Really?

I had the honor of reviewing a transformation program and providing a health check.  The program is ambitious; technology intensive, process demanding, and can truly redefine the rules of the industry.  But there is a catch, the transformation program had progressed to a point where it had raised serious business issues, but the program and its sponsor did not have the authority to answer.

Sitting at this crossroads, the teams did what they could, keeping busy until there was a decision from the executive level.  The health check became necessary as the program sat stalled for more than six months and instead of creating pressure for decisions, it created calls to cancel the transformation.

It was clearly time for the executive team that sponsored the effort to step in and make some hard choices.  In the report recommending that action, among other recommendations, the Executive Team came back with the following reply:

“Why are you not telling us more about IT and where it has failed?  Why are you talking about where they are going wrong?  Why are you saying that we need clearer business direction, your just covering for IT and their failings.”

When I pointed out that there were several highly critical points in the report related to IT, which had little effect.  All the executive team heard was that there needed to be more business direction.  Their reply:

“If you say we haaave to be involved then please know that we are tired of having to make every decision.”

I was not surprised.

I was stunned.

Here was a major multi-multi million-dollar transformation program that had done the work, found the tough issues, gone as far as it could and now needed active executive sponsorship in the form of some hard decisions to go forward.

The executive team commented that their job was to be ‘above all of this’, to think strategically, and to be visionary rather than making operational level decisions.  The only problem was that the open issues were not just operational; they were strategic in the sense that the answers would determine the performance profile of the company in the future.

As I reflected on the meeting a few things became clear.

• The executive team assumed that saying it is should be so is the same as making it so. “We said yes, so we consider it done.”

• The executive team did not see making hard decisions as an expression of their leadership.  They wanted to remain ‘above it all’ and not create winners and losers on an issue.  They believed that you demonstrated leadership by guiding without getting their hands dirty.

• The executive team was ready to criticize the decisions or direction others had taken but they did not have the time, energy or political will to lead in creating that future.  “I can tell you what your did wrong, but its not my job to help you make it right.”

• The executive team did not welcome evidence to the contrary nor recommendations on how to move forward that required their active participation.  I will listen if you confirm my suspicion, your motives are suspicous if you do not say what I expect to hear.

These reflections give the impression of an incapable executive team.  But that is not the case, this team runs one of the most successful, global, industry leading companies in their market.

So what gives?

These executives were giving the level and type of sponsorship that had worked in the past.  Their responses, comments and attitude was appropriate for the type of relatively incremental, back office, administrative changes that have dominated the executive agenda for the past 10 years or so.

The level of sponsorship that worked when we talked about IT.

While the quality of that sponsorship was fine for then, it is totally in appropriate for the types of changes we are doing now.

The level of sponsorship required when technology becomes greater than IT.

Executive sponsorship needs a significant upgrade as the demands for transformation have outstripped current sponsorship models.  Enterprises are going through real and deep change, like this one, requires direct executive action, decisions and direction.  Not delegation.

If figuring out how your business needs to operate to create value is not part of the executive team’s job, then I do not know what is.

What are the changes, if any, you are seeing in the type, nature or level of executive sponsorship?  Not just for technology, but for any transformation.

I believe it is the business analyst.

But not the type of business analyst we have today.  That type of business analyst was a junior position in IT.  The one responsible for gathering requirements from their business peers.  The one focused on building application solutions and contributing to projects.  The role provided an entry point for new hires into IT.

I started my career in IT as a business analyst in part because a business analysts did not have to be a technician, they could learn the technology while working with the business.  Methodologies and IT processes supported this type of business analyst by defining formats, tools and techniques for requirements gathering and analysis.

This type of business analyst is still required, particularly in consulting and service provider organizations where the focus is on implementing new solutions.  That role is diminishing in captive IT organizations that need greater experience, knowledge and context to create value in today’s complex, cost conscious and cycle time driven world.

CIOs are rebuilding the business analyst role, not as an entry point for new hires but a leverage point for experienced IT professionals.  These CIOs are redeploying experienced I&O professionals, developers, managers etc. who are able to translate what they know into the best way to move the organization forward by building on and adapting what you have rather than always requiring developing a new solution.

