Imagine a football game without any set rules. A chaotic game where eleven players are running around in random trying to understand how to score and what is allowed on the pitch. Players moving on and off the pitch as the number of players allowed are changing all the time. In one second, the offside rule applies but in the next moment it doesn’t. The referees are carrying the goal posts around as they see fit. How do you become successful in this game? One thing is for sure – not by playing the old rules and with old tactics. The fact is that the business environment is moving more and more into a chaotic game without set rules. Digitalization is re-shaping the business environment faster and faster with higher degree of unpredictability. The rules of the game are undergoing constant and unpredictable change – and especially how to be successful. The winners are those abandoning the old rulebook (old management literature) and tactics (traditional planning) and acknowledging the new chaotic environment with high degree of adaptively, change and learning. Trusting the players to make the right decision when an opportunity for success is given. Still, a majority of companies play by the old rulebook and wonder why it doesn’t work. In most IT organizations, September is often the starting point for setting the plans for the coming year. In 9 cases out of 10, the planning process is based on the hypothesis of predictable business and IT environment and static customer behavior – with known market rules. Things are comfortable and stable. Strategic documents are briefly revised and the IT budget process is started up to fund the plans for the next year. A huge amount of KPIs are implemented to monitor the IT performance from every possible angle. Playing by the old rulebook in an imaginary business environment of stability and predictability. Adjusting the image of the business conditions to fit the structure of the planning process – and not the other way around – creating a fouls sense of security. My point of view is that there are three general flaws with the traditional IT planning process. The flaws are based on the wrong assumption that business is predictable in a slow changing way.
- Unpredictability: The digitalization of business is increasing the unpredictability. In many industries, it is difficult to foresee further than 6-12 months in the future (decreasing rapidly). Still, we based our strategic roadmap on the August situation – which will be obsolete by April! The remaining of the year (75% of the year) is just guessing and brings little or no business value. Planning is a continuous process constantly challenging the current strategy, plans and budget.
- Level of Trust: Nothing is more sensitive, from a IT management perspective, than the IT unit target setting. Often bonuses are linked to the achievement of targets and bonuses are seen as a tool to make managers to perform. There is a lot of talk about “leadership” and “trust” but when it comes to target setting – those nice words are nowhere around. It is often an act of “command and control” by senior managers that kills any innovation, value creation and spontaneity to the organization.
- Number of KPIs: IT organizations are often struck by the KPI disease with either too many, too few or wrong kinds of KPI not reflecting the strategic direction of the business and IT. There is no “golden” set of KPIs to be used. Endless time is used to monitor and analyze useless KPIs that have no relevance for the IT performance. IT organizations are generally given a fouls sense of security that shows an irrelevant picture without any connection to business value creation.
Unpredictability is often seen as something scary. Something that challenges our business existence and don’t follow the linear structure of logic that we have been taught. It is the unknown. But unpredictability is the “new normal” and demands new tactics and ways to be successful. Successful are those that can find a way to live with unpredictability and adapt to changes in an efficient way. Success is awarded those that leverage the cognitive abilities and mastering skills such as listening, learning, adapting and trusting. How do you carry out your planning process? Old or new rulebook? – Hans Gillior (email@example.com)