Monthly Archives: June 2008

Some Suggestions for a “CIO 2.0″


A few days ago I posted about a client situation where the CIO had a strong sense of the possibilities and impact that Web 2.0 could have for his organization and the firm as a whole, but the small team he appointed to figure out the specifics quickly fell back on their traditional (and very well-honed) IT competencies.  This led to them thinking about:

  • the business problem to be solved (rather than potential opportunities to surface)
  • projects to be framed out (rather than experiments to find and stimulate, communities to seed)
  • deliverables to be created (rather than behaviors to be fostered)

I’ve been talking with that CIO, and wanted to share some of the suggestions we’ve been discussing.

  1. Expand the collaboration/innovation team into an experimental “Collaboration/Innovation community” by pulling in people from across the IT organization – try to get some Gen Y’s, people from different levels, and from different groups and geographies.  As soon as they feel comfortable, reach beyond IT into the business, customers and partners.  Don’t worry about getting the community too big – some people will quickly fall by the wayside – that’s OK – others will engage.  Anticipate that 30% will stick with it, so invite 3 times as many as you feel you’d like to have in the experimental community.  Make it clear that it’s an experiment.  Resist the temptation to call a meeting or set up conference calls.  You may need a call or two to get it started, but move as quickly as possible to electronic collaboration.
  2. Either before step 1, or through step 1, come up with a description of what success with collaboration/innovation would look like.  Don’t obsess about metrics – start in terms of behaviors.  For example:
    • People know how to reach out globally across the company, and do so all the time – to find answers, solve problems, test and share ideas.
    • Everyone knows about the latest activities across the company, and contributes to these via the collaboration platform.  A variety of special interest communities surface and morph across the company.  Some are work related – e.g., community of people with interest in SOA, predictive markets, etc. and these help us more quickly understand, socialize and capitalize on evolving technologies.  Others seem to be unconnected to our work – but help people get to know each other, trust each other, and eventually this benefits our work. 
  3. Once you’ve brainstormed a list of behaviors you’d like to see, identify ways these behaviors would benefit the company. Again, this is not about defining “exit criteria” or “project milestones.”  This is about helping clarify what we mean by collaboration and innovation – what it would look like and feel like, and how it might benefit the company – to get people excited and involved.
  4. Find the experiments/examples of collaboration and innovation that are already going on across the company.  Apply the appreciative inquiry technique to understand how and why the “experiments” worked/are working – what were the conditions for success?  Then look for ways to recreate/expand upon these conditions.
  5. Identify opportunities for new experiments and ways to seed them.  Assume one in ten will succeed, but the ones that don’t are also successes if you can learn from them why they did not work, or perhaps tweak them and try them again.
  6. Look at web sites such as mystarbucksidead.com and Dell’s ideastorm and see if there are ways this type of approach can work for you.
  7. Find good opportunities to broaden your use of the collaboration hub with wiki’s, tagging, polling, voting, predictive markets, etc.
  8. Members of the IT leadership team should be visible modeling the types of behaviors you’d like to see.  As a beginning, you should (all or most of the team) become more active bloggers in the company.  Try to get to a state where people feel drawn to the collaboration hub on an almost daily basis in order to keep up with what is going on.  Perhaps do this against a specific goal of reducing email traffic by 25%.

The specific recommendations here are not really the point – the key point is getting the immediate team to move beyond their typical “IT project” thinking (top down, structured, lots of rigor and formality) to a more emergent, middle out, and unstructured approach to “jiggling the system” (as my hero Jerry Weinberg used to say) and letting stuff happen.

