Archestra: Strategy Archives

September 17, 2008

Business Process vs. Business IT: again?

These frustrate the chances of recognizing "a business process called IT".

On the one hand, this is hard to overcome if people don't say what aspect of IT they mean to identify when they say "IT". An interesting point to put on the matter is that the primary expectation of IT users is actually "process management automation" -- not the same problem to solve as "information management" nor the level-setting about which sanctioned company processes are strategic/tactical/operational.

On the other hand, the word "alignment" itself continues to provoke and refresh the difficulty of reaching "I get it". The more important term to emphasize is not "alignment" but "integration". Imagine that some decision-making sector called "Business" was not integrated with the decision-making sector called "Finance". Since managing IT, like managing Finance, creates and governs a critical dimension of the business operational environment, some businesses cannot be dis-integrated with it and still rationally expect to succeed.

What might be really interesting short-term is to see and compare what stances about "alignment" come from CEOs who are Lawyers or are Technologists as opposed to Finance alumni.

Furthermore, however, as long as the "alignment" banner keeps getting hoisted by analysts and pundits in the trade, they'll keep educating CxOs to think about things in the wrong way. When it comes to IT, CxOs should be working on the management process competency at all levels -- an approach that would make it more obviously the responsibility of CEOs and CFOs to cultivate, not just for CIOs to offer.

Posted by Malcolm Ryder at 10:04 AM

September 6, 2008

Management Improvisation

Normally, management authorizes actions based on information. But the most frequent and expected connotation of the word "manage" is the word "control".

Given that management is undertaken to provide some assurance of "success", this connotation may be why management effectiveness is most often sought in terms of proof of control. The problem with this attitude is that it ignores more than half of the range of opportunity that is available to deliberately effect valuable progress in an endeavor.

In the framework below, a much fuller range of management is identified, in a way that puts "control" in context -- and shows it to be not only more varied than we typically allow it to be, but also that it is accompanied by important complements and alternatives for driving progress. To start with, the framework shows how the usual old notion of "control" is probably contained by items (left column) that are not best called control but rather "organization".

As seen here, a new semantics of "controls" is proposed (and explained later below). And still, the value of controls is to promote success.

A simple observation that may capture the ambitions about success in management is this: if it takes scoring to win, intending to score is more essential than planning to win. In management, progress is essentially like scoring. Given that, strategy is fundamentally about how to enable progress under the prevailing circumstances -- which in turn means that as circumstances change, strategy dynamically identifies and solves the problem of sustaining an ability to progress.

This readiness to improvise the action -- to take the "fast break", acknowledges that the circumstances of the game are all incidental within the basic boundaries that others play within as well. That is, within the same standing set of boundaries, many separate games are played -- and one game never necessarily predicts the next even if it winds up resembling it.

In that regard, what may be most difficult about competitive strategy is, first, to identify the boundaries that most matter; and second, to invent relevant actions within that awareness. In a competitive situation, much of what truly surprises the competition is an action that they didn't foresee because they hadn't identified the pertinent boundaries yet. (This is exactly why we often tend to speak of game-breaking competitors as being outfits that "change the rules"...)

Arriving at the necessary awareness is the product of surveillance and analysis, to which much dazzling and complex effort is formally dedicated now through business intelligence and knowledge management.

But the framework above imagines it more simply. It is not hard to see that the three forms of "management affects" -- controls, influences* and standards -- correspond respectively to knowledge, communications, and references -- are different modalities of common information that generate authority and action. The question is, how are the modalities currently being used?

So, what we get from this framework, mainly, is another perspective from which to assess how we manage now and whether the right modes are applied in the right ways.

Along with showing how information figures in, the framework helps show that the nature of management authority ranges (bottom to top) from being externally objective (standards) to being more cooperatively elective (influences) to finally being internally directive (controls). This tracks the application of recognized authority from its lightest to its heaviest.

The layout of the framework also corresponds (left to right) to the difference between micromanagement (organization) and macromanagement(improvisation). From that viewpoint, when we think of managed action as execution, the span of potential methodologies shows up being quite broad. Assumptions about what is needed to realize a strategy are challenged by showing that taking management more "micro" is possibly an inhibitor, but really just a supporting option, not a defacto requirement. For example, we have to allow for the possibility that individual contributors, rogues or artists -- left unbridled amongst changes -- may be enough, or even best.

In short, the old notion of control is really micromanagement. And as argued by the framework here, a big implication is that micromanagement and strategy are possibly allergic to each other or at least require arbitration -- a thought that may be the cause of some fresh assessment of management.

* While the word "influences" seems somewhat forced here (and may be replaced in the future), the intended sense of it is as a degree of imposition, here being neither benign (like standards) nor compelled (like controls).

Posted by Malcolm Ryder at 4:57 PM

August 25, 2008

The Mystery of I.P., or Not

What mystery?

The rule of thumb is that concepts are not property. The challenge is to wrap "property" around the concepts, so that the property is where people go to find the concepts. Since the value of the property is to some degree related to its scarcity, it is not difficult to understand what to do next.

- Use of ideas can be licensed in certain contexts.

- Information is either confidential or it is not, and you can sell access to confidential information.

- Knowledge is proprietary only if you have the ability to control the context of the knowledge delivery; control is all about packaging (whether the package is a venue, an event, a medium, or a box). You can sell the package; you can also sell delivery.

Posted by Malcolm Ryder at 7:27 AM

August 16, 2008

Why Leading Thinkers Won't Be Thought Leaders

In the ideas game, cutting edge thinkers are typically too far ahead of the approval criteria for implementers, and since "thought leaders" derive their credibility from the probability of implementations occurring, most leading thinkers don't become thought leaders.

To get probability on their side, leading thinkers usually have to choose to think about something that approvers already want to implement.

This certainly distresses the notion of "innovation", except within the sense of "infusing the accepted with newness". But that is not an outright knock on anything; it simply points to a reason for having the notion of "pragmatic innovation".

Much leading thought throughout history has been pretty rapidly dismissed as "impractical", which of course should have meant "unable to be put into practice"... But with 20/20 hindsight we are able to know at least that what is undoable for one outfit is merely inconvenient for another. And yet another may have no resistance to the idea at all and let it rip, wherefore the popular "disruptiveness" tag in the vocabulary of the betting pundits who track ersatz innovators.

Thought leadership is safe. It doesn't carry along with it the stockades, burnings-at-the-stake, smear campaigns, or other proven techniques used to enlighten leading thinkers about their impracticality. In fact, when you get right down to it, thought leaders are "voted into office", more or less like successful consultants, which means that they are the product of followers, not vice versa. This explains why the best-known thought leaders hardly ever have a hardluck story about finding followers...

In the other camp, leading thinkers sprout of their own accord and may carry on for quite some time with no followers at all. Some leading thinkers get lucky: they wind up being befriended either by a thought leader or by an influential producer who can spell "pragmatic" but isn't worried about it for the time being. But conventionally, the bridge between leading thinkers and thought leaders is the kind of engineering called "R&D".

The problem is that if R&D is not funded well enough, then the bridge may not reach all the way across. So the issue mainly comes down to who will sponsor the way that the R&D is adequately funded.

Leading thinkers really are often into fundraising, but a lot of fundraisers aren't any good at it. In a healthy organization that wants to be progressive as well, the case for funding thought leaders is not so hard to make, but the exceptional organization strategizes funding of its leading thinkers.

Posted by Malcolm Ryder at 9:28 AM

August 10, 2008

The Decisive Moment in the Garden of Good and Evil

My Strategy to win the Presidency

So, how do you get it going at such a late stage in the race?

The first part is to pick my Vice Precedent. Eventually, I’ll get caught for something, right? and why not just tell people what it is in advance, especially if it's something that's just more me? Thanks to the internet, people are confused... there’s no longer any sense of priorities amongst most of the self-indulgences that actually get us from Monday to Tuesday and from Tuesday to …

…. oh, you meant vice “president”… hmm, in that case, it would have to be the guy from truTV, Marc Juris, executive vice president and general manager, who showed me that if you can’t be the head, at least keep it on straight. For example, the other day he was saying, "Reality has a connotation of not being real, of being phony… We felt that because (our programming) was real, we couldn't call it reality." There aren’t that many people running around with that kind of clarity now.

The second part is I’m going to play the gender card.

