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The need for Business design to underpin strategic and operational agility

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Talk given at the business architecture Master Series in Sydney October 2019.

Agility is here to stay. But dig a little deeper and you will see that fundamental strategic, structural and cultural issues exist that often prevent success within large organizations. Some organizations have learnt the hard way when it comes to the missing pieces of the puzzle around organizational agility.

I was recently asked by a new-ways-of-working team to help them apply business design to create the target operating model needed to enable structural, operational and strategic agility. Is this the secret sauce that’s been missing in the agility conversations?

In this talk I’ll discuss the broader issues around agility when creating the adaptive and fast learning organization. And discuss the "secret sauce" that is missing when it comes to business heuristics and patterns.

I will also look at the areas where agility is succeeding and failing and discuss the need for multi-disciplinary architects that can help with the transition across strategic, business and delivery lenses.

PS - this is a presentation pack. I dont put everything I talk to into a slide. Some of these slides will therefore lack some context for you. Next time I'll record the talk and you can hopefully catch the story around the slides.

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The need for Business design to underpin strategic and operational agility

  1. 1. Business-by-Design True Agility is in Need of True Business Architecture www.designchain.co Business Design Briefing Presenter Pack October 2019 VERSION 1.0 LAST UPDATED: Level 2, 696 Bourke Street, Melbourne, Australia COMPANY ADDRESS Business Architecture Guild Master Series
  2. 2. Man, Machine and the Dog "The factory of the future will have two employees: a man and a dog. The man's job will be to feed the dog. The dog's job will be to prevent the man from touching any of the automated equipment.” Warren G Bennis ON THE INTRODUCTION PAGE OF A TIER 1 BANK STRATEGY DOCUMENT:
  3. 3. True Agility is in Need of True Business Architecture 3 Developing Learning Organizations We have to develop “new ways of working” to try and reduce the delay between insight and action The Promise of business agility frameworks Performance and Productivity Do what you do better. Disruption Change why you do it Transformation Change what you do Are we doing things right? Here’s what to do: Procedure or rules Why is this value? How is value created & captured? What is Value? How is value delivered? How is value measured? Context, values, problem, system dynamics Principles, Assumptions, & value thinking Strategies, decisions & Actions Value Delivery Results Are we doing the right things? Here’s why this works? Insights and patterns? How do we decide what is right? Here is why we want to be doing this Feedforward Feedback The reality of business agility frameworks DevOps sits in here BizOps sits here. So does the DAO. (1st learning loop) StratOps sits here (2nd learning loop)
  4. 4. True Agility is in Need of True Business Architecture 4 ‘Enterprise Lifecycle's 2014 © Enterprise Architects PTY LTD PERORMANCE TIME ENTERPRISE BRAND PLATFORM BUSINESS MODEL BUSINESS COMPETENCIES PRODUCT New products and services no longer suffice Organizations need to be rebooting entire business models and moving into ecosystems and value systems in order to provide more value. Increasing the level of complexity
  5. 5. True Agility is in Need of True Business Architecture 5 Are our problem solving disciplines equipped for the complexity we have to deal with? We are moving into the complexity space, where problems are often referred to as wicked. Unknowable: The relationship between cause and effect is impossible to determine as they constantly shift. In chaos, it is necessary to act first and then sense through the result of action how to further respond. Understanding the problem comes later. This is the domain of rapid response. Example: Natural disasters Unknown Problems: The problem is in constant flux as a change to the situation causes ripple effects and unpredictability in other aspects. Information is often incomplete. Rather than implementing a solution, devising a concept, testing, iterating and then responding is needed. Problems often become complex when human behavior is a significant factor. This is the domain of emergence. Example: Schooling experiences, organizational change management, traffic management Known unknowns: A complicated problem can have multiple right solutions. Complicated problems are understood, analyzed and then responded to. It often requires expertise to solve and is largely process driven. Solving a complicated problem often requires the right expertise along with the right tools. In this realm you may know you have a problem but may not be able to solve it alone. This is the domain of expertise. Example: Fixing a car, constructing an airplane. Known knowns A simple problem is one of cause and effect. The solution is rarely disputed. The problem can be categorized, understood and a response devised based on the information. This is the domain of best practice. Example: 1+1 = 2, solving a jigsaw puzzle. The Knowledge / Innovation funnel * ‘A Leader’s Framework for Decision Making’ David Snowden & Mary Boone KnowledgeFunnel
  6. 6. • “The leaders who will succeed in the future will be those who have the following abilities: • The ability to ask the best questions • The ability to choose the right methodology against a particular problem and knowing how to govern the work, methodology dependent.” • Director of Innovation Skills at Nesta Skills for the future are shifting
  7. 7. True Agility is in Need of True Business Architecture 7 Other disciplines are moving into the 4th order space…are the architecture standards? Person to Symbol Graphic Design Visual Design Communications Design Person to Object Product Design Industrial Design Engineering Architecture Fashion Design Person to Person Service Design Experience Design Instructional Design Process Design Person to System System Design Business Design Organisational Design Culture Design Capability Design 4th systems 3rd interactions, experiences 2nd objects, artefacts 1st signs, symbols Low complexity High complexity *Richard Buchanan 1992: Wicked Problems and Design Thinking • Social Change • Economic Policy • Crime & Unemployment • Networked warfare • Smart City programs • Digital Citizen Services • Reduce repeat visits • Tax system interaction • Staff Pride and Satisfaction • Products • Parking meters Smart Lamps and IOT • Prosthesis development • Voting Devices • Street signs • Branding • Messaging Version 2.0
  8. 8. True Agility is in Need of True Business Architecture 8 Multiple Disciplines are needed to address the complexity To cope with the rate of change and continual shifts, a variety of disciplines are needed to traverse the innovation lifecycle. This has been the NWOW focus *Adapted from Nordstrom Innovation Lab Version 2.0 DEFINE THE CHALLENGE OBSERVE PEOPLE FORM INSIGHTS FRAME OPPORTUNITIES BRAINSTORM IDEAS TRY EXPERIMENTS LEARN BUILD PIVOT/PERSEVERE? ABSTRACTCONCRETE customer SOLUTIONcustomer PROBLEM DESIGNTHINKING LEANSTARTUPAGILE
  9. 9. True Agility is in Need of True Business Architecture 9 Start thinking of business agility as the common thread: an adaptable and sustainable narrative that binds & guides us into the uncertain future, rather than directing us. The Result has been the pursuit of Big-A Agility Business and Enterprise Agility extends into the structural, enterprise and strategic areas *the business agility institute Version 2.0
  10. 10. True Agility is in Need of True Business Architecture 10 • Most agile frameworks have their origins in the software development space • They start with Devops and continuous delivery of product • They fall short around business agility and strategic agility, these areas are beginning to take shape • A multi-disciplinary future seeks to combine strategy, design, architecture, PMO and delivery • How feed the backlog at a portfolio and solutions level? • Only then will true agility be reached And the commoditization of “Agile” The Scaled Agile Framework looks to build agility into the entire business model Version 2.0 *Scaled Agile
  11. 11. True Agility is in Need of True Business Architecture 11 For now these frameworks focus on process agility Area of Strength Area of Weakness How an agile organization sets, communicates and operationalizes an adaptive market vision. Scaling ways of working across divisions, departments, the organization and ultimately between organizations. The form of agility that encompasses an individual value stream - the combination of discrete activities that are undertaken by teams and projects. The relationships between individuals, teams & divisions to create an agile organization.
