As we head into the final month of the year, it might be a good time to talk about books. I realize it's the holidays and you're probably thinking you're too busy to read. But when you start having to leave the safe harbor of your home to do holiday stuff -- attend parties with excruciating people, shop, go to the airport -- I think you'll find time. Would you rather be out there battling dense masses of humanity or sitting by the fire with a snifter and a useful book on how to be a winning CIO? I've chosen these books because they contain substantial passages that directly address CIOs' contribution to their companies' success factors. I'll even tell you which chapters you might read if you just don't have time to read it all.
Islands of Profit in a Sea of Red Ink: Why 40% of Your Business Is Unprofitable and How to Fix It by Jonathan L. S. Byrnes (Portfolio Penguin, October 2010)
You may remember Byrnes from a post I wrote a few months ago. That was before his book was released. It's out now, and CIOs who are serious about contributing to their companies' profitability might benefit from reading it. Yes, there is a chapter specifically on the CIO role. But to limit your reading to Chapter 34 would be short-sighted. It would also miss Byrnes's critical point about IT: that all the activities that contribute to profitability are IT-based. Given IT's presence in every value-creating activity in a firm, Islands of Profit might be more useful to CIOs in its entirety. Fortunately, the book is an easy read for its clarity. It's also organized in a way like a handbook, with the early chapters laying out the essentials of strategy (Chapter Four) and a guide to creating a "profit map" for the company. No conversation about profits omits the CFO, and CIOs might find in Byrnes's discussion of the way the finance chief's role has evolved (Chapter Nine) edifying. Understanding the CFO role can shed light on ways to work productively with finance toward the goal of profitability. Moreover, CIOs might find some surprising parallels between the challenges of both the finance and IT functions as a result of new responsibilities and new expectations. Finally, I want to call attention to Chapters 35 and 36 on management and leadership, respectively. On leadership in particular Byrnes has the good news that you needn't be a born leader; you can learn to be one.
How Companies Win: Profiting from Demand-Driven Business Models No Matter What Business You're In by Rick Kash and David Calhoun (Harper Business, October 2010)
I wouldn't be telling you about Byrnes's book if I thought it was a waste of time. Of course, his is one of many, many proposed paths to profitability. Management consultant Rick Kash and David Calhoun, chairman and CEO of the Nielsen Company, offer their own solution. The demand-driven model they propose is based on their thesis that with the shift from a supply-driven global economy to a demand-driven one, satisfying customer demand is the way to profits. What's especially valuable in How Companies Win are the many and detailed case studies of companies from Anheuser-Busch to Ball Park Franks to McDonald's that illustrate the practices and frameworks the authors recommend.
As Kash told me earlier, CIOs preside over innovation at their companies and therefore "are the DNA of how companies win." Chapter Five, "Total Innovation," will naturally be of special interest to CIOs. But again, you'd be remiss in limiting your perusal to this section. At the very least, check out Chapter One, "The Demand-Driven Company," for an introductory example of the basic premise in action at McDonald's. If the demand-driven model piques your interest, you'll want to explore Chapter Three, "Demand Profit Tools." Here you'll find an alternative way to analyze customers; i.e. by customer-profit "pools" instead of tradition market segments. You'll also see how Best Buy identified different customer profiles by their needs and demands, analyzed which customers brought them the most profits and what these customers' unmet needs were, and sought to differentiate Best Buy from competitors by satisfying these needs. If CIOs are the DNA of how companies win, collecting and analyzing data is the genome that enables the company's key strategists and decision makers to take ultimately profitable actions.