Context of Operations
This is most of an email I sent to a colleague who was about to teach a class on Operations. This was my introduction to him of me and what I do.
“I have spent the past 23 years designing processes (12 years), designing departments (7 years) and designing businesses (4 years). If you don’t mind I will recount how that progression occurred. Initially I worked on determining the root cause of process performance problems (nice alliteration) and designing solutions. The effort was typically directed to one department. As the projects grew so did the breadth of the processes. It did not take long until I was working on processes that spanned departments which definitely increased the complexity. I did have great success and eventually was asked to step into the CIO role at La-Z-Boy (LZB). In that role I redesigned the IT department for the LZB division (3 years) and then created an entirely new IT department to service the all 14 divisions at LZB (4 years) plus the corporate office. Though my title was CIO my actual role was IT Department designer, leader and manager.
As a Vice President I did have control over those areas reporting directly to me and so I could design them to work the way I wished them to. IT, HR and Finance are all support functions and because each area is asked to participate in all projects you can see how important it is for them to work closely together. If you know anything about IT you will be aware of the challenge made to every CIO – Align IT with the business. Problem is businesses are not aligned with themselves and therefore there isn’t just one thing IT can align to. (I contend that there really is not something called “the business” but instead a collection of departments that share a common business name.)
Businesses need a way to have all of the parts working together. It does not benefit a company to let each department go off and try to optimize itself thinking it will have an optimized whole. It simply does not work that way. Optimizing all the parts does not optimize the whole. After leaving LZB four years ago I started documenting the design of the entire business to show relationships and how the parts needed to work together. It actually shows how to align the parts of a company – the holy grail of business.
You have some process work in your course. If you are a process designer you know that processes are invisible until each activity/component is documented. Documenting processes is actually documenting process designs. It is only when the entire process is visible that you can determine if a change is warranted and what the impact of that change will be. By documenting the process before making changes you minimize risks of unintended results. Also by documenting the process you can determine whether the process needs to be changed in order to achieve certain performance goals or if it is a matter of execution. Poor process performance is the result of either a poor design or the poor execution of the design. Until you document the process you can not know where the problem exists. More than 80% of the time it is design-related.
Now reread the last paragraph and substitute the word ‘process’ with the word ‘business’. The principles are exactly the same. Most executives (people in your class) do not understand that businesses have designs. They know products have designs and some will know processes have designs but few if any will know that the business has an actual design. And because they do not know designs exist in businesses they do not look at the design when they are having performance issues. They look at their employees (remember performance = design + execution) and if you can not see the design you go after execution. This is why so many projects in companies have such a low ROI and management is frustrated with their investments. They are not resolving the root cause.
I know this is a roundabout way of getting to one suggestion I would have with your course. And that is context. Context provides the appropriate background for any area of study. One pet peeve of mine is when people judge actions taken decades ago and use today’s mores as the backdrop. Without knowing what was going on in the past those judging do not have the right context to understand the actions that were taken. Without understanding the entire business your students may not fully grasp Operations. I do see that you speak about business and process design and I want to encourage you to show how things are connected, not separated. It really is not ‘business and operations’ any more that it was ‘the business and IT’. All of it is the business because “Everything is connected to everything”.
There is a particular sequence that leads up to the performance requirements for Operations.
Ø Capstone.
o Strategic information such as the determination of the performance goals for the company. What are the revenue goals and profit goals? They drive everything.
o In addition you have to understand the competitive environment. Without knowing the competitive environment you are making plans in a vacuum. Returning to the idea of context, the competitive environment provides the context for designing the business for success.
Ø Market Model.
o Markets, customer segments, product groups, products and Value Propositions.
o Determine whether your Market Model can deliver on your revenue goals. If not you have to make adjustments to the Market Model design. You may increase your markets, sell to new customers, develop new products or redesign existing products. You may acquire an existing company which will broaden your Market Model.
o Part of the work in documenting the Market Model is determining customer expectations. This is critical because Market Model requirements are input into Operations (Process Model).