How does that make sense? Wouldn’t you be running against two men?

Well, what difference does that make? The point is, I accuse them of being guys, and then they both screw up their responses to that more than I screw up mine. That’s what voters care about.

What’s the third part of your strategy?

It’s very simple, a call to action, but it might be hard because it calls for breaking a tough habit. When you’re president, you should have a limited number of Stupid Points to work with, not term limits. If you spend up all your Stupid Points too fast, you’re out! and someone with fewer Stupid Points should take over. This might not be the other person from your party who is hanging out in the other wing of your big white house. Think about it, if it’s your party at your house, and your party gets seriously boring, people need to be able to go to another party at somebody else’s house, right? Really, it’s not such a new idea, but we can’t be wimps about it.

Is that it? Any other parts?

Well, aside from the challenge of getting enough ME-dia attention, I’m working on getting an additional line added to the list of nominee names on the ballot, right below the third party candidates. If I’m successful, it should just say “Surprise Me: __________________”

(Happy Birthday Diana! xo - M)

Posted by Malcolm Ryder at 3:22 PM | Comments (0) | TrackBack

July 5, 2008

Beyond the Spin: Measure What You Give

Does your organization really measure what you give, or does it mainly spin what you measure?

Bruce MacEwen's industry-leading website Adam Smith, Esquire offers an opportunity to gaze into the abyss of metrics and walk away without jumping. In the article
"How High Quality Are Your Lawyers? (How Can You Tell?)"
a close reading shows contrasting business models contesting notions of "performance @ cost" and "value @ quality". In the competitive situation covered, one upstart model strategically goes after a chunk of the opponent's business by bringing customers the performance/cost equation, surprisingly leaving the traditionalist competitor to justify how pricing for that same chunk of business could rationally be based on value/quality. What makes this all interesting, notes MacEwen, is the idea that 99% of what the traditionalist does is what the upstart can steal away.

For those of us who fell out of the old hot habit of saying "disruptive innovation" once a month, this looks like news, but not new news. Still, there are some fresh perspectives worth bringing to this contest.

As seen in the diagram below, the different models above are easily distinguished by what they actually offer, making it inappropriate (for managers) and intellectually dishonest (to customers) for either of them to masquerade as the other. Customers buying into cost/performance are investing in the promise of efficiency, while those buying into value/quality are investing in the promise of reliability.

In MacEwen's article, we are sensitized to the problem that high-prestige value/quality law service firms institutionalize a significant unmanaged cost in the form of "available overachievers", against which these firms then build a hedge by charging premium prices beyond rational evidence of economy for the customer. But what is sold as the justification for this pricing? Their quality?

To be sure of avoiding management posturing, "quality" here must mean only one thing: adherence to the promised appropriateness of the deliverable versus the stated need. Consider that meaning against the question of what it takes to get quality: the value/quality firm proposes that by exceptional capability they eliminate the risk of not getting quality. Therefore, the key variable that this firm actually addresses is unpredictability in the customer's need. As an operational tactic, the value/quality firm hoards talent in order to avoid outsourcing and to presume agility.

But the cost/performance firm basically argues (by demonstration) that legal work requires only competency to sufficiently meet most stated needs -- not a matter of being exceptional but instead simply correct for the task, which eliminates unnecessary effort from the equation right off the bat. Of course this presumes a degree of predictability in scope of need -- and agreement on the scope becomes the main feature.

The discussion above intends no effort to offer a wisened critique of law firm strategy. That said, on the surface there are no truly important differences between marketing professional services in law versus other disciplines where subject matter expertise is the raw material and advice is the product.

Idiosyncracies in the legal services industry will of course provoke distinctive problems and solutions there, yet these are probably driven more by the state of mind of the customer - which is the underlying important difference because it is the competitive arena. Oversimplifying MacEwen's article, the difference between the value/quality firm and the cost/performance firm is that the former sells confidence while the latter sells credibility.

Are there spats? One accusing the other of con games, and the other accusing the first of being incredible? MacEwen's article says yes; but what is further interesting (per evidence of the illustration above) is the opportunity that both types of firms can objectively profile themselves on common ground (efficiency, capability, reliability and acceptability) -- and use those profiles to determine how to optimally segment and grow a shared market. When they don't do that, you can bet it isn't because the customers don't care.

Posted by Malcolm Ryder at 9:59 AM

June 27, 2008

Do As I Do, Not As I Say

The McKinsey gang's ongoing interest in behavioral economics leads from time to time to email alerts about articles that lead off like this:
Hidden flaws in strategy

"Why do top managers, steeped in theories of good business strategy, still make bad decisions? While ignorance and hubris sometimes play a role, the brain itself—how we think—is also a culprit. Insights from behavioral economics help explain why we don't always think rationally and how our logical flaws can lead to bad strategic decisions."

On a day like today, when the stock market dropped over 300 points, the catchiness of that intro is in the contrast between the confidence we want to have in logic and the confidence we want to have in our ability to use it.

Getting strict, we might have to say that when strategy is based on logic, strategy is interpretive -- because in different hands, the same logic might lead to different strategy and/or different strategic outcomes.

But why doesn't it make just as much sense to place the first faith in the strategy and then find the logic to execute it? Well, it does; it's just that in this mode, the "strategy" is not a performance; instead it is a proposition that supplies the point of view to be used when managing functions.

McKinsey's discussion seems to be poised to warn us away from the problem of management personalities corrupting objectivity, and further, poised to argue that this should be the right warning because we can assume that there is usually going to be sufficient objectivity to correctly navigate to the correct destination. That is, the most prominent assumption that we can read into the McKinsey caution is that it's not cool to split from the plan. Logic shall bear decisions and decisions shall bear the plan and the plan shall be righteous.

But isn't that still letting the bad boys off the hook? Levity aside, coaches bring the game plan to the players knowing this: that the players actually have to play, which means that the players will improvise their way to the opportunity to comply, if they understand the strategy -- "strategy" which is again essentially a point of view and not a performance prescription.

Strategy is about belief in the value of your position. It is esentially about where you're going to be, and why you're going to be there. Because of that, any position within a hierarchy of operational dependencies can be a strategic position. In effect, a position represents the opportunity, so the most direct way for a leader or manager to damage the potential of a strategy is to make decisions that inhibit or prohibit the players' opportunity to align and coordinate their compliance to the strategy.

Because of that, we want a model of coaching to rely on, not just retraining (or re-straining) of senior staffers to the logic-decision-plan mode. We want an observation-design-motivation mode just as much if not more. We want the sideline clipboard.

Posted by Malcolm Ryder at 11:21 PM

April 29, 2008

Information Overdrive

Profitability through information management gets fresh illumination and color on Page 8 of the March 2008 issue of BPMStrategies, where Tom Dwyer, VP of research for the Brainstorm Group, walks us through a 21st-century operational blueprint in his article, "Using BPM, BDM, and SOA To Create A More Agile Supply Chain".

In the Brainstorm illustration on that page, the title of the Venn diagram (below) suggests that a blank area in the top center intersection would have been labelled "Actionable Insight".

The question we first posed to Dwyer was: shouldn't this intersection be titled "Policy Compliance" and stand as the third factor, instead of "actionable insight"? One can readily argue that a full reckoning of profit and advantage (the very central theme) must include this risk management dimension, and it proves to be so in actual practice but simply has (typically) more influence as a constraint than as a lever.

In a brief offline interview, Dwyer replied, noting how his system works:

"The point that I was making was to identify three elements that contribute to profitability by optimizing the management and execution of a supply chain... The three I chose were all meant to be levers or enablers to achieve higher profit... [Within those three] the combination – or intersection – of intelligent applications built on a responsive infrastructure and accurate, timely data is what enables 'actionable insight'... I would agree that achieving policy compliance at the lowest cost would definitely impact profits... but I would not choose the constraint of policy compliance over the enabler of actionable insight. "

Interpreted with lots of wiggle room, Dwyer's descriptions in the BPMStrategies article strongly suggest that the role of agile technologies is to generate transparency [largely internal] across the heterogeneous organization -- while the role of integrated real-time data is to generate transparency [largely external] across the organization's multichannel embrace of suppliers and customers. Respectively, albeit oversimplified, this amounts to an organization knowing what to do and how to do it, complemented by knowing what it should be acting on and why. In both cases, timeliness of correct information is critical. But to highlight the most important issue, it is the matter of being actionable that makes being insightful worthwhile.

