Gartners - Guide - To - Creating - World Class IT Principles PDF

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Gartner's Guide to Creating World-Class IT

Principles
FOUNDATIONAL Refreshed: 1 April 2016 | Published: 26 July 2013 ID: G00253902
Analyst(s): Mary Mesaglio, Jose A. Ruggero
Gartner evaluates hundreds of IT principles every year. Unfortunately, many

of these are weak and ineffective, often leading to shaky governance, more
conflict and ineffective execution. Good principles change everything. CIOs
can create and use great IT principles using Gartner's approach.
FOUNDATIONAL DOCUMENT
This research is reviewed periodically for accuracy. Last reviewed on 1 April 2016.
Key Challenges
■ An IT department that designs great principles and uses them day to day is much more likely to
create superior results, more effective investment decisions and happiness among employees.
■ Creating world-class principles requires courage; great principles take a stand, acting as
guardrails for appropriate behaviors and decisions.
■ Even the greatest of principles are useless if they are not followed in the day-to-day decision
making of every associate. Communicating the principles, and ensuring everyone is acting
according to them, is the final step.
Recommendations
CIOs:
■ Strive to create excellent principles that streamline decision making and support coherent
execution of strategy. This will help lessen organizational politics by getting everyone to "sing
the same tune."
■ Choose a small set of excellent principles, rather than a long set of mediocre ones. Ensure that
each principle is connected to business success, specific to your enterprise (not generic),
unambiguous and helps drive decision making.

■ Focus on areas of contention or confusion. Try exploring extremes and thresholds (since
principles exist at the thresholds): What will never be true and always be true, and where are the
minimums and maximums for security, investment, risk and innovation, for example?
■ To ensure principles are used, get creative in how they are communicated to the wider
organization, and weave them into operational activities: meetings, conversations and
decisions.
Table of Contents
Introduction............................................................................................................................................ 2
Analysis.................................................................................................................................................. 3
Understand That Principles Are Critical Because They Connect the Tactical to the Strategic.............3
Create Great Principles by Defining What You Stand For.................................................................. 5
Four Criteria Make an IT Principle World-Class............................................................................5
Adopt Three Tactics to Elucidate Your IT Principles........................................................................... 7
Create Principles in Areas of Contention or Confusion...................................................................... 8
Ten IT Areas Generally Require a Principle.................................................................................. 8
Make Principles Real by Ensuring They Are Part of Everyday Activities..............................................9
Do a Practice Run to Understand the Effects of a Principle in the Real World............................10
Communicate the Principles, and Get Creative......................................................................... 10
Test Whether Your Principles Are Alive and Well in IT.................................................................11
Conclusion..................................................................................................................................... 11
Recommended Reading.......................................................................................................................12
List of Figures
Figure 1. Sample IT Innovation Principles................................................................................................4

Figure 2. Sample IT Principles for Projects Designed to Deliver ROI and Concrete Competitive
Advantage..............................................................................................................................................4
Figure 3. Excellent Real-World IT Principles............................................................................................ 9
Introduction
A principle is a rule or guideline that provides clear direction

and expresses the values of an organization. A world-class IT
Page 2 of 13 Gartner, Inc. | G00253902

principle connects to business success, is specific to the

enterprise, is transparent to all, and is detailed enough to drive
trade-offs.
This research is Gartner's definitive view on:
■ Why principles are important

■ What four criteria make up a world-class IT principle
■ How to create great principles, and why it takes courage
■ Which IT areas most need principles
■ How to do a trial run of principles and communicate them, to ensure they become real
Analysis
Understand That Principles Are Critical Because They Connect the Tactical to the
Strategic
Principles are to strategy what values are to culture. They bind an effort, delineating the limits of
action — what will always be true and what will never be true; how a team will always act and how a
team will never act.
Every IT department should care about having excellent principles, because they ensure that
associates are all operating with the same objectives and limits in mind, making decisions more
clearly and quickly, and helping to execute the strategy.
While great principles are relatively scarce in IT, the wider world is awash with them. There are
examples in many forms of entertainment, such as two excellent principles from William
Shakespeare's "Hamlet":
■ "To thine own self be true," and "Neither a borrower nor a lender be."
Movies are another wonderful source of principles:
■ "There can be no interference with the internal development of prewarp civilizations." — The
Prime Directive, "Star Trek"
■ "Fish are friends, not food." — "Finding Nemo"
Great principles also exist in business. Here are three of Walt Disney Studios' principles for their
films:
Gartner, Inc. | G00253902 Page 3 of 13

