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!

Transforming governance and leadership for the digital economy

The digital economy

DE
The digital economy is not primarily about technology, nor is it just about the economy. Yes, it is being shaped and enabled by increasingly significant and rapid technological change. And, yes, it will have significant economic impact. But it is much more than that. It is part of a broader digital revolution. One in which, as in the case of the industrial revolution, we will see seismic shifts not just in technology, but in the nature of our lives, our work, our enterprises – large and small, public and private, and our societies. A shift that will not just change the nature of products and services, and how they are developed and delivered, but also how we govern and manage our lives, work, enterprises and societies.

Technology is becoming embedded in everything we as individuals, enterprises and societies do, and, indeed, we are increasingly becoming embedded in everything technology does. If we are to deliver on the promise of the digital revolution, we have to acknowledge that the way we have governed and managed IT in the past has proven woefully inadequate, and that continuing on this path will be a huge impediment to delivering on that promise. Governance of IT has been a subject of much discussion over the last two decades. Unfortunately, most of the discussion has focused on the technology, the cost of technology, failed IT projects, and generally questioning the value that technology and the IT function deliver to the enterprise. Despite all this discussion, not much has materially or broadly changed over the last 50 years, including:
• An all too often blind focus on the technology itself, rather than the change – increasingly significant and complex change – that technology both shapes and enables;
• The unwillingness of business leaders to get engaged in, and take ownership of this change – preferring to abdicate their accountability to the IT function;
• Failure to inclusively involve the stakeholders affected by the change, without whose knowledge, understanding and “buy in” failure is pretty much a foregone conclusion;
• A lack of rigour at the front-end of an investment decision, including, what is almost universally a totally ineffective business case process;
• Not actively managing for value; and
• Not managing the journey beyond the initial investment decision.

We still have what is predominately a “culture of delivery” – “build it and they will come”, rather than a “culture of value” – one that focuses on creating and sustaining value from an organization’s investments and assets.

We have been having the wrong conversation – we need to change that conversation!

Governance of “IT”

GovernanceTreating IT governance as something separate from overall enterprise governance, labeling and managing investments in IT-enabled business change as IT projects, and abdicating accountability to the CIO are the root cause of the failure of so many to generate the expected payoff. Business value does not come from technology alone – technology in and of itself is simply a cost. Business value comes from the business change that technology both shapes and enables. Change of which technology is only one part – and increasingly only a small part. Technology only contributes to business value when complementary changes are made to the business – including increasingly complex changes to the organizational culture, the business model, and the operating model, as well as to relationships with customers and suppliers, business processes and work practices, staff skills and competencies, reward systems, organizational structures, physical facilities etc. Ultimately, it is people’s intelligent and innovative use of the information captured, organized, distributed, visualized and communicated by technology that creates and sustains value. This is not a technology issue – it is a business issue.

Much of the discussion around the digital economy today is on improving the customer experience – as indeed it should be, although we have been saying the same for decades with, at best, mixed success. We will come nowhere close to achieving this unless we put equal focus on our people, and rethinking how we govern, manage and organize for the digital economy such that we maximize the return on our information and our people.

Surviving and thriving in the digital economy is not an IT governance issue, it is an enterprise governance issue. Successfully navigating the digital economy requires that we change how we govern, lead and manage our enterprises – including, but certainly not limited to IT.

What needs to change?

ChangeIn work I have been doing with Professor Joe Peppard at the European School of Management and Technology in Berlin, we have identified 8 things that business leaders, starting with the CEO, need to do. These are:
1. Don’t see IT as something separate from your core business – technology today is embedded in, and an integral part of most, if not all parts of your business processes.
2. Don’t focus on the technology alone – focus on the value that can be created and sustained through the business change that technology both shapes and enables.
3. Do recognize that you are ultimately accountable for the overall value created by all business change investments – and ensuring that accountability for the realisation of business benefits anticipated from each investment is appropriately delegated to, and accepted by, other executives and managers.
4. Do demand rigorous analysis of every proposed business change investment, whether or not IT is involved. Ensure that you and your team know and can clearly define expected outcomes, that there is a clear understanding of how value is going to be achieved, that all relevant stakeholders have bought in to the required changes, and that they are capable of making or absorbing them and delivering on the expected outcomes.
5. Do recognize that the business case is the most powerful tool that you have at your disposal to manage business change investments – insist on complete and comprehensive business cases, including desired outcomes, benefits, costs and risks, and clear explanation of how each benefit will be achieved with unambiguously assigned accountabilities, supported by relevant metrics.
6. Do recognize that benefits don’t just happen and rarely happen according to plan – outcomes and plans will change – don’t think business case approval is the end of the story. Mandate that the business case be used as the key operational tool to “manage the journey”, updated to reflect relevant changes, and regularly reviewed.
7. Do know if and when it’s time to stop throwing good money after bad, or when there are better uses for the money and “pull the plug.”
8. If your CIO doesn’t “get” the above points, and hasn’t already been talking to you about them, get one who does and will!

