I took a great class this fall in the Technology Management program at Columbia. The official title of the class is “Behavioral Challenges in Technology Management”, but it should really be called “How to become a Chief Information Officer (CIO)”. The class is taught by Alan Morley, and is a class he designed to take technologists and get them thinking like the executives we aspire to be.
On the first night of class, he pointed at one of my classmates, and said “Come up to the board and explain to the class how a company’s balance sheet works”. My classmate, like myself, had taken the Corporate Finance class a year ago, but, also like myself, had forgotten most of the information from that class. He struggled, and got excoriated by Morley. What was Morley’s point in doing so? Well, we each showed up to every class well prepared the rest of the semester – we knew that we could be publicly humiliated if we didn’t know our stuff.
But more importantly, his point was that an executive has to understand the financials of the company. If you’re not involved with increasing shareholder value as represented by the financial statements, you’re a flunky, not an executive. So one of the things we did was read How to Read a Financial Report, by John Tracy, to make sure we understood every nuance of the balance sheet and income statement, so that we could trace the cash moving around the company that way.
Another key skill that an executive must have is understanding the strategic position of a company. Technologists often believe that technology has inherent value, but it doesn’t – it only has value insofar as it contributes to the strategic goals of the company. The technologist is happy to have somebody else figure out the strategy and tell him what projects to work on – the executive must be involved in the formulation of the strategy. So we spent a few weeks going through different strategic frameworks like the SWOT analysis, Michael Porter’s Five Forces analysis, PEST analysis, and the value chain analysis. And we applied these frameworks – one week, he split the class up into groups and each group had to do a different analysis on Pfizer. The next week, we were split up into different groups and had to prepare a presentation on a company involving these analyses (my group was given ABB and covered the threats and opportunities of building generators for developing countries like India and China).
Being an executive also involves being effective at communication, so every class incorporated presentations. We had to present in group exercises as described in the previous paragraph, we had “volunteers” summarize and annotate the reading each week, and a couple people were selected each week to present an article to the class that was relevant to the week’s reading. The class was designed to get us more comfortable on our feet explaining strategic concepts in front of a room of people, as well as to function more effectively in groups. Morley also found ways to make us more succinct in our communication – we often had a time limit on our presentations so we had to figure out what the highest value information was and present that first.
The final exam tied all of the class goals together. Two nights before the final, he sent us a case study describing an agricultural chemical company. On the night of the exam, he split us into arbitrary groups and gave us the question: “You are an advisory group to the CIO – identify the strategic, technology and personnel issues facing this company, and a way to address those issues with technology.” We had two hours to prepare a ten minute presentation, using the strategic analyses to help frame the issues facing the company, and then presenting an appropriate response. Our group came up with a plan to use the web to eliminate the middleman distributors so as to increase the margin on each sale (we described it as the “Dell of Agribusiness” plan), and our ten minute presentation covered a dizzying array of topics, including a value chain analysis, an overview of the technology solution, a new plan for marketing, and the financials of how our plan would benefit the bottom line and could be funded.
The class changed how I view the world. I’m thinking more strategically, I’m poking at the numbers more, I’m looking for ways to make an impression on others both inside and outside my company. As Morley emphasized throughout the class, he’s giving us the tools necessary to be an effective executive, but it’s up to us to seize the opportunity. I may not ever be a CIO, but after this class, it will be because I did not have the will, not because I didn’t have the tools.