by Jack Keen

Real Value – Make It Clear

Dec 01, 20036 mins
IT Leadership

What gets your goat the most? How about the rejection of vital IT funding requests for no good reason that you can discern? Maybe the doomed proposal was a crucial systems infrastructure upgrade. Or a much-needed, next-generation transaction processing system. How can executive decision-makers reach the pinnacle of power and still not “get it” when it comes to IT? What can be done to help them see the light?

It turns out the answer is: a lot. What follows are ways to recognize symptoms of IT value blindness, explanations of why the problem occurs and suggestions for fixing it. The trick is not to try to change the decision-makers?but rather to change the way you and your team are delivering your message.

Warning signs of executive IT value blindness are easy to spot. Start with the age and background of the decision-makers. If these execs are eligible for senior citizen discounts at movies and restaurants, and have spent most of their careers in capital-intensive environments (for example, manufacturing, transportation, utilities), they may not “get” IT because they have never experienced the transformational power of technology at a deep, personal level. Another signal of possible IT prejudice is a fanatical insistence that benefits must always be tangible to “count.” This attitude often reflects an insecurity about things that can’t be seen or touched. A third alert is the lack of understanding of how and why IT investment selections are made. Murky methods may cover up foggy ways of thinking about technology value.

Once we’ve spotted symptoms, it’s time to drill down to the real causes of the problem, such as:

“I don’t believe it” (rejection of fundamental assumptions). Too often, what we believe are shared givens between us and investment approvers are not. For example, a CRM project request may assume that everyone agrees that sales-force productivity increases are critical to the company’s future success. But such an appeal can fail with nonsales executives. For instance, a key manufacturing-oriented decision-maker may believe that sales depend on adequate production capacity, not better-informed salespeople.

“I don’t see it” (weak data-to-decisions explanations). Just because you and I know that better data is fundamental to nourishing business success, doesn’t mean others do. People tend to rely for future successes on what worked in the past. Action-oriented executives (doers, not thinkers) are especially prone to this. They often boast about the depth of their experience and success of their gut-feel decisions. But, they may not intuitively understand how they or their subordinates need faster, better data in today’s more complex, rapidly changing world.

“I can’t measure it” (too soft for comfort). Battle-hardened senior managers can be highly skeptical of any proposed benefits that appear untrackable. They’ve seen too many mushy promises lead to project flops. Their solution becomes: no measurements, no acceptance.

A number of remedies can help you overcome these IT value blindness challenges?all within your control. Read on for tips on how to appeal to skeptical decision-makers.

1. Give ’em what they care about. Construct value messages that fit the worldviews of the purse-string holders, not the focus of the proposed investment. Suppose, for example, that a manufacturing-centric exec has a key role in approving funding for a human resources global data warehouse. You can enhance funding likelihood by casting the payoffs of the data warehouse in terms of the value to manufacturing, not to HR. Explain how the data warehouse makes HR more aware of transferable skills within manufacturing operations. Such awareness accelerates management’s ability to move production workers to areas that would most benefit from their talents, rather than keeping everyone in place and using expensive outside resources to fill perceived skill gaps. Net payoff from this data warehouse: higher manufacturing output at a lower labor cost.

2. Hammer home the data-to-decisions connection. Many senior decision-makers need help in clearly understanding how better data triggers better decisions and thus better business results. Collect and use real-world stories to drive home your point. For example, the multibillion-dollar Northeast blackout in August 2003 was caused by a lack of timely data. Reports have surfaced that if power grid decision-makers had known, 22 minutes before disaster struck, that a total of eight power grids were floundering, not just two, which the data erroneously reported, they could have taken steps to avert this historic power failure. Data-driven organizations can overturn entire industries. Look at Wal-Mart’s besting of Sears and Kmart via better use of IT. Consider how Capital One emerged as a leading credit card vendor decades after the established suppliers began. This financial upstart used a data-based, eagle-eyed strategy to track customer credit card habits, which revealed business opportunities that established companies never saw.

3. Make your message clear and succinct. One helpful communication tool is what I call a value ladder. This graphic device lays out your rationale like rungs on a ladder and is read from bottom to top. Let’s take the HR global data warehouse example previously mentioned. At the bottom of the value ladder are key features of the investment being justified (for example, better data on transferable skills of manufacturing workers). The next rung is business value benefits for IT or operations people (for example, this data accelerates management’s ability to move production workers to areas most benefiting from their talents, rather than keeping everyone in place and using expensive outside resources to fill perceived skill gaps). The final step of the value ladder is a senior executive-oriented value statement (for example, net payoff from this data warehouse is higher manufacturing output at a lower labor cost). Each rung is connected with an arrow pointing upward to the next step. Thus, in one concise value ladder graphic, the entire story is recapped, highlighting benefits for every key stakeholder.

4. Explain how value forecasts can be measured during implementation. For example, if customer satisfaction is a big part of your IT project justification, and research has revealed that decision-makers agree that more frequent purchases are a prime indicator of such satisfaction, explain how the proposed system can capture that information and report it quarterly.

More often than not, managers don’t “get” IT because the value message in an IT proposal doesn’t tell it in words they understand. Upgrading the delivery side of this message can do wonders for getting more worthwhile IT projects approved. And that means more business success.