Intelligent Enterprise

I saw videos on Youtube addressing “Signs of intelligence” in people - one good one was from Success Formulas. Contemplating how intelligence translated to action creates value and how that applies to organisations vs people. So, here are 13 marks of intelligence in enterprises:

1. Curiosity - A desire to be aware of, to know and to understand. This applies to the environment, competition, economy, technology and many other factors. Enhanced by open culture, available resources, sharing and availability of open channels and information

2. Adaptability and Flexibility - Willing to change procedures, processes, ways of working for the better, especially based on facts and evidence. Supported by investment in research, training and mentoring. Encouraged by value driven culture

3. Sense of Humour - Being able to find the funny in the absurd or adversity. Being able to see our own faults, recognise them, acknowledge, learn from them and move on

4. Learning from Mistakes - Not just allowing mistakes, but actively learning from them and spreading the learning so we don’t make them again

5. Versatile Memory - Recording things, organising things, sharing knowledge, use of ontologies, making knowledge explicit rather than than tacit. Supported by semantic technology, graph database, AI

6. Emotional Intelligence - Paying attention to the people side, desires, aspirations. Creating a good culture which values individuals and looks to satisfy their needs, but also demands high standards and delivery

7. Intellectual Humility - Our way is not the only way. We can always learn more. Take in research, see what competitors are doing, find new models. Being open

8. Creativity - Sparked by open innovation, forums, pet projects supported by enterprise resources, some pure research just based on curiosity. Leaving space for serendipity

9. Open Mindedness - Accepting of new ideas, diversity (age, race, gender, culture, language, income, values…)

10. Effective Communication - In all forms. To the ecosystem surrounding us (Partners, Regulators, Industry Bodies, Interest Groups, Unions, Media, Employees, Public, Shareholders…) via various media. Also encouraging free and open communication internally. Creating collateral which clearly communicates who we are and what we are about

11. Self Awareness - Reflection, good metrics. Knowing our strengths, weaknesses, opportunities and threats. Able to focus on what we do uniquely and well while outsourcing other things or improving them

12. Strategic Planning - Thinking long term, but acting in the present in alignment with vision. Enhanced by business and enterprise architecture

13. Range of Interests - Diversification. Not putting all our eggs in one basket / product / service or small group of customers. Being aware of the “adjacent possible” to come up with new, possible Blue Ocean offerings

Here’s to more intelligent enterprises in the coming year, leading to Desireable Futures.

Pareto and saying “No”

In contemplating the New Year and plans for the future, I came across a simple process by Vicky Zhao that looks at 1) Review 2) Plan 3) Prioritise using five techniques a) Pareto b) confirmation bias c) inversion d) "one thing" e) SMART objectives. I was struck by how similar these are to an architecture process and how we can exploit two of these ideas in particular.

The first is Pareto or 80/20 analysis in the review of past performance. Simply put, Pareto analysis tries to find the things that may have consumed 20% of effort or resources, but produce 80% of the desirable results. This is a great way to identify those things we should double down on in the future. If we can spend 60% of our effort and resources on them in future, we may be able to generate 3x the desirable results!

The inversion idea in planning is to start with the end in mind. We do this routinely in architecture through developing a vision or scenarios. We can then decompose this to identify what will be required to make it a reality. We can do this for several time horizons to give us short, medium and long term goals. Think Transition Architectures.

Next we need to ensure that we are not distracted or diverted from the focus we need to progress meaningfully and continuously. The “one thing” in the planning approach encourages finding just one key thing/theme to focus on per time horizon.

Steve Jobs extolled the virtues of focus powerfully:

"People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things we have done. Innovation is saying no to 1,000 things."

Extending the architecture idea of gap analysis, we can look at:

• Which things are on the 20% Pareto list? We should be saying “yes” to these and “no” to the others

• What should we Stop doing? Many of the things in the 80% effort Pareto list can fall here

• What should we Start doing? These would be things that support our goals and vision that are not already in our capabilities

• What should we Change? This can include improvements in efficacy, quality or efficiency

Finally, we need to further decompose the goals remaining to objectives and ensure they are Specific, Measurable, Achievable, Relevant and Time Bounded (SMART).

