The Hard Truth about IT Staffing and ROI

By Patty Azzarello

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Running an IT organization is very much about optimizing cost and risk: What is the lowest cost way to deliver each service without risking the required service level? What must be developed or managed internally and what should be outsourced? Once you get clear on that, how do you then think about the ROI for investing the in the people who remain on staff?

I never understand when some business leaders see their people more as an expense to manage down, than an asset to build up or when they think people-oriented initiatives do not have a hard ROI. I never viewed the investment in people as a nice-to-have or a soft business driver.

I’m not talking about over-hiring or over-paying, or not outsourcing anything at all. I’m not talking about touchy-feely team building that is not connected to the business reality. And I’m not talking about weak, overly consensus-driven, everyone-gets-a-say-about-everything management practices. I’m talking about paying market value for talent, but treating people above market; in ways that matter to them as humans, and that drive the business forward.

The hard ROI of people

I have led several business turn-arounds where, by any definition, we were not awash in funds. But in each case, I was able to get the people who remained with the business to personally care about what we were doing, and to personally invest in the success of the new plan. A big part of the success came from how we treated employees as people.

Each time, we delivered growing revenue and growing profits. We were able to do this because the whole team got on board -- they were highly aligned to what needed to be done and why, and were motivated to contribute above and beyond their job description.

Remind me again, how is that not a hard ROI? Why do business leaders think that they can do better for the bottom line by treating their employees like expendable, interchangeable cogs?

Investing in people reduces execution risk. This truth is at the core of the work I do with executive teams -- identifying and fixing obstacles to execution. In IT you can’t afford people not understanding what the business drivers are for IT projects. You can’t afford to have conflicting opinions and priorities. You can’t afford to have staff not be absolutely clear about what they need to be working on right now. What follows are six ideas for reducing this execution risk in IT.

Note all of these increase motivation, (and decrease employee’s anger and resentment), but it you think motivation is a soft or not-critical measure, I have noted a hard ROI for each one as well.

1. Uncertainty is expensive - Uncertainty causes people to wait for decisions instead of working. People don’t know exactly what to work on, so they don’t do as much work. Or they work on the wrong things. It is your job as a leader to remove uncertainty.

ROI: More of the right work gets done. You build value. You go faster. Less time is wasted.

2. Resolve persistent strategic questions and disagreements - This is a specific version of No. 1 above but just know that the longer you don’t provide answers, the more people either are not working at all, or are working in ways that conflict with one another. You are also sending mixed messages to your stakeholders. They see different levels of commitment and support from different parts of your organization.

If these decisions are hard for you as the leader, why are you expecting every front-line IT staffer to answer them on their own every day when they are faced with real-time choices? Get these resolved once and for all.

ROI: More powerful, clear, consistent messages to stakeholders, Less sales stalls, less re-work, less defense required.

3. Create Meaning - People want to feel like their work matters.

Make the big picture clear. Don’t expect your staff to automatically see how their work fits into supporting the big picture. You need to spell it out and show them why their work matters. How does each person’s work fit into the IT strategy and how does that support or drive the business? The more employees who understand and care about the big picture, the more employees who can make decisions and innovate in ways that contribute value or reduce costs.

ROI: More high quality work, more innovation on revenue and cost, less time in needless clarification.

4. Maximize Potential - Career development often falls first to HR and is then cut from the budget entirely. The core of career development is to help each employee at every level understand their strengths and get them in a job that is a good fit where they can thrive and step up. It’s a huge expense to have people in the wrong jobs. They are not thriving, so they are not productive, and they are taking up a spot for someone who could be thriving in that role.

ROI: More productive individuals, more higher value work done, more bench strength.

5. Recognition - The issue is not typically that executives meanly refuse or withhold Thank You’s it’s that they don’t have a system to recognize when something exceptional is done or when someone deserves to be thanked. The solution is easy: Set up a recognition process and culture, and involve the whole leadership team.

ROI: OK. So this one is about Motivation, but I can tell you for sure, that if one employee thinks, “Wow, the company really values me”, it makes them and everyone around them more productive.

6. Communication - Most organizations fail to communicate enough. Once you do 1-5 above, communicate about it every day, every chance you get. You should be tired of discussing your core messages. Not until everyone is sick of hearing about it, and you almost can’t bear to say it again, is it beginning to stick with the organization at large.

ROI: Huge decrease in wasted time for endless clarifications, email debates, and re-visiting decisions over and over again. (Stick to your plan. Go faster.)

As a leader, you can’t delegate this stuff. You need to engage personally. It’s worth it.

Patty Azzarello became the youngest general manager ever at HP at the age of 33. She ran HP's $1B OpenView software business at the age of 35, and was the CEO of an IT software company, Euclid Software at the age of 38. Today, Patty is the CEO of Azzarello Group a unique services organization that helps companies develop and motivate their top performers, execute their strategies, and grow their business, through talent management programs, leadership workshops, online products & public speaking.