Information Services (IS) performance does not suddenly crash. Rather it declines until it reaches a point where the business triggers radical change. CIOs can overlook the warning signs until it is too late, or they can recognize the need to improve IS before the business makes that decision for them.
But what can be done? There is a whole group of CIOs — the turnaround CIOs — that make a living by going into enterprises with ailing IS organizations and creating a sharp improvement in delivered value from IS.
Fortunately, current CIOs can learn from turnaround CIOs. A good place to start is by recognizing a turnaround is not business as usual. Turnarounds are very different from managing the steady state. They are a full-contact sport. An IS turnaround has to concentrate on improving the performance of the entire IS organization all at once.
Turnaround CIOs claim their ability to be successful comes from being willing to look at the actual state of IS, its performance levels and business needs. They look for root causes of the gaps in performance based on people, processes, technology, and organization.
They use visibility as a tool to connect business and IT priorities and take the actions necessary to change behavior. They also have a bias to action. And work with “aggressive empathy” in terms of understanding people, their emotions and needs, and then using that understanding to create results and change behavior.
They are also willing to upset the status quo and to recognize that entrenched political relationships are often part of the cause of poor performance. Turnaround CIOs get the results even if it means ruffling some feathers. While this may be harder for an incumbent CIO, it is not impossible.
BUILD YOUR FACT BASE FOR ACTION
If a turnaround is needed and you are ready, first stop things from getting any worse. To do this, get an independent and unbiased look at actual IS performance. Remember that performance is in the eye of the customer, not you.
In your diagnosis, you should include building an inventory of current IT projects and business requests, getting to know key personnel in the IS organization, clarifying IT technical and service-level performance, and consolidating IT budgets and costs.
Use this information to build a total view of the current situation so you can start formulating a short-term (six month) tactical plan.
Now your only priority is stabilization. Stabilizing performance means making tough decisions on technology operations, application development, and the organization. An initial short term plan is called for. The CIO implements this by killing planned IT projects that are not needed by the business, completing IT projects in testing that have a clear business sponsor, evaluating projects in the build stage and killing anything that does not have a business sponsor.
But just looking at projects isn’t enough. People, not technology, improve IT performance. During the first 30 days, turnaround CIOs review IS personnel and make quick decisions around who to keep, invest or divest. This usually involves changing an average of two to five key people in the IS leadership team.
NOW MAKE THINGS BETTER
OK, so the team and their performance have stopped getting worse, but stabilization is not success. A turnaround requires a long-term plan for consistent IT performance that incorporates people, technology and relationship issues. Think of this as the strategic payoff stage. This stage lasts from 12 to 36 months. It’s at this time that the business usually starts to invest in raising IS performance to meet its requirements.
So if, on average, an IS organization spends only around one percent of its budget on internal improvement, it needs to shoot up to between two percent and three percent to support a turnaround. What can turnaround CIOs teach the rest of us? Be action oriented. Problems, unlike wine, do not improve with age. Recognize the problem and react to it. Build and execute a clearly defined plan. Be realistic about funding. As a rule of thumb, the IT budget has to increase between 15 percent and 25 percent during a turnaround and remains higher afterwards.
Finally be willing to invite people to leave who will not be part of the new future.
–Andrew Rowsell-Jones is vice president and research director for Gartner’s CIO Executive Programs.