The Organizational Strategist

January 30, 2012

Gauging Strategic Need and Action


-Introduction-

There are many challenges that managers and leaders face when devising and implementing their strategies.  There can be a vast array of information present that overwhelms the senses or close to no information at all which can cause hesitation.  Knowing what is the right information to act on and then finding it is an ongoing challenge.  This is due to the myriad of factors that go into creating a strategic vision, rolling it out to the organization(s) involved, and the intricate process of managing the change as it is enacted.

-Utilizing Cynefin Model for Strategic Approach-

With all of these challenges that strategists face, it is hard to understand and know where and how to best proceed.  Along with that, leaders may not always know what they even need because of how the situation might evolve.  A while back I was fortunate enough to be invited to a seminar with Dave Snowden.  He presented his Cynefin model during the seminar.  I found it to be an interesting way of conceptualizing the types of situations that strategists face and recommended activities to pursue.

What the Cynefin model does is to breakdown the various types of situations, problems, and challenges into helpful and manageable segments.  The model has multiple situational domains to fit the kind(s) of information that may be present.  It also describes the level of difficulty to best act upon the domain. Below is a picture of Snowden’s that shows the domains, activities, and kind of practice that can be derived.

Cynefin Framework by Dave Snowden

Thinking about and classifying your current situation can only get you so far.  Knowing how to respond to your situation and what activities to engage in is the crucial juncture to show how effective a strategic implementation can be for a leader.   I’ve built upon Snowden’s work with my interpretations and experiences below to help guide those actions:

Domain

Description

Recommendations

Simple

As the name says, this is the easiest to understand.  The responses here can be laid down into concrete rules to optimize operations and articulate the fine-tuned best practices involved. In this domain, documenting and observing what works well, what works poorly, and the overall impact from activity.  This should be tracked in detail to then fuel continuous improvement initiatives to evolve and optimize an organization’s activities.

Complicated

In this domain, the amount and various types of information make it more challenging to act upon.  Here the breakdown of information into relevant groups and types leads to easier analysis and helping lead the information patterns into the simple domain. A big drive for this domain is to find the right tools to move groups or types of information into the simple domain.  To do this, seek out patterns and analyze the information for any or all of the following aspects:

  • Easiest to act on
  • Highest impact to enable the strategic intent
  • Short term applicability
  • Long term applicability
  • Buy-in from stakeholders
  • Stakeholder input (pain-points, brand recognition, value for stakeholders, etc.)
  • Return on investment
  • Leverage for future opportunities

This is a foundational element of business intelligence and so pulling together the right stakeholder alignment, formal engagement and action process, and communications to enable others to act and scale this approach out en masse. In this and following domains, it can help out tremendously to bring in consultants and experts to help navigate the difficulties of the domain.

Complex

This domain is where having clarity of thought becomes outright difficult.  There are many tougher aspects to tackle and analysis can only go so far.  The probing activity is the start or piloting of ideas, concepts, and efforts to gauge effectiveness and then expand.  As pilots progress, they can create enough clarity to progress a situation into being a complicated one. Using experience, observation, knowledge, resource and any other means to come up with pilot initiatives to see where and how the environment responds.  The rationale for piloting is that it gives clarity into what does and does not work while minimizing the risks involved.  Once an understanding of what works well is known, scaling out that and similar initiatives can be done more effectively and with lower risk overall.  When prioritizing pilot initiatives to undertake consider the following factors to help grasp which option is most promising:

  • Likelihood of user/environment adoption
  • Ease of implementation and experimentation
  • Predicted ROI over short and long duration
  • Influence an impact of stakeholders
  • Effectiveness of stakeholder engagement in a given pilot activity
  • Ability to create a ripple effect or chain reaction of positive inertia
  • Implications for branding purposes (for both the potential positive and negative aspects)
  • Alignment with other strategies and key objectives
  • Transparency into the most important variables
  • Ability to prevent others from entering/competing (blue ocean strategy)

Chaotic

This domain is beyond complex by being without clear order or understanding.  Knowing what is happening is difficult because the influences and moving parts are not clear in themselves.  This area must go on more abstract heuristics of what has worked in the past, like leadership principles, that give clarity into a kind of action but are not prescriptive.  As these are employed, given best judgment, it can help move a situation into a complex one. Here visionary ideas come into question as they may be utilized in full or discrete circumstances.  A leader may have values that are central to her or his teachings and actions.  By imparting those values and how they influence strategy, that can create leadership principles or operating heuristics. In this domain a best guess or try is called upon because there is no clear or definitive approach that can be ascertained.  As with the complex domain, minimizing the risk is an important factor and the risks are even larger here with so many unknowns. 

