Generally speaking, IT departments have all sorts of criteria to justify projects and measure their performance. They use measurements and metrics, KPIs. Going to the solution level, they commonly use indicators such as percentage uptime for systems from the System Management team, error rates for applications from the Development Support team, or number of calls resolved on the first call from the Service Desk, etc. These KPIs usually are defined at an early stage and very often delivered in dashboards from various support applications.

On the other hand it is much more difficult to define and implement quantifiable measure for Enterprise Architecture. Many activities introduced with appropriate governance will enhance the quality of the delivered products and services, but it still will be a challenge to attribute results to the quality of Enterprise Architecture efforts.

This being said, Enterprise Architects should be able to define and justify the benefits of their activities to their stakeholders, and to help executives understand how Enterprise Architecture will contribute to the primary value-adding objectives and processes, before starting the voyage. The more it is described and understood, the more the Enterprise Architecture team will gain support from the management. There are plenty of contributions that Enterprise Architecture brings and they will have to be documented and presented at an early stage.

There won’t be just one single answer to demonstrate the value of an Enterprise Architecture but there seems to be a common pattern when considering feedbacks from various companies I have worked with.

Without Enterprise Architecture you can probably NOT fully achieve:

• IT alignment with the business goals

As an example among others, the problem with most IT plans is that they do not indicate what the business value is, and what strategic or tactical business benefit the organization is planning to achieve. The simple matter is that any IT plan needs also to have a business metric, not only an IT metric of delivery. Another aspect is the ability to create and share a common vision of the future shared by the business and IT communities.

• Integration

With the rapid pace of change in business environment, the need to transform organizations into agile enterprises that can respond quickly to change has never been greater. Methodologies and computer technologies are needed to enable rapid business and system change. The solution also lies in Enterprise Integration (both business and technology integration).

For business integration we use Enterprise Architecture methodologies and frameworks to integrate functions, processes, data, locations, people, events and business plans throughout an organization. Specifically the unification and integration of business processes and data across the enterprise, and potential linkage with external partners become more and more important.

To also have technology integration, we may use enterprise portals, enterprise application integration (EAI/ESB), Web services, service-oriented architecture (SOA), business process management (BPM) and try to lower the number of interfaces.

• Change management

In recent years the scope of Enterprise Architecture has expanded beyond the IT domain and Enterprise Architects are increasingly taking on broader roles relating to organizational strategy and change management. Frameworks such as TOGAF 9.1 include processes and tools for managing both the business/people and the technology sides of an organization. Enterprise Architecture supports the creation of changes related to the various architectures domains, evaluating the impact on the enterprise, taking into account risk management, the financial aspects ( cost / benefit analysis), and most importantly ensure the alignment with business goals and objectives. Enterprise Architecture value is essentially tied to its ability to help companies to deal with complexity and changes.

• Reduced time to market and increased IT responsiveness

Enterprise Architecture should reduce systems development, applications generation and modernization timeframes for legacy systems. It should also decrease resource requirements. All of this can be accomplished by re-using standards, or existing components such as the architecture and solution building blocks in TOGAF 9.1. Delivery time and design/development costs can also be decreased by the reuse of reference models. All that information should be managed in an Enterprise Architecture Repository.

• Better access to information across applications and improved interoperability

Data and information architectures manage the organization assets of information, optimally and efficiently. This supports the quality, accuracy and timely availability of data for executive and strategic business decision-making, across applications.

• Readily available descriptive representations and documentation of the enterprise

Architecture is also a set of descriptive representations (i.e. \"models\") that are relevant for describing an Enterprise such that it can be produced to management\'s requirements and maintained over the period of its useful life. Using an Architecture Repository, developing a variety of artefacts and modelling some of the key elements of the enterprise; will contribute to build this documentation.

• Reduce IT costs by consolidating, standardizing, rationalizing and integrating corporate information systems

Cost avoidance can be achieved by identifying overlapping functional scope of two or more proposed projects in an organization, or the potential cost savings of IT support by standardizing on one solution.

Consolidation can happen at various levels for the architectures: for shared enterprise services, applications and information, for technologies and even data centers.

This could involve consolidating the number of database servers, application or web servers and storage devices, consolidating redundant security platforms, or adopting virtualization, grid computing and related consolidation initiatives. Consolidation may be a by-product of another technology transformation, or it may be the driver of these transformations.

Whatever motivates the change, the key is to be in alignment, once again, with the overall business strategy. Enterprise architects understand where the business is going, so they can pick the appropriate consolidation strategy. Rationalization, standardization, and consolidation process helps organizations understand their current Enterprise Maturity level and move forward on the appropriate roadmap.

• More spending on Innovation

Enterprise Architecture should serve as a driver of innovation. Innovation is highly important when developing a target Enterprise Architecture, and realizing the organization’s strategic goals and objectives. For example, it may help to connect the dots between business requirements and the new approaches SOA and cloud services can deliver.

• Enabling strategic business goals via better operational excellence

Building Enterprise Architecture defines the structure and operation of an organization. The intent of enterprise architecture is to determine how an organization can most effectively achieve its current and future objectives. It must be designed to support an organization’s specific business strategies.

Jeanne W. Ross, Peter Weill, David C. Robertson in “Enterprise Architecture as Strategy: Creating a Foundation for Business” wrote “Companies with more-mature architectures reported greater success in achieving strategic goals” (p. 89). This included better operational excellence, more customer intimacy, and greater product leadership (p. 100).