Additional consideration of Dwyer's formula leads to this summarization: knowledge management, business intelligence and performance management may converge to drive sustainable competitive winning, if you know how to make them converge. We view this as a matter of management information systems being deployed strategically rather than just tactically.

Strategically deployed, the information must allow the enterprise to identify and leverage its positioning, capability, and internal alignment, so as to understand whether revised operational mechanics are appropriate to the actual environment of the organization's practice.

To put this back into the proper original context of Dwyer's discussion: the improved mechanics in question are driven by business process management (BPM), business decision management (BDM) and service oriented architecture (SOA). The strategy challenge is to realize and exploit the correspondence of these approaches with the management of information. For example:

Development: SOA : Process efficiency
Production : BPM : Performance Effectiveness

Research : BDM : Actionable Insight

In a follow-on to this discussion, we could consider the recently published arguments in The New Age of Innovation by C. K. Prahalad and M. S. Krishnan on how global resource networks represent the new supply chain mechanics and how the arguments express the information/mechanics correspondence. For example, in the coverage of the book provided by Information Week's Bob Evans, the key idea noted is that Darwinian forces of customer-centricity require transformation of a supply process into a service, causing the B2B (business-to-business) supply chain linkage to operate more in B2C (business-to-consumer) mode -- which changes the kind of information necessary to manage success. Says Evans: "resources must be shifted continually... " and "processes must be shifted from a focus on millions of customers to the individual."

Punchline: for many enterprises, the prospects of future success resemble hitting a moving target from a moving launchpad. To be able to execute that strategy, there will first need to be a strategy for enabling the execution.

Posted by Malcolm Ryder at 7:09 AM

April 26, 2008

Inciting Insight

In the big picture of purposefulness versus accidents, management accommodates a coincidence of things that ought to make a difference, such as designs, events, and states. Information systems grind on each of these, going both deep and wide. But what matters is whether management orchestrates a convergence of those things. Is such orchestration forcing the issue, or is it simply the way these things actually turn out to have meaning?

It's customary to eschew information overload; but the key to their useful combination is not the specific information compared, rather how the available information is positioned in the overall scheme of interpretation. As seen in the picture above, intents and impacts which superficially represent "how things are going" will relate in terms of the "5 W's and How". Seeing the certain blending of factors here, it is easier to realize that most insights will be moments of correlation that are the prize for maintaining ordinary but diligent awareness in a variety of ways.

But just like money, insights are mainly worth the use to which they are put. So, whether this big picture describes the competency of an individual savvy person or of an enterprise, it tells something about being strategically capable but the goods are in the doing after the learning.

Posted by Malcolm Ryder at 6:15 PM

April 3, 2008

The Circumstantial Strategist

According to Edward Cone, in his CIO insight article CIO: The Accidental Strategist, most companies claim that information technology is strategic to their business.

This seems like a no brainer; competitive business is primarily a matter of matching a determined need with a defined opportunity to serve the need, and neither side of the equation can be handled at the necessary combined volume, speed and cost of sustained competition without IT.

But, says Cone, according to research by Diamond Management & Technology Consultants, IT executives say:
- just one-third of the execs play a significant role in the strategic planning process at their companies
- only about one-quarter of participating CIOs spend up to 50 percent of their time on strategic issues
- barely one in 10 spend more than half their time on strategy.

In other words, the average actual occasions of direct CIO influence on strategy amount to only about 1 out of every 16 CIO person/hours -- approximately one short morning a week.

Averages are good at promoting distorted mythologies, so having put that one out, let's immediately begin to ignore it rather than repeat it. But from the observations in Ed Cone's article -- in which several variants of "The CIO" are posed for inspection by actual CIOs and by industry management gurus -- a few other points jump to my mind:

- First: the article's title may have been more apt if it said, "The Circumstantial Strategist". The territory being covered is not so much about why CIOs should do strategy, but instead about how CIOs get to do it. Along those lines...

- Second: CIOs who report to CEOs have a fundamentally different "lay of the land" than do CIOs who report to CFOs or COOs.

- Third: A CIO doesn't have to see the whole company to be strategic; he or she has to see the whole information architecture on which relies a business operation that is directly accountable to a CxO. Certainly there are enterprise CIOs, but not all strategy is enterprise-wide. In fact, many companies have more than one CIO.

- Fourth: CIOs are often in a position to recognize an IT opportunity to alter the business model. But there is a huge difference between having (a.) both the responsibility and authority to do it, versus (b.) only the opportunity. The politics of the internal corporate governance effectively draw the boundary around the CIO's effective role. What's probably more interesting than the "CIO" title is what the other CxOs have agreed is the range of the so-called CIO role.

Posted by Malcolm Ryder at 2:47 PM

March 30, 2008

Careful What You Ask For...

Anyone who has visited Archestra more than once ( all nine people! ...well, ok, eight not couting myself) knows that a major point getting made is this: what looks like problems without solutions is often due to the romantic allegiance we have to a misleading vocabulary.

It's especially important to catch those times when strategy, management, execution, and other fundamentals are being wrestled by name. In that vein, one of the longest-standing friends of Archestra -- Bruce MacEwen at Adam Smith, Esquire -- caught the notice (again) of a somewhat newer friend -- Jack Vinson at Knowledge Jolt -- setting the stage for the commentary now here.

Bruce starts it off by reviewing ideas in the The Halo Effect, by Phil Rosenzweig. Rosenweig explores the historical ineffectiveness of management guru wisdom, and Bruce shortly comes to his own punchline: "In this unknowable world, what attitude and what approach grace us with the best odds of success? Only one: Critical thinking."

But as you read Bruce's fluid argument to the conclusion, you pass through the equally important question in his theme: "What do you have to know, to be the best performer?"

Jack, a seasoned spokesman for the Theory of Constraints (TOC), embraces Bruce's conclusion; but moreso he picks up that earlier question with his own followup, posing a perhaps ironic counterargument to Bruce's conclusion. With no pretense of being gurus, both men argue for the value of logic to management that would aspire to the top rung of performance. But Jack shines a light in the dark corner of logic's chronic problem with gaining broad acceptance. Case in point: Jack's observation that TOC works but still doesn't proliferate poses this question: "What does it take to get chosen as the management approach?" And our question, naturally, becomes "if you aren't chosen, then how can you be the key to success?"

Evidently, what it takes to be chosen is a combination of marketing and politics -- and the facts may be that the underlying genius of "success" is not the management approach used but instead the competitive approach employed by the executives. What Jack points out, intentionally or not, is beautifully brutal: that sometimes things work and sometimes they don't. And we must remember that winning ugly is still...winning. TOC companies may be winners, but most winners don't use TOC. (True, or false? Jack suggests, True.)

Consequently, when it comes to competition, we can't be sure that a great lot of companies should do anything in common; but instead we have to focus on why something works for the company that it works for.

In other words, there is a glaring difference between strategic management and competitive strategy, with the better competitors doing most of the winning, not foremost the better managed.

What executives must be responsible for is figuring out what strategy their company can win with; and what managers must do is figure out whether the company is doing what that appropriate competitive strategy calls for.

As both Bruce and Jack assert, critical thinking ought to be a key tool, and here we assert that it is a key tool in both competition and management. But what overrides both circumstances is the possibility that the thinking will be done about the wrong thing.

Eschewing mythologies and the emperor's new clothes, Jack quotes Bruce's counsel against that problem : "rigorous and unblinking analysis of reality as it is, not as you want it to be..." What we must take this to mean is not that some approach is inherently more competitively clairvoyant than another, but instead that executives and managers must not run the company based on a mythology (of an approach) that does not fit the company. To puncture the mythology, you have to be able to cut through the marketing and politics that surround it within the company.

New punchlines: as the top person in charge, you can't know what strategy will be your most successful against the competition before you know your organization; and when you reach an understanding of what your organization can do, you then have to either select a strategy that fits the organization, or you have to change your organization to fit a different strategy. What's tough is that you have to do this while the game is already underway.

Posted by Malcolm Ryder at 1:53 PM

March 23, 2008

Suddenly, It All Made Sense

Finally, that track that everything went off of, and where to get back on.
For the hi-res view, click here and go full screen or print.

