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The Cultural Levers of Business Aligned IT

The Cultural Levers of Business Aligned IT

Dec 15, 2016

It was said in many different ways during the discussions with leaders.  Quotes like:

“People and culture eat structure for breakfast.”

“The three dimensions of IT & business alignment are people, culture, and structure and structure is always the least impactful.”

“I can implement you a world class system, but do you have a world class team to use it?”

“Reporting structure is not as important as relationship across the structure (to get the job done).”

These statements illustrate the undeniable truth that an IT organization starts with its people and excels with its culture.  Structure is basically a construct to define how teams work together.

The leaders who contributed to The Tech BuzzKill series universally echoed this reality, and much of what they had to say was focused on the important elements of an ‘Embedded IT’ culture.

There are six pillars to an Aligned IT culture we have seen most often:

  • Positive Interaction with the Business;
  • Confidence to Showcase IT’s Value;
  • Accountability;
  • Business First, IT Second.
  • Instill Urgency;
  • Promote Innovation.

Cultural Lever 1: Facilitate Interaction with the Business

In The Tech BuzzKill, one of the primary issues that leaders noted is an IT department that is hesitant to interact with the business.  There are a variety of causes to this dynamic in organizations.

Sometimes there is historical tension caused by past confrontations with IT.  Sometimes there is a culture that the business needs IT and that outreach is not necessary.  Sometimes IT is too technical and is not in the habit of facilitating interaction with the business.  Whatever the cause, the issue is the same: a communication barrier between IT and the business.

CIOs need to establish a practice of open communication to ensure an Embedded IT culture.  To do this, many CIOs utilize focused activities to accomplish healthy interaction.  There have been some great ideas shared in the creation of this book.

A “Meet the Business” day – One of the leaders to whom we spoke was adamant that IT has a tendency to work in a vacuum.  “They have trouble getting out of their safe zones, and meeting the business[1].”   His answer to this issue was to designate one day a year where IT is not permitted to sit in their offices or cubicles.

During the entire day they must go and meet business team members.  Year to year they may not choose the same business team members with which to meet.  This event is publicized and the business executives are aware of it.  He noted this has gone a long way to forging bonds.

Shadowing/Walk in their Shoes – This is the most common method of keeping IT interacting with the business.  This is when IT team members observe the business doing their jobs or, in some cases, do the job themselves for a designated period of time.  Many leaders use this as a regular technique to familiarize their teams with how the business operates, and ultimately what it needs.

Cross Pollination – Embedded IT leaders are absolutely open to hiring people from the business, and in turn are open to the business hiring their team members.  One leader to whom we spoke said, “If the business has not made an attempt to hire one of my Business Relationship Managers, I think there is something wrong.”

Immerse in the Business – Immersion is a key element for creating a culture of Embedded IT.  Proactive CIOs take steps to ensure immersion is encouraged.

Immersion as a lever is one that in its purest form means placing IT team members “in the business” or “with the business,” with the intent that IT does not become “of the business.”  This may sound contrary to the team atmosphere that is the goal of Embedded IT.  However, the mark of a true leader is to know what is possible and when to depart from the ideal to achieve the optimal.  They are not always the same thing.

Therefore, CIOs need to take the initiative to immerse in the business in whatever form is possible.  Usually, these immersion steps are small actions that make a big difference.

Some CIOs take the initiative to ensure their team members receive the newsletters that are created by the business team.  They also request their entire IT team read the annual report.  This reading material becomes a regular dose of the business beyond the project or task of the day, and can help IT think and act more strategically at the lower levels.

Other techniques include sending their teams to business classes.  Some send their teams to conferences.  These outside events can contribute to the business focus of the IT team.

Some creative CIOs use exchange programs.  These are programs where a business team member comes to work in IT for an extended period, and an IT team member works for the business for an extended period.  The focus is to give each team member a sense of what the other does.  This helps relationship.  Most importantly, this helps IT learn the business from the business.

All in all, the key is to have a focus on immersion.  Tactics can vary in many ways and differ from one organization to the next.  However, the goal remains the same: immerse, learn, and relate to the business.

