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Five Ideas That Can Help IT Pros Be Better Businesspeople

Ram Charan, consultant and author, tells IT leaders what they need to focus on to move up in business.

CIOs looking to get a seat in their company's executive boardrooms need to do a better job of speaking the same language as their CEO and understanding his or her business priorities, according to Ram Charan, top consultant and best-selling business author. "Learn about what the CEO wants to know," admonished Charan, former Harvard professor, speaking Sunday at the InformationWeek Spring Conference in Amelia Island, Fla.

Charan said too many CIOs are relinquishing their rightful chance at the corner office to CFOs, marketing executives and even general counsels because many are overly focused on technology. "They will tell you everything about technology but nothing about business," Charan said, speaking to a room of about 300 IT executives.

Charan, who has consulted for numerous multinationals, including Gateway, Ford and EDS, said IT leaders need to focus on five areas to ensure they ascend the company ladder:

1. Know the "structural shifts" affecting your company's industry. That includes the effect of factors such as globalization, commoditization and excess capacity. "Find some time in your routine to talk to your business peers" to gain a better understanding of those factors.

2. Know the "nucleus of the how of making money" at your company. "Go behind the numbers and understand the processes that determine those numbers."

Charan laid out five financial measurements -- revenue growth, gross margin, operating expenses, operating margins and revenue to capital -- on which IT people should focus since they indicate how CEOs think about a business. IT personnel can make what they do more relevant by relating their work to one of those measurements and, in turn, to their CEO's priorities. "Don't talk about strategy. Talk about how you're going to improve gross margins."

3. Get a budget commitment. Look at IT spending as one of three types: maintenance, business efficiency improvements and transformational. The only way to influence the CEO is to have a budget -- in partnership with business units and tied to one of the five financial measurements -- committed to business efficiency and transforming the business.

4. Ensure a strong "leadership gene pool" within IT organizations. The goal is to build business leaders and to identify people who can define IT infrastructure in business terms and with business value. "Make sure [IT staffers] are capable of business thinking and collaboration," Charan said. That may mean sending talented IT people to work in other parts of the company. Even if they never return to an IT role, that experience can help IT's position in the company. "They go up in the organization and know how to use IT in a business environment."

5. Develop three key personal habits. One, "follow-through" -- take bright ideas and get results. "The brightest people hate follow-through." Two, learn how to do "horizontal collaboration," meaning to partner with colleagues in other parts of the business to improve processes. And three, forge contacts outside your own industries and outside IT to develop a broader perspective on business. "You have to get the same language as the CEO," he said.

Editor's Note: This article first appeared in InformationWeek, a sibling publication of Insurance & Technology.

Paul McDougall is a former editor for InformationWeek. View Full Bio

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