Have you ever experienced this story? The management team presents a new strategy.
The new strategy is going to be the answer to all challenges and is going to take the organization to the promised land.
The strategy usually has good points and a good intention. Still, you might feel a bit skeptical – will it help overcome challenges or add to them? And will it keep the focus away from the customers for a few months and thereby give an advantage to the competition?
First, there’s an organizational game of "musical chairs", then, after union negotiations, office politics and many one-to-one meetings. Then the new Org charts are finally presented publicly, followed by team workshops to interpret what the management really wanted to say with the new strategy and what it means for the specific team.
Weeks go by, months go by, and you realize that circumstances have changed, yet again, a year passes by, the management team presents a new re-organization, let´s do it all over again.
The never-ending re-organizations are probably recognized in many companies since change is for sure needed. Regardless of what market or industry you are in, things are most likely moving at a very fast pace, customers demand to be served in new ways, new disrupting competitors emerge to offer it to them, and you just need to adapt to keep up.
Is a yearly re-organization really the answer or is the answer rather to cultivate a culture of continuous change based on facts, facts that come from data points across the organization, its vendors and customers? Maybe you should start there.
Strategy is a major and important framework for how you run your business, to offer your business capabilities to customers, but it´s not the only one.
You need to consider how you have set up your Business Model.
Then you also need to consider your Operating Model.
What connects all this together is your Business Capabilities, the abilities you have or need to deliver on your mission as a company. What you as an organization are trying to provide to your customers.
In a Gartner survey, only 28% of strategy leaders surveyed stated that their organizations develop enterprise business capabilities at the speed needed to respond to market changes
62% of the same strategy leaders found that an overburdened legacy operating model supporting current and future business models made it more difficult to develop capabilities at the speed needed. (Source: 2021 Gartner Strategy Capability Development Survey)
Imagine if you could adapt to changes in the market by offering a new business capability without having to change every aspect of your business and just adjust the parts of the business that need to be adjusted, or even better, just re-use the existing organizational components needed to set up a new capability.
Well, you don´t just have to imagine it, you don´t need to look further than any of the successful organizations created in the last couple of decades to find excellent examples of this.
The ever-favorite example, of course, is Amazon. I mean, looking at their growth over the last 20 years should convince you they have a lesson or two to teach about adapting to change.
You could say that Jeff Bezos enforced this culture with just one email 20 years ago, the now-famous "mandate e-mail". This was a very techy email, but then, Amazon is a tech company. (You can read the mail at the end of this post)
In Business terms what Bezos was demanding in his 7-bullet email was that everyone contributes to breaking down the silos between teams, making sure they collaborate in an effective, non-person-depending way and share data and their services between them in a standardized way, and for the data and services to be able to be exposed externally.
This resulted in making Amazon’s business capabilities modular to the degree that it was easy to reuse services across the organization to create new business capabilities, like moving into a new market or offering new offerings to new customers. And because Amazon made sure to make all these modules externalized from the very start, it was possible for Amazon to let external companies make use of their capabilities, like offering the Amazon platform to third-party vendors or using Amazon’s computational abilities, giving rise to businesses like Amazon Web Services (AWS).
We at EMCAP believe all organizations can benefit from working in a similar way. It´s even in our name – Empowering Capabilities. We want to help organizations focus and strengthen their own business capabilities.
We believe that becoming data-driven through digitalization and digital transformation is the way to do it, but we know that, for this to be successful, Data needs to work in conjunction with handling change and adapting how the companies execute their plans.
In other words, the business capabilities will only run optimally when Strategy, Business, and Operational models work together. And if you work with these parts continuously you might be able to get ahead without a single re-organization.
The "Mandate email”´ went something like:
1) All teams will henceforth expose their data and functionality through service interfaces.
2) Teams must communicate with each other through these interfaces.
3) There will be no other form of inter-process communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no backdoors whatsoever. The only communication allowed is via service interface calls over the network.
4) It doesn’t matter what technology they use. HTTP, Corba, Pubsub, custom protocols — doesn’t matter.
5) All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.
6) Anyone who doesn’t do this will be fired.
7) Thank you; have a nice day!