Posted by Vaughn P Fox on August 14, 2001 at 13:29:58:

In Reply to: Re: CKO Reporting Structure posted by Martyn R Jones on August 07, 2001 at 04:35:01:

Martyn,
If you take a look at how much money has been spent on technology and the return on that investment, you will quickly realize there is a huge problem. Many people are throwing technology at the problem without a clear understanding of functional needs/requirements based on a clear understanding of relationships between people forming the organizational structure. The primary focus for a CIO is to ensure current and planned network infrastructure (internal and external communication) and information technology (hardware and software applications) supports the needs of the people forming the organization. But what happens when the CIO is not aware of organizational needs? I have found that “most people do not truly know what they need to succeed”. If they did, there would be little, if any problems to address and this discussion would most likely not occur. If a CIO has the ability to constantly understand operational requirements and changes in those requirements influenced by variances in the operating environment, maybe then the CIO would be a logical choice to support CKO functions. Unfortunately, most large organizations do not include the CIO as a member of the board. That status is normally reserved for the CEO, CFO and periodically the COO. That group of senior leaders is normally responsible for shaping the future direction and focus for that organizational entity. Often the CIO is expected to plan and implement network infrastructure and information technology solutions without a clear understanding of current or future operational requirements. I have found that technical solutions often do not satisfy functional needs. Take a close look at the current formal training pipeline used by industry today. In today’s world people are trained in a somewhat stove-piped manner, yet many of the capability sets (resources) being produced require technical support personnel with skill sets capable of crossing traditional training boundaries. The key point is that functional and technical integration is essential for success. Most CIOs have a technical focus and posses the authority to influence a specific group of very technically oriented people. On the other hand, a CKO should be groomed from the functional ranks, while being technically proficient. Working closely with the CEO, CFO, COO and CIO, the CKO would be instrumental in bridging gaps formed by traditional training, organizational, functional and political boundaries. Why are some of the more successful organizations recognizing there is a need to create a Chief Risk Officer (CROs) or a CKO to work closely with other senior leadership to produce integrated solutions? In most cases they have realized there are gaps that need to be filled by people who are part of the same team. People they can trust are designated to work with others to validate information requirements and resources necessary to satisfy those needs. Instead of bringing in an outsider, they create a team player capable of developing integrated functional and technical solutions based on a clear understanding of validated needs. It just so happens that the name of the person performing this function is often referred to as a CKO. Some organizations cannot afford another high paid senior executive, so they try to combine the CKO functions under the umbrella of an existing billet. In some cases the existing CIO is expected to perform CKO functions, but most often the CIO is already spread too thin and when the CIO tries to perform both the CIO and CKO functions, CKO priorities do not receive the focus of effort they truly require to produce useful results. When this occurs, people forming the organization do not realize the value added by having a dedicated CKO on their team. A useful CKO would ensure information requirements necessary to support marketing, resource management, financial support, sales, operations, etc., and the integrated application of current and planned resources to satisfy those needs achieves desired results framed by the strategic vision. How can people argue with success, especially when people can clearly evaluate progress and make adjustments, as required, based on changes in the operating environment? To influence changes in cultural mindset, you may want to carefully consider the role of a CKO and clearly establish procedures, relationships and authority necessary for that person to influence actions and issues necessary to achieve desired results. Respectfully, Vaughn.

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• Forget the name game! this is about roles and responsibilities! Martyn R Jones 06:28:07 08/15/01 (0)

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