Technology Day (External Vendors) – Many leaders described creating an event with the business where they invite technology solutions providers to exhibit their “best of” solutions.  This event accomplishes three primary goals:

First, it exposes the business to solutions in a controlled way.  Thus, it eliminates the issues maverick vendors can create when they sell vision with no path to success.  It actually stifles shadow IT via a perception positive event.

Second, it allows IT to see what is appealing to the business.  It gives IT a productive forum to learn what the business sees as its future needs, and it gives IT an opportunity to be proactive in meeting them.

Finally, it presents IT as a business vision enabler.  It proves that IT does not always have to come up with the end solution.  Sometimes, all that is needed is being the channel via which the solution is identified.  This aspect of Technology Day related to the next cultural lever, and that is ensuring IT’s value is known.

Cultural Lever 2: Market IT’s Value

“Don’t be embarrassed to show your value.”   That is what one CIO said to me very directly when we discussed his steps to market IT to the business.  Marketing is essential for Embedded IT.  Proactive CIOs realize that an IT department that lets its perception get stale is one that will find itself on the defensive very quickly.

With that said, even the most seasoned CIO cannot get away with being perceived as a walking billboard for IT’s greatness.  The key is to not sell your value, rather, the key is to display your value.

Worldwide, CIOs are taking the challenge to put IT’s value on display more confidently.  There are some very good techniques we have seen and heard along the way.

Find team recognition opportunities – When success happens, the top IT leaders overwhelmingly noted that IT should recognize the business’ role in the success.  First, this highlights the value of IT without drawing attention to itself.  Second, it forges relationship between IT and the business.  Third, it promotes active stakeholdership from the business.

Recognition conducted at the top will ripple its way through the ranks.  Soon, more team members will also share the credit.  This sharing will help grow the relationship between the business and IT and will go a long way to embedding.

Internal Technology Day – Some CIOs are taking the bold step of holding a conference complete with stations (or booths) to present IT to the business.  When this has been done, it has paid dividends with one CIO telling me that after participating in the first Internal Technology Day at his organization, he realized that the business really did not know what IT did.

At the second Internal Technology Day, a year later, there was more focus.  There were stations (or stations) for IT departments such as PMO, infrastructure management, and governance.  There were stations for systems.  Finally, there was material created that listed the accomplishments and the strategic roadmap of each area that could be handed out to the business.  All IT personnel manning the stations were ready to describe the role of their particular area and its accomplishments.

Not only is this event a real showcase to the business.  It is also a shining example to all of IT that it is a good thing to discuss IT’s value.  Finally, the preparation activities themselves arm the IT team with talking points and knowledge about the value of IT in the organization.

IT Annual Report – One highly regarded CIO in the healthcare industry I know commissioned the creation of a bi-annual report for Information Services (IT).  This report strongly presented the value the IT organization brings.  It was professionally done and a very fine instrument for getting the value message out to the business.  It was also effective to communicate to IT as well, and enhanced the culture of Aligned IT.  This is a great lever for all CIOs.

Cultural Lever 3: Accountability

In a 2013 survey by McKinsey, when respondents were asked what the most important solution to improving IT’s performance was, the answer that came back most frequently was accountability.  Forty-five percent rated that as number one, a single point higher than the number two solution, which was talent[2].

Accountability can be an elusive element in today’s corporate culture, yet it remains an important one for Embedded IT.  Teams must know what they should accomplish and be responsible to accomplish it, no matter what the obstacles.  All successful initiatives depend on this.

This accountability is not solely an IT to the business accountability.  It is also the business’ accountability to IT-related projects.  The CIOs with whom we spoke were very aware of this and took steps to address it.  They used levers to create accountability and these were employed in both directions.

IT Accountability

IT accountability starts with ensuring IT is working on what the business wants it to work on.  Question number two of The Tech BuzzKill was a question directed at learning how top leaders decipher the business imperatives and translate them into IT objectives.

