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Why Stages 1 and 3 are not viable long-term stages

Published on: 2014-06-08

Last month, I wrote about how there were different levels of interaction IT could have with the rest of the business. As a summary, here are the stages:

  • Stage 1: Internally Neutral (Minimize IT's Negative Potential)
  • Stage 2: Externally Neutral (Parity with Competitors)
  • Stage 3: Internally Supportive (Provides Credible Support to the Business Strategy)
  • Stage 4: Externally Supportive (Provides an Important Contribution to the Competitive Success of the Organization)

Despite the fact that there are four stages, there are only three stages that are sustainable for the long term, and only two can reasonably be used by companies expected to compete in the 21st century.

To start, Stage 3 is not a stage that is sustainable for the long term. To be expected to consistently provide support for the business strategy without being expected to help define and shape that strategy isn't reasonable. It's too ambiguous, and I would see the best IT personnel leaving to be full partners in shaping the strategy. Even Wheelright and Hayes observed that most companies that achieved Stage 3 fell back into their old Stage 2 habits after one or two significant initiatives.

Unlike Stage 3, Stage 1 could conceivably be used by a company for the long term. However, it is not a level that allows an organization to get anything out of IT. Any organization attempting to build software (either for internal or external use) needs to partner with the people who do it for a living. A company that stifles its best IT talent will drive away its best IT employees, making it even more difficult to deliver software, which makes it more difficult for the leaders to give up control, and so on. It's a nasty cycle that's hard to stop. In today's world, every company needs to be competent in technology. They cannot afford to be significantly behind their competitors in the way they create and consume information and technology. Otherwise their competitors will pass them by in virtually every aspect of business: marketing, operations, employee satisfaction....

To give you an idea of the dysfunction that exists within a Stage 1 environment, I'm going to tell you a story about a project I did with what was undeniably a Stage 1 company. On one particular project, we were tasked with creating a website for one of our clients that gathered information about prospective customers. The information we were gathering was relatively straightforward, but we needed to pull the participants in the program from their system and push the results back to them.

Since the leaders of the project had a Stage 1 mindset, the development team did not have any opportunity to ask for the information we needed, and instead we relied upon the sales person to get this. He was not very technical, so he asked for the wrong information more often than not. Because the development team only had a vague idea what the needs of the business were, we couldn't help him ask for the right information, we could only say that what we had was very clearly wrong.

Once we did get information that was good enough where we could get started, we found out that the sales person made promises that we would struggle to keep. We did the best we could, but ended up making a system that only barely worked and only barely had the functionality that the client requested. The worst part of it was, though, that as I was implementing the system, I discovered that the functionality that the clients requested was not the functionality that the clients really needed. But since we were on such a compressed time schedule, I did what I could and moved on. But if someone had some knowledge of the business pain and knew the data truth and not just the façade, we could have delivered software with much more useful functionality at about the same cost.

In the age of search engines, companies simply cannot afford giving their customers anything less than the best service. Word of mediocre service gets around. What would happen to your business if it consistently treated its customers like this?

One final thought – if you need proof that Stage 1 companies drive away good employees, this is a good example for you. I'd like to think that I was a good employee for this company, but when I discovered that the next phase for this client would be managed about the same way as this one was, I shortly thereafter informed the company that I would no longer be doing work for them. Life is too short.

Other posts involving the four stages:

June: Why Stages 1 and 3 are not viable long-term stages
This article was originally posted here and may have been edited for clarity.