• Customer intimacy

Enterprises which are customer focused and aim to provide solutions for their customers should design its business model, IT systems and operational activities to support this strategy at the process level. This involves the selection of one or few high-value customer niches, followed by an obsessive effort at getting to know these customers in detail.

• Greater product leadership

This approach enabled by Enterprise Architecture is dedicated to providing the best possible products from the perspective of the features and benefits offered to the customer. It is the basic philosophy about products that push performance boundaries. Products or services delivered by the business will be refined by leveraging IT to do the end customer’s job better. This will be accomplished by the delivery of new business capabilities (e.g. on-line websites, BI, etc.).

• Comply with regulatory requirements

Enterprise Architecture helps companies to know and represent their processes and systems and how they correlate; fundamental for risk management and managing the regulation requirements, such as those derived from Sarbanes-Oxley, COSO, HIPAA, etc.

This list could be continued as there are many other reasons why Enterprise Architecture brings benefits to organizations. Once your benefits have been documented you could also consider some value management techniques. TOGAF 9.1 refers in the Architecture Vision phase to a target value proposition for a specific project. Here we would apply the value proposition concept to the Enterprise Architecture initiative as a whole.

Value Management uses a combination of concepts and methods to create sustainable value for both organizations and their stakeholders. Some tools and techniques are specific to Value Management and others are generic tools that many organizations and individuals use. There exist many Value Management techniques such as Cost-benefits Analysis, SWOT Analysis, Value Analysis, Pareto Analysis, Objectives Hierarchy, Function Analysis System Technique (FAST), and more…

The one I suggest to illustrate is close to the Objectives Hierarchy technique, which is a diagrammatic process for identifying objectives in a hierarchical manner and often used in conjunction with business functions. Close, because I will use a combination of the TOGAF 9.1 metamodel with the Archimate 2.0 Business Layer, Application Layer and Motivation Extensions Metamodels, consider core entities such as value, business goals, objectives, business processes and functions, business and application services, application functions and components. This approach being inspired by the presentation by Michael van den Dungen and Arjan Visser at the Open Group Conference in Amsterdam 2010 and I’m here adding some Archimate 2.0 concepts.

Firstly the entities from the TOGAF 9.1 metamodel:

Then I will consider the entities from Archimate 2.0. Some may be identical to TOGAF 9.1. In the Business Layer, one key concept will obviously be the Value. In this case I will consider the Product (“A coherent collection of services, accompanied by a contract/set of agreements, which is offered as a whole to (internal or external) customers.” Source Archimate 2.0 Specification), as the Enterprise Architecture program. In addition to that; I would refer to Business Services, Functions, and Processes.

In the Motivation Extension Metamodel, the Goals. The Objective entity in TOGAF 9.1 can also be represented using the concept of “goal”.

And in the Application Layer Metamodel, Application Services, Functions, and Components.

It is important to mention that when we deliver a value proposition, we must demonstrate to the business where the benefits will be with concrete examples. For example: the business see Operational Excellence and Customer Intimacy as key drivers, soon you will realize that BPM suites or CRM could support the business goals. These are the reasons why we consider the Application Layer Metamodel.

We could then use a combination of the Archimate 2.0 viewpoints such as: Stakeholder Viewpoint, Goal Realization Viewpoint, Motivation Viewpoint, or some other viewpoints to demonstrate the Value of Enterprise Architecture for a specific business transformation program (or any other strategic initiative).

To be mentioned that the concept of Benefit does not exist in any of the meta-models.

I have added the concept as an extension to Archimate in the following diagram which is the mapping of the value to a program related to the” improvement of customers’ relationships”. I also have limited intentionally the number of concepts or entities, such as Processes, Application Services or Measures.

Using these ArchiMate 2.0 modelling techniques can demonstrate to your stakeholders the Value Proposition for a business program, supported by an Enterprise Architecture initiative.

As a real example, if the expected key business benefit is Operational Excellence through process controls, which would a goal, you could present such a high level diagram to explain why Application Components like a BPM Suite could help (Detecting fraud and errors, embedding preventive controls, continuously auditing and monitoring Processes, and more).

There is definitely not a single way of demonstrating the value of Enterprise Architecture and you probably will have to adapt the process and the way you will present that value to all companies you will be working with. Enterprise Architecture contributes without a doubt to the success of an organization, and brings numerous benefits, but very often it needs to be able to demonstrate that value. Using some techniques as described previously will help to justify such an initiative.

The next steps will be the development of measures, metrics and KPIs to continuously monitor that value proposition.

Architecture maturity assessments help to determine how companies can maximise competitive advantage, identify ways of cutting costs, improve quality of services and reduce time to market. These assessments are undertaken as part of the Enterprise Architecture management. There are some methodologies for assessment of the comprehensive Enterprise Architecture maturity. Examples of these are the US Department of Commerce ACMM, the Open Group architecture maturity model, and a BSC-based Architecture Score Card presented by IFEAD. For application or technology portfolios, portfolio evaluation models can be used.

As a part of project development, assessments (in reality compliance) of architecture solutions are made against the business objectives and requirements (desired process and service structures and business models) and the constraints derived from the Enterprise Architecture context (these may be standards, principles, policies or other restrictions for solution development). Assessment and compliance of technologies are also a central part of Enterprise Architecture development projects. Finally, the development of Enterprise Architectures undergoes the scrutiny of the software development quality assurance method in use. Many IT providers have adopted a comprehensive software quality assurance approach like CMMI, or ISO/IEC 15504 (known as SPICE).

