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September 29, 2006
The difference between Value and Valuable
In our management comfort zones, if we're not in the skeptic's cart, we'll usually associate "strategic" with "valuable" in an almost automatic reaction, with the additional thought of "higher" value coming along for the ride. It just feels like the enormous discipline required by strategy makes the higher value of strategy harder to come by than non-strategic value...
But the big news is that value doesn't come from strategy. Instead, value comes from execution. The essence of value is that it is a difference with a significance -- and that difference doesn't just pop up on its own.
Strategy might define what will be considered "significant" about a difference, and of course that's the real job of strategy: to identify and promote pursuit of what is most important. But literally making that difference occur is what execution is all about.
Thus, while the priorities and positions set by strategy are what we'd consider to be "valuable", that simply means that with them we have a reasonable hypothesis of the potential for value to be gained. The value is not actually there, however, until execution draws it out from real circumstances.
So what are we saying that is not already obvious? Strategy is not action. Strategy, as a plan or an idea, is the money hidden under the mattress while the markets swirl around. Everyone can guess at how valuable a strategy might be, but since real value comes from execution, the irony is that the promised value of strategy generally competes with the real value of execution.
Judging from recent popular management literature, it would seem that strategy loses this competition more often than not. But this is because we tend to discredit the importance of a strategy that must keep changing in order to stay competitive with the outcomes of execution. If the strategy "had it figured out" but then had to change, then wasn't the strategy wrong? And won't it be wrong again if it has to change again?
Think through this, however, and what surfaces is that strategy is not a static reference but instead a dynamic mentality. Like a blueprint, it is essentially a set of design principles iterated for a target moment and location of delivery. The moment and location can change, resulting in a new blueprint while the principles remain the same.
We accept that these days we usually must work against moving targets, but that simply means that we have to have means of deciding in advance what our positions and operations should probably be in the foreseable future. Charting these P's and O's, and then navigating according to the chart, covers a lot of the discipline and commitment in strategy, leaving execution with the job of producing the current movement while also protecting the opportunity for the subsequent ones.
So, while we should measure execution according to that "productivity", we should remember to measure strategy by the strength of the logic with which it identifies leverage in pursuit.
Posted by Malcolm Ryder at 7:31 PM | Comments (1) | TrackBack
September 23, 2006
Technology Information for Information Technology
Uncertainty is already hard enough on planning, but misinformation makes it doubly worse. For example,while academic and trade press journalism stirs the uncertainty with offbeat questions like "Does IT Matter?", irresponsible metrics like "IT spending as a percent of revenue" gather the kind of steam that lets people believe in the lip synching right up until the background recording is interrupted.
Business management orphans the lip-synch of metric myths. Good management makes IT better, and bad management makes it worse. Given that, guess what needs to be measured? Of course -- the management itself.
"IT" is not monolithic and for many reasons cannot be meaningfully "rolled up" into a single dimension of operational resource. We get the intellectual comfort of trying to do that from thinking about corporations as if they were buildings instead of systems, where we need to go out and buy X amount of concrete or X amount of nails. But because corporations are systems, their "composition" is more properly understood as the set of enabling terms of their behaviors. So as a business driver, technology is an environmental factor, more akin to regulations or geographies, where the challenge is this: to manage their potential impacts to levels of effectiveness and value by incorporating their inherent risks and opportunities into the company's operational behaviors.
Using a portfolio approach explicitly presents the logic of that incorporation. But here's a heads up. Who should control the portfolio? Don't be fooled by the apparently simple formula of having a CIO report to the CFO. Managing a portfolio is both a strategic discipline and a disciplined strategy. The goal is to achieve certain kinds of outcomes, but
the supporting process is to manage constraints. Just as you hold your CFO accountable for interpreting the financial environments both external and internal to the company, you'll need to hold a CTO responsible for interpreting the technology environments inside and out.
Posted by Malcolm Ryder at 9:47 PM | Comments (0) | TrackBack
September 3, 2006
3am In the Garden of Good and Evil
And now, a quick peek into the abyss.
Credits:
some trade mag, like InformationWeek, but you'll have to put in the googletime yourself to confirm that. I merely disavow any ownership of the original publication's content.
Bonus beats:
- Add your own disavowals regarding any use of the bespoke theory.
- Enjoy using the word "bespoke", though; come up with your own excuse, particularly if you're American, as that's what Americans do best. Why waste it.
Posted by Malcolm Ryder at 7:24 AM | Comments (0) | TrackBack