IT TAKES A GENIUS

Steve HeilenmanMadeline Weiss

A CHILD DIES EVERY MINUTE FROM MALARIA

Malaria claims 483,000 lives per year – 90% of those in Africa.

That’s 1300 kids who lose their lives to a mosquito bite every day…

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“Any darn fool can make something complex; it takes a genius to make something simple.”

Pete Seeger

Improving IT Management and Business Complexity

Michael WadeProfessor of Innovation and Strategic Information ManagementIMD, Lausanne, Switzerland

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CUMULATIVEPROFITS

CUMULATIVE REVENUEAdapted from Wilson and Perumal, 2010

Expected Performance

Actual Performance

Michael Wade’s Finding

“I firmly believe that complexity is the #1 challenge facing

organizations today…. and the situation is getting worse not

better.”

“The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”

Warren Buffet

LEGO at a crossroads…

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MCDONALDS at a crossroads…

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“We overcomplicated the restaurants and didn’t give restaurants an opportunity

to breathe. We need to do fewer products with better execution.” Tim Fenton, COO

How Complex is Your Organization?

20 or less? OK!

21-30 Start worrying

31-40 Too complex

41-50 Complexity may be crippling

“GIVE ME MORE!” “LESS IS MORE!”

“DON’T BLAME ME!”

MARKETING OPERATIONS

IT

Is IT a source of complexity or simplification?

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Loc

al F

lexi

bili

ty

Low

High

Chaos

- Poor local responsiveness and low global efficiency

Anchored Agility

+ Rigid standardization of non-differentiating activities leads to costs savings and efficiency gains+ Local adaptability maintained for value creating local needs

Silo

+ High responsiveness to local needs+ Quick to respond to changes in local environment - Lack of economies of scale and scope- Poor cross enterprise information flows- Process and system duplication- High cost

Bureaucracy

+ High level of global standardization+ Best practice sharing+ High economies of scale and scope+ Cost savings due to reduced process and system duplication- Relatively inflexible- Lack of local responsiveness- Slow to respond to change

Global EfficiencyLow High

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2 3

4

SPRING Clean

Your

Organization

StandardizePrioritizeRationalize

Institutionalize Navigate Govern

Standardize

• Ensure that organizational processes and systems are standardized to the highest extent desirable.• We have a standard process called “managed maintenance

(MM)” which provides a standard process for managing all of our corporate applications.

• We have built a tool called “Tracer” to manage our MM process• This provides Visibility, Control, and Optimization • Standardized processes using Team Foundation Server (TFS)• Code and architectures are standard across teams\products

Prioritize

• Build a prioritization structure to decide what to keep, what to standardize, and what to drop…• We have a broad intake method through an idea generating

program call “CAI Ideas”

• Anyone can suggest work

• A board reviews all suggestions based on value to business, technical feasibility, and overall cost

• Project approval follows• Weekly Project status review meeting to help prioritize projects• For large efforts, final prioritization is given by the CEO (shows

some alignment with the business)

Rationalize• Choose processes and systems to become the global standard, allow some

exceptions, and eliminate or outsource most others.• Cut unprofitable products, systems, processes, services and customers.

• Consolidated to be a Microsoft Shop• Implemented TFS as our standard platform• Focused on more Requirements/Design. Leverage “development” as a

commodity to be done offshore, crowdsourced or domestically• Leverage SAAS solutions or freeware were applicable• We vet new ideas through pretotyping – minimizing the investment before

the idea has demonstrated value. We cut ideas that are not panning out.• Test new products for market viability• Fail fast and pivot products and services often, based on market feedback• Don’t fall in love with a product or service, it tends to cost too much

Institutionalize• Build simplicity into the corporate culture – all the way

through the organization.

• Clearly communicate the simplicity message.• We have a simple IT mission statement• We have a set of documented IT “Guiding Principles”• We established a standard OKRs (Objectives Key Results)

program whereby everyone in the IT organization has OKRs tied to the overall organizational OKRs.

Navigate

• Develop simple rules to guide action.• Base guiding principles incorporated into every OKR• Standard 3 questions we ask for every IT request

• Can we get for free / very cheap?

• Could we crowdsource?

• Could we buy for cheaper than build?

Govern

• Ensure that there’s a structure in place to maintain simplicity over time.

• We measure productivity. Individually this enforces efficiencies and simplicity

• The OKR process puts explicit objectives on each member of the management team – this incentivizes continued and increased simplicity

• The work approval process (Navigate) also governs maintained simplicity when enforced over time

• Let smart people be lazy, and they’ll simplify things for you just to make their lives easier.

StandardizePrioritizeRationalize

Institutionalize Navigate Govern

Getting simple

Staying simple

Some APC Reports

• Achieving Repeatable Team Performance through Collaboration Engineering: Experiences in Two Case Studies

• Anchored Agility: How to Effectively Manage the Balance between Local Flexibility and Global Efficiency

• Are You Reading to Profit from Real-Time Digital Data Streams?• Delivering Effective Enterprise Architecture at Chubb Insurance• How Do CIOs Measure and Communicate IT Performance?• IT Leadership at Carestream Health: Handling a Large-Scale Divestiture• Leading Innovation Throughout the Business Life Cycle• Masters of Change• Maximizing Value from Business Analytics• Mobile App Development in Highly Regulated Industries: Risks, Rewards and

Recipes• Separating Signal from Noise: Evaluating Emerging Technologies

APC Member Companies

Acuity BrandsAir Products and ChemicalsAllstate InsuranceArmstrong World IndustriesBPBristol-Myers SquibbCarestream HealthChubb InsuranceComputer AidConocoPhillipsConstellation BrandsFederal Emergency Management AgencyFederal Retirement Thrift Investment BoardFINRAFlorida Virtual SchoolHoward Hughes Medical InstituteInter-American Development BankInternational Monetary Fund

Janssen Research & DevelopmentLeviton ManufacturingMoody’s Investors ServicesMueller Water ProductsNASA Goddard Space Flight CenterPension Benefit Guaranty CorporationPenske CorporationPfizer MedicalThompkins FinancialTransportation Network ServicesTrue ValueUMass Memorial HealthcareUnitedHealth GroupVerisk Analytics

January 2015 APC Meeting Topics

• Enterprise Internet of things (John Maloney, Colabria)• Wearable technology (Leyland Pitt and Karen Robson, Simon Fraser

University)• Digital natives and ubiquitous information systems (Mike Myers, University of

Auckland)• Business innovation accountability and the IT department (Kelly Slaughter,

University of Texas)• Big data (Rob Bearden [HortonWorks/Benchmark Capital]) with panelists from

Verizon, Home Depot, and Coca Cola.

Contact Us

• Madeline Weiss, Director – madeline.weiss@simnet.org

• Rick Watson, Research Director – rickwatson@mac.com

• Vincenzo Nelli, Manager – vnelli@simnet.org