In a bid to survive and prosper, businesses are either moving forwards through innovation while others are hunkering down to secure initial and long-term survival. Which approach proves more successful remains to be seen, but as we move together, cautiously or optimistically, we need to consider our actions of today. Starting with leadership, IT and working closer with procurement.
Lockdown is a word we all now share. But lockdown means far more than simply staying at home. Lockdown is a behaviour which many companies have adopted in recent months, a behaviour that is required to enable survival.
This lockdown behaviour is, in part, demonstrated by looking at the job market. The first ‘hot’ roles that grew sharply soon into the UK pandemic were in finance, followed by procurement. Across sectors, roles which could ensure structure to finances, conserve immediate cash and renegotiate to save some money in the mid and long term, all grew sharply. Companies were effectively managing their financial risk exposure.
Managing down this risk of exposure by limiting activity to core activities, limiting cash, and cutting spend, gives more financial headroom, but will it provide a future for those same companies? That future is one that will be measured by stakeholders, shareholders and critically the actual teams of employees who need to feel confident that they will get the funding, latitude, investment and accountability to grow again.
Widening the business lens
This, interestingly, is a time when employees who perhaps previously hadn’t really had a wider lens on the businesses in which they work in, are now becoming more aware. The agenda in many businesses has been about customers and that remains as true during these tough times as it ever was. But, perhaps the wider ‘IT’ engine room of the business had been less interesting to some parts of some of our teams.
In addition to finance, bigger constraints came into play as the landscape continued to change. Some organisations have seen a game-changing shift in their competitors and are in defence mode, protecting their businesses from both new and existing competitors in an urgent bid to maintain cash flow, remain solvent and survive the events of 2020.
Radical and sudden operational and supply chains have also been impacted and disrupted. Some companies are struggling to leverage distribution channels and to provide enough product/service availability to keep up with demand. The ability for IT systems to accurately predict customer/client demand for products and services, in the face of competitive disputers taking full advantage of change in customers’ demands due to the pandemic, requires IT platforms capable of balancing short-term focus against long term growth opportunities in a business. This, without overplaying it, is a major challenge for senior technology leaders. The propensity for historic underinvestment in technology, that same technology which now safe-guards the future, might mean any current near-term gains might well become rapidly eroded as today’s tactical gives way to tomorrows’ strategic catch-up.
These company lockdowns are being seen by many of us. So, more than ever, having a responsive IT team with definitive and exemplar leadership driving survival in some technology led companies who are consolidating revenue streams, divesting businesses, rationalising products and reducing proposition of services to help to drive a simpler business, is going need high emotional engagement, experience and intelligence, and exceptional collaboration.
IT and Procurement: hand in hand
Along with simplifying, many companies are reducing their trading risk by diversifying supply chains across multiple vendors and partners, to enable more transparency and security across supply chains. The complexity this adds to IT platforms can in some legacy IT stacks, be exponential.
This technology complexity is overlaid with another major contributor, and key strategic partner to IT, procurement.
Procurement teams are actively reviewing IT and other framework contracts, scrutinising big spend items, and assuring contractual performance with suppliers. Investigating cost reductions due to the scaled back operations of product or services outlined above, as well as removing over-licensed software, matching capacity that was built into contracts with actual need and achieving other low-hanging fruit to reduce ongoing expenditure is a joint collaboration where IT and Procurement will only succeed together.
In recent work I have led ( before the pandemic) I have been able to achieve year-on-year savings in operating expense in excess of 50% through partnering effectively with Procurement. By adopting a focused strategy on what products and enhancements can deliver proper near-term and lasting value, and by challenging and removing legacy IT, outdated working practices and processes, reducing the ‘belt-and braces’ culture and implementing a ‘what matters’ culture.
This ‘what matters’ approach was achieved through a rigorous and transparent process involving team members through the organisation, at all levels, working in collaboration with partners and suppliers to look at creative ways to finance payments, defer spend, extend contractual Terms and to avoid ‘hanging-on’ to platforms which, in the very near term, will become exposed as obsolete. In my recent conversations, one CEO said to me that we have a world class ERP platform but it’s about ten times the size we need – we’re massively over-engineered’. He is acutely aware this needs to be dealt with. In my own recent past, I have taken over 20% out of the cost base for a single large business-wide platform. A reduction of millions of pounds. This was achieved by being focused on right-sizing the platform the business needs for now and not allowing vendors to charge for licenses for future growth when that growth, right now, is uncertain.
