Archive for the ‘Corporate IT’ Category
The dilemmas of enterprise IT
Information technology (IT) is an integral part of any modern day business. Indeed, as Bill Gates once put it, “Information technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about one without the talking about the other.” Although this is true, decision makers often display ambivalent, even contradictory attitudes towards enterprise IT. For example, depending on the context, an executive might view IT as a cost of doing business or as a strategic advantage: the former view is common when budgets are being drawn up whereas the latter may come to the fore when a bold new e-marketing initiative is being discussed.
In this post I discuss some of these dilemmas of IT and show how the opposing viewpoints embodied in them need to be managed rather than resolved. I illustrate my point by describing one way in which this can be done.
The dilemmas in brief
Many of the dilemmas of IT are consequences of conflicting views of what IT is and/or how it should be managed. I’ll describe some of these in brief below, leaving a discussion of their implications to the next section:
- IT as a cost of doing business versus IT as strategic asset: This distinction highlights the ambivalent attitudes that senior executives have towards IT. On the one hand, IT is seen as offering strategic advantages to the organization (for example a custom built application for customer segmentation). On the other, it is seen as an operational necessity (for example, core banking systems in the financial industry).
- Centralised IT versus Autonomous IT: This refers to the debate about whether an organisation’s IT environment should be tightly controlled from head office or whether subsidiaries should be given a degree of autonomy. This is essentially a debate between top-down versus bottom-up approaches to IT planning.
- Planning versus Improvisation: This refers to the tension between the structure offered by a plan and process-driven approach to IT and the necessity to step outside of plans and processes in order to come up with improvised solutions suited to the situation at hand. I have written about this paradox in a post on planning and improvisation.
There are other dilemmas – for example, technology driven IT versus business driven IT. However, for the purpose of this discussion the three listed above will suffice.
The poles of a dilemma
In his book entitled Polarity Management, Barry Johnson described how complex organizational issues can often be analysed in terms of their mutually contradictory facets. He termed these facets poles or polarities. In this and the next section, I elaborate on Johnson’s notion of polarity and show how it offers a means to understand and manage the dilemmas of enterprise IT.
The key features of poles are as follows:
Each pole has associated positives and negatives. For example, the up side of viewing IT as a cost is that the organisation focuses on IT efficiency and value for money; the downside is that exploration and experimentation that is necessary for IT innovation would likely be seen as risky. On the other hand, the positive side of IT as a strategic asset is that it is seen as a means to enable an organisation’s growth and development; the negative is that it can encourage unproven technologies (since new technologies are more likely to offer competitive advantages) and uncontrolled experimentation along with their attendant costs.
Most organisations oscillate between poles. At any given time the organisation will be “living” in one pole. In such situations, some stakeholders will perceive the negatives of that pole strongly and will thus see the other pole as being more desirable (the “grass is greener on the other” side syndrome). Johnson labels such stakeholders crusaders” – those who want to rush off into the new world. On the other hand, there are tradition bearers, those who want to stay put. When an organisation has spent a fair bit of time in one pole, the influence of crusaders tends wax while that of the tradition bearers weakens because the negatives become apparent to more and more people.
A concrete example may help clarify this point:
Consider a situation where all subsidiaries of a multinational have autonomous IT units (and have had these for a while). The main benefits of such a model are responsiveness and relevance: local IT units will able to respond quickly to local needs and will also be able to deliver solutions that are tailored to the specific needs of the local business. However, this model has many negative aspects: for example, high costs, duplication of effort, massive software portfolio and attendant costs, high cost of interfacing between subsidiaries etc.
When the model has been in operation for a while, it is quite likely that IT decision makers will perceive the negatives of this pole more clearly than they see the positives. They will then initiate a reform to centralize IT because they perceive the positives of that pole –i.e. low costs, centralization of services etc. – as being worth striving for. However, when the new world is in place and has been operating for a while, the organisation will begin to see its downside: bureaucracy, lack of flexibility, applications that don’t meet specific local business needs etc. They will then start to delegate responsibility back to the subsidiaries…and thus goes the polarity merry-go-round.
Managing enterprise IT dilemmas
As discussed above, any option will have its supporters and detractors. For example, finance folks may see IT as a cost of doing business whereas those in IT will consider it to be a strategic asset. What’s important, however, is that most organisations “resolve” such contradictions by taking sides. That is, one side “wins” and their point of view gets implemented as a “solution.” The concerns of the “losing” side are overlooked entirely.
Although such a “solution” appears to solve the problem, it does not take long for the negative aspects of the other pole to manifest itself; the rumbles of discontent from those whose concerns have been ignored grow louder with time. In this sense, issues that can be defined in terms of polarities are wicked problems – they are perceived in different ways by different stakeholders and so are difficult to define, let alone solve.
As we have seen above, however, the poles of a dilemma are but different facets of a single reality. Hence, the first step towards managing a dilemma lies in realizing that it cannot be resolved definitively; regardless of the path chosen, there will always be a group whose concerns remain unaddressed. The best one can do is to be aware of the positives and negatives of each pole and ensure that the entire spectrum of stakeholders is aware of these. A shared awareness can help the group in figuring out ways to mitigate the worst effects of the negatives.
One which this can be done is via a facilitated session, involving people who represent the two sides of the issue. To begin with, the facilitator helps the group identify the poles. She then helps the group create a polarity map which shows the contradictory aspects of the issue along with their positives and negatives. A rudimentary polarity map for the autonomous/centralized IT dilemma is shown in Figure 1 below.
Figure 1: Polarity map for centralised / autonomous IT dilemma
To ensure completeness of the map, the group must include stakeholders who represent both sides of the dilemma (and also those who hold views that lie between).
As mentioned in the previous section, organisations are not static, they oscillate between poles. Moreover, Johnson claimed that they follow a specific path in the map. Quoting from the book I wrote with Paul Culmsee:
According to Johnson, organisations tended to oscillate between poles. If you accept the notion of a wicked problem as a polarity, the overall pattern traced as one moves between these poles resembles an infinity symbol. The typical path is L- to R+, to R-, across to L+ and Johnson argued that the trajectory could not be avoided. All we can do is focus on minimizing our time spent in the lower quadrants.
Again, it is worth emphasizing that the conflict between the two groups of stakeholders cannot be resolved definitively. The best one can do is to get the two sides to understand each other’s’ point of view and hence attempt to minimize the downsides of each option.
Finally, polarity management is but one way to manage the dilemmas associate with enterprise IT or any other organizational decision. There are many others – and I highly recommend my book if you’re interested in finding out more about these . In the end, though, the point I wished to make in this post is less about any particular technique and more about the need to air and acknowledge differing perspectives on issues pertaining to enterprise IT or any other decision with organization-wide implications.
Wrapping up
The dilemmas of enterprise IT are essentially consequences of mutually contradictory, yet equally valid perspectives. Is IT a cost of doing business or is it a strategic asset? The answer depends on the perspective one takes…and there is no objectively right or wrong answer. Given this, it is important to be aware of both the up and down side of each perspective (or pole) before one makes a decision. Unfortunately, most often decisions are made on the basis of the up side of one option and the down side of the other. As should be evident now, a decision that is based on such a selective consideration of viewpoints invariably invites conflict and leads to undesirable outcomes.
Towards an antifragile IT strategy
Introduction
In his thought-provoking book on antifragility, Nassim Taleb makes the point that the opposite of fragility is not robustness or resilience, rather it is the ability to thrive on or benefit from uncertainty. There is no word in the English language to describe such behavior, and that is what led him to coin the term antifragile.
Nature is an excellent example of an antifragile system: whenever subjected to a cataclysmic event (like this one that occurred ~66 million years ago), nature manages not only to recover, but does so in novel and arguably better ways. Unlike nature, however, most human-made systems tend to be fragile. An example that Taleb highlights is the global financial system , not just prior to the 2008 financial crisis but even now.
The broader lesson to be learnt from the financial crisis is that it is impossible to predict the future in any detail. Systems should therefore be designed to cope with (if not take advantage of) the irreducible uncertainty associated with this lack of predictability. Human-made systems that overlook this inescapable fact tend to be brittle by design.
