Archestra: Archestra Framework Archives

February 1, 2007

I.T. Without ITIL

The most exotic thing about information technology has always been terminology. It is the key to the scientific success of the field. But quite naturally, the complexity of the science also has meant that the terminology works steadily against any increase of ease in the field's practical management. More and more cats pop up that need to be herded. The net result -- a nightmare of semantics -- caused what the Gartner industry analysts noted over five years ago: the overwhelming majority of cost in I.T. comes from not technology complexity, but management complexity.

Perhaps that's why it is that in these last three years or so, the I.T. Infrastructure Library, or ITIL as it is commonly now known, gained traction with the kind of momentum carrying an industry standard. ITIL describes a huge range of management processes using a vocabulary of enormous logical consistency, which can make the semantics of management suddenly unambiguous despite IT's complexity.

At the same time, the sheer scope of ITIL is fear-inducing. Many of those who would use it fall into one of two groups: those who look for evidence that there is actual practical import to sticking the toe in the bathwater; or, those who religiously convert. Analysts like Forrester Research say that the former group is about 60% of the gang, while about 10% are fully pious and immersed, leaving the rest either just thinking it over or dabbling.

On the spectrum between the larger and smaller group, the larger keeps its practitioners cordoned off (but not quarantined) in a swim lane... handling the semantics of ITIL as another special expertise hoped to achieve some natural ascendency, the same way an innovation outstrips or obsoletes legacies. The smaller "immersion" group swims the rough open waters of large-scale revolutionary change in culture. Because ITIL is primarily documentation, there is not a real threat that either approach will alter it's ability to provide consistent guidance. But giving good advice is not the same as causing it to be followed. The top obstacle to following ITIL, ironically, is still confusion. Why is this the case? Simply put, corporate IT groups are forced to move at a pace that is much faster than their ability to absorb ITIL, and they are loathe to risk, much less give up, hard-won benefits from pre-ITIL practices. Yet behind those benefits, they often don't have an effective overview of where they already are. Thus, following along ITIL's paths, they constantly run into forks in the road that don't offer the obvious correct choice. Net: ITIL is a maze.To get over this hump, they still need a way to see, in short order, how they can connect the dots between their current practices and ITIL's.

Following suit, the perspective represented in the picture below simplifies the identification of the pre-ITIL circumstances, locating the starting line for a move to ITIL without the threats of disruption or of time running out.

The key assumptions in this picture are as follows.

First, no one really cares about I.T. except for whether it is perceived and proved to be useful.
Second, there are only two major points of view on that utility: the lifecycle of items composing the IT infrastructure; and, the production that composes IT operations.
Third, all of the IT management, whether in infrastructure or in operations, is essentially about two things: how things are (i.e., states), and how things happen (i.e., transactions).
Those three assumptions, when aligned as shown, organize every critical aspect of driving value from IT utilization. From this point, the rest is a matter of additional levels of detail.

Since management is popularly understood to be impossible without measurement, and since measurement can't happen without semantics, it is hugely important that the perspective drawn so far does not rely on confusing semantics and meanwhile shows analysis as an ordinary, not exotic, activity covering the field.

Within the general framework, four main phenomena surface as the major management subjects. Driving these down into daily practices makes sense under the assumption that the point of the practices is to establish value in the utilization of the info technology involved.

The utilization is established on two fronts. One is to give form to the actual information technology that users can ultimately access and exploit; this is what is called "IT Services". The other is to give form to the mechanism that creates and sustains that access and exploitation; this is what is called "Support Services".

In an unconventional but easily proved distinction, IT Services is about the provision of the IT configurations; whereas, Support Services is about linking the IT to usage requirements, as systems for use. (These systems are essentially and primarily logical, and secondarily take on physical form as the peculiarities of the company hosting them might allow them to at any time.) Usually, in effect, it's the difference between supply and demand, between service level management and service level agreement, and so forth.

As seen in the picture, the two kinds of services cover (i.e., attend to) the four major subjects in a certain way.The types of services relate to each other because they work on the same subjects. But the services differ from each other in what it is about the subjects that are the key points of their respective concern and influence. These key points are added into the framework's quadrants to clarify the high-level of analytic detail that really matters for the services. This level of detail is the one that initially accounts for the co-existence and co-influence of the two generic types of services (IT and Support).

For followers of ITIL: the difference between IT Service and Support Service is not indicated in the normal ITIL vocabulary. Instead, the generic concept of "management processes" proxies Support services that bring IT services to the user or customer. ITIL largely provides a taxonomy of those management processes, and most observers first engage the taxonomy of "delivering" IT Services (defining and developing them) versus "supporting" IT Services (maintaining and optimizing them). But at least half of the trick in adopting ITIL is to orchestrate its management processes into standing "Support Services" as described in this discussion's framework, which is oriented towards managing the value of utilization.

