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May 30, 2010
How IT Strategy and Business Strategy Co-Operate
What is the relationship between business strategy and IT strategy?
IT strategy must be seen not as a monolithic pronouncement but instead as a continual practice with which use of information technology is tailored to the business use of information.
Business use of information falls into many separate but inter-operable domains including (but not limited to) communications, learning, analytics, research, and history -- along with production, and then of course, process management.
When we say "business strategy", the assumption is that there is a type of influence that the business seeks to have on its community of stakeholders and in its operating environment. This is an influence that depends on a position that the business can establish for itself, relative to other functional or operational entities that are either contiguous or party to the community and environment. The strategy is made up of the intent and plan to take the position for the purpose.
The use of information corresponds to the strategy, but -- not all information usage is about the strategy, except in the sense that it needs to either allow or cause the strategy to succeed. This means that the usage itself needs to succeed given the particular method of usage and the actual information itself.
IT strategy must concern itself with what methods can be combined with what kind of information, to provide the opportunity that the business strategy needs, by creating effects that are either preconditions or causes of the opportunity.
Accordingly, for IT strategy to make sense, first the opportunity needed by the business strategy must be identified, and then the type of information usage needed for the opportunity must be enabled by IT.
This requires understanding how the different information usages will co-operate to create conditions that will add up to the opportunity.
Some of those combinations are intuitively appealing because they are part of proven past efforts.
- Communications, Production - selectively informing participants and stakeholders to establish efficiencies and quality in work
- Research, Analytics -- diligent search/discovery/arrangement of data, patterns and models that are useful for making and explaining things
- History, Learning -- compiling descriptions and interpretations of experience that clarify contexts and relationships
Bottom to top, those pairings usually allow the business to identify functions, design ways to conduct them, and generate specific operational capabilities from the designs. Obviously, relevant capabilities are an essential type of "opportunity". Drawing learning from history, or drawing analytics from research, and so forth, are typical interactions, and the effects of one pair are commonly leveraged by the pair above it.
At the same time, there is no guarantee that accomplishments in one area will flow up into others. Even where certain lineups are compelling, it is necessary to look into how a network of influences can arise in non-linear fashion amongst the full set of usages. These influences can be inhibitors as well as promoters.
For example: history can predispose analytics, by culturally reinforcing attention to some issues and neglect of others. Meanwhile, learning can predispose communications, by preselecting audiences. And production may impact research, whenever they compete for resources or persuasiveness.
Along with new capabilities, most business strategies can think in terms of ideas (knowledge), relationships and assets when exploring the types of opportunities that may be needed. Usually, in a mature business organization, these are all enjoying focused management The question is, for each type of opportunity, what should IT do to enable and orchestrate the six or more basic information usages required for creating and maintaining it?
The touchpoint between business strategy and IT strategy is those usages. In practice, the business strategist must determine which certain opportunities should be pursued. The IT strategist must identify, engage and evolve the related touchpoints so that their interactions are balanced towards providing the opportunities that the business strategy needs.
Posted by Malcolm Ryder at 1:00 PM
May 26, 2010
Why the Business is the primary customer of Service
- an ongoing running operation,
- that is presented to a consumer of the operation's output,
- with an offer and a mechanism (interface),
- for invoking the delivery of the output upon the consumer's occasion of demand.
The reason why this arrangement can actually work without imploding is three-fold:
- the provider of the service can share terms of agreement with the consumer about the allowable occasions of demand;
- the full range of operation outputs need not be offered as a service; and,
- the consumer need not know how the operation is constructed or maintained, so the provider can modify the operation behind the service.
In effect, it is do-able because the scope of the service can be managed.
Typically, it is the issue of operational modifications that generates the most excitement -- and the excitement typically comes to a head in the IT (and facilities) departments of the business. Levels of service, and qualities of service, are bound to managed risk and performance factors that must be aligned to each other within the architecture of the operation that will be exposed as a service.
To add further perspective: it really does go without saying that different tools may be employed to do the same job; and this points out that deployment decisions are more critical to risk and performance than are the attributes of the tools themselves. With that perspective, a "business view" of an operation concerns itself primarily with the possibility that operation structures are both rational and sustainable. This means, in turn, that the business view of how to reasonably warrant a level or quality of service relies mainly on two things:
- it looks at those same operational decisions
- it acquires a validation through test-and-proof that the outputs for offer are acceptable, within the risk and performance allowed by the decisions.
This structural coherency sought for operations is essentially what is pursued by the prescriptive practice called Configuration Management. Configuration Management is historically maturing within the domain of IT software and hardware management for integrated production systems. Today it is most heavily influenced by best practices described in the knowledge domain called IT Service Management, or ITSM.
