The need for Business design to underpin strategic and operational agility

Business-by-Design
True Agility is in Need of True Business Architecture
www.designchain.co
Business Design Briefing
Presenter Pack October 2019
VERSION 1.0
LAST UPDATED:
Level 2, 696 Bourke Street,
Melbourne, Australia
COMPANY ADDRESS
Business Architecture Guild Master Series

Man, Machine and the Dog
"The factory of the future will have two employees:
a man and a dog.
The man's job will be to feed the dog.
The dog's job will be to prevent the man from touching any of the automated
equipment.”
Warren G Bennis
ON THE INTRODUCTION PAGE OF A TIER 1 BANK STRATEGY DOCUMENT:

True Agility is in Need of True Business Architecture 3
Developing Learning Organizations
We have to develop “new ways of working” to try and reduce the delay between insight and action
The Promise
of business
agility
frameworks
Performance and Productivity
Do what you do better.
Disruption
Change why you do
it
Transformation
Change what you do
Are we doing things right?
Here’s what to do:
Procedure or rules
Why is this
value?
How is value
created &
captured?
What is Value?
How is value
delivered?
How is value
measured?
Context,
values,
problem,
system
dynamics
Principles,
Assumptions,
& value
thinking
Strategies,
decisions &
Actions
Value Delivery Results
Are we doing the right
things? Here’s why this
works? Insights and
patterns?
How do we decide
what is right? Here
is why we want to
be doing this
Feedforward
Feedback
The reality of
business agility
frameworks
DevOps sits in
here
BizOps sits here.
So does the DAO.
(1st
learning loop)
StratOps sits
here
(2nd
learning loop)

‘Enterprise Lifecycle's
2014 © Enterprise Architects PTY LTD
PERORMANCE
TIME
ENTERPRISE
BRAND PLATFORM
BUSINESS MODEL
BUSINESS COMPETENCIES
PRODUCT
New products and services no longer suffice
Organizations need to be rebooting entire business models and moving into ecosystems and value systems in order to provide more
value. Increasing the level of complexity

Are our problem solving disciplines equipped for the
complexity we have to deal with?
We are moving into the complexity space, where problems are often referred to as wicked.
Unknowable:
The relationship between cause
and effect is impossible to determine as
they constantly shift. In chaos, it is
necessary to act first and then sense
through the result of action how to
further respond. Understanding the
problem comes later. This is the domain
of rapid response.
Example: Natural disasters
Unknown Problems:
The problem is in constant flux as a
change to the situation causes ripple
effects and unpredictability
in other aspects. Information is often
incomplete. Rather than implementing a
solution, devising a concept, testing,
iterating and then responding is needed.
Problems often become complex when
human behavior is a significant factor.
This is the domain of emergence.
Example: Schooling experiences,
organizational change management,
traffic management
Known unknowns:
A complicated problem can have multiple right
solutions. Complicated problems are understood,
analyzed and then responded to. It often requires
expertise to solve and is largely process driven.
Solving a complicated problem often requires the
right expertise along with the right tools. In this
realm you may know you have a problem but may
not be able to solve it alone. This is the domain of
expertise.
Example: Fixing a car, constructing an airplane.
Known knowns
A simple problem is one of cause and effect. The
solution is rarely disputed. The problem can be
categorized, understood and a response devised
based on the information. This is the domain of
best practice.
Example: 1+1 = 2, solving a jigsaw puzzle.
The Knowledge /
Innovation funnel
* ‘A Leader’s Framework for Decision Making’ David Snowden & Mary Boone
KnowledgeFunnel

• “The leaders who will
succeed in the future will
be those who have the
following abilities:
• The ability to ask the best
questions
• The ability to choose the
right methodology against
a particular problem and
knowing how to govern
the work, methodology
dependent.”
• Director of Innovation Skills at Nesta
Skills for the future are shifting

Other disciplines are moving into the 4th order space…are
the architecture standards?
Person to Symbol
Graphic Design
Visual Design
Communications Design
Person to Object
Product Design
Industrial Design
Engineering
Architecture
Fashion Design
Person to Person
Service Design
Experience Design
Instructional Design
Process Design
Person to System
System Design
Business Design
Organisational Design
Culture Design
Capability Design
4th
systems
3rd
interactions,
experiences
2nd
objects,
artefacts
1st
signs,
symbols
Low
complexity
High
complexity
*Richard Buchanan 1992: Wicked Problems and Design Thinking
• Social Change
• Economic Policy
• Crime & Unemployment
• Networked warfare
• Smart City programs
• Digital Citizen Services
• Reduce repeat visits
• Tax system interaction
• Staff Pride and Satisfaction
• Products
• Parking meters Smart Lamps and
IOT
• Prosthesis development
• Voting Devices
• Street signs
• Branding
• Messaging
Version 2.0

