Matson CIO: The most painful, gut-wrenching part of leading transformation

Matson CIO: The most painful, gut-wrenching part of leading transformation

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March 21, 2017
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I’m an optimist, and, among the CIO community, I’m in very good company.  In fact, leading a transformation is itself an act of optimism and a leap of faith, driven by a deep desire to make a meaningful difference and an unwavering belief in the strategic vision being undertaken. Core to that optimism is the belief that most of the people in your organization who’ve been so dedicated and loyal can make the transformation along with you. However, the stark reality is that the skills required to transform are dramatically different than those required to operate. CIOs who fail to recognize the organizational disruption caused by transformation early on will quickly learn some painful lessons. I had to fight and overcome my optimistic nature in making the tough organizational decisions required for ultimate success.

Early on, I had hoped and estimated that over 60 percent of our staff could navigate our multi-year technology transformation over a five-year period. Given the length of our transformation and how quickly IT roles and technologies evolve, five years seemed to be a good benchmark. So that became my goal – execute our strategy and bring along the majority of our organization.  Well, that didn’t happen.  Through a combination of straightforward and gut-wrenching decisions, there was disruption and turnover in all nearly all areas.  Within four years, less than 40 percent of the original IT organization remained.  

Why your organization will be disrupted

As I analyzed the organizational dynamics throughout our transformation, I recognized three patterns among our employees, each of which led to different decisions:

  • Big gas tanks, intellectual curiosity These are the high performers who have a track record of learning new technologies and are unafraid of risk-taking and visibility.  Most importantly, they care about making a difference beyond their own career success.  We identified these vital contributors and took extraordinary steps to keep them on board throughout the transformation.
  • Uninterested but honest – On the other end of the spectrum are those employees whom you believe are likely incapable and not interested in transforming their skills. Fortunately, in many cases they themselves realize this and are willing to work with the management team in executing an orderly transition. Honest conversations usually lead to a sense of relief for everyone as these employees seek roles that better fit their skills. CIOs should honor these employees by offering fair and ethical treatment during the transition. It’s good business to do so, as those employees that remain will take note of the treatment accorded those who leave.
  • Messy middle – The most difficult decision-making lies in dealing with those who are willing and committed but, for any number of reasons, may not be able to transform themselves. This is where CIOs should spend much of their time and energy, ensuring that those capable of making it with some help are not left behind. Conversely, those whom you’re confident won’t ultimately succeed must be addressed, sooner rather than later. Imagine someone telling you that they are committed to doing 100 pushups without stopping. While you may admire their effort, your instincts tell you that they’re unlikely to succeed. Take time to carefully and fairly evaluate those in the middle, but once you’re sure of your decision, move decisively.

For me, the most difficult and gut-wrenching part of leading our transformation was not the technology involved. It was making and acting on those tough decisions about who was not going to succeed. In some cases, people had been with the company for decades and had been rewarded and encouraged for the very work they were no longer required to do. These were good people, skilled talent, who provided a great service to the company – but the technology and the cultural gap were just too wide for them to bridge.

Why the tough calls are necessary and right

As difficult as these decisions can be, they are critical to the overall success of your transformation. There are a few key reasons why.

1. It speeds up transformation. It can be tempting to be nice, give people the benefit of the doubt, and hope they eventually make it. But doing so in the absence of any real facts that they’re improving is a real mistake, and it’s going to slow down your efforts. Not only will it hurt the transformation, but it will also hurt those individuals because they’re not being given direct and truthful feedback. In all likelihood, they will end up burning precious years of their career trying to do something that they just can’t do. You’re better off, the company is better off, and the individual is better off if you can find a way to get them to a place that’s a better fit. By taking the difficult steps more quickly, you’re committing to finding the right talent sooner, which will lead to faster delivery.

2. You have a fiduciary responsibility to the company. Often, IT leaders are viewed by others in the company, not always fairly, as being indifferent to the company’s financial status and challenges. It’s a common notion that IT plays by a different set of rules when it comes to spending and staffing. By making these tough calls and being mindful of your staffing, you demonstrate to your peers and to your board of directors that you are indeed a good financial steward. Great CIOs are both fearless cost cutters and shrewd investors.

3. You will earn credibility as a leader. Your executive peers may not understand the technical aspects of your job. But there is a universal aspect of leadership that they do understand – making tough decisions that only leaders can make. Taking responsibility for these decisions will help you earn credibility among your peers because they will see that you’re unafraid to do what’s necessary to accomplish a greater good for the entire company. My willingness to make these tough calls accelerated the building of trust among my peers, which has paid dividends in the years that followed.

4. Your staff will understand. By the time you identify the capabilities lacking in the people who can’t make the cut, it’s very likely that the majority of those in your organization already see it too. So, if you’re thoughtful in identifying where problems exist, and compassionate and ethical in making those tough decisions, your remaining staff will understand. They will make peace with it and move on toward faster and more efficient transformation. And for those you must let go, most will land on their feet. After some initial denial, they’ll acknowledge the feedback and they too will move on.

So, be an optimist. You’ll need that energy to sustain you through the seemingly endless hurdles of a multi-year transformation. Just recognize that your attrition will likely be both disruptive and more significant than you think. Identifying those in the “messy middle” is a painful but necessary part of the process. Great leaders act quickly but compassionately, so don’t ignore your instincts and don’t hesitate.  

And remember, optimists live longer. Or at least they think they do.

Comments 1

Peter,

Peter,

This is obviously an article written from experience, thank you. This is also an article that other leaders, regardless of functional affinity, can learn from if they have never driven a transformation.

My experience is similar and I have also found that standard techniques now being called "Business Architecture" help everyone understand the change required for transformations and allow them to engage in helping define how the organization should move forward. This approach helps build employee engagement early even for those that cannot make the leap longer term. The reason I bring this up is because transformation is never limited to one function. The decision to transform IT might be up to and driven by a CIO but the impacts affect everyone. The same is true for other functional areas. So, considering the new "architecture" and designs of all business areas really helps other leaders understand the change in their groups too. The side benefit for IT is that the new business designs can then be used for the enterprise technical architecture within your IT Strategy to either validate what you and your team thought to be true or to adjust the work in the portfolio given the new structures.

Again, nice article and worth sharing with others through any company.

Peter Weis has over 15 years of global CIO experience, and is currently VP and CIO of Matson Navigation, a $2B, publicly traded, global transportation and logistics company (NYSE: MATX). At Matson, Peter leads a global IT organization that is responsible for strategy, software development, infrastructure, high-availability operations and all levels of IT governance. Peter's leadership track record spans both start-ups and Fortune 500 companies.

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