CIOs need experienced business analysts because the nature of IT project decisions is changing.  Traditionally the major business decisions revolved around budget authorization for projects.  Secure the budget and the focus moves to starting the project as business analysts get to work completing requirements.

Increasingly, enterprises and CIOs do not have the resources or time to continuously create new solutions.  This changes the role of business analyst from introducing new solutions to solve issues toward a greater emphasis on redeploying existing solutions to new issues.  The value proposition for business analysts with the experience, ability and interest in reuse is strong. Reuse not only reduces risk and cost, but also reduces cycle time by up to half.

An experienced professional as business analyst has the ability to thrive in this environment as they have one or more of the following characteristics:

• They know if the company has addressed a similar business issue in the past and the potential to reuse those solutions to fit new situations.
• The actual structure of information, interfaces and relationships between systems.
• The real performance of existing applications, data and infrastructure, providing a more accurate assessment of capacity, performance and
• Prior change requests and updates to applications
• Vulnerabilities, risks and weaknesses that may be exacerbated by the new solution.

Not every experienced IT professional can make the transition to becoming a business analyst.  The new business analyst has to be solution focused; in the sense that they are looking for ways to make things work rather than focusing on all the ways it cannot work.  Fortunately it is relatively easy to figure out if someone is solution focused.  Simply ask the following question:

We want to do “X” in the business.  What do you think?

Then listen to their response.  If they talk about how it would not work, could not work, or how poorly positioned the company is, then they are not solution focused.  On the other hand, if they start to discuss how it might be possible if we change X, Y, Z etc., then you have found someone who is looking to create solutions.

Re-building the role of business analyst creates new capabilities for amplifying the enterprise based on recognizing the value of experienced and solution focused IT professionals already within your organization.  Moving from a requirements focus to a solutions focus is an essential part of that transformation both for IT and for the analyst role.

IT frugality can be defined as putting cost considerations at the forefront of technology decisions.

Ten years of tight budgets indicate that IT frugality has largely worked, Based on Gartner Executive Programs CIO survey results, a $100.00 in CIO IT budget in 2002 is now worth $105.50 in 2012.  Adjusting for inflation that same $100.00 in 2002 would be worth $125.75.  In other words, constant dollar terms CIO IT budgets have decreased by $20.25.

CIO IT budgets are influenced by a number of factors and the calculation reflects a global weighted average, so your personal experience will be different based on your company’s strategy, industry, geography and other factors.  This is a crude factor at best, but it indicates the extent of IT frugality.

Based on this crude indicator, CIOs been adept at managing from a financial perspective in demonstrating their frugality and their ability to do more with less. While technology advances, improved price/performance ratios and other developments have ‘saved’ IT, made it more operationally productive, has IT been recognized as a source of productivity, has this frugality made IT better?

I doubt it.  A decade of IT frugality with limited catastrophic IT failure seemed to prove the point that IT is a cost rather than a capability.  The result is a cycle of cost cutting, benchmarking, renewed cost cutting, etc.  Each cycle was driven by macro-economic conditions and micro-executive vision about the role of technology.  So long as you were measuring IT spend as a percent of revenue, you could claim success as it appeared that IT frugality worked – we were getting more for less, right?

While IT spending appears to be in check, what has happened to company capability and corporate IT?

I believe that IT frugality has failed.

Failed in the sense that IT frugality has not delivered ‘more‘ so much as it has cost ‘less‘,

Ten years of tight budgets have changed IT costs but done less to raise IT capabilities.

IT frugality has required CIOs to devalue IT, lowering its unit costs either through sourcing, services, the cloud, renegotiating supplier contracts or cutting IT resources.

These strategies have worked by emphasized the “less” part of IT Frugality and in many cases failed to deliver more to the business.

How can I say that?

Because, the average IT organization is still plagued by the issues it faced a decade ago: weak alignment, poor project performance, limited skills, constraining complexity, lagging legacy systems, a overall weak benefits realization performance. All of these are issues that IT cannot invest its way out of.

All of which create a cycle that re-enforces further IT frugality rather than looking for IT re-imagine its role and how technology amplifies the enterprise rather than just having IT continue to automate and administer back office systems.

The simple answer is to spend more on IT. But I am not so sure that more money is the answer.  Sure IT budgets need to keep pace with the rest of an enterprise’s operations, but throwing money at IT does not solve these problems.  CIOs need more resources, but they also need to reform IT, change the way it works, manages, plans and measures its success.

Frugality begets more frugality.  Reform requires thinking differently.

What do you think?  About IT frugality?  About IT reform or re-imagination?

More on that subject in latter posts.

Related posts

Maximizing IT performance by amplifying performance rather than administering a budget

Technology > IT

2012 begins a pivotal three years for IT

PS:  I borrowed the title after reading Peter Coy’s article in Bloomberg Businessweek, December 26, 2011-January 8, 2012 Page 48.

Re-imagining the idea is powerful, but it begs the question –  Re-imagine into what?

This year’s CIO survey provides an answer – re-imagine it into an amplifier of the business.  This led to this years CIO agenda report entitled “Amplifying the Enterprise” which was announced in a press release today.

Amplification, which involves taking a signal adding energy to it and sending it externally, provides an apt metaphor for the role of technologies like mobility and cloud.  These technologies create new channels and platforms for reaching new customers, engaging existing customers and supporting revenue growth.

Amplification also involves handling feedback.  Improperly handled feedback creates that stretching noise that you here when someone uses a podium microphone while they are wearing a lapel microphone.  Feedback related technologies include analytics and social media, which provide better ways to understand and capture what, is happening inside and outside your organization.

Taken together, the signal and feedback constitute a new view on “the experience”.  For most that experience is the customer experience which is essential to driving both growth and removing unnecessary cost, for more details follow this link.

The quality of amplification rests in large part with how the amplifier eliminates distortion.  Its true that distortion can be a form of music, but there was only one Jimi Hendrix so distortion for most of us is a source of cost, complexity, poor service and things that just make it harder to get things done.  For CIOs and their business peers, technology can eliminate distortions caused by duplicative processes, applications, inefficiencies etc.

CIOs in many industries will focus exclusively on eliminating distortions in 2012 as they face severe economic, financial and other challenges.  This is the year to emphasize eliminating distortion rather than reducing the cost of distortion.

All of these points lead to the model below that positions key technologies and their role in amplifying the enterprise.

Is this model perfect, no.  But it does provide a way to think about Technology and its various roles in the enterprise.  We need a new way of thinking because the nature of Technology has become greater than the nature of traditional IT. CIOs, IT leaders and others may want to consider how their IT strategy, plans and actions support amplifying performance – turning up the value of technology without creating distortion or negative feedback.

I believe this is important because when you talk about IT most business leaders think of IT as automating back office business and management processes.  That is true, but that way of thinking leads to a view of commodity-based services or a cost-based zero-sum game.  It is not that this game is wrong, but playing a game of ‘how low can you go’ or ‘doing the same with less’ is one we have been playing.  It is one that limits an organization’s future.

Thinking about Technology as an amplifier reflects the innate capabilities of things like mobility, cloud, analytics and social media.  These technologies are  externally focused.  Without changing the way we think, we will bend externally oriented technologies back internally to fit our existing model.

Force fitting technology into old management and strategy models is a little like buying a sports car only to drive down to the grocery store.  Sure you will look cool doing it, but you could have done so much more – you could have amplified the enterprise, you could have re-imagined Technology.

The 2012 planning cycle will be my ninth with Gartner and working with CIOs in Executive Programs.  During that time, I have observed that change in IT happens not in annual cycles but in three-year waves.   The 2003 planning cycle was my first with Gartner, but I believe as I go back through my notes that there have been three cycles since the turn of the millennium.

• 2000 – 2003 focused on demonstrating IT’s business relevance as executives scrutinized the business value of IT following the dot.com bust and related recession.  CIOs during this period faced the need to prove that IT matters and face of increasing commoditization of technology products and services.  Financial requirements drove the first wave of outsourcing, typified by blockbuster long-term single source providers who would take over and deliver ‘our mess for less’ IT.

• 2003 – 2006 can be described as the ‘business-ification’ of IT.  This was the period when IT was supposed to run more like a business by defining its business in terms of IT services, service levels and new forms of finance and costing models.  Functions and services that could be provided better, faster and cheaper externally drove the growth of the multi-sourcing marketplace. This was the heyday of models like ISCO and IS Lite both sought to run IT like a business and eventually generating revenues on its own.

