Ramon Baez on Moving From the C-Suite to the Boardroom

Ramón Baez
Board Member
Kaiser Foundation Health Plan

Ramón Baez has had an interesting career. He currently serves on the board of Kaiser Foundation Health Plan and Kaiser Foundation Hospitals based in Oakland, California and the state of Washington Regional Board, a few startups, and Chairman of the Hispanic Information Technology Executive Council (HITEC) Foundation. In 1977, he began his career in manufacturing and eventually data processing before it was called IT at the aerospace company Northrop Grumman Corporation, then through various twists, turns, and promotions he ended up as CIO of the Military Aircraft Systems Division. He’s semi-retired now and says his retirement doesn’t look at all like his father’s or grandfather’s retirement, although he loves every minute.


Thanks for taking the time to meet with me. What does the HITEC Foundation do?

The foundation is all about giving scholarships to about 20 to 30 scholars every year for people who are in technology that happen to be Hispanic.


What do you wish you had known in your first six months as a CIO?

They should’ve talked me out of doing it. You know, you think you’re going to focus a tremendous amount of time on technology. Not so. Really, what you as the CIO are focused on, especially if the company is going through financial struggles like they were at that time, was managing the IT cost. It was a struggle to measure IT cost as a percentage to revenue. That’s what everyone was looking at, at that time. It was a big deal.

What I wish I would’ve known was I probably should have had about five or six finance experts working for me versus only one, and just totally managing and reducing the costs upfront. Once you get that under control, you can focus on technology and innovation for the organization. But if you don’t have cost under control all they’re going to want to talk to you about is cost. Once you manage it well and you demonstrate the value proposition, you can create. And as an IT leader, then it’s all about innovation, and that’s when the job becomes a lot of fun. That’s what I wish I would have done those first six months.


What three things would you advise implementing for a new CIO? In other words, things like tools, processes, policies?

I think tools are important. Apptio was a great tool. I brought it in at Hewlett Packard. You have to bring it in with good people that know how to use it, manage it well and understand the infrastructure, the hardware side of the house, and the application side of the house and bringing it together, otherwise, it becomes a difficult process. The first thing I would do as a CIO is to have a great HR leader and a great finance leader. Then explain to the finance leader, that if we don’t have great tools within the company, let’s either build the tools or buy them. Frankly, I’d rather buy them and then focus on other things.

The faster you can implement a good cost management visibility tool that you can share with the CFO, the CEO, the COO, and the business unit leaders, the better. Once everyone understands that here’s the cost, here’s the value we create, and this is how we continually drive productivity in the organization, we can move forward. If not, you’re just going to be battling the cost battle. That is not where a CIO should be spending your time. A CIO should be spending their time understanding what business problems you have within the company and how IT can help alleviate those problems and help digitize what you’re trying to do across the organization so that it can remain competitive.


So what advice would you give to a CIO what to do in their first three months, six months and nine months?

The first three months you’re doing a couple of things. Number one, understand what the CEO wants from the company. And then you also want to know what the business leaders are looking for. What are they expecting you to do? What do they want you to do and then what did, what are they afraid you’re going to do? You need to understand that with them. As you’re going through, having discussions with the leaders and then? Then you have to do a talent assessment.

Once you understand the talent on your team, determine who’s going to stay, who needs to leave, and who you’re going to hire as replacements. Typically, if an organization brings in a new CIO, and it’s from outside the company it probably means you don’t have a great team and it probably means you’re going to have to make some of those changes. Those things that are hard. Once you truly understand what the business strategy is and how the company drives revenue and profit, then you can build your team and focus on the areas of concern for the businesses. A lot of people forget when they first arrive that their role is drive, to automate what needs to be automated for the organization. Work to make it an easy place to work in, using automation and make the company an easy company to work with. From a customer perspective and a consumer perspective, it depends if you’re a business to business or business to consumer type company.

After those first 90 days, you need to layout what that strategy is going forward. You need to be able to give them early wins in those first six months, nine months, 12 months. But you know, talent acquisition is super hard. Sometimes you’re fortunate you may have it within the organization. What I always had to do since I’ve worked at multiple companies, and in multiple roles, is to perform a talent assessment at multiple levels. Once in a while, somebody who worked with you at a prior company wants to join you for the new adventure.

My issue was I went from working in an aerospace defense company to a diverse manufacturing company. Very different than aerospace defense.

Even though Honeywell had an aerospace defense group, that’s not where they put me. They put me in a commercial world, which was very, very different. Then I went to Fisher Scientific, it’s Thermo Fisher Scientific today, which was a distribution company for all intents and purposes at that time. So, I went from multiple different types of organizations, different type of businesses, if you will. You have to learn those businesses and see where the commonality of what your experience base was and how you can be successful in doing what you did at the prior group to make those things happen again.


Right. So you were going from one industry to a completely different industry. That’s huge.

Then when I got on the board of directors at Kaiser Permanente; I’d never worked in healthcare. I had to learn health care. But you know, I love that. I mean, it’s really odd. I remember the general counsel at Kaiser Permanente walked up to me about a year after I was onboard. He said, “First of all, it blows my mind that it’s already been a year. But what’s more shocking is how much you know about our business and how you’re asking really important questions that none of us think about.” I said, “Wow. Well, thank you.” I think that has a lot to do with my training as a CIO because when you’re a CIO, you’re very curious because you have to be. If you’re not curious, you’re not going to help the company.

When it comes to driving innovation and digital transformation, you have to be very curious. You have to ask a lot of questions. As the CIO, you work with multiple functions. What ends up happening if you’re good at doing what you’re doing, working with all of your colleagues in the various business units, you’re going to be very helpful to the C-suite and business unit leaders.

