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The Responsive Company:                              Strategically Focused                                       &        ...
Overview of Briefing      Part 1 – Business Realities      Part 2 – Moving Toward Responsiveness      Part 3 – Business Ca...
PART 1                                  Business Realities© 2013 Center for Systems Innovation [c4si]     3      www.Micha...
A Continuum Between Two Needs        Efficiency                                 Responsiveness      • Efficiency requires ...
People Want More than Low Price        Products meeting        higher level needs        are worth more        Sneakers co...
The Value-Added Paper Cup                                                                  Surround commodity items with t...
Strategy              is a mental tapestry of changing          intentions for harmonizing and focusing our efforts;      ...
PART 2           Moving Toward Responsiveness© 2013 Center for Systems Innovation [c4si]     8      www.MichaelHugos.com
Traditional Business Structure                                                    The                                     ...
Network Organization Structure                                      Business                 Business                     ...
Responsive Organizations      • Whole Foods Market             – Basic operating unit is the store team (10-20 people)    ...
Strategy of Focus and Response                                                                                    Deliver ...
IT Enables Responsiveness      • Maximize leverage of existing systems and infrastructure with        services oriented ar...
Company and Strategic Partners Company out                                                                             Com...
PART 3                              Business Case Study                                 “Agility in Action”© 2013 Center f...
Disruption of IT Paradigm - AGAIN      • SOA, Virtualization, Cloud Computing and Agile Development        offer new oppor...
Case Study                             Office                             Productivity                  Doing Business in ...
Case Study                             Office                             Productivity                   Doing Business in...
Case Study  Hybrid IT Architecture                           Office                           Productivity                ...
Lessons Learned So Far…      • Web portals and mashups provide unified user interface by replacing        different system...
Change                                  is the one predictable thing in a world          where so much else is so unpredic...
Learn More                Presentation excerpted from two of my books:                                                    ...
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Responsive Business is Strategically Focused and Tactically Agile

A responsive business is focused on long term trends and able to get things done in 30 - 60 - 90 day cycles. Profit comes from more than just efficiency - companies need to respond to continually changing and unpredictable markets. Let's talk about how that can be done.

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Responsive Business is Strategically Focused and Tactically Agile

