The Challenge of ‘Best of Breed‘

I think everyone in IT has at some point wrestled with the choice between ‘integrated’ solutions and ‘best in breed’.  The analogy of home entertainment plays out well to illustrate the pros and cons.  I won’t go into this well worn territory – suffice it to say that most of us end up with best of breed, and pay the price of a coffee table full of remote controls and the minor maintenance headaches they bring with them (how many different kinds of batteries can remote control manufacturers find to make our lives miserable?)

An Early Solution

In 2006, my wife and I with our ‘empty nest’ decided it was time to downsize our living situation and move into a town house in a community with shared common areas such as gym, swimming pool, tennis courts, and so on.  To be frank, I was not thrilled with the downsizing plan, but managed to blackmail myself with the idea that we’d get the basement of said town house finished and turned into a home theater and a nice home office (where I spend much of my time).  Strangely, the basement in our town house is where the second story of most homes would be (don’t ask!) so the office has windows with great views into the woods.

With money saved by the down sizing, I went for a pretty high end (for the day) home theater, with best of breed components.  Given the state of the technology in 2006 (HDMI was not very prevalent then), I opted to have a local company source the technology and install it for me.  I also opted for a single remote – the Philips Pronto – a jokingly called ‘programmable’ device.  I remember watching the installation team set up my system.  It took the best part of the day, and for most of that time, one of the install team sat on the floor with a laptop and the Pronto unit, programming and testing to accommodate my flat screen TV, surround sound, Tivo, DVD, etc.  Eventually, they got it all working and – voilà – a single remote controlled everything.  Sort of.  It never did work quite right, but was close enough for my wife and I to live with it.

Along Come the Upgrades…

Live with it, that was, until I needed to upgrade technology.  Add a Blue Ray player, for example, and that’s the end of single remote simplicity!  So, I decided to master programming of the Pronto device.  I was trained in IBM Assembler and Cobol early in my career, but never thought of myself as a programmer.  And programming the Pronto reinforced my “non-programmer” self-perception and my lack of  patience for the arcane or obscure.  I quickly gave up!  It was just too complex and time-consuming.  So I put up with 2 remotes – the Pronto plus Blue Ray player.  Then 3 remotes – the Pronto plus Blue Ray plus Roku.  By Christmas, we had decided to upgrade our flat panel TV with the latest 1080p Plasma.  Goodbye Pronto, hello 6 remotes!

Then Relief!

A little web research convinced me that the Logitech Harmony One was worth a try.  An Amazon ‘one-click’ and 48 hours later, and I was opening the box to my putative problem solver!  What a delight!  Everything from the easy-open, “green” packaging, to the instructions, to the slick look and feel of the device oozed ‘design thinking.’

Programming the device through a web interface (they must have a library of thousand of remotes and their code strings) was as simple as could be.  Once programmed, you have a touch screen device – select the activity you want (watch TV, watch Roku, listen to a CD, watch a DVD, etc.) and the right components are switched on in the right sequence and set to the right inputs and outputs.  If you need to, select the device you want, and the Harmony One remote behaves exactly like that device.  No more batteries – the Harmony One sits in a nice little charging cradle.

And a Reinforcing Customer Experience

Capping my delight, today I got an email from Glenn Rogers, Logitech‘s Director, Customer Experience, inviting me to provide feedback on “How are we doing?”  This was the most thorough and well-designed customer survey I have ever taken!  I’ve found some customer surveys actually frustrate me and lower my opinion of the company seeking input.  This was just the opposite.  They wanted to know about every aspect of how I researched, how I purchased, how I experience opening the package, installing the software, setting up the device, and so on.  I felt like they really cared about me as a customer and what they could do to improve my customer experience.

Not Perfect, But…

I don’t want to pretend that the Logitech Harmony One remote is perfect – there are some minor nits (fed back to them via their survey), but they really are minor.  This is a slick device in every respect and is a great example of how to make ‘programming’ not just user friendly, but actually user seductive!  Congratulations, Logitech!  Want to buy a bunch of old remotes, anyone?

