A High-Performance IT Culture

January 2, 2008

There’s no reason why most companies can’t develop a long-term IT road map tied to corporate goals. There’s also no reason that given sufficient discipline and resources, most can’t develop a unifying IT platform. But without a high-performance IT organization in place – one that looks very different from those found in most companies– a messy IT business will persist.

For years, corporations have treated IT people differently – a holdover from “glass house” data processing culture of 30 years ago. Treating IT as if it were a separate corporate entity sets up a vicious cycle. Allowed to work in their own tribes, IT folks feel less affiliation with the company than they do with their own projects. Like the soldiers building the bridge on the River Kwai, they grow so isolated that they forget what the war is about.

By contrast, the people in a high-performance IT organization don’t feel different from other corporate citizens; in fact, they are business-savvy leaders in their own right. They operate according to the same corporate values as everyone else and are measured by the same tough performance standards.

The story of the 1995 merger of Burlington Northern and Santa Fe Railroads offers a case in point. The two railroads had two very distinct cultures, performance characteristics, and leadership styles. Burlington Northern’s culture was kind, collaborative, and soft on accountability. Santa Fe’s culture was tough and strictly hierarchical. Thrown together into a single, 1,500- person organization, these two talented but antagonistic teams were told by CEO Rob Krebs that they had 24 months to complete a seamless merger of their separate IT systems. The goal was to develop the largest integrated, real-time rail information system in the world–one that would allow the new company to control traffic and cargo across 33,500 miles of track that covered 28 states and two Canadian provinces. From a technology standpoint, it was a challenge of immense proportions.

But once again, the issue wasn’t technology; it was about establishing a new and cohesive culture,with a clear-cut set of rules and a solid performancemanagement and feedback system. How, the leaders asked, would people react to the deadline pressure, and how would the teams work together to accomplish a Herculean mission? How would the overhaul of systems get done? How would talent be developed?

First on the agenda was the establishment of an accountable IT leadership team. An IT organization that has clear guidance, a shared mission, and high expectations can focus the developers and engineers around the work and correct performance problems. To do so, the IT managers must be hands-on people who are deeply involved in overseeing projects and teams. In setting up a leader-led organization, BNSF established three simple levels of hierarchy: the CIO, vice presidents, and directors.

Once the new leadership structure was in place, BNSF set the performance and bonus targets for expected leadership behavior – the same ones that applied across the company as a whole. These targets had three components: delivering results, leadership competencies, and the “new BNSF” cultural behaviors. A top-performing leader had to deliver on all three of these targets. None of the IT staff members had ever been evaluated in such a clear way before, and they responded extremely well to expectations and feedback.

Part of the secret of getting people out of the old way and into the new is to establish a rhythm – that is, to control the flow, timing, and pace of the work. Setting a calendar and adhering to it is, in most cases, the most visible means of signaling the transformation of the IT culture and new set of processes.At BNSF, quarterly updates, staff meetings, directors’ councils, project reviews, technical reviews, and IT board meetings all helped give the new team a sense of normality and routine– especially important for people who are undergoing a reorganization.The meetings helped transform the formerly frustrating and messy IT cultures. Instead of accepting disorganization and lack of participation as a given, people showed up on time and generally became more efficient in their jobs.

The new organization and performance system was time-consuming to put in place, of course. Most of the leaders grumbled about these demands and the intense time pressure of the work. This was especially true for those who never had to manage under a clear set of expectations. But over time, and especially with the early success of the project, healthy work patterns began to emerge, and a new culture was born. Within a few months, BNSF’s newly merged IT group became a high- performance organization – so much so that it beat the 24-month target by three months. The reorganization, combined with the savings realized from streamlining processes and facilities, allowed BNSF to achieve roughly $500 million worth of cost savings that it had committed to the Interstate Commerce Commission to obtain merger approval.Without the performance gear at high torque, BNSF could not have attained its corporate goals.

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