Using the Architecture Capability Maturity Model from TOGAF® 9.1 is a great way of evaluating the way companies have implemented the framework, to identify the gaps between the business vision and the business capabilities. Unfortunately no sufficient assessment instruments or tools have been developed for TOGAF based assessments.

Instruments or tools should contain maturity and documentation assessment questionnaires and a method on how to conduct such an assessment. In the following example you may observe four different phases on how to run an assessment.

The Phase 1 would include several steps:

• Planning & preparation workshop with the stakeholders. Stakeholders should represent both Business and IT
• Interviews with stakeholders based on a questionnaire related to all process areas (elements in TOGAF) or domains that have characteristics important to the development and deployment of Enterprise Architecture. Each process area could be divided into a number of practices, which are statements that describe the process area for each level of maturity, on a scale of 0 to 5. Each practice would have a set of practice indicators, evidence that the requirements for a process area to be at a given level have been met. A set of questions that will be asked in the interviews establishes whether or not the practice indicators exist and thus the level of maturity for the practice. If all the practices for a given level within a Process Area are present, then that level will be achieved. Ideally, directly relevant documentary evidence will be provided to demonstrate that the practice Indicator exists. As this is not always practical, sometimes for this exercise, only verbal evidence from subject matter experts will be considered.
• Production of a report
• Calculation of a maturity score. For the representation, we use the term maturity level or organisational maturity as described below

Sources

• CMMI for Development (Version 1.2, 2006)
• Appraisal Requirements for CMMI (ARC) (Version 1.2, 2006)
• The US Department of Commerce Enterprise Architecture Capability Maturity Model (2007)
• TOGAF® 9.1
• NASCIO Enterprise Architecture Maturity Model (Version 1.3, 2003)

We then deliver a report which includes the maturity of each process area or element. (There are more elements in this example than those in the chapter 51 of the TOGAF® Version 9.1).

The use of radar may also be a nice way to present the results. (Example below)

• Presentation of the report to the stakeholders with strengths, weaknesses, gap analysis, recommendations
• Next steps

The Phase 2 would include several steps:

• Based on results from the Phase 1, a consensus workshop would produce a roadmap and action plan with recommendations to attain the next (required) level of maturity.
• The workshop would provide a tool to produce an objective view of the report provided in Phase 1. This would give stakeholders and the senior management team a detailed view of how well Enterprise Architecture is deployed in the organisation, it provides a full understanding of the business drivers and organisation issues and a clear view of where the stakeholders want the organisation to be. The outputs of this phase are priorities, and an action plan that is agreed, and understood by the key stakeholders in the organisation. There could also be a target radar diagram as shown below (Example).

The updated report may then look like this (extract of an example):

The Phase 3 would be the management of Enterprise Architecture as described in the report and Phase 4 similar to Phase 1.

To conduct an evaluation of an organization’s current practices against an architecture capability maturity assessment model, allows to determine the level at which the organization currently stands. It will indicate the organisation\'s maturity in the area of enterprise architecture and highlight the practices on which the organisation needs to focus in order to see the greatest improvement and the highest return on investment. The recommendation is that assessments should be carried out annually.

Burson-Marsteller surveyed the importance of CEO reputation amongst approximately 1,400 influential business people from five key stakeholder categories, including CEOs, other senior executives, financial analysts, government officials, and journalists. Here are some of the results:

• CEO reputation can represent a staggering 45 per cent of a company\'s reputation;
• Companies whose CEOs were rated "most admired" by respondents achieved a 13 per cent annual shareholder return, while companies whose CEOs were rated less favorably delivered a negative 28 per cent annual shareholder return.

But it is not only the CEOs who have an impact on the value of an organisation. Each of us is part of the fabric that makes up the total value of an organisation. To illustrate this, let’s go back to the definition of an organisation from Herbert Simon (Nobel Laureate in Economics 1978). He described organisations as; "tools that permit groups of human beings to aim at and achieve goals that would be far beyond the reach of their powers as individuals". Although the CEO has a lot of power he or she will need others to achieve the organisational goals. Each and every member of an organisation has personal value that can be utilised for the benefit of the organisation.

For example; when Jose Ignacio Lopez, an executive in charge of global purchasing for General Motors, was approached by Volkswagen in the 90’s the GM shares on the New York stock exchange dropped immediately 4.4%, which corresponded to $840 million value destruction (adjusted for the Down Jones Industrial Average). Lopez had developed tremendous value by shaving about $1 billion of GM’s annual costs. This had a direct impact on his personal capital in the market as other manufacturing companies had similar challenges.

Personal value and reputation

Personal value is not something we can manufacture or change overnight. It is a reflection of our character and personality on your environment. Or in other words how your environment perceives you; your reputation. Your reputation is an expression of what is real and authentic about you. Frances Hesselbein, who was hailed by Peter Drucker as the world’s best leader, said: "Leadership is a matter of how to be, not how to do. We spend most of our lives mastering how to do things, but in the end it is the quality and character of individuals that defines the performance of great leaders." So we are back to ourselves, but what is the relationship of our personal value to the value of an organisation? The answer on this question can be found in Authentic Leadership.

