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Thriving In Dynamic Times: Turning Headwinds Into Tailwinds Part 7: The CIO’s Two Best Friends Should Be the CFO and the CHRO

As context and for convenience, here’s the original overview post in full.

Although there’s a lot more to talk about, and we intend to carry on the conversation over the coming months and years, I would like to cap off this series with some thoughts on executive and cross-functional teamwork. As a CIO, I’ve always believed in and had success with finding and teaming with allies on the executive team and partnering with other leaders and influencers in the business. As I wrote in a previous blog post, “The 30 Game Changers in Your Organization”, it doesn’t take many people in an organization to Make the Turn toward real transformation. It just takes the RIGHT (relatively few) leaders to team up to make it happen. In this, the last post in this series, I’m going to focus particularly on teamwork among IT, Finance, and HR. The ability of the leaders of those three functions – the CIO, CFO, and CHRO – to build a relationship and work together is important in times of crisis (“Go Short”) and for planning and leading continuous and sustainable transformation (“Go Long”) in the Modern Digital Era.

In the 20th century, the most successful companies were always in a state of “continuous improvement” (Six Sigma, Industrial Engineering, TQM, etc.). In this century, those capabilities alone won’t get it done; it’s not enough anymore. Going forward, we need to always be in “continuous transformation”. New business models are at the intersection of imagination, advancing technologies, innovation, and customer expectations. To PLAY this game, the CIO needs to be a force for engaging all other CXOs. To WIN this game, and THRIVE going forward, the CIO, CFO, and CHRO have got to be BEST FRIENDS because those leaders are the stewards of technology, money, and people.


Unfortunately, in many companies, the CFO and the CHRO are perceived as the “masters of NO” when it comes to getting more dollars and/or people. Trust me, they weren’t born with that bias, but somebody on the executive committee needs to play that kind of role. I can attest to the fact that the people playing these roles are, for the most part, thoughtful and reasonable people that have a lot of “YES” in them given facts, context, a good plan, and an accountable business leader who’s willing to commit to value creation.

My Experiences with CFO and CHRO Teamwork

The reasons I am optimistic about the positive teamwork that we can have with CFOs and CHROs all come from my experiences. Finance and HR were the two strongest functions when I first became a CIO at PepsiCo/Frito-Lay.

Finance’s power and importance were obvious because, as a growth company, we were always making big investment bets on new products, acquisitions, more manufacturing plants, and route expansion. In addition, sustained growth required aggressive recruiting and great talent and leadership development, driven by a strong, forward-leaning HR team. It was always clear at PepsiCo/Frito-Lay that the company with the best talent always wins.

These were the core beliefs of Wayne Calloway, who was Chairman and CEO of PepsiCo during the 1980s-90s. During that period, we doubled our revenue every 3-4 years and maintained double-digit profit growth. Wayne’s leadership formula was simple; he said a great leader – Sets the Agenda, Builds a Great Team, and Delivers with Consistency. That formula requires strong financial and talent management.

For more about Wayne and his leadership principles, see my book called The Calloway Way, Results & Integrity.

In the 1970s -80s in general, and specifically at PepsiCo/Frito-Lay, the CIO reported to the CFO, predominantly because most of what IT was used for was Accounting and Financial systems. Many CIOs thought that reporting structure was a problem. I saw it as a plus since I got to work closely with the CFO and understand how and why financial decisions were made. We became real teammates and “walked a mile in each other’s shoes”.

As my role expanded to support the entire business, I moved up to the executive committee and became a peer of the CXOs – including the CFO. However, I never lost the notion that the CIO/CFO partnership is at the core of being able to Set (and Sell) the Agenda.

I also understood that, once I had Set (and Sold) the Agenda, I was actually expected to Deliver with Consistency. It’s this concept of accountability that made me realize I had to Build a Great Team. That motivated me to team up with my other BEST FRIEND – the CHRO. I knew I couldn’t do anything unless we had the necessary talent on the team. In Calloway’s PepsiCo, we knew how to recruit, onboard, set expectations, manage performance, give feedback, promote the high performers, and manage out the low performers. We had great HR partners.

Over time and in many companies, talent acquisition and management have become fairly mechanical and bureaucratic, and the role of HR has become diminished. This can’t be the case going forward. In a world that is this dynamic and within a company that is innovative, the leadership, culture, and workforce need to be continuously learning, leading, and adapting. You can’t have Business and Technical Agility if you have Organizational Rigidity or weakness.

