A Response to "Too Many CEOs Still Don't Get It"

This was a recent post on CIO Magzine's web site, along with a response from Randy Bancino, Managing Partner with Profitable Growth Partners, LLC.

Monday, January 22, 2007

by Paul Gillin

If you never spoke to anyone but your best friends, you'd probably come to have a pretty high opinion of yourself. Similarly, IT leaders must avoid the temptation to believe that everyone appreciates the strategic value of their role as much as they do.

That message came through is subtext of some work that Forrester Research is doing to define IT's place in the corporate value chain. A few weeks ago, I wrote about an interesting and elegantly simple model that the research company has developed to classify IT organizations into one of three basic roles, ranging from keep-the-lights-on utility to strategic partner. I noted that Forrester believes that only about one in five IT organizations fits the strategic profile.
Now the company is doing some research to validate where business executives stand on the value of IT. It is yielding some disturbing findings.

Preliminary results from interviews with 54 CEOs shows that IT organizations are, by and large, still expected to do what's asked of them and not much more. Asked about what role IT is expected to fulfill in the areas of innovation, process improvement and asset management, the executives overwhelmingly replied that it was to participate when asked.

"CEOs have low expectations of what the IT department should be doing and that sub-optimizes their use of IT," said Laurie Orlov, the Forrester vice president and research director who is spearheading the research. She noted that despite all of the technology revolution that has gone on around us, troubling stereotypes remain.

Orlov has been sharing the results of this ongoing research with attendees at the Microsoft IT Leadership Summit. The Summit is a series of regional conferences in major cities around the country that discuss key issues IT leaders are facing and preview Microsoft's technology roadmap. Attendees get to hear from thought leaders like Orlov and many others.

My own interpretation of these results is that attitudes change slowly, but they are changing. Many of today's CEOs are products of simpler times, when technology was unobtrusive and business skills were all that mattered. In those days, an executive was expected to know sales, marketing and finance cold, but took little or no interest in back-room operations. To them, data processing meant punch cards and greenbar reports. Computers were mysterious and data processing organizations were closed and isolated.

It's hard to imagine that any CEO could be ignorant of something that constitutes the largest capital expense on his income statement. But people like that are still around in positions of power, just as there are still people who print all their e-mail. They will be washed out of the system in time, though, and replaced by a new breed of executives who instinctively get the value of IT. That is when we will see the next great leap forward in productivity. Remember that anyone under the age of 30 today has grown up using a PC as fluidly as their parents used a telephone. In a decade, they will begin to make their mark in the boardroom.

If you are an IT manager stuck in an organization that sees no strategic value to your role, you have to ask yourself some questions. Do you want to wait it out in hopes that time will bring change? Do you want to take on the challenge of changing long-held stereotypes? Or would you be better off in a different place? There is no right or wrong answer, but it is clear that a generational shift is at hand. Those are usually times of great anxiety but also great opportunity.

Jan 22 2007 - 4:56pm Paul Gillin ( Permalink ) ( Email This Page )

Post by Randy Bancino, Profitable Growth Partners LLC.

IT needs to "get it" to!

Mr. Gillin raises some great issues with respect to the potential under-utilizations of IT in organizations where the leadership does not see a strategic role for technology. However, I would challenge Mr. Gillin, and other CIOs, to think about why that perception lingers in some organizations. Is it them? Or, is it us? If your IT team doesn’t understand the fundamental business model, or core competencies of the organization, what is the chance that they will be perceived as strategic partners in the business? Mr. Gillin is right that corporate leaders need to see IT in that potentially strategic role, but it is up to IT leaders (and their staff) to be ready, willing, and able to engage in the strategic imperatives of the organization.

Randy Bancino

Profitable Growth Partners, LLC.

Assessing an Organization's Trust Environment

In the Profitable Growth Partners Boot Camp for Managers program, we start with the topic of "Trust" because trust is one of the foundations of all high performance teams. A question that often comes up in our sessions is:

"How does one assess an organization’s trust environment?"

There are ten behavioral factors I’d look for when trying to determine an organization’s willingness to trust employees and it’s own trustworthiness. Think about rating the following on a scale from low to high:

1. Leaders who don’t vs. those who do “walk the talk.” Do the senior execs in your company do what they say? Do they model the behavior that they expect from you? (E.g. they expect you to work long hours or weekends to get your job done, but they wander in late and leave early; or they expect you to always be on time for meetings, but they are typically late or cancel at the last minute; they talk about the customer always being first and most important, but they are quick to criticize and complain about the customer).

