by Dave Aron | July 12, 2011 | Comments Off
Richard Rumelt, a very well respected strategy professor, recently published a book called “Good Strategy, Bad Strategy”. Professor Rumelt has the courage to point out how bad most strategies are, and that in fact, most things called strategy are not. He peppers the text with great examples from the private and public sector, including some interesting military examples.
Whilst his book is not about IT strategy, the lessons are all very relevant for CIOs, and strongly resonate with Gartner’s suggested approach to IT strategy: clarify how the business will win and how IT will help, then ensure the detail of your IT strategy supports that strategic posture, and represents genuine strategic choice.
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by Dave Aron | May 26, 2011 | Comments Off
As a departure from the normal topic of this blog (strategy) – having just returned from a 10 day business trip in Japan, I wanted to share how the Japanese culture is shaping their response to the recent earthquake and tsunami issues, including the damage to the Fukushima nuclear reactor.
Although the incident was clearly a big deal, Japanese people and companies are trying very hard to keep on with normal economic activity, so as not to compound the problems that it brings.
One of the most concrete and visible impacts is concern about electrical power capacity. Most companies are running less/ no air conditioning, and only half the lifts/ escalators are running, for a shorter time, and lighting is low in public/ shared spaces. There are lots of signs about being mindful of the issue, walking/ using stairs more etc. As the summer will be hot in Japan, the capacity issue remains a concern.
It seems that there has been extraordinary heroism by the cleanup teams, and extraordinary patience and endurance shown by the victims and those impacted by the incident.
There seems to be a feeling amongst some Japanese people that the government is not being transparent enough with information about the impact/ risks. (It was not clear to me if this is a vocal minority or the majority of people.)
Some foreign companies and foreign staff have moved to the west of Japan, or left the country. Some have even quickly moved servers, to make their local offices more thin client only.
Some companies and individuals are doing very charitable things for the area – for instance travelling there to provide free services. As a small example, a friend of mine works for a hair salon, and their team is driving up to the affected area to give free haircuts out of a makeshift mobile salon. I also spoke to an insurance company where many staff have become temporary claims workers, travelling to the region to help people get claims resolved quickly.
From an ICT perspective, this incident highlighted three things:
(1) It highlighted the ability of (good) ICT to contribute during and shortly after a crisis, in terms of supporting communication, rescue efforts, quick recovery of service, and quick processing of issues such as insurance.
(2) It sharpened the mind regarding the need for good disaster recovery and business continuity planning
(3) It showed the flexibility of a thin client architecture – I heard a number of stories about being able to recover access to services much more quickly where there was thin client architecture in place – certainly leading to benefits for the region, and to positive reputation and possibly competitive advantage for service companies.
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by Dave Aron | April 12, 2011 | 1 Comment
In the last couple of weeks, I have met with and had telephone inquiries with a variety of Gartner clients about a variety of topics – including strategy, mergers and acquisitions and benefits realization – but the underlying theme is change.
We tend to think of our businesses’ core capabilities as being the main value chain processes, e.g. the ability to design mobile phones, the ability to sell cars. But when the level of change is high, the ability to manage and thrive through change becomes a core competence in and of itself.
This doesn’t just mean being able to execute standard change management processes, it means different things to different enterprises, but tends to be a combination of the change discipline itself, and various forms of agility, including process scalability and flexibility, communication and transparency.
Given the levels of change expected over the next couple of decades, with globalization, energy-related changes, some powerful technology changes (e.g. the real-world web, ubiquitous, high speed connectivity) – being able to change may be the only sustainable advantage. “The Only Sustainable Edge” by Hagel and Seely Brown argues that ultimately the only sustainable edge is the ability to partner with others – ideally including enterprises that are very different from your own – and learn from them, coining the wonderful term “productive friction”.
The real question is, as CIO, what does this mean to your role. For some, it may mean evolving to become Chief Change Officer, since IT tends to be a significant part of almost every major enterprise transformation, working on change tends to be a bigger part of the CIO’s role than other business leaders’, CIOs are used to operating across power silos (rather than within them), and IT often has the most well developed change function (PMO etc.)
