Trading places

Andrew Armishaw has swapped windswept Britain for, well, windswept Chicago, as he seeks to build HSBC’s profile in the US. Jonathon Edgley meets the driving force behind the bank’s expansion…

It came to me as something of a surprise that, on my first introduction to Andrew Armishaw, CIO of HSBC Holdings for North America, he answered with more than a hint of an accent from the North of England – Yorkshire, to be more precise. Although no doubt softened by the two and a half years he has spent in Chicago overseeing the expansion of HSBC’s considerable IT organization, Armishaw’s accent still suggests the determined, uncompromising traits for which Yorkshiremen are famed – an idea reinforced by the fact that the weekend before we speak, he has managed to find probably the only bar outside of England showing the soccer playoff final between Swansea City and Barnsley FC, the team he’s supported since childhood.

So what does a man from the one of the largest banking brands in Britain bring to HSBC’s US operations, where outside of New York State – and despite being one of the top 10 financial services organizations in the country – its profile is still being built? That’s what this interview hopes to find out.

Winds of change
Our discussion starts by addressing the current feeling that the role of the CIO and IT is changing, a point to which Armishaw agrees, albeit with a cautionary note. “Whilst I think the role of the CIO is changing, you can’t take for granted the basics, the bedrock of the role. If you don’t deliver very high quality, very highly resilient, very high performing and cost-effective systems, you don’t get the opportunity to do the other things. You’ve got to deliver your projects with a lot of focus, energy and drive.”

But assuming you get the basics right, Armishaw concedes that there are some interesting developments taking place. “The first, and it’s one we do here at HSBC, is to try and run the technology organization as if it was a commercial company – wholly owned. We don’t do business for anyone else, but we basically run it, we have an annual price list, we have to drive down our prices each year, we allow the business to consume what they can afford and it’s our job to try and drive efficiency through it. We try and make our IT services appear as if you were buying them from the outside, so you get a sense that we care commercially and so that you can benchmark them.”

Typically, the technology group supports most if not all businesses for HSBC in North America, from applications and data centers to networks for virtually every business. As such, it has a great picture as to what’s going on in those businesses – and in some cases is the only large-scale group that has that full picture. “As all banks are challenged to get more out of their business, we are one of the groups with a window as to what’s happening in all parts of the organization,” he says. “We have to play a much more active roll in saying how we leverage those components across the businesses – it’s a huge thing, and I think it’s one of the reasons why the management group here are very committed to always having the IT group at the senior table.” This is something of a refreshing change for IT.

Armishaw also believes that IT is increasingly becoming a big communicator of the brand. “You need to communicate the brand over the internet or through an ATM. If you look at most banks, the vast majority of the transactions now are through direct mechanisms. You need to think of yourselves as communicators of the brand of the bank, so you’d better be intimate with what the organization stands for and what it’s trying to communicate.”

But, as with any amount of change, it is imperative to fully appreciate the bottom line. “Never take for granted the day your systems aren’t working and you can’t get your projects in,” advises Armishaw. “People don’t want to talk to you about the other stuff, they want to know why the ATM is down.”

Singing from the same hymn sheet
Early in our discussion, Armishaw mentions the importance of focusing on aligning business with IT and why this is so important. Pressing this point further, he explains that the main reason for this is because banking is now so centered around technology.

One of the upshots of this is that, despite it’s increasing prominence, not everyone has followed this development with the same amount of enthusiasm – I’m sure we all know of 20-year veterans who swear that a pen and paper or flip chart are the only business imperatives and can often be heard enquiring why ‘people don’t use the phone anymore’. “You still have a lot of senior people in the business who have developed in their career without a lot of hands on involvement with the IT function,” he says. “It’s absolutely our responsibility to explain what we do, what the services are and how they’re core to those businesses; they should also feel they are driving the agenda. I think in a lot of companies, business executives don’t feel that they drive the technology agenda, they just get to vote on it on rare occasions.“

There’s an emotional aspect to this as well. “I think a lot of IT groups don’t present themselves as a service provider, they don’t treat their businesses as customers, they’re somewhat divorced and disengaged from them. So there’s a practical element that says that if we understand the business, we’re going to develop the right systems and the right infrastructure. IT therefore needs to show it’s very engaged with that business and very excited about making that business more successful, and that you understand the technology group can only grow and prosper if the businesses grow and prosper. It’s a very simple philosophy.”

