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Implementing the 4 Zone Model Playbook

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From Strategy to Implementation: Common Drivers & Expected Outcomes

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Like any new strategic framework and set of tools and processes, the 4 Zone Model’s value can only be realized through implementation and execution. I have outlined below how some early adopters of the model have deployed different elements of the playbook to address critical issues and opportunities.

The 4 Zone Model is built upon several drivers common to enterprise information technology functions:

  • A need for innovative approaches to enable organizations to address five disruptive technologies: Cloud, Mobile, Social, Data Science and Internet of Things.
  • A need to evolve from lengthy waterfall-based technology implementations to the more rapid agile development approach. The Plan, Build, Run model will be displaced by a Co-Develop, Assemble, Consume model.
  • A need to embed a trapped value assessment process to identify opportunities to shift resources and funds from maintaining legacy systems of record to developing new systems of engagement.
  • A need to utilize new methodologies and tools to identify, develop and reinforce the relevant new skills and capabilities necessary to lead and manage a digital enterprise.

The motivation to adopt the Four Zone Model playbook encompasses a number of expected outcomes:

  • Higher percentage of IT resources allocated to change-the-business outcomes.
  • Significant increase in speed to market and throughput of all development initiatives.
  • Strong alignment between future IT investment priorities and critical business outcomes.
  • Increased ROI from the portfolio of IT innovation investments.
  • More impactful IT presence at the business strategy table.

To respond to these drivers and expected outcomes, the Four Zone Model playbook affords technology teams’ processes and tools which enable them to maximize the business value of IT across all three levels of their organization.

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The Starting Point: Mission-Based Teams

In order to move expeditiously, the 4 Zone Playbook begins at the “starting point” with mission-based teams specifically assembled and empowered to attack prioritized desired outcomes. These mission- based initiatives all start from the “Incubation Zone” and seek an exit path to one of the three other Zones depending on the desired outcome.

3 exits

IT Executives leading mission-based initiatives begin the process by asking three key questions:

  1. Should we do it? Does it align with and support critical business outcomes?
  2. Can we do it? Do we have the relevant skills/capabilities, tools and capacity to achieve the outcome?
  3. Did we do it? Do we have the right metrics to measure the achieved outcome vs. the desired outcome?

Mission-based teams are appointed for work which has been identified as a priority for movement from the Incubation quadrant to another Zone within the Model. Expectations for success can be high given the following critical elements:

  • Alignment at the leadership level that the work commands sufficient priority to be implemented. Alignment must occur not only within IT but also with all other key stakeholders including internal business partners and shared services partners.
  • Formation of the mission-based team includes careful appointment of team members to ensure they have the appropriate skills and competencies necessary to achieve the outcome.
  • The initiative must be carefully scoped to fit within the Model’s timeframe boundary conditions (namely pilot initiation to go live within 30-90 days especially for productivity and performance zone projects).
  • Active collaboration and critical thinking processes must drive the shared discovery, problem solving and solution adoption. The focus of the team and their work is deliberately narrow, user centric and intentionally innovative.
  • Measurement is expected to occur throughout the discovery and design process as well as at the conclusion of the team’s work.

The Outcome is Worth the Journey

What we have learned over the past 12 months is that to successfully introduce and deploy this playbook is a leadership challenge not a management challenge. This is not about just doing what IT has always done better, faster and cheaper. This is about transforming the role of IT from a cost center/support function to a business enabling strategic partner. This is about changing outcomes by changing legacy attitudes, behaviors and actions.

As always, I am interested in your comments, feedback and perspective on the ideas put forth in this blog. Please e-mail them to me at pdmoore@woellc.com.

The 4 Zones Model: A Playbook for the Performance Zone

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The CIO is not a “Device Santa Claus”

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My good friend and technology futurist, Thornton May, clearly defined the CIO’s role when he said “…the role of the CIO is not to be a ‘Device Santa Claus’ but, rather, to craft an environment which empowers executives to create competitive advantage vis-à-vis the innovative and informed use of information technology.”

