Improve IT Investment Outcomes through Change

The results of McKinsey & Company’s eighth annual survey on business and technology strategy (http://bit.ly/1i8UWR9) shows that 61% of executives state that it’s an IT priority to improve the effectiveness of business processes (a higher percentage than any other IT priority category). However, less than 20% of IT executives are completely or very effective at “Targeting places in organization where IT can add the most value.” To do better, IT executives need to think outside of IT and establish their place in broader change initiatives.

Not all change is improvement but to improve is to change and to improve the effectiveness of business processes means to change business processes.  Because the value from IT is in the using it, not in the having it, the link between technology and improvement necessarily passes through change.

To improve your Information Technology investment decisions and the effectiveness of IT, here’s some simple rules:

  • Stop investments not intended to bring about change.
  • Stop investment where change doesn't contribute to your mission.
  • Stop investments where there’s limited change capacity.
  • Create or deploy technology that’s “good enough” to bring about the change.
  • Recognize that it takes more than technology to bring about change and consider items such as changes to the organizational culture and structure; changes to relationships with suppliers, customers, partners, and employees; facility changes; changes in policies and incentives; and necessary staff skills and competencies.

Because everything that happens on the IT side of the keyboard is a cost (except in cases where a deliberate effort is made to replace a given technology with a less costly alternative) it's absolutely critical that IT executives look past their domain when trying to improve effectiveness and bring value to the organization.

Change and Innovation or Unimproved Ends

In “Managing Transitions, Making the Most of Change” William Bridges describes a neutral zone which happens when you’ve let go of the old trapeze and you’re waiting for the new one to appear. Although this is a time of turmoil, it’s exactly because of the turmoil that it’s also a time of tremendous opportunity - as old ways are no longer set in concrete and the momentum of the status quo has been broken. William shares an example for taking advantage of this opportunity: “When you shift from one technological system to another, use the interim to redesign the work flow so you aren’t simply improving the technological means to an unimproved end.”

A technology project has a dependency on change in order to be successful, because technology doesn’t do anything, it’s only through change the promise of the project can be realized. The project itself can be a vehicle for change. And William Bridges teaches us that the chaos of the neutral zone resulting from change provides the necessary catalyst for innovation.

William Bridges gives us the recipe for success: we must protect our people, encourage them, and give them the structures and opportunities they need to succeed. Or, we can fail to do those things and simply provide the technological means to an unimproved end.

Consider Grade & Quality

When considering alternatives we need to take both quality and grade into account. Look for solutions that have the same quality, which can satisfy the need to the same degree, but may be of lower grade. In other words, don’t settle for expensive solutions, look for inexpensive solutions that are good enough.

The pictures illustrate the point how items can be of the quality but different grade. The one on the right is out of the department of redundancy department and is undoubtedly costlier than the one on the left.  The point is, that they both get their point across and satisfy the need to the same degree.

Too often decisions are made without considering alternatives and somehow, "Can we afford it?" is the only relevant question. Ask two more questions: "Are there cheaper alternatives that would work just as well?" And, "What else could we do with that money?"

Business/IT alignment means more than working toward the same goal

Imagine you’re the CIO in an organization that provides excellent customer service. Providing great customer service is part of the organization’s mission statement. Customer service in this organization is a source of pride & identity. As a hip CIO you’ve been reading a lot about Business/IT alignment and you’ve recently vastly improved the organization’s web-site so you can provide excellent customer service 24/7. The site not only contains information relevant to customers but is so deep in the information offered, it’s also an excellent resource for the customer service staff. The trouble is, the customer service staff don’t use the web site, and they don’t tell customers about it.

As the CIO it would be easy to chalk the current state up to a general resistance to change. Pressed for specifics you could paint a picture of customer service agents who have a “this is the way we’ve always done it” attitude, middle managers with a “if it ain’t broke don’t fix it” mantra, and a customer support director who fears the loss of power.

But, when you designed the web-site enhancements, did you consult the customer service experts? How many clicks does it take to get to information most valuable to callers of the help line? How effectively does the search feature return relevant search results? Were the agents trained to use the site or is it “self-explanatory”? Does anyone in customer service know that they’re supposed to tell customers about the web-site?

Now, imagine that the web-site enhancements were built with input from the customer service experts. Where reducing clicks to the most important information was a stated goal. Where search consistently returns relevant results. Where training was provided so customer service agents could efficiently navigate the site. Where customer service agents are provided incentives for letting the customers know that, although they’re not going anywhere, getting customer service 24/7 is also an option. Imagine the customer service portion of the web-site is controlled by the customer service director. Imagine customer service agents are part of a team that develops new products and services, and part of their responsibility includes proactively feeding relevant information into the site as new products and services are introduced.

Imagine an organization where Business/IT alignment means more than working toward the same goal – where it means working for the same change.

Like us on Facebook. Or not.

