IT leaders must disrupt hierarchies and sit in teams

Flow Academy's Fin Goulding

Leaders’ conference hears of the need to reduce command and control, facilitating cultural change to enable digital change

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14 October 2019 | 0

IT leaders need to get out and be with teams on the floor, to understand not only the day to day, but also to better communicate across the board.

This was an emergent theme from the recent ICS Leaders’ Conference in Dublin, where Flow Academy’s Fin Goulding asked if organisations were transforming forward towards a new world, or backwards to fix years of underinvestment in technology or over-outsourcing.

“I believe that transformation succeeds or fails on cultural transformation,” Fin Goulding, Flow Academy

A CIO, transformation leader and consultant, Goulding cited a report from McKinsey that said 84% of agile transformations fail to meet their goals. Goulding said that from his experience, the proportion may be even higher because many are afraid to admit their failure.

In exploring why so many transformation efforts fail, Goulding cited many technical issues, such as too many legacy systems, adding more platforms and not decommissioning anything, and too many business user projects, but also among the reasons for failure were the perennials of not enough resources, working in silos and bad leadership.

‘Fake agile’

Many companies turn to agile as an approach to tackle this, but Goulding said this often ‘fake agile’, where organisations use some of the trappings of agile, such as Post-It note walls and stand-up meetings, but fail to grasp the real meaning. But even where agile is truly adopted, it is often limited to IT, and the business units beyond are not agile, and so unable to keep pace or benefit from IT’s capability.

“The IT-business divide can be made worse by agile,” said Goulding.

Upstream, the business may be using old style practices, such as 3-year project implementations or 10-year strategic planning, where as downstream, IT is using DevOps and agile methodologies, which increases the divide between the two.

However, Goulding asserted that “Great things can happen when business and IT flow.”

In a now familiar mantra, Goulding argued that organisations should identify the most valuable things to do, do them quickly and efficiently to deliver value and gain trust.

Value discovery is key, as there is often a lot of waste, due to factors such as, poor decision making, CEO pet projects, or work not related to customer needs. Goulding advises using a value discovery model, such as the CATE model for value discovery.

Methodologies

Goulding said that methodologies for delivery are also important, and which one is used depends on the organisation.

“It doesn’t matter which methodology you use, as long as it fits your context,” said Goulding.

He advises to aim to deliver frequently, in small, incremental steps which are reversible. This reduces risk, but also speeds up delivery and time to value. Value based decision making is also facilitated by this approach.

According to Goulding, the 80/20 rule applies too, insofar as “80% of your customers will use 20% of what you deliver.”

To achieve this, Goulding said multidisciplinary teams are essential to what he called “punching through silos”, where less command and control (C&C) allows teams more latitude to work together without the rigidity of traditional hierarchies.

C&C in business sucks up power, Goulding warned.

Human factors

The people element is key, he advised, and removing anyone who is a blocker of transformation is necessary. This makes hiring the right people a necessary follow on, but meet everyone you hire, he said.

If there is a toxic team member, move them on. Sit with the team, disrupt the hierarchy and listen to what they have to say. Often, issues can be resolved, and challenges understood by simply being a part of the team dynamic.

Gather feedback and enable people to discuss the issues. Let them answer hard questions, such as what is that we do that is terrible. Have a ‘cool wall’ where people get to say what is you do that is good.

“I believe that transformation succeeds or fails on cultural transformation,” said Goulding.

A culture of trust is vital, he said, allow people to fail — without failure, there is no innovation.

However, Goulding acknowledged that it is often difficult to know where to start all of this and advised what he called a lighthouse approach.

Lighthouse approach

This involves defining an ‘as-is’ and ‘to-be’ target, and balancing/prioritising a portfolio of work for capacity. One project or initiative is selected, initially, to start with one multi-disciplinary agile team.

Regular showcase or playback is encouraged, with senior leaders involved in every step. Ways of working must be tested, adapted and reflected upon.

Then the ‘lighthouse beam’ can be extended for another project or initiative, allowing a new team to be commissioned, or existing ones to be extended.

The goal is to work towards value-based agility, said Goulding, where effective hierarchies facilitate micro-scale working for adaptive, incremental delivery that has a true customer focus.

M&A integrations

These themes were echoed by Fiona Taaffe, CIO, Dubai Aerospace Enterprise.

Taaffe spoke about how IT can use the kinds of approaches and methodologies outlined to be ready for merger and acquisition (M&A) challenges, whether doing the acquiring or being acquired.

Dubai Aerospace acquired the Irish company AWAS and became a $13.9 billion company with a 357 aircraft leasing fleet. The aspiration is to have some 800 aircraft within five years.

Taaffe said that IT is at the heart of change for the company, saying “Don’t think IT has no role to play in that cultural change – everything is run by IT.”

She emphasised that constant review of processes, in readiness for M&A activity was of benefit throughout the business, as “Processes are a huge enabler of change”.

IT must understand the driver for integration, or divestment, if the initiative is to succeed, with considerations made for input from the executive level, as well as the operational and implementation layers. It is also important to ask, she said, how are you going to measure IT M&A success?

Citing the Peter Drucker quote: “Culture eats strategy for breakfast”, Taaffe said that physical and technical sides of IT integration can be relatively easy, but the “People side is critical to ongoing success.” It is important to bridge the gap between ‘OldCo’ and ‘NewCo’ for the sustainable health of the company. Taaffe characterised this is as “two histories, one future.”

Retail reality

Another crucible of transformation is the food retail business, which was represented by David Codd, CIO, Musgrave Group.

Musgrave is not only is one of the largest distribution companies for food in Ireland, but it is also a significant retailer in the form of its Supervalu chain.

In food retail, said Codd, things move quickly, and it is hard to differentiate. A small difference in market share can make a big difference to profitability.

The sector was traditionally a laggard in IT investment, he said, and used a best of breed application strategy, with aggregation and integration.

Despite small margins, he said, turnover is high and drivers of change in the sector include mobile and data and analytics. He said the ecommerce channel is a mere tip of the iceberg, and the consumer relationship to the brand is becoming increasingly digital. In all of this, he said, analytics and artificial intelligence (AI) are enabling smarter operations.

“Digital is now key to growth and viability,” said Codd. Vast resources are being spent by ‘old world’ retailer to become digital.

He said the digital destination would be one where augmented decision making was a reality, where the organisation would be a ‘fast follower in technology’.

Ultimately, Codd said that Musgrave would “be the best in Ireland at applying technology and data to build, grow and run profitable brands.” This, he said, means being “digital with a purpose”.

That purpose, echoing the previous advice, is a clear unambiguous goal, namely “growing sales and margins, while cutting costs,” said Codd.  

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