Synaptus

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As an executive you are responsible to take action to help your company survive and grow. You have a strong vision, good people, and clear financial goals. But you haven’t achieved the results you desire. You want an agile organization – one that adapts to change rapidly and can create change faster than your competitors can respond. You may be tempted to turn to the latest management fad. But these may or may not work in your organization. You have to apply the right solution at the right time for your situation. And, you can’t just demand performance. Execution has to emerge from your company. As Drucker points out, you need to apply thought, knowledge, and cooperation to inspire the right execution to emerge.

You are likely faced with a rapidly changing environment as:

• technologies evolve,
• products quickly become obsolete,
• competitors adapt,
• substitutes arise from international competitors,
• outsourcing drives new business models,
• regulations redirect entire industries,
• and margins shrink in your industry.

And you have to do it with an increasingly complex organization.

• Legacy technology has become an obstacle to change.
• People don’t respond to incentives as expected.
• When you improve in one area, it causes problems in another area.
• The demographics of your workforce are changing.
• The models of managing through structure and hierarchy are no longer as effective as they once were.

What can you do to respond to this rapidly changing environment to respond in an increasingly complex organization? You have to create an understanding of your business that allows your decisions to be Business-Driven, Throughput-Focused, and Human-Powered. If your company is going to thrive you have to find a way to manage and align seven perspectives to develop the agility to manage through these challenges.

1. Make sure the interests of the company are Strategically Aligned among the purposes of each functional area and each employee. You do this by ensuring people have appropriate understanding of the strategic needs of the business. Don’t invest in a “peanut butter” fashion where investment is spread around evenly. Invest where it will have the greatest impact on the organization’s ability to create value and thrive in the future.
2. 2. Establish effective Project Delivery so your organization can rapidly implement strategic change. You organization must be great at constantly adapting to the changing internal and external demands.

Throughput-Focused

1. Establish Operational Excellence where you have a have focused your capabilities on they interact to create value. Embed an organization-wide mindset of waste reduction and improving effectiveness at the strategic and competitive level. Utilize the appropriate process improvement tools in the right places to achieve operational excellence.
2. Make sure you are Technology Enabled in a cost effective way. Technology should not be creating new opportunities not inhibiting your ability to execute your strategy – and it should not be needlessly consuming the scarce resources needed to grow the business.

1. Focus on Talent Management and get the right people, in the right jobs, with the right knowledge, skills, and aptitudes. Customer service, leadership, entrepreneurship, and innovation come from your people.
2. Establish Decision Process Optimization where people have the right information and authority to act on critical workflows. Also, establish shared understanding, coordinate efforts, and reliably make and keep commitments. Tremendous performance gains can be achieved through optimizing these interactions within an organization.

1. Through Leadership and Governance create an environment with the will to succeed – where recognizing and responding to internal and external changes emerges from the organization. You can’t keep doing business the way you have always done it. You won’t be able to recognize and respond fast enough if you have to do it yourself and then dictate the changes.

Your challenge is finding a way to balance the changing needs of your organization with the changing demands in the marketplace. You must not only constantly scan the market for new opportunities and changes in customer demand; you must constantly scan the organization to find the right way to continue to grow the organization. Don’t abdicate responsibility to the latest management fads or succumb to just demanding that the organization somehow perform better. Work holistically across the various aspects of your business to develop an agile organization.

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Visit http://www.synaptus.com for insight into enabling business transformation. You can also subscribe to our e-zine, Synaptus Insights, at http://www.synaptus.com/synaptus-insights.html and receive a free copy of our Pragmatic Leadership workbook.

Dennis Stevens, President, Synaptus

Synaptus is a proven catalyst for enabling businesses to achieve execution excellence. The Synaptus approach enables strategic focus, information technology transformation, operational excellence, talent management, decision process optimization, and successful delivery of strategic projects.

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by Dennis Stevens

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Being good at performing projects is increasingly important in many companies. It is through projects that changes in technology, organizational structure, business models, and processes are made in the company. Additionally, the work that many companies deliver to their customers is performed through project management. You might manage your projects with a formal project management process, or use a more ad-hoc approach to managing the projects. More and more companies are recognizing the importance of project management and are working to improve their ability to manage projects. This can be through project management training, formalized project management processes, and standardized project documentation. However, even with trained project managers, project schedules, requirements documents, issue logs, and status reports, many companies struggle to successfully deliver projects.

Projects can be viewed as a network of understanding, coordinating, and committing conversations that take place through a social construct. This is a complicated definition and communicates a lot of information. Let’s take a careful look at the definition. First, a project is temporary endeavor undertaken to create a unique product, service, or result. A conversation is the use of language to exchange thoughts, ideas or information entered into with intent on the part of both parties to be changed in the process. So conversations serve a purpose. In projects the purposes involve establishing a better understanding, coordinating efforts and resources, and managing commitments. Finally, projects occur through the efforts and interaction of people on the project. When people work together toward a common end, it creates a social construct.

Based on this definition of projects, you can improve your ability to manage and perform projects by improving the conversations that take place in the project. What does improving conversations mean? It means making sure the right conversations are taking place at the best time, and that the purpose of the conversation is accomplished with the least effort and waste.

Sometimes project schedules, requirements documents, issue logs, and status reports serve the purpose of blaming or forcing accountability. In these projects, these tools try to serve as a substitute for having the conversations. In social constructs, knowledge arises through effective interaction. So these tools enable project conversations, not serve as substitutes for conversations.

This article outlines the 10 primary project conversations. These conversations fall into the three primary categories of Learning and Understanding, Coordinating, and Committing. The conversations are given names, the purpose of the conversation is described, and the impact that you will observe when this conversation isn’t happening effectively.

