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Architect as Strategist

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Architect as Strategist

Comprises strategy patterns for technologists. How can you create a technology strategy and communicate it to executives and stakeholders? This is the popular talk I gave at the Software Architecture Conference in New York City, February 2018.

Comprises strategy patterns for technologists. How can you create a technology strategy and communicate it to executives and stakeholders? This is the popular talk I gave at the Software Architecture Conference in New York City, February 2018.


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Architect as Strategist

  1. 1. Architect as Strategist Eben Software Architecture Conference, New York City 2018 Patterns for creating and communicating your technology strategy
  2. 2. this is water
  3. 3. xerox
  4. 4. you
  5. 5.
  6. 6. the paperclip maximizer
  7. 7. The AI does not hate you, nor does it love you. But you are made out of atoms which it can use for something else. —Eliezer Yudkowsky, Artificial Intelligence as a Positive and Negative Factor in Global Risk
  8. 8. Strategy Patterns for architects & tech leaders
  9. 9. We cannot create the right technology strategy if we think like technologists.
  10. 10. …we would make what would appear as merely a Shopping List of Shiny Objects
  11. 11. This is about 1) how to make a technology strategy that’s right for the business, using tools from business strategy consulting
  12. 12. Even if we made the perfect technology strategy, how would the deciders know? Would they believe it? Would they want it? This is also about 2) communicating it so they do.
  13. 13. It’s about the secret to happiness in life
  14. 14. —Sun Tzu, The Art of War, 500BC Strategy is the art of making use of time and space
  15. 15. --Jomini, Switzerland, Art of War, 1803 Strategy decides where to act; logistics brings the troops to this point; tactics decides the manner of execution
  16. 16. --Lawrence Freedman, Strategy: A History, Oxford Strategy is about getting more power than the starting position would suggest. Strategy is the art of creating power.
  17. 17. Strategy is about determining a balance between ends, ways, and means: identifying objectives, and the resources and methods available to meet them. --Lawrence Freedman, Strategy: A History, Oxford
  18. 18. Strategy enables understanding your landscape, systems, organization, competitors, and customers
  19. 19. • Are resources devoted to the right areas, to the most important customers? • Are we creating products and services that can thrive in a market in different time horizons? • Where should we spend money? Where should we cut costs?
  20. 20. Where do skills need to be added or strengthened? Where can productivity be improved? What culture, attitude & skills are required?
  21. 21. Architecture comprises the set of strategic and technical models that create a context for position (capabilities), velocity (directedness, ability to adjust), and potential (relations), at the intersection of business and technology.
  22. 22. 1: Non-Functional Requirements • Availability, Scalability, Interoperability, Extensibility, Maintainability, Monitorability, Manageability, Testability, Security, Performance • In a formal document, state the metrics, do the math to show how each is supported • Concerned with where data center boundaries are crossed, where system components cross, which means protocols, data formats
  23. 23. You can never try to escape one danger without encountering another. Prudence consists in recognizing the different dangers and in accepting the least bad as good --Machiavelli, The Art of War 2: Making Trade-offs Any trade-off eventually reduces to a trade-off of time & money
  24. 24. “The man who invented the ship also invented the ship wreck” --Paul Virilio
  25. 25. 3: Containing Entropy Stating a vision around which to rally, showing a path in a roadmap, garnering support for that vision through communication of guidelines, standards, creating clarity to ensure efficiency of execution and that you’re doing the right things and doing things right
  26. 26. Business Objectives Should Be Directly Supported by the Tech Strategy • Grow shareholder value • Grow earnings per share • Increase revenue • Manage costs • Diversify or create new revenue streams • Cross-sell more products • Increase market share • Increase share of wallet • Improve customer retention • Reduce product error/defect rates • Improve safety • Improve time to market/speed of operations • Grow through acquisition
  27. 27. Part 1: Strategic Analysis Patterns
  28. 28. World Industry The Strategic Analysis Patterns Architecture Five Forces Company/Business Unit MECE Dept/Portfolio APM Process Posture Map SWOT Value Chain Life Cycle Stage Ansoff Growth Matrix Strategic Feedback Loop 7S Futures Funnel Principles, Practices, Tools Scenario Planning PESTEL
  29. 29. MECE • Suits of Cards • Seasons • Profit = Revenue – Cost • Should I buy this software package? • (Technical Factors, Non-Technical Factors) • Summarize lots of data • Force thinking in sets • Help arrive at the optimum arrangement of information: • Includes everything • Does not double count at any level of the hierarchy
  30. 30. PESTEL • Industry-specific • What actions do the current Political, Economic, Social, Technological, Environmental and Legal climates suggest? • Here you are only stating facts. Use as many data points as you can, and raw data. This shows your starting context so they can trace your argument. • Then make Recommendations: “Diversify product features represent a variety of customer payment schedules, refresh cycles, length of sales cycles and offer a variety of pricing/payment models to absorb sudden fluctuations in broader economy to improve our resilience posture”.
