It looks like nothing was found at this location. Maybe try a search or browse one of our posts below.

Not every CEO is a paragon of business acumen. I know it’s hard to believe. But it’s true nonetheless.

No, this isn’t a piling-on column about Carly Fiorina’s departure. That would be an I-told-you-so — an ungraceful and mean-spirited exercise. (I did, however, give you a pretty strong hint in my 9/16/2002 epistle.) This column is about a different subject: Why many CIOs, trying to institute a strong, systematic, process-driven approach to IT governance, find more resistance in the executive suite than anywhere else.

We’re going to take the long way round, though. I hope you aren’t in a hurry.

The story starts in 2000. The geniuses then running General Motors (many of whom are the geniuses now running General Motors) struck a deal with Fiat … negotiated, according to one account, over a long weekend … to swap equity and become global partners. The agreement contained a time bomb, guaranteed to win this year’s Business Bizarro Award: A “put option.” It means Fiat can compel GM to acquire it whether GM wants to or not — an inverted hostile takeover. How hostile is it? For $8 billion or so, GM will acquire more than $10 billion in long-term debt. And, even worse, a large pile of Fiats.

How could something like this happen? Unencumbered by actual specific inside knowledge of the players, I’m free to express strongly held opinions about what went wrong, namely:

  • Big-concept thinking: It’s an old joke: “The view from 50,000 feet,” translates to “Wrong.” In announcing the deal, the companies listed four opportunities: Reducing materials costs; strengthening both companies’ engine activities; increasing the efficiency of financial services operations; and exchanging technologies and using common platforms.The opportunities were certainly there. But to take advantage of any one of these opportunities, the two companies would have had to collaborate in a complex program of difficult business change. Even with strong leadership, complex programs of difficult business change fail more often than they succeed. This deal’s success relied on four of them. Executed concurrently.
  • Falling in love with the deal: As George Patton pointed out about dying for your country (let the other SOB do it), when you do big deals, you want the other side to fall in love with them. The moment you do, you’re doomed.GM is a car company, and the people running a car company should have recognized that we’re talking about Fiat — considered a joke among those who value good cars. But then, General Motors sells the Lumina. So maybe the right lesson comes from HP after all: When a company with a weakness buys another company that shares that weakness, it doesn’t create a strength.
  • Attitude of privilege: Privilege, you’ll recall, means “private law.” You can bet GM’s middle managers complete a non-optional due-diligence checklist before any major initiative can move forward. Smart CEOs understand that the due diligence process exists because it’s a good idea. Those who enjoy the experience of privilege figure it’s a good idea for everyone else. Had GM’s executives followed their own process, someone would have raised a hand to say, “Uh … boss? Did you know this is in here?”

Whether GM’s leadership suffers from these defects or some other set of defects instead is uncertain. That it’s just about the worst-performing car company in the world, other than Fiat, of course, is not. Nor is it in doubt that this criticism is entirely gratuitous, irrelevant to the point of this column. So let’s get to it:

Large organizations need strong processes to guide their major activities. If you’re the CIO of a large IT organization, you need them for more than the internal, day-to-day business of IT. IT governance — the means through which the company sets priorities and allocates resources, and which smaller companies can deal with through informal relationships and internal deal-making — needs a strong set of processes and guidelines to prevent chaos once large size happens.

Big-concept thinking and “generic acumen” can wound your attempts to institute strong, systematic processes. The attitude of executive privilege is worse. It’s frequently fatal. Business executives, including many CIOs, by the way, enjoy having the authority to help their friends bypass the unpleasantries of the corporate bureaucracy — the usual synonym for governance processes of all kinds.

More sophisticated executives understand that the best way to help their friends isn’t to help them around the process. It’s to help them work the process.

And even more important, to make sure the process is workable, and works.

ManagementSpeak: Application of this tool in our environment is critical to the success of meeting our objectives.
Translation: We have to find a place to use this or I won’t be able to justify the expense of the leftover funds I had to burn to secure our budget for next year.
This week’s anonymous contributor recommends that you don’t apply this phrase in your environment.