Posted by Malcolm Ryder at 6:42 PM | Comments (0) | TrackBack

I'ma Get Open Source on Yo' Ass

Yahoo joins Google and builds a nonprofit to run OpenSocial so that the OpenSocial developers can have a freezone for exchanging "intellectual property assets" without a moola market. As the Associated Press stated on the Yahoo website, "the idea behind the Google-initiated OpenSocial platform is to create a common coding standard for the ['social tools'] applications so they work on hundreds of Web sites."

We decided to look up the meaning of "tools" to be confident of the richness in the breaking story. Using Yahoo's search engine, we kept coming up with entries like this exemplary one from Dictionary.com:

tool - noun: a person manipulated by another for the latter's own ends

No avoiding the thought that Yahoo would now be Google's tool; so we used Google's "Web Definition" search functon to see what happened. The search on "define tool" ripped in under two seconds to the most appropriate place we can think of, the socially open Urban Dictionary:

1. tool 4455 votes up, 517 votes down

One who lacks the mental capacity to know he is being used. A fool. A cretin. Characterized by low intelligence and/or self-steem.

3. tool 1708 votes up, 443 votes down

someone who is a complete idiot/ one who is used by other people, and usually dosen't even realize it/ someone who can't think for themselves/ an asshat.

People who wear huge logos on their shirts are tools.

This would be a good moment to mention that Google has given up its rights to the OpenSocial branding, as part of the deal. No fools in Gtown central.

Clearly you can be a tool without being a social tool; so how wack it is that three of the most powerful companies in the free world are aggregating the tools. This might make them social, but a better question is this: does going social on a social network make you a tool if you weren't one already?

The sports pages of the conventional business press can be expected to focus on that, backhandedly, in their ongoing coverage of the market strategy smackdown between the G force and MondoSoft. But of course, that's hardly the key story.

The key story will be the one that inevitably will break on the non-profit NPR when someone looking for a job at Google tries to sue Google for using their social site residue as an excuse to not hire them -- residue found on hundreds of websites thanks to the easy proliferation path of OpenSocial.

"So, Mr. Lovitz; how do you explain your involvement in this August 2007... occasion... at the Omega Hip VIP room?"

"Uhh... Acting!"

Posted by Malcolm Ryder at 6:42 PM

March 21, 2008

Who Knows how to Manage Knowledge Management?

The initial impetus for practicing knowledge management as a discipline is to Effect a different outcome from what has already otherwise been obtained.

Best practices of knowledge management are meant to Affect the approaches to gaining the target outcome.

Question behind the outcome: "Why should knowledge be managed?"

Answer: knowledge has proved to be a resource that is critical to efficiently determining a two-part condition:
- when solution options exist and
- which options are optimal.
In the past, opportunity and quality have both suffered because effective knowledge was not available to be incorporated in a timely way during investigations and decision-making.

The goal of managing knowledge is to achieve timely discovery and acquisition of quality-checked knowledge for use during "live" investigation and decisioning.

It is important to recognize that investigation and decisioning are "constants" across a wide range of distinctive eforts:
- development (design, build)
- analysis (assess, interpret)
- auditing (measure, validate)

The management discipline provides people (roles), processes and tools to facilitate the following treatments of knowledge:
1 - discovery/generation
2 - QA
3 - acquisition/distribution
4 - lifecycle control (content versioning and retirement)

Practices within the discipline are "best" when they accomplish the following two things:
- they manage to align each of the four treatments individually with the operational environment that is meant to be sustained by executive influence (or group culture),
- but the practices align them in a way that allows each treatment to align with the other treatments (!) -- especially so that you get a chain linkage from 1 to 4 that allows 4 to also loop back as a "supplier" to 1.

With this overview, it is possible to understand where most of the phenomena that are now associated with KM should be able to fit in, and to simultaneously recognize that the various phenomena can be creatively "fitted in" to exploit special circumstances such as existing resources, emergencies, enthusiasm, or general curiosity and inventiveness. Those circumstances should be governed by a higher-level strategy. The typical phenomena include collaboration, multimedia (rich content), social networks, semantic search, library science, and games.

Posted by Malcolm Ryder at 9:51 AM

Who Knows how to Manage Knowledge Management?

The initial impetus for practicing knowledge management as a discipline is to Effect a different outcome from what has already otherwise been obtained.

Best practices of knowledge management are meant to Affect the approaches to gaining the target outcome.

Question behind the outcome: "Why should knowledge be managed?"

The goal of managing knowledge is to achieve timely discovery and acquisition of quality-checked knowledge for use during "live" investigation and decisioning.

Posted by Malcolm Ryder at 9:51 AM

March 18, 2008

The End of Irrational Execution

Faisal Hoque, Chairman of BTM, appeared in Baseline Magazine with a brief discussion on the three elements needed for "Transformation: Inertia to Agility" (BTM innovates new business models and enhances financial performance by converging business and technology.)

As usual, Faisal offers a wonderful summation of what levers to throw and why to throw them. Here, he observes innovation, efficiency and abandonment.

Sound familiar? Perhaps the most interesting aspect of his article's proof point -- Amazon -- is that it shows how far we have recovered from the dot com era assumptions, particularly when it comes to understanding that in a business we actually have to get paid for making people happy. What Hoque really pins down, though, like a refreshed road marker, is that the "making" part is not the business, but is instead the competency.

Amongst the problems in the mix, the inertia that Faisal details is arguably the description of how business frustrates competency (“We have to meet this quarter’s numbers or we’re toast.” ), while on the other side of the coin Hoque highlights how competency, through enterprise architecture, can drive a business ("the first step is to get a clear picture of the entire enterprise...").

Meanwhile, that flashback we easily have on older preached wisdom like "Fail Faster!" and "Destroy Creatively!" still seems to apply, but the difference is that we have actual history on that now. The history begs the question, "why are only the exceptions successful?" Hoque's answer looks to be a turnaround on the old saying "If you don't know where you're going, it doesn't matter how you get there..." The turnaround is, "If you don't know how to get there, it doesn't matter where you're going." But we can't make the mistake of joining the casual crowd exuberance for "execution": the point is that enterprise architecture is the competency enabler that then delivers execution for the business.

Posted by Malcolm Ryder at 9:01 AM | Comments (0) | TrackBack

March 16, 2008

Innovation by CIOs: the Same Old Same Old

Proposed: Business is built on IT, and CIOs know more about what IT could offer to innovation, so they should drive the innovation.

On the one hand, it looks good on paper. It's not new, but it seems to make sense.

On the other hand... wait, where IS the other hand?

The CIO Insight Discussion hosted some talk from industry analysts Forrester and kicked off followup commentary.

Reader Jon McAdams had left an earlier comment there that saved the rest of us some writing... So I'll segue from some of what he was pointing at.

CIO's who don't feel very "chiefly" should rightfully question whether their compensation is in line with how they'll actually be measured. But in the world of performance measurement, speaking truth to power is personally relatively expensive. How do you afford it? There's the dilemma.

Proposed: Any CIO who wants to use the word "Innovation" more than once a business quarter should be prepared to provide the definition of what innovation is, by distinguishing its flavors from each other: the planned, the authorized, and the actual. If the CIO is a decision maker in all three dimensions, then there is, fortunately, no dilemma; there's just execution.

But in execution, there are two tracks to follow: priority, and production. If the CIO is not being paid to decide and validate their alignment with each other, then again there is, unfortunately, no dilemma. There's just the matter of whether other people around the CIO want to know what's real or not before they take the actions they actually take.

Let's face it, giving action orders to the "head of IT" doesn't require having a CIO or being realistic. Meanwhile, getting orders can be done with one hand tied behind your back. But being held responsible for the consequences of someone else's higher up decisions is clearly not a prescription for being the chief.

Posted by Malcolm Ryder at 10:59 AM | Comments (0) | TrackBack

September 22, 2007

Being Steve Jobs

Oh well.
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(Image credit: not mine. Vidcap from the copyrighted commercial DVD.
On that note, how long before Jobs has it streaming to an iPod?
Consider this image use free pubilicity.)

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September 21, 2007

CIO 2.0 part One

Faisal Hoque, father of the Business Technology Management Institute, talks about the issue of solving the right problem instead of the wrong one in the CIO Insight article "Convergence, Yes; Alignment, No." As CIO Insight put it, Hoque noted that "rather than a goal, alignment is a stage on a journey to a more complete merging of IT and business that he calls convergence." With convergence, Hoque explains, "The business model is so intertwined with IT that there's no separate orientation."

