Dynamic Strategy, Dynamic Structure · BIZBOK A Guide to the Business Architecture Body of...

Dynamic Strategy, Dynamic StructureA Systematic Approach to Business Architecture

© 2018 Virtual Coast Associates, Inc. 1“Dynamic Strategy, Dynamic Structure”

David QuimbyInnovation Radiation

www.innovationradiation.com

12/6/2018

http://www.innovationradiation.com/




Volatile business environments require dynamic strategy

While conventional approaches to business architecture tend to perpetuate a static mindset, the discipline offers various leverage points for a more dynamic approach

This session will identify some leverage points, provide some design patterns for advancing the practice, and expose some practical indications that the transformation is already in motion


Business Architecture...


VUCA

Meet "VUCA"


VUCA

What is "VUCA"?


VUCA

Volatility

What is "VUCA"?


VUCA

VolatilityUncertainty

What is "VUCA"?


VUCA

VolatilityUncertaintyComplexity

What is "VUCA"?


VUCA

VolatilityUncertaintyComplexityAmbiguity

What is "VUCA"?


VUCA


Is "VUCA" Increasing or Decreasing?


VUCA


Strategy Has Met "VUCA"...


VUCA


and It Has Adapted


Is Architecture Aligned with Strategy?

Strategy

Operating Model

Capabilities

https://www.hbr.org/product/enterprise-architecture-as-strategy-creating-a-foundation-for-business-execution/8398-HBK-ENG



An organization’s strategy is

often either poorly articulated

or in a state of flux; it is more

practical to focus on the

organization’s capabilities and

constituent operating model.

- Ross, Weill, and Robertson;

Enterprise Architecture as

Strategy (paraphrased)

Strategy

Operating Model

Capabilities

https://www.hbr.org/product/enterprise-architecture-as-strategy-creating-a-foundation-for-business-execution/8398-HBK-ENG


1. Poorly articulated? Strategy

Operating Model

Capabilities



1. Poorly articulated?

How can business architecture

improve articulation of

strategy?

Strategy

Operating Model

Capabilities



1. Poorly articulated?

How can business architecture

improve articulation of

strategy?

Instead of surrendering to poor

articulation?

Strategy

Operating Model

Capabilities



2. In a state of flux? Strategy

Operating Model

Capabilities



2. In a state of flux?

Is that "state of flux" an

adaptation to "VUCA"?

Strategy

Operating Model

Capabilities






Is "VUCA" increasing or

decreasing?

Strategy

Operating Model

Capabilities







decreasing?

How is it "more practical" to

focus on capabilities...

Strategy

Operating Model

Capabilities







decreasing?


focus on capabilities... if

capabilities are not aligned

with strategy...

Strategy

Operating Model

Capabilities







decreasing?


focus on capabilities... if

capabilities are not aligned

with strategy... which is

responsive to "VUCA"?

Strategy

Operating Model

Capabilities



Four Possibilities

dynamic

static dynamic

static

strategy

architecture

strategy 1.0architecture 1.0

Cycle 1 / Previous Generation


Four Possibilities

dynamic

static dynamic

static

strategy

architecture


Cycle 2 / Current Generation



Four Possibilities

dynamic

static dynamic

static

strategy

architecture


Cycle 3 / Next Generation?



A Different Route... Architectural Leadership?

dynamic

static dynamic

static

strategy

architecture


Cycle 1 / Previous Generation



dynamic

static dynamic

static

strategy

architecture


Cycle 2 / Current Generation




dynamic

static dynamic

static

strategy

architecture


Cycle 3 / Next Generation?



A Proper Alignment

aVUCAworld

Strategy / Execution (S2E)


A Proper Alignment


aVUCAworld

volatilityuncertaintycomplexityambiguity


A Proper Alignment

aVUCAworld

dynamic / responsive /

adaptivestrategy



transient advantage vs.sustainable advantage

Rita McGrath vs.Michael Porter

https://www.hbr.org/2013/06/transient-advantage

https://www.amazon.com/End-Competitive-Advantage-Strategy-Business/dp/1422172813


A Proper Alignment

aVUCAworld


adaptivestrategy


adaptiveexecution



dynamic capabilities vs.static capabilities

David Teece





A Proper Alignment

aVUCAworld


adaptivestrategy


adaptiveexecution






David Teece



A Proper Alignment

aVUCAworld


adaptivestrategy


adaptiveexecution

strategy / execution

(s2e / strategic integration)



