CIO turned VC Brian Hoyt draws on his experience prepping companies for IPO and other liquidity events, including his own, to outline a playbook for crossing the start-up to scale-up chasm.
This article was originally published on CIO.com by Michael Bertha, Partner at Metis Strategy and Duke Dyksterhouse, Senior Associate at Metis Strategy
Suppose you lead IT at a VC-backed startup. It just crossed $100M in revenue and is approaching a major liquidity event, such as an IPO. It’s exciting stuff. But as you speak with an expanding cadre of lawyers, accountants, and bankers, you start to appreciate what such an event means for your department.
You start to see the cracks in its foundation. You see the data by which Wall Street will judge your business is scattered across the company, stored and formatted unsystematically. You see the systems that must be repaired (or built) if the firm is to comply with SOX. You even acknowledge that IT has been kept afloat by managed service providers and fractional employees. All of this, you realize, must change. You’ve reached a tipping point at which your IT capabilities must be formalized, but you don’t know where to start.
Fortunately, Brian Hoyt does — and he’s been there, having served as CIO of real-time 3D content creator Unity Technologies, for which he prepared the IT department for IPO in 2020. Today he serves as partner and chief operating officer of Parkway Venture Capital, which invests in software and AI/ML companies across various sectors. He helps the firm’s portfolio companies tackle the intricacies of crossing the start-up to scale-up chasm.
Here, Hoyt shares what he’s learned from scaling IT in rapid-growth companies, both as a CIO and an investor, and what should be considered by digital and technology leaders whose firms are heading for major liquidity events — how they might structure their departments so that the company can weather that liquidity milestone and the S-curves in the years that follow.
There are no exact thresholds for formalizing your IT capabilities, including hiring or promoting a CIO, says Hoyt, but there is one important sign: talk among your colleagues about redoing the company’s ERP system.
“I think people usually go QuickBooks, NetSuite, then onto something else, or they redo NetSuite. And often your accounting team had to implement NetSuite without IT’s support,” he says. “It works for their purposes for the time, but when it needs to be refashioned so that it can scale, that’s the time to bring in someone with some seniority, someone who’s been through it, because it’s really hard.”
Why does an ERP redo or implementation present such a great opportunity to evolve your IT organization? A couple of reasons. First because, as Hoyt observes, ERP implementations are notoriously difficult. Few leaders will volunteer to drive the work and often it will fall to the accounting team. “In many cases that won’t work out,” he says, “because the accounting team must devote themselves to their principal work, which is critical, and because they have lives and implementing ERP software sucks.”
But also, ERP systems rely heavily on IT-supported capabilities, so any work necessary to implement one will likely involve your team anyway. You might as well be the one to command that work; as a tech leader, you’re especially well suited to it, and doing so will give you reason to acquire resources that lend themselves to causes beyond those related to ERP. In other words, remodeling your ERP can afford the chance to remodel your department — to effectively say, “If we’re going to do this, I’ll need the following.”
Of course, the ERP sign is only a rough guide, says Hoyt. The right time depends on your business and industry; the more regulated it is, the sooner you should start. He uses selling into enterprise software as an example. “If you’re going through a lot of security reviews, plan on hiring a CIO earlier. My first question [to entrepreneurs in that space] is: How are you getting through security reviews? And they all groan. The people who have a clear answer are going to do better.”
As it happens, regulation — or compliance — is another area for which you’ll need to hire or promote a leader. Although Hoyt stresses he isn’t one to “insist that you hire from outside,” here you likely need to.
“You need someone who knows the territory, who knows Sarbanes-Oxley and the language of the auditor and preferably someone who’s even worked at your auditor’s firm and can speak their language and prepare everything,” he says. “Otherwise [the auditors] will grind you into a fine powder because they have an endless bench of people to schedule meetings and ask that processes be explained.”
There are plenty of candidates for this role, Hoyt says, but you might need to look outside the box. “They might not be in a job called ‘Head of Compliance.’ It might be ‘IT auditor,’ and they’re tired of flying between Nebraska and New York every week. And I think this has been a huge part of what I’ve done in the past, is finding this person.”
You’ll also need someone to lead infrastructure and ops, which rarely gets the attention it deserves when the firm’s still young and focused on core products and the viability of its business model. Often by the time the firm’s leaders start talking about going public or agreeing to sell, the firm’s foundational technologies may be in need of a closer look. A major piece of this domain is security, which Hoyt says can roll up to the infrastructure and ops lead at first but must eventually become a separate function.
“As your firm grows and starts looking to go public and becomes a bigger topic, you become a bigger target,” he says. “Some attacks from sophisticated bad actors are unavoidable, but you at least want to ensure that you don’t leave yourself vulnerable to avoidable slips.”
Finally, you need someone to lead your financial and business systems. “I love accountants interested in systems,” says Hoyt. “They’re often perfect to lead this area, and a lot of modern CIOs need technically minded leaders that they can trust to know whether a system is out of whack or a piece of work can be executed.”
Why is this leader so vital? Largely, Hoyt says, because of the projects you’ll have to undertake to prepare for your liquidity event.
Hoyt suggests that CIOs can learn much about the projects they’ll have to drive for a liquidity event from the focus of Wall Street earnings calls.
“They’re all about financial predictability and accuracy. Your firm’s viability as a financial asset largely comes down to investors asking, ‘Can we trust this company’s numbers? Will they be delivered on time?’ And if you get your numbers wrong, or they’re late, you can’t fix things by saying, ‘Well, you know, my IT person didn’t come through,’” he says. “And you can’t continue to spend 90 minutes in exec meetings arguing about whether the data you’re all looking at is right or how it’s defined. If those conversations are still going on, then you know there’s work to be done and that you need to start it as soon as possible.”
Getting the numbers right may sound simple, but it’s grueling work, Hoyt says, starting with getting your data right at the source.
“You have to stop fixing problems in the data layer, relying on data scientists to cobble together the numbers you need. And if continuing that approach is advocated by the executives you work with, if it’s considered ‘good enough,’ quit,” he says. “Getting the numbers right at the source requires that you straighten out not only the systems that hold the data, all those pipelines of information, but also the processes whereby that data is captured and managed. No tool will ever entirely erase the friction of getting people to enter their data in a CRM.”
The second piece to getting the numbers right comes at the end: closing the books. While this process is a near ubiquitous struggle for all growing companies, Hoyt offers two points of optimism. “First,” he explains, “many teams struggle to close the books simply because the company hasn’t invested in the proper tools. They’ve kicked the can down the street. And second, you have a clear metric of improvement: the number of days taken to close.” Hoyt suggests investing in the proper tools and then trying to shave the days-to-close each quarter.
Get your numbers right, secure your company, bring it into compliance, and iron out your ops and infrastructure. Do these things and you’re a long way toward being ready for a major liquidity event — or just your company’s next chapter.
Hoyt is so knowledgeable in this area that he answered virtually every one of our questions without hesitating. So it should say a lot that, when asked what one bit of advice he’d leave with CIOs preparing for a liquidity event, he pondered his answer for what seemed like 10 interminable seconds.