Posted by Malcolm Ryder at 4:50 AM | Comments (0)

November 13, 2005

Defining Competency

This illustration shows the basis of an expanding framework that defines the concept of "competency" as the dynamic retrieval and application of developed, integrated and appropriate behaviors on demand.

Additional dimensions may be added to the framework in the future. Sections of the framework will be used to illustrate more specific issues within the general idea of competency.

Related problems such as "core" competency will be linked to the framework or to models drawn from the framework without imposing new dimensions. Meanwhile, the framework will help to link yet keep distinct the related concerns about competitive strategy enablement, business model performance, and change management.

Posted by Malcolm Ryder at 11:27 AM | Comments (0) | TrackBack

September 26, 2005

Competency, Competing, and Strategic Behaviors

When we try to discuss organizational performance, it is often through the question of whether the organization's competencies prove to make its competitiveness effective. And these days, the problem of "competition" versus "competency" merits being called interesting especially because we've found out so much more about how being competent doesn't add up to being competitive despite the costs and lost sleep involved.

Sadly for the management teams of most large organizations, there seems to be no way to avoid spending a huge amount of money on the organization's becoming "more competent" -- because not spending the money almost guarantees that it won't happen. Meanwhile, becoming competent takes time and there's a risk of the competency being irrelevant by the time it matures.

What really helps, then, is to understand how investing in competency does begin adding up to being more successfully competitive.

Ideally, it's possible to clearly state what makes up "competency", so that the necessary investments are well-exposed. Without being overly technical right away, most people would agree that in any given circumstance, competency generally means "effective behavior."

One especially intriguing look into the effective behavior issue is the Booz Allen & Hamilton model of organizational DNA, featured regularly in their publication strategy+business... Organizational DNA dwells on how organizational behavior springs from the internal "programming" of the organization, and suggests that reprogramming will invoke different behavior.

Back in the fourth quarter of 2000, Booz Allen stated, "What sets the top performers apart is the 'how' -- the way they organize and operate to realize their aspirations... The solution lies in changing the organizational environment to encourage decision-making that is aligned with the overall objectives of the company."

The Booz Allen model is aimed at producing solutions that improve organizational alignment with strategy. In this general vein, a typical presumption is that management decisions explicitly pursue an "optimal" prescribed behavior only approximated by real behavior awaiting improvement. Everyone is looking for the secret to improvement.

By 2005, extensive field testing of the DNA model allowed Booz Allen to confidently state:

"To change an organization effectively, concentrate on the deliberate design of four key organizational building blocks:

Decision Rights: the rules and mechanics that govern who makes which decisions -- and how.
Information: the metrics that measure performance, and the practices that transfer knowledge.
Motivators: the incentives, objectives, career alternatives, and other elements that drive people's behavior.
Structure: the overall organizational model, including the 'lines and boxes' of reporting relationships and job descriptions."

Naturally, there are many costs associated with the "before-and-after" reprogramming of each of those conditions... However, the focal point of the Booz Allen "DNA model" is more about the flow of what we often call "political capital". This initially appears in the emphasis on decision rights. But in fact, all of the DNA model's four building blocks have been included because they are (arguably) the factors most affecting decisions.

The DNA model points at the way that decisions (not just the rights) are distributed and made by everyone in the organization, with decisions being the driver of how the organization looks and behaves. While the changes the model supports are to affect the environment for decision-making, the point of the Booz Allen approach is to position and exploit decisions themselves as the generator of performance-critical behavior.

The big issue lurking under that idea is about the difference between how suggested corrective (.e., managed) changes to the environment affects performance and how "natural" changes do. Every day, a huge number of intentional but independently made decisions collectively and "naturally" alter the environment. In detailing that organizational environment, the Archestra view finds and describes a set of basic influences "accounting for" the organizational behavior as encountered by strategy. Since we describe that environment differently from the DNA model, the course of managing it could significantly differ as well.

II.

As does the Booz Allen DNA model, the Archestra account emphasizes that several essential functions underlie (i.e., both constrain and support) the organization's potential behavior at any point. And, when that potential behavior is realized, the behavior is the environment for what comes next. But our functions are different.

DNA says that this environment affects decision-making for better or worse. But the Archestra emphasis is that key performance decisions do not just wait for a friendly environment. Instead, strategic alignment means some decision-making -- not all -- has to work on how that behavior is realized from the underlying functions in the first place; while other decision-making is then critically responsible for whether the behavior executes strategy successfully.