What are the key features of this view for the top IT manager, for the CIO of the future? The same as for the CIO of now.

The first is the working definition of IT, which must position IT as business technology. This means technology of the type of business, not technology owned by the corporation of business. Here is a brief primer on business technology:

The second key feature is the working definition of "management". In the abstract, this has to mean "drive and authorize all key decisions about the utility value of the phenomenon at hand throughout its lifecycle." Naturally, the scope of this responsibility may involve or even necessitate collaboration and power sharing, and this means that a model of value-generation must exist to which all can subscribe. If this is to occur with IT, the concept of "IT" must be "operationalized":

From there, the third key feature, the point of it all, is to apply the operational potential to the business needs: this is how the IT model becomes the "dynamic" of the business model.

dynamic

1817, as a term in philosophy; 1827 in the sense "force producing motion," from Fr. dynamique (1762), from Ger. dynamisch, introduced by Leibnitz 1691 from Gk. dynamikos "powerful," from dynamis "power," from dynasthai "be able to have power," of unknown origin. The fig. sense of "active, potent, energetic" is from 1856. Dynamics as a branch of physics was in use from 1788.

Given the numerous points at which IT could be mapped to needs, it isn't hard to appreciate that the current state of a business operation may have to go through significant re-modeling (transformation) to base the business model itself on the influences of IT. Speaking of that, the evolution of IT's realization as a business enabler actually is a goal, not just a stage. But the sneaky punchline to this is that the business may not need to be its own "IT-enablement" provider. Fusing the IT model and the business model (value management) is not the same problem to solve as the problem of establishing competency in the role of IT provider (performance management).

(This discussion continues in the follow-on article CIO 2.0 part Two.)

Image credits:
http://www.how-to-draw-and-paint.com/images/BasicHorse3.jpg
http://www.chss.montclair.edu/~pererat/7751.jpg
http://www.tsc-global.com/index1.html

Posted by Malcolm Ryder at 5:29 AM | Comments (0) | TrackBack

September 19, 2007

Make IT a Business Strategy

In the CIO Magazine article Let the Business Drive IT Strategy, the visibility of many views on strategy helps to paint the map so that people concerned with IT strategy management can see where their relative starting points are, not just their goals.

But in that map, how did we wind up in so many different starting places that we decided to call by the same name?

Here is a 50,000 foot high view to consider. What does "IT Strategy" mean? Strategy for what? The candidates are found in two dimensions.

First - what is used:
- Services
- Resources
- Information

Second - how it is organized for use:
- Provision
- Architecture
- Property (assets)

Make a 3x3 matrix of the above, identify what needs to happen in each cell and who needs to care (owner, operator, consumer), and then on the business side at least everyone can see what they are trying to talk about.

With that view, it then becomes meaningful to talk about the business's ideas of performance (goals), value (impacts), and risk (policy and culture) -- with the objective of assigning people to be responsible for them and then investing to make those people successful.

This isn't about "succeeding with a strategy"... it is about actually managing with a strategy.

Posted by Malcolm Ryder at 8:44 AM | Comments (0) | TrackBack

September 3, 2007

Performance Management meets Business Intelligence

If we assume that management prominently features Planning at the front end of the cycle of "management performance" (i.e., exercizing good competency in the discipline of "management")...

...and if we assume that planning uses intelligence in the form of research that provides indicators of the potential for future success and risk...

... then to establish that business intelligence (BI) is part of performance management (PM), it is unnecessary to go any further than the concept of forecasting. The important view of this involvement is that neither effort (BI nor PM) wholly includes or excludes the other; rather, they logically intersect, co-operatively.

BI manages the perception of the operational environment. PM manages investment in the operational dynamics.

Perhaps there will be comments from the readers on the idea that strategy manages the relationship of BI and PM for a target group of stakeholders...

Posted by Malcolm Ryder at 5:35 PM | Comments (0) | TrackBack

July 20, 2007

Strategy versus Execution

Senior managers are mainly charged with making politically correct decisions based on imperfect information. Subsequently, organizational success ultimately comes from navigation through calculated risks more than any other skill...

Discuss amongst yourselves.

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(Note: images found via Google search and at Shutterstock... and are not my original artwork.)

Posted by Malcolm Ryder at 8:48 AM | Comments (0) | TrackBack

March 24, 2007

Big Brass versus Crystal

Some balls are easier to juggle than others. But is that stance any way to run a company?

Something we certainly think we'll have to read is Michael Raynor's book The Strategy Paradox. Why? Because, as Deloitte puts it in their website's introduction to the book, "Management orthodoxy demands that strategies be built on commitments, which leaves no alternative to basing today’s decisions on assumptions about an unknowable future." This observation quickly drives down to the more important point they cite from Raynor: "The board should not evaluate the chief executive officer (CEO) based on the company’s performance but instead on the firm’s strategic risk profile..."

Since a review of the book is not where these paragraphs are going (yet), please visit Deloitte or even Raynor himself. What the heck: skip all that and read the book.

Before I read it, I'll turn my cards face up: if Raynor's book winds up telling me something other than that enterprise architecture, theory of constraints, and real options analysis is what's needed (and we assume it should), then I'll probably talk about it again. Maybe here, like, you know, in the next paragraph that could follow this one. Why not. While we're at it, let's go dust off our books about Royal Dutch Shell, do 'em again, and come back in a while.

For those of you with not that much time on your hands, a suitable companion piece is still available from Strategy+Business thanks to our buddies at Booz Allen, whose website offered this bit last year (as announced through emails to the faithful). I'm going to assume that advertising this for them will leave me in friendly territory vis-a-vis their copyright on what they sent, shown here for your convenience:

Sharpening Your Business Acumen
by Ram Charan

Dallas, March 30, 2006 -- The ability to see the big picture, anticipate external trends, and adapt accordingly requires plenty of practice, but can create unique moneymaking opportunities. It requires executives to transcend old rules of thumb and take strategic risks that don't follow precedent; to envision the effects of change before change happens. Here's a six-step thinking process to help anticipate external influences in the marketplace and craft smart strategies accordingly.To read the full article:

http://www.strategy-business.com/enewsarticle/enews033006

Posted by Malcolm Ryder at 4:34 PM | Comments (0) | TrackBack

The Rite(s) of Way

Today's coffee talk topic: performance improvement is neither performed nor improved. Talk amongst yourselves.

If you've been reading stuff around here before, you know that we always separate performance, competency and capability the same way we separate effects, causes and prerequisites. We even generally eschew pondering the catness of dogs and the appleness of oranges. But that doesn't mean we blow off the criss-crossings of ideas. This piece is about the intersection of Susan Conway in Optimize Magazine (January 2007, p. 50), and our everpresent mates at McKinsey.

Conway, driving north-south, describes her trip: "In my research over the past several years, I've found that measuring specific business challenges is possible using a productivity-impact framework (PIF) to understand what IT solutions are needed to increase productivity... PIF is a Lean Six Sigma (LSS)-compliant process that supports the correlation of ... variables ... to measure the impact of information and technology on an enterprise's productivity... Measuring, mapping, and understanding the right combination of technology and business processes, practices, and procedures let an organization achieve productivity gains...both capability and the efficiency or speed of delivery ... of products and services to customers."

McKinsey, driving East-West, routinely promotes the need to understand what kind of "productivity" would be most relevant by distinguishing and targeting the three essential strategic business needs: "Stay in the Race", "Win the Race", and "Change the Rules"... Their thought: when you come to the three-pronged fork in the road, chances are you need to pick one of the prongs before proceeding.

Conway's path is about using tools to speed up work that can also be procedurally optimized. We can call that "how to work" or "Do the Work Right". McKinsey's concern, on the other hand, is about heading in the right direction in the first place -- or let's call it "Do the Right Work".

This still allows us to see how they can -- and arguably should -- complement each other. There are lots of intersections. In drawing that up (below), a larger frame of reference emerges that starts to "organize" the ongoing 3-letter-hell blitz of "solutions" crowding our many fields of enterprise management.

