2012 – A Perfect Storm in IT!

One consequence of a 3 month hiatus, forced initially by surgery and concluded more voluntarily with much needed relaxation in Hawaii, is that I have had time to actually read and digest much of the material that, all too often, I only have time to quickly scan – and then rarely get back to. Amongst all this material was a considerable amount of prognostication on 2012 trends. In many ways, little of this was new, but collectively, it does amount to a “perfect storm” that challenges the way we as individuals, societies, and enterprises – small and large, public and private, look at, use and manage technology, including both the demand and supply side and, probably most importantly, where they intersect. In this post, I will briefly discuss the elements of this “perfect storm”, add the one element that I find to be conspicuously missing from the dialogue, and discuss the implications of both.

  1. The “cloud” – the dream of the “information utility” has been around for decades, and now, with the “cloud”, while there are still significant governance, security and privacy issues to work through (some real, some “noise”),  this is now closer to being a reality.
  2. The data explosion, “big data” – I read recently that 90% of the data in the world today was created in the last 2 years – this exponential growth of data is creating both enormous challenges, and great opportunities – on the technology side, developments include the rise of Hadoop, and recent announcements of Dynamo DB from Amazon, and Big Data Appliance from  Oracle, as well as the growing need for new data visualization and “data scientist” skills.
  3. Analytics, particularly real-time analytics – some of the technologies mentioned above, and indeed those below, are fundamentally changing the analytics landscape. Huge amounts of data – structured or unstructured, can now be analyzed quickly, and data can increasingly be captured and analyzed in real time. The challenge here is to resist the temptation  to succumb to analysis paralysis – to know what information is both relevant and  important, what questions to ask, and to think ahead to what actions might need be taken as a result of based on the answers to these questions.
  4. Mobility – services can now be accessed, data captured, information found, and transactions performed from almost anywhere – other work locations, coffee shops, restaurants and bars, at home, in other countries, in taxis, trains or buses, on airplanes or even on a cruise ship – limitations of distance and time have been virtually eliminated. The challenge here, apart from the security and privacy issues that are common to most of these points,  is to be able to find the “off” button in an increasingly, always on, 24/7 world. On an individual basis we need to maintain a work-life balance, and from a business perspective, “burn out” seriously erodes the effectiveness and value of  their most critical resource – people.
  5. Consumerization, including BYOD and “app”s – while it could be argued that these 3 could each merit their own category, I have chosen to “lump” them together as, collectively, they represent a further significant shift from the traditional “technology push” world, with the IT function in a control mode as the gatekeeper, to the “user tool pull” world with IT, potentially – if they get it right, in a facilitation role as a service broker.
  6. Social Media – this is, to some extent, simply one “flavour” of the previous 2 elements, but a very significant one, with potentially huge implications. While much of the attention to date has been on controlling social media, enterprises are increasingly using it as a communication channel, and beyond that, to tap into it to find out what their customers, and employees are thinking. Here, one challenge/opportunity that I see how we can use social media to improve performance  by tapping into the collective knowledge within organizations – “crowd sourcing” input into decision-making and, as a result, making better-informed decisions, and having employees feel more connected with, and empowered by their organizations.

In all the discussion around the elements of this “perfect storm”, much if not most of the focus had been on the IT function needing to respond more quickly to deliver and/or support capabilities in these areas. There has been much less discussion of how the use of these technologies will be used to lead to positive outcomes – creating and/or sustaining  individual, societal and enterprise value – or of the changes that will be needed in the behaviour of individuals, societies and enterprises if that value is to be realized. If we as individuals and societies are not to become “the tools of our tools”, and enterprises are not to continue the increasingly expensive and value-destructive litany of IT failures, we need to shift our focus from the technology to how we manage and use the capabilities that the technologies provide to increase the value of our lives, our societies and our enterprises.

I don’t make these comments as a later day “luddite”,  rather my focus on value is driven by many decades of frustration at our being nowhere near to realizing the individual, societal and business value that intelligent and appropriate use of technology can create. We will not close that gap until we – as individuals, or leaders in society or business, take “ownership” of how we  use technology, based on the outcomes that are important to us, and the value that we seek to create and sustain! In the enterprise world, this has fundamental implications for the roles and accountabilities of business executives and line of business managers, and for the role of the IT function, as discussed in 2 earlier posts, The Future of IT, and Value from IT – There is a Better Way!

In closing, in the context of individual and societal value, 2 areas that I have long had an interest in, and that I will be watching closely this year are healthcare and education. While we shouldn’t expect seismic shifts in either to happen quickly – it’s just not the nature of the beasts, the ground is starting to move. In healthcare, much of this is driven by the funding crunch, with increase focus on eHealth, based largely on “meaningful use” of EHRs, as well as an increasing number of apps such as Phillips Vital Signs Camera for the iPad. In education, with some exceptions, it is still somewhat more of a grass roots movement, although Apple’s recent iBooks 2 and iTunesU announcements, and organizations such as Curriki may well be  changing this. What I believe we will see here, over time, is an evolution beyond eHealth and eLearning to iHealth, and iLearning, with individuals taking increasing “ownership” of their own health and education.

 

 

Value from IT – There is a Better Way!

I have just returned from a hectic, but very successful couple of weeks in Australia. There I had the opportunity to meet with and talk to many people, including many CXOs, on the topic of “Delivering on the Promise of IT”. Overall, I was encouraged that there is more awareness of the need to do better when it comes to managing IT investments, but discouraged that there is still little awareness of how to do so, and even less appetite to take it on. As always, at the end of many sessions, a frequent reaction was “you have given us a lot to think about.” As I continue to say, we certainly need to think before we act, but thinking cannot be a substitute for action. A couple  of people echoed a comment that my friend Joe Peppard from the Cranfield  School of Management in the UK told me he had had from a senior executive of a European bank – “I didn’t know there was a better way.”

Well, there is a better way! As originally presented close to 15 years ago in The Information Paradox, proven Value Management practices exist, including, but certainly not limited to ISACA’s Val IT™ Framework, including:

  • Portfolio Management – enabling evaluation, prioritization, selection and on-going optimization of the value of IT-enabled investments and resulting assets;
  • Programme Management – enabling clear understanding and definition of the outcomes and scope of IT-enabled change programmes, and effective management of the programmes through to their desired outcomes;
  • Project Management – enabling reliable and cost-effective delivery of the capabilities necessary to achieve the outcomes, including business, process, people, technology, and organizational capabilities; and
  • Benefits Management – the active management of benefits throughout the full life-cycle of an investment decision.

