1 comment on “How to Transform IT into a Start-up?”

How to Transform IT into a Start-up?

The vibrancy of Startups. The relentless customer focus. The relentless adapting and testing of products for an ever better solution. Shouldn’t all IT departments be like this? What an exciting place to work in such an IT organization would be!

What are the waypoints on the way to transform traditional IT Departments into Start-ups?

Some answers have already been given in my recent post A 4 Step IT Manifesto – without the boring Bits. But here is a new perspective, adapted from a 2016 book “The New IT” by Jill Dyché, a seasoned author on IT Organization. It is a business practitioners book, not an academic one and therefore lacks empirical verification. But Dyché has come up with some interesting models, which provoke thought.

Start from your Archetype

Dyché clusters IT Organizations into 6 distinctive Archetypes. Most IT Organizations have elements of some or all archetypes at once, but one archetype will likely be dominant.

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Most IT departments are associated predominantly with the Tactical, Order Taking or Aligning archetypes:

  • Tactical: No frills, just keep the system going
  • Order Taking: Write a request or initiate a project, IT will implement based on the specifications
  • Aligning: Representatives of IT discuss the direction of each Business unit with Business and IT Leaders on a regular basis and try to shape applications accordingly

The more progressive Archetypes are:

  • Data Provisioning: IT does everything possible to provide excellent data sources to business units, makes access as easy as possible and supplies analytical tools thereby enabling business units to discover insights on their own. Most notably, there are not only “Application Owners”, there are “Data owners” for the different Data objects (Customer Master, Replenishment Data etc., Sales Data), too
  • Brokering: IT is not so much “delivering services”, it is rather orchestrating services across the enterprise from a multitude of internal and external service units. A lot of Service Level Agreements are typical. IT’s aim is to focus internal services only on strategic areas only. For all other services, it tries to remain agile to ramp up or ramp down services as required by the shifting situation
  • IT Everywhere: IT nearly dissolves as a unit. It is just retaining Project Portfolio and Architecture Management. Every other function, even most IT Staff, is allocated to the Business. In a world of proliferating Cloud Applications, that cause Shadow IT Units to appear in Business, this might be a formal approach to governing the complexity of the modern IT and Business relationship

All archetypes are valuable. There is no better archetype. If an organization just requires the IT Organization to keep everything stable and change nothing, the “Tactical” Archetype might be the Best for an Organization. Every attempt to go to a different archetype would be “unnecessary excellence”, aka waste.

The interesting job for the IT Manager is to find out – together with his Business counterparts –  which model to adopt. In the example found in the lower half of the graphic above a fictional IT unit spends 70% of its time and resources on “keeping the lights on” and 30% on “processing orders”. After discussing with the business, the IT Leader determines to scale down the number of time and resources spent on these “Tactical” and “Order Taking” archetypes and aims to transform her IT operations towards the more advanced models over the next 3 years.

Once the target composition of archetypes has been determined, the next question is how to get there?

Adjust your IT Governance model

The IT Governance model is like an operating system that IT is working on.  It is the sum of all processes that IT uses to provide its services. In any IT Organisation it invariably encompasses the following seven areas:

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Changing IT Archetypes means to change some or all of the seven Elements of the IT Governance Model. A switch towards the “Data Provisioning” Model would require:

  1. An updated,  re-prioritized Roadmap that does not only encompass Systems but Data objects too
  2. New policies to allow Business users access to Analytical Power Tools or even access to the Data Bases directly
  3. Updating funding plans for IT, as Data Exploration can hardly be funded by submitting business cases based on Return of Investment figures. It would be a better idea to create a new “innovation” budget for use of IT and business
  4. Portfolio Management processes, that allow Business Units to understand where IT is heading and to understand the staging process IT uses to progress from data exploration to research, to test, to re-test and finally to implementation
  5. A Talent Management that seeks to recruit or cultivate data savvy personnel. This includes not only the cultivation or hiring of Data Scientists but helping Managers to get data savvy, too
  6. A new understanding of how to manage Innovation, of the inner workings of innovation within human groups. Once that insight is there, the environment (down to office spaces and the possibilities to encounter external knowledge sources) needs to be shaped
  7. Systems: New Systems Data Management or Analytical Tools are to be supported

Once the new IT Governance has been sketched out, the Organization should be adapted in order to support it.

IT Organisation: Think “Service Lines”

IT organizations are traditionally built around applications and mirror -more or less – the organization of business units. Typically, there are units within IT that care of Systems for Finance, Systems for Purchasing, for System of Production, for Logistics etc.  Plus some universal units for Infrastructure Management, Helpdesk, Architecture or Reporting.

This makes great sense, as businesses know exactly whom to hold accountable for a certain set of systems and the IT units need to know exactly who the client is. But there are problems with this model:

  • Local Applications, such as MS Office suite Apps, fail to have a strong voice in the organizations, even tough they are immensely important to users. By failing to promote the professional use of these tools, productivity potentials remain untapped. The day to day importance of working on the big enterprise applications simply crowds out any attention on supposedly small local applications
  • User Access Devices fall in the same category: They are often overseen, if not given a voice inside the organization at a higher hierarchical level via the organization chart
  • Data ownership is automatically decentralized if data owners just reside on some low hierarchical level or data ownership is just assigned as a side task to someone. Today data is often so important, as to be represented in a separate unit reporting directly to the CIO
  • Analytics is often either just an add-on contained in other IT units. Sometimes analytics is just a big Data Warehouse application. But if a company is to become more data savvy, a unit may be useful that promotes analytical practices, tools, processes across the whole enterprise

A service line oriented organizational chart may look like this:

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But there is an even bigger problem. A typical IT organization that more or less mirrors the Business Organization or that retains too much IT services under its authority may  suffocate any initiative workers in  Business organizations have to utilize IT to maximum effect:

Having IT taking care of everything even remotely connected to information technology has the inert risk of business units always being under parental advice.

In such an environment, the business may never grow up into (digital) Adulthood.

So what can be done to let Business grow into digital Adulthood? Give them responsibility for parts of IT.dsavvy

User Access Devices, Analytics, and Local Applications are all Services of IT which can be delegated to Business Units. IT willingly withdraws out of these areas and gives business units the freedom to experiment and implement what business thinks best. Except for architectural oversight, IT will no longer be providing services as buying and maintaining Phone, Pads, Workstations, local software, reporting tools etc.

By formally handing off responsibility to business, IT moves towards the “IT Everywhere” Archetype. This might be the most effective and sustainable way to raise the digital maturity of a company as a whole.

To new frontiers: Innovation

Raising the overall digital maturity of an organization will result in the whole company feeling more like a start-up, where people are empowered to experiment and utilize IT in surprising manners. This experimentation will only happen if management behavior and values change (see for example Tired of hierarchy? Try this).

Jill Dyché offers specific advice for the CIO on how to foster innovation:

  • Encourage Questions: Who do we want to be? Who could we be?
  • Maintain an up to date knowledge of technology
  • Shift focus away from ERP towards e.g. machine learning or the SMAC Stack (Social, Mobile, Analytics, Cloud)
  • Move towards openness inside and outside the company
  • Regards Research as an end to itself, not just a mean
  • Learn the Lean Method, e.g. willingness for experiments to fail and start again
  • Rely on more organic methods to manage things and less on Up-front Business Planning
  • Do less underdiagnosing and overprescribing – do more research instead

Innovation Labs

A lot of Companies do not approach innovation in a holistic manner. Instead, they cordon off innovation in “Labs”. These are shiny new, start-up like organizations which are set-up in parallel to the old IT. While this approach is seemingly supported by a management technique that calls to apply different management techniques in for example “productivity” and “innovation” zones (see You are playing the wrong game! Learn to zone), there are pitfalls.

Innovation relies on two basic elements: Exploration and synthesis (see Social Physics: The Revival of Science in Management).  Everything must be done to maximize the opportunities for exploration and synthesis. A typical pitfall is to set up an Innovation Lab, as a “New IT”, with permanent full-time dedicated staff. This is hurting both, exploration and synthesis massively.

Instead, people should be only temporarily assigned to innovation labs. There should be:

  • a constant exchange of staff with the rest of the organization (business and IT) , based on the tasks at hand
  • people from outside the organization constantly intermingling with the internal staff
  • A democratization of initiatives, top down assignments won’t work. Instead, people need to have the autonomy to initiate lab projects on their own. Of course, this requires a new funding method, too, as the way money is to spend is effectively controlled by subordinates

Summary: Organizing IT like as Start-up

All of the above can be summarized into three steps:

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  • First get Business engaged. Show them how to use IT effectively
  • Second, create a culture of openness, dynamism, and autonomy.
  • Third, create an Innovation Zone that allows people to use their full potential

With this compelling blueprint in hand, whole companies can really get going along their road to Digitalization. Existing IT Organizations can be revitalized and Business gets new powerful tools.

Oh yes, it will be a rough ride – learning to lead and be managed in a different way is very hard. But this blueprint has a very positive “bias for action”, which is surely better than waiting for Digital Businesses to disrupt your business.

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By the way: I have changed the name of the blog from “Signal-and-the-noise.com” to “ManagementDigital.net” for the sake of greater clarity what this blog is all about.

Plus: There is a German language Podcast available on iTunes, Stitcher, and Soundcloud.

Comments are appreciated!

0 comments on “What are the 3 Essentials of Project Management?”

What are the 3 Essentials of Project Management?

