7 years, 4 months ago

Modelling mixed-value in Enterprise Canvas

Link: http://weblog.tetradian.com/2012/05/21/modelling-mixed-value-in-enterprise-canvas/?utm_source=rss&utm_medium=rss&utm_campaign=modelling-mixed-value-in-enterprise-canvas

One of the more subtle problems in enterprise-architecture – in English-language, anyway – is the distinction between values (plural) and value (singular, but often used as plural). The Enterprise Canvas frame provides several useful methods via to disentangle an existing values-mess, and prevent getting into that kind of mess in the first place.

In Enterprise Canvas, we assert that everything is or represents a service. Ultimately, each service serves the overall vision or purpose of the shared-enterprise, which often extends far beyond the boundary-of-control of the organisation itself.

The values of the shared-enterprise derive from and express that vision or purpose. Hence these are values that the organisation must respect if it is be and remain in business within that shared-enterprise. For example, the TED vision of “ideas worth spreading” is expressed in practice through values such as responsibility, respect, clarity, connection, engagement, passion for ideas and production-quality – values that can be seen in practice in just about everything for which TED has either direct responsibility or oversight (such as the independent TEDx conferences).

In the sketch-notation for Enterprise Canvas, we typically model these as the ‘vertical axis’ through the service, connecting intent to real-world results:

In detailed practice and implementation, the values are expressed in more actionable form as principles. (See Chapter 23 ‘Principles’ in the TOGAF 9 specification for a good summary of how to define and structure actionable principles.) Principles are used to guide decision-making in the face of uncertainty at every level of abstraction, from strategy to tactics to real-time operations.

Value is what is passed around the enterprise, as exchanges between services, in order to achieve the overall aims of the shared-enterprise. In effect, exchanges of value within the enterprise align with and contribute to the values of the enterprise.

In the sketch-notation for Enterprise Canvas, we typically model most of these exchanges of value as the ‘horizontal-axis’ through the service, connecting with other services before, during and after each main-transaction. We would sketch a simple supplier-self-customer supply-chain model – such as is typical in Business Model Canvas – in a format somewhat like this:

To make better sense of that ‘horizontal’ flow of value, we often partition the service into a three-by-three matrix of ‘child-services’ – the matrix being formed from a time-dimension (before, during and after) and an orientation-dimension (inbound [service-consumption], self [value-creation] and outbound [service-provision]):

Often in modelling with Enterprise Canvas we’ll use generic labels for each of these clusters f ‘child’-services. For our purposes here, the cluster we need most to focus on is value-governance, which acts mostly (though by no means exclusively) on the back-channel, the ‘after transactiuon’ flows:

The service also needs to connect to other guidance-services, to help keep the flow of value on track to the enterprise-values. The guidance-services include:

  • direction-services – the strategic, tactical and operational forms of classic ‘management services’
  • coordination-services – guiding end-to-end connection of processes that intersect with multiple services, often across or between organisational silos
  • validation-services – services that assist in building awareness, capability and action, and verifying and auditing that action, on ‘pervasive’ value-themes such as knowledge-management, health, safety and environment, efficiency, reliability, security and financial probity

In Enterprise Canvas sketch-notation we’d typically show the guidance-services like this, tagged with the respective symbol:

Of the guidance-services, probably ‘direction-services’ connect must strongly with the ‘Value Governance’ cluster of child-services, though by definition all of the guidance-services must connect with every part of the service.

So far so good: value connects to values.

Yet there’s another set of service-relationships that we must not overlook: the relationships with investors and beneficiaries. In Enterprise Canvas sketch-notation we’d usually show them like this:

Investors provide forms of value that are different from the forms of value that flow ‘horizontally’ around the shared-enterprise, but may be needed in order to start up, operate and maintain the service. The obvious example is financial investors, where the value of the investment is usually described in monetary terms. Yet there are many other forms of value that may be involved: for example, a community invests trust and, often, hope in an organisation doing business in its locality; families of employees may invest very real energy to keep them working there, and so on.

Beneficiaries receive some of the returned-value from the service, typically diverted from the flow in the backchannel, as a ‘dividend’ or suchlike. Again, the obvious example is value in monetary form, but again there are many other possible forms of value: civic pride, for example, or the shared pride of employees’ families.

Yet there are two fundamentally important traps to note here.

One is that the Investors and Beneficiaries may be different people. For example, an ‘externality’ occurs whenever one or more groups invest their own forms of value, but another group extracts all or most of the available value in one preferred form only, damaging or destroying most or all other forms of value. Again, the obvious example is financial: the community and employees invest their energy and their time, but the shareholders – as nominal ‘owners’ – claim the ‘rights’ to possess all of the returned-value, which somehow must also be converted to monetary form. A key role of value-governance is to identify such mismatches, and to bring them back into some form of balance that is acceptable to all parties – otherwise the service will fail over the longer-term.

(Somewhen I’ll have to write a post about anti-clients, anti-value, anti-Investors and, especially, anti-Beneficiaries. But that, as they say, is another story for another time!)

The other trap is that whilst the Investors’ and Beneficiaries’ forms of value may be needed by or deliverable by the service, the values of the Investors and/or Beneficiaries may not align with those of the service’s shared-enterprise. In enterprise-architecture we do need to respect the drivers and needs of Investors and Beneficiaries, but it may be essential to keep the value-systems separate. If we don’t, we risk ending up with the kind of lethal mess where, for example, attempts are made to measure everything in monetary terms, blocking the actual forms of value that traverse ‘horizontally’ across the enterprise-space.

Michael Porter described one form of this trap as“the obsession with shareholder-value is the Bermuda Triangle of strategy, in which companies sink without trace”. There are many forms of this trap, though: look around at much of mainstream politics and politically-motivated regulation these days, or the sad disaster-area that is the ‘rights’-discourse… It’s definitely a real challenge for any enterprise-architect.

In short:

  • values guide decision-making and appropriacy of choices within the shared-enterprise
  • value is what flows around, through, to and from each service in the shared-enterprise

So in each architectural context, be clear what values and forms of value you’re dealing with, and how and where and why – and don’t mix them up!