Happy planning. Remember Pareto and the power of saying “No”. Also keep in mind this wisdom from James Clear, author of Atomic Habits:

“Goals are good for setting a direction, but systems are best for making progress”

Leveraging Assets

An asset was traditionally something you own which had value or which you could use to derive value. An example of the former would be cash or gold. An example of the latter would be an item of equipment.
We can update this in two important ways:

1. Assets can be virtual or digital, so we could have something like a skill, a design, a patent or a recording

2. We don’t necessarily have to own them to derive value from them

Some of the fastest growing and valuable companies do not own the assets they leverage. Uber does not own cars; AirBnB does not own accommodation; YouTube does not own the content it serves.

Virtual assets, such as a design, can be very valuable. We can profit from royalties, copyright, trademarks etc. without necessarily ourselves making the product or delivering the service. Consider the inventor of the crown bottle cap, William Painter, whose company received a royalty on every cap used for several decades!

Digital assets are also profitable. A music track is recorded once, but can be listed on thousands of websites virtually for free, then duplicated, again virtually for free and shipped to consumers, again almost for free. This can occur millions of times, generating substantial revenues while not parting with the original asset.

The best though, is using someone else’s assets to deliver value. Uber, for example, uses the assets of owners (cars), the assets of drivers (skill and time), the global infrastructure of the Internet (funded by advertising, corporates and governments) and the asset of the user (cell phone) to deliver a valuable and desirable service.

In doing business and architecture planning, it is useful to contemplate Asset Leverage.

First list assets. Look for things that you own, things that you know, things that you know how to do. Try to find things in the categories of physical (e.g. property, stock, equipment); monetary (cash, investments, shares, bonds etc.); knowledge/designs/patents (e.g. books, recordings, designs, models); virtual (e.g. skills, customer goodwill) and digital (e.g. recordings, images).

Next think about assets you do not own that you can leverage. Examples include those of Partners (e.g. supplier knowledge, skill, equipment, stock); Customers (e.g. premises, network, computing, cell phone, time); Investors (expertise, connections); Infrastructure (e.g. Internet, public facilities); other Owners of something you need (e.g. Accommodation, Cars, Images, Location data).

Figure out to what extent you are currently leveraging the assets. Look for opportunities to leverage them to a greater extent. A great deal of value can be unlocked this way. You can find the best opportunities by looking for those assets that can generate a lot of value that you can access with relatively little effort or expense.  

#businessarchitecture #strategy #businessanalysis #digitaltransformation #assets

Architecture as a Context for Agility

Agility requires doing focussed things rapidly. The more you know going in, the better decisions you can make quickly. The more you document what you learn, the more knowledge is available for future efforts. Good agile work fills in more of the picture thereby enabling all teams.

The more of the picture is filled in the more we can avoid wasted effort, align our efforts and deliver with less risk. You can’t create the full picture quickly, which is why many agilists avoid architecture.
But you can start with a “paint by numbers” reference model/ontology, which gives you the framework into which to rapidly record your growing knowledge and which indexes where to look for information for your next effort, and what touches the squares you want to colour, so you know how to be informed and compatible.

Every project (agile or otherwise) should:

• Be informed by our knowledge of current architecture assets and challenges

• Contribute to an improvement in assets, condition, effectiveness and future readiness

• Improve the architecture of the portfolio

• Deliver business value

• Fill in more of the architecture “big picture” to inform future projects

The environment should:

• Have a conherent integrative meta model/shared concepts

• Encourage good work through well conceived principles

• Have standards for how things get recorded (artefacts) so they are meaningful and sharable

• Provide a collaborative repository that holds things and makes them findable

#agile #project #architecture #context

If data is the lifeblood, how’s your heart?

Organisations are paying more attention to data management, often driven by compliance, privacy or cyber security concerns. But simply holding data doesn’t generate value.

We need a thorough understanding of the relationships between data (numbers, text, pictures, audio, video, facts), information (data meaningful to humans: salary, sales, order, invoice, fingerprint etc), knowledge (richly connected data: contextual data, trend data, inference) and wisdom (deep insights, experience shaped). Value increases as we move up this hierarchy. Alongside that, if we are to understand what we have, manage it properly, secure it, use it, integrate it etc., we need meta data: data about data. Where is it from? How is it structured? Who owns it? How much can we trust it? How is it derived? What format is it in? Where do we keep it? How long should we hold it? What are the constraints on its use…

All of the above are complicated by the explosion of data brought on by new forms of data; technology capabilities to capture, store, manipulate, communicate, generate, represent and analyse data and innovative applications. Virtualisation of products and services compounds the problem, as more of what we offer and sell to customers is information rather than physical.

There are more opportunities than ever before to profit from data, information, knowledge and its proper use. But there are also more challenges associated with doing it properly, successfully, reliably and securely. All of these rely upon skills and capabilities. Specifically, we need high skills to understand, analyse, model, design and implement data related products and services. This is the realm of Data and Information Architecture.

Architects also need to understand business requirements, facilitate communication and build consensus, define vision, bridge gaps and scope initiatives. They need to guide projects and solution designers. Crucially, they need to connect the business/conceptual view of data with the logical (application) and physical (database and technology) views. They need to devise, apply and encourage use of good principles to evolve the data and information landscape in positive ways.

Data management is ultimately a business responsibility, but can be assisted by many technical skills, including: maturity assessment, modelling, meta data management, technology architecture, risk analysis, integration design and considerations of security and privacy.
A comprehensive data/information architecture and data management capability is vital to deliver business benefits as well as ensure security, privacy and acceptable risk.

These are all topics covered in depth in our Techniques and Deliverables of Information Architecture intensive online live course from the 7-11th November. See details here.

#dataarchitecture #informationarchitecture #digitaltransformation #bigdata #businessintelligence #bi #datamodelling

Context is Worth 60 IQ Points

This quote is attributed to one of our favourite great thinkers, Alan Kay, founder of Object Orientation, Graphical User Interfaces and other major innovations. We believe it applies to Business Architecture in a major way.

Most Business Architecture methods/approaches/languages (TOGAF®, BizBok, Archimate®...) originated from an Information Systems/Technology perspective. This is reflected in their view of concepts relevant to the business, which typically include: Organisation (Actor, Role), Process, Service, Capability, Motivation (Driver, Goals, Objective), Metric, Function and Contract. In their latest incarnations they may also recognise Value Chains and Course of Action. The former does relate to the position of the organisation in its industry, while the latter relates to high level change/initiatives.

What is typically missing, in our view, is consideration of the context in which we operate in a serious way. The context includes: Competitors, Product and Service Offerings, Legal and Compliance Environment, Technology, Political Climate, Society, Various Stakeholder Groups (Customers, Agents, Suppliers, Channels, Business Partners, Unions, Regulators, Industry Bodies…) and the Value we exchange with them, the Economy, Resources, Ecology, etc. all of which can provide Opportunities and Threats.

A thorough approach should contemplate these issues. There is no point designing a great new internal combustion engine vehicle in a world where legislation and public sentiment will prevent us selling it. There is no point devising a strategy where there are no resources to realise it. There is no point launching a physical record company into a media space that has gone fully digital (unless we want to be a niche player).

Being fully cognisant of our context helps us be much more intelligent about our strategy, our architecture and the resultant initiatives.

TOGAF® and Archimate® are Registered Trademarks of The Open Group. BizBok is a publication of the Business Architecture Guild.

How to measure business capability improvement objectively after transformational projects have been implemented?

I recently had a delegate on our Business Architecture Mastery Programme ask the above. It is a deep question with a number of dimensions. We have some ideas and a bit of experience...

