Acting as an Owner

“In looking for someone to hire, you look for three qualities: Integrity, Intelligence, and Energy. But the most important is integrity, because if they don’t have that, the other two qualities, intelligence and energy, are going to kill you.” – Warren Buffett

Departmental managers will undoubtedly be biased towards retaining the best people within their respective teams. Under these circumstances, resource allocation decisions tend to be overly focused at the tactical level. Due to the inherent conflict of interest regarding human capital resource allocation, it is recommended that authority regarding hiring, training, transfer and termination decisions be shifted away from the departmental level. These decisions are best made by a strategic advisory team headed by the CIO where the long-term objectives of the I.T. organization can be best served. In order to guarantee the impartiality of the group, it must be comprised of individuals that have no direct management oversight of the functional areas.

Motivating leaders is critical and must be done early on. One of the most powerful ways to foster leadership is to tap into people’s volunteer ethic. Regarding managers with integrity as volunteers encourages their willingness to do well. The traditional leadership promotion model is flawed in that it is usually ineffective towards retaining talent within the company. The overuse of the promotion model is counter-productive towards the goal of recognizing and rewarding integrity displayed by a leader. These individuals are usually motivated best through a trusting relationship with their leader. While compensation is an important ingredient in retaining good leaders, it cannot insure commitment and service longevity by itself. A leader that is provided with responsibility, authority, trust, and fairness, will provide diligence, honesty and commitment in return.

Effective managers should have general experience across different functional areas of the IT operation. Establishing a program that facilitates the attainment of this cross-functional experience will give selected individuals that exhibit desired leadership characteristics the opportunity to be fully exposed to each area. The time spent in each area should be no less than one year. This requirement will establish the level of commitment that would be expected of such individuals and will provide ample opportunity to observe character traits in different situations.

Setting a minimum service term that must be met before subordinate promotion can be considered is an effective policy to counter self-serving managerial behavior. This policy also produces the desirable side-effect of encouraging manager cooperation amongst peers.

It is important to nurture a leader by encouraging an attitude of ownership. The “Act as an owner” philosophy can be a revolutionary concept to a new manager when importance and focus is placed on controlling costs and improving business revenues. A pervasive ownership culture will simplify managerial effort by eliminating the need to provide continuous oversight. The Minimum Specification approach can be utilized towards this end as a set of simple guidelines to help influence the manager to behave in a way that is aligned with the best interests of the company.

A man doesn’t learn to become a leader in one day. The law of farm tells us that it takes time and experience to develop the vision of “acting as an owner”. When this vision is properly educated, departmental managers will only expand their teams after carefully considering the impact to the company’s bottom-line. Development managers will only commit development effort towards features that will add business value. Project managers will avoid the tendency to rush projects through the pipeline without questioning the reasonable purpose of the project. Such a vision motivates each of these leaders to take the necessary steps required to improve performance.

Measure It

Completing implementation project is one of the primary activities in IT operations. It ultimately steers the direction of the operation, good or bad. For senior management to be able to make decision on a project, we need informative and accurate facts. Realistically, company does make mistake, and sometimes they are not obvious. To avoid pitfalls in the past from happening again, we need to be able to see and to learn from previous mistakes.

We need a mechanism to help us identify such mistakes, and as well as decisions we made that were right. Defining success criteria can help, and the most important factor would be able to translate the figures to the financial numbers, whether they were savings or profits related.

Establishing metrics as success criteria in each project could help measure the benefits associated with a change event. Collective of measurements from multiple projects can help determine the overall total cost of ownership on a specific system. Return on investment can be interpreted at the system’s TCO, given that the analysis is done to interpret what systems made up the operation process that is revenue or risk driven. Total cost of ownership measurement includes the initial investment, maintenance upgrades, regular patches and other up keeps.

In practice, establishing ROI is somewhat of an art. To properly capture factual figures to represent the reality requires a deep level of analysis on how systems respond to the services that are directly tied to the revenue stream. The effort of establishing ROI requires an iterative approach that can help the manager to improve the accuracy over time.  Since each project is subject to scrutiny of revenue or risk justification, project initialization must be properly authorized and monitored by bodies that are ultimately responsible.

Project management team should be independent from development, QA, Support, Infrastructure, or other operational function. This will provide the project team with an unbiased perspective. One of the project management goals is to implement change that can improve business revenue which will have been documented clearly as part of the justification and approval process.

It is important to stress that completion of an implementation is only the first step in measuring a successful IT project. Reports should be produced regularly that provide visibility on the effectiveness of the implemented system. The metric used for measurement is usually added to the requirement to be implemented. In the end, a project cannot be considered successful if its benefits are not quantifiable.

If metrics are setup properly, any negative effects caused by production issues should be reflected appropriately. Overall performance effectiveness can be broken down by an aggregative major system, (e.g. Pricing, Accounting, Supply Chain, etc.)

All of these recommendations are aimed at providing general guidelines to establish a successful project that can be executed and measured. However, there are cases when a project might be ill executed. Such projects should be re-examined when projected cost of funds is depleted or milestone deadlines are not met.

After guidelines and concepts are established, a tool shall be put in place to facilitate and simplify process execution. Regardless of the tool chosen for this task (i.e. ClearQuest, MSF, etc.), the method should be standardized to avoid communication interruptions between departments.

True Value

An organization’s true worth is reflected, in time, by the long-term economic values. No matter what people may say in short term; the organization that can stand the test of time will eventually succeed. It is important to make informed decision base on fundamental values that can be proved and be measured economically.

It’s easy to come up with some ideas to improve operations relying on almost endless possibility of technological solutions. However, not every IT initiatives can improve the bottom-line of the business. We will have to be careful to choose and to decide what strategy can provide long term benefits to the company

The road that leads to great success is usually paved with a ton of mistakes. They are the natural process of making decisions. Experienced leaders can correct the mistake quicker, able to come around without losing the momentum, and continue taking the team to the promise land.

All managers need to believe in and commit to the idea and vision that is for the betterment of the company. When problems occur due to confusions and misunderstandings, they can act as the referees by interpreting the principle and applying it properly in the situation.

A great leader is measured by the economic benefit created during the era. To achieve such goal, the idea must be infested to all level of organization like a virus.

A Simpler Approach

“The business schools reward difficult, complex behavior more than simple behavior, but simple behavior is more effective” – Warren Buffett

Simplification of the process management function is the key to sustaining growth and maturity within the I.T. organization.  Breakdowns in ambiguously defined processes usually result in reduced organizational capacity due to bottlenecks that occur at points that require “crisis management”.

It is important to design and implement an effective organizational structure that will promote process improvement.  This can be accomplished through the implementation of specialized functional teams that are responsible for a particular aspect of our I.T. business process.

Team specialization promotes quality and consistency by allowing the team to focus on a specific area of responsibility. The method encourages team leaders to lead and teach by example which improves the work quality of all team members. Through repetition, better and more efficient methods of performing tasks can be learned and incorporated into the process.  Specialization also encourages standardization providing consistent performance across the organization on a specific functional subject area. New hires can also be benefited by following a set of baseline procedures which ensure minimum quality of service.

Organization by specialization encourages supporting and mentoring relationships between team members. Proper management behavior can shape how the team should work closely together. Management should emphasize team recognition over individual effort.  Just as the team is recognized for success as a whole, responsibility for failing to meet expectations shall be shared across the team as well.  If a project manager fails to perform, the entire PM team, including the team manager, shall be held accountable for not providing the necessary support to the failing individual.

Organization for Simple

While specialization is the primary characteristic when defining the construct of separate teams, it is important to promote knowledge sharing to avoid specialization within a team unit. Cross subject training is important. Take Project Management team as an example, if a commercial PM has expertise in implementing IP, Cash management, etc; his role should be exchanged with another Retail PM who can have exposure to the commercial related subject. This cross subject exchange may occur every 12 months or so.

Insuring that each team effectively contributes to the organizational objectives requires the definition of team mission statements and clear cross-team protocols and hand-off procedures.  Expectations and assumptions should be clearly understood without requiring extensive interactive communication and documentation.  Keeping the interfaces between teams simple and intuitive will increase the likelihood that the underlying processes will be adopted and embraced.  By focusing on team interfaces at a high level, a map can be formulated that will serve as a guideline and reference for insuring effective process management.

Once team objectives and cross-team interfaces are established, individual teams shall be given the autonomy to define internal processes.  Moving a process definition from theory into practice requires the specification of finite information requirements and deliverables that will serve as an instruction guide for team members. By focusing on process requirements at the functional team level, unnecessary tasks and communication can be eliminated resulting in improved manageability across the board.

Accountability for the successful implementation of improved practices within each functional area shall rest with each respective team leader. Establishing this level of accountability will create an environment where incentives exist to gather and utilize information and knowledge more effectively. Accountability will be coupled with empowerment and authority to promote practices and establish procedures that will improve efficiency.  Team coordination will be a critical component in creating smooth transitions between functional processes. In addition to creating and implementing team processes, team leaders will be responsible for insuring that their process is tightly integrated with adjoining and/or dependent processes.

Improve Quality

Development goes thru an iterative cycles of a process which has the following steps : creating hypothesis (or idea), implement the idea, test the implementation, and evaluate the test result with the end-user.

The end-result tends to improve over number of iterations. The more cycle we go through the process, the better of knowledge and experience accumulate. The development progressively becomes mature and concrete.

The process encourages quality improvement within a planned time box that consists of short iteration and high number of cycles. This is the principle that drives the exercise of eliminating unnecessary procedure and to shorten time required on necessary steps.