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|In: Industry Commentary|Last Updated:

Sometimes, being right is more misleading than being wrong.

I’m thinking of Nicholas Carr, writing in the Harvard Business Review that IT doesn’t matter anymore — in his view it has become so plentiful and commoditized that it no longer provides anyone with a competitive advantage. He is, of course, right.

In a wrong kind of way.

Imagine that every company has all of the information technology up and running that we read about in the industry journals. Their supply chains have “full visibility.” Their customer data warehouses and operational data stores are populated with terabytes of accurate, up-to-the-second information. Their customer service centers support communication across all customer-accessible channels, popping up relevant tidbits from the aforementioned repositories as needed.

Meanwhile, far from having islands of automation, the magic of web services and EAI provides full integration of their application architecture, seamlessly exposing a unified interface that masks the complexity of the underlying software while resolving all ontological incompatibilities.

Oh … I nearly forgot: The batch systems have been retired — all updates happen in real time.

Yes, if we lived in press-release land, Carr might possibly be correct. We might have reached the point of diminishing returns, and information technology won’t provide any further competitive advantage. Failing to invest in IT will, in this world of trade-journal fiction, lead to huge competitive disadvantages, but that’s a different story.

Except … it isn’t about information technology. It’s always about how business gets done. IT is an enabler of business processes and practices, not a separate and distinct provider of value.

Businesses either change or they fail. They adopt new strategies and reconfigure themselves to implement those strategies on a regular basis. They improve their internal processes and practices continuously and change their IT to support the improvements. Even for companies with the most flexible application architectures, adapting them to these business changes is difficult and time-consuming. IT fails and the strategy fails. IT fails and business improvement fails.

IT doesn’t matter? For this to be true, how you conduct business can’t have an impact on your success in the marketplace.

So even in the land of press releases, Carr can only be right if strategy doesn’t matter, and business processes and practices have reached optimization nirvana … there are, that is to say, no competitive advantages to be had, except, maybe, for who has the better advertising.

I once read a description of the perfect factory. It’s staffed by one person and one dog. The person is there to feed the dog. The dog is there to make sure the person doesn’t touch anything. To the best of my knowledge, nobody has yet built this perfect factory. When somebody does, factory automation will have achieved perfection, and Carr will be right, insofar as manufacturing IT is concerned.

Right up until the product that factory produces becomes obsolete. Then we’ll need some additional technology to assist with the process of reconfiguring the factory to handle whatever new product replaces the old one, and reconfiguring the network of suppliers that sends raw materials to the factory.

Imagine all of that becomes instantaneous and commoditized. Hey, it could happen. That doesn’t mean change now stops. It simply means it’s time for a new strategy — perhaps it will focus on the distribution channel; the business might decide to bypass its distributors and sell directly to consumers. What … that’s going to happen without software?

Imagine a time when the conduct of business has been so thoroughly researched that no further improvements are possible, human behavior is so well-understood that even the sales and marketing function has become perfectly optimized, and the only advantage anyone has is price. We can imagine it. It’s unlikely, and depressing besides, but it could happen.

It hasn’t happened yet, though, and in the meantime, in the world inhabited by real IT leaders and practitioners, even the well-trod-ground of redesigning business processes, determining how applications have to behave to support them, and implementing working technology that behaves that way … well, we all know the success rate for IT-related projects, and it hasn’t yet reached 50%.

It is barely possible that we’ve reached the point in our evolving understanding of information technology that the end of the line is in sight … where our ability to design and implement business applications has reached the point of diminishing returns. That, in turn, can only be true if we’ve reached the limits of human ingenuity with respect to business strategies, tactics, processes and practices.

And while that’s possible, I guess, I think the better explanation is the simpler one: that some pundits have reached the limits of their ability to envision new and better ways of conducting business, and have mistaken that for a real boundary in the real world.

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|In: Leadership|Last Updated:

Back in my electric-fish-research days I found myself in a small pond near Makoku, Gabon. Having noticed a faint squeaking noise, I investigated, looking for the source. After five minutes of careful searching I discovered it: A frog, caught in the mouth of a very long green snake, dangling from a tree roughly two feet from my face.

Sometimes, the most difficult things to see are the ones directly in front of our eyeballs.

Another example: After more than two decades of ongoing investigation into business strategy and how to formulate it, I only recently noticed an odd anomaly: how seldom business strategies are cast in a context of beating other companies. Sure, many include “competitive analysis” among the influencing factors, but very few have strategies that are actually formulated to beat the competition.

Which brings us to the strange case of General Ulysses S. Grant.

In the standard version of history most of us grew up with, General Robert E. Lee was a brilliant strategist and tactician who almost beat the Union army against near-insurmountable odds. Grant, in contrast, was a plodding soldier with a drinking problem, who would have won the war if he’d slept through it, given his twin advantages of overwhelming numbers and the Union’s greater economic strength.

In the standard version, that is to say, the Union’s winning strategy had nothing to do with the effective use of armed forces — it was nothing more complicated than building a bigger army and a stronger economy.

It’s all bunk. Grant beat Lee because Grant out-generalled Lee. He was the better strategist, the better tactician, the better logician, and the better leader. Which is where this subject connects to you: If, as leader of an information technology organization, you have any interest in any of these subjects, or for that matter any interest in the Civil War as it actually happened, read Ulysses S. Grant’s Personal Memoirs.

That the story of Lee’s superiority is the result of simple myth-making is an inescapable conclusion once you read Grant — not because Grant indulges in self-aggrandizement, but because he describes his and Lee’s strategies, tactics, logistics, and troop strengths in each important battle with such clarity and detail that no other conclusion is possible.

Grant won because he was the better general. He understood that to take the offensive is to choose the battleground and gain the advantage, and how to deploy his troops to provide his own side with maximum opportunity while denying alternatives to his opponent.

He was also a superior leader, by the measure of his age or our own. If you read Grant just to gain better insight into leadership you’ll find the investment is time well-spent. Grant’s constant focus was to build a superb fighting force, led into battle by the best officers he could find, train and promote. He understood the critical role played by morale, and that the best way to build morale is to win. Grant reserved his disdain for timid officers unwilling to take risks, and especially for the political generals who gained command, not through ability but through social maneuvering in Washington.

Grant understood how to develop talent, and how, when, and how much to delegate: In some situations he wrote detailed orders of battle for subordinates and followed up carefully and repeatedly, while with others, such as Sherman and Sheridan, he wrote only the most general statements of objectives, knowing that they could be trusted to make the best decisions possible without the need for close supervision.

He also understood the importance of information technology: Whenever any of his battalions established a position, a corps of engineers immediately linked it into a telegraphic network, allowing all of his commanders to communicate their situations instantly. This innovation conferred a huge advantage to the Union army, as Lee relied exclusively on messengers to obtain information from his own forces.

Grant’s misfortune was that his mediocrity as president has tainted the memory of his achievements in the Civil War. It appears the skills needed for generalship and those needed for high political office were (and still are) different:

To be a great general, you have to lead troops to victory against a defined opponent. Political leaders, on the other hand, often have to lead when there’s no opponent to provide a focal point for action.

I don’t know which of the two is easier or harder. You have to wonder, though, why it is that so many businesses, which rarely lack for opponents in a competitive economy, adopt “strategies” that have nothing at all to do with maneuvering to beat their competitors.

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