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What’s Driving IT’s Record of Failure — And What Can Fix It?

A former insurance CIO traces the endemic failure of IT projects — and the economic waste it implies — to the imposition of an industrial process on the social phenomenon of knowledge work.

Former Guardian Life CIO Frank Wander’s new book recounts a history of IT failure and offers a prescription for success. He begins with a list of major missteps from the 1960s forward, along with statistics from sources such as the Standish Group, Gartner and McKinsey verifying dismal rates of project success right up to the present. Wander’s diagnosis is that IT organizations remain trapped in an industrial mindset that works well for manual processes but is worse than incompetent at the task of managing intellectual processes. Management guru Peter Drucker would seem to agree.

Frank_Wander_IT_Excellence_Institute
Frank Wander, IT Excellence Institute

Wander, who now heads the IT Excellence Institute, quotes Drucker in the first chapter of Transforming IT Culture: How to Use Social Intelligence, Human Factors and Collaboration to Create an IT Department that Outperforms. Wander sees growing awareness of a “blind spot” in the business world: people feel unease about the future, he says, and have some sense of an imminent and momentous shift. Peter Drucker anticipated the problem, Wander suggests:

The most important, and indeed the truly unique contribution of management in the 20th century was the fifty-fold increase in the productivity of the manual worker in manufacturing. The most important contribution management needs to make in the twenty-first century is similarly to increase the productivity of knowledge work and the knowledge worker.

That goal requires evolving from industrial process-based efficiency to what Wander calls “people-based potential,” which will be manifested in an “emerging socioproductive age.” He stresses that the process lessons of the industrial era are by no means to be forgotten, and indeed have important applications in the engineering aspects of IT. However, he insists that IT projects are inherently emotional and quasi-artistic endeavors. Process discipline is a foundation upon which to erect a productive social structure — the social system, according to Wander, is the factory. The people who make it up must be considered not simply as means to an end, but as ends in themselves.

That being the case, managers need to add new skills to their standard management and process disciplines, according to Wander. Over a career of fixing broken IT organizations and running projects on time and within budget, Wander has affirmed the value of a humanistic management approach characterized by “prosocial” behavior and an ethos of serving one’s subordinates. He writes on p74:

To transform organizational behavior, I established ground rules in my town halls and leadership meetings by communicating that the basis of our success would be building a trust-based community where meaningful collaboration and prosocial behaviors would infuse every interaction. Those behaviors included sharing/helping, caring for one another (empathy and compassion) openness/acceptance of others’ personalities and ideas, complete transparency (no hidden agendas), and an absence of blame. Ultimately, the goal was to create harmony, because that is a powerful driver of collaborative productivity.

Musical performance metaphors abound in the book, with teams likened to orchestras or improvisers in ensemble. Probably the most common word in the book is “caring,” used in the sense of managers taking a humane approach to their knowledge worker subordinates. If it all sounds a bit touchy-feely, don’t be fooled: the book is about competing fiercely — but not against the people on your own team.

[Related: Workforce Optimization: The Science of Efficiency, The Art of Customer Experience .]

A “cruel but fair” approach just won’t cut it with knowledge workers, Wander implies, and backs up his point of view with science. He details how the limbic system responds to threats by triggering survival mechanisms that drown out creativity and cooperation. On p42, Wander caricatures knowledge workers in a socially toxic work environment with a photograph of the statues of Easter Island staring stony-faced. The caption reads: “The Beatings Won’t Stop Until Morale Improves.”

Most readers will probably recognize elements presented in Wander’s Chapter 5 case study: “An Unproductive State of Mind: Toxic Leadership and its Aftermath.” However, in most cases the toxicity of a given organization will be considerably lower — and its effects more subtle. Few people go through a career without intervals of living hell — and probably some moments of organizational bliss as well. Most knowledge work is probably well within the tolerable zone (leaving aside the time immediately around deadlines) but still tinged throughout with a detectable odor of Dilbert — Scott Adams' cubicle-dwelling cartoon character that began satirizing the emerging knowledge work environment in 1989.

It is in that tolerable zone that Wander’s work may be most important, because the problem is so pervasive. A Dilbertized work environment, where people are cogs in a machine, their individuality and dignity subordinated to bureaucratic processes, is at best a mediocre environment. If you depend on people’s creativity, you must engage them as individuals with a unique contribution to make. Managers who master that engagement will enjoy a team that is not only more productive in the most basic sense, but also more creative and innovative than the Dilbert shops. If enough teams begin to work at this level, then the IT organizations’ project record may finally turn from failure to success. You can measure that as you like: in happiness — or in cold, hard cash.

