Fear, Frustration and Hope in a Covid19 threatened Digital World


Photo by CDC on Unsplash

We live in unprecedented times. With Covid19, we are in a global war with an invisible enemy – a war in which we are both potential victims of, and foot soldiers for that enemy. We all live in fear for ourselves, and even more so for our families – our parents, children and grandchildren, as well as for all those who are more exposed and at risk to this unseen yet ever-present enemy.

At a time like this we need strong, decisive and transparent leadership at all levels. Leadership that must also be compassionate and comforting in helping us understand that we are all in this together, and that collectively we can and must play our part in beating this enemy. Here, in Canada, and in our province, British Columbia, we are seeing that, as we are generally across Canada. But this is a global war with an enemy that moves fast and silently, and respects no borders and no-one, and that can be anywhere at any time. At a time like this, it is immensely frustrating that we are not seeing a collaborative global response to this global enemy. Instead, from many leaders across the world – some more so than others – we have seen, and are seeing: Denial instead of action; Delay instead of speed; Secrecy instead of openness; Division instead of unification; Competition instead of collaboration; putting Self-Interest ahead of the interest of the people, and (largely driven by that same self-interest) putting National Interest instead of global interest…and the list goes on.

In what we once referred to as the IT space, but what is now increasingly becoming an all-encompassing digital world, we have suffered from similar failures of leadership for decades. We have seen, and continue to see many billions of dollars spent on technology with all too often little or no value being delivered as a result of those expenditures.

In this current crisis, it is frustrating to see the inability of aging technology systems – systems that have been neglected for far too long, to respond to critical needs in an agile and timely way. We are experiencing the result of years or decades of little or no investment in maintaining and updating our technology infrastructure. Where new investments have been made, they have all too often failed to deliver the expected value – assuming that value was even clearly defined at the outset, which is generally the exception rather than the rule. These investments are often made without clear understanding, ownership and accountability from the business or organizational leadership, and without inclusive and ongoing engagement of those who have to use and live with the systems and applications resulting from those investments.

But there is also hope. During this crisis we have seen, and continue to see the ability of organizations and individuals in all sectors to pivot to new ways of delivering their products and services. As Satya Nadella, Microsoft’s CEO, summed it up, Social distancing rules have brought forward the adoption of a wide range of technologies by two years. A comment echoed by Google’s CEO Sundar Pichai predicting a “significant and lasting” impact from the forced move to online work, education, shopping, medicine and entertainment.

In the case of healthcare, digitally-enabled services that have been discussed for years or, in some cases decades, have been delivered in a few weeks. Manufacturers have retooled their production to produce respirators and Personal Protection Equipment. Distilleries have switched production from liquor to hand sanitizer.  In response to a request from local hospitals, Quinn Callander, a 12 year old boy scout in Vancouver, Canada answered a request from the local hospitals for a device to help relieve severe pain from pressure and friction of wearing masks for long periods. Working with his 3D printer, and by prototyping several designs, he developed a simple but effective “ear guard” strap. In just a few weeks, he has produced 1,700 such straps, a volunteer group he is part of has made an additional 5,000 straps, and he has made the design available for others to download[1]. Across America, makers of all ages and skill-levels have thrown themselves into helping to alleviate the shortage of personal protective equipment (PPE). Some are actually making masks, shields and gowns. Others are collaborating on designs, and making those designs public. Still others are trying to figure out how to get PPE to those who need it most as quickly as possible. These charitable tinkerers provide ground for both a deeply American sort of hope—strangers doing as much as they can, wherever they can, for the good of their neighbours—and despair, at the colossal federal failure that inspired them[2].

An article in the April 25th edition of The Economist under the heading “Creative Disruption” discusses the pandemic “liberating firms to experiment with new ideas”, and being to do so at breakneck speed, and without huge financial outlays. But, as evidenced above, it’s more than that. It is actually liberating organizations of all types, and in all sectors, as well as individuals of all ages across the world to do so. As Michael Waters said on April 30th in the Financial Times, “The pandemic is working on all the main levers that affect the pace of digital adoption: consumer behaviour, business processes and government regulation”.

We are seeing examples of outstanding leadership coming from everywhere and anywhere, but not, in all too many cases, from those in “official” leadership positions in the public and private sector. The challenge ahead, when the Covid19 crisis is brought under control, to whatever extent that may happen, is how to keep the momentum, and not slip back, as The Economist article says, to our comfortable traditional world of  ‘“analysis paralysis”, an affliction caused by top managers having pored over the same irrelevant case studies at business school.’ We need to tap in to that outstanding, yet previously unrecognized leadership that is everywhere and everywhere. This will require rethinking, or blowing up previous models of leadership and management

We need to ask ourselves, when the crisis abates, are we going to fall back to the traditional world of ineffective leadership, bloated inefficient bureaucracies, and disengaged employees and citizens, or are we going to learn from the crisis and move forward together to a better world. A world in which leadership is a behaviour, recognized, nurtured and rewarded throughout an organization, with leadership at the top playing a role akin to some combination of an orchestra conductor, and an air traffic controller. A world in which: Bureaucracy, a term coined roughly two centuries ago is no longer fit for purpose when today’s employees are skilled, not illiterate; Competitive Advantage comes from innovation, not sheer size; Communication is instantaneous, not tortuous; and the Pace of Change is hypersonic, not glacial. A world in which employees, as in the case of China’s Haier, are engaged as “energetic entrepreneurs, and an open ecosystem of users, inventors and partners replaces formal hierarchy”[3].

[1] Source: Fast Company, April 9, 2020, “This 12-year-old invented an ingenious solution to one of the biggest problems with masks”

[2] Source: The Economist, April 30, 2020, “America’s Makers and tinkerers turn their hands to PPE

[3] Source: The End of Bureaucracy, Gary Hamel and Michael Zanini, Harvard Business Review, November-December 1918 Issue

IT and Digital Failures – the Time for Study is Over – it’s Way Past Time for Action!

A recent article in diginomica, “Senate agrees to launch inquiry into Australia’s digital government failures” caught my eye. My immediate reaction was “Here we go again”, quickly followed by a somewhat more lyrical “When will they ever learn?”
The challenges of IT projects have been analyzed extensively over many decades. Most of us are familiar with The Standish Chaos Survey, the 2015 results of which reported successful projects constantly representing only ~30% of the 50,000 surveyed projects (where success is defined as on time, on budget and with a satisfactory result).

A 2012 Mckinsey article, based on research conducted on more than 5,400 IT projects by Mckinsey and the University of Oxford, found that half of large IT projects (costing >$ 15 million) massively blew their budgets. On average, large IT projects ran 45% over budget and 7% over time, while delivering 56% less value than predicted. The projects in total had a cost overrun of $66 billion, more than the GDP of Luxembourg. The impact of these failures is more than financial. In the case of healthcare, for example, the impact includes significant avoidable loss of life, pain and suffering.

More anecdotally, The International Project Leadership Academy Catalogue of Catastrophe records quite a few troubled projects from around the world, many, but not all of them IT projects. The list includes the UK’s NHS National Program for IT in Health, the original budget for which was $4.6 billion, which had risen to $24 billion when it was cancelled in 2010. At the time, and possibly still now, it was the world’s largest civil IT project.

Challenges to success – being on time, on budget, and achieving the expected value, are common across private and public sectors and across all jurisdictions. If one were to take all the studies, audit reports, and other post-mortem review of so-called “IT projects” or, more recently, “digital” initiatives, you could fill a medium-sized – possibly larger – library. The good news is that you would only have to read one or two of them to realize that they all came to basically the same conclusions, and made basically the same recommendations. It’s great business for consultants, as they can usually just dust off and tailor a previous report – a great but expensive example of re-use. Over the same time, research papers and articles beyond count have been written on this topic, and frameworks, methodologies, tools and techniques have been produced (almost) ad nauseam. Yet, despite this, very little has changed, other than that the impact of these failures, as technology becomes increasingly embedded in everything organizations do, is both more severe and more visible, not the least so in the public sector.

The underlying causes of both earlier “IT project” failures, and those of more recent “digital” initiatives are basically the same. They include:
1. A continued, often blind focus on the technology itself, rather than the change – increasingly significant and complex organizational change that technology both shapes and enables, and which is required if organizations are to come anywhere near realizing the potential value from their digital investments;
2. The unwillingness of business leaders to get engaged in, and take ownership of this change – preferring to abdicate their accountability to the IT function (I should add that I have also seen cases where IT leaders know this should be owned by the business leadership team, but do not believe that they have the competence to do so);
3. Failure to inclusively and continually involve the stakeholders affected by the change, without whose understanding and “buy in” failure is pretty much a foregone conclusion;
4. A lack of rigour at the front-end of an investment decision, including, what is almost universally a totally ineffective business case process, resulting in lack of clarity around the expected outcomes, the full scope of effort required, the assumptions being made, the risks involved, and how progress and success will be measured;
5. Not actively managing for value; and
6. Not managing the journey beyond the initial “project” completion.

A much over-used definition of insanity, commonly yet apparently inaccurately attributed to Albert Einstein, is “doing the same thing over and over again and expecting a different result.” This is certainly a good description of the where we are today. It should have been obvious to anyone reading any of the previously mentioned reports and studies that the issue of IT or digital failure needs to be re-framed from a technology delivery problem to a business problem of managing increasingly significant and complex organizational change. A business problem that has had a global cost estimated by Michael Krigsman, a respected industry analyst, to be in the order of $US3 trillion/year. And that cost doesn’t include opportunity cost – the non-realization of expected value.

So, why is it that business leaders – in both the private and public sector, have not stepped up to the plate? Despite the term “digital” now being much more commonly used – or abused –  in place of “IT”, digital is still largely equated with, and thought of as, a technology implementation issue. We certainly don’t need any more studies! As a client of mine once said, the less will we have to solve a problem, the more we study it. We need leaders to finally wake up and understand that this is not a technology implementation problem, but a problem around understanding, accepting accountability for, and managing the business change required to create and sustain business value from leveraging digital. We need these leaders to move beyond eternal studies to action. I discussed this in an earlier post, “Digital Leadership – Much More Than IT Leadership”. What follows builds on parts of that post.

In this new digital era, technology itself, how technology is delivered, how it is used, and by whom are changing at an ever-increasing rate. This is blurring the roles and responsibilities of IT and other business functions, and giving rise to a fundamental rethinking of how IT, and its delivery and use is governed and managed, and the capabilities that are required to ensure and assure that the use of technology contributes to creating and sustaining business value. The role of the CIO is being questioned ad nauseam, particularly as it relates to the CMO, and a new position, the CDO, is appearing. And, of course, let’s not forget the CTO. However, the answer is not as simple as renaming the CIO position, getting a new CIO, or appointing a few new CXOs (or now, due to alphabetic limitations, CXXOs).

I have, over many decades, used the simple formula below to describe reason for the current dismal state of affairs:

OO + NT = COO

The formula represents that simply applying new technology (NT) to an old organization (OO) results in a Complex Old Organization (COO). Gavin Slater, the new head of the Australian Government’s Digital Transformation Agency (DTA), used a variation of this formula in a recent address to the Australian Information Industry Association, in which he replaced COO with EOO – expensive old organization.

Digitization cuts across organizational silos, and across all levels of organizations. Realizing value from digital requires more than putting lipstick on the old industrial age pig, with its hierarchical, command and control approach to governance, leadership and management. It requires continually rethinking, reimagining and reinventing every aspect of our organizations. Digital transformation, or more accurately the on-going and ever-evolving digital journey towards a digital ecosystem will require digital literacy and collaboration across and beyond the C-suite to ensure that their organization has, as EY’s David Nichols said in a May 2014 CIO Insight interview, “an integrated and holistic plan to really leverage digital”. This includes questioning their very purpose, how they are organized, the very nature of the work they do, who does it, and how it’s done. It requires challenging established cultures and long-held beliefs. The digital economy both enables and requires a different view of leadership. As Sally Helgesen said in a May, 2014 article, “Leadership’ isn’t Just for Leaders anymore”, leadership no longer, or should no longer equate with positional power and has, or should become a behaviour that is broadly distributed, recognize and rewarded.

Organizations must tap into the collective knowledge of all their people…~70% of whom feel no engagement with their organizations today. As Julian Stodd said in a June, 2017 blog, “The Age of Engagement”:

“The mechanisms and mindset of engagement in many organisations lags far behind the lived reality of the Social Age: Organisations exist in a realm of expertise, domain specific input, hierarchical power, at a time when communities are rising, co-creation is maturing, and dynamism is key. The solution will not be adaptation within an existing mindset, but rather a paradigm shift to a new space: the Age of Engagement.”

Peter Staal extends this thinking in an August, 2017 article, “Organizations of the future operate as communities”, in which he says:

“Meeting the demands of the digital age will require a new way of working. Take for instance the decision-making process. Organizations no longer have the time traditionally taken up by this process through a decision tree. The future belongs to organizations which are made up of multiple autonomously operating communities forming part of the larger whole (so-called pods).”

This is not a new concept. It was original posited in the early 20th century by Oswald von Neil-Breuning with his law of subsidiarity – an organizing principle that matters ought to be handled by the smallest, lowest or least centralized competent authority. This means locating accountability and decision-making at the most appropriate level, while supporting decisions with broader and more knowledgeable input.

We could have adopted such a concept long before now, indeed, some organizations have done so. For organizations to survive and thrive in the digital economy, this is no longer an option! We certainly now have the technology available today to support such a concept. However, I’m not sure we will see this widely accepted  any time soon – likely not in my lifetime. As Steve Vamos said in a 2012 Australian Review article:

“The challenge ahead is to unwind more than a century of industrial-age mindsets at work which are controlling, mistake-averse and “know it all” and evolve them into mindsets that are enabling, learning and willing to try new things and fail.”

Laurence J. Peter, author of The Peter Principle, echoed those sentiments when he said, “Bureaucracy defends the status quo long past the time when the quo has lost its status.” The reasons for this are well laid out by Ted Bauer in an August, 2017 article, “Bureaucratic management ain’t going anywhere”, as summarized in the figure below.

As an eternal optimist, I hope that he’s wrong, but as a realist, having pushed similar ideas for many decades, I think it will take some time before we see the extinction of the organizational dinosaurs. This will certainly be the case if we stand on the sidelines and wait for it to happen. As a former colleague, Don Tapscott,  has said for decades “Leadership can come from anywhere”. We must all take a leadership role in making it happen.

Digital Leadership – Much More Than IT Leadership

There has been much discussion of late on who should be responsible for “digitization”. The role of the CIO is being continually questioned, particularly as it relates to the CMO, and. a new position, the CDO, is appearing. And, of course, let’s not forget the CTO. A recent post by Michael Krigsman describing Intel’s IT leadership and transformation pyramid got me thinking yet again about this. The pyramid, shown below, is a brilliantly simple depiction of how digital leadership must evolve (in my words) from an operational “factory” to a business partner to a transformational leader.

 

intel-it-transformation-pyramid

As Michael Krigsman says, “The pyramid reflects the complex reality of IT / business relationships and the need for IT to deliver at multiple levels simultaneously.” This reminded me of discussions I had in New York last month at the Innovation Value Institute (IVI) Spring Summit around their IT Capability Maturity Framework (IT-CMF). The discussion centred around the digital economy, and the fact that organizations are taking an increasingly business-centric view of IT, with the focus shifting from the delivery of the “T” to the use of the “I”. That technology itself, how technology is delivered, how it is used, and by whom are changing at an ever-increasing rate. And that this is blurring the roles and responsibilities of IT and the Business functions, and giving rise to a fundamental rethinking of how IT, and it’s delivery and use is governed and managed, and the capabilities that are required to ensure and assure that the use of technology contributes to creating and sustaining business value.

In an earlier post, The Digital Economy and the IT Value Standoff, I reiterated my long-leld view that the business change that IT both shapes and enables must be owned by business leaders, and they must accept accountability, and be held accountable for creating and sustaining business value from that change. This cannot be abdicated to the IT function. Yet today, in all too many cases, we have a stand-off where the business doesn’t want to take ownership, and the IT function doesn’t know how, or doesn’t want to give up control.

The key question that arose from the Summit discussion was “Why can’t we get our business leadership engaged in this discussion?” Certainly not a new question – how to do so was essentially the underlying theme of The Information Paradox when it was first published back in 1998. The answer to the question, going back to the leadership pyramid, is that the IT organization has to achieve operational excellence before it can start to change the conversation from bottom-up delivery of technology to top-down value from business change. This requires a maturity level of around 2.5, where 5 is the highest maturity – most organizations are still not yet at this level, most being somewhere between 1 and 2.

So, what does this mean for the CIO? Much has been written about CIOs themselves having to transform to fulfil the 3 leadership roles of the pyramid – running the factory, partnering with the business for value, and strategic transformational leadership. There is no doubt that all these roles are required – but is it reasonable, or necessary to expect that they will be found in one individual. Certainly, there are CIOs who have stepped up to the plate, but many more that haven’t, and possibly cannot.  Professor Joe Peppard at the  European School of Technology and Management in Berlin has put many hundreds of participants through an IT leadership program. He describes in a recent article how, using Myers Briggs typing, he has found that 70% of CIOs fall into one particular type: ISTJs (Introversion, Sensing, Thinking, Judging). Further, along the dimension of where they get their energy, 85% have a preference for introversion. In terms of moving up the pyramid, the very things that may contribute to success in their technology role, can be what leads to downfall in a business leadership position. Even where an individual does have the ability to handle all 3 levels, the day-to-day operational demands all too often leave little time for the other 2 levels. Demands that, while they will definitely change with the advent of the cloud and “everything as a service”, will not go away.

The real issue here is not so much, as Michael Krigsman says, “the need for IT to deliver at multiple levels simultaneously”, but understanding the range of digital leadership capabilities and responsibilities required in the digital economy, and where they should reside. The answer is not as simple as renaming the CIO position, getting a new CIO, or appointing a few new CXOs. It requires recognizing that digitization cuts across organizational silos, and across all levels of organizations.. It will take digital literacy and collaboration across the C-suite to ensure that their organization has, as EY’s David Nichols said in a recent CIO Insight interview, “an integrated and holistic plan to really leverage digital”. It will also require recognizing that the digital economy both enables and requires a different view of leadership. As Sally Helgesen said in a recent post, “‘Leadership’ isn’t Just for Leaders Anymore”, leadership no longer, or should no longer equate with positional power and has, or should become broadly distributed.

If organizations are to succeed in the digital economy, they cannot constrain themselves to the knowledge of a few individuals – to put it a more brutal way, they cannot be constrained by the habits or ego(s) of their leader(s)! Organisations must tap into the collective knowledge of all their people. We need effective governance that reaches out to and involves key stakeholders – retaining appropriate accountability, based on the law of subsidiarity – an organizing principle that matters ought to be handled by the smallest, lowest or least centralized competent authority. This means locating accountability and decision-making at the most appropriate level, while supporting decisions with broader and more knowledgeable input.

As a former colleague of mine, Don Tapscott,  has said for decades “Leadership can come from anywhere”. For organizations to survive and thrive in the digital economy, this is not an option!

Partnering for Value in the Digital Universe – a Call to Action

Technology per se is just a cost – it is how the business uses technology, and manages the change that technology both shapes and enables,  that determines whether the technology contributes to business value. Over the last few decades, the way that we use technology – and who uses it, has changed dramatically. Yet one thing that has not changed is the on-going questioning of the value received from our investments involving technology. As we move into an increasingly digital universe, there has never been a more critical time to address this question.

As I discussed in a previous post – the “IT value” standoff, as long as boards, business executives and line of business (LOB) managers continue to view this as a technology issue, and fail to accept appropriate responsibility and accountability, and the CIO and the IT function either see their responsibility and accountability ending with the delivery of the technology capability, or are unwilling to “let go”, often because they have no confidence in the LOB managers to get the job done, we will continue to fall far short of realizing the full potential of the digital universe.

What has been lost in all this is the understanding  of, and accountability for managing the increasing breadth and depth of business change that technology both shapes and enables, and which is required if value is to be created and sustained! We need to change the conversation – to change it from one largely about the cost of delivery of technology to one focused on creating and sustaining value from business change.

Business value will only be realized from our increasingly significant and complex investments in IT-enabled change when complementary changes are made in the business – including changes to the organizational culture, business and operating models, business processes and practices, people’s work, and the skills and competencies required to successfully get the work done, reward and incentive systems, organizational structures, physical facilities etc.

All this is blurring the roles and responsibilities of IT and the business functions, and  giving rise to a fundamental rethinking of how IT, and it’s delivery and use is governed and managed, and the capabilities that are required to ensure and assure that the use of technology contributes to creating and sustaining business value.

In the 1998 edition of The Information Paradox,  I introduced the “Four Ares” as the key questions that must be addressed by governance. Subsequently, in the 2008 update, I introduced the Strategic Governance Framework (SGF), relating it to the then emerging digital economy, and described the 10 key management domains that must be included in any governance framework. In the remainder of this post, I will reintroduce and briefly describe both the “Four Ares”, and the SGF (somewhat further evolved since  2008). I will then use a combination of both to illustrate the responsibilities of the board, executive management, LOB management and IT management related to value.

The four “ares”

Slide1

As we said in The Information Paradox, “ Tough questioning is critical to get rid of silver bullet thinking about IT and lose the industrial-age mind-set that is proving extremely costly to organizations.  Asking the four “ares,” in particular, helps to define the business and technical issues clearly, and thus to better define the distinctive roles of  business executives and IT experts in the investment decision process. Are 1, Are we doing the right things? and Are 4, Are we getting the benefits?  raise key business issues relating to both strategic direction and the organization’s ability to produce the targeted business benefits.  Are 2, Are we doing them the right way?  raises a mix of business and technology integration issues that must be answered to design successful [IT-enabled] change programs.  Are 3, Are we getting them done well?  directs attention to traditional IT project delivery issues, as well as to the ability of other business groups to deliver change projects.”

Strategic Governance Framework (SGF)

Slide2

The first, and overarching element of the framework is Value Governance  – governance being  traditionally defined as the system by which enterprises are directed and controlled and as a set of relationships between a company’s management, its board, its shareholders and its other stakeholders.  Value Governance establishes how direction and control is accomplished within and across the other 10 elements of the framework which I refer to here as “management domains”. This direction and control will have both compliance and performance aspects, both of which must be considered. From a performance standpoint (and to some extent compliance in the case of risk) I add the dimensions of cost, benefit and risk across the Strategic Governance framework to show that these factors are not independent, and have to be taken into consideration when decisions are being taken in or across the management domains. The ten “management domains” are:

  • Strategy Management – Defining the business…mission, vision, values, principles, desired outcomes and strategic drivers to provide direction and focus for understanding, configuring and managing assets to deliver the greatest value.
  • Architecture Management – Understanding, communicating and managing the fundamental underlying design of the components of the business system, the relationships between them and the manner in which they support the enterprise’s objectives.
  • Portfolio Management –  Managing the evaluation, selection, monitoring and on-going adjustment of a grouping of investment programmes and resulting assets to achieve defined business results while meeting clear risk/reward standards.
  • Investment Management – Managing the full life cycle of an investment decision, using the business case throughout the life cycle to ensure a continued focus on value from the initial idea/concept (ideation) through to the retirement of the resulting new or improved assets.
  • Asset management – Managing the acquisition, use and disposal of assets to make the most of their service delivery potential and manage the related risks and costs over their entire life (source: Vicnet, State of Victoria, Australia).
  • Programme Management – Managing the delivery of change around business outcomes through a structured grouping of activities (projects) designed to produce clearly identified business results or other end benefits.
  • Project Management –  Managing a group of activities concerned with delivering a defined capability required to achieve business outcomes based upon an agreed schedule and budget.
  • Management of Change – A holistic and proactive approach to managing the transition from a current state to a desired state
  • Operations Management – Managing the production of goods and/or services efficiently  – in terms of converting inputs (in the forms of materials, labor, and energy) into outputs (in the form of goods and/or services) using as little resources as needed, and effectively – in terms of meeting customer requirements.
  • Performance Management – The definition, collection, analysis and distribution of information relevant to the management of investment programmes and assets so as to maximize their contribution to business outcomes.