  12. 12. True Agility is in Need of True Business Architecture 12 NWOW Still has a journey to travel This is the Area of opportunity
  13. 13. The NWOW Operating Model True Agility is in Need of True Business Architecture Performance and Productivity Do what you do better. Disruption Change why you do it Transformation Change what you do Are we doing things right? Here’s what to do: Procedure or rules Why is this value? How is value created & captured? What is Value? How is value delivered? How is value measured? Context, values, problem, system dynamics Principles, Assumptions, & value thinking Strategies, decisions & Actions Value Delivery Results Are we doing the right things? Here’s why this works? Insights and patterns? How do we decide what is right? Here is why we want to be doing this Feedforward Feedback The “Operating Model” of NWOW
  14. 14. True Agility is in Need of True Business Architecture 14 “A Business Model describes the rationale of how an organisation creates, delivers, and captures value” Alex Osterwalder – Business Model Generation An operating model determines how the organisation mixes its resources to create, capture and deliver value The business model vs the operating model? VALUE THE ENVIRONMENT BUSINESS MODEL Markets Industries Customers Market Segment Channels Customer Relationships Value Proposition Offering: Services/Products Processes/ Value Chains Capabilities Business Service Functions Data Applications Technology MARKET MODEL OPERATING MODEL SERVICE MODEL VALUABLE
  15. 15. Mixing resources across the business model Capability What about rules? True Agility is in Need of True Business Architecture
  16. 16. The Art of Mixing • The new way of thinking and operating is no longer linear • The value is in the mixing, whilst the parts are utility True Agility is in Need of True Business Architecture
  17. 17. THE DISCIPLINE OF MIXING How can we become better at mixing? Unresolved Business Challenges Rules of thumb Robust, repeatable and replicable formulas & processes Ultimately all innovative algorithms will become utility. * From Roger Martin (2009) The Design of Business
  18. 18. A Multi-Disciplinary Journey * From Roger Martin (2009) The Design of Business MYSTERY HEURISTIC ALGORITHM T h e K n o w l e d g e F u n n e l Design Thinking Architecture Thinking Agile TM Thinking No single discipline can traverse the funnel, it is a multi- disciplinary journey. THEAGILEORGANIZATION True Agility is in Need of True Business Architecture
  19. 19. Design Thinking Put the person in the center Architecture Thinking Put the business in the center Hybrid thinking focusses on a blended approach to the problem space Agile Thinking Put delivery in the center Hybrid Thinking True Agility is in Need of True Business Architecture
  20. 20. Where should we focus? True Agility is in Need of True Business Architecture
  21. 21. For the Business Designer / Architect, heuristics are the secret sauce True Agility is in Need of True Business Architecture Focus more here Focus less here Rules of thumb Mental Shortcut Principles Recipes Mixes Process Procedure Building Blocks
  22. 22. For the Business Designer / Architect, heuristics are the secret sauce True Agility is in Need of True Business Architecture Behaviour Economics* Increasing Ideality: Systems improve over time by providing more benefits with fewer inputs/costs and resulting in fewer harms. Business Heuristics: Unlock capacity, complement products, challenge pricing orthodoxies Business Rule - ? *sketchplanations
  23. 23. Abstract Plot Archetypes Harley-Davidson aligns its product design and branding with the outlaw archetype, emphasizing freedom and living outside the rules of society. True Agility is in Need of True Business Architecture
  24. 24. Abstract Heuristics for Innovation True Agility is in Need of True Business Architecture
  25. 25. Problem My Specific Solution World’s Best Ideas solving similar problems My Specific Problem Generic Problems similar to mine Abstract Concrete Solution Example of the Prism of TRIZ Cleaning the exterior of tall windows Identify similar problems from other industries (Cleaning, injury, cost)
  26. 26. Funnier Example Concrete / Abstract thinking and the sly fox
  27. 27. Restaurant Meets Airport – Morphological Analysis
  28. 28. Business Design Patterns using GRASP • Given a capability x, which responsibilities can be assigned to x? • The Expert principle says – assign those responsibilities to x for which x has the information to fulfil that responsibility. • They have all the information needed to perform operations, or in some cases they collaborate with others to fulfil their responsibilities. True Agility is in Need of True Business Architecture
  29. 29. True Agility is in Need of True Business Architecture 29 Patterns of Business Design based on The Economic Lifecycle The evolution of management science, strategic and business models is a continual process. Leading and Best Practice Research, 2011/2012 Scope: 1765 CEO’s and 2936 business leaders representing all major countries and industries Version 2.0
  30. 30. Disruption patterns = market models Performance patterns = business models Productivity patterns = operating models True Agility is in Need of True Business Architecture
  31. 31. Where can we insert heuristics and patterns – a conversation ? ? ? ? ?
