Nurture Diversity to Achieve Better Results

Diversity is essential to critical thinking, innovation, and improved decision-making/governance. The more ways we have at looking at a problem, the more likely we can be to challenge the status quo, break old paradigms, and find new and better ways of doing things.

However, according to the Wall Street Journal, 25 January 2010, often diversity—even at the highest levels, such as on boards of directors—doesn’t produce the desired results.

WHY? “People often feel baffled, threatened or even annoyed by persons with views and backgrounds very different from their own. The result is that [those]…with views or backgrounds that are different are isolated or ignored. [Moreover,] constructive disagreements spill over into personal battles.” In the end, Groupthink and poor decision-making—rather than diversity and constructive dialogue—prevails.

Therefore, the imperative to improve governance mechanisms is “to unlock the benefits of diversity, boards must learn to work with colleagues who were selected not because they fit in—but because they don’t.”

WHAT WE NEED TO DO:

1. “Assist Newcomers”—Help new people to fit in. Explain how things work and how they can play an important role. Introduce them to others, provide them opportunities to connect, and make them feel comfortable to share their points of view.

2. Encourage Dissent—“diverse boards must not be afraid of conflict, as long as it is constructive and civil.” Alternate views should be encouraged, recognized, and even rewarded for benefiting the governance process.

3. Ask Everyone What They Think-- It is easy for new people “to tire of the struggle of making themselves heard. Feeling isolated and ignored, they end up self-censoring.” Obviously, this is counter-productive to having diversity and hurts decision-making. So the chair of the board needs to make it easy for people to express their views and to elicit participation from everyone around the table.

4. Assign a “Devil’s Advocate”—choose different governance board members to play the role of devil’s advocate at different meetings to counter the inclination for everyone to agree just to get along and fit in.

Overall, the key to benefiting from diversity on governance boards is not to let any individual or any group predominate. The proverbial “my way or the highway” approach is how decision-making becomes one-sided, narrow, and deficient. Instead, every one on the board must be treated with respect, courtesy, and be given the opportunity to speak their mind.

In my opinion, leaders must ensure that governance boards do not just create an appearance of diversity, but rather encourage a genuine and productive encounter between very different people that is richer for the interaction.

Nurture Diversity to Achieve Better Results

Diplomacy and the Pitfalls of Dictatorship

Let's say yes to sound governance, and no to absolute power...

Power is a strange thing: the more you have, the more you want – it’s never enough. It’s an addiction of the soul that often results in poor decision-making and project failure.

I remember a teacher in high school that used to repeat to us the maxim that “absolute power corrupts absolutely.” Obviously someone has to be in charge and get things done, but there is more than one way to achieve results:

The first and crudest method that we have seen since the dawn of humankind is dictatorship. This is the aforementioned tendency for those in power to collect it, savor it, and protect it—and to want to wield it alone. Often those with power, not enlightened by the benefits of sharing and “checks and balances,” like to hold decision-making power for themselves. While perhaps made “in consultation” with others, it is their decision and theirs alone to make. Thus, decisions by the individual are more subjective, prone to mistakes, and driven as much by gut, intuition, and personal whim as by real facts. Furthermore, those who have to carry out the decisions do not understand them as well and are not as committed to their success because they weren’t fully part of the process.

A better method is diplomacy, when we work with others to strategize, collaborate, and vet decisions. Working with others in this way may often costs more in terms of time and effort upfront to “work though the issues,” but invariably these result in better and less-costly decisions being made in the long run. Diplomacy works especially well when the group you are working with is diverse and can bring a variety of experiences and perspectives to the table. You end up seeing things in ways that you would have missed otherwise.

Working through the decision process with others on a governance body (councils, boards, committees)—with individuals representing the universe of our stakeholders—provides a solid mechanism for all perspectives to be heard and for decisions to be scrutinized and challenged before being implemented. This is what good governance is all about.

Of course, there are occasions when diplomacy may fail and governance bodies may become dysfunctional. When groups fail to work together, dictators can sweep in and take over or, on the other hand, there can result endless bickering, a state of analysis paralysis, and no decisions being made at all. This is why governance must be well defined, structured, have an end-to-end process, and clear roles and responsibilities.

Although sometimes dictators can be brilliant and effective in getting things done and we can all think of business leaders who fit this style, too often these individuals can become drenched in their own “absolute power”—falling victim to ego and selfishness, and making decisions that are not in the best interest of the organization. This is a condition that must be countered with solid, structured organizational governance, in which decision-makers work with others collaboratively and share in the decision-making process, and the collective interests and those of the organization as a whole are put above those of the individual. In this way, diplomacy protects us from the whims and errors of dictatorship.

This is one of the nice things about our system of government, where despite the many strong differences of opinion and results that we may not always agree with, the system of checks and balances results in governance by the people for the people, where everybody has a chance to participate and be heard.

Diplomacy and the Pitfalls of Dictatorship

Taking the Politics out of Enterprise Decision Making

Some people say power is primarily exerted through military might (“hard power”), others says it is through use of diplomacy—communications, economic assistance, and investing in the global good (“soft power”). Then, there is a new concept of employing the optimal mix of military might and diplomacy (“smart power”).

It’s interesting to me how the Department of Defense—military approach—and the Department of State—diplomatic approach—is as much alive and well in our enterprises as it is in the sphere of world politics to get what we want.

At work, for example, people vie—some more diplomatically and some more belligerently—for resources and influence to advance their agendas, programs, projects, and people. This is symptomatic of the organizational and functional silos that continue to predominate in our organizations. And as in the world of politics, there are often winners and losers, rather than winners and winners. Those who are the “experts” in the arts of diplomacy and war (i.e. in getting what they want) get the spoils, but often at the expense of what may be good for the organization as a whole.

Instead of power politics (hard, soft, or smart), organizations need to move to more deliberate, structured, and objective governance mechanisms. Good governance is defined more by quantifiable measures than by qualitative conjecture. Sound governance is driven by return on investment, risk mitigation, strategic business alignment, and technical compliance rather than I need, want, like, feel, and so forth. Facts need to rule over fiction. Governance should not be a game of power politics.

Henry Mintzberg, the well-known management scholar, identified three mechanisms for managers to exert influence in the organization (Wall Street Journal, 17 August 2009):

1. Managing action—“managers manage actions directly. They fight fires. They manage projects. They negotiate contracts.” They get things done.

2. Managing people—“managers deal with people who take the action, so thy motivate them and they build teams and they enhance the culture and train them and do things to get people to take more effective actions.”

3. Managing information—“managers manage information to drive people to tale action—through budgets and objectives and delegating tasks and designing organization structure.”

It is in the third item—managing information—that we have the choice of building sincere business cases and creating a genuine call to action or to devolve into power politics, exerting hard, soft, and smart influence to get what we want, when we want it, and how we want it.

When information is managed through the exertion of power, it can be skewed and distorted. Information can be manipulated, exaggerated, or even buried. Therefore, it is imperative to build governance mechanisms that set a level playing field for capturing, creating, calculating, and complying with a set of objective parameters that can be analyzed and evaluated in more absolute terms.

When we can develop decision support systems and governance mechanisms that take the gut, intuition, politics, and subjective management whim out of the process, we will make better and more productive decisions for the enterprise.

Taking the Politics out of Enterprise Decision Making

What China’s Bullet Trains Can Teach Us About Governance

One of the foundations of this great country is that we believe in respecting the rights of the individual. This belief is founded on the Judeo-Christian doctrine that every life is valuable and the loss of even one life is like the loss of an entire world.

The rights of the individuals are enshrined in the Bill of Rights that establishes what we consider our fundamental human rights, such as freedom of speech, press, religion, due process, eminent domain, and many others.

The flip side of the protection of individual rights—which is sacred to us—is that it may occasionally come at some “expense” to the collective. This can occur when those individuals who may be adversely affected by a decision, hinder overall societal progress. For example, one could argue that society benefits from the building of highways, clean energy nuclear plants, even prison facilities. Yet, we frequently hear the refrain of “not in my backyard” when these projects are under consideration.

In my neighborhood, where a new train line is proposed, there are signs up and down the street, of people adversely affected, opposing it—whether in the end it is good, bad or indifferent for the community as a whole.

So on one hand we have the rights and valid concerns of the individual, yet on the other hand, we have the progress of the collective. Sure, there are ways to compensate those individuals who are adversely affected by group decisions, but the sheer process of debate—however valuable and justified, indeed—may slow the overall speed of progress down.

Why is this an especially critical issue now?

In a high speed networked world with vast global competition—nation versus nation, corporation versus corporation—speed to market can make a great deal of difference. For example, the speed of the U.S. in the arms and space race with Soviet Union left just one global superpower standing. Similarly, many companies and in fact whole industries have been shut down because they have been overtaken, leapfrogged by the competition. So speed and innovation does matter.

For example, in the field of information technology, where Moore’s Law dictates a new generation of technology every two years of so, the balance of speed to modernization with a foundation of sound IT governance is critical to how we must do business.

Fortune Magazine has an article called “China’s Amazing New Bullet Train (it leaves America in the Dust!)”

China’s new ultra-modern rail system will be almost 16,000 miles of new track running train at up to 220 miles per hours by 2020. China is investing their economic stimulus package of $585 billion strategically with $50 billion going this year alone to the rail system. This compares with the U.S. allocating only $8 billion for high-speed trains over the next three years. Note: that the high speed Amtrak Acela train between Boston and Washington, DC goes a whopping average speed of 79 mph.

One of the reasons that China’s free market is credited with amazing economic progress—for example, GDP growth this year projected at 8.3% (in the global recession)—is their ability to retain some elements of what the military calls a “command and control” structure. This enables decisions to get made and executed more quickly than what others may consider endless rounds of discourse. The down side of course is that without adequate and proper discussion and debate, poor decisions can get made and executed, and individuals’ human rights can get overlooked and in fact sidelined. (Remember the shoddy school construction that resulted in almost 7000 classrooms getting destroyed and many children dying in the Earthquake in China in May 2008?)

So the question is how do we protect the individual and at the same time keep pace—and where possible, maintain or advance our societal strategic competitive advantage?

It seems that there is a cost to moving too slowly in terms of our ability to compete in a timely fashion. Yet, there is also a cost to moving too quickly and making poorly vetted decisions that do not take into account all the facts or all the people affected. Either extreme can hurt us.

What is important is that we govern with true openness, provide justice for all affected, and maintain a process that helps—and does not hinder—timely decisions action.

We cannot afford to make poor decisions—these are expensive—nor do we have the luxury of getting caught up in “analysis paralysis.”

Of course, there are many ways to approach this. One way is to continue to refine our governance processes so that they are just to the individual and agile for our society by continuing to simplify and streamline the decision process, while ensuring that everyone is heard and accounted for. Recently we have seen the use of new information sharing and collaboration technologies, like those provided through social media—wikis, blogs, social networks and more—that can help us to do exchange ideas and work together faster than ever before. Embracing these new technologies can help us to pick up the pace of the vetting process while at the same time enabling more people than ever to participate.

Perhaps social media is one of the only things faster than China’s new bullet trains in helping us to progress how we do business in the 21st century.

What China’s Bullet Trains Can Teach Us About Governance

6 CIO Tools for Managing IT Risk

“The consequences of not managing risk have hit Americans square in the jaw.”-- Government Executive magazine, March 2009

Too often CIOs see themselves very literally as managing IT. What they need to do is manage risk along with all of the other key leadership issues such as innovation, information-sharing, collaboration, and so on.