This is illustrated in the figure below.

If enterprises are to successfully adopt and meaningfully use these practices, their leaders will have to change their behaviour. They will need to acknowledge that this is not an IT governance issue, it is an enterprise governance issue. Further, they will have to evolve from an enterprise governance model rooted in a culture of delivery (of technical capabilities) to one based on a culture of value – creating and sustaining value from investments and assets (for more on this, see a recent paper that I wrote with the Benefits Management SIG of the APM in the UK). In the IT context, this means recognizing that we are no longer dealing with “IT projects”, but with increasingly complex programmes of organizational change – change that is often both shaped and enabled by technology, but of which the technology is only a small part.

They should start by focusing on the business case. The business case sows the seeds of success or failure. Most today are woefully inadequate – based on “delusional optimism” and “strategic misrepresentation” (aka lying!), resulting in:

  • limited or no clarity around desired outcomes
  • limited or no understanding of the scope (“depth” and “breadth”) of change required to achieve the outcomes;
  • failure to balance “attractiveness” with “achievability” (including organizational change capacity, project and programme management capabilities); and
  • limited or no relevant metrics (both “lead” and “lag”).

In the context of IT, business cases must be owned by the business, and for any type of investment, used as a living, operational management tool to manage the full life cycle of an investment decision, and supported by the value management practices outlined above.

Again, in the context of IT, as Susan Cramm states in her book, 8 Things We Hate About IT, this will require  a significant  realignment of roles, responsibilities and accountabilities related to IT. There must be a partnership in which:

  • The IT function moves from providing infrastructure to being a broker of services (both internal and external – and increasingly external) while retaining responsibility and accountability related to fiduciary, economies of scale and enabling infrastructure;
  • Business units accept responsibility for defining the requirements for, meaningful use of, and value creation from these services; and
  • The IT function, as a trusted partner, helps the business:
    • Optimize value from existing services;
    • Understand the opportunities for creating and sustaining business value that are both shaped and  enabled by current, new or emerging technologies;
    • Understand the scope of business change required to realize value from those opportunities (including changes to the business model, business processes, people skills and competencies, reward systems, technology, organizational structure, physical facilities, etc.; and
    • Evaluate, prioritize, select and execute those opportunities with the highest potential value such that value is maximized.

The challenge here is not a lack of proven value management practices – it is the “knowing – doing gap”, as described by Jeffrey Pfeffer and Robert Sutton in their book of the same name. We know what to do, and (should know) how to do it. Yet, so far, here has simply been little or no appetite for, or commitment to the behavioural change required to get it done, and stick with it.

The cost in money wasted and, more importantly, benefits and value lost, eroded or destroyed is appalling. It’s way past time to move beyond word to action – the status quo is not an option!

There is a better way!

The Siren Call of Certainty

In Greek mythology, the sirens were three bird-women who lured nearby sailors with their enchanting music and voices to shipwreck on the rocky coast of their island. The term siren call, from which this derives, is described in the Free Dictionary, as “the enticing appeal of something alluring but potentially dangerous”. In today’s increasingly complex and interconnected world, it is the siren call of certainty that is luring many organizations into failures akin to shipwrecks, particularly, although not limited to their increasingly significant investments in IT-enabled change. More accurately, it is their failing to recognize, accept and manage uncertainty, that leads to these wrecks.

Yet again here, what we have is a failure of governance, and of management – a failure that starts with how strategic decisions are made. In a recent McKinsey paper, How CFOs can keep strategic decisions on track, the authors make the point that “When executives contemplate strategic decisions, they often succumb to the same cognitive biases we all have as human beings, such as overconfidence, the confirmation bias, or excessive risk avoidance.” My discussion here covers the first two (excessive risk avoidance essentially being the opposite of these, and equally dangerous). Executives are often so certain about  (overconfident in) what they want to do that others are unwilling to question their certainty or, if they do, they are dismissed as “naysayers” (and quickly learn not to question again) or the executive only chooses to hear those parts of what they say that confirm their certainty (confirmation bias). I must admit that I have probably been guilty of this myself, in language if, hopefully, not intent, when I have told my teams, “I don’t want to hear why we can’t do this, I want to hear how we can do it.” What I really should have added explicitly was “…and then tell me under what conditions it might not work”.

To resist the lure of the siren call, we require an approach to strategic decision-making  that is open to challenge – one in which multiple lenses are brought to bear on the decision, where uncertainties, and points of view contradictory to those of the person making the final decision, be that the CEO or whoever, are discussed, and where individual biases weigh less in the final decision than facts.

I am not suggesting here that uncertainties should prevent investments being approved, if they did we would never do anything. I am saying that they should not be buried or ignored – they must be surfaced, recognized, mitigated where possible, and then monitored and managed throughout the life-cycle of the investment. This means acknowledging that both the expected outcomes of an investment, and the way those outcomes are realized will likely change during the investment life-cycle. It means managing a changing journey to a changing destination. Unfortunately, once again the siren call of certainty also gets in the way of this.

When investments are approved they are usually executed and managed as projects, all too often seen as technology projects (I use the term broadly here). In a 2010 California Management Review article, “Lost Roots: How Project Management Came to Emphasize Control Over Flexibility and Novelty”, authors Sylvain Lenfle and Christoph Loch, discuss the history of Project Management, and suggest that the current approach to Project Management promises, albeit rarely delivers, greater cost and schedule control, but assumes that uncertainty can be limited at the outset.”

