Enterprise Design and Transformation

Pondering the initial model in “Business and Dynamic Change”, this morning led to this 1st draft of Enterprise Design and Transformation Capability Model.  I had been watching a video from Productivity Games on YouTube (Well worth subscribing) on Performance State and Flow.  Suddenly I was in the state and this 1st draft on the next level of designing and transforming enterprises appeared to me.  This was looks like the framework I was trying to abstract from the process flow I created earlier.  The first chapter to the Structure in Threes (follow-up to Chapter in “Business and Dynamic Change” is on the agenda for this month.  

Investigating developing some instructional courses around the book to transfer skills to other EA.  Looking for the right platform for such now.


CEO’s Transformation Nightmare

This week I had an interesting time creating a detailed scenario and storyboard for circumstances enterprises face today.  It’s a mashup of several brainstorming techniques I learned while in a Think-tank decades ago and from time to time get ask to participate in again due to the insights and opportunities it creates. With that context here is a fragment of the fictional narrative I came up with. 


One of the chief executives in a rather large firm called me up in the middle of the night; this has really happened in the past, but not late at night.  He was concerned with their recent transformation efforts.  The CIO, CFO, and him had agreed to a course of action to transform the business by moving to the cloud.  The logic being big consulting firms, analysts, trade press, and vendors all were touting going to the cloud, so they should also.  After several months of preparation, execution, and significant expenditure of funds the majority of the enterprise was now “In the cloud”.  The CIO was happy, the CFO was happy, all seemed right but something was bothering him.  It was only a couple of months to the annual stockholders meeting and the board of directors meeting the week past left him with an uneasy feeling.  One of the questions during that meeting hung in the air like the feeling you get from oppressive heat and humidity:

 “You’ve spent X dollars this year decommissioning the data center just several years ago you argued we needed and an additional sum migrating our data and applications to the cloud.  What will the stockholders think about what they got for the money?  Sales and margins have not changed significantly from last year.  Our net profit is lower due to the additional expense.  While our IT expenses in the future will be more elastic changing from CAPEX to OPEX.  Are we going to be able to meet Wall street expectations and dividends our shareholders were expecting from completing the datacenter build out we’ve been touting up until the beginning of the year?  How is this going to grow the company?

 The discussion we had could have been the general business version of the book “The Goal”.  James relayed the discussion with the board and his concerns to me.  As in the book, I asked several questions knowing the answer already, but to have him consider his actions from a systems approach.  This was difficult for him so I reframed the questions into a more concrete example.  He had already read “The Goal” as captured its lessons when he was the VP of Manufacturing years ago.  So I asked if your IT Capability was a CNC machine on your floor would you have made the same decisions?  What?  He exclaimed.  Would you sell your CNC machine that you just bought two years ago and lease a new one today?  A few minutes of thought.  “Well no”  So I asked why then sell you “information machine” and lease a new one?  “Well it changes our costs structure from CAPEX to OPEX and it provides us a more elastic capability.”  Oh I see, so you’re planning to lay people off in the next few months and preparing to be acquired?  Are you about to ask about how to play the M&A game?  “NO! I had nothing like that in mind”  Well from the outside of your executive staff room, that’s what I’d assume is being prepared for.  “No, we’re preparing to utilize the cloud’s capabilities to expand our business and grow”  I ask one final question. How?  I could see his heart immediately sink.  This was what his subconscious was telling him about the board and upcoming shareholder’s meeting.  He’d gotten caught up around the hype and focused on the tool rather than its use.