2. Micro-management vs. Empowerment. Does your management team freely give responsibility to others and then let go, trusting that the work will get done as requested? Or do they micro-manage the people and the process, undermining a person’s sense of autonomy and authority?

3. Taking credit vs. giving credit. Do the managers in your organization give credit for a team’s or subordinate’s accomplishment rather than take all the credit themselves? Do they recognize and compliment a job well done or are they more often criticizing?

4. Redundant Work vs. streamlined, efficient work . Is there redundancy throughout the organization, as evidenced by unnecessary duplication or rework? If yes, this implies a level of distrust based on the belief that no one person can do the job right.

5. Unclear, overlapping roles vs. clear roles/responsibilities. Is there confusion about who does what within your organization and who is responsible for what on a team project? If yes, this readily leads to unproductive competition and mistrust amongst co-workers.

6. High level of bureaucracy vs. low level. Is there a seeming abundance of rules, regulations, procedures and approval processes that must be adhered to and that slow down the workflow or inhibit creativity? If yes, this is indicative of an organization which is overly controlling and reluctant to trust individual judgment.

7. Office Politics vs, Office Openness. Do employees spend more time worrying about how to influence a senior exec or gain more “power” within the company than they spend time worrying about doing their jobs well? If yes, people will tend to withhold information, operate with hidden agendas, “back-bite” others. This creates a high level of distrust of dysfunctionality.
8. Disengaged, unmotivated employees vs. Engaged and motivated. Do employees seem to be just going through the motions, working the minimum required hours with a low level of enthusiasm or commitment? If yes, this is a sign of serious dissatisfaction that can fester within a non-trusting environment.

9. High Turnover vs. low turnover. What’s the employee, the vendor, the customer turnover rate for your organization? Higher than industry averages? If yes, it’s a clear sign that trust in either the management or the organization is lacking.

10. Low Customer Satisfaction vs. High Customer Satisfaction? How satisfied are customers with your product and your customer service? If satisfaction is low, there’s obviously a problem here, which ultimately results in lower trust of the organization and could be caused by an organization which operates with low trust.

If you find yourself identifying more of the low-end, negative behaviors, then trust could be an issue within your organization. If you are the boss, think hard about how you can change your culture. If not the boss, be sure YOU are trustworthy and exhibit the behaviors we’ve previously discussed. Be an example!

Claire Zevalkink

Managing Partner

Profitable Growth Partners, LLC.

Re-establishing Trust

In the Profitable Growth Partners Boot Camp for Managers program we start with a session on "Building Trust" and one of the questions that often comes up is "Can trust be re-established once broken, and if so how?" The short answer is "yes," however the first thing to remember: Trust is established by one’s action not words. What you do has a far greater impact than what you say. As Stephen Covey says,

“You can’t talk yourself out of a problem you’ve behaved yourself into.”

So, when trust has been broken, it will take repeated, consistent and positive behavior to prove one’s trustworthiness. This takes time. The amount of time will depend on the nature and seriousness of the breach of trust and the risk-tolerance (willingness to be vulnerable and trust again) of the person with whom you are trying to re-establish trust. Obviously, the more serious the breach and the less risk-tolerant the parties, the longer it will take.

Consider this as you develop an action plan to repair trust:

a. Are the parties involved more or less risk-tolerant?
b. Was the trust broken by a breach of character or a breach of competence? A breach of character (lying, being disrespectful, intentionally withholding information, covering up mistakes, blaming or bad-mouthing others, breaking a commitment) is more difficult to repair than one of competence (failing to deliver, ignoring reality, not taking responsibility, creating vague expectations).

The next thing to consider: who has broken trust? You? Or someone important to you? Or both?

You as Trustee: You’ve inadvertently broken trust with someone that matters. How do you go about repairing it? Think about ways to put deposits back into that individual’s emotional bank account. Try to learn what’s important to that person, since everyone’s emotional bank account is different.

Every situation is indeed different, but here are some basic guidelines when you’ve broken trust:

• Straight talk: try having an upfront, respectful and caring conversation with the individual. Admit your mistake and apologize, without blaming others or making excuses. Take responsibility for your own actions! (Don’t expect miracles from this conversation – it’s only the beginning).
• Benevolent Caring/Listening: let the individual know that the relationship is indeed important to you. Ask them how they feel, and what they need from you to re-establish trust.
• Make a commitment that you can and will keep and that has meaning for the individual. (don’t over-promise)
• KEEP THE COMMITMENT (over-delivering on the commitment is even better).
• Show loyalty in little ways: speak positively and supportively of the individual to others, never negatively. Let the individual hear from others how you respect him. Give him direct credit where it is due. Offer help and support when needed. (Make sure you mean it or it will ultimately backfire).
• Make another commitment.
• KEEP IT!
• Always communicate openly and honestly.
• Make another commitment.
• KEEP IT!

By behaving in the above manner, you are carefully making deposits into the individual’s emotional bank account. Over time, your behavior/actions will demonstrate your sincerity and integrity, hopefully re-establishing trust.

You as Truster: Someone important to you has broken your trust. What can you do?Once again, the best action plan will vary depending on the nature of the breach of trust and the risk-tolerance of the individuals involved. One more variable comes into play in this scenario: does this person have the motivation, the integrity and the capabilities to regain your trust?

Scenario A. Yes, the Trustee has the motivation, integrity and capabilities to regain your trust. Here are some basic behavior guidelines for you to create an environment for re-establishing trust:

• Straight Talk - have an open, honest conversation with the individual. Let him know the relationship is important to you. Tell him calmly and respectfully how his behavior made you feel (don’t get angry!). Ask if you did anything that might have triggered the behavior. This is a good way to take the individual off the defensive and show that you care. And you might find out you did do something.
• Show Respect – display a caring attitude that is respectful.
• Clarify Expectations – be clear about what it will take to re-establish your trust.
• Accept Commitments – encourage the individual to make a commitment and then accept it.
• Extend Trust – if re-trusting this individual is important to you, then be willing to take a risk and extend trust. Give the benefit of the doubt.
• Provide feedback – show appreciation when commitments are kept; clarify expectations when they are not.
  

Scenario B. No, the Trustee does not have the motivation, integrity or capabilities to re-gain your trust. This is a trickier situation.

• Apply Scenario "A" action plan above to “test” the individual. Your perceptions just might be wrong and a behavioral change on your part could create the right positive environment for this individual to change.
• If Scenario "A" fails and your original perceptions are verified, consider the following action.- Continue to talk straight, show respect and clarify expectations. Never stoop to the other’s unethical, distrusting behavior. Maintain a high integrity profile around this individual.- Be cautious of extending trust or expecting commitments to be met. Manage your expectations regarding this person’s ability or willingness to help you meet your goals.- If you are in a position to do so, consider a restructure that removes this individual from your team or your organization. An individual who cannot be trusted can be like shattered glass in an organization, hurting everyone in small, unseen ways.

Claire Zevalkink

Managing Partner

Profitable Growth Partners, LLC.

The Speed of Trust

In a recent blog post, I talked about “The Decision to Trust” which is based on a Harvard Business Review article by Robert F. Hurley. Expanding on this topic is the latest book from Stephen M.R. Covey entitled The Speed of Trust. While Hurley lays out 10 factors in establishing trust, Covey talks in depth about the “4 Cores of Credibility:”

- Integrity: While integrity includes honesty, it’s much more, says Covey. It’s walking your talk. It’s being congruent, inside and out. It’s having the courage to act in accordance with your values and beliefs.

- Intent: This has to do with our motives, our agendas, and our resulting behavior.

- Capabilities: These are the abilities we have that inspire confidence – our talents, attitudes, skills, knowledge, and style.

- Results: This refers to our track record, our performance, our getting the right things done.

Notice that integrity and intent come from our character, while capabilities and results are a product of our competence. Without competence, even the most honest person will not be trusted. In his book, Covey uses the metaphor of a tree. Integrity is the root system below the surface. Intent, which is somewhat more visible, is trunk. Capabilities are the branches which enable the tree to produce. Finally, results are the fruits – the visible, tangible, measurable outcomes that are most easily seen and evaluated by others.

The combination of Covey’s book and Hurley’s article provide an excellent framework for understanding the issue of trust, and how trust, or the lack thereof, has a huge and lasting impact on the productivity and effectiveness of an organization.

Randy Bancino
Managing Partner
Profitable Growth Partners, LLC.