Context

The IT environment today is part of a larger social, political, and economic context that is more fraught with risk than ever. The mortgage meltdown, the financial crisis, job losses, volatility in commodity prices (e.g. oil), and so much more—it seems like it will never end. I would add that recently we had birds collide with an airline in NY, satellites that collided in space, and submarines that collided from France and the U.K. Oh, let’s not forget Russia’s invasion of Georgia and the terrorist attacks in India in November that killed at least 173 and wounded 308 and the Asian Tsunami in 2004 that killed over 225,000 people from 11 countries.

This is scary beyond belief!

Is G-d punishing us, teaching us, ignoring us?

Expectations

Whatever is going on, people are crying out for help--they are praying, and they are also turning to their government for “recovery” (as in the Recovery Act), “bailout” (as in taxpayer bailout), “relief” (as in the Troubled Asset Relief Program). The CIO is operating in an environment in which risk management is increasingly something that the average citizen expects from their leaders (and IT is not immune):

--“Citizens are increasingly calling on government to prevent bad things from happening and to ride in to help when they do.” (Donald Kettl).

--“American want life to be less risky…[and so] without realizing it, federal officials are risk managers at their core.”

--“The public, not only demands that the government manage the consequences of risk, but that it deals with problems before they turn into catastrophes. Merely reacting to risk is eroding the people’s trust in government.”

Challenges

While risk management is clearly a critical need, it is also more difficult than ever, for the following reasons:

--Pace and impact—“the problem now is the rapid pace of the challenges—that whatever it is that happens punishes and punishes instantly.”

--Scope—“’we obviously don’t want to get to a state where the government is running everything.’ But with no clear definition of the limit, the number of public risks the government should manage appears endless.”

In my opinion, cost is a huge factor as well. Just the financial crisis so far has cost us trillions of dollars and added to our debt probably for generations to come, and at a time when we are already on the brink with unfunded social security and Medicare liabilities for the baby boomers that are quickly nearing retirement and is feared will overwhelm the system. How much more financial burden can the system take before there are dire consequences?

Framework

There are no easy answers to these trying times or to how we manage the incredible risk that we seem to face virtually every day. However, there are three common approaches to risk management set forth by Moss:

--Reduce it (or eliminate it, if possible)

--Spread it

--Shift it

We often reduce risk, by having a backup plan (such as in IT having backup and recovery), and we mitigate risk by spreading or shifting it (such as through insurance policies or government social programs, and so forth).

6 Tools for CIOs

These lessons in risk management are critical to professionals in information technology, a field that is always in rapid transition with changing products, skill sets, and practices and where the scope of IT impacts almost everything we do (from online finance, health IT, e-commerce, robotics, and more). And where the price of keeping up with Jones in technology is does not come cheap to any organization these days.

In IT, where more than half of projects are over budget or behind schedule and many end up cancelled all together, we need to manage project risk. Here is a suggested toolkit for CIOs to do so:

--First, we need an architecture plan to ensure that we are aligning to business requirements and complying with technical requirements. This helps reduce the risk that we are doing IT the “wrong” way.

--Second we need to have sound IT governance to manage the selection of our investments, the control of cost, schedule, and performance, and the evaluation for lessons for the future. This helps reduce and spread the risk that we are doing the “wrong” IT investments.

--Third, we need solid project management to guide projects from initiation through close out in a defined, repeatable, and measureable way. This helps reduce the risk that we doing projects the “wrong” way.

--Fourth, we need robust IT security that protects our data from manipulation, interception, interjection, or other malice. This helps reduce and spread the risk of our IT working “wrong”.

--Fifth, we need adept customer relationship management so that we are fully engaged with our customers in building solutions that meet their needs and solves their business problems. This helps spread and shift the risk that we are managing our IT customers the “wrong” way.

--And sixth, and not least, we need to focus on our human capital to ensure they have the leadership, motivation, tools, and training to perform at their peak. This helps reduce and spread the risk of human error.

Together, these six CIO tools are the keys to the kingdom when it comes to managing IT risk and we can never take risk management for granted.

6 CIO Tools for Managing IT Risk

Disruptive Technologies

When companies get cozy, the marketplace gets innovative and from out of nowhere...a disruptive technology upends things.

We've seen this happen countless of times in big ways.

In the auto industry, 50 years ago neither GM nor Ford would have ever dreamed that they would lose their virtual monopoly on the U.S. auto industry to foreign car companies that would dislodge them with compact vehicles and hybrid engine technologies.

More recently in the music industry, Apple seized the day by combining functionality, stylishness and price on their iPod player with an accessible online iTunes music store.

More generally, the whole world of e-Commerce has stolen much of the show from the brick and mortar retail outlets with internet marketing, online transaction processing, supply chain management and electronic funds transfer.

Now, another disruption is occurring in the computer market. For years, the computer industry has made every effort to provide more raw computing power, memory, and functionality with every release of their computers. And Moore’s law encapsulated this focus with predictions of doubling every two years.

Now, on the scene comes the Netbook—a simpler, less powerful, less capable computing device that is taking off. Yes, this isn’t the first time that we’ve had a drive toward smaller, sleeker devices (phones, computers, and so on), but usually the functionality is still growing or at the very least staying the same. But with Netbooks smaller truly does mean less capable.

Wired magazine, March 2009, states “ The Netbook Effect: Dinky keyboard. Slow chip. Tiny hard drive. And users are going crazy for them.”

How did we get here?

“For years now, without anyone really noticing, the PC industry has functioned like a car company selling SUVs: It pushed absurdly powerful machines because the profit margins were high, which customers lapped up the fantasy that they could go off-roading, even though they never did.”

So what happened?

“What netbook makers have done is turn back the clock: Their machine perform the way laptops did four years ago. And it turns out that four years ago (more or less) is plenty.”

“It turns out that about 95%...can be accomplished through a browser…Our most common tasks—email, Web surfing, watching streaming videos—require very little processing power.”

The netbook manufactures have disrupted the computer market by recognizing two important things:

1. Computer users have adequate computing power for their favorite tasks and what they really want now is more convenience and at a price that says buy me.
2. Cloud computing is no longer an idea full of hot air, but it is a technology that is here now and can do the job for consumers. We can get our applications over the web and do not have to run them on our client machines. We can afford to have computers that do less, because the cloud can do more!