I’ve written before that listening to how clients talk about things can be illuminating, so allow me to share with you some of the things I hear people say about process discipline, what it reveals about their biases and how these misconceptions get in the way of good performance – and, more importantly – get in the way of performance improvement.

A Bias for Continuous Improvement

First, let me state my own biases.  I was trained as an electrical engineer, and started my career in computer hardware design.  A training in engineering disciplines forges a strong and deeply held worldview about the way things work.  On top of this, by the random chance of meeting and being influenced by certain people, I came to be a believer in the Total Quality movement, and in the teachings of Deming, Juran, Shewhart, et al.  For a period in my career I was a judge for a Malcolm Baldrige type quality award for the software industry.  So, I do see the world through a lens of process discipline and continuous improvement.

I later came to work with Professor Tom Davenport, a brilliant colleague who exposed me to the world of business process re-engineering.  This approach has brought enormous benefit to the world, but I do regret the fact that along the way, it somehow trumped the quality movement.  “Don’t improve it – blow it up!” became the mantra.  While in many cases, this was the right thing to do, unfortunately, the “Don’t improve it!” part rose to prominence.

“We Do Have Process Management – Our Process are Documented!”

This is one of the first clues to listen for as an indicator of process mis-perception.  There’s a couple of traps here:

1. If we’ve documented the process we are using process management discipline.  Wrong!  The fact that it’s documented does not mean that it’s being followed!  That would be akin to claiming, “All our citizens follow the laws of the land because those laws are documented!”
2. A central tenet of process management discipline is continuous (and, sometimes, discontinuous) process improvement.  Having a process documented does not mean it is continuously improved – and may in fact be an inhibitor to improvement!

“Process Creates Bureaucracy!”

Another clue to process cluelessness!  Yes, if the process management approach is disproportional to the nature of the work being performed (e.g., a highly detailed process model for an activity that is either trivially simple, or is essentially skill-based) then it does become bureaucratic and unhelpful at best, or even dangerous.  (Imagine someone who is not a brain surgeon being handed a process model for brain surgery and being expected to remove a small growth from their spouses brain!)

“We Want Our People to Be Creative, and Process Stifles Innovation!”

A couple of years I posted on the distinctions and interrelationships between Improvement and Innovation.  Process management, intelligently applied, as one of the core management disciplines is an enabler of innovation, not a stifler!  My former colleague Tom Davenport used to say, “Process sets you free!”  And he was right – and he had the right perspective within which to apply process thinking.

“We Are Masters of Escalation!”

Escalation – the final clue!  I find that organizations that don’t have good process management typically have great escalation capability!  They have to – in some respects, great escalation is almost a sign that process management is weak.

How about your organization – are you really good at process management?  Or are you simply good at process documentation and escalation?

Cartoon courtesy of Savage Chickens

Related articles

• What the C-Suite Needs to Do for Process Improvement (blogs.hbr.org)
• Six Sigma is Not Just for Projects (brighthub.com)
• Analysis of TQM Quality Concepts (brighthub.com)

The Problems with Traditional Strategy Formulation Approaches

I think the supporting evidence for my findings lies in the fact that most companies either:

1. Don’t undertake strategy formulation initiatives unless they feel they have to (e.g., 5 or more years have passed since they last conducted a strategy session, or the current strategy is clearly not working!)
2. Do undertake strategy formulation regularly and rigorously (typically annual), with a detailed process spanning many weeks and taking lots of time.  When they are through the effort, everyone breaths a big sigh of relief, and gets back to work – and to executing against the original strategy!

Those in camp 1 above often engage strategy consulting firms.  Nothing inherently wrong in that, except that it can be a high cost route that ends in a good strategy that either:

• Does not fit the firm’s capabilities particularly well, or…
• Does not get sufficient engagement with those in the firm who must understand, buy into and execute against the new strategy.

Those in camp 2 above usually have a full time strategy organization – a small, but expensive group of bright folk who need to justify their existence.  Nothing inherently wrong in that, either, except that:

• The results are often less than inspiring.  They do a good job going through the motions, but the thinking isn’t really very strategic, nor the goals very ambitious.
• The results typically do not get sufficient engagement with those in the firm who must understand, buy into and execute against the new strategy.