Multiple Disciplines are needed to address the complexity
To cope with the rate of change and continual shifts, a variety of disciplines are needed to traverse the innovation lifecycle. This has
been the NWOW focus
*Adapted from Nordstrom Innovation Lab
Version 2.0
DEFINE THE CHALLENGE
OBSERVE PEOPLE
FORM INSIGHTS
FRAME
OPPORTUNITIES
BRAINSTORM IDEAS
TRY EXPERIMENTS
LEARN
BUILD
PIVOT/PERSEVERE?
ABSTRACTCONCRETE
customer SOLUTIONcustomer PROBLEM
DESIGNTHINKING LEANSTARTUPAGILE

Start thinking of business agility as
the common thread: an adaptable
and sustainable narrative that binds
& guides us into the uncertain
future, rather than directing us.
The Result has been the pursuit of Big-A Agility
Business and Enterprise Agility extends into the structural, enterprise and strategic areas
*the business agility institute
Version 2.0

• Most agile frameworks have their
origins in the software development
space
• They start with Devops and continuous
delivery of product
• They fall short around business agility
and strategic agility, these areas are
beginning to take shape
• A multi-disciplinary future seeks to
combine strategy, design, architecture,
PMO and delivery
• How feed the backlog at a portfolio and
solutions level?
• Only then will true agility be reached
And the commoditization of “Agile”
The Scaled Agile Framework looks to build agility into the entire business model
Version 2.0
*Scaled Agile

For now these frameworks focus on process agility
Area of
Strength
Area of
Weakness
How an agile organization sets,
communicates and
operationalizes an adaptive
market vision.
Scaling ways of working across
divisions, departments, the
organization and ultimately
between organizations.
The form of agility that
encompasses an individual
value stream - the combination
of discrete activities that are
undertaken by teams and
projects.
The relationships between
individuals, teams & divisions to
create an agile organization.

NWOW Still has a journey to travel
This is the Area
of opportunity

The NWOW Operating Model
Disruption
Change why you do
it
Transformation
Change what you do
Procedure or rules
Why is this
value?
How is value
created &
captured?
What is Value?
How is value
delivered?
How is value
measured?
Context,
values,
problem,
system
dynamics
Principles,
Assumptions,
& value
thinking
Strategies,
decisions &
Actions
works? Insights and
patterns?
How do we decide
what is right? Here
is why we want to
be doing this
Feedforward
Feedback
The “Operating
Model” of
NWOW

“A Business Model describes the rationale
of how an organisation creates, delivers,
and captures value” Alex Osterwalder –
Business Model Generation
An operating model determines how the
organisation mixes its resources to create,
capture and deliver value
The business model vs the operating model?
VALUE
THE ENVIRONMENT
BUSINESS MODEL
Markets
Industries
Customers
Market Segment
Channels
Customer
Relationships
Value Proposition
Offering:
Services/Products
Processes/ Value
Chains
Capabilities
Business Service
Functions
Data
Applications
Technology
MARKET
MODEL
OPERATING
MODEL
SERVICE
MODEL
VALUABLE

Mixing resources across the business model
Capability
What about rules?

The Art of Mixing
• The new way of thinking and operating is no
longer linear
• The value is in the mixing, whilst the parts are
utility

THE DISCIPLINE OF MIXING
How can we become better at mixing?
Unresolved Business
Challenges
Rules of thumb
Robust, repeatable and
replicable formulas &
processes
Ultimately all innovative
algorithms will become utility.
* From Roger Martin (2009) The Design of Business

A Multi-Disciplinary Journey
* From Roger Martin (2009) The Design of Business
MYSTERY
HEURISTIC
ALGORITHM
T h e K n o w l e d g e F u n n e l
Design Thinking
Architecture Thinking
Agile TM Thinking
No single discipline can traverse
the funnel, it is a multi-
disciplinary journey.
THEAGILEORGANIZATION

Design Thinking
Put the person in the
center
Architecture
Thinking
Put the business in
the center
Hybrid thinking focusses on a blended
approach to the problem space
Agile Thinking
Put delivery in the
center
Hybrid Thinking

Where should we focus?

For the Business Designer / Architect, heuristics are the
secret sauce
Focus more here
Focus less here
Rules of thumb
Mental Shortcut
Principles
Recipes
Mixes
Process
Procedure
Building Blocks

For the Business Designer / Architect, heuristics are the
secret sauce
Behaviour Economics*
Increasing Ideality: Systems
improve over time by
providing more benefits with
fewer inputs/costs and
resulting in fewer harms.
Business Heuristics: Unlock
capacity, complement
products, challenge pricing
orthodoxies
Business Rule - ?
*sketchplanations

Abstract Plot Archetypes
Harley-Davidson aligns its product
design and branding with the
outlaw archetype, emphasizing
freedom and living outside the
rules of society.
True Agility is in Need of True Business
Architecture

Abstract Heuristics for Innovation

Problem
My
Specific
Solution
World’s Best
Ideas solving
similar
problems
My Specific
Problem
Generic
Problems
similar to mine
Abstract
Concrete
Solution
Example of the Prism of TRIZ
Cleaning the
exterior of tall
windows
Identify similar
problems from other
industries
(Cleaning, injury,
cost)

Funnier Example
Concrete / Abstract thinking and the sly fox

Restaurant Meets Airport – Morphological Analysis

Business Design Patterns using GRASP
• Given a capability x, which
responsibilities can be assigned to
x?
• The Expert principle says – assign
those responsibilities to x for which
x has the information to fulfil that
responsibility.
• They have all the information
needed to perform operations, or
in some cases they collaborate with
others to fulfil their
responsibilities.
Architecture

Patterns of Business Design based on The Economic Lifecycle
The evolution of management science, strategic and business models is a continual process.
Leading and Best Practice Research, 2011/2012
Scope: 1765 CEO’s and 2936 business leaders representing all major countries and industries
Version 2.0

Disruption patterns =
market models
Performance patterns =
business models
Productivity patterns =
operating models

Where can we insert heuristics and patterns – a conversation
? ? ? ? ?

The Problem with Current NWOW Attempts
Beliefs
Meaning
Esteem
Calling
Health
Nutrition
Exercise
Sleep
Mindfulness
Resilience
Self
Awareness
Hope
Affiliation
TOOLSETSKILLSET
KNOWLEDGE
SET
MINDSET
HEARTSET
CULTURE SET
(Group)
Internal External
DoingThinkingFeeling
SPIRITSET
CULTURE SET
(Society)
Being
Emotions
Motivators (intrinsic)
Purpose
Autonomy
Attitude
Empathy
Mastery
Ability
Practices
Routines
Orientation
Perspectives
World Views
Values
Work area design
Ergonomics
Community
Social influence
Ownership
Affiliation
Belonging
Behaviours
Engagement
Communication
Leadership
Accomplishment
Recognition
Support
Motivators
Empowerment
Language
Concepts
Theories
Principles
Heuristics
Experience
Frameworks
Methods
Processes
Techniques
Resources
Artefacts
Architecture

The NWOW Operating Model opportunity areas
Disruption
Change why you do
it
Transformation
Change what you do
Procedure or rules
Why is this
value?
How is value
created &
captured?
What is Value?
How is value
delivered?
How is value
measured?
Context,
values,
problem,
system
dynamics
Principles,
Assumptions,
& value
thinking
Strategies,
decisions &
Actions
works? Insights and
patterns?
How do we decide
what is right? Here
is why we want to
be doing this
Feedforward
Feedback

The Easy Stuff: Feedforward and Feedback
Feedback
Feedforward
Using heuristics and rules on the feedforward planning activities +process
mining + the structural agility engine = enterprise agility