The result?

Foreign companies are running away with the Netbook market. “By the end of 2008, Asustek had sold 5 million netooks, and other brands together had sold 10 million…In a single year, netbooks had become 7 percent of the world’s entire laptop market. Next year it will be 12%.”

“And when Asustek released the Eee notbook, big firms like Dell, HP, and Apple did nothing for months.” They were taken off guard by miscalculation and complacency.

The future?

Of course, the big boys of computing are hoping that the netbook will be a “secondary buy—the little mobile thing you get after you already own a normal size laptop. But it’s also possible, that the next time your replacing an aging laptop, you’ll walk away into the store and wonder, ‘why exactly am I paying so much for a machine that I use for nothing but email and the Web?’ And Microsoft and Intel and Dell and HO and Lenovo will die a little bit inside that day.”

Implications for CIOs?

• End complacency and always be on the lookout for disruptive technologies and ways of doing business. There is always a better way!
• Hardware becomes a commodity over time and supplying the infrastructure for the organization is moving the way that electricity generation did at the turn of the 20^th century—to outside vendors that can do it more effectively and efficiently.
• Cloud computing means that commonly used software applications are available over the internet and can be provide the foundation business functionality for the organization.

The important future value add from the Office of CIO is in IT strategy, planning, governance, and mission-focused solutions. We need CIOs that are true leaders, innovative, and focused on the business and not just on the technology.

Disruptive Technologies

No Choice But to Change

It’s easy to get into a rut and just follow the status quo that we’re used to.

People do it all the time. It’s doing what we know. It’s comfortable. It’s less challenging. It feels less risky. It doesn’t “cause waves” with various stakeholders.

Don’t we often hear people say, “don’t fix it, if it ain’t broke”?

Here’s another more arrogant and obnoxious version of the anti-change sentiment: “don’t mess with perfection!”

And finally, the old and tried and true from the nay-sayer crowd: “we tried that one before.”

Unfortunately, what many of these die-hard obstructionists fail to acknowledge is that time does not stand still for anyone; “Time marches on.” Change is a fact of life, and you can either embrace it or make a futile attempt to resist.

If you embrace it and moreover become a champion of it, you can influence and shape the future—you are not simply a victim of the tide. However, if you resist change, you are standing in front of a freight train that will knock you out and drag you down. You will lose and lose big: Change will happen without you and you will be run over by it.

In short, it is more risky to avoid change than to embrace it.

Therefore, as a leader in an organization, as The Total CIO, you have an obligation to lead change:

• to try to foresee events that will impact the organization, its products/services, its processes, its technology, and its people.
• to identify ways to make the most of changing circumstances—to take advantage of opportunities and to mitigate risks, to fill gaps and to reduce unnecessary redundancies.
• to develop and articulate a clear vision for the organization (especially in terms of the use of information technology) and to steer the organization (motivate, inspire, and lead) towards that end state.
• to course correct as events unfold; the CIO is not a fortuneteller with all knowing premonition. Therefore, the CIO must be prepared to adjust course as more information becomes available. Sticking to your guns is not leadership, its arrogance.
• to integrate people, process, technology, and information; the CIO is not siloed to technology issues. Rather, the CIO must look across the enterprise and develop enterprise solutions that integrate the various lines of business and ensures true information sharing, collaboration, and streamlined integration and efficiency. The CIO is a unifier.
• to institutionalize structured planning and governance to manage change. It’s not a fly by night or put your finger up to see which way the wind is blowing type of exercise. Change management is an ongoing programmatic function that requires clear process, roles and responsibilities, timelines, and decision framework.
• to bring in management best practices to frame the change process. Change is not an exact science, but we can sure learn from how others have been and are successful at it and try to emulate best practices, so we are not reinvesting the wheel.

Change is a fact of life, even if it is often painful.

I’d like to say that maybe it doesn’t have to be, but I think that would be lying, because it would be denying our humanity—fear, resistance, apathy, weariness, physical and mental costs, and other elements that make change difficult.

But while the CIO cannot make change pain-free, he can make change more understandable, more managed (and less chaotic), and the results of change more beneficial to the long term future of the organization.

No Choice But to Change

The Perilous Pitfalls of Unconscious Decision Making

Every day as leaders, we are called upon to make decisions—some more important than others—but all having impacts on the organization and its stakeholders. Investments get made for better or worse, employees are redirected this way or that, customer requirements get met or are left unsatisfied, suppliers receive orders while others get cancelled, and stakeholders far and wide have their interests fulfilled or imperiled.

Leadership decisions have a domino effect. The decisions we make today will affect the course of events well into the future--especially when we consider a series of decisions over time.

Yet leadership decisions span the continuum from being made in a split second to those that are deliberated long and hard.

In my view, decision makers can be categorized into three types: “impulsive,” “withholding,” and “optimizers.”

1. Impulsive leaders jump the gun and make a decision without sufficient information—sometimes possibly correctly, but often risking harm to the organization because they don’t think things through.
2. Withholding leaders delay making decisions, searching for the optimal decision or Holy Grail. While this can be effective to avoid overly risky decisions, the problem is that they end up getting locked into “analysis paralysis”. They never get off the dime; decisions linger and die while the organization is relegated to a status quo—stagnating or even declining in times of changing market conditions.
3. Optimizers rationally gather information, analyze it, vet it, and drive towards a good enough decision; they attempt to do due diligence and make responsible decisions in reasonable time frames that keep the organization on a forward momentum, meeting strategic goals and staying competitive. But even the most rational individuals can falter in the face of an array of data.

So it is clear that whichever mode decision makers assume, many decisions are still wrong. In my view, this has to do with the dynamics of the decision-making process. Even if they think they are being rational, in reality leaders too often make decisions for emotional or even unconscious reasons. Even optimizers can fall into this trap.