Ø Process Model.
o The Process Model contains all of the processes that the business performs. What I am referring to may be slightly different than how you think about it. Selling is a process. Marketing is a process. Assembling components is a process. Making components is a process. There are processes that focus on Creating Demand for a company’s products and services. There are processes created in order to Fulfill Demand for those products and services. I expect that in your course you equate Operations with Fulfill Demand processes. If I am correct in that assumption I would suggest that in the future you consider all processes as part of Operations. That is why Lean concepts work on the shop floor and in the office as well.
o The point I wish to make here is that the performance requirements for processes is not arbitrary. The market place will determine what is an acceptable price or acceptable lead time both of which are determined by the Process design (Operations). The market gives Operations the minimum requirements in order to be competitive.
I will stop here. I have probably worn out my welcome by now. You should know there are two more Models that are part of a business design: Organizational Model and Systems Model. If you wish to have an overview of them I would be glad to share it with you.
Everything I have written comes from my business partner and me. I can not direct you to a different source because we are the sources for these ideas. This is just the tip of our ice berg. I have much, much more I could discuss.
Let me know if you wish any clarification on the ideas I have presented. I will be glad to respond.”
Good, Fast and Cheap
I remember in 1984 walking into a print shop to have some brochures prepared and seeing a sign above the counter which read “Good, fast and cheap – pick any two.” At the time the meaning behind that sentence was true:
- Good and fast will not be cheap
- Good and cheap will not be fast
- Fast and cheap will not be good.
Surprising how what seem to be incidental moments just stick with us.
Part of the reason why it stuck so firmly to me is I wanted to figure out a way to do all three at the same time. I felt like the shop owner was throwing down the gauntlet and I needed to come up with a way to solve that problem. For those of you that have read other postings to this blog know that my background includes many years of designing processes. That challenge was in the background every time I redesigned an old process or created a new one.
Apparently I was not the only person who felt this way. Over the years the expectations of customers changed. First companies differentiated themselves with quality. After a while quality was assumed and price became the breaking point when making decisions. And finally in certain industries lead times were the key. Dell became the model for Good, Fast and Cheap. You could get on line, customize your computer and have it delivered to your home in a matter of days. Dell’s computers were often priced lower than its competitors and the quality was every bit as good. Why wouldn’t people buy Dells? Dell had solved the challenge and its sales went through the roof. By being able to sell Good, Fast and Cheap Dell had changed the rules and customers expectations were never the same.
However there is another factor that customers consider before making a purchase and that factor is called Desirability. If I could put in front of you a car or television that meets your expectations for price, quality and lead time but the vehicle is unattractive or does not have the options you are looking for are you going to buy it? Not if you can find something comparable in price, quality and lead time that comes much closer to what you are looking for.
The term Value Proposition is used when referring to the four considerations when making a purchase. Price, quality and lead time are fairly straight forward – at least on the surface. How much is this going to cost me, will it last and perform the way I expect it to and how long do I need to wait to have it available? If any of the answers to those questions are outside your tolerance limit you will not make that purchase. You will either buy a competitor’s product, buy a substitute product that meets your needs or you will put off the purchase.
As I mentioned earlier the Desirability factor weighs into each decision. Desirability is very product specific. If you are looking at a car Desirability may be defined as: appearance, options, and gas mileage. If you are talking about a PC your definition of Desirability may include: size of memory, size of storage, speed of CPU, graphics capability… There are many considerations when defining Desirability in relation to each product or service.
Just one other thought on the idea of Value Proposition. Though there are four factors when making a decision about a purchase not all of them have the same weight. When buying a car a person just out of college may be willing to sacrifice some on quality, lead time and desirability for the sake of price. More affluent buyers may weigh Desirability the highest and insist on leather seats, sun roof, media capabilities (iPod hook ups, GPS,) and sheer comfort.