  32. 32. The Problem with Current NWOW Attempts Beliefs Meaning Esteem Calling Health Nutrition Exercise Sleep Mindfulness Resilience Self Awareness Hope Affiliation TOOLSETSKILLSET KNOWLEDGE SET MINDSET HEARTSET CULTURE SET (Group) Internal External DoingThinkingFeeling SPIRITSET CULTURE SET (Society) Being Emotions Motivators (intrinsic) Purpose Autonomy Attitude Empathy Mastery Ability Practices Routines Orientation Perspectives World Views Values Work area design Ergonomics Community Social influence Ownership Affiliation Belonging Behaviours Engagement Communication Leadership Accomplishment Recognition Support Motivators Empowerment Language Concepts Theories Principles Heuristics Experience Frameworks Methods Processes Techniques Resources Artefacts True Agility is in Need of True Business Architecture
  33. 33. The NWOW Operating Model opportunity areas True Agility is in Need of True Business Architecture Performance and Productivity Do what you do better. Disruption Change why you do it Transformation Change what you do Are we doing things right? Here’s what to do: Procedure or rules Why is this value? How is value created & captured? What is Value? How is value delivered? How is value measured? Context, values, problem, system dynamics Principles, Assumptions, & value thinking Strategies, decisions & Actions Value Delivery Results Are we doing the right things? Here’s why this works? Insights and patterns? How do we decide what is right? Here is why we want to be doing this Feedforward Feedback
  34. 34. The Easy Stuff: Feedforward and Feedback True Agility is in Need of True Business Architecture Feedback Feedforward Using heuristics and rules on the feedforward planning activities +process mining + the structural agility engine = enterprise agility
  35. 35. The Easy Stuff: Feedforward and Feedback Feedforward: Customer Experience Management is both a feedforward and feedback activity CXM metrics must be designed to allow easy incorporation into higher level metrics as well as the performance and value model of the business. This will allow continual improvement of customer experience as well as clarity around the ROI of CEM. CXM are designed to enable an overall per-customer “Customer Experience Index” (CEI) and “customer engagement score” (CES)to be determined. The CXM’s also enable per-customer CEIs for each customer journey and episode experience. These are built up from the individual KQI scores of the constituent touch points Category Metric Impact on CEM Brand Reach Social connections This defines the raw number of social connections such as Facebook fans or Twitter followers a company is likely to have. This is an indirect measure of CEM as a measure of publicly stated recommendation based on followers. However followers only demonstrate interest but not commitment. In addition this is only applicable for large consumer brands, and not for niche products. Consumer Activity Social Page Views This measures the page views, wherever this information is available such as in YouTube. However without a measure of how much time a consumer spends on the page this is not a useful measure of customer experience. Consumer Engagement Engagement rate This metric is the total of likes and comments divided by the total number of fans, indicating the raw # of engagements per fan. The engagement level is an indirect measure of relevance of the media itself and acceptance of the brand Acquisition Talking About This This is a Facebook specific metric which reports on how many people are talking about the brand and the related pages on their own pages, as a measure of social sensation created by the brand. This is an indirect measure of social sensation caused by a specific campaign or launch. Consumer Activity Retweet rates This is a measure of how many times tweets have been retweeted, which is an indirect measure of an importance of an event, for example an outage. Consumer Activity Chatter level This is an imperfect measure of all posts, tweets and blogs about a specific topic in social media. This could be an important measure but will need to be apportioning an appropriate value to various media based on their relevance and importance. True Agility is in Need of True Business Architecture
  36. 36. A B C D E * * * * * * * * * * * * * * * * System 1 System 2 System 3 System 4System 2 * * * * * * * * ** Data Message Data Message Data Message Data Message Data Message Process Message Process Message Process Message Process Messages Store and Forward/ Request Reply Store and Forward/ Request Reply Store and Forward/ Request Reply Services: End Points: The Easy Stuff: Feedforward and Feedback Process Centric Automation True Agility is in Need of True Business Architecture