Enterprise governance must evolve beyond a 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. In the context of IT, this means recognizing that we are no longer dealing with “IT projects”, but with increasingly complex programmes of organizational change.

Leadership

LeadershipThe most important aspect of governance is leadership. Effective governance in the digital economy requires that leaders truly lead – moving beyond tactical leadership to strategic and transformational leadership. Understanding and taking ownership of the organizational, cultural and behavioural change that will be required to succeed in the digital economy – change that starts with the leaders themselves. We also need to get away from the cult of the leader to a culture of pervasive leadership. As Joel Kurtzman says in his book, Common Purpose, 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. It will also require a dynamic, sense and respond approach to enterprise governance – one that is focused on value, while balancing rigour with agility. Only then will the full potential value of IT-enabled change in the digital economy be realized. The technology exists to support this today – what is lacking is the leadership mindset, will and capability make the change.

There is certainly not for a lack of proven value management practices. Since The Information Paradox was published, there has been an ever-growing proliferation of books, frameworks, methods, techniques and tools around the topic. The issue is the lack of serious and sustained adoption of them. The real challenge is one of overcoming 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 the knowledge is available on how to do it. Yet, so far, there has simply been little or no appetite for, or commitment to the behavioural change required to get it done, and stick with it. This has to change!

As I said in my previous post, this will not be easy to do – very little involving organization, people and power is. However, 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. For enterprises to survive, let alone thrive in the digital economy, and for the potential individual, community and societal benefits of the digital economy to be realized, the status quo is not an option! To quote General Erik Shinseki, a former Chief of Staff of the US Army, “If you don’t like change, you’re going to like irrelevance even less!“

After all is said and done, there is more said than done!

As I have travelled around the world over the last thirty years or more, speaking to and talking with thousands of people on the topic of realizing benefits, and creating and sustaining business value from our increasingly significant and complex investments in IT-enabled change, I invariably get these three responses:

  1. You’ve given me a lot to think about;
  2. My boss should have been here; and
  3. Why aren’t we doing this?

In response to the third point, although it also encompasses the second, I decided a number of years ago to write a paper titled “Moving beyond Words to Action”, and submit it for inclusion as a chapter in a book around Enterprise Governance of IT which was being put together by a couple of colleagues of mine. In many ways, the paper was somewhat of a rant – a constructive rant, based on more years than I care to count of trying to get organizations to “get it” when it comes to the challenge of realizing the full potential of creating and sustaining value from the use of IT. I circulated the paper among a number of peers, all of whom provided constructive feedback and positive support, then submitted it to my colleagues. The good news was that they liked the paper, and thought it was much needed. The bad news was that, being academics, they were looking for more academic research for the book, and, as this was an opinion piece, they didn’t see it as a fit (although I was actually asked to write the Foreword for the book!). I was very busy at that time, so basically parked the paper and carried on with my “real” work.

However, I found myself continually going back to the paper, and, over the years since, have reworked and included much of its content in various smaller articles, and posts, and the paper in its entirety has also been used by at least one business school.

I am now, with another colleague, considering embarking on writing another book. Although the book will encompass more than that in the paper, much of the thinking behind the paper will be included. Coming off a week in New York, where I yet again heard the “Why aren’t we doing this?” question many times, I feel that this is a good time to just throw the paper out there in the hope that some readers will find it of value, and also that I will get some more feedback as we start moving ahead with the book.

The paper, the subtitle of which is the title of this post, can be found here Working Chapterv2.0 – it ends with a “call to action”, which I have included below:

Finally, 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 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.” I urge you to move beyond words and take that first step – I can’t promise that the journey will be easy, but without it, value from IT investments will remain elusive.

