organisational design

Extraordinary but ordinary

  • Saturday, 27 November, 2010
  • By:

“Two-thirds of HR and IT organizations develop strategic plans that are not linked to the organization’s strategy”. Says the father of the Balanced Scorecard, Robert Kaplan.

“This is extraordinary.” He adds. Too right, but that’s the wrong word, it isn’t extra- ordinary, it is ordinary.

It is ordinary for IT to develop an architectural strategy based upon their understanding of “the business” rather than the strategic ambitions of the organization.

It is ordinary to see “a chronic disconnect in organizations between strategy formulation and strategy execution.”

It is ordinary to see fundamental disconnects between IT and “the business”.

Like the bank who were porting their branch banking applications from one technical stack to another without asking the business to define which were strategically important and which were no longer fit for purpose.  Or the FTSE 100 company whose IT organisation built a new web platform and interactive services, in the knowledge that “the business” were developing a complete refresh of their on-line strategy but kept that at arms length (“because the business can never make decisions and we need to fix the technical issues we’ve got” with the current stack.)

Robert Kaplan proposes the “office of strategy management” to address these issues.  It may sound like organisational overhead, but it is hard to argue with a function whose purpose is to “unlock unrealized value by making strategy execution a distinct and recognized competency in an organization”.

And fundamental to this, and what large organizations so often fail to do is “enabling others—operating units and functions—to do their jobs in a way that supports the organization’s strategy”.

Nothing and nobody is indispensable

  • Tuesday, 31 August, 2010
  • By:

The cemeteries are full of people who thought they were indispensable.

If you didn’t turn up to work tomorrow, if you never came back, what would happen? I mean, what would really happen?

The world wouldn’t stop.

Can you hand on heart say it would be the end of your organisation? So you may be the ‘key man dependency’, but is that your ego making you think that? (OK, so I once worked with an organisation who had one of those. Their system was written in some obscure language that only one person knew its inner workings. He spent his weekends base jumping. Our job was to migrate the data to a new system to alleviate this risk).

When was the last time you took a holiday? Been too frightened to because you fear everything will fall to peices when you’ve gone? Get over it. Take a vacation, Nothing will change whilst you are away. You’ll get back and nothing will have changed.

What is indispensable?

OK. Now think bigger. History is full of organisations who thought their products and processes were indispensable. Of the FT30, (the oldest index of share prices started in 1935) only one company (Tate & Lyle)is still there after seventy five years.

What do you think would really happen if your organisation ditched all that process and product baggage it held onto so closely? What would really happen? Are your current ways of working really indispensable?  How about your business model?  Maybe time to do some scenario planning to ask precisely those questions?

<Personal Interlude>  Eight months ago I was a lazy tub of lard. I could barely swim the length of a pool, my bicycle had two flat tyres and I’d be breathless and beaten after running 50m to catch the train. I looked for a goal, something that was outside my comfort zone, my frame of reference. I entered the London triathlon, sprint distance. Completing a triathlon became an unobtainable dream (you have to understand that I went to Loughhborogh University, home to the Jocks, [and a rather good Human Sciences department and Ergonomics course, hence my attendance there], I felt totally alienated from all the sporty types, and triathlon represented the pinnacle of pointless exercise and sport). And slowly started training for it. Running, I hated. My first swimming lesson I discovered the need to breath. Cycling, I discovered the ride to work scheme and bought myself a decent bike. I put myself on a change programme. A programme of gradual change. Baby steps. And a few weeks ago it all came together at the London Triathlon; the swimming, the cycling and the running. A multi-disciplinary effort, a radical change to my being. And I completed it. In a not overly embarrassing time; in fact I can in the top half. but better still, I ended it charged up with how much faster I could have gone, now that I know what it is like. I paced myself too slowly. I’m buzzing on triathlon. </Personal Interlude>

Organisations I see are like the tub of lard I was. Full of inertia, and reasons why they can’t change, why they can’t be triathletes.

Yeah, wouldn’t it be great to be an Apple… But we just don’t have a Steve Jobs.  Reasons why you can’t rather than inspiration, spirit and belief in why you can.

There is nothing in your organisation that is indispensable. There is no reason why you “can’t” other than your own myopia and inertia and inability to dream the future and train and practice to make it happen. All you need to do is get over the inertia and make it happen.

