Some Observations on Dysfunction in organisations

The Leadership Problem

I have noted with interest that many people inside organisations operate without regard for the good of the organisation, or with a grossly faulty view of what is good for the organisation. Some people operate with their own departments interests in mind instead of the overall organisation’s interests. This is probably a fairly obvious statement, that anyone who has been in business for more than a few months will know to be true.  The issue of concern is how many senior executives seem to be willing to allow this behaviour to persist, once they have become aware of its existence.

• I have seen Executive committee members that win favour with the CEO by painting their colleagues in a bad light, thus making themselves look “relatively” better than the next executive.  Once this becomes a culture the organisation is on a downward spiral;  The “least-bad” executive gets a bigger share of the ever-decreasing bonus pool.  It is almost as dysfunctional as trying to grow a business by cutting costs – it is doomed to failure.
• I have seen some IT organisations that have no immune system, and exist in a state of being continuously on life-support.  Actions have no consequences, because the life-support will ensure we go on living, and short-termism can make a new executive look good long-enough to earn a nice bonus, and then leave the organisation in a worse state, but still alive.
• I have seen some organisations where sales teams from 2 divisions compete against each other to offer their solution to the same client, sometimes cutting the price down as far as “cost” to ensure winning the next sale.  When said this way, it is the most obviously dysfunctional behaviour, yet the incentive-schemes of the sales managers insists that this is the best course of action for him or her.

It is fairly easy to imply that these individuals, acting out of self-interest are at fault.  Surely they should know better, and should be acting in the best interests of the organisation. This is just common sense.

On reflection though, dysfunction in organisations is usually a dysfunction in leadership; Partly because leadership allows the issue to persist and grow, but also because the leadership does not put in place a carefully thought out mechanism to ensure that everyone concerns themselves with the correct and proper outcomes.  Performance management is simply a necessary evil imposed by HR on management.  We have to tick the boxes, but really don’t run the business using these mechanisms.  Hard to believe, but this happens!

For example the competing sales-team issue is simply that incentives and structures in the organisation drive that behaviour.

The short-termism issue could exist because Executives cannot be made to take accountability for their actions, because Board members and shareholders do not know enough about the inner workings of the business to challenge the existing approaches and define a proper set of objective measures for the new appointees.

The finger-pointing and blame-shifting game exists simply because objective measures of a manager’s success are not defined or measured.

Open and honest, robust internal debate is very valuable and healthy, but when the agenda is genuinely not for the betterment of the greater organisation, this becomes a very serious cancer.  An honest individual can be misguided about the correct path, have incorrect or incomplete information, they can have flawed logic, or lack a broad enough education on the topic; All of these can be overcome by debate with colleagues which can result in the betterment of the organisation.  The requirement here is simply honesty, and a genuine desire to act in the best interests of the organisation. If those are missing the organisation has a virus in it that if the immune system does not expel it, will eventually kill the organisation.

I would suggest that the real cancer is weak leadership:

• Unable or Unwilling to deal with the bad apples who are creating dysfunction.
• Unable to set a clear objectively measurable course for the business.
• Unable to see beyond the current ways of doing things, or challenge existing business models.

The IT Leadership Problem

The Leadership problem in IT is compounded in organisations such as the one described above, because IT is seldom understood at Board and Executive level.  When the CIO gives his report the attendees catch up on emails.

If the trust between CEO and CIO fails, it is often because they misunderstand each other, not because of genuine mischievous intent on either part.

Sometimes it is because the CIO was promoted through the ranks of IT, without genuinely being the right person for the job.  I have seen some sincere Corporate IT leaders who genuinely think their job is about the coolest latest technology; But management is about people, and good IT-people are not often great people-people. Obviously a good CIO should have good technical knowledge and be a great people-person.

Occasionally I have seen great candidates for CIO within an organisation who suffer under a technocratic leader because they are too junior to be awarded the role.  Once trust between the CEO and CIO is lost, the CEO is unlikely to look to them within the IT organisation as a successor to the outgoing CIO.  So the CEO appoints someone he or she trusts;  Usually someone with little or no IT experience.  These good Junior candidates should take the opportunity to ally themselves with the new CIO, and help him, and also learn to be great leaders in a relatively risk-free way.

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If you are that promising junior IT resource, or this newly appointed CIO without IT experience, then read this blog.

If you are a long time CIO, and you’re constantly at odds with the Board or the CEO, I doubt you’ll enjoy this blog, but if you can manage to read it, I’m sure it will help – like awful-tasting medicine.

If you are on that Board, or you are that CEO who doesn’t see eye-to-eye with your CIO, then this should be an interesting read for you.

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Before wrapping up this rather cynical and bitter post, I’d like to say why I think these things happen:

• Well thought-out, Measurable Organisation Objectives are not set, or there are too many to manage effectively, or they are not used for daily management.
• Well thought-out, Measurable IT Objectives are not set, or they are conflicting, or they are not used for daily management.
• CIO’s are promoted through the ranks without regard for their aptitude, and end up managing technology instead of people.
• Poor Leaders let the resultant problems escalate instead of stopping the rot early.

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Enough of setting the scene… Next time we’ll consider some research in the field of IT Performance.