So the challenge is not just Good, Fast and Cheap any longer. As customers we have expanded the challenge to include Desirability. We want our purchases to also look good and have everything we want it them. Our expectations keep changing which puts pressure on the suppliers of our products.
Suppliers are in a very difficult position. If they could deliver on the Value Proposition without consideration of profit their lives would seemingly be much easier. They could have the attitude of just getting the product out there, price it to sell and their customers will be happy. Problem is there is the other side of the equation.
For a business to be successful it must make both customers and stakeholders happy. For a customer to be happy the business must offer a compelling Value Proposition. A shareholder is looking for a strong return on their investment (ROI). I will write a different posting on the idea of Return on Investment.
I also intend on providing a more detailed, somewhat academic, article on the idea of Value Proposition. For the sake of brevity and to have this post be somewhat casual reading I did not drive down very far with that concept. If you have questions about Value Proposition please feel free to ask any questions and I will respond.
General Conversation
I joined two groups on LinkedIn – one for general business opportunities and one for executives. Since most of the entries in both groups are advertisements for services I decided to use it to spread the word about the value design plays in the success of any company. I did receive two responses from one thoughtful gentleman and have decided to publish our dialogue. My comments are in black and his are in blue.
This Post will be used to share questions that are posed to me and my responses to them.
Beyond Strategy! The closest thing to a Silver Bullet in improving performance is Business Blueprints.
Strategy alone can not take you where you need to go. The design of each business must factor in the goals it has set and the strategies it wishes to execute. Goals that can not be reached and strategies that can not be executed are harmful to the entire organization.
Design is the key to success, not strategy. 80% of performance problems can be tied directly back to a poor design. This is true with businesses, processes and products. Go to my website at www.stankirkwood.com and see the top 10 common Business Pain Points that can be addressed with a set of Business Blueprints™. You can also request a presentation of the system we created to address business design issues at www.businessdesignconcepts.com.
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Plan you work and work your plan!
Business Design is much more than creating a plan and then executing that plan. Probably every large business that has failed had annual (business) plans as well as strategic plans.
The progression is: establish goals and identify desired strategies; design markets to support those goals; design processes to support the markets; design an organization to execute the processes, and design systems to support all of the above. The overall design must be able to execute the desired strategies. Then you create the implementation plan and execute the implementation plan. After the design is implemented it must be executed. An execution plan must be created and executed.
In theory I agree, however I’ve been associated with too many businesses that can’t get out of their own way due to the weight of the planning process. And that process allows too many to forge their own agendas, diluting the resources to simply move from “A to B”.
I sat in too many senior management planning sessions just mumbling on how we were able to make the simple overly complicated. And generally, once a process document was crafted, the senior most managers went on their way, comfortable in knowing their job was done! Never did it occur to them that outside of making sure their board meetings notes were put in lock step with the plan, did they ever think they actually had to work that plan themselves! That’s why most major companies fail miserably when it comes to a plan.
I was cleaning up some emails and reread your message to me. You hit on several problems in your response: 1) the weight of a planning process; 2) covert agendas; 3) making the simple complex, and 4) lack of commitment or understanding on the part of senior management on their role in the implementation of a plan.
Each one of those issues does cause problems in many companies today. If a company were to go through the Business Blueprinting™ process the first three issues would be immediately addressed. The process itself is intentionally designed to deliver maximum impact with minimal effort required by the senior management team. The entire process of documenting the design of a company, analyzing that design to determine whether the company’s goals can be achieved and strategies executed and then redesigning the business to ensure success only takes eight days of our clients’ time. It takes us 8 – 10 weeks, but only eight days for our clients.
During the gathering of company and competitive environment information agendas become apparent. Why? Because our goal is “Total Business Performance”. We are looking for what is necessary for the business as a whole to be successful. As Dr. Farson suggested: “Leaders have to become designers and designers need to become leaders”. In actually we do the design with the input from the leaders. Our design is actually a recommendation which the leaders need to agree upon. It is exactly the same role an architect has in designing a house. S/he would gather important information from the prospective home builder and then design a house to meet those requirements.
