In most organisations IT is a central function. It started off as the experts who ran large mainframes with huge tapes. Weird science to many of the day. Even, Tom Watson of IBM predicted there would probably only be need for 5 of these things in the world. How wrong he was. IT then became the place that looked after all the computers on our desks. Growing to the hundreds and thousands. It grew to a department looking after e-mail, and a PC and handheld device for every employee. We’re now talking hundreds of thousands of devices within a major enterprise. Then IT started looking after the company website, and the infrastructure that manages all of our enterprise applications. All the while they were probably dealing with the telephone systems too. Basically, anything Technology related. Along the way it also picked up other disciplines: software engineers and solution designers and enterprise architects and service managers and user experience experts and project managers and testers. All this seems an eclectic mix of responsibilities, and it seems odd to lump all of these under one umbrella called the IT function. I wonder why we did. Was it because it was still weird science for the masses. It was only the technically minded folks who really got it, and it wasn’t really what the business was about. Unfortunately, for most companies now, IT is the business. Our products are IT based. Our service is IT based. Our processes are enshrined in what IT can do, and our people are only as good as our IT systems allows us to be. Our customers are tech savvy and they engage with us in new ways. No longer can an IT service manager really be separate from ‘the business’. If IT doesn’t work our business does not work. A software engineer who develops the core user experience, operational experience, process experience is the front-line of the brand and the customer experience. We need a new approach for IT.
Lean IT is a set of concepts that has been gaining much traction over the last decade. It has started to look at how we can bring in some of the lean manufacturing concepts into the IT world. It started by looking back at the toyota production system, and what made them produce great products that conquered the US car market. But, today people are scrutinising the Toyota Product Development System in more detail because they realise that innovation and creativity is not so much about removing waste and variation out of repeatable manufacturing processes, but developing compelling products and services that require pushing boundaries, exploring solutions and working with customers more closely. It is inherently about more agile ways of working. It is about Lean Software Development and Lean Product Development. It is about a philosophy of collaboration, learning and creating feedback and empowering people to deliver what is right and in the right way. It represents the world of strategy promoted by Henry Mintzberg or Gary Hamel with their focus on learning, innovation and creative strategy in shaping and creating new markets. This is not so much about doing what we’ve always done more efficiently. It is about creating customer experiences and products that are loved and sought after.
The Lean IT movement looks how you might enable and sustain a lean transformation that enables you to be more customer focused, and how the culture of the organisation needs to develop to embrace collaboration, and working across boundaries to deliver an outstanding service for customers. This is in direct contrast to how most businesses set themselves up. Functional silos are normal. There is a belief that economies come from scale by bringing together functional expertise. This is not untrue for some things. It comes at a cost though, so shouldn’t be considered a general rule of thumb in environments where innovation and creativity are being sought, and where speed is essential. The cost is that these functions and departments are focused on their bit and not the end-to-end flow of value from a customer standpoint.
Bringing new products and services to market is a value stream known as Concept-to-market. This includes creative input from all functions across a business. Doing it fast will require us to focus on the value stream goal and not the functional goals. The same can be said for another key value stream that exists in most organisations, Order-to-Cash. Sales and Delivery need to work in tandem. The IT supporting these functions needs to work.
There are some elements of the central IT function that can and should remain central, but much doesn’t or shouldn’t have to be. How might you decide? Put simply, does pulling people into a silo slow down delivery in the eyes of the market in a way that might hamper our competitiveness? If yes, you should consider focusing on the value stream. If no, you might consider developing it as a function. If it isn’t on the critical path then it might be better value to consider economies of scale.
I prefer to consider things from the customers’ perspective first. After all, there is no value stream without them. We can’t make something more cost effective without first satisfying our customers to the extent that they are prepared to pay for the product or service. We actually cannot remove waste from a value stream without their being value first. So, what does the customer think about our organisation design and the place IT has in it? Not a lot, but they might feel the consequences of our choices. What do they think about the service they receive? Do they care how we set ourselves up? The person I use as my benchmark on this thinking is my wife, Helen. She always has great suggestions on how service can improve from the companies she deals with. She couldn’t care less about the organisational structure and decisions going on behind the corporate walls on how we manage ourselves and set goals. Her suggestions always make me smile as I then start thinking about how the organisation will be set up and why her suggestion will be a nightmare to implement because there will be no direct line of sight between the backlog of work for the specific system or process that will need to be changed and the customer experience being felt by the paying customer. There will be many layers between the person who wants something (Helen) and the person who can do something about it (a software developer or some other creative engineer who knows how things work).