Frank Wander Transforming IT Culture Book

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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edeshields
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edeshields,
User Rank: Apprentice
3/16/2013 | 3:35:37 PM
re: What’s Driving IT’s Record of Failure — And What Can Fix It?
The 2 most frequent failure points for insurance IT are: 1) Time to deliver a production solution and 2) The absence of a documented senior management business profitability expectation session before the project starts.
No 1 - A long running development project will result in management taking a look at cost versus potential benefits, and frequently result in dumping a project. That is especially true when there is a major management change, which is quite frequent for long running development projects. Short deliverables are goodness.
No 2 - If there are no perceived business benefits by management you will not get a management buy-in; and at some point your project, even if it goes into production, will be declared a failure (aka waste of resources). Profitability expectations are goodness.
Anthony R. O'Donnell
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Anthony R. O'Donnell,
User Rank: Apprentice
3/14/2013 | 5:31:23 PM
re: What’s Driving IT’s Record of Failure — And What Can Fix It?
I hope the Franks will permit me a quibble here. I'm a big fan of Haidt's work but I find the "hive" metaphor unfortunate. It has been the pejorative metaphor of choice for critics of collectivist totalitarian societies. Mere insects in a hive mindlessly cooperate, and while they may be industrious (busy bees) they are eminently interchangeable. I prefer a metaphor G if it even is a metaphor G from our mammalian relatives: the pack. Effective teams are not programmed like a hive nor docile ruminants like a herd G they are packs on the hunt, always with an eye on the quarry.
Frank Wander
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Frank Wander,
User Rank: Apprentice
3/13/2013 | 3:18:23 PM
re: What’s Driving IT’s Record of Failure — And What Can Fix It?
Jack, you are spot on. If leaders do not get the talent dimension correct, they will fail, or terribly under perform (another all too common outcome). There is no question about that. We must remove obstacles that are in the way of collaborative success. So beyond building a highly skilled, deeply collaborative and highly experienced talent base (especially institutional experience), we must focus on senior leadership responsibilities These include ensuring the strategy is sound, making sure the organizational design is productive (I like federated, or even embedding IT in the business), creating role clarity to prevent turf wars that destroy relationships, deploying a comprehensive governance model tied into the systems development lifecycle so it is clear how decisions get made, etc.
Frank Wander
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Frank Wander,
User Rank: Apprentice
3/13/2013 | 3:04:32 PM
re: What’s Driving IT’s Record of Failure — And What Can Fix It?
Scott, I love any approach that requires deep, open, and meaningful collaboration. The question is one of scale. At the level of a cross-functional team, this is highly valuable. When the scale of what is required extends into larger numbers of people, across many disciplines - IT, marketing, product development, sales and operations - then collaboration is necessary. The only way to create this level of collaboration is to have a culture where antisocial behaviors are not allowed, where complete transparency is required, and where people openly accept one another by embracing coworkers for who they are, and also listen to their ideas; moreover, people have to share openly, helping one another succeed, etc. There is more, but the bottom line is you need individuals with deep institutional experience, operating within a supportive culture, where management has their back, and best interests in mind. Nothing else really works.
Frank Wander
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Frank Wander,
User Rank: Apprentice
3/13/2013 | 2:52:29 PM
re: What’s Driving IT’s Record of Failure — And What Can Fix It?
Chet, that is an interesting idea, but I prefer to create a culture that is open, where complete transparency is required. Hidden agendas are socially corrosive, and are rarely hidden. People feel the game, which destroys trust, causing disconnects in the process. Having a culture where a Consigliere is needed, is a sure sign that it is unhealthy.
Frank Wander
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Frank Wander,
User Rank: Apprentice
3/13/2013 | 2:49:07 PM
re: What’s Driving IT’s Record of Failure — And What Can Fix It?
This is a great, and highly informed post. Thank you. I haven't read Haidts work, but will certainly take a look. Humans are social animals (hivish), and are in fact wired that way. We all come with mirror neurons that literally enable people to feel others emotions. However, school teaches us to think, but not to feel. This is an enormous blind spot that needs to be corrected. Ignoring who we are, and then trying to process manage departments full of "interchangeable parts", mere "human resources", is the root cause of IT failure, and why it is pervasive across industry verticals. I review many aspects of knowledge worker productivity throughout my book, using my turnaround transformation experience of what actually works, and then backing up the areas I can with the underlying social and scientific research. Until corporate leaders understand the "human infrastructure" as well as the processes and technology, we will waste significant amounts of human capital.
Frank Wander
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Frank Wander,
User Rank: Apprentice
3/13/2013 | 2:38:36 PM
re: What’s Driving IT’s Record of Failure — And What Can Fix It?
The outcome is the objective, and there are many elements necessary to create a good one. We need to value all of them. Process is very important, and a positive legacy of the industrial era that we must embrace and rely on. Nevertheless, people create both good and bad processes, and we've all seen both. So, at the level of outcomes, people are integral to creating finely tuned and thoughtful processes. If the people component is broken, then even the "process creation" outcomes will be sub-optimal, requiring the investment of additional capital, i.e., beyond the customary optimization work. Regarding the talent itself, our outcomes are much more diffuse today, because we treat people as interchangeable parts, and have cultures that are literally toxic to knowledge worker productivity. Few companies continuously improve both their culture and pool of talent, which is the only way to create a truly high performing organization. Collectively, we are far too heavily influenced by Wall Street's short them thinking, which has proven highly destructive in my honest opinion. So, I often hear the term "high performing organization" bandied about, but in most places, it can't be true. We must reinvent the world of work to unlock the full potential of our workforce. Let's not focus on whether people are present, but rather make sure they are in a productive state of mind; let's worry less about alignment, but rather ensure there is open, honest, and meaningful collaboration across both business and IT; let's not treat people as an expense, but rather as an asset that must be grown; let's stop embracing outside experts, but rather embrace our own people. Let me end by saying the insight about "input versus output' is excellent. The industrial era was output driven, while in the case of knowledge workers, it is the inputs that matter.
Fnalbergo
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Fnalbergo,
User Rank: Apprentice
3/12/2013 | 9:48:49 PM
re: What’s Driving IT’s Record of Failure — And What Can Fix It?
The psychologist Jonathan Haidt has been working on a very similar line of thought as Mr Wander. Haidt joined New York University Stern School of Business in July 2011 which may have been a weird thing for an evolutionary psychologist to do 10 or so years ago but not today. I recently listened to a RSA podcast where Haidt spoke about his most recent work. He referred to the research of the economist Elinor Ostrom - successful groups require strong group identity, consensus, consistency, autonomy and fast resolution of conflicts. He also said, "An organization that takes advantage of our hivish nature can activate pride, loyalty and enthusiasm amongst employees and monitor them less closely. The bonds of trust mean more gets done at a lower cost than in other firms. Hivish employees work harder, have more fun and are less likely to quitGǪ they are team players.Gǥ

Ostrom won the Nobel Prize in Economics in 2009. I believe this is the work Haidt was referring to (from Wikipedia):

Design Principles for CPR Institutions

Ostrom identified eight "design principles" of stable local common pool resource management:

Clearly defined boundaries (effective exclusion of external un-entitled parties);
Rules regarding the appropriation and provision of common resources that are adapted to local conditions;
Collective-choice arrangements that allow most resource appropriators to participate in the decision-making process;
Effective monitoring by monitors who are part of or accountable to the appropriators;
A scale of graduated sanctions for resource appropriators who violate community rules;
Mechanisms of conflict resolution that are cheap and of easy access;
Self-determination of the community recognized by higher-level authorities;
In the case of larger common-pool resources, organization in the form of multiple layers of nested enterprises, with small local CPRs at the base level.

These principles have since been slightly modified and expanded to include a number of additional variables believed to affect the success of self-organized governance systems, including effective communication, internal trust and reciprocity, and the nature of the resource system as a whole.

Ostrom and her many co-researchers have developed a comprehensive "Social-Ecological Systems (SES) framework", within which much of the still-evolving theory of common-pool resources and collective self-governance is now located."

Poteete, Janssen, and Ostrom (2010). Working Together: Collective Action, the Commons, and Multiple Methods in Practice. Princeton University Press
chet777
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chet777,
User Rank: Apprentice
3/12/2013 | 5:28:47 PM
re: What’s Driving IT’s Record of Failure — And What Can Fix It?
One role that I see greatly missing is that of Consigliere (from The Godfather.) This is someone that is willing to say what people need to hear, not what they want to hear. This role advises and counsels as an elder statesman and has no political aspirations. Their advise is "neutral" in that it does not favor a side or agenda.
jslavinski281
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jslavinski281,
User Rank: Apprentice
3/12/2013 | 10:56:26 AM
re: What’s Driving IT’s Record of Failure — And What Can Fix It?
"Human infrastructure"...Very cool way to frame it Frank. So, so true. This is all about putting people first and using our strengths as leaders to help eliminate the obstacles that get in our teams way to enable THEM to be successful!
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