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|In: Leadership|Last Updated:

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.”

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|In: Leadership|Last Updated:

According to the laws of physics, the strength of forces such as electromagnetic radiation declines as the square of the distance from the source, since they have to cover the surface of a sphere whose radius is the distance from the source — an area, which is why the distance is squared. Since the universe might actually have more dimensions than the four accounted for in classical and relativistic physics, other forces, which interact in these dimensions as well, might decline even more rapidly.

But no physical force declines in influence with distance as rapidly as the remote offices of an average business. Sometimes, all it takes is an elevator ride to reduce influence to negligible levels.

Awhile back I wrote about the “proximity trap” — a pitfall in which those closest to you have the most influence on your decisions. Even with the best of intentions, the inconveniences resulting from physical and time-zone differences can circumvent effective communications, especially when compared to the ability of those close to you to buttonhole you in the hallway or sit down with you for lunch in the company cafeteria.

What I didn’t write about was what to do about it, as several correspondents pointed out. So here’s the first step in avoiding the proximity trap: Remain aware of the hazard.

This is more easily said than done. In any aspect of our lives, most of us, most of the time, unconsciously give the information we do receive more of our attention than the information we don’t receive. The legendary example of the pre-Iacocca Chrysler corporation is instructive: Faced with marketing surveys demonstrating the American public’s desire for small, fuel-efficient cars (okay, it’s a very old example!) the Chrysler executives asked friends at their country clubs whether any of them wanted to buy a small, fuel efficient car. None did, the executives rejected the survey findings, and Chrysler nearly went out of business altogether.

The Chrysler executives of this bygone era fell into the proximity trap — their golfing buddies had easier access than either the average car buyer or their marketing analysts. The result was basing a crucial business decision on information from a statistically biased source, which of course yielded biased results.

Often, your information will come from biased sources. You can’t help this, but you can mentally adjust for the bias.

Whenever you’re trying to make a good decision, pay attention to who you haven’t heard from on the subject. This is harder than it sounds. Imagine, for example, you’re wading through the pile of project proposals for the next fiscal year. Most corporate governance processes are designed to weigh the advantages of the various proposals received, to establish priority rankings for the enterprise. Relatively few look at the sources of the proposals to determine whether some constituencies are under-represented.

Look at yours. If you see a lot from headquarters but few from the field, or a lot from one or two field locations but few from any of the others, you know you have an issue. What to do about it? There’s no way of telling from your office. Leave your chair, leave headquarters, and find out.

Simple awareness can solve a bunch of proximity-trap issues. Take for example, an organization whose sales have collapsed. Faced with this problem, many business executives huddle at headquarters to brainstorm possible solutions. Let’s think hard: Shouldn’t they talk to their sales representatives? No, not their sales managers, their sales representatives. How many executives take this simple step? Not enough.

Here’s another example: How many times have you read in the newspaper that some elected official or other is going to eliminate waste in government? I’ve read it so many times I’ve lost count. Here’s what I haven’t read — that somebody is going to talk to a bunch of government employees, supervisors and middle managers to discover where money is actually being wasted. Instead, politicians argue about which programs to cut.

Sometimes, simple empathy is enough. If you find yourself in a discussion about some issue or other and what to do about it, look around the room and inventory the affected parties who aren’t present. When you have a chance, break into the discussion, list them on the whiteboard, and ask the assembled multitude what they think each of the missing might say if they were present. You’ll either get an answer or an awareness of the need to find out.

Even if there’s no time to ask the missing parties, second-guessing their ideas and attitudes is better than ignoring them altogether.

Not necessarily good, but better.

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