Aggregated enterprise architecture wisdom
So far in our blog series, the capability models we’ve used are relatively simple in terms of their structure. In our previous blog post on capability measurement, we already promised to provide more detail on how you can model capabilities over time and how to describe different instances. In larger organizations, the same business capability…
Summary of our blog series on Capability-based Planning Our ongoing blog series on capability-based planning has covered a lot of ground. We started by explaining the basic concepts and the value of capabilities, addressed the design of capability maps, how to relate capabilities with your strategy and operating model, explored capability assessment and roadmapping, discussed…
Our blog series on Capability-based Planning focused on the why, what, and how of this subject matter. We’ve discussed the meaning and value of the concept ‘capability’, its use in decision-making and planning, the design of Capability Maps, and how to model capabilities and other business architecture concepts in coherence, among other subjects. This blog…
A topic attracting increasing attention from architects and executives alike is: How to use Capabilities to inform strategic planning. The previous blog articles in our series on Business Capability Design and Management focused on “How to assess Business Capabilities” and “How to Measure Business Capability Aspects”. These articles describe the overall four-stage Capability-based planning process…
As we explained in our previous blog on capability assessment, to effectively assess Capabilities and execute Capability-Based Planning, we need to define three dimensions: Strategic Importance, Capability Maturity, and Adaptability, and measure them. Simply put, the first dimension lets you prioritize those capabilities that are most important to your enterprise; the second focuses on where…
In my post “Strategic Tunnel Vision”, I touched on the concept of capability. I discussed how focusing on new capabilities can crowd out existing capabilities and the detrimental effects of that when those existing capabilities are still necessary. I also spoke to how choices about strategic capabilities can trickle down to effect tactical capabilities. What […]
I guess it shouldn’t surprise me that business strategy work is often about constrained thinking. Thinking “inside the box” is nearly always rewarded well. After all, the person giving the rewards lives in the same box. One of the most pernicious kinds of constrained thinking is “brand thinking.” That is the notion that the value of your existing brand is the starting point for all your products. Living within the box of the brand is definitely constrained thinking.
Brand thinking says “everyone knows us for doing this one thing well, so let’s invest in variations on that thing.” That’s great. And it often works. For example, the Dell computer company has a great reputation for building good (but not wildly innovative) personal computers for individuals. So naturally, when they decided to diversify, they decided that they should build on that brand. They decided to build server computers for businesses. It worked fairly well. As they tried to become more innovative, they had problems with the brand. In some areas, Dell simply bought other brands (Alienware for gaming computers, for example).
On the other hand, brand-thinking also leads to a kind of situational blindness. Essentially, we choose not to see the things we think are outside the brand, or even the market, that we are used to. And in doing so, we nearly always miss opportunities. At least, until our competition points them out to us. Dell was good at electronics manufacturing to the home. Had they looked outside their brand, and focused on their abilities, perhaps in the 1990s, they would have been successful competing with Sony or Sharp for personal electronics. Brand thinking says “no.” They stuck to computing, moving into printers, laptops, and tablets. All have suffered from the “commoditization” of their market.
A strategist is a unique role. To be a successful strategist, you have to do everything you can to resist the boundaries of constrained thinking. But then your ideas have to be judged by people who are PAID based on constrained thinking. And that’s a tough sell.
When we do business capability modeling, we are looking not at the products of a company, or it’s brand, but at what that company can do. We look at what a company has the people to do, the processes to do, the information to do, and the tools or technologies to do. We bring together this knowledge into a complex model of elements, and summarize it as a capability map.
The value of doing this is typically revealed when creating initiatives for the execution of strategy. If a company is doing incremental strategy, there may be one or two areas that have slowed or prevented the company from achieving its goals with respect to its competition. But when a company is following an innovative strategy, there may be a dozen different capabilities that need attention. Some may have to be created from scratch. Capability modeling is a clearly valuable tool in this arena.
However, there is another use for capability modeling that is not often discussed, and that is the need for unconstrained thinking on the part of the strategist.
If you are over the age of 30, and live in a western country, you’ve probably heard of Eastman Kodak. Known for their near monopoly on film and film processing, Kodak was the undisputed king of photography for decades. In 1990, they held 90% market share. They were unbeatable. Remember this logo? It was a very successful brand.
Let’s assume Kodak had done a capability model back in 1990 and had actually paid attention to it. They would not look at their brand or their existing products, but at the things that they do very well. What would be on that list of “things they do well?”
Let’s be clear here. These capabilities were not just solid. They were the best in the world.
What’s not on here? Electronics. Electronics manufacturing. Electronics R&D. Electronics Marketing. Not on the list.
So when Kodak started to see the need to expand, they used brand thinking. People see the brand “Kodak” and think photography. So why not go into the manufacturing of digital cameras?
Do you see anything on that list of capabilities that deals with innovation and manufacturing of digital cameras? Heck, they didn’t make that many analog cameras (Nikon, Olympus, and Canon made most of the analog cameras). They had no distribution network, no reputation, no capabilities, no core skills to make cameras of any kind, and certainly not digital cameras.
