Translating Business Strategy into Execution using Business Architecture™

white board sketch with strategy at the center

A coach once told me that my word was “big”. It’s true. I love climbing mountains, physically and metaphorically. If there is one mountain I know, it is business architecture. I’ve literally been one of the few who pioneered it, explored it, and lived it from every angle imaginable. Being a Sherpa for this mountain, and guiding business architecture leaders and practitioners around the world to the top, has been one of my greatest honors.

My business architecture journey was inspired by observing how challenging it can be for organizations to move big ideas into action. I have found this to be true for all types of organizations, everywhere, from the largest to the smallest. There is a missing middle to translate and activate those ideas. Business architecture creates a holistic blueprint of an organization – or an entire business ecosystem – to create a shared understanding and activate change. Business architecture is the bridge between strategy and execution.

I believe wholeheartedly in the power of business architecture to help us to build better organizations and societies, and unlock new ways of executing strategy, collaborating, and creating value. For this to be possible though, we must share a common foundation of understanding and a vision bigger than ourselves, and we must deliver practical value.

Having been in many boardrooms, countries, languages, and organizations both large and small, I have seen first-hand that the “big” problem that they all share, is a common one.  Every organization starts out with a vision for who that organization serves, what they do, why they do it, and the plans to grow their business or organization or company into the future.  This is generally referred to as Strategy.

What is Strategy?

Strategy guru Michael Porter defines strategy as a competitive position: “deliberately choosing a different set of activities to deliver a unique mix of value.” He also indicates that the “essence of strategy is choosing to perform activities differently than rivals do.” Strategy is about choice. An entrepreneur’s or company’s business strategy gives them a general plan to help them achieve long-term goals.

What is its Importance?

Great Strategy Execution, or the ability to translate and implement business direction quickly and effectively, has never been more important than it is now. Change is the new normal and resources are precious. The ability to continually sense and respond to change ensures that an organization can continue to survive and thrive.

Successful Strategy Execution Plays a Vital Role in the New Normal of Business Today. Effective strategy execution is now your single most effective competitive advantage source.

However, “…a great strategy is valuable only if a company is capable of executing that strategy. And whether or not a company can execute its strategy depends largely on whether it is designed to do so. In other words, it depends on business architecture – the way a company’s people, processes, systems, and data interact to deliver goods and services to customers.” (Jeanne Ross from “Architect Your Company for Agility”)

Where they seem to fail is in two common and essential important steps, and unfortunately, it is so imperative to get it correct that success or failure within these two essential steps it has proven to be THE overwhelmingly primary factor in predicting whether an organization experiences massive competitive advantage and growth in profits or fails within a few short painful years.

So, what are these two important steps:

  1. The first step for an organization to successfully execute strategy for growth and profits, is to involve the entire organization.

In order to do so, each department leader and their team needs to be able to successfully understand: What is the overall strategy and what exactly does it mean? They need to ensure they have a crystal-clear understanding of it instead of a skewed or incomplete interpretation.  The fact is that “95% of employees in most organizations do not even understand their organization’s strategy” (as cited by Robert Kaplan, Harvard Business Review).

Imagine how this can create inconsistency and chaos within an organization, when the company is not even aware of how differently each of its leaders has incorrectly translated the Strategy and created action steps from their skewed understanding of the corporate Strategy.

  1. The second step is they need to put the words into action, and in a cohesive way.  In other words, they need to turn Strategy into Reality and make the Strategy Goals real through people, processes, information, and technology. In doing so, they need to have a proven method to turn big ideas into action.  Challenges with strategy execution are so commonplace that we seem to have become immune to them. Statistics such as “66% of HR and IT organizations develop strategic plans that are not linked to the enterprise strategy” abound (as cited by Robert Kaplan, Harvard Business Review).

Why is it so important to translate strategy using business architecture?

Here are four benefits of translating strategy into initiatives with business architecture. Business architecture ensures that strategies and other business directions are…

  1. Clearly articulated and communicated – To ensure clarity and measurability of business objectives and outcomes.

  2. Consistently decomposed and deconstructed into the requisite components – To ensure alignment and cohesiveness of strategies, goals, objectives, metrics, and courses of action across the organization.

  3. Collectively viewed through a customer/stakeholder value and business lens – To identify the comprehensive set of changes needed to the business and technology environment, which can be orchestrated in a coordinated way and leverage reusable solutions.

  4. Effectively made real through a prioritized and rationalized set of initiatives – To allocate resources in the most effective way, empower teams, ensure coordination, and enable agility.

