California CIO: IT Executives Must Lead "Dexterous Organizations"

The next challenge state IT officials face as those efforts begin to pick up speed is "to think hard about what it takes -- organizationally -- to do IT right because that is the big issue from the legislative perspective and certainly from the public's perspective"

by / October 6, 2005
The state of the state's IT is strong, California's CIO, Clark Kelso said in his opening address at the State of the State of California IT meeting of technology executives yesterday in Sacramento. Now it is time to move forward to confront the challenges that will face state government moving into the future.

"We've taken the first step in the consolidation of a common IT infrastructure and systems with the creation of the Department of Technology Services," Kelso said. P.K. Agarwal will be starting at the department some time in mid-to-late October, according to Kelso. "I'm looking forward to working with P.K. to complete the organizational transformation that now is underway in that department.

"This past year, we spent a lot of time planning how we would actually do some of the goals we set for ourselves in last year's strategic plan. About halfway through the year, we began implementing [it]....and we are accelerating those implementation efforts," Kelso said.

The next challenge state IT officials face as those efforts begin to pick up speed is "to think hard about what it takes -- organizationally -- to do IT right because that is the big issue from the legislative perspective and certainly from the public's perspective," he said.

Kelso believes the state is doing IT right most of the time, but IT is a risky venture. "And doing IT right is very much a matter of proper risk management," he said.

However, the state needs to do more that just do IT right if it is going to successfully confront the challenges of service delivery it will face in the future. In the future, older people will outnumber younger people. Immigration from Europe will largely be replaced by immigration from Latin America and Asia, while gateway states in the West and South will see the largest population growth.

Furthermore, "these people are not going to be moving out to the middle of nowhere," Kelso said. "People are going to concentrate in urban areas. 85 percent of the growth is going to be in urban areas near to where there are government, medical and social services," he said.

Additional trends that are creating challenges for government agencies include the shift in economic growth being driven by service industries and new technologies. Other challenges will include increasing globalization and demand for resources, the privacy and security concerns created by increasing collection and analysis of citizens' personal information, political polarization and confused governance.

To meet these challenges, and as part of proper risk management, state IT executives will have to embrace a new view of their organizations -- the concept of the dexterous organization, Kelso said. The state has begun to implement the IT Strategic Plan and begun to deal successfully with the issues that made "change" and "adaptability" watchwords of last year's Statewide IT Leadership Summit. Now, California's technology executives need to create the new breed of technology organization by embracing throughout the organization a commitment to innovation, a willingness to take on and manage risk, forward-looking decision making, the delegation of authority commensurate with responsibility and by providing for the preservation of resources for unexpected contingencies.

Ingredients for a Dexterous Organization
  • "Commitment to innovation throughout the organization....It's not good enough to just have leaders who are committed to innovation. Innovation has to be systematically celebrated and rewarded. This is difficult for us to do at times in government. We don't have quite the same incentive programs. We can't put in place the same types of things that can be done in the private sector. But we actually can do a better job than we have been doing in celebrating and rewarding innovation. And we need to devote a significant amount of our organizational time to
  • organizational improvement. If you don't make that investment, over the long haul you will quickly fall behind. And once you fall behind, it is very hard to catch up. So a commitment to innovation is critical."
  • "Willingness to take on and aggressively manage risk and uncertainty.... You have to be willing to take on substantial risk and then be prepared intelligently manage that risk and uncertainty. Innovation -- and this is why IT is a risky business -- innovation is a risky business. Keeping up with change involves tolerance for uncertainty. The challenge here is to exercise disciplined judgment about which risks to take on and how to manage them. And that is what distinguishes dexterity from mere adaptability and agility."

    "You need the capacity to exercise expert judgment about risk. I am not advocating the enthusiastic and unrestrained embracing of all risks. But the dexterous organization is not fearful of risk, because it is confident in its ability to manage risk and uncertainty. "
  • "Forward looking decision making.... Do not waste your time looking back at decisions already made and second guessing yourself. If you adopt that posture -- spending more time looking in the rear-view mirror than looking at the road ahead, you will very quickly be forced into slowing down your forward progress. You will be so afraid of making the wrong decisions moving forward that you will end up not making decisions at all. And the nasty reality is that not making decisions or substantially delaying decisions whose time has come always results in substantial lost opportunities. You may not see those lost opportunities or costs initially. But they're there, and they slowly eat away at organizational dexterity. You need to identify the issues, gather the necessary information, make the decision and move on to the next one."
  • "Delegation of authority commensurate with responsibility.... Dexterous organizations understand that organizational success depends upon the individual efforts of people throughout the organization -- hundreds or thousands of people pulling together. That can happen only if organizational supervisors and managers throughout the organization are empowered to act. Executive leadership needs to set strategic direction and policies and then delegate to those responsible for implementing that direction the real decision-making authority they need to get he job done. "
  • "Preservation of resources for unexpected contingencies.... Dexterity is a great organizational benefit, but it clearly comes with greater risks and costs associated with innovation. You need to anticipate and plan for those risks and costs by setting aside resources that deal with the unexpected. Now one way organizations do this, is by setting aside a sort of a reserve fund. And a general reserve fund is a good idea. But that's not what I'm talking about. Those funds should be reserved for truly extraordinary events. What I'm talking about is the ordinary unexpected contingency that a dexterous organization doing innovation is routinely going to face. For these types of contingencies, IT project contingencies, you really need to build a small amount of extra funding or extra time into almost every program and project. Those extra resources are how you keep moving and not lose your balance. They are a key part of dexterity. One of your challenges is to build those in. And it's a challenge because you've got departments and the legislature that looking to shave things off. You know -- 'Why do you have this money here?' If you identify it as a contingency fund it is almost guaranteed to get tossed away. You got to build things in."

    "An organization that nurtures these behaviors and characteristics is an organization that is primed for organizational dexterity. That is what it is going to take for organizations to survive and thrive in the 21st century."

    "IT has been the primary driver in the accelerated rates of change that we're all experiencing. And IT itself is one of the big reasons that organizational dexterity becomes so important. So IT is in a sense, part of the problem. If we didn't have IT, we wouldn't be having all these issues. At the same time, IT is going to be a big part of the solution," Kelso said.