Business Transformation Requires Transformational Leaders

During the go-go years of the Internet boom, I used to run an exercise in some of my executive education classes that went like this: I'd ask each participant to write a list -- not to be shared with anyone -- of his or her top five ideas for using IT to create economic value for his or her own company. After the participants had finished, I'd ask them to consider their list and code each item "R" or "C" based on whether the idea created value primarily by increasing revenue (the "R") or by reducing cost (the "C").

In the classic film All the President's Men (about the Watergate break-in), Robert Redford and Dustin Hoffman, playing Washington Post reporters Bob Woodward and Carl Bernstein, respectively, receive a recurring piece of advice from the unknown informant Deep Throat: "Follow the money." Over and over, Deep Throat cautions the young reporters to "follow the money" and that if they do, all their questions will be answered. It turns out to be good advice.

Resources should be allocated to those activities that most directly influence a company's strategic and operational effectiveness. By managing to improve those effectiveness factors (the causes) through IT, we can contribute to the company's future financial performance. By prioritizing, aligning, planning, and measuring IT's performance with strategic and operational effectiveness as the focus, we can improve the bottom-line impact of IT and communicate it to the enterprise. How should companies respond to this issue? In two ways:

In Raymond Carver's short story "What We Talk About When We Talk About Love," two couples have a few predinner drinks and talk about love. But, as with many complex ideas, the story's characters cannot talk directly about love. Instead, they try to communicate through an emotional and conversational triangulation; each character offers multiple points of reference, which taken together converge as their ideas of love. In talking about love, the characters reveal, directly and indirectly, more about themselves and their relationships with one another.

As a professional negotiator, I am always surprised at the poor quality of the contracts that I have to renegotiate. They are often created by intelligent and well-meaning folks, who unfortunately are not experienced in the negotiation process and who therefore do not understand the pitfalls that may lie ahead.