The origins of “modern” project management (PM) can be traced to the Manhattan Project, and the techniques developed during the ballistic missile projects. The article states that “the Manhattan and the first ballistic missile projects…did not even remotely correspond to the ‘standard practice’ associated with PM today…they applied a combination of trial-and-error and parallel trials in order to [deal with uncertainty and unforeseen circumstances] and achieve outcomes considered impossible at the outset”. This approach started to change in the early ’60s when the focus gradually changed from ‘performance at all costs’ to one of optimizing the cost/performance ratio. Nothing inherently wrong with that, but along came Robert McNamara who reorganized the planning process in the Department of Defense (DoD) to consolidate two previously separate processes – planning and budgeting. This integration was supported by the Program Planning and Budgeting System (PBS), which emphasized up-front analysis, planning and control of projects. Again, nothing inherently wrong with that, but the system resulted in an emphasis on the complete definition of the system before its development in order to limit uncertainty, and a strict insistence on a phased “waterfall” approach. The assumptions underlying this approach are i) as decisions taken by top management are not up for discussion, the PM focus is on delivery, and ii) rigorous up-front analysis can eliminate and control uncertainty – these underlying assumptions are still very much part of Project Management “culture” today.

Again, I am not saying here that there is no need for sound analysis up-front – quite the contrary, I believe that we need to do much more comprehensive and rigorous up-front analysis. What I am saying is that, no matter how good the up-front analysis is, things will change as you move forward, and there will be unexpected, and sometime unpredictable surprises. We cannot move blindly ahead to the pre-defined solution, not being open to any questioning of the outcome (destination) or approach (journey), and focusing solely on controlling cost and schedule. The history of large projects is littered with wrecks because, yes, there was inadequate diligence up-front, but equally, or even more so, because we failed to understand and manage uncertainty – forging relentlessly on until at some stage, the project was cancelled, or, more often, success was re-defined and victory declared.

The article suggests that “Project Management has confined itself in an ‘order taker niche’ of carrying out tasks given from above…cutting itself off from strategy making…and innovation”. Many organizations, particularly those embracing agile development approaches, do apply a combination of trial-and-error and parallel trials in order to deal with uncertainty and unforeseen circumstances, and to achieve outcomes either considered impossible at the outset, or different from those initially expected. But, as the authors say, “these actions happen outside the discipline of project management…they apply [these approaches] despite their professional PM training.”

The tragedy here, with both strategic decision making, and execution is that we know how to do much better, and resources exist to help us do so. Strategic decision making can be significantly improved by employing Benefits Mapping techniques to ensure clarity of the desired outcomes, define the full scope of effort to achieve those outcomes, surface assumption, risks and uncertainties around their achievement, and provide a road-map for execution, supporting decision making with an effective business case process, and by applying the discipline of Portfolio Management to both proposed and approved investments. The successful execution of investments in the portfolio can be increased by moving beyond the traditional Project Management approach by taking a Program Management view, incorporating all the delivery projects that are both necessary and sufficient to achieve the desired outcomes in comprehensive programs of change. Many of the elements of such an approach were initially discussed in The Information Paradox, and subsequently codified in the Val IT™ 2.0 Framework.

We know the problem, we have the tools to deal with it – what is still missing is the appetite and commitment to do so.

The Real Alignment Challenge

It has, yet again, been a while since my last post – this partly because of both work and personal pressures – I have been helping Diane run one of the largest juried art shows in our province, but also because I haven’t seen anything that caused me to “lift up my pen”. A number of articles and posts that I have seen over the last few days have now pushed me to do so.

Yesterday, I read an interview with my old colleague, Don Tapscott, by Shane Schick in Computerworld Canada  in which he discusses yet another new book, his follow on to Wikinomics –  Macrowikinomics: Rebooting Business and the World (which Tapscott wrote with collaborator Anthony D. Williams). The book is based on the idea of mass collaboration both within companies and between them, with their partners, customers and other stakeholders. Since his first book, Paradigm Shift (which he co-authored with Art Caston), Don has been a visionary in the IT space – he has helped many individuals and organizations, including myself, to have a broader understanding of what could be. Whilst I would also like to think that I am somewhat of a visionary, I am primarily interested in what it takes to turn vision into reality – a reality where the potential of IT turns into realized value. Unfortunately, the gap between vision and reality (and, by inference, concept and implementation) continues to be large, and, as another former colleague of mine, Michael Anderson, once said (or, possibly, quoted), vision without action is hallucination.

This leads me to the second article by Chris Kanaracus in Computerworld – ERP woes blamed for lumber company’s bad quarter . On first seeing this, I thought here’s yet another ERP failure story to file away which, to some extent it is in that, as the article says “Lumber Liquidators is attributing a weak third quarter to a complex SAP implementation, saying the project imposed a significant drain on worker productivity.”  The article goes on to say that  “…lower productivity led to an estimated $12 million and $14 million in unrealized net sales, according to the company. Net income fell nearly 45% to $4.3 million.” Lumber Liquidators’ CEO Jeffrey Griffiths, in saying that “There were a few things that didn’t work quite right, a few things that were unique to our business that we didn’t see as well ahead of time…” , attributed the problems in the quarter to employees’ having difficulty adjusting to the SAP software, which he nonetheless praised. The article concludes by saying that “The situation differs from other troubled SAP projects, such as one conducted by Waste Management that led to a bitter lawsuit, which was ultimately settled.” It may differ in that it did not result in a lawsuit, and the SAP system is still running, but it certainly does not differ in that the significant loss of income, and the resulting drop in share value of 14%, was due to a problem that could and should have been anticipated and headed off – this did not have to happen! The problem here usually comes down to focusing too much on the technology – not the change that technology shapes, enables and require, not applying due diligence at the front-end – to understand the scope and breadth of the change, and not effectively and pro-actively managing the change. In Lumber Liquidator’s case, this view would appear to be supported by today’s ZDNet Article by Michael Krigsman – Understanding Lumber Liquidators’ ERP failure.

The next article, Business as Organism, Mechanism, or Ecosystem by Bob Lewis in CIO provides some useful insights into the nature and behaviour of organizations today. Introducing the article, he asks “Do you envision your organization as an organism, mechanism, or ecosystem?”

In the case of an ecosystem, he suggests that “The enterprise is organized, if that isn’t too strong a word [such that] employees at all levels interact to further their own self-interest. Furthering the interests of the enterprise is an accidental byproduct at best. More usually it isn’t a byproduct at all. The enterprise is left to look out for itself. And so, organizational ecosystems devolve to silos within silos within silos. It’s no way to run a railroad. Or any other organization, from an enterprise down to the smallest workgroup.”

