G00237176

Governance Concepts for Government CIOs

and General Managers to Share in Working
More Effectively Together
Published: 4 September 2012

Analyst(s): Jerry Mechling

To govern IT-related issues well and resolve conflicts in ways that protect
the public interest, CIOs and general managers need to work better
together in establishing goals, measuring gaps in performance, and
improving results through a balanced reliance on freedom and authority.

Key Challenges
■ More "cross-boundary" interactions: In a networked world, many interactions take place
across boundaries of authority-defining processes, jurisdictions and so forth. While these can
be valuable, they often lack agreed-on ways to resolve conflicts.
■ More possibilities for feedback: Digital information is increasingly available to make goals,
activities and results transparent. This feedback needs to reach those at the edges and outside
of authority hierarchies, not just those at the top.
■ More extensive demands for institutional change: While early IT-enabled innovation (such as
payroll automation) involved limited computerization of steps in the value chain, more recent
options (such as electronic medical records) require more extensive changes in jobs, processes
and structures.
■ Greater needs for cost saving and agile innovation: The pressure and pace of change in
government has picked up, requiring severe cost cutting and sustainable new ways to detect
and respond to new conditions.

Recommendations
For CIOs and general managers to work effectively together:

■ Establish goals that are agreed-on and verifiable, for outputs and outcomes as well as
inputs; don't view governance as merely establishing limits or setting visionary but unmeasured
goals.

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 ■ Measure gaps between goals and performance, using these to motivate initiative and cultural
pressure, as well as apply more formal sources of authority.
■ Focus authority on the transition to new IT-enabled divisions of labor throughout
government, not just on the financial and technology elements of IT itself. While IT is rarely
more than 5% of government budgets, it can greatly improve the productivity of non-IT
resources.
■ Empower contributors on the organization's edge, especially frontline employees,
customers, volunteers and others with critical interests or expertise.
■ Develop new organizations and leadership for problems when cross-boundary interactions
become problematic or dangerous.

Analysis
As IT on its own rapidly grows more cost-effective, its strategic applications require CIOs and
general managers (department heads, budget directors, mayors, governors, and others) to work
more effectively together. This research is part a series on fundamental concepts (analysis,
governance, information, work design, implementation and innovation) that CIOs and general
managers need to share and use in collaborative problem solving.

People work together largely to gain from specialization and scale. In his most famous example,
philosopher and economist Adam Smith observed how specialized tasks in making pins — with one
person drawing the wire, another cutting it, another sharpening the point, and so forth — improved
productivity an estimated 240 to 4,800 times over that of an individual working alone. Specialization
and scale have long been broadly advantageous.

But working together requires decisions about who does what and who gets what from the results.
Making such decisions and making them work is the problem of governance. (For a more extensive
Gartner definition of IT governance, see Note 1.)

This research applies to the general governance problem (where CIOs can typically provide
information needed for the governance problems of general managers), as well as to the IT
governance problem (where general managers can typically provide authority needed for major IT
initiatives).

Governance is more difficult as communities grow larger and more complex. When individuals are
compensated from collective results, there is a tendency to slack off or complain about the fairness
of how results are distributed. Note, however, that — while larger is not always better —
communities over time have grown larger and more complex. People have moved from rural
communities to metropolitan areas around the globe. As economic institutions have grown larger,
so have governments.

As shown in Figure 1, good governance requires balance among two major activities:

1. Supporting individual freedom to collaborate and compete with other individuals and groups

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 2. Imposing community authority to define and protect the public interest
Figure 1. Governance Balances Freedom vs. Authority to Gain From Specialization and Scale

AUTHORITY
to protect the group interest

FREEDOM
to pursue goals

roles offering specialization and scale

Source: Gartner (September 2012)

In general, freedom motivates work and creativity. Uncontrolled freedom, however, can produce
bad results, including monopoly economic power along with ongoing inequities and stagnation. On
the other hand, while political processes can correct for economic failures, too great an emphasis
on authority can lead to politically enforced inequities and stagnation. Thus, there are ditches on
both sides of the governance road.

Here we present five recommendations for improving governance for IT-enabled change. We
illustrate these briefly with examples, primarily from well-known policing reforms beginning in the
1990s and introduced most visibly by William Bratton, New York City's police commissioner at the
time.

1. Establish goals that are agreed-on and verifiable, for outputs and outcomes as well as inputs.
Don't view governance as merely establishing limits or setting visionary but unmeasured goals.

Private organizations typically use profits to measure both value and risk; many use profit-related
goals in allocating resources and accountability. In contrast, government organizations lack
generally accepted measures of value and risk, especially across different service types. In
government, measurable goals are not as heavily utilized.

