IT Manager’s Guide to Business Strategy
144 Pages; Metal Bound
Why IT business alignment veers off track and how you can keep it on course
One recent META Group survey reports that two out of three business deals are passed over by companies because the IT departments aren’t geared up to handle the business. Translation: The IT team wasn’t prepared and obviously missed the signals pointing them toward developing the capabilities the company needed to handle new business and add real value to the company—in short, they were misaligned.
Furthermore, Morgan Stanley reported that between 2000 and 2002, U.S. companies spent $130 billion on software and hardware that they ultimately didn’t need to support their businesses. According to figures by Gartner, this number jumps to $540 billion on a global scale.
How is it that IT teams become misaligned with business strategy and end up contributing to a poor showing on the economic charts as well as outright waste of IT investment dollars? The answer is found by examining what happens as business goals and expectations filter through layers of management. CIOs can follow several steps to avoid this erosion of alignment.
Uncovering the cracks in alignment
Several years ago, as the head of an IT team, I sent out an e-mail inviting the team members to meet so we could get to know each other. The team consisted of a number of managers who were my direct reports and their staff members. I asked them to reply to a few brief questions before our meeting. The questions included the following:
When I received the responses, I sorted them and batched together the responses by each team member with the responses given by that specific team’s manager. To my surprise, almost 90 percent of the items listed by the teams as their key objectives differed from the key objectives listed by their managers.
What’s more, the key objectives listed by the managers were different by almost the same margin from the key objectives I had been given by my new bosses.
I have, since that day, performed this survey several times with similar results. A director of a large, well known development organization recently told me his organization has had similar results in its studies. The organization found that, on average, even the better teams were still about 60 percent off in terms of having a correlation between what managers and their teams considered key objectives.
The puzzle we both faced was determining how the misalignment was happening. In my organization, there seemingly was strong communication—people in my team regularly attended company and team meetings where presenters talked about and outlined company objectives and goals. So what happened?
Deciphering the cause
There seem to be two major causes of misalignment: Messages are lost as they’re passed through various levels of management, and staff in the lower layers aren’t given clear insight on how their efforts tie into the bigger corporate picture.
The phenomenon that causes this erosion of alignment of purpose through layers of an organization was the topic of Management and the Activity Trap, by Dr. George S. Odiorne, who states, “People tend to become so engrossed in activity that they lose sight of purpose.”
I believe that most of us tend to reinterpret our objectives to fit the activity we’re involved in. That was the insight I got during my team survey experiences. It happens even in environments where senior managers get together with staff and talk about company goals regularly.
The managers, and people in the layers below, hear and understand what senior managers say about company objectives and goals, but aren’t given a clear map of how they and their teams personally affect these bigger picture items. They tend to go back to work and focus on individual tasks at hand without further reference to the big picture. They’re listening and understanding the alignment message but can’t translate the messages into “so, here’s what I need to do to contribute.”