From the above notes, however, the emphasis would appear to be not primarily technological but instead concerned with the decisions (left side of the illustration), underpinning the business information model and business process model (right side) that together shape those outputs of the operation that are eventually made selectively consumable.
Where technology takes root, through IT architecture, is in operationally instantiating the service -- to meet a quality and level that works for the business. Primarily, the service must, on demand by the business, be available within the rationality and sustainability that the business can accomodate. In that sense, the first customer of the service is the business itself.
The net of this is that the IT practice within the business will need to understand and mature configuration management on business terms, especially in a time when systems management of IT-based operations is relocating outside of the business campus to what is called the Cloud -- managers of provision of web-based delivery of IT-systems-as-services. Although the Cloud is most often referred to as an "environment", its business role is that of a contracted service partner or supplier, conducting critical chunks of operations that must not disconnect from information and process management.
The takeaway: alignment of operations to information and process models will call on the ability to articulate how much configuration specification by the business is necessary for the business to achieve confidence in risks and performance levels, and thereby agree to the terms of service delivery.
Posted by Malcolm Ryder at 2:52 PM
May 24, 2010
Discovering Leadership
Acuity may be the explanation for how leaders emerge from the complexity of ongoing operations. We expect leaders to be able to navigate; but often, after the goal-setting that dictates what should be IN the participants' points of view, the remainder of the task is largely delegated -- and this creates the risk and problem of losing awareness of what is AT the points of view. On the other hand, the successful navigator may acquire the leadership, gathering the role and position around them as they are found repeatedly, by others, at the right place at the right time -- a trick attributable to acuity.
Mythical leaders are most often soloists, but the complexity of modern organizations means that leadership teams are the rational way to assure that goals and navigation are not disconnected from each other. The purpose of the team is not to forsee the future, but to develop 20/40 vision of the present. Delegation into teams is a collaborative strategy that provides the bandwidth of attention to find the track to the goal and stay on it. And like all lines, the track is a collection of key points.
Image and full article Copyright 2009 Malcolm Ryder / Archestra
The track from current benefits to future benefits can be seen as a passage through various gates. Generally, four gates are along the way.
At the first gate, current pains are felt as a tradeoff accepted to sustain the currrent benefits. Because their impact extends beyond their causes and justifications, pains may become excessive and trigger a decision to find a substantial remediation, the second gate. This research for a course of action, usually fueled by analysis, will separate remedial action options into those that are mandatory and those that are not. With the weight of "necessity", these decisions or change mandates -- the third gate -- will drive determination of priorities going forward; and those priorities -- the fourth gate -- will in effect set the grounds and boundaries from which future benefits can develop.
For this pathway, it's often the case that leadership must reverse-engineer the course, finding and aligning the appropriate set of conditions at each gate. In this effort, acuity is paramount to determining if these conditions do, or can, exist.
Said differently, the gates in this route are practical checkpoints in the assessment of an organization that presumes to form itself around the leadership and follow.
- Priorities correspond to culture. Culture is the primary factor constraining future benefits.
- The requirement for changes that precede the culture corresponds to politics that, understood objectively, is the negotiations about the balance of risks between stability (quality) and progress (advantage). But it must be understood that because requirements are decisions, all needs are not necessarily requirements.
- Preceding the change requirements, administration moderates a competition for attention to needs;
- and administrative transparency may be critical to allowing the environment of operations to present its true current pains.
Building forward again, those issues can manifest on familiar management terms -- for example, terms such as quality, resourcing, policy, and governance. Other terms may similarly and respectively apply
But the more interesting aspect is this: the necessary ability to identify the path to future benefits within an existing organization suggests that from the perspective of the participating organization, real leadership may have to be discovered more than to be supplied.
Posted by Malcolm Ryder at 8:34 PM | Comments (0)
May 23, 2010
The Seven Ways that People Don't Listen
We know that strategy is essentially a proposal. All strategy says, "Let's try it this way..." -- or it says nothing at all.
But one of the most understated things about strategy is that it is more a response than it is anything else. The value of a strategy is not primarily in the impact that it ultimately has. Instead, a strategy takes its basic value from the problem that it wants to solve. In most instances, if the problem is very important, then the strategy that responds to it will be important.
However, what many people, including practitioners, fail to attend to is that a strategy's being important does not cause the strategy to be a good one, nor does it prevent the strategy from being a bad one.
That fact is why the quality of the strategy must have high priority, and why making strategy must prevail over the culture of execution. In too many cases, practitioners trip over another conceptual stumbling block, which is that execution does not make an important strategy good. Instead, a good strategy enables execution to be effective.