So, a strong triumvirate of CIO, CFO, and CHRO has got to shape and lead together to create the technical, financial, and organizational firepower that the other, operating CXOs need to win in the marketplace. It’s hard for me to imagine achieving all three essential outcomes (Business, Technical, Organization) required to thrive in this era if any of those three leaders, or their organizations, are weak or not working in harmony.

As CIOs, if we work on the relationships, we can make the CFO and the CHRO our TWO BEST FRIENDS. Really, it’s a shared responsibility and call to action. This spirit of partnership needs to permeate down and throughout the IT, Finance, and HR organizations. We need to eliminate our blind spots. We need to work on those key relationships through some form of simple common language, shared mental models, and having empathy for each other’s role. If we do this successfully, we will be able to relate to each other. The alternative is not good.

As IT leaders, if we try to run over, under, or around Finance and HR, they can become our two worst enemies. It’s our choice. I guarantee it’s much better to be BEST FRIENDS.

“Go-Short”(-Term): Show Up and Partner

During any crisis, the two most stressful functions are Finance and HR. The CFO needs to use every bit of intellect and energy to keep the cash pipeline from drying up. Communicating with, and satisfying the information and financial needs of, “the street” and shareholders, the Board of Directors, the executive committee, banks, employees, customers, and suppliers are top of mind and all-consuming. The CHRO has to deal with employee safety, workforce/layoffs, unions, pension funds, benefits providers, changing the way work is being done. They also have so many constituents to react to and to work with, including the board of directors and the other CXOs, while maintaining the culture and employee engagement for the long-term.

This is not necessarily the best time to say, “let’s be friends” in a casual way. If the relationships and teamwork aren’t built already, the best approach in a crisis is to actively and positively collaborate on solving the “Go Short” stresses that everyone’s facing.

Here are thoughts about getting through a crisis together and accelerating the longer-term relationship required for the “Go Long” transformation.

Work with Finance and HR to explain your approach to both meet your commitments now AND be positioned to accelerate the transformation once the crisis subsides. Your actions and rationale should be logical, connected, and focused on “answering the (short-term) mail” – but in a smart way. Take the time to explain which activities you’re stopping, who you’re letting go, what you’re slowing down, and how you’re powering up a SWAT team to help the other departments meet their short-term needs. If you’ve done all of the things we talked about in the “Go Short”(-Term) sections of the previous six blog posts, you’ll have a great approach that will make sense to your Finance and HR partners.

This kind of teamwork, in a crisis context, could form bonds that will last beyond SURVIVE mode and could be a great springboard into the kind of long-term working relationship you need when, sooner rather than later, you get back to focusing on the bigger picture business and technology transformation you will need to THRIVE.

“Go-Long”(-Term): Set the Agenda, Plan & Justify BIG, Deliver SMALL

Setting an agenda to deliver the three essential outcomes (Business, Architectural, and Organization) requires that we plan 3-5 years out, justify the business case based on the long-term end game and then implement an Operating Model that delivers value frequently in smaller increments of time (every couple of weeks, every quarter, etc.). This approach requires that Finance thinks about technology investment the same way they think about other significant investments like manufacturing expansion, fleet replacement, acquisitions, etc. They need the business leaders to commit to the overall value and then deliver in reasonable “chunks” as they go forward with the plan. They don’t expect a separate, micro ROI on every plane, truck, store, or locomotive.

However, for some reason, many times technology investments are presented in two very different ways. IT investments are typically shaped and approved either by:

  • project-by-project ROI cases made by individual departments and rationalized with an Annual Operating Plan (AOP) budget for a particular fiscal year
  • or big programs that address significant initiatives (e.g. ERP, move to the Cloud, Omnichannel) and require multi-year investment but only have a “trust me” business case – requiring a big leap of faith.

Both of these approaches fall short and won’t deliver real value – you’ll never see the money. Wide aperture planning and real accountability to deliver make up a framework that a CFO can relate to and support. Holding both the business and IT teams responsible for total economics, and measuring delivery along the way, is the key that unlocks the usual friction between IT and Finance.

In addition to Finance partnering in IT strategic planning, HR leaders need to be leaning in, engaged, and helping from the beginning. In the early, Setting the Agenda, phases of a transformation, there are major people considerations across the entire business. The Digital Transformation is creating huge shifts in the WHO, WHAT, HOW, WHERE, and WHEN work happens. This is now vividly clear and rapidly accelerating. There will be big business model changes enabled by technology.

