Transforming IT

Are You Willing to Blow It Up?

One of my favorite lines is from a book Jack Welch, the legendary CEO of GE, wrote in which he told the story of his transition to the new CEO, Jeff Immelt. He said that he simply told him to "Blow it up."

That simple phrase has a tremendous amount of power in it.

It says that nothing is sacred.
It says that what worked in the past, may not be what's needed to succeed in the future.
It says that their true legacy was not in the things they had built, but in the people they had grown.
It says that fear of change is a death sentence.

Blow it up.

It is not easy to do. Are you willing to look just as hard at what worked as you are at what failed? We have a tendency to want to "leave well enough alone." But when you accept that it is "good enough" you set yourself up for complacency - and you put yourself on the path to your own demise.

Blow it up.

We're doing that right now. We're working with a client on a program that has been viewed as a very, very big success. And we're tearing things down to the core to look for ways to improve it. Not because it failed in any way - although there's always room for improvement. But because we have to do this if we want to keep growing.

Are you willing to blow it up? You'd better be.

What success are you holding on to? Can you see places where your comfort in what is working is holding you back? What will it take for you to be willing to blow it up and take it to the next level?

Undeniable Trend #3: Last-Mile Value

This is part 4 of a 4 part series entitled, The Three Undeniable Trends that Will Shape the Future of IT.

IT organizations have an addiction problem.  We are addicted to "big." 

Almost since the beginning, IT leaders have sought the big leap in technology that was going to change everything - touch every corner of the enterprise. It is this addiction that leads to $100MM and $500MM and $1B ERP projects. It is why we love big, giant data center projects. It doesn't matter if we are developing them or migrating them or consolidating them - just as long as it is big.

I think it is because the bigger the project, the more complex it becomes. And if a project is big and complex, well, you must need some highly paid IT professionals to handle it right?

And let's not forget us consultants and all of the hardware and software vendors. We all love big too, don't we? Big, complex projects mean big deals and big consulting contracts. As a bonus, big and complex means that there are a bunch of players involved - so no one group can be blamed when it all falls apart. Big contracts, no accountability. Sounds perfect doesn't it?

Big and complex is good for everyone...well, almost everyone, that is. 

The problem is that the one person that it generally isn't good for is the only one that matters - the customer.

Do you think the customer cares about that big ERP system? Or the data center consolidation? Nope. And most of the time, you will be hard pressed to even make a valid case for how the $100MM or $1B investment translates into $100MM or $1B in value to the customer.

In fact, I think that we should add a new step to the IT portfolio analysis and approval process. Before any significant budget can be approved, the IT leadership team must stand before a focus group of real customers and pitch them on how the proposed project will result in something that they value. I wonder how many of those big projects would make the cut?

Don't get me wrong, I get that technology is complex. I get that all of that infrastructure is the foundation upon which value is built. But here is the thing: to the extent that the infrastructure is just the commodity foundation, then it adds little discernable value to the organization. It is just a commodity utility and the only thing that you can do to be effective is to deliver it as inexpensively as you can.

Which leads me to the third and last undeniable trend that will shape the future of IT - last-mile value. I am defining "Last-Mile Value" as some improvement in the customer experience that is discernable and of worth to the customer. The new Chase QuickDeposit iPhone app is a perfect example. This new feature allows customers to take a picture of their check with their iPhone and BAM! the check is deposited. 

Did that little wonder of coding cost them $100MM? I doubt it. But it created a tremendous amount of value for their customers. It also created a lot of positive market momentum. Have you seen the ads? 

If you are an IT leader, your business customers get this. They are looking for technology to once and for all get out of the back office and to get on the front line. They are looking for those small, little innovations that drive exponential value in the customer experience, in customer satisfaction, in positive brand impression and in revenue and market share growth. 

How many ERP or data center implementations do that?

Yes, these big projects will always be a part of what IT must deliver to its customers. But to be relevant in the future, IT organizations will need to break their addiction to "big" and focus on Last-Mile Value - because it will be the only value that really matters.

So what do you think of these three "Undeniable Trends?" Am I on to something?

Undeniable Trend #1: Human IT

This is part 2 of a 4 part series entitled, The Three Undeniable Trends that Will Shape the Future of IT.  Click here to read part 1.

The wild, wild west is a bygone era best left for old movies. Those carefree days of the cowboy cultures in which IT was able to operate in relative obscurity are gone. Today's IT organizations are large and complex. They employ hundreds, thousands and sometimes tens of thousands of employees with a vast range of skills, cultural influences and experiences. They operate across vastly diverse geographies and typically support multiple customers each with their own needs and demands.

It should come as no surprise then, that anyone who has spent any time in an IT organization lately knows that they can be quite dysfunctional. The reason is that despite the fact that IT organizations are typically $50MM - $1B businesses in and of themselves, they have invested very little in developing the disciplines of managing their own people.

For generations, IT organizations have viewed themselves as the bastion of technical domains.  A staggering amount of money has been invested over the years in a wide range of tools and processes to manage the technology.  Yet, the part that could have the greatest impact has largely been left untouched: people.