We like the idea that Conway's three terms can represent what the enterprise ought to be worried about getting good at. Still, with that frame of reference, I took a second pass. In the second pass I stretched but not shifted what appears to be Conway's focus on IT per se. Why? Because: as tools, IT gets (from Conway) a specific kind of attention as an "enabler" bottom layer or element in a "productivity model" (north-south axis); but in effect, there are no managerial solutions listed in the framework here that are really practiceable without IT. As a result, we should revisit this "productivity" issue in Conway's north-south axis. What is shown below is a better version of the frame using some alternative terms. The new frame's north-south terms (or second dimension) -- information, communications/workflow, and governance/practices -- describe and stack the supporting roles of those solutions shown, in a model of "strategic" productivity. That is, the bottom row supports the middle row, which supports the top row. Meanwhile, this new frame assumes that all three of Conway's PIF terms are really a third dimension -- the PIF pertains to tactical productivity within each (and every) "solution" shown in the frame.

Corrected frame:

Glossary of solutions:
ITSM - IT Service Management
BSM - Business Service Management
PLM - Product Lifecycle Management

SOA - Service Oriented Architecture
BPM - Business Process Management
OPM - Operational Performance Management

KM / BI - Knowledge Management, and Business Intelligence
SCM - Supply Chain Management
CRM - Customer Relationship Management

Posted by Malcolm Ryder at 7:10 AM | Comments (0) | TrackBack

February 16, 2007

Mind Canary

For decades, as a precaution, miners have been reeling canary birds down into their mines to warn them of potential disaster -- as the canary is particularly sensitive to toxic gases such as carbon monoxide which is colorless, odorless and tasteless. If the canary dies, then the mine is dangerous.
A mind canary is very similar, with the word "mind" as a play off of the word "mine." If the "idea miner" sends an idea canary into the "mind" and it fails to return, then the mind may be lethal!

Thanks to marketing pro Alan Brooks at Mindcanary.com for memorializing this bit of Archestra legacy. He's adapted it a bit (as you'll see in the wording on his homepage) -- but to good purpose: he's guiding folks to safe mines. Hi Alan!

What do you do with a lethal mind? See "change management" and/or "knowledge management" -- at an Archestra location near you...

Posted by Malcolm Ryder at 6:28 AM | Comments (0) | TrackBack

October 18, 2006

A Beautiful Mind

Decision-making under uncertainty is the usual line item in the list of key management challenges, but the flip side is no less worth studying too. Our colleague Bruce MacEwen at Adam Smith, Esq. composed an excellent survey of the question, "How Do You Decide When To Decide?"

My immediate observation is a flashback on the old saying, "a work of art is never finished, rather only stopped..." This points directly at an underlying work dynamic of continuous consideration and reconstruction, in which potential components of "meaning" are arriving, examined, and accepted for their relevance to realizing an overall design. In art, the "stopping" question is, has enough of the design been realized to meet the purpose of the design?

In management, the two biggest fears about decisions are typically that they will be either counterproductive or inconsequential. Cutting right to the chase, being counterproductive devalues the investment of assets and resources, and being inconsequential devalues the credibility of the decision maker. This makes the manager's only "acceptable" output one in which there is a related effect that desirably differentiates the future conditions from the past. Here, the "design" at stake is this set of future conditions. But too often observers mistake the wrong thing as the design: decision-makers and their observers focus on some measurable "state" instead of on the new conditions that allow their desired state to occur. As a result, they too easily fail to determine whether the difference made by the decision is the "right" difference until they see the desired result (if they ever do). In looking for the ultimate desired after-effect of the decision, they fail to actually grasp the value of the decision itself. No wonder decisions remain mysterious to many observers.

What must instead be understood is that decisions don't create the target state; instead, decisions enable the conditions that allow or create the target state.

To be fair, a proven business approach to establishing this perspective is to require "justifications" as part of the decision-making process. The justifications call out the terms by which the desired ultimate outcome is reasonable to expect from the circumstances that will prevail if the proposed decision is made. This degree of foresight is wonderful if there is the time to develop it, and MacEwen's article points out the value of prior experience and rehearsal as a critical path to the competency for rapid envisioning.

That's a lesson every good football quarterback or basketball point guard has already learned -- and their practice is a great one to consider here. When using a pass to improve field position, what they are doing in their on-the-field work is envisioning multiple possible future states, setting certain events in motion towards those states, and in the heat of the subsequent flow of moments they examine incoming "data" and make reactive adjustments to raise the probability of the "still most feasible" desireable state to its maximum. The final pass, also presumably caught, locks in the conditions for that state.

How do they get that competency to an effective level? By having to do it again and again. But the bigger point is this: what causes them to decide is a moment at which they recognize a high correspondence of probable conditions to the prescribed conditions they expect will be necessary to their goal. Put simply, they compare "reality" to their design.

At this point, another major factor kicks in -- the issue of whether the correspondence seen is "as good as it will get"... Here, I'm always reminded of the the saying "perfect is the enemy of good enough" and it points to another common but correctable mistake. The mistake here is in failing to evaluate the design independently of evaluating the means of execution. To dramatize the fault in this, consider that perfect execution of a bad design is probably pointless. The exception to that is those occasions in which perfect execution is necessary for actually determining in the first place whether the design is even valid (i.e., "good") for its own purpose. A normal management scenario, however, recognizes the difference between "testing" and "live production", even if it sometimes has to be producing "live" but experimentally.

Even with that exception included, the most important point is that decisions are made in two different dimensions: one in which a design is accepted, and another in which execution of the design occurs. Some decisions may improve execution, but others may actually improve (and/or replace) the design. If execution is already good enough to realize a great design, then execution really is good enough -- and the decision to have that level of execution is probably a pretty good one. The real challenge here is to have great designs in the first place.

In science, Thomas Kuhn explained the phenomenon of "The Structure of Scientific Revolutions", an ongoing story of how a current theory holds sway until evidence (and politics!) forces it to change or be supplanted, sometimes over a span of decades. In another story, Malcolm Gladwell talks about "The Tipping Point" as an event in which the speed of applying evidence against theory is almost literally electric and instantaneously completed, thanks to the availability of previous experience stored in the mind.These interesting stories about decision-making are not intended to portray clairvoyance, yet they both directly describe the importance of having foresight in the form of a design. The practical lesson: commit to a design, and decisions will follow.

Posted by Malcolm Ryder at 9:13 AM | Comments (0) | TrackBack

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

August 20, 2006

How To Manage Strategy

This model for managing strategy abstracts the phases of a strategy's lifecycle and identifies the connections between the phases which bring about implementation and revision.

This management model offers two major areas of attention -- "Delivery" and "Support", borrowing the somewhat unusual British terminology for (respectively) production and maintenance that many people first encountered in the IT Infrastructure Library (ITIL). No other assumptions about the model's resemblance to ITIL should be drawn from this borrowing, as there is no other intentional resemblance.

Meanwhile, some observers may also get a sense of the Deming Cycle ("Plan, Do, Check, Act") from the illustration. That is not a particularly intentional resemblance either, but instead it just reflects that lifecycles are normally not difficult to lay out in a context of ongoing responsibility for quality or improvement.

The more important general observation is that a strategy is identified as a conceptual entity, so it is the life of the concept that is being managed. The distinction between delivery and support is to emphasize that one cluster of attention and activity is busy introducing and "staging" strategies while another cluster is busy aligning them to the realities of execution. Why is the distinction important?

The main reason is that we're so strongly tempted to see the lifecycle as a "pipeline" or "queue" -- and that might be a bad perspective. For example, one question that arises in that perspective is: how many different strategies are put into the "queue" by delivery, versus the capacity and rate of "support" to process them? If we imagine a "bottleneck" in processing, we imagine that we can explain failures of strategy that way. But this is not how strategies fail.

Strategies fail the same way a house falls apart. A cheap roof in a rainy season; a weak foundation on soft ground, and so forth. The house stands when all of its supports are good enough. They all need to be good enough at the same time. But you still don't put the roof on before the floor and the walls are there or at least framed.

The breakthrough observation is that while a new strategy may be adopted one phase after another, it doesn't leave behind the earlier phases as it progresses. Instead, it finally "lives" in all phases simultaneously, and all of its phases must be continually attended, if necessary rebuilt and/or reconnected, in the face of constant change.

Strategies fail due to incompatibilites that go unresolved -- at two levels of reckoning. At a high level akin to design, there is the issue of outright misfits, the square pegs against the round holes, things that just don't work together. At the low levels of operational detail, the problem is not like congestion in the pipe, but rather more like an erosion of structural integrity leading to fragility and a breakdown.

