The inclination is often to do something radical—like a reorg—in a desperate attempt to stop the noise. Can you start with a reorganization? Sure. But this only works for organizations at a very high level of maturity, where processes are well instituted. Likewise, it can also work for organizations at a very low level of maturity that lack process rigor, but it will often result in sub-optimization. It’s not about moving things around, it’s about doing things differently.

Getting past Level 2 requires a three-pronged approach:

1. Stop managing and start leading. This one’s not easy. Leaders at this level have worked very hard to get where they are. They’re confident in what they’re doing and they’re good at it. But when things start to change, the heroics stop mattering to the business and the noise begins, and it only gets louder as time passes. Often leaders make one of two decisions: 1) comply with whatever the business says, or 2) leave. But there is a third choice and it’s to lead, step up, break free from the rut of managing noise, and take the organization to a new place.
2. Make processes efficient, then effective. Organizations at a Level 2 already have many processes that are installed. Their focus needs to be on making them more efficient, and then effective. Gaining efficiency comes through repeating the process numerous times and measuring the results to continuously improve. As every good designer/architect knows, “form follows function.”  This principle, associated with modern architecture and industrial design in the 20th century, says that the shape of a building or object should be primarily based upon its intended function or purpose.
3. Build trust. The underlying problem facing Level 2 IT organizations: Their internal clients don’t trust them. They lack credibility. It’s harsh, but it’s true. Level 2 organizations should invest in building a strong group of business relationship managers (BRMs, aka account managers). The ultimate sign of a strong BRM is when the business can’t tell if they’re talking to an IT person or another business person. So what constitutes a good BRM? What are the core competencies every BRM needs?

• Business acumen
  A good BRM should speak the business’ language and be effective at translating business needs into IT demand and vice versa.
• Communication skills  to manage expectations
  Internal customers should feel their BRM keeps them informed and up-to-date on the status of their request and projects.
• Strategic planning
  A BRM should be capable of joint account planning, e.g., collaborate with the business to proactively solve business problems rather than respond to problems after they arise.
• Facilitation
  A BRM should be effective at facilitating outcomes, including decision making, consensus building, negotiation and conflict resolution.

Classically, an organization operating at, or just above, a level 1 is focused on “keeping the lights on” activities, as well as “putting out fires.” What’s broken rarely gets fixed because no one has the capacity to diagnose the problem (i.e. root cause) and then implement a change. Likewise, the demand for “getting it done” outweighs the need to do it right.

Here are some other indicators of an organization operating between a level 1 and 1.5 maturity level.

• Nothing is tracked well. One former client’s company paid millions of dollars in penalties due to an over-allocation of software licenses because no one in IT was keeping track of the number users during a period of high employee headcount growth.
• Documentation is sketchy. Another client’s organization had loads of initial process/software/configuration documentation but didn’t have the discipline, change control, and quality practices to maintain the knowledge as the environment evolved.
• IT manages noise. My favorite anecdote is about a senior director who held a one-hour operational review meeting EVERY morning with all her senior staff just to understand what happened over the last 23 hours in case her peers or boss called.

Organizations between a level 1 and 1.5 usually have a myriad of problems across multiple dimensions. Assessing these issues can seem overwhelming. In fact, it’s often the hardest thing for an IT organization at this level. But it’s at this point that the pain of managing “noise” is greater than the risk of moving towards the “P” word: PROCESS. Before doing this, however, it’s important to understand the current state: what abilities you have, how committed your management and business partners are to change, and how accountable your IT leaders are for their part in it all.

One way to approach the problem is to use a tool, like a balanced scorecard, to help you think in a simpler, more disciplined, and measurable fashion.

Each of the four standard components of a balanced scorecard have a cause and effect on the other components:

1. Learning and Growth: How much does IT need to invest in its people so they have the skills necessary to perform high quality activities and interactions? And fulfill the outcomes of the services they support?
2. Internal Business Processes: Are IT processes consistent, repeatable, and measureable? Are they delivering/achieving expected outcomes for customers?
3. Customers: What are external customers paying the business for? Where is the business headed? How can IT enable better decision-making? How aligned are IT’s strategic imperatives with the business’ strategic driver?
4. Financial: How can the company generate revenue from the services IT delivers?

So what’s the key to progressing towards a 2+ organization? It’s simplification, measurement, and consistent communications. I know it’s not sexy, but they’re probably not paying you for sexy. It’s not easy either, but the benefits, like freed up capacity and helping your business run more efficiently and effectively, are worth it.

How have you simplified?

Since everyone was always busy, and everyone “grew up” together, access and change controls, and roles and responsibilities were loose at Acme. Bob made a few minor data and calculation changes to the accounting system to make his work easier. But he didn’t document or test his changes. Even worse, he didn’t realize his changes impacted the month-end closing application.

When the time came to close the books, the month-end closing application failed. And, as luck would have it, Bob was on vacation and inaccessible. As a result, the company was forced to perform a manual month-end close. Acme’s CFO demanded to know what happened and Bob’s tinkering was eventually discovered.

I wasn’t all that surprised by this situation. Typically, level 0-1 IT organizations operate in a very ad hoc manner. Case in point, at Acme, Bob the financial analyst had the same access rights and privileges as the DBA support person. In these low-maturity organizations, everyone works in an isolated way, focusing only on their individual needs. There’s a general lack of rigor and awareness about the complexity and interdependencies—the cause and effect—between environments.

Our belief is that stabilizing the environment is the goal at this level. In baseball, you have to get to first base, before you can get to second. But defining rights, putting processes in place, and helping colleagues realize that process is not just overhead is downright hard. While every maturity step change has its challenges, at a level 0-1, one of the biggest challenges is the people.

There are also a lot of great, disciplined people at a level 0-1 organization who are just victims of their environment. Some have become mavericks, the “doers” and “fixers,” who have come to enjoy being the heroes and are rewarded for it. Others have succumbed to their frustration and do things sub-optimally, not because it’s right or efficient, but because that’s just the way it’s done and don’t know how to change it.

Other classic characteristics of a typical level 0-1 organization include:

• Time, or lack thereof, is the number one constraint.
• “Get it done” is the only key metric, not quality or repeatability/efficiency.
• Very thin from the perspective of resources and knowledge sharing.
• Planning doesn’t happen; it isn’t even an afterthought.
• No processes or documentation so new “firefighters” learn on the job and in crisis mode how to get things done.

When I got the call from Acme asking, “How can we make sure something like this doesn’t happen again?” I recommended TransAccel’s IT Maturity Assessment, focused on IT capabilities, processes, services and roles. Somehow, I just knew that change control, configuration, and release management weren’t Acme’s only service gaps.

Another way to gather information about services and capabilities is a process mapping exercise. It can help to define what activities are being performed, who’s performing them, and reveal if the people with the right experience are in the right roles. While it’s less comprehensive, it’s a good first step to building a case for change and making some of the well-intentioned mavericks see the error of their ways.

Have you had success in moving the needle of a Level 0-1 organization? What has worked for you?

Two weeks ago, my team and I reached out to our network of past and present clients and colleagues with an update on what TransAccel has been up to. We received so many kind responses with great feedback on our website and more. But we also heard one question consistently: Can you help me better understand what you do?

I’d like to use this blog to tackle that question head on, and I’m hoping that you’ll give me feedback on whether or not my answer makes sense to you. I’m truly looking for candor, advice and constructive criticism. So here it goes…

TransAccel Group is, first and foremost, a management consulting firm. We help organizations improve their performance by analyzing existing organizational problems and developing plans for improvement.

Today, every business change has an information systems component. So we focus our efforts on Information Technology (IT) organizations because of our firm belief that a company can only progress as fast as its IT systems and organizational capability allow.

Our ultimate goal is to help IT mature: develop, grow, and become more efficient and effective. An IT organization with mature capabilities can better support change while one with immature capabilities can and will hinder it.

Since maturing an organization requires extra hands, we also provide the thinkers and doers to help with implementation…what we refer to as the “capacity for change” hence the name of our blog.

What we don’t do is build and implement technology solutions…although we could if you asked nicely.

While we have a list of services that we’re working on defining in more detail, our approach varies by organization and situation.

Now I’m looking for a few brave souls who will tell me they still don’t get it…

Unfortunately, October is also a time of enormous pressure, as both IT and the Business push hard to achieve MBO deliverables before the end of the year. Too often, the competing time constraints of completing existing projects while planning new ones causes Business to default on the planning side, leaving IT to design new projects on its own. This lack of input from Business leads to “silo” thinking: “We know what they [the Business] really want or need.”

Now, in a perfect world, Business would remain engaged with the IT Account Manager—the one who not only has the best vantage point from which to understand and articulate Business’s needs, but is also well-equipped to offer ideas and solutions to address those needs holistically (end-to-end) rather than piecemeal. But, if Business opts out and IT can’t get it back to the table, or IT believes it actually can do the planning on its own, the next step needs to be the creation of a business case, or multiple business cases, depending on the number of initiatives IT believes are necessary for the coming year. In this situation, the account management teams should lead the business case process.

What Your Business Case(s) Should Focus On:

• Quantitative business benefits: ROI that can be tracked, and the forecasted payback over the next 12 or 18 months
• Risk assessment: what is probability of success when the following variables are considered: processes needed, organizational and infrastructure requirements, bandwith capacity, timing, information and skills necessary, competing business initiatives or conflicts, etc.
• Funding: Project costs (both operating expenses and capital expenditures) for all phases of the project; these costs should also include transition and post go-live support.
• Business alignment: clear alignment with business drivers, strategies, and objectives, taking into consideration the impact of the timing of each implementation event.
• Total cost of ownership (TCO): over lifecycle of project (ideally, this includes ALL costs associated on both the IT and the Business sides).
• Sponsorship: The name of the person or organization with “skin in the game,” who will help obtain project funding or resources, advocate for the project, etc. In short, someone who has a vested interest in the successful outcome of the project.

Once you have thoroughly assessed the viability of the project, your business case is ready to be presented to the Business. If both IT and the Business are in agreement, the commitment then is to investing in the funding, people, and amount of time necessary to undertake the project.

During the business case assessment process, be sure someone on the account side works with the service delivery partners to develop an overall review of the current operations. This will help you understand what capacity is available (people, technology, funding), or conversely, what capacity is already committed and unavailable.

This capacity review really shines a light on the 60-80% of the “operational support” work that comprises the bottom segment of your typical IT Portfolio Pyramid—work some refer to as “keeping the lights on.” At most companies, operational support is a made up of three things:

1. Service Level Agreements: Services and capabilities are aligned to fulfillment of SLAs, i.e., mutually defined agreements between IT and Business. Costs associated with each transaction and response/resolution times are tracked and monitored. These agreements are critical for the IT Account Director or IT Relationship Manager to represent the total cost of service to their Business partner. In a chargeback world, fees for these services are crucial to those IT departments operating solely as cost centers, providing, as they do, the funding for new projects. This is the only operational support activity in which you should invest.
2. Phase 2 & 3 Hiding Place: This is project work or “stuff” that didn’t really get done after the implementation of phase 1, can’t operate as a stand-alone, and thus is very hard to justify on its own merits. Ergo, it is categorized as operational support.
3. Unnecessary demand stuff: This is the “stuff” that should have been decommissioned years ago, but no one has the resources (funding/man-hours) to invest in getting rid of it and tossing it out of the environment. (Picture that box of moldy college textbooks you’ve been lugging around for years.)This “waste” is what I refer to as the “slow death of IT,” and it is my number one place to begin to restore capacity. In ridding IT of this old baggage, you will create the capacity that IT desperately needs for delivering on current Business needs. I have studied this dilemma for years, and many companies have tried to address it by taxing new projects or building it into the (TCO), but, like “training,” getting rid of it never seems to be the necessity it is, and it always seems to get cut.

Every dollar spent needs to be viewed as an investment. “Keeping the lights on” consumes a majority of IT’s budget, and yet, undergoes the least amount of scrutiny during planning. Why? Because:

1. It’s hard. If you haven’t done a good job of writing cogent SLAs with your Business partners or been diligent about tracking costs, unraveling the mess will take time and effort.
2. No one gets a bonus or a promotion for cleaning up someone else’s mess.
3. IT leadership has not done a good job of educating their Business partners on TCO.
4. IT Account Managers would much rather be working on the new blockbuster than talking about maintenance on last year’s project.

Many smarter than I thought that with Shared Services the CFOs would get more involved, and unnecessary demand costs would be reeled-in. Surprisingly, I have seen only a few CFOs willing to invest in “consolidation and rationalization,” even during these tough economic times.

Back to planning:
By mid or end of October, you will need an aggregate view of your total next year’s plan that should include:

• Innovation projects (short, 4-6 week sprints to learn and de-risk future larger projects
• New projects (i.e., Business and IT)
• Phase 2+ functionality improvement projects
• Service investments (otherwise referred to as “Keep the lights on” investments)

To ensure success, new projects need to have an estimated funding of +/- 20%; Phase 2 should come in at +/-10%; and service costs need to be aligned to the service agreements and appropriate funding model. All projects should have clear business cases.

November is all about prioritization based on guidance from Executive and Finance. The better you plan in October, the more successful you will be when the new guidance comes—and, yes, it will come.

Putting your investments into a portfolio tool is something we can help you with, and will allow you to manage your investments and make the right tradeoff decisions.

Most maturity level 1 and 2 companies still optimize by divisional silo, but there are new processes, tools and governances that can help you and your company to make cross functional tradeoffs and ensure you are returning the most value for your IT investment…surely something your CEO and CFO would want to know.

Enjoy October. The hard decisions are coming, and those of you who are prepared will enjoy Thanksgiving much better.

Over the next few months members of my team and I will be writing about:

• IT Maturity
• Capacity for Change
• Operational Effectiveness
• Measurement and Metrics
• Governance
• Portfolio Management
• Change Management
• Leadership and Organization Development
• Vendor/Service management
• Communities of Practices
• Innovation (my personal favorite)

Where to start? For me it all begins with a good understanding of who you are, where you are, and where you would like to be. And, just as an annual physical exam uncovers potential health issues, we insist on a “IT Health Check” too. After all, how can we know what remedial measures to take without an initial assessment?

Now, it seems pretty obvious that getting an annual check-up is smart and generally contributes to better health, right? Well, how many IT organizations put off a yearly exam and try to self diagnose? Worse yet, how many IT organizations have never even had an exam—you know, an independent review of how they operate? Interestingly, when we do a “Health Check,” we find that most IT organizations today are similar in two respects.

First—and to the seeming surprise of Business—IT is made up of human beings who have the same issues as everyone else: lack of trust, fear of conflict, lack of commitment, avoidance of accountability, inattention to detail, and indifference towards results. Having been in the business some 30 years I can tell you without question that these “soft” skills are just as important as “tech” skills to the success of IT initiatives and operational effectiveness.

Second, today IT stands poised at a crossroad. On the one side are the Business demands: compliance with internal and external regulations, security of information and assets, maintenance of IT architectural integrity and stability, and the delivery of innovative technology. On the other side are the obstacles to fulfillment: a rapidly changing workforce, a lack of leadership expertise, budgetary restraints, the shifting of non-core activities to external resourcing partners, and the fact that every department can make individual hardware and software decisions. The resulting tension and stress on IT cannot be overstated.

Considering these problems along with the scant resources spent on infrastructure, i.e., leadership and management training and development (that soft skills stuff I mentioned earlier), it is no surprise to me that most IT organizations are running full bore and still unable to meet the myriad Business objectives. We refer to this phenomenon as “no capacity to change,” and it is this very inability that is misconstrued as a lackluster attitude toward innovation, the very “innovation” that is supposed to save our beleaguered economy.

The challenges facing IT are complex; I won’t deny that. But they are not insurmountable. And, because this is my first blog, I feel compelled to tell you how deeply committed I am to helping IT employees and organizations work differently and maturely so that every individual and organization as a whole can deliver its very best. I want to give them the tools to work in new ways that are uplifting and rewarding. But most of all, I am determined to help IT gain the capacity to change and to attain its rightful place at the center of business driving innovation. By the way, this is what our consulting firm is all about.

Please check in from time to time. I’ll be here sharing my thoughts and specific ideas about specific issues—it would be great to hear from you too. For now, my parting thought is this: Get checked-out sooner rather than later so that you and your organization can begin to focus on innovation. After all, we have an economy to save.