Saturday, July 20, 2013

Executive Moves

Before the start of the football season, football journalists have little to write about except transfer speculation - wondering which player might be about to transfer from one overpaid job to another overpaid job. This period is known as the Transfer Window.

The simplest assumption is that a player's talent is completely transferable from one club to another. His individual performance at his new club will be similar to his individual performance at his old club, and this is why he commands a particular market valuation.

Of course it is never as simple as this. An astute manager may spot a player who is performing poorly for his current club, and may be able to acquire such a player cheaply, at a price that doesn't reflect his full potential. A well-known example is the transfer of Thierry Henry from Juventus (where he had a disappointing season playing on the wing) to Arsenal (where he made his name as a world-class footballer).

Conversely, there have been many players who have been transferred at inflated prices, and who have then performed disappointingly for their new club. Any football fan will be able to name examples. The possible reasons for such failures range from personality clashes and team culture, to differences in team strategy and style. A player that is brilliant in one formation may struggle in an unfamiliar formation. (See Wikipedia: Soccer formation.)

Similar considerations may apply when a senior manager moves from one company to another. An executive commands a high salary because of a widespread belief that her skills and experience are easily transferable within the same sector, or even across sectors. Thus if a company has challenges in (say) supply chain, it seems to make sense to poach some supply chain expertise from elsewhere.

This is turn relies on an assumption that supply chain is basically the same everywhere. In business architecture, such assumptions result in enterprise models that abstract away from what makes each company unique, and concentrate on showing what all companies in a given sector have in common. So naturally there will be a box called Supply Chain. (Or Supply Chain Management, or Manage Supply Chain, or whatever your naming standards dictate.)

When an executive move doesn't work out, this often leads to suggestions of personality clashes or company politics. Technocrats love these explanations, because they regard such matters as beyond their understanding or control. But personality clashes and company politics are often symptoms of some deeper (structural) differences. Perhaps the challenges of supply chain innovation (and the creative tension between supply chain and other capabilities) are not the same in all companies; in which case, we should be wary of relying too heavily on enterprise models that make supply chain appear the same everywhere. Obviously business architects are interested in the things that companies have in common, but business architects must also be able to articulate (and help reinforce) those things that make a particular company unique.

In my presentation to the IASA conference in April 2013, I discussed the evident differences between hi-tech companies (Amazon, Apple, Facebook, Google, Microsoft, Oracle), and challenged business architects to explain these differences in structural terms. I have my own ideas about how this can be done, and I am interested to hear other ideas.

@wimrampen writes that this post fits well with @jhagel's Strategy Made Simple. "Nothing simple about strategy ;) but @jhagel does great job showing what's really important", adds @wimrampen.

No comments: