IT for Business (IT4B), balance, strategy and organisational change

In the third of their series of blog posts, Brian Johnson and Walter Zondervan, authors of IT4B, look at balancing resources, maintaining equilibrium and identifying what is needed to transform business.

First, let’s look at some theories about the pyramid of organisational change, starting with the traditional picture where strategy sits at the apex (Figure 1). Second, we’ll explain how we think IT4B can help.

Figure 1: Analytic enterprise

Figure 1 is likely familiar to anyone who has read a book on management. It represents what is often described as the analytic enterprise, exemplified to a large extent by the principles of scientific management (also known as Taylorism – as described by Frederick Winslow Taylor in the early 20th century).

Typical characteristics of analytic enterprises include a ‘Theory X’ posture towards staff, which is a mechanistic view of organisational structure, functional silos, local optimisation and a management focus on things such as costs and efficiencies. Middle managers are seen as owners of the way the business works, channelling executive intent, allocating work and reporting on progress within a command-and-control regime. The analytic mindset recognises that the way work is done has some bearing on costs and the quality of results.

Figure 2 shows the strategy, tactics and operations labels disappearing into the sunset, imagining these as laid out along a road.

 

Figure 2: Synergistic enterprise

 

Also referred to as ‘holistic’, synergistic enterprises exemplify the principles of the lean movement. Characteristics include a ‘Theory Y’ orientation (characterised in internal propaganda as respect for people); an organic, emergent, complex and adaptive system view of organisational structure; and an enterprise-wide focus on learning, value flow and effectiveness.

Middle managers are respected for their experience and domain knowledge, coaching the workforce in things such as building self-organising teams and systemic improvement efforts. The synergistic mindset realises that individual tasks within an enterprise are co-dependent on each other and only have relevance in getting some larger end-to-end purpose accomplished.

The reality is that most enterprises are chaordic and although they might aim to be analytic or synergistic, they are sometimes a mess. The road to digital effectiveness is rarely a straight line. If the ‘sunset’ is becoming a digital enterprise, getting there requires more organisation of the organisation.

Figure 3: Chaordic enterprise

The chaordic mindset believes that being too organised, structured, ordered and regimented means being too slow to respond effectively to new opportunities and threats. A chaordic enterprise will attempt to operate balanced at the knife-edge of maximum effectiveness, on the optimal cusp between orderly working and chaotic collapse.

We believe the IT4B model is of value in any organisation, but its value is especially easy to demonstrate within chaordic enterprises.The IT4B model can coordinate the chaordic enterprise to keep it focused on the horizon (Figure 3). Although strategy leads and has a focus nearer to the horizon, improvement follows closely with operation not far behind. Governance monitors if everything is still on track. The shorter the cycle and the more often it is completed, the more balanced and agile the organisation will be.

To carry out these tasks, we have proposed 12 key elements (Figure 4), four ‘touchstone’ elements (Figure 5) and a gyroscope model (Figure 6) of continuous improvement.

When we put these into place (Figure 7) you can see how IT4B is formed. Our new operating model describes all the generic, high-level issues, capabilities and processes that are common to the enterprises we have worked with.

The IT4B operating model

Figure 7: The IT4B operating model

Those who read our recent post on balancing business goals and digital innovation  will remember that our design reflects continuous improvement and is based on four overlapping circles: governance, strategy, improvement and operation. The four circles are themselves each made up of four elements that comprise the concepts that we believe must be in equilibrium.

In the governance circle, effectiveness and efficiency must be in balance with overall policy and compliancy. And the opportunities and risks facing the enterprise must be in balance with developments and trends in the environment in which the enterprise operates.

These elements also form the structure for supporting the business needs and values that are fundamental to fulfilling business missions, and the capabilities needed to do so.

Being IT types, we had to build our own model. The difference with ours is that we have not tried to reinvent methods or create buzzwords. The model is just a coherent picture of the key issues and competences that any enterprise will need if it depends on IT.

The approach is to discover which elements or resources are in good shape and which are not, then make reasoned arguments about what needs to be done, what should be done and the necessary actions to take.

IT4B helps assess what you need to focus on so that your enterprise can prosper, provide better services or decide how IT can create a better digital future. Learn more about the model and the ways it can help your business here.

Figure 8 provides an example of an enterprise assessment using IT4B where the need to improve has been identified using colour coding and iconography.

IT4B operating model and digital readiness

Figure 8: Operating model and digital readiness

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