“Make sure you have the full support of the top officers — the CEO and CFO, or COO. It’s hard work. And to some extent you’re going to have to make people’s lives harder, so there’s going to be friction,” Hoyt says. “The only way you’re going to overcome it is if you have top-down alignment. As time goes on, more CIOs are reporting to CFOs or COOs or CEOs. But in some firms, the CIO still reports to someone farther down the food chain. That won’t cut it in a firm preparing for an IPO.”
And that’s good news for IT leaders looking to take a step forward with their careers at startups and beyond, he adds.
“CIOs hold a unique position,” says Hoyt. “They can see every part of the company. They see the challenges regarding real estate and ERP and so on. That purview has to be recognized and respected if a firm is serious about playing in the big leagues.”
In transforming your IT workforce, modeling its to-be composition is a necessary and smart first step, but it represents only the tip of the iceberg. Here’s how to pressure-test your model against the realities of execution.
This article was originally published on CIO.com by Michael Bertha, Partner at Metis Strategy and Ishan Prakash, Manager at Metis Strategy
In today’s ever-expanding digital landscape, in which many IT teams operate across geographies, it’s no secret that your ability to leverage technology to its fullest depends crucially on your workforce composition: on how your resources are allocated across various sourcing models, namely, FTEs, onshore, nearshore and offshore. As technology becomes ever more important to strategy, IT leaders are reconsidering their workforce compositions. Where they once optimized predominantly for cost, they’re now weighing that one variable more carefully against many others, including productivity, digital maturity, and the development of longstanding capabilities.
And though modeling the composition of a to-be workforce is a necessary and smart first step, it represents only the tip of the iceberg. In other words, it’s unrealistic to redeploy a role as part of a different sourcing model and expect instant productivity gains. Countless variables must be considered: skillset alignment and maturity, time zone differences, and ways of working (both within a team and across the organization), and so on.
Acknowledging these challenges and complexities, how can one pressure-test their spreadsheet exercise against the realities of execution? Drawing from our collaborations with several Fortune 500 clients on this topic, we suggest an archetype-based approach, one that, when executed well, will allow you to charge ahead with implementing your to-be workforce composition, and with the confidence that it reflects the needs of your organization.
By shifting the composition of your workforce, you are bound to affect certain functions, capabilities, or products. Begin by understanding those entities’ remit and ways of working. Are they developing novel products and services? Configuring a package solution? What key technologies are they using? What skills will enable operations in the new model? Are they working in agile? If so, what flavor do they employ?
As an example, consider the case of a global retail client. In assessing the demand profile of the team that oversees their fulfillment capability, the client examined their inventory management solution, a niche one, and determined that, even though the company might benefit by bringing the solution’s support team nearshore, the right skills would be hard to find in the short run.
Cataloging the answers to these questions provides a fact base that allows you to understand what capabilities, roles, and skills will be needed to support demand. And perhaps equally important, it allows you to understand which of those capabilities are fungible across sourcing models, and which are, at least in the short run, tied to specific locations or vendors.
After constructing a demand profile for each function, look across those profiles. Reconcile and rationalize them. And make sure the various types of demand will be supported by creating a master set of archetypes.
What’s an archetype? In this context, archetypes encompass the roles, responsibilities, and geographies that constitute a specific capability and that are required to support a certain type of demand.
As an example, consider the archetypical teams found at one of our global retail clients. For one, they have an infrastructure delivery team archetype, which consists of a nearshore engineering delivery manager, a scrum team, and both a nearshore and offshore delivery team (i.e., developers), the latter supplementing the former with overnight or follow-the-sun support. They also have single or multi-capability delivery teams that work on, among other things, innovation and product development, and operations and maintenance. As you can imagine, the archetype after which these teams are modeled varies based on the demand profiles they are constructed to satisfy. While every organization is different, we often challenge our clients to limit themselves to six archetypes.
By undertaking this exercise, you not only confirm that your teams are structured such that they can both support demand and satisfy the objectives of the workforce shift; you create a vehicle for scale and standardization in what is likely to be a multi-vendor, multi-geography workforce.
Having established a master set of archetypes, it’s crucial to apply them to each function’s to-be workforce composition. Doing so will reveal discrepancies between those archetypes needed to satisfy demand and those targeted for the to-be workforce compositions, which may have been painted with broad strokes in a top-down exercise that gave little consideration to execution.
By applying the archetypes to your to-be model, you will quickly see where your current workforce easily ports into the new model, and where there are gaps that must be closed through some combination of reskilling, recruiting, and partner sourcing. The time it takes to execute these tactics will inform the speed and sequencing of implementation.
Here you can also take stock of the various ways of working practiced by the different capabilities or functions. If those capabilities and functions work similarly then perhaps it will suffice, as responsibilities change in the new model, to simply recalibrate planning and execution processes. If they work quite differently, however, then a major change will likely complicate both their work and the effort to shift the workforce composition. The discrepancy may indeed merit a broader reset as you move toward the to-be model. It is also at this point that more attention tends to be given to an organization’s horizontal capabilities. One such capability that often surfaces is Knowledge Management: how do we ensure that in changing or relocating a resource, we don’t lose critical institutional knowledge?
By the end of this exercise, you will have effectively pressure-tested your to-be model. You will have uncovered a clear set of gaps that, when accounted for in your roadmap, will help you avoid surprises as you move towards the to-be workforce model. You will also have created a set of archetypes that transcend the seams of your workforce ecosystem and bring harmony and scale to your multi-vendor, multi-geography workforce.
If your organization is anything like those of our clients,’ you will have realized that a shift in global workforce composition, what may initially feel like a lift and shift of resources, is akin to engineering a skyscraper: structural integrity, precision, and attention to detail are paramount to ensuring that the building can withstand any pressures and function according to the needs of its occupiers and stakeholders.
Walgreens’ Stephen Ma shares why fewer architects, with wider domain expertise, may close the gap between EA’s ethos and its perceived value proposition.
Skim recent articles about enterprise architecture (EA) and you’ll notice a contradiction. Of them, plenty suggest that, unless a company develops a strong EA muscle, it will limit itself. Yet just as many seem to question the function’s value, or spotlight material that does. A recent report from Forrester, for example, opens: “[While] enterprise architecture remains a critical capability … many digital and IT professionals view enterprise architecture as a roadblock that adds no real value.”
All this contradiction suggests that EA, as a function, may be suffering an identity crisis, but Stephen Ma — acting chief architect at Walgreens — is not about it.
Ma doesn’t object from a place of defensiveness — he knows the function’s value. But he’s frustrated that the discipline’s value hasn’t been communicated as well as it should be, a grave issue in today’s business climate, in which every role of every function is under scrutiny. He also thinks the solution is straightforward.
“We need a full-stack architect,” he says.
That’s right: According to Ma, the solution to EA’s identity crisis is fewer architects, but ones with the ability to traverse multiple architectural domains.
To understand what makes an architect “full stack,” we first need to define EA. Per Gartner:
“Enterprise architecture (EA) is a discipline for proactively and holistically leading enterprise responses to disruptive forces by identifying and analyzing the execution of change toward desired business vision and outcomes. EA delivers value by presenting business and IT leaders with signature-ready recommendations for adjusting policies and projects to achieve targeted business outcomes that capitalize on relevant business disruptions.”
