Governance

Developing key relationships to enable delivery of value

Alistair Russell · March 16, 2023 · Leave a Comment

A recent article in Harvard Business Review identified four elements of the playbook that differentiates organisations that deliver class-leading productivity improvement. The ability to capture value from digitisation was the first of the playbook’s elements.

Based on cross sector research by a team from McKinsey, the playbook’s other elements were “investing in intangibles”, “building a future ready workforce” and “adopting a systems approach”. It prompted us to come back to an enduring issue in our work. How does an organisation develop the ability to capture value from investing in digital technology? What should you do as CIO or senior technology leader to enable, prompt or improve your organisation’s’ ability to deliver value? Where should you start? How do you make the difference?

We have previously shared our insight on the tool we use to focus and motivate teams to deliver value, “the Personal Measurement Framework” – see connecting to value . However, whilst the tool can and does make a difference; through the conversations it prompts and the actions that result. However, our insight is that there is something more fundamental that has to be addressed to provide the fertile ground for such tools to work.

The fundamental thing seems to be the senior executive team sharing a deep, comprehensive, non-transactional view of how digital technology works for their customers, their teams and the organisation’s stakeholders . The senior team understand the specific benefits that digital investments can deliver and the critical success factors in the delivery of benefits.

And in our experience, the foundation for that deep understanding is the CIO and their team investing time and emotion into the set of powerful connections, engagements and relationships with their colleagues both inside and outside the organisation. And the first step is to establish those relationships and importantly to never stop developing them – it’s a critical part of your work. In our view, it is the foundation for the delivery of value from investment in digital technology.

In building, developing and sustaining those critical relationships, the important steps, include:

Focus, identify the key players for the delivery of value through a stakeholder analysis process;
Invest, take time to understand what value means for each of your c-level colleagues and beyond that for customers, for your board, shareholders, make explicit the value statements and the evidence that will be used to demonstrate value delivery;
Challenge, identify and address the difficult questions, confront those questions with data, engage in constructive debate with colleagues to deepen the mutual understanding;
Deliver, take action, lead your team through delivery of changes at the appropriate frequency – anything from by the minute and the hour through to more traditional weekly or monthly reviews;
Don’t stop, developing these foundational relationships should not stop, it is work, it may not feel like it when you start, but in our experience it is the source of value delivery.

And in telling stories about what you do, in the language you use, putting value creation “front and centre” matters. As CIOs you have the platform of your enterprise view and awareness of the change agenda, you are extremely well placed to enable decision making based on value. As CIO, you understand value and know how your organisation can deliver. Enable your organisation make the right technology investments to deliver long term productivity gain.

Connecting to Value

Alistair Russell · November 25, 2021 · Leave a Comment

In our experience, focusing and motivating your teams to deliver value for your organisation remains one of the most considered challenges for leaders. Especially doing it in a way that works. In a way that is both efficient and effective. We know that sustaining teams and individuals to do the right thing is critically important and yet it remains hard work for us all. This challenge is heightened in our context of enabling clients to deliver value through the power of digital technologies. In our dynamic and developing contexts, we continue to work at making sense of which managerial and leadership approaches and tools will deliver the right outputs, let alone make sure that the outputs do really enable the value desired.

Addressing this challenge is made more complex in many of our client organisations because teams and individuals are typically ‘citizens’ of many units. Units that have a digital product or service focus, units that have a strategic business focus, units that have a professional focus such as programme and project management, business analysis, quality assurance, user experience etc.. We find that now more than ever, generic objective, KPI driven models rarely deliver for the individual, team or indeed the organisation. Sometimes such models can even work against the delivery of true shareholder or stakeholder value.

In response to this enduring challenge we developed an approach – the “Personal Measurement Framework”. We have used this successfully many times with clients, guided by three important axioms. Firstly, to design an approach that connects with value as perceived by the relevant stakeholders, connects to why your role, your team and your capability exists. Secondly, to provide structure and framework, yet empower individuals to develop their own measurement framework and thirdly, to balance the measurement framework across the full range of measures, not just on the traditional metric of output delivery.

The Personal Measurement Framework starts with the idea of a value proposition from the Business Model Canvas – see Business Model Generation. The process invites leaders and teams to teams to start with ‘end in mind’, to start with the job that their ‘customer’ or indeed their customers’ customer is responsible for delivery and what are the pains and gains for them in delivery of that job. Then the process gets the leaders and teams to make explicit the value proposition of their product or service in terms of the pain relievers and gain creators that they deliver. If appropriate you can add in a step of using the value proposition to structure and engagement with ‘customer’ or agent of ‘customer’ to validate the value proposition.