A recent McKinsey & Company survey of business and IT leaders validated that when CIOs play an active role in shaping their company’s business strategy both IT’s and the company’s overall performance greatly improve. However, when business executives were asked how well IT supported key business activities like entering new markets and driving new revenues, only 35% agreed IT played that role in their company down from 57% in the same survey two years ago.

If actively engaging the CIO in helping to shape a company’s business strategy works so well, then why are so many companies not doing it? My answer is that they don’t have a “good decision-making governance process” that aligns future IT investment priorities with critical business outcomes.

The Performance Zone: Demonstrating the Business Value of IT

The 4 Zone Model I’ve developed ( link to earlier blog http://eepurl.com/blFb3T ) is designed to enable CIOs and their senior leadership teams to maximize the business value of IT across their organizations. IT’s charter for the Performance Zone in particular is to provide new user-centric tools, services and solutions e.g., social, mobile, cloud and data analytics that improve the competitive performance of each of the company’s lines of business.

To effectively demonstrate IT’s ability to directly contribute to generating new revenues and profits, CIOs and their leadership teams must actively engage their internal business partners and users. To activate this new process, I propose that they utilize the Collaborative IT Governance Model below.

The Collaborative IT Governance Model

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From my early work in this area, I have seen first-hand how effective this model is in breaking down hierarchical, silo-based decision-making processes and converting them into horizontal cross-enterprise decision-making processes. It enables all the key stakeholders to be aligned with and committed to a common course of action to deliver the desired business outcomes. It has also dramatically increased the speed to market and throughput of major IT developmental projects.

It’s An Outside-in Approach Not An Inside-out Approach

To effectively deploy the collaborative IT model, you need to start with a common understanding of what you want the ultimate user experience to deliver to customers, employees, supply chain partners and other key constituents.

Historically IT has started with the technology it has and added to it. This inside-out approach is fine if your goal is to modernize your Systems of Record and optimize the cost of maintaining them. However, if your goal is to provide “friction-free” customer engagements then you must take a very different approach.

This outside-in approach begins by getting all the key stakeholders to address three fundamental questions:

  1. What are the key moments of customer engagement that define the success of our business or company?
  2. Who or what system represents our company at this moment of engagement?
  3. How could we strategically intervene with a new system of engagement in order to make that moment of engagement more compelling and enduring?

Some companies I’ve worked with have used a “customer touch point” mapping exercise to identify all the different touch points and eliminated those that they felt added no value to the customer. They then looked for opportunities to enhance the value of critical touch points and finally they identified gaps where they could add new touch points.

In all cases, it has been gratifying to see that when these models and tools have been utilized they have successfully demonstrated the business value of IT in multiple business growth venues.

In my next blog, I will take a deeper dive into the Incubation Zone and talk about how you can deploy our Three Innovation Playbooks model to significantly increase the ROI on your portfolio of IT investments.

As always, I am interested in your comments, feedback and perspectives on the ideas put forth in this blog. Please e-mail them to me at pdmoore@woellc.com.

The 4 Zones Model: A Playbook for the Productivity Zone

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Reversing the IT Resource Allocation Imbalance Equation

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For decades, senior IT leaders have confronted the financial reality that every year 80% of their IT budgets are allocated to “running the business” while 20% are allocated to “changing the business.”

No one can argue how important it is for IT to make sure each company’s systems infrastructure and data is stable, secure and in compliance with industry standards and regulations. Unfortunately, just doing that job well severely limits the ability of CIOs and their senior leadership teams to maximize the business value of IT across their organizations.

The Trapped Value Audit

The new 4 Zones Model is designed to reverse that equation by creating individual playbooks for each zone and, in doing so, enable IT to exponentially increase its business value. The Productivity Zone Playbook is designed to optimize the costs of maintaining a company’s systems of record thereby freeing up resources to be redeployed against developing new systems of engagement.

