoy looking at cloud offerings and Software-as-a-Service and those types of services that historically we couldn't look at as part of a larger aerospace and defense company. I don't have a lot of skill sets on the staff right now in those cloud offerings, whether it's Platform-as-a-Service or software-defined networks and data centers. I'm going to be looking for that kind of skill set as we start building out the IT organization for the new sporting public company. The CIO role is under a lot of stresses these days, lots of change on the technology front, changing expectations on the business front. How do you see the role of the CIO changing in order to stay powerful and relevant?

Kubacki: As I coach and advise people who aspire to be CIOs, I still talk about those three sets of skills around business acumen, leadership and technical skills. I also advise them that it's helpful to have an MBA, that you have that mindset every day when you come into the office: I'm running a business. I'm running a $100 million P&L or whatever the IT budget is. You're running a P&L so you're the president of the IT Company, and you need to think about it that way.

There are so many options now, even more every year with cloud and external hosting and outsourcing, that we have to make sure we're delivering value at a competitive cost to the business or they have every right to look for that IT service from a different service provider. I need to be able to compete with external service providers, we have to be running IT like it's our own business and we don't want to get thrown out of the account, so to speak. Lately, and it's really part of the world class IT model as well, [it's about] idea generation and innovation. Are there ways to leverage technology more than we've ever done in the past to help facilitate affordable innovation in the business so that we can be developing the next bullet, missile system, rocket motor, you name it? Can we figure out a way to do that faster and at lower cost so that we can get these products to market faster? IT can play a role in that.

When you look at today's CIOs and the idea of CIO plus, meaning you wear a couple different hats, or even CIOs who go on to be COOs, that's the mindset we all need to have, even if that's not what you aspire to be. I think that's table stakes these days. It's not just can you keep email up. That used to be it. To keep your seat at the table it's so much more than that now, which makes the job even more fun than it's ever been. One of the issues that we hear when we deal with CIOs is about managing in an environment where consumers are bringing technology in and experimenting with their own ways to approach things. How do you manage that shadow IT or shadow innovation, depending on how positive you want to be about it?

Kubacki: I think it's easier in my current environment, again because of having an aerospace and defense business and a huge emphasis on information security. I don't have a bring-your-own-device policy and probably won't have one. We do allow iPhones and iPads, because we've enhanced our capabilities around mobile device management.

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