Computer experts rule the world but not its companies

Chief executives are selected from general management and finance, but rarely from IT. Why is this?

I was asked by a friend to make the opening address at a conference of information technology executives yesterday. I could see at once that I was in danger of breaking the first rule of speech-making: make sure you know more than your audience. The only thing to do, I concluded, was to build my session around questions that I could put to my audience for debate.

I was asked by a friend to make the opening address at a conference of information technology executives yesterday. I could see at once that I was in danger of breaking the first rule of speech-making: make sure you know more than your audience. The only thing to do, I concluded, was to build my session around questions that I could put to my audience for debate.

I first asked whether applying information technology could facilitate the introduction of non-traditional management structures. In other words, could IT produce something different from traditional systems where everybody reports upwards to the rank above until, at the highest level, the chief executive is reached.

I had in mind some different ways of doing business that have appealed to me over the years. One is now a historical curiosity, though I encountered it back in 1960 when I joined, as my first job, the venerable firm of NM Rothschild & Sons in the City. For the merchant bank was still run as a partnership. There was no position of chief executive. The partners transacted business as a group, in the same room, and the intimacy that came from sitting together substantially improved the effectiveness and cohesion of their decisions.

I am also impressed by research carried out in the United States into the way women manage businesses in contrast to men. It suggests that the structures favoured by women resemble a series of concentric circles, with the boss in the middle. In this system the leader reaches out to whoever is useful for the work in hand, whether senior or junior.

Finally, I had in mind my experience in newspapers 15 years ago when Fleet Street finally embraced IT. The new operating systems were used in this newspaper, for instance, to get away from the old, deep-seated blame culture by devolving responsibility from the centre out to individual sections. But since then, I have not encountered any further examples of information technology changing management structures.

Then I took a different tack and recalled that when I first became a financial journalist (after Rothschilds), few companies had finance directors. A chief accountant did all the work. However, a crisis in the late 1960s, when companies lost control of their finances, changed all that. Then it took a nightmare period of industrial unrest to bring a second profession in from the cold – personnel, or human relations (HR) as it is now called. More recently, as the financial and business press has grown more powerful, public relations has grown in importance. Likewise, the IT function has similarly broken through, guardian as it is of a revolution in the way companies operate.

But from which discipline are chief executives selected? From general management of course, also from marketing and finance, but rarely, so far as I can tell, from HR, from PR or from IT. Is there a good reason for this? This was my second question to the IT professionals: are you forever condemned to be the assistants but never the chiefs?

If this is so, is it because you speak a different language from the rest of us? Because you are poor communicators? I mentioned two IT failures and one success familiar to me. The first concerned a medium-sized company that introduced a new computer system to handle all its processing work. The project took forever. It went way above cost. And when it was at last completed, after some years, it was found that lots of the promised functions were missing.

The second is a famous public service that has become overwhelmed by paperwork and is struggling to make sense of it. When I met some of the hard-working, dedicated supervisors, I asked whether they would welcome new technology. Their reaction was negative. They had long suffered from a badly functioning computer system and they felt sure that a replacement would be just as disappointing.

The good example is a new public body that, provided with a reasonable budget, was able to introduce a new case-working system for its tasks. This time the work was completed without visible hitches, in months, on budget and to the delight of everybody.

Why were these outcomes so different? In the first case, a computer illiterate management was told what it needed so the system was imposed rather than specified by the internal users. In the second, a poorly functioning system corroded trust. In the third example, a genuinely iterative process was present between users and the internal and external suppliers of the new kit. In short, the difference between success and failure was accounted for by the quality of communication within the organisation concerned.

My third question, therefore, was whether IT professionals have seen their responsibilities in too narrow a fashion and whether they have failed to understand that everybody needs to establish legitimacy. By legitimacy I mean that nowadays you always have to sell yourself and what you do, and at the same time open channels so that those whose activities you can affect by your actions have a means of communicating directly with you. I proposed a motto for IT executives: explain, always explain.

aws@globalnet.co.uk

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