Why the CEO Couldn’t Care Less About IT

Why I didn’t write this nearly 30 years ago is beyond me, it’s a topic that I’ve wrestled with for that long.
Huh? You’re asking yourself… What’s he talking about?

I’ll start with my background and how I got here. You can easily read from my LinkedIn profile, that I started out life as a technical practitioner in IT, and nearly 30 years later I’m still in IT. So I guess you can call me career IT.

IT isn’t exactly the easiest career path to stay on, especially in the world of business.

The product practitioners and software engineers look down at you because you’re obviously not good enough to do REAL product development. The business and financial practitioners look down on you because you’re the geeks who don’t understand business, speak a language they can’t relate to and are at best a fixed expense to be managed and minimized. The business and financial people at least tolerate the quirkiness of engineers, because they produce a revenue generating product, usually.

Sound familiar?

So after 27 years, two masters degrees and four companies why am I still fighting the daily battle that is a discipline called Information Technology? Because I have the firm belief that there is a direct contribution that this discipline can make to facilitate and generate top line revenue growth for a business; I believe in a world of cost reduction and technology commoditization, that Information Technology can and must become a competitive advantage to business in the 21st century.

Nicolas Carr wrote in 2003 a watershed article entitled “IT Doesn’t Matter,” in his article, published in the May 2003 edition of the Harvard Business Review, Carr asserts the notion that in an environment where every business has an IT department to write management reports and process data, having the ability to do so no longer is a competitive advantage. He continues to assert that as these technologies become more widely available they should become costs to control rather than invest in.

When I first read the article, it took me some time to understand the perspective Carr was fostering. At the time the article was written, Carr was correct, and at some level still is. As traditional IT becomes increasingly commoditized in an ever increasing cloud world, Services, servers, and infrastructure do become operational expense that should be outsourced and controlled.

But traditional IT is changing; IT must truly become a driver to the business, IT and the role of the CIO must transform from a support expense to business technologist, share increasing evangelist; dare I say visionary partner to the others in the “C” suite about how the business market can be transformed through the use of enabling technology.

It was after reading Carr’s article I committed to understanding business, the drivers behind markets, and the sensitivity to market share that every CEO and business leader are concerned about; and then demonstrating the value that IT brings to the table to facilitate revenue growth, and improve shareholder value making IT a competitive advantage in the hands of the right person.

IT’s has a real challenge in dealing with the business

Why is it such a struggle for IT practitioners to communicate with the business owners in such a way that both sides of the table understand where the other is coming from? I mean we are all on the same team, right? We all believe that when the business succeeds as a whole we as team members succeed, right?

While perception of ‘when the team wins we all win’ is absolutely right; the technical practitioners in IT, and the business owners look at the world through completely different sets of lenses.

Eliyahu Goldratt said in his seminal 1984 book “The Goal” that “the goal of the business is to make money.” And everything related to a business must contribute to removing the constraints of obtain the goal.

That’s how the business owners view the world, through the lens of making a profit from the business (while some business owners might want to appear to take a more altruistic approach, I would argue that if you weren’t running an enterprise with the purpose of turning a profit, you’re probably in the wrong pursuit).

The finance and accounting practitioners look at the business through a similar lens, adding that they are to produce the financial statements used to measure the profit, and identify sources of cost that sub-optimize profit generation.

IT, however, tends to look at things in terms of how to leverage tools to accelerate execution or improve communication, or secure the business from risk. While ITs view of the world isn’t incorrect, it is challenging to communicate to non-technical practitioners the meaning and impact of ITs agenda on the business, especially given the highly technical nature of ITs solutions.

And the last paragraph is exactly the reason why the communication breaks down so frequently and thoroughly. IT is often attempting to forward the IT agenda… NEWS FLASH: It’s not ITs Agenda it’s the BUSINESS’, but when IT speaks it is frequently doing so in such a way that it sounds like gibberish to the business and finance practitioners. And when the gibberish to the business practitioners sounds something like “we need to implement a high availability virtual cluster built on Hyper-V, and attached to our global MPLS data network.” The business owners hear “blah, blah blah” becoming yet another reason for IT to become irrelevant.

A great example of this is the movie Pearl Harbor starring Ben Affleck. When my wife and I saw the movie for the first time, we both loved it, but for entirely different reasons. When a friend asked me what I thought of the movie, I said I thought it was a great representation of some of the lesser known historical facts of WWII and the events before and after the attack. When the same question was asked of my wife, she said it was a great love story.