  • Customers will do more for themselves through self-service -things that used to require customer service associates or call centers.
  • Customers expect 24X7 service and near-real-time delivery of goods and services, regardless of day-of-week or time-of-day.
  • Long manufacturing runs and big central or regional warehouses will give way to shorter, just-in-time production and the resulting products always being in motion through much expanded, more complex, and very dynamic logistics networks.
  • Robotics will take over repetitive and basic tasks and free people up to do different kinds of work if they can be retrained.
  • Artificial Intelligence will inform business rules that can make some of the complex decisions that used to require teams of analysts and layers of management.
  • More people will be using technology to work remotely, collaborate with distributed teams, and learn to work more seamlessly and intimately even across oceans.

Each of these shifts, and countless others like this, will change the size, mix, skills, location, compensation, organization, and culture of the workforce for all businesses. Remember, just changing the technology and processes won’t achieve real or sustainable outcomes unless the workforce changes too. For this, we have to have to partner with HR leadership to help make it happen across the entire business.

In addition to the larger workforce and cultural transformation required to compete in the future, the IT team also needs to change and evolve. We need to be able to protect and retain the domain and legacy systems knowledge that got us to where we are today. That knowledge is also required to help us modernize and continue to get value from our legacy portfolio of applications. While we’re doing that, we need to be great at new technology, and we have to make sure we are getting the RIGHTS right – right skills, right mix, right size, right place, right cost. Just as our business and our technology are on a transformational journey, our IT workforce and culture are also on a journey. We need that partnership with HR to help us Build a Great (IT) Team or the transformation will never get traction.

Three Key Leaders (BEST FRIENDS) Should Lead the Way Together

In the Digital Era, departmental or functional excellence and continuous improvement are still important but are only table stakes (necessary but not sufficient). In addition, now and into the future, continuous transformation capabilities and excellence across functions, across business units and across partner ecosystems are the differentiators. The only three leaders that are truly cross-functional and are stewards of the most critical resources (money, technology, people) are the CFO, CIO, and CHRO, and they need to step up together to be leaders among their CXO peers.

This is a shared responsibility across these three special leaders. However, I believe, it’s the evolving role and responsibility of the CIO to be the Chief INTEGRATION Officer and make sure this teamwork happens. Once the team gets through the crisis and things begin to stabilize, we need to pick back up on (or begin) the conversation with the CFO and the CHRO about how successful companies will win in the Modern Digital Era. The focus should be on the role that each of these three key leaders needs to play in building a future-ready company that can be agile and resilient.

Author: Charlie Feld, Founder, The Feld Group Institute
Connect with Charlie Feld on LinkedIn

Photo by Anastasia Petrova on Unsplash

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Russell Villemez

Affiliate, The Feld Group Institute

Head of Technology Strategy, Dialexa – a Feld Group Institute partner

Highly regarded CTO and change agent with IT strategy and enterprise architecture expertise.

Russell Villemez is an Affiliate with the Feld Group Institute and the head of Technology Strategy at Dialexa, a Technology Research, Design and Creation firm that works with organizations on initiatives such as Operational Transformation, Business Growth, and New Venture Creation.

During 17 years in operational roles and 15 years in consulting roles, Russell has worked across a variety of industries in both executive leadership positions and as a subject matter expert. Russell thrives on the scale and complexity of leading major change agendas in large corporate environments.

Recent consulting clients include AmerisourceBergen, the American Automobile Association, Brinker International, Cubic, Equifax, and Cox Automotive. A common thread is the client’s need for strong leadership during a period of change—whether motivated by acquisitions, spin-offs, competitive pressures, or other factors. Clients also benefit from Russell’s expertise in enterprise architecture, agile development, application portfolio rationalization, technology and architecture strategy, as well as business strategy and commercial software product development.

Recognized as a versatile IT executive, adept at solving complex problems with innovative solutions, Russell’s capabilities and achievements span a continuum from business-strategy formation to hands-on IT solution development. His extensive career achievements include pioneering the first use of relational databases in high-volume transaction systems in the ‘80s, applying voice recognition DSPs in public intelligent network services for consumer markets in the ‘90s, and leading large-scale adoptions of open systems, object technology, and middleware frameworks in complex business environments, often in advance of commercially available software products.

Prior to joining Dialexa, Russell served at HP as Enterprise Services Chief Technology Officer for the Americas, leading a global capability for embedded Account CTOs in large enterprises. Russell began his career at Accenture, where he first crafted his consultative problem-solving approach, later honed at A.T. Kearny and the Feld Group. Russell’s deep telecom experience is built upon numerous director and enterprise architect positions at AT&T, Bell Atlantic, Telstra, US West, Pacific Bell, and Sprint, and as V.P. and CIO for WebLink Wireless.

Russell has a BS in Business Administration from Louisiana State University and an MBA from Vanderbilt University. In his spare time, Russell participates in amateur auto racing, and is a driving instructor with the Porsche Club of America.