Daily Archives: June 8, 2010

Generally, the CIO and IT Department reports into the CFO or financial organization of the company. However, more and more CIO’s are starting to report to the operations side (COO, President) or even the CEO.

I’ve reported to both CFO’s and to CEO’s in different companies.

My preference is always to report into the highest executive as possible who is close to what’s going on in the business operations of the company.

Sometimes, a CEO is close to the action, sometimes not. But generally, I want to be under the President or CEO if possible. They are almost always closer to the operations of the company than the CFO will be.

IT reports into the CFO often because many of the company’s support services organizations (Accounting, Purchasing, Payroll, Accounts Payable, etc.) report to the CFO. Also, the CEO often thinks the CFO is more technically oriented so it’s more logical for him to think that IT should report to the CFO.

The problem is that most of your client and users IT supports are probably from the operations groups who are producing the products or providing the services your company sells. For that reason, you need to be close to what’s going on in the operations groups to support them effectively.

My preference as I said is to report into the President or CEO because they are generally closer to the real operations of the company and many of the operations initiatives depend on IT to succeed. It helps me anticipate things that are coming up if I can be closer to the actual operations arm of the company, , , I’ll usually hear about it sooner when working directly for executives in charge of the business operations.

I’ve reported to some great CFO’s and you can certainly be effective reporting to a CFO. I’ve also reported to a poor CFO and that makes it much harder to be effective for your company because you can get blocked from the real needs and issues of the company.

It helps when reporting to the CEO or President in other ways. It puts you on the same level as many of the senior department managers (your customer) who also report to the CEO or President. The image of being at the same level can be important for some, possibly even the IT staff and the operational staff of the company.

It also helps you when you have support from the top. For example, when pushing an IT initiative, it is much more palatable for your client if the initiative is a company initiative and IT is just helping to make it happen. There is always resistance from the operations side when IT tries to push an initiative, , , it is usually seen as an “IT agenda”.

In the last company I was with, one of the hiring requirements I had was that I report to the CEO. It was based upon my need to be aware of what senior management was trying to do and also knowing that the CFO was not particularly strong. It helped insure I would be able to participate in key meetings and be part of planning processes, etc.

The CFO in this situation wanted IT to report into him, , , purely an ego thing I believe, , , but a condition of my joining the team was that I report to the CEO so I could be as effective as possible for the company.

A good CFO makes it a point to include the CIO in planning meetings and important sessions. A weak CFO doesn’t always understand the need for it.

Another issue is that some CFO’s tend to look at the glass “half empty” when they think of IT. What I mean by this is that some CFO’s only look at reducing IT cost as opposed to the leverage a good IT organization offers and what can be accomplished with appropriate investment in IT.

Now, most CEO’s I’ve worked for don’t want the IT department reporting into them, , , they don’t understand technology nor do they want to. In addition, they simply don’t want to spend much time listening to technology support issues.

To be effective, you have to be able to communicate with the CEO or President in business terms, not technical terms. Otherwise, they will be lost and will want you to report somewhere else as soon as possible, , , probably the CFO.  😉

Gain your senior manager’s partnership by creating a solid track record:

• All recommendations are business driven and offer business value
• All project recommendations are cost justified
• You discuss things in business terms, not technical terms
• You deliver what you say you will d0

At the end of the day, you have to navigate your way through the management structure of your company to insure your IT team is effective. Some reporting structures make it easier than others. The key is that the manager you report to is supportive of your efforts and helps you be involved at the right levels to become aware of things early that will require IT support.

What do you do when you have a problem or non-performing employee?

I’ve observed managers who pass their non-performers on to other managers because they don’t want to step up to the problem. Rarely does the employee become successful in another organization.

In the cases where there was improvement, it was usually because the employee was able to work on something that he/she was truly interested in. If the transfer was for that reason, it’s a good thing, , , but far too often it’s because the manager avoids the “dirty work”

In most cases of poor performance, it is my belief that the employee just doesn’t really like the work or isn’t well suited to do that type of work. Either way, there is a bad fit and avoiding the problem only allows the problems to get worse. More problematic is that it causes you, the manager, to lose credibility.

Everyone is watching, , , yes, that’s right, , , people are watching how you take care of a problem employee situation. Your employees, your clients, even senior management may know about the problem situation, and they are watching to see if you do anything, , , and how you handle the situation. If you aren’t proactive, supportive, but most importantly willing to step up to the problem, , , then your credibility is going straight to the bottom of the river.

You cannot be successful without credibility. Managers get paid to manage and part of managing is to deal with difficulties, improve performance, and to get things done through your team.

It’s not being mean or insensitive when you end up firing a bad employee. In fact, it’s mean and insensitive to your staff, client, and company when you don’t deal with these issues. More importantly – it is mean and insensitive to the poor performing employee to allow him to stay with a company or in a job where he isn’t going to be successful.

3 rules for dealing with problem employees

First rule – Try to help the employee become successful
We want all of our employees to do well and we need them to perform. Our first objective should be to help the employee correct the problem so the employee can be successful. Do what you need to do to determine what the problem is that’s causing the lack of success and coach your employee for improvement, , , in other words, start working with him or her and be sure the employee knows they are not succeeding. You cannot be vague about this, , , they have to hear from their manager that they are not succeeding and improvement is required.

Second rule – Only spend an appropriate amount of time and effort
You should coach as long as you think is necessary. For some really bad issues, coaching might be one session. For lesser things, you might coach and work with the employee for weeks, even months. At some point, if improvement isn’t coming, you need to stop coaching and go to the next step.

Third rule – Never fire anyone unless they know it’s coming and why
There should never be an employee who is fired for cause and he or she is surprised. If you aren’t direct and specific in your coaching efforts, that could happen, , , so be certain you are clear about the problem, the need for improvement, and the ramifications if the issues are not corrected.

A simple process to use with a poor performer

1. Coach and counsel the employee and be clear about the problems that exist.
2. After you’ve coached enough (subjective determination on your part), you tell the employee that the next time you have this discussion, you plan to put him on a formal improvement plan. Also explain that if that happens and the problems continue, then the next step will be termination.
3. If the problem occurs again, you put the employee on a formal written improvement plan with a probationary period (3-6 months depending upon the issue).
4. If the problem occurs again within the probationary period, you terminate the employee.

In over 90% of the cases, the employee will fix the problem or will leave your company on his own after the first 2 steps, , , if that employee is conscientious and wants to do a good job. Most of the rest that get to step-3 will correct the problem or leave on their own if they are put on a formal improvement program, , , and realize that termination is imminent if they do not fix the problem.

I’ve dealt with many poor performers in my career, but only a few ever got to the final step. When you address the problems with the employee and you are specific and direct (something many managers tend to shy away from), most employees will understand the issue has to be corrected. They will usually correct the situation or go somewhere else.

If the poor performer is a single source working on mission critical things, you may want to work in a backup before pushing him. Losing a bad employee who has the “keys to the kingdom” still puts you at risk so take care of your company by initiating things that helps reduce the risk this person creates.

Take ownership of the situation and be proactive in dealing with the issues. Managing IT is about continuous improvement and a big part of what helps you make progress is by improving the performance of your team.