In reading it, do remember that it was written around seven years ago, long before the terms “digital economy”, “cloud”, “big data”, “BYOD”, etc. were in general use. Also, at the end, I discuss ISACA’s Val IT™ Framework, the development of which I led. While the framework has now been absorbed into ISACA’s new COBIT 5™, it is still available, and relevant – probably even more so – to addressing the challenge of realizing benefits from investments in IT-enabled change.

I hope that you get some value from reading the paper, and look forward to receiving your thoughts.

Reflections on 50 Years in IT- and the Pursuit of Value

SunriseIMG_2908It has been many months since my last post to this blog – the result of continued recuperation from last year’s surgery, involving a good amount of vacation travel, and a reduced work schedule.  Now however, with that all hopefully behind me, as I sit in my office looking out at the sunrise over beautiful Saanich Inlet, and the snow covered Vancouver Island mountains beyond, it seems as good a time as any to reflect on the fact that 2013 marks my 50th year working in, with and around technology. To think about what has changed, what is still changing, what hasn’t changed, and what has to change if we are to really unlock the potential value of our use of IT.

What has changed?

To cover all the changes that have occurred in 50 yrs would need a book, not a post, so suffice it to say that when I started working in 1963 for  C-E-I-R (UK) Ltd., 1401I was working with an IBM 1401, which had  a (not really published as such) processing speed  close to 10 million times slower than today’s microprocessors, 8k of storage (later upgraded, with an additional unit, to 16k), no solid state/hard drive, displays or communication capability, and no operating system (that was me!). Weighing in at around 4 tons, it needed a fully air conditioned room, with a raised floor, approximately twice the size of my living room.

Today, in my home office, I have a (now pretty old) MacBook Air with 256GB of storage, an iPad with 32 GB and an iPhone with 64 GB (I’m still not sure why I did that), and a number of printers all wirelessly connected within my house and to the world beyond through the internet. I have access to an ever growing body of knowledge that can answer almost any question I have, and, generally free through Skype, to anyone in the world I want to talk to (and see). I can manage my banking, pay bills, check my medical lab test results, organize my travel, shop, read books, listen to music, watch videos, play games, organize, edit and enhance my photographs and videos, and a myriad of other tasks. And, I can do the same from almost anywhere  – including from a lanai in Hawaii, a stateroom (we used to call them cabins) on a cruise ship or, unfortunately, now a airplane. And, of course, this doesn’t include all the other computing power in the house,  our security system, appliances, watches, cameras, cars, etc. but you get the picture. And I’m just one guy!

At the enterprise level, we have experienced extraordinary advances in computing power, storage and communications capabilities, and how we interface and interact with all this. Technology is now no longer a “black box” – it is embedded in almost all business processes, and in everything that we do. As described in a recent blog by Mark McDonald of Gartner, the technology model is changing from computing – the technology in and of itself, to consumption – how individuals and organizations use technology in ways that can create value for them and, in the case of organizations, their stakeholders.

What’s still changing?

On the technology front – everything, and at an increasingly rapid pace. We are in the middle of what I first described in a January 2012 post as a “perfect storm” of technological change, including:

  • Increasing adoption of the Cloud, Software (and just about anything else) as a Service which is fundamentally changing the delivery model for technology – and business services and, as a result, leading to seemingly endless debate about the role of the IT function and the CIO as I discussed in a January, 2011 post;
  • The explosion of “Big Data”, and along with it analytics and data visualization – here, as described by Bryan Eisenberg in a recent post, it’s not the “big” that’s so important, although it is impressive and presents it’s own challenges, but rather the shift beyond analyzing samples of data to all the data, historical data to real-time data, and structured data to unstructured data. All of which with a cost structure for using these data tools has now made it more widely available and accessible to a greater number of organizations, regardless of size. Other implications/challenges here include the need to look beyond analytical tools themselves to the creation an environment where people are able to use their organization’s date and their knowledge to improve operational and strategic performance, as described by Joe Peppard and Donald Marchand in a recent HBR article, as well as the increasing personalization of data, and the question of “whose data is it?” as discussed by my son, Jer, in a 2011 TED talk.
  • Mobility, consumerization and BYOD which are fundamentally changing how, where and when we interact with technology and access information – as described by Mark McDonald of Gartner in his previously mentioned post on the technology model changing from computing to consumption;
  • The emerging ” internet of things” (TIOT) where everything talks to everything and which, as described by Andrew Rose of Forrester in a recent WIRED UK article, brings with it unprecedented challenges in security, data privacy, safety, governance and trust.; and
  • Robotics and algorithmic computing which have considerable potential to change the nature of work as described by Sharon Gaudin in a recent Computerworld article.

