This article is adapted from the Moskowitz/Kern book Partnering For Success:Managing IT as an Investment (Prentice Hall, 2002)

Strategy requires a Big Picture and a roadmap to get there. For instance:

• Everything becomes more meaningful when there is context

• The more meaningful an enterprise becomes to the individuals, the more effort people exert to bring about success. This is very different than a mission or vision statement that is “owned” by the organization and not the individuals. Owned by the organization, you get brick layers earning wages. Owned by the individuals, Cathedrals are built.

Just as every brick is laid understanding its role in the cathedral, every project undertaken by technologists needs to be related to its role within the enterprise vision and the IT vision. This leads to a counter-intuitive truism: All operations are strategic and all strategy is operational.

Strategic thinking is not a once a year process or a road to a document, it is a perspective that can be developed and can be taught. It is a behavior that can be learned and must be reinforced at all levels of the organization. “The ability to connect one’s job to a larger mission is not primarily a matter of competence, work ethic or other such traits that good workers naturally possess. Instead, the job-mission connection comes about through communication that starts at the executive level and resonates throughout the ranks.”

Strategic thinking stresses enterprise points-of-view over, seat-of-the-pants, silo thinking. An interesting example is acquisition planning and its attendant due-diligence. Enterprise acquisition strategy may require integration of technology, emphasize economies-of-scale, require product integration, marketing integration, supply chain integration etc. It may require consolidation or complete independence of businesses or anywhere in between. IT needs to be part of every due-diligence effort and needs to budget and plan accordingly. While it is unlikely that technology becomes a deal-breaker, it can happen. Appropriate due-diligence that incorporates integration planning avoids the untenable situation of building “islands of automation” through short-term thinking. The result is an expensive and non-competitive enterprise with little ability to react to its marketplace.

The Practice Of Management in 1954 was the first book that asked the question, “What is a business?” No one had asked that. They thought we knew, and I asked that question because my clients asked it. I was a securities analyst 70 years ago in London, so I can say that no financial man will ever understand business because financial people think a company makes money. A company makes shoes, and no financial man understands that. They think money is real. Shoes are real. Money is an end result. What is a business? The only function of a business is to create customer {value} and to innovate (Business 2.0 The Guru’s Guru - Peter Drucker). The “financial man”is a powerful example used by Mr. Drucker but is by no means the only example of such thinking. In the technology arena we often encounter technologists who implement technology for technology’s sake.

We are all in the business of contributing to the creation of customer value and innovation. Thinking strategically means consistent decisions incorporating foresight replace trendy decisions that are often inconsistent and rarely synergistic. It means understanding and planning for the implications of decisions. It means being proactive not reactive. We can proactively make a decision that is counter to our technology strategy, for a clear business purpose, but it is done consciously and with a plan to converge eventually with the enterprise technology strategy. It means that we do not avoid the tough questions in order to simplify a short-term decision. For example, it is not enough to put together a disaster recovery plan for technology without pressing the organization to confront the issue of business continuity. Business continuity is often reduced to disaster recovery and left in the hands of IT. If this is the case it is incumbent upon the CIO to educate executive management on the need for a business continuity plan and the role of technology within such a plan.

Business Strategy Formation sets the context that relates the enterprise to individuals and individuals to the enterprise. A simplified illustration of the Business Strategy Formation process is depicted in the Figure below.

Business Strategy Formation

Enterprise strategy is the cornerstone of Business Strategy Formulation.Enterprise strategy informs business unit and IT strategy, which, in turn, influence enterprise strategy. However, business unit strategy and enterprise IT strategy are more interdependent and are created in partnership. This is an arduous and exacting process that begins with a vision.

Companies whose employees understand the mission and goals enjoy 29% greater return then other firms (Watson Wyatt Work Study). Vision statements need to obey some fundamental principles. The vision statements should be:

• Simple

• Clear

• Timeless

• Powerful

• Memorable

• Actionable

What many executives don’t realize, however, is that a company’s mission statement can also be a management tool. But it is only useful to the extent that each employee links the mission to his or her job…“High scores on the… mission question correlate positively to all desirable business outcomes,” but especially to productivity and profitability. This is validated quite
effectively in Table Esprit De Corps below.

Table: Esprit de Corps

The ability to connect one’s job to a larger mission is not primarily a matter of competence, work ethic or other such traits that good workers naturally possess. Instead, the job-mission connection comes about through communication that starts at the executive level and resonates throughout the ranks. The best statements… are short, direct, and set a value system.” (Gallup Management Journal Winter 2001, On A Mission by Susan Ellingswood).