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Mark Your Calendars – September 18-19, Chicago, Il


I am very excited about an upcoming event we are holding in Chicago mid-September.  I’ve been busily collaborating with an internal team here at nGenera, and with a Professor from Emory University on creating an event designed for senior business, IT and HR executives.  The session, entitled “Unleashing the Core, Innovating the Edge” explores the thorny subject of innovation in today’s businesses. It will open with a dinner on September 17, then continue through lunch on the 19th. It will be at the magnificent The Ritz-Carlton, Chicago, Illinois.  We’re going for an innovative format and stellar presenter/facilitators including Enterprise Irregular Susan Scrupski, our own Dr. Nicholas Vitalari, Professor Gregory S. Berns, MD PhD, the Distinguished Chair of Neuroeconomics at Emory University, where he directs the Center for Neuropolicy.  Greg’s new book “Iconoclast. A Neuroscientist Reveals How to Think Differently” is actually being published September 29, but the publisher has offered to get advance copies to us for the session.  We will also have some of my friends from The Second City (improvisation and comedy) bring us lessons from the performing arts through experiential exercises.

Here’s the context. For the last decade or two, companies have been establishing and automating their operating models. Enabling all this process automation is a complex and sophisticated infrastructure comprising processes, systems, data centers, communication networks, data storage, and so on, plus a large group of technology professionals charged with building and running this infrastructure, and with defining and automating the company’s business processes. We refer to this collection of processes, systems and infrastructures that have evolved over many years as “The Core”.

While this has been going on, a technology revolution has been taking place – one that took seed in DARPA and the academic communities in the form of the Internet and World Wide Web, and that has mushroomed into what is now referred to collectively as Web 2.0. Tools such as social networks and collaboration hubs can liberate the workforce from the constraints of legacy communication and productivity tools like email. They can provide business managers with access to the right information at the right time, anywhere, through a web of inter-connected applications, services and devices. The collective “wisdom of the crowd” can now be easily tapped, with the promise of a huge competitive advantage in the form of increased innovation, productivity and agility. We refer to this emerging suite of Internet-based capabilities as “The Edge”.

The Core is the known. It is designed and managed for operational excellence. When it is improved, the business calls it business process improvement and IT calls it maintenance. The Edge is the unknown. It is where experimentation is encouraged and innovation occurs. Companies with strong Edge capabilities have an incredible knack for flourishing along the edge of the markets they serve, the products they create, the services they offer, the geographies in which they participate, or the resources from which they draw. The Apple iPod, iTunes, and iPhone are all innovations occurring along the edge of what was the Apple core market (excuse the pun!). Perhaps more than any other company, Google has learned how to detect, attract, and cultivate “edgy” people – people who creatively dream up new ways to solve problems that result in improved internal effectiveness or external service offerings. The Edge can stimulate and refresh the Core, keeping it vibrant and relevant in the marketplace.

Unfortunately, the very constructs necessary to establish a healthy Core become sticking points in creating a thriving Edge – something I’ve posted on frequently in this blog. Core’s are locked down, standardized, secured, designed to “prevent bad change.” The Edge must be open, agile, innovative, and designed to “foster good change.” How can a traditional company leverage the emerging Web 2.0 technologies? How can you unleash the Core by Innovating the Edge?

I’ll post more about the agenda, and even a link for folk to sign up for the event – please consider this an early notification.

But there’s no business problem here….


I recently had an interesting conversation with a consulting client.  The CIO has a strong sense that Web 2.0 is going to be important to the business, and therefore to the IT organization.  He can’t put his finger on why, or what it all means, or exactly what to do about it, but his instincts tell him it’s too important to ignore, and he’s invested time, effort and some money pulling his top IT leaders together for an off-site to raise awareness and explore options and possibilities.

One IT leader raised the question, “What’s the business problem we’re trying to solve here?”  (The CIO was not present for this interchange.)  Several of the other IT leaders latched onto this with a general consensus that there was no particular business problem to be solved, and therefore the topic of Web 2.0, while interesting, was not especially relevant, and certainly not urgent.  And given that everyone was busy, it was probably best to declare the off-site event a success and move on.

This is a huge pity and misses a crucial point.  I’ve blogged often on this site about the Business-IT Maturity Model.  One way of thinking about the progression of business demand maturity, and the corresponding progression of IT supply maturity, is that:

  • Level 1 is about improving business efficiency – in other words, enabling the business.
  • Level 2 is about improving business effectiveness – in other words, solving business problems.
  • Level 3 is about innovating the business – in other words, finding business opportunities.

