Governance from the middle out: When You'reDecentralized

Not all CIOs can expect to get that kind of attention from seniorexecutives. That is why having a good committee governance structureat the middle level is so important.

Jeff Balagna, senior vice president and CIO for Minneapolis-basedMedtronic, which makes pacemakers and other electronic medicaldevices, was brought in from GE in 2001 to establish a core governancestructure. Medtronic is highly decentralized and was not interested inpowerful supergroups. So Balagna formed a committee of senior ITleaders from the company's five business units. Many companies usethis device, the IT council, to govern the IT function when they havemultiple independent business units, each with its own ITstaff.

Though he does not have the leaders of the different business units inthe council, Balagna adds an interesting twist to this governancemechanism that gives it more strategic significance: Each CIO ofMedtronic's five business units reports directly to the president ofthose business units, not to Balagna, who gets dotted-line authorityover them. The divisional CIOs sit in on their business units'strategy sessions and bring those strategies with them to the meetingsof the IT council. That helps the council set an overall strategy forIT that reflects the business interests of the business units. Whenthe committee decides to make a big IT investment or a major policychange, final approval goes to Medtronic's executive committee of topbusiness honchos, but most of the company's IT discussion andstrategizing remains at the IT level.

Too much governance?