To illustrate these two different layers of effects, first we directly call out the basic "modes" of organizational alignment that provide the environment in which strategy must survive.

Within these modes of alignment, there is a hierarchy of influence, with the most dominant at the top and the least at the bottom. In the interplay of these influences, "competency" leverages taxonomy and standards but is largely constrained by culture. Given that, one thing we can point out is that culture largely determines the competitiveness of a competency.

The alignment hierarchy also exposes an additional crucial dynamic. Namely, within the organization's overall functionality, external or exotic influences such as taxonomy or standards are more readily swapped in and out of the organization from one time to another than are more internal or intrinsic influences such as competency or culture. However, once in, external influences are significantly constrained by intrinsic ones.

In the picture, we see specifically what items the influences work on, noting that those items independently change all the time. Overall, the decisions that bring in and/or shape the four "alignment" influences produce the predisposition aspect of the behavioral environment.

III.

Meanwhile: another essential aspect of the organization's behavioral make-up consists of the way the organization responds to the circumstances that it believes it inhabits -- in short (and coining a term), its responsivity. Typically, this responsivity is what the alignment modes must work on, but when they arrive they find natural forces already at work.

The three key natural influencers of "responsivity" are:
- motivators which encourage certain action)
- generators (which enable and manage action)
- indicators (which suggest action)

More specifically, the interplay of those three influencers "maps" the intuitive dimension of responsivity as in the following picture:

Day to day the organization sees itself in a mirror, noticing key elements (of needs, options and requirements), and directly reacting to what it sees.

But the deeper issue is the way that those key elements are linked by the natural influencers, generating the overall intuitive responsivity -- so what are the origins of those influencers?

In the picture, those origins are awareness, execution, and assessment. The next step in discussing "effective behavior" examines those issues.

IV.

Our first illustration above details the underlying four parts of "predisposition". Likewise, the three underlying parts of "responsivity" shown in our second picture can be described more specifically. For that, one approach is to see the parts -- awareness, execution and assessment -- as tendencies or "characteristics" developed from particular organizational activities and observations.

Awareness is developed from the following factors:
- Decisioning
- Modeling
- Measuring
- Communication
The net effect of awareness is to create the "working image" that the enterprise will have of the circumstances within which it believes it operates. The working image presents options of varying attractiveness to the enterprise. The options are thus motivational. This four-tier hierarchy of "awareness factors" also features, from bottom to top, increasing complexity in the development of the working image.

Execution is developed from the following factors:
- innovation
- collaboration
- optimization
- change
The net effect of execution is to proceduralize activity in the cause of "recognized progress." Understandably, these tend to be the major issues on everyone's operational management agenda. The four factors are stacked relative to each other with the most reactive activity (towards progress) at the bottom and the most proactive at the top. All of the factors are about exploiting requirements, and all of them are at risk without "alignment". Arranged hierarchically, each of these four factors is critically dependent on the factor below it in order to be successful at generating maximum impact.

Assessment is developed from the following:
- Value
- Performance
- Quality
- Risk
The net effect of assessment is to establish the meaning of the "current state" and thus validate or challenge the existing perception of needs. In the context of progress (from execution), assessment tries to understand whether the difference achieved is important enough (or not) to defend the means by which it was gained or to change them. While each of the four factors is a kind of importance per se, they are hierarchically ordered with the issue on top being the most indicative of (i.e., directly relevant to) a specific strategy and the one at the bottom being least so (although perhaps more relevant in general to all strategies).

Summarized from the viewpoint of strategy, awareness must offer encouragement; execution must offer enablement; and assessment must offer clear ideas.

V.

The combination of a working image of circumstances, recognized progress, and an accepted meaning of the current state characterizes the intuitive dimension of responsivity. Again, day to day, the organization sees itself in a mirror made up of those aspects and reacts to what it sees.

But for a full appreciation of how that version of awareness, execution and assessment might really play out as behaviors, the following view gives another perspective crucially important to performance management:

As featured above, behavior is coordinated by approvals, assignments and accounting. Together, they make up the political dimension of responsivity, mediating the otherwise "intuitive" responsivity of the organization and intervening between predisposition and actual results.

The most prevalent characteristic of this coordination is that it is negotiated -- not once-and-for-all, but repeatedly and without guarantee of consistency, due to the continual and irregular influence of internal and external change on the organization. Yet the political formatting of responsivity is what most organizations believe will spawn "effectiveness"...