I realize that these homilies can sound trite and simplistic, but I strongly believe that underneath those simple-minded expressions are some important truths.  If you look at Web 2.0 through the lens of waiting for business problems to appear, you will probably fall short in leveraging powerful opportunities.  I’m convinced that these types of technologies, almost by definition, drive opportunity from the outside-in, and from the bottom-up.  You have to facilitate their use, empower their users, and watch carefully to see what happens.  This is a very different paradigm from the traditional IT world of business enablement or business problem solving.

This “waiting for the business problem to surface” is one of the many reasons that is causing the take-up of Web 2.0 technologies in mainstream businesses to be slow.  As long as the IT organization is the gatekeeper, and as long as that organization is waiting for the business problem to be solved to become clear, we are at an impasse.

 

IT Infrastructure, Options, and Cost-Benefit Analysis


There was a piece on National Public Radio this morning that got me thinking about IT infrastructure funding.  I think this is especially relevant as companies consider Web 2.0 technologies and ask the inevitable question – “What’s the value proposition?”  It’s a great question, unless that question gets morphed (as it so often does) into “What’s the return on investment?”

The NPR article was about the levees along the Mississippi River.  Apparently, after the huge floods in 1993, a few Midwestern states got together with the Army Corps of Engineers to draw up a plan to build higher levee walls.  Unfortunately, the plan, which could have helped limit the amount of flooding the region is now seeing, ranked the project low on the Army Corps of Engineers’ priority list, because a cost/benefit analysis showed an economic benefit to cost ratio of less than 10%.  This was due to the combination of high cost (over 1,000 miles of river bank) and the fact that the land was already protected by existing levees, so the new plan would have only added protection when the water got really high (which, of course, has just happened, and in retrospect, the levee work would have been well justified!)

As someone on the news piece pointed out, this is a classic error of trying to use cost/benefit analysis for projects that are infrastructural in nature.  This has been exactly my experience with IT infrastructure.  When IT infrastructure (or any type of infrastructure) works well, it is invisible, so nobody wants to fund improvements to it.  This is exacerbated by the fact that the economic benefits for a given IT infrastructure investment, while potentially significant, are often indirect and/or intangible.  There is extensive research on this phenomena, and a literature review shows that traditional financial evaluation techniques, such as NPV, undervalue IT infrastructure.

There are a variety of preferable techniques such as Real Options that include the effect of project inter-dependencies and recognize that an IT infrastructure project may have a negative NPV when evaluated on stand-alone basis, but the project nonetheless can provide an option to launch future value-added capabilities. Unless the option value of this flexibility is taken into consideration, it is impossible to accurately represent the strategic business value, or justify, strategic investments in IT.  A related technique is the Value Net approach to estimate project benefits based on interactions between stakeholders. A Value Net is a map that links a firm to various player segments: customers, competitors, suppliers and partners.

For all of the research on this topic (see, for example, the Journal of Information Technology Management’s “Justifying Investments in IT” by Sasha Dekleva at DePaul University for an excellent treatment of this topic) I find IT management surprisingly lackadaisical on their approach to IT infrastructure funding, with the result that infrastructure is misunderstood, undervalued, and therefore underfunded.

All this, of course, course, depends upon your definition of IT infrastructure.  I still find that Professor Peter Weill’s definition works most effectively:

“The base foundation of budgeted-for IT capability (both technical and human), shared throughout the firm as reliable services, and centrally coordinated.” 

This gets at the key distinctions of “foundational”, “budgeted-for”, “technical and human”, “shared throughout the firm”, “services”, and “centrally coordinated” (note, not necessarily centrally-managed.  This definition, together with appropriate justification techniques such as Real Options and Value Net approaches, together with a strong partnership between the CIO and CFO, can lead to a more robust understanding of the role of IT infrastructure, and a more valuable IT capability for the firm.  By the way, these techniques help not only in that they might get an investment approved (and/or appropriately prioritized), but that they ultimately improve value realization by clarifying the cause and effect chains between IT infrastructure investments and the value they enable.