A Proper Alignment

Business Architecture as S2E Driver

aVUCAworld


adaptivestrategy


adaptiveexecution

business

architecture




How to Bridge the Gap Between 1.0 and 2.0?

dynamic

static dynamic

static

strategy

architecture


Cycle 3 / Next Generation



Some Leverage Points

A Guide to the Business Architecture Body of Knowledge®

(BIZBOK® Guide)

BIZBOK

https://www.businessarchitectureguild.org/page/about


BIZBOK

A Guide to the Business Architecture Body of Knowledge®

(BIZBOK® Guide)

capability

mapping




A Proper Alignment


aVUCAworld


adaptivestrategy


adaptiveexecution





Enterprise Architecture

Strategy

Operating Model

Capabilities



Enterprise Architecture

Strategy

Operating Model

Capabilities

capability

mapping



A Proper Alignment


aVUCAworld


adaptivestrategy


adaptiveexecution




Capability Mapping

Dynamic Capabilities vs. Static Capabilities


according to Thomson

Scientific: one of the 10

most-cited scholars in

business and economics

during 1997 - 2007

the ability to integrate,

build, and re-configure

internal and external

competencies in response

to rapidly changing

environments

https://www.strategy-business.com/article/00225?gko=d24f3


Capability Mapping



according to Science

Watch: the most cited

paper in business and

economics globally during

1995 - 2005

the notion of dynamic capabilities transcends reference to competence

and routines

it includes the organization's ability to adapt established resources

and routines in response to environmental change

https://onlinelibrary.wiley.com/doi/epdf/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z


Capability Mapping



the theory of “dynamic capabilities” explains how organizations fulfill

two seemingly contradictory imperatives:

- they must be both stable enough to continue to deliver value in their

own distinctive way

- and resilient / adaptive enough to shift rapidly when circumstances

demand it

https://en.wikipedia.org/wiki/Dynamic_capabilities


high

low high

low

agility

scalability

volume /not sustainable

the ambidextrous organization

variety /not sustainable

Capability Mapping




Capability Mapping



the dynamic capabilities framework analyzes the

sources and methods of wealth creation and

capture by organizations operating in

environments of rapid technological change

identifying new opportunities and organizing

effectively and efficiently to embrace them are

generally more fundamental to wealth creation

than strategizing (engaging in business conduct

that raises competitors' costs and excludes new

entrants)

https://www.amazon.com/Dynamic-Capabilities-Strategic-Management-Organizing/dp/0199691908


Capability Mapping



https://www.slideshare.net/happyjen1107/dynamic-capabilities-and-strategic-management


Capability Mapping



https://www.goodreads.com/quotes/8800-the-illiterate-of-the-21st-century-will-not-be-those


aVUCAworld


adaptivestrategy


adaptiveexecution





Capability Mapping


David Teece



A Proper Alignment


aVUCAworld


adaptivestrategy


adaptiveexecution






Next-Generation

Strategic Integration

(NGSI)



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle


The S2E Cycle



The S2E Cycle

High Frequency vs. Low Frequency



The S2E Cycle



software engineering as a "design pattern" for S2E


The S2E Cycle



the evolution of software engineering

agile

development


The S2E Cycle




agile

development

continuous

integration


The S2E Cycle




agile

development

continuous

integration

DevOps


The S2E Cycle



agile

development

continuous

integration

DevOps

what is the difference between these transitions?


The S2E Cycle



frequency

agile

development

continuous

integration

DevOps


The S2E Cycle



frequency and functional integration

agile

development

continuous

integration

DevOps


The S2E Cycle



what happens as frequency increases?

agile

development

continuous

integration

DevOps


The S2E Cycle



cycle overhead moves in two directions


The S2E Cycle



internal as cycle payload and external as waste


The S2E Cycle



waste is decreased and payload is increased


The S2E Cycle



cycle overhead is decreased


The S2E Cycle



cycle overhead is the barrier to increasing frequency


The S2E Cycle



as frequency increases, overhead decreases


The S2E Cycle



enabling further increase in frequency


The S2E Cycle



trending toward a continuous mode of execution


The S2E Cycle



we might call this phenomenon the "flywheel" effect


The S2E Cycle



what is the difference between these cycles?


