6

IT in the Lead

You do not lead by hitting people over the head.

—Dwight Eisenhower

Interlude: Going Paperless for Real

We run a complex business. More to the point, our business has a complex sales process that relies on a global network of three hundred-independent manufacturers’ representatives who custom design solutions for their customers’ manufacturing lines.

It’s a highly competitive business that creates a steady stream of new products and specification changes to meet customer demand. The manufacturers’ reps need detailed, readily accessible information about each component we sell to help them design systems for their customers.

And did I mention they’re independent? They’re free to source components from us, our competitors, and often both.

To support the manufacturers’ reps, our Sales Support organization printed and mailed out product catalogs in three-ring binders. Each new product introduction produced several new pages of product detail. Sales Support mailed or emailed out new or replacement pages. The reps had to constantly update their product catalogs, pulling out old pages and inserting new ones.

I run IT. When I received a request from Sales Support to select and implement a new printing and delivery system to more efficiently provide catalog updates to manufacturers’ reps, I wanted to satisfy my internal customer, so I put my best business analyst on the hunt.

Meanwhile, we were already in the middle of satisfying a different request, in which we were rolling out iPads to our traveling employees. The pilot group found the iPads to be handy for email and web browsing. However, adoption was tepid, since iPhones were already doing the same job.

Fortunately for all of us, IT’s business analysts and project managers talk with each other, which is how it happened that the business analyst I’d put in charge of the new catalog printing and delivery system and the project manager responsible for the iPad rollout dropped into my office.

“Kill the catalog printing and delivery system project,” they told me. (I’d say “recommended,” but really, they told me.)

Instead of an IT project based on requirements drawn up by Sales Support, they assembled a team from Sales Support, the manufacturers’ reps, Marketing, Engineering, and IT. They proposed to solve the printing and distribution problem by not printing and distributing anything anymore. Instead, our so-called internal customers became our design collaborators in the Slimline Product Catalog initiative. The easy-to-sell concept was that manufacturers’ reps could avoid hauling around heavy product catalogs, replacing them with an easier-to-carry electronic version designed for the iPad’s form factor and capabilities.

Along the way the team adopted an Agile approach, not that they called it that or cared. Their new application development process repeated a cycle of brainstorm, prototype, test, critique, and modify, fine-tuning the app and adding new functionality with each iteration.

Our planned benefit was a dramatic reduction in printing and delivery costs, a fact we didn’t once mention to the manufacturers’ reps. Our message to them: the new tool was an easy way to look up parts and their specifications more quickly than paging through a five-hundred-page three-ring binder, and oh, by the way, they wouldn’t need to waste their time replacing pages over and over again.

When the app was first rolled out to a pilot group of manufacturers’ reps, it contained only basic search and display functionality for all SKUs in one simple product line.

Our reps loved it.

After the fifteenth development iteration, Slimline was providing three hundred manufacturers’ reps with an up-to-the-minute product catalog with features far beyond those provided by the print catalogs: capabilities like search/filter by product family, application, part number, specifications, competitor’s part cross-reference, availability, and price. It delivered multilingual capabilities, product drawings, order entry, shipment tracking, and returns processing.

As we added incremental features, we discovered our original business case had become just a fringe benefit: while the original print-and-distribute request was justified by projected cost-cutting, it turned out our electronic catalog resulted in increased revenue, as the manufacturers reps were now specifying our products over the competition more often, because it was a lot easier to do so.

Oh, and we did substantially reduce our printing and distribution costs too.

One more thing, where before this project I had a hard time making IT anything more than an order taker, after it, we started to get requests that weren’t just for information technology.

They were to help people figure out better ways of getting things done.

The previous five chapters have set the table. They’ve established what organizations need to do to achieve excellence at intentional business change, including the means for sorting through the large stack of business-change proposals that is a feature of healthy organizations.

But not all proposed changes come from within the organization. Those in the executive suite are, after all, paid to lead the business, which includes responsibility for setting and planning strategy.

When there’s no such thing as an IT project, this changes too, and in ways you might find startling, starting with the ClO’s role in the business.

