Power To The People: Managing IT Organizations Effectively

Frank Wander, head of the IT Excellence Institute and former insurance industry CIO, dislikes "human resources" precisely because he's passionate about managing people. His problem isn't with the HR function itself but rather with the name, which he says reflects a deeply held belief that professionals are interchangeable parts.

"What's in a name?" you might respond. Wander asserts that the term reflects what's wrong with how we manage IT organizations and explains the tech industry's appalling record of failure.

"Terms such as 'human resources' and 'human capital' dehumanize people who have their own thoughts, feelings, creative ideas and projects," Wander declares. "The more highly attuned the organization is to that, the more you'll get out of your staff. If you think of them as 'human resources,' you shouldn't be surprised if you have low employee engagement scores."

In his new book, Transforming IT Culture: How To Use Social Intelligence, Human Factors And Collaboration To Create An IT Department That Outperforms (Wiley CIO, 2013), Wander chronicles a record of technology failure. He begins with a look at the unforeseen limitations and costs of IBM's OS/360 in 1964 and takes us up to a 2012 McKinsey study of 5,400 projects across all industries valued at more than $15 million each. McKinsey found that these projects were, on average, 45% over budget while delivering 56% less value than planned. The aggregate cost overrun was about $66 billion, and 17% of the projects actually put the company at risk.

Employees Aren't Machines

"After programming modern computers for 50 years and with trillions of dollars of experience, we should be experts," Wander says. The reason we aren't is that we continue to apply industrial notions of resource and process. What may have been effective for manual and automated work doesn't translate to knowledge work that depends on creativity and communication, he insists.

"Big projects fail more regularly, which shows how poorly connected people are in corporate environments," Wander says. "Initiatives in large organizations require a high degree of cross-functional collaboration, and companies aren't good at collaborating."

Wander says he isn't a critic but rather an advocate for a much better way of doing IT. During more than five years as CIO at Guardian Life Insurance, he drove between 92% and 94% of projects on time and under budget, a record characteristic of his entire career, which includes stints at Prudential and Merrill Lynch. That success is rooted in the formation of collaborative social systems, where you have "the deepest and most meaningful form of collaboration, and that only happens where there's a high degree of trust between people," he says.

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Wander's convictions aren't based merely on his instincts as a manager but rather on evolutionary science. Humans evolved in a dangerous environment, and when they feel threatened, the brain's limbic system triggers reactions that are destructive to creative thought, he says.

"Success of a technology team depends on people knowing that management has their back, so that they can relax and think about their work," Wander says.

The manager must be a "servant" to the needs of those under their supervision, he says. "The manager's job is to nurture talent and reduce the amount of stress associated with deadline-driven work."

The industrial approach has been to establish a process, assign "human resources" and expect success, Wander says. However, the record shows that IT managers should rethink the human component, which constitutes the bulk of operating expense in IT -- about 64% on average, according to a Gartner study Wander cites.

"Talent is the only shortcut," Wander counsels. "Until we understand talent as well as we understand computers and networks, we'll continue to have problems."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio