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August 8, 2005

Strategy vs. Governance vs. Alignment

When is a solution not a solution? When it solves the wrong problem!

Hunting for solutions is so complicated because it is a multidimensional issue.

First, solution approaches vary:
- re-engineering, or "designing the problem out"
- innovating, or defining a new relationship of a technique to a task
- renovating, or correcting mismatches of current configurations to current requirements

Additionally, a choice must be made between pursuing the root cause of the problem or pursuing something less (such as symptoms). This choice is affected by:
- timing
- execution risk
- cost
- agreements

And not least of all, stakeholders affect the prioritization of the solution effort. In general, stakeholder concerns include:
- solution scope
- benefits and liabilities
- safety

These issues of approach, range and priority are almost invariably brought up in discussions about strategy, governance and alignment. Relying on the guidance of these discussions, a very substantial checklist of action items can easily be built. This level of awareness is a critically useful shot of clarity, but how do you decide which action items are the "right ones" to put at the top of the list?

First, defining the list's "top" region should follow the technique of rating alternatives according to both importance (the need for a certain impact) and urgency (the starting time needed to ensure likely achievement of the impact). Items that rate highly on both counts go to the top.

This won't prevent high-priority issues from competing with each other. And the competition doesn't mean that something big should be dropped... But the different items should be distinguished by their purpose.

This is where most of the confusion reigns in the literature about strategy, governance and alignment. There is no debate that most of the concerns in any of those articles and studies are vital to preserving and improving business opportunity, but that doesn't automatically communicate how to incorporate the advice at the appropriate times and levels of the organization's operations. Such incorporation is a critical success factor to the solution really being a solution.

Too often it seems that every concern is trumpeted as an item essential to every cause, whether the cause is strategy, governance or alignment. But if there is any importance to the different names for these causes, then how can the most effective distinctions between their respective basic concerns be drawn out?

The quickest way may also be the most reliable and comprehensive. Often the difference between the causes is mainly a difference of "perspective" -- and perspective is something that by definition is generated by looking around from a certain point of view. It is possible to see the same item in more than one perspective (or literally, from more than one point-of-view), and this is how the same item comes up in different stories. But the item's meaning can and often does vary with the perspective. The trick is to detect that difference, and this relies on point-of-view.

We can describe the key organizational management perspectives called strategy, governance and alignment, as follows:

- Strategy: addresses needs; needs are about the values of the organization, which reflect its idea about where it is in the scheme of things and what importance is attached to that position.

- Governance: addresses requirements; requirements are about the critical dependencies that exist amongst interactions that define the organization's functioning.

- Alignment: addresses specification; specification is about the particular definition of deliverables that are measured for their level of impact (whether benefit, neutral, or liability).

How confident can we be that these distinctions are correct?

The first way to test that confidence is to simply imagine if there is any importance to the initiatives for strategy, governance or alignment if they did not focus on the key components in these descriptions. Strategy that does not organize things around needs is pointless. Governance that does not organize things around requirements is pointless. And so on.

The second way, in case the first is not decisive enough, is to look at what the three perspectives respectively show us about the organization's current state and therefore what kind of problem is at hand. Generally:
- Failures of strategy pertain to the way an organization became disassociated from the basis of the opportunity that it pursued. It lost relevance.
- Failures of governance pertain to the way it became unable to control the dynamics of the opportunity pursuit. It lost viability.
- Failures of alignment pertain to the way it misunderstood the importance of its output versus the way its stakeholders did. It lost value.

As a result, we can finally understand the differences in an even more rudimentary way:

Is it time to change directions? -- Strategy
Is it time to change the rules? -- Governance
Is it time to change measures? -- Alignment

In order to follow up on any of those three things, certain actions prove to be constructive, and some of those actions prove to be constructive in two or even all three of the areas.

This further explains the recurrence of certain points and advice across all the various topics. But the key to their being "successful" solution components is to understand why it is important to achieve the difference that they make, set expectations accordingly, and then use them explicitly for that reason.

Posted by Malcolm Ryder at August 8, 2005 11:08 AM

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