The next step is to use the gain creators and pain relievers identified in the value proposition to develop measures of delivery of value. And to develop measures through challenging leaders and teams to hold onto the tenets of Kaplan and Norton’s work on balanced scorecards – see Harvard Business Review article. Developing measures that don’t just measure output e.g. tested and integrated code, but also measure development of capability and learning e.g. codified process improvement alongside measures that are meaningful for the customer e.g. transaction speed, volume growth.

The Personal Measurement Framework delivers benefits through explicitly connecting your teams to value delivery with additional benefits delivered through the process that builds ownership and commitment leading to increased effectiveness and efficiency. As with all ideas and models our Personal Measurement Framework is only as good as the leadership that assures implementation, learning and development. And when deployed fully, with appropriate support and collaborative coaching amongst the team the Framework can and does deliver sustained value.

References:

Business Model Generation: Osterwalder and Pigneur, Wiley 2010

The Balanced Business Scorecard, Kaplan and Norton, Harvard Business Review 1992

Enabling Transformation of your Business Platform: Enterprise Architecture for Hybrid Cloud World

Alistair Russell · May 12, 2021 · Leave a Comment

Back in 2016, we wrote an insight piece discussing the role of the Enterprise Architecture (EA) capability of an organisation in designing and delivering the architectures for future cloud environments, the pitfalls and some of the phony thinking that was touted at the time. The original article entitled “Cloudy Day” is available on request from Laing Russell. Prompted by listening to Peter Weil from CISR (Centre for Information Systems Research) at Massachusetts Institute of Technology (MIT) talk about their recent research on most effective strategies for “re-platforming” enterprises, we went back to the original “Cloudy Day” piece. Reviewing that five year old piece, it was interesting to note what’s changed and what’s endured. Especially as our work on strategy and enterprise architecture is increasingly focused on enabling the development of a digital platform for organisations. Digital platforms that make the most effective use of cloud capabilities.

The cloud industry is slated to grow from $371.4 Billion in 2021 to $832.1 Billion by 2025 according to the latest analyst’s figures. Back in 2016, we were predicting 36% pa growth from a $13.3 Billion starting point. By our calculations that 36% pa growth rate would have put us at about the $62 Billion mark in 2021, so we have comfortably outstripped that growth metric. AWS, Azure and Google Cloud Platform are now the market leaders and there other players in train as well. However, the majority of organisations are embracing hybrid architectures, adopting some cloud-based services across the landscape from IaaS to SaaS. Five years on, it is still the minority that are entirely cloud resident.

One significant shift in the narrative from 2016, is the move away from a cost-based benefit case for adopting the cloud to a benefit case based on business agility, flexibility and elasticity. The cost reduction argument was always a false narrative. Many organisations, to their peril, have fallen prey to the salesmen’s patter and ended up with higher running costs in the “cloud”. We have been involved in several turnaround initiatives where unpicking a simplistic rush to a ‘cloud nirvana’, has proved expensive, complex and time consuming. Today, we are all more acutely aware than ever that the hybrid architecture needs to designed with a clear-eyed view of how different aspects of the cloud environment enable value, reduce risk and at what cost. Once strategy, design and implementation path are set out they need to be governed tightly. An outcome of this shift is that quality vendors now offer multi-year payback schedules to justify the investment in the transition.

As more organisations look to transform to deliver value as a platform, their operating models are evolving such that value is delivered by an eco-system that extends beyond the traditional organisational boundaries. These operating models require a new level of engagement by organisational leaders in setting and governing digital strategy and architectures. For example, flexible integration and API management strategies are transformational utilities in their own right. However, if poorly architected they can become contributors to technical and organisational debt through design ‘cul-de-sacs’ and in-efficient processes. We are finding that EA needs to support the organisational leadership in being aware of the benefit opportunities and risks. EA are using new collaborative processes to produce design artifacts, with the associated commitment based on understanding, that will deliver for the organisation and its stakeholders.

Back in 2016 there was a greater scarcity of expertise in cloud technologies than there is today. The increased understanding of the “cloud” has helped ensure we have better technical architectures in this constantly developing environment. But organisations are still dependent on the strategic perspective that the EA brings. EA is as necessary as ever. EA helps make explicit that vital link between your hybrid cloud services and your organisation’s business strategy.

Enterprise Change done right: keep your vision in mind

Alistair Russell · November 9, 2020 · Leave a Comment

Whatever the label used by our clients, be that transformation, digital, agile or change, fundamentally we see our purpose as enabling change. Laing Russell is about getting enterprise change done right.

