Strategic Human Capital Insights

 
We all know, on an intellectual level, that the value of IT is critical to an organization’s success. That’s obvious and supported by extensive research. However, how IT, in reality lives, performs and produces in an organization often contradicts its critical need and limits its importance in the organization. It’s time to sync IT into the fabric of the organization because the organization needs you. However, IT, you have a lot of work to do in your own functional area before this synchronization can happen. Below are 5 IT operating myths that must be debunked by IT:

I recently hosted a forum with Fred Mapp of Mapping IT for CIO’s and Senior IT professionals entitled "Future Proofing the Business of IT" dealing with:

• Future organizational needs
• Future technology needs
• Future competitive advantage
• Company growth acceleration
• Maximum corporate profitability

Taking a page from the recent Fortune Global Forum, one of the 4 challenges facing business today:

The Greatest Challenge Isn’t Tech, but People - Creating the right culture is the central challenge for surviving technology-driven change. Process has dominated our business thinking and operations for the past 15 – 20 years.  At this point in business, we have taken process about as far as it can go.  People, a company’s human capital, have finally been acknowledged as a key, critical business driver for the future.

You may have the right processes in place and you may have your IT needs covered right now, but do you have all the right people in the right roles to position your IT organization for:

• Future organizational needs?
• Future technology needs?
• Future competitive advantage?
• Company growth acceleration?
• Maximum corporate profitability?

Background

IT organizations have grown so quickly over the past 3 decades, and in the grand organizational lifecycle, technology is a relatively new corporate discipline and is still evolving. In addition, IT organizations have grown very quickly with increasing demands being placed on finite people and financial resources. All too often, IT is considered a cost center rather than a strategic business growth center. The cost center perspective has put cost constraints and people pressures on IT at a time when demands are growing, as all organizations are becoming tech companies (Fortune Global Forum, 2015). We see that with all these conflicting demands and constraints, IT organizations are running just to stay in place, surviving rather than thriving, living under organizational yokes that are diametrically opposed to strategic business growth objectives.

As we evaluate the human capital aspect required for leading and managing a robust, future-focused IT operation today, the skills / knowledge (skills) required today are fundamentally different from the required skills of the past. 

Current research tells us that organizations perform much better when their IT department has a seat at the strategic table and has the business skills to innovate, transform, and speak the language of the business. These are easy concepts to talk about, but much harder to implement and measure.  

The ability to innovate, transform and speak the language of the business requires multiple, interdependent business skills. Just being technically competent is no longer adequate. The successful IT leader must be able to perform at sustainable peak levels for all the necessary business skills and here’s the challenge. When we speak with the C-Suite, below are the skills they expect from their senior IT leadership:

Nowhere in any organization is there more potential disruption going on than in IT. This organizational stress can be overwhelming. In the search to create order in this chaotic environment, there are three key considerations you must keep at the forefront as you navigate these stormy waters:

1. Disruption is BAU 
2. We Are Now All Technology Companies 
3. Rethink Everything You Know About Human Capital

1. Disruption and Disruptive Technologies - The New Normal: 

   Our world, at every level, WILL BE disrupted. The McKinsey Global Institute defines disruptive technologies as new emerging technologies that unexpectedly displace an established one and shakes up the industry. Some disruptors will be easy to spot. Others will come from the most unexpected places. IT organizations are at the heart of this disruption. IT organizations must consciously and continually focus on the outside horizon to anticipate disruption and deal with it as quickly as possible.

• Living with Disruption as the Norm. BAU and the Steady State are a Thing of the Past: Change has become the norm and business as usual (BAU), which was formally the goal, will become a subset of Change, Transformation and Transition Management. IT must be prepared to accept that as soon as the steady state (BAU) is achieved, disruption will shake things up again. 

Last week I attended the AZ IT Symposium in Phoenix. Last year I was a presenter for one of the breakout sessions. This year, I sat on a panel. As both a participant and a presenter, I would like to comment on this recent event compared to last year. There was a subtle but significant shift that took place regarding the topics of the event and ensuing conversations. 

A Year Ago
Last year, there were several slots focused on people and leadership in IT.  My topic was, The Impact of Workforce 2020 on IT.  Last year, the session was filled to capacity and the Q&A session was engaging, but more people were passively listening, which was expected since this was newly released information. 

This Year
This year, either by design or chance or the fact that there is finally a greater appetite in IT for the business issues of IT, the concepts of leadership, innovation / transformation and human capital were not only topics on their own, but drifted into many of the tech type sessions, as well.  Finally, it appears that leadership, transformation and human capital concepts are converging with the business topics of IT!  How refreshing, at least!  

Recent surveys of business and IT executives find that IT performance increases across the board when CIO’s are involved in shaping business strategy.  The survey results show that IT leaders are increasingly taking action to market IT and develop objectives, strategies and metrics, to build and solidify relationships with their non-IT stakeholders. But are these efforts working?

On a scale of 1 – 5 with 1 being low and 5 being high, how would you rate the following statements?

• My company provides cost-effective services.
• My company delivers projects on time and on budget.
• My IT organization is innovative.
• My C Suite, business management and their staffs have a poor perception of IT.

IT Business Transformation can make or break an organization's efforts to establish competitive advantage through the tactical use of technology resources.  

The term, business transformation, represents a significant shift in both the mindset about and the actual definition of the role of technology. This shift goes beyond just business process management and business, IT alignment, to that of IT business integration. In the exhibit below, it’s challenging to find the right balance between business innovation and operational excellence.

According to the 2015 Fortune Global Forum:

“We are all technology companies now.”
“Competition can come from anywhere."
“The greatest challenge isn’t tech, but people."

Does Your IT Organization Struggle with These Four Issues?

1. Driving Innovation: As IT leaders, we are responsible for enabling and driving innovation while at the same time maintaining service levels, ensuring security, and controlling costs.
   
   
2. The Business Transformation of IT: IT Business Transformation can make or break an organization's efforts at establishing competitive advantage through the tactical use of technology resources. IT must shift its role beyond just business process management and business-IT alignment, to that of IT business integration.
   

As IT leaders, we are responsible for enabling and driving innovation while at the same time maintaining service levels, ensuring security, and controlling costs. Let’s discuss how successful IT leaders are stepping up with bold leadership management strategies for growing the business through the innovative use of technology. Innovation must be targeted toward a clearly defined, value-creation focus such as:

• Top-line growth – innovation activities that primarily generate revenue
• Bottom-line optimization growth – innovation activities that yield profit
• Shareholder value growth – innovation activities that increase the value of the company

How do you currently address these questions? How do you share your experience in delivering innovation to your organization and provide ways to leverage innovation to help drive business results?  As seen below, finding the right balance can be challenging.