Seeing the Whole Board
- 09 October, 2002 10:15
In an episode of the TV drama The West Wing, President Josiah Bartlet uses chess as an analogy for geopolitical strategy. Bartlet, locked in a global game of brinkmanship with the Chinese, observes that in both chess and foreign relations, it's dangerous to focus too narrowly when considering your next move. "You've got to see the whole board,"he tells an aide.
Seeing the whole board is exactly the challenge that CEOs and CIOs face in guiding the use of business technology. In a world of seemingly unlimited technology fads but limited investment capital, it's unwise to rely on consultants to do the thinking for you. After all, they have a vested interest in creating more work for themselves. CEOs and CIOs need to develop their own sense of the future technology needs of the enterprise. And that requires vision that's tempered with discipline, a focus on value and a healthy dose of scepticism.
Here are four ways to achieve IT thought leadership, based on lessons we've learned at Vanguard.
Create a disciplined process for evaluating technology. It's easy for CEOs and CIOs to become so consumed by the day-to-day demands that the future of the business doesn't get the formal attention it deserves. If you truly want answers to the questions Are we using the best processes? and What could we be doing with IT? you must establish a disciplined process to identify and evaluate strategic technology opportunities.
At Vanguard, our disciplined approach to technology has three key elements: 1. Senior managers devote several hours a week to major technology decisions; 2. We have a group of people dedicated exclusively to thinking about strategic technology; and 3. We tap into the perspectives of vendors and clients.
Our technology steering committee - of senior IS and business staff - serves as a high-level focus group with a business-needs perspective. We've learned that you have to invest time to let bold ideas bubble up. When we meet, it takes an hour to get through the business at hand; only then do we get to the what ifs and why nots so important to the company's future.
Our in-house R&D team approaches these what ifs from a different perspective. The group is assigned to assess the potential of technology that's still two to four years away from widespread adoption. Group members scan the environment to identify technology opportunities and then pitch innovative ideas to the business areas. They expect to sell the business on just 20 per cent to 25 per cent of the ideas they pitch.
IT thought leaders must cast a wide net to identify opportunities for innovation. At Vanguard, we seek insights from multiple perspectives. We routinely ask the frontline people who interact with our clients: "What should we be doing differently?"We also solicit ideas from our best IT vendors - who, after all, are themselves in the business of R&D.
The CIO should tap into the knowledge base of vendors. She must be plugged into the IT industry to recommend which vendors can truly be key partners in developing a particular technology. The CIO can then bring those vendors' scientists - not just their salespeople - to the conference table.
Focus on value. New technology ought to improve internal operations or meet client needs with new or improved products and services. At Vanguard, if a new technology doesn't add value in one or both areas, we aren't interested.
It can be tough to recognise the value of a new technology, even when it's right in your face. I remember a presentation in my first year of business school by a developer of new software called VisiCalc - a primitive spreadsheet program that predated Excel. Nobody was impressed. We couldn't imagine why anyone would need a PC-based spreadsheet when they could do things the modern way, as we did: performing our number crunching on time-share terminals in the university's computer lab.
Sometimes the toughest question is not whether to adopt the technology but how to apply it to capture the most value. For example, at Vanguard we've adopted collaborative browsing technology that allows us to serve clients simultaneously via the Web and the phone. It's leading-edge stuff: the software lets a Vanguard phone associate take control of a caller's Web browser and guide him through our Web site while they talk on the phone. The catch is that this is expensive technology - too expensive to use in every client interaction. The challenge for the business is in deciding when to make it available.
Be sceptical about technology hype. One could make the case that, from a client service standpoint, the investment-management industry has seen just three technology advances of magnitude during the past 20 years.
The 800 number, which provided every US household with easy access to direct sellers of mutual funds.
The PC, which revolutionised companies' internal operations by giving everyone desktop access to current business information.
The Web, which created a new channel for investment products and services, as well as a cost-effective way to provide individual investors with new educational and investment tools.
It's hard to know what the next big technological breakthrough in the investment industry could be. In my view, most of the hot technologies being touted today - including voice/portal technology and data aggregation - amount to incremental improvement. While these technologies are worth pursuing, they won't reinvent the industry. So I take a sceptical view when consultants or anyone else makes claims to the contrary. In every industry, IT thought leaders should maintain a healthy scepticism about killer apps.
Trust your intuition. With experience, IT thought leaders develop a sixth sense for what is valuable and what isn't. Some years back, everyone said mainframe computers were passA©. One of the thought leaders of Silicon Valley came to see me to reinforce the view that mainframes were dead, IBM was a dinosaur, and we should replace our mainframe computer with a multitude of servers (from his company, of course). We didn't buy his thinking because it just didn't feel right. As you know, more than a decade later, the mainframe is alive and well - a critical part of systems infrastructure, valued for its reliability in large-scale, mission-critical transaction processing.
Getting thought leadership right takes a system of checks and balances - a commitment to focus and disciplined processes, a sense of scepticism and the confidence to trust your intuition. CEOs and CIOs have to cultivate all of those traits to be able to see the whole board.
Jack Brennan is chairman and CEO for The Vanguard Group in Malvern (US)