//What incentives lead to an optimum portfolio?

What incentives lead to an optimum portfolio?

Ever heard the expressions: “People will do what you pay them to do.”  It literally means that they will do their job, but it also means that they will do what will help them to keep their job.  In other words, if you measure someone by how well he delivers projects “on time,” his projects will be on time, with budget or resources ignored. 

Even a balanced scorecard poses an interesting problem, because balanced scorecards work best when they are measured at division level, and not the level of a particular team.  Therefore, if one person knows that he affects only two numbers on the ‘balanced scorecard’, and his manager knows it too, then the employee’s individual scorecard is far from balanced.  He will do what it takes to make those numbers look good.

So creating the right incentives in a company has to be done carefully.  Every variable has to be considered.  Business agility, compliance, security, marketing, sales, public relations, investor relations, profit, cost of goods, all kinds of things…

So I charge that many incentive systems in a company ignore the need to keep a balanced and optimum IT portfolio.  The number of IT applications isn’t visible enough, and not enough people’s jobs depend on making that number smaller, to move your typical IT department.

Making those numbers visible is sometimes the work of a ‘special projects group’ or is simply delegated to a senior staff member, without anyone having any teeth. 

Of course, bringing in a person with teeth to support the optimum portfolio can be an expensive and devisive change in an organization that traditionally values it’s independence, self reliance, and agility.  A lot of people have to be trusted who where never trusted before.  Some people have to be consulted when they did not before.  More importantly, some people who had to be consulted before are now completely cut out.  It’s a whole new world.

But without that person to draw the fire, raise the issue, and focus the attention, it’s the same old song.

 

By |2006-05-01T10:16:00+00:00May 1st, 2006|Enterprise Architecture|0 Comments

About the Author:

President of Vanguard EA, an Enterprise Architecture consulting firm in Seattle focused on the Pacific coast of the US. Nick has over 30 years of professional experience in management, systems, and technology. He is the co-author of the influential paper "Perspectives on Enterprise Architecture" with Dr. Brian Cameron that effectively defined modern Enterprise Architecture practices, and he is frequent speaker at public gatherings on Enterprise Architecture and related topics. He coauthored a book on Visual Storytelling with Martin Sykes and Mark West titled "Stories That Move Mountains".

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