The S2E Cycle



both cycles are systems


The S2E Cycle



both cycles behave (or should behave) systematically


The S2E Cycle



can the S2E cycle benefit from the "flywheel" effect?


The S2E Cycle



can the S2E cycle operate nearly continuously?


The S2E Cycle



is organizational agility a "different kind" of agility?


The S2E Cycle



can strategy / execution be integrated like DevOps?


high

low high

low

organizational level

cyclefrequency

The Fallacy of Level / Frequency

strategic 1.0



high

low high

low


cyclefrequency

tactical


strategic 1.0



high

low high

low


cyclefrequency

tactical strategic 2.0


strategic 1.0



The S2E Cycle




A Proper Alignment


aVUCAworld


adaptivestrategy


adaptiveexecution




SAFe promotes alignment, collaboration, and

delivery across large numbers of agile teams

it seeks to address the problems encountered

when scaling beyond a single team

at the scale of many tens or hundreds of

development teams, self-organizing teams

becomes increasingly chaotic with SAFe

SAFe puts constraints on team autonomy to

enable teams that are working on the same

product to synchronize their deliverables


The S2E Cycle

Scaled Agile Framework

https://en.wikipedia.org/wiki/Scaled_agile_framework

https://www.amazon.com/s/?ie=UTF8&keywords=team+of+teams&tag=googhydr-20&index=aps&hvadid=241895014260&hvpos=1t1&hvnetw=g&hvrand=12565041407788795827&hvpone=&hvptwo=&hvqmt=e&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9019534&hvtargid=kwd-79779609946&ref=pd_sl_7v0nceoqmp_e


SAFe promotes alignment, collaboration, and

delivery across large numbers of agile teams

it seeks to address the problems encountered

when scaling beyond a single team

at the scale of many tens or hundreds of

development teams, self-organizing teams

becomes increasingly chaotic with SAFe

SAFe puts constraints on team autonomy to

enable teams that are working on the same

product to synchronize their deliverables


The S2E Cycle

Scaled Agile Framework

https://en.wikipedia.org/wiki/Scaled_agile_framework

https://www.hbr.org/2012/11/accelerate



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework

vertical /

"up"


as the pace and complexity of change in the marketplace required the whole

organization to become more nimble and innovative, “agile software

development” began morphing into “organizational agility"

as large organizations like Apple, Amazon, Facebook, Google, and

Microsoft have mastered agile management practices, they have become

the most valuable and fastest growing entities on the planet


The S2E Cycle

Organizational Agility

https://www.forbes.com/sites/stevedenning/2018/09/09/what-the-c-suite-must-do-to-make-the-whole-firm-agile/amp/



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework

vertical /

"up"



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework

vertical /

"up"

organizational

agility



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework

vertical /

"up"

organizational

agilityhorizontal


design thinking is starting to power corporate strategy

executives are using this approach to devise strategy and manage change

the emphasis on design clearly is moving to the C-suite, and more and more

organizations are creating a chief design officer role

through iterative interaction with the decision maker, a proposed direction

gradually wins commitment throughout the process of its creation...


The S2E Cycle

Design Thinking

https://www.hbr.org/2015/09/design-as-strategy



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework

vertical /

"up"

organizational

agilityhorizontal



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework

vertical /

"up"

organizational

agilityhorizontal

design

thinking


Systematic Innovation

"deriving" next-

generation strategic

integration with

systematic innovation

"predicting" leverage points / endpoints

hypothesis testing

experimental design

technological forecasting

continuous accounting is an approach to managing the accounting

cycle that aims to achieve a more strategic finance and accounting

function by resolving tactical issues

it optimizes the accounting calendar by distributing workloads evenly

over the accounting period to eliminate bottlenecks, optimize the

sequence of accounting tasks, and allow processing of transactions

as they occur



The S2E Cycle

Continuous Accounting

https://www.blackline.com/blog/continuous-accounting/what-is-continuous-accounting/