A key tool to achieve this outcome is the Trapped Value Audit which enables cross-functional teams to systematically review all their systems of record and determine if they should be modernized, out-sourced or, if possible, eliminated. This audit is also designed the identify opportunities to significantly reduce or eliminate a company’s “technical debt.”

You can get started by asking some core questions:

  • Where is the trapped value in our company? E.g., maintaining systems of record
  • How can we identify and unlock that trapped value?
  • How can we redeploy that trapped value against critical new IT investment priorities? E.g., the development of new systems of engagement
  • Where is the new business value of IT going to come from?

The results of these efforts will enable senior IT leaders to redirect resources away from lower busine47ss value activities in the left hand column to higher value activities in the right hand column in the chart below.

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Extending IT’s Business Value Beyond A Company’s Infrastructure Model

Unlike previous evolutions of enterprise IT, which were mainly focused on the need for a company to adjust its infrastructure model, the disruptive impact of social, mobile, analytics and the cloud extend to its operating and business models. As such, it is imperative for IT to realign its skills, capabilities and resources to better enable the performance of the company’s operating model and if necessary help shift its business model.

From my early discussions with CIOs, this process entails earning the trust and confidence of their internal business users and partners as well as creating cross-functional teams to align future IT investment priorities with critical business growth goals and deliverables.

The chart below highlights these three levels of disruption and identifies specific sources of trapped value that these cross-functional teams can pursue together.

infograph2 By optimizing the costs of maintaining the infrastructure value delivery system, IT is then well positioned to deliver net new value creation for the company and thereby extend its business value across all three areas of potential disruption.

End Of Life Programs – It Takes A Village To Make Them Work

To be perfectly clear, companies cannot operate without stable, secure and well-maintained systems of record. These SORs run core functions from CRM to ERP to Finance. They also must be able to quickly and seamlessly connect with systems of engagement in order to deliver a friction-free user experience. That said, the fact remains that there is a significant amount of trapped value in how most companies deploy resources to maintain them.

In taking on the challenge of reducing or eliminating that trapped value, CIOs must establish a set of protocols and repeatable processes to monitor and evaluate the business value each SOR delivers. I have drawn upon some ideas and perspectives from my brother, Geoffrey, to give you some suggested ways to increase your odds of success:

  • Establish a stand-alone end of life (EOL) shared service function whose sole purpose is to manage this process from start to finish. Note: this is not just IT but all effected stakeholders.
  • Transfer all the SOR’s costs/expenses to the EOL shared services function.
  • Develop an EOL roadmap and timetable for each SOR.
  • Don’t allow non-EOL priorities/deliverables to compete for the shared services time and resources.
  • Accrue any trapped value savings to be redirected to new IT investment priorities.

A First Step

The Productivity Zone playbook is the first step in helping CIOs maximize the business value of IT across their organizations. It incorporates a set of tools to help senior IT leadership teams find the right balance between protecting the value they’ve created with stable, secure, compliant systems of record and creating new business value with easily accessible, friction-free systems of engagement that deliver compelling and enduring user experiences.

In my next blog, I will take a deeper dive into the Performance Zone and talk about the importance of IT building strong collaborative relationships with their internal business partners and other key stakeholders.

As always, I am interested in your comments, feedback and perspectives on the ideas put forth in this blog. Please e-mail them to me at pdmoore@woellc.com.

THE 4 ZONES MODEL: A Playbook to Maximize the Business Value of IT

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Defining the Company’s Future Enterprise IT Agenda

The disruptive impact of social, mobile, analytics and the cloud is fundamentally changing the ways companies engage with their employees, customers, supply chain partners and other key stakeholders. In order for companies to remain competitively viable in the new world of digitally mediated interactions, they will need to overcome their legacy mindset about IT as primarily a cost center support function. CIOs must facilitate IT’s evolution to a full strategic partner role that directly contributes to delivering new revenues and profits. Simply put, a company will have to use technology as a source of competitive advantage in order to transform itself into a digital enterprise.