The most prominent dimensions of a good strategy are the following:
- Relevance
- Logic
- Credibility
- Visibility
- Urgency
- Distinction
- Change
What practitioners may discover, to varying degrees of surprise, is that the list above is a good predicter of whether execution is likely to result in effective outcomes. Even more importantly, they may discover the reasons why an existing strategy may be unusable or failing. In general, any point in the list makes sense only if the point preceding it is in good stead.
The overall single reason why a strategy may be structurally predisposed to fail is that the chain of dependencies inherent in the above list can be broken at any point by a failure of stakeholders to "buy in" at that point. What is even more surprising to presenters of strategies is that such "buy in" failures are not due nearly so often to rejection as they are to indifference.
The cult of execution holds that indifference can be pushed out of the equation by performance incentives. This poses the situation that a key participant need not worry about why assignments matter if they are well rewarded for being carried out successfully. These "rewarding" outputs are then advertised as "priorities", and managers are deployed to enforce priorities and to maintain a balance of their alignment amongst the complexity of their concurrent demands. This is exactly why metrics dominate management. Management then tends towards the idea of "best practices" -- the patterns associated with manageable high performance. But this is fundamentally different from strategy.
Let's turn back to the essentials of strategy and look at how indifference first appears. The most important notes to make are about why people decide to not buy in -- which takes place mainly by their choosing to not listen. As opposed to merely hearing, listening requires that the person absorb, interpret and represent the offered idea in their own mind. This is not the same thing as acceptance; instead it is the same as "realization", which for that person allows the idea to become the basis of their follow-on action. Otherwise the strategy remains an external fiction: someone else's story. In noting this, we also have to remember that typically, with strategy, exposure is not a universal experience. Different people need to listen at one or more different points in the chain of dependency:
- Relevance: how do we know that the problem being tackled is the right one? This may start out with identifying what the problem is really pointing at -- namely, a need. The primary needs are innovation (evolution), preservation (growth and health), and recovery (healing).
- Logic: what plausible mechanism is readily apparent to address the need given the most plausible disruptive risks or inhibitors to that mechanism?
- Credibility: who is the source, and presenter, of the case for the need and the logic? What is the agenda of that source?
- Visibility: what modes of validation-on-demand are available for the participants approached with the presumed relevance, logic and credibility?
- Urgency: why is the opportunity for the presumably required effort (not the desired outcome) more available now than it is later?
- Distinction: what is it about doing this with the designated parties that makes the effort as likely to succeed as competing strategies?
- Change: how do I know I will wind up better off than I am now?
Experience shows that strategies are often undermined or aborted due to such things as competing ideas, turf wars, and under-resourcing. That is, that actual design of operations indicated by the strategy cannot be fully completed, communicated, and subscribed. This general picture of resistance or disconnect suggests the scope of challenges to any strategy. But the picture should be much more specific; and again the matter is not so much one of rejection as it is a failure of the strategy's proposition to overcome the inertia of the present.
Given the specific dimensions listed above, here are the associated ways that people are predisposed to not listen. The idea that a strategy has high quality is all about the way that the strategy predictively addresses these issues:
- Relevance: not aware of this need's primacy over other possible or identifiable needs
- Logic: don't understand the mechanism
- Credibility: lack of trust
- Visibility: limitation of information access
- Urgency: risk to current commitments
- Distinction: appearance of being excluded
- Change: fear of loss
Given those issues, it is apparent that the most important things to materialize for substantiating the strategy at the participant level are models, education and proof -- none of which are the domain or responsibility of execution.
Without end-to-end substantiation, the interdependencies within the proposed strategy are not integrated, and this in turn means that the organization available to execute the strategy is either missing, logically misaligned or inherently deficient -- in other words, the engineering of the strategy is suffering from classic flaws of omission, errors or defects.
The pressure on managers and executives to deliver "performance" can often provoke them to "re-organize" somewhat ruthlessly as a way to "enable" a strategy. This is not uncommon as a business practice, and none of the above argument is intended to claim that it should or should not be done. Instead, the takeaway from the above is more importantly an awareness that aggressive management is not a substitute for actual strategy, and that the purpose of strategy is to create a basis for effectiveness, not to to create results.
Strategy designs operations; execution conducts them. As a further caution, it must be pointed out as well, though, that strategy is not static; as it is fundamentally responsive and is a design discipline, strategy must be dynamic and itself must be managed for real-time quality -- an ongoing process, not just a product.
Posted by Malcolm Ryder at 9:20 AM | Comments (0) | TrackBack