Workbook for developing strategic computing initiatives some course material by Dr. Jerry Mechling of Harvard University. ---------- Bullet Para #&x~ p?nd other accounts. Customers are learning to expect that good service means personalization and accessibility at any time of the day or week, from almost any place in the world. Examples in government include: correspondence and case management systems in Congress; welfare payments via ATMs in Ramsey County, Minnesota, and a combination of Food Stamp and other benefit programs via point-of-sale and other terminals in Maryland; touch-tone phone access to Albuquerque databases including, for example, water bill status so that real estate closings can be concluded on weekends; "Electronic City Halls" springing up for 24-hour service around the country. According to research of the Strategic Computing program, client contact systems represent a major and underdeveloped strategic target. There are many opportunities for high impact at a relatively low cost in terms of technology and organizational change. 1. CLIENT CONTACT SYSTEMS. At what places within your agency -- or in collaboration with other institutions -- might I-T be used to improve service at the point of direct contact with clients and constituents? Are there particular services for which better access and personalization might be strategic? Work Dispersal. Another strategic target is work dispersal and telecommuting -- i.e., using I-T to move work to the people instead of forcing people to move to the work. Work dispersal need not operate on a full-time basis. Sizeable improvements could be made via part-time work at home or neighborhood-based satellite centers (perhaps organized on a cross-agency basis). Improvements in productivity (through less stress, less turnover, less expensive office space, and/or through the use of under-utilized part-time or handicapped workers) can be weighed against needed investments in infrastructure (databases, networks, portable and home-office computers) and management (learning new skills for managing at a distance). A number of agencies are working on dispersal: California is investing in prototypes, hoping to reduce their horrendous environmental and traffic problems. Seattle is also experimenting, again due to energy and environmental concerns. The IRS is seeking to attract needed staff by locating their offices outside of the central cities. Organizations around the world are globalizing office work in much the same way manufacturing has already been globalized. Over the next 20 years organizations will push to locate near "brains and beauty" -- i.e., in attractive locales where talented people prefer to live. Government should understand and control this trend, not be surprised by it. 2. WORK DISPERSAL. How might your agency take advantage of (or protect itself from) the abilities of I-T to support geographically dispersed work and telecommuting? Job and Organizational Redesign. For many years a dominant mode of organizing work has been the production line. Henry Ford made production lines famous, bragging he could take an unschooled farmer from Iowa and, in half a day, make him effective by having him specialize on a narrow task and then using the production line to set the pace and measure productivity. The production view provides a coherent view of workers, machines, and how the two should be organized: workers have limited skills, machines are good for repetitive physical tasks, and work should be organized by specialty, then integrated by the production line and a clear hierarchy of command. Production lines are often effective. Many government bureaucracies have been designed as paperwork "factories," bringing production line organization to office work. With the advent of new information technologies, it is possible to specialize tasks and measure results even more aggressively. On the other hand, new information technologies are also making it possible to organize in a new way, which some have called the "network" view. This assumes: that workers have both skills and needs for work involving choice and "intrinsically whole outputs;" that machines have intelligence for knowledge-intensive work; and that organizing should be based on broad jobs with a heavy reliance on self-control and teamwork. Technology projects, if strategic, are basically projects to reorganize jobs and work flows. The goal is to make the organization flatter (fewer hierarchical layers), faster (fewer steps and quicker turn-around in orders and new service designs), and/or friendlier (services more accessible and personalized). If I-T is used for simple-minded automation and "tightening up," it becomes part of the problem rather than part of the solution. firm 3. JOB AND ORGANIZATIONAL REDESIGN. Where is I-T likely to significantly change the character of work in your agency over the next few years? What steps might you take to see that the jobs and structures being created are appropriate for future needs? Executive Support. Another I-T target is the managers responsible for establishing the agency's strategic direction. Executive support systems (ESS) can be built for these people following a methodology such as the "critical success factors" (CSF) approach. CSFs define a handful of areas of utmost concern to senior managers over the next 3-5 years. Once these have been defined, data is sought (often external, often survey-based or "soft") to track progress. Systems can then be developed to present this data comfortably to senior managers and to keep them in touch no matter where they are. I-T has matured enough over the past decade to make such systems technically feasible and often worthwhile, especially in the private sector. Internal data has become more accessible through networks and relational databases. External data of an enormous variety is also becoming available electronically. Tools like electronic mail and voice mail can speed up communications. Better interfaces through graphics, pointing devices, and voice recognition can make the systems easy to use. The public sector has been slow to adopt ESS, but numerous agencies are exploring the possibilities: In the federal government, the GSA and NOAA, among others, have developed well-publicized systems; such efforts may typically need to find a new champion as administrations change. In state and local settings, financial systems (such as the one for former Governor Sununu of New Hampshire) remain the central focus. In general, it is impossible to "sell" senior executives on such initiatives. Success requires the executives to be the driving force and to want to use I-T as a way of focusing the attention of their management team. Executive support is still a pioneering effort in government, but the prospects look increasingly good. 4. EXECUTIVE SUPPORT. Which senior managers might be good targets for executive support systems? For what programs or purposes might they be interested? II. TECHNOLOGICAL CAPACITY/THE AUTHORIZING ENVIRONMENT Network and Database Infrastructures. Without a consistent data and network infrastructure, many "strategic" applications are impossible; With the right infrastructure, however, the marginal cost may be so low that strategic applications are relatively easy to implement. To the extent this is the case, the infrastructure is the strategy. Examples: A well-known private initiative is Merrill Lynch's "Cash Management Account" (CMA), the first nationwide "relationship" banking service. Once implemented, the CMA attracted roughly $70 billion in new deposits. Success depended to a great extent on Merrill's pre-existing databases and networks, and on its competitors' lack of such infrastructure. A public example may be found in recent initiatives of the U.S. Environmental Protection Agency. EPA has moved to extend its network and to share data in a more intimate and integrated fashion with a variety of state agencies. The aim is not only to reduce the costs of data collection (an important goal in today's fiscal climate), but also to build an infrastructure for EPA's data to exert strategic leverage in an era concerned with dispersed, cross-media, and locally-controlled pollution problems. An ambitious example is the National Research and Education Network (NREN), a high speed computer network to connect the nation's research and educational institutions. The technical goal is to increase communications and switching speeds from the present 1.5 megabits per second to 3 gigabits; the more strategic goal is to evolve an infrastructure which might eventually improve the global competitiveness of the American economy. Building infrastructure requires major investments and strong management and external support. At workshops of the Strategic Computing program, technology managers almost uniformly given a top priority to infrastructure investments, while program and political managers have been skeptical. The infrastructure is the strategy? 5. NETWORK AND DATABASE INFRASTRUCTURES. What networks and/or databases might add strategic value for your agency? (You might want to think about infrastructure as a tool for cross-program, cross-agency, even cross-governmental sharing and integration.) Crisis Leverage. The way to win with technology in government is not by frontal attack but by jujitsu: i.e., by taking the momentum of the opponent and, catching it at the right point, turning it to your own advantage. This insight, while powerful, is nothing new. Successful managers have long known that "politics is the art of the possible." A new element is that, until recently, no one thought that I-T was a relevant weapon in the politics of crisis and change. Recently, however, the perceptions and reality of technology have changed. I-T projects can often keep pace with and facilitate crisis-initiated change. Some examples: In private companies, the high frequency of organization-threatening crisis is cited as a key factor in gaining support for strategic I-T applications. In Massachusetts, as a public example, a referendum on hazardous wastes was used to justify I-T investments for the required clean-up; today, these referendum-driven investments are among the few bright spots for I-T innovation in a horribly tight fiscal situation. In general, the idea is to align I-T with other forces for change. Add a technology component to crisis management, to a new administration, to new legislation. Timing is everything: win via jujitsu. 