Over the last ten years or so, this has begun to change.  With growing complexity, IT leaders have realized a need for management disciplines.  This has ushered in the era of the process improvement and management domains such as ITIL, PMBOK, COBIT, Agile, LEAN and Six Sigma. But these efforts have only scratched the surface.  The amount of differentiation and competitive advantage that can be additionally realized from improvements in technology and architectures is limited. That leaves the effective management of IT's human resources, rather than the technical ones, as the great untapped reserve of value potential.

I believe that it will come down to this.  IT organizations will be driven to develop robust disciplines which enable them to create true learning organizations that can adapt to change rapidly. It will no longer be sufficient to just manage technology. Advantage will come to those who are most adept at managing their people.

Three Undeniable Trends that Will Shape the Future of IT

What are the three most important trends that will shape the future of IT?

If you guessed social media, mobile technology and "the cloud," you're wrong - at least in my opinion. 

I had an interesting conversation the other day with a long time associate of mine who is in the middle of a job transition and had called to just pick my brain. It was good to catch up and during the call we ended up talking about what I saw as the future of IT and, if I was plotting a career move today, where I would focus my attention.

During the conversation, I ended up rattling off these three trends without giving it much thought. A while later, I started really thinking about them and they began to crystalize in my mind.

They became so clear and stark - at least to me - that I decided that I was going to write a white paper of some sort on them and make them a centerpiece to a lot of what we do at CastlePointe.

Perhaps what I found most interesting though, is that these aren't the normal things that you hear bandied about these days.

Which means I am either dead wrong...or I am on to something.

We hear constant stories about social media, mobile and the cloud as transforming technologies - but that is not (exactly) what I am thinking of here. I mean, those three technologies are important and will certainly have an impact, but I don't think that they are going to fundamentally change the way IT organizations operate, per se.

But I think that these three trends will.

Ok, I know that I've been beating around the bush here a little bit, but I wanted to make sure that I got the setup right. These trends are not about technology. They are about how IT organizations themselves will need to transform. Technology is a part of that, but it is not the main part. At the center is an attitude and an approach to how IT views both itself and its customers.

I am going to spend the next three days giving a little view into the details of each of these trends and then put the real meat in the white paper, but I am very curious to know what you think about these at first blush.

So here it is. The three trends that I believe are going to shape the future of IT are:

• Human IT: Developing the disciplines to manage the people-side of IT - those that are most adept at managing their people will win
• Dynamic Provisioning: Developing capabilities to deploy and manage dynamic architectures - those that can most effectively and rapidly respond will have advantage
• Last-Mile Value: Developing expertise in delivering value at the point of the customer experience - it will be the only value that matters

At first blush, these may not seem that "out there." They aren't. There is also plenty of interrelation between these trends/concepts and the buzzwords of the day. But I think the difference, while subtle, is significant.

I'll examine each of these over the next few days and I hope you'll see what I mean.

Ok, so am I nuts or on to something?

The Razor of Strategic Simplicity

I recently had the opportunity to meet with Monica Peace, the Vice President of Sales for a unique company called RAZR Marketing.  

RAZR Marketing is a full service marketing firm. But they're unique in that they understand that all marketing is really about crafting a strategy for the change you seek and then determining the simplest way to execute to realize that change. They base their approach on the well known philosophical principle, Occam's Razor.

What struck me during our meeting is how relevant these two basic points are to IT:

• Start with strategy
• Keep it simple

These are so simple and basic, but so often are missing within IT organizations today. We find that IT organizations either lack a coherent strategy altogether, or their strategy is so complex and convoluted that it's meaningless.

This ties back to something that Ashwin Rangan, the CIO of Edwards Life Sciences, said a while back on what IT leaders need: vision, clarity and authenticity. You must have a vision, a strategy.  What do you want to accomplish? What change do you want to see become reality? But you must also keep it simple. Find the shortest distance between where you are and where you want to go. Eliminate all of the unnecessary complexity and find clarity.

Sometimes, I think that if we just got these two things right, everything else would fall into place.

The Fallacy of Best Practices

Talk may be cheap.  But action without thought is costlier still.

There is a trend at many conferences to put significant weight on having practitioners speak about what they've done, what has worked and what hasn't.  This is often coupled with an implied belief that "vendors" are less desirable because they present too much "theory" and "philosophy."

Now I get that no one wants to go to a seminar or conference and get a sales pitch.  But the problem is that while we should always seek to learn from the successes and challenges of others (no sense in repeating someone else's mistakes), innovation doesn't comes from simply copying what some else has done.  

This is the greatest risk brought by a focus on "best practices."  We are creating an entire IT generation trained to simply go out and copy what someone else has done.  I am shocked at how often clients want to hire us simply because they think we have some secret sauce that we picked up by watching someone else do something.  There must be some "best practice" somewhere that will help them solve all of their problems, right?