What’s ultimately at stake for CIOs is who will take the lead in defining and implementing the future enterprise IT agenda for their company. To regain their rightful leadership position requires both a new organizational and operating playbook for IT. We call this the Four Zones Playbook and it is designed to ensure that the organizational structure, operating cadence, resource allocation process and success metrics including ROI are properly adjusted to and aligned with the priorities and deliverables for each zone. In doing so, it will maximize the business value of IT across the enterprise.

The Four Zones: Maximizing the Business Value of IT


The 4 Zones

The Productivity Zone: Here the focus is to optimize the costs of maintaining the company’s legacy systems of record while making sure that all systems and platforms are stable, secure and in compliance with industry standards and regulations. There will be an ongoing effort to identify and unlock trapped value in maintaining legacy systems of record to be invested in new systems of engagement. There will be a goal of “no technical debt.”

The Performance Zone: Here the focus is to demonstrate the business value of IT as a source of competitive differentiation for all of the enterprise’s established lines of business. IT’s charter for this zone is to provide new user-centric tools, services and solutions eg: social, mobile, cloud and data analytics that improve the competitive performance of each of the company’s lines of business. The implementation of a Collaborative IT Governance Model will align future IT investment priorities with critical business outcomes.

The Incubation Zone: Here the focus is to help the company identify, test and validate next generation product, service and business ideas and leverage technology enabled innovation to develop them. An Agile development model will replace the traditional waterfall development model.

The Transformation Zone: Here the focus is to help the company scale net new lines of business that produce material (10% or more of current revenues) new revenues and profits. There can only be one transformational new business initiative in play at any one time.


The Key Principle for Success

Overall, the key principle behind the Four Zones model is that, because the goals and objectives of these quadrants are so diverse, any set of management methods that creates success in one zone is likely to cause failure in each of the other three. Therefore, it is critical to:

  • Install a governance model that separates these four zones from one another
  • Establish IT business value deliverables for each zone
  • Overlay a light-weight corporate system to oversee all four zones in parallel

In upcoming blogs, I will take a deeper dive into each zone and further examine the specific functions and deliverables from each one. I will also highlight specific implementation tools for each zone such as the Trapped Value Audit and the Collaborative IT Governance Model.

Based on some early engagements with CIOs and their senior leadership teams, I have seen first-hand the value and benefit this 4 Zone Model brings to maximizing the business value of IT within an organization and with its key external partners and stakeholders.

As always, I am interested in your comments, feedback and perspective on the ideas put forth in this blog. Please e-mail them to me at pdmoore@woellc.com.

The Evolution of Enterprise IT

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Why it’s Critical for Companies to Achieve “Technology Leadership Competency”

A Wide Gap between Expectation and Performance: Over the past two years, The Harvard Business Review and The Economist have been conducting primary research to better understand the changing role of the CIO and IT Department. Some of the key findings from their research suggest that there is a wide gap between the role IT currently plays today versus what it should play going forward.

  • Nearly half of CEOs feel IT should be a commodity service purchased as needed
  • Almost half of CEOs rate their CIOs negatively in terms of understanding the business and understanding how to apply IT in new ways to help the business grow
  • 57% of the executives expect their IT function to change significantly over the next 3 years, and 12% predict a “complete overhaul” of IT in their company
  • Only 25% of CEOs thought their CIO was performing above his or her peers

Unfortunately for many companies, the overhang of legacy thinking about IT has permeated the ranks of the C-Suite to a point where they have lost the ability to recognize the value of technology as a source of innovation and transformation that can deliver new revenue and profits for the business. Part of the responsibility for this current state of affairs rests with the CIO and IT Group who have willingly or unwillingly allowed themselves to be put into the cost center/support function pigeon hole. In these cases, the CIO does not report directly to the CEO but rather to the CFO or Head of Operations. As such, the primary focus is on how cost efficiently they can operate and maintain the company’s enterprise IT architecture and systems.