While the framework may at first look intimidating, it should not be seen as such. Many, if not all functions within these domains are already being done to a greater or lesser extent in enterprises today, often in many different ways, with little communication or interraction between them. It is the management of the critical relationships between these “management domains” which, if managed well, can provide tremendous strategic advantage to enterprises, but which, if not managed well, can have serious, if not catastrophic consequences. If enterprises are to maximize the value from their investments in IT-enabled change, or any form of change, these relationships need to be understood, and managed within a dynamic, “sense and respond” governance framework.

The four “ares” and the SGF

Slide3

The figure above summarizes the primary areas of focus for each of the four “are” questions, indicating where accountabilities lie, and highlights the relevant SGF domains. The key elements of this include: 

  • Managing IT investments through a portfolio of business change programmes;
  • Developing comprehensive and consistent business cases describing: the expected outcomes; ownership of, and accountability for, the outcomes; the full scope of the change required to achieve the outcomes; the expected contribution of each change to the outcome(s); risks to the achievement of outcomes; and metrics.
  • Objective evaluation criteria enabling prioritization and selection of investments.
  • Inclusive and on-going engagement of all the stakeholders affected by the change.
  • On-going Management of the “journey”, including:
    • Using the updated business case as the key management tool; and
    • A strong gating process for progressive commitment of resources to ensure that, when thing are not going to plan, timely corrective action can be taken, including changing course, revisiting/changing the outcomes, or cancelling the program.
  • Capturing, reviewing and acting upon lessons learned so that mistakes are not repeated, and value continues to be maximised.

A call to action

I don’t want to imply that all this is easy. Working with CEOs and leadership teams I invariably get pushback when I present a way forward as it is seen as complex and time consuming. Well, getting IT right is difficult! But what is the alternative? Highly visible failed investments (that can increasingly put the very existence of the enterprise in jeopardy), with even more time and resources spent trying to find what went wrong (and often where to lay blame), and the loss of potential competitive opportunities? It is imperative that the accountabilities, roles and responsibilities of the board, executive management, LOB management, and IT management are clearly defined, understood and accepted. The impact of not doing so was relatively minor when we were merely automating well-defined tasks, became more serious, sometimes disastrous,  as we moved into integrating and using information across enterprises, and will be catastrophic as we move into the digital universe.  A universe where technology is embedded in everything we do – indeed, one in which we are becoming increasingly embedded in everything technology does, and in which everything and everyone will be connected anywhere, any time, and there will be data about everything and analytics for anyone.

The CFO of a Fortune 100 company that I worked with once confided: “I know the way we are doing things isn’t working, but I don’t know a better way.” Well, there is a better way! A better way that is not simply about thinking differently about IT, although that is a necessary pre-condition, but about doing things differently. A better way that is about boards, the C-suite, LOB and functional  management, including IT recognizing, understanding and accepting their accountability for creating and sustaining value from investments in IT-enabled change and driving that accountability down through their organisations. If enterprises are to survive, let alone thrive in the rapidly evolving digital economy, the status quo is not an option. The cost of resources wasted and, more importantly, benefits and value lost, eroded or destroyed is appalling – its way past time for all business leaders to move beyond words to action!

Getting Healthcare Right

I have just returned from a trip to Australia where I gave a keynote speech at the HIC 2010 Conference in Melbourne. I also had a number of other meetings and workshops while in Australia. most around the topic of healthcare and, more specifically, eHealth.

