Change Management is not an Implementation Issue

June 15, 2008

It’s good that we’re taking a greater interest in the relationship between enterprise architecture and change management. The interesting thing about most discussions is that they talk about enterprise architecture as the “development” phase and change management as the “implementation” phase. There’s certainly nothing wrong with this but I don’t think it goes far enough.

The reason I don’t think it goes far enough is that change management should be an input into your enterprise architecture work. It shouldn’t be a handover – we’ve built this great thing and now ‘lets do some change management’ and roll it out.

I’ve got a software background so I’ll use a software development analogy. When you’re designing software you should always take into account the deployment environment. If the application is to be deployed in a Microsoft environment then PHP and MySQL aren’t your best bet. This example is far fetched but the fact remains – deployment is a non-functional requirement, it should not be an afterthought. If you can’t deploy your finished application to the target environment then its not a ‘deployment’ issue – it’s a development issue.

What’s this got to do with enterprise architecture? Some EA teams are full of great ideas that never see the light of day purely because the change management issues are not considered up front. Typically this problem manifests itself it two ways:

  • Organisation issues – EA teams generally don’t have the clout to force large scale organisational changes – even when such changes are the right way to go. If your architecture work requires such changes in order to be of value then you’re wasting your time.
  • Technical issues – the EA team come up with a great ‘target architecture’ but don’t provide any guidance on how to get from ‘here’ to ‘there’. Enterprise architecture is a journey not a destination – so you need to provide a map.

Obviously, you don’t want your EA efforts to be hamstrung completely by organisational issues and technical issues. Enterprise architecture should be about change – and change always leads to some amount of discomfort within the organisation. They key is to find the right balance. Some organisations can handle revolution others prefer evolution. You want to push the envelope – but not to breaking point.

PS: If you’re interested in a good book about a similar topic try High Impact Consulting by Robert Schaffer. In a nutshell the book is about tailoring the work you do to what the client is ready to do. No matter how great the work is, if the organisation cannot use your advice (deploy it) it just becomes useless shelf ware.


The Curse of Knowledge

April 8, 2008

The ever increasing need for business-IT alignment is well documented. But surely the prerequisite for such alignment must be an ability for the two groups to communicate effectively. Unfortunately, technically oriented people continue to bamboozle the business folk with their endless jargon, three letter acronyms (TLAs) and other assorted techno-babble. One possible explanation might be the ‘Curse of Knowledge’.

I recently read Made to Stick by Chip and Dan Heath. The book is about how to communicate your ideas more effectively, that is, make your message ‘stick’ in the minds of the people you’re communicating with. When technical people speak to business folk the message usually goes in one ear and out the other – the message rarely ‘sticks’.

The authors propose that the reason for this is something they’ve dubbed ‘The Curse of Knowledge’ which states that:

Once we know something we find it impossible to imagine what it was like not to know it… and it becomes difficult for us to share our knowledge with others, because we can’t readily recreate our listeners’ state of mind.

There’s an interesting experiment that proves this phenomenon exists, devised by Elizabeth Newton. She divided a group of people into two groups “tappers” and “listeners”. The tappers were asked to tap out the rhythm of well known songs (e.g. Happy Birthday) to a listener (by knocking fingers on a table). The listeners had to guess what song was being tapped out. 120 songs were tapped out. The tappers were asked how many songs they thought the listeners would guess. They decided 50%. In actual fact the listeners guessed 3 out of 120 (2.5%). The tappers were dumfounded by the listener’s complete inability to ‘understand’ what was being communicated. The reason for the discrepancy was that the tappers couldn’t imagine what it was like for the listener NOT to have the information they had – the tappers could ‘hear’ the tune in their head as they tapped – but of course the listeners couldn’t hear this – all they heard were the taps in isolation.

If you’re an expert in a given field you know all the ins and outs, all the different perspectives and all the subtle nuances. You know that nothing is black and white. You know that the answer to almost every question is “it depends”. You don’t want to dumb things down for fear of oversimplifying the matter. The end result is that when these experts communicate they want to convey all their knowledge, with perfect accuracy, right up front. But this is a recipe for making sure that the message goes in one ear and out the other.

If you want to know how to overcome the Curse of Knowledge the read the book. It’s an entertaining read and well worth a look!

In the meantime I’ll give away one suggestion.

One way to avoid the Curse of Knowledge is NOT to dumb things down, but rather, give people just enough information to be useful, then a little more, then a little more and so on. For example, if you were explaining how a car engine works to a 10 year old, you might say:

  • The engine mixes air and fuel. The mixture is then ignited and when it explodes it pushes the car along.
  • The mixture is mixed in a metal chamber called a cylinder. Most cars have 4, but some have 6 or 8 and some really high performance cars even have 12.
  • The fuel-air mixture is ignited by a spark created by a spark plug.
  • The exhaust fumes from the ‘explosion’ come out of the exhaust pipe

Individually, none of these points are ‘dumbed down’ – they are all correct at a basic level. It’s just that we build our listener’s knowledge incrementally.