Just for giggles, take a few minutes to google the contents of your average MBA curriculum.

I’m not going to quibble about what’s in them. My quibble is with what isn’t. High on the missing courseware list: project management. Curiously, this, the practice needed to make tomorrow different from yesterday isn’t important enough to be a mandatory business management skill.

Then there’s this week’s missing subject: epistemology.

Yes, epistemology. It sounds abstruse and esoteric. But one of the eight tasks of leadership is making decisions, and decision-makers can’t make good ones if they don’t know what they know and how much they should trust it.

Read about epistemological thinking and you’ll bump into Karl Popper, the pre-eminent philosopher of science. His key insight: Science never proves anything. Scientific research fails to disprove – to falsify. Fail to falsify an idea enough times and scientists start to have confidence in it.

Or, more accurately, they have more confidence in it than in any of the competing ideas floating around in the meme-o-sphere.

Which leads to the business response to COVID-19.

Most of the decisions your average business leader must make might be scientific in a metaphorical sense, but they’re rarely about scientific issues. Quantum electrodynamics, for example, has little impact on compensation policy.

COVID-19 changed that, calling for business decisions about a scientific issue. And so, decision-makers were advised to “follow the science” – advice I made myself and still endorse.

With this caveat: As pointed out in Michael Lewis’s excellent The Premonition: A Pandemic Story, when the SARS-CoV-2 virus appeared there was no science to follow. Epidemiologists had few established facts about it – too few to formulate high-confidence policy recommendations. Even such fundamentals as the virus’s lethality and contagion had large error bars.

Nor did economists have a body of knowledge to guide how to go about putting the economy in an induced coma … necessary given the millions of lives that were at stake … and then, when the situation was safer, to resuscitate it.

To everyone’s credit, most leaders endorsed the idea of “following the science” in their decision-making. What became blurred, though, was that the science being followed wasn’t yet actual science. Our ability to forecast how the virus would behave in real-world populations hadn’t yet been tested by multiple Popperian falsification loops.

What we did have were seasoned, dedicated, brilliant researchers who extrapolated from their knowledge of coronaviruses, viral propagation, and economics to the situation at hand.

Recall that even the prosaic idea of taking maximum advantage of the tools and practices associated with employees working remotely was an extrapolation from far too little data to accurately predict where it would lead.

“Follow the science,” that is, didn’t, and couldn’t, mean what the plain words signaled. It meant that, given the choice, we should take the current scientific consensus about the virus as the best alternative available – in the phrase made famous in Argo we followed, for the most part, the best bad plan we had.

Bob’s last words: In the early 1990s, Al Gore sponsored the legislation that, combined with Tim Berners-Lee’s invention of HTML, led to the modern internet.

Imagine what today’s world would be like had he not provided this leadership. And yet, as his reward, he was widely ridiculed for a claim he never made … that he’d “invented the Internet.”

Culminating on January 2, 2000, an army of dedicated and hard-working technologists successfully prevented world economic collapse through their response to the Y2K problem. Instead of throwing a parade for the IT professionals who had just saved the world, the world griped ignorantly about the so-called Y2K hoax.

And so, I guess we shouldn’t be surprised that the level of appreciation we as a society have been expressing for the dedication and hard work aimed at deflecting the worst of the pandemic is somewhat lacking in enthusiasm.

Which gets us to takeaways in the leadership and management principles we apply every day to do the work of the businesses we support:

There will come a time when you have to formulate a response to a difficult, complicated, and high-impact challenge. It won’t be the kind of challenge that comes with a well-defined, packaged solution you can follow with confidence.

The best you’ll be able to do is to pull your best experts together to figure it out, knowing they won’t achieve perfection.

Please – when this happens, apply the lessons of recent world history. Thank the team for the successes they do achieve; don’t grouse about what they missed. They did their best … and, very possibly, did the best possible. That they failed to predict the future with precision won’t have been a failing.

It’s the nature of the future.

On CIO.com’s CIO Survival Guide:The successful CIO’s trick to mastering politics,” about the basic principle that relationships outlive transactions, and what happens when a CIO fails to embrace this fact of organizational dynamics.