CIOs, who are responsible for substantial IT investment dollars, must understand why this happens and how they can use IT management best practices, structures, and tools to improve the decision-making process.

An insightful article that sheds light on unconscious decision-making, “Why Good Leaders Make Bad Decisions,” was published this month in Harvard Business Review.

The article states: “The reality is that important decisions made by intelligent, responsible people with the best information and intentions are sometimes hopelessly flawed.”

Here are two reasons cited for poor decision making:

• Pattern Recognition—“faced with a new situation, we make assumptions based on prior experiences and judgments…but pattern recognition can mislead us. When we’re dealing with seemingly familiar situations, our brains can cause us to think we understand then when we don’t.”
• Emotional Tagging—“emotional information attaches itself to the thoughts and experiences stored in our memories. This emotional information tells us whether to pay attention to something or not, and it tells us what sort of action we should be contemplating.” But what happens when emotion gets in the way and inhibits us from seeing things clearly?

The authors note some red flags in decision making: the presence of inappropriate self-interest, distorting attachments (bonds that can affect judgment—people, places, or things), and misleading memories.

So what can we do to make things better?

According to the authors of the article, we can “inject fresh experience or analysis…introduce further debate and challenge…impose stronger governance.”

In terms of governance, the CIO certainly comes with a formidable arsenal of IT tools to drive sound decision making. In particular, enterprise architecture provides for structured planning and governance; it is the CIO’s disciplined way to identify a coherent and agreed to business and technical roadmap and a process to keep everyone on track. It is an important way to create order of organizational chaos by using information to guide, shape, and influence sound decision making instead of relying on gut, intuition, politics, and subjective management whim—all of which are easily biased and flawed!

In addition to governance, there are technology tools for information sharing and collaboration, knowledge management, business intelligence, and yes, even artificial intelligence. These technologies help to ensure that we have a clear frame of reference for making decisions. We are no longer alone out there making decisions in an empty vacuum, but rather now we can reach out –far and wide to other organizations, leaders, subject matter experts, and stakeholders to get and give information, to analyze, to collaborate and to perhaps take what would otherwise be sporadic and random data points and instead connect the dots leading to a logical decision.

To help safeguard the decision process (and no it will never be failsafe), I would suggest greater organizational investments in enterprise architecture planning and governance and in technology investments that make heavily biased decisions largely a thing of the past.

The Perilous Pitfalls of Unconscious Decision Making

IT Planning, Governance and The Total CIO

See new article in Architecture and Governance Magazine on: IT Planning, Governance and the CIO: Why a Structured Approach Is Critical to Long-Term Success

(http://www.architectureandgovernance.com/content/it-planning-governance-and-cio-why-structured-approach-critical-long-term-success)

Here's an exrcept:

"IT planning and governance undoubtedly runs counter to the intuitive response—to fight fire with a hose on the spot. Yet dealing with crises as they occur and avoiding larger structures and processes for managing IT issues is ultimately ineffective. The only way to really put out a fire is to find out where the fire is coming from and douse it from there, and further to establish a fire department to rapidly respond to future outbreaks."

IT Planning, Governance and The Total CIO

Weapons or Troops and The Total CIO

Should the CIO focus on day-to-day operational issues or on IT strategic planning and governance issues?

From my experience many are focused on firefighting the day-to-day and putting some new gadget in the hands of the field personnel without regard to what the bigger picture IT plan is or should be.

In many cases, I believe CIOs succumb to this near-term view on things, because they, like the overall corporate marketplace, is driven by short-term results, whether it is quarterly financial results or the annual performance appraisal.

The Wall Street Journal, 30 October 2008, had an article entitled,
“Boots on the Ground or Weapons in the Sky?”—which seemed to tie right into this issue.

The debate is to which kind of war we should be preparing to fight— the current (types of) insurgencies in Iraq and Afghanistan or the next big war, such as potentially that with Russia or China.

Why are we facing this issue now?

“With the economy slowing and the tab for the government’s bailout of the private sector spiraling higher…lawmakers are signaling that Pentagon officials will soon have to choose.”

And there are serious implications to this choice:

“The wrong decision now could imperil U.S. national security down the road.”

The two sides of the debate come down to this:

Secretary Gates “accused some military officials of “next-war-itis,” which shortchanges current needs in favor of advanced weapons that might never be needed.”

In turn, some military officials “chided Mr. Gates for “this-war-itis,” a short-sighted focus on the present that could leave the armed forces dangerously unprepared down the road.”

From war to technology:

Like the military, the CIO faces a similar dilemma. Should the CIO invest and focus on current operational needs, the firefight that is needed today (this-IT-itis) or should they turn their attention to planning and governing to meet the business-IT needs of the future (next-IT-itis).

But can’t the CIO do both?

Yes and no. Just like the defense budget is limited, so too is the time and resources of the CIO. Sure, we can do some of both, but unless we make a conscious decision about where to focus, something bad can happen.

My belief is operations must be stabilized--sound, reliable, and secure—today’s needs, but then the CIO must extricate himself from the day-to-day firefighting to build mission capabilities and meet the needs of the organization for tomorrow.

At some point (and the sooner, the better), this-IT-itis must yield to next-IT-itis!

Weapons or Troops and The Total CIO

IT Planning, Governance and The Total CIO

CIOs are consumed by day-to-day tactical/operational IT issues and firefighting IT problems, and as a result, there is a lack of focus on IT planning and governance—two of the biggest problems facing CIOs today.

ISACA, an organization serving IT governance professionals, conducted a survey consisting of 695 interviews with CEO/CIO-level executives in 22 countries, and published the results in IT Governance Global Status Report 2006.

Here are some of the amazing findings from this study.

Firefighting predominates: “Organizations are suffering from IT operational problems…only 7% of the respondents experienced no IT problems at all in the previous year…Operational failures and incidents…are mentioned by approximately 40 percent of respondents.”

IT’s alignment with Business is weak: Only 56% of the organizations surveyed “understands and supports the business users’ needs.”

