Exploring an IT Operating Model for Enterprise 2.0 – Part 4: IT Governance

In Part 1 of this series, I suggested that the implications of Enterprise 2.0 for the IT organization are dramatic.  I also suggested that the ways of designing and executing an IT Operating Model in a Web 2.0 context are quite different from traditional approaches.  In Part 2, I outlined the major elements of an IT Operating Model as being:

  • 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

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Deming’s 14 Points Revisited: Part 4

Web - Quality 1This post picks up on Parts 1, 2 and 3 and examines the third of Deming’s 14 Management Points, which urges:

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

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Social Networking for IT Organizations in a Recession


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!

IT in a Recession – What’s Different this Time?

dolphin Like most of us, I’ve been thinking about the current economic climate and its implications for IT leaders.  I posted back in early September in The Economy, Information Technology and Opportunity Creation that it is now more important than ever to find creative and constructive ways to drive growth and innovation by whatever means.  I’ve also bemoaned the fact that many CIO’s have taken an alternate approach – that now is the time to hunker down and lay low.  In my post A Tale of 2 CIO’s: Proactive Innovator vs. Reactive Operator I drew the distinction between two types of IT leader – “Cecil the Controller” and “Ivan the Innovator.”  The former essentially is inclined to hunker down and “do no harm” when the financial conditions get tough, while the latter sees the financial conditions as a challenge that is best addressed head-on – proactively looking for ways to stimulate growth and innovation.  For them it’s a time for IT to shine, not to retreat deeper into the shadows!

We’ve been in recessions before, and the innovator versus controller behaviors – ever present – do tend to stand out during such times.  I guess the appropriate variation on the old cliche is “When the going gets tough, tough CIO’s innovate!”  Anyway, the question I’ve been pondering lately is, “Is there anything different with this recession that should influence IT leadership behaviors?”  The familiar knee jerk reaction of “take out costs” – stop discretionary spending and be the responsible corporate citizen by cutting IT costs might deserve a second look.  Here’s what I’ve come up with so far.  What’s different this time?

  • If you have been a responsible IT leader, you’ve already done the reasonable cost cutting and cost take-out measures, and run an efficient IT operation.  Cutting any further is likely to cut into bone and muscle rather than fat.  Is the best thing we can say about IT that when money is tight, we should do less of it?  My problem with the knee jerk reaction is it reinforces the perennial perspective that IT is only a cost to be contained, rather than an investment to be leveraged.  This time, and under current global economic climate, it seems to me that finding growth and business innovation (be it process, product or service innovation) is a better strategy – a more constructive IT response.
  • But, you’d better be able to prove the investments are going to pay back in a time frame that is consistent with business needs.  Therefore, robust business cases, a clear business-driven IT portfolio strategy and ongoing portfolio management are essential.  Similarly, superb program management and a real focus on value realization become key.  As is rapid business experimentation and analytics.
  • This time you might be able to get into or accelerate the use of SaaS and Cloud Computing – these approaches are inherently less capital-intensive, and, arguably, lead to lower operating costs.
  • For those that have not already done so, you might need to get more serious about global sourcing – not just as in outsourcing, but as in leveraging temporary and contract workers, retirees, and the growing body of unemployed who will be happy to work for lower rates than might have been the case 6 months ago.  Unlike in other recessions where the IT ranks felt almost immune, this time around there are many well qualified people out there in the unemployment lines – and with life saving perhaps seriously depleted, they are hungry for work.
  • This is a great time to take advantage of the “air cover” that the economic climate provides and get really aggressive and focused on ‘weeding and pruning’ – rationalizing and consolidating the legacy environment.
  • This time most companies have the basic infrastructure (broad band web access, desktop videoconferencing, services such as WebEx and LiveMeeting to support virtual work arrangements.  Given that much of the IT operating cost base is people, it might be worth getting creative about not only facilitating, but proactively encouraging alternate work arrangements (e.g., work from home, work part time).  People may be willing to give up some base pay to take advantage (including cost savings plus green benefits) of work-at-home arrangements.
  • Some IT expense is depreciation – with many companies coming off several years of capital investments, you might need to get creative about moving assets off the books. This was one of the forces driving outsourcing 15 years (or so) ago, and it may be worth exploring some creative (though legitimate) financial schemes.
  • Some organizations have been improving IT service levels year over year, and are now in a situation where service levels are higher than is truly needed.  You may therefore need to reassess and re-balance service levels/demand constraints. (e.g., take help desk response times from 15 min guarantee to 1 hour.
  • Lastly, Web 2.0 and all that it means (cloud computing, SaaS, etc.) promise a relatively quick and easy way to find and conduct experiments in business innovation and collaboration, without the investment and effort of building all the infrastructure and developing a whole bunch of code.  For many companies there is a potential gold mine in the application of social networking to business growth and innovation.  Now is a great time to look hard and identify opportunities to connect with employees, customers and the company ecosystem in new and productive ways.

