When CIOs eliminate systemic cultural roadblocks by changing beliefs, behaviors, and outcomes, three primary types of value-creating IT cultures can emerge: those emphasizing stability, partnership, or courage.
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IT culture is an often-overlooked secret weapon. A vibrant and agile culture can deliver untold advantages to the business, while a stagnant or chaotic work environment can limit a business’s ability to achieve critical goals. Forty-five percent of CIOs surveyed in Deloitte’s Global CIO Survey say that a high-performing IT culture is essential to their success, yet less than a quarter (22 percent) describe their current organizational capabilities as leading or excellent in this respect.
This article, the first in a two-part series, discusses the cultural challenges faced by CIOs, the core elements of IT culture, and three types of healthy IT cultures.
IT Cultural Challenges
IT cultures are prone to several challenges.
- The rapidly changing business and technology landscape can put IT teams in a near-constant reactive state, with success measured in tactical terms such as the ability to execute on time and under budget.
- A historical tendency to value solo IT heroics and technical competency can de-emphasize collaboration and teamwork with business counterparts. Silos can also exist within IT. For example, software developers may write code, build an app, and “throw it over the wall” to testing and production teams who know very little or nothing about the app.
- As a back-office partner responsible for creating and maintaining mission-critical business systems and applications, many IT teams take pride in their focus on reliability and resilience. This can mean the IT organization is able to build solid, powerful tanks but struggles to develop sleek, speedy race cars. Overengineered, unwieldy processes and long development cycles can lead to frustration among business peers.
When these qualities become entrenched in an IT organization, they can lead to a culture of mediocrity. Leaders and employees may be reluctant to make difficult decisions, act quickly, think creatively, or take risks.
Core Elements of IT Culture
Organizational culture can be deconstructed to its core elements: commonly held beliefs that lead to certain behaviors and ultimately deliver specific outcomes.1 Cultural change thus requires CIOs to first discover and then reframe their organizations’ embedded beliefs—a task that can be substantially more complicated than implementing new technologies.
Consider the case of a large technology company’s IT organization, where business demand outpaced IT capacity so significantly that the department was 18 months behind schedule.2 Output was inconsistent, and IT had developed several customized tools for different business units to complete similar jobs. Business leaders were unhappy with the department’s performance and viewed it as a roadblock to business growth.
In this organization, business and IT leaders operated in individual silos. Business leaders inflated project benefits and set unrealistic deadlines, and the IT team developed projects without collaboration or discussion. Even though IT worked diligently to meet the demands of eight different business leaders, it did so without coordinating, prioritizing, or holding anyone accountable for outcomes. As a result, the department almost always failed to meet expectations.
Upon investigation, the IT team’s corresponding outcomes and behaviors were traced to a deeply held cultural belief that the customer (in this case, the internal business unit) is always right. Over time, this belief, however well-intentioned, led the IT team to accept all business requests and prioritize projects according to the “squeaky wheel” principle.
Changing a cultural belief system is a nontrivial undertaking. In another case, the CIO of a financial services company reinforced the IT organization’s transformation from a back-office support group to a driving force in customer experience by:
- Mandating that IT leaders develop cross-functional teams involving marketing, operations, and sales organizations in every customer-facing project
- Encouraging and facilitating conversations across functions and businesses to understand customer needs
- Collaborating with IT and business leadership to reserve dedicated resources for technology projects
- Measuring and rewarding employees on business outcomes (e.g., changes in customer experience scores and customer retention rates) instead of project performance and uptime
- Holding the collective team accountable for outcomes.
The CIO created a belief system that helped establish IT as an equal partner with marketing in terms of customer experience ownership, which served as a foundation for customer-focused behaviors and outcomes for the whole IT organization.
Three Types of IT Cultures
Diagnosing and remediating cultural problems can help ensure that IT meets basic operational obligations and enable CIOs to align IT teams with business expectations. When CIOs eliminate systemic cultural challenges, three primary types of IT cultures can emerge, emphasizing stability, partnership, or courage.
Stability. Technology is a business enabler and stable technology environments can allow businesses to thrive. In a stability culture, the primary cultural belief is that the business must operate efficiently and without disruptions. The culture commonly rewards behaviors that result in improved security and capacity, timely and cost-effective project delivery, and cost savings. The outcome of a stability culture is often an efficient, resilient IT environment.
However, CIOs should be aware of the possible challenges posed by an IT culture that overemphasizes stability. For example, IT systems and processes may not be built for speed, and IT staff may not focus enough on innovation.
Partnership. Partnership-oriented cultures are often familial, with a focus on nurturing and teamwork. The overarching belief is that collaboration and teamwork welcomes and engages the workforce and business partners. A partnership culture commonly promotes loyalty, mentoring, friendship, and work flexibility. Outcomes can include better customer service, more engaged employees, and an environment of openness and trust.
In some companies, the culture of partnership permeates the entire organization, and a commonly held belief system creates a single, unified tribe. In others, the partnership culture is limited to the IT team, which can lead to an “us versus them” mentality when IT staff are interacting with business peers. In addition, the consensus-building required in a partnership culture often takes much time, effort, and energy, which could lead to project delays, costly adjustments to project scope, and lack of consistency in technology systems and processes.
Courage. A high degree of passion and willingness to take risks are at the heart of cultures emphasizing courage. The core belief of such cultures is that technology can transform the business and drive company growth and performance. Many CIOs nurture behaviors such as calculated risk-taking, experimentation, and creative thinking and are rewarded with better business performance and innovative technology-driven products and services. Courage cultures that are tightly aligned to growth-based business objectives can drive significant revenue.
CIOs can guard against the possible pitfalls that arise from overemphasizing courage without boundaries. For example, in the absence of risk management, risk-taking can quickly become excessive, impractical, and expensive. Too-frequent changes in direction can waste time and create frustration among both staff and business leadership; too much focus on experimentation can render teams incapable of executing basic IT functions.
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No single culture type is superior; each has advantages and disadvantages. A single culture type may naturally dominate, but all culture types can and often do coexist within many IT organizations. Often, more than one culture can help CIOs respond to challenges such as talent shortages, persistent skills gaps, M&A and divestiture, digital transformation, and organizational restructuring.
A company’s IT culture is as unique as a fingerprint. The CIO can proactively use culture as a dial to align an IT organization with business needs, creating cultures of stability, partnership, or courage as required.
Next up: In the second article in this two-part series, the five common characteristics of high-performing IT cultures.
—by Khalid Kark, research director, U.S. CIO Program, Deloitte LLP; Judy Pennington, managing director, Deloitte Consulting LLP; Robyn Wagner Skarbek, senior manager, Deloitte Consulting LLP
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1. Ajit Kambil, “Catalyzing organizational culture change,” Deloitte University Press. Kambil’s model borrows from the Lewis-Schein change model, which is discussed in detail by Edgar Schein in “Kurt Lewin in the classroom, in the field, and in change theory: Notes toward a model of managed learning.”
2. Examples are based on authors’ personal knowledge.
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May 16, 2017 at 09:12AM
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