Vol 49, No 3
Shared vision and trust are crucial to a good relationship between the HR executive and the CIO
Mike Williams, senior vice president of HR, and Greg Wilson, chief information officer (CIO), began working at TransAlta Corp. on the same day nearly two years ago. In their early weeks on the job at TransAlta, a power generating and wholesale marketing company in Calgary, Alberta, Canada, they lived at the same hotel, dined together and shared perceptions of their new employer.
“We were lucky,” Wilson says. “We talked about what we were seeing. We were both from tech companies, and we were shocked by the state of technology in the utility industry. In those first days we worked on aligning our vision and goals.”
Williams agrees. “Today we have a common vision of what we’re trying to do. To some extent we’re flip sides of the same coin. Our joint task as leaders in the organization is to help it become more effective and more productive. Greg does it from a process and technology point of view. I’m doing it from a people point of view,” he says.
To build a good relationship, the HR executive and the CIO do not need to start their jobs on the same day as Williams and Wilson fortuitously did. But they must reach a point where they share a vision, align their goals and trust each other.
“An effective relationship between the HR executive and the CIO is absolutely critical to the success of HR strategies,” says Naomi Bloom, president of Bloom & Wallace, a consulting firm in Fort Myers, Fla., that provides strategic HR consulting to Fortune 500 companies. The once-wide gulf between the information technology (IT) executive and the HR executive—one was from Mars, the other from Venus—has narrowed in the past decade, Bloom says. But when a gap exists, as it still often does, it can cause great harm to companies.
Many of Bloom’s consulting jobs involve HR executives and CIOs who are not working together effectively. “Disrespect is at the core of a lot of these problems,” she says. “IT people see HR people as fuzzy-minded, nonanalytical people with bad work habits. HR people see IT people as lacking interpersonal skills, too machine-oriented and not valuing the people side of the business. These are the stereotypes that lead to inbred disrespect.”
HR executives must work to overcome these stereotypes. These days the CIO is a key business relationship for the HR executive. The most important, of course, is the CEO. But much of an HR executive’s success is tied to technology-enabled HR processes, which means the relationship with the CIO is crucial to getting the results that will satisfy the CEO, Bloom says.
The relationship forged by Williams and Wilson and by others like them demonstrates how HR can benefit from a strong partnership with the CIO, thus avoiding the dismal fate of those who have an adversarial association.
Bloom and other consultants can tell plenty of dreadful stories about bad relationships between CIOs and HR executives leading to disastrous results, but, for obvious reasons, they decline to name names. Generically, a fairly common “classic horror story,” Bloom says, goes something like this:
The HR executive has avoided learning anything about technology. The CIO thinks the HR executive is squishy and can’t get his act together. The situation is exacerbated if either one lacks general management experience. Too often, Bloom says, CIOs are promoted from the IT ranks and HR executives from the HR ranks. Both may have exceptional domain-related knowledge, but neither has a strategic vision or a clue about what is good for the business. These executives are on a collision course, she says.
The crash might come when the HR executive returns from a conference at long last jazzed about technology—but with his mind set on one piece of software he heard about, without understanding what it can and cannot do. Or the clash might occur when the CIO returns from a conference determined to impose a particular piece of software on his company—and on HR. The real problem is that neither executive approaches the situation from a business perspective: What business or process problem is either one of them trying to solve?
“The HR executive should have said, ‘We really need to improve the alignment between what we take responsibility for and the broader business objectives.’ And the CIO should have been engaged in this discussion from early on,” says Bloom.
But the conflict may run below the surface, another Fortune 500 consultant notes. Sometimes an HR executive and a CIO have a sufficiently good relationship but their staffs are at each other’s throats, says Bob Stambaugh, president of Kapa’a Associates in Kekaha, Hawaii. “Technology projects don’t often fail because of the disconnect between the HR executive and the CIO,” he says. “They fail because one or two levels down, the staffs don’t understand.” There is quite a bit of contempt for each other between IT and HR staffs, he says. “In most cases, it is a lack of time or willingness to understand the other.”