 This small little nightmare is on the verge of happening all over the landscape as I watch “Cloud Transformations” occur.  If your about to “transform to the cloud” what you should be asking as the chief strategist is “How am I going to exploit this capability to improve the business?  Not the cost structure unless your cost structure makes you uncompetitive”       

Cloud and AI Adoption Maturity and Opinion

Developed in 1989 I observed that design disciplines such as Architecture, Mechanical and Electrical Engineering, Information Architecture, etc. followed a unique and recurring pattern that was intimately linked to technology.   Awareness of the technology occurred with innovators and early adopters exploiting its new characteristics first. As the technology’s performance attributes became better known application techniques developed through a maturity cycle becoming more structured. This body of knowledge eventually become ubiquitous in the discipline and the technology application common practice. Eventually, the discipline and technology application pass through industrialization stages to where practitioners debate about the aesthetics surrounding its usage. Here is where typically a shift occurs. Innovators become aware a newer technology and start the cycle over again. These innovators are typically not the innovators of the previous discipline-technology generation as most have established expertise and reputation in the status quo. However, that does not preclude a small sect of innovators that are in constant search to push the boundaries.

So where are we today in Enterprise Design (aka Enterprise Architecture not Enterprise IT Architecture)?


The Gartner Hype Cycle now places Cloud Technology somewhere in the Industrialization Stages 2 and 3.  However, from the artifacts and observations so far I would place Cloud maturity approaching Stage 2 as I continue to see modular componentry as the primary research thrust despite Cloud Providers, myself included**, having sold the technology as an economic benefit.  [**While at Microsoft I had been asked to research economic justification and develop a body of knowledge behind Cloud usage to create calculators and portfolio management techniques].

AI is supposedly the next big thing. From the observations and artifacts again, the discipline maturity of such is still in the Craftwork Stage where it left off in the 80s.  What has changed is the cost, performance, and availability of data for experimenting.  However, the discipline maturity is still quite low as well as the understanding of the potential hazards for a enterprise.  A decade ago program trading (AI in disguise) crashed several investment houses and several months ago a corporation had to shut down it’s AI response experiment, it had learned to become racist.  Now consider the exposure and liability a Senior Executive or CxO has with regard to such.  While AI has promise, till safety controls and the design discipline with this technology is at a Stage 3, I would suggest it be employed internally to support automation decisions with humans monitoring in failsafe positions.

Is AI a CxOs dream or an Iceberg about to be hit


This morning’s ponderings.  This latest iteration of AI, Machine Learning and the like seems much like the hype of the 70s AI with the exception of it operates faster.  But does that mean it operates better?  If one follow the middle page news, AI still needs a lot of work.  Yes for optimization it works, but standard OR worked too.  What is interesting are the side effects that make the news:  An AI Blog app learns to become racist, a app turns off critical systems to conserve power, and other no so minor effects that have not seen the light of day due to the sensitivity of impact. 

Bugs and side effects are normal in any new and even old technologies.  A any student of dynamic systems will tell you that side effects that you didn’t planned for are common.  These can be from your decisions to change a complex system or someone else’s decisions to do the same.  The interdependencies –some hidden from our awareness—in systems creates this complex web of unintended consequences. 

If I was a CEO would I trust AI to be making major decisions for me?  Given SOX and other standards place accountability on my shoulders I can’t push it off to “my AI system made the decision”.

This opens up two other and interdependent courses of advanced research for us at Elyon Strategies: Governance and Dynamic Systems.  While we have existing practices that utilize excellent methods for both I’m seeing both potential breakthroughs linking the two as well as a new area of concern when it comes to AI.

Personal Kanban One Month Later

Its been slightly more than a month since I had started my personal productivity experiment. This Friday afternoon I’ll be looking at all my Kanban cards (4 full pads of Post-it Notes**).  Completed, In Process, On Hold for Someone Else’s Action, and Ready Queue.  Part of that retrospective is to look for patterns and analyze where not only throughput, but effectiveness can be improved.

Just a cursory look at tasks completed provides no surprise; where I have no dependencies upon anyone on executing a task these tasks are completed quickly with a few exceptions, home projects and maintenance activities.  Where there are coordination or decision dependencies many tasks are often in the hold queue waiting for input than the level of effort to complete.  The small insight I have into this delay is due to just a few factors:

·         First the nature of opportunities is such that others need to jump on these immediately.  Whether that is to assess these or actively pursue those interruptions are necessary but still delay current activities.