Strategy Formulation as a Continuous Process

I believe much better results can be achieved if strategy formulation becomes:

1. A continuous process.
2. A firmwide capability – a strength, even!
3. A collaborative process.

We are living in unprecedented times.  Uncertainty and change are everywhere.  Market conditions can change overnight.  The globally interconnectedness of everything creates a complex environment that behaves in unpredictable ways.

New Possibilities Enable Continuous Strategy

At the same time complexity has increased and predictability decreased, information technologies create new possibilities for a very different approach to strategy formulation:

• From an event to a continuous process enabled by the Internet
• From a “canned” exercise for the select few to a “social” exercise for the many – employees, customers, suppliers, partners
• From lengthy “big bets” with high uncertainty to rapid “business experiments” with low risk
• From a dearth of data to help evaluate strategic options to a plethora of powerful business analytics, predictive modeling and simulation tools to help bring strategy formulation and execution together into a rapid learning model

Some of today’s fastest growing companies have figured this out and are quietly, but aggressively honing their continuous strategic capabilities.  Meanwhile, the large majority of companies are stuck in the old paradigm – afraid to open up the strategy process – just when the need for a shot of innovation and fresh thinking are matters of survival!

What do you think?  Are you in a company that is successfully moving to a more continuous approach to strategy?  Should your company be doing more to make strategy continuous?  How can you help achieve this?

Related articles

• Why do well-formulated strategies fail so often? (normanmarks.wordpress.com)
• Top Ten Management on Strategy-focused Organizations: An Overview of How a Focus on Strategy Can Lead to Corporate Success (bizcovering.com)
• Accepting and Embracing Uncertainty (collings.co.za)

Alignment can also refer to Structure – IT capabilities are structured to align with business structures and needs.  But there’s a crucial ‘third leg’ to the business-IT alignment stool, and that is the alignment of relationships that sit between business units and IT capabilities.

The Crucial Relationship Manager Role

Many IT organizations have created a role that bridges the business and IT.  Rarely actually called “Relationship Managers”, this role represents IT to the business and the business to IT. I’ve posted on this role before – see, for example The IT Relationship Manager’s Role in Expanding Business-IT Capability,  and From Supply-Constrained to Value-Constrained IT Business Model, and IT Maturity and the Role of the Relationship Management.  Sometimes called an IT Account Manager, or Business-IT Director, or some-such, the role is primarily responsible for ‘demand shaping‘ – stimulating an appetite for high value demand, and suppressing appetites for low value demand.  Sometimes, people in this Relationship Manager Role are effectively mini-CIO’s or Business Unit CIO’s – leveraging shared IT infrastructure (and often leveraging common applications and enterprise systems) but taking care of business unit-specific IT needs.

Relationship Alignment

There are at least three dimensions along which Relationship Managers can align with their business partners.  The first two dimensions are pretty obvious and generally handled well, but the third dimension is trickier and often not well addressed.  The dimensions are:

1. Domain Expertise – the Relationship Manager (or whatever title this role operates under) needs to really understand the business domain for which they are responsible.  Be it marketing, supply chain, human resources, and so on, they need to have deep domain knowledge in order to bring real value to their business partners and have the credibility to have impact.
2. Geography – as the real estate cliché goes, ‘location, location, location!’ so goes Relationship Management.  At its best, the Relationship Manager should be co-located with the senior managers of the business unit with which they are aligned.  At the very least, they need easy access.  The occasional ‘fly in’ to meet with their business partners typically doesn’t do it in terms of creating a productive business-IT partnership.
3. Maturity – this is the tricky dimension, and one that is typically not well addressed.  Skilled Relationship Managers are a rare resource.  You want your most effective and creative Relationship Managers aligned with those business units and executives with the highest demand maturity – i.e., with the best  capacity to recognize and leverage high value IT-enabled opportunities.  Innovative, ‘change agent’ types of Relationship Managers will quickly become frustrated facing off against executives who are technologically in the dark ages, or who cherish the status quo.  Similarly, progressive, innovative business leaders will become quickly frustrated working with a Relationship Manager who lacks drive, a sense of urgency, the creativity to generate valuable ideas about IT possibilities, and the wherewithal to bring them to fruition.