Blue Ocean Strategy

March 21, 2008

How to Create Uncontested Market Space and Make Competition Irrelevant
Author: W. Chan Kim, Renée Mauborgne
ISBN: 1591396190

The basic premise of the book is that there are two types of markets:

  • Red oceans which are markets which are known today – the mainstream where companies try to outperform their rivals to get a greater share of existing demand.
  • Blue oceans which are markets that are unknown (yet to be created). While red oceans are characterised by competition for existing demand, companies that create blue oceans are creating demand and new markets – making competition irrelevant.

Traditionally, business books have focussed on how to compete in red oceans. Michael Porter is the undisputed thought leader in that space and he proposed that companies can either choose to be a cost leader or to differentiate. This book on the other hand proposes that companies that seek to create blue oceans pursue low cost and differentiation – simultaneously. The authors dubbed this approach “value innovation”. The book does provide a number of tools and techniques that help you formulate a compelling value proposition and thus create a blue ocean.

The book is an easy read and it will help build your “innovation” and “thinking outside the box” skills, and for those reasons it is well worth a read.

The target audience for this book is obviously company managers but even so, I like to take at least one thing away from each book I read and try and apply it to enterprise architecture. One of the tools in the book is called the “Eliminate-Reduce-Raise-Create Grid”. Essentially it involves analysing your industry and looking for ways to:

  • Eliminate factors that the industry takes for granted even though customers no longer use them for making buying decisions.
  • Reduce factors that have been overdesigned or overcomplicated in the race to beat competitors, resulting in ‘overserving’ customers. Customers may not want these things and wouldn’t pay for them but since they’re ‘free’ they’ll take them.
  • Raise factors well above the industry standard where they create new value for customers. Or put another way – eliminate the compromises that the industry forces customers to make.
  • Create entirely new sources of value for buyers, thus creating new demand, and allowing you to set prices without reference to the industry as a whole.

So how can you apply this to EA? When we’re building solutions, the concept of “value” should be foremost in our minds. But how often do you see this: the solution team meets with the client. They listen intently and studiously write down everything the client says. Then they label the result a “Requirements Document”. All too often, no effort is made to assess the “value” of what the client is asking for. The “Eliminate – Reduce – Raise – Create” tool is a really simple tool for quickly assessing the underlying value of each requirement. Here’s a simple example of how you can use this tool:

  • Eliminate any requirements that do not have a hard, traceable link to business value. (e.g. “we’d like to be able to change the fonts and colours in the application and reorder the fields on the form”)
  • Reduce any requirements that are “nice to have” or been put in just in case (e.g. “we need to be able to export reports to Excel. It would also be nice to be able to export to PDF, Word and HTML)
  • Raise any requirements that don’t offer a level of future proofing for reasonably foreseeable events (e.g. “the application only needs to support 50 concurrent users”).
  • Create requirements that have not been explicitly asked for (or have been explicitly excluded) but are generally accepted as important (e.g. “we don’t need any security built into the system because it will be hosted on a secure intranet”).

Pretty simple stuff – and we all do it subconsciously- but sometimes it’s good to apply a bit of rigour or structure to our subconscious – particularly when you need to communicate your thought process to clients.

The Innovator’s Dilemma

March 9, 2008

Author: Clayton M. Christensen
ISBN: 0060521996

This book attempts to explain why large, industry leading companies with deep pockets and seemingly unassailable market dominance fail. The obvious answer might be bureaucracy, arrogance, stale staff, poor skills, overly conservative management, inadequate investment and so on. While Christensen acknowledges that these are factors in some failures, he points out that even the best run companies also fail. Market leaders, that listen to customers, invest heavily in new technology and are run by astute managers. Although seemingly inexplicable, this is a recurring feature of the business landscape.Christensen begins his explanation by proposing that technology falls into two categories:

  • Sustaining technologies improve the performance of established products, along the dimensions of performance that mainstream customers in major markets have historically valued.
  • Disruptive technologies bring to a market a very different value proposition that had been available previously and generally underperform established products in mainstream markets but they have other features that are valued by fringe customers.

Side note:

The distinction between “sustaining and disruptive” is not the same as the distinction between “incremental and radical” improvements. Whenever an established product improves along established performance criteria then the improvement is ‘sustaining’– regardless whether that improvement comes from incremental or radical technology. Conversely, disruptive technology need not be (and often isn’t) radical – they aren’t necessarily technical breakthroughs, they are often existing technology applied in new ways.

In a nutshell, Christensen’s explains the failure of good companies as follows. I’ll use the example of motorbikes in the American market to illustrate.