We do the same in business – which leads to your third point about complexity. Businesses are complex. The challenge is to simplify them as much as possible and we are able to do that. Basically all businesses are the same. Certainly their products and services vary and how they do their work varies but the foundation is the same. For instance every business must create demand for its products and services (unless you enjoy being a monopoly or government agency). And every business must fulfill the demand for its products and services. We have created a common framework, common structure, common DNA, and common metrics for all businesses. We simplify the complex.
Another way we help address complexity is by documenting the design of the business. Five people can use the same word and have a different understanding of its meaning. By putting a picture in front of executives it brings them together and they share a common understanding. Those meeting rooms you spoke about are often like the Tower of Babel and they don’t even know it. We give them the common language of pictures.
Lastly, we do our best to involve the senior management team by delivering not only an updated business design but also a strategic plan, master project plan and a governance model to keep the design current (Strategic Management). The master project plan is a very strong reminder that their responsibility is not over when the meeting ends. If the CEO will take ownership of the master project plan (does not need to manage it but does need to own it) then the issue you surfaced is greatly diminished.
Design, Strategy and Execution
Outside In design
I spend time in several Business Process groups on LinkedIn and one of the terms I keep seeing is “Outside In”. I keep seeing people using that phrase as if they just had an epiphany or that they just came over the ridge and have seen the promised land. What I don’t understand, or what surprises me, is that it seems to be a new thing to experienced people. “top down, outside in” is how everything should be designed. How do you go about designing something where you have not established its purpose? How do you design something if you don’t create specifications (performance requirements)? Outside In is common sense and I don’t see why it is getting so much play.
So I responded to a discussion and wrote the following:
‘Outside In’ is about Context. Understanding Context is critical in every line of thought – not just BP design.
In order to understand the purpose of an activity you have to understand it in the context of the process in which it exists. Processes are a collection of activities. Evaluating an activity on its own has some merit but to fully understand the activity one must understand it within the context of the process in which it exists.
Seeing an activity on its own will not provide you with an understanding of how it fits into the whole. Every activity has a cost associated with it and should also have a value associated with it (non-value added activity?). The activity receives its performance requirements from the next level up – the process.
In order to understand the purpose of a process you have to understand it in the context of the system in which it exists. Systems are a collection of processes (Senge – Fifth Discipline). Every process has a cost associated with it and its corresponding value. The process receives its performance requirements from the next level up – the system.
Every business has a number of systems which support it and to understand the performance requirements of those systems you have to view them in the context of the overall business. The system receives its performance requirements from the next level up – the business.
And there is where some companies have stopped their thinking. They view their systems, processes and activities only in the context of the business itself. They are operating in a vacuum and use performance indicators focused within their four walls.
However those businesses need to go the next level up – the competitive environment. They need to add another layer of context. The business operates within the context of the competitive environment. If a business does not factor the competitive environment into their performance requirements it will be flying in the dark. And the likelihood it is going to hit the mark (from the competitive environment’s perspective) is slim to none.
Hence the need for Outside In design. While one can look at performance from the ground up (activity to process to system to business) the requirements come in the opposite direction. One needs to understand the competitive environment first. One has to know what the outside (competitive environment) is requiring to know the minimum performance requirements for the business and then it cascades all the way down to activities and individual employees.
And the competitive environment is not defined solely by the expectations of the customer.
What happens if your company slightly exceeds customer expectations but there are competitors offering even more? In that situation you will most likely lose market share. Remember, your investors are not the only ones looking for a Return on Investment. So are the customers. Customers want to get the most for their money (the greatest return on their investment) and if your competitors are offering more than you then you need to adjust your performance requirements. You need to be offering a compelling Value Proposition to the market and if you don’t understand what the customers want and what your competitors are offering then you will most likely fail.
Companies don’t get to decide what the performance requirements are for products and services. Customers do.
