IF I want to buy shares in a business as a long-term investment, one of the criteria I use to screen companies is how they treat their information technology (IT) and human resources (HR).
The Human Capital Telescope with Brett Chulu
For me, if IT and HR are maids of the business, I simply won’t buy the stock. It simply means the company is encumbered by long-term uncompensated business risks that can wipe out my investment in an instant.
IT hazards are notorious for one thing — they can be so hidden that when they become perceptible it might be too late to make amends. They are like a disease that allows its victim to do activities that healthy people normally do.
When one finally succumbs to the illness people are often taken aback: “But he/she looked healthy!”
In the idiom of one of our local languages, isiNdebele, close relatives and friends would normally respond “Wayehamba lakho”, meaning that he or she could have looked healthy, but was in essence carrying the diesease. This idiom aptly describes the danger IT hazards pose to an unwary organisation.
Unfortunately, whether by default or by design, CEOs may be oblivious of these hazards due to little interest in IT issues. As CEOs come and go, these IT hazards remain unaddressed.
The tendency is for new CEOs to invest time and money in activities that impact on quarterly performance numbers. Resultantly, with each new CEO the risk of a major IT risk event occurring and causing a sudden death of operations increases.
It must always be remembered that a CEO is first and foremost a general manager. As such he or she is responsible for all business subsystems. If CEOs delegate management of IT and HR to people who do not report directly to them in a bid to concentrate on operations, finance and marketing, they are still accountable for major disasters in IT and HR.
We all know that it is the height of negligence on the part of a business leader to fail to identify and monitor key risks in any part of a business ecosystem. Disinterest in IT and HR issues can come back to haunt business leaders when things go awry and blow up in their faces.
It is established wisdom that closing the stable door before the horse has bolted is better than trying to do this when it already has. Strategic HR can help CEOs to either close the stable door before the IT risks horse bolts or to stem the horse’s desire to do so.
HR can unearth hidden IT risks
One simple tool from strategic HR that CEOs need to have is a job profile. In the case of IT, a CEO needs to have updated job profiles for each position in IT. We have to be very clear from the onset; a job profile is not a job description.
A job profile is a systematic document that captures all the salient features of a job.
A well-researched job profile such as one we have developed in our consultancy work analyses the business risks associated with a particular job. Using this approach to job profiling we have helped bring to the attention of senior business leaders the lurking dangers resident in the IT job family.
Our experience shows that where Strategic HR uncovers key business risks by bringing them to the attention of the CEO, interest in IT issues and respect for the unique value that Strategic HR brings to the business usually increases.
By mapping all the nuances of an IT position, routines that need close monitoring and to be reported formally to the CEO can be picked and flagged.
For instance, organisations that keep huge databases and whose business is heavily dependent on software-run management information systems have huge servers (computers or network of computers that store large volumes of data). These servers must be kept at optimum temperatures.
If the temperatures of the servers exceed a certain threshold they overheat. If not addressed timeously, overheating can cause servers to crash (malfunction and become practically useless). As software-run management information systems are part of a business ecosystem, a major disaster like servers crashing will impact every subsystem of a business.
Put simply, there will be chaos which will impact directly on customers, suppliers and the whole systems of operation. Don’t you think that a CEO needs to know if IT has proper procedures for monitoring the temperature of servers?
Not only that, don’t you think that a CEO has to be sure that these procedures are being followed?
Imagine a scenario where one who is responsible for monitoring the temperature of servers suddenly falls ill and the HR system has not factored in contingency measures to make sure that this critical duty continues. What if the IT team, for one reason or another, genuine or not, neglects monitoring the servers’ temperatures?
We have only highlighted just one major IT risk that strategic HR can uncover. There are many specific business risks arising from IT that unique and specialised Strategic HR tools can uncover, quantify and rank for the attention of the CEO.
Even as CEOs come and go, strategic HR ensures through its tools that new CEOs are made aware of key IT risks during their orientation and induction.
It is a good risk management practice for the head of HR to take a new CEO through the job profiles of every department, including IT, flagging key risks for the incoming leader’s attention. That way, IT risks are given equal priority just like any other business risk.
Reflect on it
CEOs should make use of strategic HR tools to build a solid awareness of IT risks that need formal monitoring and reporting.
Chulu is a strategic HR consultant who is pioneering innovative Strategic HR practices in listed and unlisted companies in Zimbabwe — email@example.com