The above is true not only of systems, but also of future-directed activities such as strategic planning. Overlooking the role of irreducible uncertainty in planning invariably locks an organization into an inflexible course of action. Unfortunately, this is not always appreciated by those who run organisations. As Taleb puts it:
Corporations are in love with the idea of the strategic plan. They need to pay to figure out where they are going. Yet there is no evidence that strategic planning works —we even seem to have evidence against it. A management scholar, William Starbuck, has published a few papers debunking the effectiveness of planning [see this paper, for example]—it makes the corporation option-blind, as it gets locked into a non-opportunistic course of action.
The trick, as Taleb hints in the above passage (and elaborates on in his book), is to plan in such a way as to take advantage of options that we are unaware of now, but might emerge in the future.
That, of course, is easier said than done.
In this post, I draw on Taleb’s book and my own experiences to discuss how one can formulate an IT strategy that thrives on uncertainty. Although my focus is primarily on IT, the points discussed have a wider applicability to strategic planning in general.
Towards an antifragile IT strategy
Before we get into antifragility, it is useful to take a brief look at how IT strategy is usually formulated.
Although some IT leaders will contest this point, a good majority of organisations tend to view IT as a cost rather than a strategic focus area. As a consequence, the objectives of an IT strategy are generally geared towards cost reduction and increased efficiency. The obvious ways in which to do this are through strict governance, standardization and/or outsourcing. Unfortunately, these actions tend to make organisations less flexible and hence more susceptible to uncertainty…and thus more fragile.
So, the key to an antifragile strategy is flexibility…but what exactly is flexibility?
The best definition of flexibility I have come across is the one proposed by Gregory Bateson who defined it as uncommitted potential for change (see this post for more on Bateson’s definition of flexibility). Only if one is flexible in this sense can one take advantage of unexpected events when they occur. The problem of formulating an antifragile IT (or any other!) strategy thus boils down to finding ways in which one can increase one’s flexibility. With that in mind, here are some suggestions.
Decentralisation
This one is going to raise some eyebrows because the general trend in the world of corporate IT is to move in exactly the opposite direction – i.e. towards greater centralisation. The drive to centralisation manifests itself in many different ways: from top-down decision-making to the deployment of standardized processes and pan-organisational “enterprise” applications (single instance ERP systems being an extreme example).
The justification offered by advocates of centralisation is that it increases efficiency and reduces cost by using a one-size-fits-all approach. In reality, however, such an approach almost always has undesirable features. For example:
- It overlooks the unique features of different structural units of the organization (subsidiaries in different countries, for example). Indeed, this is precisely at platform standardization fail – see my post entitled, The ERP paradox for more on this point.
- It increases coupling between different structural units. Since systems and processes have a global reach, an unexpected glitch in any of these will affect all structural units within the organization.
Decentralisation basically amounts to giving structural units the autonomy they need in order to make decisions and choices that affect them. To be sure, this must be balanced with some oversight and direction from a central authority, but the overall aim should be a federal structure rather than a centralized one. A few examples of things that can be controlled centrally include network infrastructure, security…and possibly even things such as preferred vendors, especially from the perspective of getting volume discounts on pricing. There is no black and white here: choices need to be made judiciously and revisited if they don’t work.
Agility
I use the term agile here in the sense of adaptability rather than as a reference to the slew of methodologies that go under the banner of Agile. Indeed, agility in the sense I use it here is more about a mindset than a methodology: if you are adapting to a shifting environment by changing your approach and priorities appropriately, then you are being agile in the sense of adaptability.
So, what does agility entail? Here are some things I see as being important:
- Responding to changes within and outside the organization…but only after determining that they need to be responded to. The qualifier is important: one must be able to distinguish between changes that merit a response and those that don’t. Moreover, any change should be instituted in a gradual or incremental fashion so that one can adjust one’s approach and take corrective actions if needed. Agility does not imply rapid, large-scale change.
