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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
Proven and practical strategies for leading IT teams and departments In Fostering Innovation: How to Build an Amazing IT Team, accomplished technology strategist, executive, and leader Andrew Laudato delivers an eye-opening exploration of how to design, build, staff, and run a high-performing IT department. The book is filled with universally applicable strategies and techniques that can transform any IT team into an all-star cast perfectly aligned with your organization's objectives. Incorporating proven and practical processes throughout the narrative, the book offers useful continuous improvement concepts the reader can apply to their team, company, and professional development. Readers will also find: * Foolproof ways to put people before technology * Detailed discussions of perennially important topics, like the importance of uptime, how to deploy redundancy, and creating the perfect organization chart * Strategies for managing and motivating the wonderfully unique individuals we refer to as "technologists." The perfect resource for newly minted Chief Information Officers and Chief Technology Officers, Fostering Innovation will also earn a place in the libraries of non-technical professionals who work closely with IT, and business leaders seeking a better understanding of how to lead an IT team.
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Veröffentlichungsjahr: 2022
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Table of Contents
Cover
Title Page
Introduction
Why Did I Write This Book?
About This Book
Reader Support for This Book
I: Become an Empathetic Leader
1 Hey, What Do You Know?
Build Your Skillset
Grow Through Listening
A Proactive Mindset
Note
2 An Amazing IT Department? What's That?
3 Conventional Wisdom Is Wrong
A Tale of Two Projects
The Downward Spiral of Micromanagement
Notes
II: Four Steps to Innovate
4 The Right Foundation
Set Expectations
Build Trust
Share Your Values
5 The Laudato Hierarchy of IT Needs
Note
6 Keep the Lights On (KTLO)
Note
7 Lean and Efficient IT
8 Create Value
Cost Reduction
Increase Revenues and Enable Opportunities
Reduce Risk
9 Let's Innovate
Develop the Mindset
Dedicate Resources
Embrace Risk
Idea Generation
Rapid Prototyping
Note
10 CIO Report Card
III: Develop a Winning Culture
11 Culture Eats Eggs and Strategy Eats Bacon, or Something to that Effect
The Wrong Way to Develop Culture
Building a Strong Culture
How Can a CIO Influence Culture?
The Blue Bloods
12 The Boxes, the Lines, and the Dashes
Step 1: Identify Your Functions and Business Needs
Step 2: Create an Org Chart
Step 3: Run Use Cases
Step 4: Identify Skills
Step 5: Review Your Team
13 Org Design—Just Show Me the Answer
Support
Cyber-Security
Portfolio Manager
HR Partner
Finance Partner
Executive Assistant
Notes
14 Organizational Design and Culture
15 It's Not the Play, It's the Player
Note
16 Take Care of Those Peeps
Ask People What They Want from Their Career
Spend the Most Time with Your Best People
Provide Career Development Planning
Always Support Your Team, Even When They're Wrong
Be a Diode
Have a Real Open-Door Policy
Listen
Only Make Changes that Are Necessary
Provide Fair and Timely Feedback
Be Kind Enough to Let Someone Go
Notes
17 Hire the Best
Notes
18 The Best Team Is a Diverse Team
Note
19 Using Mercenaries—I Mean, Consultants
Management Consultants
Project-Based Consultants
Offshore, Nearshore, Onshore
Staff Augmentation
Boutique Firms
20 The Power of Experts
Notes
21 Build that Network
Formal CIO Networks
Navigating a Cocktail Party
Social Media
22 Good Advice Doesn't Come Cheap; It's Free
Note
IV: Deliver to Delight: a Collection of Usable Tips and Tools
23 The Written Word—a.k.a. IT Strategy
Align Your Strategy
Create Your Strategy
Put Your Strategy into Action
24 It's the Uptime, Stupid
Measuring Uptime
Nuances of Measuring Uptime
Information Technology Infrastructure Library (ITIL)
When You Have a Problem, Proclaim It Loudly
Troubleshooting
Let Them Eat Cake
Change Management
Daily Meeting
Annual Readiness
Note
25 If It's Important, You Better Get Two
Redundancy and Probability Math
The Only True Test
Does Any of This Matter in the Cloud?
