CHRO Alignment Series: Syncing with the CIO

Mo Fathelbab: [00:00:00] Welcome to today's episode of People and Strategy. I'm your host, Mo Fathelbab, president of International Facilitators Organization, People and Strategy is a podcast from the SHRM Executive Network, the premier network of executives in the field of human resources. Each week we bring you in-depth conversations with the country's top HR executives and thought leaders.

For today's conversation, I'm excited to be joined by Paul Tyson, founder and principal of tag, CXO, a network of on-demand fractional executives. Paul himself is also a fractional CIO. Welcome Paul.

Paul Theisen: Thank you, Mo. It's good to be here and I'm looking forward to the conversation.

Mo Fathelbab: Well, thank you. Great to have you with us to kick us off.

Tell us how you landed in a fractional CIO role and what that entails.

Paul Theisen: About, uh, seven or 8, 7, [00:01:00] 7 and a half years ago, I landed, uh, in an unexpected role, uh, which I referred to as a consulting role in a wonderful company in Orlando. And, uh, really looking back on that, retrospectively, it was a fractional executive CIO role.

I was the chief information officer or acting CIO for that firm for a period of time. We didn't call it that back then. We just called it consulting. But whoa, are those things different? So when I, when I came out of that. Role. Um, I was actually flying home on an airplane and I said, you know, every middle market company in America needs what we just did for this company.

And, uh, there's a talent gap in my view of it, was there's a technology leadership gap at the executive level, and, uh, we're in a, I'm in a unique position to help with that. I don't wanna just do a consulting agency. I wanna build a [00:02:00] firm and I want to invite lots of other people into this to go solve that gap for the middle markets.

So, um, that's how I found myself in my first fractional CIO role. And I've had many since then. And, uh, currently I'm not engaged as a CIO. Uh, I'm running the firm and serving lots of other CIOs with lots of other clients.

Mo Fathelbab: And so Paul, why are fractional executive roles so important right now?

Paul Theisen: And I think that the reason they're so important right now is because they genuinely fill a gap, a, a leadership vacuum that unless a, a specific and trained and, uh, you know, expert with experience is filling, uh, the role.

Uh, you know, as a domain expert, if they're not filling in that role, other people are doing it who are le perhaps less qualified, right? And less prepared to run the [00:03:00] role effectively. So what's happened with the, with fractional executives fractional, is, is think about it as in terms of access. You're able to access higher levels of talent for, for less cost.

On a part-time basis, and that creates a whole new pool of labor force, right? That can come in and do things at an executive level, an execution level for strategy and people leadership, and could contribution, uh, to the rest of the C-suite in terms of running the company and making decisions even outside of their domain.

But being a, a decision participant. I'll give you an example. I had a, a, a water filter salesman say to me one time, Paul, if you don't have a water filter, you are a water filter. And I, I've never forgotten that. Well, if you don't have a CIO, you are a CIO. How good of a CIO are you and are you prepared to fulfill that whole role [00:04:00] and uh, and to take on those accountabilities?

More and more we're seeing, uh, across, uh, companies and we focus a lot of the middle market that they are, um, re recognizing that they can take off that hat that they've been assigned and they can hand it to a career advocate, you know, expert that knows how to run that and they can pass the baton. So I think that's a fundamental reason why fractional executives are popular.

Another one is this. Fractional executives, if it's done right, are filling an actual role at a company, not just a, as a consultant working on a project. They'll work on projects, but they'll own the role. And with owning the role comes a certain level of accountability. Might I even say fiduciary accountability.

Okay. To represent that company and, and its interests as a co-executive. That's the difference between fractional and consulting.

Mo Fathelbab: So Paul, in your [00:05:00] perspective as a fractional CIO, how would you describe the symbiotic relationship between the CIO and the CHRO?

Paul Theisen: The symbiotic relationship of CIO and CHRO? I would say, you know, there, there's, there's really built in symbiosis or there should be, um, because both of them are consuming services from, from the other group.

So they're customers or consumers of those services, and both of them are providers of services that are consumed by the other group. So they're both providers and customers of each other. And so in that, I, I, so a technology group, a CIO, is looking for really good, capable people and needs help, recruiting them, hiring them, developing them, and then turning them into a team and providing culture with them.

Who better to turn to than the HR group? Who's sourcing the right people with the right roles, with the right skill sets, and then helping to cultur them, you know, into the organization to build teams. [00:06:00] Well, on the same token, a CIO provides systems and automation to the HR group, and they have tons of systems that are needed, and automation is a wonderful lever for them to leverage the capabilities of their own people in the HR organization.

So that's, that's a very practical. Sort of foundation stone for how to build symbiosis between those two roles. They need each other and they need each other to be successful in their own roles as co-executive. Now, beyond that, I think that that symbiosis is powerful if it's established because not only can that people and system and culture and engagement.

Uh, uh, help those two departments, but together, those two roles can have a vision for how to go help the rest of the company, get the right people to adopt the right technologies and, and build, uh, the culture of the company. See, uh, good technology leads to [00:07:00] good engage. Good engagement leads to, to good employee experience.

Employee experience leads to good retention. You know, there's, we all want this, you know, and, but there's a core between, uh, you know, we wanna move beyond implementing things and tools, and we want to use things in tools to create leverage and advantage. So the difference here is. Is, uh, you know, implementation is money spent.

Think about that. A solution adoption in an organization is money made. It's the outcome, it's the result of why we're doing this and what two better people than the CIO and the CHRO to say we are going to move forward with good employee experience when it comes to our systems. And we're not only gonna put the right people in the company, we're gonna empower them at the right systems, and we're gonna give them good experience to go do that.

And, uh, you know, that's a strategic, uh, nod to retention [00:08:00] and employee engagement. So that's where I think symbiosis starts and where it can go.

Mo Fathelbab: Important stuff. Uh, so Paul, now we're gonna go and do some trivia based, uh, questions based on recent research. Uh, we'll start with two multiple choice questions, followed by a true and false question.

Uh, make your best guess. Uh, there will be three questions, and afterwards we'll discuss the impact of these trends. Here we go. According to an I-C-I-M-S study, which of these factors is the top ranked factor? Holding back the HR IT partnership? Is it a limited budgets and resources? B, strategic disconnect between both sides or c resistances change from HR?

Paul Theisen: I would, I'm gonna say number two, strategic disconnect between both organizations. I think they can become tech.

Mo Fathelbab: You are correct. You are correct. The answer is B. Uh, while all these factors play a [00:09:00] role in HR, IT partnership, strategic disconnect was ranked as the top factor at 55%. Wow. A close second was limited budgets and resources at 48%.

And resistance to change, uh, from HR was ranked at 42%. Yeah. Resistance, but yeah. Okay,

Paul Theisen: good. Interesting. Very interesting. Yep.

Mo Fathelbab: According to the 2024 Gartner AI Survey, what percentage of CIOs focus on mitigating the potential negative impacts of AI and either employee work or wellbeing? Is it a 20%, B 10%, or C 5%?

I, I wanna say 20%. I think it's high. You are correct again.

Paul Theisen: Okay.

Mo Fathelbab: Else you think it's even higher. Uh, the survey found that one in five CIOs said they focus on mitigating the potential negative impacts of AI on either employee [00:10:00] work or wellbeing. Interesting. All right. Now we're gonna go to our true or false question, uh, based on a SHRM study of job postings for HR positions, technology skills command, an estimated premium over $20,000.

True or false? Hmm. False. The answer is true. The study reported an estimated premium of $23,775.

Paul Theisen: Okay, that's really interesting. And I, and I believe it, where my mind was is everybody needs technology skills now, today, and they're fully commoditized, but maybe, but maybe they're not, you know? So, so there is a lot.

Therein lies an assumption that either needs to be validated or eliminated, so we just eliminated one.

Mo Fathelbab: Wonderful. Wonderful. Well, thank you for playing the game. Now let's unpack the data. Based on your experience, where do you see the strategic disconnect occurring between the [00:11:00] CIO and the CHR?

Paul Theisen: I really believe that, uh, a lot of organizations, uh, a lot of CIOs and a lot of CHROs come into their relationship as, as department managers.

That's the hat that they're wearing. I run the, the IT group and the other person says, I run the HR group. And they have real and urgent needs in each of those groups. I need people, I need 'em now. I need you to recruit, I need to onboard, I need to do performance evaluations. I need, I need, I need, I need an employee portal.

