Translating Business to Enterprise Architecture: Methodology Activity #2

Capabilities from this context are the “what do we need to be able to do” to enable the strategy.  This requires more thought than just saying we need the capability to collaborate.  Collaborate by itself is just an activty with no context. If we add a software application associated with collaboration we’re still not talking about a real strategic capability.  There is a lot still missing from such a short capability definition.  To be effective a capabilities definition should contain what activitiy, who is envolved, what is to be accomplished and how. 

 Using capability to collaborate as an example, it would be neccicsary to define the what and who of collaboration.  This could be “we need to have our marketing staff around the country collaborate on collecting and analyzing market intelligence to determine new opportunities”.  This moves the definition from a broad and vague initiative to a supportive activity that could be associated to a strategy such as “the enterprise being more market agile and adaptive than competitors”.   When associated with this strategy those in the organinzation can see why collaboration capability is important and how it should be implemented. 

This definition also brings to the surface that developing a capability is more than just providing technology, it infers that there are people to be envolved with skills and knowledge, information that needs to be supplied and further sub-activties to be accomplished other than just sharing the base information.  This underlying information with the objective of usage or what is to be accomplished provides the context on how the capability is to be used to provide the what of the satrategy.  With this context established the further refinement of creating the capability by selecting the technology, configuring its, and informing staff on its usage is kept in alignment with the strategy.  Too many technology driven projects often are successful in deployment of software, but fail in implmentation for te business.  Further research had shown that while the technology was functional, its usage was never thought of or publized in context to the enterprise strategy.  In some exterme cases the implementation and thereby adoption was actually counter to the enterprise’s goal.  As such while capability discussions seem simple these are crictially important and is where most of the loss of value occurs.  It is my believe this is where most initatives start going off track and further deviate from the path as the activities move from the abstract to the concrete.

Strategic Alignment: Getting your people going in the same direction

One of the hardest roles anyone has in a corporation today is that of leadership.  Like Peter Drucker and Henry Mintzberg, I separate leadership from management.  Leadership suggests strategy and change, while management focuses on operational excellence –doing what others are doing , may be a little better—think best practices.  What brought upon these insights and surfaced another method I use in my enterprise architect’s tool box, is last night’s read; Deep Dive by Richard Horwath.  His book highlighted the previous differentiation between strategic thinking (leadership) and strategic planning (operational excellence).

The insight I came up with was one of, here’s another business buzzword coming, strategic execution.  Over the past two decades I watched lots of interesting strategies emerge from the likes of IBM, Samsung, Microsoft, etc.  Some had promise, some thankfully died of neglect.  When On-Demand came about, I thought it was a great idea, still think so.  However, execution of that idea was years away.  Not because of technology immaturity, but because of a lack thinking on how to deploy the strategy and the competitive responses it was likely to provoke.   

After a strategy review meeting I sat down with the teams to discuss how to analyze competitive response and what they needed to do to get the strategy operationalized or in management consulting-speak strategic execution.

Competitive Analysis is too broad a topic for this post, so I’ll pass on any further discussion here.  Executing the strategy or any strategy for that matter is a cross between Strategic Thinking and Strategic Planning.  Strategic Planning typically has evoked a set of activities that forecasts based on past performance. (i.e., let’s do what we did last year only better, but we don’t really know how).  So the “how” of achieving those insights seems to get lost in the exercise of metric and resource allocation.

The technique I’ve used is a refinement of concepts that Deming taught Japanese Industry; Hoshin Planning or Strategic Policy Deployment.  The technique is fairly simple to understand, difficult to master but worth the effort.  If you ever wonder why Sony or Honda can get an entire corporation to turn on a dime strategically, this is it. 

Hoshin Planning is simply a set of cascading matrices that interlock objectives with strategies to achieve.  Each subordinate matrix uses the strategies from above as objectives to be achieved.  The owner of the subordinate matrix then determines strategies that will achieve those objectives and determines the strength those strategies have in achieving each.  This provides the alignment.  Next in creating this strategy execution system is defining the goals and measures for both Strategies and Objectives.  Then the matrix structure is almost complete.  Lastly is assignment of resources accountable for each strategy and monitoring progress.

This series of matrices enables someone to see where subordinate activities contribute or conflict with overall corporate strategies.  When I’ve used this technique I’ve had great success in deploying strategy and changes throughout the organization.

Small successes don’t always translate into big wins

Had a discussion this morning with one of my peers; she asked a rather interesting question: “can an organization be successful focusing on lot of small product deliveries? “   The answer like most questions these days is “it depends”. 

Over the course of the past three decades I’ve watched various business and development models come and go.   What I’ve observed from a systems perspective is that you cannot grow a business by savings.  Viscerally this sounds wrong, however, to grow a business takes investment.  No investment no growth. 

Observing nature you find the same phenomena.  All systems that grow take additional resources to grow.  Without allocating resources to growth it remains locked in a near status quo state.  I say near because typically without enough resources to repair and renew components the system will decompose also.  However, that assumes that the system is isolated in a stable environment; a huge and dangerous assumption.  When was the last time you experience any environment being stable.  Certainly today’s economy looks anything but stable.  A series of systems dynamics and little decisions has placed the world economy into a Mobius Loop pitching it back and forth between chaos and stagnation.

With that context in mind, I see too many organizations and managers using the small wins strategy towards business success.  Typically this approach is used to limit losses by timid management, using the excuse of building momentum.  The problem becomes that the next step has not been defined.  There is no there, there in the mind of these managers. 

The strategy is for them not to screw up enough to get fired.  If the project fails, well it was a small lost.  If the project succeeds, it gives the backer rights to try building something else.  The only problem is that the something else then becomes another unsure step because you were not invested enough in the first project.  Thus the next project is often driven by social pressures off from its original trajectory. 

Eventually you have hundreds of small unrelated small wins that in many cases are out of alignment.  Think of a group a small kids, all running after the ball, playing some older kids that have learned how to play as a team.  Sure the older ones have more physical abilities, but, it’s the alignment and coordination that wins the day.    

Many people decry strategies, vision and architecture these days.  However, I contend why this is so is that many strategies, visions and architectures are not or if they are they’re poorly conceived.  Recent books and research on the market are indicating that most management is not up to the task of strategy or architecture.  Small wonder, the jobs they performed and were rewarded for were on operational excellence not strategy and vision.  Maybe that’s why other corporations and nations are winning markets away and not in a temporary manner.        

If you focus on best practices which improve operation effectiveness, you’ll eventually compete on a price level as others will be doing the same.  There is only a limited competitive advantage in best practices as others eventually adopt the same. Strategy and architecture seeks to do things better and different than the crowd.   This small wins without a long term strategy result in either chaos or mediocrity.  .