Even though they were able to leverage their brand for a while, eventually their ability to sell digital cameras fell away and they lost money. Huge sums. At the same time that their analog film business was also losing money.
Now, look at that list again. What do you see? Ignore the fact that this is a film company. Do you see other things there?
The simplest capability to build is the ability to market to a new segment. The hardest is the ability to do R&D and manufacturing well, so let’s drop the marketing for a moment. Not completely, but let’s focus on the hard stuff. Could they have built products based on treated plastics and treated paper? Almost certainly. There’s an entire industry that makes sheets of plastic film for a wide array of different purposes from glass protection to window tinting. What about chemistry based R&D? Could they have created innovative consumer products to compete with companies like Clorox or Proctor and Gamble? Could they have leveraged their chops in chemistry to compete with companies like 3M? Maybe. But only if they had looked first at their core capabilities.
The important thing to note about these industries is that they have not been disrupted by technology the same way that camera film was. While these industries are not easy to compete in, the ability to leverage existing world-class capabilities is more critical to success than the ability to leverage the brand.
Eastman Kodak thought of themselves in the film and photography business. And it was their downfall. Unfortunately, it still is.
What about this brand? What are their core capabilities? And what can they be doing with those capabilities?
Are they on the precipice of disruption? You bet.
I guess it shouldn’t surprise me that business strategy work is often about constrained thinking. Thinking “inside the box” is nearly always rewarded well. After all, the person giving the rewards lives in the same box. One of the most pernicious kinds of constrained thinking is “brand thinking.” That is the notion that the value…
This one’s really straightforward: it’s just a follow-up to a public request on Twitter by Bizzdesign consultant Bas van Gils: basvg: I am looking for definitions of these concepts, please help: capability, capability based planning, capability increment, capability map I’ve…
As Business Capabilities are directly derived from the corporate strategic plan and are designed to satisfy the enterprise’s business strategies, goals and objectives, so they provide an excellent basis for the creation of an Enterprise Architecture Roadmap. What are Business Capabilities? A Business Capability represents the ability of an organisation to perform an activity that […]
<p>This is the 12th posting of the enterprise architecture Roadmap for success blog series, before we wrap it up with an overview in the last posting. We have covered a wide range of topics so far, in this posting we zoom in on one of the most useful techniques in the field of strategic enterprise architecture planning: capability based planning.</p><div class=”captionImage leftAlone” style=”width: 337px;”><div class=”captionImage leftAlone” style=”width: 600px;”><img alt=”Capability Based Planning” class=”leftAlone” height=”375″ src=”http://www.bizzdesign.com/assets/BlogDocuments-2/20130426_ea-roadmap-for-success/_resampled/resizedimage600375-Roadmap-for-success-capability-based-planning.png” title=”12th posting in the roadmap for succes series” width=”600″/><p class=”caption”>Part 12: Capability Based Planning</p></div></div><p><span style=”color: #e3004a; font-size: 12px; letter-spacing: 1px; line-height: 15px; word-spacing: 1px;”>Capability based planning</span></p><p><img alt=”Capability Based Planning” class=”left” height=”139″ src=”http://www.bizzdesign.com/assets/BlogDocuments-2/20130426_ea-roadmap-for-success/_resampled/resizedimage150139-capability-based-planning.png” title=”It may take a long time to realize the architecture” width=”150″/></p><p>There are many ways to look at architecture as we have seen in this blog series. Generally, architectures of systems (in the broadest sense of the word) are fairly high level and focus on the fundamental organization of the system as well as principles underlying this <em>fundamental</em> organization.</p><p>Especially for complex systems, it may take a long time to realize the architecture. Or, to put it in a different light, organizations may be smart and to cater for the fact that their long-term vision may change, deciding to take it one step at a time, allowing for the vision / architecture to change. This also takes into account the fact that organizations already have certain capabilities that they may wish / need to develop further in an incremental fashion. This is where Capability Based Planning kicks in.</p><h2>Capability Based Planning – the TOGAF™ way</h2><p>Many definitions for capabilities (and frameworks around capabilities) have been proposed and used in practice. In this post we zoom in on the TOGAF-framework which is fairly well aligned with other capability frameworks. The TOGAF-standard has two definitions for the term Capability, which can loosely be paraphrased with the statement “A capability is an ability that an organization, person, or system possesses”. Capabilities are typically ‘horizontal’ in the sense that they span many lines of business as is illustrated by the figure below (from <a href=”http://pubs.opengroup.org/architecture/togaf9-doc/arch/chap32.html” target=”_blank”>Chapter 32</a> of the TOGAF standard), but that is not always the case.