Are you avoiding risk or managing risk?

avoid_risk_from_ITADI just read a great article over on the Mckinsey & Company blog titled “Building a bridge from CMO to CIO” where Matt Jauchius, EVP and CMO of Nationwide, describes his approach to working with the CIO of the company.    I encourage you to jump over there and read the article…there’s some great advice to help the CMO and CIO work together.

There was a line in that article that really caught my eye. The quote from the article is provided below:

As CIO, you want a CMO to be safe and avoid obvious risk. Marketing has a cultural need to be innovative.

Now, there’s something to be said for avoiding obvious risk. You don’t want to rush off into the world and take on every risk that comes along but you also don’t want to avoid any risk altogether. Part of being in any leadership role is to decide on what risks are worth taking and then determining how to manage those risks.

There’s a considerable different between avoiding risk and managing risk.  When  you avoid risk, you put yourself and your company at a disadvantage.  As a CIO (or CMO) you should never want to avoid risk at all…your goal should be to identify and manage the risks that are necessary to ensure your organization meets its goals.

Back to that quote from the McKinsey article regarding CIO’s wanting CMO’s to be “safe and avoid obvious risk”.  While I understand and can somewhat agree with the spirit behind the statement, I can’t agree with the statement itself.    If I were a CIO, I’d want the CMO (or any other colleague) to identify and manage risk, not avoid it. In fact, if risks are ‘obvious’ there’s generally a way to manage those risks. It’s usually the non-obvious risks that really cause the most trouble for an organization.

Rather than avoiding risks, the job of a leader should be managing risk and mitigating risk. Every activity undertaken by an organization has some risk involved with it. Software development has risk.  Outsourcing has risk. Using cloud services has risk.  The difference in whether any project is a success or failure lay partly in how risks are managed and mitigated.

I have to ask you…are you managing risk or avoiding risk?

Choosing the ‘right’ KPI’s to manage IT

This post sponsored by the Enterprise CIO Forum and HP.

6554190017-150x150The Enterprise CIO Forum currently has two articles having to do with Key Performance Indicators (KPI’s).

The first, titled The Magnificent 7: KPIs to help IT perform better by Myles Suer, has a nice run-down of what Myles believes are the top 7 KPI’s for  improving the performance of IT groups.

The second article, titled IT Performance Metrics: Balanced Scorecards & Leading vs Lagging Indicators by Jerry Bishop, provides an excellent discussion of the use of KPI’s and the difference between leading / lagging KPI’s.

Both articles are good reads…I suggest you jump over and read them.

Done?  Are you normally that fast a reader? 🙂

In the the Magnificent 7 article, Myles provides these 7 KPI’s as the most important to improve IT performance:

  • Change Success Rate
  • Percent of Emergency Changes
  • Percent of SLA’s met
  • Percent of healthy projects
  • Percent of first call resolutions
  • Number of Security Incidents
  • Variance between actual and planned costs

Nice KPI’s…and they capture a good amount of data for IT.

But…do they capture data that is useful for seeing issues before they arise?  Maybe…maybe not.

Jerry Bishop talks about this in his IT Performance Metrics post.   Jerry writes:

I suppose it could be argued that if IT is using at least some performance metrics, if only the Magnificent 7, it is better than none at all. But there are scenarios where an IT department can shoot themselves in the foot by using the wrong metrics for performance management and performance reporting.

The classic example is an IT scorecard filled with impressive uptime statistics but not a single metric for application performance or the user experience.

Well said.

Jerry continues on to talk about the difference between a lagging KPI and a leading KPI.  The difference, according to Jerry is:

KPI’s that are lagging indicators are those which are a measure of a performance trend after it has already happened. The utility of lagging indicators can be very limited because the signals produced by these metrics are after the fact which for IT can have a significant delay.

and

Leading indicators however, provide a signal of a trend that as it is just starting. Leading indicators are usually process performance related allowing for early intervention.  In the case of IT performance management this means the use of leading indicators enable you to correct issues and possibly salvage the SLA for that period.

