Niccolò Machiavelli made some important observations regarding the conduct of a prince, making specific recommendations for what a prince must do to maintain the integrity of a state. Among other things, he wrote about the composition of forces necessary to both defend and advance the interests of a principality.
While military metaphors are in many ways inappropriate for business (business situations are nowhere near as serious as armed conflict), they are among the oldest of human endeavours and provide a rich history of organization and social dynamic. Just as there have been business books that derive lessons from such diverse personalities as Sun Tzu and Attila the Hun, we can similarly draw some interesting lessons from Signore Machiavelli.
Machiavelli observed there are four compositions of troops:
- One's own forces (i.e., drawn from the population of the principality)
- Mercenaries
- Auxiliaries
- Mixed from any combination of the above.
On the buy side, most businesses aspire to staff with “one’s own forces.” This provides a perception of control, specifically with regard to compensation, promotion, and even daily work activity. Many firms believe they have "one's own" because they staff with direct hires. But there's more to having “one’s own forces” than putting people on the payroll. The interests of the employees (or in military terms, the conscripts) must be fully aligned with the unit. A unit (e.g., a project team or an army) is victorious and with it the sponsoring organization (business or state) and the individual, or the unit is not victorious and with it both sponsoring organization and individual lose out.
If an individual is pursuing a path of personal success that is not aligned with the success of their unit, they are not, from the perspective of the principality, “one’s own forces.” In fact, they fall into one of the next two categories, that of mercenary or auxiliary. In technology, we see this all the time. For example, freshly minted university graduates are typically looking first to acquire skill and experience in a specific technology, expecting to change employer many times in the pursuit of that skill, as opposed to being motivated to fulfill a business mission enabled by the project they’re working on.
By the same token, most businesses engage mercenaries. Mercenaries are often independent contractors, loyal to no leader, and loyal only to themselves. While there can be exceptions, according to Machiavelli they're not good troops in the end because they are not dependable in battle. Specifically, they're the first to desert since they have little on the line. Also, their interests are not aligned once the battle is over. According to Machiavelli, the risk here is "dastardy," or maliciousness. Mercenaries draw income from battle, not wealth from victory. It is in their interest to seek - or to create - conflict. And this is common in the IT industry. How often have we seen an important business initiative beholden to a technology component that is laden with technical debt, the delivery of which is in the hands of mercenaries who are motivated neither by the business impact of the solution nor its reliability and affordability of maintenance? By contrast, how often do we see people develop career "annuities" for themselves, drawing an income for an extended period of time as caretakers of a business critical application that is heavily laden in situational complexity?
Auxiliaries, according to Machiavelli, are particularly dangerous. In military terms, the independent auxiliary unit seeks its own opportunities precisely because it is in a position to create attractive circumstances. In business, if a host company gives a contract firm autonomous leadership on an initiative, the host firm will find a significant portion of its forces are loyal to another. According to Machiavelli, the risk with auxiliaries is "valour". Auxiliaries are motivated by the opportunity to drive wealth from adventurism. If a buy side firm contracts with a sell side firm for an independently-functioning team, it is not out of the question that under competent leadership that sell-side firm will look to strike its own bargain with the market. It may develop expertise, capability, intellectual property or domain knowledge that it can monetize elsewhere. Alternatively, it may hold a customer firm hostage for better terms for some of these things.
The last category of forces - mixed - is in fact the most common in technology. Most firms don’t have a homogenous staffing model. They rely on contractors and outside firms for significant portions of their staff. Also, as mentioned above, there will be inconsistencies in the motivations of their FTEs. “One’s own” forces must be motivated by the wealth of the business (however “wealth” in the situation is defined) as opposed to personal income, to have it at risk, and to have a direct influence on the outcome. Very often, that isn’t the case among badged employees, which means a fair number will be mercenaries. They'll be motivated by individual interests that are not fully aligned, and may even come at the cost of their paymasters. There are also cases where there are auxiliary units lurking about in a business, especially technology: people who have worked together for many years for several different organizations, who form a shadow unit and eventually move to strike their own bargain.
People on the buy side and sell side of technology generally don’t recognize these distinctions. Generally speaking, people on the buy side (a) don’t recognize that their staff are mixed and not "one's own" especially in the absence of contractors; (b) don’t understand the consequences of their staffing mix (e.g., what does it mean from a retention perspective that people aren't first-and-foremost die-hard employees committed to the success of the business imperative?); (c) fail to understand the nuances of how to deal with each group specifically (e.g., in project crises, we tend to see a lot of rah-rah managerial fluff spewed forth from buy-side leadership to sell-side people who are completely disconnected from the business situation at hand); and (d) have no idea the risks and opportunities of each group.
By the same token, the sell side doesn't appropriately approach the market. Sell-side firms that aspire to be "auxiliary forces" talk as if they can be "one's own" (the ubiquitous word "partners” is usually invoked), yet they usually sell themselves as mercenaries to the classic formula of people x time x rate. In this effort based formula the risk is borne by the buyer, but the impact of mercenary pricing cuts both ways. Sell-side firms very often end up in mercenary situations yet fail to price and structure it to reflect the “income” that it really is, mistakenly believing they're developing a vehicle for “wealth” (i.e., a sustainable business opportunity.) Finally, sell-side firms typically fail to understand the full terms and conditions required of both parties for the supplier-vendor relationship to be fully aligned to perform as “one’s own” for the business mission at hand. Very often, they export the problems they have as a sell side business (such as hitting revenue targets or maintaining margin) into the value proposition offered by the sell side. It comes as no surprise that in the end, they default into a cost or "mercenary" engagement model.
The nature of forces – and the consequences – haven’t changed all that much since the dawn of time. The lessons of Machiavelli for the state apply to both technology buyer and seller alike.
The buy side sources staff from a market overwhelmed with sell-side firms offering technology specialists, vertical market expertise and bodies in bulk. The buy side needs to have the right expectation for the right type of firm. The large-scale staff-aug firm has some of the characteristics of an auxiliary, but when it comes right down to it aren't they really just a large mercenary outfit? And does a firm with deep vertical "practices" have aspirations to monetize (possibly to our disadvantage) the expertise derived from the solution we're engaging them for? Alternatively, are we trying to engage a genuine partner firm in a mercenary model? For that matter, do we do things on the buy side to create the circumstances that allow us to engage "one's own" forces? Perhaps most importantly, do we recognize the fundamental characteristics that make a person or a firm suitable for that kind of engagement?
The buy side also needs to consider the project mission. Perhaps the organizational politics have compelled us to go in pursuit of some boondoggle but we know that sooner or later, people will come to their senses and cancel the project. Or perhaps we have a situation where we need to prop up a project deliverable only until we complete negotiations for an alternative solution. In such cases, the buy side firm would be foolish to allocate "one's own" forces, and would be better off to engage mercenaries or auxiliaries.
Curiously enough, a lot of business press has covered this from the perspective of the buy side. It’s worth reflecting on this in greater detail from the perspective of the sell side, or the supplier of “forces.” That will allow sell-side firms to recognize the right characteristics, opportunities, and circumstances for deploying capability across their customer portfolio.
Firms on the buy and sell sides – from established to start-up – experience this phenomenon. Many buy side firms wish to engage, and many sell side firms wish to be engaged, as "one's own." To do that requires trust, which doesn't come easy and must be earned every day. It also requires some form of a shared opportunity model, and very, very few examples of this exist today. This isn’t to say that true partnerships can’t be forged, but instances of this are the exceptions and not the rule in technology. Auxiliary and mercenary buying patterns – transacting for specialized knowledge or bulk capacity (people x time x rate) – are the rule in IT.
A fully aligned partnership - that is, sourcing for "one's own" in Machiavelli's model - is possible only with like minded people who form deep relationships built on a firm foundation of trust and fundamentally aligned interests in achieving a business goal. Those like minded people on whom you can build that trust relationship are hard to find, and they're few and far between, but seek them out and you'll build mutually sustainable businesses.
Labels: Corporate Psyche, Leadership, Strategic IT
¶ 9:04 PM
My friend Bradford Cross posted an interesting blog on wages last week. It’s a great piece, particularly his comments on Henry Ford's approach to business profitability.
To a great extent, the Ford model Brad refers to is dependent on the combination of volume and productivity. That aspect of the model came to a screeching halt for Ford in the 1920s when the Model T simply passed its "sell by" date. Once the product outlived its market, sales volume dropped. They not only discontinued production in response to growing inventories, they didn’t have their next product, the Model A, out of the design phase. They were forced to shut down the line for months. That put quite a dent in accumulated profitability. They also lost their lead in market share.The focus on volume and productivity drives businesses to aggressively remove cost and increase productivity from repeatable processes to maximize profitability. In so doing, they're not focused on sustainability, they're focused on efficiency.
Sustainability requires constant change. We have to constantly think about the surrounding business conditions: labor patterns, competitive threats, customer needs and so forth. Sustainability requires us to be primarily concerned with where the business is going to be tomorrow. Efficiency requires everything to stay the same. We luxuriate in the simplicity of holding everything else constant when we focus solely on efficiency. When we pursue efficiency, we're focused on where the business is right now.
In the extreme, we optimize relative to the circumstances of this moment in the hope - the hope - that time will stand still long enough for us to draw an income, have 2-point-something kids, take a decent vacation every year, and accumulate sufficient wealth to retire.
Hope may be audacious, but it's a lousy strategy.
Brad mentions that Ford's model was more complete than volume and productivity. There's another dimension that, if executed, makes a business sustainable and less prone to seismic interruption: constant innovation in response to external factors. With that must also come invention, which is of course not the same as innovation. This is also not the same as internally-driven innovation. To wit: while shaving a few seconds off the time it takes to tighten a bolt might make bolt-tightening more efficient, it's useless if the market has switched to rivets in place of bolts.
If we aggressively evolve both what we make and how we make it, nobody in production will be doing what people were doing 10 years ago, because those jobs didn't exist 10 years ago. They won't exist 10 years from now, either. In fact, we don’t want entire categories of jobs that exist today to exist a decade from now. This means we have to be less focused on the known (what we’re doing) and more focused on the unknown (what should we be doing?) This makes work a lot harder.
In innovation-centric firms, production isn't in a bubble. In fact, it's very much integrated with its surroundings. That's where Brad's reference to “worker skill” comes into play. In technology, it’s more than just a question of skills: it’s a question of both capability and the passion to acquire more knowledge.
This may seem to be blatantly obvious: of course those are the workers we want. How hard can it be to hire them? It’s just a recruiting problem, right? Brad specifically makes the point that there’s a (wildly mistaken) school of thought that assumes we can get the best people by spraying a lot of money around.
If only it were so simple, as Brad points out. It's very difficult to succeed at this, not only because it requires a change in recruiting behaviours, but because it means significantly disrupting an internal business process. That's harder than you might think: the efficiency-centric mindset is firmly entrenched in business, government, and the universities that educate the management that run them both.
Efficiency-centric firms are process heavy. The people in these firms - badged, independent contractor and supplier alike - are very heavily invested in that firm's processes. Subsequently they resist change to the processes and practices that they have worked so hard at mastering and making “efficient.” This creates organizational headwinds so resistant to change they can bend solid steel. Any "change initiative" that isn’t blown away by these headwinds is corrupted by it. So, the boss says knowledge is power, and he's told us we’ve got to have the most knowledgeable people in the business? No problem: we’ll show how knowledge-hungry our people are. HR will set up some computer-based training and tie a portion of management bonuses to the number of training hours their people “volunteer” for. Managers will then measure their supervisors on training hours their people receive. Supervisors will set a quota for laborers. Laborers will fill out the necessary form to show they’ve hit their training quota, and circulate answer keys if there’s a test at the end so that nobody fails to meet their quota. The efficiency-centric system returns to balance with no net impact: laborers aren’t inconvenienced, management receives its bonus, and the organization can now measure how much they "value knowledge." Everybody plays, everybody... well, it's complicated. Those who lead the initiative "win" because they can report that a measured improvement took place on their watch. Those who sponsored the initiative are "reaffirmed" because the firm can now prove they have knowledge-hungry people. The rest don't necessarily win, but they certainly "don't lose." And isn't that the point these days, to make sure everybody is a winner?
We see this pattern repeated with all kinds of well-intended initiatives, whether it be a mission for zero defects or a drive to be Agile. People will do everything they can to sustain that which they have already mastered, even to a point - misguidedly or maliciously - of giving the appearance of innovating and changing. Efficiency-centric organizations have stationary inertia that is extremely resilient to internally-initiated change. Only when an external event trumps every other priority - and most often it has to be a seismic event at that, such as the complete evaporation of revenue - will a bubble burst.
Going back to Brad's blog post, this creates a wage discrepancy and with it, a bubble. People who accept the annuity make the erroneous assumption that the rising tide of inflation will sustain their income levels. It’s actually just the opposite: the minute somebody is working in one of those annuities, their skills are deflating because they're not learning and accumulating new knowledge. So is the asset value of the thing they're caretaking. The people who do this misread the market (e.g., assume an outsized value of the asset to the host firm) and subsequently have a misunderstanding of their wage sustainability. The resultant wage bubble lasts until the "market" catches up: either the host firm takes costs out of maintenance (e.g., by labor replacement) or retires the asset. The person who was earning what amounted to an outsized income by being in this bubble faces that same seizmic correction as Ford did in the 1920s if they're not prepared with their own "Model A" of what they're going to do next.
The mis-fit of the industrial model in technology is that industrialization makes no provision for capability: each person is the same, the only difference being they're either more or less productive than the average, and indexed accordingly. That completely ignores the impact of destabilizing change that people make in what they do and how they do it. Disruptive, externally-driven innovation should be the rule, not the exception. Of all lines of business, this should be the case with technology. And with the right group of people, it is.
Disruptive innovation pops a bubble. A popped bubble threatens entrenched interests (e.g., those who have mastered life inside the bubble). But disruptive innovation is what makes a company sustainable.
1 I am indebted to my colleague Chereesca Bejasa for using the term "bubble" to describe a team operating to a different set of processes and behaviours within such an environment. Just as a team can be in a bubble relative to the host organization, the host itself can be in a bubble relative to its market.
Labels: Change Management, Corporate Psyche, Innovation, Leadership, Strategic IT
¶ 9:34 PM
In the late 1970s, the microcomputer industry was still in its emergent stages. Microcomputers weren’t nearly as powerful as mainframe and minicomputers. There also wasn’t clearly a “killer app” for them. But at the time, it was obvious that microcomputers were going to have a significant impact on our lives. People bought computers for home and used them for work. They even brought them from home and used them at work. While the software was primitive, you could solve many different kinds of problems and perform sophisticated analyses more efficiently than ever (e.g., the simple "what if" forecasting that we can perform in an open-source spreadsheet today was a major breakthrough in productivity 30 years ago). Having a microcomputer in the office was something of a status symbol, if a geeky one. And they made work fun.
The microcomputer industry had some other interesting characteristics.Most corporate technology people (working in a department known as "Information Systems" as opposed to "Information Technology") didn’t take microcomputers all that seriously. They were seen as primitive devices with little computing power. Toys, really. From the perspective of the technology establishment, “micros” were only really useful if they had terminal emulation software (such as VT100, 3270, 5250) so they could connect to a more “serious” computer.
It was a highly fragmented market. There were lots of different combinations of architectures, operating systems and CPUs. There were also lots of different manufacturers, each offering their own standard and going in pursuit of business users, including firms such as Osborne, Sinclair, Commodore, Tandy and a rather unique firm called Apple Computer.No one microcomputer platform was dominant. Each sought to develop and sponsor a library of applications and add-ons so they could sell hardware. For the most part, each relied on value-added resellers as their primary channel.
IBM took a different tact when they entered the microcomputer market,. IBM didn’t compete against the rest of the microcomputer market. They created a new market for something they called a Personal Computer. Using off-the-shelf components they built an open platform that anybody could replicate. Through the combination of brand, applications and reach, IBM was the standard in the personal computer space. The prevailing wisdom at the time was that “nobody got fired for buying IBM.” This made personal computers a safe corporate investment, and made IBM the standard.For a few years, Apple and IBM waged a pitched battle. IBM, or perhaps more accurately, the "personal computer" standard as defined by IBM, was victorious and for all intents and purposes remains the dominant platform today. And while they lost control of that which they had created, IBM had strong hardware sales, while Apple was for many years relegated to being a provider in niche markets such as education and desktop publishing.
Fast forward 30 years.A handheld computer / smartphone industry has emerged in recent years, and it shares many of the same characteristics of the early stages of the microcomputer business.
Smartphones have been underpowered for much of the past decade, but it’s pretty obvious that they'll soon become very powerful and will have significant impact on our lives. The current "killer app" - e-mail - is really a utility function. The equivalent to the microcomputer's “’what if’ scenario” capability hasn't yet been identified for the smartphone. But it will, and these devices will change how we live and work. As with the early microcomputers, a lot of people have bought a personal smartphones, and it’s not uncommon for people to use their personal handheld for work (e.g., using an iPhone for maps/navigation). The smartphone a person carries is something of a status symbol, if a bit of a geeky one. And they’re fun.Until recently, we’ve been force-feeding big-screen (1440 x 900 pixel) form factors into small handheld devices. That is, until the current generation of smartphone arrived, mobile devices were primarily made useful as “internet terminals” more than application processors, no different from the terminal emulation of a previous generation.
It is a highly fragmented market, with competing CPUs and operating systems. There are also lots of different vendors with proprietary products, such as Nokia, Blackberry, Palm and another called Apple Computer.