Notes
26 Lock It Down
Note
27 Lean and Efficient IT
Software
Legality
Cloud Services
Telcom
Professional Services
Capital Expenses Drive Operating Expenses
The Small Stuff
Reduction in Force
Less Is More
Note
28 What Should I Work on First?
29 Limit Your Work in Process (WIP)
Notes
30 One List to Rule Them All
Create Your List
Rank Your List
Create a Standard Deviation Report
Communicate Priorities
Cumulative Total
Operationally Required Projects
Be Ready for Line Jumpers
Moving Forward
31 Portfolio/Program/Project Management
Consistency Creates Speed
Ranked Project List
A Unified Calendar
Big Room Planning
Project Charter
A Project Schedule Is Not a Project Plan
Kanban
Agile Mindset
Keep Teams Intact
Note
V: Develop Key Business Proficiency for Maximum IT Efficiency
32 Love Your HR Department, Just Don't “Love” Your HR Department
Compensation
Employee Relations
Learning and Development
Payroll and Benefits
Organizational Design
Talent Acquisition
33 If I Wanted to Be a Lawyer, I Would Have Gone to Law School
Licensing Models
The Cloud
Indemnification
Limitation of Liability
Breach/Litigation
Force Majeure
Accounting Considerations
Data Ownership and Preservation
Cyber-Security
Unsavory Practices
End-User License Agreement (EULA)
Changing Terms on an Invoice
Virtualization
Hyperlinks
Relationships over Contracts
Software Audits
Other Involvement with the Legal Department
Notes
34 Let's Make a Deal
35 Accounting, My Worst Subject
Chargebacks
Showbacks
Remedial Accounting Starts Here
Note
36 Learn Your Business, Inside and Out
VI: Straighten Up and Fly Right
37 What You Should Have Learned in Kindergarten
Notes
38 Professionalism Isn't Just Wearing a Suit
Complain the Right Way
Don't Allow Gossip
Make Your Word Gold
Keep a Secret
Don't Yell, Curse, or Pound the Table
Assume Everything Will Get Out
Remove Stress from Your Boss
Just a Little Bit Better
Notes
39 What You Do Matters—You're Always on the Clock
40 Vendors and
Frendors
41 A Word to the Vendors
Note
42 Be a Cool Customer
43 Get Your Butt in Shape
Sleep
Weight Management
Nutrition
Exercise
Notes
VII: Final Tips and Advice
44 When Something Goes Wrong
Step 1: Leap into Action
Step 2: Assess Things
Step 3: Plan Your Response
Step 4: Communicate
Step 5: Monitor the Situation
Step 6: Learn from It
Notes
45 When Others Come Knocking
46 What's Wrong with Outsourcing?
Notes
47 Switching Jobs
Should I Stay, or Should I Go?
Make the Move
On-Board Yourself
Notes
48 Technology Matters
49 Conclusion
Index
Copyright
Dedication
About the Author
About the Technical Proofreader
Acknowledgments
End User License Agreement
List of Tables
Chapter 3
Table 3.1: CIO Self-Assessment
Table 3.2: Common Unfortunate Responses to IT Problems
Chapter 18
Table 18.1 Updating Your Thinking Paradigms
Chapter 21
Table 21.1: Networking and Social Media
Chapter 30
Table 30.1: Responses to Line Jumpers
List of Illustrations
Chapter 5
Figure 5.1 Laudato Hierarchy of IT Needs
Chapter 6
Figure 6.1 Laudato Hierarchy of IT Needs
Chapter 7
Figure 7.1 Laudato Hierarchy of IT Needs
Figure 7.2 CIO Performance Matrix
Chapter 8
Figure 8.1 Laudato Hierarchy of IT Needs
Chapter 9
Figure 9.1 Laudato Hierarchy of IT Needs
Chapter 10
Figure 10.1 The CIO Report Card
Chapter 11
Figure 11.1 Culture Evaluation Matrix
Chapter 13
Figure 13.1 Sample IT Organizational Design
Chapter 14
Figure 14.1 Problem Resolution Path Org Chart
Chapter 15
Figure 15.1 Speed and Quality Rating Matrix
Chapter 23
Figure 23.1: IT Strategy Alignment
Chapter 24
Figure 24.1: Sample ITIL Incident Reporting Process
Chapter 28
Figure 28.1: Project Prioritization Evaluation Matrix
Chapter 30
Figure 30.1: Example Project Ranking Worksheet
Guide
Cover Page
Title Page
Copyright
Fostering Innovation
About the Author
About the Technical Proofreader
Acknowledgments
Introduction
Table of Contents
Begin Reading
Index
WILEY END USER LICENSE AGREEMENT
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Fostering Innovation
How to Build an Amazing IT Team
Andrew Laudato
Introduction
Are you a CIO? Then let's face it, nobody likes you. Not your team, not your boss, not your vendor partners, and, unfortunately, not your company's functional leaders. Because of the long hours you work, your family may not be too happy with you right now, and even your dog wonders where you've been all day.
How is that possible? You work around the clock; you are constantly juggling priorities and pulling off the impossible. You and your team have saved your company from disaster on more than one occasion.
IT leaders face many challenges. The first one is that IT can do more harm than good. When everything works perfectly, success is attributed to the functional leader. High sales result from desirable products and on-point marketing. When things go wrong, there's a good chance IT will take the blame. When the network is down, the registers aren't ringing, and the website is inaccessible, sales are impacted. When projects fail to deliver the expected value—IT again becomes the scapegoat.
Another challenge IT leaders face is that we accomplish only a small fraction of what is desired. How many initiatives did your team complete last year? How many were requested? The gap is usually large. It's easy to dream up an extra feature, capability, or report. But it takes time, effort, and money to deliver those things.
Another risk for IT leaders occurs when we don't understand or relate to our business. When we become enamored with solutions, we turn into hammers looking for nails. Trying to solve a technology problem with business is not the path to CIO stardom.
The good news is that there has never been a better time to be an IT leader. The world is on the fast track to digital everything, and technology is at the center of everything we do. I bet you bought this book on a computer. You may even be reading it on one. Not that long ago, we had to go to a bookstore to buy a book. As technologists drive this transformation, our standing as leaders and innovators will continue to improve. IT leaders' opportunities for career growth have never been better. More and more, IT leaders are part of the executive committee, and they have a seat at the executive table. IT leaders are being promoted to Chief Operating Officers (COO) and Chief Executive Officers (CEO). IT leaders are being tapped for corporate board seats, as the importance of technology has expanded in every type of business, big and small.
In this book, we explore several tools and techniques for improving the IT function in your business.
Why Did I Write This Book?
My grandmother had a saying: “If not me, then whom?” Like your grandmother, she'd be the one willing to tell you that your zipper was down, your breath smelled bad, or that dress did indeed make you look fat. She'd tell the hard truth because who else would?