6. CRISIS LEVERAGE. What crises or other powerful forces might be allies in opening up opportunities for strategic I-T investments? For what problems will it be relatively easy to acquire support? III. ORGANIZATIONAL CAPACITY Plans and Linkage Many strategic investments are initiated as some sort of planning effort. I-T projects, in particular, require planning to handle the many details and interdependencies involved. A problem, of course, is that planning alone is not enough. Planning may even be a means of deferring action which otherwise could lead to change. Too often we bring in the consultants, isolate them from operations, drag things out, listen politely to the recommendations, then let the report gather dust. What we need is planning which not only handles the technical elements, but also engages the power structure. There are many workable methodologies to do this. What is essential is for those involved in I-T planning to understand the organization's overall strategy; and for those involved in strategy understand the opportunities and constraints created by I-T. Such understanding may be created in many ways; e.g.: by elevating I-T managers to the senior management team, by having general managers take a greater role in managing I-T, and/or by requiring that I-T planning be included as part of the budget process. Organizations which take planning and linkage seriously tend to work on both formal and informal fronts, developing explicit processes to tie I-T planning to other planning, and staffing important planning efforts with a combination of I-T and general managers. 7. PLANS AND LINKAGE. How might your agency ensure that I-T capabilities are properly aligned with organizational strategy? What changes in your procedures for planning would add the most value? The Acquisition Process. Some things we produce internally under command and control of the hierarchy. Other things we purchase from markets. In general, markets have an advantage in terms of incentives (production efficiency), while hierarchies benefit from reduced coordination costs (search and negotiation). Markets are typically best for things that are simple (commodities) while hierarchies are best for complex things like large machine tools which require tight coordination with other factors of production. What can we expect as the Information Age progresses? In general, I-T makes things flexible and easier to coordinate; for example, computer-controlled machine tools can be used in a broader array of tasks than earlier machine tools. Further, information technology makes it easier to compare complex offerings; thus a higher proportion of airline tickets are now sold through travel agents than before the arrival of computer networks. As both markets and hierarchies become electronic, more work may be coordinated via markets. For complex and innovative services, long-term cross-organizational relationships (i.e., "strategic alliances") may increase in importance as a way to manage I-T and other acquisitions. These trends create important public sector issues: Should governments move to market-based rather than internal means of production? Should governments be moving aggressively to form widespread electronic links with suppliers? Should acquisitions at least for innovative technologies and applications, be based importantly on the concept of "relationship" and not only on the concepts of "transactions" and "contracts." Should acquisition policy give more weight to vendor past performance and other non-cost factors? 8. THE ACQUISITION PROCESS. How should the acquisition process change if I-T is to be used strategically in your organization? Alternatively, how should I-T be used to improve procurement and contracting for all government goods and services? Organizational Learning. With organizational innovations, long-term benefits are uncertain early in the learning curve. Learning typically follows an "S" curve, with slow growth followed by fast growth followed by slow growth. What is difficult with I-T-based innovations is not so much getting the machines to work as fitting them into a revised workflow. Since organizations cannot simply jump over a learning stage or begin at full efficiency, the appropriate style of management must shift over time, particularly between the early "effectiveness learning" and later "efficiency learning." Organizations which take learning seriously tend to: Accept higher risks on early stage projects. They do not require a uniform ROI justification for all investments, but instead have an "R&D" category where projects are funded for long-term learning and strategic potential, not for near-term payback. Monitor emerging technologies. They invest in R&D to keep near to the leading edge on technologies which appear to be key to future success. Allocate resources to pilot projects and other "learning" investments.Defining their problem as "learning," they invest to learn about applications as well as technologies. Support for organizational learning and innovation is difficult in government, given tight resources public scrutiny. Still, perhaps especially in government, support for organizational learning may be the key strategic investment. 9. ORGANIZATIONAL LEARNING. What might you do to improve your organization's capacity to learn about and use technology for innovation? What technologies need to be explored? Some Other Opportunity. There are many dimensions along which high priority I-T investments could be described and analyzed -- we could search for particular technologies such as GIS or imaging, particular activities such as the establishment of technology standards, etc. In your view, what is a promising opportunity which has been left out of the list of nine opportunities presented above? 