·         Second, schedule integrity of all considered.  This often is caused by the prior, but often is because priority changes are not communicated until after an appointment has been missed.  When I was at Microsoft, this was a common issue along with overcommitting schedules (double or triple booking).  Typically, many had back-2-back meetings though they knew it took 10 to 15 minutes to go between meetings. The results of which was having to go over materials that were just covered 10 minutes prior.   Many times, this could have been avoided by keeping schedules on-line, ensuring that you don’t request a meeting time that was already scheduled, or sending a notification to others as soon as you know you have a conflict.

·         There are a few other reasons for such, however, what I’ve seen is the first reason dominating those dependency delays.

To address such from my end I’ve tried to keep some specific office hours, not quite free time but time where I do tasks that can be interrupted with little detriment to schedules dates.  One executive management’s end they attempt to have regular 1:1 meetings or stand-ups with teams, but again opportunities impact such.  Since I don’t have insight to management’s day-2-day activities and challenges I’m not sure of a means I could propose to help attenuate such interruptions or even if doing so would be beneficial.

The second insight which was not surprise and was pointed out in both books — Personal Kanban and Making Work Visible—was that of shifting priorities.  Here again changes in task execution priorities revolved around opportunities that arise suddenly.  I’m fortunate to be working in an area that has limited impact by such, but this can’t be avoided in a small firm.  The one saving grace to this, is that we have a highly motivated, cooperative and smart team. So, when a challenge arises it’s all hands-on deck almost before a request is made hands are raised to help.

The last insight I have before delving deeply into the statistics later today is that creating the Kanban board and pushing many items back into the ready queue limiting my work in progress has resulting in what I believe has been higher quality output and more throughput.

For my readers I would highly recommend reading and experimenting with the concepts in Personal Kanban and Making Work Visible.

Has this made a positive impact to the rest of the firm. I don’t know yet.  I plan to bring up the topic during our strategic planning session and see if others are interested in trying these concepts out, several of which require a little more coordination/commitment to our planned team stand-ups.  

**It should be noted that these cards cover tasks not the major projects these support, those some of these cards represent complete deliverables.                                       


Enterprise Physics -the Gravity of Business


I While I was preparing a presentation a few years ago for Microsoft’s TechReady 2016 I had been fairly engaged with the ideas around physics or more aptly put applying concepts of physics applied to business.  This idea intrigued me and has actually driven me and my research around creating a design system and practice for enterprises.  This vision was inspired by my mentor at IBM, John Zachman.  His articulation of using the interrogatives as a means for describing an enterprise captured my imagination and over the years has had me research to create the coordinate system behind such.
With that as a background another aspect of looking at how to apply physics to enterprise has me looking at the parallels between Quantum Mechanics and Relativity.  This week Geoffrey Moore posted a great article: A Quantum Theory of Venture Capital Valuations.  This was in addition and possibly opposition to some of the analogies he used in his book Escape Velocity which inspired the following graphic and research on innovation I was going to present at TechReady.   

The past several months I’ve been heavily investigating various physics concepts and how these apply to the world of enterprise.  Such brainstorming has led to the following graphic/concept I quickly scribbled in my notebook several months ago.

On the surface it seems readily apparent a large enterprise due to its mass warps the ecosystem it operates within and influences the behaviors of other enterprises.  This might explain why social networks are so powerful outside and inside corporations.  And why enterprises are only now catching up to such an idea.  Most corporations are still in transition from Newtonian Physics to Relativity and Quantum Mechanics.  The idea about some invisible force –social networks—effecting their organization is about as easy a concept to accept as “Dark Matter” and “Dark Energy” was several years ago in physics.

 With that little bit of insight, I’ll leave you to continue my morning R&D on how to apply such in my Design and Transformation of Enterprise workshops     

Enterprise Architecture Catalog++

Every dream about having a catalog of the complete design of your enterprise?  One that not only gives you and inventory and status of components, but also gives you the relationships between those to create higher level objects: Business and Operational Models, Capabilities, Processes.  How about linking in how these play against your business and technical strategies or assessing those strategies against your abilities to achieve?   Well the wait is almost over, because I’m almost finished building it!

