Thursday, 23 October 2008

For 99Designs

Here is my latest attempt at the integrated business diagram, there are more versions in the slideshows below, but this is the closest at conveying everything. So this is trying to show that leadership decide certain things for employees (blue box on left) and employees decide/implement certain things for customers (blue box on right). Within each blue box is the flow of decisions - starting with why the company exists, to what they'll sell, to how they'll make it all happen.

Important: the order of decisions is fixed. 'Why' leads to 'What', to 'How' to 'When'. Leaders have more or less exclusive responsibility for 'Why', employees focus on 'How' and 'When', 'What' unites leaders, employees and customers.

Still there are problems including:

- Duplication of elements. 'Why' and 'What' don't really need to be in the box between employees and customers. But I've had to put them there to show that they are crucial to later decisions.

- The offer is not nearly prominent enough. It should be at the heart.

The other posts below give you more of my thinking - though I suspect that taking all this in if you're not used will be tricky, so as before feel free to ask questions.

Friday, 17 October 2008

Articles of Faith

  1. Alignment, alignment, alignment. All great organisations succeed through huge alignment and consistency around what they're trying to do.
  2. The core of any business is the customer offer - what they do and crucially also don't do for customers. This is what everyone and everything aligns around.
  3. The organisation's mission/purpose/vision underlies all activities including the offer. It acts as a stable foundation, changing very rarely. But necessarily it's therefore a bit abstract. Something to check on occassionally, rather than stay focussed on.
  4. Having a vision that's all about making money for shareholders isn't all that motivating. Great organisations tend to have a purpose beyond that.
  5. Values are the shared assumptions in the organisation that shape behaviours - the everyday actions that bring the customer promise to life.
  6. An organisation may have one or more brands with their own 'brand values', and a separate set of 'organisational values'. But if so these should really just be different articulations of the same thing. Allowing the marketing department to make a promise without the internal alignment to back it up if one of the cardinal sins of business.
  7. All organisations have an implicit vision and values (as perceived by employees) and offer (as perceived by customers). Many organisations also have articulated, written down, ones. Businesses with a big gap between their implicit and articulated statements are fooling themselves.
  8. The only purpose of articulating these things is to stimulate discussion and subsequently alignment.
  9. Strategy is what you're going to offer, to who (which customers). Tactics, goals, KPIs, strategic objectives and all of that are about the how.
  10. When I talk about alignment, I mean the seamless integration of all the elements mentioned above.
  11. All of the above are about relationships, ideas and decisions. There are also flows of money - revenue, costs, profit, value chains etc. (I tend to think this all happens within how, but think that's still up for debate).
  12. There are also flows of information - insight, feedback, sales data etc. This feeds into the why and what and from them into how.
  13. It's an iterative processes - businesses tend to go round the diagram in loops improving their alignment.

Ideas are cheap

(This post is not relevant for 99Designs people)

There seems to be this notion floating around that we've past the age of farming, and the age of making, and now we're on to the age of ideas. But trust me, I do a lot of brainstorms and we come up with great ideas all the time. It's implementing the damn things that's hard. Back to that things about alignment - keeping good people focussed around a shared goal all day every day is really rather more difficult than it sounds.

Oh, and to be fair there are a couple of other tricky bits:
- Figuring out which ideas are good ones early enough
- Predicting the future (though I hear Google will crack that soon)

Zachman framework

In trying to unify different business diagrams I've found some inspiration in the field of Enterprise Architecture and specifically something called the Zachman framework. This is a relatively early attempt to categorise pretty much anything and everything that can go on in an organisation. Needless to say this can get a little complicated.

What I've taken from it is that you can categorise most boxes on most business diagrams into the following:
  • Why: Vision/Mission/Purpose
  • What: Offer/Don’t Offer
  • How: Values, Behaviours, Strategic Pillars, Iconic Actions, Comms
  • When: Goals, KPIs
  • Who: Which leaders, employees, and suppliers you need at all, or performing particular activities. Which customers you will target.

So why shapes what which in turn shapes how and when. Who in one sense stems from what and how - what you'll do and how you'll do it dictates the people you'll need. But you can also view all of these things as coming from people - why is a shared belief, what people chose to do about them and how they chose to do it. In other words, organisations are collections of people with shared beliefs and activites, and arguing that the ideas in the organisation are somehow a precursor of the people makes no sense.

It can sometimes be helpful in this context to differentiate between leaders and employees (doers? builders?). These need not be different people, they can be the same people in different roles. So someone acting as a leader shapes the why and what. Leaders most buy into the vision. Everyone else gets on with making them happen, and although it's heartwarming when they focus on the big vision ('improving quality of domestic life'), it's easier to get them to buy into the offer ('selling lots of really nice carpets').

I occassionally add the rather nebulous 'stuff' to cover assets, IP and all the rest! This is a messy workaround, but I'm stuck with it until I think of a better alternative.

There's also where, but that's making things a touch too detailed for me.

The Tyrrany of Specialisation

Thinking in organisations is too fragmented, as I argue here:

Unifying diagrams

I've been working on some new diagrams to try to represent a more holistic way to think about an organisation - its vision, values, customer promise, goals, key strategies, business model etc etc. By getting these down in 1 diagram, I'm hoping to make a point about the need for alignment between all of these things.

Here are some early attempts, more to follow...

Business Diagram V3
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Business Diagram V2
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