Shell Downstream CIO - ‘IT needs to add to the bottom line if it wants a seat at the table’
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Craig Walker, Shell Downstream CIO, explains how he had to adjust how his IT department thought about projects - with the bottom line front of mind.
I sat down with Walker at Salesfroce World Tour in London last week, where he explained that Shell should be fearful of the disruption it could face from more innovative competitors and about how the company is using Salesforce as a platform to improve the way it works and to connect with customers.
In the second part of the discussion, Walker described how if an IT department is to become strategic within an organisation, it needs to prove to the business that it can directly impact the bottom line. Once this is achieved, the technology function has proved its worth to the business and it can get more demanding with what digital tools it would like to introduce - because it has buy in.
Walker said:
If you don't get that, if you don't fundamentally understand how the part of the business you look after makes money, how it puts a dollar on the bottom line, how do you know where to put your time? How do you prioritize? How do you become someone that the business wants to have in the room when they make decisions or talk strategy. Because as far as they're concerned, you're some techy bloke who they chuck the functional requirements over the wall at and six months later they get it back.”
And we've put ourselves in that position, so they treat us like that. That is fundamentally our fault. But if you're gonna work with this sot of stuff, you've gotta be fast, you've gotta be agile. You gotta understanding.
Don’t just be the tech person
Walker said that he told his team to think about all elements of Shell’s business - crude, trading, supply, manufacturing, retail - and ask, where can IT add value? What are the treats? What are the disrupters?
This led to the creation of a new ‘business interface’ team, created by Walker, which has a job to go and understand what each part of the business is trying to do, what it’s trying to achieve, what the threats are, and to have a conversation with them about the technology opportunity.
This was prompted by Walker’s previous experience as a CIO, where he said he would walk into a room with a senior executive and before he could open his mouth, the executive would want him to just fix his PC. Walker said:
You know, so you're not gonna walk in and talk, here's my digital strategy! You have to get the fundamentals right. And so the second thing I introduced was ‘one team’. No more of this shit with business and IT blaming each other - or blaming finance, or blaming HR. We have to get rid of that barrier. You know, the last time I looked, we were all here to make money for Shell. Keep Shell secure, keep Shell running. It’s about the bottom line. You might be part of the IT function, but you're part of the Shell business.
Be results focused
Closely linked with getting his team to not just be the technical people, but become more closely aligned with the business, Walker believes you should get IT to think about outcomes. Again, this is about the bottom line. If your team is working with the business on a project, but hasn’t even asked how much money the project has made, or looked at the business case, then something needs to change. Walker did this himself at Shell. He said:
If you don't bother to understand how it's gonna contribute to the bottom line, you're not really doing your job properly and you're not adding value to the process of being in IT. So it took about two years, because of course when you come in, you've gotta gain your credibility.
I had a seven figure budget, and I said, "You know what, this is nonsense. You're spending way too much on IT." And [the business] said, "I've never had someone come in and say that before. You're normally after more money." I went, "No, no, no. I'm gonna take you hundreds of millions out, and I'll do it by 2017." We actually got it out by the end of 2015.
Shell’s operational stats were up, its project costs were down and it was delivering more. This is what go Walker and his team the buy-in, which has enabled him to talk with the business more broadly about a digital strategy. Walker said:
That got me the credibility. So now, when I go to the exec team, instead of the normal poor CIO goes in with this stack of cost lights to explain everything, they look at about three of those, and they go, "Yeah, yeah, yeah. Craig, we've got that. Yeah, you're still on the right trajectory. You've hit everything you said you were gonna do. We're very happy with the way it is. Right, now let's talk about this digitalization stuff." And you go, "Hallelujah. I've got that."
Walker has taken this approach directly to his team too, where he asks them to spend more time with the business and to be persistent in their approach. He explained how he once had someone in his team complain that a senior executive wouldn’t meet with them, but would meet with a costly management consultant. Walker told the person on his team that instead of giving up, they should write a white paper and convince the executive. This worked and now Walker’s team creates a lot of white papers that are used to educate the business on technology strategy. He said:
Your goal is that they want you there, because you know, for 30 years, finance has been on the team. Why? Because the finance guy brings other insights. The HR guy's not there because they don't know what a person looks like, the HR guy's there because he brings other insights around the culture, the ways of working, what you need to achieve that business outcome.
And once IT has a seat at the table and has convinced the business that they’re valuable, this enables IT to do more interesting things and to become strategic. Walker said:
That breakthrough allows you to bring these newer technologies to the table and people get it and they want you to be part of the discussion.
The minute you lose this connection to the customer, I'm dead, because others will step in, and they'll be non-traditional people who will step in. It's all about, how do I move now from being a product company - Shell is known for its great products. I truly believe they are great - but people don't care about that so much. They want our service.