Demystifying the term ‘Maturity’ – [1] the model

There are numerous models that organizations can use to estimate their 'maturity'. These models often use a scale with 5 or 6 levels. All these models catch some expression of ‘how good’ an organization is at something. The traditional dimension of these maturity models is ‘capability’. Capability, however, doesn’t tell you anything about the ability of the organization to deliver value to the customer, which is the most widespread indicator of any organization’s purpose these days. In fact, using the traditional capability-based maturity modeling only demonstrates a low level of modern value-based maturity modeling. So, let’s have a closer look at the concept of maturity.

It’s all about the scale’s dimension

The maturity models mentioned above use different dimensions to measure the organization’s ‘maturity’. Ever since the days of Shewhart with his first specification of quality improvement over time (1924), Richard Nolan’s first organizational maturity modeling in 1973, Crosby’s quality management maturity grid (1979), and Watts Humphrey’s software development maturity model ( CMM(I)) of the 1980’s, most models have used a common 5 levels, running from something like ‘bad’ to ‘excellent’, sometimes with a ‘0’ at the start for a 6th level. This seems to make the models fairly similar, but this only applies to the models using the traditional capability dimension. The new way of looking at maturity uses a very different dimension: the ability to create value. This way, the modeling shifts from focusing at the inside to focusing at the outside.

Almost all maturity measuring scales look at capability (“the ability to do things well”) while the maturity of modern service organizations is much more about your ability to add value to your customer’s business with your services (“the ability to do the right things for your customer”). This value creation ability then also includes the assurance for your customer that you can continue delivering that added value in such a way that the customer can rely on it. This, then, has everything to do with control, your ability to continually do the right things for your customer, in a guaranteed and demonstrable way. And that is how we measure value-creation.

Capability has no relationship with value-creation

To give you an example of how this works out: Dell may be qualified as an excellent provider of computer systems in terms of pricing, bandwidth, delivery speed, quality of goods, etc.. At a capability-based scale they would probably score a 5. At a value-creation scale, however, they wouldn’t score more than a 2: Dell doesn’t have a clue what I’m going to do with that computer system in my business, and I would never invite Dell to advise me on how I’m doing my business. Ergo: capability doesn’t say a thing about the ability to create value for a customer.

Many organizations apply these capability maturity models with which they hope to demonstrate to their customers how good they are at their job. In doing so, they actually widen the gap with the customer, who most likely is looking for a partner who thinks and acts in terms of creating value to the customer’s business.

Providers that opt for such a capability assessment, and as a result do not exceed level 2 of the Value Maturity Model, often follow an Operational Excellence Strategy: they try to execute a capability to perfection. An organization seeking value should not rely on these providers.?They should be looking for providers with a Customer Excellence Strategy.

Value & control

So, from your customer's perspective, the only significant measurement scale is one of added value and the degree of control you have as a provider to deliver that added value in a sustainable way. Unfortunately, the majority of providers follow the capability approach, as in:

• CMMI – “a maturity model of processes for system and software development”. CMMI, however, has very little to do with processes, as it focused entirely at practices. The limited scope of developing a technology product (software systems) makes it completely unsuitable for measuring value. The same goes for the Business Process Maturity Model (BPMM)
• PRINCE2 Maturity Model – “a tool to evaluate an organizations’ project management capability”. As project management is a technique, this can hardly tell you anything about the organizations’ ability to deliver value. The same goes for PMI’s OPM3, for Axelos’ P3M3, and for Gartner’s ITScore PPM Maturity Model.
• ITIL? Maturity Model – “A management maturity model that assesses the service management capabilities of your organization, and the maturity of your governance structure and management system”.?As the management system has been the blind eye of ITIL for 3 decades, there’s little hope that this will be of any relevance in terms of measuring the value creation ability.

A Value Maturity Model

USM follows a value-creation based model that was initially published in the mid nineties by KPMG. This (fairly unknown) model was way ahead of its time – a masterpiece. The KPMG model used the common scale of 5, but now with in a very different dimension:

1. Technology-driven
2. System-driven
3. Service-driven
4. Customer-driven
5. Business-driven

This model required only some small adjustments to suit the evolutionary steps of modern organizations that want to improve their ability to create value in a sustainable way.

In the next 5 posts of the USM Newsletter, I’ll discuss each of these 5 phases or steps. At the end of that series you can ask yourself the ultimate question:

“What is my organization’s maturity level if we look at our ability to deliver value?”

Next post >>Level 1: technology driven