KPI’s are wonderful. Wait…let me rephrase that…the right KPI’s for your business are wonderful.

The Magnificent 7 are good KPI’s and worth tracking…but to me they are all lagging indicators. These lagging indicators tell you what has been done in the past and give you some ideas of things to look at for improvement.    Don’t get me wrong…KPI’s like the Magnificent 7 described by Myles are worthwhile to track. But…are they able to tell you…truly tell you…how your IT team is performing today?

I’m a bigger fan of using leading indicators if I can develop them. The problem with leading indicators is that they are hard to create…or at times…they convert to lagging indicators after a while.  Why?  Because we get lazy and wait a week before compiling new numbers.  Or…because the data used in the underlying measurement is old.

At the end of the day, whether an indicator is a leading or lagging may not be the biggest issue.  The issue that matters the most is whether the KPI is even useful to you and your organization. What do you do with a number or a scorecard?

To me, the best KPI’s answer the following questions:

  • Are we doing the things that the organization need us to do? How well are we doing them?
  • Are my processes / procedures moving us forward or backward?
  • Am I getting the results I expect to see?  If not, why?
  • Where is my money going?  Why is it going there?
  • Are my people happy? Why / Why not?

With these five main questions in mind, I can create KPI’s the work for the organization that I’m working with.  Each organization wants (and needs) to measure each of these questions differently…some use 10 KPI’s to track these questions while others use 100 KPI’s.

At the end of the day, you’ve got to be able to use the KPI’s that work for your organization. Preferably there are plenty of leading indicators to help you turn on a dime as needed…but the right lagging indicators can work just as well.

What are some KPI’s that have worked for you?  I’d be interested in your thoughts on whether you think your KPI’s are leading or lagging indicators as well.

Image Credit: Verax KPI Dashboard – Revenue segmentation for usage types By Verax Systems Corp on flickr

This post sponsored by the Enterprise CIO Forum and HP.

A CIO and A CMO walk into a bar…

direction signs By emreterok on flickrA CIO and A CMO walk into a bar…

…except…they aren’t in the same bar.

They made plans to meet at Good Time Charlies on Monday.   You know – the CMO and CIO are best friends now so its time to go have a few drinks together, right?

They agree on a time and day and schedule the happy hour together in their calendar.

On Monday, the CIO leaves the office and drives over to Good Time Charlies on the east side of town.

The CMO leaves a few minutes after the CIO and heads off to to Good Time Charlies as well. Except…she goes to the new Good Time Charlies on the West side of town.

Kind of sounds like most organizations today, no?  Lots of talk about where they are going, but no real planning or clear communications about the actual destination.

The CIO and CMO want to be friends. They want to work together. They want to do the right thing.

But…are they on the same ‘page’ when it comes what needs to be done?   If not, you’ll end up just like our CIO and CMO above – in different places waiting for the other.

Are the goals of the CIO and CMO well articulated and understood?  Sure…each person understands their own goals, but does the CIO understand the goals of the CMO and vice versa?

Do the CIO and CMO communicate regularly? Do they meet regularly one-on-one?

CIO’s – do you know what the goals of the CMO and marketing group are?  Do you understand them? Do you understand how the IT group can help with those goals?

CMO’s – do you understand the goals of the CIO and IT group?  Do you understand how your team can work together with IT go ensure your goals and their goals are met?

Its very easy to say that the CIO and CMO are working closer together and will be doing so for years to come…but without clear goals and an agreed upon strategy, they may not actually be doing the best work possible.

Forget whether the work is the best possible work…without clear goals, strategy and regular communications, the CIO and CMO may end up at completely different destinations.

Image Credit: direction signs By emreterok on flickr

Are CIO’s missing the “O”?

This post sponsored by the Enterprise CIO Forum and HP.

O - glowing By Eva the Weaver on flickrThink about the CIO’s that you know…or…if you are a CIO, take a hard look at yourself.

As we all know, the CIO acronym stands for Chief Information Officer….but do we really know what the ‘Officer” means?  Do we really have CIO’s?