Not all this work gets done by architects of the same type. By Ma’s count, there are at least four major architect types: Business, Solution, Enterprise, and Technical. Each works across at least two of six major domains of expertise: Business, Product, Design, Engineering, Delivery, and Support. None of them works across all six.
And herein lies the problem, says Ma: When business stakeholders seek to understand EA’s value proposition, or even check the status of a project, they may get different answers depending on whom they ask. It’s the three-blind-men-describing-an-elephant problem: The man who feels the tail describes an animal very different from the one described by the man feeling the abdomen, or by the one feeling the ears and tusks. Though the variety in their descriptions may reflect the function’s comprehensiveness, to the uneducated executive, it sounds like misalignment. That executive feels that, to get a complete picture, he or she must piece it together him or herself.
As Ma sees it, this perception has never been more damning than it is today.
“A lot of people, during COVID, really thought COVID was going to live with us for the foreseeable future, so companies made big digital bets on how people work, how customers interact … and they over-hired,” he explains.
Among these digital bets was greater investment in technological functions believed to critically enable strategy and scale in a remote world — functions like enterprise architecture. Ma recalls how difficult it was to attract talent to CVS, where he was leading architecture at the time.
“I would put a job description out there for a really quality principal architect or director position, and I would get one good resume maybe every three weeks,” he says. “It took me six months to even think about finding somebody good.”
Of course, in the end, many of those bets didn’t pan out. The pandemic ended, many customers returned to their usual patterns of behavior, and about a year ago, companies began revisiting hiring decisions they made under different pretenses, asking, “What exactly does this role do?”
And now, with technologies such as AI emerging, they’re asking twice as emphatically. Ma warns all architects that they need to be able to answer this question clearly, consistently, and persuasively.
“I’ve actually heard fellow architects say, in describing their role, that they’re ‘marriage counselors.’ Relationship-building is very important, but it alone is no longer enough. Architects have to know what they are talking about at a deep technical level,” he says.
To solve this problem, Ma sees the emergence of a full-stack architect who can describe the whole elephant — and enhance EA’s service delivery model by several means.
First, the full-stack architect could ensure the function’s other architects are indeed aligned, not only among themselves, but with stakeholders from both the business and engineering.
That last bit shouldn’t be overlooked, Ma says. While much attention gets paid to the notion that architects should be able to work fluently with the business, they should, in fact, work just as fluently with Engineering, meaning that whoever steps into the role should wield deep technical expertise, an attribute vital to earning the respect of engineers, and one that more traditional enterprise architects lack.
For both types of stakeholders, then, the full-stack architect could serve as a single point of contact. Less “telephone,” as it were. And it could clarify the value proposition of EA as a singular function — and with respect to the business it serves. Finally, the role would probably make a few other architects unnecessary, or at least allow them to concentrate more fully on their respective principal responsibilities. No longer would they have to coordinate their peers.
Ma’s inspiration for the role finds its origin in the full-stack engineer, as Ma sees EA today evolving similarly to how software engineering evolved about 15 years ago. During that time, as social media and e-commerce exploded, so too did the variety of software engineers holding the seams together. Those engineers gradually sorted themselves into realms of expertise — front-end, back-end, data layer, and so on — and ultimately came to be coordinated by the full-stack engineer, now quite common in mature organizations, and expected to become only more so over the next decade.
Ma sees this role as analogous to the full-stack architect: “You can’t really have one person, engineer or otherwise, who’s truly a full-blown expert up and down the stack — I’m not suggesting this is a magic bullet — but the idea here is, let’s have full-stack architects who cover all areas from both a business and technical perspective.”
For some readers, this may beg the question: How would the full-stack architect differ from a product owner? Do they both not link the business and the digital execution? They do, but with different priorities. Product owners, explains Ma, even technical ones, tend to never get sufficiently deep into the weeds of the technology itself, always concerned first with the product. Having worked in organizations that leaned on such roles, Ma has never seen it work.
“Maybe it could if your company is clear about what it does and which roles have exactly which responsibilities, but most are not and don’t. You need a role that can help the in-between, that can be the glue holding together some of the areas that fall under several verticals, and who can be the person that anyone — engineers or businesspeople — can go to when they have a need that concerns both the business and the technology teams,” he says.
Another important justification that Ma offers for such a role is that the problem solved by architects is here to stay, even as advanced technologies enter the equation.
“It’s part of the reason I love this space,” he says. “What’s under it is so many different technology domains — integration, data, APIs, and so on — but also multiple business prongs and industries. There is so much to learn.”
The same can be said for most companies today, as they branch out into new opportunities, often by way of digital transformation, he adds.
“Consider Walgreens, people usually think of our pharmacy, but we also have photo, healthcare clinics, supply chain, and many more functions,” Ma says. “You’re always going to need someone who can bridge the gap between business and technology. You’ll always need someone who underpins it all.”
Underestimating the importance of this role could make or break your operating model transformation: here’s how to think about sourcing the role that will only increase in importance.
This article was originally published on CIO.com by Michael Bertha, Partner at Metis Strategy and Kira Kessel, Associate at Metis Strategy
You’ve seen the virtues of transforming from a project to a product operating model: value-driven work, delivered by dedicated teams rather than through projects led by disparate team members.
But as you embark on this transformation, you’ll have to remember one thing: you can’t do it without a product owner. The strategist, the technical expert, the business savvy leader—those with all three commonly called unicorns, or rock stars—is a person not easy to find.
Product owners are the linchpin of the product operating model; on product teams, a bad engineer is one bad apple, but a bad PO can sour the whole batch. No one else has the end-to-end accountability for a product like the product owner does. No one else so consistently represents customer interests, pushes engineers to adopt DevOps and Agile methodologies, and corrals individuals to execute against a roadmap. This is a leader who thinks of technical features in one conversation and business strategy in the next. The unicorn, if not sourced with proper due diligence, will be viewed only as a creature in fairy tales.
In a traditional project model, a leader is judged based on how well they react to requests and executes on them. In a product model, however, a good product owner anticipates the customer needs and responds to them by prioritizing items on a roadmap based on the capacity of a product team.
Product owners move you from reactive to proactive.
Adopting the product model is no meager mind-shift. Broadly speaking, you have two main options: hiring or upskilling.
You might hire for either of two reasons. The first is that you may not have the luxury of time and mistakes. This is largely a matter of two things: culture and industry.
Let’s start with culture. Ask the following of your company: Is learning tolerated? Is training available? Are there resources you can use to help establish the person in their role? Is there strong leadership and mentorship? Without these variables at play it will be difficult to develop someone internally. You might need someone who has the core PO competencies and fits your culture, someone who perhaps already has the leadership chops you’re lacking—a necessary hire.
Then there’s industry. Also unable to afford time or mistakes are those industries that are heavily regulated, scrutinized by agencies and governments, or uniquely depended upon by their customers. If, for example, you work in medical, military, aviation, and so on, you may not want to risk upskilling when you need someone who can navigate complexities beyond just those inherent to a product owner’s role. These product owners will have to consider certain variables—safety, cybersecurity, geopolitical factors, and many others—that require extra attention when representing the voice of the customer.