Those of you who read this blog will know that my primary passion is around value – specifically enterprises realizing value from IT-enabled change. What you may not know is that there are two areas where I have worked in the past, and continue to work, where I believe IT-enabled change has enormous potential to deliver real value, including social value – but they have as yet come nowhere near to doing so. These are healthcare and education.

Staying with healthcare, and resisting the temptation to further lambaste the UK NHS’s National Program for IT in Health (NPfIT), my experience, and a review of case studies from a number of countries, reveals two disturbing common features among them. These are:

  1. Much is said about the biggest challenge in realizing benefits/value from major IT-enabled change programs in Healthcare (often lumped under the eHealth umbrella)  being management of change – process and behavioural change – yet little or no guidance is provided on how to manage that change, or even what the major elements of change are; and
  2. Benefits are usually treated as an afterthought, often not well defined let alone evaluated until years into the program.

Basically, the approach appears to be: let’s get the technology implemented first, then we’ll find out what changes are required to “meaningfully use” the technology, then we’ll worry about the benefits. As long as we continue with this technology first approach, we will continue to fall dismally short of realizing the potential benefits of such change – the waste of money is a scandal – the opportunity cost of not delivering on the value promise is even worse. We must move from starting with the technology to “starting with the end in mind”.

Over the last few months, I have been involved in working on a number of case studies of enterprises who have made significant progress in implementing value management practices and developing a “value culture”. In preparing my speech to the HIC conference, I drew on the factors that I found to be common in the success of these enterprises – factors that I believe should be seriously considered in the healthcare context. They include:

  • Shifting the focus beyond technology, activities and cost to focus on change – process and behavioural change, outcomes and value
  • Strong and committed business leadership – change programs must be owned by the business and the business must be held accountable for the benefits of those programs
  • Appropriate business engagement and sponsorship/ownership – change cannot be done to people – it must be done with them
    • Cascading sponsorship – there must be leadership at all levels in the enterprise – this should include “formal” leadership, those appointed to lead, and “informal” leadership, those selected/looked to by their peers as leaders
    • “Front-line”  input and feedback – these are the people who usually know what needs to be done, their voice is all too often not heard
  • Clearly defined governance structure, role and responsibilities
  • Don’t underestimate the emotional and political issues around “behavioural change”
  • Be prepared to change course – both the journey and the destination
  • A strong front-end planning process with inclusive and challenging stakeholder engagement
    • Get “the right people in the room having the right discussion”
    • Use Benefits mapping workshops
      • Build clarity and shared understanding of desired outcomes
        • Recognize and balance/optimize different views of value
      • Surface “assumptions masquerading as facts”
      • Surface, understand and manage complexity – understand the full scope of effort including changes to the business model, business processes, roles and responsibilities, skills and competencies, reward systems, technology. organization structure, facilities and management of change
      • Don’t treat  as a one-time event – revisit regularly through an ongoing process
    • Avoid the “big bang” approach – break work into “do-able” chunks that deliver measurable value
  • Define, develop and maintain standard and complete business cases
    • Clearly defined outcomes
    • Full scope of effort
    • Clearly defined – and accepted – accountabilities (for outcomes – not activities)
    • Relevant metrics, both “lead” and “lag”  – “less is more” – measure what’s important and manage what you measure
  • An aligned and results-based reward system
  • A clear and transparent portfolio management process to select and optimize investments in IT-enabled change
  • Manage the journey
    • Use the updated business case as a management tool
    • A strong gating process for progressive commitment of resources
      • When things are not going to plan, understand why and be prepared to change course, change the destination or cancel the program
  • Manage and sustain the change
    • On-going inclusive two-way communication
    • Support/sustain with one-on-one coaching/mentoring
    • Celebrate and build on success
    • Learn and share

All investments in IT-enabled change are important, but few have such impact on all of us as  those in healthcare (and, I would add, education). We cannot continue to muddle through with technology-centric approaches that are designed to fail. We must learn from past failures. There is a better way. Starting with the end in mind, with strong ownership and leadership, inclusive engagement, and pro-active management of change – managing the destination and the journey – we can do better. We must do better. We deserve no less!