« Alignment, Configuration, and Enterprise Architecture | Main | Balancing Governance and Strategy with Portfolios »

August 26, 2005

The Structure is the Strategy

Years ago, Sun Microsystems launched the thought-campaign called The Network is the Computer. This idea absolutely flouresced with the charge it took from an elegant certainty about what "computing" was -- a state of continuous interactive processing of information resources. But implicit in the message was that the interactivity within a single processing unit or node could not deliver the real value of computing. Anyone who agreed with this idea of value essentially designated themselves as a target audience for the campaign's value proposition. With the ambition we have about computing, who would disagree?

So it is that the fantastic Marakon Commentary paper written by Richard Kibble and Neal H. Kissel proposes value of similar sexiness, but in another flavor: "Structure is Strategy". Scanning the main parallel, strategy would be, for us, an activity whose minimum threshold of value is reached only by the grace of the nature of the environment that breeds it.

To embrace the parallel, we have to agree on a concept of "strategy" that highlights its dependency on its host's organization instead of the inherent autonomy of its insight.

I.
Famously, Marshall McLuhan had already pronounced that the medium is the message before the Sun campaign began -- pounding the originally popular sign in the ground that semed to warn we cannot get anything from what we make other than what it allows us to get. But the flip side of the pronouncement was that the message always talks about the medium -- or in our case the strategy is always "about" the organization.

Echoing that in terms of business operations, Kibble and Kissel in effect identify strategy as the connection needed between (on the one hand) business issues that need to be resolved and (on the other hand) the way that an organization deploys the opportunity and authority to make the decisions that address and resolve those issues. In their view, that deployment, which is an organizational design (or structure), predetermines the prospects for successful resolutions -- in pretty much the same way that a language predetermines what kind of concepts can be transmitted between people. Essentially, this influence of language is what we refer to in some instances as programming, and in other instances as architecture -- with the general sense that the former's influence is active and the latter's is passive.

But does this mean that "strategy" can only shop around within the programing or architecture to find things to do?

II.
Programming an organization and running that program will produce directed behaviors and outcomes, which Kibble and Kissel synonymously call "strategy" -- but what we know about programming is that it, too, exists in an architecture, and that a given architecture can host more than one kind of program. So it seems that there is an important ellipsis in "structure is strategy"... and that there is wiggle-room for variety.

How, then, do we finally reach strategy from the structural point of view?

If structure really means organization, and organization really means enabled behaviors and outcomes -- then the threshold of what we would consider to be "strategy" is the point where begins the management of the specification and direction of those behaviors and outcomes.

This contrasts interestingly with what we might consider to be "governance", defined by Peter Weill and Jeanne Ross in their book IT Governance (Harvard Business School Press) as "specifying the decision rights and accountability framework to encourage desirable behavior in" an objective (page 2). Their definition, aside Kibble and Kissel's, clearly positions governance in a role supporting strategy: governance provides the mechanism for managing the behaviors that strategy has identified as desirable.

III.
Logically, this means that governance provides organizing principles that maintain the structure as a base from which strategy is addressed. At the least, that should let us avoid the dreaded circumstances in which, eyeing a target, we realize that "we can't get there from here..."

But if in that sense strategy "comes from" structure, then to parse that value proposition are we really saying that performance come from governance?

Using the term "performance" to signify the success of executing the strategy, the answer should be "yes" because we give governance the assignment to make behaviors align with strategy.

But there's a catch. To understand things in terms of performance, we have to agree that the phenomenon we call strategy is always, both essentially and in effect, responsivity, and that responsivity might be intentional OR unintentional.

We have no habit of calling unintentional responsivity "strategy" but this is exactly the intellectual challenge posed to us by Kipple and Kissel (whether they intended to or not!) when in their paper they cast the understanding of "strategy" as "the ability to tackle strategic issues"...

IV.
Using responsivity as the underlying focal point, the key idea that links strategy and governance is that when governance is exercised, strategy can be intentional instead of inadvertent. This is an important understanding because the deliberateness with which an organization pursues objectives (i.e., problem solutions and opportunities) may be a matter of strategic impact whether the deliberateness follows the officially desired strategy or instead follows an "other" strategy. If the other strategy is inadvertent (that is, proceeding outside of the attention of designated authorities), there may still be value generated and captured -- but the measurement of that value might be based on other kinds of expectations, and therefore that measurement may not reflect "good performance".

What we really want here, then, is to clarify the relationship between responsivity and structure -- and then complete the picture with the relationship between goals and responsivity.

Enterprise Architecture solutions vendor Troux defines [IT] governance as "a framework that delivers strategic alignment, performance measurement, risk management, value delivery and resource management."

What's most interesting about that definition is its set of multiple "deliverables": it doesn't say that the framework is exclusively responsible for any of them; so the real importance is that it shares, with other things, responsibility for all of them. The implication is that they are inherently related to each other and that the framework can make this relationship explicit and help the relationship.

V.
In a scenario of multiple related parts, we can show the space between structure and strategy, and see that a more precise claim would be "Structure is Competency"-- where competency is the abilities to willfully respond.

Further, we can see that:
- Strategy, using the terms of competency, translates goals into responsivity.
- Meanwhile, governance, using the terms of objectives, translates structure into responsivity -- in the same way that a model translates (i.e., organizes) functions into a program.

Thus strategy is moderated by governance. Performance ultimately measures the value of the responsivity -- the link established between competency and objectives.

This set of relations shows that structure might change very significantly without necessarily altering the purpose, activity or effect of strategy. If there's more than one way to skin a cat, the cat is Responsivity. That said, the specific implementation of a particular strategy is clearly beholden to the available underlying structure. But the common issue, or general one, is whether or not the structure provides strategy with something good enough to attain high performance and meet objectives. This is the value proposition of alignment.

VI.
If in fact governance is the lever for making structure enable strategic performance, a governance framework has the responsibility for relating tactics and priorities across the range of issues such as those we saw in the Troux definition. For a discussion on how management addresses the issue of alignment, see the article Managing Strategy versus Managing Performance here in the Archestra archives.

Posted by Malcolm Ryder at August 26, 2005 10:00 AM

Trackback Pings

TrackBack URL for this entry:
http://www.malcolmryder.com/cgi-bin/mt-tb.cgi/115

Comments

Post a comment