A culture of change
In driving this change there is a huge reliance on having the best possible people engagement, exceptionally high amounts of transparency and trust, and a culture which embraces the uncertainty openly, and with empathy. Being transparent and operating with empathy will give businesses more of a license to do the right things and the hard things and get as much support as possible.
Businesses that operate counter to this, with secrecy, obfuscating their thinking and sharing their decision making until as late as possible, will lose trust of their teams, both in the short term and long term. How many of us have seen M&A activity destroy value because of the wrong behaviours of an acquiring company? Good leaders in good companies remove information silos within their organization (including those among leadership roles) and focus on more cross-functional collaboration, but this is not all we need to consider as senior IT leaders.
Our teams, especially in times of immense change, also need support. The investment made in supporting people in time of need pays dividends in the future. The key to this is allowing flexibility within the operations of the business. During the pandemic, a number of my team worked split days, early morning to mid-morning and then evenings. It worked well and was well received, allowing for home schooling and other home life challenges. But, this flexibility is not something for a few months, this is change for the long term. How then, as our businesses rely on being more agile, can IT teams be collaborating yet separate and discontinuous in time? The role of IT leaders going forwards is to provide a far clearer outcome-based approach to working, enabling people to organise themselves not just to meet when needed, but to work when needed. This needs new skills and behaviours. Skills of collaboration, not being afraid to ask for help and readiness to be flexible to expand in tangential roles. This new way of working is going to take time to settle in organisations; employers, leadership, managers and their teams will need help long into the future of how to adjust, while working productively and collaboratively.
Change is necessary
Productively and collaboratively is not enough anymore. We also need to keep everyone safe, both physically and mentally. Leaders and managers, no matter how functional and historically distant from deep rooted emotional intelligence thinking they are, also need to become significantly more aware. Development will be needed as part of basic early-career management education in a range of topics as far ranging as diversity and systemic bias in decision making in the workplace, to building products with sustainability and carbon neutrality in mind; maybe with objectives and performance linked to this more extensively than is found today.
Having recognised that functional skills alone are likely to be a smaller percentage of the competency of the next generation of first-time leaders, what other capabilities are needed in the best of the next generation of leaders?
Characterising these skills has been driven forward by the pandemic, but clear expectations would include critical thinking, creativity, and inclusiveness driven from both curiosity and a growth mindset all deployed in an organisation that shows both flexibility and adaptability. These operations must be prepared to be courageous and challenge the status quo in an empathetic and technology inspired way.
Being a next generation leader in this new and complex world will take some investment. Being a current generation leader living with today and developing teams for tomorrow will require all of us to draw on everything we have learned to date and double it up, This is certainly the case if we want to be the beacons of hope, inspiration and confidence for those we lead, coach, mentor and develop today.
As we all think about the new world with this technology issue showing us some of the possibilities of our future, I think deeply about the ever-growing challenges of being a technology leader in society, both in industry and globally.
The once simple(r) operating model of developing great products, wrapping great service around them and giving great value would likely mean success. Alas, this is a formula that has long since passed and the final bastions of companies that could operate in that way, have, in no small part to Covid, been rapidly eroded.
The future is ours to see
Having started with a conversation about finance, procurement and risk, we return to the conundrum; How do keep the spirit of innovation, effectiveness and efficiency in our teams alive, whilst at the same time cutting cost, driving wastage down and surviving?
Will we see a resurgence of command and control style operating models? Or will waterfall style driven deliveries prevail? For the Agile proponents reading this, will we see a reversion to less iterative, less accountable, less empowered teams of technologists, and arguably less innovative thinking?
Or, as some are demonstrating, will fortune favour the brave and the courageous?
Will we see encouragement to experiment and invest in new ideas, with quick adaptation, pivoting in response to the recent disruptive events?
Will we see a further acceleration of the latest thinking, the use of AI, blockchain, cloud, ML, IoT, edge computing, at every level of our operations from changes in our supply chain to enable better transparency and security?
Will we see changes internally unlocking more efficiency through new models of operations? models that complement new technologies platforms and underpin remote working
Out of the shadows
Regardless of the delivery model, approach and style, it’s clear several companies are pushing forwards on some big-ticket innovation items in readiness for their futures.
Others are hunkering down.
No strategy can yet be judged as right or wrong, it is too early to tell.
Both hunkering down and investing might lead to initial and long-term survival, but as we move together, cautiously or optimistically, we need to consider our actions of today.
Never has the shadow we cast as IT leaders been so evident. Never has IT output, and the trust in IT, been so high. Never has IT been so central to the future, as it is now.