  31. 31. Political ex. • Direct Travel & Tourism GDP growth is expected to accelerate to 3.8%, up from 3.1% in 2016, making a strong foundation • Government bans and restrictions on travel, burdensome visa restrictions, prolonged labor stoppages or political unrest • As nations seem to be looking increasingly inward, putting in place barriers to trade and movement of people, the role of Travel & Tourism becomes even more significant
  32. 32. Economic ex. • Travel & Tourism investment in 2016 was USD 806.5B, or 4.4% of total investment. It should rise by 4.1% in 2017, and rise by 4.5% pa over the next ten years to USD 1.3T in 2027 • Fluctuations in the US dollar, Euro, and other foreign currencies can create sudden pockets of places where travel unpredictably becomes undesirable for a period of months • Introduction of Bitcoin and other cryptocurrencies could require additional infrastructure if it enters mainstream for payments • Millennials save at a higher rate than other generations
  33. 33. Social Ex. • Working trends such as work from home, telecommuting, video conferencing replacing business travel can act as substitutes • Threats of terrorism hurt travel to unpredictable specific places for short periods • Ratings/reviews continue as strong currency. Millennials love rating and reviewing, and they trust reviews and user-generated content more than any other demographic. Expect more qualitative ratings for content within apps and social media, and newsfeed algorithms that sort and display content based on those ratings
  34. 34. Technological Ex. • Software industry now focusing on 1) Internet of Things, 2) Artificial Intelligence 3) Virtual Reality • The “cloud wars” have moved from competing on storage & compute to competing on cognitive capabilities, as witnessed by DSaaS & MLaaS, the willingness to open-source previously differentiating tools such as Kubernetes and Mesos • Self-driving cars could mean fewer people need to stop for the night • There are now more than 5 billion unique mobile users around the world = 67% of the world’s total population now using a mobile device • In China, with the latest figures from Tencent indicating that more than 870 million people in the country now use Weixin, the platform known as WeChat in the English-speaking world.
  35. 35. Environmental Ex. Scarcity of raw materials, pollution targets Carbon footprint targets set by governments Millennials more interested in doing business with ethical and sustainable companies
  36. 36. Legal Ex. GDPR, other European data regulations Franchise “co-employer” law suits ADA compliance Industry-specific laws that might change your business or technology sourcing abilities
  37. 37. Porter’s Five Forces
  38. 38. 5 Forces: Threat of New Entrants • The existence of barriers to entry (patents, rights, etc.). The most attractive segment is one in which entry barriers are high and exit barriers are low. High barriers to entry also almost always make exit more difficult. • Switching costs • Access to distribution channels • Government policy • Capital requirements • Absolute cost • Cost disadvantages independent of size • Economies of scale • Product differentiation • Brand equity • Expected retaliation • Customer loyalty to established brands • Industry profitability (the more profitable the industry, the more attractive it will be to new competitors)
  39. 39. 5 Forces: Threat of Substitutes • Ease of substitution • Perceived level of product differentiation • Number of substitute products available in the market • Availability of close substitute • Buyer propensity to substitute • Relative price performance of substitute • Buyer's switching costs
  40. 40. 5 Forces: Bargaining Power of Customers • Degree of dependency upon existing distribution channels • Bargaining leverage, particularly in industries with high fixed costs • Buyer switching costs • Buyer information availability • Availability of existing substitute products • Buyer price sensitivity
  41. 41. 5 Forces: Bargaining Power of Suppliers • Employee solidarity (e.g. labor unions) • Degree of differentiation of inputs • Impact of inputs on cost and differentiation • Presence of substitute inputs • Strength of distribution channel • Supplier concentration to firm concentration ratio • Supplier switching costs relative to firm switching costs
  42. 42. 5 Forces: Industry Rivalry • Sustainable competitive advantage through innovation • Powerful competitive strategy • Competition between online and offline companies • Level of advertising expense • Firm concentration ratio • Degree of transparency
  43. 43. How to Use the Five Forces • Make a slide for each Force, and list how the company is positioned within each force. • Then make your Claim regarding how an aspect of your proposed technology solution or direction supports or defends against that. How do these circumstances inform your technology strategy? • For each of the threats, state in red, yellow, green if the threat seems high, medium, low • In a conclusion slide, make recommendations on business strategies, technology strategies
  44. 44. Porter’s Value Chain Analysis
  45. 45. Using Value Chain Analysis
  46. 46. Life Cycle Stage Value 0 50 100 150 Introduction Growth Maturity Decline End of Life Value Value
  47. 47. Ansoff Growth Matrix Current New NewCurrent Market Products Diversification Strategy: Develop new products in new markets Product Development Strategy: Develop new products in current markets Market Penetration Strategy: Gain market share with current products in current markets Market Development Strategy: Develop new markets for current products
  48. 48. SWOT Helpful Harmful InternalExternal • Item • Item • Item • Item
  49. 49. People, Process Technology Map • Must look at all three in any analysis • People • Use a 9 Box • Process • List all your processes out in categories • Assign a current posture for each process • Not all will be central to your strategy. The ones that need work might have a technology solution or gap, or at least might help explain why something is broken but you’re not addressing it.
  50. 50. Process Map
  51. 51. Process Detail
  52. 52. Process Posture Assessment
  53. 53. Application Portfolio Management • Make a new product in same market • Make a new product in new marketCreate • Spend to grow this existing product to maintain positionInvest • Salvage this damaged product • Spend on architecture or featuresRemediate • Phase this product out, ramp down investment • Plan for migrationRetire
  54. 54. • Item (Cash cows, necessities) • Item (Dogs to retire, product possibilities to stop considering) • Item (Wildcards to Prototype) What products are possible? APM: Alternate Simplified View What products should be ‘just good enough’? What do we not do? What products are best-bets? • Item (Leaders to Invest in)
  55. 55. Futures Funnel
  56. 56. Scenario Planning • This helps you understand the business future so you can best map your strategy to it. You can do this regarding the business itself, or regarding your technology world alone. • Scenario Interviews: get stakeholders and interview them individually to determine what matters to them, where they think the business is going, why. What is happening to customers and competitors? • Identify the critical uncertainties and issues to address in the workshop. • Develop Scenarios in Workshop: identify several significantly different possible outcomes and the forces that could lead to those. Consider how those forces are linked and if they have a low or high probability and low or high impact. Then the team can develop the potential histories that lead to those opposing outcomes. • Make a Plan: what actions can decision makers take now. • Make a recommendation using Ghost Deck.
