(WHY, WHAT, HOW, WHO see Blind Spot)
If we are to make consistent and significant progress over this Journey, we must be able to establish and hold to robust dialogue with the Executive team.
In order to have a dialogue, we must establish a common language. The foundation for that language is a set of agreed upon durable principles. For these principles to be durable like they are in Finance, Engineering, Manufacturing, etc. they must transcend technologies (i.e. mainframe, client server, web, etc.), decades, industries and organizational models. 
In other words, they must be universally applicable. In addition, in order for them to be useful they must be simple and common sense enough that every executive can enter the dialogue. For example, every member of a company’s leadership team is conversant enough with financial principles to have a viewpoint and to understand cause and effect of their decisions. However, few if any other than the CFO understand GAP or FASB. Finance has been able to extract the essence of a few principles that enable all of the others to participate in an intelligent way. Following that paradigm, although IT can be very complicated and deeply technical, it is not important or even helpful for the CIO’s counterparts to understand it any more that they might understand tax laws. What is important is that they understand the following principles enough to intelligently enter and maintain the IT dialogue and decision making for their company. It would be even more helpful if they were universal so that as the executive teams evolve the IT dialogue, like the finance dialogue, can be held constant from company to company.
Blind Spot Framework – WHY, WHAT, HOW, WHO
(Basis for the Dialogue)
To understand the framework in full, see the book Blind Spot: A Leader’s Guide to IT-Enabled Business. Every journey should begin with a well articulated “call to arms” or WHY do anything. This is driven by the executive team, including the CIO, usually supported by strategy consultants like BCG, McKinsey, Bain, etc. The work for the IT organization is to synthesize and abstract the implications for systems and process changes that IT implies. That sets the narrative for structuring the work around the Business Agenda (WHAT), the Systems Agenda (HOW) and the Organization Agenda (WHO) required to execute the journey over time. The important part of the WHAT, HOW and WHO is that they must be harmonized and work together as “Gears” (that support they WHY) not as individual components. These gears get their power from the executive teams’ business vision (WHY) and must be lead by articulate, energetic and confident IT teams. (This is no different from any other functional leadership model.)
Unfortunately, few leaders have had frameworks or even practical experience to help guide their decisions in this matter. The lack of the Executive Committee’s IT savvy combined with IT industry marketing, promising quick fixes and “silver bullets,” causes confusion and, in many cases, missteps.
Therefore, the Executive Committee, in well-run companies, needs to be part of this common sense dialogue. It is critically important to actively leverage this framework. A high-level synopsis of these Gears follows
Gear #1
Business Agenda (WHAT are we going to build over time?)
Multi-Year
- Business Plan
- Application Release Strategy
- Financial Investment Plan
How we go to market, serve our customers, partner with our suppliers, measure our productivity or develop products and channel initiatives are by their nature strategic. Most of these enterprise-wide business model changes or initiatives (major transformations) transcend many functions or business units and the 12-month Julian calendar. Virtually all of these have a technology, process and human change dimensions connected to their successful implementation. Therefore, successful IT organizations must develop big themes that can capture and hold the organizations imagination through a lens that extends beyond the Annual Operating Plan (AOP) and functional boundaries (although major deliverables against should be delivered in 6 – 9 month releases).
For example, big themes like changing the Customer Experience or a Unified Supply Chain span functions and years. They are also durable because they transcend how you are organized. They existed in the 1930’s and will continue into 2030. While projects for an airline, like Gate and Boarding, Kiosks, Gate Information Display, Flight Information Displays, Virtual Check-In, to name a few, are interesting projects in isolation, the dramatic change in the Customer Experience and productivity only comes when you go “end to end” with self service and kill the lines and misinformation. Having the overall business vision, architecture, sequencing, pacing, value extraction plan, etc. is the only way to productively achieve a durable, scalable business result for the IT investment.
A project by project “ROI” planning and justification can take the same projects, serve them up piecemeal and lead to stovepipes and poor sequencing where no one project really changes the economics or the Customer’s Experience. I’ve seen situations where a strategic “Golden Spike” couldn’t be justified on its own but was critical to complete the value proposition. The message is Plan, Design, and Justify from a Wide Aperture and, with that as your context, implement reasonably sized pieces.
