Strategy & Leadership - removing the hype

The views on strategy range from alignment (Passive following adherence) to transformation ("strategic" intervention). Strategy and the formulation of it have become such a hyped process that senior executives are paralyzed into inaction.

I'm not going to labour the point on what strategy is, or what makes it good or bad. It's really a pragmatic approach to what is in essence a bunch of simple questions:

• What are the shareholders expectations?
• Is what you are doing now sustainable, or is what you are going to be doing in the future radically different ( for whatever reason - market forces, new technology, competitors, divestment, integration etc)? - don't whitewash the reality.
• Put it on the table - not the solution, just the facts of where you are now, and where you want to be ( a combination of short, medium and long term goals)

Get you executive team to put their experience together and create a workable plan to get you there. It doesn't have to be perfect. We all fall into the trap of trying to create the perfect strategic plan, when it is in fact a living, breathing process, adapting and adjusting to change.
What you don't know (the gaps), get your professional staff to fill in, i.e. what process needs to be developed , would new technology be required, is it going to change the way you market, are you're customers going to be interacting with you differently? etc.
Don't discount the use of tried and true basics, adapt if you must, but don't have a knee jerk.
Make the time with your executive team to actively engage and set in motion the plans to make the strategy come true. Do it! I'm sure I'm not the only executive that has attended strategy workshops and seen little or no action come from them (Its all about strong leadership here) and ensuring the operations are being dealt with by competent staff, and allowing the executive to get on with making the future happen.
If things change, as they will, have the maturity to change with it, you can't predict the future nor is it likely you will sail straight to the goal. A little bit of tacking will be required. At least you will be reaching your destination.
Having a "good" strategy and doing nothing, equals a "bad" strategy with lots of activity. The saving grace of the latter is that there is at least a chance that you will recognise your errors and fix them as you proceed.

Tactical Business Intelligence - its about fit and choice

CIO's often face ongoing criticism about technology services, the "IT doesn't give me what I want" versus the " But its designed to do it this way - best practice" syndrome. So who's fault is this, and what can be done to remedy the disparity in view points, as obviously this is a road to knowhere?

There is no one size fits all approach to business intelligence. Perhaps I have a more simplistic, practical view (don't underestimate the complexity behind delivering "simple") of the approach to BI. I've spent a lot of time with the executive team in defining the requirements, but at this level, the focus appears to be limited to historical results. A well presented Balance Sheet offers no value in terms of proactive management, it is what it is.

So when you start exploring the alternatives and asking "What would be the key things that if you knew them, would make a fundamental difference to you ability to respond proactively?", you see the blank stares. Its not easy. What is that prescient feeling that senior executives develop over time to say " there’s something wrong here" to be proved correct on further investigation? How do you translate that into tactical business intelligence?

At one stage of my career I could walk through an industrial plant and sense quite clearly if there was a problem. I've developed the same sense over the years with IT infrastructure and delivery, and reading financial statements. If something doesn't gel, I follow my gut instinct. I’m not often wrong.

You have to develop an early warning system at tactical level, sensors as to the quality of business you are doing now, in real terms. You can’t rely on history to trigger proactive management. What these will be are dependent on the type of business you manage, but here’s a clue – put yourself back in the position where you were at operational level. Try and remember the challenges you had, the information you would have killed for to make you job easier, that little bit of advance notice that would give you the edge. If you can do this, you’re on the right track.

An example of this in a service environment would be a “potential late delivery” sent out as an email of flashed to a website/ dashboard/ display. Perhaps this is not so simple, as it does imply you have the right data in place to do this i.e. lead times, routings, capacity planning etc. This is in all likelihood the source of the issue – no basics in place.

As I said before, simple tactical reporting is not simple, it requires a level of operational capability that to a large degree has been diluted through apathy and neglect. Companies that have a solid core of operational professionals are well aware of this secret.

In conclusion, Tactical BI=solid operational core, this is where you get the value. Executive dashboards are exactly that, dashed.

Getting Value from Compliance

I read through the draft of the King 3 Corporate Governance code recently to contribute my comments. (See IODSA). What was mentioned (in my own words) was the large cost of "forced" compliance incurred relative to the initial events that triggered it, and I refer here to the Enron/SOX relate issues.

There is little mention of a value added approach to compliance, instead of compliance for the sake of it. I would rather advocate a semi marketing approach to implementation i.e. look for ways of improving competitive advantage for your organisation, making you slicker, more innovative, more responsive and more profitable. I think that it was Sir Adrian Cadbury who intimated that good governance is good business, although I suspect that this had more to do with the higher share premium than the effectiveness of management.

If you follow the apply or explain principle,

• then involve your colleagues in the process
• define what the positive result will be or how it can be achieved
• look for the sweet spots how it can contribute to competitive advantage
• don't do it if there is no real justification for it in terms of the above
• Obviously, don't be stupid and ignore the risks in the process or the spirit of compliance in the first place
• Remember your duty of care as a CIO to sustainability, you shareholders and stakeholders
• Turn compliance into an investment, not a cost

Software Licensing - the death of an era

Software licensing as a viable model for customers should be placed under scrutiny. It's strange that CIO's spend a lot of time and effort in RFQ's, RFP's and ROI's to put software in place without sometimes reviewing the total cost of ownership. It struck me this morning that like an insidious disease, you could inflate your "fixed" overhead IT component over a period of time, and wake up to find that your available spend is being consumed by "maintenance" fees.

Lets assume that 55% of your budget is for maintenance and and infrastructure, less you salary and depreciation, this does not leave much room for any kind of intervention e.g. BPA, process innovation, tweaking etc. It places you as the CIO in a state of maintenance, which is the reverse of where you really want to be - making a strategic difference to business.

In my opinion, CIO's need to question the value add of ongoing license fees. Why pay them at all?

An option is to save the annual fees and plough that back into innovation and leveraging what you have. By the time you have reached the end of life of the software, the latest and greatest release, on another platform, a new set of infrastructure, open source alternatives or even a web2 environment will be available. By then, you may be in a better position to evaluate the next move.

Failing this, at least you would have leveraged your investment and got the value out of your software that was always the "unreachable" promise. The easy route is to muddy the waters and get something "better". Real CIO's make what they have work! after all, they were responsible for the RFP in the first place!"