10. SOME OTHER OPPORTUNITY. What is the most promising opportunity which, in your view, has been left out of the list presented above? In Summary: What's strategic for you? Now you should begin to look back over the ideas you have generated. Sift through them and identify the few which seem to be best for you. How would they work? What problem would they solve? How would they be strategic? If you don't have the information to answer these questions confidently just now, where could you go or what could you do to get a "definitive" answer? Our class time on Thursday will be devoted to issues of implementation and to helping you think about how to build momentum for your own "short list" of top opportunities. 11.YOUR "SHORT LIST." Please go back over your notes and summarize your best ideas here. High Impact Ideas Most Feasible (Starter) Ideas (repeat from above if applicable) ---------- Workbook Two IMPLEMENTING STRATEGIC OPPORTUNITIES This workbook is designed to help you get the strategic opportunities you identified Tuesday ready for implementation. We will proceed by examining the implementation problem, then look at seven elements of implementation success. The goal is to build momentum for your own strategic opportunities. As before, there are no "right" answers -- brainstorming is the proper approach. You can take notes directly in this workbook. (For your convenience, beginning on page 9, we include a summary of the presentation.) 1. VISION. What is your vision of success? Imagine it is several years from now and you have just met an old friend. You are out for dinner, catching up, and the time has come to tell the story of your success. What did your success do and how? Why was it strategic? What made it happen? 2. STYLE. Should your opportunity and vision be pursued as a "revolutionary" or "evolutionary" effort? What are the implications of this choice on your implementation plan? If revolutionary, implications? If evolutionary, implications? Best approach? 3. MOTIVES. Who will be your likely supporters and why? Who will be your likely resistors and why? What can you do to mobilize support and neutralize resistance? (Be as specific as possible.) Likely supporters, motives, mobilization. Likely resistors, motives, neutralization. Other motivational issues. 4. LEADERSHIP. Who might be a good "senior sponsor?" Who a good "operating champion?" What will they need and how can you get them to act? Who could serve as external supporters or change-agents? How do we get a "senior sponsor?" How do we get an "operating champion?" How do we get external support and change-agents? 5. SIZE. What is the biggest your initiative could be in its first year (in dollars, other measures) without outrunning your ability to attract resources or manage it? What is the smallest it could be and still prove the concept? With these limits in mind, what is the "right size" for your initiative? Biggest? Smallest? Right size? 6. MILESTONES. Describe a handful of milestones you could use to measure progress and/or communicate with others. a. b. c. d. e. 7. FLEXIBILITY. What's a good goal for a year from now? What pitfalls might be most problematic? What flexibility does your initiative need to respond to these problems successfully? 1-year goal. Pitfalls . . . and responses. a. b. c. d. A Summary of the Presentation on IMPLEMENTING STRATEGIC OPPORTUNITIES I. WHAT IS THE "IMPLEMENTATION PROBLEM?" "There is nothing permanent except change." The quote could come from any of a large number of management gurus. It could refer to recent concerns about, even preoccupations with, the "increasingly turbulent social and business environment." But of course it doesn't. Heraclitus was born in 540 B.C. The point is simple: leaders have always been dealing with change and the balance between continuity and change. The focus on change is a primary difference between leaders and managers. We are interested in "strategic computing and telecommunications" because of its potential for dramatic and positive change. But the potential is fulfilled only if the change is successful. AYc = TYc - ISU We all know that change is NOT always successful. Every organization has its stories of "implementation screw ups." The history of I-T in government has its share of painful failed projects. Still, some people seem better at managing change than others just as some surfers are better when the waves are rough: Some paddle around all afternoon, looking but never actually catching a wave. Others catch a wave and are bold enough to stand up for a ride, but are soon swept out of control and dashed onto the reef. A few can consistently catch a wave, keep their balance, avoid the reef, and ride to the safety of shore. Our purpose in this session is to examine seven elements of technology-based change in order to help your build momentum for your own initiatives. Be forewarned, however, that implementation is still more art more than science. Organizations are Resilient. Successful change is difficult because it's not just a technology problem. It's not even mostly a technology problem. Organizational change is very much a problem of people and task allocations and coordinating systems. Changes in one component of the overall system tend to be damped out by compensating changes in other components. For strategic success, many if not all components need to change, and in ways which support each other. If technology changes, what changes are needed in task allocations? In finding new people, or at least in developing new orientations and skills? In revising the control and reward system? Given the resiliency of human organizations, strategic change requires significant and sustained action by the power structure. It cannot be handled as a problem of technology alone. Unfreezing --> Moving --> Refreezing. This simple model has long been used as a framework for thinking about change. 