To make this issue more explicit, first consider the high level -- two points in the cycle that are major "reality checks" on the strategy.
- One is the decision on whether the strategy is important enough to develop in competition with other concerns. This is the matter of "optional" versus "must have", or as represented in the model, Portfolio vs. Requirement. Here, funders consider the investment versus the significance.
- The other most critical point is where the agreed concept has to be formally expressed (not just intended) as operations. In the model this is represented as Plan vs. Initiative. Here, people are concluding whether their effort has discernable impact of a valuable kind.

Why are these two points the most critical? Because a lot of the cycle is "thinking about" the strategy, and a lot of the cycle is "already using" the strategy -- but these two points represent where the strategy is accepted or rejected by the organization that must "realize" the strategy.

Also, they explain where a strategy not born of the organization can enter the organization, or where one born of the organization might have to exit. For example:
- Perhaps the strategy is actually delivered by a third party (including cases where a consultant or a new organizational leader brings it in, or where the example of some other organization's strategy is adopted).
- Perhaps the supporting organization exhibits a competency that indicates new options and probabilities, stimulating the conception and/or development of a new strategy. However, incompetency can signal the demise or retirement of an existing strategy.

Those two reality checks are prominent, but they are not effective on their own. The other points between lifecycle phases are also part of the decisiveness of the strategy's management in practice. They are required to move from one phase to another. The decisiveness comes from resolving the pairs, such as scenarios versus actors, or agreements versus policy.

Why do we say "versus" ? This refers to an aspect visible in an expanded view of the model (click here, then save or print landscape). Each of the pairs opposes two kinds of management resources -- an "artifact" resource against an "environment" resource.
- Artifacts (like scenarios and agreements) document the description of the concept in its current phase. These would be the items such as scenarios, agreements, initiatives, etc. (in blue). They communicate the strategy.
- Environments (like actors and policy) constrain the activity that the artifact indicates is necessary at each phase. These constraints in essence become the key ingredients of the strategy's workflow.

Realization of the strategy occurs mainly through synchronizing the communication of the strategy and the conduct of its activity appropriate to the communications. The synchronized pairs then become the "inputs" into their respective following lifecycle phases.

The expanded view of the model also reaches down to the low level of resolution detail. It points out that at each lifecycle phase, the processing of the synchronized input should be designed, and the model identifies what the phase design is like. For example, a key design parameter is "Fit to Organization"... at various phases shown in the model, "best practice" in this design aspect has the following features:
- Research is cross-disciplinary
- Modeling is iterative
- Publishing is cataloged
- Etc.

And as activities, each phase has a design with a "Functional Goal"; for example:
- Research is automated
- Modeling is synthetic (not organic)
- Publishing is networked
- Etc.

In terms of development, the model also maps to the conventional concerns of vision, mission and implementation:
- Vision is addressed through the span of the cycle from Adjusting (including its evaluation and measures inputs) through Research (including its scenarios and actors outputs).
- Mission is addressed likewise, from inputs to Modeling, through outputs from Publishing.
- Implementation sits between inputs to Tracking and outputs from Examining.

Given that arrangement, the most notable aspect is that Vision must stretch across strategy Delivery and strategy Support -- and while that span does not guarantee success, it's hard to think of a successful strategy that didn't span that way.

All that said, the model is a work in progress. As with most Archestra models, this one is intended to diagnostically expose points at which current efforts may have had a critical failure, or conversely where the development of efforts should prioritize attention.

For elaboration on the model's other design parameters of strategy management, or to provide your commentary on the model, contact me by email. Other commentary on the progress of process management is posted in the July 04, 2006 Archestra entry on "Managing the process of internal Business Change".

Posted by Malcolm Ryder at 9:05 AM | Comments (0) | TrackBack

June 26, 2006

Recognizing Progress: Effects versus Results

We know the old saying, "don't confuse activity with achievement." It warns us that making an effort doesn't necessarily mean we're making progress.

But one of the problems in recognizing progress is the need to know whether the conditions being generated by activity are beneficial or not.

To do that, there first must be an awareness that benefits may be unintentional as well as intentional. And meanwhile, we might get to the benefits in a planned or unplanned way.

This quickly catalogs four kinds of outcomes:
- intentional benefits from planned activity
- intentional benefits from unplanned activity
- unintentional benefits from planned activity
- unintentional benefits from unplanned activity

But along with activity and benefits, there's a third dimension too.

In management, we have to especially notice that planned or assigned activity is a mode of change, and that the circumstances (think "environment" or "context") of the activity can also change -- independently of the activity and especially during the activity.

With two sets of changes occurring -- activity and context -- the impact of each one on the other will shape the emergent conditions that are examined when we look for "progress".

When it comes to an assessment, history has shown that some combinations of conditions are far more associated with ultimate success than are others. This is why the "profile" of the conditions is so important to detect, not just a measure of an action or event.

This is a way of saying that success is relative to circumstances, so describing the circumstances adequately is more important than anything else in understanding whether an effort is being "effective" as opposed to its being ideally conclusive. For example, in a long race, the "patient tortoise" is more successful than the "impatient hare". The progress profile includes the awareness that the race is a long one... not just that the runner is fast or slow.

Here's another similar example. Imagine a motorized walkway running from point A to point B. If we decide that "progress" is to get from one point to the other, then the following problem occurs: walking on the walkway against the direction of its flow might "net out" to going nowhere. That seems to represent no progress.

But alternatively, if one must try to get to the opposite point even if walking against the flow, then going nowhere is better than going backwards -- so in making the effort, avoiding a likely loss of ground is a benefit to the cause and must be seen as making progress.

In the latter case, the benefit is clearly an "effect" -- meaning that it is an outcome contributing to the overall desired "result" although we don't yet have that final result. And we can see that the idea of "effectiveness" is most strongly associated with the way (and the fact) that we have predefined the requirement, not the goal.

Meanwhile, the effects of an effort are not always beneficial. We'll be getting effects from any effort, but they may not all make positive contributions to the desired result, and furthermore they may even be counter-productive.

The above perspective on things yields a description of the approach we need for understanding and communicating progress:
- We identify effects;
- We rate the impact of the effect(s); and...
- We measure the result

Thus there are three kinds of achievement to observe:
- producing the right kind of effects;
- gaining more beneficial impact from the effects; and...
- getting closer to the desired final state

Superficially, this mimics the structure of organizational responsibilities:
- operations (for the right effects)
- management (for the beneficial impacts)
- executive (for the target state)

But more importantly, there should be a strategy that guides the prioritization of efforts by telling what kind of progress is most critical, giving the most bang for the buck, at different times and places. Changing operational competencies is radically different from changing targets. Changing the wrong thing can be at minimum wasteful and at most catastrophic.

Postscript:
Extensive practical analysis of this issue -- including further distinctions between "activity", "achievement", and "progress" -- is available from Eliyahu Goldratt, who developed the Theory of Constraints.

Posted by Malcolm Ryder at 8:02 AM | Comments (0) | TrackBack

April 9, 2006

Uncertainty versus Execution

Understanding agility as the solution to executing versus uncertainty.

Everyone is accustomed to the idea that change is now the rule rather than the exception.

But despite this level of anticipation, how will your operations be affected by events and trends that represent sudden or intense change? Are management capabilities up to the task?

Our operational concerns are usually cast in the perspective of Success versus Failure, but measurement in those terms is often accompanied by a significant confusion. Operations typically require several different planes of activity to interact and build up to an ultimate outcome. The factors critical to success on one plane have no necessary simlarity to factors on another plane. (For example, running fast requires energy on hand. But what produces the availability of energy on hand is entirely different from what produces the smooth mechanics of speed.) The problematic confusion of measurement is that distinctions indicating "success" on one level of activity are mistakenly expected to "cause" impacts or "represent" outcomes at some other different level -- and thus may be used as measurements of the other level. . This mismatch makes the problem of decision-making more difficult and/or less effective, as it encourages trying to solve problems with the wrong tools (e.g., inappropriate metrics).

While "success" may go by many names, solutions are generally recognized in terms of "impacts" -- and it is the impact that finally gets measured. To avoid the confusion of looking for impacts in the wrong places, we need an overview of how different basic types of impact generally relate to each other. With that visibility, it is safe to go directly to a consideration of (and plan for) what is fundamental in operational modifications that successfully address change.