This is certainly not an exhaustive list – it doesn’t, for example, include 3D printing or wearable technology, both of which will also have significant impact, and it will certainly continue to change and be added to, but it does capture the main areas where change is occurring, and the essence and magnitude of that change.

What hasn’t changed?

Back in 1998, together with what was then DMR Consulting. later Fujitsu Consulting, I wrote The Information Paradox, which described the conflict between the widely held belief that investment in IT is a good thing, and the reality that this, all to often, it’s value cannot be demonstrated. The book’s main premise was that benefits do not come from technology itself, but from IT-enabled change, and that benefits do not just happen, nor do they happen according to plan – they need to be actively managed “from concept to cash”. It put forward the view that this was not a technology problem, but one that business leaders needed to own and step up to – that realizing the potential value of IT to organizations should be an imperative for all business managers. It proposed an approach, the Benefits Realization Approach, to enable them  to address the challenge of value. In the second version of the book, published in 2003,  an Afterword built on the Benefits Realization Approach to address the essence of overall organizational governance focused on enterprise value. (A good summary of the book can be found on Basil Wood’s bazpractice blog). Yet today, 15 years since The Information Paradox was first published, the track record of so called “IT projects” remains dismal, and realizing the value promised by IT remains elusive. Why is this? The answer lies in what has not materially or broadly changed over the last 5o years, including:

  1. A continued, often blind focus on the technology itself, rather than the change  – increasingly significant and complex change – that technology both shapes and enables (more on managing change in this post);
  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 (as discussed in this post);
  3. Failure to inclusively 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 (as described in this post);
  5. Not actively managing for value; and
  6. Not managing the journey beyond the initial investment decision.

Overall, despite all that has been written and spoken about this challenge, and the growing number of frameworks, methodologies, techniques and tools that are available, we still have  what is predominately a “culture of delivery”  – “build it and they will come” – rather than a “culture of value”, one that focuses on creating and sustaining value from an organisation’s investments and assets. For more on this , see my recent APM UK paper on the topic.

What needs to change?

In work I have been doing with Joe Peppard, we have identified 8 things that business leaders, starting with the CEO, need to do. These are:

  1. Don’t see IT as something separate from your core business – technology today is embedded in, and an integral part of most, if not all parts of your business processes.
  2. Don’t focus on the technology alone – focus on the value that can be created and sustained through the business change that technology both shapes and enables.
  3. Do recognize that you are ultimately accountable for the overall value created by all business change investments – and ensuring that accountability for the realisation of business benefits anticipated from each investment is appropriately delegated to, and accepted by, other executives and managers.
  4. Do demand rigorous analysis of every proposed business change investment, whether or not IT is involved. Ensure that you and your team know and can clearly define expected outcomes – (value), that there is a clear understanding of how that value is going to be achieved, that all relevant stakeholders have bought in to the required changes, and that they are capable of making or absorbing them and delivering on the expected outcomes.
  5. Do recognize that the business case is the most powerful tool that you have at your disposal to manage business change investments – insist on complete and comprehensive business cases, including desired outcomes, benefits, costs and risks, and clear explanation of how each benefit will be achieved with unambiguously assigned accountabilities, supported by relevant metrics.
  6. Do recognize that benefits don’t just happen and rarely happen according to plan –outcomes and plans will change – don’t think business case approval is the end of the story. Mandate that the business case be used as the key operational tool to “manage the journey”, updated to reflect relevant changes, and regularly reviewed.
  7. Do know if and when it’s time to stop throwing good money after bad, or when there are better uses for the money and “pull the plug.”
  8. If your CIO doesn’t “get” the above points, and hasn’t already been talking to you about them, get one who does and will!