Why IT Might be Slow to the Web 2.0 Collaboration/Innovation Party

partyLately I’ve been spending time with several IT teams from global Fortune 500 enterprises who are charged with fostering collaboration, innovation and the other hoped-for outcomes of Web 2.0.  It’s been a fascinating experience – plenty of good news, but some aspects I find frustrating.  More importantly, I believe these are things that are slowing progress in exploiting Web 2.0 et al in the enterprise context.

For most companies, the necessary infrastructure, while mostly in place, is not fully there.  Desktop software may not be at the right level.  Videoconferencing capabilities are first or second generation, and need to be upgraded to tap the full potential of today’s telepresence and high definition video.  Instant messaging, previously banned as a perceived “renegade, redundant and dangerous technology is now seen as a useful tool, but the IT infrastructure must now be tweaked to embrace it.  Early implementations of SharePoint that served as interesting experiments, must be updated and redeployed to take advantage of the latest release and goodies.  More complex initiatives such as virtualization, unified communications, shifts from perimeter-based to asset-based security take time, energy and investment to sort through.  Collaboration strategies tend to be emergent rather than holistic,
IT- more than business-centric, push rather than pull, infrastructure rather than application focused.

The good news is that for the more forward-thinking companies, these infrastructure initiatives are funded, resourced and underway.  The people leading them are the best and brightest from the IT infrastructure ranks – they know what they are doing, and move assuredly through this complex space, checking off important milestones, and celebrating successes along the way.

The more frustrating, and ultimately limiting aspects are around the demand management (especially, stimulation/seeding) and application (especially value capture) of Web 2.0 – how to ensure that the emerging collaboration infrastructure is actually used, and used productively and creatively.

A couple of points.  Without the right infrastructure, Web 2.0 doesn’t work, or doesn’t work well enough to sustain itself – it is the table stakes.  But, a shyness in addressing the broader landscape of collaboration and innovation across the enterprise and its ecosystem ultimately limits the value of the infrastructure.

I use the word “shyness” with some thought – there is literally a shyness about getting into things that are thought of as “really needs to be in the business.”   The Catch-22, however, is that without IT leadership in demand shaping/management, you might not have the exact infrastructure you need to really tap the power of the emerging collaboration capabilities.  And I’m taking “infrastructure” quite broadly to include all the shared components and services that support Web 2.0 and its inevitable implications (e.g., Cloud Computing).

So, my recommendations to these teams typically include:

  1. Keep going with the infrastructure plans and deployments!  Celebrate the infrastructure, market its capabilities, keep up the great work!
  2. Step back and look at your broader collaboration strategy.  What other projects or programs are underway that impact or are impacted by this initiative?  What other projects or programs are needed to ensure success?   What does success look like?  How would we measure it?
  3. Add a demand shaping/demand management perspective to the collaboration initiative.  Wrap it into the overall collaboration strategy and plan.
  4. Expand the collaboration initiative team and brief/charter to bring in the business and customer/user perspective, and some “Net Gen” people or really understand how the Web 2.0 world works in the social/consumer space.
  5. Foster adoption from the grass roots up.  Think “chaos theory” and “emergence” – but don’t lose sight of the fact that we are human and ultimately, political and social animals.

The Economy, Information Technology and Opportunity Creation

I realize it might be somewhat outré (and very circular!) to reference a post that is referencing one of my own posts, but I’m going to do that.  Espen Andersen picked up my post The New IT Role: From Problem Solving to Opportunity Creation and made some important expansions on the inherent ideas, in his post The Opportunity-creating IT Department.