Since this means that the underpinning assumptions and conditions of the strategy might vary beyond expectations, the organization must grapple with how strongly a policy of adherence to strategy will be enforced. Successful enforcement means resolving the tension between the organization's predisposition and its politics. Even more importantly, since intuitive responsivity is continuously forceful at setting things in motion, the balance of predisposition and politics must "train" the intuition towards the strategy instead of away from it.

VI.

Given the above pictures of predisposition and responsivity, our full account of organizational behavior is based on how the two things affect each other.

From a management standpoint, effective Predisposition presents its influences with dependencies summarized as follows:
- Culture's function of granting permissions involves the relative strength of permission granted
- Competency's orchestration of abilities involves the maturity of the resulting combination
- Standards' presentation of rules involves the degree of adoption generated for those rules
- Taxonomy's offer of definitions involves the stability of those definitions across time and place.

Management can deliberately attend to those dependencies. The current predisposition constrains the likely effectiveness of the functions that make up intuitive responsivity -- by the way that strength, maturity, adoption and stablity are established for each function.

On the other hand, political responsivity will counter-offer different criteria of acceptability and importance to shape behavior, whic can pose a significant problem. If positions, assets or stakes are challenged in any combination, their owners may push for settlements, using approvals, assignments or accounting that either ignore effective predisposition or must attempt to change its underlying terms.

Consequently, if politics compromise the optimal predisposition, then the predisposition will compromise the intuitive responsivity that is the real environment for strategy.

As outlined by these worksheets for detailing intuitive responsivity, very many variables can be changed. Management's challenge is to know where, when and why changes occur -- and to control them by type and degree for benefit to supporting the strategy:
- Awareness details, which combine to envision current states
- Execution details, which combine to create future states
- Assessment details, which combine to determine overall status

VII.

In the intuitive responsivity arena, the awareness aspect's hierarchy of factors bears a superficial resemblance to the Booz Allen DNA model, especially in its inclusion of decisioning. But... the set of awareness factors does not Instead, it presupposes that most decisions have both traction and persistence only when the other three "awareness" factors support them, so if you want a new decision to succeed then you have to "tune" the other factors to support it.

Posted by Malcolm Ryder at 5:36 PM | Comments (0)

May 23, 2005

Aligning Operations and Strategy

"So, you know how to get there, right?"

In business, results rule. Understanding the results of operations is typically the dominant issue in management communications between different levels and departments of a company.

This accumulated understanding is key to synchronizing operations throughout the enterprise; and by providing end-to-end support for fulfilling business requests, that synchronicity allows current priorities to be a successfully demanding driver of operations.

But different parts of the organization respond to different kinds of requests. Over time, if a common awareness of objectives is lost, the request-driven results being observed more easily diverge from strategy, and those results are then much harder to use as representations or predictors of future performance.

To minimize or prevent this divergence, the organization needs a shared and consistent view of the big picture -- consistency that provides an on-demand ability to refresh the awareness of shared objectives, across the multiple parties involved in the pursuit and across the multiple occasions in which action must be prioritized.

"Honey, please stop and ask for directions..."

The organization's most consistent view of a strategy comes not from the analysis of results but from the enterprise-wide publication of the plan.

Drawn from that awareness, a management-grade depiction of planned organizational readiness would cover the state of the organization spanning all possible states to all actual states.

Put that way, the task first seems to require a prohibitively large amount of descriptive information; yet ordinarily the company fully attends to getting that scope of information by capturing it through processes and the systems that host those processes. With the numerous information sources, creating the "big picture" is not done through brute force but instead through compiling surgical slices of observations that are each shaped by a particular point-of-view. Because there can be an almost unlimited variety in the points-of-view, the classic problem is to prioritize them, and then to coordinate the ones that are most important. The compilation is a model.

This model helps to reveal, remedy, and support key interdependencies amongst the differing responsibilities and authorities that run the business day-to-day. Consequently, it is seen as a critical success factor in understanding how the organization is really functioning.

But what is the model's prevailing logic for coordinating those differing views? Is the logic oriented towards explaining results or towards monitoring objectives?

"Are you sure we can get there from here?"

We want to say that the logic must be oriented to both... but this rarely happens except in product management or in project management.

Outside of those two domains, there still needs to be a framework in which operations are synchronized in a way that can account for both objectives and results, while allowing changing priorities to be flexibly accommodated.

This framework must take into account the different perspectives on organizational readiness that are usually established by managers. The question: what is the organization ready for? In taking responsibilities for issues ranging from all possible to all actual states, "management" sees selected, authorized, and assigned states.

But while managers are doing that, operations must make things happen through the front-lines perspective on current demand versus its capabilities to respond. The operational perspective recognizes and must handle constraints that appear in another spectrum of concerns -- going from demand, to associated requirements, to response options, and then final responses.