You need to know how to collaborate extremely well. You know, you’ve got to have the communications skills, but you have to have the collaboration skills. If you’re not good at trying to drive the win/win solution all the time, then you’re going to struggle.


What talents or qualities do you most look for when hiring a new executive team member?

Attitude is number one. You can tell attitude pretty fast when you’re meeting with a candidate in an interview. They don’t speak ill about their prior boss or company, and they have a pretty positive attitude, but you want them to be pragmatic. I don’t want someone in there looking through rose-colored glasses where everything looks Pollyanna-ish. I’m talking about somebody with an attitude of how they were able to drive results, working within an organization and working with the team, driving success, and also somebody that’s failed at something that can talk about that as a success as well. Of course, they have to have technical proficiency. If you’re going to be in technology, you have to understand how technology makes a business better. They need to demonstrate and talk about things that they worked with, their teams, how they were able to change the performance of an organization by deploying a really good solution.

They also have to be curious. That attribute of really asking the right kinds of questions, coupled with a great attitude makes them valuable. If you have a great attitude and you start asking people questions, people want to talk to you. They go, “This person cares about me. They want to know what I’m trying to get done and what I’m trying to achieve.” That’s what business leaders are looking for in a partner. The executive believes that the IT leader wants them to be successful.


What do you wish mid-level executives understood about a C level position?

I think number one when I go back, and I think about when I was mid-level, I didn’t understand the role either. You don’t get to see the whole company. You see it from a certain perspective where the C level, they see things at 50,000 feet versus 10,000 feet. They have to see it at a much different perspective to see how it all comes together. From a staffing perspective, from a budget perspective. I would want the mid-level executive to understand that the C-Level exec is deciding from a vantage point where they may have more information to take the organization in a different direction than the mid-level exec would prefer.


What advice would you give C level folks on how to move into the boardroom from their current role?

Well, first of all, not everyone may want to be on a board. Number one, you have to understand why would you want to do it. Do you have a passion for a particular industry or company? You have to understand that piece of it. And understand the risks as well as the reward. There’s more risk than there are rewards. Some people say they want to be on a board because I’ve seen other people serve on boards. They may not understand the pros and cons.

The risk/reward analysis is important. As far as reward, are you looking at it from a strategic impact? Is it going to make you a better leader in your current role? Does it allow you to do more networking across the industry? You have to manage it the way you manage your portfolio. That’s what I do. Not everyone may want to do that.

Then what kind of personal growth will a seat on the board offer? Well, for me, I had nothing on my resume about health care when I was asked to serve on the Kaiser Permanente board. I got pretty excited about that because of that very reason. I said, “You know, healthcare, it’s the number one issue in the country.”

But then the risk piece of it is, if you’re a CIO or currently an executive, do you have time for the workload? Do you understand how this will affect your reputation? If you’re on a board and the company goes under, how is that going to affect your reputation? Are you going to be viewed positively on your current job because you were on a default company board? How’s that going to work for you? Then there’s a legal liability. There’s a director and officers liability insurance, but are you sure it’s going to cover you. So those are the kinds of things I tell people they must look at from a risk perspective.

There are mature companies and so the board you’re on might be a snoozer, you’re not doing much of anything, right? Or worst of all, you’re on a company that’s distressed. If you’re currently working, a distressed board isn’t something you’d go to every quarter. It could be a daily or weekly call. Can you afford that in your time? Especially as a CIO, you already have a full schedule, and you’re budgeting your time.

Then I talk about what it takes to prepare for a seat on a board. In other words, what are you doing? Are you on any advisory boards today? Are you on any non-profit boards? And by the way, those are not prerequisites to get on a publicly-traded board, because the nominating committee probably doesn’t care that you’re on these types of boards unless you can demonstrate that you do some governance on the board.

If you can demonstrate that you’re either helping with the finance or audit committee and dealing with some governance of the company, then that’s a different thing. If you’re just there to help them fundraise, either give money or get money, then boards don’t care about that.

It’s also important to understand this is different than an operational role. There’s a term that’s used out there called, “Nose in, hands-off.” So you stick your nose in and ask a question, but you’ve got to take your hands off because you’re not going to do this. The person you just asked the question of is going to go off and do the work. That’s hard sometimes for operational leaders to say, “Well, wait a minute, I want to help. Why don’t you guys call me every day? You know, keep me updated.” It’s like no.

The other thing I tell them from an attitude perspective is tone. Your tone is important. How do you come across? Are you coming across as arrogant, like you know at all? Or are you asking questions with an attitude of a duty of loyalty to the company or duty of care of the company?

Education matters. If you haven’t had any education, you can work with NACD. NACD stands for the National Association of Corporate Directors and or in my case because I’m Latino, there’s LCDA, which is Latino Corporate Directors Association and similar organizations to obtain training or attain a certification in board governance. Or if you’re working at a large company and you have an auditor similar to KPMG or Deloitte, they have training programs you can go to. They’d love to be able to help the executives that they’re serving to get involved in these programs.


That’s great! What have we not discussed that you’d like to bring into the conversation?

The last thing CIOs have asked is how I get phone calls for board roles. How do people even know I’m interested in being on a board? I recommend they use their LinkedIn profile. Include your interest in seeking an opportunity to serve as a board member for a publicly-traded company somewhere on your profile. I have asked them how are people going to know that you’re interested if you don’t share your interest? The other thing I tell them is if they do work with search firms, it’s essential to share that interest with the recruiter. They’ll add it to their system. It’s as easy as spreading the word in the right places.

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