By Thornton A. May, ComputerWorld.com,
Strategies are all around us in IT. We have go-to-market strategies, growth strategies, vendor management strategies, consolidation and migration strategies, infrastructure strategies, HR strategies and innovation strategies.
What we don't have all too often is a differentiated, make-the-heart-pump-faster enterprise strategy.
"Not our job," a lot of you are probably saying. "We're here to enable strategy, not formulate it." But if a company lacks a coherent, clear-cut strategy, the IT organization's ability to really add value is significantly reduced. In the absence of such a strategy, you, as an executive, have an obligation to assist in the creation of one.
Part of the problem is widespread confusion about what strategy is. It can mean a whole lot of things to different people. Many undergraduates, as they embark on the study of business, believe that the words mission , goals and objectives are synonymous with strategy . Too often, that confusion hasn't been cleared up by the end of the course of study, and we end up with business executives who are just as fuzzy on the nomenclature.
Writing in the April Harvard Business Review , David J. Collis and Michael G. Rukstad asked, "Can you say what your strategy is?" Their answer: Very few executives can. In fact, only a sad little minority could respond affirmatively when asked, "Can you summarize your company's strategy in 35 words or less?" and, "If so, would your colleagues put it the same way?"
Collis and Rukstad went on to explain why strategy matters. They pointed out that companies in the same industry can ? and frequently do ? have very similar missions (why they exist) and visions (what they want to be). A good strategy, they argue, can fundamentally differentiate a company from its competitors, and they list three key ingredients that make differentiation possible: an endpoint (a specific objective, complete with time frame), a domain (the landscape upon which the enterprise will operate) and an advantage (why and how you will achieve that endpoint vis-a-vis the competition).
Our own research at the IT Leadership Academy helps show why strategy matters to IT. For 30-plus years, IT executives have taken the rap for underperforming IT investments. Yet our CIO Habitat interviews revealed that for over 60% of the IT projects that were deemed to be "underperforming" or "disappointing," the root problem was not poor project management, bad technology choices or lackluster execution. No, the steaming projectile in the middle of the IT value crater was bad business strategy.
The big question, then, is how to devise a valid strategy. It needn't -- in fact, it shouldn't -- be plucked out of thin air.
Several organizations we talked to don't really have a formal strategy. But in many of those cases, the seed of a strategy, if not the strategy itself, already exists. It helps to see this by thinking of what economists call "revealed preference," a theory that states that people's preferences are revealed by the choices they make. This is true of organizations as well. Even when there is no formal strategy in place, it may be possible to tease out what the underlying strategy is through behavioral observation.
If you want high-value IT, you need a high-impact strategy. The important thing is to apply the brainpower to do this and to work with other executives to make the strategy as coherent, valid and ripe for success as possible. You want your company to be among that minority of organizations that have a strategy to change the rules of the game being played or to be one of that slightly larger group that has a strategy to win the game as it is currently being played. What you can't afford to be is one of those companies that has only a vague idea that there is a game being played at all.
Thornton A. May is a longtime industry observer, management consultant and commentator. You can contact him at thorntonamay@aol.com.
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