Leadership in tough times - should it be different?

There are a number of articles recently that expound the theory that the current global meltdown requires new leadership at company level. What does this imply, that the current leadership was inadequate? Then who is to blame? Is this a valid argument?

I do believe that different management styles are required dependent on the maturity of the organisation, but this does not mean that the same management mentality must be pervasive throughout the organisation. You need to have a situation where a portion of the executive team tends toward a level 6 management style with an even balance through the rest.

Some need to innovate, some need to strategise, some need to be conservative, some need to be pragmatic and so forth. Irrespective of the economy, the organisation needs to remain sustainable and deliver to shareholder expectations. A good leader recognises this and guides and balances this team dynamic.

Why the sudden focus on cost optimisation, working capital and cashflow management, the mad scramble for customer retention in the form of innovation and close relationship management etc etc . This is company management 101, and should always be applied and the benefits maximised. If this was not done automatically, then you have the wrong management.

When the markets tough, the above just becomes tougher, not something we suddenly wake up to do to "save" the company..

So, should leadership change? I think not. Just lead in the right direction. There is no such thing as a leader for War and a leader for Peace. Leadership transcends management style. Leaders show the way in tough times, and give the the glory to others when the going gets good. Its what we do.

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!"

Audit - Time to add value

I should have perhaps titled the article - Audit - What Value? In a recent presentation I did on behalf of the South African Chapter of ISACA (Information Systems Audit and Control Association), as is my provocative bent, I challenged the group to review the value proposition offered by the audit function, not only IT, but all the elements of good governance.

Where there is a legislative framework in place that forces companies to use a service, its inevitable that a certain amount of service ethic falls by the wayside (Why should you when companies are forced to use your services anyway?). This in turn effects value delivery. Given that the current global economy is shaky, the focus on cost and value is now suddenly at the top of the board agenda. If good governance was the order of the day, and boards actively practiced their duty of care, this would already be a way of life!

However, back to the point. The days of an audit firm attaching itself like a bloated leech to
a company at year end, and completing the required audited statements in a detached fashion, without actively contributing to the good governance of the entity, are over.

Shareholders and boards should view this kind of activity and behaviour with circumspection and downright suspicion. After all, you pay a fortune for the service, and for what - to rubber stamp? Why not go to the CA down the road and do the same thing at a fraction of the cost? Better still, force your board to instill good governance at source, it will save you a lot in the long term.

This is not a singling out of auditors in anyway. We should apply the same rigour when selecting any vendor or service provider. We should look for value, we should question the return on investment and we should look to it supporting our strategy and sustainability. Above all, we should look for practical solutions that fit our market and culture. Why should we not expect the same from the audit function?

The challenge is for auditors to look inside of their own organisations and develop a value proposition. Why would I look to you as a valued partner? What makes you different and why shouldn't I use the CA down the road?

Shareholders and boards are well advised to rethink their relationships with their partners, and Auditors are no exception.