■ No bad language
■ No uncomfortable sexual situations
■ No gratuitous violence
In IT, great principles generally exist in areas that require clear guidelines for behaviors and
decisions. For example, an IT department looking to innovate more might create a set of principles
like those in Figure 1.
Figure 1. Sample IT Innovation Principles
We always define value from the point of view of the external customer.
Our success is measured in terms of uptake and adoption of our innovations, rather than
by implementation and deployment.
We undertake to try new things, even where a concrete business benefit is not apparent
at the outset.
Learning and experimentation, rather than a concrete return on investment, is the key
benefit for half of our innovation projects.
The IT innovation team always takes responsibility for articulating the value of an idea,
and never assumes it is self-evident.
Source: Gartner (July 2013)
Conversely, an IT department focused on projects that deliver competitive differentiation and a clear
ROI might consider the principles in Figure 2.
Figure 2. Sample IT Principles for Projects Designed to Deliver ROI and Concrete Competitive Advantage
We centralize differentiating capabilities that drive synergies for the entire enterprise.
We localize capabilities that provide competitive advantage to one business unit only.
We limit access to competitive data only to employees with a legitimate use.
When single-handed yacht racer and world-class innovator Pete Goss was designing Team Phillips,
which aspired to be the world's fastest ocean sailing vessel, the team was too big for him to
oversee every decision. Instead, he instituted the following principle to guide his team's decision
making: "If you are between two alternatives, choose the one that makes the boat go faster."
Note that Goss did not say, "Choose the alternative that makes the boat go faster, and is also not
that expensive, and is also quite safe." Great principles are unambiguous. It should be practically
impossible to misinterpret them.

Principles cannot exist in a vacuum as purely aspirational statements that don't connect to the real
world. Good principles distill the identity of the enterprise, putting boundaries around what is
acceptable, important and valuable in a particular environment. In this way, principles express the
values of the organization.
Principles inform both strategic and operational decisions. Good principles act as the interstitial
tissue that helps interpret day-to-day decision making in light of the long-term strategy. In this
sense, principles connect tactical decision making ("Should we buy this technology or that one?
How should we prioritize competing projects? How should we choose between these vendors? Is
this risk worth it?") to the strategy ("We win by doing X. We choose this path over the alternatives.
We will focus here, not there.").
Principles are most powerful when they are understood by

everyone in the enterprise, and when associates commit to
making decisions that abide by them. Great principles need no
explanation. Their meaning should be self-evident to all.
Create Great Principles by Defining What You Stand For

Creating great principles takes courage, because great principles take a stand. They are
unambiguous about what is right and what is not. Creating world-class principles means making
statements that are clear, not subject to interpretation. Principles express the organization's values
in a form that is intended to guide behavior.
To the degree that a principle supports one direction above all others, it might also be controversial
when introduced. In fact, a useful informal test of how effective a principle is, is whether it makes
anyone in the room nervous. If the principle doesn't make anyone even slightly concerned, then it is
probably weak, because it can be interpreted in multiple ways and does not eliminate any particular
course of action. When people begin debating back and forth about the consequences of a
principle in the real world ("If that's true then we have to change entirely the way we make
decisions!" or "But if we adopt that principle, then we have to go out and talk to customers every
time we test a new idea."), you know you are onto something.
Since principles distill the identity of a group, demarcating what the group stands for and what it
doesn't, they are strongest if they are created via a collaborative, emergent effort. They should not
be created via a closed door management effort or worse, by external consultants. In that sense,
principles creation is one of the few things that should never be totally outsourced to someone
external, along with strategy and architecture.
Four Criteria Make an IT Principle World-Class

A great IT principle must:

1. Connect to business success. The principle should not float in the ether, untethered to any
particular business reality. It should be clearly connected to how the enterprise wins or to its
particular mission. If your enterprise competes by having the most innovative products and
services, all your principles should be clearly connected to that goal, for example. In the public
sector, if your agency's mission is to better serve your citizens, all principles should directly
support that goal.
2. Be specific to the enterprise. The principle should not be generic. It should not be applicable
to any IT department, anywhere. In other words, one IT department's principles should not look
like another's, even in the same industry.
3. Be clear enough that it cannot be misinterpreted. The principles should be transparent
across the enterprise. There should be no room for ambiguity.
4. Drive decision making. The principle should drive toward a particular alternative. It should help
an associate choose between different options, guiding their behavior.
The theory is better-understood with an example to illustrate what we mean. What follows is an
example of a bad IT principle that Gartner sees frequently in IT strategies:
"IT will be high-value, low-cost."
If we subject that statement to the four tests of world-class principles, we find that the principle fails
all four:
1. It is not connected to any particular way of winning for the business or agency.
2. It is not specific to a particular IT department. Gartner has never heard of an IT department that
doesn't want to be high-value and low-cost, so this principle is generic.
3. It doesn't help an associate make a decision about competing options.
4. It is subject to (mis)interpretation — how do you really know when you are being high-value,
low-cost?
A good test of whether you have a great principle is to check if

the principle's opposite could be true in different
circumstances. If the opposite could never be true, then the
principle is weak. For example, Gartner has never heard an IT
department state that it wants to be high-cost, low-value (and
we hope we never will!).
An example of an effective IT principle comes from an insurance provider whose business strategy
was to respond more quickly to regulatory change than its competition. In other words, the business
strategy was focused on agility. As a result of this business strategy, the IT department came up
with this principle:

"We never enter into a vendor agreement that exceeds two to three years."
If we subject that principle to our four-part test, we find that:
1. It is connected to business success because it preserves agility by avoiding long-term vendor

lock-in.
2. It is not generic. It would not apply to all IT departments. Lots of IT departments happily sign
five- or seven-year-long contracts with vendors and that is the right path for them.
3. It is clear and transparent. It would be difficult to misinterpret.
4. It helps associates make a decision.
To further illustrate, imagine that the head of vendor management is choosing between Vendor A
and Vendor B for a big contract. She notes that Vendor A is 10% cheaper than Vendor B. As noted
earlier, to obtain the savings, Vendor A is asking for a five-year contract term. Vendor B's terms are
only three years, but they are 10% more expensive.
The purchasing department is putting pressure on the associate to choose the cheaper vendor. She
should save the company 10%! Without the IT principle "We will never enter into a vendor
agreement that exceeds two to three years" to guide her, the head of vendor management would be
tempted to choose the cheaper option, since saving the company money always seems like a good
idea. Even with a high-level strategy stating that agility was her company's most important priority,
she might not have chosen Vendor B, since it's tough to connect strategy to day-to-day decisions.
But the principle provided the decision road map between the strategy of the enterprise and the
choice of IT vendor. Armed with the principle, the head of vendor management knows that she
should choose Vendor B; saving 10% by choosing Vendor A will actually hinder the longer term
strategy, which is to preserve agility above all things.
Adopt Three Tactics to Elucidate Your IT Principles

It seems odd but it's true: It can be difficult to understand exactly what IT stands for, and what it
doesn't. Below are three tactics that can help explore what IT's principles should be. Try to adopt
each tactic thoughtfully, by shedding default assumptions and keeping an open mind.
1. Push your stance to the limit — What is always true and what is never true for your IT
department? What will IT never do? What will IT always do? For example, what will IT never
outsource? Never centralize? Never standardize?
2. Find the threshold — This is the point at which something is no longer acceptable. For
example, what is the real minimum acceptable level of security? The maximum acceptable level
of investment or risk? The minimum standards required?
3. Explore what changes you need to adopt — What decisions, processes and assumptions
must be broken, stopped, changed or started for a particular principle to be true? For example,
a principle that prioritizes agility above all else likely means changing the governance so that
some decisions can be made in 24 hours or less. Are you set up to achieve that? Likewise, a

principle that requires IT to talk with external customers for all frontline innovations likely means
setting up a repeatable way for IT to access those customers.
Create Principles in Areas of Contention or Confusion