Say you’re a technology executive at a biopharma company. Your product owner will not only need to drive innovation—putting the most promising features at the top of the backlog—but will also need to do this while adhering to regulatory constraints. For Shobie Ramakrishnan, Chief Digital and Technology Officer at GlaxoSmithKline, this looks like balancing core values like “accountable for impact” with the pursuit of AI/ML technologies to “supercharge” R&D and clinical trials.
Luxury and time, of course, is only one of the reasons you might hire. The other is that you want a fresh perspective. In particular, someone who offers a point of view you can’t train. Usually that someone comes with a mixed bag of experience: a background in product, engineering, marketing, and finance are most common. What matters is that they offer something new to your company. A leader like this may disrupt the status quo, bring innovation, and offer new ways of thinking about the same problem. They may even serve as a catalyst for change beyond your recent move to the product model.
But could you not solve these issues—the constraints of luxury and time and the desire for a fresh perspective—by outsourcing? Your contractor may not cost as much, but you may face bigger drawbacks. A contractor who doesn’t stick around will take with them the skills and experience you want an employee to share with colleagues so that expertise, new ideas, and growth of the company reinforce one another from within.
In contrast, when you retain someone full time, especially a product owner, you retain institutional knowledge, which is especially valuable when it concerns strategic areas like GenAI, data, cyber and other innovation—areas of central concern to the product owner. A good example of this comes from Zurich North America’s COO Berry Perkins, who has made it part of IT strategy to keep this type of knowledge in-house. Of course, that’s not the only part of the strategy—it also involved the establishment of nearshore competency centers that will depend on Zurich’s employees acquiring new skills and embracing new processes and technologies. Which brings us to upskilling.
You may have a unicorn in your backyard without even knowing it.
What can distract you from that realization? Budget. If it prevents you from hiring, then you may next consider whether you have the funds, and the bandwidth, to pursue training your soon-to-be product owner.
Investing in your training muscle—developing a training capability, establishing career coaching, and encouraging growth from within in other forms and fashions—could do more than just produce the perfect product owner. It will signal to your employees that you want them to stay, that their contributions matter, and that there is space for them to grow internally. Retention could soar, innovation may spike, and revenue would, inevitably, grow.
If training isn’t on the agenda, you may decide to pursue upskilling simply because your employees hold something valuable already: their relationships and their institutional knowledge. The high-performing product owner will have already built relationships with their colleagues, will know the dynamics that exist between teams, will understand the technologies used, and will be better equipped to align IT and business stakeholders. Most importantly, they will have established trust.
Perhaps not even trust is the most important thing. What could be? Institutional knowledge, which, as we’ve seen, an existing employee will already have. They will know the tools, know the processes (which they’ve seen are convoluted at times), and know the customers of the company they are serving (and can speak to the company’s competitive differentiation, not just industry norms). Best of all, they know the product—its thorns, buds, and roses.
Believing in the value of the product operating model is one thing. It’s another to embrace the transformation from project to product with eyes wide open. You should acknowledge the challenges you will encounter, most notably that this one role could make or break the transformation. So before you’re too far into the journey, remind yourself: if you don’t know who your product owner is, at least understand what will dictate whether you hire, contract, or upskill. Better to figure it out now, not later.
Company-first CIO Krzysztof Soltan and his team helped transform the construction-aggregates giant with a focus on digitizing operations, modernizing infrastructure, and overhauling how IT goes about its business.
This article was originally published on CIO.com by Michael Bertha, Partner at Metis Strategy and Chris Boyd, Manager at Metis Strategy
In a recent “all-hands” meeting, Krzysztof Soltan, CIO of Vulcan Materials, announced his IT organization would continue its “laser focus on digital transformation.”
Digital technology, he explained, would remain a central focus of the construction-aggregates industry and would underpin customer-grade experiences increasingly expected from industry leaders. Vulcan, based in Birmingham, Ala., is the nation’s largest construction aggregates company, producing materials such as crushed stone, sand, and gravel, with strategic downstream assets like asphalt and ready-mixed in select markets. Soltan, previously a tech leader at Johnson Controls, ABB, and GE, became the company’s first CIO just two years ago and is at the forefront of the company’s digital transformation efforts.
Soltan and his fellow leaders attribute Vulcan’s success to many things, but chief among them is the company’s attitude toward key activities like operating and selling — “The Vulcan Way,” as it is widely referred to within the company. This orienting force has become so strong that, to Soltan and his team, it seemed only right that they should rethink IT in terms of how it might amplify the approach. As Soltan explains: “If we were going to keep up with the pace of change in the industry, IT would have to be recalibrated.”
Here, Soltan and his IT leadership team share the story behind those efforts. They highlight the mindset and approach necessary to leverage new technologies to best compete in the digital age.
As Soltan’s IT leadership team explains, Vulcan’s digital transformation turned a corner with the advent of the Vulcan Way of Selling, an enterprise-wide initiative that, through technology, aimed to turn the company’s highly manual relationship-based sales model on its head. And so it did.
Since the initiative’s launch in 2017, Vulcan has deployed myriad proprietary technology solutions that serve up real-time market insights, thereby improving experiences for sales reps, customers, and the truckers responsible for transporting goods to job sites. For sales reps, these improvements show up as more time spent talking about solutions with customers, and less time on administrative work like quoting. For customers, real-time location-tracking of materials shipment translates to better labor planning. For truckers, a seamless, paperless experience when picking up materials at a Vulcan quarry means faster delivery.
As Vulcan SVP Jerry Perkins put it at the company’s 2022 investor day, “Time is money in the construction and trucking industry, and these tools make our truckers and customers much more efficient and productive.”
The success of the Vulcan Way of Selling brought the company to an inflection point. Enterprise-wide, tech-enabled transformation programs would no longer be one-off events; instead, they were destined to become fixtures in Vulcan’s pursuit for continuous improvement.
Enter Soltan. After learning the business and getting acclimated with the effort to integrate US Concrete, which the company had recently acquired, Soltan got to work charting IT’s path forward. “Between the US Concrete acquisition and other major initiatives, we hadn’t taken a step back in awhile to reflect on how we were managing our own shop,” Soltan says, noting this isn’t unusual for companies during periods of growth.
The path to cementing Vulcan IT’s value proposition, says Soltan, would be two-fold: Invest continuously in enabling business-driven initiatives, and modernize how they manage the business of IT.
As just one example, the company has commenced VulcanX, an initiative that extends the Vulcan Way of Selling by providing best-in-class tools to the company’s Sales teams to help them win more business and deliver better experiences to customers, in the form of seamless and secure interactions. These efficiencies, the company hopes, will drive more quotes and, subsequently, higher quote-to-order conversions, all while allowing the team to spend less time on administrative tasks.
Just as important is the technical foundation on which Vulcan operates its plants. And so the company has launched another initiative in partnership with its business units to modernize the organization’s technical infrastructure, including improving the speed, connectivity, and mobility of its networks in service of Vulcan’s 10,000+ employees — qualities that will become only more vital as the company multiplies its digital capabilities.