When you look executing a business transformation through this Wide Aperture lens, you must consider the appropriate approach to achieve the desired change. Should the transformation unfold through a series of renewal phases or perhaps through a “Greenfield” approach where the future solutions are built separate from the existing environment requiring a “hot cutover”? How should these initiatives be funded? How do we keep the business moving in the short term? Do we have the talent? How can the functional, tactical pressures be managed? Who will drive the required business changes?
As we begin to answer these practical questions our approach will become more realistic and achievable. It will become clear that there are no “silver IT bullets” just as there are none for any other function. Practical people with common sense working hard over time are what are required. The Executive Committee, in well-run companies, needs to be part of this common sense dialogue.
It then follows that investment planning for IT is an activity that needs to be closely linked to the company’s overall strategic vision, appropriately wide in aperture and provide for a constant renewal of the assets that keep current operations vibrant. (The tortoise will always beat the hare.) Investments in IT should be supported by the underlying business value that they provide and, therefore, should be rationalized and prioritized based on the value that is generated to the entire enterprise not just to a particular business segment. Although most companies have fairly rigorous processes to rationalize non-IT investments (i.e., fleet, plants, products, etc.), the processes are not always applied to IT investments. Since investments in information technology play a significant role in “enabling” a company’s ability to succeed in today’s marketplace, it is important to focus not only on the expected return generated from IT investments but on a fairly constant level of IT investments made on an annual basis. Companies that have wide swings in IT investment levels from year to year find it difficult to maintain quality or absorb the changes. Throwing more money at IT is usually not a good long-term solution. Cutting too deeply often destroys your “offensive” horsepower, which is hard to get back quickly, and can leave you with unhealthy impaired assets.
The way the CIO enters this dialogue sets the stage for the quality and efficiency of the IT component. If the strategic dialogue is entered early, proactively and without confusing jargon, then the proper aperture can be put on the problem. If it is entered passively by trying to service each function head’s tactical view of the “elephant”, then it will end up small aperture, poorly constructed, disconnected, hard to extract the business value and almost impossible to justify.
Gear #2
Systems Agenda (HOW will we go about our software engineering?)
- IT Management (Plan, Build, Run)
- Architecturally Led
- Integration/Information Strategy
Once the WHAT (Business Agenda) is in place, bringing clarity around HOW (Systems Agenda) the organization (WHO) working together is crucial to delivering high quality, high impact information technology. This vision for HOW the work gets done starts with a “Common Way” of delivering IT solutions. This “Common Way” consists of a development process that uses well-known methods, technologies and management disciplines to delivery business function that is built on a well articulated, modern architecture, supported by a technology infrastructure that is managed for maximum reliability and flexibility at a reasonable cost, on a “Narrow, Virtualized Footprint”. Central to this “way” must be the Enterprise Data Strategy. This becomes the playbook and contract between teams. In most organizations, every development team operates differently because the technical footprint has been so wide. The last 35 years of small aperture “Point Solutions” has caused high cost structures in IT and an exponential level of complexity. Most executives can see the cost of complexity when plant equipment, types of aircraft or sub-assemblies are widely diverse. The same is true for Information Technology. In most cases the “best deal” in isolation is not always the “best deal” over time.
Companies whose IT organizations don’t have a common development methodology and management system (see HOW article – Development Framework on this website) don’t have the strategic lever they need to use technology effectively. Typically, their IT organizations are unable to deliver the right function, in the required timeframe in a cost effective manner. They are unable to sort through complex issues like programming requests or simple issues like “when and how do I ask for infrastructure support” or “who can make a requirements decision?” Applications that are delivered may miss the mark on scope, quality and integration. Project costs are high because each group does things differently, which makes it difficult to work across teams. It’s difficult to move people between groups because the “way” they do things is so fundamentally different. Every team estimates and reports differently so it is tough to manage large complex initiatives holistically and proactively.
Contrast that with a company whose IT organization has a “Common Way” (no one is right or wrong) for development and has clear accountability for delivery. A common approach brings consistency of delivery and quality of software. It brings a way of delivering integrated applications and services against the Multi-Year Plan without gaps and overlaps of function. It results in lower project costs because throughout the Project Life Cycle, the scope, architecture, data and code quality are managed. It also facilitates the fluid movement of resources (labor and non-labor) to keep projects on track and the spirit and development of people vibrant.