That is one perspective on Outside In design. Where does your understanding differ from mine?
Businesses do not Exist
I am not certain if it is a matter of being lazy or if it is nature’s way of not burdening us with too much detail but regardless of the reason people do not ‘think’ correctly about governments, religions, races or businesses. Our thinking falls down when referring to any group or entity as if is one thing.
We often hear about how inefficient “the government” is in the US. “The government can not run anything” or “the military and intelligence should not be used in the same sentence”. What we are failing to realize is the government is not one thing – it is many. The military (while being protrayed as having some questionable purchasing practices) is composed of many brilliant people. The military is many.
And when we speak about business we should remember that it is not just one thing. I spent seven years in the role of CIO. One of the challenges facing CIOs centers on the idea of aligning IT with ‘the business’. And here is when I learned that ’the business’ does not exist. The business is a collection of disparate groups, all sharing a common banner, but operating relatively independently of each other. Each have their own metrics, own goals, objectives, and key performance indicators. Each being led by a person wishing to have a World Class organization.
Essentially each department is a business within a business. I witnessed it first hand when I sat in on the assessment of the alignment of an IT department with the rest of the business. The findings were not in favor of the IT department. The consulting company determined that more than 80% of the IT projects did not support the key drivers for the business. The consulting company therefore determined the IT department was not aligned with the business. Just how wrong the consulting company was became apparent when it was discovered that every one of those projects originated outside of IT. Those projects came from ‘the business’.
What you have is the situation where ‘the business is not aligned with the business’. Actually there is no such thing as ‘the business’. ‘The business’ was never designed as an entity but instead it evolved one decision at a time and just happens to look the way it looks.
This is the primary achilles heel for every business - business executives do not understand that the business they are leading actually has a design and that design is as tangible as the design of their products or processes. Nor do they understand that the design of a business has the greatest impact on the performance of ‘the business’.
Wouldn’t you like to see what your business design looks like? Wouldn’t you like to be able to analyze the performance capabilities of your design and make any necessary changes to improve its performance?
If you took the time to have your business designed – then your business would actually exist. Without the design your business is really just a bunch of departments acting mostly independently. Good luck with that.
Fundamentally flawed thinking for 21st century
I do find some interesting discussions on LinkedIn. I tend to spend my time with Business Process people since they have a slightly better concept about how something invisible (process and/or business) can have a design.
Here is my 2 cents when addressing the idea of how some business thinking is fundamentally flawed (which I agree in principle).
I know I sound like a one note singer but I am willing to live with that. I want to comment on the idea of “Fundamentally flawed thinking for the 21st century..”
It is all about Context! It is my contention that the relevance of any design is determined by the environment in which it exists. Think about that sentence and apply it to any design. Apply it to processes, to products and to businesses.
Businesses are created within the existing environment and survive because its design is compatable with the environment. But as we know time changes things. The expectations of the customer change (outside in design), the offerings of the competition changes and materials and technology change. What was a leading design becomes obsolete at an ever quickening pace.
Important tenets that affect business performance (according to me):
1) Businesses, just like products and processes, have designs that can be documented.
2) No product, process or business can outperform its design
3) Design dictates performance
4) The best any product, process or business can do is to reach the maximum performance capabilities of its design.
5) The best any strategy can do is to help the business reach its maximum performance capabilities of its design.
6) Strategies do not change the design of a business.
7) Four step process to business (or process) performance: Design, Implement, Execute and Manage. Carpe DIEM
Businesses are much more than processes. Don’t get lost in processes. You must have the Context for processes just like you must have the Context for products and the other facets of the business.
The most important responsibility of any executive is for the design of the business and for executives to not understand that is the biggest flaw in thinking today!
That concept fits the idea of Outside In design better than most people realize. One can only create a relevant business design by understanding the context in which it exists (the outside). I can go on and on about this but will stop here.
Some business truths
One LinkedIn discussion centered on truths. Here was my offering.