</p><p><img alt=”TOGAF and Capability Based Planning” class=”leftAlone” height=”333″ src=”http://www.bizzdesign.com/assets/BlogDocuments-2/20130426_ea-roadmap-for-success/_resampled/resizedimage600333-TOGAF-framework.png” title=”The TOGAF-standard has two definitions for the term Capability” width=”600″/></p><p class=”caption”>Two capability definitions in TOGAF</p><p>The idea is that an organization’s capability may be at a certain ‘level’ at some point in time. In order to further that capability – conform the Architecture Development Method – a new architecture is developed (using e.g. ArchiMate), which is fleshed out in more detail in a solution model (e.g. ArchiMate, UML, BPMN) before it is actually implemented:</p><p><img alt=”Capability, Architecture, Solution model” class=”leftAlone” height=”193″ src=”http://www.bizzdesign.com/assets/BlogDocuments-2/20130426_ea-roadmap-for-success/_resampled/resizedimage600193-Screen-Shot-2013-04-26-at-11.32.44-.png” title=”a new architecture is developed (using e.g. ArchiMate), which is fleshed out in more detail in a solution model (e.g. ArchiMate, UML, BPMN) ” width=”600″/></p><p>Another important aspect of capabilities lies in the fact that they may have different ‘dimensions’. For example, <a href=”http://pubs.opengroup.org/architecture/togaf9-doc/arch/chap32.html” target=”_blank”>Chapter 32</a> of the TOGAF standard lists a people dimension, process dimension, and material dimensions for a given capability. In other words, when planning the next increment for our ability (i.e., the goal we want to achieve for this increment in the next ADM cycle), we should consider the ramifications for each of these dimensions.</p><h2>Modeling support</h2><p>Given the integration between ArchiMate® and TOGAF™, we feel that capability based planning also deserves proper modeling support. We are working on a simple meta-model to support capability based planning, the core of which looks like this:</p><p><br/><img alt=”Capability based planning. A meta model” class=”leftAlone” height=”301″ src=”http://www.bizzdesign.com/assets/BlogDocuments-2/20130426_ea-roadmap-for-success/core-modeling-ArchiMate-TOGAF.png” title=”meta-model to support capability based planning” width=”422″/></p><p>This sample shows that capabilities may have one or more dimensions, and are realized by one of more increments, indicative of the different points in time. These increments are still conceptual in nature, and indicate points in time. Each increment may be realized by an architecture, expressed as a set of core concepts (<a href=”http://www.bizzdesign.com/blog/archimate-core-overview/” target=”_blank”>see our series on ArchiMate</a>). Using this simple meta-model we can create the following view:</p><p><img alt=”Capability with 5 different dimensions” class=”leftAlone” height=”299″ src=”http://www.bizzdesign.com/assets/BlogDocuments-2/20130426_ea-roadmap-for-success/_resampled/resizedimage500299-core-concepts-meta-model-ArchiMate-TOGAF.png” title=”Each increment may be realized by an architecture, expressed as a set of core concepts” width=”500″/></p><p>Here we see a capability with 5 different dimensions. In each of the four increments, the capability has a certain <em>value</em> that indicates ‘how good we are doing with respect to this capability’. As the analysis of this diagram may be hard, we propose a simple radar view as follows:</p><p><img alt=”radar view of capability” class=”leftAlone” src=”http://www.bizzdesign.com/assets/BlogDocuments-2/20130426_ea-roadmap-for-success/customer-dimension-capability-increments.png” title=”Capability radar view” width=”350″/></p><h2>Use in practice</h2><p>In our experience, Capability Based Planning as a technique can be used in a many different settings. The main benefit of this approach lies in the combination of easy communication (capability is a term that management tends to understand well) while still allows for formal modeling and analysis. We have used it successfully in helping one of our clients in furthering their data management practice, linking the technique of capability based planning with the DAMA DMBOK framework. The DMBOK framework decomposes the data management capability into several sub capabilities such as data governance, master data management, Business Intelligence and so on. It also proposes to consider each capability from different dimensions which may lead to an assessment such as:</p><p><img alt=”Capability assessment” class=”leftAlone” height=”270″ src=”http://www.bizzdesign.com/assets/BlogDocuments-2/20130426_ea-roadmap-for-success/_resampled/resizedimage450270-DAMA-DMBOK-framework.png” title=”such diagrams communicate well and provide a solid basis for further analysis and realization” width=”450″/></p><p>Indeed, such diagrams communicate well and provide a solid basis for further analysis and realization (which steps will we take? When? What is the architecture that goes with each of these steps? How does this translate to projects that take us to the next level?).</p><h2>Next posting</h2><p>If you’d like to know more, please contact the authors directly at <a href=”mailto:b.vangils@bizzdesign.com” target=”_blank”>b.vangils@bizzdesign.com</a> / <a href=”mailto:s.vandijk@bizzdesign.com” target=”_blank”>s.vandijk@bizzdesign.com</a>, or leave a comment. The next wraps up the series! It is scheduled to between 6th and 10th of May.</p><p> </p>
Enterprise Architecture is much more than a list of components. Too often one sees diagrams in slide decks that are either simple lists, a layered view of domains, or a graphical hierarchy. And these are supposed to represent the ‘Architecture’? These visualisations are good to use to inform on the scope and context, but they […]