The Future is More Predictable than You Think – A Workbook for Value Chain Mapping
Maps have been critical in many forms of competitive engagement throughout history. They help us to understand where we are, why we take action, how we can outmanoeuvre foes and what escape routes we have if things go wrong.
Many of the most well-known competitive engagements have been military, and these stories have consistently shown that understanding and exploiting the landscape is vital in battle as it acts as a force multiplier. Probably the most famous example is the battle of Thermopylae, where the Athenian general Themistocles used a narrow coastal pass to enable 7,000 Greeks to hold back a Persian army of as many as 200,000 for seven days. This is the tale told in the film 300 (the number of Spartan soldiers).
Similarly, while Ball’s Bluff is not commonly cited as one of the major battles of the American Civil War, it is a lesson in the importance of maps and situational awareness. Through misinformation and miscalculation, Union troops were caught in disadvantageous terrain. A thousand men were lost – killed, wounded, missing or captured in an 8:1 ratio – because the Union generals ordered soldiers forwards without knowledge of the lie of the land, how reinforcements would reach them, or how they could withdraw. They did not see what was really going on.
Situational awareness and the use of terrain are vital techniques influencing the outcome of any conflict, and they depend heavily on maps. Maps enable us to determine where we might attack, from which we can then decide why one route is better than another – because it cuts off an enemy supply route, gains a geographical advantage over an enemy position or restricts an opponent’s movement. The how (capture this hill), the what (bombard with artillery followed by ground assault) and the when (tomorrow morning) all flow from this, though the specifics change as no plan survives first contact intact.
Military maps traditionally describe a geographical environment, the physical landscape in which the theatre of battle operates. But business is also a form of conflict – a competitive engagement between opponents, fought over a landscape of consumers, suppliers, resources and changing technology. We believe that maps also matter a great deal in such engagements, and thus companies must be sure to map their business landscape effectively.
The first realization I had that mapping was important in business was in the mid-1990s when a multinational organization asked me to examine alignment issues in a number of business and IT strategies. The questions to be addressed included whether the strategies were aligned, whether these strategies made sense and whether the company was generally heading in the right direction.
It was noticeable that most articulations of these strategies typically detailed the what, when and how of action but only weakly described the why. Almost two decades later, I see the same problem in many firms. Strategies often appear to suffer from a tyranny of the how, what and when over the essential why.
In many cases, large documents that purport to be a company’s strategy consist mostly of purchasing decisions, tactical choices, implementation decisions and operational details. The why is often reactive and vague, with generalized goals regarding the pursuit of innovation, efficiency or improved customer focus. But when you boil it down, the why is actually ‘because everyone else is doing this’. (Examples include the cloud, social media and big data.)
This weakness of the strategic why often stems from our inability to map the environment and understand the context of a business or ecosystem, as well as our tendency to adopt ‘one size fits all’ management approaches. This typically results in inappropriate strategy, governance and decision-making processes.
Whilst all organizations have some form of governance (if we include ad hoc decisions), surveys have shown that as few as 25 percent of enterprises use any type of ‘standard’ governance mechanism such as COBIT, PRINCE2, the Balanced Scorecard, TickIT, Six Sigma, CMM, ITIL, TOGAF, Agile and Lean Sigma. Of course, all of these methodologies have their proponents with examples of successes, and detractors with counter-examples of failure.
Nevertheless, there still appears to be a widely held notion that there is a ‘one size fits all’ method that can be appropriate in all cases, leading many companies to ‘go’ Agile or Six Sigma. Alas, the evidence does not support this belief; instead, it supports the conclusion that no such method can exist.
The reason for this is that in any industrial ecosystem, new activities emerge and then evolve, and as they evolve their characteristics change. What starts as novel, uncertain and unpredictable (uncharted) becomes common, defined and measureable (industrialized). The management methods that need to be applied vary with those characteristics. At the extremes of uncharted and industrialized, the appropriate methods are essentially polar opposites. Given that any large-scale organization or venture will contain at least some components at each extreme, no ‘one size fits all’ method can ever be optimal.
Unfortunately, without a means of clearly mapping these different evolutionary states, superficial industry arguments such as ‘Agile vs Waterfall’ become common. The deep-rooted desire for a single method can be seen in attempts to merge polar opposites into integrated concepts such as ‘WAgile’.