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ResourcesBreaking the technology mystique...Why is it that leaders and managers can bring about business outcomes in the areas of revenue, market share, yet do so poorly when it comes to deploying technology and achieving significant return on investment.Hopefully, through this material, we will be able to break the technology mystique, and help you release your leadership and management skills, so that you can achieve greater business outcomes with technology. Experts, such as Adrian Slywotzky, in his book, How Digital Is Your Business, are telling staffing executives that value and profitability are going to increase by taking a serious look at conventional business design and moving toward a digital design to our organizations. Adrian Slywotzsky describes what a digital business is: "We define digital business as one in which strategic options have been transformed and significantly broadened by the use of digital technologies. Under this definition it's not enough to have a great Web site or a wired workforce or neat software that helps to run a factory. A digital business uses digital technologies to devise entirely new value propositions for customers and for company's own talent; to invent nice methods of creating and capturing profits and ultimately to pursue the true goal of strategic differentiation: uniqueness." The following are a few examples of companies competing in low margin almost commodity type businesses that have catapulted over their competitors in market share, profitability, differentiation, just because of the leadership and innovation they exerted around technology: These are the financial implications: 3 year Average Pretax Profit Margins *
Three-Year Average Revenue Growth Rates (1997-1999) *
* Tables from How Digital Is Your Business Copyright 2000 In the late 1980's people recognized that fax machines were important tools to have in their businesses. In making the purchase, no one sat down to do a business outcome analysis. It was simply recognized that it was necessary piece of electronic gear to do business. In fact, if someone ever did strategic outcomes analysis on owning a fax machine, they might come up with some innovative ways of using it that could possibly distinguish their businesses. Send instant confirmations on orders. Send thank you notices for inquiries, do blast faxes on helpful hints about HR. There might be dozens of ways to increase one's ROI with a fax machine. On a $400 purchase, you could easily get 20X to 100X ROI. It is astonishing that during the 1990's, the acquisition of automated accounting and front office applications requiring outlays of $70,000 to $150,000 were treated in a similar fashion to $400 fax machines. The purchases were made largely because it was recognized that they were important business tools. Senior business managers made purchases without any pre-described strategic outcome and therefore without any strategy to accomplish it. This is why many staffing firms have invested thousands of dollars into technology with very little ROI. In a sense, there was very little expected in terms of ROI, and therefore they received very little for their money. Their expectations were met; they had none! Hopefully, at this point you have become convinced of two things: First, that technology, if put in the proper context, can have a significant financial impact on your business. Secondly, that for it to have a significant financial impact on your business, you need to define exactly what strategic outcome you are looking to accomplish. "People with goals succeed because they know where they are going." Earl Nightingale Putting technology in a strategic context Business people intuitively put their time and energies into the areas they perceive are the sources of the greatest threats or opportunities for their businesses. If you were to ask a CEO how his or her business is doing, they will respond by highlighting those things that they believe are the key indicators: Sales are up. Sales are down. We got a major account. We lost a major account. Our margins are getting thin. It's getting difficult to compete. Typically, those are the areas that will draw upon most business leaders time and energy. That means for a CEO or business leader to put any significant time or energy into the outcomes that will be generated by technology, they first have to believe that significant outcomes are attainable. Outcomes that will affect market share, profitability, or some key business objective such as improving customer service will earn the attention of business leaders. Therefore, for an organization to be led into a useful and profitable deployment of technology, it would first have to be placed in a strategic context by senior management. Based on the differentials stated in the tables above, there should be plenty of motivation to put technology in a key strategic role. For organizations to capitalize on the significant financial outcomes that are attainable with technology, they have to be led by the senior management. New technology is intrusive, some more than others. The more complicated the technology, and therefore the more education required, the more intrusive the technology. Fax machines minimally interfere. New telephone systems, if used on a rudimentary level, are not terribly intrusive. The education required on both of these technologies is nominal, and a minimum amount of leadership is needed to bring about relatively successful outcomes with their deployment. Integrated automated systems are a different story. The delta between the operational process between different automated systems or between a manual and an automated system are significant. Therefore, the deployment of this type of technology hits two types of barriers. The first is that you are significantly changing the way the person does his/her job. Secondly, you are making them go through a significant learning experience while their workload of regular functions has not changed. The leadership and management skills necessary to bring an organization successfully through that type of change are sizable and should never be underestimated. It needs to have a compelling vision to rouse an organization behind it. And a leader of a company will wrap change in a convincing vision, only if he or she believes that there is a credible strategic reason to do so. Organizational change is easier when there is a compelling vision. The more values based the vision, the more compelling. An organizations energy is released around a compelling vision. There is a story about a group of employees who went on a lunch hour picnic. There were three leaders in the group who observed a thunderstorm coming. One got up and told everyone a thunderstorm was coming. He instructed them, 'Line up in single file, one foot apart, hold your lunch bag in your right hand and the blanket in your left. There is a tree 100 yards away. If we leave now, we can make it before the storm comes' (the micromanager). The second executive started shouting and barking orders, 'Pick this up immediately!' 