Several decades ago when I met John Zachman for the first time I was impressed by his curiosity about what I was doing at Rockwell.  I was using a CAD/CAM system to design a factory.  Not only the floor plan, but the systems, applications, information flow, etc.  Several years later after John had released his brilliance regarding Enterprise Architecture I got to meet up with his again.  From our talk and his insight I’ve been working on creating a CAD for Enterprise(TM) system.  One that would enable Enterprise Architects to work with Executive Teams to design the enterprise of their dreams like designing a house.  While the UX/UI will take a while longer, the Minimal Viable Product (MVP) database which is what the application will rest upon is almost complete with a usable text-based UI.   I will be considering just a few Testers for this MVP in the next few months as well as possible partnerships with graphical design tool vendors**.  Details to follow on how-to sign up.

**Graphical Design Tool Vendors you can contact me directly now.

Are you designing your Enterprise or just copying someone else’s wiring plan?

Last week a former executive client of mine and I discussed his latest initiative: “Digital Transformation”. He was all excited about moving to the cloud, AI, and a host of other hype cycle buzzwords. After attending an analyst firm’s briefing about the latest and greatest technology trends. With his CIO in tow he was ready to invest in moving applications from his on-premise infrastructure to the cloud and magically have his business transformed.

Now my former client is also a friend so I can speak candidly to him. I asked one simple questions of him. “Aside from changing the technology you’re using, what are you going to do differently that would make you say you’ve transformed your business?”   “Well were scalable now and….” “Oh, so adding another server in your on-premise infrastructure is not scalable also?”. I could see he was getting very uncomfortable about my questions.

Next came the flash of insight I hoped would occur. “Are you trying to tell be all this doesn’t matter?” My response “Does it?” After a few awkward moments “It does but I’m not sure why”. “Tell me. You have a really nice house. Would you be willing to rip out all the wiring, replace the receptacles and switches because some new wiring technology has come to market?” A puzzled look for a moment, then a “That’s crazy, I’d only do that if it enabled me to do a lot more or something different with my house…” Then a pause and a second flash of insight. “I get it! You’re not say don’t go to the cloud. You’re saying ask what I’m going to do differently that the cloud will enable me to do”. Then a friendly dig back at me. “Just like a consultant always giving a depends answer and telling me what I already know”. “Maybe so, but would you have asked yourself those questions before coming to me. Clearly there was a reason you called me up after a couple of years have passed since our last set of discussions”.   “Brian, you’re sounding more and more each time we talk like a psychoanalyst”

“So, Doctor Brian, what should I do?”. “First off, lay here on the couch…. Seriously, the question you should be asking yourself is; am I repeating someone else’s wiring plan in my house (a pattern) and do I expect to get a competitive advantage from doing what others are already doing?”

I’m a great believer in patterns. Patterns in whatever shape and form they are: frameworks, templates, etc. help you organize information so you can focus on the innovation potential locked away in it. Implementing patterns also mean you have to focus less on routine activities that are necessary but don’t provide differentiation and advantage.   Also, examining patterns can give you insight into opportunities or threats and weaknesses. That is by examining patterns you can learn on another person’s dime.

With this little vignette and hopefully passing some insight to you, I’ll ask: Are you designing your Enterprise or just copying someone else’s wiring plan?

Enterprise Portfolio Management Series: Innovation within and existing Enterprise

Enjoyed Alexander Osterwalder’ s article on Portfolio Management today. He covers some of the same ground I’ve been presenting within Microsoft, DMR and IBM over the years. The enterprise has many portfolios. These are categorized in hierarchies, functional domains, temporal horizons, as well as the innovate/exploit Portfolios.

The issue I found within many organizations was with the cross-over from Innovate to Exploit. While at IBM it took a while to build out the practices to somewhat effectively do such. At IBM we had embraced “Alchemy of Growth” for portfolios but the transition became the stumbling block. At other companies I’ve consulted to, it’s the same. Creating that system that enables escape velocity from the innovation center and then captured into a new orbit around the performance center of gravity ( i.e., exploitation of the innovation into the core business ) is no small challenge.