So, what is it going to take to make these changes happen? For myself, I am going to continue to try to make a difference – but more directly, and more directed. Since the initial publication of The Information Paradox, I have travelled the world presenting to, talking and working with many hundreds of organizations and tens of thousands of individuals. Some of the organizations have heeded these ideas, embraced  a value culture, and continue to thrive, many have taken some of the ideas across the organization, or all of the ideas in parts of the organization with some success, and others have tried but slipped back. There are many individuals who tell me that my ideas have changed their lives – sometimes resulting in success, in other cases simply greater frustration in that they understand what has to be done but can’t make it so. At the end of many presentations or discussions, I almost invariably get the same two comments. The first – “You’ve given us a lot to think about”, to which I always reply “Great, but what are you going to DO about it?”  The second comment, which in some ways answers my question – “My boss should have been here”. Getting the “boss” to come to listen to anything that has an IT label has been, and continues to be a challenge as I discussed in my last post. Where I and they have been successful, it is only when we have got the attention, understanding and commitment of of the Executive Team. It has become quite clear that without this commitment, the best we can do is tweak around the edges – and that is just not good enough.

So, it’s time to be more direct – getting this “right” is not an option for business leaders – it’s their job and they cannot be allowed to shirk it. The CEO, supported by the Board and Executive Management Team is accountable for ensuring that effective governance is in place around IT decision-making, with specific focus on value, as well as for the selection, oversight and optimisation of value from the portfolios of business change investments and assets. This should be a condition of employment, and grounds for immediate dismissal if they with fail to do so.

It’s also time to be more directed – to get the message directly to business leaders – a shareholder or taxpayer revolt would be a good idea, but, turning 70 next year,  I can’t wait for that. I will however be working to get in front of more boards, or organizations of directors, targeting articles to more business-oriented publications, presentations to more business-oriented events, and targeting presentations, seminars and workshops to business executives.

We can, and must all play our part in this. In my case, in addition to getting more active on this blog, I am currently working on articles in business journals, as well as executive briefings and workshops – I will be co-instructing one of these, Value Management Master Class: Enterprise Governance of IT for Executives and Senior Managers, with Peter Harrison from IBM at the University of Victoria in Wellington, NZ on April 11th & 12th. If you’re interested and live in the area, or would like to visit Wellington – a beautiful city, you might want to consider this opportunity, or – even better – encourage your bosses to do so.

 

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 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.

Waltzing with the Elephant

I have just finished reading Mark Toomey‘s Waltzing with the Elephant, subtitled A comprehensive guide to directing and controlling information technology. This has taken me longer than I had thought as the book is indeed very comprehensive. I was reminded as I read it of a comment from an early reader of The Information Paradox who described it as  “a book you want to have read but don’t want to read. If you’re an executive with control over your company’s information technology purse strings, you probably don’t want to read a book this detailed in the intricacies of IT, which is exactly the reason that you should.” But will they? I will return to this point later.

As Mark says in the book’s dedication “Through better, more responsible, and effective decision making and control, we can make better use of information technology, and we can improve the world.” I couldn’t agree more – indeed it is that belief that has driven me for the last 20+ years, and which continues to drive me. There is certainly considerable room for improvement – as Mark goes on to say “…there is a compelling reason to improve the performance of IT use within many organizations.” I would  be even stronger here in that I believe this to be the case in most, if not all organizations.

Waltzing with the Elephant is organized around the the six principles of ISO/IEC 38500:2008:

  • responsibility;
  • strategy;
  • acquisition;
  • performance;
  • conformance;
  • human behaviour.

And the three fundamental Governance tasks that it defines – Evaluate, Direct and Monitor.

Mark does a good job of explaining the principles, and of putting “meat on the bones” of what can be seen as fairly high level and broad concepts. The book is a long, but relatively easy read – helped by Mark’s refreshingly irreverent style, and the many real world examples and anecdotes he has included. Mark also makes good use of models to frame and organize sections, including an earlier version my Strategic Governance framework. Although my brief summary may not do the book justice, what I believe you should take away from it, somewhat adapted and, of course, biased by my beliefs, include:

  1. While much has been written and talked about IT governance over the last decade or more,  progress has been painfully slow. As Ian Wightwick says in his introduction, “…there is a fairly strong case for arguing that the investment in IT improvement has not delivered the desired rate of improvement.”
  2. Slide2