• 2007 – 2011 cycle, the one we are completing now, could be described by the consolidation of IT cost, as economic, technical and operational realities required CIOs and organizations to cut costs in the face of economic and financial realities.

While we can debate the exact dates, themes and timings the broad trends are reflected in the major books of the time, themes of Gartner’s symposia, etc.

2012 is a pivotal year for CIOs and IT because we are completing a wave of consolidation and cost cutting that raises the question what comes next?

A few thoughts on the pieces that are floating around that will play a role in shaping IT over the next three years.

• Technology becomes important than IT.  Technology is inherently externally facing and that will displace the current crop of IT centric internally facing transaction systems.  Mobility, social media, analytics, new interfaces are all part of an arc of technology that is much broader than IT.

• Consumer and personal tastes are driving technology and resetting expectations for IT in terms of time to market, complexity and customer experience.  IT has been used to running on its own time and it will have to change to run at the customer’s clock speed.

• Competition will center around an expanding view of the customer experience touching on channels, ease of doing business, internal complexity, cost, marketing and provisioning.  Organizations that see a next version of the customer experience as CRM on steroids will experience increasing investment and decreasing returns.

• Increasing IT workforce productivity and throughput will become a requirement with CIOs having to commit, monitor and manage year over year productivity improvements.  This will be critical to the future as right now most firms manage ‘productivity’ from the denominator of cost, they will need to raise the numerator (output) in the future.

Individually none of these issues is a ‘show stopper’ leading some to think that they can be addressed through incremental improvements and responses.  Taken together and considering implementing them in less than three years, it becomes apparent that incremental responses will not be sufficient to enable IT’s role to expand at the same rate as the expanding role of technology in the enterprise.

That is why I believe that we are leaving the world of the consolidation of IT cost and moving into a phase where technology amplifies the enterprise and the position of IT can no longer be assumed.  Why three years? It takes time to re-imagine and re-orient an organization.

Are these pivotal years for IT?  If not then why not?

So far so good, people going up to the wall to see where they need to be, I am sure you have seen it a hundred times.  But then the word came down, the company CEO was going to be visiting the meeting.  Suddenly the information that was helpful was taken down.  ‘It was too messy for the CEO to see,’ argued one of the suddenly present members of the corporate staff.   They will see the mess and assume that that what you are doing is a mess.

So, about 30 minutes before the CEO was expected to arrive, corporate staff swooped in, cleaned up and encouraged people to look busy.  Funny thing was that they were already busy, very busy in fact and the paper, while a little messy was helping them be productive.

People talk about senior executives being distant and disconnected from the front line people, their challenges and their reality.  The idea that corporate needs to come and clean up for the front line associates is not only offensive but also detrimental to the business.

Hiding information from the CEO is never a good idea.  It gives the CEO incomplete information that quickly forms into assumptions and expectations that neither sustainable nor supportable.

We all work hard.  We are all inventive in improving the way we work.  Some of those inventions, while not pretty, work really well.  Some of those inventions are indicative of real operational problems.

Hiding reality from the CEO distorts their view to your and everyone’s determent. It is a sign of weak management. To find others see links below or use the keyword ‘signs of weak management’ on this blog.

Besides how will things ever improve unless we are all honest about the way things are?

Selected links to other signs of weak management

Blame storming – one of the signs of weak management

Strategic constipation – one of the signs of weak management

The Little Red Hen – one of the signs of weak management

Working your way stupid – one of the signs of weak management

Sophie’s Choice metrics – one of the signs of weak management

India is a diverse and dynamic economy at the center of transformation of the IT industry and of the nation itself.

IT’s evolving role

While CIOs are continuing their focus on building out administrative and ‘management’ systems they see the need to evolve their role in the enterprise toward more direct business impact in areas like revenue generation and innovation.  The progression from IT as a function to IT enables the business to a goal of IT contribution has happened faster in India than in any other market I have visited. CIOs in Indian companies looking to raise IT’s role need to demonstrate ITs value and how it

Leadership and Management Capability

Leadership and management talent within Indian companies are as good as anywhere in the world, but talent is thin and unevenly distributed around the company.  Companies are growing well where it is concentrated and encountering problems in areas where operational demands have outstripped management capability.

