For Enterprise Architects to advance in their technical careers they need to become increasingly relevant to the business. This requires strong leadership skills and a deep understanding of business fundamentals.

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© 2007 GEAOEA Conference – BTELL Sydney – 14 August 2007
GEAO
®
Leading the Transformation:
Changing the Dialogue
Ben Ponne, Executive Director GEAO, Enterprise Architect EDS
ben.ponne@geao.org

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Overview
» Introduction
» Enterprise Architecture context
» Perspectives on Enterprises
» Diagnosing Enterprises
» Up the value chain
» Why do you need to change the dialogue?
» Business Perspectives
– Strategic Design perspective – overview
– Political perspective – overview
– Cultural perspective - overview
» Leadership
» Leading Change

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Introduction
» The Global Enterprise
Architecture Organisation
– www.geao.org
– Independent, not-for-profit
organisation for high-end
professionals who work in
the field of Enterprise
Architecture
» EDS – www.eds.com
– Global IT Services company
– 135,000 employees in 64 countries
– Deep relevant industry expertise
– A proven approach to support
long-term business transformation
» INSEAD – www.insead.edu
– Leading Business School
– France / Singapore
– Multicultural perspective on Global
management

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GEAO – Purpose / Services
» Core Purpose:
– To help Enterprise Architecture professionals
to be successful.
» Publications – Journal/ Newsletter
» Membership platform
– Collaboration / Communication
» Participation in Conferences and forums
– BTELL (Sydney) / iCMG (Bangalore)
– Flipside (Singapore) / Architecture Forums
» Chapters
– India Chapter / New Zealand / Singapore / Beijing
» Workshops on EA
– Enterprise Architecture / Strategic Planning
» Certification
» Business Services

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GEAO – Target audience
» MBA / eMBA level
Enterprise Architects
» High-end Business
oriented mindset

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Enterprise Architecture Context
Scope
» “The essence of a visionary company comes in the translation of its core
ideology and its own unique driver for progress into the very fabric of the
organisation – into goals, strategies, tactics, policies, processes, cultural
practices, management behaviors, building layouts, pay systems,
accounting systems, job design – into everything that the company does.”
(Source: Collins & Porras in “Built to Last”)
» Enterprise Architecture = the Architecture of the Enterprise
(Source: Zachman)

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Enterprise Architecture Definition
GEAO Definition of Enterprise Architecture:
Enterprise Architecture refers to the way in which an enterprise vision is
expressed in the structure and dynamics of an Enterprise.
Enterprise Architecture provides, on various architecture abstraction levels, a
coherent set of models, principles, guidelines, and policies, used for the
translation, alignment, and evolution of everything that exist within the scope
and context of the Enterprise.

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Restriction of Design Freedom
» Conceptually, Enterprise Architecture creates a restriction of design
freedom for the Enterprise at various architecture abstraction levels.
Vision Models
Principles
Guidelines
Policies
Top level restriction
Models
Principles
Guidelines
Policies
Alignment
Source: GEAO

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Alignment starts with understanding
» We need to make the enterprise intellectually manageable
– Simplify complexity
» If the concepts in the mind of one person are very different from those
in the mind of the other, there is no common model of the topic and no
communication (Taylor, 1975)
– One model will not do the job
– Many stakeholders, many models
– Need to distil what is significant

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Perspectives
» Perspectives (metaphors, lenses, schemas) are cognitive structures
that represent people’s construction of reality
– They simplify reality and determine:
– What is important and what can be ignored
– What questions you ask and where your attention lies
» Powerful
– They make complex realities manageable
» They guide processing of new information
» They are resistant to change
» They become universal rules

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Enterprises: Micro level
» Organisations are tools that permit groups of human beings to aim at
and achieve goals that would be far beyond the reach of their powers as
individuals.
Herbert Simon (1916-2001) - Nobel Laureate in Economics 1978
Society
Organization
Team/department
You
Source: INSEAD

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Enterprises: Macro level
Strategic Design
Enterprises are machines
A mechanical system crafted to achieve a
defined goal. Parts must fit well together
and match the demands of the
environment.
Action comes through planning.
You are an Architect.
Political
Enterprises are contests
A social system encompassing diverse, and
sometimes contradictory, interests and
goals. Competition for resources is
expected.
Action comes through power.
You are a Politician.
Cultural
Enterprises are institutions
A symbolic system of meanings, artifacts, values,
and routines. Informal norms and traditions exert
a strong influence on behavior.
Action comes through habit. You
are an Anthropologist.
Source: INSEAD

