Analyst Outlook: Business smarts are critical

There’s a clear trend in in-house IT departments: white-coated techies are out, more rounded business executives are in. Truth is, this trend isn’t news. It’s been going on since long before System 360 meant a mainframe computer not a new brand of videogame. What is news is its importance. It’s become a critical issue because of the expansion of IT’s role from a provider of technical services to a provider of a richer set of business-process design and organizational-change capabilities.

To step up to this broader role, IT needs new business capabilities in addition to its traditional technical skills. In short, IT people now need business smarts as well as technical ones.

Business smarts comprise two things: skills (know how) and competencies (know what). But where are the people with these business smarts to come from? Does this mean hiring a whole new IT team, or can the existing team be up-skilled?

The good news is that there is almost always someone with the sought after business smarts just waiting to be discovered in your own IS organization already. A methodical approach will find them.

First, for each IT role, determine the business smarts that define it: what skills are needed in interpreting the business environment and its operations? What communicating and influencing competencies are required? Once this list of skills and competencies is drawn up, set a proficiency target for each. What does the role demand you to be expert in? What can you be intermediate in? What can you be a beginner at? Armed with this finely tuned job spec, assess each of your IT staff.

A practical approach to assessing people for their business smarts is to adopt a simple interview approach, balanced with any quantitative data you may have on their performance. When interviewing, bear in mind that the traditional “fact collecting” interviews (tell me about your financial services experience. Tell me how long you have worked for a bank) can expose people’s business skills but not their behavioral competencies.

To dig into someone’s competencies HR professionals and theoreticians claim an alternative interview technique called behavioral event interviewing (BEI) produces much better results.

BEI uses probing questions to illuminate behaviors. These questions should address challenges, actions and results.

By way of example, one query might be, “Tell us about the most complex project you have managed.” This should be followed with a series of questions that target challenges, actions and results. For example, the challenges might be, “What was the situation?” “How was the task assigned to you?” “What led to your assignment?” The actions might include, “What did you do?” “How did you get things back on track?” “What was your role in the project?” And the results might be uncovered by asking, “What feedback did you get from your boss?” “What followed up this work?” “What did you learn from this experience?”

You will find that in some roles you have a surfeit of business smarts – ideal people for moving somewhere else. In other roles you may have a deficit of business smarts. These are gaps you’ll need to plug.

How can they be plugged? Assuming you don’t have any ‘business smart’ people you can move to fill all the gaps from elsewhere in IT, you have two choices. Develop new business smarts; which can take time, cost lots and have uncertain outcomes. Or you can import people from the business.

If you choose the import route, you will need to support your imports well. Mentor them, and don’t have them try to make complex technical decisions without help. Business smart they may be, but IT smart they aren’t.

IT’s role is broadening, and the capabilities of the IT organization need to broaden too. This makes developing business smarts a top priority. Fortunately, there is a systematic way of building the business smarts of your IT organization.

QuickLink: 062192

–Andrew Rowsell-Jones is vice president and research director for Gartner’s CIO Executive Programs.

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