Feedforward: Customer Experience Management is both a feedforward and feedback activity
CXM metrics must be designed to allow
easy incorporation into higher level
metrics as well as the performance and
value model of the business. This will
allow continual improvement of customer
experience as well as clarity around the
ROI of CEM.
CXM are designed to enable an overall
per-customer “Customer Experience
Index” (CEI) and “customer engagement
score” (CES)to be determined.
The CXM’s also enable per-customer CEIs
for each customer journey and episode
experience. These are built up from the
individual KQI scores of the constituent
touch points
Category Metric Impact on CEM
Brand Reach Social
connections
This defines the raw number of social connections such as Facebook fans
or Twitter followers a company is likely to have. This is an indirect
measure of CEM as a measure of publicly stated recommendation based
on followers. However followers only demonstrate interest but not
commitment. In addition this is only applicable for large consumer brands,
and not for niche products.
Consumer
Activity
Social Page
Views
This measures the page views, wherever this information is available
such as in YouTube. However without a measure of how much time a
consumer spends on the page this is not a useful measure of customer
experience.
Consumer
Engagement
Engagement
rate
This metric is the total of likes and comments divided by the total number
of fans, indicating the raw # of engagements per fan. The engagement
level is an indirect measure of relevance of the media itself and
acceptance of the brand
Acquisition Talking About
This
This is a Facebook specific metric which reports on how many people are
talking about the brand and the related pages on their own pages, as a
measure of social sensation created by the brand. This is an indirect
measure of social sensation caused by a specific campaign or launch.
Consumer
Activity
Retweet
rates
This is a measure of how many times tweets have been retweeted, which
is an indirect measure of an importance of an event, for example an
outage.
Consumer
Activity
Chatter level This is an imperfect measure of all posts, tweets and blogs about a
specific topic in social media. This could be an important measure but will
need to be apportioning an appropriate value to various media based on
their relevance and importance.

A
B
C
D E
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
System 1
System 2
System 3
System 4System 2
* *
* *
* *
* *
**
Data Message
Data Message
Data Message
Data Message
Data
Message
Process Message
Process Message
Process Message
Process Messages
Store and Forward/
Request Reply
Store and Forward/
Request Reply
Store and Forward/
Request Reply
Services:
End Points:
Process Centric Automation

Typical Enhancements Supporting
Business Model Innovations
BPM Focussed
(% effort)
Dynamic SOA
(% effort)
New endpoint for a business service1
100% 20%
Change business service for a new Policy based on customer status2
100% 40%
Addition of temporal constraint for use of Internal Customer DB Service
3
100% 20%
Provision to a New Customer10
100% 25%
Personalisation based on location4
100% 12%
Addition of new consumption channel to support end customer role6
100% 45%
Add a service with temporal, location and status constraints 100% 8%
Turn off a customer9
100% 8%
Load sharing by customer type to accommodate peak loads11
100% 15%
Personalisation of content based on consumption channel7
100% 16%
Addition of new type of end-customer role5
100% 2%
Easy Medium ComplexKey: Generic difficulty
Source: IBM SWG Services
The Process Governance Nightmare

Business Services Layer
Dynamic Assembly of Services Based on Heuristics and Rules
Shifting to Heuristics and Rules Centric Automation
A
B
C
D E
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
System 1
System 2
System 3
System 4System 2
* *
* *
* *
* *
**
Data Message
Data Message
Data Message
Data Message
Data
Message
Process Message
Process Message
Process Message
Process Messages
Store and Forward/
Request Reply
Store and Forward/
Request Reply
Store and Forward/
Request Reply
Services:
End Points:
Business Process

The Easy Stuff: Feedforward and Feedback Canadian
Government Service Patterns
These are the recipes and rules on how to stitch together services. They are not rules engine or AI driven yet,
but the possibility is there.

The Easy Stuff - Strategic
Continuous delivery cannot occur without continuous strategy and architecture
Feeding the backlog from the roadmap at a
strategic and operational level

The Easy Stuff - Structural
Strategic Agility will
not work without
operational agility and
visa versa.
It’s the business
architects
responsibility to
enable strategic agility

The Easy Stuff – Using Roadmaps to Glue Strategic and Operational
Backlogs
Gluing things together at the right levels and in the right cadences is essential

The Easy Stuff – Strategic Innovation to feed the portfolio backlog
Applying the innovation lifecycle at a strategic level is key for strategic agility

The Easy Stuff – Operational Innovation to feed the program / tribe
backlog
Applying the innovation lifecycle at a delivery and operational level is key for operational agility

The Hard Stuff - The Dark Matter of
the Business
• Dark matter – believed to constitute 83% of the matter in the
universe
• Virtually undetectable
• Neither emits nor scatters light, or electromagnetic radiation.
• Believed to be fundamentally important in the cosmos , we
cannot be without it
• Yet there is essentially no direct evidence of its existence and
little understanding of its nature
• The only way that dark matter can be perceived is by
implication, through its effect on other things.
• With a product or service, the user is rarely aware of the
organisational context that produced it. Yet the outcome is
directly affected by it. Dark matter is the substrate that
produces the effects on them.
• If we operate without understanding the unseen force, it will
be like planting a garden without understanding the seasons,
sunlight, water, insects, soil etc
• To be effective, we need to develop a partnership with this
unseen, intangible dark matter