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Up the value chain
Procurement CTO CIO COO CEO
Cost
Agenda
Infrastructure
IT Systems
Architecture
Domain
Expertise
Business
Expertise
Enterprise wide
Architecture
Scope

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Change the dialogue: Why?
Stakeholder Messaging priority
Response to technology-
oriented messaging
Business Executive 1. Better
2. More
3. Cheaper
Strongly negative
(---)
Finance/procurement
executive
1. Cheaper
2. Better
Strongly negative
(---)
Line-of-business
manager
1. Better
2. Cheaper
3. More
Negative
(---)
IT Executive 1. Cheaper
2. Better
3. More
Accepting
(+-)
IT Manager 1. Cheaper
2. Better
3. More
Receptive
(+)
Source: Forrester Research, March 2007

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Business Perspectives
Leading the Transformation
Strategic Design Perspective
Rewards & incentive systems
Formal organizational structures
Informal organizational structures
Political Perspective
Power & politics in organizations
Managing with power
Cultural Perspective
Organizational culture
Managing across cultures
Corporate Governance
Leading Change
Source: INSEAD

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Strategic Design Perspective Example:
EDS Industry Frameworks
HealthcareHealthcare ManufacturingManufacturing
Financial
Services
Financial
Services
CommunicationsCommunications Consumer
Industries
& Retail
Consumer
Industries
& Retail
GovernmentGovernment TransportationTransportation
Energy
Enterprise and industry specific knowledge to rethink and reshape your organisation.
EDS captured industry experience over more than four decades.
Source: EDS

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EDS Example
Oil & Gas Industry Framework – Oil Refining Sub-Segment
Source: EDS

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EDS Industry Framework
Example – Oil Refining
• Overview
• Industry Trends and Impacts
• Possibilities and Solutions
• Industry Insight
• Regional Perspectives
• EDS’ Point Of View
• Desired future
• Business Processes
Source: EDS

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• Increased regulatory &
environmental
requirements – e.g.
increasing plant efficiency
and thereby reducing
carbon footprint
• Young workers not
attracted by the image of
the industry – workforce is
ageing
• Mismatch between crude
supply and product
demand – e.g. increasing
demand for gasoline
requires light crude oils
which are in shorter supply
• Mergers and acquisitions have reduced the numbers of
industry players
• Investment in new plant is required to improve efficiency
and reduce costs
• Globalization necessitates regional/global client
management & relationship
Breakaway Points
• Improved Labor Relations
•Next-Level Cost Performance
•Infrastructure/Legacy Modernization
Change
Operational Perspective
• Focus on attracting new entrants to
the job market to combat ageing
workforce
•Invest in new technology – to
streamline operations and reduce
costs
•Realize IT benefits
Global Market
Dynamics
•Changing global consumption
patterns due to changes in fuel
specifications caused by
legislation
•Replacement of ageing assets
– e.g. cat cracker reactor
replacement in older plants
•Increased need to improve
energy efficiency of refining
process due to increasing cost
of energy
•Declining supplies of light,
sweet crude increase reliance
on sour crudes which require
more complex refining to
remove impurities
The oil/gas industry has
undergone tremendous
change in the last
decade from a
globalization
perspective with
changes in regional
importance in terms of
supply and
consumption.
Developed,
industrialized societies
depend on energy for
growth and changes in
the economics of
energy impact virtually
all other industries in
some direct or indirect
aspect.
Refineries must keep
pace with changing
consumption patterns
and demand for new
fuel specifications
Oil Refining Point of View
Source: EDS

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Oil Refining Regional Perspectives
Many trends in the
upstream oil/gas
industry are common
globally such as
consolidation and
pressure on costs.
However, there are
key differences in the
regions that require
unique business
propositions such as
the changing economic
viability of certain
reserves and the
change in gas logistics.
North America
• Diminishing supplies of light, sweet crude, with
new deepwater reserves in Gulf of Mexico
producing sour crudes (need more refining)
• More flexible refining methods are needed as a
large array of new crudes with different yields
become available
• North America has 153 of the world’s 717
refineries (132 in US) but still imports refined
products from overseas to meet demand
• Exposure on the Gulf Coast due to high
preponderance of refining capacity which is
vulnerable to hurricane damage and which is
currently already running at high levels of
capacity
EMEA
• Declining North Sea supplies of low
sulphur oil are being replaced with oils
with more impurities which require more
refining
• Legislation demanding reduced sulphur
levels in motor fuel – diesel & petrol –
require major investment in new and
existing refineries
Asia/Pacific
• Enormous pressure on supply with
rapidly increasing demand from
China/India
• New avenues of supply enablement
with LNG (Japan)
Latin America
• Increasing demand for oil/gas
• Logistics changes with LNG; opening
of non-North American markets
Source: EDS