Of course, having a “Common Way” built on a great architecture won’t get us anywhere if the technology infrastructure is out of control and complex. One of the characteristics of most IT environments is a proliferation of technologies. Either because of a strategy to pursue the best deal or newest technology at the time, because each department wanted the independence to choose its own technology, or because of mergers and acquisitions, most companies have technologies from almost every era and vendor.
The cost of proliferation and complexity comes in at least three areas. The first is the cost of maintaining all this variety. Inventory levels, sparing levels, and staffing levels all have to be higher, and this translates into a higher total cost of ownership. A second cost is less obvious: the loss of the ability for the IT staff to move from project to project to manage delivery against IT’s goals as a whole. If the technology is different, people can’t move causing you to lose the flexibility to manage project delivery (in other words, there is no “Common Way”.)
The third category of costs introduced by technology proliferation is the effort (and sometimes inability) to integrate systems and data hosted on the various platforms. Although techniques and tools are being introduced to help in integrating disparate applications, integration will be easier and cheaper if the number of enabling platforms is minimized. The key to managing these costs is “Narrowing the Footprint” or controlling the proliferation of technology. It’s hard, but not hopeless. There are technical and governance techniques that let us maintain discipline in the choice and deployment of technology, and that discipline is the key to an infrastructure that can support a layered architecture and a “Common Way” of delivering applications. This is where the business teams really need to understand the insidious cost and complexity that is inevitable if these principles are violated due to small aperture lenses.
Having a “Common Way” of developing systems is impossible without an underlying architecture. What we need is an architecture that insulates the applications (which are expensive and hard to change) from the underlying technology (which is going to change no matter what we do). We want to embrace the technology changes, because they allow IT to continually extend its reach while becoming cheaper and more reliable, but we want to minimize application changes related to the technology. And while we don’t want to change the applications just because the supporting technology changes, we will want to change them to support changes in the business (and those changes are happening as fast as technology changes these days). The architecture needs to make these changes as easy as possible by isolating functions, having well-defined and published interfaces, making things more model, rules-and table-driven, and providing a set of services that form major building blocks.
The way to achieve these architectural goals is “isolating”. By “isolating”, we mean separating the parts of the IT process into distinct functions (called “services”) and defining rules about how those distinct functions work together. The goal is to standardize and reuse as much of the function as possible. Because we’re using standardized services, application developers can concentrate on new business function and re-use previously built components to assemble and orchestrate an application. The support organizations are dealing with things that are common to many applications, so they don’t have to learn something different every time a new system is installed, and the development organization can standardize its development process because the common services and the rules for their use dictate a “Common Way” of building systems.
A big part of the “Common Way” is having an information strategy, making sure everyone knows what it is, and then sticking to it. If a company’s information is one of its most valuable assets, having a strategy to build, maintain, and access that IT should be a given. Having a plan, and sticking to it will decrease costs, improve accuracy and integrity of the data, events, messaging, etc. and ultimately determine whether a company’s information represents a cohesive collection of facts that can guide its operation and decision-making or a random collection of conflicting assertions that raises more questions than it answers.
Duplicate information costs money. It costs to collect data unnecessarily, to store it, to back it up, and to rationalize it when it gets out of synch. Synchronizing multiple versions of a piece of data often accounts for a significant part of a project’s costs and complexity. Different versions of the truth (conflicting values for redundant elements) undermines integrity and reduces confidence in the information it conveys, even though both versions may be technically correct. Multiple instances of a customer “master” record can make it hard to understand that customer’s behavior and relationship with the company as a whole, leading to missed opportunities or potentially embarrassing customer service mistakes. Once systems are implemented, most performance and response time issues are a result of problems accessing data. How can we avoid these problems? Having a clear, well-thought-out information architecture is a start. Thinking about, and explicitly stating, the rules for how data is stored, where it comes from, how many copies of it we will keep, and what rules will be used for calculating and transforming it is the key to avoiding unnecessary costs, confusion, and lost opportunities. Of course, just having the strategy is not enough: it needs to be followed throughout the development and implementation process. The architecture needs to be kept current, and a process to make sure it’s applied is a critical part of the “Common Way”. More and more it has become critical to put information – data and events, in context, “in the moment and in motion”. A modern systems requires a modern HOW.
