Is high risk-aversion to change and modernization ever warranted?

A CEO from one of the leading financial institutions and I were talking about the integration of IT and the business. I said, "We've got to stop calling it that. Stop creating the separation between the two.” And he said, "No, I completely disagree. You absolutely should consider IT different from the business." And he was adamant about it. And his reasoning was very traditional in the way that he was thinking about the role that IT played as more of a reactive function within the company. I know some folks in financial services that are of the other mindset, but there are reasons why I think that change becomes hard. For example, I was doing work for one of the major airlines in the world and they run their operations on a mainframe. We talked about, "Okay, what does it mean to transform that and modernize it?" And the reality was not just the cost, but the risk to the organization and the operations of their airline were so significant that there was no way that it even came close to outweighing the value they would get over a period of time. And so they just continue doing it. And unfortunately the software in that particular industry is so heavily specialized that it just doesn't get modernized unless you want to do it yourself and then you kind of get back to this change aversion.

10 views
3 comments
1 upvotes
Related Tags
Anonymous Author
A CEO from one of the leading financial institutions and I were talking about the integration of IT and the business. I said, "We've got to stop calling it that. Stop creating the separation between the two.” And he said, "No, I completely disagree. You absolutely should consider IT different from the business." And he was adamant about it. And his reasoning was very traditional in the way that he was thinking about the role that IT played as more of a reactive function within the company. I know some folks in financial services that are of the other mindset, but there are reasons why I think that change becomes hard. For example, I was doing work for one of the major airlines in the world and they run their operations on a mainframe. We talked about, "Okay, what does it mean to transform that and modernize it?" And the reality was not just the cost, but the risk to the organization and the operations of their airline were so significant that there was no way that it even came close to outweighing the value they would get over a period of time. And so they just continue doing it. And unfortunately the software in that particular industry is so heavily specialized that it just doesn't get modernized unless you want to do it yourself and then you kind of get back to this change aversion.
1 upvotes
Anonymous Author
I'm always falling back on the notion of leadership. From a leadership standpoint, the interesting thing about IT is that, it's not like facilities, it's not like marketing, it's not even like sales. If the head of sales makes a mistake, sales doesn’t grow as fast as it  could. Employee turnover is a little worse than it should be. If marketing makes a mistake, most people don't even recognize it. When a mistake is made in IT, it affects every part of the company and it involves obvious interruption, like a flat tire in a car. So the problem is the majority of CEOs still don't hire CIOs in the way they should. They don't source them the way they should and they don't enable them the way they should. CIOs come in all flavors, just like heads of marketing and heads of sales. There are companies where the head of IT is most likely not making change because they don't feel like they have a great relationship with the CEO or their boss. They're worried that if they make a mistake, they're going to get fired. Or a CIO can have his or her own failings as a human and a risk aversion associated with their leadership. Those things are different for an IT leader to some degree than they are for almost any other department in the company. They get highlighted much more effectively.  Unfortunately, without aggressive tactics by the executive team to find more ideal candidates that match the need for innovation or to create  a culture shift in IT, you run that risk of finding people that are victims of their own failings from a leadership standpoint. Whether or not they're a good IT person is immaterial.
0 upvotes
Anonymous Author
Yes.  Sometimes a system is so critical, requires so much uptime, that any sort of migration or modernization can’t be done.  Obviously, this can’t go on forever. But may indeed be an effective short-term approach.
1 upvotes