- Sensing (or even creating!) new opportunities and taking advantage of them. The term intrapreneurial is often used to describe such a mindset. Many IT leaders are aware of the need to do this, but don’t always know how. In my experience, instituting a dedicated innovation group isn’t the best way to go about it. Instead, it may be better to focus on creating an environment in which people feel inspired to try new things. One of the ways to do this is to actively encourage staff to learn by experimenting on company time – say, one Friday afternoon per month – with no expectation of useful outcomes.
- Building flexibility into your external contracts so that you can respond to changes that weren’t foreseen when the contract was drawn up. Essentially this amounts to building a trust-based relationship with your vendors (see the last point in the present post for more on this) and factoring in transaction costs in your outsourcing deals.
An agile mindset is unlikely to thrive in an IT department that is bogged down by overly onerous rules and procedures. To be sure, rules and processes are necessary, but not at the expense of flexibility.
Diversification
One of the keys to being antifragile in financial investing is to spread one’s investments over a range of different products. In analogy, one of the best ways towards developing an antifragile IT strategy is to diversify elements of your IT environment, especially those things that are likely to be negatively affected by uncertainty.
Here are some examples:
- For coverage in times of trouble, ensure that your team consists of people with overlapping sets of skills. This should be reinforced by periodic cross-training of staff in all key technologies that are used within your organisation.
- Hire people with different thinking styles. Your teams should contain a mix of people with analytic and synthetic approaches to problem solving. Most uncertain situations require both types of approaches.
- Diversify your vendor base. Among other things this means do not…and I repeat, do not…tie yourself to a single vendor by signing a multi-year, multi-million dollar contract!
- Set up small, low-cost skunkworks projects to explore technologies and ideas that have the potential to provide your business an edge.
- Seek to understand diverse viewpoints. Any important decision should be made only after soliciting and understanding viewpoints that are different from yours. Such an understanding will lead to better decisions than those made by relying on gut instinct or advice from a single source.
…and I’m sure there are many other possibilities.
Creating an environment of trust
I kept this for the last because it is possibly the hardest to put into practice. An antifragile IT strategy will only work if there is a mutual trust between all parties involved in a business relationship – be they managers and employees or IT folks and the businesses they serve. Although much has been written and spoken about trust, the fact is that it is conspicuous by its absence in the present day corporate world. Indeed, use of the word in corporate circles tends to evoke cynical reactions from the rank and file; it is seen as platitude rather than a word of significance.
Why is trust important?
Elinor Ostrom’s prize winning work established that trust is one of the core relationships that promote cooperation (see this post for more on this point). In situations of uncertainty, those who work in a high-trust environment would generally be willing to step outside their regular roles and work with others to fix the problem. In contrast those in a low-trust environment are likely to switch off or worse, start apportioning blame. On another note, people are more likely to share their ideas in a high-trust environment rather than in one that is riven by mistrust and unhealthy competition. I’m pretty sure that most readers would have experience of low-trust environments and would know from experience that such work environments are fragile in that they simply fall apart under stress.
It should be noted that that trust is also important in external relationships, such as those with vendors. Although purchasing and legal departments are quick to advise us about the importance of rock-solid contracts, in my experience it is far better to rely on trust. Indeed, it has been suggested that contracts can destroy trust!
Finally, just in case it is not clear: the onus for creating an environment of trust lies with management rather than the rank and file.
Summing up
I offer the above as some suggestions aimed at making your IT environment less susceptible, even responsive, to unexpected external or internal events. Indeed, I believe that in times of uncertainty, they are likely to work much better than some of the well-worn but discredited command and control approaches that are inexplicably popular.
To sum up: IT strategies are invariably focused on improving efficiency and reducing cost. Typical measures to achieve this tend to reduce flexibility (tighter governance and outsourcing, for example). As a result most IT strategies are unable to deal with, let alone benefit from uncertainty. In this post I have outlined key elements of an antifragile IT strategy that can correct this oversight.
When I reviewed this piece just prior to posting it, I was struck by the fact that the points I have mentioned have more to do with social or ethical matters than technology. This reminded me of Heinz von Foerster’s ethical imperative:
“Act always so as to increase the number of choices.”