No one platform is dominant. Each is seeking to create and sponsor a library of applications as a means by which to gain market share. Most sell through value added resellers.Google recently entered this market. In many ways they’re taking the same approach as IBM. By offering an open platform, anybody can build a Droid-compatible phone. They’ve built out a sizable applications catalogue in a short amount of time. They also have brand and reach, although it can't be confirmed whether somebody has been fired for buying Google.
It's interesting to see not only the same market phenomenon happening on a different technology, but that Apple Computer (and specifically Steve Jobs) is at the epicenter of it.Perhaps it will turn out differently this time. Apple has been through this same dynamic once before. They can also learn from Microsoft’s unsuccessful attempts to make Windows Mobile an ubiquitous platform . And Google has entered the hardware business on the Droid platform, but they're not a hardware company. However, none of this may matter. In the 1980s, the value was in the hardware, but the lion's share of revenue in the Android market won't be in hardware sales. This means Google is following a similar pattern, but changing the attributes. They're not pursuing a 30 year old strategy as much as they're updating a strategy to be the dominant provider in a current market.
No matter how this plays out, it's shaping up to be an epic battle for platform supremacy, just as we experienced 30 years ago. The microcomputer industry was highly innovative in the 1980s. It was an exciting business to be in. No doubt the same will be true of the smartphone / handheld computer business in the 2010s.
It was Mark Twain who wrote, “History doesn’t repeat itself, but it does rhyme.” We’re witnessing this now. Best of all, we have a front row seat.
Labels: Leadership, Strategic IT
¶ 9:08 PM
This is an apt metaphor for IT. We do a lot of things, such as introduce situational complexity and technical debt, that pile on the work we have to do.
This is at the heart of what we have to pay attention to in our restructure from industry to profession: if we know that we are not doing things that make more work to be done, and if we also know that we are doing things that consistently result in quality outcomes, we’re much less likely to self-inflict more work.
Restructuring IT requires us have a different set of expectations. When we follow traditional restructuring led with org charts and budgets, we take behaviours for granted. We simply can’t. Like US policy on nuclear disarmament in the 1980’s, we must trust, but verify.
The good news is, behaviours are actionable. There are things we can do to bring about the right behaviours in an organization. The bad news is, this is vastly different from everything we’ve been taught about reorganization.
The purpose of this restructure isn't to assign people into roles, but to build an IT organization that is durably, anticipatorily responsive. That’s a mouthful. “Durable anticipatory responsiveness” is the extent to which we’re consistently able to do things that allow us
to get things done – complete things, useful things, not just bit twiddling. But it isn’t enough to just “get things done.” We have to avoid launching any self targeted missiles, like creating high-maintenance code and therefore high cost assets. So being responsive means doing useful things, and it means not making work for ourselves.The “anticipatory” bit means that we’re doing things that allow us to look ahead to figure quickly out where we’re at risk, or where we have an opportunity. Anticipation is important. We’re not simply waiting around for things to happen. That was how IT applied Rapid Application Development. We tried it in the 1980s, and it let us be better, faster, cheaper… pick any two. We need to anticipate. We need to get in front of things. So, dealing with whatever comes through the door isn’t enough; we also influence the business agenda in a meaningful fashion. That means positioning IT as a peer with the business, not in a power struggle with it or subservient to it.
To restructure this way, we have a model . We look at 10 practices, each decomposed into 6 stages, that allows us to assess a team, department or organization. Each practice is explained in sufficient detail to allow us to identify how
a team gets things done today, how people behave. We recognize there are behaviours that inhibit responsiveness (“regressive” behaviours), and there are increasingly aligned behaviours. Especially in the early stages of restructure, we want to establish basic collaborative behaviours, because we’re creating new work patterns among people in a team. We're building “muscle memory” of how people in a cross-functional team must work together.
One example of this was that teams were in the "defect tracking" business more than they were in the "defect fixing" business. Following the relocation, QA analysts were sitting next to developers in the same team, but rather than talk to each other, developers and QA continued to work independently and communicate exclusively via the defect tracking tool. Defect reports, questions, "non-replicatable" and "ready for retest" and so forth we're all communicated via tracking tool. Not surprisingly, this led to re-opens, failed retests, questions, requests for additional documentation, and all kinds of other hand-offs. That not only made the remediation process inefficient, it created very long histories of defect tracking activity that were more noise than signal as a lot of the data captured was irrelevant to the actual problem.