If you see that as a potential direction of travel for your CIO role, it is worth investing some time thinking about the implications for skills, relationships and positioning.
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by Dave Aron | March 25, 2011 | Comments Off
The last week has been a very intensive re-immersion in the world of benefits realization for me. Presentations and workshops with more than 50 CIOs in London and Paris, and kicking of the research for the September Gartner Executive Programs report on Benefits Realization.
Unlike IT operations management and project and program management, where we have a pretty good understanding of the disciplines, tools and techniques, and are moving forward, benefits realization is still a relatively ‘undiscovered country’ for most enterprises. Most of us are really managing activity, not managing value.
Having said that, there are some breakthrough tactical behaviors out there. One of my favourites is internal partner scorecards, where the IT organization scores the rest of the business, department by department, on how good a partner that department is to the IT organization, including whether the department is realization promised benefits from IT-intensive projects that it requested/ sponsored. See Gartner research note: “Internal Partner Scorecards Make Business Partners’ Contributions Visible”.
But getting consistently better at benefits realization is tough. Not only because the discipline is less mature, but also because it is mostly outside the CIO’s direct control, and often cuts across power silos in the enterprise.
Ironically, the benefits realization challenge can often get worse as the IT organization becomes better at project/program management and IT operations management, as the credibility brings projects with more complex benefits.
Benefits realization is, of course, not an IT-only topic, but it is important for the CIO to influence benefits realization capability, since these days almost every change project has a significant IT component, and failure to realize benefit has an impact on business value and IT organization credibility (even if the cause of failure was unrelated to IT).
In some enterprises, getting a handle on benefits realization may even point to a future path for the CIO as ‘Chief Change Officer’ helping the enterprise realize the value promised by all business investments/ change projects.
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by Dave Aron | March 11, 2011 | 1 Comment
I have spent time this week with a couple of businesses helping them craft their ‘IT contribution statement’. This is a critical part of the IT strategy which crystallizes ‘how IT will help our business win’.
How does IT help a business win? There are a few ways to think about it. Below are two I find most helpful:
1. Efficiency/Effectiveness/Integrity/Agility – IT helps by making the business more efficient (reducing like for like cost per transaction), more effective (able to grow/ be more productive), safer in business (improving security, risk management, business continuity, regulatory compliance), or more agile (faster, cheaper and/ or safer to change.)
2. Automation/Enrichment/Information/Collaboration – IT helps by automating processes (cost/quality/scalability benefits), enriching the company’s products with information, improving decision making with information, and facilitating greater levels of collaboration (B2E, B2B, B2C).
Ideally, the IT contribution statement should be useful and helpful to both senior business leaders – clarifying the value the IT organization will bring, and to IT staff – helping them remain focused on the key business outcomes.
A great IT contribution statement starts with the key business success factors and business capabilities the enterprise needs to succeed in the planning period, then ties IT contributions to them. So, for example, if a key business capability is absorption-style acquistions, then IT will contribute with highly scalable applications that can absorb large books of business.
It is helpful to try to ensure that the IT contribution is not too generic (“IT will provide a reliable backbone for the business”) and not simply a list of services and projects that will be completed. Also, it is probably unhelpful to identify more than about 8-10 types of IT contribution.
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by Dave Aron | February 27, 2011 | 3 Comments
This week I discussed the CIO agenda and outlook for 2011 at a CIO roundtable. I shared our finding that CIOs are challenged in developing the skills and capabilities they need, and their most effective techniques involve outsourcing and the use of contractors, which is not a sustainable solution on its own.