Recent Bain & Company research endorsed our perspective that the central focus of any programme of work in this area should focus on changing the behaviours of the human beings. In contrast to what is often taught on MBAs and promoted by the writers of airport business books, our insight is that enterprise change is complicated and it is unhelpful to reduce the complexity of the real world to simplistic, predictive Newtonian models.

There are many useful models and thinking frameworks that we use to focus and structure clearer, more productive conversations about what to do as leaders of change. Our recent experience is that the foundation for us all is to persist with a clear vision in mind. Success comes from using that shared and explicit clarity of your desired outcome, your vision, to guide your actions in leading change.

In building that shared, explicit clarity on the vision, the framework developed by John Kotter is better than many in creating a checklist to get you started. The focus on a sense of urgency, as Kotter describes it, is key. A critical early step is to develop that clarity around what we would call the rational and emotional ‘case for change’. Crucially, it is important that case has the support of sufficient number of the wider and influential leadership team.

Kotter argues for gaining the support of 75% of the leadership population, although often it is more important to just start. Rather than wait to hit a specific threshold. Our recent insight is that you have to persist with creating that sense of urgency and never stop working at it. This persistence includes using more ‘viral’ communication approaches, building stories as we set out in our last insight piece.

A critical, perhaps the most critical, part of your leadership behaviour is the communication of this vision. In our experience you cannot ever do enough communication, especially two-way communication. Communication is much more conversation than broadcast, more of a process to enable the change to be led by others. Enabling and empowering others to interpret the vision and make it their own, which Kotter calls enlisting that volunteer army facilitates others to translate the vision into their own changed behaviour. Once outcomes start to be delivered, the role of leader moves on to activities such as removing barriers, designing and delivering early short-term wins, and sustaining acceleration of delivery of the change that has been delivered. At all times it is important to institutionalise the change byanchoring or embedding the changes in systems, process and corporate culture.

An important reflection from our recent work is that whilst Kotter’s model is useful in making sure we think things through and develop plans, following the model will not on its own deliver the outcome for you, and you will not realise your vision.

To achieve your vision of lasting change, you must persist with all of the activities that are summarised in Kotter’s model, all of the time. Spot opportunities to deliver or embed your vision that you had not seen in your first round of strategising and planning. Review and learn from experience in a fast cycle. In practice, it never was and never will be a serial, sequential start to finish activities. Leading change is messy, it’s a parallel set of on-going processes that need to be led. Persist and do it right you will deliver.

Micro-standards Enabling Pace and Agility

Alistair Russell · September 17, 2020 · Leave a Comment

An enduring dilemma for organisations is setting and holding their position on standards. Standards good vs. standards bad can and often does become an unhelpful debate. The focus can be on the narrative of the standard itself rather than the outcomes that they promote. This dilemma has many specific challenges in our work with clients as it impacts their ability to get the best value from digital technologies.

Current, critical complications are evident in many areas. These areas include: what the specific technology is able to do; the range and flexibility of business models for how that technology can be provided; what customers need and the ways that organisations deliver on those needs; notwithstanding the implications of the current disruption to where and how work is delivered prompted by the Covid 19 pandemic.

These complications and many others mean that there is not, and probably will never be, an axiomatic truth. Whilst recognising that the right place on standards for you and your organisation is and should be contingent, we do recommend moving to having a set of what we would call micro-standards. In our work on digital strategy and the development of Enterprise Architecture capability, we are concluding that rather than universally mandating a specific software solution or platform we recommend setting standards at a lower, micro, level in the hierarchy. Micro-standards that should ideally fit within an overarching architectural and operating framework.

We see this as a more effective and productive approach than taking time deciding for example, whether or not strategic business units are able to choose the “best” software for their needs or if a standard ERP should be introduced across the whole enterprise or having a programme of work to ensure that there is single, trusted view of the organisation and its performance for the Board.

We recommend that micro-standards should be developed within each of the five key architectural domains of busines, data, solution, technology and security based upon sound guiding principles. For example, in a ‘cloud first’ world, if your organisation has a principle dictating single-cloud as opposed to multi-cloud, then your business units can work within this standardised environment provided to rapidly implement change, whilst you can be comforted by the knowledge that they will not be building anything that fails to interoperate with the existing infrastructure. Noting that governance behaviour and process need to ensure the right standards are set and complied with.

The business benefits of standardisation are well rehearsed. Technology provision costs are lower with standardisation, standard software allows digital technology teams to focus and spend less money and time on integration; standard processes enable resources inside and outside your organisation to be more flexible. With the addition of micro-standards organisations can meet the needs of customers at pace. Rather than restricting innovation, micro standards enable the flexibility required to assemble and disassemble building blocks efficiently. You know they’ll fit together, you know the way that the process will be coded, tested and put into operation.