Learning and understanding conversations deal with conveying ideas and getting performers on the project operating from a shared understanding of the project.

1. Purpose: Projects are performed with a purpose in mind. It is important to communicate this purpose consistently to everyone on the project. The conversation for purpose is about having the stakeholders and project performers in addition to understanding the project purpose, align their purposes with the project. Paul Evans says that people don’t dislike change, they dislike being changed. When the conversation for purpose is not held with the people impacted by the project, they feel like the project is happening to them.

People don’t do their jobs for the best interest of the business. They do what they do for the best interest of themselves. Performers on the project typically have very different purposes than the project itself. These purposes may even go unexamined by the performer. Their purposes may involve implementing cool new technology, using the latest management fad, protecting their turf, or earning respect by being in charge of the project. These purposes are often considered undiscussable. So decisions are made throughout the project that serve the purposes of the performers and that might be at odds with the project or the organization.

2. Understanding: Conversations for understanding involve establishing common understanding. This often involves one person on the project learning something new from someone else on the project. Conversations for understanding are important between different functional groups, and when defining expected outcomes. The need for conversations for understanding comes from the complexity of social constructs and projects.

In domain complexity, where it is difficult for one person to see how another person will create a results. In social complexity, people have diverse opinions and perspectives. In dynamic complexity, cause and effect are separated by time and distance. In generative complexity, people may have vague or differing views of the future outcome. For example, requirements documents define what needs to be done on a project and to make it meaningful context is needed to enable understanding. The requirements documents by themselves are not adequate. The gap in understanding leaves room for the performer to build something that is not optimal either from a development or a requirement standpoint.

3. Creative Solutions: Problem solving is often considered to be eliminating something undesirable. This is often performed by a single person who does it from their perspective. It can result in constraints on the rest of the organization. On the other hand, a creative solution accomplishes an outcome that is in the best interest of everyone involved. This can only happen by involving other people in a conversation to explore possible outcomes. When during the process an unforeseen event or problem arises, there is a choice. One to eliminate the issue and move forward on the original plan. Or, reexamine all the new options presented by the current circumstances. Since these issues may require extra work, and maybe a change in direction, they actually present opportunities to create a better solution.

4. Competing Concerns: Based on the conversations for purpose, or resulting from complexity during a conversation for understanding, people may end up with competing concerns. A typical approach for managing competing concerns is to elevate the issue up through management and have management devise a compromise solution. A compromise solution means neither party will get the optimal outcome from there perspective. This is almost never in the best interest of the organization or the project outcome. A conversation for competing concerns involves identifying a shared result and exploring the assumptions behind each person’s perspective. In many cases, it is possible to invalidate an assumption and define a result that meets everyone’s best interest.

Coordination conversations involve aligning the performers and resources with the work to be performed.

5. Enrollment: Stakeholder’s and project performers may be more or less committed to a project. A conversation for enrollment serves two purposes. First to align the stakeholder or performer with the project. Secondly, to identify the actual level of commitment to the project. People will pay lip service to a project while actually having no intention to support the performance or implementation of the project. It is important for everyone to have clear agreement on the level of enrollment.

6. Flow: Moving work through a project team is at least as important in ad-hoc work as it is in a manufacturing process. When work piles up in a manufacturing process, it takes up space and slows down throughput. When work piles up in project and knowledge work, it spoils quickly. Not just the work itself, which may spoil because other decisions are made that cause the work to be irrelevant or incorrect. Work also spoils because of losing the freshness and perspective of the people who were working on it.

A conversation for flow involves coordinating hand-offs very tightly. Conversations for flow also involve identifying causes when work doesn’t flow, and putting into place changes to improve flow. When work is ready to be worked on, it should be handed off to someone to work on it as soon as possible. This reduces the work in process, allows the project team to capitalize on gains where work was completed in less time than estimated, and capitalizes on the freshness of the memory of the people performing the work.

7. Planning: A conversation for planning involves defining outcomes, dependencies, resources requirements, and estimated effort. It is very important that the conversation for planning is not confused with the conversation for promising. The planning conversation cannot be a conversation for commitment because of the uncertainty in estimates and learning that will take place during the project. There are multiple levels of planning conversation that can take place. It is important for everyone involved to have the same understanding of what the planning horizon is. When planning is confused with committing, performers will pad efforts due to the uncertainty inherit in planning. When performers pad efforts the tendency is for gains to be lost and losses accumulated. This results in a dramatic increase in the amount of time it takes to complete a project.

Committing – Committing conversations are about the actual promising, status, and delivery of the work. They are very different than coordinating conversations in that they do not involve estimating but are about specific intention. Hal Maccomber at Reforming Project Management has spent the last decade or so helping organizations improve their committing conversations.

8. Promising: A conversation for promising begins with negotiating between the requestor and the performer about the specific nature of the request. A promise isn’t made until the performer clearly understands the request has scheduled the time, has available resource and skills, and has all predecessors available. Slippery promising is one of the greatest costs to project performance.

9. Completion: A conversation for completion occurs when the performer tells the customer that the work is completed. The customer will then review the result of the work. This conversation is often overlooked. Work may or may not be completed on the date promised. When completion is ambiguous, the next performer may not know to get started, or the work result may be incomplete. This leads to a wasted time, miscommunication and rework.

10. Status: A conversation for status is necessary during the performance of work. It involves the performer communicating whether they are on track to keep the promise they made under the current conditions of satisfaction. It is equally important for the requestor to communicate if the there is a change in the requirements for the request. Failure to perform conversations for status leads to stress on the part of the requestor and other downstream performers. When the way that the performer will do the work has an impact on the way other work should be performed, failing to communicate this leads to rework and wasted effort. Failure to conduct conversations for status on the part of the requestor when the requirements have changed, also leads to rework and waste.