How Healthy Are Your Business-IT Relationships?

Clearly, the CIO is in many ways the ‘über-Relationship Manager’, setting the tone for demand shaping and the strategic context for IT, and typically ‘owning’ the business-IT relationships with the most senior executive team.  But no CIO has the bandwidth or domain expertise to handle all the relationships at all the management levels needed to surface and steer the best opportunities to create business value from IT.  So, how healthy and productive are your key relationships between business and IT? Do you even know what would be considered ‘key relationships’?  How would you know the degree to which they are fully delivering value against their potential?

Let me know your thoughts and experiences around Relationship Management effectiveness.

I introduced my ideas about leveraging Web 2.0 (broadly defined) to significantly drive up the value of business innovation – specifically by following the principles and processes of Design Thinking.  I’ve been getting to this point in my last series of posts (Part 1, Part 2 and Part 3.)  In fact, those posts were largely written as I was developing my session materials.

Does ‘Design Thinking’ Have Legs?

Part of my thesis built upon the success of the Design Thinking movement that has gelled over the last 5 years.  I have found the success stories compelling, and the underlying principles resonate with my own experiences and values over the last 30 years in trying to leverage IT for increased innovation.  However, I was troubled by the recognition and acceptability of the term ‘Design Thinking’ – especially in the US.  The text of a 2007 speech by BusinessWeek‘s Bruce Nussbaum given in London tipped me off that there might be a problem here.

Nussbaum’s Banana…

In his 2007 speech to the Royal College of Art, Nussbaum noted:

In the US, CEOs and top managers hate the word “design.” Just believe me. No matter what they tell you, they believe that “design” only has something to do with curtains, wallpaper and maybe their suits. These guys, and they’re still mostly guys, prefer the term “innovation” because it has a masculine, military, engineering, tone to it. Think Six Sigma and you want to salute, right? I’ve tried and tried to explain that design goes way beyond aesthetics. It can have process, metrics all the good hard stuff managers love. But no, I can’t budge this bunch. So I have given up. Innovation, design, technology—I just call it all a banana. Peel that banana back and you find great design. Yummy design. . The kind of design that can change business culture and all of our civil society as well.”

One of the first to make the Web 2.0 connection, Nussbaum went on to say:

Innovation is no longer just about new technology per se. It is about new models of organization. Design is no longer just about form anymore but is a method of thinking that can let you to see around corners. And the high tech breakthroughs that do count today are not about speed and performance but about collaboration, conversation and co-creation. That’s what Web 2.0 is all about.”

I tested the waters of my Summit attendees, first by asking how many in the room had some familiarity with the term ‘Design Thinking’?   Three hands shot up, and a couple sort of hovered around shoulder level (presumably meaning, “I’ve heard of it, but please don’t call on me to talk about it!”).  Of the three hands, two were from companies for whom I had Design Thinking case studies about and who were listed in my very first slide (I had not at this point turned on the projector.)  The third hand was from a senior executive at a major Industrial Supply company that I had not expected to be particularly Design Thinking literate.  So, test 1 indicated that the term is not widely known.  Of course, this does not necessarily mean that Design Thinking is not widely practiced – perhaps all 60 companies in the room do in fact excel at Design Thinking, but refer to what they do as some variation of Nussbaum’s ‘banana’?  However, I truly doubt this.  In fact, the many one-on-one conversations that I had with the executives at this summit during the reception and dinner following my presentation supported my sense that explicit efforts to drive up the value of business innovation are relatively few and far between.

Are Design Thinkers Web 2.0 Enabled?

To the larger part of my thesis, there was little evidence at this Summit that any form of Web 2.0 was being explicitly leverage to support Design Thinking (or innovation, or the banana!)  There were a few ‘accidental experiments’ and emergent social networks – both internal and external – but nothing claimed as part of a deliberate, holistic effort to increase innovation through Web 2.0 technologies.  This for me was the big surprise.  The Senior Vice President of Strategy from one of the Design Thinking literate companies told me at the reception, “When you first connected Design Thinking and Web 2.0 in your presentation, I thought you’d completely lost it!  But as you gave examples, the light bulbs began to turn on – I think you are onto something!”  This was gratifying indeed – well worth the price of admission!