Authentic leadership in organisations

Long term sustainable value can only be achieved by people who share the same values as the organisation they work for. Dedicated and motivated leaders build organisations over a prolonged period of time. This is only possible when leaders have a deep sense of purpose and are true to their core values while working in an organisation. Recent corporate scandals have shown many examples of leaders whose strategies and tactics were focussed on short-term financial considerations. They lost sight of their inner values and focussed on outward gratification, such as power, money and prestige.

The core of your reputation is who you are and what you stand for. It is a valuable asset that you can use to create tremendous value. Your personal history, the story of your life so far, is what has shaped your values and beliefs. Only when you know the essence of what has shaped you, you will be able to become an authentic leader; a leader who is true to his or her own personality, spirit, and character. You have to ask yourself how well you understand your own unique blueprint and the associated story that shaped it.

Organisational culture and your reputation

Your personal reputation is also formed by the organisations you have worked for. Organisations with excellent leadership usually have a strong culture. In a strong culture employees will slowly internalise the values of the organisation and can make independent decisions based on this. These values are reinforced over and over again and employees know exactly what is expected of them and how to act in a given situation. This has a tremendous positive impact on productivity. Employees who act on these values will receive positive feedback that keeps reinforcing them.

Your reputation will keep changing all the time based on your experiences. The reputation of organisations, good or bad, will impact your personal story. If your values and beliefs are not aligned with your organisation then you will not provide maximum value. In business and governance this is known as the agency problem. The agency problem is a conflict between the employees (the agents) who look after the interests of the business but use their authority or power for their own benefit. This is a problem that exists in almost all organisations to a certain extend. Obviously this problem gets larger when the interests of the business are completely different than the interests of the employees.

Great organisations have people whose values align with the organisation’s values and minimise the agency problem. In fact it goes even further. Jim Collins, in his seminal book "From good to great" that researched the differences between good companies and great companies, found that leaders from companies that go from good to great, do not start with "where do we need to go" but "who should be on board". They don’t set a new direction by articulating a fresh vision or strategy and hope that people "fit" in. They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats. And they stick with that discipline; first the people, then the direction. This allows the values and beliefs of the key people to amalgamate into the organisational fabric and vision. Colins gives the following example to illustrate this:

"
Take David Maxwell’s bus ride. When he became CEO of Fannie Mae in 1981, the company was losing $1 million every business day, with $56 billion worth of mortgage loans underwater. The board desperately wanted to know what Maxwell was going to do to rescue the company. Maxwell responded to the "what" question the same way that all good-to-great leaders do: He told them, That’s the wrong first question. To decide where to drive the bus before you have the right people on the bus, and the wrong people off the bus, is absolutely the wrong approach.
"

Once the leadership and culture in an organisation is established it will be very difficult to change. It is often easier to change the leaders (the people) than change the leaders (the behaviour). Wall Street Journal editor Jack Falvey observed this very well when General Motors invested more than three million dollars on a program called "Leadership Now". He wrote: "They will discover soon that they can’t spend their way into instant leadership".

Most organisations will not just look for a skill set but for people whose character and personality fit within their organisation, at a particular point in time. This was one of the reasons Google announced in January last year that their CEO Eric Schmidt, who had been in charge for 10 years, would step down and Larry Page would become the CEO again. Larry Page cofounded the company in 1998 with Sergey Brin. Eric Schmidt had done a fantastic job and financially Google had a very strong balance sheet. However, Google’s reputation as being on the technology edge, started to erode. Competitors like Facebook, Yahoo, Twitter and Apple were starting to eat into Google’s user base and associated advertising dollars. A good balance sheet was not good enough and the board believed that Page could bring back the reputation Google once had.

Communicate your story

Smart leaders know that their reputation can help drive value into their company. When you clearly understand your personal story, and know who you are, then you will need to find out how to communicate your story. If you communicate well and you are aligned with the right organisation, then the results will be surprising. But how do you get the communication right as a leader?

Brain activity scans have shown that people who receive information that contradicts their current beliefs (cognitive dissonance), activate the emotional centers of their brain. This does not happen with information that supports their current beliefs. Once people arrive at a conclusion that makes them emotionally comfortable then the reward and pleasure centers of the brain show increased activity, which reinforces their original beliefs. This phenomenon is called the confirmation bias.

This means that trying to persuade people based on logical reasoning and abstract concepts might not be the best way to go from the outset. This approach is likely to enforce people’s current beliefs, good or bad. You better have a good story that engages people at the emotional level. Let’s illustrate this with an excellent example, the story of Al Gore.

In 2000, when Al Gore ran for president, he failed to connect with his people. He didn’t have an emotionally inspiring campaign and used abstract arguments to make his case. Also, his body language, which was perceived as quite aggressive, didn’t help him and he lost the election.

This is in stark contrast with his authentic approach in his movie "An Inconvenient Truth" in 2006. This is where he connected with the audience at an emotional level, instead of reading scripts prepared by his campaign team. He used engaging stories that captured the imagination of the audience. Authentic and sincere stories about his family, his life and what the environment meant to him personally. Between 2000 and 2006 he had learned how to emotionally connect with his audience. His body language was confident and calm with dry humor about himself. He had found his own personal story, a way to communicate it, and an environment where this would provide the most value.

