Discover Performance

HP Software's community for IT leaders // May 2013

Your skill set: Making the value change

HP senior consultant Keith Macbeath says tapping your own management bandwidth may be the biggest challenge to improving IT’s bottom-line contribution.
As we put together our latest issue around the concept of “value streams” (you’ve already downloaded the free ebook, right?), we talked with Keith Macbeath, senior principal consultant with HP Professional Services. One of the key topics he raised was the level of skill and determination an IT exec needs to see through the kind of root-and-branch transformation a value stream initiative offers.

Keith Macbeath
Getting the value streams working the way you want them to in your IT organization involves stripping away all the detail of incumbent processes, legacy technology, hot buzzwords, and outdated assumptions to understand what IT really delivers to the business, and how that directly leads to value along with the success of the company’s overall mission. Thus, the key challenges for a CIO leading this initiative are not tech-based, but management-based: digging deep, building (or enforcing) consensus, and committing to see the effort through.
Macbeath helped us frame the challenges, and pointed toward the solutions.

Q: When you’re trying to understand your IT value streams—and organize around them—what (or who) is the hardest sell?

Keith Macbeath: Like anything else, the hard sell is change, especially when it is perceived to incur cost or risk. I don’t think we see any organizations pushing back against value streams as a concept. It’s more often a question of whether companies are prepared to sacrifice some of their management bandwidth to these types of change.
One common proverb in the strategy world is that management bandwidth is your scarcest resource. The effort and resulting changes of looking at your value streams require relatively senior managers to agree to change ways of working, in terms of decision rights as well as processes. Financial investment can be an issue, but usually the barrier is: “Are we going to step up and lead this kind of change?” Everyone has a lot of things on their plate, and this is real leadership effort. They have to believe the outcome is sufficiently valuable to warrant engaging in this level of change. So, does it get high enough on your list for you to take action?

Q: It seems like a lot of the change in IT is things a CIO and other IT leaders might agree with conceptually, and then delegate: “Testing automation? Sounds smart—take some budget and get that done.”

KM: Right. These sorts of things are subcategories under the four value streams. Testing automation addresses an aspect of testing, so it’s a sub-aspect of Request to Fulfill, and Requirement to Deploy. You’re not necessarily changing the way you govern anything, at the higher level. It’s a productivity improvement, and/or velocity improvement. These are comfortable decisions to make and to delegate.
But these higher-order questions around how you set outcome metrics, or how to completely change the way you govern and execute Request to Fulfill—they are more radical decisions. When you decide to standardize and automate, you have to get all the stakeholders affected by the standardization to agree, then define and impose standards. That requires real management bandwidth, and real leadership. In most organizations, it’s unlikely  to emerge from a consensus of peers, the exception being organizations in which innovation is the norm. In a sense, being leaders is what separates the effective CIOs from the ineffective ones. We can really see it across the organizations we deal with.

Q: So if a CIO wants to lead this kind of value-based change to truly integrate IT with the business goals, what’s the necessary skill set?

KM: Discipline, an ability to lead, and the bandwidth to see this through. They also need an ability to relate outside of IT, to span the chasm between enterprise goals and IT outcomes. The business won’t do that for you. As a CIO, you have to draw the connection and do the work to identify the IT goals and metrics that derive from the enterprise goals. Then you have to explain them back to the business.
With technology expanding to be an everyday companion in phones, cars, and so on, business leaders have increasingly high expectations of IT, but they are not going to get their head around your mission of leading IT as a function. So, as an IT leader, you have to get your head around their needs as a business.

Q: So you have to relate to your IT team and to your CEO and business peers. Do you also need a perspective external to the enterprise?

KM: You absolutely need an outside perspective. IT, in my opinion, is in a period of the greatest rate of change it has ever seen. If you look at the big seismic changes in IT, they have always occurred in either production or consumption. The move from mainframes to client-server in the ’80s was mostly a major shift on the production side, although it did enable the first IT access to non-specialists. In the mid-’90s, the Internet changed the consumption of IT completely by enabling the first truly large-scale consumer interaction with IT.
But right now, both are changing rapidly. Cloud changes the economics and methods of IT production. Systems of engagement—social media is not a powerful enough term—are radically, fundamentally changing the consumption side. The way people under 30 interact with the world and each other is very different: it’s largely system-mediated on the Internet. As a result, much more of the information you want, from a business perspective, exists outside enterprise IT than within it, especially if your business serves consumers.
In terms of skill set, then, you have to be able to look outside, because the pace of innovation is driven by consumer IT. Enterprise IT is no longer at the forefront of developments in IT. You have to know about major platforms such as Amazon, Google, Facebook, and so on—and what’s happening in terms of mobility, with SaaS tools, and trends in your specific industry. If you’re in hospitality, for instance, you’d better know what is available from TripAdvisor, Revinate, and similar sites. If not, you can’t possibly provide ideas to your business that are relevant to the market they operate in today.

Q: So you have to be something of a futurist?

KM: You really have to keep up with what is going to affect your business—of course the high-probability things, and sometimes even the less probable but high-impact things, especially if you figure your enterprise will need a long runway to respond to them. I know a guy who’s the head of corporate BI for a large company, and when he and his CIO make trips to Silicon Valley, they’ll visit Intel and say, “Tell us how you’re innovating to ensure your own survival, and to make us continue to invest in your products. Tell us why we shouldn’t go a different direction with regard to the infrastructure on which we run our go-forward BI.”
Say “show me”—that’s what a winning CIO does. Don’t just follow the IT market, but develop a point of view on where it’s going and how that will affect the economics of your business, especially now that the “safe bets” of the last 25 years in IT are at best in question, and at worst a thing of the past.
Keith Macbeath, senior principal consultant with HP Professional Services, has more than 20 years of experience in helping clients use analytics to identify value, set performance agendas, and track results. For more on value streams, read the free ebook (reg. req’d), and our lead article, “Finding your true value.”


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