Of course, there’s still the hurdle of differences in approach between IT and business staff that need to be taken into account. “We all have pictures in our head of the typical characteristics of people in business, whether they’re from IT, sales or senior management – not all of which are necessarily flattering. So it is important to get past these stereotypes and appreciate what we all bring to the table.”

It’s the personality that’s important
Being careful not to generalize, Armishaw typifies the characters of IT and business employees. “IT people are pretty analytical, are good at structure and are good at projects and breaking things down and delivering. Business people on the other hand, tend to be more commercial, entrepreneurial, wanting to do things fast.” As such, you can often get a clash in approaches: the “I’ve got an idea, I want to do it on Monday” business approach, versus the “here’s my structure, here’s my project methodology, here are my controls” IT approach.

Although this is in part an exaggeration to make a point, there is also some truth to it, and some common ground must therefore be found somewhere in the middle. “IT needs to realize that we cannot grow as a technology group unless we make commercially good decisions and are nimble. Similarly business must realize that it’s not IT’s job to develop systems quickly and poorly without quality and thinking through the infrastructure; it just won’t work.”

Armishaw points out that it works best when these two groups are very closely engaged and understand the benefit of the different approaches. As such, one of the things Armishaw is very keen on is moving people between the IT and business disciplines to get a greater appreciation of the underlying business (see The Apprentice sidebar). “We’re having some success at this because it does give people a different view. Nobody has the monopoly on the right answer in this, but I do think it’s important the IT people understand that in the end, if you’re not supporting and driving commercial success it doesn’t matter. You need to understand how your structure, controls and projects help the organization be more commercially successful.

“As we all know, sometimes what is commercially successful isn’t always logical. What consumers buy, and what they like and do isn’t quite as rational as we think. What we encourage our IT people to do is really understand why our businesses are commercially successful or not. Look at why we have an advantage with customers rather than just analyzing the process – why are we successful, what are the things that make the difference to end customers and the reasons they buy and how can IT influence that?

“We encourage people to get out to branches, call centers and onto the internet to understand how customers buy and what drives them to buy, because sometimes the results might surprise you.”

The driving force
I ask whether this is an admission that IT is there primarily as a service to the business, facilitating their demands as opposed to driving development – and to a point, Armishaw agrees that it is. “In general, I would say all the best products I’ve seen have had a very clear business sponsorship, there’s no doubt about that.” But of course, as Armishaw continues to explain, IT still has a responsibility to shape the agenda. “If they see things being built that they think are either impractical or not commercial, then you’ve got to raise that. If you just do what you’re asked that’s not enough. You have to look at what you’re asked and you have to present alternatives and explain why what might appear to be a very good commercial way of doing something isn’t.

“With the best will in the world, you’ve got to educate them from time to time. You have to be in the position to influence the agenda, not just execute it.”

It’s this focused approach that has enabled the tough Yorkshireman from across the pond to quietly build something of a success story at HSBC. You certainly wouldn’t want to bet against him gaining even further success, and in the past few months his efforts have increasingly gained recognition from both the media and his peers. Oh, and for the record, Barnsley won the final. It looks like Armishaw knows one or two things about backing the right team.

The IT services apprentice
There have been many attempts to solidify disparate groups within business; some have been successful, some not so. Amongst the more recent initiatives, one that sticks out above the rest is Armishaw’s take on the popular TV show The Apprentice as a means to educate his staff on the ways of the business world. This wasn’t your typical team bonding event that wears thin after a couple of hours and is forgotten the next time the e-mail server goes down. This was a genuine learning experience for all involved.