Perhaps here more than others, it is important to very closely observe, track progress and activity, and learn what happens to then derive patterns and preferred approaches.

-Summary-

As a strategist is immersed in different domains and circumstances, the needs for more thoughtful and thorough organizational development and effectiveness activities grows significantly.  Particularly in complex and chaotic domains, devoting significant time and resources to maximizing the brain power, dedication, and diligence around the strategic activity and implementation becomes chiefly important.  The more challenging a domain may be the bigger the potential risks and the rewards.  Will you be one to take on the biggest challenges or simply watch others? 

-References-

The Wikipedia article and image were both taken from the http://en.wikipedia.org/wiki/Cynefin site.

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October 24, 2011

McKinsey 7S Model – Progressive Change


-Introduction-

In an earlier article, I introduced the strategic and alignment 7S model from McKinsey.  Assessments, like the 7S or the well-known SWOT (Strengths, Weaknesses, Opportunities, and Threats), help establish a snapshot of the status and progress of an organization, product, or service.  These assessments alone do not give lasting value and information as market forces change quickly and often with little notice. As such, an assessment is best utilized as a change catalyst to move the organization forward.

-Applying McKinsey 7S Model Assessments-

With planned change, the destination or future state should be understood first.  This knowledge gives perspective.  Having a future state vision allows one to gauge progress, set targets, and milestones to achieve.  Once the future state is known, the current state can be documented to show a comparison.  This makes it clear what can be leveraged, where the current strengths are, and where there are areas to build or holes to fill.  The gap analysis leads to steps to build upon.

 As covered in the previous article, the McKinsey 7S Model covers multiple facets of an organization.  In order to most effectively change an organization, the foundational characteristics (Shared Values) and broad ranging direction (Strategy) should be addressed first.  Following that, the internal coordination (Structure) and setup (System) should be determined to align to the direction.  Lastly, the more people-centric areas fulfill an organization’s goals and objectives.  That is done via updates to its capability (Skills), individual placement (Staff) and the manners that people interact and work (Style).

 

-Conclusion-

The McKinsey 7S Model is helpful in delivering a comprehensive organizational analysis.  Using that information can lead to a new vision, through internal operation updates, and down to individual abilities and placement.  Mapping out change in its entirety is very helpful in its planning.  The successful execution and management of that change then requires a comprehensive, dedicated, business impact-focused, and sustained effort.

May 24, 2011

The Evergreen Model: The gateway strategy model as an assessment


-Introduction-

In my previous blog article, I introduced the Evergreen Model, which is also known as the 4 + 2 Model.  This article will dive into how to use the model as an assessment for internal or external consulting purposes.   There are sets of questions should be expanded upon during an assessment’s data gathering. 

-Assessing the Core Elements-

Strategy Questions-

  1. What is the organization’s strategy aiming to achieve?
  2. Describe how it is organized, aligned, and implemented.
  3. How does the organization grow?  What is the track record?  What are the future plans?
  4. What is the value proposition to customers?

 

Execution Questions-

  1. Rate and describe the organization’s product and/or service delivery.
  2. What is done to continually improve delivery? How does that compare to the industry?
  3. How does the organization respond to changing market conditions?
  4. How satisfied are customers?

 

Culture Questions-

  1. Describe the organizational culture.  What is valued and sought after?
  2. How are the desired behaviors reinforced (reward/punishment)?
  3. What were the founding principles of the organization?
  4. Where and how do the founding principles show through?

 

Structure Questions-

  1. How are employees organized? What are the accountability relationships?
  2. What is the information flow like? 
  3. How are decisions made and carried out?
  4. Does the structure enable work to be done at higher quality, faster, and/or with fewer resources?

