MIT's Weill on Leveraging Infrastructure - ' Lessons from Delta '

Lessons from Delta

Now, of course, things have changed in the airline industry in the past year or so, and this has been a very tough time. I guess there are just a few lessons I just would like to draw from the experience with Delta. First, the notion of a nervous system is a really powerful one, and I think this is a brilliant idea, and I think they implemented it very well, and when they focused on using it, it was very successful for them. Of course, other events have taken over, and I noticed in a Wall Street Journal article a couple of days ago that they had actually slipped down a few notches on the on-time statistics. And so one of the things I've learned from this case is that it's more than good infrastructure that gives you good customer service results. A lot of other things have to come together.

But Delta's experience does prove that a company's infrastructure is capable of making it happen, but you then have to really keep focused on it. And it's hard to know what's caused that drop, whether it's the events of the last year or other things. But it's a real focus that's needed to utilize that infrastructure, and I think they have this capability that they're still learning how to use.

But the key takeaway here is that all companies can benefit if they start thinking about infrastructure as being able to give their firm strategic agility.

How to get started? Prioritize the nature of strategic agility required. It requires choices, it requires tradeoffs. The easy answer is we want it all, but then the cost of wanting it all is significant. A high-capability infrastructure costs more than a lost capability infrastructure. It takes longer, and it's got much more integration issues with the other parts of the infrastructure. So there's a tradeoff.

The second piece is to identify the current infrastructure capabilities. Rate your current capability in terms of inferior, average and superior. Then compare your infrastructure capability with your future needs, and get really serious about alignment between infrastructure and strategic agility. If we don't get the future strategies from our partners, we make assumptions. You need input from the business side. Put it out there and let them edit it. That's a very powerful idea, and I think it would work quite well in this approach. And then create the infrastructure plan. I really am strong on the federal model for data management because I think it's the only solution to this dilemma of having local versus enterprise data, and then the architecture and standard setting is deliberate and not a default. It's the most important part of any infrastructure and I think very hard to do, and so spending a lot of time on the architecture process is good investment.

Right now we're doing a project on IT governance. We think this is the hot topic for next year, which is the question of how you govern IT rather than the detail of making the decisions, who makes the decisions and the accountability frameworks. And so I would like to suggest to you that an absolutely fundamentally important part of governance that we've found in this work in progress is the infrastructure process like the one we've just described here.

Find a way to describe infrastructure that makes sense to the business and the IT folks. Look for partners and relationships, if you don't already have them, or work on the ones you have, to help the business articulate their slightly formed, half formed or fully formed strategies into something you can use here. What are the key future business initiatives that people have in their minds? Actually, it's a tremendous approach for a couple of reasons. One is it helps the business articulate it, and they will understand the business if you're able to get them to articulate it. You can build better infrastructures. If you can't, you have two choices. You build absolutely minimalist infrastructures and a whole bunch of extreme programmers are ready to jump in when you need to develop something. Or you build the absolute sort of gold-plated, tremendously high-capability infrastructure that sometimes doesn't get utilized or utilized well. They're really the only two other choices you have.

And so I would start with the simple ideas of communicating infrastructure in business terms and then in response getting business strategies communicated, and these are very simple ways. We're not asking people to be very specific. In fact, that's all you really need to sort of narrow down where to focus infrastructure. And, by the way, if you're doing either of the other two approaches, that is, building an absolutely minimalist infrastructure and waiting, or building the gold-plated infrastructure, you know, "Build it and they will come," we found that is much less effective than the sort of tailored approach. Good luck!