“One reality of our business is that we have to enable modern day technology in the rugged, remote locations that are home to our plants and quarries,” says Soltan. “VulcanX enables scale and mobility in the plant with cloud-based solutions, and our modernized networks will improve our ability to capture data and to quickly drive insights for the folks running our operations.”
Vulcan’s employees can leverage digital capabilities in the field only to the extent that the company’s IT and OT systems are integrated. This reality — understood by Vulcan’s business unit leaders as well as anyone — has ultimately stood to justify, incentivize, and propel the company’s transformation.
A great deal of Vulcan’s success in managing the business of IT can be traced back to the department’s operating model. “The capabilities you deliver within IT the roles and responsibilities, and the ways of working — getting these things right — creates a solid foundation for execution,” Soltan says. To Vulcan’s leaders, it made sense, then, that the operating model should be among the first things they strove to modernize.
First, there was talent strategy — how the company would recruit and train. Of particular concern was the department’s IT career paths, which stood to be refreshed. As Soltan recalls, “We needed our paths to be more indicative of the work we’re doing. This not only helps us attract new talent but allows our team to feel confident they are adding modern skills to their toolkits.”
To this end, Vulcan leaders did two things. First, they developed a new set of career paths, including specific tracks for product management, DevOps, Data Engineering, and other sets of skills that, as Vulcan advances, will become indispensable. Second, the leaders expanded its talent pool by opening a second hub in Dallas, home to Vulcan’s US Concrete acquisition, and the fourth largest metropolitan area in the United States.
The second facet concerned projects, which experienced high demand. As Soltan explains, when digitally transforming at the pace Vulcan has, “priorities change daily, and without rigorous governance processes, it’s nearly impossible to have visibility into your IT investment portfolio.”
To rein in demand, and ensure resources were allocated impactfully, Vulcan formalized its IT Project Management Office (PMO). “The goal is to manage IT like a business,” says Soltan. “That means being clear about investment criteria for IT projects and establishing expectations for project execution that allow us to monitor value capture.”
For Vulcan, each new project introduces new applications and integration patterns into the technical estate. To ensure these can be properly absorbed, Vulcan also invested in maturing its enterprise architecture muscle. “Standards around technologies, integration patterns, and security are becoming more important,” says Soltan.
“Architecture ensures that new solutions do not render old ones redundant and that we construct things in a manner conducive to easily capturing and integrating data,” he explains, noting this will only become more important as IT/OT convergence accelerates to enable capabilities such as predictive maintenance in the plants.
For CIOs in similar sectors just starting out on digital journeys, the prospect can be unsettling, especially in light of recent technological changes — the AI craze, the pace at which IT and OT are converging — not to mention the list of demands from the business. And still, as Soltan says, one thing is certain: Technology will increasingly enable you to compete and differentiate yourself.
So if your company is like Vulcan Materials, if it has climbed to great heights despite preceding the dawn of digital, Soltan suggests you get started: “Your business leaders are smart. They know the importance of technology and of modernizing IT to compete. They have your back. So look honestly at where you are, rip off the band-aid, and start moving, piece by piece, towards your future state.”
Zurich North America COO Barry Perkins shares how tech chiefs can repatriate skills and hone digital prowess by rethinking the onshore, nearshore, and offshore composition of their global workforce.
Composing a workforce is like playing chess. When it’s done well, every choice is calculated, made mindfully of both its short- and long-run impacts, and of the delicate balance in which it must hold certain key variables — cost, productivity, digital maturity, and the potential to build capabilities that last.
In striking this balance, digital and technology leaders have long optimized for cost, but so rapidly is business evolving that many of them are reconsidering that approach. Among such leaders is Barry Perkins.
From 2011 to 2023, Perkins led technology in various senior-level roles for global property and casualty group Zurich Insurance. Then, in September 2023, he became COO of the company’s North American outfit (ZNA), revenues of which exceeded $22 billion that year. Atop his tech-related responsibilities, Perkins inherited responsibility for ZNA’s operational functions, such as premium audit and call-centers, and for thousands of global IT workers. Of the latter, 70% to 80% were supplied by strategic partners.
“In many cases,” explains Perkins, “we’ve become supplier-managers. And while that can be good from a cost standpoint, it’s become a limiting factor to increasing our digital maturity.”
As Perkins explains, an IT organization will constrain itself if it depends too heavily on suppliers. It will struggle to act autonomously, meet evolving priorities, and innovate. It might even suffer atrophy in critical functions such as recruiting and career development, as the employees overseeing those functions are taxed increasingly by the burden of managing suppliers.
So how do you forge a different path? Perkins advises IT leaders to adopt three principles to strike the right balance between cost, productivity, digital maturity, and the means to build long-term capabilities. These principles, Perkins contends, can catalyze digital transformation when prioritized across the enterprise.
First, says Perkins, IT leaders should “differentiate very carefully the areas for which you’re going to focus on maturing your digital capabilities, and what they mean to the organization.”
Having aligned on this, you can examine your workforce to ascertain whether your onshore, offshore, and nearshore operations are optimized for cost, productivity, and digital maturity, among other variables.
Before he became the COO of ZNA, Perkins served in Europe as Zurich’s COO of group technology and operations, and as head of the company’s business technology centers. In this latter capacity, he oversaw the company’s nearshore competency centers, which would later serve as a blueprint for the one he would proactively establish in Mexico after coming to ZNA. Aside from sharing time zones with America, this center would cost less than US-based resources and provide access to more diverse talent.
Perkins warns CIOs not to underestimate the effort and complexity of building a nearshore capability. It took his team “two years just to get the basics of the center and management set up with a core set of 80 to 100 people.” After laying the foundation, Perkins filled roles by drawing on both ZNA’s internal recruiting muscle, and on vendors through a model of build, operate, and transfer. Vendors provided resources with specialized or rare skills. Internal recruiting handled the rest.
Perkins explains that there’s a benefit to placing key functions such as developers and strategic decision-makers in similar time zones. Doing so enhances collaboration and cuts response times relative to an offshore outsourcing model in India, for example.
With a nearshore operation in place, as well as offshore and onshore ones, Perkins and his teams could pull from the full spectrum sourcing models. His team was ready to start moving chess pieces.
According to Perkins, one key to controlling your digital destiny is to bring your most strategic roles onshore. “You can reclaim autonomy over your key digital initiatives, build internal capabilities, and repatriate institutional knowledge all by reducing dependencies on suppliers.”
As for which roles should be upskilled and hired full-time, Perkins swears by the mnemonic “ABC”: artificial intelligence, big data, cybersecurity. Generally, he says, business stakeholders understand how important these capabilities are, and are thus more likely to invest what’s necessary to build them internally. “Given their importance in protecting as well as transforming the organization, these are not areas they would want to outsource,” Perkins says.
Transitioning individuals in house, however, typically raises labor costs, and as Perkins notes, that proposition will likely cause a few stakeholders to raise an eyebrow, despite their recognizing the strategic importance of digital operations.
