The Naked CIO: Price of panic

Capricious boardroom decisions based on the flawed thinking of panicky executives always end up with the wrong things being cut. They should think again, says the Naked CIO.

Once economic optimism falters, it's remarkable how quickly the emergency strategic meetings kick in. Every project comes under review. The business looks at everything from innovative growth strategies to cuts across the board.

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Our top line is still strong - 15 per cent year-on-year growth is in line with the budget. But the fear factor has been uncorked and we must do something - even though we should be dealing with real market changes, not panicky speculation.

In reality, downturns are the best time to spend money on innovation and projects. Unfortunately, it's a truth rarely understood by C-level executives.

As a realist I know that any cuts will have significant impact on resource-constrained services. I also realise that cuts will be focused on perceived administration areas such as IT.

I say 'perceived' because IT is no longer administrative. In fact if it's managed properly, IT can be almost entirely strategic - with the exception of the wonderful rules and regulations stifling innovation enforced by Her Majesty's Government.

It sickens me to see projects with momentum suddenly halted, awaiting review. Staff become demoralised, progress stalls and success lies compromised.

The worst thing that companies can do is second-guess a project. Hard-working employees have often expended untold effort attempting to deploy a project championed by IT and the business, only for a panic attack by executives to wipe it all away in the space of a two-hour meeting.

In the course of the project review the CEO will invariably ask for all alternatives to be investigated and set a timeline for a decision. The result of this is generally a rewrite of the initial recommendation that led to the project being approved in the first place.

Then, against all reason and based on the flawed thinking of those in marketing and finance with no grasp of what it takes to manage enterprise IT projects, the decision is made to scale down plans but demand the same results. Do it with fewer people, less money and in less time.

They vacillate and change their minds without committing to a clear way forward because they are so scared of what may come with a downturn in the economy.

Yet through all of these actions, and through the incompetence of making a decision that is clearly not in the best interests of an organisation, these executives create a self-fulfilling prophecy.

By cutting services, halting needed improvements and refusing to consider alternative ways to innovate that may cost a bit of money, the ability to continue to grow the company becomes more distant and less achievable.