 

-Assessing the Auxiliary Elements-

Talent Questions-

  1. What is done to develop and cultivate the employees?
  2. How happy are the employees?  What is the attrition and retention like?
  3. How engaged are the employees?  Do they enjoy the work, find it interesting and thrive in the challenges?
  4. What are the selection and promotion processes?  What is leadership’s involvement there?

 

Innovation Questions-

  1. How are new ideas incorporated into new and existing products, services, and operations?
  2. How does the organization stay on top of industry developments?
  3. What does the organization do to innovate?  How successful is the organization at innovating?

 

Leadership Questions-

  1. How does leadership interact with employees?  How is the leadership committed to execution?
  2. What is the vision and mission that employees hear from leadership?
  3. What is the relationship between employees and leadership like (trusting, inspirational, proud, etc.)?
  4. How invested is leadership to the success of the organization?

 

Mergers & Partnerships Questions-

  1. How does the organization work with other organizations?  Are there M&As or partnerships?
  2. What is the size and scope of these deals and partnerships?
  3. How effectively do the M&A deals go through (before and after)?
  4. How effectively do the organizations and partners work together?

 

With the Auxiliary Elements, it may be necessary to first determine which the two selections are or what should be the two selections.  Each element can lead to substantial organizational efforts, so finding where to focus efforts can help ensure an organization is not spreading itself too thin.  The Auxiliary Elements can form sustainable competitive advantages as well. 

-Analyzing Results and Next Steps-

The analysis should look for themes and patterns in the following aspects:

  • Consistency
  • Alignment
  • Conflicts
  • Gaps
  • Support

 

A traditional SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis could be done as well.  Other questions that should be examined include:

  • What is the core like in relation to the auxiliary areas?
  • What are the best and worst auxiliary areas?
  • What are the chosen two auxiliary areas, if it’s not already known?
    • What should they be?
    • What needs to change?

 

The exact next steps would be dependent on the question results.  Each element, both in the core and the auxiliary sets, could result in further investigation and targeted initiatives.  Here are some general guidelines to act upon:

  • The core 4 are absolutely vital.  These form the basis of a successful organization so those would have prioritized action.
  • Choose the 2 auxiliary options, if it is not already clear.  Then focus and refine those to make them core competencies of the organization. 
  • The SWOT analysis should lend itself to combinations of Strengths (S), Strengths and Opportunities (SO) and Strengths and Threats (ST) to overcome the Weakness (W) areas.

 

These questions and analysis points can give you a great start into determining how effective the 4 core and 2 selected elements are in an organization.  Share how your assessments go and what other tools and techniques are useful complements!

May 21, 2011

The Evergreen Model: The gateway strategy model


-Introduction-

Like other strategic models, the Evergreen Model has its best case uses and poor fits.  The Evergreen Model, also known as the 4 + 2 Model, is a good for a general organizational framework.  The Evergreen Model looks into core organizational aspects that need to be well aligned to lead toward marketplace success.

-The 4+2 Elements-

This model comes from a comprehensive 10 year study of 160 companies, across 40 industries, which were all performing at an equal level.  The study was named “The Evergreen Project.”  Over time, there were clear companies that excelled while others floundered.  The results of tracking and examining these companies can be boiled down to a set of 4 core pursuits common to the successful companies and a selection of 2 auxiliary pursuits. This is why it is sometimes known as the 4 + 2 Model instead of the Evergreen Model.  The authors of the study and model are:

  • Nithin Nora, Dean of the Harvard Business School
  • William Joyce, Strategy and Organizational Theory from Dartmouth College’s Tuck School of Business
  • Bruce Roberson, Executive Vice President of marketing and sales at Safety-Kleen

 

The model can be used as an organizational assessment that covers common organizational elements.  I will later get into the assessment or consulting take on the model.  That will include question sets to examine the health and orientation of the 4 core pursuits as well as the 2 selected auxiliary pursuits.  Each of the examined pursuits could lead to many initiatives, which is why it is a more general framework.