Because it was more important to show effort as opposed to results, they weren't behaving as a team delivering a software asset, they were behaving as a team that needed to track details about defects. By asking people to collaborate on solving defects at time of discovery, we were able to make defect repairs available sooner. In fact, it wasn't unusual for a repair to be available in a build in less time than it took to submit an initial defect report. Getting into a state where this was the de facto behavior did not happen simply because people were physically co-located and had some collaboration tools. It required active intervention by management working directly with developers and QA solving specific problems in a collaborative manner.
Behaviour change is not a one-time action. Team circumstances change: people come and go, technology is upgraded, business needs change, etc. That means we must constantly pay attention to behaviours if they are to be durable. To do that, we can apply the model as often as we need - annually, quarterly or monthly - to ascertain whether people are making good "lifestyle" decisions." This allows us to assess the extent to which we are restructuring the fundamental organizational behaviours to focus on results as opposed to effort.
However, we must be careful. Competent assessment is a capability, not a task. Assessment is not done by questionnaire or checklist, and "objective self-assessment" - asking teams to critically analyze their own behavioural restructure - is most often wishful thinking. It requires an experienced touch to apply a combination of archeology and sociology to separate the opinion of how people aspire to work from the fact of how they are actually working. Creating a competent assessment capability requires investment, but it is critical to success as the assessments provide the telemetry of restructure.
We now know that to be a results-based organization, we must reorganize around behaviours. We have a good idea of what those behaviours are from an established model. We can use this model as both guide to and instrumentation of our restructure. But before we go off in pursuit of restructure, we must first internalize some guiding principles. We'll cover in the next installment of this series.
Labels: Change Management, IT Governance, Restructuring IT, Strategic IT
¶ 6:00 AM
Up to this point in this series on Restructuring IT, we’ve looked at how IT has adopted an industrial model. IT has achieved scale, but at the cost of results, as is clear from the low rate of success of IT investments. We'll now take a look at how we can organize IT for results.
Professional versus Industrial
IT needs to reorganize for results, not scale. Organizing for results requires professionalism as opposed to industrialism.
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People in industrial and professional situations each use drills, but you wouldn’t staff an assembly line worker in an operating room to get "capacity" on a surgical team. | |
To get professionalism, we need to organize less to try to be predictable (which will always escape us) and more to be responsive and accountable.
Let’s think about the things that would professionalize IT.
- Instead of scrambling just before a deployment, what if every solution build acted as an internal gatekeeper of quality, continuously executing to validate technical, functional and non-functional completeness of everything we do?
- Instead of trying to “inspect quality” into IT, what if testing were a team responsibility, automated and integrated into what we do daily?
- Instead of watching big-up-front designs morph from whiteboard masterpiece to over-engineered Frankentecture, what if teams had the flexibility to take design decisions in near-JIT fashion, with a minimum of duplication and the fewest moving parts possible?
- Instead of a “requirements arms race” between business and IT, what if we were able to accommodate continuous business involvement, facilitated to enable continuous change management and adaptive project management?
- Instead of standing up volumes of impenetrable and unactionable requirements, what if we had short, business oriented requirements that could be quickly steered through development and QA and into production?
- Instead of sending round reams of paperwork for PMs to fill out in little more than CYA exercises, what if we were able to govern IT non-invasively, ascertaining from our delivery teams whether they’re delivering value for money, and working in accordance with expectations?
We have the means by which to do all of these things. Today. Right now. But we can’t simply will them into place. To get these things, we need to restructure IT.
What does it really mean to “restructure”?
Before we discuss what restructuring IT is, let’s first understand what it isn’t.
Restructuring IT isn’t a question of org charts. All too often, new reporting lines just rearrange the deck chairs on the Titanic. It also isn’t about budgets, either: we can’t do more with less, because there isn’t that much less with which we can get any more done with.
How about the management cheerleading of recent years, things like “be close to your customer” and “have fewer hand-offs in your work processes.” When folks like Tom Peters started putting those messages forward in the 1980s they were a wake-up call that business had gone adrift. And yes, we need to restructure with this in mind. But we can’t have reorganization by platitude. We need something actionable.
Restructuring IT is about behaviours. Changing behaviours away from industrial thinking to professional thinking is a pretty big shift. Among other things, it means each person is responsible not just for doing the tasks they’ve been assigned, but doing what is necessary for the project to succeed.
Think back to the surgical team metaphor. As my colleague Greg Reiser points out, the surgical team collaborates toward a shared objective, improving the quality of life of the patient. Their primary goal may be to graft blood vessels that bypass a coronary artery blockage, but their objective is to prolong the life of the patient. What does the team do when they discover, as they almost always do, that the condition of the heart and surrounding tissue is not exactly as they expected? They apply their professional expertise and work as a team to adapt in order to achieve the primary objective. This is how professionals behave.
