Discover Performance

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

When IT cleans house, the business cleans up

IT guru Gene Kim says that no matter what’s on IT’s plate, or how boring it may sound, improving how we do daily work is the most important piece for providing true business value.
Gene Kim has been studying high-performing IT organizations since 1999, when he was cofounder and CTO of Tripwire, Inc. In previous Discover Performance articles, he’s talked about how his journey led him to become a huge proponent of DevOps, which he believes will be the key to survival for any business that depends on technology. His new business novel, cowritten with Kevin Behr and George Spafford, is “The Phoenix Project: A Novel About IT, DevOps, and Helping Your Business Win.” In the vein of “The Goal: A Process of Ongoing Improvement” by Eliyahu M. Goldratt, the book is intended to educate, entertain, and inspire change.

Kim and his colleagues have put a lot of thought into improving IT in a new era, so we asked him what he thinks should be front-of-mind for IT leaders in 2013 and beyond. A big fan of kanban and Lean processes, Kim believes the key to creating a more agile and innovative IT department is prioritizing improvement work and keeping planning horizons short. That means results must be shown in weeks, not months.
Why? William Gibson is credited with writing, “The future is already here. It’s just not evenly distributed.” In a mobile/cloud era, your colleagues on the business side—and your customers—are already living in an agile and innovative world. If you’re not already there, you’re running out of time to catch up.

Q: All right—it’s 2013. What should IT leaders be turning their attention to, now that we’re living in the future?

Gene Kim: Every organization is being pressured to innovate, which almost always involves technology. But IT can’t do it alone. For IT to “help the business win,” there must be a culture change where IT is not viewed as merely a department, but as a competency that has to reside in the business. In “The Phoenix Project,” we hint at what’s possible when the business and IT are truly working together to innovate and beat the competition.

Q: Let’s walk through that. What, exactly, is innovation trying to accomplish?

GK: We must always be reducing the lead time to go from idea to value, from “concept” to “ka-ching,” enabling the business to constantly experiment and innovate. Intuit’s Scott Cook has long championed the notion of an “innovation culture,” where everyone in the business is coming up with experiments, where improvements can be seen within days or weeks, as opposed to quarters or years. That not only requires great IT operations capabilities, but means that IT itself is a critical enabler.

Q: Generally, how do you make that work?

GK: There are several basic steps: The first step is to ensure that business leaders have set the mandate to “out-experiment the competition.” If that mandate isn’t already there, IT leaders must do what they can to help create it. 
The second step is then to look inward at the processes and culture within IT to ensure that we’re constantly increasing flow and reducing the lead time and cycle time from “concept” to “ka-ching.”

Q: What is “IT as a business competency”?

GK: Every business is an IT business, regardless of what business they think they’re in. Why? Almost every innovation requires something from the IT value stream, and most daily business operations run on IT. IT is not only the nervous system of the company, but also the majority of muscle mass.
To ensure that we can maximize the flow of work through IT, as well as ensure that IT services are stable, secure, and resilient, in the novel we codify the principles in “The Three Ways.” The First Way is all about ensuring that work only flows in one direction, from dev to IT ops. The Second Way is about ensuring that we create fast feedback loops from IT ops to dev. And maybe most importantly, the Third Way is about creating a culture that rewards taking risks and learning from failure, as well as creating the habits and patterns that lead to mastery.
The Third Way is all about process, culture, and elevating “improvement of daily work” over “doing daily work.” Marty Kagan, one of the luminaries of product management and design, asserts that we must reserve 20 percent of our time for paying down technical debt, which is all the things that slow down flow or jeopardize services. Why? Because if we don’t, 100 percent of our time will be spent dealing with all the shortcuts we’ve made in the past.

Q: How does that 20 percent fit into the routine complaint that IT spends 70 to 80 percent of its effort on maintenance, and only the remainder goes toward anything new or innovative?

GK: I love the standard lament that goes, “I aspire to have my IT organization spend 20–30% for innovation, but instead I’m spending all my time maintaining existing code.” There’s now a school of thought that says the reason we haven’t been able to break out of that cycle is because we haven’t elevated the priority of improving how we do work.
Technical debt compounds, just like financial debt. Just like being disciplined about paying down principal on loans, we must protect the time to pay down technical debt. Facebook has Hack Days to fix problems, which prevent entropy from taking over.

Q: So it’s “innovate for business success” and “fix—not just maintain—what isn’t performing.” Why is now the time for CIOs to embrace this message?

GK: As Dr. Deming said, “Survival isn’t mandatory.” Now more than ever, IT is under pressure to get its act together. Cloud and SaaS are increasing IT’s disintermediation. We’ve reached the point where IT becomes innovative, better and faster, or IT becomes irrelevant.

Q: That’s one of the challenges your character faces in the novel, right? He’s an ops VP stepping into the vacuum created by a CIO’s departure from a foundering IT organization …

GK: Absolutely. Bill is the VP of IT operations in “The Phoenix Project,” and helps his CFO and CEO realize that they depend on IT far more than they think, and that virtually every commitment they make to the outside world depends upon IT. They learn that the investments they make in IT also improve the business, as well.

Q: That’s not going to narrow down your character’s to-do list, though.

GK: Every IT manager can relate to the never-ending to-do list, trying to focus on the important, rather than merely on the urgent. Another way to state this is by saying, “If everything is important, nothing is.” 
One of the first aha moments that Bill has is during a self-imposed project freeze, which stops everything except for “Project Phoenix.” They learn that, just like in manufacturing, when work in process goes down, lead times go down and throughput of work goes up. In two weeks, they make huge progress on the long-stalled Phoenix Project, and are able to fix things inside of IT that prevent them from ensuring fast flow of work and stable IT services.
That’s the first of many breakthroughs that Bill and team make that not only fix IT, but help the business win.

Q: So step one is “IT leader, upgrade thyself”?

GK: Yes. IT leaders must eradicate technical debt to create fast flow and stable IT services. They must elevate improvement work, keep their planning horizons short, and create an innovation culture that is always experimenting and coming up with novel ways to help the business win. They must embrace concepts like the Three Ways to ensure that work is flowing in one direction, and that they’re creating fast feedback loops.
That’s what enabling innovation is all about, and what DevOps is all about. 
“The Phoenix Project: A Novel About IT, DevOps, and Helping Your Business Win” is available now from IT Revolution Press. Discover Performance readers can click here to download a preview of the first chapter. For more about HP’s approach to DevOps, visit
Read more in Discover Performance about DevOps and the authors of “The Phoenix Project.”


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