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Executives at the highest level of decision-making level must understand how an organization built around value should operate and create the prerequisite for a customer-focused Value Network with the power to adapt. The responsibility to develop the fundamental structures that control the responsibility and scope of Value Streams typically belongs to the board.
The steps to follow
The complexity dilemma in organizational design is the same as in IT systems design, and IT architects have since long mastered the various patterns that prevent complex systems from collapsing. This article will touch on typical challenges when transforming a business and how Enterprise Modularization can reduce the complexity of a legacy structure to enable success in the new digital era. This is a description of how Executives need to take advantage of well-known architectural patterns can be used at the highest management leveland enforce forms relevant to the Digital Age.
Background
Large organizations Organizations that produce complex cyber-physical systems increasingly have to compete with advanced digital services in changeable business models. . New concepts are continuously emerging, and for example, Industry 4.0 is an established description of the Value Networks replacing traditional hierarchical structures. The concepts are opening up for new business models, and new actors with less legacy are just around the corner to challenge the incumbents. No one can be surprised when disruptive innovation will play faster than ever in the digital age.
The new technological landscape is a well-known fact covered in many articles and books. Still, many organizations have a leadership that has difficulty adjusting, and Mik Kersten gives one of the most distinct descriptions.
"Organizations that manage IT delivery as projects instead of products are using managerial principles from two ages ago and cannot expect those approaches to be adequate for succeeding in this one. Visionary organizations are creating and managing their Value Stream Networks and product portfolios to leapfrog their competition in the Age of Software."
― Mik Kersten, Project to Product: How to Survive and Thrive in the Age of Digital Disruption with the Flow Framework
The long tale of legacy
Large organizations that produce complex products, naturally have the biggest challenges. Under the hood of these large organizations, there are many is a large number of systems to control support the operational value streams, which typically consist of . All tighs together in a product structure which is the backbone for making it all work in the supply chain, production, development, finance, sales, distribution, and aftermarket. All tighs together in a product structure which is the backbone for making it all work. Especially companies with long-lived consumer products have a substantial legacy of supporting systems.To unleash innovation and create new attractive products, it is not just the product development in itself that must become faster and more reliable. It is also the
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To counter the market competition, the long long tail of supporting support systems that need to be upgraded. But, there is no time to investigate new operative structures or how the supporting systems should work. The focus needs to be on exploring what customers want. The legacy structure is a huge obstacle to reaching cross-domain alignment. Especially in large organizations that produce complex products, the development of supporting systems is a challengeneeds to be in shape which requires upgrades. A technical perspective, such as Life Cycle Management, security, and system integration gives lots of reasons why existing systems must be invested in. Unfortunately, the structural perspective is a significantly bigger scope than the technical one. It involves the thinking of a company's product offering and also the tacit knowledge any organization has built up.
Companies generally understand the urgency to have a structure including support systems up to speed. The big question is: “How can we know how our future support systems should work when it is unknown what the future products look like?” And, they start to investigate what future infrastructure they need. Meanwhile, the market is adapting faster and faster.
Many companies also invest in transforming the way their infrastructure is maintained and developed. There are plenty of success stories of how Lean, Agile and DevOps have reduced lead time, increased quality, and other business benefits. Regardless of how well you succeed in Agile abilitiesimproving system development, the tale of legacy is far too long very long and complex.
In my experience, excellent product development abilities are not enough for these large organizations with a long history.
to be organized around value with effective Development Value streams that can execute in Cadence and Sync.New competitors with less legacy are just around the corner to introduce entirely new services. The all too well-known disruptive pattern will play faster in the digital age.
But, there is no time to investigate new operative structures or how the supporting systems should w, and theThe focus needs to be on exploring what customers want.
To unleash innovation and create new attractive products, it is not just the product development in itself that must become faster and more reliable.
Cadence and Sync
If you have been involved in an Agile transformation, you have likely seen the struggle to deliver working Features within a short period. It can be hard enough for an Agile Release Train to finalize Features within a Program Increment. But, in a sizeable Lean-Agile organization, the ability to quickly deliver working Features across several domains in multiple Release Trains is needed to accomplish Cadence and Sync.
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The power needed to rebuild fundamental organizational structures belongs to the highest level of decision-making. The board is usually determined to form new business entities to engage in organizational design and decide about the business model and principles for operations.
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Unfortunately, board members seldom engage in business architecture, nor do they have the expertise to model and explore alternatives. Their alternative is to expand the C-level's strategic authority and reshape business structures.
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In one monolith enterprise, the lead time for creating the required new structures is far too long compared to what speed of the market.
Modularized business models
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Separate compliance responsibility
Waste of investment
Coaches running around helping to coach individuals and teams, facilitate and traini
Not saying it's going bad. A lot of nice things are emerging, people are happier and organizations can measure their progress. But compared to the outcomes that are reachable, what we celebrate is far from….
Summary
References
https://www.pega.com/insights/articles/applying-microservices-principles-your-business-architecture
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https://en.wikipedia.org/wiki/Federated_architecture
Old
Large organizations that produce complex products, naturally have the biggest challenges. Over time, their supporting systems that enable operations have become a legacy that heavily interferes with Business Agility. Regardless of excellency in transforming into Lean-Agile development, the burden of the legacy structure is a strategic obstacle that inhibits execution in cadence and synchronization. Thus, removing the benefits of enabling short feedback cycles as the underlying idea in Lean and Agile.
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