A key management problem is that organizational readiness and operational perspective can develop independently of each other as separate pre-dispositions -- without productively converging or co-operating. This source of misalignment must be rigorously minimized.

"Okay that's it. Gimme the keys."

The Archestra framework cross-references the organizational and operational issues.

On the organizational side, the problem is to correctly determine the positioning of the organizational unit within the implications of the strategy. On the operational side, the problem is to identify the availability factors that underpin decisions and responses.

When organizational positioning and operational availability are reconciled, the proper throughput of energies is established for objectives to drive results. Alignment solutions must provide support for the intersection of positioning and availability.

Copyright 2004 M. Ryder
Click here for an enlarged detail of the populated framework, showing the reconciliation touchpoints.
For a review of how to develop solution models from the framework, contact me via email.

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May 12, 2005

Performance Management - a master framework

Performance management is most often presented as an analytical effort. But managing "performance" means managing activity designated to produce certain levels of prescribed effects, including the befores, durings, and afters in the activity lifecycle.
- The befores must logically relate events to influences and to each other.
- The durings must occur within tolerances expected to preserve the integrity of those relationships.
- The afters must validate the correlation of the actual results and the planned results -- providing critical information to the management of change that will deliberately adjust ongoing activity.

In each case, the fundamental effort is to generate alignment between the business mandated state and the reality of the business organization's production. This alignment must be managed on strategic, tactical and operational levels, in each case covering the complete decision cycle that establishes business positions and reactions from intentions throughout impacts.

(Click here for an enlargement of this image.)

Therefore inherently operational, performance management involves a universe of interactions between methods, tools and knowledge that can manipulate actions from the abstractions of their original conception to the concreteness of their impact.

Performance management "solutions" must provide logically integrated coverage of this scope of interactions-management .

(Click here for an enlargement of this image.)

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May 1, 2005

When is a Model not a model?

Usually we develop a "strategy" based on other ways of organizing our observations. But this gets tricky. We are all the time seeing things called models that are not models. Likewise, we see so-called frameworks that are not frameworks, and so-called processes that are not processes.

Two other typical confusions compare models against frameworks (apples vs. oranges), or offer a hybrid of a model and a framework, to provide "valid" grounds for the strategy.

The toughest test of a framework, model or process is its ability to tell you how to make something that works the one chance you have to make it.

With that in mind, navigating through the variety of misnomers and mismatches is a prerequisite for developing strategy and for managing performance.

Here's the basic lay of the land:
- The Framework is where the value system for construction is defined.
- The Model is simply an application of the value system to a proposed circumstance.
- Plans then translate the model into an actual circumstance.
- Programming is like planning. Programs create and relate functions.
- Functions are executed by processes using instructions.
- Following instructions is when the rubber meets the road.

The whole point of applying a strategy is to logically drive results of intended value, but the intended impact of the strategy arrives only as the payoff of other underlyng levels of success. Although frameworks and models are offered to guide construction of strategic solutions or improvements, strategy is more like programming than it is like frameworks or models. Essentially, the guidance supplied by frameworks and models promises the effectiveness of the programming in the context that the framework or model inhabits. But the faithfulness of the program's processes to its instructions, which greatly depends on the run-time environment of the processes, will always be challenged by some degree of risk, so the design of the process must make risk management an integral part of its quality.

A key point to sign off with here is that processes must negotiate with their environments, consequently they really only "interpret" instructions. However, depending on the circustances, that interpretation might be quite literal or might range to the very improvisational. The difference is meaningful in terms of control, cost, repeatability and other aspects, but the process always finally has one main responsibility: to produce the targeted output. Organizational tolerance for the methods of the particular process may allow or disallow the use of that process, but this is what process management is for.

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April 25, 2005

The ROI of Management

The essential function of a business is to process resources to generate value in a targeted market. Generally, the profit results from exchanging the delivery of specific benefits of that processing for something else more valuable.

To sustain this ability over time, the business must be able to regenerate and refocus resources in accordance with the changing requirements of competitive demand in the market.

This means that the capability to execute is the result of an ongoing investment, and the capability itself is a return on that investment. Let's call this the capability return on investment, or CROI.

Because market demand forms competitively, the business must anticipate the conditions in which the exchange of benefits for reward is probable. Organizing around the probability is the concern of strategy.

For the purpose of instituting practice of this organizational effort, Strategy is formulated in Plans.

The business goal is then to have execution of the plans generate a profit return on the investment -- or PROI.

