The Ostrich Effect and Enterprise Architecture

From the financial and credit crisis, to soaring energy prices, job losses, foreclosures, and run-away inflation, people’s investment portfolios are looking pretty darn gloomy these days.

The Wall Street Journal, 13-14 September 2008 reports “Should you Fear the Ostrich Effect?”

What’s the ostrich effect?

“Behavioral economist George Loewenstein of Carnegie Mellon University coined the term, ‘the ostrich effect’ to describe the way investors stick their heads in the sand during lousy markets.”

Forget the letter opener when your financial statement arrives and stop looking up the value of your investment portfolio online, because “if you don’t know for sure how your portfolio did, you can always retain the hope that it somehow did better.”

This is a way for people to hide from the reality of their losses. “Turning yourself into an ostrich doesn’t make your losses go away, but it does enable you to pretend they aren’t there.” What a wonderful defense mechanism for our psyches!

Reading and thinking about this ostrich effect, I realized that it applies not only to the way people deal with financial losses, but all sorts of bad news they don’t want to hear or deal with.

I believe in Freudian terms, they call this DENIAL!

Just put your head in the sand and whatever it is you don’t want to deal with isn’t there, right?

We all know that hiding from problems doesn’t make them go away. Yet, this same phenomenon in people’s personal lives is ever present in our enterprises!

How many of the executives in your organizations follow this prescription of sticking their head in the sand when they don’t want to hear about or acknowledge problems in the workplace—competitive, technical, regulatory and so on?

Unfortunately, many of our leaders close their eyes and ears to the problems that afflict our organizations in spite of all the reports, briefings, metrics, dashboards, and subject matter experts they consult.

Why do our leaders ignore bad or challenging news?

I suppose similar to the investor who doesn’t want to face the negative returns and shrinking balances on their account statements, executives often don’t want to or are unable to deal with the harsh reality in their organizations and in the competitive environment. It’s so much easier to pretend problems and challenges don’t exist and continue to report stellar results and returns to their boards, stockholders, stakeholders, regulators, and oversight authorities.

In this election season, there has been a lot of banter of “putting lipstick on a pig.” Sounds a little like how ineffective leaders pretend to lead, by putting rosy colored lipstick on a pretty awful looking pig.

The best leaders will use all the information available to face reality and raise the performance of the organization and its people to meet the challenges head on and truly grow and excel.

The average and worst leader ignore what’s going on around them and see only what they want to see and report up and out what they believe others want to hear.

Where does enterprise architecture come into play with this?

Enterprise architecture is a vital source of information for our CIOs and other leaders. The wise ones see the strategic value of enterprise architecture, commit to it, champion it, and invest in it, using it to identify gaps, redundancies, roadblocks, and opportunities to innovate and improve the business and technology of the organization. I urge all CIOs to avoid being like the ostrich, and take this approach.

The Ostrich Effect and Enterprise Architecture

A Federal CIO / CTO

Should the U.S. federal government have a Chief Information Officer (CIO) and/or a Chief Technology Officer?

“The chief information officer (CIO) is a job title for the board level head of information technology within an organization. The CIO typically reports to the chief executive officer.”

“A chief technology officer (CTO) is an executive position whose holder is focused on scientific and technical issues within an organization.”

“In some companies, the CTO is just like a CIO. In still others, the CIO reports to the CTO. And there are also CTOs who work in IT departments and report to the CIO. In such a situation where CTO reports to the CIO, the CTO often handles the most technical details of the IT products and their implementation. Despite the diversity of approaches to the CTO role, this IT department executive is increasingly becoming the organization’s senior technologist, responsible for overseeing current technology assets, and more important, for developing a technology vision for the business.” (Wikipedia)

For the purpose of this blog, I will use the terms synonymously.

In the federal government today, we do not actually have a federal CIO or CTO. The closest thing we do have to it is the Administrator for the Office of E-Government and Information Technology in the Office of Management and Budget (OMB). Within that office, we also have a chief architect.

MIT Technology Review, September/October 2008 has an interview by Kate Greene with Mitch Kapor, the founder of Lotus, founding chair of Mozilla, and a board member of Linden Research who advocates for a federal CTO.

Here’s why Kapor thinks we need a federal CTO:

“The government needs cohesive technology practices and policies…tech is intertwined with virtually everything. You can’t talk about homeland security or education or energy without it being in large part a conversation about technology. The president will be well served if policy making is done in a more technologically sophisticated way.”

What are some policies the federal CTO would champion?

• Ubiquitous and affordable broadband deployment
• “Tech policies that stimulate innovation in the economy are very important, because innovation is the engine of growth.”
• “Net neutrality is also a huge issue in ensuring the Internet isn’t controlled by the people who own the wires, because that us just going to impede innovation.”

While I believe that this is a good start, there are so many other areas that could benefit, such as—

• Information sharing and data quality
• Interoperability and component reuse
• Standardization and simplification of our infrastructure
• Beefing up our IT security
• linking resources to results (i.e. driving performance outcomes and having our business and mission drive technology rather than doing technology for technology’s sake)
• And of course, overall enterprise architecture planning and IT governance.
  

Overall, Kapor says “The advantage of a CTO is that there can be coordination. There’s a ton of work that goes on within different agencies: there needs to be someone to identify the best ways of doing things and some common practices.”

In the federal government, we do have the federal CIO Council to help coordinate and identify best practices, but the role that Kapor envisions is more of a visionary, leadership role that will truly drive the technology of our government and “lead by influence and not by command.”

As we enter the last few months before the presidential election of 2008, perhaps it is a good time to think not only about the next Commander In Chief, but also about the leadership role(s) of tomorrow—such as a federal CIO/CTO—that will be necessary for maintaining and solidifying our nation’s technological superiority for now and the future.

A Federal CIO / CTO