There was one overall takeaway from the answers to this question.  CIOs focused on accountability as a cultural lever of Embedded IT by cascading business imperatives into the IT team’s personal objectives.  This ensured a line of sight into the business.  This has multiple benefits including making IT team members a stakeholder in the success of an objective.  Those CIOs who ensure it see enhanced enthusiasm and growth[3].

The next step in this cascading is to tie financial incentives to business objectives.  This was mentioned only a few times throughout the interviews, but who could argue with it being the most powerful way to keep IT invested in the business.  In short, tie IT compensation to the business, either through their overall performance or mapping of business objectives.  When this is possible, it should be done.[4] It is very effective in keeping IT accountable to the business goals.

Transparency was the number one way IT leaders used to be accountable to the business.  They constantly said that communicating what is being delivered resonates.  It keeps performance on display, and gives the business a sense that IT is not hiding anything.

A primary method of transparency is the scorecard, because it becomes an accountability billboard.  By clearly putting performance on display through the scorecard, CIOs can lean on the competitive spirit of their teams and drive performance.

Business Accountability

A constant issue today for CIOs is the need for the business to be active owners of initiatives that benefit them.  CIOs that are successful evangelize from day one that there are no IT projects.  There are only business projects supported by IT.

That is why it is important to ensure active stakeholdership from the business.  This can be challenging and many CIOs struggle with it.  It is a never ending focus, and those who take the helm as an IT leader need to accept this reality.  With that noted, there are levers to facilitate active stakeholdership.

Stakeholder Scorecard – A unique idea that has been used within the scorecard system is the additional measurement of stakeholder involvement.  This can be articulated in multiple ways, such as meetings attended with representation from the business.  It is important to gain consensus with the business leaders on how this will be measured as they do not want to be blindsided with a metric that reveals their group’s deficiencies.  With that said, no business leader will stand down from the need to be an active stakeholder in a project from which they benefit if it is presented correctly.  It is a great opportunity to facilitate involvement.

Communication – Communication is the best method to facilitate accountability.  A constant rigor is key.  This can start with regular town hall meetings.  Proactive leaders invite the business into the meetings.  As they are held, invite the business to speak, or present a project.  Even though IT might be doing a significant amount of the work, by giving the business an opportunity to show leadership within the initiative, stakeholdership is facilitated.

Additionally, joint executive reviews will generate accountability.  This is a review to communicate progress to leaders, but by making them joint with the business, accountability can be communicated.  Once this is known to the highest executives, neither group (IT or the business) can hide from being held accountable.

Strategic Plan – The most influential lever for CIOs to facilitate accountability on the business side is the company strategic plan.  By continually framing up the business’ investment in an initiative back to the strategic plan, CIOs can use the company’s own words to achieve accountability.

I have spoken to many leaders who have not had the benefit of a company strategic plan to lean on when the business was not taking accountability for their requests or needs in an initiative.

One Vice President of Sales Systems at a global cosmetics company said it best.  “When you don’t have a strategic plan, you say no to nothing and timelines get dictated to you.”   She emphasized that an organization that doesn’t have a strategic plan puts IT in a position where they can’t say no.  There is no business accountability to a macro outcome, and, therefore, there is no business accountability within technology projects.

Training Super Users – There is a method mentioned to me by a CIO of a healthcare organization that is worth singling out.   He was concerned about soft stakeholdership and decided a unique approach.  How?   He went to the business leaders and described the dynamic where a poorly used application can cost organizations big in the long run.   He invited them to help him avoid it.  His plan was to get some of the more IT savvy business users trained to be super users.

There were three outcomes he sought.  The first was that he could actually minimize the cost of replacement applications by ensuring the current system was used correctly.

Second, he realized that super users can forecast for IT the shortcomings of a system versus the business objectives early.  This helped IT avoid situations where the business was asking for a rip and replace on short notice.

Finally, the chosen super users were invested in the success of the systems in which they were trained to be expert.  This lessened the chance of soft stakeholdership from the business while creating a very healthy interaction for IT.

