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The CIO Guide to Overhauling Employee Morale

If morale at your company is falling flat, rejuvenating your employees with a sense of purpose and accomplishment may be your most important priority for 2007.

Don't start the new year with a dejected staff. Inspire them! they'll take IT to new heights.

Whether your IT staff is reeling from layoffs or you just want to energize the team for projects and growth in the new year, it pays to know how to motivate. That skill doesn't come naturally to most CIOs. But it's one worth learning; A CIO who can't motivate isn't likely to get much done.

Kevin Stack knew this when he began his job as CIO of crafts and fabrics retailer Jo-Ann Stores Inc. last year. One of his first goals was to give his staff -- which had previously been cloistered within the confines of the IT department -- more exposure to the business side so they could figure out how to use IT to increase sales and profits.

But first, there was one small problem to take care of: Stack's 100 staff members weren't exactly ready to trust their new leaders. In addition to Stack, they had gotten a new chief executive, who had begun making changes in the corporate culture. One of the Hudson, Ohio, company's new policies encourages employees to be at work between 8 a.m. and 5 p.m.; previously, workers' exact hours in the office were more flexible. Though the change sounds straightforward enough, it put workers on edge. What other changes were in the offing, they wondered?

Winning them over would not be easy. Stack learned this early on, when he invited the staff to drop anonymous suggestions in a collection box. One person objected, he recalls, that suggestions couldn't truly be made without fear of repercussion because there were security cameras posted near the drop box, which meant Stack could review the tapes to divine who had made what suggestions.

It seemed paranoid. But it spoke volumes about how low morale had fallen. "The only way to attack that theory is to gain some trust with the staff," Stack says.

Over time, by clearly communicating his goals and including them in his decision-making processes, that is what he did. Now, one year later, no one is fretting about security cameras (though as part of the building's overall security, they remain in place). During meetings, in one-on-one impromptu lunches, and over coffee and doughnuts, Stack encourages his staff to speak up, and they do. The atmosphere is so open that at one recent meeting, he fielded questions and comments ranging from how he gets along with the chief executive to a critique on the shape of the corporate parking lot. Stack may never make it his priority to reshape that lot, but the important thing is that his staff members aren't afraid to ask.

That means they can spend less time watching their backs and more time working with Stack on other initiatives, like learning more about the business, so they can use IT to drive sales and earnings. "I'm on a quest to build an IT organization that is more engaging to the business," Stack says. And now that he has a re-energized staff behind him, he can.

Overhauling Employee Morale

Many CIOs begin the new year with the aim of continuing their plans to improve IT's reputation and better align the department with the business. Toward that end, they worry about budgets, equipment and buy-in from the business side. But few consider the morale of the team they have to work with. That's a major oversight. When morale is low, staff turnover increases and the ability to complete projects grinds to a halt.

If a CIO can re-energize a sluggish staff, the payoff is tremendous. This is especially true for midmarket companies, where budgets are smaller, but so is the size of the staff. So a little attitude change goes a long way. In general, "it doesn't always cost a lot of money to change the root causes" of dissatisfaction, says Bill Huber, regional practice leader for the Southeast region at Tatum LLC, a consulting firm that specializes in IT management. "The bad news is, it usually takes some overhauling of perspectives."

Conversely, if a CIO can't motivate his staff, that bodes ill for his career, especially "if you are being evaluated for keeping your project teams excited about what they are doing for clients, and your boss doesn't think you are doing that," says Carol A. Hacker, a human resources consultant whose clients include Matrix Resources Inc., a midmarket IT staffing firm in Atlanta. Depending on how low morale has fallen, the process can take months or even years. Hacker says she worked with a client whose CEO destroyed morale by trying to shake things up with what appeared to be indiscriminate layoffs -- a "bloodbath," as Hacker describes it. "It took 10 years for morale to return to normal," she says. That happened only with almost complete turnover at the company.

In most cases, morale isn't that low. But fixing it still requires a lot of effort: communication, coaching, cross-training, personnel changes, a re-examination of reporting hierarchies and compensation, and above all, a basic grounding in emotional intelligence and organizational dynamics.

Trouble is, while most CEOs expect to find these skills among their top executives, including their CIOs, many CIOs don't measure up. "There's nothing in a typical CIO's career that prepares them for that. They have spent 20 years as a program manager, and one day they find themselves moving into the C suite. They're at a pretty major disadvantage" when it comes to people management skills, Huber says.

Those CIOs who do succeed in re-energizing their IT staffs usually get plenty of help. One of their best allies is someone from human resources who understands the business. In addition to recruiting, retaining and developing staff in general, a good human resources professional can help the CIO revitalize and retool the staff by establishing programs for cross-training and interdepartmental hiring, says Andy Walker, research director for executive programs at technology consultancy Gartner Inc.

