I consult, write, and speak on running better technology businesses (tech firms and IT captives) and the things that make it possible: good governance behaviors (activist investing in IT), what matters most (results, not effort), how we organize (restructure from the technologically abstract to the business concrete), how we execute and manage (replacing industrial with professional), how we plan (debunking the myth of control), and how we pay the bills (capital-intensive financing and budgeting in an agile world). I am increasingly interested in robustness over optimization.

Wednesday, September 29, 2010

Restructuring IT: Guiding Principles

This is a continuation of a series I left off in December 2009 on Restructuring IT. This post presents a few guiding principles to understand before undertaking a restructuring exercise.

First, don't fool yourself about your ambitions. Come to grips with what you think you want to be: a demonstrably world-class organization, or just less bad at what you do. The prior is easy to say but hard to achieve. If you're wed to any aspect of your current organization, if you think process will make your business better, or if you're concerned about making mistakes or losing staff, you're really no more ambitious than being less bad. There's nothing wrong with that. Minor restructure can have a beneficial impact. Just don't mistake "sucking less" for "software excellence".

Second, be aware of your level of commitment. Change is hard. As liberating an experience as you hope it will be, the people in your organization will find restructuring invasive, divisive and confusing. Some people will resist, some will revert. Some will exit of their own volition, and some you'll have to invite to leave. Change is tiring and frustrating. Staying the course of change through the "valley of despair" requires a deep personal commitment, often in the absence of compelling evidence that the restructure is going well and frequently against a chorus of voices opposed. Fighting the tide is never easy, even from a leadership position.

Third, don’t expect that you’re going to restructure with tools, training and certification. That won’t change behaviours. If you believe change comes about through tools and training, you should release 80% of your staff and hire brand new people every year: just put them in training and give them tools to run your business. Of course you wouldn’t do that, because you’d lose all the experience. So it is with this restructure: you’re developing new experience. Tools can make good behaviours more efficient, but tools alone don’t introduce good behaviours in the first place.

Finally, be less focused on roles, titles and hierarchy and focus instead on what defines business success and what actually needs to get done to achieve it. Tighten up governance scrutiny to verify that people are working to a state of “demonstrably done" and not just "nobody can tell me I'm not done". And prioritize team over the individual. Don't privatize success while socializing failure: incentivize the team, not each person. People focused on a team accomplishment are less concerned with individual accolade. Culturally, make clear that an outstanding individual performance is a hollow (and dubious) victory in a failed team.

The final installment in this series will cover some immediate actions you can take today to restructure.