In the previous article of our Change vs. Transformation series, we presented the value of a maturity model for an enterprise embarking on its transformation journey. We discussed the need for mapping the relationship from corporate goals to enterprise strategies down to a product or initiative. This connectivity is a crucial step to ensure alignment with the purpose of a transformation and guarantee that the digital initiatives are on track and drive the organization towards the aspired state.
However, many enterprise leaders do not undertake this value propagation exercise because
- they spend minimal time on strategic planning and dive right into execution (run before crawl)
- they are not aligned on what is valuable for their organization (no singular why)
- they perform this mapping once, and it becomes another unused artifact (checking the box)
- they offload organizational restructuring responsibility to an external digital hitperson
- They are unable to map the strategies into deliverables in the secured software supply chain (stuck in the messy middle)
- they are looking for an overnight change rather than a steady, iterative transformation journey
- they rely on lengthy manifestos rather than use visual thinking and visual representation
Asanka and I call the organizational map of value propagation a strategy tree, and in this article, we outline how you can create a strategy tree for your organization.
The strategy tree (similar to a Lean Value Tree) is an enterprise construct that helps visualize the flow of business value and express how work is connected within the organization. The root of the tree is the aspired state that the organization wants to achieve through the business transformation (mission). The first level shows the high-level strategies that will help achieve this target state. These strategies must be cross-functional and not contained to departmental silos, or else the transformational effort will fail. The next level is the portfolio of activities that will make the strategy successful. The last level is the backlog of products and initiatives that will drive value to a portfolio.
Developing a strategy tree requires input from different levels of the organization:
- Strategy workshop: involves C-suite and executives, strategic change agents, and advisors
- Tactical workshop: involves portfolio owners and transformational leaders (department heads, line of business leaders, directors)
- Operational backlog: involves portfolio owners, functional managers, and product/initiative leads
Note: use remote-friendly alternatives such as online meetings, open mailing lists, polls, surveys, and chat groups to conduct these collaborative sessions.
Importance of the Strategy Tree
Creating a strategy tree is an involved exercise and requires considerable dialogue, transparency, and candor at various levels within the organization. It promotes organizational alignment, communication, and cross-functional collaboration. The sheer act of developing the strategy tree will reduce friction between teams and break down silos within the organization. There are additional benefits to be garnered.
The strategy tree helps executives and transformational leaders develop a value matrix bespoke to their organization at a strategic level. This value matrix focuses on what the enterprise aspires to achieve through the transformation and focuses on what is essential (value) to achieve that aspired state, rather than just traditional metrics such as cost reduction or return on investment (ROI).
Appropriate weightage is assigned to each category, and greenlighting products and initiatives shifts from a subjective, emotional decision-making exercise to a value-centric approach. As humans, we are more comfortable with relative comparisons, and comparing total weighted scores for products or initiatives will help ascertain value (and, therefore, importance) quickly. It also helps gauge prioritization at the tactical and operational levels and signal a sense of urgency through the organization.
In Drive, author Daniel Pink stresses three crucial elements of motivation – autonomy, mastery, and purpose. From a workforce perspective, the strategy tree acts as a visual indicator of how a team member influences and drives success to the organization and radiates information about their purpose and the value they contribute. This is a powerful motivator in enabling the workforce, increasing transparency, and providing context around why a product or initiative is vital to achieving the organization’s aspired state.
From an organizational culture perspective, the strategy tree promotes visibility of work, candor, trust, collaboration, and communication across the enterprise and partner network. Cross-skilling and upskilling opportunities for employee enablement increases. Team members can volunteer for initiatives that are passionate to them, improving cross-departmental camaraderie. As a result of all these, psychological safety and happiness within the organization improve. It is imperative to embrace the four principles that enable autonomous teams—engage, empower, entrust, and equip.
A Guiding Framework for Business Architecture
The strategy tree is a powerful guiding framework to ensure strategic execution. It maps the flow of value within the organization (including the partner ecosystem) and demonstrates enterprise connectivity. It also steers the enterprise towards its aspirational state. However, a successful business transformation requires a comprehensive blueprint to effectively and optimally harness an organization’s capabilities, competencies, structure, maturity, and flow of value. Business architecture serves as the holistic blueprint for an enterprise and uses the strategy tree to align the aspirational state to business outcomes for a successful transformation. It provides the much-needed visual thinking and visual representation techniques crucial for business architects and product owners. We will explore the various aspects of business architecture in our next article.