Executives often do not consider the differing evolutionary pace of technology and management thinking. Executives over invest in technology and more importantly under invest in management capability because of this gap. The result is the incomplete business cases and benefits realization rates that are endemic in IT.
Executives need to recognize that IT evolves faster than management thinking in order to invest properly to realize and sustain benefits.
The pace of technical innovation is legendary. Consider the PC that has more computing power than two-ton mainframes of just three decades ago. That computing power, coupled with the Internet has transformed business operations creating new processes, products, companies and industries. During all of that technical change, management practices at many companies have barely budged beyond using the web for back office processes.
The pace of management innovation is measured. Gary Hamel, the author of the book The Future of Management, points out that the next wave of breakthrough performance will likely come from management innovation. At the Gartner 2008 Symposium, Dr. Hamel spoke to more than 800 CIOs about the topic pointing out that management innovation is the next frontier for technology.
How do you address the different rates of change between IT and management innovation?
Addressing this issue starts by recognizing that management, technology, process, etc are not separate and distinct parts of a company. They are all part of the capabilities that executives lead to create value. (See #3 – IT is part of a capability) They all have to work together, so a change in one needs to be accompanied by an appropriate change in the other components. Those changes reflect a balance in the different ways we think, model, manage and work in our organizations.
The balance between these different ways, shown in the figure below, is natural and will happen whether we like it or not. You see it in the ‘resistance to change’ associated with a major IT project, the changes in behavior and collaboration when new management metrics are created of the disruption of a management or organizational shake-up. Companies are complex systems and they will an equilibrium – however its not always the equilibrium you wanted.
The way of working describes how the company uses its capabilities and the elements within those capabilities to create results. Executives often think of this as the exclusive domain of IT. They invest in new systems, processes, technologies all the time to change what people do and how they do it.
Executives often ignore changes to the way they manage. This is in the believe that the ways of managing are stable and do not change how we organize, engage, monitor and direct the performance of the various ways the company works. “Workers get new tools, managers get new targets” was the way it was explained to me once.
Technology changes both ways of managing and ways of working. This is the rub.
Technology advances that change the way we work can and often do move faster than the ways of management or even the way the company thinks about itself and its roles. This creates tension between the technologist who sees the operational potential of new technologies and the executive operating with rules of management and finance. That tension has led to technology adoption in waves from data processing, to online systems, client/server and the web. These technology waves are often accompanied by a ‘management revolution’ that seeks to take advantage of them. For example, client/server coupled with business process re-engineering.
Studies by Erik Brynjolfsson and others indicate that it may take management more than a decade to understand and take advantage of new technologies. While many attribute that rate of adoption to generational changes in management, clearly executives need to break through and change both the way we work and the way we manage.
Executives raise performance by changing both the way they work and the way they manage. This means giving managers new capabilities, information, skills and guidance to match the new tools, techniques and processes provided to their teams. Here are some ideas for how you know:
- Look for changes in management tools as part of the scope of an IT change
- Require the business case to define the new metrics, targets, and information managers will use to achieve and sustain performance
- Push back when someone says that there is ‘no change in management’ because all we are doing is giving them new tools
- Require managers be a target of deployment processes and transformation efforts. They can be coaches, but they also need to change as well.
Technologies must ponder the same questions and ask what changes about the way we work and the way we manage. If you are not changing management capability, metrics, targets or the priorities for managers, then the business value potential of your solution is limited to incremental improvement.
Executives recognize that new tools require upgrading management capability will be better prepared to manage for results. Managers who are ignorant of this connection will continue to see operational improvement as independent of manager ability to manage and suffer the consequences.
The connection between managing/working and technology are critical as the new waves of technology innovation such as web 2.0 and the technologies we cannot even imagine will test us all.