continuous accounting embeds control and period-end tasks within

daily activities, allowing alignment of the accounting schedule with

the rest of business

it shortens the close, smooths end-of-period spikes, and converts the

visibility of financial results that are traditionally reserved for the close

process into a real-time picture at any point in the accounting

period


finance is shifting from

traditional, rigid, and manual

accounting processes to

more automated, more

flexible, and more agile

operations


The S2E Cycle


https://www.sfmagazine.com/post-entry/may-2017-the-blueprint-for-continuous-accounting/


continuous

technical non-technical

discrete

functional type

operational mode

software engineering


The S2E Cycle



continuous


discrete

functional type

operational mode


accounting / finance 1.0


The S2E Cycle



continuous


discrete

functional type

operational mode





The S2E Cycle



continuous


discrete

functional type

operational mode


?

?


The S2E Cycle




Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework

vertical /

"up"

organizational

agilityhorizontal

design

thinking



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework

vertical /

"up"

organizational

agilityhorizontal

design

thinking

continuous

accounting


Strategic planning is no

longer an exercise for just

senior management -- it is

a participatory activity

Most organizations

recognize the importance

of engaging multiple

perspectives in the

process of strategy

formation -- especially if it

requires performance

improvement and culture

change

HueLife uses “Technology of Participation"

(ToP) for a variety of settings, from

community-wide strategic planning to

planning for mergers to planning for venture

formation to conventional strategic planning


The S2E Cycle

Strategy Formation

http://www.performanceexcellencenetwork.org/pensights/events/strategy-formation-that-makes-culture-change-happen-dec-11-bloomington-workshop/


The facilitators will share real

applications to reveal what

works when engaging whole

systems in strategic

thinking and planning efforts

Participants will practice the

strategic planning tools,

enabling assimilation in their

organizations and

communities

Strategic planning is critical

for the success of any

organization or community

The Baldrige “Criteria for Performance

Excellence" indicate that effectively

developing and implementing strategy

aligns organizational processes and

leverages core competencies


The S2E Cycle

Strategy Formation

http://www.performanceexcellencenetwork.org/pensights/events/strategy-formation-that-makes-culture-change-happen-dec-11-bloomington-workshop/



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework

vertical /

"up"

organizational

agilityhorizontal

design

thinking

continuous

accounting



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2E cycle

S2

E c

ycle

S2E cycle

scaled

agile

framework

vertical /

"up"

organizational

agilityhorizontal

design

thinking

continuous

accounting

strategy

formation



Next-Generation


(NGSI)

ca

pa

bility

ma

pp

ing

dynamic

capabilities

S2

E c

ycle

S2E cycleS2E cyclevertical /

"up"

scaled

agile

framework

design

thinking

horizontal

vertical /

"down"

organizational

agilitycontinuous

accounting

strategy

formation



S2

E c

ycle

vertical /

"up"



S2

E c

ycle

vertical /

"up"

scaled

agile

framework



S2

E c

ycle

vertical /

"up"

scaled

agile

framework

design thinking



S2

E c

ycle

S2E cycleS2E cycle

vertical /

"up"

scaled

agile

framework

design thinking

horizontal



S2

E c

ycle

S2E cycleS2E cycle

vertical /

"up"

scaled

agile

framework

design thinking

horizontal

organizational

agility



S2

E c

ycle

S2E cycleS2E cycle

vertical /

"up"

scaled

agile

framework

design thinking

horizontal

organizational

agility

continuous

accounting



S2

E c

ycle

S2

E c

ycle

S2E cycleS2E cycle

vertical /

"up"

scaled

agile

framework

design thinking

horizontal

organizational

agility

continuous

accounting

vertical /

"down"



S2

E c

ycle

S2

E c

ycle

S2E cycleS2E cycle

vertical /

"up"

scaled

agile

framework

design thinking

horizontal

organizational

agility

continuous

accounting

vertical /

"down"

strategy

formation


Next-Generation Strategic Integration

Attribute 1.0 2.0

Mode relatively

periodic

relatively

continuous

Frequency low high

Structure relatively

aggregated

relatively

distributed

Flow one-way two-way

Direction top-down top-down +

bottom-up


Q & A




David QuimbyInnovation Radiation

www.innovationradiation.com

12/6/2018



Dynamic Strategy, Dynamic Structure · BIZBOK A Guide to the Business Architecture Body of...

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