The Dark Matter of the Business
*Karen Oikonen – Gigamap Example

ABOUT
OUR COMPANY
We are an innovation and strategic design consultancy.
We’re a team of strategic thinkers, makers and doers. We
create impact through design, and scale through
architecture. We help organisations solve challenges in
creative and human-centred ways.
We see ourselves as super-mixers, blending multiple and
diverse disciplines together to help our clients adapt faster
to a changing world.
WWW.DESIGNCHAIN.CO

OUR
VISION
Create, shape and
transform
organizations to
create impact &
legacy on the future

OUR
MISSION
Question the status quo.
Go deep to unlock insight.
Challenge established
thinking.
Always think and behave
circular.
Never stop learning

WHO WE ARE
We have expertise in strategy, transformation, design, innovation, architecture, agile, capability building,
governance and risk, digital, programme management and strategy execution.
We have a shared belief that innovatively designed, and well engineered organisations can have a
profound impact on our society and the future societies of our children.
35+ 30+
People Delivery Locations
150+
Projects
60+
Clients

WE BELIEVE...
DesignChain empowers teams to deliver greater
value through new ways of thinking and working
Blended thinking creates
more durable change
Everyone wants to add value. The business just
needs to be designed to enable it. DesignChain
helps individuals, teams and organisations find
their heart, making them more passionate and
productive in the workplace and society.
Aligning passion and value
has the greatest impact
We believe that design and innovation must
have some rigour and repeatability. DesignChain
taps into the innovation potential of your
customers and teams through a systematised
process that leverages multiple innovation
frameworks.
Innovation can be
systematised
The commoditisation of human knowledge frees
up humanity up to solve bigger, more complex
problems. DesignChain understands complexity,
and helps design and enable outcomes to
address complex challenges.
The future opportunities are
in complex spaces

WHAT
WE DO
We give you insight around possible
societal, business and technological
futures.
We help you go deeper into problem
spaces to ensure you focus on the
right areas.
We determine the best responses to
these futures and problems through
innovative asset mixes.
Strategic
Foresight+Design
We help you innovate more
creatively, and incubate and scale
more efficiently.
We understand the blockers that
exist across the innovation lifecycle.
We reduce the gap between ideas
and delivered customer impact using
a blended mix of human and
machine interventions.
Innovation+Incubation
We help companies reduce the gap
between action and result. We know
and understand what levers to pull
where on your business, to create
the greatest impact.
Through our unique designs,
approaches and methods, clients will
learn and adapt faster at both a
strategic as well as a delivery level.
Business
Design+Improvement
WE ADVISE+CONSULT | WE TRAIN+COACH

OUR CLIENTS INCLUDE
Public-sector Private-sector
Architecture

CLIENT TESTIMONIALS
“DesignChain helped us challenge some of our established ways of thinking. They gave us a set of outcomes that helped us understand and articulate
the problem space, then to analyse, design and iterate possible solutions in a human-centred, business-focused way. Our team found the experience
invaluable.”
“Fantastic journey bringing new products and business models to market. DesignChain's combination of mentoring, training and consulting was a
great fit to help us through the journey. Working with them taught me an enormous amount about innovation, developing and testing ideas”
“DesignChain were instrumental in articulating a clear and structured process to unite disparate functions and mindsets behind a single vision. With
their leadership we delivered a cohesive digital strategy to drive the business unit into the desired customer focused, digital experience"
“Prior to the work, my SES team were assessed as not capable of leading cultural change. Eighteen months later they have led significant cultural
change due to the insight delivered by the DesignChain team.”
“The team was able to deliver a clear, concise and evidence-based report which included actions that were implementable immediately. Feedback
from staff involved in the workshops was positive and reflected well on the way the team operated. From my perspective, the team clearly
understood the assignment and were adaptive in their approach to ensure a successful outcome.”
“The training delivered by DesignChain was great! It was fun, informative and has given me skills I can apply in my position. The case studies threw
curve-balls and made us think on the spot. The facilitator was amazing. My only suggestion is to run more courses like this!”
Architecture

THANK
YOU
www.designchain.co
For further information
Please contact to:
Craig Martin
CEO & Founder
E: mail@designchain.co
P: +61 3 8797 5475
Contact Us:

The need for Business design to underpin strategic and operational agility

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