Coming out of the worst of the pandemic, Maya Leibman kept hearing people talk about getting back to normal. Leibman, American Airlines’ CIO, knew better. “It’s clear things aren’t going to get back to normal again” she recalled thinking. She also understood that this disruption provided an opportunity to remake the budgeting and business planning process in order to infuse company culture with greater agility, inclusivity and focus. She and her team had been partnering with CFO Derek Kerr’s group to achieve that but that pandemic provided a great opportunity to accelerate that effort.
“It’s just so easy when things are status quo to say, ‘Okay, well, this is how we do it every year,’” said Leibman, who announced in June that she was moving to an advisory role within American. “But now we had the opportunity to say, ‘No – the budget’s going to be done completely differently this year.”
Indeed, the business planning and budgeting process is emerging as a key transformation arena. And CIOs like Leibman are partnering with CFOs to use it to reinvent their organizations ‘cultures and teams’ effectiveness.
It’s a challenge and opportunity for CIOs, not just within their own walls but in taking on greater leadership roles throughout the organization. A January PwC survey found that 60 percent of executives identified digital transformation as their most critical 2022 growth driver. And while a Gartner survey found that only 30 percent of CIOs and CFOs have strong, collegial relationships, this post-COVID moment – including the prospect of a faltering economy – can be an inflection point.
“CIOs have a unique opportunity right now,” Leibman said. “The unprecedented pace of digitization really gave CIOs the opportunity to say, see, look this really works. … Look at all the great things that can come from it. ” The pandemic experience gave us a taste of what transformation can unlock. We used cutting edge digital tools and technology to change the way we work and unleash teams’ productivity. Our research institute, GoForwardToWork.com, has captured many of these lessons, and one thing which has become clear is that we have only started tapping this transformation’s potential. Even so, we have learned that this new way of work allows us to incorporate a broader range of voices into the planning process.
“What we said was, ‘Look, we’re taking control of the planning and prioritization process that will then inform the budget,” Leibman recalled. “We’re going to start with our enterprise objectives. We’re going to translate those into portfolio objectives and then into product objectives. ” Crucially, transformation permitted American’s leaders to set the strategic goals while crowd-sourcing how to achieve them.
“It’s top-down objectives and bottom-up initiatives,” Leibman said. “We’re allowing the people closest to the problem to say this is what we need to do to move the dial on the objectives we want to achieve and the key results that we’re looking for.”
For American Airlines, that meant introducing a new taxonomy which defined all of the products that make up the company. That allowed them to map their funding model to the product structure and introduce an objectives and key results planning model. “The concepts were born in IT and this was something that was really IT-led but finance was able to bring all the business units and all the leaders across the company really to the table and make the change really quickly,” recalled Farah Ellenbogen, a Delivery Transformation Office and Organizational Change Manager at American.
American is not alone in forging this path. In 2020, for example, Unilever redesigned its planning process to crowdsource ideas from senior managers below the executive team level. This not only led to a half-dozen strategic priorities for the company but also to greater mission alignment throughout the organization.
Thanks largely to the CIO-CFO alliance, a nimble, inclusive and bottom-up business culture is emerging – but it is not assured. In order to achieve it, these movers will not simply have to team up but also team out beyond their own companies, sharing best practices and working together to go forward, not back, to work.