1.The first need is to unfreeze the status quo. This typically takes more force than the actual movement to a new end state. People must feel a compelling need if they are to accept any change which will probably disturb the web of relationships within the organization. Destruction of the status quo is often a necessary prelude to creativity. 2.The second need is to move -- and to motivate and guide your progress through appropriate incentives and controls. 3.The final -- and often neglected -- need is to refreeze the organization at the new end state. Without reinforcement and institutionalization of newly learned behaviors, old behaviors may soon be re-established. The central insight is that strategic change, whether or not it involves technology, is essentially a political process. What works is what people can be convinced to make work. "Top-down" may generate large change, but it will also take large force and political resources. "Bottom-up" (or even "middle out") may proceed with more consensus and less resistance, but tends to be incremental and slower. Elements of Implementation Planning. What you should seek to produce is not a detailed implementation plan, but rather some ideas to get you started. Let's examine seven elements of the change process: 1.Vision. What is the end state you desire and how will it add value? 2.Style. Should your opportunity and vision be pursued as a "revolutionary" or "evolutionary" effort? 3.Motives. How could your supporters be mobilized and your resistors be neutralized? 4.Leadership. Who will sponsor your initiative? Who will be the day-to-day champion? Who will be the external change-agents or supporters? 5.Size. How big is too big? How small is too small? What is the right size and how can you get the resources you'll need? 6.Milestones. How can you measure progress and communicate it to others? 7.Flexibility. What are the major threats you can expect in the next year and how might you respond? We'll spend 8-10 minutes on each of these questions. I'll describe each one, then give you time for thinking about how they apply to your own situation. Vision. What is your vision of success? How clear can you make it? Will your vision, like a lighthouse, show the way for others? Does it make the end state clear? Does it make the benefits palpable? Is it strategic? Will it generate excitement? Research on athletes shows that visualization is extremely important for success in many physical activities. Experiments suggest that basketball players, for example, don't have to shoot real foul shots in practice, they merely have to go through the motions and imagine the ball going through the net. Visions are powerful. What is your own vision of success? Imagine that it is several years from now and you have just met an old friend. You are out for dinner, catching up, and the time has come to tell the story of your success. What was it and how did it work? Why was it strategic? What made it happen? 1. VISION. What is your vision of success? Imagine that it is several years from now and you have just met an old friend. You are out for dinner, catching up, and the time has come to tell the story of your success. What was it and how did it work? Why was it strategic? Style. Should your opportunity and vision be pursued as a "revolutionary" or "evolutionary" effort? Most of the time we pursue innovation on an evolutionary basis. We keep most of the present organization in place, changing only a few pieces. We make progress through lots of small starts. This approach depends heavily on clarity and consensus building. It rewards participation and often succeeds through "bottom up" and "inside out" movement. Thomas Edison advertised electricity in this fashion, emphasizing the similarity of electric lighting to gas lighting, not the long-term differences of the new approach. Total Quality Management is an aggressively incremental approach to significant long-term improvement. But incremental improvement within a basic organizational paradigm can only take us so far. Continued progress eventually requires a completely new approach. This implies a revolutionary leap and depends heavily for its success on conflict resolution. It often succeeds through "top down" leadership and "outside in" movement. It often depends on speed to keep the opposition disorganized. Revolutionary change promises very high returns, but at a cost of high disruption and risk. Still, there are times when revolutionary change is clearly the way to go: getting to the moon requires a rocket, not a series of step ladders. Butch Cassidy and the Sundance Kid escaped by literally jumping off a cliff. Which style of change should your opportunity and vision pursue? What are the implications of this choice on your implementation plan? 2. STYLE. Should your opportunity and vision be pursued as a "revolutionary" or "evolutionary" effort? What are the implications of this choice on your implementation plan? Motives. Those seeking change must overcome motives and forces that maintain the status quo. For each individual, some motives support change while others resist it. Many motives may be brought into play in order to shift: misunderstanding into comprehension disagreement into agreement personal loss into personal gain overload into capacity fear of incompetence into confidence value conflict into value congruence Think about motives relevant to your own strategic opportunity. Then predict: 1.Who will be your likely supporters and why? 2.Who will be your likely resistors and why? 3.What can you do to mobilize support and neutralize resistance? (Be as specific as possible.) 