Shifting markets mean that PROI relies on CROI. But the likelihood that execution will drive profits rests on the likelihood that the underlying resource-processing will have the characteristics needed to establish -- on demand -- appropriate delivery of benefits for the current opportunity presented by the market.

This makes capacity and coordination the key characteristics of execution, while strategy directs the execution.
- Capacity provides immediate breathing and maneuvering room in the set of options for resource allocation and application. Growth is the increase in capacity that is effectively applied to opportunity.
- Coordination provides constructive throughput of the impacts of resource deployment, from the initial decision through runtime activity. Alignment is the increase in coordination that ensures operations meet requirements.

Those key characteristics of execution mean that PROI from execution mandates a use of resources that both results in and leverages growth and alignment.

In turn, the criticality of appropriate usage mandates direct management of utilization to comply with strategic direction. The degree of compliance realized is called "performance."

Thus, in order for CROI to drive PROI on a long-term basis, performance must support strategy by establishing compliance through growth and alignment.

This understanding is the basis of the Archestra Management Framework.

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April 22, 2005

Managing Strategy versus managing Performance

For the most part, recent consensus on the state of business health includes two interesting headlines. One is that business competitiveness now requires "growth", which in turn requires moves that go beyond cost-cutting. Another is that effectiveness requires "alignment", which in turn requires moves that go beyond efficiency.

In the new era of growth and alignment, the old business platform of economy and efficiency is now mainly a staging area in which processes are designed, or repaired, or re-designed. There can be no doubt that every business must design there, but as we also see in the current consensus, the new criterion thrown into the mix is change. This ingredient pushes all resource management (whether of processes, people or technology) up against the challenges of agility and renewal -- both challenges pressed upon the business by operating environments that are increasingly independent of any given business.

In fact, to secure the business's ability to be responsive to the right things at the right times and thereby consistently exchange value offered for more value gained, the business now must concentrate more than ever on relationship management. Through collaborations and partnerships (both internal and external to the company), relationships bring the business earlier alerts, economies of scope, and a broader range of available resources -- on demand. Thus the business has greater means to assure itself the right positions, on time.

However, exploiting the positions is what causes a payoff -- and another current general consensus is that companies do not so much fail to have viable positions as they do fail to execute from them.

This notion, which argues that most companies have a strategy but fail to execute it well, points us at the idea that performance should be seen mainly as successful execution of strategy.

Ironically, the other big story that managers are hearing is about how companies that successfully execute poor strategies would actually "outperform" companies that have great strategies poorly executed. This story clearly equates performance with results. But it does not usually drill down into whether the sustainability of that output is likely or is even relevant to the foreseable future. In effect, it is a disposal definition of performance.

As a kind of advice, the story is appealing in a comforting, common sense way, as if to say "perfect is the enemy of good enough!" This advice is just great, as long as whatever strategy is being used really will likely tap into significant levels of opportunity even if it is poorly conceived. Executives who are betting your careers on that, please raise your hands.

So how does the idea of "successful execution" of strategy actually net out? Is the point of strategy simply to get organizations on a productive path but then step aside? Or does strategy just "pan filter" the range of execution's results for the results that it wants? Or is it that the competitors that really matter are just not different enough to require a strategy above and beyond superior execution?

Our problem is to understand what strategy really has to do with results, and how that connection works. The underwhelming answers just described above can be reached by at least three paths of confusion, each of which should be avoided...

#1 - "Execution" is thought of as just a synonym for operation (i.e., thought of as procedure, instead of as actions continuously negotiated between options and risks).
#2 - No distinction is understood between tactics (securing opportunity)and strategy (creating opportunity).
#3 - Short term results are not examined in the context of long-term value, so they are not asked to contribute to it.

The Management Framework
To dispel this confusion, a couple of "management" definitions of strategy and performance allow a better perspective on the issue and provide consistent connections of strategy and performance to growth and alignment.

- Strategy is about the value of the direction chosen. Essentially, strategy selects positions oriented towards a selected goal.
- Performance is about the quality of the effort made to go that direction. Essentially, performance selects ways to get and use the positions established by strategy.

The key to this vocabulary and point of view is recognition that both strategy and performance start out in management's mind as projections, as models of possible futures, not as assessments of the past. From the models, plans are developed to link the models to the specific organization. Then the plans are used to both steer and evaluate the ongoing "actuals" versus the models.

Again, strategy and performance are both aspects on a planning axis; typically, given the usual level of internal and external business complexities, most organizations will not approach projected strategy or performance targets except by working to realize the plan.

On another axis, growth and alignment are both aspects of execution.
- How is growth pertinent? Primarily, growth is meaningful when it is increased capacity that is effectively applied to opportunity.
- How is alignment pertinent? Alignment is meaningful when it is increased coordination that raises the certainty of operations meeting requirements.

