Nigel Dalton, our Chief Information Officer, is a great champion for the engineering and innovation culture at REA. Here’s an interview Nigel recently did for CIO Magazine published in full to give you an insight into his psyche.
What’s your name and title?
Nigel Dalton, REA Group’s Chief Information Officer. I also have a role as an executive coach for our team that runs the Commercial real estate line of business within REA Group in Melbourne.
What’s your professional background? How did you get to where you are today?
Social scientist, not an engineer – but I have a passion for machines that has proven powerful when combined with an innate passion for people. I have worked globally in both IT and business roles (marketing, sales, product and service), and often in the twilight zone between those more traditionally defined professions – in modern digital companies, they are the same thing.
What academic qualifications do you have? What value have they offered you?
A degree from Waikato University, a long time ago in NZ with diverse subjects from economics to geography, statistics, sociology and computer science, which essentially makes me a behavioural economist by profession. The computer science part involved punch cards – and I suspect I am the only CIO on Linked In with an endorsement for Fortran that is actually proud of it.
Now that working in IT is understood to be the foundation of the massive movement toward knowledge work in the 21st century, more and more engineers and technologists are drifting toward the socio-technical fields in order to understand how to innovate their teams, organisations and work. By good luck or good fortune, I was already there.
Who do you report to at REA Group? Have you ever worked in any of those capacities?
I report in a traditional sense to REA’s Chief Executive Officer, Greg Ellis. Truth is, on a day to day basis my real boss is our customers – they are driving almost everything we do.
I have held various executive roles in smaller digital companies and big traditional corporations – filling in where necessary for all sorts of jobs in a start-up in the USA for example. It led me to appreciate the leadership challenges that sales, product, marketing, customer care, and finance execs face day to day. Since becoming a lean and agile enthusiast in 2000 I have spent about 2/3 of my time in pure IT roles, comfortable that they are a brilliant spot from which to improve an organisation’s overall performance.
How important is it to maintain strong relationships with other C-level executives? Which ones do you work most closely with, and how does that relationship manifest itself, particularly in setting IT strategy?
An isolated IT leader is a disaster waiting to happen.
The toughest gap to bridge for many CIOs is the relationship with the CFO – and yet, it is the most vital. That has given me a lot grey hair in my career in IT- overcoming a general legacy of mistrust and a reputation for IT being fairly proficient at spending without concern for ROI. I doubt there’s more than a handful of CFOs in the world who have a degree in Entrepreneurship and Innovation, which is the case with REA Group’s CFO, Jenny Macdonald, which I can assure you rockets the IT – finance relationship to levels of synergy most CIOs will only dream of.
As all the classically engineering-trained CIOs are starting to discover and read the likes of Deming, Dan Pink (Drive), John Seddon (Freedom from Command and Control), and Stephen Denning (Radical Management), they are waking up to the importance of their relationship with the HR Director. IT people have way more in common with creative writers than the robotic code-monkeys they are stereotyped to be, so creating a team culture that works for knowledge workers is vital. You’ll need professional help with that.
All that said, get to know your head of sales really well – their people pay your salary every day.
What projects have you or are you currently working on where you are helping to drive the business and add value?
REA Group has embraced lean and agile ways of working like no other organisation I know of in the world – from the CEO on down, people outside of software development are working in a daily rhythm, talking face to face at boards that transparently show the work being done for customers. I am proud to say I’m getting to have an impact on that radical agility, as a coach and advisor to teams and executive colleagues alike.
Considering realestate.com.au’s total reliance on IT and online operations, has this affected your role as CIO and what different pressures has it placed on you and your department?
It’s not until we chat with people in more traditional sectors of the economy that we realise how radically digital REA Group has become, and how comfortable we are with life at this scale and speed. Getting comfortable with working at extreme rates of change, in multi-disciplinary teams, in a daily rhythm took REA a few years – I had the joy of inheriting a high performing IT group in 2012, to whom a billion page views a month for a website is a daily ‘situation normal’.
Pressure has come in recent times by a massive migration to mobile devices – both our consumers and our agents drive more than 40% of our traffic via tablets and smartphones. The people with those talents are hard to source in Australia at the moment, so the traditional skills of technologists to create alternatives and options, as well as prioritising and balancing work, are in high demand at REA.