Let's face it: IT does not have the best reputation. We've come a long way since Nicholas Carr published “IT Doesn't Matter” in the Harvard Business Review in 2003, but we still have a long way to go. In many companies, IT bashing and IT scapegoating continue to be an acceptable part of the corporate culture.
If you're a struggling CIO, I hope this book will help you turn things around. If you're a new CIO, you need to learn quickly because, in the digital age, you won't have the runway that my generation did. If you’re an aspiring CIO, don’t let this introduction discourage you. Consider this book proof that there’s a robust community of CIOs and IT leaders willing to exchange ideas and share lessons learned as you walk this path. CIO should no longer stand for Career Is Over. We're in the digital age, and the IT department can be an organization's most important asset.
About This Book
In this book, I provide detailed and prescriptive advice on how to best run an IT department. I do so with the understanding that there's more than one way to accomplish that goal. Your approach should vary based on the company's size, the company's plans, the CEO's style, and the team's strength. External factors, including the economy, the state of the market, customer demand, and advancements in technology all impact how you should lead.
Staying true to your values and beliefs is vital to being an open and honest leader. Don't read this book and then walk into the office on Monday morning a new and improved you. Continuous improvement concepts apply to our personal development as much as they do to our teams.
If your goal is to transform IT by pivoting to Agile and DevOps, you need to understand where your company is on its journey and adapt accordingly. IT leaders need to be agile with a little “a” before they can be Agile with a big “A.” You will find the Agile and Lean principles woven throughout the text. Although I am a staunch Agile advocate, this is not an Agile book.
People who know me well will be shocked to see that the word project appears in this book over 100 times. Like George Carlin's seven words you can't say on television, I have a list of words I dislike. These, in no particular order, are project, user, phase, and resource. My dislike for the word project came from my adoption of Agile and its association with Waterfall project management. However, I'm okay with the classic definition of a project: an activity with a defined start and stop. We all set out to do work, and hopefully, that work gets finished in the best way possible.
I wrote this book in plain language, making it accessible and hopefully enjoyable for non-technical readers. This book will provide insights for anyone in an IT leadership role and anyone who works closely with IT leaders. In today's digital age, that's just about everyone.
Reader Support for This Book
How to Contact the Publisher
If you believe you've found a mistake in this book, please bring it to our attention. At John Wiley & Sons, we understand how important it is to provide our customers with accurate content, but even with our best efforts an error may occur.
In order to submit your possible errata, please email it to our Customer Service Team at [email protected] with the subject line “Possible Book Errata Submission.”
IBecome an Empathetic Leader
1Hey, What Do You Know?
When I got my first chief information officer (CIO) gig in August 2000, I had no clue what I was doing. The skills needed to get the job—charm and charisma—differed from the skills required to do the job.
Over the past 20-plus years as CIO, chief technology officer (CTO), and now chief operation officer (COO), I have learned many lessons, practices, and techniques that I have used to foster and develop three winning IT Departments. Most of these lessons didn't come easy; several came through failure, embarrassment, and trial and error.
We all know you learn terrific lessons from failure. You need to learn from your wins as well. What worked? Why did it work? Maybe you got lucky by hiring a hotshot project manager who muscled your initiative across the finish line. Perhaps you think you're winning, but you're destroying your team morale. Don't let the failure discourage you, and don't let the wins make you cocky. Remove emotions from your performance self-assessment. This isn’t personal; it’s business. You are not defined by your last project.
Build Your Skillset
An essential parenting skill is to remember when you were your kid's age. As much as the world has changed, remembering what you did, thought, and felt in middle school and high school will make you a more empathetic parent. This concept applies directly to leadership. I started as a programmer/analyst, an old term for developer. I moved my way up to senior programmer analyst, manager, senior manager, director, and then VP of applications. In each of those roles, I paid close attention to my leaders and, frankly, judged their behavior. There were some behaviors I despised, some I loved, and some I didn't understand. By remembering what it's like to be in the trenches, you'll hopefully be a better General to your troops.
If you didn't work your way up to CIO and instead came through a different path, there's still hope for you. If your path was a boarding school, Harvard, McKinsey, and now CIO (congrats, that's impressive), you must put in extra time and energy to get honest input from the rank and file. If your path to CIO was from a business function, read The Adventures of an IT Leader by Robert D. Austin.1 In that book, a functional leader complains so much about IT that the CEO puts him in charge of it. There are a lot of good insights in that book. The most important insight is understanding why the prior CIO got fired.
Technology is one part of the CIO role—albeit a small part. Five critical skills are needed to be a successful CIO:
People skills
Business expertise
Technical prowess
Project management
Administration
You're probably good at three or more of these, or you wouldn't have gotten the job. What's your weakest subject? Focus on rounding out your skillset in each of the areas. Put the most effort into the items you struggle with.
Grow Through Listening
As you look to improve, start by listening. Listen to your team. Listen to your peers. Seek out and listen to other CIOs. Read everything you can get your hands on. Build a network of IT leaders across your industry. Being a CIO is a lonely job. Although I use the word peers to describe the other executives in your company, they aren't peers in the sense that they can relate to your challenges. The first time I sat down and had a beer with a CIO from a similar-sized company in the same industry, I could feel the stress leave my body. I was not alone—CIOs in other companies have similar challenges. When I left retail and took a CIO role in senior living, the issues were remarkably similar.