Each conversation has specific elements that, when they exist, improve project performance. When they don’t exist, the conversations tend to be ineffective. One of the complaints heard is that there isn’t time to have the conversations and that it takes to much work to get the conversations right each time. However, over the course of any successful project, the understanding, coordinating, and committing conversations take place within the project team. So no time is saved by not having the conversations, and doing them purposefully and effectively can dramatically reduce the amount of time it takes to perform the work.

On your next project effort, pay attention to the conversations for understanding, coordinating and committing. Notice what exists when the conversations are effective, and what is lacking when the conversations aren’t effective. Don’t work to improve process standards or documentation for the sake of improving. Improve them so that they enable effective conversation. When you do run into problems, look at the list of conversations and try to determine what the appropriate conversation is to move the project forward successfully

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Dennis Stevens leads Synaptus, a consulting firm that helps executives improve business performance by connecting strategy to execution. For more information, please visit www.synaptus.com.

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by David Hallowell & Dennis Stevens

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Over the last three centuries advances in technology, supportive government policies, and expanding and changing trade networks have combined to lead to major changes in organizations and how businesses create value. At each of the major changes new challenges for managing organizations arise. Management has had to develop new capabilities to respond to these challenges. Today, management faces another nexus of technology, globalization, and new business models that is changing how businesses create value. Knowledge and creativity are becoming increasingly important and the management practices from the Industrial Age and the Productivity Age are no longer enough. Managers that develop the new capabilities to respond to these new challenges will gain an advantage over the ones that don’t.

Industrial Age: 1700-1939
The industrial age refers to the developments that transformed Great Britain, between 1750 and 1830, from largely rural people making a living almost entirely from agriculture to a town-centered society engaged increasingly in factory manufacturing. Over the next 100 years, the industrial revolution spread across much of the world. The industrial revolution was fueled by a combination of new technology, expansive government policies, and a large and varied trade network. During the industrial revolution assembly line production raised the productivity of workers and taller building in cities put workers in closer proximity to the means of production. The coordinating a large workforce and transitioning unskilled agrarian workers to industrial jobs presented new challenges to management. Management had to develop new capabilities to handle these challenges. Hierarchical organizations and work standardization work allowed mass production to take hold.

Productivity Age: 1940-2000
Throughout the second half of the twentieth century, business has been working to optimize the models that resulted from the industrial revolution. Introducing process improvement techniques such as; the Toyota Production System, TQM, Lean, Six Sigma, and Business Process Re-engineering have lead to order of magnitude improvements in productivity. The focus on cutting variation, robust design, improving quality, and cutting out waste are the keys to these productivity gains. Improvements in transportation and low barriers of entry to manufacturing lead to a large and varied trade network where textiles, cars, computers, and appliances built in one part of the world and sold in another part. Computing power and a ubiquitous communication network led to communication connectivity and availability of information that has suppliers, producers, and consumers interacting to create new business models. This combination of productivity gains, globalization, and technology advancements have changed how businesses create value. These changes have created new challenges to management. Business intelligence, knowledge management, decentralization of information and decision making, process management, project management, and matrix organizations have developed to address these new challenges.

Knowledge Age: (Present-????)
The current combination of the Internet and massive computing power, the entry of two billion workers from China and India, and the movement of information and buying power to the consumer once again form a nexus that will change how businesses create value. Moreover, there is a sense that process has largely been exploited and it is time to work on the people side. Management needs to develop new capabilities to exploit the current nexus. These new capabilities will revolve around improving how organizations leverage knowledge and creativity. Since knowledge and creativity are social processes, the new capabilities will revolve around social interaction. From a social interaction standpoint, organizations can be looked at a network of context setting, coordinating, committing, and learning conversations. The primary capability management has to develop is to leverage conversation to improving the ‘fidelity’ of this network. The focus once again will be on cutting variation, improving quality, and cutting out waste. But this time the target will be improving the conversations in the organization. A few ‘info-degrading’ nodes can have undue influence – degrading the performance of the whole network. Management will have to figure out how to find out what conversations are critical; who should be involved in each conversation, how to make sure relevant information is available, and how to know reduce waste in the conversations.

This new management capability will take active effort and attention to intentionally shape the context setting, coordinating, committing and learning conversations needed for the performance of work. Productivity gains will occur though raising the throughput and quality of information flows while cutting out the waste of these conversations. We are on the brink of a new age. The new capability of managing conversations to improve the organizations ability to set shared context, coordinate, reliably commit and to learn and rapidly adapt to changes in the market are what is needed to meet the new challenges ahead.

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David Hallowell is Managing Partner at Six Sigma Advantage, a consulting firm that applies Six Sigma to products, services and the technologies that drive them. For more informatin, please visit www.6siga.com.

Dennis Stevens leads Synaptus, a consulting firm that helps executives improve business performance by bridging the gap between strategy and performance. For more information, please visit www.synaptus.com.

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by Pete Blazek & Dennis Stevens

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When I was in the fifth grade, I didn’t think much about my future. I was focused on hanging out with my friends, playing baseball and swimming, getting my school work done, avoiding bullies, and trying to get girls to talk to me. School was more of a chore or social event than the main event. Many of the lessons I learned in school have never proved valuable to me in my career. What I didn’t know was that over the next four years I would form habits that would shape everything I would become as an adult. These habits shaped how well prepared I was for the world when I got out of high school.