He then goes on to say that, as a result of this proliferation of silos, “Many business executives choose to view their organizations as mechanisms instead — collections of gears, cams, cogs, levers and buttons, connected so as to achieve a coherent result. It’s business-as-automobile and business-leader-as-driver. It’s the view preferred by process consultants of all religious persuasions … lean, six sigma, lean six sigma, theory of constraints and whole-hog process re-engineering for the enterprise as a whole; ITIL for IT, and other process frameworks (I imagine) for other business disciplines. All start by describing an organization as a collection of processes and sub-processes that feed each other’s inputs and use each other’s outputs to achieve the organization’s purpose… the purpose of the executive in charge … the CEO for the enterprise as a whole and the other C-level executives…Business-as-mechanism is far superior to business-as-ecosystem because mechanisms, whether they’re automobiles, power tools or computers, can and do achieve the purposes for which they’re designed, so long as they’re operated by people who (a) have the appropriate skills to use the mechanism; (b) know what they’re trying to accomplish with it; and (c) have chosen to try to accomplish something for which the mechanism is suitable.” Relating back to the SAP challenge described above,  it is this last statement that contains the root of the problem.  Many executives choose to implement ERP solutions, such as SAP, as a way to address the silo problem. However, if insufficient effort is put in up front as part of the change management process to ensure that managers and employees think beyond their individual silos, have a clear and shared understanding of the purpose of the change that they are being asked to make, and how their roles and responsibilities will change across the silos, and if they are not trained such that they have the appropriate skills to operate in the changed environment, the result will be, at best, disruptive, and, at worst, highly visible outright failure.

Bob then goes on to contrast the above with organizations that operate as organisms, saying that “Unlike mechanisms, the organism’s purpose belongs to every part of it. That’s what lets it adapt to changing circumstances. Feet build callouses, muscles harden and bulk up, skin tans when exposed to more sunlight — each part supplies its own energy and figures out the details of its operation on its own without subverting the overall purpose of the critter it’s part of. Organizations that are organisms are rare because leaders willing to invest the effort to build them, and to forgo the gratification of being the sole driver, are rare. While evidence is sparse … Business Management theory hasn’t yet reached even the level of reliability associated with Economics … what evidence we have suggests organizations that operate as organisms are the most successful in both the short and long run.”

The above caused me to again reflect on Joel Kurtzman’s book, Common Purpose, which I referenced in an earlier post The Traveller Returns, in which Joel provides a very insightful critique of today’s leaders. (As I threatened in the previous post, I will review this book in greater detail shortly). What I took away from Bob’s article, and what I see in my everyday work across the globe is a serious mis-alignment between enterprises whose leaders have an ecosystem mindset, but  adopt mechanistic solutions to change what are becoming increasingly complex organisms – this is the real alignment problem! If we are to solve this problem, if enterprises are to survive and thrive, we need to get away from what I have described in previous posts as the cult of leadership. As Joel says in his book, leaders need to move beyond the traditional “command and control” model to establishing a  ”common purpose” and creating a “feeling of ‘we’ among the members of their group, team or organization”. This will require leaders who can “park”, or at least manage their egos, break down silos, and really engage with and empower all employees – fostering leadership across and at all levels in the organization. Only then will the full potential value of IT-enabled change be realized!

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!

The Traveler Returns

To quote Mark Twain, “The reports of my death are greatly exaggerated!” Understandable, however, as it has indeed been quite some time since my last post. This is largely because I have been traveling extensively – a mix of business and  personal time – including Toronto, Asia, Alaska, Vancouver, the UK and Greece. Part of the personal time included a 23 day cruise from Beijing to Vancouver. A quick scan of emails on my return – once I eliminated the 90% related to the (aptly named) Cloud –  had me yet again shaking my head and wondering whether I had not been on a cruise ship at all – rather traveling in Dr Who’s police box time machine – backwards! Here are just a couple of examples:

  • In his May 21st blog, Project Managers Need to Engage IT At the Right Time, commenting on a project predictability seminar, Jim Vaughan says “It was noted that problems with requirements management are rarely with the IT organization and process. This caught me by surprise at first because I usually thought of IT, myself included, as the source of the problem.To get to the right requirements you need the right people to define those requirements. These are not the IT people. If we let the IT people define the requirements we will likely get into trouble. That is why people will blame IT for failed projects. The correct people to define the requirements are the business people and end users.” As this is what I have done for more than 45 years – and what I assumed was well understood, if not common practice – I was amazed that Jim should be surprised by this.
  • In a May 24th Computerworld article by Julia King, These CIOs go way beyond IT-business alignment, she discusses “an admittedly unscientific short list of pioneers in IT-business convergence including  The Progressive Corp., Southwest Airlines Co. and The Procter & Gamble Co.” as well as Vanguard Group and Zappos.com where “business and IT are virtually indistinguishable” and “IT doesn’t just support the business; it enables and continually transforms the business, often creating new revenue and profit streams.” I think that this is great – but why, when we have been talking about this for decades, are there still only a small group of pioneers doing this?

On a more positive note, I attended the CICA conference in Toronto at the end of March, where I gave a Val IT™ workshop, and was pleased to have some people talk to me about Val IT before they even knew who I was, and also to discover that an increasing number of organizations, including the Office of the Auditor General of Canada, are using it, or planning to do so.

In May, I presented at the first annual CMC BC Consulting Conference in Vancouver – how could I resist speaking at a conference with the theme “Charting a course to value”. Among the other topics, there was much discussion about social media and networking and I was pleased to see a tweet sent from Chris Burdge of bWEST who was attending my presentation saying that he was finding it “surprisingly fascinating”. He has subsequently invited me to participate on a panel at a  SocialMediaCamp he’s organizing for October. My son, Jer (blprnt), is quite active in the social media scene, and has a digital art practice in which (I quote) he “explores the many-folded boundaries between science and art”. He and I have been spending quite a bit of time lately discussing the intersection of governance and social media/networking – not just the current preoccupation with how to control social media/networking but, beyond that, how it could be used to improve governance, specifically the quality of decision-making, by tapping into a much broader experience/knowledge base. I may need to spend more time with him before October.