Strategic Planning is underrated by CIOs: “More than 93 percent of business leaders recognize that IT is import for delivering organization strategy…Somewhat paradoxically, general management perceives the importance…slightly higher than does IT management.” In fact, in the public sector, IT was viewed as a commodity versus strategically by 47% of respondents!

IT governance is lagging: “CIOs recognize the need for better governance over IT,” to align IT strategy and manage risks. Yet, “when asked if they intend to do or plan IT governance measures, only 40 percent replied in the affirmative.”

Liza Lowery Massey, who previously served as CIO of Los Angeles, says in Government Technology, 9 July 2007:

“Establishing IT governance up front is the No. 1 thing I would do over in my career. IT governance is crucial to a CIO’s sanity.

Further, Liza wrote in Government Technology, 14 April 2008:

“Now when I help my clients implement IT governance, I see the benefits firsthand. They include shrinking your IT department’s to-do list, achieving IT/business alignment, putting teeth into policies and standards, and focusing departments on business needs rather than technology. My work life would certainly have been smoother had I set up governance to address these issues instead of trying to handle them all myself.”

CIO Magazine, 1 November 2006, has an article by Gary Beach, entitled “Most CIOs Fail to Convince Top Management That IT Can Transform Business.”

In this article, Gary notes that the rate of investment in IT is half the rate of corporate profit growth, and he asks why?

Certainly, the failure to align with business, and effectively plan and govern IT is hindering CIO’s ability to succeed.

The unfortunate result, as Andy McCue reported in Silicon.com on 26 April 2007, is that “CIOs and the IT department are in danger of being relegated to the role of support function because of a lack of vision and technology innovation.”

The answer is clearly for CIOs to “stabilize the patient” and get out of firefighting mode, and allocate sufficient time, attention, and resources to IT planning and governance. Only in this way will CIOs effectively align IT with business requirements, solve genuine business problems, innovate and transform the enterprise, and fulfill the strategic role that the business is looking for from them.

IT Planning, Governance and The Total CIO

The Enlightened Enterprise and the Total CIO

The Total CIO is responsible for the strategy, operations, and governance of everything IT.

The strategy ensures that we are doing the right things and doing them the right way. It’s the CIO’s vision, goals, and objectives for developing IT solutions that meet business requirements.

The operations is providing for core IT functions like voice and data communications, information, applications, infrastructure, security, and so forth,

The governance is how we make decisions about IT. Through good governance we enhance visibility of IT requirements and projects, enable better communication and vetting, share risks, and prioritize, authorize, and control IT investments.

Architecture and Governance Magazine, Volume 4, Issue 2, has a good article titled “Bringing IT Governance from Theory to Action.” (by Davin Gellego and Jon Borg-Breen)

The problem is complexity:

“Even as technology has simplified and become almost invisible to most audiences, the complexity of maintaining technology is reaching a breaking point for information technology organizations…little time is invested between the lines of business and IT to communicate corporate goals and how technology can support these goals. The mandate is simply ‘do more with less.’”

The solution is governance:

Lines of business and IT can no longer work in their respective vacuums. This new interconnectedness means that what affects one now affects all. If problems are no longer confined to one functional area, solutions can’t be either. IT governance defines accountability and decision making and simplifies the challenges of consolidation, outsourcing, and increased visibility—ensuring IT expenditures deliver real business value.”

The traditional organizational paradigm was silos. Everyone works for their particular unit, division, line of business and so on. Each is functionally and organizationally independent. Each develops their own strategy, products and services, customer base, and so on. Each has their own profit and loss statement. Working with other divisions, conducting joint product development, sharing information or ideas, cross-selling, and other collaborative efforts are discouraged, shunned, minimized, and looked at with suspicion. It’s every line of business or man for themselves. A unit that is not “producing” gets disciplined, downsized, reorganized, spun off, or otherwise eliminated. A division head that isn’t meeting their targets is toast! (Interestingly enough, people traditionally work in a “division”—that very word connotes separation, distinctiveness, and divisiveness.)

The enlightened paradigm is cross-functional. Everyone works for the enterprise. Each unit of the enterprise is part of a functional whole. The whole is greater than the sum of the parts. Collaboration, integrated product teams, working groups, information sharing, cross selling, corporate brand, interoperability, standards, component re-use, and other unifying activities are encouraged, taught, mandated, recognized, and rewarded. Performance measures take into account not only how your division is doing, but how it is contributing to overall mission of the organization. The goals of each individual and unit are aligned to the enterprise.

In the enlightened enterprise, The CIO is not running “the IT division,” but rather is providing IT services and solutions to the enterprise. In this paradigm, the CIO requires a structured and mature governance process, so that all stakeholders have a voice at the table and can influence the decision process and ensure more successful project delivery. IT governance provides for a consistent, collaborative decision process. Governance bring business and IT subject matter experts together to communicate, make visible, align, share risks, vet, prioritize, and issue decisions.

“The most successful enterprises engage in both business and IT in investment decisions. IT governance strengthens and clarifies the connection between corporate goals and IT initiatives. And with both business and IT aware of the strategic benefits of a given initiative, the initiative has a far greater chance of company-wide adoption and success.”

In the enlightened enterprise, “no line of business or IT department is an island. What affects one, affects all.” And in this environment, it is The Total CIO who can reach out across the enterprise bringing a unifying IT strategy, a sound, reliable, secure, and cost-effective operations platform, and a governance process to communicate, make visible, share risks, and make better decisions through the participation of all the pertinent IT stakeholders.

The Enlightened Enterprise and the Total CIO

The Outlook for Enterprise Architecture

Enterprise architecture in its current form is due for a review by the next administration—McCain or Obama.

Will EA be the same under the next president?

Government Executive Magazine, 15 September 2008, discusses “seven election-proof initiatives likely to go on in some form or another no matter who wins in November,” and enterprise architecture is one of those.

The Federal Enterprise Architecture is looked at as a mixed bag by the Office of Management and Budget.

