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We’ve been talking about ITaaS — IT as a Service, which doesn’t mean an IT organization that lives in the Cloud, and does mean an IT organization that runs itself as a separate business that views the rest of the enterprise as its internal customers.

Which means with ITaaS you have broader responsibilities than the head of a business division or department. Starting with the past two weeks’ topic – deciding on your business model, of which we covered about half the ones on my list. To continue … and let me emphasize, I’m not saying these are all good ideas. I’m not going to even try to connect these to anything IT might want to pursue — I’ll leave that to your imagination. But they are common business models, so what the heck:

    • Size/growth. Whatever it takes to get bigger. The usual end-game is to dominate a market or distribution channel to the point that doing business with you is either unavoidable (de facto monopoly like Microsoft with desktop Windows and Office) or just a lot easier than the alternatives (Amazon).
    • Do the deal. Live to sign big, interesting contracts. This is an entrepreneur’’ business model. Think Donald Trump and Ross Perot. It’s a business model for people with chutzpah. Not for the faint of heart.
    • Amoeba.  Try a bunch of stuff. Do more of whatever sells and less of whatever doesn’t. This is just the ticket for entrepreneurs who are too prudent to base their futures on doing big deals. Big-deal entrepreneurs will say “risk-averse” or something stronger rather than “prudent,” but they’re pretty much the same thing.
    • Landlord/Tenant. Also known as the Hollywood Studio Model. You provide facilities for entrepreneurs, internal or external. They take most of the risks; your risk is that they might not succeed well enough to pay the rent.
    • Return/profit. Whatever it takes to improve the bottom line. Not a good idea, because it encourages business leaders to take their eyes off the ball. Profit should be a consequence of the business model, not the model itself.
    • Shareholder value. Whatever it takes to drive up the stock price. You know that eyes-off-the-ball thing? Focusing on shareholder value makes focusing on profit look like a good idea.
    • Wait ’em out. Sure, your marketplace has changed. But if you batten down the hatches and hoist up the landlubbers, maybe big competitors will die first and you can inherit their customers, thereby putting off the inevitable. Think Best Buy, inheriting Circuit City’s customers, thereby looking like it was succeeding even as it was becoming little more than “Amazon’s showroom.”
    • Charybdis. The business spiral of death, aka “eating the seed corn.” Revenues are declining. Rather than fix the problem, cut costs enough to maintain profit margins. The business will fail, but you’ll pocket enough bonuses to retire in comfort before the inevitable happens.
    • Find a buyer. Give up. Suck in your gut, put on lipstick and makeup, and find someone with a lot of cash to take you in and give you a nice home.

There you go. If you want to head down the ITaaS path, ask yourself: Just how seriously are you going to take the idea that you’re running a separate business? If you mean it, start with the business model. If it’s just a metaphor, you’ll have to decide how far you’re going to take it.

Which gets to Mike Riddle beating me to the punch on a couple of points he made in last week’s Comments, namely: “If it is really going to be ITaaS, then it must be subject to market forces:

1) It must compete with outside vendors to keep its business, and

2) It must be free to sell to outside business. If it cannot, then the separate run as a profit making unit fails because it is not allowed to develop a full market.”

Yup. If you’re serious about running IT as an independent business, the rest of the business is going to want you to compete with outside vendors for their trade. Then there’s the other side of the coin, namely, that you’ll be dividing IT’s time between the rest of the business and other corporate customers.

Oh, and one more thing — you and your staff will have to get into the habit of responding to the various informal requests for favors you all get from your non-IT colleagues every day, “I’ll be happy to do this. Here’s what it will cost.”

They’ll love that.

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|In: Cloud|Last Updated:

I have a new set of hearing aids. In the instruction manual, well before the explanation of how to change amplification and programming, is this:

You are not allowed to operate the equipment within 20 km of the centre of Ny Ålesund, Norway.

There’s no explanation for the rule, just the fact, which is why my wife and I were briefly tempted to burn some frequent flier miles, just to break it.

But cooler heads prevailed. Actually, colder heads — we live in Minnesota, which we figured is bad enough (Google Maps reveals Ny Ålesund is on an island roughly 1,000 km due north of Lapland).

Which gets us to another disadvantage of relying on policies, standards, and enforcement to make sure how you want everyone to do things around here becomes how everyone actually does do things around here, beyond those mentioned last week: You have to explain your reasons, which makes your policies and standards burdensomely long. If you don’t, you’ll tempt employees to violate the ones that make no apparent sense, just to see what happens.

Changing the culture simply works better. When enough people internalize how we do things around here, peer pressure becomes your primary means of enforcement.

How to change it? You’ll find a detailed account in Leading IT: <Still> The Toughest Job in the World. Glad you asked.

The short version is to change your own behavior, because culture is the learned behavior people exhibit in response to their environment, and leader behavior is the dominant aspect of their environment.

Before you do, you have to describe the culture you want, and there’s a gotcha. The temptation in describing “how we do things around here” is to be procedural: “When someone contacts the service desk, we first identify the caller, next assign a ticket number, then get a description of their issue,” and so on.

But culture isn’t a matter of procedure. It’s a reflection of shared attitudes. Your behavioral description of culture should reflect this — something like, “When someone contacts the service desk we assume they’re experiencing a real problem, and we take ownership of it.”

<SnideComment>Given my experience with service desks, and in particular with my current mailing service after many subscribers received five copies of last week’s column, I’d say this would represent a radical cultural shift in far too many.</SnideComment>

To change your culture you have to describe both the culture you have and the culture you want. You have to figure out what about how you currently behave results in the culture you currently have, and how you’ll need to behave to get the culture you want.

If there are other managers between you and the employees whose behavior you want to change, you have to pay close attention to how those managers are behaving, how you want them to behave, and what you have to do so they’ll behave that way.

A few subscribers asked if there’s a way to change the culture quickly.

The answer is yes. Actually, there are two.

The first is to lay off a significant number of the employees you have and hire to the new culture. It’s unpleasant to say the least — unpleasant for you, more unpleasant for the surviving employees, and … and I hope this is obvious … even more unpleasant for the dear departed.

Although to be fair, on the pleasantness scale the employees you hire as replacements might very well find the change quite positive, all in all.

Anyway, massive layoffs are quick-culture-change tactic #1. The second one is slightly less draconian — fire all of the managers whose behavior seems to be driving the old culture and replace them with managers who seem to have the attitude you’re looking for.

Yes, it’s ugly. No, I don’t generally recommend it. But if you need to turn around a seriously dysfunctional culture quickly, this is your most efficient alternative.

Start with the ringleader, and perhaps his/her chief acolyte. Reason #1: Fire all the managers at once and the disruption will be too great. Reason #2: Persuading HR to go along will be a challenge. Reason #3: Do you really want to be that kind of person? And most important, Reason #4: Once you’ve fired one or two, the rest will usually figure out you’re serious and change their behavior to match what you’re looking for.

And, in case this isn’t clear, you still have to change your behavior (and attitudes) too. Otherwise, the culture will gradually revert back to the one you say you don’t like.

And you’ll have to go through the unpleasantness all over again.

* * *

Four years ago in Keep the Joint Running, Gartner predicted that in just two short years, 20% of all companies would have no IT assets of their own — it will all have moved to third parties and the cloud. KJR’s rebuttal was suitably pungent.

And eight years ago you read about a popular technique for manipulating people.

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