Wednesday, May 13, 2009

Pettit - Governing IT Restructure

By Ross Pettit - 13 May 2009

In a previous article on change management, I outlined the urgent need to restructure IT. Corporate revenues have plummeted and demand will take a long time to recover. Capital structures have buckled and capital markets are on life support. Business operations are being scrutinized for inefficiency and businesses are deflating their cost structures through salary reductions, unpaid leave and RIFs. With this as a backdrop, it comes as no surprise that 91% of CEOs say they need to restructure the way their organizations work. IT, being core to business operations, faces restructure as well.

The restructuring we need to do in IT has less to do with org charts and budgets that direct effort, and more to do with behaviours that get results. Testing must be a team responsibility, automated and integrated into everybody’s daily activity. Our business partners must be continuously involved in solution development, to enable continuous change management and adaptive project management. IT Governance must be non-burdensome and non-invasive, tracking and connecting a variety of indicators. We have the experiences, examples, patterns, tools and technologies to do all of these things today, but bringing this about requires very basic change in how people get things done.

So how do we restructure? We follow the usual change management formula – figure out where we’re at, where we want to be, and how we’ll get there – but we pay less attention less to the tasks of restructuring, and more to the results we achieve.

Step 1: Define a Vision for Operations

The first thing to do is define a vision of operations. That vision needs to be explicitly spelled out. For example, part of our organizational vision might include an expectation such as: "solutions are subjected continuously to quality gatekeepers that validate technical, functional and non-functional completeness." Simple, assertive statements like this clearly communicate expectations for how work is done.

But more than just the “what” of the vision, we also need to make clear “why” we want to do these things. That means communicating the business impact we expect by doing these things. It also means we draw a line between “what we do” and “what it accomplishes.” For example, suppose we’re trying to get solutions into production faster. We can make it clear that we expect we’ll do that by reducing rework, having fewer non-value-added tasks, and having higher bandwidth communication among people in teams. We expect our operational vision will bring each of these about. For example, continuously executing quality gatekeepers will catch defects sooner and reduce rework, and also eliminate non-value-added tasks such as manual solution packaging and industrial-scale manual testing.

In expressing why we want to do these things, we must be specific: for example, as a result of this restructure, we expect we will be able to deliver new solutions to production every 20 business days, or we expect to reduce IT spend on solution delivery by 25%. The purpose of any restructure isn’t a new structure, but results, so we must use the language of results.

Step 2: Assess Current State

With a very specific vision in hand, we now assess the current state of how work is done, so we know the gap between where we’re at and where we want to be. This requires critically assessing both how work is done, as well as how it is not done. This generally involves artifact review, but more importantly involves facilitated group discussion among people in different roles - PMs, business people, developers, QA analysts and so forth - to identify practices and patterns.

This assessment is the single most important activity in a restructuring initiative. If we get this piece wrong, nothing else – not the vision, not the plan, not the monitoring – will matter, because all of our actions will be based on false data.

One of the most common mistakes organizations make in restructuring is to try to self-assess where they're at today. Self-assessments are inherently inflationary, because any type of assessment has performance ramifications. They make people uncomfortable, and can be outright confrontational. Self-assessing is usually hypersensitive to the politics of a situation, which creates a tremendous risk of distorting objectivity.

This means we should look to bring in somebody from the outside to perform the assessment. Having no personal investment to protect or political baggage to lug around will give them an independent perspective. In addition to looking critically at how things are done today, they can ascertain the viability of the vision, and recognize potential (and potentially undesirable) outcomes that may result from this restructure. But this takes the right facilitator: it calls for somebody experienced in business, management and technology who understands IT and can quickly understand a business context. The right person will not only waste little time in ramping-up, they’ll bring relevant experience into the process.

Another risk during assessment is denial that there are any real shortcomings in the way work is done. To overcome a false sense of operational excellence, start the assessment process by talking to its customers: perform a customer satisfaction survey or Net Promoter score of IT solution users. An unvarnished external opinion makes it a lot harder to gloss over operational shortcomings, and gets people focused on results (“how do we improve customer satisfaction”) instead blame (“you’re making it impossible for me to do my job.”)

Step 3: Define a Restructuring Plan

With current and future state now defined, we next determine the plan that will get us there. A behaviourally-centric reorganization is going to require a change in “muscle memory.” Change doesn't happen overnight, so we need to figure out the stages of organizational evolution that will allow new patterns of work to take root and become durable under stress. While we can look to patterns of organizational change to help us sequence the activities of our change initiative, the plan will be largely derived from experience. There will be some “low hanging fruit” as well as some significant challenges in the plan. We can get on immediately with the obvious stuff, but before we get too far down a path of execution, we need to come face to face with our competencies and deficiencies and call in outside help. For example, if we get blindsided by late-stage project failures, we shouldn't expect that our PMs can self-source a change to new project management practices. Recognizing the areas where we need expertise and engaging it at the right time of our restructuring initiative will get us through the change process with minimum blowback.

Step 4: Monitor the Restructuring

Finally, while we’re in process of restructuring, we need a way to monitor that we are making meaningful progress. Ultimately, we need to be cognizant of our results: are we closer to our goal of achiving faster time-to-market, or reduced operating costs? But those take time to materialize, and we need to scrutinize the underlying factors of our success or failure. Ongoing customer satisfaction or Net Promoter scores that we initiated during the assessment phase can help ascertain whether we're on the right track, but again, this isn't an elemental enough data point. Restructuring milestones such as “roles defined and staffed” and “reporting structures created” are insufficient, because they're task-based and not results-based. What we're looking for are ways to monitor behavioural change.

To do this, it helps to have a model, such as the Agile Maturity Model. Having been applied at a number of IT organizations in a variety of industries, the AMM allows us to consistently frame current and target organizational behaviours, map actions that will change those behaviours, and monitor how well we’re taking to those behaviours over time.

By using a framework that allows us to consistently and frequently assess how work is performed, we get a pretty good idea as to whether we're increasingly doing things that will engender success. It also allows us to scrutinize where we're deficient, communicate the impact that deficiency is having on our goals, and take corrective action.

You can get started with some of the AMM concepts by running an online profiling tool for your own organization or project. This will give you a picture of how you are structurally aligned today and some insight into where you might have opportunities to change.

While we don’t yet know the regulatory, capital, competitive and commercial fallout from the financial collapse and economic recession, we do know that "business as usual" is off the table. While this makes day-to-day execution challenging, it presents us with an opportunity to recast and remake IT. By focusing on results as opposed to effort, we make IT a transparent, efficient, responsive and collaborative contributor to the business. This makes IT less a supplier of technical services, and more an engaged business partner, putting it firmly at the forefront of corporate leadership. At a time when companies are navigating uncertain waters, better to be sharing responsibility at the helm than relegated to the engine room below deck.




About Ross Pettit: Ross has over 15 years' experience as a developer, project manager, and program manager working on enterprise applications. A former COO, Managing Director, and CTO, he also brings extensive experience managing distributed development operations and global consulting companies. His industry background includes investment and retail banking, insurance, manufacturing, distribution, media, utilities, market research and government. He has most recently consulted to global financial services and media companies on transformation programs, with an emphasis on metrics and measurement. Ross is a frequent speaker and active blogger on topics of IT management, governance and innovation. He is also the editor of alphaITjournal.com.

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