Recently, however, the availability of digital data has made it cost-effective for governments to set
and measure goals for outputs and outcomes, not just budgets and staffing levels. For example,
Police Commissioner Bratton's team in New York used FBI crime data to set an annual goal of a
10% reduction in crime to be achieved year after year. The broad goal was translated into specific

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 and measurable goals for problems such as getting guns off the streets, reclaiming public spaces,
curbing youth violence in the schools and the streets, driving drug dealers out of the city, and
breaking the cycle of domestic violence.

In working together to set good goals, CIOs and general managers should fully assess the risks and
rewards of staying with the status quo.

(See "Key Practitioner Goals, Allies and Action Channels for the Ongoing Transition to 'New Normal'
Government" and "Ensuring Strong Lieutenants; CIO Desk Reference Chapter 2, Updated Q4
2011." Note that several governments have goal-driven performance management initiatives,
including Canada, New Zealand and Australia. The U.S. federal government's TechStat program
and IT Dashboard also offer examples of performance goals.)

2. Measure gaps between goals and performance, using these to motivate initiative and cultural
pressure as well as apply more formal sources of authority.

Systems with quick and clear feedback are quite easy to control. Bicycles are the classic example.
Governments are at the other extreme, with slow and unclear feedback (partly because those
receiving value are often different from those bearing costs, and partly because of delays in the
election process).

Given these realities, governance can typically be improved through feedback made possible by
abundant digital data. Taking advantage of feedback is the essence of smart government. We can
augment the historic focus on inputs by also measuring outputs and outcomes and, most
importantly, the gaps between goals and results.

The measurement and analysis implemented by Commissioner Bratton in New York was called
CompStat (for Computerized Statistics). CompStat was based on measures for robberies,
homicides, burglaries, gun-related deaths, and other statistics that, in many cases, had previously
been available but not used for problem solving. Using up-to-the-minute feedback, CompStat
ranked precincts against themselves year over year, month over month, and day over day, as well
as against all other precincts.

Steps to improve transparency and accountability inevitably raise tensions, especially when the
news is bad and conflicts rise between personal privacy and community authority. In general,
however, governments have barely begun improving transparency and using it well. There are many
"CompStat-like" opportunities to be harvested, where the big risk is not in failing to reach new
goals, but failing to change the old approach. (See "Effective IT Governance. By Design" and
"Mastering IT Portfolio Management." Other performance accountability examples include those
spearheaded by Washington Gov. Chris Gregoire and Maryland Gov. Martin O'Malley.)

3. Focus authority on the transition to new IT-enabled divisions of labor throughout

government, not just on the financial and technology elements of IT itself. While IT is rarely more
than 5% of government budgets, it can greatly improve the productivity of non-IT resources.

Most government technology proposals are required to justify their technical feasibility (Will the
technology work?) and economic feasibility (If it works, can government afford it?). The real issues,

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 however, are not feasibility or cost, but using technology to operate within new and more-efficient
production methods.

Most fundamentally, the transition to new divisions of labor requires overcoming barriers that keep
individuals from performing as needed or, in many cases, from wanting to do so. Success requires
negotiation and the authority of general managers, not just technology managers. What's most
important is getting stakeholders "to the table" and resolving issues. Decisions about how much
involvement and influence to give to the various parties are critical. (The RACI structure, which is
often used for assigning involvement and influence, is outlined in Note 2.)

CompStat made governance decisions through reviews as each patrol borough and its precincts
convened twice a week for three-hour sessions. CompStat focused on problem solving and
accountability. Guided by data analysis and collaboration across levels of the police hierarchy —
and with other New York institutions — CompStat decided how to close performance gaps. The
availability of information was of course essential, but not enough on its own. It took ongoing
applications of authority to show that goals would be taken seriously. Promotions and demotions
down to the level of individual units deep within the department depended on performance. In the
first year of CompStat, crime in New York City dropped 12% (compared with a 1% decrease
nationwide), and kept falling as Bratton continued with CompStat (see "A Different Theory of the
Firm and IT: Comprehensive Value and Dynamic Capabilities" and "Governance; CIO Desk
Reference Chapter 8, Updated Q4 2011").

4. Empower contributors on the organization's edge, especially frontline employees, customers,

volunteers and others with critical interests or expertise.

Much work, especially in government, is delivered through routines developed for repetitive
activities including communication and control. Attention is designed to remain "in channel," with
performance guided by authority delegated from the center of the organization.

In today's world, however, productivity increasingly requires innovation, not just routine
performance. Further, those at the front lines — at the edge rather than the center of the
organization — can often be given a combination of "big picture" and local detail that makes them
better decision makers than those further up the hierarchy. For example, this is happening in a
variety of customized and integrated human service offerings, as well as in the military. As computer
networks make it easy for those formerly "out of channel" to make valuable contributions, more
collaborative and self-directed patterns of work are needed.