We both saw the same movie, at the same time, but we both looked at the movie through two very different lenses.

And I believe that’s the fundamental struggle in communication between the technical practitioners of IT and the business and financial practitioners charged with running the business.

Add to this miscommunication, that there is very little crossover or trust between disciplines, and that the situation can be compounded by the technical practitioners somewhat smug and occasionally outright condescending self-righteous attitude toward non-technical practitioners, and the whole thing becomes a recipe for disaster.

Finally, articles written by the trade journals are typically written by either the financial professionals fostering the need for more governance and control over the IT function, because they are incapable of doing it themselves.

Or articles written by the technical practitioners complaining that the business and accounting functions aren’t qualified to make decisions or govern the technical function because they don’t have the technical acumen and decisions shouldn’t be made on finance alone.

Ok, so what, this is all well and good you say, but what needs to change?

If IT wants a seat at the table, to be a meaningful contributor to the business, and help drive profit and change, then IT needs to earn it’s seat at the table.

It means that IT leadership MUST become a business leader, the CIO must not only understand what drives profit in the enterprise, he or she must also understand the market channel the enterprise plays in, and how IT can make a meaningful contribution to exploiting the drivers to drive sales, increase revenue and profit.

The CIO MUST learn the vocabulary of business, to be able to communicate with his or hers business peers in a way they can relate.

It also means that the CIO absolutely must get out from behind the desk and build relationships with the business leadership, because in the end, that is going to be the ONLY way to understand what drives product and profit.

It means Mr or Ms CIO, that you must learn how to read a balance sheet and income statement, you have to understand the impact you can have on cost of sales and operating income. Developing an understanding of the market drivers for your industry doesn’t hurt either.

It also means to check the technical ‘alpha’ ego at the door. Business and technical practitioners, you might be the smartest person in the room; but if you don’t know how to work together, and relate to people, that smart mass just means you’re a jerk.

But this isn’t a one way street either.

Mr or Ms CFO or business leader, it also means that you must develop at least a basic understanding of what drives the use of technology in the enterprise; it doesn’t mean you have to become a network or database engineer; but it does mean that you need to understand the impact of the tools and trends on the business. For example can you explain in simple terms why social media is important to driving customer and employee engagement in your enterprise?

It’s a process.

I’d like to say that as an IT evangelist I’ve been completely successful, and most days I feel like I am. But I continue to struggle with staying relevant, communicating with the business in ways that are meaningful to them, and not fall in to the trap that the truth (at least to me) is self-evident.

And I find it ironic and (most of the time today) funny that in a room full of officers, board members, venture capitalists, and business executives, everyone continues to turn to me when there’s a problem with the WiFi at a conference center where we are having an investor’s meeting. (sigh) Forever the printer repairman.

China’s Growth Depends on the Service Sector

Very real opportunities exist for investment in China;

China continues to struggle fueling it’s economic growth; partly because it’s been paying for all of the infrastructure through borrowing, which as of right now is at about 250% of it’s GDP, adding to the fire is the forecasted economic growth not expected to hit 7.0% in 2015.

The amount of building that’s going on here is crazy… roads, high rise office towers, everything.

China recognizes the need to improve the lives of the citizenry rests in producing sustainable growth and participate globally.

In order to do that, China is going to have to shift from low end manufacturing to high end production.

Such a move requires that China reduce all of the heavy government spending and borrowing to fuel its growth, and move toward a consumer market with a focus on increasing the services sector. The services sector has risen 46% over the last 10 years, and will need to continue to grow and outpace the low end manufacturing.

We combine the rise in services with the strong dollar gives China a chance to increase exports to the US.

Now here are the clinchers, president Xi Jinping has eased up on visa restrictions to enter and stay in the country, I literally received a 10 year visa this year after having to renew my visa yearly for the last 10 years; the easing up on visa restrictions will allow more talent to enter the country more frquently from foreign companies.

Next while the Shanghai stock exchange has suffered some eratic performance recently, the fact that the Chinese equity markets have been opened to foreign investment is huge. In fact several mainstay Chinese companies are actively seeking foreign investment capital.

http://lrs.ms/ChinaGrwth

http://lrs.ms/DlrsRise

http://lrs.ms/ChinaServiceSector

http://lrs.ms/ChinaGDPFactors

Telling The Hero’s Tale

Haiku Deck (and Nancy Duarte’s Book – Resonate) has changed the way I present content in and speaking; I hope to see them at SXSW 2014 – Unlocking Inspiration for Visual Storytelling – http://ow.ly/odxEG

Does SOX Change Company Culture?