The ‘Order-to-Cash‘ lifecycle is a great place for organisations to start when examining their focus. It exists for most (if not all) profit making enterprises on earth. It might look different in different industries and organisations, but at the highest abstraction everyone has one. Think Amazon and buying a book. Think ordering broadband. Think getting a new credit card (maybe the cash is going in the opposite direction for this one). All of these will have many different computer systems supporting the process. That could be the telephones, the e-mail, a website, the Customer Relationship Management system, the Billing Engine, the Workflow Engine, the Service Management systems, the Inventory Control systems. All of them will have a part to play in any fulfillment journey. For some forward thinking companies this might also include an interaction on facebook. Another one through twitter. These all play a part on the experience of interacting with the company. Each interaction gives us an opportunity to delight or disappoint. From a customer’s perspective, if one of these elements is not functioning then it isn’t working. It doesn’t matter if our CRM system has a 99% Service Level Guarantee from supplier X if the billing engine can’t allow us to complete an order. The customer doesn’t care about our CRM or our billing engine. If the Website is down, the service is down. It doesn’t matter if we cannot complete an order because of an out-of-memory error within our workflow engine that passes jobs and tasks around our enterprise. The customer just doesn’t care.
If every system has a target of 99% uptime and there are 10 systems in a customer journey then the actual uptime ‘target’ is now less than 90%. 1 in 10 times a customer might come along and something not be right. That is a big deal. Imagine now 20 systems. We have sub-optimised the whole system from the customer perspective, but we’ve probably made sensible organisational design decisions and the targets we’ve given our staff are probably okay, right? Wrong.
This becomes worse when we consider how my wife’s improvement idea might make its way into the future service. This is the intersection between the Order-to-Cash processes and the Concept-to-Market process. If each system has a queue of work that they are crunching through in some arbitrary order, or if a critical transformation project is hogging all of the delivery capacity of our business, then it might take years for any idea to filter through our Concept-to-Market process to be implemented. We might be slowly losing our customers because we are focusing on our own internal transformations. Our functional decomposition seemed a good idea to group people together into logical departments of like-minded people who all have the same goals of CRM or Billing, but they do make our ability to respond to the people who make us money (customers) in a really terrible way.
The concepts behind Lean IT teaches us to think differently. We need to focus on the Value for our customers. We need to focus on the Flow of our improvements and new features of their service, and how we interact with our customers to find out how we are doing. And we need to focus on the quality that they receive from our service. Every IT interaction is a Moment of Truth.
I know we need to consider our IT strategy in terms of how we might share data across different products and services, and how we might re-use capabilities in order to help us launch future products more quickly, but this does not necessarily mean we need to bring everyone together into functional silos. The customer experience is what attracts our paying customers. It is what will keep our paying customers. It is also, if we don’t get it right, the reason why people will leave.
We need to get the tension right between the customer experience and the architectural purity of our systems and organisational design.
Our first goal is to look through the eyes of the people that create value, and then figure out the grouping, management and scaling problems that all enterprises have. We need to encourage customer perspective in every job.
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.
The most common architecture
5 years ago I inherited a big ball of mud. It was an exemplar of ‘this most frequently deployed of software architectures’ described in the paper written in 1999 by Brian Foote and Joseph Yoder. It was then 2006 and the system was part of the new strategic architecture. A shiny new system that represented our future. Yet, it was still a big ball of mud. When will we learn?
The project was interesting. It was part of a crucial business transformation. It was to deliver a key architectural component that integrated into a more complex system of over 70 individual components – some new, most existing – and it impacted thousands of people and processes. It was based on an off-the-shelf product that we had never managed to successfully deliver before. It had been outsourced as a fixed-price piece of work to the company that built the software, and we had 3 people ‘managing the supplier’ back in to our business. It was the biggest instance of this piece of software in the world and I was their biggest customer. We had insisted that another 3rd party service provider be part of a design and integration team to de-risk the situation. And, to make matters worse, a bigger supplier of off-the-shelf software then bought the supplier of our product for strategic reasons. The project was interesting. The project was not simple.
A happy coincidence?
Because of this context and the need to join a few things together, I decided to focus my current studying needs of my MBA dissertation on ‘Relationship Management and Collaboration in delivering large business programmes using Agile Methods’. I thought it was worth killing the proverbial two birds with one stone and these both seemed like big birds. At the time of starting out on the project, I had been reading Implementing Lean Software Development book by Mary Poppendieck which set the tone for my approach to the delivery. In addition, I also read widely on the topic of relationships, partnerships, contracting, alliances and a whole gamut of other agile texts to explore how they might interrelate. For the purpose of this post, I am going to focus on the need for managing relationships and not step into the world of contracts (maybe another time). My position at the time of inheriting the project was to damn the contractual position. If I (and my business) was to be successful then we all had to be successful together and no contract was going to help us or get in the way of doing the right thing.