When you are taught something, what you already know affects what you learn. If you don’t know what you are looking for you may miss the opportunity to learn something important. When you learn something and put it into practice, it becomes a habit. Habits are built into your brain and they become part of who you are. Habits happen without much thinking and they will influence everything you will become as you apply them in other life situations. Whether you do it thoughtfully or not, you develop habits in all areas of your life when you are young and the habits you form shape how you participate in the world when you grow up. If you develop bad habits when you are young, you will only be able to change them with great effort and strain when you get older.

For most of what you are being taught in school, the content matters. The core skills of reading, writing and math are important. But these are not the most important lessons you learn in school. The most important lessons are the ones you will learn about people, time management, and teamwork, since these will have the greatest impact on your success. The world is changing so fast, we don’t know what content will be most important to you. The issues we face are changing and that rate of change is growing faster. The growth of consumption and movement of jobs and wealth around the world are altering the work place into something different from our parents’ work place. The good news? You can learn to focus on forming the right habits to help you succeed in this changing world.

In 1900, the major concerns in cities involved the environment, disease, energy, communication, and economy. The environment in our cities was harmed by pollution from the horse manure in the streets. Infectious disease was killing large numbers of children as people flocked to the cities for jobs. The primary source of energy was coal, which poured soot into the air. It took 15 weeks to get a message to India from the United States. The industrial revolution was well under way and the movement of a largely unskilled labor force from farming to an industrial economy was a big concern.

In 2000, the major concerns were still the environment, disease, energy, communication, and the economy. The environment was being polluted by smog and acid rain from fossil fuel burning cars that were not invented in 1900. Infection had been largely wiped out by antibiotics, but heart disease, viruses and cancer are the major killers. The primary source of energy is oil, although France gets 80% of its electric power from nuclear energy, a power source not even thought of in 1900. With email, a message gets to India in seconds and the internet has opened communication up around the world in spectacular ways. The knowledge revolution is well under way and the training of a largely unskilled labor force from an industrial to a service and knowledge based economy is a big concern.

The future concerns for the environment, disease, energy, communication, and the economy are impossible to predict. None of the issues that exist today were predicted in 1900.

The rate of change is getting faster

There are more scientists alive today than in the entire history of the world combined. These scientists have access to powerful computers and can access all the information ever researched before them, Entire industries are being reinvented. For example, the printing technology didn’t change between 1500 and 1750. For 250 years it was the same. In the last 15 years, the publishing industry has changed twice and it is about to change again.

The impact of technology is amazing:

• Pagers – It took 41 years to have 10 million pagers in use
• Fax Machine – 22 years
• VCR – 9 years
• CD Player – 7 years
• Personal Computer – 6 years
• Internet Web Browser (Internet Explorer) – 10 months
• MySpace – 4 months. 11 months after launch a concept that didn’t even exist and a business model that wasn’t possible two years before had a market value of $1.8 billion.

We are in our forties. We use a laptop computer (which didn’t exist when we were born), to connect to a cell phone network (which didn’t exist when we were born), to connect to the Internet (which didn’t exist when we were born), to connect to Amazon (a business model which didn’t exist when we were born). We may be old, but the fifth grader from today couldn’t do this when they were born either. Oh, and by the way, the cell phone infrastructure built in the 1980′s and 1990′s in the US that enables all this is out dated and needs an overhaul.

The global business world is changing

And that change is not just from new technologies. There will be 2 billion educated workers entering the work force from China and India over the next 10 years. There will be more use of goods and services in the next 25 years then the cumulative use of the world in history. As jobs and the use of goods and services spread around the world, the spread of wealth will change. Today, the spread of wealth is unequal. We are in the high wealth nations. My generation benefited from a birth right of wealth. The next generation won’t benefit from that same birth right. You will have to earn it. The world where you will earn a living and feed your family will not look like today’s world. Does the world of 1900 look like 2006? The change will be major. Like 1900, the changes will occur in ways that will boggle our minds.

So here are five things I wish I knew were important in the fifth grade. Because if I knew they were important, I would have paid attention and focused on developing good habits. I had plenty of opportunity to learn them; I just didn’t know they were important. These are far more important to you than they were to me. As the rate of change gets faster and the business models change, don’t ignore how important paying attention to these five things and developing strong habits around them.

1. Be a Leader

A definition of leadership is “the ability to guide in direction, course, or action.” Being a leader doesn’t mean telling others what to do. Leadership comes from the inside – from knowing what you want and why it matters. Leadership means developing the habits that will help you be successful in life. The schools are about testing scores, they are not going to teach you leadership. Your teachers want you to know this stuff, but they aren’t paid or supported in doing it. Although you may find a great teacher that points you in this direction, it is up to you to decide to learn and develop the habits you need to be successful. It is time to form those habits, not for mom or dad, or some test, or for your friends. The kids that develop these habits today will have an advantage in the new world of work. You have to develop these skills and habits today to lead you into the future. That habit of leadership is what will set you apart from others.

2. Think and communicate clearly and creatively

The International Association for Human Resource Information Management says the number one skill needed for new workers is creativity. The number two skill is communication. Look for chances to think, read and write creatively. Learn to develop and discuss your opinions. Learn to form original thoughts from what you read or see in the world around you. Learn to take your writing seriously. Communicating change and new ideas so many diverse people can participate is an important skill. Be creative. The ability to face your fears to perform great work is critical. Learn to communicate in writing from the heart with passion, vision, and emotion. With a shrinking world, much of how you are measured will be your ability to communicate a great idea to people who may never speak to you. Learn to be a great writer. Reading great writers is one way to do this. Develop a writing style of your own. The people who succeed in the future will have formed the habits of communicating clearly and creatively, both in writing and in speaking.

