Out Of Time, Out Of Talent – Why IT Departments Fail

IT Departments Need To Hire From Outside To Avoid Business Stalls
IT Departments Need To Hire From Outside To Avoid Business Stalls

A business stall can hit a company / IT department at any time. There can be many reasons for what causes a stall including having a premium product or abandoning a good market segment too early as a company goes looking for greener grass. If that was all that could happen to a company, that would surly be enough. However, there is one more key contributor that can cause an otherwise successful company to lose forward momentum and go into a tailspin: they run out of talent.

In this day of IT layoffs and downsizings, it doesn’t seem possible that a firm could run out of the IT talent that they need. However, it’s having a lack of IT leaders and their associated staff who have the necessary IT capabilities and interpersonal skills that are so desperately needed in order to execute the company’s strategy.

We’re not talking about not having enough SQL knowledgeable programmers here. Rather what we are discussing is a lack of specific required capabilities that are needed by the firm. These capabilities can include such things as the ability to sell complex IT solutions, or perhaps some special skill in marketing IT solutions to a given market segment. This lack of talent becomes most glaring when it occurs at the executive level within the company.

How Do Talent Shortages Happen? It turns out that most internal shortfalls in skills are a result of a company’s too strict adherance to a “promote from within” policy. What’s interesting about this is that this situation is most often seen in company’s that are lauded for their strong sense of corporate culture. This internal promotion policy serves the company poorly when the company’s business environment presents it with a novel challenge or when their competition suddenly increases.

What Role Does Experience Play? A big one it turns out. Rapidly developing events in a company’s market place require the company to quickly respond by modifying how it does business. Having a narrow set of experiences in the executive suite means that the company’s ability to quickly respond to such changes can be severely limited.

So What’s The Solution? Quick question – does your IT department have any program in place to formally monitor the balance between both company lifers vs. those who have been brought in from the outside both in the executive team and lower on down the management ladder? It’s the outsiders who are going to bring in fresh approaches and perspectives. Even if the firm does bring in outsiders, does it incorporate them into the company? Studies show that between 35%-40% of senior executives don’t make it past their first 18 months. The correct way to solve this problem is to set up a formal IT department policy that states that HR will work to ensure that there is a mix of management. A good suggestion for a mix ratio that seems to work is to ensure that there is between 10% – 30% of management that is from the outside.

Where does your IT department’s management talent come from – inside or outside? Does your company actively hire from the outside? How long do new senior managers seem to last? Why do they leave? Leave a comment and let me know what you think.