A few weeks ago, CEB and Andrew Horne were quoted in the Financial Times, explaining that a growing share of “shadow spending” should not be seen as a risk or threat, but a sign of innovation from business-partners.
While many CIOs agree with this point of view, the same can’t always be said for more junior IT employees, as some of the (very forthright) comments on other news sites show.
Leading CIOs recognize that they must change their teams’ outlook. They educate their IT staff on when to encourage business-led technology experimentation, when to intervene, and when to stand back.
The Three-Step Plan
We spoke with the CIO of a leading manufacturer who, in three steps, managed to shift his IT employees’ outlook to one that was much more willing to support business partners’ technology experiments (for CEB CIO members).
Help IT employees understand what matters most to business partners: Create roadmaps of business capabilities before technologies, and share these roadmaps with frontline IT staff. Business capability roadmaps help IT employees understand what their business partners must do to meet their objectives.
For example, rather than having discussions about business partners’ need for “Skype video calls,” frame conversations about “a need for better collaboration between remote employees”.
Educate IT employees on the risk and reward of changing capabilities: Categorize business capabilities by the risks and benefits of making changes. The segmentation results in categories such as:
- Capabilities of Record which are core to business operations but not differentiating.
- Capabilities of Engagement which support customer and employee engagement (this category is described in detail in Geoffrey Moore’s book on “Escape Velocity“).
- Capabilities of Productivity which mediate the way employees work.
- Capabilities of Insight which relate to analysis and reporting.
Describing these segments is an effective way of changing the “shut-it down” mentality that some of your IT employees may have, as they can clearly see the value of the technology projects that their business-partners are experimenting with.
Define when IT employees should get involved in business partner-led technology experimentation: Show IT employees when it is – and is not — appropriate for them to get involved with business-partner led technology experiments. By using the risk and reward framework, CIOs can show IT employees that for capabilities of record IT should get involved early because the risks related to changing the capability are high while the benefits of making a change are relatively low.
In contrast, IT employees can be a lot more hands off with capabilities of engagement. The risks of changing these capabilities are low and the potential benefits high, so business partners should have the freedom to experiment.
Educating IT employees on the value of business-led technology experiments and enabling them to balance risk against reward enabled this manufacturing organization to increase the amount of experiments that reach scale. In fact, over the course of two years, IT increased the amount of money spent on capabilities that matter most to the rest of the business (engagement, productivity and insight) by over 50%.