  57. 57. Principles, Practices, Tools • What we Build (Principles / Tenets) • How we build it (Practices) • What we build it with (Tools) • How we know it works (Metrics) • Put it in a spreadsheet to spawn remediation projects & improve alignment • Then show it in a Sankey Diagram
  58. 58. Meta-Pattern: Current State Assessment  Frame only the Problems  Collect data  Consider business readiness, application, data, infrastructure  Use Lifecycle Stage  Use Value Chain Assessment  Categorize/cross-reference lists into People/Process/Tech  Determine business/tech owners as the RACI A & R  Score on 2 axes: Ease of Implementation & Impact  Plot a bubble chart  Repeat with Opportunities  Focusing only on problems maintains the status quo
  59. 59. Strategic Feedback Loop
  60. 60. McKinsey 7S • ActionStructure • ActionStrategy • ActionSystem • ActionShared Value • ActionStaff • ActionStyle • ActionSkill 3 “Hard” S 4 “Soft” S
  61. 61. McKinsey 7S Matrix Structure Strategy System Shared Value Staff Style Skill Structure ---------------- Strategy ---------------- System ---------------- Shared Value ---------------- Staff ---------------- Style ---------------- Skill ---------------- Use this matrix to check alignment of each item against each other item to see where you need focus, which ones support the others, where you need to make changes.
  62. 62. World Industry The Strategic Analysis Patterns Architecture Five Forces Company/Business Unit MECE Dept/Portfolio APM Process Posture Map SWOT Value Chain Life Cycle Stage Ansoff Growth Matrix Strategic Feedback Loop 7S Futures Funnel Principles, Practices, Tools Scenario Planning PESTEL
  63. 63. Part 2: Strategic Communication Patterns
  64. 64. Communications Strategic Patterns Summary • Rented Brain • Strategy Map • Stakeholder Map • Decision Framework • Technology Radar • Use Case Map • Directional Costing • Ars Rhetorica • Ghost Deck • Ask Deck • Good/Better/Best • Fait Accompli • Dramatic Structure • Roadmap • Tactical Plan
  65. 65. Rented Brain Speak truth to power by acting as if you were a consultant who isn’t an employee. If your arguments have structure, you will help drive success
  66. 66. Strategy Map Mission Statement Vision Statement Strategic Goal 1 Strategic Goal 2 Strategic Goal 4Strategic Goal 3 Initiative 1 Initiative 2 Initiative 3 Initiative 1 Initiative 2 Initiative 3 Initiative 1 Initiative 2 Initiative 3 Initiative 1 Initiative 2 Initiative 3 Summarize your strategy in one slide. Then break it down on subsequent pages
  67. 67. Stakeholder Map • You need to know how decisions get made, who makes them, and figure it out quickly in order to get people on board before the meeting and know whom to invite to the meeting. • Interview people from sales, strategy, product, developers, marketing, leadership to get their input into your strategy so it’s 1) a better more holistic plan and 2) theirs too and they’ll agree to it because they see themselves reflected. • List the stakeholders who are internal and external to your business unit and your company. List the functions, the roles, the names. • Those external stakeholders might be customers, patients, auditors, patrons, purchasers. • Once you make this you can assign roles in RAPID and RACI.
  68. 68. Decision Framework
  69. 69. Technology Radar The process of strategy evolves through a series of states, each one not quite what was anticipated or hoped for, requiring a reappraisal and modification of the original strategy, including objectives. It evolves. –Strategy: A History
  70. 70.
  71. 71. Use Case Map • For the use case breakdown of what you want to do, show • what the business benefit is • The Features: what they get • The Data Components required • The System components required to build it • The Customer success measure
  72. 72. Use Case Map ex.
  73. 73. Directional Costing •What’s the cost of a sprint?
  74. 74. Directional Costing 2 • Oh, and this all assumes that there is no delivery cost, no documentation to write, no marketing, no customer training, no communications to do, which there likely would be all of those if what you’re doing matters. Throw those in and you’re around $5M. But no one expects you to do that, usually because they’re paid out of other cost centers. • There is labor in the operations team now. What about the DBAs and the GNOC and the networking folks? Maybe it’s a month for a couple of them so that’s another $50 grand. • Oh, and this all assumes that the day your thing goes live, you’re done. The project is over for you and so you close up shop and it’s all free. What about the ongoing run costs?