Graphic courtesy of RI Nexus

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The easiest way to do this for IT people is to think in terms of a process, the steps in that process, and how information technology might enable those steps.

Tim Brown‘s “Three Spaces of Innovation”

A good place to explore the Design Thinking process is in IDEO CEO, Tim Brown’s excellent HBR article from June 2008.  In that paper, Tim presents a model of how Design Thinking happens.  Tim’s model describes “Three Spaces of Innovation” – Inspiration, Ideation and Implementation.  What I like about this picture is that it’s not a simple linear process – it is somewhat chaotic, full of little feedback loops and more concerned with how things connect and flow that with a rigid process.

How Web 2.0 Might Enable Innovation Activities

In the figure below I have added simplistic examples of how different types of Web 2.0 capabilities might play into the major activities contained in Tim Brown’s model.  Consider this a simple illustration – there are a zillion possible variations on this theme!

Move Edge Activities to the Cloud

I believe that Cloud Computing in its various forms presents a relatively attractive way to quickly develop Edge capabilities.  Given that Design Thinking requires that we become more comfortable with experimentation, at the very least we should be experimenting with the Cloud, and Edge capabilities present an ideal case for cloud experiments.  We can keep them relatively isolated, implement them very quickly with little to no capital outlay, and everything we do in the cloud is inherently collaborative (e.g., think Google Docs, Google Wave, Mindmeister, etc.) just as just about everything we need to be doing around Design Thinking is inherently collaborative.

A More Traditional Process View

For those that prefer to take a more traditional process view, Wikipedia suggests a simple 7-Step Design Thinking process, rendered as a loop below.  Note, please don’t take this process too literally.  Design Thinking is more about ‘iterate and converge’ than the more typical IT process.  These steps are rarely going to be linear and sequential.

Collaborative Intents for Each Step

A couple of years ago, working on a multi-company research project with my colleague Tammy Erickson at nGenera, we identified 10 distinct types of ‘Collaborative Intents’ to be considered when planning any type of collaboration initiative.  For each collaborative intent, we can be quite explicit about the business outcomes to be achieved.  So, for example, in the Design Thinking step “Define” we are interested in ‘connecting ideas’ that might not typically be connected in order to amplify knowledge and identify innovation opportunities.

Web 2.0 Technologies for Each Step

We can map the types of Collaborative Intent to each step in the Design Thinking process.  In the table above, as an illustration, for each type of Collaborative Intent, I have identified the types of technology that might be useful to enable that intent, and provided some examples of actual technologies in each space.  Please note, mention or lack thereof for any specific technology does not imply any endorsement (or lack thereof!)

Does this make sense to you?  Do you have experience in applying Web 2.0 to Design Thinking?  Please weigh in – let’s generate some dialog on these ideas and their reality in practice.

Image courtesy of Red Jotter

Most recently I’ve been giving a lot of thought to how Web 2.0 might help foster and enable Design Thinking.  I’ve been doing this as part of a new multi-company research project I am leading.  And I’m very excited!

The Case for Design Thinking in the U.S.

The insightful Thomas L. Friedman, in a New York Times Op-Ed column on March 2, 2010 titled, “A Word From the Wise” noted comments in a speech by Paul Otellini, CEO of Intel, who was in Washington to talk about competitiveness:

that a 2009 study done by the Information Technology and Innovation Foundation and cited recently in Democracy Journal “ranked the U.S. sixth among the top 40 industrialized nations in innovative competitiveness — not great, but not bad. Yet that same study also measured what they call ‘the rate of change in innovation capacity’ over the last decade — in effect, how much countries were doing to make themselves more innovative for the future. The study relied on 16 different metrics of human capital — I.T. infrastructure, economic performance and so on. On this scale, the U.S. ranked dead last out of the same 40 nations.”

Too many companies (and the governments that shape corporate behavior through taxes and regulations) have become too comfortable with exploitation, and not sufficiently adept at exploration.  They have come to rely too much on analytical thinking, and not enough on intuition.  They have become so bogged down in their business core, they have all but ignored the edge where customer problems meet the creative process to create new products and services.