IT is seen as a way to make up for limited management capability, by creating more controls and process.  That approach may work in the short term, but it establishes IT in a role of protecting/preventing improvement and as responsible for poor performance, particularly when managers have to work around IT to create results.

This represents a particular trap for CIOs as they respond positively for requirements to build new control systems without requiring a requisite increase in management capability.  This sets the stage for misinterpretation of IT’s role and value as when good managers do appear, they frequently have to fight through constraints created by IT to protect the company from prior weak management.  This makes IT seem like a stumbling block or barrier. It makes it the object of management derision rather than enablement.

A better course of action is to keep Executive Responsibility focused on building management capability and capacity.  Link future plans for new systems investments to management education, recruitment and employment so the organization has the people to lead and knows how to use the system to get results.

Cloud Computing is part of the plan

Interest in cloud computing was particularly high with the CIOs and others at Symposium.  Cloud, while not immediately or widely available, is part of future CIO plans despite challenges related to internet reliability and the cost of workstation computing.  From what CIOs were discussing, it looks like plans for cloud call for fusing it with mobile and handset technologies to enable work processes and practices at a national scale.  When you consider the scale and geographic diversity of India this approach seems a reasonable path for future investigation.

Social media is of increasing interest.

Social media was of particular concern as Indian companies look at what is happening in popular culture and other countries.  India is ripe with social media potential as it is a young country with 50% of people under the age of 25. India is also a diverse country creating opportunites for mass collaboration as a path to greater performance.  Indian CIOs indicate that their executive teams are wary of social media either seeing it as Folly or Fearful that social media is a waste of time and uncessary distraction.  Both attitudes are understandable, but CIOs are interested in seeing what mass collaboration might bring to their organizations. Assess your own company at gartner.com/socialreadiness.

Overall

Indian CIOs indicate that their organizations are at multiple places all at the same time.  Organizationally they are evolving from closely run companies with an emphasis on hierarchy toward divisionalized business units.  Technologically they are leapfrogging the functional and task based technology investments to adopt leading information, process and mobile-based solutions.  Managerially they are dealing with a diversity of management talent and the need to build capability.  Globally Indian companies are playing on a world stage in ways never contemplated before either by the nation or by the leadership teams.

This is a dynamic time for Indian companies in general and their use of technology in particular. The decisions they make will re-imagine the organization, IT and their future.  It was an honor to talk with CIOs who are leading from the front and I look forward to future symposium in India.

Obviously we will see on the good parts, the creativity, an uncompromising attention to detail, concern over the user experience, etc.  We will choose to see how we have stood up to authority, embraced our inner muse and fought against the odds to win all in the light of one of the most influential people in our world.

Seeing the genius of Jobs in us is natural.  It helps us feel and look better.   What I am afraid we might do is gloss over how Jobs, according to Isaacson, brought those values to life: being incredibly rude to people, dismissing their ideas, adopting them as his own, and generally describing everything he saw for the first time as ‘shit’.

I have been known to adopt this form of communication as well as work with others who have the good intentions and the bad manners attributed to Jobs.  My colleagues used to call it ‘D-Bombing’ as I would swoop in on a review of their draft only to find the weak points and tear it apart like it had been hit by a giant bomb.  All with good intentions and a desire to make the work as strong as it could be, but also with consequences.

I forgot about the consequences.  I believed that the results more than compensated for the tactics as people continually demonstrated to themselves and others that they could go beyond what was expected of them to do some truly exceptional work. The only problem was that without that constant prodding and challenge most slipped back into what was comfortable rather than continuing to push the envelope.

The moral, that while you can get great results from challenging people to be and do more, there needs to be other ways to sustain excellence than constant criticism no matter how constructive or well intentioned.

The point of this discussion is that many people are reading Job’s biography and its easy to become like John Scully as they convince themselves that they are like Jobs and all they have to do is adopt his ways.

You are no Steve Jobs.

You are not John Scully.

Be yourself and find your own way to excellence rather than copying that of others, particularly when that path is one that might cause others wonder, “you kiss your mother with that mouth?