In most organizations, there’s a CIO who’s heading up IT…but are they really an ‘Officer’ of the company? The Merriam-Webster dictionary defines ‘Officer” to be:

one who holds an office of trust, authority, or command

So…the CIO is an officer of the company and holds a position of trust and authority.

But do CIO’s really step into that role?

I’m sure some do…perhaps many do…but I’ve run across quite a few who’ve completley misunderstood the role and their “officer” responsibility

Over on the Enterprise CIO Forum, Joel Dobbs wrote a nice piece titled If you’re at the table, BE at the table where he hits this issue square in the eyes. Joel Writes:

The “O” in CIO is not silent. It stands for officer. Corporate officers are the people with day-to-day responsibility for running the corporation, such as the chief executive, chief financial officer, the treasurer and, yes, the CIO. For years CIO’s struggled to get a seat “at the table” and it pains me greatly to see cases where CIOs reach this level and, instead of rising to the occasion to serve as business leaders, revert to the geek role. I hope this is uncommon but I fear that it is not.

Emphasis mine.

Earlier in his post, Joel describes a meeting that he attended with all the officers of the company. In that meeting, all the officers of the company were present and discussing strategic plans. The CIO was there along with the CEO, CFO, COO, etc etc.  Awesome…the CIO had a seat at the table!

But…what was the CIO doing?  Joel writes:

…the CIO who showed up with his laptop and, while the rest of us debated various strategic alternatives and explored opportunities to grow and diversify this $100 million + business, apparently spent the entire day answering e-mail and responding to instant messages. In fact, his only comments the entire day were some negative remarks about one of the company’s strategic business partners.

Emphasis mine.

Think back to your meetings…have you spent the meeting being engaged did you spend it buried in your laptop or smartphone responding to some ‘crisis’?

My personal experience with CIO’s and other senior level IT leaders mirrors that of Joel…while in meetings, they spend a good deal of their time reacting to issues outside of the meeting rather than being present and providing leadership.

CIO’s and IT have been fighting for years to get ‘a seat at the table’….so why not take that seat and run with it? Be present…be valuable.

As Joel says…if you get the seat at the table, BE AT THE TABLE. Be present.  Be available and be real.  Don’t hide behind your computer or smartphone…provide leadership and actually be an ‘officer’ of the company. Get your head out of the technology for at least a few minutes and focus on the business.

Image Credit: O – glowing By Eva the Weaver on flickr

This post sponsored by the Enterprise CIO Forum and HP.

To manage it, measure it…but don’t destroy it in the process

Tape Measure By dirkjankraan on flickrI’m a big believer in the mindset that you’ve got to measure it to manage it.

If you can’t measure something, its very difficult to manage that ‘something’.  If you want your websites to load faster, you need to know what ‘fast’ means and have something to compare past, present and future measurements too.

You must measure to manage…but I”m not a proponent of measuring every little detail.  I only want to measure what i need to measure (there’s a catch-22 here…do you know what you need to measure?).

I’ve known people / companies to go overboard on their measurements.

Some believe they need to measure their employees time in order to manage their workload properly.  I’ve known companies that have implemented time-tracking projects that require every employee to input their time in 5 minute increments and assign each 5 minute segment to a project cost center.  Those same companies have a hard time getting anything done too.Now…I’m not saying every company that tracks time like this cannot accomplish anything, but i can tell you the ones I worked with didn’t accomplish much.

A recent example

This past week, I went in for a sleep study. My doctor told me that he thought I had sleep apnea due to the way my throat looked.  He said my Uvula looked like it had taken quite the beating…I believe his exact words were “your throat looks like someone uses your uvula for a punching bag”.    So…he setup a sleep study for me.

During one of these sleep studies, a contraption (that’s the scientific word for it I think) is placed on that measures all sorts of things. Heart rate, eye movement, breathing, leg movement, chin movement, etc etc.  Go read more about it here and see what the contraption looks like here after its been placed on you (note: if you can’t tell, that is not me in the photo!).