It seems to me the issue is not around set theory and the axiomatic approach. Board members (representing those holding the equity of the company ) and customers (representing those deciding to spend their disposible cash with your company) don’t care.
Executives are at the center of the fulcrum. One the one side are the equity holders wanting a better return on their investment and on the other side are the customers who want the greatest value for the money they are spending. And the business leaders are trying to navigate through the existing environment and give each what they desire.
Here are a few ‘truths’ those executives should be paying attention to:
- Products, processes and businesses have designs that can be documented.
- Products, processes and businesses can not outperform their design.
- Changing strategies has no effect on the design of a business.
- Strategies are executed, designs are implemented.
- Strategies can only be executed if the design can accommodate them.
- Strategies need to be embedded in the design of a business.
- Design, not strategy, is the key to change.
Getting to KPIs. Their use is in determining when a design needs to be updated. Since designs gain their relevance from the existing environment KPIs need to be sensitive to what is changing.
Why are we lagging?
Here is a response I penned this morning in one of the LinkedIn process groups. The person who initiated the discussion was asking the question “Why are Americans lagging in trying new things in relation to processes? Even the two approaches of Lean and Six Sigma are not being adhered to as strictly as in the UK and on the continent.”
My response to that question is:
You have hit directly at the core of a problem I keep running into. I have been trying to connect conceptually and intellectually with both business leaders as well as academics around the idea of business design. Every principle you can think of in relation to process design is equally true for business design.
Here are some examples:
- A poor process design can never result in great process performance.
- The key to process performance is in the design, not the strategies.
- You can not execute process strategies unless the process design can accommodate those strategies.
- Processes have a design, just like products.
- Performance requirements for processes should not be arbitrary but instead based upon requirements of the market place and stakeholders.
- Before making adjustments to a process you should always document the process to reduce the likelihood of unintended consequences.
- When documenting a process what one is actually doing is documenting the design of the process.
- Process management consists of four steps (DIEM): Design (according to performance requirements); Implement (the design according to specs); Execute (the design according to specs); and Manage (keep track of KPIs to know whether design is meeting requirements of two sources: customers and shareholders). Go back to first step when design either does not meet performance requirements or performance requirements change.
- Now reread every bullet in the preceding paragraph and substitute business for process. And every sentence is equally true. Only now you are operating at a higher level, one where processes are just one piece of the puzzle.
Why am I having trouble getting across the importance of business design to executives and academics? I think for two reasons: 1) they have trouble with critical thinking. They have been taught what to think and not how to think. They filter everything through what they have been taught and can not see other possibilities. This is reinforced by consulting companies who keep selling them the same processes (strategic planning for one) that continue not to work (which I can explain why rather easily). And 2) they have too much invested in the way they currently think to allow something new to come in. I have been especially disappointed in people I know and respect and have even studied under in their inability to consider what I have to say. They have been teaching the same ideas for years and have all of their case studies lined up for students to review, analyze and report. But the universities and colleges are supposed to be the heart of new ideas and creativity and what I am finding is a stone wall just as thick as those of the business world.
And I see some of that same resistance in several of the process groups.
Speaking Engagements
Throughout my college years I traveled all around the United States – for free. My home base was California, Pennsylvania the site of a small state-supported college. During those years I spent a summer in Alaska; went to California three times; Florida twice; New England once and enjoyed the Mardi Gras. I spent one summer traveling back and forth from Hamtramck, Michigan to Rillton, Pennsylvania every weekend to see my girlfriend.
My mode of transportation was my thumb. I simply stuck it out where the driver of every car passing by could see it and waited for some kindred soul to stop and offer me a ride. When I first experimented with hitch hiking I was very tentative about putting my thumb out. I did not want to seem too aggressive nor did I want to impose myself upon the drivers. So in my meekness I barely held my thumb away from my body and I never looked directly at the driver. End result was people were confused about what I was doing on the side of the road. They thought I was waiting for a friend to pick me up or that I was loitering with nothing to do.
