Its not IT, its your brand!

Organizations come up with pithy slogans, tag lines and spend millions advertising and promoting them. Ostensibly, this builds the “brand”. Arguably, brand is one of the most powerful concepts not just creating but also sustaining shareholder value. So, all this energy and dollars are well justified.

However, are you taken at your word or do your deeds speak more convincingly? My own experience as a customer and consulting with companies is that self professed virtues are important but action driven images are critical.

The issue in your customers’ mind is: Can you back up your claims?

This is where IT comes in. Let me explain.

Brand is critical to shareholder value
Brand is the essence of an organization. It cannot be touched or felt and in more ways than one, it is a perception. It does not speak yet it is that one thing that tells more about an organization than all the reams of paper taken up by press releases, brochures, employee manuals etc.

Why do people buy iPods for twice or thrice the price of a comparable MP3 player? Why did people automatically associate “Xeroxing” with “photocopying”? Why do people watch Steven Spielberg movies even when they know nothing about them in advance? Why is Mike Tyson still a huge draw? Why is Toyota going to be the largest car company in the world in 2007?

Brand takes time to build; short time to destroy – sometimes an instance. How many of you are going to watch Michael Richards’ (Seinfeld’s Kramer) stand up comedy show? He blew away a lifetime of value in that one outburst.

• According to J.D. Power and Associates surveys, American car companies are competing head to head with Japanese companies in quality but is that the car buyer’s perception?
• Can an airline come out of a crash? What happened to Pan Am?
• Would you like to have a brokerage indicted for fraud manage your investments?
• Would you like to put your money in a bank whose statements are inaccurate? How many inaccurate statements before you change banks?
• Would you like to buy your insurance policy company known for waste and mismanagement?
• Would you buy the stock of a company involved in options scam?

How bad can it get? Remember Anderson? This Big 6 accounting firm was indicted for participating in fraud against shareholders. The issue never went to trial. No guilt was ever proven. They were out of business on that indictment.

Brand is a promise – an implied one at that – of value.

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Putting IT Strategy in Context

In my travels over the past two decades, I have noticed the peculiar state of IT Strategy. Some worship at the altar of IT strategy as “it’s all in the strategy”, while others malign it as “the last thing we need is a strategy?"

While these are extremes and a majority of the views are somewhere in the middle, I do believe that the context for IT Strategy is not properly understood. Consequently, its development and implementation misses the mark.

The first step to an effective IT Strategy is to put it in context, i.e. understand its role and scope.

The Role of IT Strategy

IT Strategy sets the direction for an IT organization, just like business strategy sets direction for the enterprise. If this direction is correct then execution against it will result in the desired results, i.e. value creation. If this direction is not correct then the exact opposite will happen.

IT strategy does not say or do anything about the execution that follows in response to it. A good direction with flawed execution will still result in disaster. The blame, as it were, is not in the strategy but in the execution. Similarly, flawless execution in the wrong direction will not result in the desired outcome either.

IT Strategy enables the effectiveness of an IT Organization. IT Implementation defines its efficiency. Consequently, an IT Organization needs both, a good IT strategy and execution, for value creation.

Quite often, we miss this point, and debate the relative importance of IT strategy versus execution. One can understand, if the debate is on relative emphasis i.e. how much time and effort should an organization devote to each? However, pitting them against each other an “either or” equation is counterproductive.

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