Don't Make Your CEO Happy (Meh Will Do)

David Wagner, Managing Editor | 5/7/2014 | 34 comments

David Wagner
CIOs, take my advice and stop trying to make the business happy. Or if you must do it, be careful how you do it, because you just might find raising satisfaction with the job your department is doing will actually get you fired for spending too much money.

This advice actually comes from research around customer satisfaction in retail, but I think a lot of advice applies to the CIO. E2's writers and plenty of other analysts have spent the last few years advising CIOs that their most important priority is to serve the business -- but serving it doesn't necessarily mean making it happy, and that's a hard thing to understand.

In this research in MIT Sloan Management Review, they show that there is very little correlation between customer satisfaction and company profits. There were many companies with high customer satisfaction that were losing money. In fact, the research showed that there is often an inverse correlation between the cost of something and how satisfied people are with the product. The less someone pays for something the happier they usually are. In business, that means your most loyal and happiest customers may actually be the least profitable. For IT, it means you're probably doing it wrong if you're doing your best.

Think about that for a second before you propose a new project to add capability to your IT department. If that new project means your department costs more, is the CEO going to be as satisfied with your product if he's paying more?

The answer is that it depends, of course, on the offering. Here's the most important quote to remember from the article:

There is a downside to continually devoting resources to raise customer satisfaction levels. Why? Because managers are rarely able to accurately quantify the cost associated with increasing customer satisfaction scores from, for example, 8.7 to 9.1 on a 10-point scale, nor are they able to determine precisely what such an increase is actually worth.
If your customer, the business, is merely satisfied with your IT efforts, and you are a relatively lean organization, it may be more expensive for you -- both in terms of your career and your budget -- to try to make them happy than it is to leave them unimpressed. With that in mind, reconsider your IT efforts around these thoughts.

OK might be better than good. I'm not suggesting you want your CEO calling you up every day and asking why the company email isn't working. But chances are, there's no level of service that is going to have the CEO calling you and saying, "This is the best IT ever." So stop trying.

You see projects, they see IT. The CEO and CFO see the bottom line of the cost of your department more clearly than they see the success of individual projects. They're not idiots. They can get granular if they have to, but what they really want to know is if the total cost of IT is worth the output. Each time you add something, remember that while you are adding a capability you are also adding to your total cost -- and bumping up the total cost means that the value proposition is changing for your "customer."

Smaller is happier. When it comes to customer satisfaction, companies with broad-based markets like a Wal-Mart or a McDonald's always have more customer satisfaction problems than companies that serve a niche. In IT terms, that means the bigger your company, the less likely you are to please everyone. If your company is growing, don't expect to keep the same levels of satisfaction you had when it was small.

Eliminate free riders. The research divided customer relationships into four categories: those where the customer was happy and the company made a profit (obviously the best), those where neither got what they were looking for (obviously really bad), and then relationships that were unbalanced one way or the other. In the case where the customer was happy but the profit was low, they called those free riders. In IT, you've got relationships with certain departments that suck a huge amount of resources and provide less gain for the company as a whole. While it is tempting to keep those relationships so you have a "champion," you are hurting your overall satisfaction because you are taking on unnecessary costs.

So the next time you think about your IT department's upcoming goals, think of them in terms of a customer buying a product. You want them to be happy enough with the product that they buy it again, but there's a minimal advantage in making them any more satisfied than that. Your department has a price point. It might be a Lexus or a used Kia with a dented door, but the price tag matters as much, if not more, to the driver's happiness.