By now the idea that the CIO should “have a seat at the executive table” is well-explored territory. What’s less clear is what the CIO should do once seated there. A common but flawed version is that the CIO should sit there to hear what everyone wants firsthand instead of at a distance, and to hear everyone’s gripes about IT’s performance so that IT finally takes the gripes seriously.

Here’s what it should mean: IT leads planning. This one phrase has three very different but equally important meanings. The first is leadership in planning—helping everyone who needs the help understand how to turn good intentions into a plan of action. The second is driving much or all of the company’s strategic planning. The third is serving as the gateway to business-change governance.

Leadership in Planning

Role Reversal

IT and manufacturing are in the process of reversing roles.

A lot of the past conventional wisdom about making IT work right was based on making it more like manufacturing. Writing software was supposed to become a factory-like situation . . . never mind that the goal of manufacturing is to make lots and lots of products that are as identical as possible, while the goal of IT is to write lots and lots of software modules, each of which does something entirely different from all the rest.

But never mind all that.

In typical businesses, most executives’ and managers’ expertise is in keeping the joint running—in making sure the business runs the way it’s supposed to run, to produce, sell, and account for the products and services its customers buy and pay for.

Their expertise, that is, is in maintaining and perfecting the status quo.

But we’re living in a world of change that isn’t just constant; it’s accelerating. And while nobody in the executive suite is fully versed in making change happen,* the CIO, who represents all of IT’s capabilities by proxy, is, in most companies, better versed in making change happen than anyone else.

IT is in the change business. By providing leadership in change planning, it will make manufacturing, and by extension the rest of the business, more like IT.

Including the CIO on the executive leadership team (ELT) reinforces this point and provides a vehicle for the CIO to connect the relevant dots between executive intentions and how IT can help turn those intentions into real-world accomplishments.

If you like coining new CxO titles, you might consider retitling the CIO to CCO (chief change officer) in recognition of this point.

Or not; name changes are often more of a distraction from what matters than anything else.

IT-Led Strategic Planning

Leadership. The word is inspiring. Even those who run away from decisions as if they were rabid wolverines utter it in reverential tones.

Back in the day, when computers were first escaping the confines of the accounting department, where they supported the general ledger, accounts payable, and payroll, IT led much of most companies’ strategic planning.

The logic was uncomplicated. Everyone recognized that automating manual processes made processes cheaper and more reliable. Of course IT led the way.

Then it didn’t. As related in chapter 1, IT relinquished its leadership role, instead taking on the guise of a merchant with wares to sell to its internal customers.

It’s time for IT to take the lead again, not that the IT leadership of the future will look much like the IT leadership of days gone by.

Then, it was all obvious—choose the next process to automate, and automate it. Now we’re in an era in which “Digital” has become both a noun and an imperative. The lead story in business strategic planning isn’t process automation. It’s capability. Here’s why.

SWOT Spelled Backward Is . . .

The world is filled with strategic planning frameworks. One of the more popular is SWOT analysis, which stands for strengths, weaknesses, opportunities, and threats. As frameworks go, it has a lot going for it.

Except that it’s spelled backward, because strengths and weaknesses are introspective, while everything that matters is extrospective. That is, no characteristic of any company is a strength or a weakness except in the context of externally facing threats and opportunities.

When CIOs reassume strategic planning leadership, they can do worse than pinning their fortunes on TOWS.

And in particular, on mapping potential new business capabilities, made possible by technological innovation, to the marketplace to understand whether or not they represent threats and opportunities.

That’s threats and opportunities because the two are the same thing. A newly possible business capability is an opportunity if your company adopts it, and a threat if a competitor gets there first.

What’s the CIO’s role in all this? Recognizing how newly evolving and maturing technologies can create capabilities that might be relevant to the business model; discussing the possibilities with the executives and managers who might benefit from pursuing them; and, in larger companies, creating an organizational solution within IT for keeping track of all this.

As with so many other responsibilities, with growth comes the inability to do everything yourself.

Wait—Isn’t Strategy the CEO’s Job?

Answer #1: Yes.

If heading up strategic planning isn’t in the CEO’s job description, your company needs a different board of directors. The first task of leadership is setting direction, and that’s what strategic planning is all about.