Next steps

Your value as a leader is strongly connected to who you are. It is not just about the skills you have but more about who you are. Everybody is unique and understanding your own personal story can help you create great value for your organisation. It can also help you find the right place in an organisation. Or it can help managers to identify untapped potential (value) that they can leverage. However, you will need to be able to communicate your story in a clear and unambiquous, authentic way. People will immediately notice when you are inauthentic. It’s the same as a lie; the truth will always catch up. Knowing your unique personal story, and connecting to it, can add another valuable dimension to your journey to become a great leader.

"Leadership is a deep journey into yourself" – Jeff Immelt (CEO GE)

What is leadership coaching?

For this article I will use the following definition of leadership coaching:

“Leadership coaching” is a one-on-one leadership development agreement between an independent professional coach and an individual client to accelerate the client’s journey to become an excellent leader.” - NEO

This definition implies some important differences with other definitions of leadership coaching you may have encountered. I use the term “client” as this implies a formal contractual relationship between the coach and the person who is coached. This also highlights the difference between internal managers who coach their employees, and external coaches that don’t have authority or confidential relationships with employees. Despite the fact that an organisation often provides the context for an agreement, the focus should be foremost on the individual and not just on the organisation. Leadership touches all aspects of your life, not only your professional environment. You cannot just switch off your behavior at the corporate door.

Coaching is not something that just happens to you or that can be forced onto you by an organisation. You must have a strong desire to learn, grow and spend the time and energy to succeed. Leadership development is a lifelong journey and at times you will be disappointed. Coaches are committed to help you make the journey and have a deep dedication to help you grow and realise your dreams.

Matching Coach and Client

There are many coaches that you can choose from and many use a different approach to coaching. You will need to find an approach that fits your view of leadership growth and also reflects your current situation. For example, if you are a CEO close to your retirement you may want a coach to help you deal with leadership succession. You may also be part of a large corporation that wants managers being coached to become future senior leaders. Or you may want to opt for a new leadership position outside your organisation and prepare for a career transition. Each situation will generate different developmental goals and will demand a different approach to coaching.

Not only is your situation is important, but also the style of coaching that fits you as a person. Personal characteristics, such as cultural background, customs, moral and ethical norms, preferences in learning styles, personality traits, aesthetics, experience with coaching, values, beliefs and attitude, are all important factors in finding the “right” coach and coaching style.

For example, you may have heard of Neuro-linguistic Programming (NLP) as a valuable approach to becoming a better leader. Emotional Intelligence, popularized by Daniel Goleman in the 90s, is another approach that has seen considerable growth in the last decade. You may want to focus on behavioral aspects without psychodynamic thinking and revert to the behaviorist approach, which focuses only on the behavior that can be observed and manipulated without looking at the underlying motives. If you have a religious background you may want a coach that puts leadership in the context of your religion. Cognitive perspectives are other widely used approaches in clinical and counseling psychology, which focuses on internal mental processes and rejects introspection.

So shortly, there is a wide spectrum of coaching approaches available and you will need to find the approach that fits your personality and situation.

But we are still not there. The key foundation of a successful coaching experience comes down to your individual relationship with your coach. This should be a relationship of trust, confidentiality, collaboration, encouragement, intensity, commitment and action. So let’s have a look at the role of the coach.

The role of the coach

Coaches are facilitators that allow you to see new perspectives and gain clarity about your own emotions, thoughts and behaviors, related to your situation and social context. The coach will help you identify choices and solutions. Your coach will not be directive, which is one of the differences with consultants who will give you advice on what you should or should not do. Usually the coach will lead you through the coaching process while you have to lead the change yourself (self directed learning). The coach will not have formal authority over you but there will be an agreement in place between you and the coach that facilitates accountability and guidance through the process. Obviously, the conversations with your coach are private but the process is transparent and may be shared with your organisation. Especially when your organisation is the initiator of the coaching engagement.

The coaching process

Coaching is an experience-based process. Compare this with how you learned as a child. When you learned to bike you probably fell over a few times and hurt yourself. Instead of explaining the rules of gravity to you and give you a range of solutions, a coach would show empathy, ask open questions, listen, talk about the experience and encourage you to find your own solutions to stay on the bike. The child’s agenda is key here and it is not the agenda of the coach that leads. The challenge of the coach is to facilitate the formulation of your agenda and then translate it to action and accountability.

What can you expect from coaching

Coaching can deliver a variety of outcomes. Many of these outcomes will relate to you personally, as this is what coaching is about. However, the personal benefits usually translate into an organizational impact. This is why a coach is often brought in by HR to help realise an organizational transformation.

The most common personal outcome is an increased awareness and self-knowledge. This provides clarity about your goals and how you can make changes to achieve these. This also allows you to take ownership and responsibility of your own decisions and slowly you will build up confidence and self-belief. You will be given the space to experiment with, and reflect on, your knowledge, emotions and behaviors. The coach is there to clear up any blockages in your leadership development journey. She will ask you to step back and look in the mirror to see your life in proportion and encourage you to take new perspectives. Once you are able to make decisions with clarity of purpose and aligned with your inner world, you can move forward. This will also have an impact on your mind and body. You will feel more optimistic, in control, and your energy levels will be higher. The coaching process is exciting and you will uncover new opportunities that will give you renewed energy. Coaches will channel this energy to change your feelings and behaviors for long lasting impact.