It doesn’t help, of course, that there are so many headwinds to getting things done in IT, ranging from a constant cycle of upgrades that change points of integration to an abundant supply of people without the complete gene in their DNA. Results are hard. Finishing stuff is hard.
This begs a critical behavioural question: why take the risk of getting “results”? Why put yourself on the line, underwriting success with your personal guarantee, especially if you have a built-in scapegoat? I met with a team last year where the PM, BA and dev lead knew a project was going to fail, because the development team simply didn’t have the capability. The project leadership didn’t make any effort to change staff, because the decision of who to staff was somebody else’s: people were supplied to them by procurement. The project was conspicuous because it was late starting as it was, so their priority was to get started. Never mind that they knew it wouldn’t finish. In the end, they could say they simply played the hand they were dealt by the organizational structures – in this case, an industrial-inspired procurement function – that existed to make IT effort “cost effective.”
So rather than work to success, rather than pressing the button and stopping the line and saying “this project is going to fail and we need to do something about it before we make a commitment of capital and time” they simply got on with the work knowing they were going to fail.
This is all too common. There is structural disincentive to achieve results in a lot of IT organizations. This disincentive is supplemented with soft scrutiny. Most measures of “complete” amount to little more than people working to a state where nobody can tell them they’re not done, instead of working to a state where somebody can conclusively tell them they are done.
So what makes us think people will make the effort to get things done?
It also makes you wonder: how much of this is going on in your IT organization today?
In our next installment, we'll take a look at how, specifically, we restructure for results.
Labels: Change Management, IT Governance, Restructuring IT, Strategic IT
¶ 11:37 PM
October is normally a heads-down month. In addition to being in the home stretch of meeting our yearly objectives, we must dedicate cycles to shaping, communicating and justifying our plans for next year.
October is also a busy month for information sharing. The thoughts and ideas that have percolated through the year reach their maturity about this time, and we want to share them before everybody goes on their winter holidays. ThoughtWorks has no shortage of events coming up, and I am privileged to be a part of many of them.
If you’re in Chicago on Tuesday October 20, ThoughtWorks is hosting a panel discussion on the Budgeting and Financial Implications of Agile. On the panel are experienced IT leaders who head strategy, portfolio management and application development for their respective businesses. They've come to terms with balancing short-term operational flexibility with long-range budget forecasting. Stop by the Aon Center at noon if you can, but please register before you do.
Our first webinar in the Agile PMO series, Real Time Metrics, was very well received. We’re pleased to present Real Time Governance, a follow-on webinar that extends the concepts to their next stage of evolution. I’ve had the opportunity to present the Governance material with my ThoughtWorks colleagues Jane Robarts and David Leigh-Fellows in Calgary, Toronto (which was recorded and is available on InfoQ) and San Francisco. We’re broadcasting this next as a webinar with a full Q&A session on Thursday, October 22nd. The response has again been very enthusiastic, but with virtual seating at a webinar there are unlimited spaces, so please feel free to register and attend.
Members of the Project Portfolio Management Professionals association attended our Real Time Governance presentation in San Francisco last month and invited us to present it to their membership. I’ll be presenting to the PPMP via webinar on Friday, 23 October. If you are an IT leader with project portfolio management responsibility today, I strongly encourage you to look into this association. Take a look at their website or reach out directly to them for an invitation.
If you’re in Dallas on the 27th, I’m hosting an executive roundtable on Financing and Budgeting Agile projects. ThoughtWorks hosted a similar event in Chicago back in August. The people who attended that event have self-organized a micro-community. We’ve had a follow-on event and lots of peer-to-peer conversations as we mutually educate and collaborate on the unique funding and forecasting challenges and opportunities presented by Agile. Reach out to me directly if you're interested in attending the Dallas roundtable.
Finally, ThoughtWorks is sponsoring Agile East at the end of October in Philadelphia on the 29th and New York on the 30th. We have a powerhouse lineup of experienced, thoughtful practitioners, including Martin Fowler, Graham Brooks, Premanand Chandrasekharan, Carl Ververs, Joe Zenevitch, Shyam Mohan, Greg Reiser, Andy Slocum, Tiffany Lentz, Manu Tandon and Alla Zollers. This is an outstanding group of people and I’m humbled to be a presenter among them. I’ll be giving the noon keynote on Budgeting and Financial implications of Agile. Specifically, I'll be looking at how Lean and Agile allow us to maximize capex but require us to be extraordinarily diligent to prevent the perfect storm that can create an IT liquidity - and potentially IT solvency - crisis. I can’t stress enough what a stacked lineup of people this is. Make plans to be in Philadelphia or New York at the end of the month, just be sure to register.
