What is IT Governance and Why is it Important?

 

In my almost three decades in IT, what has truly amazed me is how few organizations actually have IT governance programs. What is even more amazing is how few C-suite leaders and other leaders even understand what IT governance is and the value that it can bring to their organizations. This group of leaders includes those within IT as well, many of whom see IT governance as a threat to their leadership. Let’s take a dive into what IT governance really is, why it is valuable and why IT leaders should actually embrace and not fear it.

What is IT Governance?

Simply put, IT governance is a framework that helps organizations manage and align their IT operations with their business goals and objectives. At the end of the day, isn’t meeting the organization’s goals and objectives what we should all be about? IT doesn’t exist in a vacuum. In order to make sure that IT is properly aligned with and working towards the organization’s goals and objectives, stakeholders outside of IT need to be involved in determining what that looks like from a strategy and performance management perspective. The goal of IT governance is to bring those outside stakeholders to the table.

Why is IT Governance Important?

So, now that we know what IT governance is, why is it so important? Bringing outside stakeholders to the table to help IT leadership create an aligned strategy ensures that the projects that IT takes on are the right projects to help the business progress. Furthermore, these stakeholders work with IT to help prioritize these projects and provide support and funding to ensure that they get done. One of the most common reasons for projects failing is unclear business objectives or poorly defined project goals and milestones. Including stakeholders in this process can help ensure that the business objectives, project goals, and milestones are clearly defined before the project is even approved and started. This increases the likelihood of project success and that the project will provide the organization value. IT governance is really a “shared responsibility” model where IT works with its key stakeholders to share the responsibility for the success of the IT department and ensure that its efforts are optimized and delivering value to the organization.

Why Should IT Leadership Embrace IT Governance?

In the traditional IT model, IT owns the total responsibility for the success or failure of its initiatives and projects and whether or not it delivers value (real or perceived) to the organization. In this model, IT leadership really becomes the scapegoat for failures related to lack of engagement and support from other business leaders. I don’t know about you, but to me, that just seems like a recipe for failure. And a lot of times, it is.

With a true IT governance model, on the other hand, responsibility for the success or failure of IT to deliver value to the business is a shared responsibility with stakeholders having input into the strategy and execution of the IT department. If done right, there really is very little reason that there should be failure as we will see in the next section when we talk about the mechanics of how IT governance works and how it delivers value.

How Does IT Governance Work?

We stated earlier that, in its most simple terms, IT governance is a framework that brings together IT leadership and leaders or stakeholders from across the organization to share the responsibility for the governance of IT. Let’s talk a little bit, in a very generic way, about ways in which this is typically achieved. Keep in mind that these are broad, high-level applications and the approach and the details required to make this work for a particular organization really depends on that organization’s needs and resources.

1. The Chief Information Officer (CIO) should be a part of the business strategy development process and should be in attendance at board of directors’ meetings. In order to ensure IT alignment with business goals and objectives, the leader of the IT department needs to be in the room when those are developed and discussed.

2.  An IT Steering Committee should be formed made up of stakeholders from across the organization. This committee makes recommendations on the IT strategy and ensures that it aligns with the overall business strategy before being passed up to the board of directors for approval. 

a.      This committee acts as a governance body for IT where key metrics and KPIs for evaluating the operational performance of IT are developed, approved, and presented.

b.     Prioritization of projects and initiatives for that the IT department works on should also generally occur in this committee.

c.      The agreed upon KPIs, metrics, and project portfolio performance should be captured in a balanced scorecard which can then be used to measure the overall effectiveness of the IT department in achieving its strategic objectives. Plans for corrective action, if necessary, can be discussed and developed in this committee and then progress against those corrective action plans can be monitored along with the balanced scorecard. 

      3.  The IT scorecard, as approved and validated by the IT Steering Committee, should then be presented to the board of directors along with summaries of any actions discussed and taken in the IT Steering Committee and project portfolio status.

Conclusion

As you can see, this model sets up an organization for the most effective use and deployment of its IT resources by ensuring that said use and deployment is always in alignment with the needs of the business as directed by the business leaders. This avoids the IT department making key decisions in a vacuum and increases transparency in the effectiveness of the operation of the IT department. This transparency increases credibility and sets the IT department up to be trusted technology advisors and a strategic asset for helping the organization scale and achieve its objectives.

Let’s Do Away with The Annual Performance Appraisal!

Credit: https://clipart-library.com/clipart/performance-review-clipart_13.html

Most organizations go through a fairly painful, rather useless process, in my opinion, called the annual performance appraisal. During this process, each employee receives a subjective score on various items, accompanied by a narrative intended to justify the score, which is also subjective. Typically, performance appraisal processes occur just once a year instead of incorporating frequent feedback, making them subjective and inconsistent. I don't know of many people outside the HR department who can honestly say they see any real value to the company in conducting annual performance appraisals. Let’s take a look at how the current performance appraisal process works and how a more dynamic, project management-based approach can not only replace outdated annual appraisals, but also enhance employee motivation and organizational success.