I really believe that with the confluence of a weakening global economy, widespread social and political upheaval, and the emergence of a whole slew of “2.0” information technologies, it is now more important than ever to find creative and constructive ways to drive growth and innovation by whatever means.  I made a personal vow when I started blogging almost a year ago to stay out of certain topics – politics being one such taboo.  I am prepared, however, to state my position that I believe a major driver of an economy is psychology and mindset.  With FDR’s words ringing in my head, “The only thing we have to fear Is fear itself” I do believe we can depress ourselves into (or further into) a recession, or just as easily inspire ourselves into an expansion.

I talk to too many CIO’s who have gone into hunker-down mode.  These are the problem-solvers.  They see the problem as IT costing too much, so they try to help solve that problem by doing less.  Of course, the real result is fueling the vicious cycle and creating a self-fulfilling prophecy about the role and cost of IT.  Thank heaven for the visionary CIO’s who are the opportunity-creators.  They see the opportunities in the emerging technologies and capabilities.  They don’t know exactly what that all means to them and their companies, but they are actively involved in finding that out through action and experiments – through bringing leadership and inspiration to their organizations and their companies.

What kind of CIO are you, or do you aspire to be – problem-solver, or opportunity-creator?  What do your actions tell about you?  What can you do to become more of an opportunity-creator?

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.

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.

Surfing and IT Innovation


Thanks to a colleague for pointing me to a remarkable post by John Hagel entitled Innovating on the Edge of Big Waves.   Hagel explores the evolution of ‘big wave’ surfing – both from a perspective of the technology innovations (e.g., fibreglass, foam core, changeable stabilizing fins) and techniques (e.g., tow-in surfing, insights borrowed from wind surfing, skateboarding).  He then examines the lessons that can be applied by business executives.  For those of us that don’t have first hand experience with big wave surfing, the history and achievements of this sport are very interesting.  More importantly, the analogy to, and lessons for business executives are very insightful.

I think these lessons are especially intriguing for IT executives, and both match and expand upon some of the issues we’ve explored here, and in our Reaching Level 3 mutli-company research.   With acknowledgments to Hagel, here are some of the lessons I see for IT executives.

  1. Find the ‘edge’ that pushes performance boundaries.  Most IT organizations have become bogged down managing the ‘core’ IT systems and capabilities.  This core, managing and running the firm’s infrastructure and foundation systems consumes much of the IT budget and most of the IT management bandwidth – and yet it delivers relatively little in the way of new business value.  You can’t take your eye off the ‘core’ but you have to find ways to be watching, stimulating and working with the ‘edge’ – this is where the big opportunities lurk.  Somewhere in your ecosystem – in your business units, customers, suppliers, and so on, there are ‘edge’ needs and ideas being surfaced and explored.  Are you ‘catching these waves’?
  2. The ones who achieve the breakthroughs are ‘risk takers.’  While you typically can’t take risks with your ‘core’ systems, you have to with your ‘edge’ opportunities.  And yet, you have grown a culture of “prevent bad change.”  While not throwing the baby out with the bathwater, you now need to foster a culture of “create good change.”  I’ve mentioned before that onerous, rigorous Net Present Value-based business cases are good at screening out low value IT opportunities, but if you are not careful with them, they will also screen out potentially high value, but risky opportunities.  Rather than the onerous business case (or at least as a supplement to it) you need to develop competencies and capabilities in business experimentation, analytics and rapid, iterative development.
  3. Appropriate insights from adjacent disciplines.  Are you tracking adjacent disciplines?  Do you know how the disciplines of marketing, and especially advertising are evolving in the Web 2.0 world, and how this impacts IT opportunities?  Do you understand the state of the art in ‘design thinking’, or ‘customer experience design’ or ‘IT enabled innovation’?  What other adjacent disciplines might be applicable sources of insight in your ecosystem?
  4. Bring users and developers closer together.  We’ve discussed this whole idea of business-IT ‘confluence’ before – I truly believe it’s the ‘big idea’ behind business-IT maturity and Reaching Level 3.  It’s also the essence of ‘agile development’, ‘extreme programming’, ‘rapid interactive prototyping’ and many of the development methodology improvements and innovations of the last 10 years or so.
  5. Foster and understand ‘loose practice networks’ of edge practitioners.  This follows the Appreciative Inquiry school of organizational development.  Or as science fiction writer William Gibson said, “The future is already here. It’s just not very evenly distributed.”  In other words, somewhere in your ecosystem, someone has tried/is trying something innovative – can you find it, and make it more common practice?