“When your leadership has gotten accustomed to the highly outsourced workforce composition,” explains Perkins, “there are challenges in shifting the cost profile.” Therefore, he says, it’s imperative to have a strong business case and predefined criteria for shifting your resources. You’ll need them to justify such a move.
Finally, Perkins underscores the importance of including your peers in your workforce transformation journey. Whether you’re pitching for resources to be shifted to a nearshore captive, or for cloud to be more fully adopted, Perkins insists that the message should be delivered in business terminology, and that it should highlight the value proposition.
“Cost advantages, accelerating speed to market, and making better decisions will resonate with your peers,” he explains. “Reserve the three-letter technical acronyms for your IT colleagues.”
Equally if not more important to bring along on the journey is the IT workforce. The priority is to help “employees not just understand their responsibilities today but rather encourage them to actively participate in setting up a future roadmap,” Perkins says. By harmonizing mindset, skillset, and toolset, you’ll equip your employees to manage constantly evolving technology and innovation.
The thought of re-composing a workforce, uncomfortable as it can be, can paralyze even the most seasoned CIO. But given the pace of digital change, it can be even more detrimental to avoid the work and to push forward with a cost-above-all mindset.
Today, every company is a technology company, and thus, as Perkins suggests, you should get comfortable with being uncomfortable.
“Shifting your workforce composition is a major operational and cultural change,” says Perkins. “It’s not for the faint of heart, but it’s necessary if you want to position yourself for the future.”
Associa CIO Andrew Brock expanded his C-suite mandate by parlaying his IT purview to helm proptech spinoff HOAM Ventures. Here’s his advice on doing the same.
This article was originally published on CIO.com by Michael Bertha, Partner at Metis Strategy
Early in his career, Andrew Brock was told by a mentor that, to reach the C-suite, you have to take assignments across the various drivers of a P&L: marketing, operations, information technology, and so on.
At the time, Brock had held finance-related roles of increasing responsibility at household brands such as Kraft and PepsiCo at the time, and the advice piqued in Brock a curiosity that has since marked his career. It led him to accumulate cross-functional experiences that eventually landed him at Associa, which, serving 7.5 million homeowners globally, is the world’s largest residential property management company.
In rather short order, Brock was tapped to lead the launch of Associa’s first client shared-service center, and the success of that initiative propelled him to the perch of CIO, where he inherited corporate IT and the remnants of a forgotten software development group that came via a previous acquisition. Again, his curiosity was piqued.
“I wondered if we could use the development group to start building our own products,” Brock explains. “We were paying a lot of third parties to provide digital services to our clients.”
As it turned out, they could, in fact, build their own products. Soon after repurposing the development group, Brock and that team launched the company’s first digital product: a solution through which residents could pay their HOA fees digitally. This solution, along with other early products the team developed, significantly reduced costs, inspiring Brock to consider whether these products might be commercially viable on the open market.
The opportunity, as Brock explained, was that the market was fragmented. Associa, as large as it was, owned less than 10% of the residential property management market, even as the market leader. This intense fragmentation meant fewer barriers to entry for entities looking to introduce new solutions, so Brock and his team determined that “if we built a product that worked for us, it could also work for the open market.” And they were right. As these products built a client base and a sales team was mobilized, it became easier to cross-sell more digital services, and by doing so, they created for Associa not only a new organic revenue stream, but a platform by which they could scale their acquisition growth strategy — which, in the era of prop-tech, focused increasingly on digital services.
Once the operation was earning profits and boosting EBITDA, Associa’s leadership formalized what had started as a few experiments into a proper business unit, and to address the reality that their customers consisted mostly of their competitors, they spun off a new entity, called HOAM Ventures, tapping Brock as president and CEO, a title he would add to his existing one Associa’s CIO.
If you, too, are a CIO seeking expanded roles in the C-suite, you’re likely wondering: How can I emulate this strategy? Brock, who admits that luck and timing have been paramount in his career, modestly offers the following advice.
Brock says he never would have earned more responsibility had he not brought order to IT proper. “Our systems had to be up, stable, and secure, and if any of that went off the rails, I would not have had the time or confidence of my peers to pursue this path.”
He emphasizes the importance of hiring leaders that can “manage the operations as you are leaning into the white space,” and he rejects the notion that, by empowering such a team, you might render yourself redundant. “It can be scary letting go, but it’s a necessary step to allow the space required to determine your beachhead, and, ultimately, scale any business.”
Brock suggests that, if, as a CIO, you lack a cross-functional upbringing, you can build these aspects of your resume in myriad ways. For example, you could volunteer to lead a large acquisition integration, which Brock sees being especially relevant. “You’re analyzing a company, function by function, examining their merits, and figuring out how to put the pieces together to maximize value.” Moreover, the highly cross-functional nature and visibility of integrations can only help you gain relevant experience, he says.
If your company isn’t acquisitive, Brock advises joining the steering committee of another cross-functional transformation program, an opportunity available to most CIOs. When such a program is executed thoughtfully, it wins hearts and minds, adding stamps to your functional passport.
Even with the right team and resumé, ascending to “CIO plus” requires some self-advocating. “Nobody is going to ask you to take on this role,” Brock explains. “There’s a lot on you to make your intentions known.”
For Brock, this meant talking with CEO John Carona. Brock recalls expressing early on that, while he was grateful and honored to serve as CIO, he was open to more. “I shared that if the opportunity were to present itself, I was keen to explore a broader leadership role,” he says.
Additionally, as he was coming up, Brock carefully cultivated his brand, so that when he would in fact get the chance to expand his responsibility, his peers would support his candidacy. “Of course, I’m the technology specialist when it’s needed, but that’s not how I brand myself or operate within the organization,” he says. “I try to ask operational and budgetary questions that demonstrate my grasp of the business. If you aren’t intentional about this strategy, you could get pigeonholed.”
Luckily, as CIO, you have a unique purview in the organization. “You’re the only person that can see holistically across the organization and how all of the systems, functions, and process work together,” Brock says.
By coupling this view with your responsibility to chart the company’s digital transformation, you discover new avenues to create areas of opportunity, he points out.
“There’s bound to be customer and business needs adjacent to technology that haven’t been explored: This is your chance to stake your claim. You have to discover it, want it, and raise your hand,” he says.
The US Division CIO of Wacker Chemie says tech chiefs should think beyond run, grow, and transform, and consider how they are uniquely positioned to promote social values across the business and beyond.
CIOs hear constantly that their position has evolved, that it’s now a business position. But whenever this is pointed out, the emphasis tends to fall on the tactical responsibilities of such a position—the “plan, build, and run” of it all. But just as important now are holistic matters of people—diversity, inclusivity, employee welfare, and so on, and perhaps few technical leaders have concerned themselves with these as enthusiastically as Raj Polanki, the US Division CIO of Wacker, the seven-billion-dollar German chemical manufacturer, and the co-lead of its DEI council.