'We need to do it now!' (The dictator). The third executive got up and said, "Look, there is a beautiful apple tree over there. If we move under that tree, we could stay out of the rain and sit down and enjoy apples' (the vision caster). The story depicts the importance of incorporating change into a compelling vision that includes incentives for people. The more a vision can be cast around high values, the more buy-in for that vision and the more people are willing to change their behavior. People rally around strong values. Visions are most compelling when they are values based. People are most productive in a climate of positive values. September 11th changed the United States of America. For weeks after the tragedy at the world trade center, people behaved differently towards each other and they did it on their own. Being attacked by terrorist united and rallied our country around the value of patriotism. Flags started popping up everywhere. Stores ran out of them. People were nicer to each other. Many people took their own money and mailed it to people and organizations that they did not even know. And they did it because the tragedy hit something high in their value scale. They love this country and therefore were highly motivated to do things that were good for America and for their fellow Americans. What does your company stand for? How does it treat its employees and its customers? Do your employees see the company doing things for the right reasons? Is it all about money or is it about caring about people and serving them. Not serving them because if you do, you will make more money and get more market share, but serving them because you believe that it is part of the golden rule. People in organizations are motivated more by values then by any other thing. Employees rally around values. It is good to have a profitable business and one of the reasons why it is good is because you can be generous with your people and provide them with growth and opportunity. If you believe that, then promote it, and make it part of your vision. If you care about your customers, then you are going to think of ways of improving their lives and the business opportunities that you can help them with. If you believe that then promote it. Cast that vision to your customers and your employees. When companies do excellence in the way they treat people and provide services, it has a dramatic impact on the morale of an organization and helps oil an organization for change. People are much more willing to move in new directions as long as they believe in the leadership and the vision of the organization. When technology deployment is the out growth of a values proposition that your employees believe in, they will be much more willing to adopt the changes that will take place. Hopefully at this point you have become convinced of four things:
Driving business outcomes with technology through the proper management structure: What gets measured gets done! The most powerful and dramatic business outcomes take place in the context of a strong management structure. Companies have good cash flow because they have good business practices that bring about good cash flow. Every two weeks they produce a report (measurement). Based on the information on the report they take specific actions. Then they close the loop by tracking the response to those actions. Though this is a simple and effective approach to measuring and producing good cash flow, these management skills are often avoided in terms of bringing about specific business outcomes with technology. Developing performance metrics, tools and procedures to measure business outcomes and designing closed loop systems so that there is continuous feedback are all part of a quality management system that brings about positive change. The greatest goal that can be accomplished in an organization is when changed behavior and the reasons for it (the vision) become part of a corporate culture. That is when new behaviors become self-sustaining. Peers instead of leadership reinforce behavior. That is powerful stuff. Why a strong message is part of strong leadership; your staff knows what you think is important through your actions. Priorities mean that there is competition between events. The realization that there is competition and that value decisions are made between priorities is one of the most important realities to face regarding system deployment and training. Do your people understand the outcomes that you are looking for? Are there incentives in place for them to reach them? Do they understand the value of that event and outcome in relation to other ones that leadership values. Has leadership expressed the value in such a way that employees clearly understand how to make choices during the day between events (competing priorities)? Has leadership empowered the staff to move into new events and processes through extensive training and orientation with new technology? People will always move to that which is most familiar and comfortable. How much training is required in a new process for it to become comfortable and familiar so that I adapt the new process in lieu of the old one? Hopefully at this point, you are convinced of six things:
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