Here are the stories of three small companies that have hired CIOs and are the better for it.
The Standards Bearer
Pat Byrnes arrived at work one fall morning in 1994 to find his company's network engineer with his head on his desk, fast asleep. The "computer guy," Byrnes's shorthand for most systems personnel, was supposed to have been up all night fixing the network, but he hadn't done squat. It was just one more example of how Actuarial Consultants Inc.'s (ACI) practice of employing only low-level tech support wasn't working.
The slumbering technician was the second of three "computer guys" hired by the employee-benefits consulting firm since 1991. All three had been disasters. The first, described by Byrnes as a "super typist who liked computers," had a passion for workarounds--a way of circumventing bugs without actually fixing them. A muddled attempt to integrate the company's E-mail and word-processing applications brought down both. The second and third computer guys, who weren't big on things like compatibility or usefulness, purchased hardware and software that reduced ACI's network to an unworkable hodgepodge.
Clearly, Byrnes couldn't rely on those characters for basic support, let alone anything resembling a technical strategy. And a technical strategy, Byrnes was convinced, was what ACI needed to galvanize its growth.
ACI, based in Torrance, Calif., is a $4-million company that designs custom benefits programs such as 401(k), profit-sharing, and employee stock ownership plans. Since its inception, the company had relied on referrals for its customers, but that strategy had produced four straight years of flat sales. To achieve Byrnes's goal of 10% to 15% annual growth, ACI would have to begin aggressively pursuing new business. And that would require a big investment in the company's sadly malnourished marketing function. ACI had no marketing database and no system for tracking the entire marketing process. "It made it difficult to plan for the number and types of clients we might have coming in," says Byrnes.
ACI also needed better processes for acquiring, servicing, and terminating accounts, so that it could handle the hoped-for influx of customers without adding staff. Byrnes had always been a proponent of autonomy, hiring veteran benefits consultants and then letting them work in their own ways so long as those ways worked. The result, unfortunately, was that the organization had degenerated into islands of information floating on a sea of paper. Employees kept their client-contact data in Rolodexes and on sticky notes, stuffed handwritten prospect-information forms into files on their desks, and calculated potential benefits-plan yields on whatever spreadsheet pricked their fancies. Documents had to be located before they could be moved; efforts were duplicated, data lost. "We are in a business that needs to move information quickly," says Byrnes. "We just couldn't go on like this any longer."
So when the CEO convened a meeting of his management team in May 1996, topping the agenda was a process and systems revamp of the entire company--with an emphasis on marketing operations. For the first time in its 13-year history, ACI would simultaneously consider how its employees worked and the technology with which they worked. Creativity, while still prized in individuals, would be banished from companywide procedures. Two mandates coming out of that meeting made clear the new orientation: "Make standards a religion" and "Don't tolerate heretics."
The management team drafted the broad outlines of a reorganization plan whose technical underpinnings included standardization on Windows 95, Microsoft Office 97, and PCs from AST Corp. But given ACI's previous experience, Byrnes wasn't about to entrust the company's grand scheme to some low-level technician. He wanted someone who understood not only computers but also business and people--a management-level leader who could sell the changes to the staff, handle outside consultants, and make sure the company's choices positioned it for growth. To get that, Byrnes was willing to pay three times what ACI normally paid for technical employees.
The someone Byrnes found was Howard Moore. An 11-year IBM sales-and-marketing veteran with an M.B.A., Moore had been in charge of administration at an executive-benefits consultancy before he joined ACI, in July 1996. His title, special assistant to the president, was purposely vague--a reflection of Byrnes's uncertainty about the new guy's role. The president handed his special assistant the technology plan and said, "Here you go. Make this happen."
At IBM, Moore had implemented large systems for big companies. He applied the skills he developed there--an understanding of the strategic value of technology and the ability to explain that value to skeptical employees--to his new job at tiny ACI. But he soon found that ACI's staff wasn't nearly as skeptical--or as change resistant--as Byrnes had thought, so long as someone listened to the employees' concerns and responded in their own language. Over the first three months, Moore spent a large proportion of his time talking individually with ACI's 38 employees, who eagerly suggested both process changes and technologies--Internet E-mail, for example, and file-sharing capabilities--that would help them do their jobs better.