  1. 1. The Responsive Company: Strategically Focused & Tactically Agile Michael Hugos CENTER FOR SYSTEMS INNOVATION [c4si]© 2013 Center for Systems Innovation [c4si] 1 www.MichaelHugos.com
  2. 2. Overview of Briefing Part 1 – Business Realities Part 2 – Moving Toward Responsiveness Part 3 – Business Case Study© 2013 Center for Systems Innovation [c4si] 2 www.MichaelHugos.com
  3. 3. PART 1 Business Realities© 2013 Center for Systems Innovation [c4si] 3 www.MichaelHugos.com
  4. 4. A Continuum Between Two Needs Efficiency Responsiveness • Efficiency requires predictability and stability • Both are now conspicuously absent • Responsive enterprise is to real-time economy as assembly line was to industrial economy – source of wealth creation • Respond to changing customer needs by wrapping products in blanket of tailored, value-added services (they are information based) • Use responsiveness to differentiate yourself or else participate in “grim race to the bottom” • Tale of evolving mobile phone… is it a phone or a fashion?© 2013 Center for Systems Innovation [c4si] 4 www.MichaelHugos.com
  5. 5. People Want More than Low Price Products meeting higher level needs are worth more Sneakers cost: $20 or >$100 Cars cost: $16,000 or >$40,000 As soon as basic needs are met, people want something more© 2013 Center for Systems Innovation [c4si] 5 www.MichaelHugos.com
  6. 6. The Value-Added Paper Cup Surround commodity items with tailored Ordering Budgeting blanket of value added services Labeling Receiving Usage Reporting Delivering Invoicing “Never sell a naked commodity” Actual Item or Service (commodity, easily copied, low margin) Every product has two components Information Component (tailored to each customer to achieve desired results)© 2013 Center for Systems Innovation [c4si] 6 www.MichaelHugos.com
  7. 7. Strategy is a mental tapestry of changing intentions for harmonizing and focusing our efforts; as a basis for realizing some aim or purpose in an unfolding and often unforeseen world, of many bewildering events and many contending interests. John Boyd, A Discourse on Winning and Losing© 2013 Center for Systems Innovation [c4si] 7 www.MichaelHugos.com
  8. 8. PART 2 Moving Toward Responsiveness© 2013 Center for Systems Innovation [c4si] 8 www.MichaelHugos.com
  9. 9. Traditional Business Structure The Boss! Information Orders VP of VP of THIS THAT MANAGER MANAGER MANAGER A B C PAWN 1 PAWN 2 PAWN 3 PAWN 4 PAWN 5 PAWN 6 What worked well enough ONCE is way too slow NOW© 2013 Center for Systems Innovation [c4si] 9 www.MichaelHugos.com
  10. 10. Network Organization Structure Business Business Unit A Unit B Network of autonomous Coordination replaces business units control Enterprise Business Business Coordinator Unit C Unit B Business Business Unit B Unit D Enterprise Coordinator says WHAT Business Units free to choose HOW© 2013 Center for Systems Innovation [c4si] 10 www.MichaelHugos.com
  11. 11. Responsive Organizations • Whole Foods Market – Basic operating unit is the store team (10-20 people) – Senior managers say WHAT, teams say HOW – Very profitable grocery company in highly competitive business • U.S. Marine Corps – Basic operating unit is the platoon (20-40 people) – Philosophy of command requires decentralized decision making – Epitome of effective modern, mobile, military • Network Services Company (I was CIO for 6 years) – Network of 86 independent distributors – Owner operators insure quick, autonomous decision making – Profit opportunity for each distributor on national accounts© 2013 Center for Systems Innovation [c4si] 11 www.MichaelHugos.com
  12. 12. Strategy of Focus and Response Deliver • Three feedback Business Success loops illustrate how focus and response LOOP 1 Market Awareness works Data & Customer • Responsiveness is a Desires LOOP 2 LOOP 3 blend of balance and Balance Agility Analyze agility with the Standardize Non-Standard Create New Operating Operating awareness to know Processes Input !!! Processes when to do which • It is continuous, Detect New Eliminate incremental Root Threats & Opportunities change… Causes LOOP 1: Awareness = Observe and respond LOOP 2: Balance = Improve existing processes LOOP 3: Agility = Create new processes© 2013 Center for Systems Innovation [c4si] 12 www.MichaelHugos.com
  13. 13. IT Enables Responsiveness • Maximize leverage of existing systems and infrastructure with services oriented architecture (SOA) • Support for responsive operations is layered on top of existing systems (ERP, CRM, SCM, etc.) as needed: – Data Warehouses and Business Intelligence (BI) – Business Process Management (BPM) – Simulation and Predictive Analytics • Use parts of old systems in creation of new systems; grow systems iteratively as needs unfold • SOA + Virtualization + Cloud + SaaS + Mashups = Responsive© 2013 Center for Systems Innovation [c4si] 13 www.MichaelHugos.com
  14. 14. Company and Strategic Partners Company out Company Alliance sources support Partner Data Ctr/Cloud focuses on functions to Computing ‘A’ Customer core strategic partners functions Company that Alliance Partner Support Support produce Core unique ‘B’ Core Customer Core value-add SaaS Apps Support for its customers Strategic partners Customer Business provide tailored Alliance Partner Process bundle of products Outsourcing ‘C’ & services© 2013 Center for Systems Innovation [c4si] 14 www.MichaelHugos.com
  15. 15. PART 3 Business Case Study “Agility in Action”© 2013 Center for Systems Innovation [c4si] 15 www.MichaelHugos.com
  16. 16. Disruption of IT Paradigm - AGAIN • SOA, Virtualization, Cloud Computing and Agile Development offer new opportunities for IT infrastructure that is fast, flexible, cost effective and embedded in business processes • Three unequivocal standards of IT and Business Agility: 1) No Cap Ex 2) Variable Cost 3) Scalable Platform • Those that master the use of these technologies and techniques will set the pace for everyone else • “I’m all for progress. It’s change I don’t like.” Mark Twain© 2013 Center for Systems Innovation [c4si] 16 www.MichaelHugos.com
  17. 17. Case Study Office Productivity Doing Business in Real Time • Old-line candy company selling ERP System through traditional low margin retail channels • People see opportunity to sell Data “designer chocolate” and related items Warehouse in cozy storefront setting App Servers • Company decides to quickly market test idea by opening a few stores • Need systems support in 90 days! • Consider TCO of solution: lease/buy; Inventory sunk costs; scalability; flexibility Production Control Scheduling • Business agility calls for IT agility…© 2013 Center for Systems Innovation [c4si] 17 www.MichaelHugos.com
  18. 18. Case Study Office Productivity Doing Business in Real Time • Concept is a success ERP System • Accelerate rollout of new stores… what next? Data SOA Warehouse Server App Store Virtualization Servers Support Store POS Ver 1.0 System SaaS SOA Inventory Production Control Supply Chain Scheduling DW© 2013 Center for Systems Innovation [c4si] 18 www.MichaelHugos.com
  19. 19. Case Study Hybrid IT Architecture Office Productivity Store The Support Cloud Cloud Extend In-House Ver 2.x Systems in Cloud Cloud SaaS Computing Data CRM BPM Warehouse Analytics & App Simulation ERP Servers Store POS System SOA • No Cap Ex Production Inventory Scheduling Supply Chain • Variable Cost System DW • Scalable© 2013 Center for Systems Innovation [c4si] 19 www.MichaelHugos.com
  20. 20. Lessons Learned So Far… • Web portals and mashups provide unified user interface by replacing different system screens with common GUI front-end • Maximize use and re-use of existing applications (ERP/CRM/SCM) with SOA and WOA (web oriented architecture) • Maximize server utilization through virtualization • Split systems processing between in-house platforms and cloud/SaaS platforms; host new system in-house or in the cloud as security and business needs dictate (cloud computing nascent but evolving quickly) • Extend in-house systems, improve performance of applications and reach new users and customers via cloud computing options • Continuous incremental change to IT infrastructure as business unfolds (No big bang projects!)© 2013 Center for Systems Innovation [c4si] 20 www.MichaelHugos.com
  21. 21. Change is the one predictable thing in a world where so much else is so unpredictable, and companies optimized to deal with change will certainly be more successful than companies not optimized to deal with change. That is why responsiveness trumps efficiency; that is why responsiveness and the business practices that bring it about are the basis for sustainable prosperity in this century. Michael Hugos, Business Agility: Sustainable Prosperity in a Relentlessly Competitive World© 2013 Center for Systems Innovation [c4si] 21 www.MichaelHugos.com
  22. 22. Learn More Presentation excerpted from two of my books: Join the conversation on my blog at CIO.com Doing Business in Real Time Briefing management in strategies for agility; mentoring teams in agile development. Reach me at: www.MichaelHugos.com • Business Agility: Sustainable Prosperity in a Relentlessly Competitive World, John Wiley & Sons publisher, 2009 • Business in the Cloud: What Every Business Needs to Know About Cloud Computing, John Wiley & Sons publisher, 2010© 2013 Center for Systems Innovation [c4si] 22 www.MichaelHugos.com

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