Tuesday, October 27, 2009

How the Mighty Fall

Mark McDonald, in his article How CIOs can sense if their companies are getting ready to fall, draws on Jim Collins book, How The Mighty Fall: And Why Some Companies Never Give In, to provide some useful insight into how five stages of company decline manifests in leadership attitude and use of IT.

Collins' five stages of decline are:
  1. Hubris Born of Success.
  2. Undisciplined Pursuit of More.
  3. Denial of Risk and Peril.
  4. Grasping for Salvation.
  5. Capitulation to Irrelevance or Death.
McDonald maps these to five stages for IT:
  1. A breakdown of investment and technology management disciplines.
  2. Multiple and competing business unit initiatives pursuing more IT.
  3. IT budgets increase focus on current operations as support requirements consume resources. Executives begin to doubt the ‘value of IT’ as they challenge the need for costs that seem to be rising faster than revenues.
  4. Hope that a single integrated application system and infrastructure will erase systemic weaknesses. The silver bullet solution mobilizes IT resources and gives IT an apparent new relevance coming from the prior stage.
  5. Good talent moves on and there are challenges attracting and retaining market leading talent – leading to reduced expectations for IT.
According to one reviewer of Collins' book, the book does a particularly good job of describing dysfunctional leadership behaviors of companies in decline.

I think McDonald does a good job describing the stages of dysfunctional leadership in the use of IT.
"Senior management teams often question the value they get for their IT investments....which sustain - but do not improve - [business] performance. Among the many knee jerk management team responses to these frustrations, firing the CIO and outsourcing all of IT have emerged as perennial favourites. The problem with these two solutions is that, for most enterprises, they do not attack the cause of the problem - poorly designed IT governance, often with a corresponding lack of business leadership participation in the key IT decisions...If IT is not generating value, senior management should first examine its IT governance practices - who makes decisions and how the decision makers are accountable." - Weill & Ross, MIT Sloan School of Management, in their book "IT Governance", p147.

Thursday, October 1, 2009

Waltzing with the Elephant

Mark Toomey's latest newsletter is a good, easy to read summary of the major issue in getting value from IT; that business leaders must be engaged in directing and controlling their organisation’s use of IT to achieve their business goals. That is fundamentally what governance of IT is about.

The article refers to Sir Peter Gershon's address to the ISACA Oceania conference in Canberra, where the Elephant in the Room was identified in the context of public sector governance of IT but applies equally in business:
"Realising the dream of world class governance of IT in the public sector largely depends on the behaviour of those at the top."
The article goes on to explain why leadership in governance is needed; Directing and controlling the use of IT is part of the much bigger picture of directing and controlling the business.
"IT is an enabler of radical change. But, the mere act of buying or building an IT solution does not of itself deliver the change – a reality that has been proven again and again through the failures of projects where there seems to have been a delightfully na├»ve expectation that this would indeed be the case."
After reading the article I'm looking forward to reading Mark Toomey's new book, Waltzing with the Elephant.