It's why, in my opinion, we actually need MORE theory and philosophy at industry events.  Our goal should be to create an army of critical thinkers who learn how to look at business problems and solve them.  That's what we tend to do when we work with clients.  We may talk a little bit about what we've seen at other organizations, but we never want to offer a solution "out of the box" based on "best practices."  Yes, learn from the success and failures of others.  Use those experiences to inform your situation, but don't forget to think.

Somewhere in the midst of all of those challenges and problems is an opportunity just waiting for an innovation that will change everything.

IT Transformation Must Drive Business Value

This is the third post in a short series describing the three pillars of our vision for IT Transformation.  The third part of our vision is really where it all comes home:

IT Transformation Must Drive Business Value

One of the greatest risks that IT organizations have when undertaking a transformation initiative is believing that becoming an effective and efficient organization is enough.  As I discussed in my last post, IT Transformation Begins with Organizational Effectiveness, it is where you must begin, but being effective is merely meeting the base expectations of the customer.  In the end, if you are merely effective, you are still nothing more than an effective commodity provider. 

The ultimate goal of any IT Transformation initiative must be to provide strategic and competitive value to the business.  It is only in this state that the business' investment in IT will be fully realized. 

To accomplish this will require that IT transcend its traditional structures, perspectives and sensibilities.  It will require the creation of a service culture, a commitment to transparency and the development of true intimacy with the business.  Only through this level of transformation will IT be able to truly stand in partnership with the business.  And only then will IT be able to drive technology-enabled innovation that accelerates the achievement of business objectives in unexpected ways. 

It's surely no simple task.  But that, after all, is what a transformation is meant to be - the fundamental change in form, shape and appearance of an organization.  So, are you ready to transform?

Running IT as a Business Doesn't Mean It's a Separate Business

There always seems to be a lot of controversy over the concept of running IT as a business.  There has been a recent backlash over whether or not it's a smart strategy and there has been a long running industry discussion over what it really means to run IT as a business.  I think that the biggest problem is that most IT folks aren't actually business folks, so they say the words, but don't really know what it means or how to make it real.

But the recent dust-up has really been about the idea that running IT as a business is the wrong strategy in that it creates separation between IT and the business.  This was all brought to mind as I read a recent article from Information Week entitled, "Global CIO: What's IT Worth?" 

The article and Northwestern Mutual Life's story of IT transformation really had two key messages:

• Words Matter - How you describe your IT organization and the services you provide/activities you perform are the tip of the spear as you try to transform your organization.  Where your words lead, your organization will follow if you make them real.
• IT Assets Have Business Value - and should be measured as such

The article has a lot of good ideas and information on measuring IT value, but the thing that struck me the most was Tim Schaefer's (the CIO of Northwestern Mutual Life) focus on changing the language to remove the perceived barriers between IT and the business.  A lot of the targeted terms will be very familiar to those of us who are proponents of "running IT as a business" - internal customers, IT leaders, alignment, etc.

I understand why this is - words used improperly can create divides between people.  His focus on the words was a statement that he was demanding intimacy and partnership between the IT organization and the business - to integrate IT into the business itself.  And I can see where on the surface this seems like a repudiation of the whole "running IT as a business" mantra.  But I don't think it is.

The issue is that "running IT as a business" was never meant to be a literal construct.  It is meant to create a "service attitude" within the IT organization to combat the greatest ill that most IT organizations have - that they focus on the technology rather than on the business value that the technology provides.  The intent - at least to me - was never to create this little stand alone business within a business with all of the separation that seems to imply.  Instead, the model should be the one that the greatest businesses in the world follow - the creation of such intimacy, that they become an integral part of their customer's business.  I believe that this gets to the same place that Northwestern Mutual Life is going. 

In the end, maybe "running IT as a business" has a limit to its useful life.  I think that it's a critical metaphor and place to start as you begin the process of transforming your IT organization to think in terms of services and consumers of services and the derived value of those services.  But perhaps the metaphor begins to break down as the service context matures and leaves a residual of separation from the business as people take it too literally.  Then maybe, the next evolution is to one of true intimacy with the business to finally make IT and the business one.  Could be.

Roadblocks to Innovation: Knowing What Your Customers Want

Ok, so this isn't really about technology, but Malcolm Gladwell gave a talk at a TED conference in 2004 that talked about something that I think often perplexes IT leaders - understanding what your customer wants.

We know the basics.  We know that our customer needs us to deliver ERP and financial systems.  That we need to deliver and support an infrastructure to enable these, etc.  But when we have reached a level of maturity and are looking to take that next big step forward - to move beyond the stale strategic planning process and really begin to bring new, innovative ideas to the table - we are often stumped at the starting gates with the simple question - what does my customer really need and want?

It's a question we need to be able to answer if we are to cross the divide and become true IT innovators.  I know it's a stretch to make a connection between IT and spaghetti sauce (you'll see), but take a look and see if it doesn't stir up some ideas.  If nothing else, it's very entertaining.  Enjoy!

How to fix the innovation gap: A conversation with Judy Estrin

McKinsey has recently posted a video interview with Judy Estrin on the state of innovation and how companies need to be looking at driving greater innovation.  There are definite lessons to be learned for CIOs and IT organizations.  Check it out here.