The CIOs present mentioned a number of practical concerns, including:
- the lack of a pipeline of high quality IT graduates, at least partly driven by IT not being seen an attractive career path
- a question as to whether IT education was keeping pace with industry needs
- a lack of graduate entry points, or a defined career path, in a highly outsourced model
- very limited pools of resource for certain skills, including enterprise architects, relationship managers and strategic vendor managers
There was a sense that in the longer term, the cloud might help with the people problem, but for now it was a real issue. Some of the solutions discussed include:
- switching from role-based hiring to capability-based hiring
- on that basis, being able to recruit those with the right capabilities from other areas
- forming closer links with universities to help them prepare students, and to be the employer of choice for graduates
- CIOs working together to sensitize their national governments to this issue (although it was acknowledged that this was, to put it mildly, tough)
More generally, I often find that business leaders and IT leaders acknowledge the primacy of human capital management issues in achieving sustained success, but their strategies don’t often reflect that. The people portion of their strategies is often none existent or perfunctory.
The message – get innovative, creative and serious about the human capital management part of your IT strategy, ensure your HR partner is IT-savvy, and include real people metrics in your IT scorecard.
Category: Strategy Tags:
by Dave Aron | February 21, 2011 | 1 Comment
I had a discussion this week with a client about the relationship between strategy and culture in their enterprise. At Gartner Symposium last autumn, I presented with my colleague Graham Waller on the relationship between strategy and leadership. And I often find myself in discussions about strategy and enterprise architecture. Also, whether governance belongs in the strategy (as it is in the Gartner strategy template). Similarly, the relationship between org structure and business processes often leaves enterprises confused, even schizophrenic.
These disciplines are referred to by some organizational theorists as management systems, and include: strategy, governance, organizational structure, budgeting, leadership, culture, processes, metrics. They are each management systems in that they influence the way the enterprise behaves.
Many people tend to think of these management systems as bits of a business, that each needs to be perfect, and somehow fit together as the pieces of the business. A kind of object view of management.
There are two important ways we need to deconstruct this mental model, in order to make our businesses work well:
(1) No management system is ever perfect. For example centralized org structures have weaknesses (lack of local responsiveness), as do highly decentralized ones (high cost), as does everything in between. The key is to think of each of the management systems of a business as compensatory, compensating for the weaknesses of the others. So, for example, centralized org structure can be compensated for by highly inclusive governance mechanisms.
(2) It is also more useful to think of a management system as a lens on the business – a view of the business – as opposed to the object model described above. Then one gets less hung up about what space the different management systems occupy/ whether there are gaps or overlaps. In this mental model, the emphasis is on using the management system lens that is most helpful for the task at hand (e.g. deciding how we will win as a business). As a helpful analogy – there was an interesting article called “Marketing Is Everything” written by Regis McKenna in Harvard Business Review in 1991. It makes the point that marketing isn’t a department in your business – it is part of every aspect of how you do business. (I would say Marketing is a ‘lens on your business’.)
The bottom line of this thinking is, firstly – don’t design your management systems to each be independently perfect – design them as a group to compensate for each other. And second, don’t get too hung up on which conceptual space strategy, architecture, org structure etc. occupy – simply use the ones that have the most power for you when you are addressing a specific issue (e.g. how and whether to outsource).
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by Dave Aron | February 17, 2011 | 1 Comment
In the last couple of weeks, I have spent time with a very large global company’s IT team, and a team creating strategy for a very large public sector agency. In such large enterprises, although the general discipline of strategy is the same, there is a whole other level of challenge around scale, complexity and diversity. In such businesses, strategy is necessarily a multi-tiered activity, where there are useful things to say at the central, regional and local levels.
Experiencing the parallels between these two very large enterprises, one thing became obvious – structure is absolutely critical in large scale strategy exercises. (And medium and small ones too!) Being able to separate and link demand, control and supply-side issues, and further into subcategories (for example on the demand side: business context, business success, business capabilities and IT’s contribution) that are consistently used is a valuable exercise in itself – and helps to bring some clarity to the wicked problem that strategy setting is. Consistent, relatively rigorous categories for strategy give those eliciting, analyzing, synthesizing and communicating strategy insight and confidence that nothing is missing.
