Problem: Building a relationship with the CEO ain't easy.
IT leaders know that building a relationship with the CEO is important in order to:
- Effectively promote a vision and strategy for IT
- Advocate on behalf of the IT group and its interests
- Build personal reputation and influence
At the same time, IT leaders face two major challenges in this regard:
- Most CEOs don't really care all that much about technology
- Getting face time with the CEO is difficult
It's a tough problem
What makes this such a tough problem is that the very core issues that are so important to you as the IT leader are simply not that critical to the CEO. For most companies, IT represents less than 5% of the budget. It's just not that important financially — except, of course, when there are problems and systems aren't running correctly, then the CEO is all over you. And that's the worst time to try and build a relationship.
The conventional approach
To address this problem, IT leaders invest (rightfully so, I might add) a great deal of time framing technology issues in business terms and advancing theirs with special-purpose presentations. (See "Three Presentations Every Influential CIO Must Have at the Ready.")
Clearly, I am a big believer in this approach, and it can yield wonderful results. However, I often find that even with the very best IT vision presentation, the IT leader struggles to get an audience with the CEO. Breaking through that structural apathy so many CEOs have to technology can be very hard.
An even better way
Thanks to the results of a recently published study (I'll get to it in a minute) there is now a whole new and much more powerful way to connect with the CEO of your company and to get him massively interested in technology at the same time.
Sound too good to be true? Hold your judgment for just a few minutes more and check this out.
We all know that the absolute best way to connect with any person is to focus your interactions with him on the issues that are most important to him. When you are talking about and working on things that are very important to the other person, he has a lot of time and interest in building a relationship with you. It's basic. The problem is that the CEO doesn't feel that way about technology. But what if you could have the following water-cooler conversation with your CEO (we'll call him Jim)? Do you think this would get his attention?
"Jim, I know you're interested in our company's reputation and our financial performance, which is why I want to come speak with you about some important industry data that has recently come out.
It turns out a company's reputation, financial performance, and even CEO pay can all be directly linked to how the company approaches certain kinds of IT investment.
What I think we can learn from the study are some really easy, no-cost or very low-cost things we could do immediately to start getting these benefits.
When should I make an appointment to see you?"
At this point, you have his undivided attention. I'd be shocked if he didn't say something like: "Actually, I've got a few minutes right now. Let's go for a short walk."
What the research shows
Before I tell you how to have the follow-up conversation with the CEO, let's take a look at the research and what it tells us.
In his study entitled "The Surprising Impact of Fashions in Information Technology," Professor Ping Wang of the University of Maryland and his team identified the business impacts associated with the method and manner of adopting different types of technologies. In particular, they were able to demonstrate a very strong correlation between the adoption of "hip" or "fashionable" technologies and key business indicators. In other words, they found that companies that approached "hip" or "fashionable" IT in a particular manner enjoyed important business benefits.
And while there were many aspects to their findings, I am going to focus on the key findings that serve our purpose as stated above: Building a relationship with the CEO.
Here are their findings in a nutshell:Finding #1: Being associated with in-fashion IT correlated with an increase in the company's reputation.
The more often a company's name appeared in articles that also mentioned an IT innovation that was considered in-fashion at the time of mention, the higher the reputation score that company had in the subsequent year's list of America's Most Admired Companies. More specifically, for each 1% increase in the company-technology associations, a reputation score increase of 0.52% was reported.
If that's not interesting enough, the reputation bumps occurred whether or not the company actually followed through with an investment in the technology discussed.Finding #2: Actually investing in hip IT further increased reputation AND was linked to improvements in bottom-line performance.
When a company actually invested in fashionable IT, their reputation scores increased even more substantially. Every $1 million investment was associated with a bump of 0.66 points in a company's reputation score (measured from 1 to 10) the following year.
Additionally, the companies that actually made investments in fashionable IT experienced better bottom-line performance by the third year, as measured by the sum of the company's return on assets, equity, and sales.Finding #3: CEO compensation went up in proportion to the size of the "hip" IT investment.
That's right, you read that correctly.
A company's association with hip IT correlated to an increase in the CEO's pay. For every $1 million a company invested in fashionable tech, the CEO received a $45,000 bump in compensation, on average, the following year — REGARDLESS of how the company actually performed.
Are you still sitting down?
If you are anything like me, I could scarcely believe this. But it's true. And the research is rock solid. Backed up by public source available data from 1971 to 2002.
Hopefully, by now you are starting to take me seriously about a whole new and powerful way to capture the attention of your CEO. But you're probably wondering: What exactly do I do with this information? How do I present it to my CEO? What's in it for me?
I'll cover that in next week's post.