Labels: Agile Management, IT Governance, Leadership, PMO, Strategic IT
¶ 8:00 AM
In previous installments of this series on restructuring IT, we looked at how IT has adopted industrial practices as it has gone in pursuit of scale. As a result, IT bears striking resemblance to Detroit automakers. Let's look at some common characteristics.
Sub-Optimal Quality
Detroit suffers its periodic crises of quality. There was a joke that made the rounds during the 1970s that you know you have an American car when you get the factory recall notice in the mail. In much the same way, industrial IT is notorious for low technical quality of what it produces.
Long Time-to-Market
Detroit has excessively long product development times. It takes years to go from idea to availability. Former Chrysler CEO Lee Iacocca famously went on a tirade when he wanted to see what the LeBaron would look like as a convertible. His design manager told him something to the effect that they first needed to do a scale model, then a wind tunnel, then the prototype, so they’d have it for him in about 6 months. Iacocca’s reply? “Just take a chain saw to the roof!” How many CEOs look at their IT department and ask, “why is it so hard to get anything done in IT?”
Too Much LeverageDetroit got by for so long because it could “pull demand forward.” Very few people pay cash for their cars. Instead, they finance their purchases. They're buying a car based on future earnings, not on their accumulated savings. Think about what happens in industrial IT, in terms of capability. There’s far less supply of “bankable capability” than there is demand. Instead, the industrial IT model looks for capacity. It puts people new to the IT industry in a position to put code on the line, learning as they go along. In effect, the industrial IT model borrows against future capability development. There’s even a few firms that have bet their entire business on this model.
As my colleague Greg Reiser pointed out recently in a webinar we produced for cio.com:
The extreme case of this are the large IT outsourcers that have rapidly grown over the past 20 or so years. Many firms that have actually bragged about their ability to add over 1,000 new professionals per month! Now while I can comprehend the ability of the US Marine Corps to add new soldiers at that rate, I personally cannot comprehend how a professional services organization can effectively add, develop and assimilate knowledge workers at such a pace. So I am not surprised when clients of these firms complain about the shallow depth of talent assigned to their projects. Remember, although the Marines put all recruits through a rigorous 12-week training program, every single one of those recruits is still just an entry-level soldier at its conclusion. It can take years to train and groom people for more challenging roles. Why should you expect different for software engineers?
Producing Solutions People Don't Want, but Have No Choice But To Use
Finally – and this one is arguably a bit of a stretch – Detroit has suffered eroding market share for many years. In many cases, they’re turning out cars people don’t want to buy, year after year. Increasingly, the people who do buy the cars are the people who have to buy the cars. E.g., they’re people who are in the automotive ecosystem. Sound familiar? IT stands up solutions that business users don’t want but have no choice but to use because they're in the corporate ecosystem.
A Troika of Trouble
There are three factors accelerating the rate of Detroitification of the IT industry.
- We have a capability shortage. For one thing, we’re not developing “heroes” in sufficient numbers to prop up this system, the folks who can jump among silos to do the unperformed tasks lost in the handoffs that happen in specialization. For another, IT isn’t the destination employer for people that it once was. (And by the way, neither are automakers.)
- We’re overloading on “situational complexity.” To get something done in most IT shops a developer has to be fluent in an esoteric landscape of existing systems, policies and procedures. Somebody might be the smartest developer in the world, but they'll make no impact unless they invest time in mastering the esoterics. That’s not attractive knowledge for somebody to acquire, because it’s not portable. There's not much value in having “I learned all the weird stuff necessary to get things done in this specific functional area of company x” on a resume. It’s also a frustrating experience, as very often the people alleged to have the right information aren’t really authorities themselves.
- Quality is assumed. Solutions delivered today are laden with technical debt, but very rarely is anybody looking for it. Apply metrics over just about any codebase in just about any company, and the odds are that you'll find at least one of the following: excessive complexity, excessive duplication, poor encapsulation or excessively long methods.
An increase in situational complexity, plus an increase in technical debt, combined with a decrease in total capability gives us exponential growth of people expending effort but showing little in the way of business results.
We should obsess about results, not scale. Scale is useless if we can’t get stuff done.
We’ve had a look at the problems with industrialization. Next, we'll look at how we can reorganize IT for results.
Labels: Change Management, IT Governance, Restructuring IT, Strategic IT
¶ 8:26 PM