You know, I need all of these things. And on the other side, I need systems. I need to upgrade my, uh, applicant tracking system. I need a better upgraded, uh, you know, uh, system. I needed a whole HRIS system if I had my way and, and. And all of these things. And what happens is the relationship people are very tactically focused, right?

And, and I think that sometimes, uh, the, uh, the [00:12:00] important things and the strategic things get sacrificed on the altar of urgent and tactical. And so I really think that, and here's what I think all of those things I just talked about are necessary. Mandatory, there are imperatives, right? We need people, we need systems.

We need to work together to go get those. Um, but we, if we're true leaders or we're true executive leaders, we should have people for that. I mean that in a very sincere way. We have people to go do that stuff, to work together, to team up together, to accomplish those things, to prioritize those things, to understand requirements and options and to make recommendations.

That's what our people will do for us. We, our relationship needs to be focused. On the strategic and the important, and the game changing things that an organization can focus on, where the only two people who can, who can partner on those things, uh, uh, and accomplish the things that we can accomplish together.

We're the only two people that can do that. We can only do the [00:13:00] things that we can only do, right? And so we should be about our business. So I, I think that, um, there, there is, in any relationship. Um, and especially a new relationship, there needs to be a rapport that's built and people need to understand each other's motives and uh, each other's strengths and perhaps weaknesses.

So I think it's rational to, um, to hold assumptions, but to validate or eliminate those assumptions. I already said that, but I really mean that here in the sense that both people are coming together and they have preconceived notions about the other organization. And, um, you need to dispel some of the myths and work together to get on the same page and develop a mutual respect for one another because people work well with who they wanna work with and whom they respect.

And so I think a good dose of humility is, is really, uh, important and coming into [00:14:00] every conversation and focusing the conversation on those things that we can do strategically, not only within our departments. More importantly, we touched on this earlier, how do we affect positive change at the firm in, in, and, uh, you know, have exponential outcomes with that?

And what are our respective roles in doing that?

Mo Fathelbab: Rapport, humility, and as strategic focus.

Paul Theisen: Mm-hmm. Right.

Mo Fathelbab: So the CHRO CIO Alliance has taken on, uh, new importance in the age of, of ai. What additional responsibilities are you seeing CHROs and CIOs be asked to take on?

Paul Theisen: Well, I think, uh, you know, the responsibilities, uh, are, are figure out ai, there's a lot of boards, you know, over the last couple of years, a lot of boards of directors that have said, what's our HR, what's our, what's our AI strategy?

What is it? And so I think that, you know, there's no CIO on Earth that could come up with an AI [00:15:00] strategy in a vacuum, right? I mean, the CHRO has a seat at that table necessarily, and fundamentally, and, uh, there's no CHRO that could build that strategy without, of course the C, the CIO being involved in that, you know, because we can't make promises to the organization that we can't deliver on.

Um, is, and as important as innovation is to an organization, what most larger organizations thrive on is reliability and predictability. And so that's, do the systems run and do they run reliably and can I get my work done today? Versus the other side of that coin is how much can we innovate and how fast can we innovate?

And the CIOs are going, whoa. That creates disruption. And disruption creates, uh, variability and variability, uh, affects my uptime and my service levels and all these other things. So there's nervous tension already. Now in the h that's [00:16:00] the nervous tension on the CIO side, that on the, on the HR side, the nervous tension is, is this gonna displace my workforce?

I'm supposed to be championing people, right? How is this going to affect my workforce? Um, so the responsibilities are, identify those things, understand that those fears are real, and uh, and then work together to, to identify those and address them together. I think that while there's fear of running our current organizations, there's also.

On the, on both sides of the table, CIO and CHRO, there's a fear of missing out. We don't want it, the AI bandwagon, you know, to, to pass us by, before we jump on, I would say that the responsibilities are this, um, level set, what your concerns are level set. That there is a fear of missing out, uh, level set that the AI relative to all, you know, technology, uh, tools is relatively new, right.

And we've. We're [00:17:00] moving through, I think we're, we're coming out of what people are referring to as the trough of despair. The trough of despair comes after the hype cycle, so, so it's good to be coming out of the trough of despair together because the products and the tools that are available are more real and more vetted.