To take advantage of these possibilities, governance must utilize:

■ Internal collaboration, much as the intelligence community has done in mobilizing internal
contributors for the widely used Intellipedia wiki
■ External collaboration, much like what is fostered by Wikipedia and other networked
applications, often via nongovernmental social networking channels such as Facebook or
LinkedIn

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 ■ Customer self-service, as with the shift to online education (with fewer teachers per student, but
greater interaction among students as well as between students and digital teaching materials)
■ Volunteers, like those relied on for hotlines staffed by unpaid workers rather than traditional
government employees

While hierarchical routines will always remain important, smart government requires strong
contributions from those outside the traditional chains of command.

While CompStat clearly engaged central members of the NYPD power structure, it also empowered
local commanders to deploy officers, invent strategies, and run narcotics and vice operations that
had previously been the province of specialized bureaus alone. As part of the CompStat process, a
layer of bureaucracy was eliminated between the 76 precinct commanders and the eight patrol
borough commanders. To solve frontline problems, collaboration was expanded to include schools,
the city housing authority, churches and other community groups. The mantra was accountability,
but with latitude (see "Delivering Competitive Advantage Through Social Computing and Disruptive
Digital Business Models" and "Degrees of Separation: Strategies for Collaboration").

5. Develop new organizations and leadership for problems when cross-boundary interactions
become problematic or dangerous.

For many interactions, self-organization is good governance. For others, decisions will not be made
in the public interest without authoritative new procedures and roles. Pandemic health problems are
a cross-boundary concern, as is global terrorism. For these and other problems, new procedures
and roles — and probably new ways to fund them — will be required.

Commissioner Bratton's CompStat process was itself a new organization designed to cut across
the boundaries of patrol, precinct, borough and citywide command territories, as well as the many
institutions needed to control crime in the city. Later, as chief of the Los Angeles Police Department,
Bratton moved in similar ways to counter the cross-boundary threats of the post 9/11 global
terrorism world. In this context, he collaborated with multiple local police, the FBI and others to set
up the Los Angeles Joint Regional Intelligence Center. This was designed as a platform for
"connecting the dots" among clues otherwise hidden from view (see "Degrees of Separation:
Strategies for Collaboration" and "Smart Government Makes IT a 'Must Have'").

Conclusion: The Governance Imperative

New IT-enabled interactions create new challenges and opportunities for governance. To take
advantage of specialization and scale via a workable balance of freedom and authority, CIOs and
other government leaders need to collaborate in establishing goals, improving feedback, and
allocating authority and accountability. The governance concepts to be used are age-old, but the
interactions to be governed and the information available for decision making make it essential for
CIOs and general managers to work better together.

Recommended Reading
Some documents may not be available as part of your current Gartner subscription.

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 "A Different Theory of the Firm and IT: Comprehensive Value and Dynamic Capabilities"

"A Framework for Balancing Global and Local Logistics Management"

"Degrees of Separation: Strategies for Collaboration"

"Delivering Competitive Advantage Through Social Computing and Disruptive Digital Business
Models"

"Effective IT Governance. By Design"

"Ensuring Strong Lieutenants; CIO Desk Reference Chapter 2, Updated Q4 2011"

"Governance; CIO Desk Reference Chapter 8, Updated Q4 2011."

"Key Practitioner Goals, Allies and Action Channels for the Ongoing Transition to 'New Normal'
Government"

"Mastering IT Portfolio Management"

"Organizing for Success"

"Practical Governance"

"Smart Government Makes IT a 'Must Have'"

"Case Study: Investment Management Process Delivers Better Business Cases"

"Worldwide Examples of Public-Value-of-IT Frameworks"

Note 1 Governance Defined

From "Governance; CIO Desk Reference Chapter 8, Updated Q4 2011."

Gartner defines IT governance as: "The processes that ensure the effective and efficient use of IT in
enabling an organization to achieve its goals." This definition contains certain key concepts:

■ IT governance specifies decision rights and creates an accountability framework that

encourages desirable behavior in the use of IT.
■ IT governance is composed of processes with the inputs, outputs, roles and responsibilities that
are inherent in a process definition (however, the definition does not talk about how these
processes might be implemented).
■ Governance ensures consistent decision making as opposed to executing specific decisions.
■ The purpose of governance is to achieve a business goal (such as globalizing the business), not
to simply approve a project portfolio.

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 ■ Governance strives to increase business value, supported with clear measures of improved
effectiveness and efficiency.

Note 2. The RACI Structure

The RACI structure assigns the degree of influence and accountability of individuals over tasks to
one of four categories: responsible, accountable, consulted and informed. This provides a way to
think through governance issues.

■ Responsible — The party or parties responsible for actually doing a specific task
■ Accountable — The party or parties accountable for the correct performance of the task
■ Consulted — The party or parties whose opinions or advice is sought on the task
■ Informed — The party or parties that are kept up-to-date on progress (one-way communication)

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