3. Network and Interact with others

You will face more diversity in your lifetime than the generations before you. You can’t know everything, you will have to work with people from many cultures, and jobs will have a short time span. So who you know will become critical – because you will need to use that network to be successful in your work, find the right know-how, and find your next job. Already I work on project teams that contain Indian, Chinese, Arab, American, and European people working together on the project. The ability to build relationships, not just with people like you, but with people different from yourself, is a critical skill. Learn to keep track of people. Stay in touch with the smartest kid, the nicest kid, the best athlete, and the interesting people. They will help you find the next job or the expert you need to be successful. Challenge yourself to network well with kids different from you. The people that succeed will have developed a strong habit of communicating with diverse people and managing personal networks.

4. Develop project skills.

In the future, most work will be short term work. This means teams will form, solve a problem, and break up. It will happen not only inside big companies, but over half the work force will be independent specialists who join project teams as their job. So project skills are important to develop. Project skills include knowing what finished means, planning your time, doing the tasks well, and finishing projects with a high level of excellence. You have the ability to practice these skills almost everyday with your homework. If you develop great habits here, homework won’t call for great effort, it will be easy. Learn to get A’s. Not because you are interested in the work, but because good jobs will be competitive. Being able to identify what is expected, and giving it consistently, is an important skill. Do it today, you can’t afford to wait to learn it later. The people who succeed will have formed the habits needed to define a project, plan and do the work, and deliver excellence.

5. Have passion and always improve

People will have to continually develop and improve their skills. You can’t do this if you don’t have passion about what you are doing. Learn what you are passionate about. Then go for it. Don’t suppress it because someone might think it is lame. Learn to be passionate about something. If you change your mind, and you likely will, you will be better prepared to be passionate about something else. Don’t learn to be mediocre. Learn to be passionate. Don’t strive to follow the pack. Strive to have passion and improve something that matters to you. The people that are successful will have developed the habits of commitment and improvement that comes from pursuing things they are passionate about.

Habits for success

You will form habits in all these areas. It’s up to you to decide if you want to develop skills and form habits that will help you be successful. Just remember, bad habits are hard to break. With these skills practiced and polished in my youth, I would have been able to reach success with much less effort and pain. I would have been better prepared for the world and far ahead of where I am today. You can’t wait for someone to show you how to do this. We may not know what jobs will be available to today’s fifth graders in ten years. We can make sure that teenagers have developed habits of leadership, creative communication, networking, project skills, and passionate pursuit. This will dictate the success these people have.

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Pete Blazek and Dennis Stevens lead Synaptus, a consulting firm that helps executives improve business performance by connecting strategy to execution. For more information, please visit www.synaptus.com.

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by Dennis Stevens

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Ric Merrifield is the head of Business Architecture for Microsoft. To view another interview with Ric check out http://channel9.msdn.com/ShowPost.aspx?PostID=179160#179160.

1. What is Business Architecture and how does it relate to Strategic Alignment?

Business architecture is not so different from the architecture of a building in that it is an abstract representation of “what” something is, down to a very low level of detail. Then “how” that architecture is implemented, in the case of the house is the color of paint you use, and the quality of the materials you use, and places where you decide to emphasize quality, and where you decide to be more frugal. So the “how” describes the implementation of the architecture, and those implementations will change over time, as you replace your roof and do a remodel and so on and so forth, and as you do those changes, you will often go back to the architecture to inform some of those changes.

Similarly, the business architecture is a depiction of “what” makes up a business, and in this case we refer to the parts that make up the architecture the “business capabilities” and the detailed ones might be “Pay Employees” (which is a part of the “Human Resources” capability) or “Ship Product” (which is part of the “Fulfill Orders” capability). As with the house, “how” those capabilities are implemented in the form of who does the work, and what specific process steps are used, and what technology supports it, those are the implementation of the capabilities, and any or all of those implementations can change over time, but like the house architecture, the business capabilities remain comparatively stable and static.

For example in the “Pay Employees” example, things about that capability that are common are who in the organization owns that capability, the performance metrics are fairly universal, and the relationship of the performance of the capability to its parent, Human Resources, is well known and understood. So what you end up with in business architecture is a highly stable, measurable, and transparent view of a business. And then if you see that business as a complete business and not just “the four walls of the company” in which case something like Pay Employees may be outsourced to another company, but the capability is still part of your business, you have an end-to-end transparent view of the business, that is clear and understandable to business people and IT people, and this opens up a whole new dialogue about where change is needed, and who should do the work, and how it should be prioritized and so on and so forth.

With that, you are able to create a very bottoms up view of the business, or even just a part of the business, and link that to organizational strategy in a way that informs strategic direction, but also allows the strategy owners to get very specific about the impacts of their recommendations in terms of impact and benefit. Further, once you achieve this linkage, because of the richness and objectivity of the metrics you get from business architecture, you can achieve real time, or at least real enough time reporting of progress against strategy, which is a very big step forward for a lot of organizations.