After hours of disappointment I had the epiphany that I needed to put my thumb out where everyone could see it. I needed them to know that I was asking for a ride and then let them decide if they wished to offer it or not.
My thumb went out, I looked directly at drivers (not defiantly) and suddenly my success rate dramatically increased. One of my trips from Pennsylvania to Lancaster, California took only three rides and 52 hours. As one friend said: “It takes longer to drive it than that”. That trip held many interesting stories (accidentally setting a car on fire; being offered a large knife by someone who had been stabbed; being in a car chase around Albuquerque NM, and riding through the Mojave desert in the back of a pick up truck being driven by two cowboys).
Well here it is nearly 40 years later and I am ‘sticking my thumb’ back out and looking for opportunities. Only now I am not looking for a car ride but instead I want speaking engagements. My blog, my company’s website and my webinars on business design are all ways to make the public aware of ideas around the concept of business design. And while writing can be effective I prefer to directly speak with people about it. I want to speak with as many people as I can about the impact design has on the performance of their businesses or agencies. They need to know that 80% of the time the performance issues facing their business are design-related. Executives need to be reminded that the design of the business is their responsibility and they have to be shown how they can escape the business life/death cycle (Strategy Cycle).
If anyone reading this blog can point me to a speaking engagement I will be very grateful. Business design is the key to change, not strategy, and I welcome the opportunity to speak about it.
Make Contact
If the ideas you read on this blog are of interest to you, let me know. I would welcome your input. You can email me at skirkwood@gmail.com or through the contact page on my business website at www.businessdesignconcepts.com.
I look forward to hearing from you.
Happy New Year
Merry Christmas
Just wanted to extend a Merry Christmas and Happy New Year to all reading this blog. Fortunately we had children and in-laws with us during the holidays and it was wonderful.
This should be an interesting year – globally. We can see from the US bail outs how interdependent our companies and countries are so we may rise and fall together. I am not particularly optimistic (short-term) because of the adversion to facing our problems head on. We create artificial solutions which only buy us some time – in hopes that somehow things change enough to avert a complete melt down. None of us want severe economic times but we will most likely have to experience more pain than we have thus far. Bite the bullet and lets get on with recovery.
Beyond Strategy
I have essentially made a career out of being able to dig down and uncover the root cause of problems. For many years I served at the request of the CFO of a large consumer goods corporation. He would crunch the numbers, do some analysis and then say “Go down to the plant at Dayton, Tennessee and see what is happening in the warehouse – invoices are arriving to dealers before the product does.” And off I would go, dig through all the issues, discover the real source of the problem and develop solutions on how to fix the problem. The CFO would pick from the choices I had offered up and then I would lead the charge to make changes. It was a great deal of fun.
But there were two itches that could not be scratched in the role that I had. One, often times the solutions I developed were only partially implemented. I would create what I felt was a great design but reservations of local management would prevent them from fully implementing my solution. And though improvements were gained, they often fell short of what they could have been. I wanted to have control of an organization where I could design, implement and then execute.
The other itch was wanting to participate in the setting of direction for the corporation. One of my inherent strengths is the ability to think strategically. I wanted to be in the Board Room when direction was being set and strategies were being developed.
In order to gain access to that august group I had to take on the role of an executive so when I was offered the CIO position I took it. I believed I would now have control over an entire department and could mold it in the image I felt would best serve the corporation. And I would participate in strategy sessions.
Indeed I did get to shape the IT department but there were constraints placed on me by the CEO. This is to be expected. This one form of governance for the IT department.
And I became disenchanted with strategic planning. If every company goes through a planning process then why do so many companies underperform? What is it about the planning process that is not working?
Turns out it has to do with design. A strategy can only be executed if a design can accommodate it. Executives fail to realize that their business has a design and therefore ignore it or think that changing strategies has an effect on business design. It does not. To improve the performance of a business you have to go beyond strategy! You must look to the business design for success.
