If technology disappeared, what would your business look like? Virtually every company is a technology company in some way: Either technology is your product or service, or it supports your products or services.
IT typically eats up 1 percent to 10 percent of a company’s overall annual revenues and often 30 percent to 50 percent of its capital expenditures, according to The Executive’s Guide to Information Technology (Wiley, 2007). No wonder IT-related nightmares keep executives up at night.
Why do technology strategies often underperform when it comes to delivering business value? Usually it’s because they lack the strategy-to-capabilities-to-initiative mindset that can be instrumental in delivering an executable technology strategy that’s better aligned with business objectives, potentially saving significant amounts of money.
First, let’s be clear about what this mindset means and why it’s important. Though business is obviously more complex, football offers a perfect analogy.
It happens every fall. We watch our favorite football teams either squander their season or, if we’re lucky, win the Super Bowl. How did they waste all that talent? Contrarily, how did they get so far with that talent? Then there are the teams that continue to excel year after year—regardless of the players. How do they do it? By thinking first about strategy, then about the capabilities needed to execute that strategy and, finally, about the plays or tactics to implement the strategy.
While the best football organizations have a clear strategy, they also have the capabilities to execute on that strategy. You can’t be a passing team without the ability to throw, catch and block. Even if you have the best quarterback in the league, without the other skills to complement him, you are not going to win many games. It is the identification of a clear strategy (we are going to be a passing team); the identification of key capabilities required to execute that strategy (block, catch, throw); and the tactics or plays with which to develop those capabilities that lead to success.
A “hail Mary pass” may create a lot of excitement for a few minutes, but a single play rarely wins the Super Bowl. Neither will a single IT project that’s not backed by capabilities drive business success. Having the right capabilities in place is what wins in both football and IT.