In the end the approach worked beautifully.  Some of the business users actually later pursued positions in the IT organization.   This was a win-win for all.

Cultural Lever 4: Business Professional First, IT Professional Second

In 2014 I met with a Global CIO at a top-tier pharmaceutical company.  When I asked “What is your preferred mix of technical versus business professionals in your ideal IT shop?”   He replied without hesitation “They all need to be 100% business, even when they are technical.”  That CIO summarized this lever perfectly.

The past ten years have introduced many changes to the IT field.  There has been a mass exodus of roles to offshore teams to cut costs.  Yet, even with the savings the same tensions still exist between the business and IT.  Why?  It is because the issues are not about cost, they are about value.  The business will fund what it sees as valuable.

This set off a movement. During the offshore migration between 2006 and 2011, many top experts started encouraging IT professionals worldwide that they needed to be business people first, and IT people second.  This was based on personal relevance.

This micro recommendation applies to the macro world for IT.  For IT to align with the business, IT must be business focused.  That focus starts with the people, and it is led by the CIO.

Building a “Business Professional First, IT Professional Second” culture is not about programs.  It is about leadership.  This is truly where the CIO sets the tone.  For the CIO to build this culture, the CIO must do three things.

First, the CIO must be visible.  Ivory tower CIOs cannot facilitate business-first culture.  They drive the culture by showing the way.  If a CIO wants to encourage their teams to learn more about the business, one way might be to make some funding available.  Likely, that would have moderate success.

However, the more powerful way to do it would be to go to a class themselves.  At the next town hall meeting, they can incorporate something they learned as a part of their talk.  This is “walking the walk” and it is a huge driver for culture.

Second, the CIO must constantly reinforce the business first mindset.  One CIO from the gaming industry noted with me a technique he used where anyone who came into his office with an idea and justified it using the word “cool” immediately got kicked out.  His point was that he does not want his team telling him that an idea for the business is good because of how technologically advanced it is.  He wants them to tell him the business value.  “The difference between an IT professional and a geek is the word ‘cool’,” he said.

Another CIO from the pharmaceutical industry described an exchange he had with his second in command.  He said he was in the car with this person, and the person had apparently been getting frustrated with the CIO’s business focus and serving the business “like a business.”   So, the person turned to the CIO and boldly exclaimed that if he wanted to do marketing, he would have chosen to go into marketing.  He said that was not what he wanted to do, and that is why he is in IT.  In response, the CIO said, “We are all in in the business.  Make no mistake about it.  The closet room propeller head developer era is over.”

These two CIOs are great illustrations of the leadership that is required.  Although programs and tactics can help team members understand they are there for the business, nothing beats a good example.

The third and final thing a CIO must do to facilitate a business first culture is to be flexible.  The willingness of a leader to embrace change instills confidence in the entire team to do the same.  The current climate is one of massive change.  The buzz term for this is agility.  This is a buzzword with truth.

IT must be ready to adapt, and when it is, it is seen by the business as essential.  When flexibility is in the culture, IT responds more positively to ideas.  It also suggests them.  These ideas take the perception of IT from utility to strategic asset.  This is a powerful lever and it starts with the CIO.

Cultural Lever 5: Instill Urgency

In CIO Paradox, Martha Heller’s classic book for CIOs, she commented on urgency in the following way:

“The other day, I ordered a pair of shoes from Zappos. As a registered VIP customer (I do love my shoes), I was exasperated when the system took more than thirty seconds to process my payment. The delay was probably my own Internet connection, but I didn’t care. I was annoyed!  We Americans tend to want what we want when we want it; our sense of urgency is quite high, even when ordering a pair of shoes.”

Her point was made related to the diversity in markets, but her comment was very appropriate related to the business.   The business wants to see a sense of urgency in IT.  This urgency is a key lever in Embedding IT.

This lever is closely related to the accountability lever in that execution is key.  With that said, accountability can be easy if timelines are long.  Therefore, IT must live on the edge and be willing to state aggressive timelines too.