“The way I see it,” he says, “the CIO role obviously needs to make sure the business can run while contributing to growth and transformation. All those are well and good, but the current, evolving CIO role, it’s not just about going from technology to business, but from business to people. As a technology executive, I have a unique position to contribute to the human aspects of it all…DEI aspects.” And accordingly, since coming to Wacker in 2018, Polanki has worked both to embody Wacker’s DEI principles and, alongside his fellow council members, to inject such principles into the organization’s ethos.
Now, he hopes to amplify his impact by sharing some of what he’s learned with other technical officers who might themselves hope to make a bigger and longer-lasting impact. “What leaders get wrong about DEI is that it concerns much more than what can be observed by the naked eye. We are all shaped by our experiences, and the better we understand each others’, the more we can achieve.” Indeed, Polanki suggests that any leader can reap better outcomes across all their responsibilities by embracing this philosophy. Here he offers five steps for doing so.
Be the change you wish to see. It’s a well-known adage and clearly present in Polanki’s first bit of advice: “Start with self-awareness. Look inward.”
Embedded in this philosophy are two propositions. The first is that you do in fact want to change something. Therefore, a good place to start might be to understand why you do. While it’s fine to cite common talking points about the benefits of DEI, you’ll find yourself more motivated (and therefore more able) to employ such principles if they mean something to you personally. Polanki, for example, found inspiration in his background, in which technology and business overlapped significantly. “I’ve always thought in terms of how I could bring these things together to create real value for people, and value can mean many things. I recognized that Wacker’s DEI council would present a great opportunity to provide an important value pulling on both business and technology.”
The second proposition is that you must embody the change, and as Polanki suggests, you can do this in few ways more effective than to consider your own unconscious biases. He implores leaders to constantly ask themselves: “Am I jumping too soon to a conclusion? Am I assuming certain things?” And if you think you don’t have any biases, congratulations: You just discovered your first. It’s called objectivity illusion—the belief that we are more objective and less biased than others—and it underscores the gravity of Polanki’s advice. Everyone has biases, and they shape our societies. They lead us to elect taller CEOs, hire certain candidates, and sink money into failing projects. According to one survey, unconscious biases may cost the workplace $64 billion annually. Having biases doesn’t make you a bad person, but making yourself aware of them, as Polanki suggests, can free you to make better decisions and thereby become a better leader.
Next, start embodying your principles among the circles that you immediately influence—like the teams you oversee. When Polanki came to Wacker, he inherited a team whose previous manager had served the company for thirty years. Although that leader had left behind a solid team, Polanki wanted to suffuse it with his own ideals, two in particular.
“One was self-respect and respect within the team,” he recalls. “Yes, I had a list of things they could do better, but I started by respecting [the team]. I used not just my words, but showed it in my actions. I recognized them for the things they didn’t even know they were doing well, and with time, they would even come to me and say, ‘You don’t seem to get upset easily. You really maintain your composure.’” Soon, Polanki’s reports began imposing the same warmth, patience, and appreciation on their own teams, and the respect collectively expressed across the department grew steadily. It also nurtured Polanki’s second ideal, “customer oriented.”
“Because I came from an outside consulting and value-driven mindset,” explains Polanki, I put the customer in the front. I would tell my team, “If the business comes to us with a problem, we’re not trying to fix the problem alone; we’re trying to save their day to be more productive and efficient. That means we directly affect the business. We are not just a back office. We are sitting with the business. We are partnering with them to support them, and we should take pride in what we do.” He recalls evoking a sentiment he had once heard from Starbucks: “I asked them, if ninety-nine out a hundred coffees are right but the hundredth is wrong, is that acceptable? I explained that this was part of taking pride in yourself.”
And pride they took. Together, these two ideals—respect and customer oriented—energized the team and propelled what became a virtuous feedback loop. It improved morale as the teams began to celebrate small wins and to believe in themselves as more than order-takers. And the changes showed. Polanki recalls that the business partners would remark, “Your team is really solving issues, and they’re very approachable.” And in one of the team’s internal customer-satisfaction surveys, they scored 97% positive feedback—one of their highest scores ever.
After you’ve proven that you can instill DEI principles among your own teams, you can become a catalyst for wider adoption through mechanisms like your company’s DEI council. Or, if your company has no such council, you can start it.“The first thing you’ll want to do, if it hasn’t been done already, is specify the council’s DEI principles. And don’t squander this opportunity”, warns Polanki. Too many councils adopt principles that are either generic or otherwise similar to another company’s. Contemplate what DEI really means to your organization and connect it to the goals and mission of the enterprise. At Wacker, Polanki and his fellow council members conducted extensive internal research to ensure they did just that, and in the end, even became an advisory council to the executive team.Next, you have to spread the word—and show your employees that you stand behind it. “After we had defined our principles,” recalls Polanki, “we published them on posters, which were put up across Wacker’s offices. They had our signatures on them, and the executives’, so people knew we meant it.” Polanki and his council also took advantage of town halls and modified several of the company’s programs—including the leadership and management development programs and new-hire orientation—such that they incorporated DEI principles. “We even hired an external person to help us connect the content to the programs.” They also dedicated a SharePoint site and several communication channels to the cause, and instituted internal advocacy groups, including one for LGBTQ+ members and one for veterans. Polanki says more will follow.
Once you’ve spread your principles, and others have started acting on them, you can further amplify their effects, says Polanki, by “starting with the data.” It makes sense. ESG-related efforts are driven heavily by metrics, and so few tools can propel you toward your DEI goals as forcibly as data can. And as a technology leader, few have the power that you do to mobilize that data and to do so not only for your department but for others.
Polanki recommends that, above all, to employ your data more meaningfully, you make it more visible, which you can do even by simply starting conversations with other leaders, since many of them will hesitate to ask what’s possible. He recalls one such conversation with Wacker’s very own ESG team: “We asked them, what can we do for you? What’s on your mind? And it was only then that they said, ‘Well, actually, we’re having a lot of containers shipped to California and we’re concerned about the waste.’ I explained that we could give them some visibility by pulling data about those containers—what materials they contain, whether they’re recyclable, and so on. They didn’t know we could do that, and it helped them act much more effectively.”
The other tool is longstanding data solutions, like dashboards and accompanying analysis, both of which Polanki’s team constructed for Wacker’s Environmental Health and Safety group. As a result, the group could now get, in mere hours, data that once took them at least days to collect. And it came with trends, to boot. “We could now ask questions like, okay, where is it happening? Is it a seasonal thing? Why does this one area have so much variation?”
Polanki plans to resign as the co-lead of Wacker’s DEI council later this year. He feels that he and his fellow members have built a sturdy foundation from which the next leaders can further expand the council’s influence. “If you think in terms of crawl-walk-run,” he says, “we’re finally walking. The next council can take it further. They can set up new resource groups, engender more inclusivity, and start to have a more direct impact on the business.”
Yet Polanki’s far from finished improving the welfare of the people around him. A graduate of University of Michigan’s Ross School of Business, Polanki has been approached by that community to become more involved with certain university activities, like becoming a resident council member for the university’s Flint division technology and innovation center. When asked by the university, Polanki asked Wacker whether they saw any conflict. They didn’t, and encouraged him to participate, knowing that his doing so would advance their own mission to “make the world a better place with our solutions.”