Now and the players are, are starting to, uh, sort themselves out in terms of who's gonna be long term and actually add value long term and add value. So the job is to, to, for them, just to sort that out, deal with the fears and concerns, deal with the, the, the fear of missing out and enable the innovation engine at the company.

In other words, if it, if it is a sleepy organization, we must come together and embrace innovation and make it practical. A real part of our culture and, and lead our employees to embrace innovation and to manage up, to manage the rest of our C-Suite peers and our board of directors to, [00:18:00] uh, accept some measure of innovation that creates uncertainty.

We're gonna live with uncertainty. Let's do it on purpose. So there's that. I think that embracing change is probably more of something that we have to manage up than we have to manage down in terms of seniority in an organization and maybe something that we need to manage, um, for the workers that have been there longer versus the workers that have been in the workforce.

Um, you know, not as long.

Mo Fathelbab: Can you explain why we have to manage it up and not down?

Paul Theisen: I'm saying we have to manage up and uh, and we have to manage because those are leaders that don't want disruption. Right. And then we also have to manage, I think, uh, workers that have been in the workforce a lot longer because change becomes less comfortable, uh, than as well.

Yes. So not everybody embraces change the same way the younger workforce is gonna embrace it more. They're a great source of ideas. Um, but we have to mentor them and let them know that, that we're [00:19:00] running an operation here. We can't just chase a shiny object, right? But, and we have to tell the other people we're running an operation here, but we still have to innovate, right?

So we have to have a controlled innovation environment. We need to embrace change. And, and here's what I really think we need to harmonize the speed of innovation with the governance of innovation. We cannot just willy-nilly introduce things into the organization. 'cause that creates variation and, and instability.

Um, but if we, if we focus on speed and we focus on governance and we focus on innovation and we say it's not one of the other, it's all of this together. That's what a, now those are, that's very strategic and sort of principled based. Like those are the foundation stones. The responsibilities are what?

Use cases are gonna be the most beneficial for our type of business and our workforce. Let's identify those. Let's [00:20:00] prioritize those and let's start bench testing those. Let's do proof of concepts and let's, and let's put pressure and resources on this, but let's surround that program, the AI program, right?

The, the, the corporate program to go do this. Let's surround that with good speed, good governance. Good change management and, uh, and a dedication to excellence. So I think there needs to be a, in my opinion, a balanced approach and a collaborative. This is, if there's any reason for the CHRO and the CIO to be firmly planted in strategy, this would be it, right?

Technology is an amplifier. You're gonna amplify good, or you're gonna amplify bad. Let's make sure we're amplifying good.

Mo Fathelbab: All right. Well, speaking of AI and speaking of technology being an amplifier, how is a agentic AI shaping the CIO CHRO relationship?

Paul Theisen: We're not just querying them for answers, right?

They're not just giving us [00:21:00] encyclopedic answers by doing research on the internet. They're performing tasks and, and, and, uh, producing algorithms that, that reason through multiple data points. And through a basic course of it can pick a course of action and go execute on that course of action. I think it's so fascinating that the HR department now is going to the IT department to find new workers.

Do, do you have some digital workers that we can bring into the organization? Right?

Mo Fathelbab: Right.

Paul Theisen: So AI's not going to outright replace people. AI is going to replace people who don't adopt and embrace ai. And so I think that boy, um. How does it shape the relationship? Never in the, maybe the history of HR learning and development programs did we have to amplify our learning and development programs, right, to embrace where AI is taking us and to cate the, the community of employees around [00:22:00] that to embrace it effectively.

And technology is, uh, uh, providers. The CIOs are at the heart of that because they're provisioning the technology and assume accountabilities for it.

Mo Fathelbab: So Paul, when it comes to investing in new digital tools or systems, uh, how can HR and it jointly ensure those investments actually drive adoption and behavior change and not just implementation?

Paul Theisen: So many organizations stop at the finances of a project and they measure two things, is the project, uh, I want to, and they say, these are my two requirements. I want this project to be on time and I want this project to be on budget. Those are important, but they're missing a key ingredient, which you spoke about.