The Other “Seat at the Table”


One of the great clichés of the business-IT relationship is “having a seat at the table.”  This is a cute, shorthand way of describing a business-IT relationship where IT is properly represented in the strategic leadership of the business (be that a business unit or the enterprise).  When we see this condition working well, we often observe characteristics such as:

  • Business strategy formulation and IT strategy formulation are converged – business strategy is informed by IT possibilities and vice versa.
  • Senior representatives of the IT function are part of the business unit (or enterprise) leadership team.
  • There are shared goals, shared rewards and shared consequences for business and IT leaders – creating what I’ve referred to in previous posts as a “confluence” between business and IT.
  • Business leaders display high IT literacy, and IT leaders display high business literacy – they can talk a common language that is crucial to their achieving common goals.
  • There is joint accountability between business and IT functional leadership for realizing value from business-IT investments.
  • While there are “pure IT” projects and programs (for example, IT infrastructure upgrades), most initiatives are managed as business initiatives – with a strong IT content.

This is all (hopefully!) familiar territory – nothing new here.  If this is not the way things work in your organization, you need to understand why, what it will take to begin moving to this kind of business-IT relationship, and take actions to move in that direction.  By the way, “business leadership just doesn’t get it!” is not an acceptable reason – it is incumbent on all IT professionals to take every opportunity to make sure the business “gets it.”  If that isn’t happening, you need to get back at it, and figure out different ways!

But there is an implication of the “seat at the table” that is less familiar, less frequently demonstrated, and yet an important part of driving business-IT maturity.  If we know what it means (and have achieved) an IT seat at the business table, isn’t there a corresponding and complementary “business seat at the IT table”?  I don’t think it’s especially helpful to think of this simply as the ‘converse’ of the IT seat at the business table.  Certainly, business needs to be fully and appropriately represented in IT governance – in fact, I’ve always preferred to think of this and enact it as business-IT governance, rather than IT governance.  Most (though not all) IT decisions are business decisions.  (See Peter Weill’s excellent November 2002 Harvard Business Review Article “Six IT Decisions Your IT People Shouldn’t Make“.)

Rather I think the “business seat at the IT table” its a way of recognizing and realizing the business responsibilities associated with good IT stewardship.  For example, responsive, contemporary IT leadership takes a more trusting approach to employee computing.  Rather than assume that employees are irresponsible, crooked and ignorant – looking for every opportunity to leak company secrets, bring viruses and worms past the firewall, and burn up CPU cycles and bandwidth in purely frivolous ways, the enlightened IT leader starts with the assumption that employees, given access to the right information in the right ways, are in fact, responsible, honest, informed and hard working.  (If they are not all these things, then that is a management issue to be promptly dealt with!)  This type of Theory Y over Theory X approach may well be essential to unlocking the power and potential of Web 2.0 and Enterprise 2.0.

However, the other side of the coin is that employees must behave responsibly, managers must pay attention to and manage inappropriate behaviors, with clear consequences rigorously enforced, with no exceptions.  This is what I think of when I think about “the business seat at the IT table.”  Think of it, if you will, as a new business-IT compact that will ultimately help free us from the productivity-draining “locked down” IT environments we’ve had to live with for the last few years, and open up the tremendous possibilities becoming available to humankind.  The world certainly seems to be in need of a positive shot of collaboration right now!

The Creeping Insanity of Security Questions


Excuse me if I deviate for a moment and go off on a rant, but I’ve had it up to my proverbial eyeballs with the creeping insanity that’s gripped people responsible for protecting us from would be evil-doers on websites.

Due to changes in my home technology set up as well as changes to my company email address, I spent part of the weekend updating my personal details on various websites – airlines, banks, etc.  It’s one thing to be asked, “What’s your mothers maiden name?” and similar choices – unequivocal, known and already remembered (for most of us).  It’s quite another to ask questions like, “Where did you meet your spouse or partner?”