  37. 37. Typical Enhancements Supporting Business Model Innovations BPM Focussed (% effort) Dynamic SOA (% effort) New endpoint for a business service1 100% 20% Change business service for a new Policy based on customer status2 100% 40% Addition of temporal constraint for use of Internal Customer DB Service 3 100% 20% Provision to a New Customer10 100% 25% Personalisation based on location4 100% 12% Addition of new consumption channel to support end customer role6 100% 45% Add a service with temporal, location and status constraints 100% 8% Turn off a customer9 100% 8% Load sharing by customer type to accommodate peak loads11 100% 15% Personalisation of content based on consumption channel7 100% 16% Addition of new type of end-customer role5 100% 2% Easy Medium ComplexKey: Generic difficulty Source: IBM SWG Services The Easy Stuff: Feedforward and Feedback The Process Governance Nightmare True Agility is in Need of True Business Architecture
  38. 38. Business Services Layer Dynamic Assembly of Services Based on Heuristics and Rules The Easy Stuff: Feedforward and Feedback Shifting to Heuristics and Rules Centric Automation A B C D E * * * * * * * * * * * * * * * * System 1 System 2 System 3 System 4System 2 * * * * * * * * ** Data Message Data Message Data Message Data Message Data Message Process Message Process Message Process Message Process Messages Store and Forward/ Request Reply Store and Forward/ Request Reply Store and Forward/ Request Reply Services: End Points: Business Process True Agility is in Need of True Business Architecture
  39. 39. The Easy Stuff: Feedforward and Feedback Canadian Government Service Patterns True Agility is in Need of True Business Architecture These are the recipes and rules on how to stitch together services. They are not rules engine or AI driven yet, but the possibility is there.
  40. 40. The Easy Stuff - Strategic True Agility is in Need of True Business Architecture Continuous delivery cannot occur without continuous strategy and architecture Feeding the backlog from the roadmap at a strategic and operational level
  41. 41. The Easy Stuff - Structural True Agility is in Need of True Business Architecture Strategic Agility will not work without operational agility and visa versa. It’s the business architects responsibility to enable strategic agility
  42. 42. The Easy Stuff – Using Roadmaps to Glue Strategic and Operational Backlogs True Agility is in Need of True Business Architecture Gluing things together at the right levels and in the right cadences is essential
  43. 43. The Easy Stuff – Strategic Innovation to feed the portfolio backlog True Agility is in Need of True Business Architecture Applying the innovation lifecycle at a strategic level is key for strategic agility
  44. 44. The Easy Stuff – Operational Innovation to feed the program / tribe backlog True Agility is in Need of True Business Architecture Applying the innovation lifecycle at a delivery and operational level is key for operational agility
  45. 45. The Hard Stuff - The Dark Matter of the Business True Agility is in Need of True Business Architecture • Dark matter – believed to constitute 83% of the matter in the universe • Virtually undetectable • Neither emits nor scatters light, or electromagnetic radiation. • Believed to be fundamentally important in the cosmos , we cannot be without it • Yet there is essentially no direct evidence of its existence and little understanding of its nature • The only way that dark matter can be perceived is by implication, through its effect on other things. • With a product or service, the user is rarely aware of the organisational context that produced it. Yet the outcome is directly affected by it. Dark matter is the substrate that produces the effects on them. • If we operate without understanding the unseen force, it will be like planting a garden without understanding the seasons, sunlight, water, insects, soil etc • To be effective, we need to develop a partnership with this unseen, intangible dark matter
  46. 46. The Dark Matter of the Business True Agility is in Need of True Business Architecture *Karen Oikonen – Gigamap Example
  47. 47. Questions
  48. 48. ABOUT OUR COMPANY We are an innovation and strategic design consultancy. We’re a team of strategic thinkers, makers and doers. We create impact through design, and scale through architecture. We help organisations solve challenges in creative and human-centred ways. We see ourselves as super-mixers, blending multiple and diverse disciplines together to help our clients adapt faster to a changing world. WWW.DESIGNCHAIN.CO True Agility is in Need of True Business Architecture
  49. 49. OUR VISION Create, shape and transform organizations to create impact & legacy on the future True Agility is in Need of True Business Architecture