Every company has challenges, and every CIO is struggling to balance the demands being placed on them. Seeking these conversations is not just imperative for your education; it's also good for your mental state.
I vividly remember an uncomfortable discussion with the chief supply chain officer. Let's call him Joe. Joe said to me, “Every day, we complete all of our work before we go home. If we get 10,000 orders, we stay until 10,000 orders are shipped. If we get 15,000 orders, then we work until they get shipped. IT only completes a small fraction of what I need. Imagine if we only shipped 100 orders and called it a day.” An IT Department's unique challenge is that only a tiny percentage of what is requested ever gets completed. Keeping your business partners satisfied while rarely giving them what they want is a tricky business.
A Proactive Mindset
In January 2020, mere weeks before the coronavirus pandemic utterly disrupted our world, I was promoted from CTO to COO of The Vitamin Shoppe. While I still oversee the IT Department, I am now one of its biggest customers. We're in the digital age, and all of my functions rely heavily on technology to be successful. Seeing IT from the outside changed my perspective.
As the COO, I consider every problem in our business to be my problem. When you accept that everything is your problem, you save a lot of time and energy not being defensive and pointing fingers. Can you develop this mindset without being a COO? A leader who focuses on fixing problems is a valuable asset to their organization.
We are in a changing field in changing times. A career in technology is a lifelong commitment to learning. Having the mindset and willingness to learn and adapt is vital to building and running a world-class IT Department. In the next chapter, we'll look at what sets an IT Department head and shoulders above the rest.
Note
1
. Robert Austin (Harvard Business Review Press, 2016), The Adventures of an IT Leader, Updated ed.
2An Amazing IT Department? What's That?
Stacey Renfro, the award-winning CEO of mDesign Home Décor, understands the importance of a strong IT Department to any business's success—especially a digital-first company. Here is Stacey's advice to CIOs:
Speak our language, not yours. We don't need to know how you do your work.
Know the business. Don't sit behind your computer and expect to make a difference.
Communicate. Let your business partners know what you're doing. If you don't share, you may not know all the impacts of a change.
Amazing IT Departments are a competitive advantage for their company. Amazing IT Departments continually exceed expectations by providing reliable and secure systems. They have friendly, prompt, and competent support teams. Amazing IT Departments complete their projects on time, on budget, and with a high degree of customer satisfaction. Amazing IT Departments are agile, working in small iterations and adapting on the fly. Amazing IT Departments write things down and keep good records without being buried by needless paperwork and bureaucracy. Amazing IT Departments provide transparency by communicating status, honestly, and in plain language. Amazing IT Departments are a terrific value, providing cost-effective services while delivering high return-on-investment (ROI) capabilities. Amazing IT Departments openly learn from their mistakes and successes, taking the time to look back on every initiative. Amazing IT Departments provide a fertile ground for innovation. They build flexible platforms, which allow for rapid prototyping. They have a culture that allows for innovation, and they inspire and reward creativity.
If you work in an Amazing IT Department, your work is aligned with the company's goals. You know you are making a difference. You also understand what you need to do to be successful. You have a clearly defined career path based on your personal goals. The work is rewarding because people are supportive and collaborative, and everyone on the team is pulling their weight. You can't imagine working anywhere else, and when the phone rings, you tell the recruiter you have no interest in exploring other opportunities.
Attributes of an Amazing IT Department
Helps the company accomplish its goals
Drives and inspires innovation
Is an enabler, not a blocker
Delivers cost-effective results
Provides career growth opportunities for the team
Is a fun and rewarding place to work
For the most part, these qualities are all attainable, although some require more awareness and commitment than others. In the next chapter, we'll examine some of the common problems that make it more difficult to build and sustain such a team.
3Conventional Wisdom Is Wrong
If you're a sitting CIO right now, how are you doing? Use Table 3.1 to assess yourself. Answer honestly; nobody's looking. By the way, you can write in this book. You bought it.
Table 3.1: CIO Self-Assessment
Question
Yes/No/Don't know
Are your systems reliable, with 99.9% uptime?
Do you score over 90% on an internal customer satisfaction survey?
Does your board of directors (board) consider IT a competitive advantage?
Does IT provide value, continually delivering new capabilities?
Do the CEO and CFO brag about IT in public presentations?
Are you providing cost-effective services?
Are you invited to informal executive conversations because the CEO values your input?
Do your company employees find it easy to use their tools to get work done? Are their files in the cloud and easily accessible?
Do other department heads treat you as an equal?
Is IT turnover lower than the company average?
Is your team fully engaged? Do they over-deliver?
If I asked everyone on your team to list the top three IT priorities, would they all give the same answers?
If I asked all the VPs in your company to list the top three IT priorities, would they all give the same answers?
Is IT leading the way on innovation in your company?
If you answered yes to most of these questions, call me—I'd like to feature you in my next book. The rest of us have some work to do.
Compared to our executive peers, our profession is still in its infancy and only recently gaining respectability. Two of the first people to have the CIO title were Al Zipf of Bank of America, and Max Hopper of Bank of America and American Airlines. “Management's Newest Star: Meet the Chief Information Officer,” declared Business Week magazine in a headline in 19862. Just 17 years later, The Harvard Business Review declared the profession dead, in the article “IT Doesn't Matter.”3
Showing our worth has been a tough sell. We don't bring in revenue, mistakes can be extremely harmful, and what we do seems to take forever. Have you ever taken an introductory programming class, and the goal at the end is to get the words “Hello World” to pop up on the screen? The amount of effort necessary to make this happen is incomprehensible to our non-technical peers. One of the biggest challenges is that what we do is esoteric and more challenging than it looks.
