Why EG-IT struggles

I do not think there is much wrong with the basic concepts of EG-IT’s organisation structure or strategies.  The problem has been the highly unrealistic expectation of rate of change and the almost total lack of flexibility of implementation in such a diverse group of companies.  Little, if any, account of the real world has been taken.    

As examples, (in no particular order):

• The idea of the MIT being the ‘CIO’ of business areas is a sound concept, but how many CIO’s of companies have so many constraints (imposed budget allocations, no control over resources, non negotiable standards, etc.) placed upon them?

• Of course standardisation makes sense, but why make it such a priority to the point of diverting scarce resources (people and money) away from more important projects which are desperately needed by the business?

• It was clear that IT projects needed much more governance, but internal customers are rightfully never going to be happy to have additional processes introduced unless they are sure that the overheads are justifiable.

• The idea of ‘pooled’ resources in a large IT organisation is certainly a good direction to take, but it does require a very mature organisation which is experienced at operating such a model and a customer base which has bought into the concept and, most importantly, feels that the benefits outweigh the down sides.  EG-IT has neither.

• A very flat project organisation, with managers having huge numbers in their teams, has obvious benefits on paper, but I have yet to work in any organisation where it actually worked.  This is mainly because the approach ignores the fundamental fact that IT departments are never awash with strong managers.

• Generating income from external sales and thus reducing direct internal IT costs is a great idea but needs to be very carefully managed, ensuring that its impact does not push up costs elsewhere or inhibit local business growth.  It is bizarre to actively allocate key and scarce resources to competitors’ initiatives.

• Internal (IT) audits can add value but, in such a fear dominated environment, it was inevitable that such audits would create divisions, encourage defensive attitudes and foster a blame culture.

• A ‘matrix like’ organisation and one based on a philosophy of ‘conflict by design‘ needs a high level of maturity and is hardly likely to succeed when audits abound and fear reigns supreme.

Naturally, it does none of these complex topics justice to just sum them up in a sentence.  I will endeavour to cover each one in much more detail in later articles.  I must stress that I was in broad agreement with the basis of our overall approach and strategies.  But the difficulties I had was with our apparent obsession to implement all of them fully, all together and at such speed.  Unfortunately, it was very difficult to get a debate going about balance and moderation without it being seen as ‘not in agreement’.  The MIT’s rightfully pointed out the difficulties, but this was dismissed as weakness (i.e. ‘not standing up to the business‘) or a lack of ‘buy in’.  My support of the MIT’s on the topic was taken by Patrick Naef as ‘blind’ and ’parochial’.

But there were some strategies that I never agreed with (though naturally always implemented after the appropriate debate) and one of those was regarding IT funding.  In many organisations, IT is pretty much an overhead and it makes sense to limit how much is spent on it.  The usual methods are as percentage of overall overhead expenditure or  turnover or profit, etc.  It allows for simply industry benchmarking and it most certainly makes sense in shrinking and/or struggling organisations, but I could not agree that it was the right approach for a growing and innovative group like ours. In any company where it is employed, it does carry the risk of becoming a dominant index and overshadowing true business needs.  Often an improvement in the figure is more important to the CIO‘s CV than to the organisation being supported.

In such a flourishing company, I never could see sense in restricting funds for new initiatives.  I feel that such companies should spend their money where they see the benefits and leave the IT department to simply advise on how that figure stacks up in the industry and, of course, spend it for the business in an efficient manner.  Of course, some of the core support areas of the group (Facilities, HR, etc.) should be allocated a ‘top down’ budget but there is no reason why all areas and businesses supported by EG-IT need to have the same common approach applied universally.  This is another topic which I will cover at another time.

Also I was never happy about our reliance on external consultants, particularly expensive ones.  I like the description of consultants - ‘they borrow your watch and then charge you for telling you the time.’  There are times when you need to bring in experience and skills from outside but, in my experience, the answers are generally under your nose.  If you have staff who are (and, very importantly, feel) involved, empowered and trusted then they will give you the answers.  More on this topic at another time.

And also worth a mention is ‘micro-management’.  Naturally, as a manager, you have to probe and sometimes get right into the detail.  But not all day, every day on every topic.  Such an approach stifles development, leads to staff expecting it (devaluing their responsibility) and the approach is simply not scaleable.  It can never be effective in a large organisation.  You have to give people full responsibility, sometimes even allowing them to make mistakes to aid their, and the company’s, development.

But all the above differences of opinion are very healthy for any organisation and certainly none of us has the monopoly on being right.  What I simply do not understand is why, suddenly, Patrick Naef wanted my differences of (his) opinion removed from the equation.  Over the past four years, these differences often led to pretty robust discussions which Patrick  always claimed to value (I certainly did).  After all, if you have a management team who totally agree with you, you don’t need a management team! 

Looking back, there was a clear signal that Patrick no longer wanted my view.  At the time I thought it was a one off, but now it seems not.  It concerned the acquisition of the company tikAERO when I was not included in any of the evaluation work.  I had big concerns about the impact such an acquisition would have on our ongoing operation  (in particular on our internal customers) and I told Patrick so.  My status on the project was then moved from ‘not included’ to ‘excluded’!  This really frustrated me as I knew I had a lot to offer.  I am not saying I am more clever than anyone else, but I do have a lot of experience with mergers and acquisitions.  I worked on many in my previous company and I learnt a lot, particularly from people who were much more experienced than I was.  I learnt two major things:  Firstly, just like used cars, companies are never quite as good as they first seem to be.  The longer you look at them and the more loyal experts you involve to look at them, the more faults you will find.  Secondly, a company’s IT department (especially its Data Centre) is normally a fair reflection of the company itself.  Find a safe, secure and risk managed Data Centre with robust contingency plans and you will find a safe, secure and robust company. 

Only time will tell as to whether this acquisition was good for the Group or not but, as an experienced Data Centre manager, I am convinced that, had I been involved, far fewer nasty surprises will subsequently emerge.