After Vancouver, I headed off to Greece to speak at the Thessaloniki Business Conference. There was an impressive line up of speakers, all of whom had a strong focus on value.  Many of the messages resonated with me, including:

  • Professor Leslie de Chernatony, Professor of Brand Marketing Universita della Svizzera italiana and Aston Business School, who spoke about “Growing out of a recession through more effective brand strategies” stressed that that companies needed to focus on value – not price, to move beyond product quality to outcome quality, and to “watch how you invest”.
  • Howard Stevens, CEO of The HR Chally Group, talked about “Unlocking the Science of Sales Development” and reinforced the value and outcome quality messages saying that there is only a 2-3% difference in product quality between the serious players, all products can be replicated, and what really differentiates the players is the “customer experience”. He also discussed the importance of business analytics and contended that we have information management (IM) backwards – we start with the company executives when we should be starting with the customer.
  • Harold Stolovitch of HSA Learning and Performance Solutions spoke on “Maximizing Workplace Performance in Tough Economic Times” and reiterated the importance of really “walking the talk” when it comes to treating people as “your most important asset” and said that study after study shows that the most important performance blocks are failing to set expectations and failing to provide feedback.
  • Jeremy Hope, Director of the Beyond Budgeting Round Table talked about “How to save 20%-30% on costs, by managing operational bureaucracy and the introduction of modern tools for the running of the Finance Department”, claiming that replacing the annual budget with rolling plans and forecasts could save 90% of time currently spent on the budget process. This is certainly in line with my thinking as expressed in The Budgeting Circus.
  • Dr David Hillson, Director at Risk Doctor & Partners, covered the topic of “Managing risk in innovation projects”. In defining risk as “uncertainty that matters”, he suggested that risks present opportunities as well as threats, with both needing to be managed proactively, and made the case that Risk Management addresses both threats & opportunities in a single integrated process.

I spoke on the role of IT in the economic crisis, and the challenge of maximising the value from IT. I made the case that, while Nicholas Carr might say that “IT [as a commodity] doesn’t matter”, how we manage the change that IT both shapes and enables determines the success or even survival of our enterprises, and business leaders must own and be accountable for this –  it is far too important to be abdicated to the IT function.

En route to and from the Greek conference, I read Joel Kurtzman’s book, Common Purpose. The need for leadership came across in most of the above presentations, and Joel provides a very insightful critique of today’s leaders, and the need for them to move beyond the traditional “command and control” model to establishing a  “common purpose” and creating a “feeling of ‘we’ among the members of their group, team or organization”. I will review this book in greater detail in a later post.

On the subject of books, I am also reading Susan Cramm’s latest book, 8 Things We Hate about IT – as always, Susan is “right on the money” and, again, I will shortly post a review. Also, I  have received a copy of Stephen Jenner’s latest book, Transforming Government and Public Services: Realising Benefits through Project Portfolio Management, which I hope to be able to get to soon and – yes – will again be posting a review.

Hopefully, it will not be 3 months before my next post, but, as I will be slowing down somewhat through the summer – if it ever comes, it may be a while before I get back to being as prolific as I have been in the past.

Getting Information Management Right

A couple of recent articles by Thomas Wailgum in CIO.com got me thinking – yet again – about information management (IM – for more on IM see Enterprise IT or Enterprise IM?). The first, Information Wants to Be Free, But at What Cost?, makes the point that the more information that enterprises continue to exponentially collect, the more difficult and expensive it’s going to be for them to understand and disseminate that information. The second, The Future of ERP, Part II, makes the case for change in that after four decades, billions of dollars and many huge failures, big ERP has become the software that no business can live without—and the software that still causes the most angst.

In The Information Paradox, and every time I present or discuss the topic of getting real value from our increasingly significant and complex investments in IT-enabled change, I use the slide below to explain how the way we use IT has evolved.

Slide1

When I started in this business, back in the early 60s, most, if not all commercial applications of IT were automation of existing tasks – where the focus was on doing the same thing more efficiently. I call this the appliance era – applications were stand-alone and very little business change was required (as illustrated by the pie chart on the slide). You could essentially have be given the application for Christmas – plug it in and it would do the job.

In the next era, which emerged during the 70s, things became  more complex. We moved beyond automation of tasks to creating, storing, distributing and manipulating information. The focus here was on effectiveness – using information to do things differently and to do different things. You now had to worry about what information was needed, by whom, where, when and in what form – and people had to be trained and incentivized to work differently. Appliances now had to work together in an integrated way, and the way business was done had to change – I call this the rewiring era.

In the next era, which emerged during the 80s, we began to see what I heard a Northrop Grumman CIO describe as “game changing plays” – changing the rules of existing industries and creating new ones. I call this the transformation era. While the changes might not be possible without the technology, the bulk of the effort required to achieve the desired outcomes involves changes to the business – including the nature of the business, the business model, business processes, peoples roles and skills, organizational structure, physical facilities and enabling technology. Those appliances – now ranging from “mainframes” to smart-phones – have  to work together in an integrated way, not only within an enterprise, but outside it – on a global basis.

Unfortunately, while our use of IT has evolved – our management of it has lagged. In far too many cases, the focus is still on the IT appliance  – “plug it in and the value will flow”. Those days are long gone. We are not today simply dealing with appliances – or with simple appliances – we are dealing with massive organizational and cultural change – transformational change. Change that is enabled by technology, but of which technology is only a small part.

The more that I have though about this, and talked about it, the more I feel that one of the sources of the perceived and real failure of investments in IT-enabled change to deliver the expected business value is that we have still not got the information piece right. (Note that in the following comments, I may appear to, and indeed do, to a certain extent, use the terms data, information and knowledge somewhat loosely. This is not because I do not understand the difference – or at least have an opinion on it – but because terminology in common use doesn’t always make a clear distinction, and I don’t want to bog this post down with that discussion.)

While the amount of data we store continues to grow – Gartner predicts that the amount of enterprise data will grow 650 percent during the next five years, a recent Forbes Insights survey of more than 200 executives and decision makers at top global enterprises found that nearly one-quarter of the respondents cited the availability of timely data as one of the top barriers to aligning strategy and operations today. In an earlier post, The Knowing-Doing Gap,  I quoted James Surowiecki, from his book, The Wisdom of Crowds, where he said “…information flows – up, down and across organisations – are poor, non-existent or “filtered” in all directions, decisions are made by a very few with inadequate knowledge and information, and there is limited buy-in to whatever decisions are made.” So, with an enormous and growing amount of data being collected, at considerable cost, why haven’t we got it right? I would suggest that there are a number of reasons for the current state of affairs:

  1. Knowledge is power
  2. Not knowing what information is relevant
  3. Too much information
  4. Bad data
  5. System complexity
  6. Go with the gut

Let’s examine each of these.