Because change may be neither predictable nor temporary or infrequent, the idea of "operational fundamentals" increasingly refers to what is necessary for becoming "agile". Put simply, the challenge is to address how to deal with variety without sacrificing coordination.

As seen in the diagram below, this agility involves two basic kinds of variety -- changes and exceptions -- as they cross reference two challenges to coordination -- complexity and risk. Organizations bring different capabilities to the problem of developing agility; as pictured here, these differing capabilities respectively support agility in limited but interrelated ways that should be set within reasonable expectations.

This view illustrates the possibility (if not necessity!) of maturing capabilities from an relatively static objective of pre-emptive or reactive "control" (lower left) to a very dynamic objective of predictive or real-time "mastery" (upper right). In this maturation:
- controllers become solvers by gaining the ability to accomodate complexity, and likewise they become experts who are able to accomodate exceptions
- change and risk separate solvers and experts from masters;

Even more important, the same key elements of coordination and variety frame the management impacts (i.e., types of "success") that should be expected. As suggested in the picture, managing to more than one type of impact is necessary for developing the ultimate ability to deal with how external change challenges operational success.

The key is to understand that management achievement in one area must translate across the coordination and variety elements to other areas -- finally allowing management of externally-driven demand. Failures of translation mean that agility is not achieved.

To assure successful translations and mature to agility, management must turn its attention to being able to systematically deal with those factors -- typically by creating a policy that allows and fosters agility. For example, the table below clarifies where the challenge of external change hits management directly -- and thereby points out where policy should provide directions, permissions and limits necessary to the agility of operations.

With that visibilty of what is specifically being challenged by events, we can then slot customary target management outcomes like efficiency, effectiveness and so forth into the main framework of coordination vs. variety, and see where they come from.

For example,
- complexity in configurations separates or links efficiency and effectiveness; but to get to effectiveness from efficiency, the key to solving the problem is in the "logic (design) of the configurations" that efficiency is dedicated to.
- Likewise, what separates or links effectiveness and demand is change in preferences, but now we see that "priority of preference" is the solution key.

In fact, this illustration argues that if policy can manage the links between the different types of target impact (and thus align variety and coordination), agility can be strategically developed. To make this more explicit, the illustration identifies that dimensions of strategy such as objectives (top row) and opportunity (right column) are rationaly related by these same linkages established between variety and coordination.

Finally, it gives management a way to address the issue of "best practices" versus "competency". Ordinarily, the two ideas are used synonymously OR competency is assumed to be an effect of best practices. However, we now see that they are complementary yet significantly different, when faced with the problem of operational balance against shifting external demand. Best-practice operations can be derailed by risk, while Competent operations can be derailed by change. As can be seen in the ilustration, management initiatives for "capability maturity" are likely only half the battle when it comes to strategy, because "opportunity tolerance" (i.e., picking your fights) will be likely just as decisive.

Posted by Malcolm Ryder at 12:21 PM | Comments (0) | TrackBack

April 2, 2006

Business-IT Alignment: Revisiting ActiveROI

By the time the Y2K threat got serious in the corporate mindset, IT innovation had already reached a point of viability where replacing old stuff had to be taken as a serious alternative to patching it.

But it wasn't just the technology that needed to be reconsidered. As it is almost automatically remarked in the business conversation about IT, related people and processes also were in the mix -- and here came the dot-com wave.

Among various other things that "e-business" did to reposition IT in the enterprise, it gave an old teaching instrument a new meaning.

You may remember the elementray school spelling aid "I before E except after C"... For it's new web-era use, I translated it to mean "infrastructure before engagement, except after customer." The problem new to the day was that the web was now allowing customers unprecedented aggressiveness in dis-intermediating the corporate mechanics that ordinarily actually provided services. Customers emerged who wanted "do it yourself" relationships, while others emerged who simply had no patience any more for companies that mired them in internal production technicalities.

Effectively, in both cases the customer's punchline was: "if your I.T. doesn't make me happy, change it or I'm gone."

The hugely superior economies of keeping existing customers versus gaining new ones made the most sense of my new translation. But the implications for IT organizations were not really so new. The point-of-view on IT's operational performance just shifted from I.T.'s "internal" customers (business units) to the company's "external" customers. Internal customers had already had this attitude for a while, and everybody knew it.

Still, despite external customers suddenly getting their hands directly on company infrastructure, it seemed brutally obvious that IT organizations should not be held responsible for managing external customers. (Otherwise, what were business units for?) So the message really needing to be drummed was that internal customers needed to be better empowered by IT.

By abstracting the basic management steps to that empowerment -- resources to operations to relationships -- the model I first proposed set a floor under a wide region of research, from which several key further items grew. Among those, a major one well-rehearsed by 2002 forecast the IT Organization agenda as in the article CIOs: Managing the business's IT Agency.

Then, what brought that agenda to the level of the full CxO group was the problem of linking IT performance to enterprise performance. This problem enjoyed a huge rise in importance due to the maturing acceptance of having enterprise applications automate essential operations cross-functionally, despite hair-raising complexity in integrations and change management. While I liked referring to the celebrity of the problem as "Enterprise Chance Management", it wasn't much of a joke since it was also becoming more obvious that business opportunity was relying more and more on IT-enabled responsiveness.

Given the huge level of investment recommended by Y2K, enterprise applications, and the internet, the business need to understand the value of its IT capacity hit a high point that called for a way to put the IT agenda into a model of being managed by the business. In reply, I created (and own) the ActiveROI model -- a construct signifying the generation of business value from IT resource optimization, achieved in a continuous and proactively matured discipline. Translating the model into practice methodology, the consulting firm Renovance, LLP went to market. Renovance's elaboration of methods for applying the ActiveROI model was indicated early on in the whitepaper, "ActiveROI: Achieving Business Processes and IT Infrastructure Alignment through Real-TIme Management". (As a consulting firm, Renovance developed and offered trademarked practice methodologies of my copyrighted model, in its lines of business.)

From a CIO's perspective, the ActiveROI model describes that the enterprise's engagement with the marketplace runs on an organizational platform created by architectural and portfolio management disciplines that can coordinate IT.

But overall, ActiveROI understands performance in terms of relationships and the services that maintain them, while it understands resources in terms of events and the investments that address them. The critical thing to note is that services and investments are the two most highly discretionary offerings of the executive management of the business -- effectively defining the identity of the business that will predispose its opportunity in the market. As explained by ActiveROI, this "drills down" to the IT agenda and its business alignment.

By way of ongoing explanations and by hosting comparisons and debate, Archestra will continue to elaborate the ActiveROI model and several of its already-in-progress successors or offshoots -- including Archestra Runtime by myself, and works that certain colleagues may finalize for presentation via Archestra in the future.

- Malcolm E. Ryder, April 2, 2006

Posted by Malcolm Ryder at 9:50 AM | Comments (0) | TrackBack

March 22, 2006

A New Way To Think About Requirements

All progress does not result from meeting requirements. Sometimes, luck prevails, and the conditions in which we were laboring simply change to our advantage without being influenced by us. But all requirements are considered meaningful because they indicate a path to progress. Although competing definitions of progress may exist, no one debates the purpose and virtue of setting requirements.

Defining requirements is difficult. The empirical contrast of results from carefully defined requirements versus ill-defined ones has demonstrated that, and also shown that the cost of failing existing expectations easily wipes out the apparent value of isolated progress. This setback happens when it is unclear where expectations are coming from, and/or when the activity develops new circumstances without certainty of being aligned with the expectations of record.

The frustration of unstated expectations or of ones that have changed or appeared without warning may be a legitimate feeling -- but that in no way exempts the failure from the oversight or purpose of management.

Although change management is successful as a remedy and is ready for use from the start, it comes late in the proceedings.

At the start, the more important and urgent instrument is a model that allows comprehensive discovery of expectations, in a way that allows them to be processed into requirements. Shown below are the four main categories of expectations, ordered to help reveal the multiple perspectives that result in requirements being adequately defined. The categories of expectations -- responsibility, organization, resources, and objectives -- are obviously reflected in most systems of accountability.

Yet it is typical that even knowing the accounting systems, confusion or obscurity develops between what gets done and what is expected.

This problem is most often referred to as a "gap" of some k