Moving staff between IT and other departments is a key part of job satisfaction because it increases understanding all around. Unfortunately, many CIOs overlook this when it comes time to hire. According to a recent CIO survey conducted by Gartner, CIOs say one of their top three priorities is getting staff to acquire more business skills. But 69% of these same CIOs say they plan to fill vacancies from outside -- with people who don't know the business. "Only 11% said they were going to bring in non-IT people from the business side. That's strange to us," says Walker, given these CIOs' stated desire for staff with more business skills.

Shut Mouth, Open Ears

While cross-training can be key to overhauling an IT organization, that step comes later in the process. The first step is much simpler: listening.

Tony Habash, director of IT strategy and planning for the senior citizen advocacy group AARP, recommends lots of it. "Just talk to the people in a very inviting fashion. Just listen, and listen carefully, for the first 90 days. Get a real sense for what the people are telling you," he says. If they complain about something, "Don't defend it. Don't try to justify anything. Just listen. Just absorb it. I think you'll be amazed at how much people will open up."

Habash took that tack seven years ago when he started his job at AARP. After his queries yielded plenty of complaints about the lack of integration between departments within IT, he began a campaign to increase communication.

He started by pulling everyone, from programmers to strategists, into a room and posing the same question to each group. "Tell me what you need from the rest of the units to be successful," he said, "and what do you think they need from you to be successful?"

By the end of the half-day session, "it was clear where the gaps were," Habash recalls. The session didn't instantly solve all of the IT department's internal communication problems, but it laid the foundation for better collaboration going forward.

Habash says it was key that the staff used the exercise to figure out its own problems. Improved communication and collaboration don't "happen by dictating. You have to have deep engagement" to get the staff to buy in, he says.

These days, in addition to one-on-one meetings with IT staff and with department heads, Habash fosters communication by walking around the department every morning, chatting up whoever is around to see what's on their mind. "I've found, to this day, that this is the most important avenue for getting close to the pulse" of the staff, he says.

Stack is also a fan of motivating staff through informal meetings. Sometimes as often as three times a week he takes a handful of randomly chosen staff members to lunch or invites them to his office to chat. In addition to hearing their concerns, the conversations are also a kind of litmus test. By talking to junior staff members, "I can gauge how well my organization is communicating down," he says.

Reaching Out to the Business

Often, low morale stems from the IT department's inability to communicate with the rest of the company. Tatum's Huber sees this often. He's currently working with a CIO who was frustrated when his staff fell behind schedule on an important project.

At first the CIO thought the problem was a lack of manpower. But Huber's team eventually realized that the real issue was wasted work, which was the result of poor communication with the client. Some members of the IT staff were logging 100-hour weeks to deliver what they thought the client wanted, only to learn they hadn't met the client's specifications. In fact, they never truly understood what those specifications were. "You could start with the CIO and work down to the people who were developing the system. No one had an overall view of what they were promising to the client," Huber says.

Vague specifications led to scope creep, which led to software patches, which introduced glitches that required more patches, more testing and so on. Despite heroic efforts to keep the project on track, "they were so inefficient," says Huber. "They were putting out faulty product and having to go back and patch and glue it back together just to get it all operational. Quality control was lacking. Testing was lacking. It took everything they had just to keep things held together."

Instead of throwing manpower at the problem, Huber got the CIO and his staff to reconsider their approach to projects in general. "We asked fundamental questions like, 'What is a successful project? How do you measure success?' and worked our way backward from there," he says.

That process led them back to the drawing board with the customer, to get an exact idea of what was needed. Then the IT staff took time to carefully design the project. "That took a lot of discipline, because that meant that things were going to be even further delayed," Huber says. But it paid off. Once the project was released, "it didn't take around-the-clock coverage to support it. So we went from 100-hour weeks to 50- to 60-hour weeks." That, in turn, boosted morale.

Career Development

CIOs say that one of the best ways to motivate staff members is to help them develop their careers. For younger staff, training seminars can be helpful. But as IT employees advance professionally, they feel that training alone "isn't going to change your behavior," Walker says. As one CIO he interviewed put it, "You can't teach an old dog new tricks."

Instead, experienced IT professionals learn by doing, or at least by having the chance to do. Most of the 30 companies Walker interviewed realize this. When asked about their top strategy for developing and retaining business-focused IT staff, 29% said they were giving staff "stretch assignments" designed to expose them to different parts of the company or more senior management; and about one-fourth said they used job rotation. Only one-fifth listed training programs as a top staff development strategy.