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singlemud   Don't Make Your CEO Happy (Meh Will Do)   5/30/2014 10:07:35 AM
Re: Don't Make Your CEO Happy (Meh Will Do)
This is a very interesting article, thanks a lot
Henrisha   Don't Make Your CEO Happy (Meh Will Do)   5/28/2014 2:25:50 PM
Re: Don't Make Your CEO Happy (Meh Will Do)
The constant thing about IT is change. New developments, new trends, new tech. Everything will always be updated and it will never be at a standstill. To be a good IT manager, you have to understand the demands of your job and continue to educate yourself in order to move forward.
Anand   Don't Make Your CEO Happy (Meh Will Do)   5/27/2014 6:47:00 AM
Re: Don't Make Your CEO Happy (Meh Will Do)
Employers are always doing their level best to please their CEO even if it means that they lower their standards. That should not be the case at all. In many business related books they talk of employees serving the business. People actually get this point wrong. Serving the business does not necessarily mean making the CEO happy it is basically doing what you're expected to be doing in some cases going overboard may actually get you fired and no employee is usually looking for this to happen to them.             
SunitaT   Don't Make Your CEO Happy (Meh Will Do)   5/22/2014 1:45:13 PM
Re: Don't Make Your CEO Happy (Meh Will Do)
I never thought I would ever say this but I have to really disagree with you on this one. This approach limits the creativity of the IT manager and would lead to the death of innovation in the company. The IT world is never still and is constantly evolving. A good IT manager must keep in touch with all the changes and evaluate them so that the business is never left behind.
kstaron   Don't Make Your CEO Happy (Meh Will Do)   5/16/2014 12:29:26 PM
Just happy enough not to leave
So you want them just happy enough to not really think about it at all. That way they will still do as they do requiring what maintenance you already do or making things like you normally do, so they don't cost more and are not unsatisfied enough to think about going somewhere else. On a personal level I want my customers to do a little better than meh, but if you always strive for outstanding you can run your budget into the ground.
MDMConsult   Don't Make Your CEO Happy (Meh Will Do)   5/15/2014 1:02:38 AM
Re: Don't Make Your CEO Happy (Meh Will Do)
@SaneIT Good points. There seems that these type of relationships can be harmful to the company or the team. I see a lack of trust here or loss of trust with others happening with these type of people. It is good to have a well rounded view and interpersonal interaction with people of all levels when working at the corporation.
stotheco   Don't Make Your CEO Happy (Meh Will Do)   5/14/2014 2:04:04 AM
Re: Don't Make Your CEO Happy (Meh Will Do)
Right. If you care too much and something happens where you are slighted in the end, then you end up losing out and would be in too much grief. But care too little and your work will be sloppy, and so will your future at the company.
SaneIT   Don't Make Your CEO Happy (Meh Will Do)   5/13/2014 7:16:28 AM
Re: Don't Make Your CEO Happy (Meh Will Do)
I would tend to agree with you.  When you spend all your time making your superiors happy anyone who is going to support you from the bottom will quickly grow tired of you and when the talks start you won't have anyone to back you up.  I get brought into talks on just about everything even if it's not IT related because people know I won't mix words and my goal is to take the company as far as possible not take myself as far as possible in the company.  This irritates some people because they can't sweet talk me into doing things their way but they don't refuse follow my advice because they understand where I'm coming from.
vnewman   Don't Make Your CEO Happy (Meh Will Do)   5/12/2014 5:06:14 PM
Re: Don't Make Your CEO Happy (Meh Will Do)
@SaneIT - I like your style.  Far too many people strive to be liked and to please others in the organization and too often there are unintended consequences of that type of behavior.

Case in point: At my old firm, my IT Director was a yes-man.  He gave anyone in management exactly what they wanted from a tech standpoint, no matter if we had the money or resources.  He would bully our vendors into cutting their prices so much so that no one wanted to work with our firm.  He'd overwork everyone in the department at the detriment to day-to-day operations to complete an unrealistic deadline.

That worked for awhile and everyone who mattered loved him UNTIL the firm grew so much bigger that it could no longer adapt and be dynamic to the changes in techology and in the industry.  Every person was working in their own customized environment.  There were security loopholes everywhere because someone wanted some sort of software that my boss didn't seem to care posed a risk to data breaches.  Soon people realized this is not how you move forward and was not in the best interest of the business.

That IT Director was given a severence package, but even so, the company was recently bought out by a bigger fish because it could no longer sustain itself on its own.  I can't help but wonder if trying to please everyone proved the ultimate downfall...
SaneIT   Don't Make Your CEO Happy (Meh Will Do)   5/12/2014 7:33:22 AM
Re: Don't Make Your CEO Happy (Meh Will Do)
That's really been the goal my entire career.  It may be a character flaw but I don't care if people like me.  I'm not big on being popular, probably because I never really was.  I'm more driven to be respected because I am capable of doing the job.  It frustrates people to hear no when they are asking for things that just don't make sense but I have found that my reputation means that when I tell them it's a bad idea they take that advice seriously.  I was just told a couple weeks ago by our COO to stop letting people make decisions for their departments when I know that it is just going to mean they drag the process out.  I laughed at first but I realize he meant it, sometimes you just have to tell people how things are going to be and make it so.
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