One CIO in the Resorts and Gaming industry that I spoke with recited a story that captures the essence of this lever.  He described an episode when it was New Year’s Eve and the hotel he was running IT for at the time was having a bash.  The servers went down, and so the guests could not gamble.  As he and his team were calmly trying to solve the issue, the top business leader in the hotel came into the room and screamed at the CIO up and down because he looked like he did not have a proper sense of urgency.

The CIO reflected on it and it was good because later that year a similar thing happened again.  He described his reaction when he heard that same business leader coming down the hall.  This time the CIO picked up a phone receiver, and although he wasn’t talking to anyone but a dial tone, he screamed “bloody murder” to get the servers back up (to no one).   His business leader saw him having the sense of urgency the business wanted him to have, and he received a pat on the back.

There is no secret formula to instilling urgency in a team.  It is not about panic, or yelling, or an ‘everything has to get done right now’ attitude.  It is about having a sense of the business priorities and mapping them to the IT objectives.

This starts in objective creation for IT.  An IT team with the proper sense of urgency will understand the business objectives.  In most cases, the IT team’s goals will be directly tied to them too.  The team will continually contextualize their next steps and task priority order based on the business objectives and their deadlines.  In this way, IT will always be in alignment with the goals of the business.

As Steven Covey said in The 7 Habits of Highly Effective People “The key to effective management of self, or of others through delegation, is not in any technique or tool or extrinsic factor.  It is intrinsic— in the paradigm that empowers you to see through the lens of importance rather than urgency.”

Cultural Lever 6: Promote Innovation

In Disrupt IT, the excellent book about digital leadership in today’s age, Ian Cox wrote the following:

“One of the main objectives of regular engagement is for the CIO to become the go-to person for any discussions about technology-enabled innovation and change.”

Ian captures the innovation lever perfectly in his statement.  Whether it be via alignment, engagement, relationship, or whatever, innovation is a driver of Embedded IT.

As one banking CIO said it to me “Innovation has to be part of every job in IT.  Opportunities present themselves every day,” he said.  “You could be walking down the hall and having a conversation that becomes a spontaneous improvement opportunity.  It could be anything,” he concluded.

The key to innovation is to drive a culture of innovation.  The team must know it is a focus.  This lever, once pulled, excites the team to engage the business, and as new ideas are shared and executed, the bond grows strong.  This culture is not always easy to implement, but there are some straightforward steps to achieving it.  A Healthcare CIO who contributed said it this way:

“Number one, you create a safe culture, a safe environment, where it is safe to say a process is not sufficient.  Or to ask: Why are we always doing things this way?   Why do we run the process through that department or through that system?   Why do we buy this certain kind of keyboard?   Inquisitive questions. You have to create a culture where it’s safe for your frontline staff to bubble up ideas…..and know that they’re not going to be retaliated upon because they suddenly brought up an idea that might be unpopular or unconventional or something different.  So number one, you make it safe.

Number two, you listen actively and by listening actively, you have somebody in leadership look at those comments on a frequent basis and respond.

Number three, you reward.  You reward the good people.  You call them out and say look at this idea that’s a hundred thousand dollars by not printing.  Great job! People will bubble ideas up.  So now you suddenly have an infusion of IT ideas, non-IT ideas or whatever.”

When IT facilitates organic innovation through culture, the business will naturally lean on IT as its adviser.  This forward thinking, results oriented lever will pay dividends for the business and IT.

[1] This was a frequent barrier to alignment mentioned throughout the interviews.

[2] Please note that the #1 and #2 solutions were not structural.  They were cultural (accountability) and people (level of talent).  More information can be found here: http://www.mckinsey.com/insights/business_technology/why_cios_should_be_business-strategy_partners

[3] It is best if this is done when there is a published business strategic plan.  When there is not, proactive CIOs have created a departmental strategic plan that was created from interaction with the business.

[4] It is not always possible to tie compensation.  Sometimes it is because of stodgy practices, or a business that is not clear on their objectives.  Either way, CIOs should do this when it is possible.  They must recognize it is not always possible.

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