On one hand, it has been “a jargon-filled, technical IT effort, and one of the toughest for the Bush administration to tackle.”

On the other hand, “prognosticators say it will survive in some form because it has been a useful planning tool for chief information officers.”

Indeed EA is a challenge for any organization—planning and driving business and technology change, breaking down organizational and functional silos, pushing for information sharing, interoperability, and reuse, mandating technical standards and preferred products, insisting on performance measurement, and enforcing compliance of IT security, privacy, Section 508, records management—EA is even more taxing for OMB which is looking to do these things across the entire federal government!

What is undeniable is that enterprise architecture plays a vital function in our organizations!

The vice president of FedSources, Ray Bjorklund, states: “As painful as an architecture is to create, it is really very helpful.”

Glenn Schlarman, former chief of Information Policy and Technology Brach at OMB, states “I don’t give architecture in its current state much of a chance of survival because it’s too complex. If they could distill it down to a couple of salient points and wrap it with security then maybe it can be saved.”

While the Schlarman’s points may sound harsh, I actually agree with him on the unnecessary complexity. This is a core tenet of User-centric Enterprise Architecture. As Schlarman says, we need to “distill” the message and clearly present it to our organizational decision makers. It needs to be useful and useable to them!

EA will not only be saved, but will continue to thrive. As global competition continues to heat up, the pace of technology change spins faster and faster, and constrained resources continue to press us to do ever more with ever less, our organizations will be forced to respond in strength. Organization’s will continue look to enterprise architecture to better plan business process improvement and IT enablement and to govern sound investments and change. User-centric EA will keep the efforts focused on valuable and actionable architectures.

The Outlook for Enterprise Architecture

“Postmodern IT” and Enterprise Architecture

We all want to know where IT is going in the future, what the trends are, so we can meet our future in it head-on.

CIO Magazine, 1 May 2006, had an article called, “The Postmodern Manifesto”, predicting what the postmodern IT department will look like. 2+ years have passed (a long time in IT according to Moore’s Law), but these IT trends remain solid and true.

• Business innovation—“IT will assume responsibility for business innovation across the company. IT has spent the better part of 40 years automating business processes…IT’s role in process innovation will only increase…’we’ve gone from being the engineers of new processes to being the movers of innovation across the company,’” says Judith Campbell CIO of New York Life.

This view is consistent with the Federal Enterprise Architecture Practice Guidance, November 2007 that states: “Results-oriented architecture is developed with the context of the Performance Improvement Lifecycle broken down into three-phases: ‘Architect’, ‘Invest’ and ‘Implement’. Each lifecycle phases is comprised of tightly integrated processes which combine to transform an agency’s top-down strategic goals and bottom-up system needs into a logical series of work products designed to help the agency achieve strategic results.”

Bottom line is the IT function and enterprise architecture in particular is viewed as the discipline for business process reengineering, improvement, and the introduction of new technologies, and the measure of success is results—cost-savings, cost-efficiencies, and performance improvements.

• Federated governance—“IT governance will settle on the federated model and shared services…CIO’s have come to a consensus on the overall model for IT: a mix of centralized and local services known as the federated model, which is governed centrally by a small headquarters staff that gives varying degrees of autonomy to IT groups allied with different business units, functions or geographies.”

This is consistent with the need for IT organizations to be interoperable, secure, share information and services, and be cost effective, yet at the same time stay nimble and allow “unique resources to remain local.”

• Return on Investment (ROI)—“IT ROI will become even more difficult to prove…Tacit IT is not about automation…Tacit IT is all about decision support, knowledge management, business intelligence and artificial intelligence…And the pressure will be on vendors to make technology think rather than automate.”

IT has always been challenged in measuring return on investment (or in the government return on mission), but it is especially difficult when it comes quantifying the return on an abstract called information.

This performance measurement challenge is manifest in the field of enterprise architecture as well.

At the 1105 Government Information Group Enterprise Architecture Conference in DC this past week, Keith Herrington of the Defense Intelligence Agency (DIA) presented the following:

“• Observation: Within the Federal government there is no observed link between the maturity of the enterprise architecture effort and the performance of the enterprise as a whole.”

I too have personally seen many agencies struggle to quantify the results of their IT and architecture programs and hence, anecdotal evidence, unfortunately continues to prevail as the default “measurement.”

• Transformation—“CIOs will have to step up…’the concept of providing a secure, stable infrastructure is merely the price of admission,’ says Jeffrey Campbell, CIO of BNSF Railway. ‘[to survive], you have to be a transformational CIO.’”

So true! According to an article in Architecture and Governance Magazine, Volume 3, Issue, “Metrics that Matter”: “IT should measure three types of attributes in what is essentially a modified form of the Balanced Scorecard approach to measure performance and change management. Those three attributes are: strategic value, project management effectiveness, and operational effectiveness. Ironically, while the first two matter the most to executives in most cases, IT typically focuses on the third area, which executives only care about if the IT department has a history of failure and thus needs to be closely monitored on the basics.”

Yes, we need to make sure the IT computer and server “lights” stay on, the network is up and the communications are available, but more importantly we need to take IT to the next level, to strategically partner with the business to architect, govern, and achieve genuine, measureable ROI and transformation!

“Postmodern IT” and Enterprise Architecture

Toyota and Enterprise Architecture

MSNBC on 24 April 2007 reported: “through a shrewd combination of investing in environment-friendly vehicles, offering sharp new models and wooing drivers with brand power, Toyota has toppled GM from the top global sales spot for the first time ever.”

Harvard Business Review, June 2008, reports on “Contradictions that Drive Toyota’s Success.” (by Hirotaka Tekeuchi, Emi Osono, and Norihiko Shimizu) “Toyota Motor Corporation has become one of the world’s greatest companies because of Toyota Production System (TPS)…enables the Japanese giant to make the planet’s best automobiles at the lowest cost and to develop new products quickly.”

What is Toyota’s secret?