My sleep study appointment day arrives off I go the sleep center at the appointed time. When I arrive, I’m shown my room and told that the technician will be in shortly to get me all ready for the study.  After a few minutes, a nice tech walks in and begins hooking me up. This process takes about 30 minutes and I end up with wires connected all over my body.

I immediately realize that I’m going to have a tough time sleeping this contraption.  I’m told that I can sleep in whatever position I choose, but they need me to sleep part of the night on my back…which is good because once I got into bed i couldn’t move into any position except for laying flat on my back.

Now…I’m sure I got some sleep that night, but I don’t really feel like I did. I was uncomfortable with all the wires, I was in a strange room and I was being watched via video camera.  Not exactly the most fun I’ve ever had, especially when you have to get up in the middle of the night to go the bathroom (because you are an idiot and drank a bottle of water before bed).  Did I mention that in order to get out of bed you have to call for the tech to come unhook you from the machine and re-hook you when done?  fun times.

My point of all this?  This sleep study was intrusive.  I’m sure there is useful data gathered this way but is it truly the best way to measure the things that need to be measured while a person sleeps?  Perhaps with current technology it is.

But in my case, and in many other people’s cases, the very thing that this sleep study was attempting to measure (sleep) was disrupted.  Was the data gathered that night in the sleep study true data? Is it really an accurate picture of how I sleep?  I don’t know.

But…what I do know is that the process of gathering the data just about destroyed the data.  I barely slept. It took me two days to recover from that night.

Measure it, but don’t destroy it

So my story is just a simple word of caution to everyone.

Sure…measure what you need to measure (again…do you know what you need to measure?).  But don’t destroy what you are measuring by the process of measuring it.

Find the simplest, least intrusive method of measuring what you need and use it.

Do you think the employees entering their time in 5 minute increments like their work? If you need to track their time in five minute increments…perhaps something is wrong with the culture of the organization. If you need to know what your employees are doing all day, ask them.

To manage it, you do need to measure it…but don’t destroy it in the process.

Image Credit: Tape Measure By dirkjankraan on flickr

The Little Black Book of Leadership – a book review

Last week the author of The Little Black Book of Leadership, Todd Dewett Ph.D., contacted me to say hello, complement me on my work here and offer up an electronic copy of his book.

I receive variants of this type of email quite often.  Most are from agents and PR folks trying to get a review of their clients book.  I’ve started stepping back from accepting offers of books to review, mainly due to time constraints on my side.

So, normally, when i receive these types of emails, I polity decline.  But…this time…I couldn’t decline.

Why?

A few reasons:

  • 1.) Todd made the note personal.
  • 2.) Todd made the note about me and not his book.
  • 3.) Todd included a funny little photo (see below photo) that caught my eye and got me interested in learning more about him, his services and his book.

Photo from Todd Dewett's email

So…I promptly said I’d take a look at the book.  I’m boy am I glad I did.

While scanning the book, I saw a passage that jumped out at me…and caused me to stop scanning and start reading.

That passage is:

It is a big lie that “managers” and “leaders” are different things! Managers deal with the present. Leaders deal with the future.

Simple statement but powerful.  Think about all the commentary out there in acadamia, the interwebz and in books about ‘leadership’ vs ‘management’.  Sure…the concepts are different….but at the end of the day, a good leader is one who can manage well…and vice versa….or at least it should be that way.

I’ve known good ‘managers’ who couldn’t lead their teams to save their lives.  I’ve also known good ‘leaders’ who could get people focused and moving in the right direction…but the most successful people I know are those who could do both roles at the same time.  They can lead and manage extremely well.

I read through the book twice….once while scanning and again with more focus on the content and I have to say this is a pretty darn good little book.

Is there anything in the book that’s groundbreaking?  Nope. Nothing new either….but the way that Dr. Dewett presents the material is golden.  This book isn’t something you read once and put on the shelf…its a checklist and reference guide combined.  Its something that you can use at any stage of your career to become a great leader.  The book has some great little nuggets of knowledge that will make it worth your time.

Check out Todd’s Fuel for Leaders website and pick up a copy of his book in his shop.  I think you’ll be happy you did,.

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