And that, quite possibly, is the perfect one-line summary of an antifragile strategy.
Professionals or politicians? A client’s guide to management consultants
Introduction
The general image of management consultants in contemporary society is somewhat ambiguous. To take two rather extreme views: high achievers in universities may see management consulting as a challenging (and well paying!) profession that offers opportunities to make a positive difference to organisations, whereas those on the receiving end of a consultant-inspired restructure may see the profession as an embodiment of much that is wrong with the present-day corporate world.
The truth, as always, is not quite so black and white. In this post I explore this question by taking a look at the different types of consultants one may encounter in the wilds of the corporate jungle. My discussion is based on a typology of management consultants proposed by Mats Alvesson and Anders Johansson in a paper published in this book (see citation at the end of this post for the full reference).
Background
There is a considerable body of research on management consulting, most of which is tucked away in the pages of management journals and academic texts that are rarely read by professionals. It would take me too far afield to do even a cursory review of this literature so I’ll not go there, except to point out that much of the work can be classified as either strongly pro- or anti-consultant. This in itself is revealing: academics are just as divided in their opinions about consultants as professionals are. Indeed, to see just how strong the opinions are, here’s a small list of paper / book titles from the pro and anti-consultant camps
Pro
“Management Consulting as a Developer of SMEs”
“Process Consultation, Vol 1: Its Role in Organization Development”
Anti
“The Management Guru as an Organizational Witch Doctor”
“The Violent Rhetoric of Re-engineering: Management Consultancy on the Offensive”
These titles have been taken from the reference list in Alvesson and Johansson’s paper. A quick search on Amazon will reveal many more.
The pro camp depicts consultants as rational, selfless experts who solve complex problems for their clients, sometimes at considerable personal cost. The anti camp portrays them as politically-motivated, self-interested individuals whose main aim is to build relationships that ensure future work. The classification proposed by Alvesson and Johansson puts these extreme views in perspective.
A classification of management consultants
Alvesson and Johansson classify consultants into the following categories based on consultants’ claims to professionalism and their preferred approaches to dealing with political issues:
Esoteric experts
These consultants typically offer high expertise in some specialized area. Some examples of these include IT consultants specializing in complex products (such as ERP systems) and tax experts who have specialized knowledge typically not possessed by those who work within business organisations. As one might expect, esoteric experts have strong claims to professionalism.
One might think that such consultants have little need to play political games as their skill/knowledge does not threaten anyone within organizations. However, this is not always so because esoteric experts may portray themselves as being experts when they actually aren’t. In such cases they would have to use their social and political skills to cover up for their shortcomings. Perhaps more important, esoteric experts may also play politics to secure future gigs.
Typical clients of esoteric experts are purchasers of large IT systems, small organisations in occasional need of specialized skills (lawyers, accountants etc.) and so on.
Brokers of meaning
Brokers of meaning are sense makers: they help clients make sense of difficult or ambiguous situations. Typically brokers of meaning act as facilitators, teachers or idea-generators, who work together with clients to produce meaning. They often do not have deep technical knowledge like esoteric experts, but instead have a good understanding of human nature and the socio-political forces within organizations.
Brokers of meaning typically do not indulge in overt politics as the success of their engagements depends largely on their ability to gain the trust of a wide spectrum of stakeholders within the organization. That said, such consultants, once they have gained trust of a large number of people within an organization, are often able to influence key stakeholders in particular directions. Another way in which brokers of meaning influence decisions is through the skillful use of language – for example, depending on how one wants to portray it, an employee taking the initiative can be called gung-ho (negative) or proactive (positive).
Typical clients of brokers of meaning are managers who are faced with complex decisions.
Traders in trouble
The archetypal trader in trouble is the hatchet-man who is employed by a senior executive who wants to reduce costs. Since the work of these consultants typically involves a great deal of organizational suffering, they are careful to cast their aims in neutral or objective language. Indeed, much of the corporate doublespeak around layoffs (e.g. rightsizing) and cost reduction initiatives (e.g. productivity improvements) originated from traders in trouble. Typical outcomes of such consulting engagements involve massive restructuring on an organization-wide scale, often resulting in a lot of pain for minimal gain.
The work of such consultants is necessarily political – they must support senior management at all costs. Indeed this is another reason that they go to great lengths to portray their proposed solutions as being rational. On the other hand, their claim to professional knowledge is ambiguous as they often have to (knowingly) forgo actions that may be more logical and (more important!) ethical.
Alvesson and Johansson summarise this by quoting from Robert Jackall’s brilliant ethnographical study of managers, Moral Mazes:
The further the consultant moves away from strictly technical issues – that is from being an expert in the ideal sense, a virtuoso of some institutionalized and valued skill – the more anomalous his status becomes. He becomes an expert who trades in others’ troubles. In managerial hierarchies, of course, troubles, like everything else, are socially defined. Consultants have to depend on some authority ‘s definition of what is troublesome in an organization and, in most cases, have to work on the problem as defined. As it happens, it is extremely rare that an executive declares himself or his own circle to be the problem; rather, other groups in the corporation are targeted to be ‘worked on.
A terrific summary of the typical trader in trouble!
Clients of such consultants tend to be senior managers who have been tasked with increasing “efficiency” or “productivity.”
Agents of anxiety (suppliers of security)
The agent of anxiety is a messiah who sells a “best practice” solution to his clients’ problems. This type of consultant can therefore also be described as a supplier of security who assures his clients that their troubles will vanish if they just follow his prescribed process. Common examples of agents of anxiety are purveyors of project management methodologies and frameworks (such as PRINCE2 or IPMA) or process improvement techniques (such as Six Sigma).
Although such consultants may seem to have a high claim to professional expertise, they actually aren’t experts. A good number of them are blind followers of the methods they sell; rarely, if ever, do they develop a critical perspective on those practices. Also, agents of anxiety do not have to be overtly political: once they are hired by senior managers in an organization, employees have no choice but to follow the “best practice” techniques that are promoted.
Clients of such consultants tend to be senior managers in organisations that are having trouble with specific aspects of their work – projects, for example. What such managers do not realize is that they would be better served by creating and fostering the right work environment rather than attempting to impose silver bullet solutions sold by suppliers of security.
A comment
Now that we are done with the classification, I should mention that most of the consultants I have come across cannot be boxed into a single category. This is no surprise: consultants, like the rest of humanity, display behaviours that vary from situation to situation. Many consultants will display characteristics from all four categories within a single engagement or, at the very least, exhibit both professional and political behaviours. As Alvesson and Johansson state:
Management consultancy work probably typically means some blending of these four types. Sometimes one or two of the types dominates in the same assignment. But few management consultants presumably operate without appealing to the management fashions signalling the needs for consultancy services; few altogether avoid trouble-shooting tasks; few can solely rely on a technocratic approach, and few can simply work with cooperative meaning making processes. The complexity and diversity of consultancy assignments requires that the consultant move back and forth between a professional area and a non-professional area, i.e. areas viewed as coherent with claims of professionalism, recognizing the highly floating boundaries between these areas and the constructed character also of technical and professional work. Professional work is mingled with, but can’t be reduced to, political or symbolic work.
Finally, I should also add that consultants sometimes hide their real objectives because they are required to: their duplicity simply reflects the duplicity of those who hire them. Whether consultants should choose to do such work is another matter altogether. As I have argued elsewhere, the hardest questions we have to deal with in our professional lives are ethical ones.
Closing remarks
In this post I have described a typology of consultants. For sure, the four categories of consultants described are stereotypes. That said, although consultants may slip on different personas within a single engagement, most would fit into a single category based on the nature of their work and their overall approach. A knowledge of this classification is therefore helpful, not just for clients, but also for front-line employees who have to deal with consultants and those who hire them.
References
Alvesson, M. & Johansson, A.W. (2002). Professionalism and politics in management consultancy work. In R. Fincham & T. Clark (Eds), Critical consulting: New perspectives on the management advice industry. Oxford: Blackwell, pp. 228–246.
Eight to Late 