$464,000.
This was the cost of a new custom software development tool that the IT department was proposing to a CEO I was working with. He was ready to sign off.
He asked for my advice, so I asked him what he was hoping to get out of it.
To my surprise, he couldn’t clearly explain what the tool would do once they had it in place. But IT had convinced him they needed it.
And then I read a fascinating article that said, 10% of people in IT consider a project successful, provided it’s “on time, on budget, and to specification.”
The article also stated that 30% of IT professionals believe that if a project is on schedule, but not on budget, or built to specifications. It’s still successful!
And yet another 47% believed that if a project was on time, and on budget, but not built to specifications – it was still considered a success!
“Here’s an application to create digital balloon animals. We know you were interested in measuring sales performance, and it’s not “exactly” what you were asking for, but hey, it’s on time, and we’re on budget. That’s a success in our books!”
Apparently, 47% of IT professionals would agree and cut the check.
Surely you remember Jerry in accounting who we spoke about last year?
Well, now Jerry is in IT is spending your money without thinking about the strategic intent behind his purchases, and without the right metrics to determine the ROI.
But this isn’t a tidbit about IT departments.
It’s about the prevalence of “siloed expectations” between different departments in a company.
Siloed expectations indicate what a person or department believes to be the right decision for them, regardless of what it means for the company. If you’re a smaller company, you’re very likely to have these differences in expectations crop up amongst employees, partners, investors, and even spouses.
You can replace IT with the divide between sales and marketing; the divide between R&D and accounting; the divide between marketing and accounting. It doesn’t matter.
The key is this.
When you have these “siloed expectations” people can get very busy focusing on their specific areas of expertise but lose sight of the overall strategic goals.
Senior leadership teams need to keep their fingers on the pulse of strategic decision making, and not just blindly foist off important decisions to various departments.
All major decisions need to be put through the filter of, “how does this help get us closer to achieving our strategic goals?”
Here’s one more example:
I walk into a lot of companies that say things like, “We’re doing well. We just need some tactics for improving our customer follow-up. Can you help us with that?”
And then we find they don’t have a sales process in place, or a sales manager, or the ability to track accountability or performance.
Without these fundamentals in place (a strategic responsibility), the tactical approaches aren’t going to make a difference.
Keep your eyes peeled for these kinds of siloed expectations the next time you’re in a meeting where you need to make a decision, and it could save you a substantial amount of time and money.
We know that when your only tool is a hammer, every problem looks like a nail. In many companies, every department only has a hammer, and so it’s critical for senior leaders to be able to challenge, push back, and recognize when somebody is using an approach that might fit perfectly with their beliefs and experiences, but is detrimental to the business as a whole.
Here’s my challenge for you this week: Send me an example of a time in the last six months where you’ve seen something like this in one of your meetings.