Suppose you want to do something sizeable, which requires the collaboration of several people over a period of time.  Something like a Start-up, a software project, a process improvement or building a house. You will be creating something new. You get something from the status quo A to a new state B.

You need to start a Project. So let’s get out the toolbox of project managers!

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The danger with these tools – reinforced by the classical training of project managers – is that they tend to imply a”one size fits all” perspective. A good tool, like a work breakdown structure (a list of the activities that make up a project) used in an innovative, start-up context is likely to suppress creativity if it forces the project team to take the route to the solution prescribed in the work breakdown structure instead of giving them the freedom to choose their own path.

Tools used without wisdom are dangerous.

A “Fool with a Tool is still a Fool” (Bill Gates) – but that Fool that is now armed.

3 Types of Projects

To be treated as robots is a major part of the reason why some people really hate projects. They are forced by “fools armed with tools” into administrative nightmares,  while they long for the freedom to get creative.

So before you start “hitting away at a screw with your new Hammer”consider the project type you are facing:

  • Explorative: Start activities right away and deal with issues as they come up
  • Control: Plan ahead in detail, communicate and start once plans have been made
  • Loose/Tight: Start some activities right away and add a certain degree of planning along the way

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The middle ground between control heavy projects (e.g. building a bridge) or explorative projects (e.g. finding a minimal viable product in a start-up) is occupied by typical business projects.

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In a project falling into the “loose/tight” category there are a lot of tradeoffs that need to be made: Adding too much control to a supposedly agile software project will be as counterproductive as to forego any structure, reporting, and standards.

So the message is: Tune your approach to the type of project you are facing.

But isn’t there a set of common factors driving the success of any kind of project? I believe there is.

3 Essentials for any type of Project

All the complexities of a targeted business change and all the perceptions of what a project should be obscure the true essence of what it takes to get anything from A to B. There are really just 3 things that matter, everything else follows from that: A Just Cause, Alignment of People on the Target and Commitment to the Cause.

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1. A Just Cause

With a “Just Cause” the project team and other stakeholders have something they desire to achieve. A “Just Cause” gives the project team the very reason for being, the reason why their efforts and dedication to the project is making sense for the organization and themselves. It provides the “true North” to orientate all decisions.

The word “just” has a moral implication. After all, people aspire to do good and the Inspiration gained by a “Just Cause” is invaluable to a project. What is deemed to be “good” is, of course, depending on the values a person hold dear to herself. But as long as the project team and most stakeholders share the conviction of the Just Cause, the project is driven forward by it.

So how is one to shape a “Just Cause” out of a dry mission objective like “implement that system”? The key is to answer the question “Why?” for multiple times until you are at the essence of the project. Finally, a project is there to make something better, to help someone getting things right, to make the world “just” a little bit better. Identify what your project contributes. If there is really nothing, then just don’t start the project at all.

2. Alignment

Alignment has a strategic and a tactical side.

Let’s start with the strategic element. It’s not enough to have identified a Just Cause for a project, it needs to be shared by others. So get project members and stakeholders to think of the just cause, discuss it with them. Sharpen the mission. Put it in writing, visualize it, display it, give your project a name. Make sure that the “Just Cause” provides true North for the lifetime of a project for everyone involved.

But Alignment is more than just strategic. It is, on a tactical level, the day to day synchronization of activities: The avoidance of waste, the clearness of areas of responsibility, the awareness of datelines, the knowledge of what the other team members are doing, the knowledge of dependencies and risks, the setting of standards, even the provision of templates.

By aligning the team on a day to day level everyone works in the same direction, towards the true north without any unnecessary waste of efforts – and therefore with speed.

3. Commitment

Even if people share a certain sense of the “Just Cause” of the project and work in an aligned, concerted manner towards the goal, that is not enough to ensure project success: They need to be as deeply committed to the project as possible on a personal level.

A Just Cause might make a good reason for the company to do something, but Commitment can only be gained by addressing the individual needs of each project team member individually. The project leader needs to understand what make the person tick, what are his strength, his interest, his desires, his fears, his passions. The more he understands, the better. The only way to find this out is to spend time with the team member, listening and asking probing questions.

To gain Commitment, Emotional Intelligence is what is needed, rather than technocratic skill.

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Perceiving, understanding, using and managing emotions is key to gain and keep the commitment of team members. A committed project team working in an aligned manner is a fast and efficient project team.

Masterful Project Management

If a project manager is able to…

  • Conjure and uphold a Just Cause that is shared by team members and most Stakeholders
  • to align the team in detail on a day to day basis without interfering into their preferred individual work styles
  • and to commit each team member emotionally to the project

…she may consider herself a masterful Manager, as she gains the maximum of the contribution of the team. And all that performance comes by using unobtrusive nudges instead of strict orders.

After all, Management is the art to get people to do things. And creative things can not be ordered.