The Upside to the Economic Downturn

A CASUAL FRIEND of mine recently confided to me his private glee (and relief, I suppose) at the collapse of the dotcom bubble. After years of inaction and stewing about how much the other guy was making, he is now congratulating himself on his prescient decision to do nothing. Geez, I gotta get some new friends. But this guy’s slimy self-satisfaction aside, there may actually be some very good reasons to welcome the current downturn, at least for a while.

I was 14 months into a major development project that started, coincidentally, the same month as the 1987 stock market collapse. What should have been a pretty straightforward effort to refit our distribution systems had long since turned into the most difficult and aggravating project I’d had in a long time. The design and coding were taking far too long, in part because of what the design analysts were calling creeping complexity (or receding oversimplification, depending on whom you asked), and I was saddled with a senior vice president of distribution who was determined to sit on the far sidelines, lobbing the occasional stone, in case things didn’t work out.

One Saturday morning, a few of my development folks and I sat in a conference room and reviewed the previous week’s spotty integration test results. While it seemed pretty clear that we needed to do more tuning and testing, the intense pressure I was getting from the CEO about the budget and schedule, combined with my unrivaled flair for overruling common sense with carefully crafted rationalizations, got the best of me, and I determined that we should move on to field tests as soon as possible. The meeting adjourned around midday, but the arguments continued as we drifted to our cars to salvage what was left of the weekend. Sometimes I sit behind the wheel of my parked car and think while the devil of self-scrutiny and doubt sits on my shoulder. Sometimes I just sit behind the wheel of my parked car.

About 10 a.m. the following Monday, I got a call from the aforementioned SVP of distribution (not really him, of course, but his assistant), saying that he’d like to meet in his office in three hours to discuss the decision to test the new applications in his distribution centers. “Of course,” I mumbled, biting through the tip of my pencil.

Should I grab my passport and leave the country? I thought, or should I find the rat that spilled the beans on the test results, kill him and then leave the country?

“I’ll be there,” I said.

In the year and a half since I’d joined the company and put the systems strategy together, I couldn’t remember a single time when this guy ever made any attempt to be the least bit cordial or engaging. So it was a huge surprise to see him stand up and walk from behind his desk to shake my hand as I walked in. The niceties and chit-chat were beginning to drag on a little when he finally said, “Listen, our folks in the distribution centers seem to have fallen a little behind on their preparations for the field test. That, combined with the upcoming summer vacation season, means it’s going to be tough to take on that testing now. I’d like for you and me to speak with the CEO together about stepping back on the project for a couple of months to help us out. I don’t want to get anyone in trouble here, so it’s important we show a united front. I promise to repay this favor real soon. OK? No squabbling allowed on Olympus and all that.”

Barely able to keep from giggling like a 9-year-old, I graciously agreed, solemnly lamenting the disappointment my team would surely feel at the delay, and got out of his office as fast as I could.

Reprieved! Sometimes you get lucky and sometimes you hit the lottery. Only the uncertain standards of decorum in the ’80s workplace (and the fact that she probably would have decked me) kept me from kissing my 68-year-old admin right on the lips.

This was one of the first real breaks I’d gotten since joining the company. My first task when I was hired to turn things around (new CIOs are never brought in when things are going great) was to develop and present a strategic vision. It was received by most of the executives well enough, but new strategies?until they’re proven with a successful system implementation or two?are defenseless cobwebs, thin strands of erasable marker forming interconnected patterns on a white board. The last thing they need is someone blowing on them, which is all this guy had been doing for more than a year. Suddenly, he was off my back and we had more time to clean up the applications and test things right.

The recent slowdown in the economy, the layoffs, the reduced budgets and refocused priorities could, in spite of the pain, also be just the reprieve most IT organizations need. The past three years, for all the good things they brought us?namely higher visibility, larger budgets and in many cases a seat at the senior table?also brought frantic, panic-driven, often wasteful development schedules induced by absurd claims about the new economy. It also brought us shortages of just about everything?especially people?and user and market expectations beyond anyone’s ability to deliver.

A critical component of the hype driving all this was to make predictions that seemed bold and counterintuitive and to dismiss doubters as old economy pikers who just didn’t get it. Sometimes, these predictions were accompanied by a lot of numbers masquerading as information showing fantastic growth and given the more authoritative moniker “projections.” Eventually, when enough of these self-styled new economy thinkers were all saying roughly the same thing, these visionary insights morphed into conventional wisdom. We were all reacting to very small and meaningless amounts of data, projected endlessly and seamlessly into an improbable future.

For a while anyway, the bold and patently goofy projections are over, and we can begin to think and rethink strategies and tactics for a more earthbound reality. Granted, more rational and measured growth and investment may not be as exciting, but think of the opportunities.

To begin with, tighter budgets and more measured implementations are an invitation to reexamine investments in IT both inside and especially outside our departments. One of the nastiest byproducts of this go-go expansion, especially among more centrally controlled IT functions, has been the emergence of secret IT organizations: teams running hidden projects (ones that didn’t make your priority list), funded by budget surpluses and chartered and managed by other departments or field operations to solve tactical problems. Valuable, they may be, but they are often poorly documented, built on nonstandard platforms and nearly impossible to integrate. Eventually, of course, they’re handed over to you to support. Closer, companywide scrutiny of budgets is your opening to identify and gather these projects back, make them more rational and integratable, and find a place for them in your priorities by co-opting resources.

Here also is a chance to fold e-commerce development and support into transaction systems development and support. Many companies?believing that the new economy was about to bury the old one and/or seeing e-commerce as primarily a marketing exercise?allowed design and development teams to operate outside traditional IT organizations, sometimes outside the company altogether. The result is e-commerce systems with sloppy, awkward interfaces to the systems that do the real work, inefficient spending and lots of interdepartmental friction. The new search for efficiencies should make the advantages of bringing these organizations together obvious. The result, if exploited properly, will be more capability, better systems and enhanced customer service.

Finally, we’ll have more of what are potentially two of the most precious commodities around, namely, talented people released from dotcom startups and downsized blue-chip companies and, if we’re smart enough to use it properly, time to get our underlying systems healthy in preparation for when things turn around. A golden opportunity, if there ever was one.

In the end, the extra two months I got on that distribution system made all the difference. We delivered nearly flawless applications, and, the best part, that SVP of distribution twisted himself into all kinds of unnatural shapes to be nice to me from then on. That was pretty sweet.

I sure hope he doesn’t read this column.