What this means isn’t that the CEO has the vision, translates it into the plan, and just tells everyone what the answer is.

What it does mean is that the CEO owns the strategic planning process, making sure it’s fed by the best information and insights available.

That the CEO should lead the strategic planning process in no way diminishes the importance of IT taking the lead in establishing the strategic plan’s drivers. The CEO builds strategic planning around a TOWS framework; the CIO plays a dominant role in establishing likely threats and opportunities; the CEO makes sure the ELT has the right conversations to assess their relevance to the business’s future.

One more point: it’s usually up to the CEO to draw the line that separates strategy from everyone on the ELT promoting their pet projects and horse-trading to end up with a consolidated list. A consolidated list is certainly a plan. It is, however, in no way a strategy.

Quite the opposite, it’s the abdication of strategy—what a company does when nobody has a clear idea of what it should be doing.

Beyond this, refer back to chapter 3 (Fixing Agile) for thoughts on how to make strategy agile. Answer #2: Yeah, but . . .

Another model that works transfers more responsibility for strategy to the CIO. In this model the CEO sets direction, goals, and priorities at the highest levels only. And, the CEO makes sure everyone in the ELT participates in the process, commits to the result, and recognizes their parts in making everything happen.

In this model the CIO (or CCO?) organizes and facilitates the planning process itself.

It’s Okay to Lead

Leading strategic planning requires, obviously enough, leadership, which is to say getting the rest of the company to follow. This isn’t a comfortable role for mainstream IT management, which is often so fearful someone will accuse it of squandering the company’s scarce financial resources on technology for technology’s sake that suggesting the company explore something new, different, and potentially useful is as intimidating as proposing a hefty assessment to pay for roof replacement at a townhouse owners association meeting.

So the starting point for technology leadership is, it’s okay to lead. Not only is it okay, the business leaders we talk to are, for the most part, hungry for it. They want to have conversations about how they can use information technology to (1) get their work out the door more effectively, and (2) do something entirely new, different, innovative, and most important, profitable. Sadly, few in IT are equipped to have these conversations.

Properly led, IT is in the best position of any part of the business to have these conversations—to identify promising new technologies, incubate them, and help business leaders incorporate them into how we do things around here. It’s technology leadership whether the technologies are new and emerging or just haven’t been put to use in the business IT supports.

Sadly, many and perhaps most IT organizations aren’t led this way. As evidence we offer the chief digital officer (CDO), a position defined as “what our CIO should be doing but isn’t.” Far too many IT leaders and professionals are shockingly unaware of new developments in their field, making IT as a whole unequipped for the conversations about capabilities businesses need to be engaging in, right now, all the time, for the foreseeable future.

To be fair, plenty of companies, and we’re including many of those that undertake formal strategic planning exercises, aren’t equipped for them either. Their strategic plans are tepid, fearful things. These companies don’t think in terms of gaining marketplace advantage, beating the competition . . . you know, how to grow. Technology leadership can’t happen in these companies, because no leadership can happen in these companies.

When decisions are rooted in fear, the outcome is stasis or retreat, not innovation and progress.

We hope your company is the other kind, poised to become an aggressive leader in its industry, with executives who want to try something more exciting than a stock buyback. They want to invest in competitive advantage. They just don’t have better ideas about how to invest the company’s spare cash.

All it might take is the suggestion from the CIO that (for example) adding intelligence to the company’s products might make them more desirable; that social media intelligence might point the sales force to at-risk accounts, turning customer defections into increases in walletshare; that sales analytics will make both back orders and overstocks far less common than they are right now; that artificial intelligence can scan headlines to recognize events of interest to customers and shareholders, and even to craft and deliver messages—via Facebook, Twitter, or email—that cast the events in a favorable light. The possibilities aren’t endless, but they are numerous.

Can One Person Keep Track of It All?

We’re in the middle of an innovation wave, with new IT-driven capabilities appearing, evolving, and maturing so quickly it’s hard to just keep track of what they are, let alone figure out their strategic implications and readiness for incorporation into the portfolio of business capabilities.