In the next few posts, I want to share what I have discovered and learned so far, and hopefully stimulate some constructive discussion and engage you, my readers, in shaping the upcoming research.

Does Your Executive Management Know What They Are Doing?

In a 1998 HBR article entitled, “Interpretive Management: What General Managers Can Learn from Design,” Richard K. Lester, Michael J. Piore, Kamal M. Malek, observed:

Today’s markets are increasingly unstable and unpredictable. Managers can never know precisely what they’re trying to achieve or how best to achieve it. They can’t even define the problem, much less engineer a solution. For guidance, they can look to the managers of product design, a function that has always been fraught with uncertainty.”

“We shape our tools, and thereafter our tools shape us.”  Marshall McLuhan

So, the big question for me is how can the tools we have shaped into Web 2.0 enable ‘Design Thinking’ to help us realize dramatically higher business performance?  It seems that we have a whole new and powerful set of capabilities – social networking, crowdsourcing, innovation jams, social and semantic search, collaborative project, program and portfolio management, polling, listening feeds and activity streams, tags, 2D and 3D modeling, prototyping, virtual worlds, workflow modeling and automation, and on and on. And yet, aside from knowing that a distant friend is having a bad hair day, most of these tools and technologies are still looking for a meaningful business purpose.

So, What Is “Design Thinking”?

There are many definitions and descriptions, but the ones I’ve found most illuminating are:

The methodology commonly referred to as design thinking is a proven and repeatable problem-solving protocol that any business or profession can employ to achieve extraordinary results.” – Mark Dziersk, Fast Compan

A discipline that uses the designer’s sensibility and methods to match people’s needs with what is technologically feasible and what a viable business strategy can convert into customer value and market opportunity.” – Tim Brown, Ideo

Design thinking is always linked to an improved future.  It is a creative process based around the ‘building up’ of ideas, rather than critical thinking which is more concerned with analysis and the ‘breaking down’ of ideas.   Design Thinking moves design from a downstream (tactical) step to upstream (strategic) – vests everyone involved with the role of ‘designer.”  At its best, Design Thinking balances art and science, intuition and analytics, validity (doing the right things) and reliability (doing things right), exploration and exploitation

Design Thinking Has Profound Organizational Implications

Design Thinking has profound implications for:

• Organization structures
• Rewards, recognition, compensation
• Portfolio management and strategic alignment
• Governance and leadership style
• Talent management and global sourcing

I believe that it also presents a significant opportunity …

• For IT, HR, Finance, Facilities, Legal, etc. to step forward and make a real contribution to business success
• To re-think ‘staff /line’ roles and responsibilities
• To learn to love matrix management!

How is Design Thinking playing out in your organization?  How have Web 2.0 capabilities helped (or hurt) these efforts?  How do you see this playing out over the next couple of years?

To be clear, Design Thinking is essentially human centered, and there is something potentially incongruous in discussing the use of Web 2.0 to enable it.  However, I still firmly believe that these collective and collaborative technologies have a role in “greasing the skids” to make Design Thinking more accessible.  I will pick this up and drill down a bit further into this realm and discuss  ideas on how Web 2.0 can play a positive role in Design Thinking.

Graphic courtesy of IDEO

• Processes – how we perform activities that deliver predictable and repeatable business results through competent people using the right tools.
• Governance – how we make and sustain important decisions about IT.
• Sourcing – how we select and manage the sourcing of our IT products and services.
• Services – our portfolio of IT products and services.
• Measurement – how we measure and monitor our performance.
• Organization – how we structure and organize our IT capabilities.

In Part 3 we looked at how Web 2.0 approaches could transform the way IT processes are defined and managed.  I now want to look at IT governance, and the implications of Web 2.0 for this ever important aspect of IT operating models.  Due to the depth of this topic, I will discuss the facets and domains of IT governance in this post, then deal with the Web 2.0 implications in a subsequent post.