Tractors, nuclear powerplants and the bleeding edge

  • Wednesday, 14 July, 2010
  • By:

It is common for organisations to select a major technology leader (such as IBM or Oracle) and ride their product development cycle.  On client I worked for stated that they would:

“not follow a ‘best-of-breed’ approach, but rather select a major technology leader (IBM)… This means we explicitly seek and accept the “80% solution” rather than trying to optimise for each and every possible requirement. …Shortcomings will be made explicit in order that we can escalate with IBM, and influence their product strategy”.

Influence the IBM product strategy.  Good luck.  This one-size-fits all approach to technology maybe appealing on paper, and certainly has its benefits, you recruit a certain type of developer who has skills in that technology stack, if you are big enough your buying power may get a small voice in future releases that you will pay through the nose for.  But is it the best approach for the business?  A colleague, Stuart Hogg, takes three metaphors for enterprise IT.  The tractor, the nuclear power plant and the bleeding edge.

The tractor. This is the technology that keeps the lights on.  It is commodity software, it is the HR system, email, intranet etc.

Nuclear powerplant. This is the (generally bespoke) mission critical software that drives the business.

The Bleeding edge. This is the platform where you do cutting edge stuff, test and learn.  The ideas may one day be migrated to the nuclear powerplant.

All too many organisations get confused between these three models, loose sight of where they should be investing and plump for a one-size-fits-all technology to do all three.  Thus we see tractor technology trying to do the bleeding edge (Is it possible to innovate at speed with those Big Enterprise Solutions?)  By trying to combine utilitarian computing with strategic and speculative innovation, using the same skillsets, timeframes, processes and models, IT will never truly deliver the value for which it is capable.  Another ThoughtWorker, Ross Petit reiterates this point using a banking metaphor of utilitarian retail banking and speculative investment banking. He divides IT into “utility”, around 70 percent of IT investment (tractor and the nuclear powerplant); and “value add” the other (bleeding edge)30 percent.   Like other utilities such as electricity and water, ‘you don’t typically provide your own. You plug into a utility service that provides it for you’.  In IT that means SAAS and outsourcing and taking a strategic decision to differentiate between the different functions that IT performs.  He concludes:

Separating utility from value add will make IT a better performing part of the business. Because they’re comingled today, we project characteristics of “investment” into what are really utilities, and in the process we squandor capital. Conversely, and to ITs disadvantage, we project a great deal of “utility” into the things that are really investments, which impairs returns.

As a business function, IT has no definition on its own. It only has definition as part of a business, which means it needs to be run as a business. The risk tolerance, management, capabilities, retention risks, governance and business objectives of these two functions are vastly different. Indeed, the “business technologist” of value added IT needs a vastly different set of skills, capability, and aptitude than she or he generally has today. Clearly, they’re vastly different businesses, and should be directed accordingly.

Separating the utility from the value add allows us to reduce cost without jeopardizing accessibility to utility functions, and simultaneously build capability to maximize technology investments. Running them as entirely different business units, managed to a different set of hiring expectations, performance goals, incentive and reward systems, will equip each to better fulfill the objectives that maximize their business impact.

Pillars of a compelling experience

Pillars of a compelling experience

  • Monday, 7 December, 2009
  • By:

This is a model I often see in organisations when it comes to their web presence.  A product owner comes up with a commercial proposition, marketing work up the content, IT build the functionality and it is goes live.  With this model, no-one actually owns the customer experience.

Worse, this little temple model is repeated across different commercial propositions so you end up with something that is not very joined up.  I’ve blogged about this lack of joined up thinking before.

Now let’s construct a model where the roof of the temple is a compelling customer experience.

What are the ingredients of this new temple model?  It is still going to be founded upon commercial propositions, but they are going to be overlaid by a culture of test and learn.  That is a willingness and ability to experiment; to realise that what you have developed is never final and is always evolving.  It is about taking the learnings of experiments to inform and improve the experience, or to rapidly refine or kill propositions that just do not work.

Then we have the five pillars.  I describe these in a paper I wrote ages back (pdf here, google books here).

Unfortunately these pillars tend to sit within organisational silos; content and personality are ‘owned’ by  marketing, functionality by IT, and operational excellence (that’s all about fulfilling on the customer promise and beyond) is a mixture of IT and operations.  Usability is a ‘funny one’ in that might sit alone, sit in marketing or sit in IT.  But ultimately it is best placed to direct the horizonal filter of Quality Control.  Quality control is not an additional layer of bureaucracy, rather a cultural component that all the pillars feed into.  It is about ensuring consistency and meaningfulness of the experience.  It is about balancing the commercial needs of the product, with the marketing needs of the message and the delivery capability of IT.

Photo credit: K. Dafalias