2. What is the cost to organizations from the lack of strategic alignment?

Organizations that lack strategic alignment are going to see cost in three specific areas:

a) Risk. If you do not have an explicit link between strategy and the details of the business operations, things will happen at the operational level, and the strategy owners won’t be able to see it either reactively or proactively, and even when they are made aware of an issue, they still may not have clarity with respect to the strategic impact and that can create great risk to a company if they do not respond properly to strategic shifts. Similarly, not having that linkage makes it harder to get predictability in outcomes and performance, and for most organizations, high variably in outcome can be very expensive.
b) Waste. Absent an explicit link, the people in the tactical roles may invest in projects, people, and technologies that are not aligned with strategy, and while not every decision has to be aligned with strategy, if there is a link, people can at least ask the question. If people are investing in the “wrong” things and there are no checks and balances, those investments are at best a waste of money, and at worse are actually counter to organizational strategy.
c) Wrong spending. Different from simple waste, organizations are often faced with decisions about project selection and prioritization. If the strategy and operations are not linked, there is a chance that projects that are aligned with strategy will not get funded, either because of politics or some other reason, and that can also be very expensive in terms of recovery and simply ending up with an organization that is different from what the strategy calls for.

3. How is Business Architecture different than Process Mapping or BPM?

It is very easy to get caught up in a “label” disagreement, but there are some very specific differences that we have found most people are comfortable with:

1) What/How. The business capabilities that make up a business architecture describe “what” the work is and process usually describes “how” it is done. At the higher level functions, the labels can be very similar, but as you get more detailed into something like “Send Fax to Agent”, that describes how they are performing a capability which is “communicate status to agent” where the fax is an implementation decision.
2) Schematized. Capabilities have a schema associated with them (with attributes such as who owns it, who is the customer of it, what are its performance measures, are there compliance needs, etc.), whereas process has not historically had that. So what often happens with process is if you ask five people to describe a given process, you can get five different depictions, whereas with the capability, because its attributes cause it to have more objectivity and more specificity in terms of where it starts and where it stops, the capability definition tends to be more objective and stable.

3) Stability. You can change the process without changing the capability, but you can’t change the capability without changing the process. In the example of “Pay Employees”, whether it is five process steps, or ten, or whether it’s automated or manual or even outsourced, all of those things can change, and it’s still “Pay Employees” with the same performance measures and inputs and outputs.
4) Not just the company. People typically stop process mapping at the four walls of the company and capability mapping encourages people to view the entire business with all partners, customers, suppliers, regulatory bodies, and so forth.
5) Process is unique to a company, and business architectures tend to be highly common within an industry, and in some cases even across industry. “What” a company in an industry does is usually very similar. It is “how” they do the work that makes them unique, that defines their brand and identity. This allows organizations to look within and even outside of their industry to make decisions about what to outsource and what to focus on from a strategy perspective as some industries get more and more competitive. Focusing on that small percentage of the business that truly drives performance, and brand, and identity, in this day and age is a big advantage.

4. Does a balanced scorecard serve the same purpose?

Absent a schematized view of a department, or a division, or even the entire business, you cannot “stitch” together all of the scorecards in the same way that allows end-to-end organizational transparency. Scorecards, by their nature, measure the results of activities. They don’t give you insight into what to change to get different results. Also, in many implementations, scorecards cascade through the organizational hierarchy. So the conflicts inherent in that structure are reflected in the scorecards. In business architecture, the business model comes first, and the organizational hierarchy second. What is powerful is if you combine scorecards with business architecture in a meaningful way. So, scorecards are necessary but not sufficient.

5. How does Business Architecture help with Organizational Alignment?

Because of the transparency provided by business architecture, different parts of the business that do similar things, or even the same thing, with different people, or process, or IT allows the organization to ask the questions about whether they should be different people, processes and IT. It allows businesses to highlight areas of best practices, it highlights opportunities for consolidation (there’s a good reason HR is a central function in many organizations), risk reduction (doing contract management five different ways can be a risk if it doesn’t need to be different), even outsourcing if it makes sense for the business.

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Ric Merrifield is the head of business architecture at Microsoft. You can contact Ric at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Dennis Stevens leads Synaptus, a consulting firm that helps executives improve business performance by connecting strategy to execution. For more information, please visit www.synaptus.com.

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by Dennis Stevens

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Being agile is critical to an organization’s success. Agility is the power of moving quickly and easily is response to outside forces. And, there are so many forces to keep pace with. Like competition, regulatory changes, technology innovation, demographic shifts, globalization, and the never ending changes in customer demands.

And what enables you and your organization to stay ahead? Executing strategy, right? To execute strategy, you’re going to have projects and that means you need project management to guide the changes you need to make inside your company, and to ensure you are delivering value to your customers. In this article, we will discuss what it takes to have project management improve your ability to execute your strategy.

While this requirement to change is threatening, there is opportunity here. The companies that learn to respond to these forces more quickly than their competition will gain a competitive advantage. According to PricewaterhouseCoopers “those organizations that understand the vital importance of excelling at project management, and act upon it, will undoubtedly outperform the competition” (2004).

But, maybe project management hasn’t been as effective as you expected. Due dates on your projects are still unreliable, projects take too long, they are running over costs, and there is conflict within the project. But you are stuck with going through the pain because you have to keep up with forces of change.

If you are struggling to perform projects effectively, you’re in good company. Standish Group’s 2004 CHAOS study found that 71% of strategic projects failed to deliver the desired benefit or with almost half of those being cancelled prior to implementation. That same Standish Group study found that in the US, IT spending waste alone was $55 billion made up of $38 billion in lost dollar value and $17 billion in cost overruns (InfoQ, 2006). This number doesn’t even take into account the waste from projects that were executed that didn’t advance the strategy of the company.

Making projects work isn’t easy – but some organizations are able to consistently perform them well. Based on over 20 years of experience, an intensive research project, and a recent study sponsored by Synaptus, we’ve found what it takes to make project work. Leaders need four key elements, all working in concert to make project management successful. To be successful and effective projects management MUST:

1. Ensure projects are aligned to the organization’s strategy
2. Develop processes and methodology that work for your unique circumstances
3. Ensure project manager have the right knowledge, skills, and attitudes
4. Focus on enabling the project performers

Without all four of these factors in place, organizations struggle to perform projects. When these factors are addressed exist, an organization will greatly accelerate the execution of its strategy through the delivery of programs and projects.