This afternoon I read an interesting question on Quora (www.quora.com)…

Is there a documented case where a company believes its culture was materially changed because of restrictions imposed by Sarbanes-Oxley?

Theoretically, and this might sound a bit Pollyanna; anything that's done as part of an internal control environment should be done because it's the right thing to do for the business (public or private), and not because of a regulatory requirement like SOX. So if your organizational culture is that of business and process excellence; then your organizational culture won't materially change because of an implementation of internal controls. If your organization doesn't have the mindset of process management, then your organization is in for a harsh awakening.

For example, you stop at a red traffic light in a busy intersection because it's a good idea and you don't want an accident, not because the law tells you to.

In the same vein, we have a segregation of responsibilities between the person who can approve a payment to a supplier, and the person who writes the check because it's a good idea and we don't want to have someone paying themselves and defrauding the company (exaggerated for effect), not because SOX tells us to.

We control and document programming changes in an IT environment because it's a good idea, not because SOX tells us to.

What burdens an organization with a mindset of business excellence when it comes to regulatory compliance isn't the process change, or cultural shift, it's the shear weight of the audit function, and potentially overwhelming documentation required to support the audit function (but that's a tale for a different day).

Interestingly enough, Grant Thornton, did a survey in January 2013 of corporate general counsels for their clients; the survey, on the largest threats to organizational growth, showed the overwhelming response from the GCs… regulatory compliance. Go figure.

You can find the survey here.

 

The Five Macro Trends Driving Business (and Life) in the 21st Century

I'm at a global conference for ERP applications and Ray Wang, technology futurist, is speaking about five macro trends that will be the primary technology driver for business in the 21st century.

1. Mobility (Band on the Run)
We are changing the way we work. Forrester estimates that 283 million smart devices will be shipped this year. Where we are working has changed and we're not tied to the office any longer. I am working today from the conference floor of Perspectives the Epicor global conference (of which I'm presenting on Wednesday); I'm writing this blog post on my iPhone.

Location independence is critical to keeping people working and leveraging the best skills not from any one geographic region, but from anywhere. ANYWHERE.

2. Social (Butterfly) Media
How many of you are connected on LinkedIn or Facebook. Social media is neither a fad nor a passing fancy. Facebook added 100 million users last 9 months. People are by nature social animals; we want to connect as a community. Extending social media to business and extends information across business and consumers.

What does social media mean to business? Consider this, how do we either connect to our customers, or if you are a non-profit your constituency? I'll bet you either connect to your 'peeps' via email blasts or email or phone calls or face to face.

How about connecting to people by like interests? You connect to your friends on Facebook because they're you friends and you have common interests. Why not connect to your customers or constituents the same way.

3. Get Your Head IN the Cloud (Computing)
Part of mobility and location independence is the ability to work anywhere. As I write this article, I did so originally on my iPhone while at the presentation on the floor, I saved the draft to my Evernote account, then as I had time today, sat down to edit the article in the hotel atrium on my MacBook. What does this mean, well software is quickly becoming a service and moving all of our applications to the web. I never required any software ‘loaded’ on my notebook per se.

I could have just as easily sat at the Internet café in the hotel and edited this article from Evernote and a web browser. This idea of location independence no longer ties me to any one particular notebook, workstation, or machine, as long as I have access to the Internet and a web browser, I can continue to work. It is an ongoing experiment for me, and it occasionally works better sometimes than others.

I still prefer Word as my ‘power’ text editor, especially for particularly long papers and articles, but as a rule, I tweet, post on my blog, and write on Facebook using mobile devices, and web services exclusively.

4. Business Intelligence and Enterprise Dark Matter (Not the Dark Side)
Informatics and data visualization is at the center of translating data to information to knowledge and wisdom. How do we better understand the Internet of Things?

It’s not about the numbers, in as much as it is about understanding the patterns in the numbers, we are increasingly faced with a deluge of data, Ray noted that we estimate the amount of data in the universe is on the order of 1.3 Exabytes (That’s a 1.3 with 18 zeros behind it or a REALLY big number).

