Chapter 2 - The Operations versus Strategy Paradox
The author speaks to an informal experiment he did at a conference - assembling a list of paradoxes and asking CIOs to identify the three that cause them the most pain. The one that really struck a nerve was "You were hired to be strategic but you spend most of your time on operational issues."
It's particularly frustrating because CIOs want to be innovative and contribute to the organization in a strategic manner, but are regulated to maintenance functions that consume so much of their time and resources that they cannot raise themselves from the day-to-day crises.
Deliver Revenue
One CIO took a more proactive role by assessing the firm's external suppliers and thinking about "business deals" by laying out engaging strategies for twenty of them. He went to the executives in other groups and shared his plans, getting the go-ahead to proceed.
It's suggested that there is a good network of CIOs out there, who make great contacts at industry events with firms that could open new revenue opportunities rather than merely serving the current needs, and that this is very seldom leveraged.
In some instances, internal services can be leveraged: another CIO in the manufacturing industry gave a presentation about mobile security to customers who purchase their products - which identified an opportunity for the firm to sell business services to customers who faced the same challenges.
Structure Your Organization for Strategy
Shifting away from the operations perspective to a strategy one requires organizational changes. Just as the CIO cannot focus on strategy when his primary job is the day-to-day operations, so are employees unable to think strategically when it is in addition to keeping up their other obligations: resources must be dedicated to innovation. "Because otherwise, people are so consumed with the running of the business that they can never focus on the future."
One problem is the consideration of IT as an overhead cost, something that is paid as a part of doing business, whose value is fixed (such as the rent). Instead, consider operation costs as a baseline, and see strategy as a way to recover costs - this provides the basis for investment decisions to be made based on recoveries.
Another approach was to set aside 10% of the team, and devote them to discovering revenue-generating work. The department still remains a cost center but enables them to deliver revenue opportunities to the business units.
Another approach was to establish a strategy roadmap for the IT department - though it took some work and the assistance of an third-party consultant to negotiate aligning the strategy roadmap with that of the organization in order to get funding.
Manage your own expectations
Be careful about becoming overeager at the opportunity to shift to more challenging and stimulating strategic work: much of IT is still operational, and the day-to-day work still needs to be done. Diving in too deep and too fast can result in heartbreak.
Consider operational excellence to be strategic. Focusing your creativity on finding innovations to reduce time and effort can help to clear the budget and build support you will need to take on more ambitious work. In many instances the firm evaluates a new CIO by their ability to reduce costs and improve efficiency, to the point that if you haven't made progress in ninety days, you won't be around much longer. Particularly in tough economic times, the inclination is to take every dime out of innovation and focus on efficiency.
There's also the need to "get smart before you get strategic." You must demonstrate you understand the business environment before you will have the credibility to push new ideas. The more you are able to relate technology to the business need, the more interest the business will show in what you have to say.
There's also a suggestion to be objective in assessing your own skills. Anyone can have an idea, but not all ideas are strategic just because they are new and different. Worse, not all plans are strategic and many are tactical or operational planning - and especially for those who have been in IT for years, they may not have skill and expertise in strategy.
It may also be necessary to address substantial bias against IT involvement in strategy, in firms that have traditionally seen IT as a supporting operation and a cost center. Where IT is deeply entrenched in operations and there is much resistance to its participation in strategy, "you would be better off working elsewhere." It's likely to get the feel of this by asking questions before you accept your next job: when you ask about the key problems that you will be expected to address, you will get a clear sense as to the existing perception of IT.
Get Good at the Core; Get Rid of the Context (A Turnaround Story)
It's generally believed that each "generation" of leaders is better off than the one before it - the previous CIO solved at least some of the problem, leaving the ecosystem better for the next guy. In practice, that never seems to happen. Infrastructure is unattractive: to get approval for a project that replaces the system and adds no new capabilities is less attractive than several others that jury-rig it further. As a result, each generation of CIO adds an entirely new layer of kludge - such that things are constantly getting worse.
There's a bit about a CIO who was brought into a nightmare scenario, and a suggestion that this seems to happen very often. The executive committee finds a bright candidate with vision, then toss him into a creek without a paddle. One CIO suggests that this must be addressed even before accepting a job: understand the situation, set the expectations, and name conditions - and be prepared to walk away if you cannot negotiate to an achievable set of goals with the support that is needed to get there.
A three-step planning approach is described: first take the time to identify what needs to be done, then identify the resources it will take to do them, then lay plans for those resources to accomplish the goals. Only when this is done will you be ready to take decisive action.
There's also advice not to make assumptions about what initiatives are most important: at some companies supporting remote workers is a nice-to-have, at others it may be critical to operations. The danger for an innovator is focusing a great deal of effort on things that don't matter very much.
Another potential mistake is focusing on only one area. For example, a new manager might tackle project management and neglect other issues until he has it worked out. One problem is that other areas, which may be more critical, are neglected. A larger issue is that problems tend to be interrelated and working on one end will not lead to an effective solution, but instead spin off more and bigger problems.
Many firms outsource parts of their IT operation to vendors, and then stop paying attention. This is very clearly a terrible mistake, exacerbated by the fact that many IT departments do a bad job of vendor selection in the first place: whomever can promise to deliver the desired capabilities at the lowest price wins the contract. Then, the firm discovers there are terrible terms and conditions, needs are not fulfilled, and vendors are running amok. Another significant issue is that collaboration is difficult because each system is managed by a different vendor, with the typical rivalry. Even if each is best-in-breed, the combination is not always beneficial. There is also the problem of playing hardball with vendors, constantly grinding them to get more for less, such they are often soured on the relationship and reluctant to suggest value-adds.
Another bit of advice is to switch to a more proactive model, inventing solutions in the IT department and then suggesting their value to the enterprise, rather than waiting to others to come to IT with problems to solve. Most often, such people show up with desired solutions, taking IT out of the problem-solving process, and relegating them to delivering as-ordered solutions.