The Evolution of the CIO
As part of Hawaii Business’ C-Suite conference series, we brought together three of Hawaii’s leading CIOs. Todd Nacapuy, chief innovation officer for the state, first talks about driving change and accommodating all kinds of users.
Then, Sheh Bertram of Bank of Hawaii and Craig Grivette of KPMG LLP join the conversation to discuss strategy, innovation and the risk of not taking risks.
CIOS MUST UNDERSTAND WHAT DRIVES THE BUSINESS
“The role of the CIO is no longer just running the IT and managing the information, it’s truly partnering with the business to create innovation. That’s huge. No one will ever ask you to be CIO if all you can do is keep the lights on.
“I just came back from the meeting of all 50 state CIOs and a lot of them are struggling because they don’t have a seat at the table. About half are not cabinet members. They report to some other director, not the governor. If your CIO is not at the table, they have a hard time understanding the business needs and therefore can’t drive innovation into an organization.
“CIOs have to develop business acumen. Stop talking tech. Really try to understand what the business drivers are, and speak in that language.”
STOP USING “SECURITY AS THE TRUMP CARD”
“The biggest cultural shift we needed was to understand IT’s job is to enable the rest of the state government. My job wasn’t to shove technology down somebody’s throat, and use security as the trump card. Saying, ‘You must do this, because if not, it’s not secure.’ IT loves to use that trump card of security. We have to stop doing that.
“For me, security is always top of mind, I just don’t talk about it much. If I talk about security, you’re going to know what I’m using and it’s going to expose certain things.”
“Gartner talks a lot about bi-modal IT. It’s the difference between the innovative side of your organization and, to be blunt, the non-innovative side. They call it agile versus waterfall. When we do waterfall, we gather 100 percent of the requirement before we start developing a product. In the agile approach, we gather most requirements and roll out a product that’s maybe 80 percent there and continue to improve it with regular roll outs. Bi-modal is about creating an IT organization where you have legacy applications and legacy developers plus sprinters who can develop and move quickly.
“Part of our job as CIOs is to keep the lights on by doing waterfall things. But we also need someone who develops in the simplest form, mobile apps, digital government or open data, those things.”
CHANGING THE CULTURE BY ENABLING OTHERS
“One of our biggest accomplishments is changing the IT culture in the state government. We call it services- oriented infrastructure, but it’s about helping the business to be innovative. We show the different departments the available tools. Whether you choose to use those tools is up to you. If it makes sense for your business, you should use them.
“But they say, ‘I’ve no idea what Office 365 can do for me.’ So we have a solution delivery manager whose role is to interact with each department, understand its business and tell the team which tools could help them.
“Director Rachael Wong of the Department of Human Services is here. She is an Apple user. That’s how she wants to conduct business. So instead of forcing her to use a PC, we gave her different tools to enable her to do her job. I tell all the cabinet members: ‘My job is to allow you to be innovative by using different types of technology.’
Director Wong tells me, ‘Todd, OneNote changed my life.’ She needed a way to be organized, communicate and share notes with her team, especially during the Legislative session. So I showed her what Microsoft OneNote and Outlook groups could do, how easy it was to form a shared calendar, those things. They ran with it and now I’m jealous, because their OneNote legislative notebook looks better than mine.”
LEADING THE NATION IN GOING PAPERLESS
“I’ll give you an example of how a business need turned into a technical delivery. One of Governor Ige’s big initiatives is for the state of Hawaii to be paperless. So a technical person will too often say out loud: ‘What about security? Do we need two-factor authentication? Where do we store all of these files? Can we put it in the Cloud? What compliance issues do I have to deal with?’ Too many times we list all the reasons we can’t do it instead of telling them, ‘Sure, we can do it.’
“When you list all the obstacles, the business person says, ‘You’re too slow,’ and goes around you. How many people have shadow IT in their organization? Or know someone who can get something done, so they go around IT?
“Here’s what actually happened: The governor said, ‘Todd, I would like to go paperless.’ I said, ‘OK, Gov, what’s your time frame?’ ‘Can you do it in three months?’ ‘Done.’
“I went back to my team and told them, ‘We have to make the state paperless in three months.’ (laughter) They looked at me and all the tech stuff came out. And I said, ‘We’ve just got to break it down and do it.’ So we went through a lot of things and figured out the first step was to enable digital signatures. Then we could capture all of the data digitally and store it.
“The governor didn’t have time to talk to us, so we asked other people about the signing process. His secretary, Joyce, said, ‘You see that stack of different color folders? That’s what he signs every day.’
“Gov. Ige signed his first digital signature in October as a pilot. We launched it officially three months later and, to date, we have over 22,000 documents signed in the state of Hawaii. We are leading the nation. The entire state government is now licensed to do digital signature.
“Who in the room uses esign at work? Less than 10 or 15 percent. The state of Hawaii has newer, better, more secure technology than you? Who would have thought that?”