In a local mall a shoe store has a sign out front that tells me to like them on Facebook.  Each time I read it, I think, “Why should I?”  Recently, I was in Chicago with the family and we went to Gino’s East.  While waiting on our table, the host bribed us with free appetizer coupons if we liked them on Facebook.  Naturally, we did because we were hungry – for Gino’s – and we were at Gino’s – planning to eat at Gino’s – and he was offering us free Gino’s food.  Now maybe people like pizza more than discount shoes, but Gino’s has about 1,500 likes per location compared to the shoe store’s 7.

The point is it takes more than the presence of a Facebook page (or any other technology for that matter) to get people to change their behavior, and we need to give more than cursory consideration to what those things are or our technology initiatives will never fully live up to their promise.  If you’re like that shoe store, it’s probably not too late to take a lesson from Gino’s East.

If you want your Technology Project to Succeed, don’t focus on Technology

In his 1964 book Scientific Method in Behavioral Science, Andrew Kaplan described his Law of the Instrument: “Give a small boy a hammer, and he will find that everything he encounters needs pounding.” You may have heard this paraphrased “If you have a hammer, everything looks like a nail.”

Picture a boy with a new hammer who encounters a plastic bottle. Will he (A) Ignore it, (B) Recycle it, or (C) Hit it with the hammer? The boy, of course, completes what Paul Nutt describes as an Idea-Imposition process. The boy has an idea and he implements it with no consideration for option (A) or (B). But Paul Nutt didn’t study what a boy does with a hammer, he studied 400 critical business decisions and his 20 years of research shows half of those decisions are made with the same impulsive behavior. When we ask business critical questions like how we can improve work practices, or save money, or make the most of our limited resources, our thoughts often (impulsively) turn to technology and like the boy with the hammer, once we have an idea we implement it.

The thing is, when we turn to technology, we often provide a reasonable answer to the wrong question because it’s in that instant that our focus often shifts away from the change that is necessary to improve work practices, save money, or become more efficient, and it shifts toward implementing technology. Technology becomes the alpha the omega. When we implement a technology based solution we provide a reasonable answer to the wrong question because by that time, the only question becomes, “How’s that computer thing coming along?” In his 2002 Nobel Prize lecture Daniel Kahneman describes this phenomenon as attribute substitution: people who are confronted with a difficult question sometimes answer an easier one instead.

When the computer thing is complete the results are less than stellar, because technology is not the answer to any of the difficult questions. Technology, like exercise equipment, doesn’t do anything, it just is, and work practices can only be improved, money can only be saved, and we can only become more efficient through change. In that same book that Andrew Kaplan wrote about the hammer, he had this to say about what he called electronic computers: “(I)t is not they that produce scientific results, but the investigator that uses them scientifically.” Technology isn’t the answer, but when people use technology to change what they’re doing, that change may provide the answer to those difficult questions. The distinction between implementing “technology” and “technology enabled change” may seem like a subtle point, but it has extraordinary ramifications. It means that in order to succeed we need to focus on change more than technology, and when our focus shifts from the messy business of change (the hard question) to all about the technology (the easier question), we simultaneously lose sight of goals and the promise of technology.

And it happens in the blink of an eye. Well, faster, but the point is it happens before we know it’s happening. The bad news is that because attribute substitution happens before we know it, we don’t question it. We literally don’t give it a second thought. The good news is that although we can’t see it in ourselves, we can see it in others. So the next time you hear someone posing technology as the answer to a difficult question, picture the boy with the hammer. Then ask how the [investigator] might use [an electronic computer] to facilitate [scientific results] and you’ll be back on the right track.

Don't Settle for Expensive

In a 2010 TED Talk (Sweat the Small Stuff) Rory Sutherland said, “Once you have a very large budget, you actually look for expensive things to spend it on. “ He goes on to explain that although we look for expensive things that have a major impact and call that “strategy” we don’t spend much time looking for inexpensive things that could also have a major impact. In fact, we don’t spend enough time doing that even if we don’t have the luxury of a very large budget. You can think outside the box of expensive solutions by examining alternatives that serve the same purpose, and by examining the opportunity costs associated with choosing one thing over another.

When considering alternatives we need to take both quality and grade into account. The American Society for Quality (yes, there is such a thing) describes quality as, “The characteristics of a product or service that bear on its ability to satisfy stated or implied needs.” Grade is a category assigned to products or services having the same functional use but different technical characteristics. Paper & china plates may have the same quality but are of different grade, and in many cases paper plates are an adequate substitute. Look for solutions that have the same quality, which can satisfy the need to the same degree, but may be of lower grade. In other words, don’t settle for expensive solutions, look for inexpensive solutions that are good enough.

Another way to break the cycle of mind numbingly expensive solutions is by expressing concrete alternatives. Follow the example of Dwight Eisenhower set in a speech given to the American Society of Newspaper Editors, Apr. 16, 1953: “The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.” Taking into consideration how many people you can hire and how that could contribute to your overall effectiveness, if you didn’t (fill in the blank), is a great place to start. Too often decisions are made without considering alternatives and somehow, “Can we afford it?” is the only relevant question. Ask two more questions:” Are there cheaper alternatives that would work just as well?” And, “What else could we do if we didn’t do this?”
Subscribe to: Posts (Atom)

Benefits Management Book