Understanding the landscape
When I started working on the project my first job was to go and live with the supplier on their premises and get to know them. Ask them questions. Understand what their philosophy was in their approach. Know thy enemy (well… not enemy per se, but it was clear a fight was coming).
My guiding light when starting out was to use the ‘Working software as the primary measure of progress’ as a way to judge the current position of the project. Every person I talked with I asked ‘…and how does the work you do help create working software?’ and ‘…how do you know you’ve done a good and effective job today?’ I was a right pain in their behind. But, the problem was not one person told me about the working software. For me, my approach was simple and very engineering focused. I believe that quality and speed are inextricably linked. So, if there was any dubious approaches to quality, then my belief was that they’d never be able to go fast enough for my business. They told me about their designs, their reporting, the project plan, the paper-based architecture and other very important elements that they thought an IT director should hear about. Frankly, I was horrified. Even more so when I found out that the 3rd version of the project was released into a production environment over 6 months late, missing most of the important functionality and had generated in the region of 400 major defects. In addition, there was NO WAY to deliver that same version of the software again because they didn’t actually know the configuration of the software and the metadata that went with it. Boy, was I in trouble? They were already underway developing version 4 and version 5 in parallel <sigh>.
But, this gets worse… It wasn’t just the people delivering for my project that I needed to worry about. This solution was based on an ‘off-the-shelf’ product that ‘just needed configuring’ (huh hum), so I really needed to look in to that too. Oh, and we also had that extra dimension of a 3rd party doing the integration work that I needed to just cast an eye over.
In the paper Big Ball of Mud, Conway’s Law is mentioned a couple of times. It is also discussed in other lean and agile texts when discussing strategies around scaling delivery practices. It says: …organizations which design systems … are constrained to produce designs which are copies of the communication structures of these organizations.
If this law is true (and I believe there is a lot of evidence to support it from my experiences) this has big implications for how you manage relationships, communication structures and how you might choose products to build your systems around. The number of points for communication between a supplier and your organisation can be vast. In this case, my project had over 200 people involved, plus the product engineering department of the supplier and all the management roles involved in the relationship. In addition, there were all of the integrating systems within the rest of the programme to consider. The communication structures were complex and inconsistent. The goals, scope and delivery approach were not well understood. The people working for the suppliers didn’t really understand what needed to be delivered, and the direction set by the supplier was not one destined for success.
Working on the relationships
After assessing the project for the first few days and spending time with the team it was clear they were under a huge amount of pressure from their management and from the management within the programme. My first step was to build relationships with the people who were desperate for a change. These were often the ones who could see what was being done was way below the standard needed or people who were constantly in the firing line of the flame-thrower. Basically, these were the folks who were not resistant to change.
I chose to close down the communication channels from within my own company who were creating the pressure and noise. I chose to take the heat away from the team; I needed to build trust and I could do that by removing pressure and creating a more collaborative environment.
Because of a need to do primary research and analytical study for my MBA I explored a few models that might help me empirically manage to a better situation. I found a model created by the Department of Trade and Industry from 1997 that described 5 dimensions to consider that I decided to use to better understand the situation:
- Compatibility – the degree to which each parties’ business interest coincide
- Trust – the degree to which the parties open up to each other and discuss sensitive issues such as pricing and quality problems
- Closeness – how much the parties know about each other’s businesses
- Depth of Relationship – the depth and breadth of contact between different levels of the hierarchy and departments
- Reliance – how dependant are both parties on business output
When setting out, the only measure that scored highly was reliance. This was empirical information from over 200 people. Our destinies were entwined at this stage so we’d better improve the other 4 scores!
