Roadblock: The Business Unit CIO

By Kim S. Nash  |  Posted 2003-05-01 Print this article Print

When a diversified company decides to unify technology across business units, power is rearranged.


When a diversified company decides to unify technology across business units, power is rearranged. Some people lose it (field executives) and others gain (often the corporate chief information officer). There's plenty of motive and opportunity for the technology managers in business units not to cooperate fully with headquarters. The field managers, for example, may not believe that any corporate-level CIO in a faraway office can really know what's best for specific businesses. On the other side, the ascending CIO at the head office is perceived as dismissive or, worse, antagonistic. Both sides are usually at fault.


Avoid vexation about representation. A complaint from former business-unit technology managers at PepsiCo is that the top technologist for the corporate group didn't seem to understand the nuances of what makes one business unit different from another. For instance, one manager complained that Pepsi Bottling Group—which buys secret syrup from PepsiCo, adds carbonated water, and sells and delivers the drink to stores—has different needs in data warehouse technology than Frito-Lay, a PepsiCo unit that is 2.5 times the size of the bottler and that sells lightweight bags of fragile chips with shorter shelf lives.

It was frustrating to feel unheard and more so to battle for permission to buy hardware or software outside the decreed standard. If the corporate-level technology office includes staff from just one or two—or maybe none—of the business units, all the other units will feel overlooked or under-heard. One remedy: seed the corporate group with managers who have roots in each of the company's various business units.

Be nice. Firm, but nice. A certain amount of confrontation comes with the job of getting people who have historically made their own decisions to cede authority. But be respectful. When business-side managers fear losing power, they, as would anyone else, close up. Explain exactly how their help will make the larger company work better and be stronger, and how, in turn, that will reflect very well on them. One key piece is communicating the right way, says Ken Harris, former CIO at Pepsi-Cola North America. Harris, who is CIO at The Gap and was CIO at Nike before that, says each company has its own preferred way to talk. Nike is more of an e-mail culture; Pepsi is voice mail. The Gap is visual; executives love charts and diagrams.

Reward well. When business-unit managers finish a project with the corporate group, reward them. Reward them big. A monetary bonus is good but extra days off is better, says Leon Kappelman, a business professor who runs the Information Systems Research Center at the University of North Texas in Denton. The manager will remember that long weekend away or that Thursday golf game. If there are no bonuses or recognition for working with the corporate group, who's going to do it? It's not that people are motivated solely by money, but it helps. Employees also absorb the unspoken priorities of a company by watching those above them. Business-unit managers must be seen interacting and cooperating with the corporate group, Kappelman says. "You do what your boss tells you, what your boss thinks is important."

Senior Writer
Kim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.

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