If you think of your available IT effort as an iceberg, most of the mass sitting below the waterline is devoted to maintenance. There is precious little free resource above the waterline available for new initiatives. If you have just 10% resource available for new work, but 5% works on the wrong stuff (one hour in 20), you are wasting half your ‘dry powder’ that could be delivering value towards strategic projects. From the perspective of you the CEO, the job is to ensure that IT is working on the stuff that advances strategy. One of the biggest mistakes you make is not including IT in your strategy process.

When IT is not in the loop on business strategy, three bad things happen:

1. IT loses the linkage between its everyday work and what the business needs to thrive. Systems are interesting, and the natural human tendency is to perfect them. In the absence of clear, pressing priorities, your IT people will work on that last 10% - 20% that has ‘de minimus’ value to your business. This is totally natural.  Like a hamster spinning in its wheel, IT has to work on something. If it doesn’t understand what you strive to achieve, IT will not advance towards achieving it.
2. The second bad thing is that you risk IT over-reacting to half-baked cues and rough draft project ideas because it does want to deliver value. Since it doesn’t have the stabilizing rudder of strategy, it doesn’t deliver what you and your team have identified as the key winning deliverables. In the worst scenario, IT charges ahead on projects that you’ve never even heard of and surfaces months later with a deliverable that no one is waiting for.
3. Finally, when IT is not in the loop on business strategy, you as CEO experience your CIO as a hopeless geek who doesn’t ‘get it.’ This only isolates IT even further, deepening the hole. Whether or not your CIO has the business chops you wish he had, your job is to ensure the IT agenda flows from your business priorities.

Here’s how you start:

#1. Include the CIO in Your Strategy Process

Include your top IT leader (called CIO here) in your strategy process. Three reasons why this is vital:

1. If the CIO doesn’t participate in — or least audit — the back-and-forth of the strategy creation process, he isn’t going to get the nuanced grasp he needs.
2. It builds the right conversation between yourself, the CIO and the rest of the management team.
3. It arms the CIO to generate ideas as to how IT can advance the strategy. As the one who has the deepest understanding of company-wide systems, she is best positioned for doing this.

If your company doesn’t have a written strategy or strategy process, we’ll have a post on that topic in the near future.

 #2. Examine How IT Work Advances the Strategy

Coming out of a strategy process, you ideally have three deliverables:

1. The key strategies / themes / mantras that according to the strategy deliver success. These represent your theory of competitive advantage, the investment thesis of your business.
2. The initiatives that — when well executed — define the successful execution of the strategy. Commonly these initiatives must happen now so you can sample the anticipated benefits and take in evidence that the strategy works.
3. The initiatives that you could do, but you put aside for now. This is sometimes the hardest point to accomplish, but often the most important. You have precious little headroom to work on new initiatives after satisfying the essentials. Freeing up just 5% of wrong-focused attention might double the ‘discretionary’ resource available to work on strategy.

Therefore the next step in getting IT working on the right stuff, is to review existing IT effort in terms of how it advances the strategy.

First, draw out the relationship between the strategy and the required IT ‘capabilities.’ We choose the word capabilities carefully. Too often your staff jumps to the conclusion that you need to buy a new system to deliver capabilities. But if done with discipline, you might be able to deliver capabilities with a web-based service offering, with admin or offshore labor, or with a prototype pulled together in a matter of days. Often the ‘capabilities‘ are simply improved business process combined with better information. You work backwards from the needed results, and pull through only that which clearly delivers value.

Second, review your list of existing initiatives. Are they focused on strategic value? How clear is the value delivery? How far away is the promised value? This is where you have to be the bad guy. Most projects have that feel-good, ‘good ideaness’  about them. But most are in support of ‘second-best’ benefits and don’t deliver clear enough value to overcome the execution overhead that stands in their way. Without really big and really clear value, these projects don’t get the business attention to overcome the technical challenges, the power struggles, and the resistance to change that most projects must overcome. That’s where you have to step in when there are too many things going on and get the team focused on that compelling, game-changing initiative. To these good-but-not-great projects,  say, ‘Not yet.’ — not ‘no.’

#3. Lead

Upon completing step 2, you should have a sense for where the effort needs to go and how much ‘dry powder’ you have. You also have some consensus on what new work will move the dial. You work with the team to prioritize, you make decisions. This is where most CEOs dust themselves off, set a progress review date, and say to themselves, “My work here is done now… time to get back to something important.” 

One big key to getting these important projects delivered resides with you. Here are three tips for your leadership role in delivering strategically important projects:

1. Demand business-relevant deliverables at least every three months. The only exception would be in the first start-up phase, and even the case for that usually is weak. After that first phase, every six weeks is about right. This keeps everyone focused on value delivery, keeps a sense of urgency in the team, and forces hard prioritization which is the kind you need. You’ll get push back, but insist on it.
2. Give face time to the team. Your role is to keep the connection to the project’s urgent strategic meaning clear to the team / organization. This includes the technical team, which will learn much and be inspired to work hard and long for the privilege of this direct connection with you. Make unexpected appearances. Don’t stand judge and jury every couple of months. Your people want to feel the connection of what they do to the business significance of the strategy.
3. Run Interference. As soon as you pat yourself on the back for running this process, new stuff threatens to derail IT projects. More requests. False emergencies. A desire for topical instant gratification. Measure your CIO on her ability to keep focus on the right stuff. Give support when she takes the inevitable hits when she has to say no in order to keep that focus.

There’s a lot here, and we will dig deeper in future posts. Keep to the high level principles and think ‘lean and fast.’  You should see improved focus on the active priorities of the business, and will drive more of the IT iceberg above the waterline where you can see it and assess the value it delivers.

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