The problem often comes down to money. Jason Averbook, director of global product marketing for PeopleSoft Inc., based in Pleasanton, Calif., sees more HR executives and CIOs than ever marching to the same tune, driving toward the same goals and aligning their visions. Still, difficulties arise when the HR executive must battle for the same limited funds that every other company executive is after—and all the executives are the CIO’s customers. “The HR executive’s role is to make a business case strong enough to outdo his or her peers who are all competing for one pool of money the CIO has to spend.” Friction with the CIO is inevitable, he says.
Deborah Schmidt, vice president of business solutions for SAP AG, a business-software provider based in Walldorf, Germany, agrees that budgets have an impact but says it can be a positive one. “It varies by company, but we’re seeing a healthy improvement in the relationship between CIO and HR executive.” Tighter budgets have drawn these executives closer by requiring them to work together on a business case for major projects and set priorities, she says. “There is a tremendous opportunity for them both to make a huge impact in cost reduction and leveraging resources across the enterprise.”
Shared Goals and Vision
HR executive Williams says the solid relationship he and CIO Wilson have at TransAlta would have evolved regardless of whether they started at the company the same day. Nonetheless, he says, “it was helpful that we joined and were going through our learning curve at the same time. We were both trying to learn who’s who and what the issues were. That naturally spawned discussions. We also understood that a productive relationship was the key to both our successes.”
By the time the two new executives arrived at TransAlta, the company had already rolled out a product from SAP, and the HR and IT staffs had a good relationship, Wilson says. But the company had not mounted any significant effort to make the best use of the technology. SAP was collecting data, but people were not widely using the applications, he says.
“We were focused on SAP for corporate and financial applications,” says Wilson. “But we hadn’t pushed these applications out into the business units.”
Williams found that the HR staff was using SAP well, but self-service for managers and employees was virtually nonexistent. From their different vantage points, both executives saw the same problem.
“There was a superficial understanding of technology at TransAlta and an environment where employees expected things to be done for them—processes that can be done now as employee self-service,” says Williams. “The challenge was how to get the organization to embrace it. I characterize this as change management.”
Williams and Wilson were able to collaborate in getting this done, in part because they had worked at high-tech firms that were farther ahead of most companies in using technology. Williams had been at Newbridge Networks Corp. in Kanata, Ontario, Canada, before he joined TransAlta, and earlier he worked at Cisco Systems Inc. of San Jose, Calif., which in the 1990s was an industry leader in automating business processes, including HR. In one of his previous roles, Wilson had spent several years at IBM Corp. of Armonk, N.Y.
“Because Mike [Williams] came from the same industry that I did, we were in violent agreement on vision and goals,” says Wilson. “He understood technology. I understood HR. Every place I had worked had already moved from a home-grown HR system to SAP or an outsourced arrangement.”
Williams agrees that having similar backgrounds makes their relationship easier. It also helps that they both believe salesmanship is a big part of their jobs: helping the workforce—2,500 employees in Canada, Mexico, Australia and the United States—understand the technology being rolled out and creating a desire to adopt it.
Since TransAlta implemented SAP three years ago, Williams and his predecessor were able to reduce the HR staff to 35 from 54. Williams estimates HR-related technology had a return on investment of 107 percent in 2003 alone.
Though the two executives no longer live in that hotel, they still talk a lot with each other. “We meet formally once a month,” says Williams. “We also meet as part of the executive team every other week, and we talk as necessary in a continuous dialog on the issues we are driving.”
A Business Orientation
Wilson and Williams say another key to their strong relationship is their management experience outside IT and HR. “General management is extremely important,” says Wilson. “The older I get, the more I see people not understanding the business.” Maybe one-third of CIOs have had general management experience outside IT, he says. Williams says the ratio for HR executives might be the same.
Business background has worked for other teams as well. For example, Jim Porter, senior vice president of HR at Carlson Companies Inc., a Minneapolis-based global restaurant, travel and leisure services company, agrees that a business orientation is essential for both parties. “By and large, HR people today—the best ones—are businesspeople first.”
Porter’s IT counterpart agrees. Nothing will derail an IT project faster than the lack of a business case for it, says Steve Brown, senior vice president and CIO. “Companies lose sight of the fact that any technology investment must be driven by a business process requirement.”
Only in the past five years or so have many CIOs and HR executives added business or other general management experience to their resumes. Bloom estimates that no more than one-fifth of HR executives in large corporations have meaningful experience outside HR—and the portion at smaller companies may be even smaller.