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Oil Refining – Core Business Processes (L0)
Assess Current
Capacity
Provide Capital
Project Support
Manage
Construction
Plan for Capital
Investment
Assess Future
Demand
Requirements
Manage
Maintenance
Inventory (MRO)
Schedule
Maintenance
Activities
Address Break /
Fix Events
Plan Maintenance
/ Inspection
Work
Monitor Facility &
Refining Process
Execute Refinery
Process
Configure Facility
Perform Start-up
& Shut-down
Execute
Maintenance /
Inspection Work
Manage Design /
Engineering
Confirm Capital
Project
Manage
Engineering
Changes (EC)
Plan Production
Plan & Schedule
Operations
Manage Real
Estate
Develop
Maintenance
Programs
Provide General
Support Services
Manage Vehicle
Fleets
Schedule
Hydrocarbons
Manage Corporate
Security
Provide Legal
Support
Manage Public
Affairs
Manage Process
Improvement
Establish & Monitor
Business Direction
Perform Nominations
Manage Oil
Movements
Support Health,
Safety, Environment
Compliance
Provide Regulatory
Reporting
Manage Commercial
Activities
Provide Laboratory
Services
Evaluate Current
Impact Scenarios
Project Future
Facility
Requirements
Develop Optimized
Portfolio
Plan Facility
Utilization
Manage Feedstock
Perform Medium-
term Production
Planning
Manage Tank
Inventories
Perform Blending
Manage Vessel
Operations
Manage Dock
Operations
Manage Harbor
Operations
Account for
Hydrocarbons
7 Provide Other
Business
Services
6 Provide
Support Services
5 Manage
Refinery Logistics
& Hydrocarbon
Management
4 Maintain
Assets
3 Operate
Refinery /
Plant
2 Perform
Refining System
Capacity
Planning
1 Manage
Design,
Engineering &
Construction
Analyze
Operational
Performance
Evaluate Outages
L0
Monitor Emissions

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Strategic Design: Incentive systems
» Some myths about pay
– Low labour costs are a competitive strategy
– Individual incentive compensation to increase individual’s productivity
– Labour rates and labour costs
» Why do incentive plans not work
– Undermine the process they are intended to enhance
– Rewards only buy temporary compliance
– Individual rewards create competition, which destroy cooperation
– No correlation between pay and performance …
» Culturally shaped
Source: HBR

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Empirical Evidence
Better
43%
Same
41%
Worse
16%
Terminated Plans (12%)
Main Reasons for Termination
•Missed targets/ Demoralizing 46%
•Business Slump/ Hi Inventory 30%
•Lack of employee acceptance 29%
Business Performance Relative to Market
Source: 1993 Survey of 663 performance-rewards plans.
Consortium for Alternative Reward Strategies Research
Better
45%
Same
47%
Worse
8%
Kept Plans (88%)

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Strategic Design:
Formal Organisational Structures
» Functional, divisional, matrix (and combinations)
– Each has strengths and weaknesses
» Example: Functional Design
– Activities are grouped together by common function from top to bottom of the
organisation - E.g., production; sales & marketing; accounting & finance
» Strengths
– efficiency within departments
– economy of scale
– knowledge and skill development
– best with a stable environment and few products/services
» Weaknesses
– slow response to external change
– weak horizontal coordination, leading to overload in decisions at the top
– less innovation
– restricted view of overall organizational goals Source: INSEAD

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Strategic Design:
Informal Organisational Structures
SOCIAL CAPITAL
HUMAN CAPITAL
Use
your own
knowledge
and
expertise
Coordinate
other
people’s
knowledge
and expertise
Individual contributors Managers and leaders
Source: INSEAD

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What can you do?
Evaluating your Social Capital
Source: INSEAD
Team
Members
Supervisors
Outside
Partners
Other
Functions
Mentor
Social Support
BREADTH
Does the network allow
access to diverse groups?
» Seniority
» Nationalities
» Places of work
DEPTH
Does the network allow for
effective use of your time and
energy?
» Duration of the relationship
» Frequency of interaction
» Strength of the relationships
LEVERAGE
Does the network allow you
to influence key individuals
and to maintain autonomy?
» Number of contacts
» Density of ties among contacts
» Centralization