Reaching for the stars—Toyota sets “near-unattainable goals.” For example, “consider the company’s strategy: Meet every customer need and provide a full line in every market.” This runs counter to Michael Porter’s strategy of “choosing what not to do.” Additionally, Toyota’s goals are “purposely vague” to force exploration, innovation, and collaboration to meet them.

Consider the goals stated by Toyota’s president, Katsuaki Watanabe:

“Build a car that makes the air clean [not just less dirty], prevents accidents [not just reduces accident’s], makes people healthier and happier when they drive it [not just a car that gets you from place to place], and gets you from coast to coast on one task of gas [not just incrementally improving gas mileage].”

Have you ever seen anything like these goals in your organization’s strategic plans?

I highly doubt it. But imagine how your enterprise would change culturally and competitively overnight if you did!

Of course, Toyota’s strategy of Kaizen—continuous improvement—is part of their unending desire to succeed and not be satisfied. They view improvement as not something you achieve, but as something you continuously strive for.

We can apply Toyota’s reach goals and Kaizen philosophy to making enterprise architecture planning more effective too. We need to stop conveniently “planning” on things we are working on now or for which we have a head-up that are just around the corner. Sure it’s easy to plan with 20-20 hindsight and it helps us to achieve our unit and individual performance plans and gets inappropriately recognized and rewarded, but this is really a short term outlook and not one that will drive organizational success. Instead, like Toyota, we need to set goals that are stretch goals for the organization, and which make us go beyond our comfort zones, so that we can truly work to break out of the box and differentiate ourselves and our organization from the status quo and the limits of our imagination. Setting the bar truly high and then not settling for anything less than continual improvement is a long term strategy for success and one that needs to be genuinely encouraged and rewarded.

Here’s another important aspect of Toyota’s success:

Employees are highly valued— “Toyota views employees not just as pairs of hands, but as knowledge workers.” Ideas are welcome from everyone up and down the organization. “Employees have to operate in a culture where they constantly grapple with challenges and problems and must come up with fresh ideas…when people grapple with opposing insights, they understand and come up with effective solutions.” In fact, at Toyota, “employees feel safe, even empowered to voice contrary opinions and contradict superiors.” There is a culture of open communications, and a tremendous value is placed on personal relationships and networking. Additionally, value is placed not on results, but for “how much trust and respect the manager has earned from others,” and “refusing to listen to others is a serious offense.”

This concept of valuing employees and listening to them can shed light on how we need to develop effective enterprise architecture and sound governance; whereby, we provide all major stakeholders a voice at the table--to participate in and influence planning, decision making, and innovation. This is the way to achieve higher returns and lower risks. We need to stop planning and making decisions on the whims of the few or based on gut, intuition, and politics. We must cultivate information sharing, collaboration, and elevate people as the quintessential element of our enterprise’s success.

“Toyota’s culture…places humans, not machines, at the center of the company. As such, the company will be imperfect, and there will always be room for improvement.”

People are flawed, but our endeavors make us great!

Toyota and Enterprise Architecture

Reorganizations and Enterprise Architecture

There is an interesting article in Harvard Business Review, June 2008, on “The Secrets to Successful Strategy Execution.” (Gary Nielson, Karla Martin, and Elizabeth Powers)

The article states: “Research shows that enterprises fail at execution because they go straight to structural reorganization and neglect the most powerful drivers of effectiveness—decision rights and information flows.”

In fact, “employees at three out of every five companies rated their organization weak at execution.”

Hence, the simple answer is the infamous reorganization.

Enterprises are constantly reorganizing (AKA “another REORG”). The reorgs are supposed to make the organization more efficient and effective, but more often than not, it results in instability, confusion, a reshuffling of bodies and a movement of lines on the org chart without any substantial changes to people, process, or technology. At the end of reorg, leadership falsely claims success and starts the process again, of course collecting their mega sized bonus along the way.

What a crock and what a disservice to our customers, employees, partners, and investors.

“Structural measures [reorgs]…seems the most obvious solution and the changes the most visible and concrete…but in so doing, address only symptoms of dysfunction, not its root causes.”

So should we stop reorging?

No. “structural changes can and should be part of the path to improved execution, but it’s best to think of it as the capstone, not the cornerstone…research show that actions having to do with decision rights and information are far more important.”

It sort of obvious, but most organizations still don't get that strategic execution depends on having a good plan to begin with and a sound governance structure to manage it!

Decision rights = sound governance.

Here’s how we should implement decision rights/governance to be more effective at implementing strategy:

“Everyone has a good idea of the decisions and actions for which he or she is responsible.”

“Once decisions are made, they are rarely second-guessed.”

“Managers up the line get involved in operating decisions

“It is more accurate to describe the culture of this organization as ‘persuade and cajole’ than ‘command and control.’”

“The primary role of corporate staff here is to support the business units rather than to audit them.”

Information flows = sound enterprise architecture planning.

Here’s how we should implement information flows/EA to be more effective at implementing strategy:

“Important information about the competitive environment gets to headquarters quickly [and the information plans on how to respond get out from headquarters quickly].”

“Information flows freely across organizational boundaries.”

“Field and line employees usually have the information they need to understand the bottom-line impact of their day-to-day choices.”

“Line managers have access to the metrics they need to measure the key drivers of the business.”

The research seems to clearly demonstrate the EA and governance imperative. Even more importantly though, pure common sense dictates that:

We set a strategic direction—that is through our business strategy and enterprise architecture plans.

AND

We enforce it—that is our governance (for authorizing, prioritizing, funding, controlling, and assessing programs and projects).

Reorganizations do not supplant the need for good planning and governance. Without good planning and governance, reorganizations are leadership’s feeble attempts to do something, anything to change the status quo, and often they result in short-term gains only (and sometimes they do not even do that and result in more harm than good). However, a reorganization that is driven by solid planning and governance can have significant and lasting impact for our transformation efforts.

Reorganizations and Enterprise Architecture