A common refrain we get when talking to organisations is "we really struggle to get anything done": this article explores this in more detail.
There are plenty of reasons for organisational inertia: most people do not like change, for a start. However, one that rarely gets the air time it deserves is the agency problem. How so? It is most visible in formal outsourcing arrangements, where two organisations are bound by a contract to do something. Of course, to the client in this arrangement, that "something" is the achievement of an end goal for them: better client experience, cheaper administrative processing, etc. For the outsourced supplier, however, the aim is the delivery of an agreed set of processes for a profit. Of course, this dissonance is camouflaged at the time of signing by warm words ("think of us as your own team/partner/department, blah, blah"), soon to be drowned out by client howls of frustration as the operational teams take over. As time moves on, achieving those same client aims require different means. To the client, nothing has changed: to the supplier, everything has. A bit like a rail passenger who, congratulating themselves on buying an advance saver ticket for a particular train, arrives breathlessly on the platform having missed their return journey due to sh*t happening, forking out for another whole ticket.
I think everybody understands this. So, after all the evidence to the contrary, why do people keep opting for arrangements that exhibit a world-beating combination of inflexibility and expense? This gets to a point less widely made: the agency problem exists within organisations too. Consider the first question in this paragraph. Why do people sign these things if they know they often fail? "Yes, that is true if your marker of success is the winning long term prosecution of the organisation's aims and priorities", would say the aforementioned leader/politician signatory under the influence of a truth drug, "but it fulfils my aims perfectly, in the timescales that align to mine (two years). Not only can I represent the awarding of a contract for X as solving X (ideally with a juicy £amount announced), but that the issues will only start once I'm safely gone - ideally to an advisory position at the same outsourcer".
The agency issues exist throughout an organisation, and not just at the very top. Consider the case of the lowly IT project manager - they are "one of us", right? Well, it's best to think carefully how they are incentivised, and how they might be penalised: incentivised to deliver "on time, in budget", and penalised for any deviance in either. What's wrong with that, I hear you ask? Well, it's worth noting that there will be a reason for the project, something to deliver on the organisation's aims - a richer client experience, for instance. Notice that does not sit anywhere in our dear project manager's view. So what? To the project manager, what's most important is the project and its conduct, not what the project is designed to fix. It's also not their job to think like an owner: to them it's better that the project costs £100k and delivers only £10k over budget, than a £20k equivalent with the same £ overrun: 10% v 50%.
When we scratch our heads about why we can't move the productivity needle, this should be near the top. How do you lessen the agency problem? I'll stick to our lane here, and concentrate on enterprise technology. It's worthwhile noting why it's so difficult to solve. The old orthodoxy had it that with greater degrees of specialisation, you generate greater efficiencies, as specialism brings optimisation: the law of comparative advantage. Whilst that was undoubtedly true of the manufacturing world, it seems less bountiful for more knowledge-based activities. Specialism in this context is more likely to lead to silos, obscure to those outside, where qualified insiders gold plate their demands of a business "just to be on the safe side". The walls of these silos are built from the complexity of modern technology and the volatility of modern regulation - who from company management can challenge those who speak "druid" about the dark worlds of cyber and regulatory compliance? We have lost count of the times we have encountered use of the battle cry "GDPR!" as a reason for not improving an organisation's grip on its (legitimate) data, just in case something goes wrong. Read the legislation and you'll find it remarkably sensibly written.
Back to the tech. The cloud, as we keep banging on about, represents most of all a governance revolution: the chance for the business to interact with all the computing power they need directly, not through a silo. Modern cloud apps offer all the lego bricks a business needs to store its data, power its processes and colour its reporting. Our advice? Take one problem that currently sits in the murky silo and give it to a bright young thing to solve, just using the tools you might already have - Microsoft 365, Zoho, Salesforce etc. You might be surprised.