How do you know where you need a principle most? First, you may need a strategic set of
principles that guide all behavior everywhere, as well as domain-level principles that guide, for
example, how to develop applications or govern priorities. Either way, choose the contentious
areas. An area is contentious if any of the following apply:
■ Many decisions are being made inconsistently — For example, in demand management,
investment prioritization can be inconsistent. This happens when some projects are prioritized
due to their long-term benefit, others because they are urgent, others because the sponsor was
extremely persuasive, and so on. A principle can be used to make these decisions more
coherently: "We prioritize projects that…."
■ The area is subject to frequent change — This is true in emerging technologies, for example,
where the landscape is ever-changing, creating hype that can mislead decision makers. A
principle can take a stand on whether IT intends to be cutting edge, wait to see what others
have done, or be conservative, only investing when necessary. A well-crafted principle can also
determine where it's important for IT to be first and where it's not.
■ The area is of strategic importance to IT or the enterprise as a whole — For example,
budgeting ("How should we determine which projects to fund?"), staffing ("How do we want to
treat our people? Do we promote from within, or hire the best external talent?") or decision
making ("Which decisions should be centralized? Which should be left to the local units?").
Ten IT Areas Generally Require a Principle

Gartner has observed 10 areas, broken down into two sets, that consistently require a principle to
guide decision making and behavior. The first set is the strategic principles. These tie directly to
demand, and to the firm's strategic intent. These principles define the "why":
1. Governance — How do we make decisions? Is decision-making centralized or decentralized?

How fast do we need decisions to be made?
2. Architecture — Where do we need to build for growth? Divestment? Efficiency? Agility? Where
should the architecture be standardized, and where should it be differentiated?
3. Investment Prioritization — What investments do we prioritize? Based on what? How do we
fund our development?
4. Innovation — How innovative do we need to be? Where is it most important to innovate?
5. Standardization and Integration — How do we balance these two processes in a way that
meets the need for central compliance and local responsiveness? Where should we be globally
standard? Where should we allow for local differentiation?

The next set comprises the tactical principles that connect demand to the control and supply
processes that support demand. In other words, these principles define the "how":
1. Risk — Where is it acceptable to take more risk? Where does risk have to be minimized as
much as possible? What is the threshold of risk beyond which we will never go?
2. Staffing — How do we hire? How do we treat our employees? Do we promote from within or
hire from outside?
3. Security — When does security trump all other considerations? Where do we need to trade
security for speed?
4. Benefits Realization — What benefits are most important? Which ones will we prioritize, and
where? How crucial is it to see benefits accrue quickly?
5. Sourcing — What will we always outsource? What will we never outsource?
Figure 3 highlights several real-world examples that we admire as having great IT principles;
however, we have anonymized the enterprise names to protect the identities of the clients.
Figure 3. Excellent Real-World IT Principles
Enterprise Strategic Success Driver IT Principle

PensionCo Agility in the face of regulatory change [We] must be able to disengage from
any vendor in two to three years.
InsuranceCo Excellence in absorption-style The IT architecture must be able to

acquisitions grow on demand, possibly in large
chunks.
TravelCo Growth through cross-sales, where Everything is decentralized, unless we

business units don’t like to collaborate agree it is a commodity.
RetailCo Operational excellence We converge to a single operating

model across all our countries.
Public Agency Need to support extremely remote All DFID systems to be used
sites overseas must deliver acceptable
performance over satellite
connections.
Make Principles Real by Ensuring They Are Part of Everyday Activities

Just creating a list of principles, however laudable, doesn't effect change. For principles to have an
impact, people must abide by them day to day. Use the following guidelines to make your principles
come alive.