2. MOTIVES. Who will be your supporters and why? Who will be your resistors and why? What can you do to mobilize support and neutralize resistance? (Be as specific and detailed as possible.) Leadership. Research on innovation suggests a need for several types of leaders: A senior sponsor. This person legitimizes the project and secures needed resources. An operating champion. This person provides ongoing energy and support from the inside. Successful champions need technical and communications skills; they may also need political resources (i.e., the ability to be a "fixer" on many lower-level problems). An external change-agent and supporter. Especially for public sector innovations, it appears extremely valuable to join with external players who can demand change and provide expertise. For your strategic opportunity, who might be the "senior sponsor?" Who the "operating champion?" What will they need to be good at and how can you get them to act? Whom might you recruit as external change-agents and supporters? 3. LEADERSHIP. Who might be a good "senior sponsor?" Who a good "operating champion?" What will they need and how can you get them to act? Who could serve as external supporters or change-agents? Size. Some projects are so costly and uncertain they create paralyzing confusion among those who must authorize the needed resources. In such cases, it may be possible to prove the concept through a pilot project, thereby reducing uncertainty. It may then become possible to roll out full-scale investment later when the "authorizing environment" has become comfortable with the payback. New technologies are much better than those of a decade ago at facilitating quick pilots and modular construction. In thinking about the scope of your initiative, what is the biggest you could become in the first year (in dollars or other measures) without outrunning your ability to attract resources or manage the effort? What is the smallest you could be and still prove the concept and generate supporters? With these limits in mind, what is the "right size" for your initiative? 4. SIZE. What is the biggest your initiative could be in the first year (in dollars, other measures) without outrunning your ability to attract resources or manage it? What is the smallest it could be and still prove the concept? With these limits in mind, what is the "right size" for your initiative? Milestones. Systems projects are notorious for being 90% complete through 90% of their development. That is, there is steady reported progress through 10% completion, 20% completion, and so on, until serious problems arise as 90% approaches; the result is a project that stalls for a seeming eternity around "90% complete." Painful history has taught us important lessons about objective milestones for measuring progress: we need testable benchmarks, not subjective guesstimates of percentage completion. With strategic projects, uncertainties are so great that detailed milestones are not needed. They may even hamper progress by becoming outdated and destroying the credibility of the entire effort. But we still need measurable milestones for mid-course correction and control. Describe a handful of milestones which you might use on your own initiatives. Could these milestones also be used for communicating with others? 5. MILESTONES. Describe a handful of milestones you could use to measure progress and/or to communicate with others. Flexibility. Research suggests that another key for success is flexibility. Strategic initiatives need a capacity to learn, to adapt, and to respond to adversity. Like the palm tree, it is better to bend in the wind than to snap. In building momentum for strategic change, details are not so important as a general sense of where you are headed and how you might preserve flexibility. Over the first year of your own I-T initiative, what's a good goal for your effort? What pitfalls might be most problematic? What flexibility does your initiative need to respond to these problems successfully? 6. FLEXIBILITY. What's a good goal for a year from now? What flexibility does your initiative need to respond to these problems successfully? In Summary: What's your plan? Now is the time to look back over your notes to summarize the key ideas. 1.What's your vision? 2.How will you build momentum for implementation? We look forward to your answers. Please write up your strategic proposal in memo of 5 pages or less. Discuss it with members of the class and get 3 to sign your proposal. Their signature will indicate that they have read your proposal and discussed it with you -- not that they agree with it (they may either agree or disagree). When you are done, turn your paper in to Taubman 354 by Tuesday, November 23rd. Good luck! IN SUMMARY What's your vision? How will you build momentum