Of course, it's easier to do job rotations in larger companies, where there are more positions available to shuffle into. But by the same token, with smaller staffs, midmarket companies are more likely to give a wider range of duties to individual workers. These broadly defined midmarket jobs might be considered "stretch assignments" somewhere else.

In Huber's case, cross-training did a lot to improve the morale of his client's IT staff. After he discovered that much of the staff was unaware of their employer's businesses goals, he got many levels of IT workers to spend days, or even weeks, learning about the business through the eyes of their internal customers. "It was pretty eye-opening for these guys. Some had been there for 10 or 15 years and really didn't have that much insight into what their business actually did," he says. (For the record, the business sells services, but Huber declined to be more specific for fear of identifying his client.)

Huber also added new positions: business analysts who test applications for their relevance to business needs. Previously, his client had tested its products only for technical problems.

At Jo-Ann Stores, all new hires spend a day or two in the retail stores, seeing how the company makes its money. In IT, Stack is getting all his staff, down to the most entry-level programmer, to participate in strategic meetings.

During these meetings, programmers hear about how, for instance, moving a product from one shelf to another can increase or decrease sales. "It makes them try to put their brains in the same shoes" as the strategists so they understand how their applications can affect what happens on the sales floor, Stack says. The process makes them more efficient, he says, but also gives them a better attitude about their work: "Having a clearer understanding of the impact they have is a big motivator."

The Personal Touch

Ironically, though many CIOs reported to Walker that their careers benefited greatly from mentoring, not many act as mentors themselves because they don't have time or because they don't see how they benefit from the arrangement.

Those who do mentor, however, say that the arrangement makes their protégés feel better about working for the company. Robert Owen, who is vice president of information technology for Microchip Technology Inc., a manufacturer in Chandler, Ariz., has created a management development program that includes 13 members of his 100-person staff. In the hopes that some of them will become Microchip's future leaders, Owen meets with them to discuss the business and management philosophy.

"We would hope that the people participating in this feel a greater sense of participation and energy" in their jobs, Owen says, "because they're part of the future team."

Flex-Time

Back in the dot-com days, when companies routinely engaged in bidding wars over almost anyone who could fog a mirror, many employers sweetened their offers with perks, including flexible work arrangements like telecommuting or more days off in return for longer workdays. Later, when the same companies started slashing staff, these perks largely disappeared.

Now, many IT workers are routinely putting in 10- or 12-hour days, says Gartner's Walker, noting that much of the overtime is unpaid. That is leading to burnout. IT departments that rely on their staff to put in long hours "are going to lose talented people. Even their high performers don't want to work those long hours," Walker says. Some are fleeing to the public sector, where they are willing to work for less pay in return for more sane schedules.

In the next year or two, Walker expects competition to heat up for IT hires, especially project managers. As that happens, he expects to see some of the old perks return.

In some places, they already are. At AARP, for instance, Habash says that more than 30% of his staff have flexible work arrangements, including part- or full-time telecommuting and condensed workweeks, where staff work 10-hour days Monday through Thursday and take Friday off. Habash says his department can offer these arrangements because it measures performance in terms of work accomplished rather than time served.

In return, Habash gets happier workers. He knows this because every year his workers fill out anonymous surveys about the IT department, including when, whether and why they plan to leave. They say they like flexible hours. "It helps them a lot if they can balance their life with IT," he says.

None of the CIOs we interviewed believe that low morale is based on pay. "Most things don't indicate that pay is the primary reason why people leave" an IT staff, says Owen. "Almost every study there is says the No. 1 reason that most people leave is basically their manager."

But pay is part of what motivates workers, so it can't be ignored -- especially now that companies are starting to compete for certain types of IT workers, like project managers. In general, if most companies end up filling vacancies from the outside -- "poaching from each other," as Gartner's Walker likes to call it -- salary inflation is bound to follow.

Back Scratching

Another major motivator is deceptively simple -- and free: recognition. If all the other motivational elements are in place -- challenging work, decent pay and a flexible work environment -- a simple thank you can do a lot to boost morale. "So many managers and supervisors don't know how to treat people. They don't show respect. They don't use the words 'thank you' often enough. Those words are free," says Hacker.

When Stack meets with his direct reports, they spend the first 10 minutes discussing which worker did something special the previous week. Stack then sends out an all-hands email, on behalf of the entire IT management team, publicly thanking that person.

"We don't all have a million in our pocket to pay everyone more," Stack says. So when it comes to motivation, "you've got to deal with the human side."

Joan Indiana Rigdon was a contributing writer for CIO Decisions. To comment on this story, email editor@ciodecisions.com.

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