It must be clear throughout the organization how projects relate to the business strategy. Project failures are often a consequence of aspects that are organizational and over which project managers have little influence (PricewaterhouseCoopers, 2004). Almost 80% of project managers recognize that their project success is dependent on alignment with between the business leaders and the project team (Synaptus, 2006).

As intuitive as this is, only 32% of companies said they had a method for prioritizing projects within the business strategy (PricewaterhouseCoopers, 2004). When projects are not aligned with the business strategy, they don’t help executives accomplish their goals. When they have to interact with a project that is not clearly aligned with advancing the strategy, these executives don’t find the time and energy. Executive sponsorship drives organizational alignment. This alignment is critical to sufficient resource participation. This is critical since inadequate resource and low project sponsorship are the best predictors of project failure (Taylor, 2005).

Formal project management helps organizations implement projects. There is a positive correlation between an organization’s level of project management and its actual project performance (Cook, 2003). 85% of project managers have an understanding of this. Yet many organizations don’t have a formal project management approach and 60% of organizations that have project management don’t implement the basic PMI processes with discipline within their organization (Synaptus, 2006).

Many businesses have developed proficiency at process improvement. Project management processes can be managed like other processes and process improvement concepts can be applied to project performing organizations. Project teams that apply process management principles to project management reduced their average development times by 30% to 50% (Harvard Business Review, 1996). The use of a project management methodology is far more common among successful projects than the existence of project management tools or project success incentives (Taylor, 2005).

Project Manager Talent Management

Obviously, project managers are a critical part of successfully implementing project management. But who makes the best project managers. Project managers are often promoted because they have reached a high-level of technical competence. They may be promoted because they are liked and are not performing successfully in a technical role. Project managers are typically not selected based on a systematic understanding of who will be the best project manager. In addition to sufficient technical understanding, project managers should possess the appropriate knowledge, skills and competencies.

Being effective as a project manager requires specific knowledge and skills. Knowing how to go about project initiation, planning, execution, control, and closeout transition are important for a project manager. The Project Management Institute (PMI) provides a certification, called the Project Management Professional (PMP) that demonstrates a baseline set of project management experience, knowledge, and skills. Project management knowledge and skills be developed through training and professional development.

A competency is a combination of inherent traits, skills, attitude and behavior. Competencies for effective project managers include taking initiative, customer service, interpersonal understanding, organizational awareness, relationship building, assertiveness, perspective, self control, problem solving, and flexibility. Competencies can be developed over time through experience, self-development, and coaching.

Since effective project managers must have the appropriate technical knowledge, project management knowledge, and professional competencies, not ever person will be an effective project manager. When gaps exist in the knowledge, skills, and competencies a development plan should exist to close these gaps. There is a clear correlation between companies that invest in professional development for their project managers and the success of the projects they execute (PricewaterhouseCoopers, 2004).

There is also a very strong relationship between an ineffective project management and project failure (Taylor, 2005). Even in organizations that have project management 40% of projects still fail (Taylor, 2005). Ineffective project management adds administrative and bureaucratic overhead without contributing enabling the performance of the group.

While it is important to maintain a clear understanding of project performance, effective project management is not about tracking and blaming. Specific methods to communicate alignment with the strategy, gain organizational support, and manage project execution are more important to achieving strategic change than any other single element (Taylor, 2005). That means the most important role of the project manager is establishing understanding around the project, effectively scheduling resources, and coordination of people.

It is interesting to note that on projects that have failed, 90% of the people new half-way into the project that it would fail without correction (VitalSmarts, 2007). In over 80% of these cases, the project could have been gotten back on track if changes had been made (VitalSmarts, 2007). Ineffective project management treats people as machines in an assembly line that instructions are sent to, not as active participants in the project.

Projects take place within a social network of understanding, coordinating, and committing conversations (Synaptus, 2007). Every project management artifact serves a purpose. This purpose is typically to aid in establishing or sharing knowledge through the social network. Improving communications does not mean putting more effort into reporting status or documenting requirements. Project management must participate in enabling this network of conversations. Effective communication, scheduling, and coordination take place when the project manager actively participates in the conversations that occur within the project.

In today’s fast paced world, the failure to execute project equals the failure of strategy. Project management is effective when clear strategic alignment leads to organizational support; when the project management processes are managed; when the right effort is put into the selection and development of project managers, and when project manage focuses on enabling the people. When all four factors are addressed on the project is likely to perform successfully. When any of these factors is overlooked, the project is likely to fail.

Maybe your organization is different and isn’t facing these pressures to change. Maybe your organization is effective in delivering projects on time and on budget. If so, you are on your way to success. If not, its time to figure out how to make effective project management a priority in your organization.

Cook, R. (2004). PMI Research Topic: Measuring the value of success in project management organizations. Retrieved from July 16, 2006 from http://www.pmi.org/prod/groups/public/documents/info/PP_RobertCook.pdf.
Harvard Business Review (1996). Getting the most out of your product development processes. Harvard Business Review, March-April 1996.

InfoQ (2006). Interview: Jim Johnson of the Standish Group. Retrieved on March 2, 2007 from http://www.infoq.com/articles/Interview-Johnson-Standish-CHAOS.

Synaptus (2006). Factors Influencing the Successful Project Management Office. Synaptus White Paper: Atlanta, GA.

Synaptus (2007). Project conversations: Raise the conversation above blaming and conflict. Retrieved on March 15, 2007 from http://www.synaptus.com/project-conversations.php.