How do you and/or your department contribute to shareholder value?
The core structure of REA Group now has IT integrated into it – this is our customer focused, line of business structure. Developers, site performance engineers, and many more IT people spend their days working in multi-disciplinary teams with product, marketing, and sales team members, not in a big IT shop. It’s also a measure of how different we are that as a CIO, I am also looking after a multi-million dollar line of business – realcommercial.com.au.
As an IT group, we developed an interesting index that we will track over time, to benchmark IT’s contribution as a part of the overall organisation – we call it the RPIT, or Revenue per IT Worker. Knowing my background in economics, you can probably guess where this came from! It’s a fairly coarse-grained measure of IT’s contribution to shareholder value over time counting everyone in IT from service desk to developers, on-premises and partners alike. We managed to get data from a wide variety of global organisations and modelled where we sit on the league table – and have plotted our journey towards being world-class across our global organisation by 2016.
How important do you think it is to be ahead of the game? How much does an innovative approach play in your activities and responsibilities, and how does that manifest itself in your organisation?
We often talk about Wayne Gretzky, the world’s greatest ice hockey player, who called it ‘skating to the puck’ – you will never win chasing the puck itself, the game just goes too fast for that. That is how REA came to be the leader in the digital space, and how it maintains that leadership. To sustain that, we need a team of highly skilled players in IT.
IT were the initiators of REA’s famous hack days three years ago, which are now an event that almost the whole company downs tools for every couple of months. Nowadays we narrow the problem down to more customer-focused challenges – for example, which house will list next in Australia, or how can we enhance salesperson efficiency? To solve those kind of puzzles, you’ll need a team made up of sales, product, marketing and IT people. They are my favourite days at work – you can see some amazing video of our recent hack day here: http://hackday.realestate.com.au/
What IT trends are you most paying attention to?
Firstly our customers are driving us to be excellent at providing our services and products on mobile technologies; and secondly we’re investing a lot in understanding how to manage large sets of disparate data streams to re-imagine the consumer experience for people seeking property to rent or buy. The latter is somewhat ‘big data-ish’, and there are many technologies to track in that space.
How does your current role with REA Group differ in terms of activities, priorities and pressures from previous employment?
To be honest, until I joined the REA Group executive I don’t think I had really experienced a ‘proper’ C-level job – I had the C-title many times, but I now know the power of an executive team that collaborates effectively towards shared business goals, and is really focused on solving customer problems as a way of growing the business. It helps that pretty much everyone at REA is fairly tech-savvy – technology ideas can come from anywhere, and it is a relief to not be the only exec reading tech blogs, buying the latest gadgets, and following Matt Cutts and Werner Vogels in social media.
What would you see as the ideal characteristics of a ‘future state’ CIO?
The CIO role stands a good chance of disappearing completely in future, especially in the most digital companies where the line between product, marketing and technology is becoming so blurred we can all comment intelligently on tech trends, risks and innovation. The emergence of the role of Chief Data Officer working in combination with a more engineering-focused CTO will likely end the era when ‘information’ was seen as an executive portfolio that stood alone. To succeed in future, pretty much everyone on an executive team should be able to have a crack at being the CIO.
Is it difficult to achieve that state, and what advice would you offer others on doing so?
Australia has to step up the challenge of building companies that can achieve a more mature model of managing technology and IT people within their organisations – or the post-mining economy is going to be a disaster zone. I fear that not many organisations will actually kill off the ‘IT Crowd’ model for at least 20 years, or (being frank) until the current generation of leaders are retired. The path is through adopting agility and lean management principles, combining the intrinsic Antipodean traits of being resourceful and creative, with a new skill of being relentlessly customer focused.
Those lean and agile principles are so counter to the command and control careers that the current generations of leaders were socialised within, the average executive is going to oppose them at every step – overtly, or covertly. This grey brigade of technologists slogged for years to get into that corner office and have the right to tell people what to do – and they are not about to give that up easily. You won’t find any of that at REA–Group, and it makes everything possible.
As William Edwards Deming said – “It is not necessary to change – survival is not mandatory”. Most won’t make it, but I’m willing to bet REA Group will be there.