The Way the Process Typically Works Today

1.  A trigger point occurs, say the fourth quarter and all employees need an annual appraisal before the end of the year or 60 days before the employee’s anniversary date.
2. The manager looks at last year’s performance appraisal and any notes that may have been taken during the year regarding the employee's performance. Any goals listed in the prior year’s appraisal for the next year are examined.
3. The manager may optionally ask the employee to do a self-assessment of their performance.
4. The manager then takes all of this compiled information and attempts to score the employee on a number of pre-determined goals or objectives. These may relate to the employee's official job description, be general corporate goals/objectives or a combination of both.
5. The manager then attempts to craft narratives for each score to justify them. Actually, this is ideally the way it should happen. In reality, this rarely happens, or the narratives are very thin and full of platitudes or remarks too generic to be of much use.
6. The manager then sits down to meet with the employee to deliver the appraisal. Discussion ensues about the scores, how the company views the scoring, etc. Both parties typically walk away less than satisfied.
7. A merit increase may or may not be given based on the performance appraisal and the amount may or may not be reflective of the employee’s actual performance over the last year.

Current Flaws in the Current Annual Appraisal Process:

1.  It is subjective! It is really difficult to put any faith in a process that relies on largely subjective measures (both as a manager and an employee). As a result, this process largely becomes a process of box checking to meet a requirement.
2. It is done once a year.
3. Outside of meeting some sort of company or compliance requirement, what is the real goal of this process? I will take later on in this article about what I think the goals of employee “appraisals” should be and how I think those can be better achieved.
4. It ends up being a negotiation and a shuffling of scores on the part of the manager to fit into some predefined expectation (anyone heard of the bell curve?) which tends to negate what little value the process might actually have. Managers end up negotiating with employees about scores (how many times have we had to say, “I can’t give you a 5/5 on this metric, because we are told that no one actually gets that score here” or something to that effect?)
5. Scores then get reshuffled again when looked at by HR or executive management to fit some sort of budget or equity protocol.
6. Lack of consistency. As the performance goals/objectives are usually very subjective to begin with and you have many managers across the organization delivering performance appraisals, there is absolutely no way to have consistency, except by accident. I know many organizations try to analyze, stratify, and smooth scores, but, again, is that really accomplishing anything but fitting into a predetermined result (here comes that bell curve again)? Additionally, many organizations are trying to introduce SMART goals into their process (if you are not familiar with what a SMART goal is, you can go here to read up on the topic). That is a nice effort, but in my humble opinion, is just putting lipstick on a pig.

 

So, What Should We Do?

To be clear, I am not advocating for a world where we do away with employee feedback or management. Actually, far from it. A well-designed employee feedback process should actually act as a retention tool rather than just some onerous mandate thrust upon middle managers once a year.

Let’s Talk About What the Goals of the Process Should Be

1. Provide timely feedback. Feedback once a year is meaningless and doesn’t reinforce desired behaviors when they are occurring or deal with those behaviors we would prefer not to see in a timely manner. I know most good managers already have one-on-one meetings with their staff at least monthly. Why not make this a formal part of the process?
2. My background tends to skew very heavily towards project management, which I know is much different than that of many of our HR partners out there, but to make employee feedback objective and consistent, why don’t we take a project management-type approach to it where we lay out well-defined milestones, with actual deliverables and timelines and measure against that? A well-defined plan with timelines and milestones works for employee development such as training, taking on additional responsibilities or projects with defined milestones, as well as day-to-day activities. This becomes a very objective way of measuring development and performance as the manager is not responsible for assigning some arbitrary score, but measurement lies solely in evaluating the question did the employee achieve the milestone, yes or no? Achievement is judged by whether the deliverable was completed on time. Now, there can be a subjective component that measures how the milestone was achieved with coaching and mentoring around specific areas of how the employee approached and worked on the milestone. This would be delivered in the one-on-one meetings as the employee is working on the milestone, with the goal of improving the end product. We should be coaches and not managers. Our goals should be to facilitate growth in our employees. This helps accomplish that in ways that most annual performance appraisal processes do not. If you are a big fan of the SMART goal movement, you can incorporate that here, however, I think that just overly complicates things. If you follow a project management approach where you have tasks that lead up to a milestone and deliverable, you have essentially accomplished the same thing without the silly acronym. In my experience, people struggle with the SMART goal concept, and it just becomes a roadblock for them. Let’s simplify.
3. A detailed growth plan that considers where the employee wants to go with their career (short-term and long-term) and the needs of the company should be at the heart of the process. This should result in a series of actions that culminate in milestones and deliverables, with due dates. The development of this process should be a partnership between the employee and the manager and, in my opinion, driven by the employee.
4. The process should be constantly evolving. As milestones are met, new milestones should be created and agreed upon. The process should be re-evaluated and adjusted for each employee on an annual basis to make sure that it continues to be relevant and that the goals of the process are being achieved for each employee (i.e., as employees are more easily achieving milestones, new milestones should increase in difficulty to continue to challenge the employee and encourage growth).
5. The employee should be engaged and motivated and not fearful or feel dread. Again, frequent coaching geared toward helping the employee be successful and grow is what drives and motivates the employees that we all really should want to retain. If the employee is vested in the process and feels a sense of ownership, there is a much higher likelihood of success and employee growth.
6. Most annual performance appraisal processes culminate in the award of some arbitrary merit increase based on the subjectively scored performance appraisal. I think everyone would be better served by identifying merit values associated with the successful achievement of each milestone and awarding those as the milestones are achieved, not once a year. This keeps the employee engaged and motivated and brings the reward closer to the action or behavior.