  50. 50. OUR MISSION Question the status quo. Go deep to unlock insight. Challenge established thinking. Always think and behave circular. Never stop learning True Agility is in Need of True Business Architecture
  51. 51. WHO WE ARE We have expertise in strategy, transformation, design, innovation, architecture, agile, capability building, governance and risk, digital, programme management and strategy execution. We have a shared belief that innovatively designed, and well engineered organisations can have a profound impact on our society and the future societies of our children. 35+ 30+ People Delivery Locations 150+ Projects 60+ Clients True Agility is in Need of True Business Architecture
  52. 52. WE BELIEVE... DesignChain empowers teams to deliver greater value through new ways of thinking and working Blended thinking creates more durable change Everyone wants to add value. The business just needs to be designed to enable it. DesignChain helps individuals, teams and organisations find their heart, making them more passionate and productive in the workplace and society. Aligning passion and value has the greatest impact We believe that design and innovation must have some rigour and repeatability. DesignChain taps into the innovation potential of your customers and teams through a systematised process that leverages multiple innovation frameworks. Innovation can be systematised The commoditisation of human knowledge frees up humanity up to solve bigger, more complex problems. DesignChain understands complexity, and helps design and enable outcomes to address complex challenges. The future opportunities are in complex spaces True Agility is in Need of True Business Architecture
  53. 53. WHAT WE DO We give you insight around possible societal, business and technological futures. We help you go deeper into problem spaces to ensure you focus on the right areas. We determine the best responses to these futures and problems through innovative asset mixes. Strategic Foresight+Design We help you innovate more creatively, and incubate and scale more efficiently. We understand the blockers that exist across the innovation lifecycle. We reduce the gap between ideas and delivered customer impact using a blended mix of human and machine interventions. Innovation+Incubation We help companies reduce the gap between action and result. We know and understand what levers to pull where on your business, to create the greatest impact. Through our unique designs, approaches and methods, clients will learn and adapt faster at both a strategic as well as a delivery level. Business Design+Improvement WE ADVISE+CONSULT | WE TRAIN+COACH True Agility is in Need of True Business Architecture
  54. 54. OUR CLIENTS INCLUDE Public-sector Private-sector True Agility is in Need of True Business Architecture
  55. 55. CLIENT TESTIMONIALS “DesignChain helped us challenge some of our established ways of thinking. They gave us a set of outcomes that helped us understand and articulate the problem space, then to analyse, design and iterate possible solutions in a human-centred, business-focused way. Our team found the experience invaluable.” “Fantastic journey bringing new products and business models to market. DesignChain's combination of mentoring, training and consulting was a great fit to help us through the journey. Working with them taught me an enormous amount about innovation, developing and testing ideas” “DesignChain were instrumental in articulating a clear and structured process to unite disparate functions and mindsets behind a single vision. With their leadership we delivered a cohesive digital strategy to drive the business unit into the desired customer focused, digital experience" “Prior to the work, my SES team were assessed as not capable of leading cultural change. Eighteen months later they have led significant cultural change due to the insight delivered by the DesignChain team.” “The team was able to deliver a clear, concise and evidence-based report which included actions that were implementable immediately. Feedback from staff involved in the workshops was positive and reflected well on the way the team operated. From my perspective, the team clearly understood the assignment and were adaptive in their approach to ensure a successful outcome.” “The training delivered by DesignChain was great! It was fun, informative and has given me skills I can apply in my position. The case studies threw curve-balls and made us think on the spot. The facilitator was amazing. My only suggestion is to run more courses like this!” True Agility is in Need of True Business Architecture
  56. 56. THANK YOU www.designchain.co For further information Please contact to: Craig Martin CEO & Founder E: mail@designchain.co P: +61 3 8797 5475 Contact Us:

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