  75. 75. Ars Rhetorica • Ethos or the ethical appeal, means to convince an audience of the author’s credibility or character. You show that you know what you are talking about, that you are the right person to make this recommendation because of your experience. • Pathos or the emotional appeal, means to persuade an audience by appealing to their emotions. • Logos or the appeal to logic, means to convince an audience by use of logic or reason. Include data, charts, statistics, trends, facts.
  76. 76. Ghost Deck • Start at the end, with the claim that is your insight/conclusion which you will unpack the long math for • Put it first • Create empty slides for your outline, which is an argument for your strategy • Add the headlines only that you will have to fill in • End with the Ask • “Therefore, Executive: You do this (my tech strategy which follows)” • Now your team can work on gathering data, filling in the arguments in parallel
  77. 77. Ask Deck • Context • Exposition: Executive Summary • Imperil the Hero: Book of Job • Statement: show how we are in bad shape or how there is a new opportunity • X number of P1, P2, P3 contributed to Y amount of downtime YTD • Trend P1, P2, P3 totals up X% over past 3 years • Identified 60 items of technical debt • Identified the 12 most impactful • Save the Hero: the Path Forward Vision • Roadmap • How long will it take? • How much will it cost? • Who will do the work? • Ask for Decision • Appendix: Show Your Homework • Use strategy patterns herein
  78. 78. Dramatic Structure • In dramatic structure as outlined by Aristotle in The Poetics, there are two parts to a play: • Reversal throws the action in new direction • Recognition means the protagonist has an important revelation
  79. 79. Dramatic Structure: Chekov’s Gun "If in the first act you have hung a pistol on the wall, then in the following one it should be fired. Otherwise don’t put it there”
  80. 80. Dramatic Structure: MacGuffin The thing the spies are after but the audience doesn’t care about. It’s super important but not revealed or emphasized.
  81. 81. Shock & Awe/Book of Job • Shock and Awe was a military tactic designed in 1996. • Its goal is to paralyze the will of the adversary to fight: overload an adversary's perceptions and understanding of events such that the enemy would be incapable of resistance • For us, it is a metaphor for a show of decisive force such that a decision point of the executive is required, by you making clear the need for swift action, using the Scope & Forcefulness of your argument.
  82. 82. Fait accompli • Make sure there is a decision meeting and everyone knows what it is • Chat up the people in the decision meeting before hand to hear their concerns, determine if they are on board • Have the meeting in little individual meetings with each stakeholder leading up to the ‘real’ meeting so it’s already done by then
  83. 83. Good/Better/Best Recommendation • Create three options, each with different scope and cost and time and outcome (what they get) • Be clear on each of those: make it a menu • Be sure you are happy with any of the options • This patterns gets them to choose which of your three recommendations to do, instead of whether to say yes or no to you • They know things about upcoming climate or events and will welcome the flexibility. This saves you time because you’ll end up making options anyway if you don’t do it up front.
  84. 84. Roadmap Pre-Plan Jan18 Mar18 Jul18 Oct18 Mar19 Sep19 Architecture Dec19 Milestone 1 Milestone 3 Future State Realized • Item • Item Milestone 2 • Item • Item • Item • Item • Item • Item • Item • Item • Item • Item
  85. 85. Tactical Plan Category Tasks Accountable Responsible 26-Feb 5-Mar 12-Mar 19-Mar 26-Mar 2-Apr Item Alice Bob Item Alice Bob Item Alice Bob Item Alice Bob Item Alice Bob Item Alice Bob Item Alice Bob Item Alice Bob Item Alice Bob Item Alice Bob Category 1 Accountable must be only one named person
  86. 86. Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat. --Sun Tzu