Six weeks after joining a company, the CEO may ask you to do a strategic review of the business -- concurrently with your work as CIO. Rob Fyfe found himself in this situation when he joined Air New Zealand in 2003.
"The reason he asked me was not per se because I was CIO, I think it was largely because I was just the newest person on the team with the freshest set of eyes," says Fyfe of the directive from the CEO, Sir Ralph Norris.
"The challenge he gave me was to say, 'What sort of airline should Air New Zealand become if we were to have a viable future?'"
At that time he conducted the review, the economics of the airline industry and the Air New Zealand business itself was "quite challenging". Fuel has doubled in price in the last four years, which added another $600 odd million of costs the airlines had to absorb without any significant rise in fares.
In this situation, it was easy for the CEO or the executive team to spend all their time focused on the bottom line, he says. This is particularly true for Air New Zealand, a "subscale operator sitting at the bottom of the world" and flying some of the longest airline routes.
"We were never going to be able to create a competitive advantage through purely managing the financial metrics. We just didn't have the scale, and the airline business is a scale business."
Sir Ralph Norris told him to "put the economics aside and start the strategic review".
The review led to a raft of programmes at Air New Zealand, including the retention of its core reservation system that initially required over $250 million to be replaced.
Today, the reservation system remains the "heart" of Air New Zealand's competitive advantage, he says, and has made several innovations its competitors have struggled to match. These include grab a seat, and "revolutionary changes" in the check-in and boarding processes.
"All those innovations and many more we would not have been able to address if we hadn't retained our capability in managing our own reservation system," says Fyfe.
"Now, typically 70 percent of development expenditure is spent on customer facing and operational systems rather than corporate systems. And by the time I left, I was hardly ever hearing any complaints from people about project priorities or dissatisfaction with IT's performance."
Fyfe stayed as CIO for less than a year before becoming general manager of airlines. When Sir Ralph Norris moved to Commonwealth Bank in Australia, Fyfe took on the top job.
Fyfe therefore knows the push and pull demands placed on the CIO, and he also knows how it can be a very good position to vault into other executive roles. For this, he looked no further than his former boss Sir Ralph Norris, who started as a computer programmer, progressed to CIO and then CEO at ASB Bank, before taking the top role at Air New Zealand and Commonwealth Bank of Australia, the parent company of ASB.
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