Knowledge is power

Building on the Surowiecki quote referenced above, Sir Francis Bacon was (among) the first to say that “Knowledge is power”. Peter Drucker expanded on this saying “Today knowledge has power. It controls access to opportunity and advancement.” This presents a cultural and behavioural barrier to sharing information and to getting it to (all) the people who need it – one that should not be under-estimated.

Not knowing what information is relevant

In another life, I led a lot of what we then called Information Resource Planning assignments. We would interview key stakeholders in an enterprise to find out what information they required. Once we had their requirements, I always asked one final question: “If you had this information, what would you do differently?” Very few people could answer this question or had even thought about it. Enterprises need to take an outcome and role based approach to identifying and meeting information requirements. Expanding on my earlier question, we need to ask: ” Based on the outcome(s) we want to achieve, what decisions/actions need to be taken, who needs to take them, and what information do they need – where, when and in what format – to take them, and what information do we need to know that things are working as they should be?”

Too much information

Today we are drowning in information and, as per the Gartner prediction above, it is only going to get worse. Even if the information that we require is available, it may be lost in the sheer volume of information – the information noise. This noise level is only going to increase. If we are to cut through this noise to what is relevant, it is even more critical to take an outcome and roles based approach to defining information requirements. We will also need to beyond the traditional reporting metaphor and simple, or simplistic dashboards to much more sophisticated, yet intuitive (see “System complexity” below) analytical and data visualization tools.

Bad data

One of the biggest risks to organizations is “bad data quality.” Results from Scott Ambler‘s September 2006 Data Quality Survey show that 46% of data have some data sources that are a “complete mess” or the data itself has serious problems. In an April 2009 data quality PRO survey of Data Quality in Business Intelligence, 42% of respondents reported minor issues, 50% reported major issues, and 4% didn’t know –  leaving just 1% reporting no problems. A 2007 Accenture CIO survey claimed that the costs of compromised data quality are clear—billions of dollars squandered each year due to mistakes, manual processes and lost business. Of the CIOs surveyed,  29 percent said that they had minimal or limited data quality efforts in place, even for critical systems, and only 15 percent of respondents believed that data quality was comprehensively (or near comprehensively) managed. Indeed, not a single North America-based organization reported that they have a fully comprehensive data quality program today. Information is only as good on the data it is based on. It will take time to implement workarounds for, and fix the mess that we have created. In the interim,  we need, at a minimum,  to know how credible the information is and what confidence we can have in decisions based on that information.

System complexity

ERPs were promoted as one “solution” to the information management challenge, but have  proven a challenge for many enterprises – see ERPs – Can’t live with them – Can’t live without them!. Where they have been successful, they may have done a good job of integrating data across enterprises, but few would describe them as easy to use. Even if relevant information is available, if it is too complex or time-consuming to get at it, people won’t. While somewhat simplistic, I have often felt, and even more often heard that “if I need to be taught how to use it, I won’t use it.” Again, information needs to be relevant, outcome and role based, and easy to access and understand.

Go with the gut

Business intelligence was identified in the 2009 SIM Trends Survey as one of the top technologies that enterprises were planning to invest in. Research reported by Accenture in 2008 found that close to half (40%) of major corporate decisions are based on “gut feel”.  The reasons for this executives cited most often, which reinforce some of the points above, were: because good data is not available (61 percent); there is no past data for the decisions and innovation they are addressing (61 percent); and their decisions rely on qualitative and subjective factors (55 percent). 23 percent of respondents identified “insufficient quantitative skills in employees” as a main challenge to their company, and 36 percent said their company “faces a shortage of analytical talent.” 39 percent of respondents said that IT capabilities restrictions were a major challenge and 27 percent said there was an inability to share information across organizations within their company. I also wonder if this might not also be a bit of the “cult of leadership” where they believe that they have achieved a level of knowledge/wisdom where they don’t need information to make good decisions.

Information and people are the two most important and, in all too many cases, the most ineffectively utilized assets in today’s enterprises. What information is available to people – be they executives, managers, workers, suppliers, customers or other stakeholders –  the quality of that information, and how they use it is a key part of what determines business success or failure – value creation and sustainment, or value erosion and destruction. This is true both for “business as usual” activities and – even more so – for transformational change. If enterprises do not get the information piece right, their transformational efforts, and their survival, will be in extreme peril.

ERPs – Can’t live with them – Can’t live without them!

A CIO.com article and a blog, both by Thomas Wailgum, caught my attention this week. The first, Why ERP is Still So Hard, and the second, The United Nations ERP Project: Is SAP the Right Choice?. Both caused me to reflect on ERPs – in many organizations now themselves legacy applications.

The first article opens by saying that:”After nearly four decades, billions of dollars and some spectacular failures, big ERP has become the software that business can’t live without–and the software that still causes the most angst.” Interestingly, when we wrote The Information Paradox, the major IT investments at that time were ERPs, and that is where most of the problems where. It appears that not much has changed.  The article goes on to make a number of points:

  • ERP projects have only a 7 percent chance of coming in on time, most certainly will cost more than estimated, and very likely will deliver very unsatisfying results. In addition, today’s enterprise has  little better than a 50 percent chance that users will want to and actually use the application.
  • CEOs and CFOs are still trying to wrap their heads around the financial aspects of your standard ERP package, a most unusual piece of the corporate pie: the licensing, implementation, customization, annual maintenance and upgrade costs. A CFO Research Services study of 157 senior finance executives, found that a typical company will spend an average of $1.2 million each year to maintain, modify and update its ERP system.
  • Manjit Singh, CIO of Chiquita Brands International, makes a key point that the reality CIOs face when synching business processes with those in ERP applications leads to “internal arguments over how we are going to define something simple as a chart of accounts. So all of the sudden, what looked like a very simple concept has exploded in complexity, and now you’re into trying to get some very powerful people aligned behind one vision. In some cases, you can; in some, you can’t.”
  • In a  first implementation, Taser International customized its chosen ERP package to meet the business processes that it already followed. In a subsequent upgrade, they decided to “…get rid of these customizations and go back to the best practices and recommendations out of the box”. Taser International CIO,  Steve Berg, acknowledged that the upgrade took longer than expected: Testing and training issues, as well as certain customizations that were unavoidable, complicated progress along the way.