  3. A fundamental reason for this lack of progress is that most IT governance activities  deal only with one side of the problem – the supply side. This is what another Australian colleague of mine, Chris Gillies, calls IT governance of IT –  focused on the IT “factory”. If we are to have effective enterprise governance of IT,  as illustrated in the figure to the right, we also need to pay equal attention to the demand side – business governance of IT – focused on how the organization uses IT to create and sustain business value. For more on this, go to Back to the Basics – the Four “Ares”.
  4. If we are to make progress, there must be the  understanding that governance of IT is an important part of the overall governance framework for any organization, and that governance itself is a business system.  Governance must deal with both compliance (meeting regulatory and legislative requirements) and performance (setting and achieving goals).
  5. Ultimately, the people who should control, and be accountable for how IT is used are the business executives and managers who determine what the focus of the business is, how the business processes are performed, how the authority and control structure operates, and how the people in the system perform their roles. None of these decisions are normally within the scope of the CIO, and so, without the means of enacting any decision, the CIO cannot be held responsible or accountable for the organization‟s use of IT. The CIO should be responsible for administering the system of governance on behalf of the governing body, and accountable for most elements of the supply of IT, but not responsible for the demand and certainly not accountable for the use of IT by the business.
  6. Increasingly, we are not making investments in IT  – we are making investments in IT-enabled change. While IT may be a key enabler, all the other aspects of the business system – the business model, business processes, people, and organization need to be considered. Enterprise governance of IT must  go beyond IT strategy, the IT project portfolio and IT projects to more broadly consider the business strategy, and the portfolio(s) of business investment programmes and business and technology projects that enable and support the strategy (for more on Programme and Project Portfolio Management, go to Moving Beyond PPM to P3M and Get With The Programme.)
  7. It is not enough to just focus governance on new investments. Effective governance must cover the full life-cycle of investment decisions – covering both the initial investments and the assets that result from those investments – assets that all too often fall into what Mark calls the “business as usual” space and receive little attention until something goes wrong.
  8. Essential ingredients of the system for governance of IT include transparency and engagement. Transparency means that there is only one version of the truth – that real, accurate and relevant information flows up, down and across the system to support decision making. Engagement means that, at each level, the right people are involved in the system, in the right way with clearly defined, understood and accepted roles, responsibilities and accountabilities.
  9. Effective governance of IT will rarely be achieved by simply following a standard or a generic framework. Rather, it requires fundamental thinking about the issues that are important, and it requires that the leaders of the organization behave in ways that maximise the value and contain the risks in their current and future use of IT.
  10. Ultimately, while standards, such as  ISO/IEC 38500, and frameworks, such as Val IT™ are useful tools, improving the return on IT investments, and improving governance around those investments and resulting assets is about changing human behaviour. Merely developing and issuing policy is insufficient in driving the comprehensive behavioural change that is essential for many organizations that will seek to implement or improve the effectiveness of their enterprise governance of IT. Behaviour is key…changing or implementing a new system for governance of IT necessarily involves taking all of those people on a journey of change – which for some will be quite straight-forward and which for others, will be profoundly challenging.
  11. This journey of change must be managed as an organizational change programme. While much has been written and should be known about this, the absence of attention to the individual and organisational contexts of human behaviour in plans for IT enabled change to business systems is profound. Where there is understanding of the need to do something, enterprises often then run into “The Knowing-Doing Gap” as described by Jeffrey Pfeffer and Robert I. Sutton in their book  of the same name. As the authors say in their preface, “…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.” For more about this, go to The Knowing-Doing Gap.

I want to return now to my initial comment about who will read this book. In a recent review of the book, Fiona Balfour described it as recommended reading for academics, students of technology, all IT Professionals and “C‟ role leaders and company directors. The book provides very comprehensive and practical guidance for those who have decided that action is required, but will those who have not yet understood or committed to action read it or, more importantly, take action based on it? Almost a year ago, I was having lunch in London with Kenny MacIver, then Editor of Information Age who, after listening to me expound on this topic for some time, said “What you are saying is that we need a clarion call!” Mark’s book adds significant value to those who have decided to embark on this journey, and he is to be commended for the tremendous effort that he has put into it and for his willingness to share his experience and wisdom – but will it provide that Clarion call? It will play well to the converted, but will it convert? Going back to Ian Wightwick’s introduction, he says “Clearly the purpose of Mark Toomey‟s text is to promote the need for adequate IT governance. It is commendable in this regard, but is only the beginning. Company director (including CEO) education courses and regular director briefings will need appropriate attention with provision of simplified explanatory material and check-lists, as well as encouraging the de-mystifying of the whole business-critical IT issue.”

