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CxO Perspective: Here Is How You Are Putting Your Company At Risk

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A CIO has to succeed in many areas; from technology to financials, from people to service levels, a CIO has to keep an eye on all the issues. However there are times when CIOs, together with all other CxOs lose common sight and neglect things that they never should.  Here are some points where CxOs are putting their companies at risk.

The first and foremost item is ensuring business continuity and with this I mean disaster recovery before everything. People sometimes fail to lose the understanding that they are in the company because of the business; if business is gone, they have no place there. It is that simple right? Wrong. CxOs fail to realize that simple point and still do not think about disaster recovery solutions. Often CIOs cannot make them realize how important this is. This is not to discuss the capability of the CIOs, but rather how other CxOs are “closed” to the subject. Disaster recovery is not just another data center to spend money. It isn’t just the business’s continuity, it’s CxOs chance to continue to earn money when all is gone.

Minimizing costs is another point where CxOs lose common sense. I am not talking about extravagant expenses, or avoidable costs, such as preferring videoconferencing instead of flying, when and where one can. I am talking about the costs of doing business. The cost of doing business is what you must do to continue your sales, to continue your business. If you are -say- a photographer you must have that lens to do your job. If you are seeing that lens as a “cost” and you are travelling to your customer’s location with taxi when you can use public transport (when you can, of course), you are doing nothing other than hurting your business.

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Some CxOs also lose sight on the revenue losses and decreasing profit margins. These are where the company is bleeding. The business environment seems to value financials all above anything else and tend to take cost-based decisions. Frankly, cost-based decisions look very good both on paper and in the presentations. Many items go unnoticed: what if the best-price supplier cannot meet the demand? What if we do not have a back-up supplier? What if the lower-cost logistics company cannot place the goods on the shelves before the holiday season? What if our web server cannot keep up with the traffic during the peak times? There is yet another dangerous issue with all these problems; these are attributable to 3rd parties. “The logistics company couldn’t”, “the web hoster couldn’t”, “the supplier couldn’t” and all other excuses will obscure the truth: you made the decisions based on cost only.

When the company gets big enough, CxOs forget that it is the people who made the company great, not the IT systems nor themselves alone. Everybody in the company worked hard to get there, from the janitor to the CFO from the security to CIO. And it is not just that you can replace anybody with anybody because the unemployment rate is high. And it is not just that you do not need to develop any inside talent because there are many high-profile unemployed people. Companies who train and develop their staff proactively achieve employee engagement and commitment, and the employees pay back really good. There is an excellent dialogue that highlights this situation perfectly:

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CFO: What is we train our people and they leave?

CEO: What if they don’t and they stay?

Sometimes the CxOs do not want to develop their key personnel with the fear that this personnel will be their successor and they will be replaced when the time comes. This fear marks the stumbling point for many enterprises. The loss of a key manager or an officer comes quite costly for any company. I believe any CxO who does not make succession plans should be replaced as soon as possible: he is trying to secure his future rather than the company’s.

Customer satisfaction is often measured with some numbers: sales figures or call center responses. CxOs assume that if a customer is serviced below X minutes, she is happy. One GSM operator in Turkey made that mistake for 10+ years. Then the tide turned and they were calling people and asking what it could do for them to switch back to the operator. Neither me, my family, my wife and my wife’s family switched back. They are still sending SMSs. The point here is to ensure overall customer satisfaction. In Turkey, Dell offered 2-year in-place repairs for its notebooks free of charge. I purchased one for myself and had problems the first week with my laptop computer. They kept their promise and I made 5+ people buy Dell computers. They stopped this service and I am not sure if I will go with Dell again.

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And finally, the “quarter” issue. Acting only on quarterly reviews are as destructive as the cost-only decisions. Will you be shutting down the company after a quarter? If yes, then go on. If not, quarterly statements are there just to keep an eye on and see how you did. Acting only on the quarterly statements make you forget about the long term strategies and commitments. You have to ensure that your business is an established business. You have to think about years ahead. Quarters are just guides on how you used your time and what you need to do to achieve your strategies.

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