To contribute business value, IT has to understand the organization’s mission, vision and strategies. All of that starts with trust and transparency.
It was a fairly routine appeal—a capital budget request to upgrade the organization’s WAN acceleration technology. The cost was estimated to be seven figures. But something about the request struck Michael Keithley, CIO of entertainment industry giant CAA, as wrong; he couldn’t quite put his finger on it, but he felt this budget request needed more investigation. So he asked a question: What was this investment’s business value?
After some time crunching numbers, his team came back with an ROI study, demonstrating how the investment would create some kind of a return. Keithley, however, wasn’t satisfied. It seemed too abstract. “Which of our customers are complaining that our WAN is too slow?” he asked. “None of them,” he was told, “but our WAN acceleration technology is getting old and we need to be proactive.” That’s part of life for an IT executive—you have to maintain the technology you have—but the question was still gnawing away at him. “If no one was complaining, was this a good investment?”
“I want you to try something,” Keithley instructed his team. “I’d like you to turn off our existing WAN acceleration technology for our New York office.” His team must have thought he was crazy. “Let’s see who complains.”
No one complained. In fact, no one seemed to notice at all.
Keithley asked his team to turn off WAN acceleration, office by office, across the entire network. No one complained. As it turned out, the WAN technology that they were about to replace because it was getting too old, wasn’t needed any longer. At some point, it was probably a critical piece of their solution. But like many things that simply become part of the “assumed necessity,” the WAN acceleration technology was maintained without anyone asking if it still provided business value to the organization. Rather than a seven-figure investment, the company ended up de-installing an entire suite of unneeded technology, reducing its complexity and freeing up precious capital for other investments.
It was a triumph of how an IT organization is supposed to work. It was a testament to Keithley’s management style. And it delivered significant business value in terms of the cost savings but, more importantly, in the form of the innovative initiatives that those dollars later funded.
But this triumph did not start with this episode. It had begun years before when Michael Keithley first started at CAA. This triumph was just the latest realization of an investment made years ago.
Creating Business Value
If you have followed my writing, you know that “business value” may be my favorite phrase. I use the term “value” about 70 times in my book The Quantum Age of IT: Why Everything You Know About IT is About to Change. I think that the understanding of business value and how IT contributes to it is the key to unlocking IT’s continued relevance in the new era of IT organizations.
But what exactly is business value, and how can an IT organization create it?
I think Michael Keithley’s story can help us understand the answer to this question. What makes the concept of business value difficult to understand is that it is not simple and consistent. It is different for every company because it is intimately tied to the organization’s mission, vision and strategy. Business value is anything that helps the organization execute its strategy, realize its vision and fulfill its mission. But those are often communicated and measured in terms that IT rarely uses, such as “return on shareholder value,” “first or second in every market” and “customer experience.”
To contribute to business value, the IT organization has to be on the inside. IT leaders and managers have to understand the organization’s mission, vision and strategies. They must possess an intimate understanding of how IT can affect them and how they play into the bigger picture. And all of that starts with one thing: trust.
The Gift of Trust
When Keithley started at CAA, he was asked to meet with the head of the organization. They talked about the job, expectations and all of the normal stuff. But one small comment trumped the rest of the conversation. His boss simply looked at Keithley and said, “I trust you.” He then told him to just do the best that he could. It was powerful in its simplicity and in how it made Keithley look at his role.
IT executives and managers often lament that “the business doesn’t trust us.” They complain that their decisions are second-guessed and called into question. There is an implied belief that we in IT are the “professionals” and therefore when we make a statement, it should be inherently trusted. I have historically counseled IT leaders that this is wrong. That they must first earn that trust through the consistent and reliable delivery of services. I still believe this to be true, but I now realize that this isn’t where it begins.
Trust begins as a gift.
When Keithley’s boss looked at him and told him that he trusted him, he had almost nothing to base that trust on. The boss didn’t really know him. He offered up his trust before Keithley had earned it. It was a gift. It was a statement that Keithley’s focus should not be on impressing him or living in fear that he wouldn’t measure up, but that he had a positive balance in the “political capital” bank account; therefore, he should go do the job he was hired to do. The psychological effect of that gift is so powerful that you are reading about this story 20 years later.