Despite overwhelming evidence of the need to take action to improve enterprise governance of IT, business leadership – boards, executives and business managers – have shown little appetite for getting engaged and taking accountability for their use of IT to create and sustain business value, or to embrace the transparency that must go with it. I hope that, at least in Australia, the emergence of the ISO standard, and  Mark’s book provide that much needed “clarion call”. History, unfortunately, tells us that it may take more than this – we may still have a long way to go!

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!

Value-Driven IT

As  the weather did not fully cooperate on the last week of my vacation, I spent some more time catching up on my reading, including reading Cliff Berg’s Value-Driven IT. I have to admit that Cliff sent me the book some months ago, but it has lain too long on my desk while I travelled the world. I am glad that I have taken the time now.

The overall thrust of the book – as described in it’s sub-title is Achieving Agility and Assurance Without Compromising Either. Cliff describes himself as “…an IT architect at heart, but one who has had business-level responsibility and who appreciates the business side of things.” In the book, he “makes the case for connecting business value with IT efforts” and goes on to recognize that “this has been tried countless times before, but today only a minority of firms are able to make this connection. It is a hard problem, and the gulf between IT and the business is as great as it ever was. The view from the ground is not pretty: ground level IT staff have a deep disrespect for policies, compliance, paper processes, and indeed for the entire mindset that is represented by the parts of the business that represent these. This is due to ignorance and a lack of communication between these two important parts of the business. The view from the middle is not pretty either: mid-level executives in IT and in  business units do not know how to change their organization s to address the resistance that they experience when it comes to implementing change. Finally, the view from the top is best characterized as misinformed: executives think that their IT staff have a handle on their technology and the executives do not realize how far their people are from having the skills that are really needed to get the job done.”

The book has four main premises:

  1. Business Agility – lead by a potent champion for change, with a mission to ensure consistency;
  2. Assurance within IT with regard to risks – with the champion for change introduced above having a mission to ensure that all enterprise concerns are addressed in a balanced manner;
  3. Accountability (transparency) for IT decisions – focusing on quantifying and measuring the business value of IT choices, recording the reasoning behind IT decisions, and measuring the actual value produced by IT; and
  4. Amplification – increasing IT’s value by using IT resources to amplify the effectiveness of the rest of the organization and being more transparent about IT’s value when this amplification is achieved.

Implied (and made explicit in the book) in these premises is that business value needs to be integral to IT. Yet, Cliff shares my view of the current state of IT governance saying that “the term ‘IT governance’ as used by the IT industry is a legacy of the separateness between business and IT.” As Mark Lutchen, says in the Foreword to the book: “Business value and IT – For some executives, even placing those words in the same sentence can be considered an oxymoron. Others might argue that you can focus on achieving business value and get it right or you can focus on delivering IT and get it right, but never the twain shall meet. I would argue that the real imperative within organizations today is to ensure that business value and IT are so commingled and intertwined with each other, that to not focus on getting them both right or to not understand how dependent each is upon the other, is to set up your organization for potentially disastrous failure.”

I couldn’t agree more. Having, over the last couple of weeks, read this book, and Stephen Jenner’s Realising Benefits from Government ICT Investment – a fool’s errand, which I discussed in a previous post A Fool’s Errand, I am pleased that more practical guidance is being offered in this space. At the same time, I am once again left wondering just how many more books need to be written about this topic before more than a minority of enterprises start doing this. To repeat Donald Marchand‘s conclusion in his testimonial to the Stephen Jenner’s book: “The big question is will [public sector] managers and executives have the “will” to put the book’s prescriptions and methods into everyday practice with ICT projects?” History would suggest that we still have much work to do before this happens – and not just in the public sector. Much of what I and others have been espousing over the last 10 – 20 years, and what Stephen and Cliff present in their books, is common sense – unfortunately, as I said in my last post, common sense is still far from being common practice!

Why is this?  As discussed by Jeffrey Pfeffer and Robert I. Sutton in their book The Knowing-Doing Gap, “…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.” There are many  proven approaches available to address the challenge of realizing business value from IT investments, including, but certainly not limited to Val IT™, yet adoption of these approaches continues to be limited and, as a result, value from IT investments remains elusive. 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’. If we are to move beyond reading and listening to taking action, we need to focus on understanding the behavioural constraints to adopting such solutions, and identifying and implementing approaches to overcoming those constraints. Ultimately, as I discussed in an earlier post, Managing Change – The Key to Delivering Value, it all comes down to changing people’s behaviour – from the Board to the front line.