The rise of the celebrity CIO

The Michael Harte phenomenon.

From twenty minutes before CommBank CIO Michael Harte was due to speak at the Gartner Symposium, his peers milled close to the doors of the auditorium to ensure they’d get a seat.

As they queued they spoke in anticipatory tones, as they might have done lining up for Steve Jobs at WWDC, or Bill Gates at a CES.

Once inside, two senior Gartner analysts stood upright at front of stage, as twin statues guarding a temple.

They took it in turns to reverently speak of a man that had the "willingness and ability to tackle challenges head on", a man with the courage to perform "open heart surgery on core systems" and "elevate the role of the CIO".

Welcome to the rise of the celebrity CIO. It took time, but we have a genuine contender.

A tanned Michael Harte arrives on stage rocking yellow slacks, a blue sports jacket, and a breezy white cotton shirt. The girl next to me leans over – “Did he just come from the beach?”

"It's been quite a wild ride," Harte tells an arena of IT managers and pin-striped vendor sales execs, left wondering why they missed out on invites to the party.

Who knew the banks were having so much fun? We’re clearly in new territory. So what are the characteristics of a good CIO that invites this sort of adulation?

First and foremost, you need to have the right job.

For this audience, Michael Harte represents some kind of ideal. Every person in the room – whether they are on the buy or sell side – want to see the strategic importance of IT realised on company boards, and budgets to rise accordingly.

CommBank’s core banking transformation – the “open heart surgery” so to speak - isn’t yet finished, and hasn’t come cheap. But that’s not what makes Harte an outlier – he is revered simply by standing up such a tough business case in the first place.

The CIO is becoming “increasingly irrelevant”, Harte told the audience, with outsourcing rampant and many IT departments relegated to the role of ‘plumbers’. Further, there is competition - chief marketing officers are vying for control of online strategy, CFOs and other risk officers vying for control of security.

An effective CIO takes somebody with some ego, somebody “assertive” as an individual, leading an equally assertive team. Harte says he has moments of self-doubt and indecision, but his public face is all about “trying to keep motivated people on a focused mission".

The hard stuff

Sometimes it isn’t very glamourous.

The role of the CIO is to make “capital reallocation decisions”, he said. The CIO must pluck the business rules and data from systems built up over 40 years that are now too expensive to maintain, and apply them to more agile systems.

Most IT infrastructure – which represents half of the IT budget of most financial services organisations - will not confer strategic advantage into the future, he said. Infrastructure can be commoditised and run by a third party. You can also outsource “risky” application development around specific tasks, “outsourcing the risk of getting that development done right or quickly".

Then there is retaining talent – the mark of genuine leadership.

Harte claims that one in five of CommBank’s IT team was “actively disengaged” when he arrived at the organisation.

“They were better off working for another company,” he said.

It was a huge concern – as in Harte’s opinion, the next wave of strategic advantage would come from people and ideas, not from the platform.

“Now it is the capabilities of your staff,” he said. “How many can do big data analysis? Create dynamic and lightweight content on mobile devices? Harvest assets today for multiple devices in the future? They are the new competitive advantage.”

What he wanted was a team of “strategic thinkers”. He wanted staff that would be “aware of how the organisation makes money”, staff that would be excited by the mechanics of projects that would ultimately lead to a richer relationship with customers.

Harte put together a training program with MIT and encouraged the sharing of resources and new ideas using social networking tools like Yammer. He is even trying to work out a way to reward those that conceive and share innovative ideas.

Again, this talk appeals to the industry’s highest ideals. Staff want a clear goal and the tools they require to effect change. And they don’t want to be managed. They want a leader.

“We don't have to be boring risk averse bankers any more,” Harte said. Staff needed to be “not afraid to fail” and “learn through rapid experimentation”, being open to change around new ways of thinking and working.

Isn’t that Google territory?  No, he said, Google only tends to offer sales roles in Australia.

“Developers have better jobs in my organisation because we are spending way more money,” he said. “We have a huge amount of money for innovation.”

Read on to page two for Harte's vision - for the the future of banking IT, but also for himself at CBA.