Most of us have stories just like this one. We remember that moment when someone believed in us when we weren’t even sure that we believed in ourselves, the moment when someone trusted in our abilities, in our integrity, in our character. And that faith and trust propelled us to achieve things that we didn’t know we were capable of achieving. We committed to honoring that trust.
Yet, how often, as IT leaders, do we fail to offer that same kind of trust, as a gift, to others? And then we are shocked that they failed to deliver, which ironically reinforces in our minds that we were correct to withhold that trust to begin with. But when we start by offering up trust as a gift, things change. People have this tendency to live up to the expectations that are set upon them. When you believe that they can do something, more often than not, they will do it.
Trust Creates Transparency
This tale of trust given as a gift, and the culture it creates, is the real story of the WAN acceleration project that wasn’t. While his boss was long gone by this time, his spirit of trust was embedded deep in Michael Keithley and the culture of the organization. When we were talking about this story over lunch, Keithley told me that had he submitted the WAN acceleration request, he knows that it would have been approved. He was trusted, right? But because he knew that, he also knew that he owed it to the organization to make sure that it was the right to submit the budget request.
A true sense of trust, one that is embedded into the culture, creates organizational transparency. I think people tend to think of it in the opposite order—that transparency creates trust. But I believe that transparency simply reinforces trust—a trust that was given freely to begin with. As you trust your management team, your leaders and your entire organization, they will be emboldened and will stop holding back. The truth will begin to flow unvarnished. And in that transparency, trust will be reinforced and deepened. And from that fertile bed, the seeds of deep and lasting relationships are planted. Those seeds eventually sprout into what I call “intimacy” in The Quantum Age of IT.
That level of intimacy is the engine behind generating sustained business value.
The Trust Dividend
The cynics among you may be cringing that this is all a bit too warm and fuzzy. You may be grumbling that you were looking for some hard examples of how business value is created. But I believe that this type of warm and fuzzy approach results in an IT organization’s ability to consistently deliver business value to the organization. Call it the “Trust Dividend.”
Years ago, Keithley had an opportunity to be at the forefront of what we would now consider the smartphone revolution. Working with groups that would eventually become Research in Motion (and then BlackBerry), they began experimenting with this technology to see how it could work in CAA. Because of the high levels of trust that existed, they invested significant amounts of time and resources in a highly speculative project. They hid nothing and shared everything with the management team, who clearly did not understand where they were going. But trust and intimacy prevailed. Eventually, they produced a co-developed BlackBerry-like product that would allow CAA agents to gain remote access to critical data sitting in data center servers.
One day over lunch, one of their executives was sitting with a high-powered producer discussing a package of talent. It was clear that it was not the right mix. In the past, the opportunity would have been lost and they would have had to go back to the office and start over, hoping that the opportunity would still exist once they had regrouped. But this executive was testing out the new mobile tool. Sitting in a bathroom stall, he quickly searched CAA’s databases and compiled a new talent package on the spot. Returning to the table, he got the deal done. The dividend was clear when that executive called Keithley on his drive back to the office and told him, “That one deal just covered your entire IT budget for the year. Thank you.”
Creating business value is not alchemy. It is about being close enough to your business partners that you can see how your team can contribute to the organization’s mission, vision and strategies in immediate and tangible ways. That takes trust. The good news is that it all starts with you. If you treat trust as a gift—and give it—you will be laying the foundation of an organization that will consistently perform and deliver. It will put you on the path to lasting intimacy with your customers and will eventually help you to realize the trust dividend and take your organization to places even you haven’t imagined.
Founder & Institute Fellow
Charles Araujo is a technology analyst and internationally recognized authority on the Digital Enterprise and Leadership in the Digital Era who advises technology companies and enterprise leaders on how to navigate the transition from the Industrial Age to the Digital Era. Having spent over thirty years in the technology industry, he has been researching Digital Transformation long before it became the uber-buzzword of today, and is now focused on helping Digital Era Leaders prepare themselves and their organizations as the macro trends of the primacy of the customer and the primacy of the algorithm collide, ushering us into what he calls The New Human Age.
Principal Analyst with Intellyx, founder of The Institute for Digital Transformation, author of three books, and most recently the co-founder (with his wife) of The MAPS Institute, he is a sought-after keynote speaker and has been quoted or published in CIO, Time, InformationWeek, CIO Insight, NetworkWorld, Computerworld, USA Today, and Forbes.