IT Needs Effective Leaders -- Now More Than Ever

The current financial crisis is considered by many economists to be the worst since the Great Depression of the 1930s. Does the tried and true work in times like this?

We have been through tough economic times before and accumulated a host of methods either to survive until recovery or even triumph while others suffer. But we have never seen a coming together of so many negative factors -- and all this after years of tightening our belts. Tactics we may have used in the past are no longer viable responses. There is no fat left to cut. Company morale, even in companies showing robust financial results, is at an all-time low. So how do leaders effectively maneuver their organizations through this unprecedented set of events?

Now more than ever, effective leadership is needed to weather this perfect storm. There are no easy answers. IT leaders need to keenly discern which approaches are likely to be effective during these difficult times. Which areas show the most promise? Here is some advice for where to focus your energy:

1. There are no IT plans, just business plans with IT components.

In the 1990s, running IT as a business within the business became a sought-after discipline. I am a true believer in this approach. But some firms have taken this to an extreme, separating IT from the rest of the business. True enough, we need to understand our products and services, ensure they are competitively priced and educate the rest of the business regarding cost drivers. But we cannot do that in a way that fails to fully integrate all IT efforts into business plans.

It is not good enough to set a budget, "align" all these efforts by taking a list of company strategies and picking one that seems to sort of fit, prioritize everything business units have requested along with IT's own infrastructure needs, and draw a line where money runs out. Every IT effort has to be combined and fully integrated into a business effort, never scrutinized on its own in a budget discussion. If the business strategy is approved, the IT component goes with it. If it is rejected, the IT effort is rejected. It is too easy to cut IT budgets if there is no understanding of what the business will not get if the cut is made.

2. Prepare for the upturn. It will come -- it always does.

The most successful companies make the most of the good cycles. Now is the time for serious discussion regarding capabilities that may be insufficient to maximize desired business results when times are good. Invest during bad times to prepare to capture the most business during good times.

Many companies so overuse the theory that they can cut their way to success during economic downturns that they find themselves unprepared for the opportunities that present themselves when the cycle turns. Can you bring out new product as opportunities arise, or are your aged systems an obstacle to new product introduction? Can you handle significant increased volume, or have you so stripped down your workforce that when volume increases it will take you months to rehire and train sufficient staff, requiring you to turn down business in the meantime? If so, these are prime areas to look for IT solutions to automate processes, freeing the existing staff to handle increased volume.

Good cycles have limited tenure. Capture all you can during that cycle by preparing for it during the down cycle. Argue investments in business terms, not as discrete IT expenses.

3. Tend to your staff.

Everyone needs to be working at their best during difficult times. An effective leader communicates more during difficult times, ensuring that employees have a sense of purpose, hope and confidence that they can succeed. Too often leaders "hunker down" and avoid communication, not wishing to hurt morale by discussing difficult conditions. This leaves employees feeling lied to and unvalued. Bring them into the leadership space, trusting them with full knowledge of the conditions and listening to their suggestions for how to manage through these times. This will create an energized workforce, maybe still fearful but now more in control of their destiny and willing to work as a team.

Many companies have successfully used the leadership development course offered by the Society for Information Management (SIM; Regional Leadership Forums/RLF) to best prepare their leaders to maximize their effectiveness. Graduates tend to discover their own authentic leadership style, build more confidence and consequently take on more-educated risks. And this investment in their abilities will create both energy and company loyalty in your high-potential leaders.

Companies that choose to just limp along, hoping that the recession will end soon and things will go back to normal, will emerge from this period weakened. There are no gimmicks to make difficulties disappear. Ineffective leadership can increase the damage caused by these negative conditions. Now is the time to focus on what truly matters.

June Drewry, a 2001 Elite 8 honoree for her role as global CIO at Aon Corp., most recently was global CIO for the Chubb Group of Insurance Companies.