Those who have such experience recognize its value. For example, Dave Aker, senior vice president of worldwide HR at information technology giant Unisys Corp. in Blue Bell, Pa., says his early career in production management for Brunswick Corp., a recreational equipment manufacturer in Lake Forest, Ill., made him a stronger HR executive. “I had an operational background, and at one point in my career at Unisys I also had to run a number of service functions, including IT,” Aker says. Facilities and asset management are still among his responsibilities. He has an HR staff of 450 worldwide, including 80 in the corporate university.
Understanding business is important to the success of the HR-CIO relationship because the two need to work together to make the case for major projects, Aker says. “In a company like Unisys, which focuses so much on shareholder value and the business, you wouldn’t last long without a business case for your projects. Just whining doesn’t get it.”
In 1996 Aker helped to recruit and hire Unisys’ CIO, John Carrow. The corporation was making a transition from selling big computers to becoming an IT services firm. Carrow, who had spent several years in IT at General Electric Co., arrived in time to work on Unisys’ upgrade from PeopleSoft 5.1 to PeopleSoft 7.5.
The Unisys executive committee’s deep involvement in all technology decisions, especially setting priorities, makes Carrow’s and Aker’s jobs—and their relationship—easier. “We run in a centralized manner,” says Carrow. Major IT projects are part of the annual strategic planning process. Members of the executive committee, including Carrow, Aker, the CEO, the CFO and all business unit chiefs, debate and decide which IT projects are priorities. “What’s great about this process is that it really clears the air of conflict once the strategic direction is set at the top and then we’re in execution mode,” says Carrow.
The two executives’ offices are about 20 feet apart. Their communication is primarily ad hoc, and they talk all the time, they say.
Proximity also has proved beneficial for Porter and Brown at Carlson Companies. HR executive Porter relocated his office next to Brown’s when the CIO arrived several months ago. “I literally talk to Steve [Brown] every day,” says Porter. “I can’t walk to my office without walking past Steve’s office.” He says the two decided to locate their offices next to each other because they were about to embark on a major upgrade from PeopleSoft 7.5 to PeopleSoft 8.3, greatly expanding employee self-service in the process.
Trust in the Ranks
Two program managers—one each for Porter and Brown—are working together on the upgrade, which involves about 50 people from IT, HR and outside contractors. Those two key staffers are “joined at the hip” on this project, says Porter, who has about 180 HR staff members companywide. The implementation has helped both staffs respect each other, he says.
When Carrow arrived at Unisys, he suggested to Aker that the HR person most involved in IT issues attend IT meetings to represent HR concerns. Both men say this not only helps the two of them work together but also has had a positive effect on the two staffs. With members of their respective staffs working together on the upgrade to PeopleSoft 7.5 soon after Carrow arrived, the two executives and their staffs got off on the right foot, says Aker. “John [Carrow] supported it, helped drive it and worked with me on the business case. Not he and I specifically, but his top people and mine worked on it together. That had not happened when we installed PeopleSoft 5.1.”
Carrow agrees that the upgrade process gave both executives a chance to build bridges between the two staffs. PeopleSoft 5.1 had included a great deal of customization, which IT then had to maintain. Both executives and their staffs agreed at the beginning of the upgrade that they would keep customization to a minimum. The staffs worked together to accomplish that goal, Carrow says. “The initiative for self-service and the PeopleSoft upgrade caused a bonding to take place,” he says. “And it created a great deal of understanding among IT for HR processes.”
The relationship between the CIO and the HR executive is the key to building respect between IT and HR staffs, Carrow says. “Every institution I’ve been in, the troops follow the example of the leaders,” he says. “If the leaders are in conflict, it echoes down through the company, and things don’t get done.”
Carrow and his staff generally have more tension with other parts of the company than with HR, he says. He attributes that to the collaborative nature of his relationship with Aker and the cooperation between the two staffs. “When conflict comes is when the businesspeople define requirements, dump them on IT and say, ‘Here, now it is an IT project.’ Whenever you have a you-and-they situation, you are destined to fail.”
Bill Roberts, technology contributing editor for HR Magazine, is a freelance writer based in Los Altos, Calif., who covers business, technology and management issues.