Leadership

A strategy primer for IT leaders

The word "strategy" has been so overused lately that its meaning has been diluted and often rendered pointless. Ilya Bogorad takes up the case for strategy and its importance in the organization and your career.

Strategy is perhaps the most misused word in the dictionary of business English, and is a darling of many management consultants and business writers. Articles and reports are full of gems such as "It is envisaged that the company will continue to derive sustainable strategic value by leveraging the synergetic strengths of its constituent brands." Makes your eyes glaze over, doesn't it?

It's because of this misuse that I felt compelled to write this blog about the incredibly important notion of strategy. I referred to this term several times in my prior blogs on Techrepublic, speaking on development of business skills in IT staff, decision making and outsourcing. Now is the time to explain what the word implies, sans the bad rap. It's merely a primer, and is not meant to even pretend to cover the vast ground of the subject which many great thinkers cared to write on in depth.

Why should you care?

Strategy is not merely a fancy term, but a business necessity. It's hard to imagine a successful enterprise without a strategy, or picture a successful IT executive or manager without the full understanding of what it means.

Not unlike humans, organizations follow a certain lifecycle: they're born, they grow, they mature and, finally, they cease to exist, through a sale or dissolution. Humans typically have some goals in their lives, which they try to achieve. Some don't and they may or may not be able to fall back onto support structures like friends, family, or a social net. Certainly, all successful people set goals in life and work to accomplish them. When circumstances or priorities change, the revise their goals and proceed accordingly.

No organization, except for the artificially maintained monopolies or heavily subsidized entities, is sustainable without similar goal setting. Scores of misguided, poorly run organizations are dissolved or sold at fire-sale prices around the world every year. On the other hand, those organizations capable of setting relevant goals, working towards them and adjusting them in a timely manner, prosper and thrive.

But, clearly, setting goals is not sufficient if they exist separately from the way organization goes about its day-to-day business. Once the future vision is determined, the question is how to get there. And this is exactly what strategy is, a framework within which decisions are made that influence the direction of the business. See, there is no great mystery about it and nothing to do with executive retreats, consultants' reports or grandiose statements. Just a simple (but not simplistic) concept: if you have a decision to make, ask yourself if it moves the organization towards its stated goals. If it doesn't, why would you make it? Practical strategic thinking

Consider the following small sample of the key decisions IT executives and managers make, and see how important it is to have the organizational strategy in mind.

  • Selection of project alternatives. Project and project alternatives should be evaluated against the strategy. Does the project help the organization reach its strategic goals? Is this project alternative the best way of getting us there?
  • Project portfolio management. What projects are appropriate given the organization's strategic goals?
  • IT business model. What should the IT department be like given the chosen goals? What should be in-or out-sourced? What methodologies are most appropriate?
  • Hiring. What kind of individuals should we seek to hire?
  • Sourcing. Should we diversify our vendor base? Given what we are trying to achieve, what kind of technology vendors should we work with?
  • Technology and infrastructure. What applications/databases/hardware are needed? What should the communications be like?
  • Resilience and security. What level of business continuity planning is appropriate? How should we structure our security policies?

The list goes on and on, and none of these questions can be adequately answered without the notion and knowledge where the whole organization is heading.

Strategy success factors

Strategy often fails in execution. It's not that difficult to imagine a bright future and declare it your destiny. It's more difficult to ensure that this future is both relevant and realistic. And it's difficult to have the discipline and the determination to execute the organization's strategy and not be swayed by ephemeral crises, firefighting, and fads of the moment.

Here's a selection of success factor in strategy formulation and execution:

  1. Relevance. Strategic goals must be relevant and realistic. A burger joint cannot aspire to beat the Bank of Scotland in the business of derivatives, no matter what. Irrelevant and not at all realistic.
  2. Forward thinking. Strategies rooted in constraints and problems of today lack innovation. Why do we chuckle at the technology of the distant future depicted in sci-fi movies of the 1960s? Because it looks like it belongs in the 1960s, as it obeys the technical constraints known at the time and looks nothing like what we use today. Strategic goals should be set in the future, and then walked back from to today, to determine what needs to be done to hit them.
  3. Flexibility. Strategy does not weather well under the "set it and forget it" approach. Strategic goals should be tested for relevance and realism regularly, and adjusted if so required.
  4. Communication. Strategy is of no use if it leads a lonely life on a CEO's bookshelf. Strategic decision-making across the whole organization is only possible if the whole organization is aware of where the ship is going.
  5. Discipline. Dealing with day-to-day minutiae, issues, and engaging in firefighting is inherently easier than relentless execution of strategic decisions. These items are more tangible, have immediate and visible result and something that every middle manager is used to. A great sense of discipline is necessary to ensure that strategic priorities do not get relegated to the backburner.

Being aware of the organizational strategy and using it to direct decision making is a skill critical to the success of an IT organization, IT projects, its business model, and the personal success of the IT executive, manager, or a professional making such decisions. Much more needs to be said and done to develop this skill in an individual, than this brief blog can possibly cover. Still, I hope it provide some useful direction to those interested in advancing their (and their department's) role and the visibility within the organization.

Ilya Bogorad is the Principal of Bizvortex Consulting Group Inc, a management consulting company located in Toronto, Canada and specializing in IT- business alignment. Ilya can be reached at ibogorad@bizvortex.com or (905) 278 4753.

About

Ilya Bogorad is the Principal of Bizvortex Consulting Group Inc, a management consulting company located in Toronto, Canada. Ilya specializes in building better IT organizations.

4 comments
VytautasB
VytautasB

The author is correct to say that there is much confusion about what a strategy is. The definintion used, "a framework within which decisions are made that influence the direction of the business", misses a point. Strategy needs to be based on a certain criteria. It is not enough just to say that one has a strategy. One would think that for business saving money and profitability are serious concerns. Not just any strategy will do. A strategy that accomplishes the goal but wastes a lot of recourses can be said to be a bad strategy and bad for a business. A canal for example can be dug using cranes and other heavy mechanised equipment or it can be done by giving 10000 people a shovel and setting them to work. Both strategies will be successful but a good strategy is the one that uses available resources efficiently. I would propose that strategy is the art of efficiently using resources to achieve a desired end. The "art" part requires setting criteria and making tough choices. The planner who comes up with the appropriate strategy will keep his job while a bad strategist won't.

dablack
dablack

In its simplest form, all strategy is, is a plan. Then, add the ingredients to the plan that address handling foreseen roadblocks that make it unique, and you have a strategy for reaching a specific goal. Viola! Is it a good strategy? Well, that opens up another can of worms.

ibogorad
ibogorad

Thank you for your comments. Strategy is one of the components of the decision making process with respect to allocation of resources, that is, for instance, which project to undertake and how to run it. There are other factors such as the organization's values, mission, current priorities, other projects on the go, and so on. I wrote on this here: http://blogs.techrepublic.com.com/tech-manager/?p=538 But the definition of strategy is accurate.

The Management consultant
The Management consultant

I am accepting that Strategy formation is a complex process and in many companies its value is ignored or not realised fully. I once went to a client who wanted me to help make the company successful. I asked if they had a strategy to take the company forward? The directors all looked at each other and said 'we had one written up last year'. When asked where it was and what they could tell me about it they replied its collecting dust in the storeroom! Many people don't understand it?s the cement that cements the building block of the company together. In many cases it?s a plan on how you are going to satisfy your stakeholders now and in the future, cascading through the organisation like a shaft sun light in Ocean.

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