This articulation of the right way to get the work of IT done (the “HOW”), coupled with a high-performing organization whose design and culture facilitates great execution, working against the highest priorities of the enterprise, is the key to delivering consistently high-quality, impactful results.
Gear #3
Organization Agenda (WHO will govern and manage?)
- Leader Led
- Structure
- Operating Model
- Workforce Management
- Communication and Cadence
Building an organization that is well known for delivering what is expected to customers, colleagues and shareholders is crucial to the other gears. The payback in having employees that are committed to producing excellent goods and services requires discipline and energy. Expanding the staff’s learning as they creatively solve problems and meet day-to-day challenges is the work of the leadership team. Creating an environment where people are highly committed, competent and accountable, and when necessary, willing to go the extra mile, is the key differentiator. When there is a united force of leaders who are dynamic, visible and approachable, the organization’s energy is palpable. When there is openness and trust in the sharing of ideas and solutions across teams and functions, you know you are part of a high performing organization and something special. There are also strong and meaningful relationships between individuals and people who spend time together inside and outside of work. Employees look forward to coming to work and are fulfilled because they believe they are contributing to the greater good and to a larger mission. Employees are energized and proud of the company and feel they are an important part of sustaining it. Therefore, they speak well about their place of work to their friends, family, and community an encourage others to come on board. In other words they are “Net Promoters”. Voluntary turnover is low and the company has an easy time of attracting talent because of its excellent reputation.
Top notch IT organizations detailed here do not happen all by themselves. They don’t spring forward in a vacuum. It requires a relentless pursuit of explicit and implicit principles and best practices that are no different than any other world-class function. These concepts are increasingly more important when your workforce also consists of suppliers. They must be included if you are to be successful.
To achieve this there is no substitute for hands-on leadership. Many IT leaders are surrounded by large staffs that isolate them from the work, the people, the user, the projects, the technology decision and the numbers. It’s not unusual to have large project management offices (PMO’s) Finance teams, H. R. Staffs, Procurement Organizations and client interface groups surrounding the IT leaders creating overhead costs and bureaucracy and making them administrators versus line General Managers. Leaders, “on the floor” with their teams, accountable and managing the environment in an organization designed for “speed and control” is essential for great results.
By being immersed in the work also enables the leader to know their people. They learn that not everyone is created nor performs at high levels. Setting expectations, giving feedback, constantly calibrating performance, moving, promoting and developing top performers and differentiating them with pay and opportunities is critical to upgrading talent. It all starts with recruiting teams not each manager selecting people. Only your best can judge talent. Then people are assigned to a team for an 18-24 month period. The top performers are selectively given increasing opportunities through a move or reassignment. Low performers are given specific feedback and eventually improve or leave creating room for new recruiting. This set of activities is time consuming and requires that the leadership is on the floor and knows their people. However, the payback is that a thousand people managed with this rigor will be geometrically better than a thousand people that get paid the same for showing up to work. Again a “Common Way” (HOW) is critical to this kind of people development system.
Also, great modern IT development in a “services” architecture with a “Common Way” is a team sport. It’s closer to a manufacturing line where throughput and quality requires a number of departments and individuals to execute their portion of the work. In IT, Systems Engineers, Architects, Business Analysts, Developers, Testers, Operators, etc. are all necessary to deliver a quality product on time, on specification and on budget. Dropping the normal conflicts and explaining the dependencies are crucial to high performance. The leader’s job is to create a spirit of community and alignment amidst the diversity of disciplines and a balance between risk and control. In other words, a great environment where “people love to get up in the morning and go to work” and all “Playing to Win” not “Playing Not to Lose”. (See the WHO articles on this website.)
Summary of the Gears and Principles
Although there is a huge body of knowledge and detail in each principle, hopefully this simple “headline” version has given you a 10,000-foot topological view of each. It should be clear that each on its own is common sense. It should also be obvious that they are reinforcing with the high grouping or gear.
The point that may be more subtle is that all 3 gears must work in concert to give you the results. The relationship between the WHAT, the HOW and the WHO depend on each other and when operated over time build a powerful engine that will deliver the right solutions, in a cost efficient way and create the power that will deliver the speed and agility required in the 21st Century.