Given that, it's fair to assume that all companies want to enhance growth and alignment -- in other words, they want to accomplish both growth and alignment in a way that makes the two things valuable. But even if they don't immediately accompish those things, they want valuable results from their ongoing efforts, which means organizing activity for meaningful, incremental deliveries of value.

This brings us to a clarified distinction of what it means to manage strategy and to manage performance.

By understanding that execution must be concerned with supporting growth and alignment as success factors and not just with outputs, we see that the manager's primary responsibility is not simple procedural adherence to plans, but rather that "realizing" the plan should be continuously pursued in terms of whether intermittent activity and outcomes are consistent with the goal of growth and alignment.

In both the cases of strategy and performance, managers need to bring execution capabilities to the plans. Synchronizing those capabilities with the needs of the current plan is a manager's highest priority. By making change more manageable and therefore increasing the organization's accommodation of new plans, capacity and coordination (respectively, elements of growth and alignment) characterize the key approach to optimizing the potential of strategies and performance. Because capacity and coordination are literally provided through the makeup of the organization, this point of view explains the connection between organizational development and results.

Consistent with the working definitions established so far, we can now use typical management terms to map out the synchronization described above...

STRATEGY:
- growth intersects strategy in objectives.
- Similarly, alignment intersects strategy in priorities.

Strategy management primarily attends to objectives and priorities -- conceiving, communicating, tracking, supporting, evaluating and adjusting them -- such that they nurture and leverage growth and alignment, respectively.

Applying that same cycle of attention (i.e.,conception through adjustment), performance management addresses performance's intersection points with growth and alignment.

PERFORMANCE:
- initiatives nurture and leverage growth; while
- tactics nurture and leverage alignment.

Thereafter, with initiatives and tactics supporting objectives and priorities, management negotiates results. This understanding replaces the ambiguous notion of "executing strategy" with something that all managers can directly and rationally engage.

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April 20, 2005

The Performance Analysis Framework Pt. 2

"Performance Drivers" are the conditions that usually obtain for value to emerge from the interactions of the organization's operations, locations and relations with other parties. Drivers may be causes or they may be prerequisites. Typically, when managers translate a leader's mandate into actions, the step initially considered is to decide how to configure resources and methods to leverage environmental conditions that "drive" progress.

Management's job is not just to orchestrate the interactions but also to cultivate those conditions and, through designing the co-operation of conditions and interactions, to prescribe when the emergence of value is most likely supported or inhibited.

For performance management, an organization needs to comprehensively manage information that is used to:
- develop a performance logic model (a theory of progress)
- develop the supporting plan for organizationally implementing the model
- initialize and prioritize action
- monitor status
- confirm underlying or correlated events, and
- reconcile significant differences.

Those actions will primarily involve information that describes operational conditions in terms of value, including:
goals,
assumptions,
relevance, and
priority as well as
variance and
status.

In emphasizing the value-perspective on the operating conditions, performance analysis has two needs: one, for the first four of the six types of information to be logically interrelated; and second, for that logic to be continually applied as a major influencer on business operations.

The real-time decisions for directing activity then matter because, as evidenced in variance and status, they emphasize how follow-up activity is succeeding in turning "plans" into "actuals".

This follow-up activity constantly confronts opportunities, restrictions and expectations that surround the ability to use procedures, tools and people for getting things done.

The practical intelligence about those constraints is distributed throughout the organization. To allow discovery of how to optimize resource utilization for the plan, that intelligence must be coordinated and integrated. Then, refined activity can realize the plan, and drivers can be supported, to produce desired outcomes, which will be observed as good performance.

With the Archestra framework for performance analysis, the identification of goals, assumptions, relevance and priorities is subjected to a reality-check. Opportunities, restrictions and expectations that mitigate them are excavated and grouped in two dimensions:

- reasons (typically dynamic)pertain to the "why, what, and when" decisions that drive resource deployment, while...
- requirements (typically structural) pertain to the "who, where, and how" decisions that establish the organization's position regarding its relations with other parties, locations and operations.

The most important influence of the framework is to illustrate that progress cannot occur unless business reasons are articulated as organizational requirements-- and that if reasons change, then requirements must adapt through change or realignment with the reasons.

As shown in the following example, the framework elicits and accounts for another set of defined progress drivers to be managed, beyond the typical basic level of operational "components" such as designated procedures and resources. The overall value articulated in this example is "sustained superior fulfillment".