A Tale of Two Projects
Imagine the case where a company is doing well, so it adds hundreds of people to its staff. The company's growth has created two problems: it needs a more robust people-management solution, and it needs additional parking. The decision is made to build a parking garage and implement new cloud-based human resources (HR) software. Both projects coincidentally cost around $3 million to complete.
The company performs a rigorous ROI process before software projects are approved. The chief people officer (CPO) is adamant that she needs tools for talent acquisition, compensation management, payroll, and employee development. As we know, it's hard to associate a revenue increase with this software. Costs will go up compared to their current business processes using spreadsheets and email as their primary tools. The parking garage doesn't go through the ROI process. Nobody likes to park a mile away and ride a shuttle bus back and forth. It's clearly needed.
The CFO wants estimates. The parking garage estimate is detailed and easy to understand. It includes tangible tasks such as excavation, framing, concrete, and painting. The HR project documentation is riddled with obscure jargon. The CIO is reluctant to give an estimate or a completion date for the HR project, stating that he doesn't even know what the requirements are yet.
The decision is made to complete both the parking garage and the HR software projects. Both projects complete on the same day.
There is a ribbon-cutting for the parking garage, and the employees are thrilled. No training is required since they all know how to park.
The new HR software is having a few problems. It's slow, and some users can't log in. Nobody knows how to use the software. As part of the project, HR implemented new policies for vacation and paid time off (PTO). These new policies frustrate the users, who blame the problems on the new system. The parking garage has a clear and immediate benefit. It will last for years. No doubt everyone thinks, “What a brilliant investment; we should build more of these.” The new HR software generates negativity, and the CEO struggles to understand what she got for her investment.
Is a parking garage more valuable to a company than advanced software to manage people? Of course not. What went wrong? In this example, the HR project was on time and within budget, but it was still considered a failure to some.
The Downward Spiral of Micromanagement
When things go wrong in IT, leaders tighten the screws and micromanage. Table 3.2 provides a list of IT problems and the corresponding unfortunate responses that often follow.
Table 3.2: Common Unfortunate Responses to IT Problems
Problem
Unfortunate response
Project delivered on time and budget but missed the mark on functionality
CIO implements a detailed requirement process that includes user sign-off before work begins.
Project value fails to materialize
CFO implements a strict capital approval process.
CFO questions cost overruns
CIO implements strict time-tracking, so every minute of work is captured and mapped to a project.
Security incident
CIO locks down systems, email, and files. Requires onerous processes for working remotely.
Third-party consultant brought in to analyze IT
CIO overreacts and completely restructures.
Pressure from board to stay competitive
CIO agrees to take on multiple large projects at the same time.
Findings on Sarbanes-Oxley (SOX)
4
audit
External consultants are permitted to create oppressive controls.
CEO demands more innovation
CIO ignores technical debt (e.g. legacy systems) and builds new capabilities on a weak foundation.
During the first week of a new job, we had a planned fire drill. While in the stairwell, I overheard two of my new developers discussing the proper way to record the time spent in the fire drill. When I inquired, it turned out that the team was required to account for every minute of their time. When I asked why, several answers were given: (1) it is necessary for Sarbanes-Oxley (SOX); (2) it's required for accounting; and (3) it's necessary for resource planning. None of these answers are accurate, and all of them are frustrating. There are no SOX rules that say you need to document the time salaried employees spend on a fire drill. There are no accounting rules that say you need to document the time salaried employees spend in a fire drill. Micromanaging time is the surest way to destroy productivity. Yes, you must track the time internal employees spend on capital projects. But time tracking should not be extended to lunch breaks, social activities, and fire drills.
As the rules become stricter, the team slows down, and morale dwindles. When a team is not empowered, discretionary effort is gone. The mentality becomes, “If you treat us like babies, we'll act like babies.”
When morale drops, people will leave. In any economy, top IT talent is highly sought after, and they can find jobs outside of your company. When morale is low, top talent departs, and the downward spiral continues. As IT delivers less and less, more pressure is put on the CIO, and the screws are tightened another turn.
In an act of desperation, the CIO will cut corners. Usually, the first thing to go is quality assurance testing (QA). Testing is the last thing that stands between development and launching a solution that will be accessed by its users to do their jobs. Cutting corners on QA appears to save time and money, and by squeezing testing, you’re merely hoping to still ship a quality solution on time.
This is not a suspenseful story; we all know what comes next. The release is buggy, the users are frustrated by these defects, and the new features create havoc for the customers. Now IT is not just a burden on the bottom line—it is negatively affecting the top line. Fixing these bugs must become the CIO's full-time job, and the dream of being a strategic partner will have to be postponed. Top talent is redeployed to remediation, and the beautiful three-year Gantt chart is quickly turning from yellow to red because you can't move forward when your house is on fire.
At this point, more bad things happen:
The CIO loses his job.
The CEO brings in outside consultants to “fix” the IT Department.
A decision is made to outsource IT.
The chances of an internal candidate becoming the next CIO are slim to none as the internal team is associated with the failures.
The conventional wisdom that you can improve IT by implementing more and more processes and controls is wrong. You may try to combat this by embracing an Agile methodology, but done poorly, Agile can create the same problems. Leaders who micromanage lose their team first and their job second. Trusting and empowering your team is the only way to create an Amazing IT Department.
