Most business and IT strategies never get implemented due to common dysfunctions inside companies, but this need not be, writes Dennis Hodges, CIO at Inteva Products.
If you are like me, you were given a task to define where you would be in 2020. Around here, we call it our ‘2020 Vision.’ We mapped out where we wanted to be and added a timeline that gets us there – sometimes one painful step after another.
It’s a given that we will accomplish everything in our 2020 Vision, right? Why do I sense some of you smirking out there?
Four things often get in the way of achieving a strategy.
1. Lack of Funding
One is a lack of funding, even though it should have been addressed by the strategic plan at the beginning. There’s no surer way to derail progress than to surprise a CFO with a request for capital between budget cycles. This is where an IT Steering Committee is helpful. Having other executives on your side will help in the tougher negotiations – a business voice speaking in unison with the technologist wins more battles.
2. Shifting Strategies
Constantly changing strategies will have a major impact on the technology team and the larger organization as well. A company that is constantly changing its direction will cause many to question whether leadership even has a plan. While strategy has some explicit visibility and oversight at publicly traded companies, privately held companies, with fewer requirements to communicate their plans, can cause the rumor mill to work overtime.
3. Changing Technology
The constant improvement in technology is another reason that many companies never complete a strategy. To my mind, this means that the strategy is too technical. One should expect many evolutionary and even revolutionary technological changes to occur. Building a strategy that focuses on business objectives rather than on IT improvements is imperative.
4. The Strategic Plan – Tactical Implementation Conundrum
From here on I will focus on the final reason that strategic steps are so difficult to achieve. I call it the Strategic Plan – Tactical Implementation Conundrum: splitting strategy and implementation into separate silos that are not developed together or expected to align. This is caused by the reasons noted above, but also because organizations tend to focus on the two components separately rather than on the whole. Doing so, we build the seeds for political infighting right into our organizations.
We develop strategies that are put on the shelf and never reviewed. Or, they are so unrealistic that they are avoided, or simply forgotten about. In any case, they become what I call disconnected strategies – victims of the conundrum.
Quite often, strategy development is a one-time special event. As noted above, there are probably a significant number of companies that have developed a five year plan to line up with the new decade. Unfortunately, history tells us that many of these strategies will succumb to the Strategic Plan – Tactical Implementation Conundrum. For many people, the thought of developing another strategy makes them cringe because they know that the grand ideas will only end up discarded or forgotten about over time.
These disconnected strategies, victims of this conundrum are all too common and they harm organizations in a number of ways. We stay in the trenches so often that we need to step out and look over the horizon. If we give up on developing strategies, we are like a driver without any navigation.
Breaking the Strategic-Tactical Conundrum
After a number of years in the CIO job, I found that there are a variety of ways to ensure good strategic development, and tactical implementation to fit the strategy.
Let’s start with the budget. This is an area many people have real difficulty building in a strategic fashion. While the newer applications and ecosystems coming our way allow us to operationalize more expenses, there are still many CFOs and companies who think all spending is capitalized. In a capital intensive industry (such as manufacturing), IT often gets put on the lower rungs for prioritization. This alone can get us in trouble if spending gets diverted. Planning an alternate path for funding is necessary.
Understand IT Spending Preferences
Operationalizing expenses tends to allow you to align spending over a longer horizon. Subscription models typically don’t have large upfront requirements like an on premise solution, where you are buying hardware and software at the beginning of the project. It is imperative that you as the IT leader work closely with your financial counterpart to best understand how they want to approach and plan for spending. Understanding your “spend” as a percentage of revenue and where it stacks up to your industry average will help you to drive the discussion better. If nothing else, it shows that you are looking at your department from a more business-like perspective.
Weathering Strategy Storms
If the company is constantly changing strategy, the IT department must be able to define less specific goals in order to withstand periodic storms. IT is usually not allowed the luxury of changing strategy even if the company does. Therefore, the IT leader must be able to see long term goals and translate them into adaptable tactics. I liken this to building a highway—we may not know where the on and off ramps will be yet, but we have a general direction of where we are heading.
As IT professionals, we live within a changing environment that is much more dynamic than most of the organization. However, we can’t just chase technology as our strategic focus or we risk two phenomena: 1. We change technology constantly and spend way too much, so we are viewed as big spenders, and 2. We choose overly specific technologies that end up not making the grade. Does anyone remember Micro Channel Architecture and Token Ring? We must keep our ear to the ground listening for change, but not jump on every train that passes the station.
Make Strategy a Constant
Finally, we have to stop treating strategy development as a one-time event. If we don’t, the strategy can become irrelevant almost as soon as it is complete. We have too much change coming our way to use a hammer and chisel for defining our plans, but we can’t simply chase butterflies as they come into our view. This is the crux of the Strategic Plan – Tactical Implementation Conundrum. We tend to operate at one end of the pendulum or quickly move to the other end, when what we really need to do is develop the flexibility to meet needs of both ends.
It is imperative for you to constantly discuss the strategy – have it as part of your IT leadership meetings at least monthly. In addition, the IT organization should be set up so that the architecture and development functions are mixed with operations and support. This allows the team to communicate the weaknesses of the current environment and define what new functionality could improve or revolutionize the business. While this can be difficult for larger organizations, frequent conversations between these constituencies lessen the mistrust that often develops, and build up more of a team attitude.
That’s my two cents worth on the subject of strategy and tactical implementation. I hope that some of this will resonate with you or spark new insights. All of us have different backgrounds and experience, so I would love to hear your thoughts, or better yet, stories from the trenches on this subject in the comments section.