It is really easy to tell someone what you are going to do before beginning a project. It is much harder to deliver what you said regardless of your intentions. Parasuraman, Berry and Zeithaml proposed a model in 1985 called the Service Gaps Model. This described simplistically the different areas where gaps can appear between managers, the people who do the work, and the service received by a customer, and what factors might be involved in generating these gaps. Ultimately, any programme delivery is done by the people who do the work and they are the people that you need to build trust with and get to know. You do need to understand what their challenges are and work out how they need to be helped for them to be successful. Sometimes their challenges come from within their own organisation. As a manager of such a programme this was part of my job. I needed to understand who, what and why blockers were coming. There were lots of different reasons. One thing that became clear was that there was an authenticity gap. Most people can spot such gaps when words and behaviours don’t match. The words of the management team didn’t always match the work of the team. Sometimes it did, but there was, obviously, some conflict going on. The excellent Cluetrain Manifesto talks about this in regards to the authenticity gaps of a business. Business is a conversation. It is many conversations. It is a conversation that happens at all levels. The people doing the work are quite happy to tell you about things that are not working. They are happy to share with you the troubles that they suffer from. If they are not happy to do so, then there may even be deeper problems in the culture of your supplier. Silence speaks volumes. There are rarely no problems. You have to be open to listening to them and resolving them together. But, you need to believe that the problems and solutions you are discussing together are for the good of your objectives as well as theirs. If the answer sounds like one that you’ve heard before, it will probably lead you to a similar result you’ve experienced in the past.
The folks doing the work are the people who really define the service and outcome you will receive. An old boss of mine always said ‘Know your people’. I believe this. As with all relationships it is working through the problems and creating shared experiences that improves the bonds.
I needed to reset expectations with all parties. I needed to set the standards that I needed based on the poor engineering that had been delivered to-date. I needed to Demand Technical Excellence. I also need to create an environment where all the parties felt that they could participate effectively (this did have some contractual implications and is for another time). I also needed to insert people into the overall team who knew what it would take to meet the quality standards that I was expecting. There was no point in relying on my suppliers or the people who had managed the project so far as they were the team who had taken us to the position we were in. I decided to hire some agile coaches and technical leadership to help the existing parties really understand. The funny thing about trying to change a situation like this is that people are very quick to think change has happened, and claim success, but my experience is that people want to tell you what you want to hear rather than to show you what has changed in reality. Holding the line on the new standards was difficult. It meant heated discussions and politics at different levels within the relationship. This was an 18-month battle and we made incremental steps of progress in terms of building trust, deepening relationships and delivering on our promises. We did manage to improve the quality of the software, and we did deliver our business objective. Every iteration and release was better than the previous one. We need time to retrospect and continuously improve. If the line wasn’t held though and quality demanded the project would have reverted to its old ways. I am absolutely convinced of that. My job was to take my suppliers on a journey that was fit for my business. The core competence of my suppliers was supposedly software delivery. My experience told me a different story and one that I see repeated in many clients. It wasn’t because the people were not good. They were, but they didn’t have the environment or support to succeed.
Why share this story?
At the moment, I have a number of friends and colleagues involved in a huge Big Ball of Mud fight. I feel for them. It is a massive project recovery that is taking its toll. It is a death-march, for sure. These things don’t come up because of one person’s decision-making capability. They occur because of ‘the system’. They occur because people believe that someone else will fix the problem. They occur because of the short-term need for higher margins. They occur because people still don’t know what great (or even good) looks like. They occur because wishful thinking is still predominant in lots of companies that I see. And they occur because active management of relationships and suppliers is not happening with people who can get under the covers of what is really going on. What does happen when your luck runs out?
As an aide memoir, here are a couple of things that I learned through this experience that I would urge managers to consider:
- You can outsource work; you cannot outsource your problem. It will end up hurting you more. Help your supplier through the problem.
- You must build relationships at all levels to gain the best and most complete perspective. Businesses are full of conversations. Don’t believe the brochure. Know the people doing the work.
- You should explore how well aligned your communication channels and cultures are. How do you know that your partner will be successful and support your needs?
- Be aware and actively manage all parties interfacing with your supplier and from your supplier into your business. Communication channels are important to look after. Loose lips sink ships. Remember Conway’s Law. If your communication channels are confused, your software will be too.
- You need to know what great looks like, set that standards and help all parties achieve that standard. If you’ve never seen great, find someone who has. Find examples of great even if they exist in different industries. Don’t rely on the team that has been deployed to your project without validating that what they are doing for you is, indeed, world-class. Just because the supplier says they are doesn’t mean that team knows what awesome looks like or that their company can make great happen. Judge results on working solutions not on hyperbole. And keep the feedback cycles short. As google says at number three in their philosophy, ‘Fast is better than slow.’
- Get to know what objectives and systems your suppliers have in place. Is your success really (and I mean really) aligned to your success? Change control is still a key business mode for many System Integrators – the more Work-In-Progress that exists, the more expensive change will be to your business. That’s good for them, but terrible for your ability to deliver quickly.