How to keep track depends on the size and scope of the business: entrepreneurships will have to make do with the CIO reading a handful of trusted sources, while small and medium-size businesses might create a position whose purpose is to read widely and champion pilot projects for the most promising possibilities.

Larger enterprises will probably have to establish a Research and Development-style office, perhaps integrated into the responsibilities of the enterprise architecture function.*

Whatever organizational solution you choose, the outcome should be to:

•   Maintain a shortlist of promising new technologies—not promising in general, promising for your specific business.

•   Perform impact analyses for each shortlist technology and keep them current, taking into account your industry, marketplace and position in it, brand and customer communication strategy, products and product strategies, and so on. Include a forecast of when each technology will be ripe for use.

•   For each technology expected to be ripe within a year, develop an incubation and integration plan that includes first-business-use candidates and business cases, the logical IT (or, at times, non-IT) organizational home, and a TOWS impact analysis (threats, opportunities, weaknesses, strengths). Submit it to the project governance process.

Governance Gateway

In chapter 5 we placed the company’s strategic plan outside the scope of its Business Change Governance Council (BCGC). The reason is simple: the ELT has authority over the BCGC, not the other way around; likewise, the strategic plan takes precedence over departmental plans, except to the extent departmental plans are integral to achieving the strategy.

There is one force that has, or at least should have, even more authority than the ELT, and that’s simple arithmetic. The company has fixed resources—fixed levels of staff, budget, time, and attention—that constrain its change bandwidth by limiting the total level of effort it can muster.

The BCGC is the keeper of the company’s project master schedule. While it doesn’t get a yea or nay vote on the collection of projects that make up the company’s strategic plan, it does have an obligation to insert them all into the project master schedule, which exists to ensure the company doesn’t pretend it has more effort to invest than is actually available.

While anyone might chair the BCGC, the CIO is the most likely candidate.

Which means the CIO is the one who has the uncomfortable responsibility of driving discussions regarding what inevitably happens while pouring the legendary ten pounds of project sugar into the proverbial five-pound resources bag.

To Sum Up

It’s time for IT to resume its logical and necessary leadership role in the enterprise. While this might sound like a gratifying increase in the CIO’s stature and importance, mostly it’s going to mean neck out-sticking, political dexterity, and the need for deep insights into the marketplace and the company’s current and potential place in it.

One more point: Rule #7 of the KJR Manifesto states, “Before you can be strategic you have to be competent.”¹

More than ever, businesses need IT to be in the lead. But to let IT take the lead, business leaders have to have confidence in its ability to deliver the goods.

If You Remember Nothing Else …

•   SWOT—strengths, weaknesses, opportunities, and threats—is a useful strategic planning framework. Except that it’s backward. The new SWOT is TOWS, because until leaders recognize the external threats and opportunities facing the business, they have no context for evaluating strengths and weaknesses.

•   Before IT became a separate supplier and the rest of the business became its “internal customer,” IT drove business strategy because automating the next manual process almost always made excellent sense. Now that IT is an equal partner and collaborator in designing and achieving business change, it’s time for IT to resume its place at the planning table, because most threats and opportunities are the result of innovations in information technology, making IT the logical home for recognizing them and planning what to do about them.

•   Strategic implementation projects aren’t run through the change governance process. Because of their source, they are, by definition, approved. They are, however, incorporated into the project master schedule managed through the business-change governance process because the time, money, and staff required for their execution shouldn’t be double-counted.

What You Can Do Right Now

•   If you’re the CEO, get in the habit of consulting with the CIO regarding IT-driven business threats and opportunities.

•   If you’re the CIO, make time to know how to answer the CEO’s questions regarding IT-driven business threats and opportunities.

•   If you’re the CEO and the CIO doesn’t step up, find a replacement capable of providing strategic IT leadership to the rest of the enterprise. Or, if you must, establish a CDO (chief digital officer) to provide IT leadership; but if you do, get ready for endless blamestorming and mutual finger-pointing.

* If they were, this book would be unnecessary.

* In case enterprise architecture isn't familiar territory, we provide a very quick sketch in chapter 7.