The IT Mindset and Managing VendorsPosted: July 17, 2011 Filed under: Agile, Flow, middle ground, Outsourcing, rambles, Relationships, Value 1 Comment
A slave to the business?
Have you ever come across someone who, when asked, tells you they work in IT? I wonder about this answer, what it means, who they actually work for, and why they don’t tell you about the work that their company does. I mean, IT isn’t a company, is it? In fact, I more often hear the speculation as to whether IT exists at all? That is, whether IT is a part of the business rather than apart from the business. When I hear people answer that they work in IT, I conjure up images of many IT departments that I have walked into and feel my life-source drain slowly away from my body. I call this phenomenon the IT Mindset.
A mindset is a way of thinking that determines somebody’s behaviour and outlook. The IT mindset is a state-of-mind that puts people who work with IT technology at a subservient position to people who work within a business. It promotes the idea that the people working in IT are order-takers of the people who work in Operations or Customer Services or Marketing or Finance or Strategy or anyone who requires some technology solution that helps them do their jobs. This mindset comes through crystal clear in organisations where IT people refer to other members of the same company as their ‘customer’. For me, the customer is external to the company and is a person or business that pays money in return for the goods or service sold by the company. Thinking of anyone else as the customer is not a healthy view.
Not the norm
I was in an excellent session last week of one of my customers where they were talking about their first step of a transformation journey to change the way they bring products, services and features to market. This session had people from suppliers, technology and business units talking about the success that they had started to see after embarking on a transformation that included many agile and lean concepts. There was an air of back-slapping that was quite refreshing from large enterprises and there was a real sense of camaraderie that isn’t often seen. The CIO was watching this session and actively acknowledged and praised this behaviour, and told a story of how, when he first became the CIO, he was surprised at how much IT got the blame for all of the failures to deliver and how things had been steadily changing over the last year or so. In fact, it wasn’t even really the people within IT getting the blame; it was the suppliers. The interesting thing about this comment is that the CIO was a long-serving member of the business and was previously a marketing executive for the firm.
The interesting thing about this is that most of the elements of the transformation hasn’t really been in the IT department. It has been in the relationship of the people and their departments, and how the work is broken down into manageable chunks and passed effectively between the different groups in a steady stream. Funnily enough, these changes have actually helped the suppliers’ business as well as delivered more value to the customers, and made the way work gets delivered more enjoyable for all parties. Tritely, it could be considered a win-win-win situation.
So, why is this not the modus operandi for enterprises? Because people focus on power, politics and managing their turfs. Because people put others into boxes and stereotypes. Because managers don’t understand the psychological contracts between departments (and, indeed, suppliers). Because IT people haven’t figured out that they can add more value to their business and understand their business better than most. In my last post, I touched upon an issue that can create massive problems for a successful project or system delivery. Most of the problems described stemmed from different approaches for managing relationships and communication gaps between different parties who have competing and conflicting requirements, and from people who can create very different mindsets in how departments and suppliers interact with one another. Relationships need to be managed.
The Psychological Contract
The psychological contract was a concept introduced in 1960 by Argyris and has been used to describe the mutual awareness that employers and employees have for each others’ needs beyond their contractual obligations. This is a concept that is continually being reviewed as employees have more choices in what they do and how they do it, and as work is becoming more knowledge based. I believe that the same metaphor can be applied to the interactions between groups. Guest and Conway have further defined this contract as “It is generally not written down, it is somewhat blurred at the edges and it cannot be enforced in a court or tribunal… it is implicit. It is also dynamic – it develops over time as expensive accumulators. Employment conditions change and employees re-evaluate their expectations”. At the heart of this contract exists trust, depth-of-relationship, mutual benefits, understanding and dependability. This is very different to how most business treat their IT relationships and supplier relationships.
I used to spend a lot of time with my procurement department when I worked for BT because of a problem with a supplier relationship and their product. Nothing really met with our expectation, and, unfortunately, it led to many legal discussions focusing on penalties. This was a complex process of learning about the history of the relationship in both contractual and experience terms. Many people had been involved in the relationship and many people had set and reset expectations about the value of the relationship. No continuity of the relationship existed, so it fell to me to define what we wanted out of the relationship and to consider what we would be prepared for the supplier to get out of it. In this example, the one thing that was abundantly clear was that the performance of the product and delivery had to be improved otherwise we would not be successful, and it wasn’t going to be solved with the existing mindset and behaviours from both parties.
The Arbinger Institute have done lots of work in helping solve issues between parties (normally individuals) working with each other. Their central premise comes down to one of self-deception. In short, it points to the fact that people normally blame others for the relationship that they have, not themselves, and that the most effective way of breaking the cycle of an unhealthy relationship is to focus on changing your own behaviours.
Changing our ways
What does this have to do with the IT Mindset and Managing Vendors? Everything! There is often a very human instinct to look to pass off the risk of our own shortcomings or unknowns to others. This is normally more of a reputation or responsibility risk being passed (remember, nobody ever got fired by hiring IBM?) rather than any real business risk. Business risk cannot really be passed as a failure to deliver is still a failure to deliver and damages the firm’s ability to deliver value.
Enterprises today are at a point where most products and services are based on some sort of technology and have some form of vendor involvement. Michael Porter’s value chain has very much been extended to third parties and no company lives in isolation of other companies who can help them create enormous value. Having a mindset of ‘we’re in this together’ and ‘we all succeed or fail’ is necessary for performance. End-to-end thinking without organisational boundaries is more important today as things become more complex and complicated. Every part of the system needs to be positively engaged to bring innovation, critical thinking, energy and enthusiasm to the workplace. All parties within a value chain need to feel a sense of ownership and accountability to make things happen and to succeed. I have seen this challenge to the IT Mindset work wonders within companies. I have also seen changing the focus of supplier relationship from one of persecution based on problems, legal discussion and procurement beatings, to working collaboratively for success be extremely successful.
The IT department needs to figure out how to behave differently. They need to be the business. They need to stop waiting for a written invitation. Also, as Business Leaders, IT Directors need work alongside their colleagues to actively review and monitor the intentions towards other individuals, departments and third-parties, and make sure any policies, processes, pride and prejudices don’t get in the way of the whole business being as successful as it can be.
An interesting post Phil, that resonates with a lot of my current thinking (but presents it in a more coherent manner).
My own thinking at the moment, in terms of how transformations of the type you describe, leads me to think that they can only possibly succeed if the purpose of the system is clear and thoroughly understood, and that furthermore, the transformation effort is both aligned to the purpose and embracing of all the involved parties i.e. vendors, as you suggest.
I particularly liked the comment you made about the fact that IT departments need to start to behave differently themselves and that they should stop waiting for a written invitation. This in itself is where the biggest opportunity for organisational behavioural change is, I believe and I think it’s particularly interesting that the CIO you mention is an ex-marketing executive. I presume therefore, that he / she is capable of clearly communicating a vision and as I suggest above, the why.