Moving from Strategy to Operational Excellence

I recently delivered a 3-day Applied Business Architecture workshop (https://www.ealearning.com/our-courses/courses/applied-business-architecture-virtual-classroom.html). This course is designed to help students and organizations to strengthen their business planning process by applying best practice business architecture methods and techniques. The course provides a practical understanding of:

• How to link strategy and execution with effective planning
• Mapping and communicating business motivation
• Mapping business capabilities
• How to use capability-based planning and business anchor models to develop a business architecture
• How to begin to plan for a successful transition

In this article, I want to focus on the first bullet point: linking strategy to execution. I will cover the other topic points in future articles.

Many of my students and clients have approached me more than once with these questions:

• How do I know our business strategy is the right one?
• How do we know if we are going in the right direction?
• How do I ensure that what is delivered is aligned with this strategy?
• How do I ensure the business is getting value from the initiatives?
• How do I make sure we have the right mix of business capabilities if we have a change in our strategy?

These are great questions indeed. So where do we start to answer these (and many more) questions? To better answer these questions, lets break it down into 3 smaller questions: Why? What? and How? To expand: why are you doing it, what do you plan on doing, and how are you going to do it.

We begin with the “why” first. In order words, why is the company going in that strategic direction? It is often challenging to take a step back to ask the “why” question. Companies feel they need to make decisions quickly or potentially miss out on growth opportunities. Or perhaps they have been going in a specific direction for so long they don’t want to change directions. This is where we hear this from leadership: “It’s the way we have always done it,” or “It has worked for us in the past, why do we need to shift?” Then I remind them of other companies who did not make the necessary strategy changes and eventually suffered the consequences. Digital Equipment Corporation (DEC) was one of the first ones I remember learning about many years ago (does anyone even remember DEC now?). They initially believed that mainframes were here to stay and no one was going to want personal computers. They eventually realized the flaw in this thinking and developed a personal computer called “Rainbow 100.” There were other reasons why DEC failed to survive. Bottom line is that that the failure of the company ultimately fell to the leaders who were unable to foresee what was coming in personal computing and were not able to take decisive or quick enough action in time to save the company.

Organizations perhaps focus too much on the “how” they are going to get there and don’t think to ask the reason why they are doing it. The “why” answer they had a year ago, two years ago, and even 6 months ago may no longer even be applicable. Think about it. Six months ago, we had no clue on how this pandemic was going to affect us. Many companies were “caught” by surprise and needed to shift their strategy. A few years ago, I published an article titled “What is driving your organizational change?” (https://www.dhirubhai.net/pulse/whats-driving-your-organizational-change-mark-t-edmead/) that discussed the pain points and trigger events that influence the strategic direction.

How can an organization make sure they are indeed going in the right direction? In another article from a few years ago (https://www.dhirubhai.net/pulse/what-driving-your-strategic-intent-mark-t-edmead/), I discussed how companies determine their strategic intent. In this article, I briefly referenced the work of Peter Weill and Marianne Broadbent. In their book “Leveraging the New Infrastructure: How Market Leaders Capitalize on Information Technology” they state “This strategic context incorporates not only the strategic intent but also an understanding of the organization’s core competency, current strategy, and business governance. This changing environment impacts what products or services to deliver, and more importantly, what investments (in terms of people, processes, and technology) the organization must make in order to achieve the desired results.” I would like to add “information” to the list of investments (or resources). In the Applied Business Architecture course, we discuss how we need to assess how people, process, information, and technology (PPIT) and the levels of maturity needed to achieve the desired future state. 

Figure 1: Leveraging the New Infrastructure: How market leaders capitalize on IT, P. Weill & M. Broadbent Harvard Business School Press, June 1998.

In Figure 1, Weill and Broadbent show us where it should all begin. Be should begin by understanding the environment, the organization, and how it affects the strategic context. In the Strategic Context section, we look at not only the strategic intent but also the current strategy and the core competencies needed to achieve the future state. This Strategic Context then drives the IT Strategy (notice it is not the reverse). And finally, the IT Strategy aligns with the IT Portfolio of IT assets.

For the purposes of this article, we are focused on the top two boxes. The Environment represents the “why” and the Strategic Context represents the “what.” In future articles, we will cover the bottom two boxes which answer the “how” question.

The best recommendation I can provide is to take a moment and get yourself out of the “weeds” and look around at your environment. What’s different? What’s new? What’s no longer there, or applicable? As stated in the diagram, what opportunities, threats, and/or constraints are you facing now or will in the foreseeable future? The key to moving in the right direction is to understand and re-evaluate how this new environment may affect or impact my current strategy and “what” needs to change in terms of products, services, market, investment, and/or customers.