Leadership coaching will have a variety of benefits for an organisation, such as increased engagement and commitment, higher productivity, stronger culture, increased risk-taking and creativity, and healthier employees. Productivity is one of the most attractive measurable outcomes for organisations. Even a small increase in productivity would have a large impact on the bottom line because salaries are usually fixed costs, which means that productivity immediately drops down to the bottom line. But it is not only about improving the current environment. Excellent coaches will encourage you to explore the impossible that you carry within you and stretch your mind and skills to reach it.

Are you ready to be coached?

Not everybody is coachable and professional coaches will go through an exploratory session with you to make sure that you will get the benefits of your coaching experience. Many top coaches will not coach you if they consider you as non-coachable. Not everybody is ready to be coached. There can be a few serious obstacles that can make or break the coaching experience.

First of all you need to be committed to the coaching process. Coaching is a major effort from the coach and the client over a long period, with many ups and downs. If you have no intention to put in a lot of effort then the coach will lose interest and put her energy somewhere else. Coaching should be seen as a great opportunity to become a better leader and never seen as a punishment for dysfunctional behavior. The more active you are involved the more you will get out of it.

Unrealistic expectations are another major cause of failing coaching experiences. Behaviour is very difficult to change and there is not a quick solution for it. Many weight-loss programs promise to turn you into a beautiful swimsuit model overnight. They fail to tell you that weight-loss, like leadership development, is about changing our habits, which takes tremendous effort to achieve. Discuss your expectations with your coach and make sure they are realistic and achievable.

Another serious roadblock is defensive behavior. Such as blaming everybody else for things that don’t go well, so that we don’t have the carry our own responsibility. Or denial, such as filtering performance feedback for favorable information and discard other information, which distorts our view of reality. For coaching to be successful you need to be brutally honest about your strengths and challenges. Putting up defenses will limit a coach’s ability to help you. These defenses may not always be at concious level but may be unconciously build up during your life.

You can’t do the coaching in isolation with your coach. You are part of a social environment and feedback from people in this environment is essential. Your managers, peers, subordinates and family are valuable resources that can provide additional insights into your behavior and its impact. You will be surprised how helpful they can be in the process. The majority of people respect someone who admits his or her shortcomings and wants to improve.

Next steps

Behind almost all great leaders is a great coach. A coach can provide tremendous value in your path to become a great leader. Coaching is intensive and can be confrontational because it reaches into our thinking, feeling and behaviour, but it opens up possibilities for change that you may not have realised before. It can add another valuable dimension to your journey to become a great leader.

In my last article “Leadership – Value Creation”, we discussed the responsibility of leaders to make decisions that create value for an organisation and manage risk. Shareholders who invest in companies want to have a level of confidence that companies create value and that they get rewarded for their investments. Unfortunately, this is not always the case.

The failure of Lehman Brothers and the near collapse of insurance company IAG in 2008 was the start of the US economy going into a deep recession.

The American Financial Crisis Inquiry Commission, a national commission that examined the causes for the Global Financial Crisis (GFC), concludes that; “dramatic failures of corporate governance and risk management at many systemically important financial institutions were a key cause of this crisis.”

This shows the importance of proper corporate governance. In this article we will briefly discuss the topic of corporate governance and the impact on value creation.

Why Corporate Governance?

The Latin root of Governance is “gubernare”, which means to steer. Corporate governance deals with the way companies are directed and controlled. Although corporate governance has attracted new attention as a result of the GFC, it has been around since the first enterprises where listed on a stock exchange about 400 years ago. The first enterprise ever listed on a stock exchange was the Dutch East India Company. They raised 6.45 million guilders from more than one thousand people. It was at this time that the first corporate scandals emerged as well.

Lehman Brothers, Enron, WorldCom, and AIG may be fresh in your memory but the directors of the Dutch East India Company kept financial results secret; shareholders had no influence on how the company was run; and the board refused to pay dividends. Moreover, the directors and insiders enjoyed high “executive pays”, which had an impact on the already negligible returns. Shareholders lodged a petition in which they criticized VOC (Dutch East India Company (Vereenigde Oost-Indische Compagnie, VOC)) of squandering of investor capital, which escalated. In the end, the Dutch government intervened to protect the VOC directors (this might have been the first bail out), and they also convinced them of putting rules and regulations in place to protect directors from investors in the future. Many big corporate failures have followed since, and after each failure, investors have demanded better governance to protect them against future reoccurrence.

So shortly, there are two key stakeholders in corporate governance, those who own or invest in the company (shareholders) and those who run the company. Those who run the company can act in their own interest instead of the shareholders, and they can take advantage of the company’s shares that are subject to speculation. This is exactly what happened in many failed companies. Corporate governance organizes the accountability between owners, the board, and management.

Governance frameworks

As a result of the Enron, WorldCom and Adelphia failures, and the associated loss of confidence in the market, the Sarbanes-Oxley Act was passed in 2002. This was a very radical change to the US securities law that impacted all companies listed on US exchanges. The US took a “comply or die” principle to corporate governance and implemented a rigorous set of legal sanctions for non-compliance. For example “\\\\\\\"Chief executives who certify false accounts face prison terms of between ten and twenty years, and fines of $1–5 million.\\\\\\\"

As a response to the Sarbanes-Oxley Act the individual countries of the European Union took a different approach to governance. Within the EU and wider OECD 29 voluntary corporate governance frameworks have been implemented that are based on the “comply or explain” principle. This principle was adopted by the UK when they developed a new approach to corporate governance as a result of the Maxwell scandal in the late 1980s.

