Getting boards of directors interested in and actively involved with IT issues has long been seen as a challenge for CIOs. But it’s an imperative as IT has become such an integral part of overall corporate strategy at most, if not all, companies. As Alan Calder, CEO of IT Governance Limited, told me when I interviewed him:
Getting boards of directors interested in and actively involved with IT issues has long been seen as a challenge for CIOs. But it’s an imperative as IT has become such an integral part of overall corporate strategy at most, if not all, companies. As Alan Calder, CEO of IT Governance Limited, told me when I interviewed him:
Seven Points CIOs Must Know About the Board of Directors
Seven areas that CIOs must understand and act upon in order to effectively work with the board.
… Information is fundamental to how the business competes in today’s environment. The value of the organization is almost certainly very dependent on the intellectual capital of the organization, which includes know-how and customer databases. It’s often more than 50 percent and often 70 percent or even 90 percent of the market value of an organization. That information resides in information technology. So if directors are responsible for the overall value of an entity, then that makes them responsible for its intellectual capital and the way it’s processed and managed.
Despite this, Calder said, “the vast majority of boards don’t have a clue.”
I’d like to think there may be less cluelessness now, given that I spoke with Calder way back in 2008. IT Business Edge’s Susan Hall in July cited a Gartner survey that found the number of company directors who rated the strategic contributions of IT “high” to “extremely high” grew from 32 percent in 2010 to 66 percent for 2012. In fact, some board directors are helping make the case to include IT executives among their ranks.
Some CIOs are better prepared to work closely with boards of directors than others, of course. For those who may not be “naturals,” Gartner recently offered seven tips that can help CIOs raise their profiles with boards of directors. (My comments appear in parentheses.) Among the tips:
- Research backgrounds of individual board members and the overall priorities of the board to better connect IT initiatives with those priorities.
- Devote plenty of effort to advance preparation so you can effectively present the most important points in your time in front of the board, which may be brief. Gartner advises concentrating on points that board directors truly need to know and providing reference materials. Also, don’t spend time on technical minutiae. Make sure it is all in a business- and board-oriented context. (As with any important presentation, I think rehearsing beforehand — in front of a mirror or a friendly audience — can help.)
- Be flexible. Realizing that more strategic or catastrophic items may be on the agenda, CIOs should prepare a two-minute summary of a situation that states the purpose, conclusion and actions you want the board to undertake. (Those aforementioned reference materials may help, by giving board members the details that can’t be included in such a short summary. And I think it’s important to reiterate the call for action. That’s a step that many folks neglect to include.)
- Be prepared for politics. As Gartner points out, “knowing the power centers and how to influence them is a key skill.” Gartner also suggests that less ambitious types may want to “outsource all issues regarding politics to their CEO.”
My interview with Calder includes some good advice related to Gartner’s tip involving research of board objectives and priorities. It’s important for the CIO to stay on top of any changes in priorities. As Calder told me:
… I am going to come at it in whatever terms I think are currently driving the board. So if the board is defensive – we’re in a defensive sector, and the economy is defensive – then I am going to talk to them about how IT can save money, reduce costs and improve the robustness of their business processes. If I am in a sector where the environment or climate change is a big issue, I am going to talk to them about how greening IT can contribute significantly to cost reductions and improve position in the marketplace. I am going to get the board involved by pitching to them what IT can help the organization achieve in terms the board can understand. I am going to do it in as concrete a way as I can and stay as focused as possible on costs and benefits.
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Some more good stuff from Calder:
- Consider taking a sales and marketing course to boost “strategic selling” skills. He said, “Most of the folks on the board and most of the senior VPs have done sales and marketing. They understand how to make a pitch. If you understand the technology but not how to make a pitch, you’re not going to go anywhere.”
- Appoint a board sub-committee to focus on IT governance. You’ll need someone with “current, meaningful IT experience” to lead the sub-committee. This creates an opportunity to encourage boards to recruit members with recent IT experience.
- Use recruitment as an issue to jump start IT discussions. Inform board members that talented millennials want access to collaborative technologies. Said Calder: “Boards don’t have to understand the ins and outs of these technologies, but they need to understand that technology is helping people to collaborate, to work effectively together, to move a whole wedge of cost out of daily activities. It can speed up product development, speed up communications, speed up everything. The organizations that get it will employ young people and compete. The ones who don’t are going to run out of people to employ and fail. Most directors of companies can look at their own kids and get what you are talking about.”