-------------------------REASONS versus REQUIREMENTS:-------------------------
WHY versus:
- Who: A director must ensure that an on-time deliverable occurs
- Where: Responsibility for fulfillment will be with the department that directly supports the customer
- How: A process for controlling the production schedule must be used

WHAT versus:
- Who: A workgroup must be authorized to manage an activity or condition that ensures an on-time deliverable
- Where: Production must take place in both a primary and secondary (backup) location
- How: New facilities, instead of prior ones, will pilot the production

WHEN versus:
-Who: The deliverable is on-time when it meets with the recipient's agreed expectation
- Where: Adequate lead time for fulfillment should be built into the delivery, including contingencies
- How: Start-up of production should be supported by a contractual arrangement

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Staged by the framework, this "plane" of requirements specification is the arena of the direct performance analysis, addressing the underpinnings of progress above the component level and instead on the policy level.

Posted by Malcolm Ryder at 6:07 AM | Comments (0) | TrackBack

April 19, 2005

The Performance Analysis Framework Pt. 1

All businesses operate on the presumption that progress is viewed through purpose. But in assessing progress, too often the business is distracted by the pressure for efficient activity, to the detriment of managing for effective achievement.

Typically, when managers translate a leader's mandate into actions, the step initially considered is to decide how to configure resources and methods to leverage environmental conditions that "drive" progress.

"Drivers" are the conditions that usually obtain for value to emerge from the interactions of the organization's operations, locations and relations with other parties.

Attending to the drivers, managers first need information that identifies how the key condition in question is helping or hurting progress, and this means identifying what underpinning aspect of the plan's cause-and-effect prescription is being influenced.

Management typically puts a lot of attention on monitoring the "components" of a plan, in the sense that there are mechanical parts such as the steps in a procedure or the quality of a particular resource being used, and the plan assumes that their use is necessary.

But those specified components are just one aspect of the plan's underpinnings. An equally critical aspect involves the actual reasons why their usage is necessary, and the requirements that are success factors for their usage in the planned way.

Those reasons and requirements are what make the components "appropriate" for the organization's attempts to execute its strategy. Managing this appropriateness is generally a matter of establishing policy.

Cross-referencing the reasons and requirements forms a framework for understanding how the organization can actually organize for performance, because it looks directly at organizational characteristics that will tend to inhibit or protect opportunities for progress.

This follow-up activity constantly confronts opportunities, restrictions and expectations that surround the ability to use procedures, tools and people for getting things done.

The utilization of that intelligence is the focal point of performance analysis.

Posted by Malcolm Ryder at 8:50 AM | Comments (0) | TrackBack

February 28, 2005

Archestra Framework: An Overview of its Development

Archestra treats strategy as a managed product.

In this perspective, the strategy management process is similar to the product management process. The genesis of the "product" called strategy is a framework

Processes are developed from models, and models are developed from frameworks.

The Archestra Framework is a structured, evolutionary knowledgebase of terms and concepts related to the underpinnings and lifecycle of a strategy. The Framework provides diagnostic approaches to examining strategy and identifying how strategy addresses renovation and innovation initiatives by managing:

risk and benefit;
their relationships and dependencies; and
the roles and dynamics for acting on them.

Users of the Framework can investigate the content to:
- add and improve definitions,
- document new relationships and patterns, and
- supply diagnostic or engineering tools to apply the content to strategic planning and strategic problem resolution.

Successful applications, related supporting materials from all users, and ongoing investigative references may be donated to the Archestra Foundation Class Library, where also will be stored standardized models and process descriptions for both creating and executing strategy.

Posted by Malcolm Ryder at 8:37 AM | Comments (0) | TrackBack

February 19, 2005

Archestra Projects

Archestra projects basically catalog individual and collaborative efforts to add to the Framework depth and integrity in any of the following ways:

(a.) identify or propose a new structural component of a relationship in the Framework;
(b.) adjust and validate components and relationships for their integrity;
(c.) demonstrate a method for "managing" development of a component or relationship - including to define, discover, make, test, scale, position, measure, change or delete;
(d.) demonstrate similarities, affinities or integrations between the Framework and other frameworks, models and literatures;
(e.) apply the Framework to designated problems in enterprise strategy, resulting in documented application hypotheses, methodologies, or case studies.

Posted by Malcolm Ryder at 7:28 PM | Comments (0) | TrackBack

September 26, 2004

Framework for implementing Strategy

Most strategies are not well-adopted by the organization that must host them in order for them to take effect.

Implementing a strategy requires that key characteristics of the organization are integrated with each other as well as individually supported.

The following chart identifies the coordination and support of those characteristics.

Posted by Malcolm Ryder at 2:32 PM | Comments (0) | TrackBack