Understanding the patterns of all that data is the world of analytics. It’s about connecting the patterns in the data in the context of the real world, for example what does the increased number of tweets Twitter receives on President Obama’s vacation mean in the context of the world economy? Does it mean that he’s simply foolish to take a vacation during the mid-term elections, or that people care about what Michelle is doing with the girls at Disneyland?

5. Unified Communications and Video (Come Together)
Looking at the jet blue model of how they communicate to their customers for reservations have nothing to do with call centers. When you call jet blue to make a reservation you aren't calling a call center you're calling Donna at home in Kansas City. Unified communications are about communicating in real time from anywhere. Do you use Skype or SMS or instant messaging? Think about it.

I completely agree with Ray’s assessment, these trends will have a significant impact on our society for the next several years.

So, have you tweeted recently?

 

NSA’s Domestic Spying Grows As Agency Sweeps Up Data – WSJ.com

Quoted from http://online.wsj.com/article/SB120511973377523845.html?mod=hps_us_whats_news:

NSA’s Domestic Spying Grows As Agency Sweeps Up Data – WSJ.com

NSA’s Domestic Spying Grows
As Agency Sweeps Up Data

From the “The price of freedom is eternal vigilance” department, come this article from the front page of today’s Wall Street Journal. This is interesting for me on a number of levels; not only am I responsible for the management of my company’s information assets, and having a master’s degree in information assurance. I find this truly disturbing. The fourth amendment of the constitution prevents the illegal search and seizure of our property, but in the interest of “national security” the NSA seem to find this notion… inconvenient. Now, honestly, this isn’t anything that hasn’t been happening since before the days of J. Edgar ran the FBI, but this move of “openness”? The NSA effectively states “yeah, we’re monitoring you, and you should probably be careful.” Interesting… I could rave on about this being a fascist plot to oppress the populous by “the man,” but they’re probably already monitoring this blog.

 

The Two Biggest Lies Told During an Audit…

My wife (an accountant) and I were having a discussion on the way to my dropping he off at her office this morning, and the whole thing stuck enough of a chord with me that I thought I'd share my insights with you on the subject (imagine that).

She and her office had just completed a year end audit from their internal audit department, and I'm about to go through the same thing shortly with my yearly GCC (General Computing Compliance) audit.

Apparently the auditor assigned to their case was more concerned about tactics than strategies in performing their audit.

It's been my experience especially in assessment and audit situations, that the demeanor and background of the folks responsible for audit oversight are every bit as important as the organization and processes being scrutinized during the audit itself.

I've found that the worst personality type to have an audit oversight is a highly structured and detailed oriented individual, someone with the background of requiring compliance in strict accordance with the letter of the law (or internal procedure as the case may be).

The problem with this approach, is that like most things in life, though rules may be interpreted as binary (0 or 1, black or white), life is not binary, and mostly consists on a continuum with everything being shades along the continuum.

Such is the case with the assessment or auditing process, the type of auditor, in my belief, that makes the best of these types of situations is that of someone with the heart of a teacher. An individual that understands the strategies involved with the process under assessment, understands that situations are different for different cases, and subsequently adjust to meet the spirit or intent of the process, not the letter of it.

I'm not advocating being sloppy about assessment processes, I'm suggesting that life requires balance. And understanding the spirit of the process and measuring against the objective evidence for assessment is every bit as important as the assessment itself.

I would rather have an organization seek to understand WHY things are measured a particular way, so they can do a better job at improving the QUALITY of the process, than worrying about HOW a particular instrument was implemented to collect data for producing an assessment artifact.

In my own experience I've run across several auditors, but three of them specifically come to mind, my experience with all three have been if not enjoyable, then at the very least educational. These are all people with the heart of a teacher, professionals interested in seeing organizations succeed during the assessment process, while not allowing for sloppy process failures. They are come from different organizations and disciplines but all share the same spirit of education.

I've worked with Mary Sakary and Neil Potter from The Process Group for several years in improving the processes on our software development systems using the CMMI, as a model systems and software process improvements.

Without this spirit of education, auditors can get caught up in the HOW data are collected and loose sight of the nature of the control and risk the process is intended to mitigate. This "tactical" approach can lead to crushing rigidity in organizations where strict adherence to the law actually causes processes to fail.

So as a note, remember WHY you're assessing a process, understand the risks and measures needed to mitigate the risks, instead of getting wrapped around the axle about HOW the data are collected.

So what are the two biggest lies told during an audit?

1. "We're here to help."

2. "We're sorry to see you leave."