Driving AIG’s Transformation Through Influence

Mark Popolano has moved quickly through the ranks at New York-based AIG ($268 billion in assets). Popolano arrived at AIG about six years ago at the firm's American International Underwriters subsidiary as senior systems officer, and became CTO after three years. In 2000, he became chief information officer, where he supervises the current CTO and the firm's four group CIOs, and is working to bring greater technological unity to AIG's famously decentralized organization.

"I'm a firm believer in transformation," Popolano says. In order to transform AIG into an integrated financialservices player, Popolano says he's maintained a loyal corps of senior IT people—with almost zero attrition at senior levels over the past three years—which is now positioned to transform IT within the organization. "And I'm very good at finding and creating good teams of people. I always tell people that it's the sergeants in the trenches that win the war, not the generals on top of the hill."

Popolano's sergeants will have their work cut out for them in AIG's traditional IT structure. "If you know AIG, it's a series of silos," he says. "But we're creating an IT function. I firmly believe the business partnership now sees us as an added value versus simply a utility or service group."

That is no simple task, Popolano says, but rather requires an entirely new mindset on the part of the business. As the IT group puts process and methodology into place, he adds, "Our senior IT executives are making the hard decisions, which are not always popular." But the goal to which the organization is heading is nothing less than a conversion to "now look at IT as not only reducing expense, but bringing in revenue, and improving customer service and quality through delivery and execution."

In order to ensure that its initiatives are engaged in a way consistent with business goals, the IT group is guided by five basic principles, according to Popolano. "We look at applications or projects for revenue growth, expense reduction, customer service, resource retention and quality," he says. "If you think about it, four of them impact revenue, and they help us to run IT like a business."

Nodes of Influence

The business-like approach has gained IT an increased respect on the part of the business, but Popolano says the IT organization is acutely aware of the expense of technology and pursues a consultative engagement with the business. "What we've done with our CIO/CTO organization is assemble a group of highly qualified individuals that steers influence, negotiating change, shaping it over a period of time," he says. "I have several organizations that are tied to stovepipes. What we've done is created an overarching organization that matrixes the stovepipes, and we've created what we call nodes of influence. It's not the organization of direct control—it's the sphere of influence, which is more sophisticated and requires greater maturity on the part of the managers," Popolano adds.

Being accountable to those who depend on you forces greater discipline and integrity, Popolano explains. "You're not going to do something just because you're enamored of the 'flavor of the month,' or the next hot technology," he says. This means laboratory testing and integrating innovations before their adoption, and managing vendor relationships with due diligence. "Before we set up guidelines and standards, we work with the organizations to influence the transition."

Each internal organization has an architecture and a vision, Popolano says. "We have architectural blueprints for Microsoft, IBM, Sun Microsystems, Solaris, for Java and for .Net. We see where the synergies are and where they converge. We see what will be a market leader today, and what will be 18 months from now," he says. "It's about clearly laying down roadmaps and testing them, then laying out a vision of the technology and driving to it." Any such endeavor requires a patient and methodical approach, Popolano says. "You have to realize it's a shaping game, not a quantum leap." And whatever the technology, he adds, one must "know the total cost-of-ownership models within the division."

The Impact of Change

It is also crucial to bear in mind a kind of "cost beyond costs," Popolano observes. "Change is a tremendous drain on resources, time and training, and there's only so much change an organization can handle," he says. "We are very sensitive to that amount of change, as well as the confusion it creates for the business," according to Popolano.

While keeping in mind the stress of change, Popolano makes sure the IT staff is well taken care of. "I say I don't hire an individual, I hire a family," he says. "I affect that individual and I affect the family over time."

Kevin Murray, CIO of AIG Claim Services, who reports to Popolano, says, "Mark is very people- and family-oriented and he probably has the best combination of technical savvy and relationship skills that I've ever seen." That combination results in Popolano's being "a good high-level strategist who delegates well and doesn't get bogged down in details." That quality is complemented by one of the highest energy levels Murray has ever seen. "I've never seen the guy tired," he says. "Mark's energy is a source of inspiration. It's a challenge just to keep up with him—you feel like putting on sneakers when you get to work."

Given the scope of Popolano's job, success demands "a good combination of energy and delegation skills," according to Murray. "AIG is so decentralized that to get your arms around it and really get a hold of the 'technology monster,' if you will, is a huge job," he says. "He's really dedicated and serious about it and that breeds motivation and respect."

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Mark Popolano

Chief Information Officer American International Group

Size Of IT Staff: Approximately 5,000

Background: Popolano worked for Chase Manhattan until joining AIG six years ago.

Interests/Hobbies: Woodworking, wallpapering and painting. Popolano describes himself as an "obsessive-compulsive reader."

Key Quote: "Management by influence is more sophisticated than direct control and requires maturity on the part of the managers."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio