You say the lean manufacturing consultants have been through and squeezed all the fat out of the production departments? You say the business process re-engineering department went through the rest of the company and squeezed a bunch more? You say the CEO laid off a thousand productive employees to send a message to Wall Street, and now, everyone else is working sixty hour weeks just to keep everything running?
And you say the executive team woke up to discover another company is eating your lunch because they’ve modernized their product line while yours has been coasting for five years? And there’s nobody left to develop a competitive product because you’ve discovered “lean and mean” really means emaciated and unpleasant?
Is that what’s troubling you, bunky?
You aren’t the only one. In one form or another, lots of companies are discovering that “lean and mean” means there’s no spare capacity to deal with unexpected situations, let alone the expected situation of the business’s need to continually evolve to adapt to a changing, competitive marketplace.
CIOs are in a sensitive position, because while IT experiences financial pressure in good times as well as bad, application development and support is an expected component of even the thinnest IT budget. The problem is, it’s always about business change, not software delivery, and when the desired business change fails to occur, everyone will blame IT no matter what actually went wrong.
What’s a CIO to do? In a word, influence.
Which is to say, the CIO can’t do anything other than suggest a solution for the enterprise, which is to stop squeezing quite so hard. In the era of lean and mean, companies need to make explicit the business change budget.
Build this into the IT governance process. Any project proposal should pass five filters before it’s even considered for scheduling:
- It must have a business sponsor. Even better — establish a one-hour business sponsor “process briefing.” (Whatever you do, don’t call it a training session or nobody will show up.) Even executives and managers who have sponsored projects in the past should receive the briefing once, just before the next project they sponsor, because this is a new set of ground rules.
- The affected business areas must sign up for the claimed benefits. Making IT commit to business benefits is as ridiculous as it is common.
- Every area that will incur costs must sign up for the cost estimates related to their part of the change effort. IT must sign up for the cost of software delivery, of course. The affected business areas must sign up as well, for all of the costs they’ll incur related to the change. That includes the cost of assigning staff to the design effort, just as much as it includes the cost of remodeling, should a change program require that.
- The proposal must have a staffing plan, both for IT and for the affected business areas. During the screening process it’s enough to express this in terms of number of people and percent commitment, but before the project is allowed to launch, these abstract budgets must be replaced with names.
- The proposed project must at least be consistent with business strategy; better, it should help advance achievement of the strategy in a realistic way. (Note that any manager with two brain cells to rub together knows how to write the obligatory paragraph asserting the strategic relevance of whatever pet project he or she is proposing, up to and including replacing the tires on his or her car.)
What does this all have to do with overcoming leanness and meanness? Go back to the middle, where it talks about signing up for the cost estimates. For this to work, business managers will have to budget enough staff to support their business change efforts. “But all that will happen is that the CEO and CFO will cut that out of their budget,” I can hear you object.
Yes, that might happen, especially in the era of lean and mean. You can’t prevent that. No process in the world can overcome bad executive business judgment. What you can do is put a spotlight on the issue. It’s one thing to say, “We expect you to find enough efficiencies to run your area with 5% less budget than last year.” It’s quite another to say, “We expect you to execute a change program with no staffing.”