While optimizing the “run the business” IT expenses for a company is not a bad thing, taken to an extreme it can completely neutralize the ability of technology to “change the business” by directly contributing to creating new and compelling ways to engage with employees, customers, supply chain partners and other key stakeholders. These new terms of engagement are redefining the competitive boundaries of most industries and failing to stay abreast of them will result in a significant loss of market share and market influence.

Some Early Examples of Success: The good news is that there are some early examples of how forward thinking CEOs and CIOs are working together to build a “technology leadership competency” throughout their organizations.  Here are some of the actions these early adopters are taking:

  • First and foremost the CIO must report directly to the CEO and be a full participating member of the company’s senior leadership team
  • In some cases, companies have gone so far as to create a separate board level technology committee, just like an audit committee, whose sole focus is to monitor and help ensure the company is getting the highest return and value from its IT investments
  • CIOs are realizing that they must evolve IT from a “developer of services” to a “sourcer of services” and focus on the cost benefit tradeoffs between in house services versus outsourced services
  • CIOs with help from CHROs are reassessing their IT group’s organizational design; the core roles their IT leaders must play to drive major transformative initiatives and the new skills and capabilities they must possess to play those roles
    • At a high level, business oriented IT skills and service based roles are gaining increased importance over the build/deploy/support roles of the past
  • CIOs, CMOs and Business Unit Leaders are embracing a new model of “collaborative IT” where all the key stakeholders work together to align technology investment priorities with critical business goals and outcomes

Some Challenges to Overcome: While these early actions can be very helpful in defining a roadmap and go forward game plan, the HBR research shows the harsh reality that a good percentage of CIOs and their IT Departments are facing.

Based on some of my recent work, I have seen first-hand that the vast majority of current IT job descriptions are well past their sell by date. Traditionally IT professionals have been recruited for their technical skills not their leadership/relationship skills. As such, when they get into discussions about new business IT requirements, they don’t have the requisite sales skills to persuade the business partner that their recommendation is the best solution.

In other cases, IT professionals spend a disproportionate amount of their time and resources “putting out fires” and doing “work arounds” for individual businesses so they never get the chance to truly get out in front of a major change and develop an enterprise wide solution that creates sustainable value.

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Some Actions to Consider:

  • To create true “technology leadership competency” a company must be prepared to make an all-out commitment from top to bottom to move the IT function out of the engine room and up to the bridge where it can help chart the future direction of the enterprise. This means that the CEO and other members of the C-Suite must see the CIO as a full card carrying member of the senior leadership team.
  • They need to recognize and leverage technology as an essential component to successfully engaging their employees, customers and other key stakeholders in this new digitally empowered environment.
  • They must also realize that they need to do an overall assessment of the new skills and capabilities that senior IT professionals must have in order to be on an equal footing with their business partners and users.
  • The CIO and the IT Group should develop a new cohesive strategy that allows them to identify behaviors and actions they will stop doing e.g.: just being order takers along with new behaviors they will adopt e.g.: being catalysts that drive technology enabled innovation throughout the company.
  • The CIO should create a series of thought leadership forums e.g.: Webinars, Town Halls, Brown Bag Lunch Sessions where they can interact with key internal stakeholders and talk about the major transformative shifts going on in enterprise IT and where they will have the most impact on the performance of the different business units and key support functions.
  • The IT group should create and utilize a series of performance measurement tools including an internal IT Net Promoter Score metric to measure the group’s ability to meet or exceed its internal business user’s needs and expectations.

While this will be a challenging journey for many companies and their senior leadership teams, it will be a journey that defines the legacy of successful leaders versus leaders who fall short of meeting this challenge.

As always, I welcome your comments and feedback along with any suggested actions you think companies should take to achieve technology leadership competency.