Facets of IT Governance

There are many definitions and descriptions of IT Governance, and frameworks such as COBIT that attempt to bring ‘best practices and processes’ to the domain.   The two definitions I have landed on in my years of research and consulting in this space, are:

1. A framework of decision rights and accountabilities to encourage desired behavior to realize maximum value from information technology.
2. Aligning IT decision-making with enterprise governance and business unit objectives through an interrelated set of processes, policies and decision-making structures with clear goals, roles and functions, sponsored by the CEO, with clear consequences for compliance or lack thereof.

I like the first definition for its simplicity, getting to the heart of both ‘decision rights’ and ‘accountabilities’ through the lens of ‘behaviors’ all focused on maximizing the value realized through IT.  This is pragmatic – you can define the types of behaviors you would like to see (e.g., business takes ownership for the business outcomes to be enabled by IT initiatives), or behaviors you are seeing but would like to eliminate (e.g., people see IT as a ‘free’ resource, and therefore use it with little or no regard as to its cost or value.)

I like the second definition in contrast for its recognition that IT governance is an extension of enterprise governance, and for its reference to ‘processes’, ‘policies’, and ‘decision-making structures.’  I also like the emphasis on CEO sponsorship and consequence management – i.e., governance with ‘teeth’.

I’ve come to view IT governance as a means to achieve balance between the competing forces of innovation versus standardization and business unit autonomy versus collaboration.  I also see IT governance as a way to manage IT investments and assets as a  resource that is shared by the enterprise.  Finally, good IT governance provides a “transmission chain” for the highest level enterprise strategy, from senior executives on down through the organization. As such, IT governance is a critical alignment mechanism.

IT Governance Domains

Peter Weill and Jeanne W. Ross, in their excellent book, IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, call out five decision domains of IT governance:

• IT Principles (strategic choices between competing perspectives.  For example, ‘We will optimize IT investments for the enterprise rather than for individual business units.’)
• IT Architecture (“the organizing logic for data, applications, and infrastructure captured in a set of policies, relationships and technical choices.”)
• IT Infrastructure (“Centrally coordinated, shared IT services that provide the foundation for the enterprise’s IT capability.”)
• IT Investments and Prioritization (“How much and where to invest in IT, including project approvals and justification techniques.”)
• Business Application Needs (“Specifying the business need for purchased or internally developed IT applications.”)

While these domains may each be handled by different processes, policies and decision-making structures, all of these domains must be covered in ways that support a coherent strategy and set of beliefs about IT.

IT Governance, In Other Words…

IT governance deals with how the business makes decisions about the deployment and delivery of IT.  When sound IT Governance is in place, senior executives not only know their organization’s IT plans and policies, they also know how they are made.  IT governance is about the specification of decision rights and responsibilities required to ensure effective and efficient use of IT.  As such, it deals with organizational power and influence, and therefore  must be approached with care!

IT Governance 2.0

The implications of Web 2.0 on IT Governance are dramatic and far reaching!  On the one hand, with ‘transparency’ a watchword of good governance, 2.0 capabilities offer several important mechanisms to bring transparency both to the design of effective IT governance processes and structures, and to their ongoing execution and management.  On the other hand, dealing with decision rights and accountabilities in the types of highly diverse, distributed and fluid information environment enabled by social networking tools can become quite complex.  We will dig deeper into the implications of Web 2.0 for IT governance in a subsequent post.

Image courtesy of The ERM Current

Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.”

This is one of the fundamental issues in quality management, with the quality movement shifting from quality control to quality assurance over the years, in part thanks to Edwards Deming and his peers during the latter part of the industrial revolution.

Testing – Value Add or Overhead?

This is a tough question I’ve had to address.  For example, I’ve facilitated IT groups where the issue of the value of testing, and how to manage it has been an important point of contention in organization and governance design.  I believe that ultimately, testing is overhead.  In that assertion, I distinguish between “inspection of final product (testing) from activities such as prototyping, modeling, running experiments – which to the contrary can be a real value add to IT discovery, solution delivery and support.  I also distinguish activities such as structured walkthrough‘s etc., which have more to do with building quality in than with inspection of final product.

Note that Deming does not suggest eliminating inspection – he urges eliminating the need for mass inspection, and “ceasing dependence” on inspection.  As such I acknowledge there’s such a thing as “necessary overhead,” but that need should be monitored and reduced over time, as built in quality improves.