“We took 330 senior level IT staff from the US, Canada and some from Mexico and for three days we didn’t talk about technology. We said if you’re going to really understand this commercial agenda and hope both to practically and emotionally engage with a business, then why don’t you create and run a business.

“We split them into 20 groups and over the course of three days they had to brand themselves, pitch for venture capital funding, create a trade fair and financial plan. There were no technology disciplines required from them. We also did sneaky things; half way through we said to them the IT group has come back and said it’s going to cost twice their original estimate, etc. So the whole sense was to understand what it feels like to be operating in an environment where you’re trying to generate new business and you don’t control all the levers, but also to open our eyes up to the kind of skills we have that we don’t usually reference on a day-to-day basis.

“”If you look at our people, a lot of them have an accounting or marketing background or they do stuff outside of work that calls on a set of skills that they don’t think they use in the office because they think their job is to analyze code design. So as well as to create awareness it was also to dust down these skills and you suddenly find we’ve got some incredibly creative people who can create eye catching marketing material, some people who can think through the commercial implications.

“People were surprised because they would normally turn up to this event and expect to be told about UNIX and mid tier infrastructure, etc. but we didn’t talk about any of that. They basically worked extremely hard for three days and created a very high level of engagement. It has embedded a much more commercial outlook throughout our technology group that has been recognized by the business and our CEO here, so much so that we have since run another three subsequent events for 500 people. It’s reinforced this notion that IT is an essential part of the banking business and we’ve got to drive our IT agenda with the commercial focus.

And the business feedback?
“I get this on an informal level so I’ll ask directly. I think people have been incredibly interested and think it’s a novel approach. We also ask our businesses to score us every half-year on a range of categories and basically in the last 18 months these have been on a nice upward path. So when they get to vote they are saying we are more inline with their agenda, we’re more committed, more responsible – those types of things. We can say both rationally and emotionally that it’s had an impact.

?We’ve now run it in the UK and we’re running it in Hong Kong. We’re probably going to export it to our Mexico group as well. What’s nice about it is we did it internally and are now rolling it out to the rest of the HSBC group. It’s a good example of the power of HSBC, if you have a good idea you can get it to a lot of people very quickly.”

You’re hired: Armishaw on staffing matters
“We have a retiring chief operating officer who only half-jokingly said IT is five percent hardware, 10 percent software and 85 percent people. I think it’s true.

“As people are typically choosing between the same two to three technology approaches it’s your ability to make the right decisions and execute them that makes the difference. My view is that the extent to which you attract and manage people better than the competition is probably going to be a bigger factor than whether you made the right technology decision. Technologies come and go but people tend to stay with us longer than particular technologies.

“One thing that may be a surprise is that in the US we probably have to explain more about HSBC than we would in the UK. Outside New York State we are not as well known as we would be in Asia or Europe. What we do here is spend a lot of time explaining the organization and what people are joining. The second thing we emphasize is that technology is crucial for the development of the company and that we report into the highest levels – the chief executives of the individual businesses and of the overall American Corporation. So everywhere we have a management seat at the table.

“The next thing we emphasize is that whilst you’re joining a bank, your also joining a technology group with around 28,000 people globally, so we’re actually a pretty big technology company. Within the scope of financial services, just about every type of technical challenge/project/infrastructure you can think of exists, so if you want variety we’ve got it, and particularly if you’re interested in how the world is developing globally then it’s hard to think of a better organization to join.

“And then, once you’re here, we will put a tremendous amount of emphasis on development and we’re very clear that the top people will get rewarded. Today that seems to work pretty well and I think the name is getting recognized in the areas we’re operating in. I think technical people are concerned with what areas they are going to be working in, whether they are going to be stuck in a particular area, whether they are going to be able to develop their particular skills – within our particular organization, if you’re good enough you’re going to get ample opportunity to develop.”