Investors or financial analysts are able to assess how well an organisation is managed by reviewing the annual financial reports. The differences in financial accounting standards in various countries made it difficult to compare companies across national borders. To avoid loopholes for companies and investors, and to be able to compare companies globally, financial reporting has been streamlined. In 2005, more than 7,000 companies across the EU adopted the International Financial Reporting Standards (IFRS) that contributed to the alignment of financial reporting and internal controls. Moreover, there is ongoing effort to align the US Generally Accepted Accounting Principles (GAAP) with IFRS. This will facilitate further integration between auditing, risk management and corporate governance globally.

Corporate governance structure

So how is accountability between owners and managers structured in corporate governance? Who are the key parties and what are their roles? A typical governance structure consists of:

• The owners (shareholders),
• The directors (board of directors), and
• The CEO (management).

The Directors

The shareholders elect and delegate oversight of the company to the directors, who act as fiduciaries. Directors oversee the company’s business on the shareholders’ behalf in the best interests of the corporation. Directors must be independent of the management they hire and oversee. This will give the shareholders confidence that the board can carry out their responsibilities effectively.

The Shareholders

Shareholders own shares in the company and are the owners. They do not have direct control over their company. In fact, due to the large number of shares in many corporations, individual shareholders have often very limited power unless they are “blockholders”. Blockholders are shareholders who hold 5 percent or more in a corporation’s stock. Blockholders, such as institutional investors, often have an incentive to monitor the board and management. They also may have more resources and abilities to effectively monitor the corporation.

The CEO

The CEO is hired by the board and is responsible for the day-to-day management of the company.

Governance problems

The board should be focused on the long-term interests of shareholders and should be independent. Instead many directors had a focus on the next quarter’s earnings. Increasingly, companies took more risk in the short term, often reinforced by compensation packages that fueled this behavior. Independence in boards is a rare occurrence, especially where the chairman of the board is also the CEO.

Sarbanes-Oxley is mainly focused on financial reporting and internal control. It doesn’t cover the relationship between the board of directors and the shareholders. This leaves the board structure fairly open in the US where we often see the role of CEO and Chairman of the board combined. Most governance frameworks in Europe, except France, don’t allow the same person in charge of the board and the company.

It is the role of the board to make sure that the organisation is managed for long-term sustainable value creation for shareholders. Too often boards have allowed greedy CEO’s with obscene pay packages to deliver mediocre business results. Independence of directors is also challenged when considering directors’ compensation. If this compensation is part of a directors’ annual income then it will be unlikely that the director will challenge the CEO or other directors.

Limitation of governance frameworks

Strengthening board independence and establishing strong board oversight is at the heart of current corporate governance reform. It is impossible to create a governance framework that covers every critical discretionary decision in a private enterprise. People will always find holes in regulations and this is exactly where independent directors have a responsibility to direct strategy, monitor performance, and control risk.

Corporate governance and value management

Good corporate governance with better oversight and transparency is likely to increase managers’ investments in projects that create maximum value. They will also be more efficient in operations and fewer resources will be wasted on non-value creating activities. Also investors are likely to accept lower returns, as the perceived risk as a result of good governance might be lower. Hence, the company will have lower cost of capital, which improves financial performance.

Corporate Governance and leadership

The short-term focus of CEOs often goes against the long-term interests of shareholders. It also has an impact on the rest of the organisation, which consequently focuses on short-term initiatives. The GFC has increased the focus on corporate governance and shareholder value. Going back to my article on “Leadership – Value Creation” we know that, as a leader you will have to make many decisions that either create or destroy value. These decisions are roughly in two areas; you have to decide what you are going to invest in for maximum value creation and decide on the right capital structure to finance these investments. Reform in governance practices will encourage directors and executives to continually assess whether management enhances shareholder value, and to take corrective action if they are not.

As a leader you will need to have a good understanding of corporate governance as it impacts everything an organization does.

A weak IT strategy can be costly and wasteful, especially for resource-constrained organizations that operate with minimal budget, tools, knowledge and people. It also implies that organizations cannot respond to changing business requirements rapidly enough. The absence of strategic anticipation causes organizations to be inefficiently reactive, forcing them to work in a constant state of catch-up.

An IT Strategy should answer the following questions:

• Are we doing the right things with technology to address the organization’s most important business priorities and continuously deliver value to the clients?
• Are we making the right technology investments?
• Do we measure what is the real value to the organization derived from that technology?
• Is our current Information Technology agile enough; flexible to continuously support a successful organization?
• Is our Information Technology environment properly managed, maintained, secured, able to support the clients, and is it cost effective?
• Can our strategy support current and future business needs?

Quite often the first thing we should consider when writing such a document is the targeted audience and its content. Different people with varying roles and responsibilites may read an IT Strategy within a company, so the document may need to serve several different purposes. It is not easy to pitch a strategy to different levels in the hierarchy within an organization, and at the appropriate level of detail. Sometimes it is too detailed and does not always match the stakeholder’s needs.

