Print this pageHarmonizing for a Purpose
Fulfilling the Need to Adapt
As the business environment becomes more dynamic, the more frequently a business needs to make course corrections, adjustments, and transform its business model. One way to do this is to build a very strong strategic management competency, applying this competency as frequently and as innovatively as needed to keep up with the changing environment. Frequent cycles of the process, some full-blown, some tailored to particular events or situations, keeps the business competitive. The second approach is simply to be more reactive, making more strategic decisions on the fly. Management participation in the strategic management process builds personal competencies to make better real-time strategic decisions.
Adaptable By Design
There is a third approach to improved business organization adaptability, and that is building adaptability into the business architecture. Business design capability includes the understanding of platforms, modularity, and their role in the architecture of a business. One of the key objectives of architecture is to build flexibility and adaptability into the business itself. This self-adapting capability reduces the need for decisions requiring another cycle of the strategic management process and the restructuring of some aspect of the business. Designing a business organization with a flexible self-adapting architecture builds adaptation into the ongoing operations, minimizing the load on the strategic management process and the stress on the organization.
Composition of Business Architecture
The overall architecture of a business can be thought of as a composite of many architectures. There is market architecture, built around interfacing the business with the customer. There is the offering architecture. There is process architecture. There is a decision making architecture and the organization structure. Market, offering, process, and organization architectures are the major fundamental architectures of the business. They are complimented by "lower level" architectures, such as information architecture. Synergistic combinations of business elements are architectural synergies. The synergy of the combination of purpose, distinctive competency, and value proposition is a powerful design theme for a business -- a strategic focus.
Architecture as Strategy
The more robust the architecture the more synergy and dynamic adaptability a business has, lessening the need for strategic management intervention. The strategic management process becomes more of an architecture creating and testing function and less energy is spend creating and selecting specific strategic activities and adjusting the business to fit them. The business organization becomes more self-correcting and self-learning, thus self-adaptive. One key to successful business architecture is to explicitly define the interrelationships between the elements of the business to provide for flexibility in joining and automatically adjusting to levels of needs. There is redundancy in that the interface is build into each module. But there is power in the self-adapting organization. The whole is optimized, not the parts. Another key is to make decision making criteria and processes explicit. The decisions can then be carried out at the lowest levels in the business, where the event is happening which requires a decision. Decision making becomes more timely and effective. The organization becomes more responsive and adaptive.
Dynamic Adaptability
The power of the adaptability of a modular architecture can be illustrated with a product offering. In this example, the offering and process architecture work in harmony to produce a mass customization capability. A highly modularized offering, where an essentially unlimited number of end item combinations can be produced from a set of components joined together on the same platform, has a modular architecture. This makes it amenable to be configured-to-order to satisfy specific demand, potentially with no two offerings ever being the same. Coupled with a modular process architecture, the process can dynamically reconfigure itself based on the configurations of the offerings demanded. As demand for some types of configurations increase and others wane, the processes used to produce them dynamically grow and contract. This flexibility takes the production process decisions out of the realm of explicit decision making and embeds them in the product and process architecture. Configuration demand adjusts the process, not planning and decisions.
Organization Adaptability
The same power of adaptability can be built into the organization architecture. Defining the organization modules interrelationships as customer-supplier relationships means a particular module will grow or shrink based on the demand for its products or services, not based on the budgeting decision where a central planning function has had to predetermine the level of demand for that module for the year. Coupling this with market pricing and the opportunity to purchase the same offering from outside the organization insures the quality of the internal offering. A module providing services at a competitive price and quality helps insure demand. A falloff in either service or quality will tend to reduce demand. It also provides an incentive for the service user to reduce their organization module's demand for services, since that provides a direct benefit to the demanding module as well as the overall business. Given this modular architecture, the organization does not have to be redesigned and resources reallocated with each strategic management cycle because it will be dynamically reshaped by the forces inside and outside the business. (See Ackoff, Russell L., Recreating the Corporation, Oxford University Press, 1999 for a thorough model of how to do this.)
Architecture as a Higher Form of Management
The more proficient management becomes at developing effective business architecture, including market, offering, process, and organizational architectures, and their synergistic combinations, the less time they need to spend on minor course corrections and the more time they can spend on broader trends, threats, and opportunities. They then can direct their efforts towards business architectural innovations which produce expanded dynamic adaptive characteristics for sustaining competitive advantage. They can focus more on being business architects and less on reactive management.
