Organization Transformation - Does IT & Process Transformation need to be coupled?

In there attempts to be competitive, organizations continue to re-invent themselves. This transformation involves organizational changes as well as IT changes to support the organization change. The million dollar question is as to whether these two need to happen together or if they can be (and should be) decoupled. While coupling the IT initiative with an initiative to change the Organization could be an issue, more often than not the issue is the difference in priorities that the IT (CIOs) and Business has (COO). Having said that, it may not always be possible to de-couple the IT Initiatives from Organizational changes. A typical organization transformation project would involve process rationalization & process standardization. While it is possible to take baby steps towards rationalization & standardization without significant changes to the technology environment - it is easier to roll-out improvements / re-engineered processes if the various units / geographies are on a rationalized application system environment. The challenge in decoupling system rationalization from process rationalization and doing them sequentially is the length of time such a project might take. By the time you finish such a project - either the technology is obsolete or the business process no longer offers any unique advantage over competition. I am not advising a Big Bang transformation though. That typically ends up being more than one can chew - and a classic disaster. I do recommend dividing projects in phases based on functional / geographical areas rather than separating the business and IT changes. To ensure that the business users do not reject change - its important that they be involved through-out the life-cycle of the project. There are various means & methodologies to do so -- either use the 'agile techniques' or something like the Conference Room Pilots that the traditional ERP implementations had. The challenges are Define and finalize a scope that ensures short cycle time. Avoid scope creep. Ensure that all geographical / business unit are represented and deviations are accounted for -- else this becomes a never ending cycle Ensure representation from all levels of the organization. There could be a difference of opinion in the business operations team & the management team Most of these things are off course easier said than done. But if one addresses these issues - it is possible to undertake a successful transformation without feeling the need to decouple IT & Business Process change. The challenge is slightly different for an Organization that has standardized / rationalized its core applications and core processes. In such situations, the business typically seeks incremental improvements to help make better decisions. There are two types of challenges one sees in this environment The IT focuses only on "Keeping the lights on" and has no man-power / budget allocation to undertake the business initiatives The IT insists on 'standard' application set with its sweet implementation cycle instead of the quick & dirty utilities that the business demands. The business might be happy working on incremental VBA utilities but the IT wants its ESB & SOA and may-be a standardized ETL connecting to a data-mart in the central data-warehouse. It is in scenarios such as this - that the business demands should be decoupled from IT strategy. It might help to let the business have their quick & dirty utilities - thus allowing them to respond to the market sittuations in an agile fashion, so long as there is a defined plan to roll back these utilities into the standard environment.

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The Innovative Mindset

The inter-webs seem to be more & more buzzing about the need to innovate. Fail to remember who, but some eminent personality said that organizations can sustain both profitability and growth only if they innovate. This was also the constant refrain in the recently concluded NASSCOM India Leadership Forum. Business leaders tend to have taken this to heart and there continues to be talk about Organizations imbibing innovative culture. While that’s a great statement to perhaps pay lip service to, it needs lot more that for any organization to actually start innovating. So what is it that stops Organizations from innovating? The short answer – Organizations do not realize the need to be innovative because either their survival is not threatened or they have not realized that its threatened. The ones that realize the need to be innovative fail to be innovative because they don’t realize that it needs to be an inherent attitude rather than a imposed or integrated culture. I would like to elaborate this by looking at three different aspects – defining innovation, defining organization culture and then coming back to the defining what creates an innovative mindset. I guess most people limit innovation to mean ‘inventing new things’. However, Matsushita (National) apparently made great business out of selling products that they had not invented but had successfully reverse engineered. Ranbaxy’s (India) recent deal with Astra Zeneca indicates that this model still works. Is ability to reverse engineer somebody else’s idea innovation? I would like to take the perhaps controversial stand that it is. Is iPhone an innovation? Isn’t it just another MP3 player bundled with a Cell Phone? Innovation not only is finding new product / service but also encompasses delivering it better / faster / cheaper and for wider audience / purpose. Each of this sub-type of innovation requires a different organization mindset. So, then what really is an Organization’s mindset or culture, if you will? And does it really remain the same through the organization’s life cycle? If you take a moment to consider Chrysler or may be Apple (Macintosh) or even IBM, it becomes even more obvious that the answer to the later question is a resounding no. Let me conclude this thought with a rhetorical question - do Google Engineers today spend the same average time (per Engineer) on personal projects as Google did say 3 yrs ago? So while it may not stay constant, the organization culture at any given span of time is, largely driven by the leaders and, by the size of the organization. Traditionally multi-nationals have ensured that the essence was carried across by having managers from home countries being deputed to manage local units overseas. Of late, these ex-pats are being replaced by local initiates who have been trained at the central temple – corporate head-quarters and who are then deputed back to their own countries. So the founding nation’s culture does tend to heavily influence the Organization culture – as is glaringly obvious when one contrasts a Toyota to a Ford. On the other hand, while these senior managers try and inculcate the same culture (from the central temple) across the organization but they may not always be able to percolate this message down the hierarchy. Do Google Engineers in US, India & Australia spend the same amount of time on personal projects? I do not know the answer – but I like to think not. But assuming that one can mould the culture of an organization – how does one get into an innovative culture? Spare a moment to think about GE, 3M, Microsoft, Google and Apple culture. While they all innovate and perhaps have a few things in common in their culture – they definitely do not have the same culture. But they all innovate – don’t they? So really – there is no one culture that sustains innovation. Organization tends to either have a mind-set to innovate or not – and its probably driven by a lot of factors such as which stage of lifecycle the organization is in (monopoly vs. commoditized services) , the market conditions, the geography it operates in and last but not the least the management team’s priorities. To hark back to what I started with - Academicians in India often cite examples of innovative use of making Butter Milk (churn using washing machines), lathes & other m/c tools soldered and fixed in road-side shops, transport assembled from water-pumps, water pumps run by bi-cycles and I could go on and on. Each of this innovation is driven by adversity. Most people (and most companies) innovate because they cannot survive if they don’t innovate. So perhaps the biggest challenge that companies have in getting into an innovative mindset is that they are not threatened enough. No doubt 3M would have still been a leader if they hadn’t invented Post It notes. But if 3M kept making abrasives (only) as it did before 1925 – would it have survived so far? Having decided to innovate – guess the next important challenge is to be able to innovate. This can be fostered only if the organization has sufficient diversity to be able to think different possibilities and solutions. Unfortunately most managers tend to hire people who are like them – limiting available diversity in the organization. Irrespective of which thinking methodology (Blue Ocean, Six hats etc) one uses – no new ideas are going to come up unless you have people who inherently have different view points on the same issue. Apart from the two big challenges of (lack of) adversity & diversity – there is the lack of openness which throttles the innovation. Most organizations hear what their employees have to say – but do not listen to them. Organizations need to give appropriate importance to the employee opinions. Finally this mindset to innovate will lead to results only if the organization can put a discipline around filtering ideas, prioritizing them and ensuring that the ideas are driven to closure / implemented.

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