by HPA Senior Advisor Bob Kaplan
The relationship between the IT function and business unit leaders should be a close one built on trust and cooperation. It’s vital given the need for continuous operational improvements, digital transformation on key business processes, improved data analytics to drive business decisions, and the ever-present threat of cyber incursions. And yet, as a former CEO, CIO, and longtime management consultant, I’ve frequently seen dysfunctional relationships between the IT function and senior business unit leaders, often to the detriment of the organization as a whole.
At their most dysfunctional, these teams struggle to align their objectives and priorities. This disconnect is almost understandable: On the one hand, you have business teams tasked with driving revenue, growth, and customer satisfaction. They tend to be results-oriented and operate within the broader context of rapidly changing markets and competitors’ actions, that demand quick and continuous adaptation. On the other hand, IT teams, in addition to dealing with constantly evolving technologies, are responsible for operational infrastructure, data protection and security, and tech-enabled innovation (among a long list of other functions). They’re expected to provide stability, security, compliance, and strategic innovation. Add poor or non-existent communication and you’ve got a recipe for failure.
But IT and other business functions need to understand each other. Understanding this divide, including the reasons behind it and how to turn it around, is essential to creating a productive and collaborative working relationship, and a thriving organization.
So, what’s causing this tension in the first place? It comes down to roles, goals, and communication.
Today, everything is touched by technology, so it’s crucial that IT and other business functions have a healthy relationship. To build that relationship up, companies need to identify and change the behavior that causes dysfunction. In our experience, these are the most common areas of disharmony and a few ideas on how to turn unconstructive behaviors around.
1) Lack of comfort with uncertainty
Technology is dynamic, rapidly evolving, and somewhat unpredictable. It is inherently uncertain and lacks precision given continuously emerging technologies, trends, and threats. Business leaders must accept uncertainty so they can facilitate an adaptive mindset that makes it easier to navigate unforeseen challenges. They must also be part of the decision-making team that calls the shots when unexpected issues arise during a large-scale implementation.
Additionally, multi-year IT projects cannot be planned with the same approaches as other more predictable operational projects. IT is best served by ensuring a dedicated project management office (PMO) and processes, separate from a corporate PMO. Financial leaders must get comfortable with banded estimates of costs and stop insisting on point estimates and rigid ROI projections. If we applied the approach many companies take to IT projects to initiatives like the space program, we would never launch another satellite.
Here are some turnaround tactics:
- A good place to start is accepting that there is uncertainty with IT projects. IT teams should put together processes that recognize uncertainty is a large factor in getting the work done and is a huge part of innovation.
- To make that uncertainty less uncertain, IT teams should commit to educating and giving context to what is causing unexpected hold-ups or outcomes in IT projects. Transparency helps business teams understand what’s going on, what’s controllable, and what isn’t. This gives business leaders concrete scenarios and options so they can make informed choices.
- Embrace the concept of minimal acceptable functionality: As IT projects progress, it’s common for project scope to drastically change without timelines or budgets being adjusted accordingly. IT teams should be rigid about what the functionality looks like and stick to it – it’s important to be disciplined about project deliverables.
2) Lack of understanding of IT
Many business leaders don’t pay much attention to or feel responsibility for their IT functions. They also show little interest in working with them to enable strategies that could benefit the business and clients. I once had a Fortune 500 CEO say to me that he “just didn’t get IT.” He would never have said this about Marketing or Finance, and yet felt no problem admitting his indifference to his IT team.
This is an enormous mistake. IT is not simply a support function, and understanding this team’s broader value and impact will help business teams communicate more effectively with their technical counterparts to facilitate collaboration, minimize misunderstandings, and accelerate project delivery. More deeply, becoming familiar with IT capabilities and processes allows business teams to make informed decisions regarding technology investments, and it helps them understand all potential outcomes of IT initiatives so they can prioritize projects that best serve the organization’s growth and profitability.
Here are some turnaround tactics:
- Business unit leaders need to spend time reading about and understanding technology. Get to know your company’s most important hardware and software vendors and leverage their educational resources to become aware of what’s going on with their technology and services. It’s a time investment, yes, but having a baseline understanding of technology can foster innovation and agility, enable leaders to identify opportunities, and help them drive efficiency, growth, and resiliency in a today’s tech-centered world.
- Technology is constantly changing, so staying informed is an ongoing commitment that can be challenging and time consuming. That’s why having the right people in place who can explain technology in terms that make sense is important. In other words, you need someone who can act as a translator between the server room and the board room.
3) Lack of communication
An absence of effective communication is not uncommon in large organizations. Sometimes, it’s as simple as teams being mentally siloed, focusing solely on what’s in front of them. In other cases, business teams may not be able to fully articulate what they need from an IT team, wrestling with tech-savvy terms. On the flip side, IT may find it challenging to get a grip on the broader strategic context of a business or initiative. This lack of mutual understanding can result in misaligned expectations and missed opportunities, project delays and budget issues, and even losing a significant competitive advantage in the market.
Here are some turnaround tactics:
- Typically, business units provide leadership with monthly update reports that contain the typical slide decks and progress updates. These may work well for other functions, but it’s difficult to get across the subtleties of an IT project in this format. Decision-making is a nuanced process that requires discussion and input from business unit leaders about balancing goals with value. The IT leader’s report might say, “I’m not sure we’re going to hit the timeline.” But sitting down in the same room and talking about why and negotiating trade-offs can yield faster, better outcomes. It comes down to one-way communication versus two-way, real-time communication. Open two-way dialogue is priceless.
- When IT teams provide updates to business unit leaders, they should provide leaders with the information they want instead of what the IT team wants to give them. Tailoring reports to each business unit leader and their understanding of IT can help get the right information across. Some IT groups even have liaisons or business relationship managers to help facilitate these communications.
HighPoint Associates is very experienced in dealing with uncertainty, and we have various models on how to navigate it. If your company needs an effective, honest broker between your IT group and business leadership to enable effective conversation that leads to understanding and action, give us a call.
Bob Kaplan is an HPA Senior Advisor with over 35 years of experience as a senior executive and management consultant. A former Managing Partner at BCG and Senior Partner at McKinsey, Bob currently counsels CEOs and other senior executives on strategy, technology, and organizational issues. Bob has held CEO and CIO roles for multiple organizations, including Motif, ITM Software, and Silicon Valley Bank. He holds an MBA from the Stanford Graduate School of Business and a BA from Yale University.