Notes
2
. G. Bock, K. Carpenter, and J. E. Davis, “Management’s Newest Star: Meet the Chief Information Officer” (Business Week, 1986, October 3), No. 2968, 160–166.
3
. Nicholas G. Carr, “IT Doesn't Matter” (
Harvard Business Review
, 2003),
https://hbr.org/2003/05/it-doesnt-matter
.
4
. H.R.3763 - 107th Congress (2001-2002): Sarbanes-Oxley Act of 2002 |
Congress.gov
| Library of Congress.
https://www.congress.gov/bill/107th-congress/house-bill/3763/text
.
IIFour Steps to Innovate
4The Right Foundation
When formulating your plan, make sure it's the right plan for your company, your team, and the times. Don't bring what you did at your last job and just impose it on your new team.
Collaborate with your leadership team, and get the right answer together. The same advice goes for this book—it should be used to inform, not direct, your actions. When bringing a new concept forward, take the time to explain the why. If it's a technique you had prior success with, tell the story: explain why it worked and what results were obtained. This could take less than 10 minutes and make all the difference in the world.
In building and executing your plan, it is essential that you establish and communicate expectations, trust, and values.
Set Expectations
If you're currently in the market for a new CIO role, you mustn't overpromise during your interview. Even if you were wildly successful in your previous position, it's going to take time to succeed in your new role. Setting expectations too high is a rookie mistake that will be hard to overcome. Straight talk about what it takes to turn around a struggling IT Department will improve your chances of getting and succeeding in the role. If they're expecting the impossible, it's time to move on to the next interview.
If you're a sitting CIO who needs to reset expectations, be embarrassingly overt. Create a new program, give it a name, give it a logo, document it in a strategy, and take it on a roadshow. It is possible to get a second chance in the same job.
To establish a winning leadership approach, you need to become customer-obsessed. Reframe the focus on your stakeholders. How does this help my external customers? How does this help my business partners? How does this help my employees?
When considering your relationships with your boss, your board, and your peers, adjust your communication style to them. Instead of lamenting that they won't take the time to learn your terminology, make it your job to speak in theirs. It's not about meeting them halfway; it's meeting them where they are.
As for your team, you need to trust them. Tech people are smart. Treat them that way. Take the time to share the why. Teach them about the business. Make sure they understand the mission, the goals, the long-range plans, and the current results. Go over the numbers with your entire team. Discuss sales results and budget variances. Are these considered a secret in your company? Is SOX used as an excuse to not share this information? If so, then explain that it's a secret. Go over the policy. Explain the risks of insider trading and freeze windows. Explain the corporate policy regarding confidentiality. Remember, you're the leader, and your example will be followed.
Ask your team their opinions about the corporate goals and the plans to achieve them. Let the team shape the solution. Get their buy-in, and they will knock your socks off. We've all been part of a high-performing team in our careers. Teams that have a clear vision, trust, and few roadblocks perform at exceptionally high levels. And let's be honest: Do you think a network engineer who has to record the time they spent in a fire drill is going to spend their personal time thinking of a more reliable way to route traffic in your network?
Build Trust
Trusting your team is critical and a core part of being successful. However, to be trusted, they must be trustworthy. If you have team members with integrity issues, they need to go. If you have team members who are undermining the new plan, they need to go.
If your boss doesn't trust you, you're going to have to move more slowly and bring them along on the journey. You could be new, your boss could be new, or you could have prior missteps that broke trust. Regardless of the reason, lack of trust has to be remedied before you can move forward.
When your team trusts you, they will take the leap of faith with you. Would you rather have someone perform a task because you told them to, or because they're totally bought in and aligned with how they can personally help achieve success? I can assure you, the latter produces much better results.
Share Your Values
Become a philosopher, not a task manager. Talk about your beliefs and values. For example, I believe that people are adults and should be trusted. I believe that the most important role of an IT Department is to “keep the lights on.” I believe that the people closest to the work will make the most accurate estimates. Stick to a few core beliefs and values, and repeat them obsessively.
I value teamwork. I value education. I value honest feedback. These are some of my beliefs and values. Yours might be different, and that's fine. Your values will be driven by your knowledge, experience, and goals. Whatever they are, be sure to share them with your organization.
When everyone trusts each other and shares the same values and expectations, you have a firm foundation in place for everything else you do. The Laudato Hierarchy of IT Needs builds further on that foundation, as you'll see in the next chapter.
5The Laudato Hierarchy of IT Needs
Most people believe that the only thing IT does is implement software to reduce costs or increase sales. When I say “most people,” I don't just mean grandmothers and schoolteachers; I mean CEOs, CFOs, and even CIOs.
Listen to the questions you'll get in an interview:
Tell me about a project that was successful.
Tell me about a project that failed.
What's your direct experience with XYZ software?
Here's what they should be asking:
How do you measure system uptime?
How should IT measure customer satisfaction?
What strategies did you use to reduce IT costs?
What's the process to determine what projects IT works on?
How important is culture to IT productivity?
How do you cultivate and nurture innovation?
While creating value is the lifeblood of an IT Department, it is only possible when a solid foundation is in place.
Back in school, we all learned about Abraham Maslow's hierarchy of needs.5 Maslow postulated that in order to achieve love, belonging, esteem, and self-actualization, you first need to satisfy your basic physiological needs — eating, drinking, sleeping — and then your safety needs. If these basic needs aren't met, you will never reach your full potential.
For an IT Department to reach its full potential, I devised a similar model, the Laudato Hierarchy of IT Needs, shown in Figure 5.1.