The distilled essence of the core four elements are as follows:

Strategy

  • Focus and stay the course
  • Continually grow

Execution

  • Strive for excellence
  • Prioritize operational changes to ensure solid delivery

Culture

  • Drive performance and behavior
  • Reinforce and reward good performance

Structure

  • Create a simple, flat, and non-bureaucratic organization
  • Instill collaboration and empowerment

 

All 4 core elements are crucial for success.  These drive the organization forward and sustain it over time.  It is also nice to have visuals.  Here are the 4 core elements and the selection of the 2 auxiliary elements on the right. 

 

The selection of the 2 auxiliary strategic pursuits should be determined by a combination of what would be most appealing or helpful to the organization and what the organization has already been striving towards. 

For example, not all market spaces would require innovation if the organization delivers products or services that do not need to be new to the industry or environment.  Another example might be that talent is not crucial for the organization if the primary execution does not require advanced experience or knowledge.

It is likely that most organizations have been working toward one or more of these pursuits, but may not have clearly focused on just two.

-Next Steps-

I call the Evergreen Model the gateway model as it sets up high level of organizational guidance.  Once it is employed, it can lead to many other avenues of inquiry and effort.  Other strategic models might complement the approach an organization takes.  Try it out and see how it can take your organization to its next level.

-Resources-

This Harvard Business School article formed the basis of this article.  My education, research, and experience supplemented and shaped the content in this blog post.

April 24, 2011

McKinsey 7S Model: A strategic assessment and alignment model


-Introduction-

The 7S model is a strategic model that can be used for any of the following purposes:

  • Organizational alignment or performance improvement
  • Understanding the core and most influential factors in an organization’s strategy
  • Determining how best to realign an organization to a new strategy or other organization design
  • Examining the current workings and relations an organization exhibits

 

The model, made famous by the McKinsey consulting company, is good for a thorough discussion around an organizations activities, infrastructure, and interactions.

-The model and its usage-

Here is the 7S model that portrays seven elements of an organization.

 

I define the elements as follows:

Strategy – This is the organization’s alignment of resources and capabilities to “win” in its market.

Structure – This describes how the organization is organized.  This includes roles, responsibilities and accountability relationships.

Systems – This is the business and technical infrastructure that employees use on a day to day basis to accomplish their aims and goals.

Shared Values – This is a set of traits, behaviors, and characteristics that the organization believes in.  This would include the organization’s mission and vision.

Style – This is the behavioral elements the organizational leadership uses and culture of interaction.

Staff – This is the employee base, staffing plans and talent management.

Skills – This is the ability to do the organization’s work.  It reflects in the performance of the organization.

 

To assess each of these elements, here are some questions to ask:

Strategy –

  • What is the organization’s strategy seeking to accomplish?
  • How does the organization plan to use its resources and capabilities to deliver that?
  • What is distinct about this organization?
  • How does the organization compete?
  • How does the organization adapt to changing market conditions?

Structure –

  • How is the organization organized?
  • What are the reporting and working relationships (hierarchical, flat, silos, etc.)?
  • How do the employees align themselves to the strategy?
  • How are decisions made? Is it based off of centralization, empowerment, decentralization or other approaches?
  • How is information shared (formal and informal channels) across the organization?

Systems –

  • What are the primary business and technical systems that drive the organization?
  • What and where are the system controls?
  • How is progress and evolution tracked?
  • What internal rules and processes does the team utilize to maintain course?

Shared Values –

  • What is the mission of the organization?
  • What is the vision to get there?  If so, what is it?
  • What are the ideal versus real values?
  • How do the values play out in daily life?
  • What are the founding values that the organization was built upon?

Style –

  • What is the management/leadership style like? How do they behave?
  • How do employees respond to management/leadership?
  • Do employees function competitively, collaboratively, or cooperatively?
  • Are there real teams functioning within the organization or are they just nominal groups?
  • What behaviors, tasks and deliverables does management/leadership reward?

Staff –

  • What is the size of the organization?
  • What are the staffing needs?
  • Are there gaps in required capabilities or resources?
  • What is the plan to address those needs?

Skills –

  • What skills are used to deliver the core products and/or services? Are these skills sufficiently present and available?
  • Are there any skill gaps?
  • What is the organization known for doing well?
  • Do the employees have the right capabilities to do their jobs?
  • How are skills monitored, assessed, and improved?

