I recently was invited to attend a meeting to gather feedback on a draft for an IT Strategy. To make it short, the verdict was the IT strategy document is NOT business aligned. Some of the attendees felt 4 years back in time when they met for the very same reason and had to suffer from it’s consequences. “A dust collector”, “doomed to vanish in the bottom drawer”. Rings a bell or feeling shudders? Yes. A real experience.
A preface on Alignment.
For a while now I tried to identify and locate patterns of business and IT alignment and back it up with observations and reasearch conducted by others. So, to give you some numbers: renowned Professor Michael Porter is teaching his students that in 70% of all observed cases of business failure the strategy-execution link was the culprit. Gartner depicted 75% of all IT projects outright fail or fail due to missing the business objective. Yes, goose bumps to hear so in 2019. That made me write an article about the cost of missing out on strategy-execution coherence.
Now, that comparison I made (Business Strategy to IT Strategy and Business strategy to Execution) is comparing apples with pears. But fruits have things in common and so does this comparision. Both times, the business managers should nail the hot spots and the proceeding unit follows accordingly. Wheather that is a business execution unit, business area, a strategy paper of a support discipline (HR, IT, Facility Mgmt, etc), they all need to adhere stringently on the Business Vision and Strategy.
Before I run in danger of boring anyone out with 1st semester managerial economics, let me explain the notion and magnitude of the adjective stringently in the process of aligning your IT strategy.
The Struggle to String(ently) IT to Business Strategy.
There are many requirements to linkable strategy that is aligned. Here are some.
Be conzise and accurate.
In this context “not aligned” and “not stringent” denote that IT is not optimized for the business objectives. You think you as business manager have no accountability in this? Yes, you do. It’s your job to make yourself understood in an unambiguous way. Despite it’s tempting and so human, don’t be deceived by blaming others before you haven’t done your job properly. It will fire back on you in many ways.
To illuminate the dilemma from the perspective of the CIO, what should IT look for in order to adapt? What document can they expect from you to phrase their IT strategy proposal? Yes, here consultants often leave you all alone.
Ehhhh…. Yes, you are responsible! You have to align strategies. It’s your choice how and you can do it as you like.imaginary worthless Consultant
Phew! I’ve heared such statements more than once from consultants. A consultant I expect to parse “how” one aligns strategies. It’s their expertise – and by the way, a solid question when hiring them for this type of work. Anyhow, let’s put the mace aside and be specific how we need to convey the essence of a strategy down the road. The trick is: make your elements in your strategies linkable e.g. 1 elment in the business strategy links to 3 elements in the IT strategy. Why linkable? Because you want to mitigate the risk of how the “down-the-road” interprets it ambigiously or even diametrically different. You clearly want to understand what IT or your managers base their decisions on. “Understand” means you can derive their actions from one, several or all the strategy elements. An unlinkable strategy element has no right to exist. The title of this article is “how to corset your IT Strategy [..]”. To corset and to speak a clear language is your “due diligence”.
And what are (linkable) elements of a business strategy?
- The purpose of business (reason to exist)
- The products and service you provide (the added value)
- The objectives of business (goals, KPI and targets)
- The core competence (capabilities)
What are the characteristics for the description of the elements of a strategy that is alignable? It’s concise and accurate. A sharp balance of conciseness and accuracy will allow you to keep it managable.
The majority of white and blue colour workers do NOT spare time to read long papers. They focus on operational work.
There are numerous reasons why the staff refuses to read your papers. They object the strategy. They follow their own ideas. They think they already understand. They dislike the effort to fuse your ideas with theirs. They simply reject you in this position or a person. They are shy or reluctant to challenge and enrich your strategy.
It’s a grossly negligent assumption that operational managers or staff will read your 40-page strategy document, not to speak of reading your thoughts as a manager. Proof? Ask yourself: How often did you meetup with co- and superior managers noticing evidently they haven’t read the documents? Yes, that happens frequently. So why bother them with your eloquent tongue? Cut it down consisely and accuratly to the pure essence! It will allow you to listen more (instead of speaking) and focus on adjusting your strategy based on valuable feedback from your staff and the business environment (Yes, that is the nature of Agile Strategy. A topic for another day.). So again, start to corset the room of interpretation.
[graph on strategy goes down the line, now it’s a circle.]
The Sample. A Banking Business.
In the following a sample of a strategy linking that I find helpful to present my idea of properly “linkable” elements.
Being a CEO, think of a set of services that you want your staff to establish and sell. You know the amount of money you need to make in order to secure your existance (or the purpose of existance). Subsequently you required capabilities to design and create the services. Can you already imagine how to describe and link the elements distinctly to the managers and staff? Doubtless, it is challenging.
Speaking banking, you may want to establish a trading service, a private banking services and a mortgage service. As for the trading serivce, you need at least the capabilities of order matching, settling the stocks in a vault (virtual these days of course), an account management and marketing to attract traders. Assign managers to these capabilities and stress them with targets (derived from objectives) to help the enterprise survive. These managers go ahead and start to design the needed capability. Subsequently, they initiate projects to realize the design. The project binds resources, finances and time to create the service. And the same applies for improvments or decomissioning of established services, also for the private banking and mortgage service. So far so well.
Now, consider a more real world. Money is tight, time is constrainted because for example governmental regulations and resources are way overloaded. So, priortising becomes an instrument to ensure survival. Let’s say the private savings service reports a small plus, the mortgage business a strong plus and the trading service a minus. The board of directors decides to sponser the trading business to improve the capability and maturity, that is considered a strategic initative. They do so beause their experience tells them that competition is high and they need to increase marketing capability.
[graph of linkable samlples]
The need to weave feedback in your strategy.
Employ EAM to create your business strategy.
We should employ Enterprise Architecture Management (EAM) for
[graph showing “strategy development” before Business Architecture –> wrong]