Figure 5.1 Laudato Hierarchy of IT Needs
© 2017 Andrew Laudato All Rights Reserved Hierarchy of IT Needs
You can't fall in love while you're being chased by a bear, and you can't deliver value to your company if your systems are crashing, and your costs are out of control. The most important task for any IT Department is building, maintaining, and supporting a secure and reliable foundation.
We'll call this keeping the lights on, or KTLO for short. If you think KTLO is someone else's job or something that gets in the way of innovation, you're going to be in trouble. If you think you'll get a seat at the table when the emails aren't emailing and the financial reports are wrong, you're sorely mistaken.
Imagine trying to add a sun deck to your house while your kitchen is on fire. You're happily nailing down the floorboards while your spouse and children are inside screaming. It's not a good look. Obviously, the urgent will outweigh the important, and rightly so. If you're dreaming of having a glass of wine outdoors while the sun sets, you need to get your house in order first. Put out the fire, and then start working on your deck.
Note
5
. A. H. Maslow,
Motivation and Personality
(Harper & Brothers publisher, 1954), 411 pages, ISBN 978-0-06-041987-5.
6Keep the Lights On (KTLO)
At Pier 1 Imports, we got so good at the foundation level of the Laudato Hierarchy of IT Needs, KTLO, as shown in Figure 6.1, that I had to fight with my HR business partner to keep it as a metric. Because we consistently maintained 99.9% uptime, he argued that KTLO was solved, and we shouldn't be rewarded for it. I've had a CFO tell me that KTLO is table stakes, and it really “doesn't count” toward CIO effectiveness. CIOs have told me they leave this to their VP of Infrastructure so they can go off and be strategic.
Figure 6.1 Laudato Hierarchy of IT Needs
© 2017 Andrew Laudato All Rights Reserved Hierarchy of IT Needs
Wrong, wrong, wrong!
The moment you get good at KTLO is when you need to double down on it. Complacency is the number-one enemy of reliability. You can only go without air for five minutes, water for three days, and food for maybe a month. If you run out of water, your needs become more desperate, and falling in love goes out the window. If your customer relationship management (CRM) system gets hacked, I promise it's going to occupy your life around the clock until it's resolved. When your engineers are up all night fighting bugs, they're not much use during working hours.
In my blog post “Why CIOs Need to Pour Concrete,”6 I wrote, “CIOs who understand the need to build upon a concrete foundation will eschew the ‘sexy' until their platform is robust, and only then will they create a beautiful and glamorous digital experience built to stand the test of time.” KTLO is the key to innovation. It's the foundation upon which it rests.
Once the systems are robust, it's time to move up the Laudato Hierarchy of IT Needs pyramid and create a lean and efficient organization.
Note
6
. A. Laudato, “Why CIOs Need to Pour Concrete,” (Heller Search Associates, May 27, 2020),
https://www.hellersearch.com/blog/why-cios-need-to-pour-concrete
.
7Lean and Efficient IT
A lean and efficient IT Department is a low-cost provider of software and services.
Imagine teaching your kids about money if you have no savings and your credit card debt is mounting. While your advice may be good, your credibility is crap. Do what I say, not what I do is a failed strategy for parenting and leadership. Now imagine talking to a senior executive about using technology to drive improvements while your IT budget is out of control. It's the same credibility problem.
As shown in Figure 7.1, we are moving up the Laudato Hierarchy of IT Needs. After getting the foundation solid, the next step is to make IT cost-effective. Get it right, and then get it cheap. Sometimes you have to spend a lot of money to get things stable. Imagine that your website is down because an engineer misconfigured it and then walked out. If the only person who can fix it bills at $500/hour, you grit your teeth and pay the bill. If you need to hire an offshore team to watch your batch systems at night, you grit your teeth and pay the bill. Unreliable systems are expensive.
Figure 7.1 Laudato Hierarchy of IT Needs
© 2017 Andrew Laudato All Rights Reserved Hierarchy of IT Needs
Place your IT Department on the chart shown in Figure 7.2. If you're in the bottom left, with systems that are both unreliable and expensive, it's time to update your LinkedIn profile. The bottom right—low cost, low reliability—is typical for companies that don't see value in IT. Keeping costs low is the only priority. The CIO probably reports to the CFO in this scenario. Sometimes these companies decide they don't need a CIO, and they turn the function directly over to the CFO.
Figure 7.2 CIO Performance Matrix
In the top left, we see the case where things are running smoothly with reliable systems, but costs are above industry averages. This is where outsourcing talk happens. Be wary; the CFO is definitely having a fancy dinner with a global outsourcing company. In other words, if the systems are stable while your costs are above industry averages, you become fodder for outsourcing talk. The CFO and CEO are being approached on a regular basis with the promise of lower IT costs. Once you're externally benchmarked, things get dicey. Benchmarks compare you to everyone, including companies with low IT costs and low IT capabilities. Whether or not it's a well-run IT department becomes irrelevant.
The holy grail is lean and efficient IT. In the top-right box, your team has the time and funding to work on strategic projects. As a superstar leader, you remember that keeping the lights on remains the most important priority, so you never lose focus on the foundation as you take the next step up the Laudato Hierarchy of IT Needs pyramid and begin to create value.
8Create Value
“Technology is all I have left.”