Capability

First, we have a different take on what a Capability means. Most methods define it a bit fuzzily as "something a business can do" or similar. That is not too different from a Business Function. They use Capability so people don't get confused with Functions used in Organisation Design, which might refer to “HR” or “Finance”.

We think a Capability implies quite a bit more. It implies delivering something of value to a client (potentially internal). There is much more detail in an earlier post. See comments for link.

Motivation

When we want to start discussing improvement, we then also need to think about motivation. What do we want to change (improve), why and how? These motivations could come from a number of sources and will be different for various stakeholders. We need to find a way to merge them and reach consensus on what "improvement" means. Please see the blog entry for a view on merging motivations (link in comments)

Metrics

Once we understand what we value and how it should be improved, we then need suitable metrics. These will depend upon the agreed goals. One stakeholder group (eg investors via the stock exchange) may only be interested in financial performance this quarter. Another stakeholder group (say employees) will be interested in job security. Another group (the community) will want to be assured that we have improved our environmental footprint, etc.

There are a variety of ways we can measure a business, its performance and its health, including traditional financial measures, balanced scorecards, customer satisfaction, sustainability metrics, strategic health checks, maturity models and industry metrics frameworks, etc.

Baseline

Next we need to know the baseline we are improving from. That involves gathering the facts for the chosen metrics via a variety of methods including accounting, scorecards, business intelligence, survey, workshop, etc.

Run the Initiatives

Finally, we can the implement our changes and then measure again.

Tracking

For tracking, we like to use a hierarchical model proceeding through layers of mission/goals/objectives which we then colour code based upon current performance (red for poor to green for excellent). This give a visual "heat map" of where to focus attention. Put it on a wall! Then measure again in about 3-6 months, depending upon the volatility of your industry. Using the new measures, update the colour coded model. Of course, also update the model itself with new concerns, insights and learning.

#capability #improvement #metrics #businessarchitecture

Product Generator (3 of 3)

In the earlier posts we covered what a product/service/business model innovation might look like and how to generate ideas. Here we summarise general guidelines we can leverage when contemplating product and service options:

• Does it provide a recognisable and desired transformation?

• Does it offer exceptional client value?

• Is it easy and convenient to find, evaluate, acquire, migrate to, use, integrate, upgrade?

• Does it generate an emotional response in the client?

• Is it a blue ocean play that will encounter minimum competition and still attract a premium price?

• Can it be sustainably and profitably offered at scale?

• Have we used all options to reduce capital dependency, to minimise physical components, increase intelligence/utility and to streamline production, duplication, delivery and servicing?

• Is it a win for the customer, us, suppliers and society at large?

• Have we contemplated constraints and risks and ameliorated these as much as possible?

• Have we created unique benefits which will be difficult to replicate?

• Is there a “unique selling proposition” / “purple cow” - i.e. will it stand out as something different and worth consideration?

• Have we formulated metrics to track performance and improve benefits through the lifecycle?

Getting there may not be a linear path. We may have to ideate, evaluate, prototype, iterate, pivot, etc. until we get it right.

Summary: Provide more value to customers, more conveniently, quickly, cheaply, sustainably and repeatedly (while ensuring we can sustain delivery, margin and ameliorate risks). The associated canvas may help to consider all the dimensions.

#Product #Service #Strategy #Innovation #BusinessArchitecture #EnterpriseArchitecture #Canvas

Product Generator (2 of 3)

So how do we find great product and service ideas? By thinking in the box, at the boundaries, out of the box and beyond!

Explore the idea of the “adjacent possible”, looking for opportunities enabled by emerging technologies, services, social and other changes, that are now just possible and satisfy an existing need in a new way. Examples were the miniaturisation of disk drives facilitating the idea of mobile digital music players and of pervasive internet and mobile technology facilitating music streaming. Also Software as a Service (SaaS) offerings exploiting the availability of networks, cloud platforms and subscription models. Machine Learning is opening up opportunities in medical analysis. Speech assistants are enabling new kinds of interfaces to electronic products.

