Aligning to Business Value

Introducing Business Agility & a Worked Example

The Problem• Hierarchical Organisations Are Slow• Slow to change– Losing out to more agile companies, inc SMEs

• Slow to Deliver• Slow to React & Adapt to Market Changes

Companies Affected• Retail Hit Badly, it can

KILL Companies – The last 5 years include:

• HMV• Blockbuster• Clinton Cards• Borders• Comet• The Co-operative Bank• Oddbins

2007 2008 2009 2010 2011 2012 2013 2014 (to May)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

0

10

20

30

40

50

60

2,60

0

5,79

3

6,53

6

944 2,46

9

3,95

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2,50

0

402

Retail Company Failures (‘07-’014)

Employees Affected Stores Affected Companies failing

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Why So Slow? Shared Services!• Create Contention Points • Encourage Context Switching• Misalignment of Value Propositions– Q: Which bit of value are you delivering NOW?

• Exposes Organisation to ‘Big-Bang’ Change– High Risk, High Sensitivity, High Cost– Productivity Losses at Departmental Scale, at

Best!

EXAMPLE: Traditional Hierarchy• ACME Road Runner Extermination Company• Traditional Hierarchy• For example, focus on just quote to payment,

via fulfilment• Value Proposition:

“We’ll Get your Road-Runner! 14-Day Money Back Guarantee!”

…Let’s Visualise the Above!

Organisation Chart

ACME Road Runner Extermination Co

Current Process: Customer Journey

Customer Services Sales EngineeringHealth & Safety Customer

Services Engineering Credit ControlReporting,

Invoicing, PR, Management…

Quote to Payment (Coyote’s Journey)

1. Coyote, an existing customer, contacts Customer Services

2. Put through to sales & purchases engineer visit.3. Sales adviser logs visit against Coyote's record.4. Through communications:

a) Engineering gets a request which waits in a queue until an engineer is assigned.

b) Legal prepare a new agreement for the extra work and send it out

5. Engineer scheduled & risk assessed.6. CS notify Coyote to expect a visit in 8 hr

window.7. Engineer visits & exterminates roadrunner.8. Engineer registers job completion.9. ...Which adds a journal entry in Accounts,

incrementing the bill, in turn finalising the contract.

10. At the end of the month:a) Accounts report AR, AP, GL etc. to board

including aggregate of Coyote's new order and...

b) Marketing Analysts determine last month cost-benefit and effort and adjust for the next month. This is reported to the board and...

c) Marketing prepare a press release to tell the world they helped Coyote finally catch roadrunner and…

d) Credit control raise invoices for all purchases, including Coyote's new service!

Who Does the Work?Mapping the process to business functions to hierarchy, it’s distributed across the enterprise!

Problem: Nature of Shared Services• Lots of different work from different sources• Forces context switching between different

items in the ‘work queue’ – especially ‘in-trays’ – These are LIFO

• Hence, alignment constantly changes• Coyote’s uncertain position in the queue

means variance is high at all stages!

Value Chain MappingIf we map the activities to the average* time to process a work item & check Coyote’s order…

* Average used for illustration only! We assume zero variance in individual task processing time. Real effects are MORE uncertain, not less!

Key

= Work Item X = Coyote Order

Total Time Through the SystemWhen calculating the expected time through the system, it’s best case is shown below! If the order is taken at the beginning of a billing cycle, it adds almost 30 days to this!

…But Can We Do Better?

Some Tips: What to Do?• Arrange Multi-disciplinary Teams– All related functions together in one team!

• Deliver JUST that Function and Nothing else!• Everyone Dedicated to that one Feature• Foster Sense of Collaboration & Teamwork– LIVE IT!– Arrange rewards around performance

• Look for areas to constantly improve!

TEAM

New Team StructureAdopt a Person Responsible for the Chain in each Function into the team. Do it again for others.

The A-Team

What Does This Flow Look Like?Continual Improvement is a journey. “Every journey starts with a first step!” Alignment and working on one unit at a time forces Coyote’s order to flow through the WHOLE system FASTER when each person in the multi-function team is aligned and working on [Ideally] one thing at a time!

Note how the whole team working on one item at a time keep the item in the same position through the system! Even here

….and here!

How Does it Perform?• The performance boost is STAGGERING!– Over 5 times faster!

Dear Gawd Man Why?• Working Together Reduces the Mountain of Work

– Note there is less for each stage to do• Less-Context Switching = Higher productivity• Pulling The Next Ready Task in the order it arrived

– Maintains item priority– No unrelated ‘distracting’ tasks jump the queue

• Marketing & Performance Analysis in the Team allows:– Short, Fast feedback cycle– Faster Billing – More Predictable Income– Higher Rate of Return– Greater Likelihood of Not Paying Out on Guarantee

• Team is always aligned to Value– Always Ask: “Will this help us reach our goal?”

Thanks for ViewingFurther Reading

“The Goal” - Dr. E M. Goldratt’s - Theory of Constraints (ToC), Amazon Kindlewww.IanCarroll.com – Lean Specialist & Agile Coachwww.vanguard-method.com – Systems thinking Website

Ethar Alali @EtharUK @Dynacognetics

Managing Director & Chief ArchitectPolymath-MathMo. Programming since 9 years old. TOGAF 9 Certified, change agent. Blog: GoadingtheITGeek.blogspot.co.uk

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