This outward growth demonstrates Polanki’s last bit of advice for looking beyond your traditional responsibilities as a technology leader. “Be thinking, can I help my communities where we operate? Can I partner with the local community? With universities? How can we make a bigger difference?” Leaders who ask these kinds of questions and embrace these responsibilities, he says, will find they create better results across the board, in part because they have wide-ranging intangible effects.
This article was originally published on CIO.com by Mike Bertha, Partner at Metis Strategy and Chris Boyd, Manager at Metis Strategy.
First-ever McWane CIO Lynn Lovelady fast-tracked the global manufacturer’s corporate IT makeover by emphasizing A-teams, smart centralization, and establishing trust.
This article was originally published on CIO.com by Mike Bertha, Partner at Metis Strategy.
In 2018, the day after his employer publicly announced it was being acquired, Lynn Lovelady, then VP of IT at Energen, received a pivotal phone call that would reshape his career.
It was from Charlie Nowlin, then CFO at McWane, who for more than a year had been searching for the company’s first chief information officer.
After a long courtship that included lunches with members of McWane’s C-suite to ensure a cultural fit, Lovelady signed on to helm IT as CIO at the global manufacturer of ductile iron products, valves, hydrants, fittings, plumbing products, fire extinguishers and suppression systems, and steel pressure vessels.
The Birmingham, Ala.-based McWane’s growing corporate IT department had existed only since 2008, and for Lovelady there was a lot of work to do. =
“We were transitioning from a decentralized IT model to one that increasingly relied on corporate IT, which necessitated enhancing the planning process, governance, and implementing consistent policies on cybersecurity,” says Lovelady, reflecting on a department that was responsible for supporting the more than 20 operationally diverse businesses under the McWane umbrella.
To address the growing pains, Lovelady reinforced the importance of strategic planning for IT. In addition to rationalizing applications and other tactics you would expect, Lovelady knew establishing influence across McWane would be essential for the IT makeover to succeed, and that in turn would require over-communicating, driving accountability, measuring success, and rewarding high performance. With these principles in mind, Lovelady and his team launched their strategy, dubbing it “fifteen in five,” representing their bold ambition to drive fifteen years’ worth of transformation in the next five, and to shore up IT capabilities in doing so.
But executing wouldn’t come without challenges: multiple ERP implementations, a reluctance to adapt to new ways of working at a storied company, and perhaps most daunting, the reality that IT in each of the 20-plus businesses had grown accustomed to operating independently.
According to Lovelady, his team’s ability to overcome these headwinds hinged on three pillars that go beyond technical implementation.
Lovelady admits that in the early innings there were some who questioned whether hiring a CIO was necessary. The company, after all, had been successful historically.
To buck the trend, Lovelady prioritized meeting with all senior executives upon his arrival: to sell his strategic plan, share how he planned to make improvements, and most importantly, state his intention to earn their trust by establishing a relationship based on frequent and transparent communication. “Whether they’re personal or business, relationships take work, but that work is how you establish trust,” says Lovelady, “and picking up the phone or walking down the hall fills the trust bank over time.”
Lovelady’s focus on communication earned him respect and support from the executive team, which included the general managers of the 20-plus portfolio businesses. It showed when he presented to them. Mr. McWane himself and other EVPs started endorsing Lovelady’s initiatives, and “this backing, coupled with some early efficiency wins, helped the GMs get behind the vision and get comfortable with the new chargebacks,” Lovelady says.
To ensure his team embraced and embodied his philosophy, Lovelady purchased everyone a copy of Excellence Wins, by Horst Schulze. “While we can’t do everything the Ritz Carlton does, I think the spirit of having a customer-first mindset is critical. Following up, not assuming a problem is solved, paying attention: It’s critical we all share these values.”
Before Lovelady arrived, many major IT initiatives, especially those — like ERP projects — meant to drive efficiency across the businesses, were viewed as non-strategic. This kept top talent on the sidelines. Lovelady turned this approach upside down. “Do you really want the software you are going to run for the next 15 to 20 years being designed by just anyone?” posits Lovelady. “Or do you want it designed by your A players?”
Combined with an outstanding internal ERP implementation team, Lovelady worked with business units to put their best talent on the ERP initiatives, which in 2023 alone, led to four on-time deployments. It also led to the consolidation of seven separate CRM environments. Those two efforts combined have enabled for the first time ever end-to-end visibility of McWane’s value chain for select businesses, from the manufacturing of products, through the sales process, all the way to recognizing revenue.
An ERP veteran, Lovelady knows that technology alone isn’t what makes ERP implementation successful. “It’s about having the right people, following the right processes, and avoiding common pitfalls like customization.”
And for Lovelady and McWane, the right people are often those with substantial IT experience. “Around here, young talent are people in their thirties,” explains Lovelady, “and a lot of our team members came with backgrounds as directors, vice presidents, or even CIOs at well-respected companies.”
It is to this talent philosophy Lovelady attributes McWane’s ability to service their approximately 6,000 employees across its global footprint with less than 30 full-time corporate IT employees, and only a handful of longstanding strategic partners.
Key to reigning in and forging partnerships with the portfolio of operationally diverse companies was the deployment of what McWane refers to as “smart centralization.” Through this strategy, Lovelady and his team have struck the often difficult to balance attributes of business unit flexibility with enterprise scale.
“At corporate, we focus on things that can be done globally,” says Lovelady. These include network management, help desk, establishing and enforcing policies related to information security and risk management, and several other IT functions. “These are strategic capabilities for IT, and we have more purchasing power when we address them horizontally across our portfolio,” says Lovelady. “Besides, our businesses shouldn’t have to worry that outdated network equipment is putting their operation at risk.”
Still, the businesses operate with a high degree of local decision-making authority, Lovelady says. “We’ve simply implemented guardrails and policies to make sure we are influencing the domains where we have expertise, and we are making decisions that serve the greater good of McWane, not just an individual business.”
About five years have passed since Charlie Nowlin phoned Lovelady in 2018, and McWane’s corporate IT is firing on all cylinders. IT’s seat at the table has been cemented for many reasons. Chief among them are a rationalized, simplified, cost-effective ERP footprint; a maturing IT security and risk management capability that includes regular audits; a help desk that receives positive ratings from more than 90% of users; and a successful data center migration, which included moving more than 400 servers in real-time, so seamlessly, Lovelady says, that nobody even noticed.
Communication from corporate IT is proactive, includes regular site visits, frequent updates to demonstrate progress against the strategic plan, and plentiful impromptu calls and drop-ins. Business and IT are rowing in the same direction, with the shared goal of making the right decisions for the greater good of McWane.
Lovelady, who announced his retirement in the fourth quarter of 2023, will leave a legacy of transformation at McWane — one that will be synonymous with service excellence, integrity, and collaboration. The results he achieved are enviable, so we asked him what advice he’d share with CIOs pursuing similar journeys. He vehemently referred to the annual strategic plan that started it all, highlighting the importance of trust.
“It takes years of hard work to build trust, and it can be lost in an instant,” says Lovelady. “Don’t breach that trust, and you’ll go far.”