Take my case – we met at school some 45 years ago.  Should I set the answer as “school”, “high school”, “Vyners High School” (the name of the school) or “London” (the place of the high school), etc.  All these answers would be correct, but of course the way the system works, I can only provide one answer, and then the onus is on me to remember how I answered a very ambiguous question, perhaps a year or so from now when I have lost my password, or some such catastrophe.   Other choices I had were, “The name of my first pet?” (that was 55 years ago, and, with apologies to sentimentalists, I don’t remember), “The name of my first best friend (again, many years ago, and there were several), and, believe it or not, “The first phone number I ever learned and can still recall.”

Please, designers of security questions, come up with questions that are unambiguous, to which the answers are memorable, and which are not completely silly!  Protecting our identities is important stuff – and deserves to be treated as such!

Business-IT Relationship Management Webinar


A few day’s ago I mentioned that I was doing a webinar (why do I hate that term?) on the Role of the IT Relationship Manager. I am pleased to say that a recording of that webinar (I still hate the term!) is now available at http://community.ngenera.com/convs/show/7380

It requires QuickTime – I hope you find the information helpful.  I’ve found the IT relationship manager role to be key to driving business-IT maturity and value.

Quality and Innovation – Strange Bedfellows?


One of the themes I’ve come back to from time to time is the notion of “sticking points” – i.e., in the context of business-IT maturity, things that you have to do to get from one level to the next, that if you keep doing them, will actually prevent you from getting to the next level.  The analogy is, you can’t walk by crawling faster, or you can’t run by walking faster (or at least, you can run as quickly!)  Different muscle groups, balance and coordination mechanisms come into play.

In the context of business-IT maturity, a common sticking point is the rigorous systems development methodology.  These are just about essential to get beyond the lowest maturity levels (to reduce the chaos of systems development without rigor and discipline) but if they are obsessively and universally applied to all types of development, they tend to stifle innovation and experimentation.

I’ve felt the same way about the so-called “quality methods” such as Six Sigma.  While these are essential for bringing order to chaos, applied blindly and with quasi-religious zeal, they can limit growth and development, and, in many cases, limit innovation.  And unfortunately, the ways in which many companies introduce methods such as Six Sigma are very prone to this, with their cult-like trappings and high priests with colored belts.  Sigma Madness, or, as one of my clients said, “Death by a thousand belt-qualifying projects!” is not an uncommon malaise.

To this point, I loved the latest posts by Cognitive Edge on Putting Six Sigma back in its box … and The Context of Error.  The traps are beautifully articulated and nicely illustrate the potential tensions between the rigor and discipline needed for “preventing bad change” versus the management practices needed to “create good change” as quality guru Joseph Juran used to say.  I also admit to being tickled by the “Sick Stigma” Spoonerism!

To be clear, I don’t think there is any conflict between the notions of quality (especially as articulated by author Robert Pirsig in his classic Zen and the Art of Motorcycle Maintenance, and his lesser known Lila: An Inquiry into Morals) and innovation.  It’s the mindless, obsessive application of rigorous methods such as Six Sigma that I am questioning.

Why Are Indian CIO’s Good Innovators?


I liked this post by Navi Radjou on “Why Indian CIOs Excel at Driving Business Innovation“.  Navi suggests two reasons for this proclivity for IT-driven innovation:

1. Indian CIOs are obsessed with IT/business alignment.

2. Indian CIOs are effective at orchestrating innovation networks.

While I don’t disagree with these factors, the research we recently completed on Reaching Level 3 Business-IT Maturity (Level 3 maturity correlates strongly with an IT capability that excels at driving innovation) points to another reason – one that I believe is an even stronger factor.