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Political Perspective
» Power
– the ability to get people to do things they wouldn’t otherwise do
» Politics is the use of power to either
– Gain more power
– Exert influence
(other than formal, legitimate authority)
The fundamental concept in social science is Power, in the same
sense in which Energy is the fundamental concept in physics.
—Bertrand Russell

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Sources of Power
» What you are (personal capital)
– Power derived from your ability and expertise
» Where you sit (positional capital)
– Power derived from the role you play in the organization
» Who you know (relational/social capital)
– Power derived from your networks
Source: INSEAD

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Cultural Perspective
Symbols, stories, lingo, rituals, dress
Artifacts are repositories of meaning. A change in
artifacts can, with time and consistency, produce
a change in basic assumptions.
Artifacts
The values we talk about or think we have
Espoused values are starting points, and some can
become assumptions, but once we get to know a
culture, sometimes we will see espoused values do
no support the artifacts
Espoused
Values
The fundamental premises that we hold
about our world but that are not
commonly articulated.
Basic
Assumptions
Source: INSEAD

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Managing across cultures Case:
The Bull market
» Saturday morning
– Grafft arrives at the restaurant where he was to meet Senor Vasquez. He finds
Mario, who is very gracious and informal (asks to be called by his first name).
They are briefly joined for the meal by Mario’s family. No business is discussed
all morning.
» High noon
– Now alone, and over several drinks, they start discussing business. Grafft is
feeling a little “tipsy.” He describes the next several hours as a “bullfight,”
although friendly.
» Later that afternoon...
– Talks slow down as the first dinner guests arrive for cocktails. Mario suggests a
change in environment and recommends a local inn.
– Grafft had already been forced to phone friends and change plans three times.
He now had a headache. He also felt that the discussion had reached a bit of an
impasse, but he felt that the relationship was developing…
» Gored!
» …but it was worth it…Vasquez writes a contract on a paper napkin
and a check that leads to $3 million in sales of printers

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What predicts success?
» Sense of humor, tolerance, and curiosity
» Language skills
» Spouse and family issues
» Previous international exposure
Ref. Schneider and Barsoux,
Managing Across Cultures, Prentice Hall 1997.

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Leadership
It’s about people …
Making enterprise architecture
effective involves the substantial
issue of attempting to affect the
behavior of staff not under direct
control, which brings with it
serious political difficulties that
can undermine the best of efforts.
-Forrester

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Scott AdamsScott Adams
Dilbert

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Leadership Development:
Basic Methods
Learning by the book
Academic content, such as cases, books, articles
Learning from living examples and forums
Listening to others tell their story, watching, even copying,
but usually at arms-length
Learning from interactive coaching experiences
Sharing and analyzing your own behaviour, and then
working on an action plan to improve
Broad
Insights &
Frameworks
& Ideas
Custom-
fitting &
Depth &
Active work

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Our Ancient Emotions
References: - LeDoux, J. (1998) The Emotional Brain
- Loch, Galunic, & Schneider (2006) “Balancing Cooperation and Competition
in Human Groups: The Role of Emotional Algorithms and Evolution.” Journal of
Managerial and Decision Economics.
Source: Prof. Charles Galunic, INSEAD

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Emotional Intelligence
» Emotional Intelligence (EI)
– sets apart leaders from others
– IQ and technical skills are threshold capabilities
» EI has a genetic component but can be learned
» EI components are:
– Self-awareness
– Self-regulation
– Self-motivation
– Empathy
– Social Skills
References:
Daniel Goleman,
“What makes a leader?” HBR 1998
Emotional Intelligence 1995 (book)
Salovey, Brackett and Mayer (2004)
Emotional Intelligence: Key Readings on
the Mayer and Salovey model.

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Leading Change: Nissan Case
» “Nissan has its back to the wall”
» First week action
– Made possible by homework and setting the conditions for success (taking a
trusted team with him; gaining promise of full control)
» Homework: asking questions for 2 months

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Summary
» Enterprise Architecture is more than IT
» Without a good understanding of the business everything underneath
is at risk
» IT services companies and departments want to move up the value
chain
» This needs a different conversation
» Leading the transformation has many aspects
» Many leaders don’t overcome the Dilbert principle
» Emotional intelligence sets leaders apart from others
» Leading transformation is about implementation