This issue will be addressed in the Enterprise Portfolio Management Levels 3/4/5 articles in the series.

Slide Notes

Today one hears a lot about innovation or being innovative in an enterprise. However, and enterprise by its nature seeks to maintain a status quo. For an Enterprise to survive today management needs to create an equilibrium between innovation and performance.

The two major centers of gravity in an enterprise are its innovation and performance engines – “Beyond the Idea”

Concepts, Initiatives, and Activities will stay in the gravitational sphere that supports these unless escape velocity is reached

Once escape velocity is reached unless influenced by another gravitational center these items will spin off into the void

Effective portfolio actions assist in the change in mass in each of the gravity centers of an enterprise.

Beyond the Idea: How to Execute Innovation in Any Organization, Vijay Govindarajan & Chris Trimble, 2013

Is your APM strategy a yard sale or a Beauty Pageant?

This and the next few weeks Carl Engel (Elyon Strategies CEO) and I are collaborating on a white paper about Enterprise Portfolio Management. The insight that we should do this came about a month or so ago at a Industry Vendor’s Conference where we saw some serious misalignment in presentations touting Agile and APM as the key to success. Our objective behind such is to give executives insight and tips how-to implement a beneficial portfolio practice beyond just APM.    My strategy creating this paper is to provide the “Cliff’s Notes**” on the Enterprise Portfolio Management practice I’ve been maturing over the decades for various consulting, technology firms and their clients.

During our brainstorming sessions one insight has continually come to the forefront.  The state of the art in APM is drastically behind the state of the industry in financial portfolio management.  Not only that but the practice in APM could actually be damaging to an enterprise.  Here is one insight from our brainstorming session:

Application Portfolio Management (APM)

APM as practiced by many IT organizations and consulting firms typically focuses on one of two strategies: Rationalization of Current or Curation of Potential.  In the first strategy the organization is seeking to ride itself of assets in its portfolio.  In the second strategy picking individual winners or highest winners is the goal.  Both of these objectives are well meaning however, if not accomplished in alignment to an enterprise’s business can prove devastating.

Portfolio Management was originally introduced as a strategy to balance risk and reward in the financial investment industry by Nobel Prize-winning economist Harry Markowitz.  As the concept of portfolio management migrated to IT the second factor, risk, seemed to have been dropped from consideration.  If a root cause analysis had been accomplished you’d likely find many of the serious issues within IT can be traced back to not considering the enterprise risk of the equation.

With regard to the first strategy Rationalization.  Lets consider why one is “rationalizing” the portfolio.  In several engagements I was brought in, was due to acquisition of multiple assets or copies of assets doing the same thing.  The root questions is why?  The other situation was the asset did not perform or no longer performs at the desired level.  The end result of such is these assets are like the tail end of a yard sale. The only thing left to do with them is box them up for charity (unlikely) or putting that ugly lamp into the trash to be hauled away and forget about them.  But why did this occur?  If it was an asset to the enterprise shouldn’t it have been managed as such?

In regards to the second strategy Curation of Potential, there are many books, consultants and firms touting how-to develop effective business cases for initiatives.   I’ve co-developed several of these for corporations such as IBM, Microsoft, and other consulting firms.  Unfortunately despite cautions to the contrary, these are often watered down to eliminate the interdependence risk portion of the equation.  This creates a popularity contest for funds.  This maybe due to self-interest by the initiative promoter, a lack of insight as to the interdependence of the initiative within the enterprise ecosystem or that no one wishes to discuss the potential downside: “You’re just being negative…”  In any of those cases the risk to an enterprise is an iceberg in the ocean the enterprise is sailing through.

The forthcoming white paper will provide some tips on effective Enterprise Portfolio Management, while the training course to follow will delve deeper into how-to establish and mature a portfolio management practice.  This will also help enterprise determine at what level they are and what level of practice is optimum for them.  That is not every enterprise needs to or should be at a Level 5  of capability/maturity.




**Shorter versions of Dummies books for those born later than Boomers