Do a Practice Run to Understand the Effects of a Principle in the Real World
Thinking through "a day in the life with our principles" ahead of
time is a good way to see how and where they will have an
impact.
If IT creates a series of principles, but then fails to examine how the principles will change day-to-
day routines and behaviors, IT risks creating a well-crafted but empty set of statements that don't
change anything. Below are three steps to test your principles, preparing them for launch in the real
world:
1. Convene your leadership team — Review your newly minted principles with your leadership
team, then ask everyone to take out their calendars and choose three different upcoming
meetings. At least one should be a standing meeting.
2. For each meeting, imagine what will be talked about — In those conversations, what
responses, decisions or processes have to be changed as a result of respecting the new
principles? Perhaps, as a result of your principles, you should cancel an upcoming meeting,
because holding it goes against a principle (such as, if you are holding a meeting on the design
of a system without customer input and have a principle that states that all systems will be
customer-driven). Or maybe you have to eliminate a series of steps in the development of a new
project, because you have a principle that states that you will become more agile for certain
projects — and you know that you cannot respond at speed unless you change the way
projects are run.
3. Make, reverse or change decisions — Cancel unnecessary meetings, change the agenda of
the meeting, change the processes, eliminate steps and undertake all necessary changes to
ensure the principles are adhered to.
Communicate the Principles, and Get Creative

Even after having undertaken the considerable effort of creating great principles, they are useless
unless associates abide by them. For that, the principles need to be communicated effectively.
Apart from embedding the principles in IT strategy documents and other documentation, CIOs
should ensure the principles have a chance to come alive in the course of day-to-day activities.
One tactic is to physically — and temporarily — post the relevant principles in the rooms where a
meeting is to take place. For example, if the IT steering committee is meeting to prioritize the
investments of the upcoming year, write the IT investment prioritization principle in big letters on a
flip chart and whiteboard, to remind everyone of the guardrails for the conversation. If the CIO and
IT leadership team are meeting to discuss staffing, include on the first presentation slide the IT
principle that distills IT's philosophy when hiring and promoting.
A second tactic is to get creative in how the principles are communicated. Like everything else in
life, people pay more attention when the message is interesting and unusual. Try weaving the

principles into a story or use the "day in the life" sequence noted above to communicate the
principles in action.
Whatever you do to communicate principles, a best practice is to ensure that middle managers
understand and apply the principles. Middle management, through no fault of their own, can often
form a barrier to change in organizations, so ensure your middle managers deeply understand how
to interpret the principles and apply them in the day-to-day activities.
Test Whether Your Principles Are Alive and Well in IT

Some warning signs that the principles are being overlooked or ignored:
■ The principles were created during an IT strategy creation process and then never spoken of
again.
■ Nothing changed after the introduction of the principles.
■ When asked, associates cannot remember any of the principles.
Some positive signs that your IT principles are alive and in use in your IT department:
■ Every employee knows them by heart.

■ The principles come up regularly in meetings, as a way to make decisions.
■ Everybody, from first-line associates to management, abides by these principles.
Conclusion
Creating great principles is worth spending time on, because they ease strategy execution, defuse
political situations and guide associates, helping them to behave and decide in a way that furthers
the strategy, rather than impeding it. Great IT principles express the values of an organization,
unambiguously. They are useful in providing the interstitial tissue between strategy (where we aim to
go) and tactics (what we're doing today).
World-class principles are connected to business success, are specific to the enterprise, are
transparent and clear to all, and support decision making. Creating great principles take courage. It
means taking making a clear statement about correct behavior.
There are two informal tests to determine if you have a good principle: Does it make someone
nervous? Could the opposite be true in any circumstances? If the principle makes someone
uncomfortable, and its opposite could be true in a different context, you probably have a good
principle.
Do a trial run of your principles before announcing them to a wider audience — think through what
decisions you will have to make differently, what processes will have to change and what will have
to be reprioritized in order to make the principles true. Weave the principles into day-to-day
conversations and decisions. And ensure that you get creative when communicating the principles,
to make sure they stick.

Recommended Reading
Some documents may not be available as part of your current Gartner subscription.
"Gartner Defines 'Governance'"
"IT Strategy: A CIO Success Kit"
"Optimize IT Investing With an All-Purpose Governance Portfolio"
"What a World-Class Innovation Charter Should Contain and Why You Need One"
Evidence
This research distills the findings of thousands of client calls and face-to-face meetings by the
authors, as well as hundreds of author reviews of client IT strategies and principles, in all industries,
spanning both the public and private sectors.

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