ONE WAY NOT TO INNOVATE
“A big mistake is when companies say, ‘All of us have to be innovative.’ A Hawaii company said, ‘All of us need to be like Apple. We should change our entire environment. I was there when that conversation happened, and I was like, ‘Whoa.’ I won’t mention who did that. (laughter)
“If we try to make our entire organization innovative, it’s not going to work. I’ll give you an example. Our financial system was built in the 1950s, running Cobalt and it’s on a mainframe system. It’s going to cost an estimated $60 million to $100 million to replace. Does that make sense? Departments don’t care what’s running on the back end, they just want specific inputs and outputs. Instead of buying a new system, should we just write new interfaces?
Should we put in an enterprise service to pull reports? No one asked those questions, so we’re looking at them. As an IT person, you have to help the business understand it may not always be cost effective to innovate.”
Bertram and Grivette join the conversation:
A CIO SHOULD HAVE FOUR PERSONALITIES
Bertram: “One of those four is a strategist, a very credible partner at the table with the business, who understands the business deeply, can fluently converse with the business folks and show them how to leverage technology to produce products and services.
“The second role is the catalyst. Someone who can sit with the business people, across the entire enterprise, to generate a conversation about business value. How technology can enable and add value.
“The third role is a techie who can provide a technology architecture to manage complexity. A lot of times, we overengineer and overthink things and end up in a lot of trouble. It costs a lot to have a complex environment.
“Last, but not least, is being an operations person. Somebody who has to keep the lights on. The old role of the CIO, the comfort zone, was to manage production day to day. It’s firefighting, and it produces endorphins. You feel good after you put out a fire. And if you can’t keep the doors open, nobody’s going to listen to you as a strategist.
“Which of those four personalities is No. 1? It changes and really depends on the day.”
WHO IS REALLY THE CHIEF INNOVATION OFFICER?
Nacapuy: “When you look at companies that are moving forward, that are really disrupting technology, that drive really comes from the CEO. A lot of it is how visionary is your CEO, your leader. As a CIO, our job is to enable that innovation and take care of all the back-office stuff.”
Bertram: “The other important part is to have a relationship with the CEO and the whole enterprise to help them understand technology is very much an investment. Technology is not just one big expense; you get something out of it in the long run.”
THINK DIFFERENTLY, ALL THE TIME
Bertram: “As part of my role, I constantly question the status quo. It is not enough for me to say, ‘We’ve always done it this way.’ How do we do it differently? There’s more than one way of doing it. It’s important that people think differently. And think constantly – come up with one idea after another.
“We don’t all have to be Steve Jobs, and yet your innovations can still have an impact on your business. One important aspect of being innovative is to allow for failure. Not all of your ideas are going to be great ideas or be successful. But have that process in place where you can come up with ideas and run them by somebody, and even try some.”
HOW TO PERSUADE THOSE WHO RESIST CHANGE
Nacapuy: “You must map directly to that individual. ‘What is in it for me?’ If I’m going to launch a new technology for a state worker, it’s very important for them to understand how that affects them as an individual? Make it positive for them. But you’re not going to turn all of them.”
WHO NOT TO BE
Grivette: “The best CIOs elevate their roles and do not compete with the people who work for them. You’re going to have a server engineer, network engineers, security professionals. You don’t need to be the smart person in the room all the time. You need to be the business person in the room. By being the business person and not competing with them, you are in a better position to orchestrate subtle changes that blossom into profound innovation. You are more useful to the entire organization that way and feel more satisfied as a contributor.”
TECHIES NEED MARKETING HELP
Nacapuy: “IT professionals don’t always do a good job at marketing or telling their story in a way that other businesses or other departments can understand. That’s why you need a Keith DeMello. Keith is my public relations officer. Every CIO needs a Keith, someone who can help translate your information to the business and other departments in ways they can understand.”
Bertram: “Technology people also need to be better at telling the stories when we succeed, so other people don’t only hear the bad stuff.”
GIVE THEM MORE DATA? NO, MORE UNDERSTANDING
Bertram: “We use data to make decisions. Part of the CIO’s role is to give the business data. But, a lot of time, they don’t know what to do with it. So the natural reaction is, “Give me more data.” But what really adds value is to come up with ideas as to how they can use this data to make smart decisions in retaining customers and attracting new ones.”
MAKING THE RIGHT DECISIONS WHEN BUYING IT
Grivette: “Implementation is not easy or perfect. The failure rate for IT projects is alarming, in the 30 to 40 percent range for all industries. If you do make a failure, recover from it quickly, move forward. That’s a mature approach. Most organizations bury IT failures.
“To reduce your risk, we strongly encourage things like service-oriented architecture. Modular designs. So parts of the system can be evolved more quickly. If you have a very large system, and your only choice is to replace the entire thing, you’re putting yourself and your organization in a risky position.”
SETTING UP METRICS TO PROVE YOUR PROJECT SUCCEEDED
Grivette: “This is where you need to really understand the status quo as you go into a technology partnership with a business to make a transformation happen. It gives you a better ability to say, ‘We were here and now we’re here.’ But, a lot of times, that inventory is more anecdotal. And it doesn’t have that baseline. So coming up with an agreement on the problem statement can sometimes help you define the success criteria better.”
Bertram: “It’s easy to say, ‘We came within budget and within our timeline.’ But another factor is the experience. You can finish a project on time and on budget, and it was the worst experience of your life. That’s not a success.”