Virtualization Cause for Organizational Civil War?

June 9th, 2010

When Virtualization Fails to Change the Organizational Culture

Is your organization at war? No I am not talking about businesses that live the methods and techniques defined in the ‘Art of War’ or ‘The Five Rings’ ancient texts. But if you don’t know what the Art of War or The Five Rings refer to, you should. Anyone in business, politics, etc., should have read both texts at some time early in their careers, if for no other reason than to understand what a lot of others have read, and do follow to various degrees. But I digress, so I ask again is your organization at war, with its-self? This is not a goof-ball question, but a serious one. There are organizations that see technology as a necessary evil and others that see it as competitive advantage. For those that see technology as competitive advantage, internal war is not likely, but for those that see technology as nothing but a cost center, the conflicts in technological culture clashing with the competing profit culture, at a strategic as well as tactical level abound.

Virtualization I believe in some ways promotes if not supports conflict in an organization, why you ask? Well, there are a few points that I have recognized over the last 6 or 7 years that provide the foundation for this:

  1. Adds unrecognized complexity to the information technology infrastructure
  2. Promotes somewhat painless initial early adaption, low hanging fruit, but that does not last
  3. Does nothing to resolve hidden issues that already exist, often hides them deeper
  4. Saves cost, by avoidance only, this is often forgotten by management
  5. An opportunity to reconsider business as usual, but often suffers from same
  6. Automation can improve time to market, only if pre-provision effort is done right
  7. Change is frequent, organizations talk change, but talk is cheap, when expected of others

There are of course more than the above list, this list is not exhaustive, just what is often on the tip of my tongue when I am discussing virtualization with others. The same points can be made about clouding or cloud based infrastructures to a reasonable degree, since virtualization is often the foundation for any serious cloud oriented or based infrastructure. The above points illustrate three points of conflict in any organization – service, cost, and mindset. Let us explore these topical points a bit, just to establish common perspective if not understanding.

Service is obvious, clients or customers want more, faster, better, cheaper. This demand is never going to change, no pun intended. The problem is, to get to more, faster; better or even cheaper, things have to change, in a significant way. Clients don’t want or like change. They resist it, deny it, out-right refuse to agree to do it. So without a top management mandate, if your organization is internalized, this is a nasty situation. At this point am I preaching to choir? Sit in on the arguments about physical-to-virtual or virtual-to-virtual such as moving from the original virtualization infrastructure to a cloud based infrastructure, talk about analysis paralysis! My mother a 30 year veteran of corporate management in a fortune 10 firm told me something on my first day of corporate life… The only constant is change. No she did not coin the phrase… Change or die, but she did make the implication, no? With all change real work must be done, expending time and effort. Clients have downsized or dummied down their technological groups, to the point where they have little or no understanding of the technology they help create in the past, and now use in a literal sense as black-boxes and thus lack any realistic capacity to embrace change, of something they no longer understand. Think I am kidding? Consider this, with the 3rd reorganization of any technical group, where 10% of staff is reduced, gone forever, laid off? What percentage of your technical infrastructure is unknown? 30%? Wrong. Cross training and job sharing are not efficient, the realistic number is more like 60%. Yes, 60%, with each organizational restack, knowledge is lost, skill is lost, talent is lost, never mind the rush to stabilize the organization, which means that training, is only 50% effective if done at all? Bingo! That 10% loss of talent is at least 20%. Take this hit for each reorganizational iteration and you are at 60% functional understanding, and this is a conservative estimate. I have seen worse.

Cost, this is the interesting point, that one would think trumps all, but cost is subjective, not objective… whoa… you are saying, how is that true? Well, for example, take System P based infrastructure, versus System X based infrastructure from IBM, which has a very long standing clash for years. With the current and next generation of Nehalem, and incremental improvements of backplanes, memory speed, etc., where System P and System X systems use the same chassis designs and components, the only real difference is the processor and software right? What if I could prove to my customers today, that System X can go toe to toe with System P, and be cheaper to purchase and support, especially at the software license cost, not just hardware? That many applications key to System P are now in the System X space, for less? That hands down System X with very few exceptions at the very top of the System P performance space, is as good or better? Meaning System X costs less than System P? You would say what? Go with System X, right? Wrong! Oh, and loyalty is not the sole issue, the key issue, based on my experience, is the degree of change. Yes, change. Clients hate change, but at the same time demand things that are only possible with change, often radical change. The System X versus System P scenario is just one example, many variants exist, just look for them. And that nasty reality about reorganization skill and talent lost muddies this issue too!

So that leads us to the last point, mindset. Cost is said to trump all, well, that is only true if the evaluation is objective, and real effective action is taken. Moreover, customers want faster, better, cheaper… which has been itemized how many times in this article alone? But change is usually embraced only when it means others change not themselves. How many times has an older system been moved, tweaked, or revamped rather than just ditching the door stop, for a new solution? Not often. Virtualization forced this to happen to a point, but not inclusive to all scenarios, or physical-to-virtual would not exist as a concept. We have explored this above, establishing how demands for change are for others to change not themselves, and how cost savings which everyone often says is a key motivator is not, when talent, skill, time and resources are insufficient. The mindset that often dominates is one of two flavors… the classic autocratic, often term strategic, do it or else, the downhill push idea. Someone from a strategic perspective has stated the direction, and that direction is to be followed, never mind the facts, fine, this is rare. The other motivator is, which is often initiated by the client as a demand, is the competitive or tactical crisis response idea… if we don’t do this and the competition does or already has, we are in real trouble rationale. But is either a positive approach? No. My experience has been that technical management often has no teeth, is doomed to be nothing but gums, so strategic mindset is very rare. Moreover, the tactical mindset is often incomplete, minimalistic, a rushed effort, mergers and acquisitions often fall into this pitfall. Where a decision was made to eliminate some competition or expand a potential market by absorption rather than real competition, and the push to integrate forces a lot of bad or short sighted decisions, the technical organization has to scramble to resolve with half-assed measures or compromises that kill strategic flexibility, often when a solution is already in production! How many articles have you read, where some firm acquired another firm, only to state to shareholders a year later… we integrated, but we did not realize the full cost savings we expected. And, the bottom line looks good this year, but don’t ask us about unrecognized costs, in the coming years to undo what we did wrong this year. Well, duh.

So the question stands… Has virtualization changed your corporate culture? Has it broken down the mindset that dominates your organization? Has it prompted new ways of thinking? Has it, in fact, improved service to your clients? Has it encouraged a culture to accept change?

Entry Filed under: A Proper Virtual World

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