Holistic CIO lessons from Peter Drucker

Holistic CIO lessons from Peter Drucker

Summary: While it's sometimes tempting to blame technology for under-performing IT projects, such views lack depth and reflect poor understanding of the basic causes for failure.

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TOPICS: IT Employment, CXO
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Leadership and management are the foundations for successful information technology in the enterprise. While it's sometimes tempting to blame technology for under-performing IT projects, such views lack depth and reflect poor understanding of the basic causes for failure.

Achieving desired results in IT requires attention to the same business drivers that lead to success in any other area of business. These drivers often come down to people, communication, collaboration, and decision-making, especially on initiatives that cross organizational boundaries and information silos.

Jack Bergstrand, CEO of strategic consultancy, Brand Velocity, truly understands the dynamics that drive IT success. Formerly CIO of Coca Cola, His current work addresses organizational conditions that create successful and strategic IT initiatives. Jack's book, Reinvent Your Enterprise, describes a enterprise management framework that is compatible with views of IT success and failure presented in this blog.

For these reasons, I invited Jack to write a guest post discussing the underlying business and management conditions that lead to successful IT initiatives. The lessons Jack describes come from direct personal experience as a senior executive over many years.

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Management "guru" Peter Drucker (he said people were called gurus because charlatan was too hard to spell) wrote for decades that "knowledge work productivity" was our greatest management challenge and opportunity.  Anyone who has managed large enterprise technology projects knows this all too well.

Implemented successfully, major technology projects can improve revenue, reduce unproductive assets, increase savings and produce operational benefits at a multiple of their cost. But when things go wrong, struggling projects can compromise business performance, increase risk and inflict financial damage many times greater than their budgets.

This challenge -- commonly the result of poorly facilitated organizational dynamics -- is most dangerous when systems are more powerful, integration is more critical, and when organizations are consolidating their vital business processes. Small and initially trivial problems, which are manageable in isolation, too often morph-due to these unproductive organizational dynamics-in ways that rapidly and negatively impact companies overall.

Executives need better-not more-involvement in large technology projects

Board members, CEOs, and others charged with governing important technology projects usually have good reason to be concerned and confused. By the time project cost overruns or operational issues are big enough to get their attention, games of defense are already in motion.  This turns unproductive knowledge work into destructive knowledge work.

The tried and true method of managing large technology projects continues to be tried -- but the truth is that it consistently underperforms.  Even worse, since company careers and consulting firm reputations are at stake, it can be very difficult for executives and boards to get understandable "big picture" information and hear it from an independent source. Technologists usually try to explain projects in ways that are very difficult for business people to understand and business people just as often offer advice that is very counterproductive.  The result is often ugly.  Fortunately, it doesn't need to be this way.

Doing the same things consistently produces poor results

As is often the case, the heart of the problem is also the source of the solution.  Yes, the conventional approach to major tech­nology projects struggles 30-70% of the time in an important way-with projects being late, over budget, or not delivering results. And yes, this is typically due to cultural, political, and organizational disconnects-i.e. unproductive knowledge work.

But, the root problems are almost never caused by a single stakeholder and a big part of the solution therefore needs to be to holistically manage enterprise projects through an enterprise lens-from a schedule, budget, quality/effectiveness, and overall scope perspective.  Linked to Michael Krigsman's research there are several key drivers:

The Business Case Is it operationally effective?
Stakeholder Attitudes Are key people on the same page?
Executive Sponsorship Is there too little or too much?
Project Management Is there too much activity without enough results?
Change Management Are line managers driving it?
Third Party Relationships Are the disconnects within and across being facilitated?
Resource Adequacy Is the right contingency management in place?

Where traditional project management techniques are designed to be very specialized and mechanized, effective enterprise projects require a more holistic and socialized architecture. Effective initiatives require a minor amount of initial complexity at the front end to avoid an unworkable amount of complication later on.

A little up-front complexity can eliminate massive complication

This difference between complexity and complication is more than semantic. Grandmasters in chess, for example, are successful because they apply a certain amount of cognitive complexity up front. By doing this they can view large chunks of the chessboard, whereas amateurs see a mass of individual pieces. In practice, this makes the game much more complicated for less skilled players and makes novices less successful when they play.

A key difference between complexity and complication is that complexity has a coherent architecture and can be effectively managed. In contrast, complication is largely random and can therefore easily become unmanageable over time. Large enterprises and large enterprise projects regularly struggle, not because they are too complex, but because they are too complicated.

What would Peter do?

Success is not simply driven by a strong sense of urgency and a can-do attitude, because you can urgently go in the wrong direction and do the wrong things. Knowledge work productivity is not about speed or direction. Similar to velocity itself, it is a function of speed and direction.

Peter Drucker wrote that three dimensions for success were to make the present business effective, identify and realize its potential, and make it into a different business for a different future. In our rapidly changing global economy, this needs to be accelerated.  The old project management approach is too rigid and disconnected to handle the social dynamics in large enterprise projects.

The great opportunity for improving success-rates and increasing implementation speeds is to take a more holistic approach and to facilitate organizational dynamics in a way that improves knowledge work productivity and -- as a result-helps your company improve revenue, reduce unproductive assets, increase savings and produce operational benefits at a multiple of their cost.

This shift in approach, which incorporates Peter Drucker's insights, is great news and offers a perfect opportunity for CIOs to bring unprecedented levels of business value to the table.

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[Thanks for Jack Bergstrand for writing this guest post. Photo from Brand Velocity. Top image, showing holistic interconnectedness, from iStockphoto.]

Topics: IT Employment, CXO

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2 comments
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  • Sure, if we had management

    I find Drucker's work from the 1950s fascinating; filled with well-written insights about management. The problem is that just about every organization I have worked for/dealt with in the last 10 years has been running away from management as fast as they can. An organization with a vice-president, 8 "directors", and 27 "project managers" in fact has at most one, and probably zero, managers. And I see the lack of management as a key driver in the failure of business projects (including those with a large business information component).

    sPh
    sphealey
  • RE: Holistic CIO lessons from Peter Drucker

    It frustrates me that Executives in both IT and in
    Operational Business Units continue to try the same ways
    to look at change and projects and to expect different
    results. Jack provides a very clear and useful approach to
    thinking "holistic" and acting "specific". In addition,
    getting a common language and framework in
    conversations between "IT" and the "Business Unit
    Leadership" is can lead to huge productivity gains. Drucker
    and now Bergstand's ideas on Reinvention, should be
    looked at as an alternative to "doing the same thing and
    expecting something different". Some companies will
    figure this out and become the real long term competitors
    for the twenty-first Century. Thanks Jack Bergstrand for
    getting this in writing and building on Drucker's success.
    wfhartman