You can work through a lot of ambiguity, misalignment, and politics by staying true to the simplicity of this method and its principles.

Translating strategy into an executable set of initiatives is one of the most important – and potentially challenging – responsibilities of business architects. Let’s break down what that actually means and how business architects do it (of course working hand-in-hand with business leaders, strategists, and others).

The same process applies to translating any type of business direction, whether a business transformation, a comprehensive set of regulatory changes, a joint venture, integration after a merger or acquisition, and so forth.

Where do we start to decompose and translate strategy?

Break the strategy down into components. There’s a sort of golden thread here that is simple but powerful in how it decomposes and deconstructs a strategy into just the right pieces and just the right detail. These components include goals (often more abstract aspirations), objectives (quantitative, measurable results that define strategy), metrics (used to measure the objectives), and courses of action (a selected option to carry out a strategy).

The more abstract concepts of strategy and goals should be distilled into a measurable objective(s), and then associated with the applicable value streams and capabilities impacted. In addition, a defined course of action(s) is also critical for organizational alignment. For example, if an organization has an objective related to increasing revenue, achieving it by creating a new product versus offering existing products in a new market versus doing an acquisition are all very different courses of action.

While there are many finer points, here are just a few considerations:

  • You may need to decompose components. For example, an objective can break down into more detailed objectives.

  • You may have many-to-many relationships between components. For example, a strategy may have multiple goals, or a course of action may apply to multiple objectives.

  • You may not have all the pieces of information you need up front. Just capture what you have and keep working on the rest.

  • You may uncover misalignment. For example, you may find that the collection of planned objectives will not fully enable a strategy. Or, you may find that business leaders are planning conflicting courses of action to meet an objective. Share your observations.

What if my organization categorizes information differently?

Different organizations and methodologies vary in the way that they categorize information within the components above. The key is for an organization to have unambiguous and agreed upon definitions of each component – and for information to be categorized consistently within each. This might sound simple, but we know it is easier said than done. However, the promise is true clarity and alignment across an organization.

Where do techniques such as OKRs and balanced scorecard fit?

Objectives and Key Results (OKRs) is a goal-setting framework used by some organizations for defining and tracking objectives and their outcomes. In the paradigm described earlier, OKR objectives would likely equate to goals and OKR key results would likely equate to objectives. Again, what’s most important is that you decide how you are going to define each component of your organization’s golden thread and just be consistent.

In the paradigm described earlier, the balanced scorecard technique would likely equate to goals (though the Norton Kaplan strategy map technique calls them objectives) and metrics. Again, you define your golden thread and just be consistent.

What comes next after we have clear objectives and courses of action?

What comes next is business architecture impacts, specifically value streams and capabilities.

Value streams provide the context for the impacted capabilities, and the capabilities are of course the Rosetta stone that connect to the rest of the business architecture domains (e.g., business units, information, products, stakeholders, policies, and other strategies and initiatives) and the operating model including people, process and technology.

It is very important to note that business architecture value streams and capabilities rarely "change" unless an organization's business model is changing, but rather they frame and coordinate where changes are necessary to people, process and technology. So, by indicating that a capability is “impacted” by a course of action, it really signifies that there are changes happening there, and the capability helps us to coordinate those changes.

As you start to identify the value streams and capabilities impacted, the importance of well-defined objectives and courses of action will become clear. Take your best shot at interpretation and then iterate with your leaders and/or strategy team as needed.

What if the strategy is not clear or detailed?

This is frequently a challenge in organizations, and it leaves a big gap between the defined high-level strategic direction and a cohesive understanding of what actually needs to change in the business and technology environment. The best way to work through it is just by doing the hard work of defining goals, objectives, metrics, courses of action, and the impacted value streams and capabilities. The process of trying to define the pieces will illuminate gaps and missing detail that can then be added.

And, over time this translation process provides feedback to the direction-setters, highlighting gaps and opportunities to enhance the strategy formulation and communication approach going forward.

Whynde Kuehn photoAbout the Author: Whynde Kuehn is recognized globally as the most sought-after Business Architecture Pioneer and a ‘Boots on the ground Thought Leader’. She built a $36 Million consulting practice with 100 consultants to prove her methodology works. Having worked with some of the largest and most complex organizations around the globe, Fortune 500 companies, governmental and non-profit organizations, to social enterprises, and start-ups, she has helped countless clients to develop their strategy execution muscles and deliver results in millions saved or earned. Managing Director of S2E Transformation Inc. Business Architect Expert. Here's more information about S2E service offerings.