Seek “blue ocean” opportunities. Instead of competing fiercely in saturated, highly competitive spaces (the “red ocean”), we look for opportunities which satisfy a need in a new and novel way, where there is currently no or very little competition. An example would be early products delivering voice telephony over digital channels (voice over IP or VOIP). Tesla has famously exploited this kind of approach in bringing fully electric cars to consumers.

Exploit digital. Make products “softer”, replacing expensive hardware with software or data: replacing atoms with bits. Make copies electronically rather than through manufacturing. Hold inventory as patterns of bits which can be duplicated and distributed with almost zero cost. Automate processes, so they can scale without extra staff or effort.

Consider the portfolio view of products and services and where they are in their lifecycle and adoption. Ensure balance across the stages.

Try to launch and get feedback as quickly as possible. Build prototypes and get rapid feedback. Explore Design Thinking to really understand the customer requirements. Build a Minimum Viable Product (MVP) and get customer feedback. Pivot where necessary.

Look for platform plays or intermediary roles. Own the customer and transaction and make a margin, without needing to own the assets or physically deliver the service. Most of the exponential businesses that have exploded in the last decade exploited these ideas. Consider Facebook which facilitates messaging, but produces no content; Youtube which is a major entertainment provider, but owns and creates no content. Amazon is a platform and an aggregator, selling millions of products from thousands of suppliers.

Consider innovative business models that satisfy the same need in a different and better way. A customer may really want personal mobility, not necessarily a car, or ambient music delivered on demand, rather than a sound system. Here it is often useful to “abstract up” asking the questions: What does this achieve for the customer? Why does the customer buy this product/service?

#Strategy #Product #EnterpriseArchitecture #BusinessArchitecture #Innovation

Product Generator (1 of 3)

What does a great product look like in 2022? Actually, it’s not a product, but a service or a platform or a model! Or maybe even a feeling...

Whaaat? Yep.

The truth is that people don’t buy products. They buy some transformation that they want. I want my feet to stop hurting, I buy shoes. I want my children to have a better life, I buy an education annuity. I want to satisfy my craving, I buy chocolate. I want to impress my partner, I buy a great outfit.

Transformations are as easily satisfied by a service, platform, model, algorithm or design as by an actual product. My desire might be to enjoy a particular genre of music. This could be satisfied by (a) buying a CD (b) buying a track on iTunes (c) streaming audio from Spotify. If I need holiday accommodation, I can use a hotel, Booking.com or AirBnB. Interestingly, iTunes, Spotify, Booking.com and AirBnB are all platforms. They do not own the assets or services on sale, but they facilitate the client’s access to them while also acting as channels for the sellers. In the case of iTunes and Spotify, notice too that the product has also become digital - morphing from physical media to digital streams. These models allow taking advantage of the “long tail” phenomenon whereby the cost of inventory and distribution becomes near zero and the platform can offer essentially infinite variety and choice.

Client experience and emotion also play a large role. When you buy a property (a major financial, long term commitment), you will probably make a very logical checklist of requirements before going to view any properties. But you will buy one which doesn’t meet the requirements, because it “felt right” or “smelt right” or “had great light”. We will then go back to the list and adjust and reprioritise until it fits our choice… Brands like Apple and Nike know this all too well. They invest huge effort in building the lifestyle image, client experience and emotional highs their clients will experience from using their products and services.

New value today is potentially delivered “out of thin air” - think of a virtual product such as Bitcoin, which is essentially an algorithm for calculating a number. Yet it has become a major asset class with serious investment houses putting 5% of their assets into it and similar offerings in 2022. Other examples are an algorithm that improves fuel consumption in transportation, or a model for how to organise components on a semiconductor die.

Modern consumers are also used to instant gratification, based on experience of mobile technology, apps and streaming. We need to ensure that our product/service is very easy to find, evaluate, try out, purchase and use. This should be as friction- and noiseless as possible.

In the second part of this post, we will explore how to come up with and evaluate product/service ideas.

#Product #Innovation #Strategy #BusinessArchitecture #Service