« Infrastructure, Information and Innovation - Who's on First? | Main | Evidence versus Truth, or Will the Witness Please Answer the Question! »

January 7, 2006

Execution as "Progress": The Four Types of Value in Performance

Here's an odd thought: if "execution" didn't change anything, then we wouldn't have to do anything to get where we want to be.

We just might not have any idea of when we'd get there.

But to know whether execution matters, it's mandatory to accurately determine whether progress is being made towards targets.

Experience has shown there's more to the problem, though: the target might be reached, and reached in the prescribed way, but the impact of that achievement might still not make the difference that was actually needed from the execution.

For getting the big picture of what matters, the most important issue is to know whether the right targets are in place. Having the big picture means knowing that the efforts thought to be "progressive" are solving the right problem.

I.

"Progress", a measurement of performance, is the concept that drives most management decisions about whether execution is "effective".

In practice, a target level of achievement is set, and "performance" pertains to the actual level obtained as measured against the target. Management continually adjusts execution to approach the target.

What a target really represents is a threshhold of change at which some necessary value is expected to be obtainable or obtained.

In other words, the target points to a working hypothesis of what kind of conditions need to be altered in order for the performer to intentionally arrive at a desired future state.

Granted, when things are going well and execution is usually reaching the target, the mentality about conditions is not so much that they are being "changed" as simply driven... Nonetheless the true importance of the target is that it originated in an awareness of some unwanted (if not harmful) condition that would likely prevail unless an effort was being made to change it for the "better"... That awareness is, after all, the motive.

But targets have a funny way of suppressing (or replacing) our memory of that baseline.

And from that point, the means go on to grab attention. Both the specific form of effort and the mode of the effort are variable factors in bringing about the change.
- By form, we mean the manner in which the effort practically incorporates the capability of resources and actors. For example, automation and manual labor are different forms of effort.
- But by mode, we mean the general but characteristic strategy of alteration being pursued by the execution. For example, persuasion is a different mode than force; gambling is a different mode than saving.

A forgotten motive and variable means can make the message in measured achievement deceptive. How does the performer know that the results this time are, through the same means, repeatable and relevant in the future?

II.

While measured against targets, execution is typically monitored in terms of actions versus requirements. Usually the actions are accompanied by attention to their associated risks and rewards. Management makes discretionary, circumstantial decisions based on tolerable balances of risk and reward.

But when we understand that the essential problem for execution is to change conditions, we can understand execution decisions more strategically -- as a matter of connecting choices (e.g., of resources, operations or relationships) to needs (which are what sets the context for strategic value).

From a strategic value perspective, we describe "progress" as being the satisfaction of need.

Thus, in considering the value of performance, one of the first key questions to address is, "what type of need is the desired future state presenting?" Getting the need properly defined must precede decisions about how to execute.

Then, needs are met through changes wrought by execution.

III.

Here we must look at the business as a performer, and at a way to generalize the concept of "needs" into practice.

The performer has four basic ways that it can address the environment in which it operates. These ways -- or modes of progress -- are used as working categories of opportunities that the performer thinks it must have in order to arrive at the desired future state:
- transform itself (e.g., transcend the environment)
- comply itself (e.g., match the environment)
- exploit circumstances (e.g., master the rules), or...
- adapt circumstances (e.g., change the rules).

Put simply, execution has no value per se, but instead is responsible for making those four things occur, whichever of them is selected as offering the best apparent likelihood of reaching the main goal.

IV.

In making that selection of what to execute for, we factor in necessary capabilities, thinking about the two basic ways that anything influences an intended change -- as either an inhibitor or a benefit.

What we want to be able to see is how different circumstances would inhibit or benefit the change needed for gaining the desired future state.

On the one hand, the means of execution are circumstances that will directly impact the intended change, so visibility of means is important to describing how the execution effort gets to create value.

But due to management, the most immediately significant circumstances around the execution effort are dictated by an objective that is attached to (and justifies) the effort. For example, supervision, resourcing, support and approvals are all aligned around the effort in order to make it bear directly on the objective successfully.

Speaking at the highest level of generality: when the purpose is to "improve" on a current state, the business as a "performer" has at least four objectives to work with.

For pro-actively generating value from the change-effort, the performer might...

enforce these:
- regulations (esp. involuntary); and/or...
- standards (esp. voluntary);

and/or develop these:
- modifications (incl. discretionary), and/or...
- new options (incl. contingent).

Generally, these four approaches tackle what are initially constraints on the current state. But they may be pursued with a special understanding -- namely, through execution the constraints can be exercised as opportunities.

That allows us to see the constraints as success factors for progress, but we have to answer the question, "for what kind of progress?"

V.

Answering that question, the framework below first assumes a "worst case scenario" about change, which is that change is usually going to be ad hoc, arbitrary or chaotic, unless explicit management is applied to it.

Considered against that assumption, management can generically distinguish each of the four approaches to execution. Each approach has a characteristic "default balance" not of risk versus reward but instead of inhibition versus benefit that it is expected to contribute to the performer's intended change-effort.

Through their typically lower or higher contribution of inhibition or benefit, the four approaches are positioned relative to each other in the framework. With that done, the illustration also maps them to the four basic modes of progress (i.e., types of value) available to the performer. In doing that, it suggests that each different approach "naturally" makes a contribution to certain types of value.

Likewise, certain approaches appear to be more appropriate to or successful for certain kinds of problems, while less so for others.

For example: If the performer can decide that the desired future state requires transformation, then "regulations" are less likely to be the place to look for key solution elements. However, transformation requires low levels of inhibition. And "modifications" are significant to transformation, while "options" are more aggressive.

The main purpose of this framework is to illustrate a mentality that allows logical analysis of how execution and value are linked. For certain managers or organizations, the details such as the four proposed modes of progress or execution approaches might be debated or even replaced with other items more closely matching their experience. But the most important management consideration with an overall view like this is that execution is in fact establishing a type of value that is truly relevant to the desired future state.

VI.

Supporting the desired type of value with execution comes with one other wrinkle. Each quadrant of the above framework offers a constraint to convert into an opportunity, but the conversion itself has a "default" or generic quality, which characterizes the quadrant's different approaches as follows:
- upper left: "conservative"
- upper right:"ambitious"
- lower left: "statutory"
- lower right: "radical"
This observation would be just a footnote, except that often the approval of execution plans is dependent on the political climate, habit or other tolerance that decision-makers have for certain styles of pursuit. Those issues could improperly insert themselves into the situation as the main reasons for "why" something should be done -- displacing the value proposition that identifies the performer's real goal or what outside observers would call "real progress"...

As a result, properly managing performance must include an aspect of assessment that first objectively describes the logic of the selected approach in terms of the value-goal, and only afterwards describes the feasibility of sustaining the approach. In that way, the most opportunistic or emotionally desirable approach might even get ruled out, but it is always more likely that the correct approach will be identified regardless of how difficult it is to execute. At minimum, this will prevent costly commitments to solving the wrong problem.

Posted by Malcolm Ryder at January 7, 2006 6:49 AM

Trackback Pings

TrackBack URL for this entry:
http://www.malcolmryder.com/cgi-bin/mt-tb.cgi/187

Comments

Post a comment