—Greg Rake, global supply chain expert Sharing what’s going well in his industry, 2020
We are now at create value, the penultimate step of the Laudato Hierarchy of IT Needs, as seen in Figure 8.1. When you look at the list of strategic initiatives for your company, how many involve technology? 70 percent, 80 percent, 90 percent or more? Regardless of the industry, technology is at the center of almost all growth plans. Digital acceleration is driving these percentages even higher, spurred by the onset of the Covid-19 pandemic in 2020. Digital is transforming all sectors of the economy: manufacturing, media, entertainment, services, education, technology, healthcare, and retail. More and more, your efforts to create value will use and depend on technology in a variety of ways.
Figure 8.1 Laudato Hierarchy of IT Needs
© 2017 Andrew Laudato All Rights Reserved Hierarchy of IT Needs
That's good to know, but what does it mean to “create value?” In simple terms, creating business value means putting money in the bank. The more successful a company is, the more opportunities exist for its employees. Successful companies invest. Successful companies hire. Successful companies celebrate, and successful companies pay bonuses.
Business value comes from reducing costs, increasing revenue, enabling opportunities, and reducing risk.
Cost Reduction
Cost reduction projects are the easiest to measure, and therefore, the CFO's favorite. One of my favorite cost reduction tools is robotic process automation (RPA). RPA automates repetitive and mundane tasks by replacing work done by people with a software bot. For example, a bot can be programmed to log into a financial system, look up a past-due amount for a customer, format a personalized letter requesting payment, and email that letter directly to the customer. The first time I implemented RPA, I feared a backlash from the people doing the work manually. However, the opposite happened: because the bot replaced the most boring and thankless tasks, people were thrilled and thankful for RPA. Employees could now dedicate their time to more meaningful and fulfilling work.
Increase Revenues and Enable Opportunities
If a company’s bottom-line projects are the CFO's favorites, then top-line projects are the CEO's favorite. Projects that increase revenue have much more upside. The sky is the limit on top-line growth. A project that delivers new capabilities can put you ahead of the competition and increase your market share.
In the heat of the Coronavirus pandemic, Vitamin Shoppe commissioned a project to sell on Instacart. Instacart allows a customer to order products on their phone and have them delivered to their home the same day.
It took fewer than 90 days to implement the Instacart project with an exceptional ROI. This is IT at its best. If the tech team had been overwhelmed with KTLO, this project wouldn't have been sanctioned. If IT was over-budget on its capital expenditures, this project wouldn't have been sanctioned. If the prioritization process had been inflexible, this project wouldn't have been sanctioned. And if IT wasn't agile, the project wouldn't have been completed successfully and ahead of schedule.
Some IT projects are known as opportunity enablers. Although these types of projects don't have a direct ROI, they are necessary prerequisites to projects that do. A good example would be a content management system for your company's website. The content management system will enable the company to personalize experiences for its customers. Personalization is the real value creator, not the CMS system, itself, that enables personalization. Be sure to combine these types of projects when computing the project's true value.
Reduce Risk
Risk-reduction projects don't directly add to the top line or the bottom line, which sometimes makes them harder for CIOs to justify. Do not let this deter you. Reducing risk is an important undertaking, and projects that reduce risk are arguably more important than projects that fall into other categories. On the infrastructure side of the house, risk-reduction projects include upgrading to supported operating systems, building out redundancy for your network and servers, implementing cyber-security tools, and moving key workloads to the cloud. Applications also benefit from risk reduction efforts. Building fallback systems, modularizing code, and test automation are examples.
Major system failures are costly and embarrassing to companies and harm the reputation of the CIO. Don't wait to reduce risk until after an incident occurs. A mature enterprise risk-management process will help you identify areas of concern for your particular situation.
9Let's Innovate
To successfully innovate, organizations first need to achieve the bottom three steps of the Laudato Hierarchy of IT Needs: keep the lights on (KTLO), operate a lean and efficient IT Department, and create value for your business.
To foster innovation, you need stable and affordable systems, a process to prioritize projects, and a method to deliver those projects successfully. When IT is a well-oiled machine, it is ripe for innovation, and giant leaps forward will occur. Welcome to the top of the pyramid. As shown in Figure 9.1, it’s time to innovate!
Figure 9.1 Laudato Hierarchy of IT Needs
© 2017 Andrew Laudato All Rights Reserved Hierarchy of IT Needs
In 2010, we implemented point-of-sale email receipts at Pier 1 Imports. I was quite excited, and at dinner that night, I bragged about it to my teenage daughter. She looked at me and said, “You didn't already have that?” Clearly, she was not impressed. Omni-channel capabilities like buy online, pickup in store (BOPUS), curbside pickup, ship-from-store, and universal returns don't impress anyone these days. In healthcare, online records, electronic scheduling, and telemedicine are the new norm. Yesterday's innovations are today's expectations.
To invest in innovation successfully, you must be willing to develop an innovator’s mindset, dedicate resources, and embrace risk. Only then can you move on to generate ideas, prototype, and turn your vision into reality.
Develop the Mindset
In most companies, especially large ones, a return on investment (ROI) calculation is performed before a project is undertaken. Risks are documented, and contingency plans are drawn up. A project is treated as an investment, and a solid return on the money is expected. Sure, there are consequences for failure: When a project fails, people lose their credibility, their funding, and sometimes even their jobs. However, if you want to be an innovator, you must take calculated risks. When you're able to consider a failed project a valuable learning experience, you have developed an innovator's mindset.
Dedicate Resources
Companies don't innovate; people do. For innovation to work, the company must create a nurturing environment. Sticking a group of people in a room and telling them to innovate is no better than putting a seed on a concrete floor and telling it to grow.
