Connecting the business

The cloud has been around for many years and Digital Transformation sufficiently long that it is now greeted with groans rather than excitement and yet many organisations are still operating a traditional technology function, often with a centralised department, that offers technology solutions to business issues but often at a relatively pedestrian pace.

Breaking out of the traditional business model

One of the primary reasons for this is that, although technology continues to develop at an ever faster pace, humans and the associated organisational approaches do not. The fact of the matter is that to compete in the modern world, organisations have to break out of the traditional model and unleash their strategy by focussing on their organisation and their people. To address this need, many successful companies are adopting far more radical approaches and building new, fast moving organisations that are able to react rapidly, and effectively, to new business challenges. The key to this change is to shift decision making away from a centralised hierarchy that requires information to be analysed before handing down a decision, to enable front line staff to determine and execute solutions and pass the results back.

Removing hierarchy enables velocity in the decision making and, therefore, the actions of an organisation; but it requires a number of key features to be enabled for it to work effectively. In his 2017 letter to Amazon shareholders, Jeff Bezos wrote that “Most decisions should probably be made with somewhere around 70 percent of the information you wish you had. If you wait for 90 percent, in most cases you’re probably being slow.” But Bezos cautions that “If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure”, but this does mean an organisation requires an in-built mechanism for course correction and this is often alien to many traditional organisations.

Facilitating organisational agility

Creating an environment that embraces rather than eschews strategies and decisions that have a less than clear end point demands an organisation has the ability to readjust their approach quickly. It requires that organisations establish less defined strategies and work with more emergent strategies that rely on a single, broad objective, a North Star, to follow. This objective may be something as simple as ‘to be a relentless ally to our clients’ but the strategies that will emerge to attain this will flex and change over time as rapid decisions are made and some then reversed.

Traditional organisations establish key decisions in the Senior Leadership Team and execute them through top down planning, staff level execution and reporting back through to the senior leaders where gaps are then identified, re-planning executed and remedial tasks cascaded back to staff. There are many issues with this model, not least being the delays inherent in the constant movement of information, the inaccuracies that inevitably emerge from the movement and the disengagement of the staff executing the tasks from the strategic motif that should be woven through all the activities. All of these issues are magnified when multiple layers of leadership and management determine that they should add value to the process by refining the tasks or information, often according to their own cognitive biases. The underlying principles that allow organisational agility have existed for many years: the current popularity of DevOps is built upon decades old principles derived from other organisations and applied to IT teams. Taking existing principles and re-purposing is effective as it is an approach that is inherently accompanied by a proof point that it works.

Reshaping the IT organisation

So, how do we re-frame our IT organisation to trigger high velocity change? The critical decision that needs to be taken is how to make decisions in the future. This decision is required to determine how the IT organisation will operate and how it will effectively reflect the core value proposition that it will embrace. The decision must define the core elements of structure, governance and process that will enable a more dynamic, de-centralised decision making structure that is capably of adapting to changing circumstances without constant reference up the management chain. This decision must be approved and communicated through the CIO and forcefully implemented across the IT organisation.

Enabling a more dynamic and de-centralised approach is challenging in many organisations, especially those that have operated in a rigid structure for years. Removing hierarchy altogether is also not the solution but abstracting innovation and decision making from elements that add no appreciable value is effective. Creating a set of basic principles and ensuring that these are understood and embraced is the first step in enabling this approach. Learning from other organisations is also valuable.

The New Zealand All Blacks have a basic hierarchy of management but a team built of leaders. The coaching and management staff create an environment that enables all of the players to lead. There is a clear and articulated culture of empowering the players to make unilateral decisions and of creating an environment where everybody believes they can lead in their own sphere of expertise. There is no time in rugby to make arbitrated decisions or to seek permission to act. The core values of the team are so ingrained in the players that their decision making at the individual level has minimal cognitive bias and is always informed by the underpinning philosophy that a collection of talented individuals without personal discipline will ultimately fail.

Character triumphs over talent.

These core values are ingrained because they are clearly and vigorously articulated. To attain a velocity in change, CIOs must now re-define their organisations and empower frontline staff to make decisions and create change themselves. Empowering people only works if they have a clear and unambiguous understanding of their accountability and scope of authority but also that these boundaries are maintained even in the event of failure. Significant organisational change will inevitably result in mistakes. These mistakes must be embraced not punished and the empowerment must be maintained consistently.

Organisational survival may be regarded as a direct function of the velocity of change in the modern world and velocity can only be attained by removing the barriers. Hierarchy is perhaps the biggest drag that slows change. Eliminating drag enables velocity.