 

Once the questions are answered, the data should be examined.  The analysis should look for the following aspects:

  • Consistency
  • Alignment
  • Conflicts
  • Gaps
  • Support
  • Strengths
  • Weaknesses

The uses of the model can be as a static picture to determine how effectively the organization is implementing its strategy.  Also, it can be used two-fold with a current state and an intended future state.  By comparing the current and future states, gaps can be assessed, which lead to improvement and action plans.  That latter case makes enables the model to be used for large scale change.

-Summary-

Like any model, there are good fits and poor fits.  This is a handy model for taking a snapshot and comparing that to the desired state or improvement.  It visually shows how everything is linked and understanding the larger implications of change can be very revealing.  It is much like how a general doctor can help diagnose a patient’s situation, but the fine-tuned skill of a surgeon can be used to make the specific, desired changed. 

Update:

Read more about how to leverage a McKinsey 7S Model assessment on my follow up article McKinsey 7S Model: Progressive change.

Sources:

This article’s content was based on http://www.themanager.org/models/7S%20Model.htm, http://www.mindtools.com/pages/article/newSTR_91.htm, and my experience and opinions.

December 8, 2010

Make your competition irrelevant – employing the power of blue ocean strategy


-Introduction-

It is very exciting when a new idea or great innovation is planned that will have a big impact in the marketplace.  The time, energy and resources that go into making great ideas a reality can be staggering; especially in industries where the pace of change is slow or the audience reach is large.  In these cases it is even more important than usual that the market share is not already filled with competitors.  Ideally, the innovation will lead to a permanent market space or niche where competition is so powerless that it is insignificant or even irrelevant.  The question is what should be done to make this happen?

-Making and shaping your ocean-

Blue ocean strategies design sustainable market share in such a way that would be competitors have no influence. This approach uses a metaphor to describe market spaces and competition.  Oceans are market space.  The best kind of ocean is a blue one, however most oceans are red.  Red oceans are the ones where competition is rife and there is “blood” in the water from the fierce fighting over customers, resources, and opportunities.  Blue oceans, on the other hand, are market spaces where there is no competition.

Who wouldn’t want their ocean to be completely blue?  The difficulty is devising and then enacting such a strategy. At times, it may simply be impossible to make a truly blue ocean.  In those cases, strive to make sections of it as blue as possible and minimize the red.  The spectrum of blue to red should gradually be moving toward blue. With the gradual shift from red to blue oceans, there will be partial boundaries to competitors.  Those partial boundaries make it so some competition is averted and the ocean is purple (part blue and part red).  Small, controlled blue ocean spaces are a good start to making a large, encompassing ocean.  That way you can scale the market share in a controlled manner that should allow for stabilization along the way. You want to build your market spaces in such a way that would-be competition has no impact.  To do that, create boundaries, challenges or other means of preventing entrants from inhabiting the same space.  The ideal would be to make your product or service truly unique.  Typical boundaries or barriers to competition are as follows:

  • Locking in contracts or exclusive partnerships
  • Controlling the resources that the product or service depends upon
  • Create a value proposition that sets your product/service far apart from others
  • Secure and control all distribution channels for placement, geography, or other advantageous positioning
  • Put up regulatory barriers like patents, environmental standards, quality programs or other initiatives that would promote your product/service while others would find it difficult or impossible to measure up

It is likely very difficult to set up a single distinguishing feature that truly sets your ocean apart from others and keep it blue.  However, the combinations of several different strategic aspects like geographic focus, differentiated product, powerful and helpful intellectual property, and an organizational culture of fantastic customer service would create multi-layered boundaries. 

-Conclusion-

Make the most of your efforts. By that, be sure that the design includes elements that will both create initial interest and have sustained interest over time.  Innovation is very difficult to surface and then enact.  Creating your blue ocean does not have to be for an entirely new market space. While that is a compelling time to pursue a blue ocean strategy, it can be done in any circumstance.  Within the ocean you are now, in whatever state of competition it is, to become as blue as possible should be a strong pull for your organization’s long term success and sustainability.  The first steps to achieve this are to pursue it intentionally.  By reading and learning more here, your first step may have already been taken.  The next series of steps after formulation is to build it into your organization for successful deployment.  That will have to wait for another post.  Stay tuned!

-Extra resources-

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