The Genesis of “Design Thinking”

Today, the movement referred to as “Design  Thinking” must welcome Deming’s admonition to “build quality in!”   But I don’t see evidence of a lot of Design Thinking in most IT organizations.  It is also often lacking in vendor products.

Design Thinking and Enterprise Architecture

One key role that, as I’ve said in many posts, is woefully under-served in terms of its potential to make a real difference to return on IT investment and the whole user experience, is that of the Enterprise Architect.  A key to the junction between problem analysis and solution design, including solutions on a grand scale such as enterprise architectures, the Enterprise Architect should be a conduit to inject Design Thinking into IT products and services.  And, with a nod to Deming, “building quality into the product in the first place!”

Image courtesy of Nanophase Nanoengineering Products

I’ve been thinking about a couple of things my CIO clients are wrestling with, and how these might be better approached jointly rather than as separate challenges.  These are:

1. How to strengthen Business-IT Relationships in the context of the current economic climate.
2. How to experiment with, learn from and foster Social Networking in the business context (rather than the more common “Facebook-like” personal context.
3. How to sharpen and refocus the role of IT for the global recession.

Business-IT Relationships and the Current Economy

The abstract notion of “business-IT relationships” becomes more tangible when we thing in terms of role.  The CIO can be thought of as the “über-relationship manager” - responsible for the relationship between IT and the Executive Leadership.  The good news is that this relationship is key to shaping, understanding and enabling the overarching enterprise strategy.  The bad news is that there is often a large gap between this strategic intent and the actual strategy as enacted by business unit management.

A second layer of business-IT relationship management is needed at this second layer – seasoned IT executives (often on a CIO succession track) who face off with business unit leaders and, just like their CIO bosses, are responsible for shaping and understanding their business unit’s strategy.  The role responsible for this management layer is the IT Relationship Manager (actual titles vary considerably).  They are also responsible, with the CIO, for reconciling between strategic intent at the top executive layer, and current strategy at the business unit management layer.

From my experience, this Business Unit Relationship Manager role typically does not work very effectively.  The competencies essential for this role to thrive include:

• Deep business knowledge and insight
• Analytical skills
• Sufficient IT expertise to keep it all real and current
• Strong communications and change management
• A goodly dose of innovation
• Decent level of finance and accounting

This is a rare combination, with limited training and development sources available.  (I must plug my company, nGenera, here for being a pioneer with our highly regarded Relationship Management Professional Development Programs).

In a down economy, the Relationship Manager role is even more important.  They have to surface and “sell” innovative opportunities that can grow market share in a recession, create new top line growth, and innovate products, services and processes that provide exceptional customer experiences.  At the same time, they have to deflect all the low value demand for system tweaks and enhancements that don’t lead to these types of growth oriented opportunities, and actually add cost while consuming scarce resources without adding much value.

Experiment with, Learn from and Foster Social Networking

I’ve posted before that many of the more innovative and visionary CIOs are driving Social Networking and Web 2.0 into their IT organizations and their businesses.  Some are still struggling with this, looking for the “killer application” that becomes the tipping point for this brave new world of IT possibilities.  I believe that strengthening Relationship Management performance might be an ideal “killer app” for social networking.

Imagine a community of Relationship Management practitioners, sharing war stories, ideas and applications of their art.  Imagine Wiki’s containing internal (and external) best Relationship Management practices, pointing to tools and templates such as customer profiling, business case development, strategic account management and so on.

Imagine this community expanding over time to incorporate IT savvy business leaders, building on each other’s ideas and creating momentum for innovative and high value IT-enabling opportunities.

Sharpen and Refocus the Role of IT for the Global Recession

So, three separate challenges – converged, might make for a potent brew.  I believe there’s a potential “virtuous cycle” here – one that can be initiated relatively easily, inexpensively, and with very little risk.  In fact, I bet for many organizations, this is already happening – it’s just not be channeled and amplified into critical mass.

What do you think?  Are you doing any of this?  How’s it working out?  How could it be amplified?  As alway, comments are most welcome!