In most mature, Western organizations, a “core” computing capability has evolved over 40 to 50 years.  This core includes the basic IT infrastructure, plus the primary transactional systems that run the business.  The way this core has evolved has left most companies with an extremely fragile and complex IT environment.  (I referred in my previous post about the spaghetti mess underneath my home-office desk – that’s the result of natural technology evolution for just a single user in a trivially simple IT environment – I see that as a personal testament to the huge challenge my enterprise CIO clients face with their billion dollar infrastructures serving tens of thousand of people and, perhaps millions of customers!) For many (most?) CIO’s, the core consumes 80% or more of the IT budget, and most of the IT resources.  All of this is necessary to “run the business” but typically does not satisfy the need to innovate.  Innovation happens “at the edge” where things are not locked down and complex, where people are free to collaborate and experiment without putting the key systems that run the business at risk.  The problem is, this “edge: needs access to core data, and to potentially other IT assets – and there lies the rub.  The “locked down” core limits what can be done at the “open and innovative” edge.  And most of the IT resources that should be working on the edge, are instead consumed by the core. 

However, our research found that in India, a couple of conditions existed that did not typically exist in the West.

  1. The “core” IT infrastructure and transactional systems in large Indian companies are much younger than those commonly found in Western companies.
  2. Rates of growth are so high that enterprises have little choice but to “blow up the core” every few years and start over.  Edge activity can readily take place alongside, or indeed as part of core activity.
  3. There is a mindset (probably fostered by 1 and 2 above) that values innovation to the point that current constraints are not seen as real limitations – more as opportunities for renewal.

I think there are important lessons to be learned from these quirks of industrialization, globalization, and timing.  I will explore this theme in coming posts.

Higher Internet Speeds and Media Convergence at Home


I don’t usually write about specific technologies or vendors, but I’m sufficiently excited by a recent development in my home and home-office set up, and by my experience with the vendor of the new service, that I think it’s worth a mention.  First, some background.  I travel a great deal, but when I’m not traveling, I’m typically working from my home office, so reliable, high speed Internet access is essential.  Over the years I’ve tried cable (found that to be unreliable, though that was some years back) and DSL, which has worked well, especially in its latest incarnation in my neighborhood, BellSouth Fast Access, which recently got to 3 Megabit download.

Last week, given BellSouth’s acquisition by AT&T, an AT&T salesperson called at my door with an offer around the new U-verse product.  When I heard the magic “10 Megabit download” my ears perked up.  When I heard about the integrated TV feed that would replace my DirectTV satellite system, I was definitely interested.  When I heard about the DVR with up to 4 simultaneous recording channels, and the ability to program it remotely via the Internet, I was even more interested.  The final nail was the cost comparison between the U-verse system, with 2 phone lines, up to 5 PC’s wirelessly networked, video-on-demand, more content and more HD content than on DirectTV, I would save some money.  The last nail was the fact that this was a “no contract” month-to-month deal.  So I signed up.

Yesterday (yes, Sunday!) AT&T came to install.  They promised between 8am and 10am and were there at 8:05a.  Also, during the week they had called me to do a pre-install test.  The install turned out to be a very long job (all day!) – they hit various snags with my inside wiring (on a 3-year old house, theoretically “wired for the digital age”!) but they got everything working fine.  I’m getting the advertised speeds (makes a noticeable difference!)  The TV set-up is great (ability to manage the DVR through a computer is excellent) and there are all sorts of bells and whistles that my old satellite set up does not provide.

Finally, I have to commend the AT&T install guys (and sales person) for their extreme professionalism throughout – keeping me informed, donning little paper booties when entering the house, and making sure everything was working and I was a happy customer.  All in all, it was a very positive customer experience (I never thought I’d utter that expression in the context of an ISP or media company!)

I don’t know what all this means for AT&T longer term.  All the providers are wrestling with “the last mile” and competing vigorously for our hearts, minds and share of wallet.  Here’s an interesting and balanced article from Fortune that presents the challenge and opportunity well.  Either way, I’m thrilled and enjoying the new surfing speeds.  Ironically, I obtained other benefits I’d not even thought about.  My old set up had a mass of cables and power supplies under my desk – for the DSL modem, wireless router, PC, printer, USB hub, speaker phone, radio, etc., and phone cables, some with attached filters, going hither and thither.  The new set up has greatly simplified things, and cleaned up my under-desk spaghetti sprawl.  Hopefully, U-verse will prove to be as reliable as BellSouth Fast Access has been, and not so prone to TV signal break up in heavy rain.  Meanwhile – bring on the bit stream!