Stop Writing Checks Your Business Won't Cash
Organisations keep telling me they have a Delivery or Portfolio problem when it comes to technology. After digging deeper, I find the real issue: strategy teams hand over initiatives to portfolio teams without involving the business. No ownership. No accountability. No connection between strategy and execution.
Then, not-so-surprisingly, initiatives languish in delivery land. Without accountability, there is no champion behind the Delivery Manager to push it along its journey and ensure it remains fit for purpose. This results in a lot of money being spent on something that no one wants to own, especially when problems emerge because it failed to answer the exam question (and ultimately, more money needs to be spent). I once worked with an electricity utility that spent significant money on a smart grid management platform that the business unit failed to claim. The decision to invest was made by the board, long before technology was involved.
But wait, you say, the technology manager or C-Suite owns this! Do they? Who is accountable for the P&L? That's the person who is ultimately responsible for how money is spent in the business, including the technology. Forking over that accountability to anyone else means you forfeit the right to operate your business. Most small- to medium-sized companies know this is fundamental to their success, but as businesses grow, this mindset tends to shift. And it's becoming all too common.
Blaming your technology department for the P&L owners' failure to take accountability shows a lack of maturity in the face of digital disruption. And one thing we know is that digital disruption will continue at an exponential rate. If you, as a P&L owner, fail to recognise this and adapt, you will ultimately fail in one way or another.
Then there is the flip side question. What's the point of the technology division if the P&L owner takes all the accountability? There are a couple of things:
Disruption happens outside of the industry. Your technology department needs to keep an eye on technology trends beyond the industry. Generally, the most significant disruption to impact you will be seen elsewhere first. Uber and Airbnb disrupted how customers interact with businesses through technology. Real-time status updates, payments in the apps, no phoning a call centre for customer service queries, to name a few. Many companies failed to adapt quickly enough to this changing landscape.
Technology decisions require objectivity. P&L owners often choose technology based on prior experience, competitor choices, or sales relationships. Good technology decisions require context. I've watched enterprise CRM reps sell massive systems to small businesses that needed a fraction of the features. Overkill that solved nothing. P&L owners need technical input before choosing software. Come with a problem statement, not a solution. Otherwise, you overspend and undersupply the fix you need. This is what we call regretful rework.
Technology builds the infrastructure and digital capability that the business needs to execute. P&L owners focus on outcomes. Technology focuses on building scalable, secure systems that enable those outcomes across multiple initiatives, like centralised data platforms that serve multiple business units.
The solution requires changing how these teams interact.
This brings us back to the original problem. Organisations operating this way have more than a tech problem. They have an accountability problem. P&L owners must make the decisions they own. Strategy needs to work like technology: as an enabler. They provide insights into value opportunities. They push toward company strategy plans. Challenge the organisation beyond its comfort zone on revenue and cost efficiency. But they also need to place ownership of the plan in the hands of the P&L owner.
Gone are the days of black box strategy. Early business engagement is pivotal to ensure initiatives remain fit for purpose between the company vision and viable business outcomes. At every stage of developing a plan or strategy, there should be feedback loops to help tweak the approach. This requires clear roles across three capabilities:
Strategy teams set big picture direction and push thinking forward.
Business owns the outcomes and P&L.
Technology enables the solutions.
If this is not how you operate today, you need to tweak your approach.
The first step is to enable time for your key business personnel to collaborate at higher levels with strategy and technology. Initially, it will feel like you're losing valuable time with your key players. In reality, you're saving time on rework down the line, which always ends up costing far more.
Why is this important? Because strategy & technology are not mind-readers. The day-to-day context is key to building practical, effective strategies, plans, and making tech decisions. Otherwise, you will get an ivory tower moment in which either strategy or technology thinks it knows the right approach and will double down on building the perfect plan to achieve it. And they omit from said strategy, plans and decisions that they are built on imperfect information. You are then left with a destination baked into budgets and annual plans that are unachievable.
To achieve the best outcomes for your P&L, you need people working together consistently to identify the pathway forward. Consistent collaboration builds efficiency. It enables debates about ideas, not egos. It gives teams ownership of both successes and failures. This doesn't mean Digital waits for business to dictate everything. Nor does it mean that strategy is waiting for business to be ready. Tech debt, shadow IT, governance, infrastructure, cyber security, commercial oversight, and legal contracts still need attention. Additionally, changes in macro and microeconomic trends require consistent oversight by your strategy teams, especially when you operate close to the customer.
But what if you have an impasse between the business, strategy and/or technology?
Show the cost of staying comfortable. Double down on identifying the cost of the status quo. In today's fast-moving digital landscape and high global market uncertainty, inaction will become more painful than change. Are your competitors sitting on their hands? Your top competitor launched three new digital services last quarter. You launched none. You're already losing ground.
Start small with quick wins. If uncertainty is crippling your organisation's decisions, start small. This provides a practical first step and a proof point that builds trust for bigger challenges. Remember Amazon's one-way-two-way door value here. Make decisions that are easy to reverse (two-way doors), not one-way doors. The latter could increase your risk of regrettable spending.
P&L owners who collaborate with strategy and technology from the start make better decisions. They avoid costly rework. They deliver initiatives that solve real problems. Most importantly, they own the outcomes they're accountable for.
