The perils of forgetting about the future

Many organisations are focused on the short-term, says Thornton A May

Is your organisation obsessed with cutting current costs to the point of forgetting about the future? If so, you are not alone.

The reason most organisations have a blind spot when it comes to the future is structural. Most organisational structures in place today are inadequate to address the challenges of the post-internet age, and it's hard to lay the groundwork for the future when you haven't embraced the present. True, a good CIO can overcome a bad organisational structure, but not having an IT organisational structure that embraces the future destroys value, or at least delays it.

This should not be regarded as a secret. The late Alfred Chandler taught generations of business leaders at Harvard Business School the principle that "structure must follow strategy". He repeatedly stressed that organisations exist for a purpose and that the structure they take should reflect that purpose.

But in most enterprises, senior management is incapable of replicating the single-mindedness of a commander in the field who tells his troops, "Take that hill". Such focus tends to occur only in crisis situations, when the enterprise's very existence is threatened. Lacking something on the order of a global economic meltdown to concentrate the mind, multinational enterprises were characterised with great insight some three-dozen years ago as a "garbage can" of problems, solutions, choice opportunities and decision-makers.

One CIO, Allan Cullop of private jet provider NetJets, uses the answers to these three questions as his structural compass: Where is the organisation making money? Where is the organisation spending money? And how is that changing? Cullop marches to the sound of the fiscal drums, making sure every single IT investment either maximises moneymaking or optimises money spending. In both cases, he augments exceptional gut instinct with ahead-of-the curve business analytics.

He explains, "I structure IT essentially around the goal of operating what you have with excellence, with an eye toward ensuring that there are enough resources remaining to move the business forward in strategic ways."

A polypurpose enterprise requires a polypurpose IT structure. Parts of the IT organisation have to be hard-wired for maximum cost-effectiveness, but other parts have to be more fluid and possess the slack resources necessary to respond to situations as they arise. In a way, CIOs have to think like the leaders of China, who found that the best way to reassimilate the former British colony of Hong Kong as part of the nation without losing its special characteristics was to rule China as one country, with two systems. In the case of IT, we need one structure, with many purposes.

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