When Egos Dare

The monarch was dead. Demoralized and shaken, the organization spent time mourning for a popular and high-profile CIO who had reigned for many years. Then, with time starting to dull the pain, the young princes began sharpening their knives, sensing their best opportunity in years to seize power.

So even though the organization had undergone a major restructure just a few years before, the clamour of business unit IT execs for a move to a federated model of IT quickly became deafening.

"It was clearly driven by the egos of those people," claims one close observer. "No one honestly believed any of the tripe coming out about why it could be good for the business. It's all about their total egotism and their desire to call themselves segment CIOs."

Now frustration is clearly rising as the efforts to transition to a federated model introduce a new element of chaos. And why wouldn't they, the observer asks, when the push is a product of personality rather than careful adherence to good management practice or theory? "It is being driven by the politics of non-cooperation rather than the politics of cooperation," he insists.

On its face, there appears good reason to argue for the IT organizational model featuring a blend of local and centralized services known as the federated model. The notion of governance being handled by a small headquarters staff while business unit IT groups share power and enjoy various degrees of autonomy seems perfectly sound.

"The federated model has won," declared one CTO in print a few years back. "Centralized/decentralized is struggling against an extreme, which means the pendulum is constantly swinging. Federated lets you balance things in a more delicate fashion."

However, when it comes to putting theory into practice, the federated model can be a bridge too far.

Support for the model received a major boost as far back as 1992, when in a paper, "The Age of Unreason", written for the online version of the Harvard Business Review, author Charles Handy expressed his confidence in the model. In a world where organizations were seen less as impersonal systems than as mini-societies, he thought applying political principles to management issues made a great deal of sense.

Handy saw "federalism" as a way to deal with paradoxes of power and control, like the need to make things big by keeping them small, to encourage autonomy but only within bounds and to blend variety and shared purpose, individuality and partnership, local and global. He saw the many organizations with federalism already on their agendas, including IBM, Ciba-Geigy, General Electric, Johnson & Johnson, Coca-Cola and British Petroleum, as believing autonomy released energy and that people had the right to do things in their own way as long as it was in the common interest. They also shared a belief that people need to be well informed, well intentioned and well educated to interpret that common interest, and that individuals prefer being led to being managed. "These principles reach into the guts of the organization or, more correctly, into its soul — the way it goes about its business day by day," he wrote.

"Federalism properly understood is not so much a political structure or system as it is a way of life."

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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