Do you have to compromise your values or ideals to get great results?  No.  But you cannot copy your way to that same result, even though it may be easy to read how others have done that.

Be great, seek greatness in others, demand the best from them and yourself, but always be you, as that is the key to authentic leadership.

We came to that finding by asking CIOs to rate the importance of their business priorities in terms of each priority on a scale ranging from differentiating to common practice across all industries.  Likewise we asked CIOs to say how strongly connected were their IT strategies to their business strategies on a scale ranging from Very strong to none.  The result was:

Many claimed to be tightly connected to the business strategy with more than 80% of their plans either strongly or very strongly connected.

However:

The power of those business strategies were quite low as more than 70% represented strategies that were general practices in their industry or across industry.

That was in 2011.

We are about to complete and finalize plans for 2012.  So it’s a good time to look at business strategies, IT plans and business expectations through the same lens.  See: It is time to create more than a little competitive instability for some ideas

Are you being asked to do the dishes again for 2012?  You are if you’re in support of business plans that do not drive your enterprise’s competitiveness – the things that make it

• Unique,
• Different from the competition, or
• Represent the reasons why customers choose to do business with you over others.

These are the terms the business uses to assess the strategic importance of a plan, an investment, or action.    Notice that size does not impart strategic importance.  Your large IT projects, one that may be too big to fail, is not necessarily strategic and in fact may be the epitome of ‘doing the dishes.’

So its time to look at your plans and ask:

• What are my major plans for 2012?  Which business strategies do those plans support?
• What is the level of that support?  What will IT do that will realize the strategy and its objectives.
• What is the strategic nature of that business strategy?  Does it create strategic value that the business would recognize?
• What are the other business strategies where IT is not involved?  What is their strategic nature?  Could IT make them more strategic?

Not every IT plan will be strategic.  In fact for a strategy to be unique and differentiating, it has to be somewhat rare. Trying to claim that all IT plans have business based strategic relevance is not recommended as it makes you look co-dependent.

Rather, treat the business strategically relevant IT plans differently.  Give them more ‘quality time’ in leadership meetings.  Give them greater visibility in your communications with the business.  Adopt business performance based measures for their success rather than progress against plan.

Raise their profile, because if you treat the business strategic programs the same as everything else in your plan then you are telling your business peers that there strategic plan is the same as general practices – you see doing them the same as doing the dishes.

Administrative work can be characterized as work that follows a prescriptive process to produce a predictable result and a predefined value to the organization.

Do your job, your whole job and nothing but the job because there is no extra in it for you or the company.

While we all recognize administrative work, we often do not recognize when non-administrative work takes on an administrative tone, task and talent.  When this happens work that used to be exciting, value based and action oriented suddenly feels more like administrivia

Nowhere is that possibility greater than in IT where most of the work is action oriented, but enough of it is administrative to cause the same person to do both kinds of work.

This point came home to me when I was sitting in a meeting and listening to a speaker drone on discussing the specific approach they were going to follow on a project.

She was telling the people in the meeting exactly how she was going to do the work, in great detail.

When asked about how she was going to get results, she came back to the specific steps, repeating them like an incantation, as if simply saying the words meant that the result would happen.

Latter after the meeting I raised this point with her 1:1.  She said ‘Oh if that is what I said, then that is not what I meant.”  She then proceeded to say how she would get the result in terms that were based on understanding the issues and actions rather than reciting the process recipe.

That got me thinking, when do you know you are being administrative rather than action oriented?   Here are a few thoughts.  You are being administrative when you:

• Put process before outcome/result, the result is why you are dong the process so it should come first
• Use process as the answer to a question, even more so when it’s the answer to every question
• See the process as overcoming human and situational challenges like differing skills sets, weak executive support, unclear objectives and the like
• Draw their authority, power or influence from the process rather than from the result they are trying to get.   The process may give you temporary authority, but it is only vested in those that get results.

An old customer of mine, back when I was a commercial banker, told me something that has always stuck with me.

“People write checks”

What he was saying was the people do things, not processes, nor systems.  When we become administrative we lose sight of that and we lose the ability to get results.

So next time you find yourself talking about process, using it as a shield against questions and a sword to coerce your peers, ask yourself am I being administrative or action oriented.

Then adjust accordingly.