If the most important performance factor for mainstream buyers of motorcycles is ‘power’ then we can expect the market’s demands to grow over time, as follows:

The Innovators Dilemma 1

The two main rivals in the high-powered road bike market in the United States were Harley Davidson and BWM. In order to win market share they continually improved the power of their bikes – these were sustaining improvements. However, in their haste to outdo each other they were spending money building bikes that had performance characteristics greater than what the market demanded. For example, there is a limit to the power that a person can use – set by the traffic authorities. Whether a bike can do 250km/hr or 300km/hr is not likely to influence the buying decision – they are both adequate for mainstream needs. Over time the gap between what was being produced and what the market actually valued widened, as shown here:

The Innovators Dilemma 2

Then new competitors entered the market – the Japanese motorcycle companies. These new bikes were a disruptive technology because along they underperform established products (Harley Davidson and BWM) along the performance criteria that the mainstream market demanded: power. So these new entrants had to find new (niche) markets for their products. As profits from these markets grew the money was reinvested and the products were improved through sustaining technology. As the graph below illustrates, eventually the performance of these new motorbikes intersected with the requirements of the mainstream markets.

The Innovators Dilemma 3

So what happened then? It didn’t matter that the power of the Japanese motorbikes was still less than the power from the established products because the performance was ‘good enough’ for the mainstream. At this point “power” ceased to be the dominant performance criteria – the market started making purchasing decisions based on other criteria: the obvious one being price. The Japanese motorbike makers needed lean cost structures to be profitable in the ‘niche’ markets and when they hit the mainstream they had a huge cost advantage over their larger competitors. And the rest, as they say, is history. The Japanese motorbikes became the dominant force in the US motorcycle market.

By the end of the book you can’t help but agree with Christensen’s persuasive argument. He presents his theory simply, lays a solid theoretical foundation, presents countless case studies and statistics and finally draws logical conclusions. The book can be a bit repetitive and the academic writing style can be distracting at times but a great book nonetheless. First published in 1997, it has stood the test of time, an amazing feat given the impact of the Internet on business over those years.

So what’s this got to do with EA?

Two core themes of this book are:

  • smaller companies can compete with, and overtake, larger entrenched rivals through the use of disruptive technology.
  • the disruptive technology used can be existing technology applied in new ways to new markets.

The trend seems to be that IT is increasingly not a source of competitive advantage. However, good EA should be about reversing that trend. In my mind, the main role of the Enterprise Architect is to build an organisation’s capabilities (both technical and non-technical) to quickly capture the business benefits of emerging technology. That is, to help build the “agile” enterprise.

Once the groundwork has been laid (i.e. the capabilities are in place), the Enterprise Architect should follow information technology trends, looking for innovation that can benefit the business. Having laid the ground work, it should be possible to mobilise the business quickly to exploit these benefits. If these benefits are realised before the competitors have a chance to act, IT becomes a source of competitive advantage. As it should be.

The Perfect Store: Inside eBay

February 25, 2008

Author: Adam Cohen
ISBN: 0316164933

Books about the history of the major players in the Internet and technology space are a light read and most even manage to be mildly entertaining. The things you learn are not likely to help you at your local quiz night but there’s often one or two things you can take away. In the case of Ebay, two things stand out.
1. The power of community.
Ebay was part of the original dot com boom and is seen by most as a Web 1.0 company. Now we have Web 2.0 – which is basically used to describe the growing popularity of social networking sites and sites hosting user generated content. Ebay survived the dot com meltdown, and maybe it’s because it saw the future.Ebay made it’s “community” a key part of its business – often consulting them on major business decisions (and on occasions backing down on decisions made without consultation). For many people Ebay was not an auction site – it was their social network and their entertainment. Ebay recognised this and actively encouraged it. In return people willingly donated their time to help run the business. This meant that Ebay didn’t have to hire paid employees to do the work and it also meant that people formed strong bonds with Ebay, making them unlikely to switch to a rival site.Clearly it pays to build a community spirit around your company or its products and services.

2. The ‘Network Effect’. Throughout its short history Ebay faced a number of challenges from larger rivals with deeper pockets. It managed to fend off these competitors by virtue of the ‘network effect’. The network effect is a phenomenon whereby the value of a service increases as more people use it. In online auctions, sellers want to use the site with the largest number of buyers and buyers want to go to the site with the most sellers. More buyers mean better sales prices and more sellers means more products to choose from. It’s as simple as that. And is the reason why Ebay is likely to remain the leader in online auctions for a while yet. Ebay had to build its network but it did so when there was little competition. Today, competitors have the daunting task of building their network by convincing Ebay users to switch.

It’s important to note that ‘community’ and ‘network effect’ are not the same thing. Ebay is not alone in capitalising on the network effect, other Internet companies such as Skype and Paypal also understand the value of a large network. But these companies do not have a ‘community’ as such and it’s these two concepts working in tandem that have given Ebay its lead in the online auction space.