We have talked about what the goals of this process should be, but what about the downsides? No system is perfect, and this process does have what I see as a small flaw around consistency. As we talked in the beginning of the article, the current process used by almost all organizations lacks consistency. There is a potential for some inconsistency in this process, not around scoring as in the current process, but just around how to measure the relative difficulty of the plan that you are measuring the employee on. Since each employee’s plan is different, how to ensure that each employee is being challenged in an equitable way can be difficult to assess.

In considering the benefits of moving to this kind of performance management process, I think that the benefits far outweigh the slight downside of having to determine how to measure plan difficulty, equity, and consistency. The mitigation strategy for this is just good old-fashioned management and knowing what your employees are doing and whether they have enough to fill their plates, or their plates are too full. That should be a critical part of the one-on-one process anyway and, in my opinion, should happen at least monthly. Under the proposed process, we should shift our emphasis when we develop our managers from the mere paperwork of performance management, to thinking about planning and having conversations with the employee that are not only informative for both parties but drive growth. Developing how managers do check-ins and one-on-one meetings with their employees to drive the most value and engagement is something that can deliver incredible results down the road.

Plan Your Work and Work Your Plan

 

                                               ID 43139543 © Ayeshstockphoto| Dreamstime.com         

In the age of AI and mass digitization, many of us forget that these adages from previous generations still hold true today (and in many ways, especially today). As an executive who frequently coaches junior and mid-level managers, this is one of the biggest problems that I encounter with my mentees. You see, there really isn’t any unit of work that is too small to have a plan. A plan doesn’t have to be a full project plan in Microsoft Project with Gantt charts and resource leveling. A plan is just a series of steps to ensure that whatever unit of work that you are about to undertake has considered all of the elements necessary to make sure that it is successful such as who might be impacted (stakeholders) by what you are about to do (this usually means communication is necessary to them!), what types of devices are going to be impacted, what are the steps to complete the work, how is this going to be tested to make sure it works as planned before affecting users or your peers and what is your back out plan if it fails. Time and again I coach managers and teams when a project, deployment, update, etc. fails and there is blowback due to failure to complete this one critical step. My first question is always, “Let me see your plan” and so often the response is that they didn’t think they needed one because what they were doing was simple or basic. Sometimes, those changes or deployments that are thought to be “simple” or “basic” are the ones that can get you in the most trouble if you don’t have a plan because you miss steps or forget to consider edge cases or all deployment scenarios, whereas bigger efforts tend to demand more planning and coordination just to get them done.

 I encourage my staff to create a template with the above steps in it to follow as an outline for everything they do. Again, this doesn’t have to be a “formal” plan, but these questions/steps should be fleshed out somewhere and considered to ensure success. The amount of work and loss of credibility due to failed changes far exceeds the small amount of time it takes to create a basic plan.

Again, just to recap, a basic plan should, at a minimum, consider the following:

1.      1. Who is impacted by this change (users, IT peers, executives, etc.)? These are your stakeholders and require communication and/or coordination regarding the change being planned.

2.      2. What devices (computers, laptops, mobile devices, servers, cloud infrastructure, etc.) are going to receive this change?

a.      Are there differences in how each of these devices may be connected?

                                                              i.      Wired connection to the network

                                                             ii.      VPN

                                                           iii.      Wireless

1.      On network?

2.      Off network (i.e., Guest WiFi)?

                                                           iv.      Mobile carrier service

                                                             v.      Are there manual procedures for applying the change to devices that have no connectivity?

3.      3. What are the steps to complete the change?

4.      4. What are the steps to test?

a.      Who needs to be involved in the testing and who signs off?

5.      5. What is your back out plan if the change fails?

 

I hope this post was helpful in at least framing how you should approach any kind of change that you are involved in and how you can take some very basic planning steps to make sure that your change is as successful as possible.