In general, in addressing complex issues, using an approach that is MECE is powerful. MECE, stands for ‘Mutually Exclusive and Collectively Exhaustive” and is associated with McKinsey and other strategy consulting firms. A MECE structure/framework covers the whole problem space (the CE part) and has pieces that do not overlap (the ME part), similar to the pieces of a jigsaw. The ME part helps you divide and conquer the issue at hand, and the CE part gives you confidence you aren’t missing anything. The Gartner strategy framework is an example of a framework that is intended to be MECE. When you look at complex issues, check you have a MECE approach.
And as a philosophical end note: People tend to think of structure and content separately, and the content being the really valuable part. In fact there is a blurring/ Derridian deconstruction of the boundaries – great structures add a lot of value, both in analysis and communication, and can in fact form a key part of the content, just as great questions play a key part in creating/eliciting great answers. (I intend to write a future blog on the leadership concept of ‘unasking’ questions that aren’t so great.)
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by Dave Aron | February 5, 2011 | 1 Comment
One of the most valuable books I have ever read is “Finite and Infinite Games” by James P Carse (1992). The basic theme of the book is that we tend to treat things in business and life in general as ‘finite games’ - where we know the rules, the available moves, try to reduce uncertainty, bring things to a known conclusion, and beat our ‘enemy/ opponent’. Carse suggests that there is a different type of game, an ‘infinite game’ where the rules, the available moves and the available resources are changing, and that in these games it is more about expanding play and possibility, and everyone can ‘win’ in these games (we are not all competing for slices of a fixed cake.)
From a strategy perspective, this suggests a couple of things. First, that we should not just think about strategy as competition, but also expanding the pie – as the popular, recent book “Blue Ocean Strategy” points out. And second, and perhaps more subtly, we should think about strategy (including the IT aspects of strategy) both as playing within boundaries (how do we succeed in our current conception of what is possible) vs playing with boundaries (playing with what’s possible). This is particularly important for disruptive technologies – not just thinking how they can make our business more successful as it is, but whether they can change the fundamental business model. Concrete examples of ‘playing with boundaries’ would be the use of technology to make the car rental industry much more liquid and dynamic (Zipcar/Streetcar), and bounty/prize based models of developing solutions to problems (e.g. Innocentive and Topcoder).
Typically, we can’t devote our entire IT strategizing to highly out-of-the-box, ‘playing with boundaries’ issues, but it is at least worth doing a mental check as to whether we are at least thinking through the possibilities, or we are entirely ‘playing within boundaries’.
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by Dave Aron | January 28, 2011 | 2 Comments
Welcome to my blog. My career has evolved to focus almost entirely on strategy – business strategy and the IT aspects thereof. In my personal life, I am also fascinated by strategy – playing the game of go (which is widely believed to be the most pure strategic game) and reading a lot of East Asian books on strategy. (By the way, “The Art of War” by Sun Tzu is by no means the best, in my view.)
This is my first ever blog post, but I am excited about using this blog to post and discuss musings, incomplete thoughts and random observations that relate to strategy. I invite your responses.
For the purpose of this blog, I would like to define strategy simply as “How to be as successful as possible”.
My first reflection is that strategy is not a luxury. I think for many of us, we feel like delivering project and operations is what we absolutely have to do, and spending time on defining and crafting strategy is something we do when we can afford to.
There are at least two reasons that’s dangerous and wrong:
- If you aren’t operating strategically, you may always be so inefficient and busy that you never have the time and space to craft a strategy.
- Strategy is fundamentally about having a focus and making trade-offs. So good strategy means you do/ invest less, to get better results. So good strategy isn’t high concept documentation, it’s direction that creates more success.
The reason many people are cynical about strategy is that most strategies are pretty weak and ineffectual. But it is possible to create great strategies, even if it isn’t easy in most complex, dynamic, messy enterprise contexts.
So, in summary, strategy is a necessity, only weak strategies are a luxury (that no enterprise can afford).
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