This is an abridged excerpt from a paper published by Booz&co
Conflict, tension, and dissent are inevitable in large organizations, and IT departments are particularly susceptible to fighting. But fights can also be positive forces for good — if they involve issues that will make a material, game-changing difference to the business, they are about the future, not the past, and they are fought fairly.
CIOs must learn how to mediate the inevitable conflicts that arise in their IT organization both internally, between competing infrastructure and application development teams, and externally between IT and the business.
Exceptional IT leaders successfully referee these battles in ways that consistently makes progress toward long-term goals such as platform simplification and lower costs, while delivering real short-term benefits to their user communities.
LaVerne Council's experience at Johnson & Johnson (J&J) is a case in point.
In 2006, LaVerne Council became the pharmaceutical giant's first global CIO. Until then, the company's IT organization mirrored its highly decentralized structure.
Her job was to position IT so that the group could realize economies of scale without undermining its 250 individual operating companies. Many people inside the company were resistant to change, and some seriously doubted whether Council could succeed.
J&J's business units had long viewed IT as an ever-increasing cost to their operations, not as a source of business value. Council's initial challenge was to persuade the operating companies to share costs with her office on new initiatives, as her own budget was so small.
To build support, she spent her first 100 days on the road talking to all the business heads, persuading them that it was time to start reaping economies of scale. She was delighted to discover that many of the business units were eager to sign up.
Moreover, J&J's executive committee agreed with her plan to change the IT reporting structure and governance and supported her decision to remake the IT leadership group into a team capable of designing and implementing a strategy that would transform IT into a true driver of business value.
Armed with a focused strategy built through consensus, Council began to establish herself as a tough but fair head coach for the IT organization and an objective referee between IT and the company's multiple stakeholders.
Council knew she had a right fight on her hands — restructuring J&J's IT function certainly mattered to the future of the business, and she had a clear vision of what it would look like — but she also knew that to win the fight, she would have to fight right.
Historically, J&J's IT leaders in each business unit had their own contracts with vendors for everything — computers, phone systems, networks, systems programming, IT support, and everything was purchased on an à la carte basis.
Council established a new group called IT Global Services and mandated that all contracts with vendors for application design, development, and support go through this group.
Similarly, a new IT strategic sourcing group would be the single point of contact for all vendors of hardware, software, and other IT components.
Both groups asked vendors to respond to formal requests for proposal (RFPs) for enterprise-wide service agreements. The bidding process became highly competitive, but Council made sure bidding took place on a level playing field.
Council directed both groups to consider every bid equally, with no advantage to vendors that had previous contracts with the company. Some of the major vendors didn't believe in her game plan, so they played the old way.
Through just such efforts, Council showed all the stakeholders at J&J that she fought fairly — by focusing on value, transparency, and strict business ethics — but that she also fought to win.
J&J employees across the globe now understood that Council would fight for what was right while ensuring firm but fair competition. To her, it was high-minded sport, not war.
The goal of any fight is to win. But the definition of winning varies.
Executives who define winning by how much more power they gain, or by the amount of resources a rival unit loses, have surely won what will turn out to be a Pyrrhic victory.
Only when the result works to the benefit of the larger organization, and by extension to all its stakeholders, can it be said that the game is worth the candle.
The Right Fight: How Great Leaders Use Healthy Conflict to Drive Performance, Innovation, and Value (New York: Harper Business, 2010), is written by Damon Beyer, senior executive advisor and Saj-nicole Joni, senior fellow with Booz & Company.