Taylor, A. (2005). PMI Research Topic: Increasing IT Project Success for Project Managers and their Clients. IT Project Success Research Results. Retrieved on July 16, 2006 from http://www.pmi.org/prod/groups/public/documents/info/PP_Taylor.pdf.

VitalSmarts (2006). Crucial Conversations Online Survey. Retrieved in March 15, 2007 from http://www.vitalsmarts.com/userfiles/File/download/SilenceFails020707.pdf.

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Dennis Stevens leads Synaptus, a consulting firm that helps executives improve business performance by connecting strategy to execution. For more information, please visit www.synaptus.com.

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Last month Dennis Stevens, the President at Synaptus, presented to the GSU EMBA Alumni Society luncheon. Dennis addressed the concepts covered in the the June 2008 Harvard Business Review article regarding a capability-based view of the business model. He discusses how to apply these concepts to your business in a difficult economy to focus and align all aspects of the organization on key operating objectives and strategic outcomes. The presentation is shown in its entirity on the GSU EMBA Alumni Society website at http://hollywood.gsu.edu/dba/wwwrcb/emba/10.24.08.html.

It is about 45 minutes in length and includes the entire PowerPoint. We will be posting some extracts from it on the website in the next month.

Many companies are working on their 2008 budgets. In many of those cases, economic forecasts point to a need to cut costs. The mandate that we have seen in this circumstances may be that a 4% cost cut is required across the board. So each department sets off to identify 4% cut in spending. This cost cutting activity may result in the financial savings desired, but it probably isn’t the best way to approach this effort. This approach is common for a few reasons. It is fair – because everyone should participate in any cut backs. It achieves the desired result and we lack a more effective way to solve this problem.

The problem is that costs are often cut too deeply in some aspects of the business and not deeply enough in others. The overall equation balances, but it doesn’t optimize investment across the firm in the interests of achieving the business strategy and creating value for the customer.

Rather than cut costs across departments, look at the business as an interdependent network of value creating and enabling capabilities. Value creating capabilities are those that directly contribute to creating value for your customers. All the rest of the capabilities are enabling. Not all capabilities contribute equally to the success of the firm – and investment is not optimized at every capability.

Some capabilities already have over investment either due to inefficiencies or an excess of capacity. Some capabilities may actually already be constraining the performance of the business and actually need additional investment.

Change the mindset from where do I cut, to how do I focus my investment to optimize the performance of the business.

1. Articulate the most important outcomes of the business.

2. Identify the capabilities in the business and determine how important they are to the outcomes of the business.

3. Dig deep enough in the enabling capabilities to see where performance will be negatively impacted by cost cutting – for example, make appropriate investments in technology to support the high priority outcomes.

4. Identify the capabilities where you currently have excess performance and inefficient investment.

5. Now focus the overall investment into the business, starting with the most important business outcomes and working down the list until you reach your limits.

Our experience is that by analyzing the level of legacy spending, misalignment between departments, local optimizations, and gross inefficiencies you will find significant savings. In fact, this exercise often results in higher organizational performance at a reduced spend.

Recently I reviewed a five page performance appraisal tool used by a software company that they believed was excellent, and they couldn’t understand why very few people were using the tool. I brought up the notion of Dynamic appraisals vs. Static appraisals. Static is a one off event completed to cover compensation issues. Dynamic is an evolutionary process that is nurtured and grows more like an organism that adapts to the business, market and behaviors.

After our discussion they started asking a lot of interesting questions; How do we get folks to adopt a dramatic approach rather than a check box approach? Can HR be the drivers of the adoption? What role should business leaders play?

These are the right questions that need to be asked, and now they are turning the tide by facilitating business adoption through aligning business leaders to competency drivers that bring out optimal performance. Optimal performance is getting people focused on their strengths and designing functional areas so that the collection of individual skills are stronger than any single individual. In other words, creating synergy that drives the business based on KSAs that are motivated and dynamic rather than static.

Static drivers create status quo performance, and aren’t very measurable. Dynamic drivers are immediately impacted by the market, competitors, economy, etc. We can prepare for changes, ie: gas prices increasing, and have contingency plans. Building performance management systems that focus on dynamic business processes will allow an organization to have more dynamic focus on growing the business rather than maintaining it.

Does this make sense? Is it just easier to manage performance by static events? Can anyone share an example where the business drives Dynamic Performance Management?

Please let me know your thoughts.

- Nat Boughton

The forward-edge-of-the-customer-area, or Forward Edge, is the foremost limit in the network of capabilities where business capabilities are deployed in direct contact with the customer. These capabilities probably make up 15-25% of the capabilities in your business.

Extra attention should be paid to Forward Edge capabilities. The Forward Edge is a two way street. This is where you create the relationship with your customer. It is also where you can be learning from your customer how to improve your ability to meet the customer’s needs and expectations.

There are a number of areas where you directly interface with your customer. These include product development, sales, product and service delivery, when the customer uses your product or service, customer care, and invoicing and payment. These capabilities should be focused on meeting the customer’s needs and learning what opportunities exist in the market.

Many businesses make the mistake of using technology or outsourcing to cut costs in these areas without considering the customer impact. When technology and outsourcing is used to improve the companies capabilities at the Forward Edge, its great. But when the customer experience or the ability of the business to learn what the customer’s emerging needs are is compromised, these are not good ways to implement the Forward Edge capabilities.

How clearly do you understand the customer’s expectations at the customer edge? How well aligned are the other capabilities in your organization to meet these expectations? What do you have in place to understand your performance here and to learn about emerging customer needs?