In summary, the track record of ERP implementations continues to be spotty at best, costs are not well understood – nor are benefits, change management is a huge issue – not to be underestimated, and there needs to be an appropriate balance between “out of the box” and rampant customization.

So, let’s now look at the UN situation. My first reaction was one of relief that I did not have to do this. Not that it isn’t most likely needed, and could contribute to improving the UN’s efficiency – which is certainly a noble goal – but that it appears to a close to impossible  challenge. What are the chances of the now $337 million project actually coming in on budget – it’s already 4 months behind schedule – and delivering the expected benefits? If this is being considered a “technology project” it will almost certainly fail. If it is really an “IT-enabled change programme”, it will likely cost much more and still be challenged. To extract just a few points from Thomas’s blog:

  • “History tells us that the greatest odds for success with SAP ERP are at organizations that run lean, disciplined shops where change doesn’t have to involve translators or global resolutions.” He then goes on to quote from the UN draft report (released in an article by Fox News – not my usual source of information!) on the progress and scope of the project: “A substantial number of its administrative processes are largely based on practices from the 1940s and 1950s and supported in many cases by technology from the 1980s and 1990s…. There are at least 1,400 [non-integrated] information systems currently in the United Nations Secretariat but in many cases they are used to support or track paper-based processes. Very often, documents are printed from these systems, signed, manually, routed, photocopied and filed with associated costs in time and money. Furthermore, paper documents are usually the source of trusted information, casting doubt on the reliability and acceptance of data existing in electronic systems. The result is that we often have several versions of ‘the truth.'”
  • He acknowledges that “The implementation team…is well aware of the challenges.” Again, from the report: “[The project] is not just about implementing a new system; it is about implementing new and better ways of working together. To meet this challenge, [the project] must improve staff attitudes and skills, align processes, policies, and organizational structures with known leading practices and standards, and deploy a new global information management platform.”

It is encouraging that the implementation team does recognize that this is indeed not a technology project, but an “IT-enabled change programme”. However, the report also say:”…based on the process analysis and requirements review done to date and assuming the organization’s ability to adapt, no customizations to the core SAP code have been identified.” Given the nature of the UN, this would seem to be the mother of all assumptions. The danger here is that while starting with this understanding, the challenges will be so daunting that the “programme” will be scaled back over time to a “technology project” with significant and expensive customization, and erosion of anticipated benefits.

As Thomas concludes: “…if there is one thing that will surely doom the project—because rest assured that the software will eventually run, whether it’s by 2013 or beyond—it will be the ill-equipped users tasked with actually changing the day-to-day of their jobs to fit the strict parameters of this foreign software.”

But, does it have to end this way? Here are my thoughts on what the UN should do to improve their chances of success:

  1. Maintain active executive sponsorship – cascade sponsorship across and down through the organization.
  2. Clearly define the desired outcomes – both end outcomes and intermediate outcomes. Use some form of benefits mapping approach to do this (for more about this look at  Get With the Programme!). Develop relevant metrics – both lead and lag metrics and consolidate them in a benefits register.
  3. Assign clear accountability for all the outcomes – with consequences – align the reward system.
  4. Develop a realistic plan – schedule enough time – break it down into “do-able chunks” with clear outcomes from each.
  5. Recognize the full depth and breadth of the change – specifically cultural and behavioural change. Manage the process of change. Have a two-way communication plan – cascade it across and down to all stakeholders. Listen to the people who have to do the work – be flexible where appropriate. For more on managing change, look at Managing Change – The Key to Delivering Value.
  6. Invest in training – cascade the training using a train the trainer approach.
  7. Measure performance against the metrics – both lead and lag. Understand and act quickly and decisively on deviations.
  8. Be prepared and willing to change course – both the outcomes and the journey.
  9. Stay the course – but know when to fold.
  10. Plan for more change.

I am sure they are doing some of this today, but certainly not all, and likely not enough – if they are to avoid a costly and avoid highly visible failure, and realize real value from this significant investment they would do well to do more!

Best Practice – the Enemy of Good Practice!

Susan Cramm’s latest blog, Why Do We Ignore “Best Practices”?, has stimulated an interesting discussion about what really is the $64,000 question (actually a lot more these days!) – why do we often ignore the “blindingly obvious” and not do what we know is the right thing to do?  I discussed aspects of this question in a recent blog The Knowing-Doing Gap which referred to the book of the same name by Jeffrey Pfeffer and Robert I. Sutton. In the book, they say “…so many managers know so much about organizational performance, and work so hard, yet are trapped in firms that do so many things that they know will undermine performance.” They found that “…there [are] more and more books and articles, more and more training programs and seminars, and more and more knowledge that, although valid, often had little or no impact on what managers actually did.”

However, I don’t want to go more into the Knowing-Doing Gap here – what the blog and the associated comments caused me to reflect upon was the term “best practice”  – a term I dislike and avoid for a number of reasons:

  • Voltaire said  “the best is the enemy of the good”. We rarely need, or can afford, “the best”, and, in any event, what is best for one organization, or one situation, may not be best for other organizations, or different situations.
  • The term “best” can also create an erroneous and dangerous belief that there is no need for further improvement. The world doesn’t stand still – changes to the global economy, the regulatory environment, business models, and technology will continue at a fast rate. We must continue to learn, adapt and improve our practices – standing still is not an option.
  • Voltaire also said  “common sense is not so common” which is also relevant here. “Best practices” are all too often seen as a substitute for judgment or common sense – or for good, experienced people. As a result, they are treated as checklists to be followed blindly without the need to think. After all, “if all you have is a hammer, every problem looks like a nail”. In many cases, more focus is put on following the practice than on the desired outcome – with the means becoming more important than the end. As one commentator on Susan’s post, Mike Myatt says in his blog, The Downside of Best Practices, “My experience has been consistent over the years in that whenever a common aspect of business turns into a “practice area” and the herd mentality of the politically correct legions of consultants and advisers use said area as a platform to be evangelized, the necessity of common sense and the reality of what actually works often times gets thrown out the window as a trade-off for promotional gain.”
  • Another problem with “best”, which I see all the time, is that it implies a competition. When an organization determines that they need to improve their practices, they undertake an evaluation of “competing” practices to determine which is the best. As yet another saying goes – “the less you want to do something the more you study it”. Rather than trying to select the best – organizations should pick one and “just do it”!
  • The term that I have preferred to use, and that we use in Val IT™, is “proven practices”. We do, however, need “proven practices” that are “fit for purpose” – adapted intelligently and innovatively to specific organizational cultures and situations based on sound judgement and common sense. In this context I use one of the many definitions of common sense – “shared understanding” – which could well be extended to mean “shared values”.

All of the above notwithstanding, the real challenge here is that we are trying to get people to change their behaviour to conform to rational, logical practices. People are not always logical or rational – often egos, emotions, old habits and a variety of other factors cause them to behave  differently. Changing such behaviour requires a well-orchestrated organizational change plan (even this is badly expressed as it is not organizations that change – it is individuals). We need to move beyond what is often mandated compliance to getting “buy in” and understanding of the need to behave differently, and the value in doing it – to the organization and the individual. We need to create those shared values within which proven practices are adopted but can be adapted to meet specific situations with an appropriate balance of rigour and agility.  Unfortunately, organizational change management is still largely paid lip service to and rarely done in most organizations.

If we are to deliver on the promise of IT – if we as individuals, organizations and societies are to realize the value of IT-enabled change – we need to change the way we manage that change. We have to stop asking: “When will they do something about this?”. We are “they” – all of us – we need to change how we think, manage and act. Only when we do this will we truly realize the potential value of the changes that IT can enable!

The Knowing-Doing Gap

One definition of insanity is “doing the same things and expecting different results.” In  The Knowing-Doing Gap,  Jeffrey Pfeffer and Robert I. Sutton  say  “…so many managers know so much about organisational performance, and work so hard, yet are trapped in firms that do so many things that they know will undermine performance.” They found that “…there [are] more and more books and articles, more and more training programs and seminars, and more and more knowledge that, although valid, often had little or no impact on what managers actually did.” When it comes to implementing effective, value-driven governance this has certainly been my experience over the last couple of decades. To paraphrase Pfeffer and Sutton, “After all is said and done, there is more said than done.”

In  A Short History of Progress, Ronald Wright refers to the work of Joseph Tainter who identified three common elements of the collapse of civilizations: the Runaway Train, the Dinosaur; and the House of Cards. Whilst the collapse of civilizations is clearly much more heady stuff, we can certainly draw parallels to the failure of investments in IT-enabled change, sometimes resulting in business failures and even industry-wide failures. Our adoption of technology is in many ways a runaway train, executive management’s failure to change to tackle the challenge qualifies them as dinosaurs, and major investments, business or industry failures show many investments to be a house of cards.

In the context of realizing value from investments in IT-enabled change, the primary element that we have to deal with here is that of the dinosaur. Going back to the “Knowing-Doing Gap”, a major contributor to this gap is substituting memory for thinking, i.e. falling back on old habits. Traditional governance and management approaches will not tackle the challenges presented by the runaway train that is IT. As Albert Einstein once said “You cannot solve a problem by applying the same thinking that got you into the problem in the first place.”  Unless this problem is recognized and addressed, we will continue to build houses of cards, and suffer the consequences when they fall.

Another contributor to the “Knowing-Doing gap” is that talk is easier than action, and indeed many good talkers are rewarded in enterprises while the doers slog on under the radar. Often, the good talkers become managers. This may be one of the factors that lead the late Peter Drucker to remark “Most of what we call management consists of making it difficult for people to get their work done.” I would add to this that in all too many cases our current implementation of governance formalizes this. In a conversation with Tom Peters a number of years ago I once, somewhat tongue in cheek, suggested that in most organisations, 10% of the people get the work done despite the other 90% – his response was “Try 5%!”

In another book around this topic, The Wisdom of CrowdsJames Surowiecki identifies another challenge in that we put too much faith in individual leaders or experts, either because of their position or track record and that these individuals also become over-confident in their abilities. I don’t want to question the ability and competence of all leaders or experts – while I certainly have seen my share of bad ones, most are good people doing the best they can. However, in today’s increasingly complex and fast-paced knowledge economy, much of which is both enabled by and driven by technology, it is unrealistic to expect individuals, however good they are, to have all the answers, all the time. The reality is that neither position nor past success is any guarantee of future success.

If organisations are to succeed in today’s knowledge 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 principle 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.

Over the last few decades, much has been said and written about empowering the people within an enterprise – unfortunately little of that talk and writing has translated into reality. As James Surowiecki says “Although many companies play a good game when it comes to pushing authority away from the top, the truth is that genuine employee involvement remains an unusual phenomenon.” As a result of this, information flows – up, down and across organisations – are poor, non-existent or “filtered” in all directions, decisions are made by a very few with inadequate knowledge and information, and there is limited buy-in to whatever decisions are made. As Peter Senge says in The Fifth Discipline Fieldbook, “…under our old system of governance, one can lead by mandate. If you had the ability to climb the ladder, gain power and then control that power, then you could enforce…changes…Most of our leaders don’t think in terms of getting voluntary followers, they think in terms of control.”

If we are indeed to move beyond words, we must place an emphasis on action—on engagement and involvement at every level of the enterprise. One of the key findings presented in The Knowing-Doing Gap is that knowledge is much more likely to be acquired from ‘learning by doing’ than from ‘learning by reading’ or ‘learning by listening’. This strongly suggests that an iterative step journey toward value management will yield, for each individual, a discrete set of opportunities for learning that, taken together across an organisation of people, form the stepping stones toward cultural transformation and the achievement of real and sustainable change. As Sun Tzu says in The Art of War, “Every journey starts with the first step.” We need to move beyond words and take that first step – I can’t promise that the journey will be easy, but without it, value from investments in IT-enabled change will remain elusive.