Strategy and Business Management

As I mentioned in my Business and Silver Bullets article, there are a lot of different approaches to managing your business, or at least a portion of your business. None of these approaches are easy to implement and it seems that there’s a bit of a revolving door around what leadership approach is the best for a given business. Furthermore, it’s troubling to me that organizations are looking at initiatives like Lean and Six Sigma as only operational improvement opportunities. As I’m reading through how Business Architecture works, it’s obvious to me that many of the organizational deployments of LSS have failed in reaching their full potential. I saw it at Samsung, AMD, and I’m skeptical of the full reach I’m going to have at Regence. It’s not a failure of the individuals deploying it or of a given leader, it’s a failure of the full organization to accept that changes need to happen. Organizations need to integrate approaches like LSS into their core strategic planning process. Otherwise those methodologies will only impact a limited area and won’t appear to have a holistic approach to making changes to an organization.

From my experiences Lean and Six Sigma methodologies can indicate the need for organizational re-alignment. These require real change with serious effort to implement those changes. In many cases those are outside the scope of the project facilitator, the leader of the process improvement center of excellence, and likely the owner of the processes. It’s got to come from an executive sponsor. They have to be able to provide the organizational courage to make real changes to an organization. Through these tools it’s possible to identify redundancies and areas where organizations require massive change.

Why don’t organization implement these changes? Too many priorities is likely one problem. Another is that these changes are hard and unless they are well versed in Lean or organizational structures, they won’t understand why the changes are fundamental to continued success of an organization. They may not understand the changes because they weren’t involved in the redesign process intimately enough. Finally, it might also be that these changes are bottoms up recommendations and not top down.

I believe this is why Business Architecture eventually was a created as a discipline. I believe in organizations that are truly Lean that these types of roles are not needed. Simply because the bottoms up approach allows the leaders to focus on different things especially since a true Lean organization is always customer centric. In organizations that there is a great deal of legacy behavior and entrenched management fiefdoms, it might be a requirement to go through an organization like Business Architecture to give the true sense of ownership to the leaders. It makes the bottoms up recommendations that come from the BA team seem like it’s a top down approach that is sanctioned by all of leadership. It let’s people see that clearer tie between the different organizations in a way that a lot of Lean work doesn’t. It’s designed to be holistic not something grown into the whole over time.

This leads to a different method for developing strategy than what a lot of Lean practitioners utilize. Business Architecture focuses on the current capabilities and works to align the strategy from there. Lean starts with the 5 year vision and goals and figures out how to align existing projects and improvement efforts to enact those goal, through providing a metric for the person doing the work on the ground.

I think that these business management approaches are both valid, I’m really biased towards Lean, but I do believe that in many organizations Business Architecture is likely required. It leaves the control a bit more in the leadership rather than the Lean approach. I believe they both can impact strategy in an effective manner, but it’s likely that BA will be more tightly coupled from the start than many Lean initiatives.

Businesses and Silver Bullets

I’ve been teaching Lean Process Improvement or Six Sigma for about 6 years now. I’m getting into learning Agile in a pretty deep way through reading a ton of books, seeing it in action, and working with Agile teams. I’m currently learning Business Architecture/Enterprise Architecture as well. All of these methodologies are similar but different in some dramatic ways. Lean itself isn’t a project management solution, it has some features of it, but the goal is to take action put something in place and measure the results. Inherently, you’re supposed to be done as soon as possible. Six Sigma has some pretty strong Project management capabilities built into it, but it’s not to be used to install software or some other type of function, it’s design to solve a complex problem, prevent it from happening again and moving on. Agile is totally about managing projects while with as little overhead as possible, while maximizing visibility. This is done through frequent light weight touches and less frequent demos. Finally business architecture is about defining the structure of the business then identifying root causes. I’m the least impressed with Business Architecture at this point because it seems to have the objective of keeping the people at the top in charge while minimizing the amount of empowerment throughout the organization. That’s just my first brush with it though and I could be wrong. The other methodologies are all about empowering the team and the people doing the work so they can be as effective as possible. With Lean and Six Sigma the goal is to eliminate your own job if you’re an instructor or internal consultant, it doesn’t seem the be the case with Business Architecture.

Regardless, all of these methodologies indicate that our businesses are extremely sick. It’s becoming pretty clear to me that the vast majority of current state business practices are flawed and leading to under performing businesses. Lean Six Sigma, makes it clear that there are out dated and poor performing processes. Agile makes it clear that traditional software development doesn’t work and is much too expensive. Business Architecture indicates that no one knows what people are doing, why they are doing it, or where other parts of the organization are doing the same type of work.

In many cases some of the problems looking to be solved by Business Architecture are eliminated in a true Lean organization, but not always. I believe that is why Lean Startup methodology is becoming so popular in both new and old businesses. It’s a novel way to force change in an existing company, while in a Startup it helps keep the company healthy much longer. Furthermore, it forces the company to build effective organization structures early and continually test them.

With the majority of businesses being unhealthy due to out dated processes or aging systems, it’s no wonder why organizations are always looking for a silver bullet. They need a quick fix because nothing is working correctly. The goal to continually drive more and more profits prevents leaders from taking a hard look at what they are doing. Forcing investment in doing the right thing the first time or to do the right thing for the organization even if it takes more time and potentially money.

With my current process improvement classes and engagements I’m seeing a continually struggle between the way you should do Lean, focus on changing what you can, and the reality that most of the work is being done through systems. Even if I wanted to improve processes around the system there’s a limit to what I can do, because I cannot effect change on the underlying system. Changing those systems either IT or organizational can be impossible to do without a strong organizational will and clear strategy. Without either of those, any improvement or agile effort is doomed to fail.