Uh, and that's is I want this project to be on value. How do I get beyond see on time and on budget? Are are KPIs that measure the success or failure of an implementation? Okay, on value then goes way beyond implementation [00:23:00] and it measures, did we get value, did we get a return on this investment? Did we create value in the organization?

So we need to train and reorient organizations and HR, the CHRO can focus on this when they're in planning meetings for software and, and rollouts. Is, are we on, are we, do we have a timeline? Do we have a budget? Are we focused on how we're gonna measure value? Right. So how do you get between, we've implemented this and we've fully adopted it, and how do we come together to achieve that?

In the old days, we called that organizational change management. You must necessarily, and with every imperative, bring people along in the process, give people a feedback loop, but then design in a process to respond to that feedback positively and do it quickly. The shorter the feedback loop and the more reactive that it is to the need, the better off it's gonna be.

And that's HR is [00:24:00] uniquely positioned to send the human message of engagement and to be the advocate for the human in the loop here, to challenge the, the h uh, I'm sorry, the it provisioners of new systems and ask these four questions, is it useful to the end user? Is it. Simple. Just stop right there. Is it useful if you can't get past useful, you're automating unnecessarily, right?

Is it, uh, simple? Is it dependable? Is it accessible? And if you meet those criteria, you will have happy, engaged users. But do you know who champions the HR function?

Mo Fathelbab: Speaking of the people, people, many HR leaders are being asked to have some AI or technical knowledge themselves. Uh, what level of tech fluency do you think CHROs need to have in this day and age?

Paul Theisen: I love it. Um, I would not hesitate to [00:25:00] go to some of the, the MBA program, the executive MBA programs that are out there, that are online and take some AI training at, at an executive level, you need executive level training. Because you're running an an executive, you're running an organization as an accountable executive.

You need to learn and be exposed to not just the tools that are out there, but the application of those tools in the marketplace to, in real businesses and with an executive posture. Okay? So that's number one. Number two is, um, take some, take some of your own training.

Mo Fathelbab: You know, there's tons of stuff online.

So Paul, as we wrap up our conversation, let's end with some final words. If you could give one piece of advice to CHROs about building High Trust partnership with the CIO, what would it be?

Paul Theisen: I would tell CHROs, look, just go to the ccio. And tell 'em you want to have a high trust, productive relationship, and that's [00:26:00] your intent.

Right? So there's a degree of humility I think that goes with that. I think that most CIOs out there, the preponderance of them, would love to hear that from the other executives. We have a unique opportunity to collaborate to affect positive change and progress at the whole company together. You're running automation, I'm running people, let's put 'em together, and, and they're both critically important and let's go signal that to the business in a unified front.

And so let's work together to establish that relationship. What will you need from me to help make that happen for you? And let's have a dialogue about that. This is probably a lunch conversation. Go and break bread and get to know each other and talk about family, and talk about hopes and dreams, and talk about your departments.

Lean into what this person is passionate about. Ask your CIO. What are you passionate about? [00:27:00] I mean, you do a lot of technology. You lead people, you know. Talk to me about what you're passionate about. Let me help you with that. And the CIO should do that as well. I mean, people are not just, uh, position holders.

They're, they're, they're so multifaceted. Get to know the person, build a rapport, and because that's the stuff of trust, trust, trust is, is, comes when you know a person and you get beyond knowing a person and you know you like that person. And, and you get beyond liking that person. Now you have experience working with that person and you see how they are and what their character makeup is like, and how they are in good times and tough times.

And, and now you trust a person, right? And so I think transparency is, is important, but you've gotta back up that vulnerability by testing it, right? Are they gonna honor that vulnerability? Right? And if you ever feel like they're not. Go to them. Go to [00:28:00] them and call 'em out on that behavior and say, here's where my concerns are.

I think that avoidance never works. We have to be humble, but take our grievances to people and have an honest conversation with them about how this affects me. Right, or what concerns I have. And so an honest relationship about telling them what you want, managing to those expectations, being brave enough to go have a conversation that's uncomfortable once in a while.

Mo Fathelbab: Yeah. Thank you Paul. Of course. And that's where we'll end it for this episode of People and Strategy. A huge thanks to Paul for your valuable insights. Thanks for tuning in. You could follow the People in Strategy podcast wherever you get your podcast. Also podcast reviews have a real impact on podcast visibility.

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