2. Governance -- the BIGGEST single cause of failure
OK, so Bridgestone decided for good or bad reasons to change.
went with SAP because SAP is supposedly THE leading
brand although a look at my Failure
has SAP occurring rather frequently.
went with IBM because IBM is a household name and surely
to be trusted -- although a look at my Failure
has IBM also occurring
Two supposedly good reasons for the executive of Bridgestone to believe they were making a good decision -- SAP and IBM!
So, what went wrong?
Well, Bridgestone had some
governance problems -- they are alleged to have
replaced their Chief Information Officer no less than SIX
TIMES in two years during the project!
Inspecting the "Bridgestone
USA Executive Bios
" page we find that there is NO Chief Information Officer on the Executive team.
After some digging on Google I was unable to establish who the CIO
reported to but it seems clear that the Chief Information Officer was
NOT really a "Chief".
Yes, it IS so that in about 70% of cases the Chief
Information Officer reports to a member of the executive team, most frequently the
Chief Financial Officer -- because somehow businesses mistakenly believe the
CFO is better qualified to manage the systems that run the company than
One of the reasons there is so much failure and so many sub-optimal
outcomes is exactly because the CFO has NO formal training that in ANY
way equips them to manage technology.
IF you are NOT prepared to have the IT Manager -- a person who reports
to a C level executive who reports to the Chief Executive is NOT a Chief
Information Officer, they are an IT Manager and calling them a CIO does
NOT make them an executive. Sitting them at the top table with a
reporting line directly to the CEO and operating on a FULL peer basis
with the rest of the executive team is what determines if a manager is a
So, it seems probable that Bridgestone changed its IT Manager six times during the two year project NOT their CIO.
Thus IBM have some basis to allege lack of leadership on several fronts.
Most importantly, the so-called OTC (Order to Cash) project involved
almost the entire spread of the business. The custodian of this
integrated view of the business and the ONLY person with the muscle to
make decisions stick across multiple operating components of the
business is the CEO.
Since the CEO does NOT have the knowledge or the time to manage
a project of this size and complexity they need an advisor and
Project Leader -- someone to direct the project. This needs to be a person
who has done this before, a gray beard so to speak, someone at least
over 50 years of age who specializes in managing this type of project on
behalf of the client. The IT Manager simply does NOT have the
clout and, in all likelihood does NOT have the experience to manage
something like this.
Remember that when you put in place a massive new integrated system
it touches just about every part of the business, it touches just
about every person in the business and, by definition, it RIPS THE GUTS out
of the business and replaces them with something that is
supposedly better. The Bridgestone debacle provides graphic evidence of
what happens when you rip the guts out of the business in a badly planned
and badly managed project -- you cannot ship product, you lose customers,
you lose millions of dollars!
IF you get the picture of what can go wrong you will recognize that for
ANY organization embarking on a project of this nature pretty much the
FIRST thing you do is go out and find a REALLY senior, REALLY
experienced expert who has done this a number of times before and knows
what works and what does NOT work. Make sure that they have
rapport with the CEO, make sure that they demonstrate intuitive
understanding of YOUR business and then bind them contractually for the
duration and give them an open door to the CEO as an Interim Executive.
On the face of all the evidence Bridgestone did NOT do this
-- probably because no one told them it was necessary -- probably because almost no
one does it that way which is a major reason why so many projects fail
or come in seriously short of expectations.
That said there was obviously something TOXICALLY WRONG with the
way Bridgestone were managing their IT Manager -- remember, since he or
she was NOT on the Executive Team they were NOT really CIO -- that alone
could be enough reason for all the resignations. Bridgestone
embarked on a massively complex and very large project and, seemingly
put a lot of responsibility on this person they called CIO and then did
NOT give that person the muscle and support needed to do the job.
OR did something else that made the position totally untenable.
A recipe for failure!
So, does that let IBM off the hook?
NOT from where I sit.
Given that there clearly WAS a problem, it is a key element of IBM's defence, then IBM should have done something about it.
Something like raising a "red
flag" on the project and advising the CEO that in
the absence of a robust and sustainable solution to the
CIO problem they would have to cease work and withdraw
their team until a suitable person was put in
place. But that would have been bad for planned
revenue so I am guessing that typical IT person temerity
(people who are good with computers are generally NOT
good with people, particularly when faced with conflict)
coupled to quarterly revenue target driven greed got in
the way of IBM's integrity
That is a major problem with the business information systems industry,
for the most part it is driven by people who are in the game for the
money and NOT for the passion of exceptional solutions delivered to high
quality standards that meet or exceed client expectations and come in
on time and on budget. The folk who are turned on by good
solutions generally do NOT make it to the top. So, if your
fundamental commercial driver is NOT aligned with a quality outcome you
will make technically BAD mistakes. It seems that IBM did this.
After all, it seems they were working with an IT person who
was punching below IBM's weight and Bridgestone, according to their
pleadings, was counting on IBM to provide the wisdom and maturity
necessary to deliver the required outcome. Problem is that in this
case IBM were, seemingly both the main player AND the referee, because
there was NO in-house referee of any substance, they changed on average
every four months and you CANNOT learn about the business or the project
in four months let alone manage a major player like IBM.
Not to mention deal with whatever ugly governance toxicity caused all your predecessors to leave!
So, YES Bridgestone were at fault and NO that does NOT exonerate IBM
-- they should have intervened one way or another to stabilize the
situation. Perhaps they were cutting costs and deploying light
weights on their side too? Bridgestone allege they were.
The lesson for your organization?
Make the CEO responsible -- see my material on Executive
Appoint a highly experienced expert to run the project
on behalf of the client and have that person report VERY
closely to the CEO in an Interim Executive capacity with
a VERY tough mandate to act on behalf of the CEO and a
strong contract for the duration of the project
-- see my article on "The
Art of Project Leadership
" for some suggestions;
c. and ... see the sections that follow.