In my last article, Don’t Let Vendors Drive Your Strategy, I talked about the dangers of letting the agendas and targets of industry analysts and vendors influence and shape the strategic direction and priorities for IT within your organisation.
As a CIO, your priorities should be set by your organisation’s priorities, and your IT strategy by the business strategy; not by an analyst’s report or a vendor’s sales drive. Furthermore, your strategy should be multi-year and should only be updated or revised as your business strategy changes.
But what if your organisation doesn’t have a business strategy? Or at least hasn’t documented its strategy?
In a recent article titled Strategy and the Uncertainty Excuse for Harvard Business Review, Roger Martin explained that many companies cite uncertainty as the reason why they cannot or will not do strategy. He argues that while such companies use uncertainty as an excuse to put off making strategic choices, their competitors may well be developing a strategy that will give them a competitive advantage. According to Martin companies that use the uncertainty excuse are often taken by surprise by developments in their markets yet claim there was nothing they could have done about such changes hence any failure was not their fault.
Martin also quite correctly points out that in reality every company has a strategy, regardless of whether it has been defined and documented as “the choices that it makes on a daily basis result in the company operating on some part of the playing field (i.e. making a where-to-play choice) and competing there in some fashion.”
However, if this strategy is not formally defined, documented and understood across the business then there is the risk of “numerous daily choices having no coherence to them, of being contradictory across divisions and levels, and of amounting to very little of meaning.”
A recent study by Gartner supports this view and demonstrates the direct impact that a lack of business strategy has on the IT department. One of the key conclusions of the Gartner research is that IT effectiveness is lower in enterprises where strategy is unclear or inconsistently executed. Without a clearly defined strategy a business cannot effectively prioritise its change initiatives or investment. And Gartner claims that this will impact the IT department in two ways: “1) IT will face overwhelming and increasing demand, and 2) executives will be dissatisfied with investment decisions and IT’s role in those investments.”
So the absence of a defined business strategy can be damaging to an IT function and the reputation of the CIO in two ways. Firstly it is impossible to develop a long-term vision, strategy and roadmap for IT, which makes demonstrating the value and contribution of IT and the CIO very difficult. And secondly, it generates negative sentiment towards IT from the rest of the business as IT cannot meet all of the demands made of it.
Whilst this creates a very challenging environment for the CIO, it also creates an opportunity for them to prompt their C-suite colleagues to think about strategy, to facilitate a process that leads to the definition of a strategy or even to take the lead in its production.
I have successfully used all three approaches at various times in my career and this has helped me position the CIO role as more than just the technology leader within the organisations where I have worked.
So whilst the lack of a business strategy can have a significant impact on the CIO it also provides the opportunity for us to continue to evolve our role to being business leaders.