A plan is not enough
A few months back, my wife mentioned that we had not had a family vacation in years, and it’d be good if I can plan something that the whole family would enjoy.
I got to work on it immediately. There are so many wonderful places to visit; so I took a systematic approach to cull down the list to a manageable few destinations. My research included talking to friends, browsing the web, and reading travel books. Finally, I hand the answer – Rome it’ll be. I have always been fascinated with ancient civilizations.
With everything planned to the detail, down to how we’d be spending each day, I was ready to share my plan with the family. Within a few minutes into my ‘presentation’ I realized something amiss. My kids all under six years of age, were not excited about ancient ruins and my wife couldn’t understand why I picked Rome. My plans wouldn’t work. Somewhere along the way, I got immersed in the research and had lost track of the original goal, which was for the whole family to have an enjoyable vacation. This has become my vacation and I had lost sight of the customer (my family).
Business problems
It is not uncommon to find similar situations in a business setting. Initiatives are continuously launched, but few are aligned with organizational goals. Relationships to other initiatives in the company are not considered, resulting in a lot of redundancies, which in turn result in maintenance nightmares. Some initiatives may even have goals that conflict with one another. At one utility company, while one initiative was encouraging customers to pay their bills through electronic channels, another initiative was upgrading the systems that were being used to process check payments. If the company anticipates a higher rate of electronic payment methods, why would they be upgrading their check processing systems?
Failure of organizations to effectively communicate the business strategy and goals, further complicates matters. At another large company, leadership said that they wanted to achieve better customer intimacy. However the phrase “customer intimacy” did not provide any guidance for the day-to-day activities of employees and there was no communication, guidelines or methodology on what each employee should do to achieve this abstract concept of customer intimacy.
In many organizations we find leaders setting high-level goals, but these goals never translate to execution priorities. In some instances, the high-level goals are abstract and the organization has no formal process or methodology to identify initiatives that would help to achieve the goals. In other instances initiatives are launched in silos, and the people assigned to these initiatives are so focused on the work that they lose sight of the organizational goals. There is a big gap between the intent of the organizational goals, and what actually gets implemented.
Before an organization can successfully create initiatives that solve a particular problem, it has to define goals and objectives. The initiatives that are then funded should support each other in achieving the goals. Examples of high-level organizational goals include retaining more customers and increasing operational effectiveness. Goals answer the question, “what do we want to do?” Examples of what an organizational goal should not be include implementing the six-sigma methodology or business process management. These answer the question “how do we want to achieve the goal?” Without answering the “what”, the “how” becomes meaningless.
Taking a top-down approach
In a top-down approach of organizational goal setting and implementation, the organization can function as a single entity with all business units aligned towards a common purpose. The goals set by the executive leadership is then communicated to all levels of the organization, which in turn interpret the information and assign their own context to it to make it implementable. Such decomposition helps to bring clarity to the abstraction and resulting in initiatives aligned with the goals.
Here is a short example:Organizational goal: To increase market share of our product by 10% by the end of the year.
Objective #1 to achieve the goal: To sell the product to college students. This objective focuses on college students because they form a large potential customer base and have a high probability of becoming long-term customers. Banks that market credit cards at college campuses use this strategy.
Usually, there are other objectives that help to achieve this goal as well but we won’t consider those. Instead, lets discuss the “how.”
How to achieve objective #1: Market on college campuses. In order to market to campuses, the organization may need certain capabilities such as the ability to ‘connect’ with college students, product pricing strategies tuned to the their needs, etc. The organization may have to develop those skills or partner with others to achieve this objective.
Such structured thinking will lead towards initiatives that are aligned towards corporate goals.
Business and Technology integration
A structured approach will lead to a list of aligned initiatives that can be executed. After this list is validated in the context of the business environment, competitive landscape, and customer requirements, the list has to be prioritized based on multiple factors such as resource requirements, cost, market needs, and so on.
In this article we discuss those initiatives that involve a technology component, since technology is an integral part of today’s business. Silos on the business side will often translate to silos in the technology side. Therefore it behooves the business to holistically understand their current and future states and drive technology towards the same goals. The discipline of Business Architecture has been used with successful results to model the current and futures states of the business.
Business architecture is the blueprint of the business. It captures the organization’s business model, and how the different units interact with each other to produce products or services that are of value to the customer. Its counterpart, the technology architecture helps to execute on the business requirements by automating operations, enhancing system-user interactions, and effectively managing information.
One way for the organization to move from current to future state in a structured manner is through leveraging business architecture. However, business architecture as a discipline has a much lower degree of maturity than systems architecture. As a result, most organizations will have to invest more time and resources to develop expertise. A mature business and systems architecture will enable the organization to achieve its goals faster and with more predictability. While business architecture is a good tool to leverage, it is imperative that the goals themselves be defined clearly.
Conclusion
Before an organization chooses to leverage disciplines such as business architecture, it needs to define it business goals clearly. Clarity around business goals will lead to the identification of initiatives that are aligned to meet the business goals. At this point, business architecture can be leveraged to enforce structure on the process of moving from current state to the future state.