An IT Strategy is an iterative process to align IT capabilities with the business strategy and requirements:

• It is a documented and approved process (part of the organization’s governance framework)
• It is iterative (it needs to be frequently be revisited). Traditionally, IT strategies are updated and communicated on an annual basis, usually to meet budget cycles. This should be considered the minimum review period. If an emerging technology surfaces that has the potential to enhance the business, it should be investigated and communicated to the business as soon as possible. A one-year cycle may be too late.
• It is a strong alignment of business and IT capabilities rather than designing IT solutions to support business requirements
• Assuming that both business and IT capabilities drive each other
• Assuming that business drives IT and not the other way around
• The IT Strategy sets future direction for IT function in the organization
• Ensuring that the IT budget is spent on value creation activities for the business
• Creating shareholder value
• Helping to maximize the return on IT investments
• The IT Strategy may include sub-elements such as:
• Infrastructure strategy
• Application strategy
• Integration strategy
• Service strategy
• Sourcing strategy
• Innovation strategy

This pyramid diagram can be used to illustrate the IT strategy and vision, and how the technology and business strategies are totally aligned. At the top of the pyramid is the enterprise overarching vision. Aligned below that is how IT supports the vision by becoming a premier IT organization in creating competitive advantage for the clients. The IT vision is in turn supported by three pillars: integration, improvement, and innovation.

To deliver this, the business strategy should clearly be articulated and documented taking into account some IT aspects. There are different ways of gathering these business inputs.

The first approach is a very classical one where you develop a questionnaire in business terms which asks each business unit to identify their future requirements for infrastructure growth, taking into account capacity and availability requirements. This extracts the data you need for business driven strategy.

This questionnaire may include some of the following examples of questions:

1. What are your top 5 business “pain” points? These are things that you wish you had a solution for
2. What are your top 5 business objectives? These can be short term or long term, can be driven by revenue, cost, time, time to market, competitive advantage, risk or various other reasons
3. How do you plan to achieve these objectives?
4. What will we gain by leveraging IT Capabilities across the business?
5. What is in the way of achieving your business imperatives?
6. Can IT help achieve your business imperatives?
7. How much do you spend on IT capabilities?
8. What is your technology ROI?
9. Does your company have a plan for technology?
10. Does your business plan include a technology plan?
11. Where is IT being used across your business unit?

The second approach would be the use of Enterprise Architecture that I will explain later on.

With this input you may now start to consider the structure of your document. It may look similar to this example below:

An executive summary

• An introduction
• The purpose
• The background
• The Business drivers
• The Organizational drivers
• The IT drivers
• The Business and IT aspects
• The Business Goals and Objectives
• The IT approaches and principles
• The IT components
• Business application systems
• IT infrastructure
• Security and IT Service continuity
• Structure, organization and management
• IT Governance
• Skills, knowledge and education
• IT Financial management
• KPIS, measurement and metrics, balance scorecards
• Technologies opportunities
• Key issues

And this is where Enterprise Architecture may have to play an important and even crucial role. Some companies I have encountered have an Enterprise Architecture team, and in parallel, somebody called an IT Strategist. Frequently the connection is non-existing or quite weak. Other organizations may also have a Strategic Planning unit, again without any connection with the Enterprise Architecture team.

An Enterprise Architecture must play the important role of assessing; existing IT assets, architecture standards and the desired business strategy to create a unified enterprise-wide environment - where the core hardware and software systems are standardised and integrated across the entire organisation’s business processes, to greatly enhance competitive advantage and innovation. The IT Strategy details the technologies, application and the data foundation needed to deliver the goals of the corporate strategy, while Enterprise Architecture is the bridge between strategy and execution; providing the organising logic to ensure the integration and standardisation of key processes that drive greater agility, higher profitability, faster time to market, lower IT costs, improved access to shared customer data and lower risk of mission-critical systems failures.

As a real example, TOGAF 9 is perfect way to produce that IT Strategy document during the Phase F: Migration Planning.

Below you will find the relationship between some phases of the ADM and the structure of the above document. It needs to be said that we should probably use a Strategic architecture level to deliver a first version of the document, which then could be reviewed with Segment or Capability architectures.

The next step would be the review of the IT Strategy document by the main stakeholders who would accept or reject technology opportunities. This could also be used as an important source of information for the Strategic Planning exercise (please refer to another article for additional information: “How Strategic Planning relates to Enterprise Architecture?“).

Once the IT Strategy has been reviewed, amended and authorised (which should in reality already be approved, as it is the result of various ADM cycles and the output of Phase F: Migration planning), the multi-disciplinary programme team for the implementation during Phase G: Implementation Governance, will deliver the solutions to the business.

As already mentioned previously, the outline strategies will be refined and expanded with a low level of detail when addressing Segment and Capability architectures. This is the part that meets the first challenge described above, where we need different levels of detail for different stakeholders. The documents should be hierarchical, with the ability to drill down to lower levels as more detail is required.

One of the main reasons for developing an Enterprise Architecture with TOGAF 9 is to support the business by providing the fundamental technology and process structure for an IT Strategy. Enterprise Architecture is the superset that represents both Business and IT Strategy; this is reflected in Enterprise Architecture’s basic structure of strategy, business architecture and technology/information architecture. One can certainly do an IT Strategy without Enterprise Architecture, but Enterprise Architecture cannot be done without an IT Strategy; the same would apply to business strategy/business architecture.

Pragmatically it corresponds to a group of various services intended to help businesses communities. BTM can include different methods such as IT planning, Project and Portfolio management (e.g. PMI, Prince 2), Balance Scorecards, Business support, Database services, disaster recovery, network management, security, document service, and frameworks. BTM delivers a set of guiding principles known as capabilities and defines the expected characteristics of an organization according to five levels of a maturity mode like CMMi. While these methods/methodologies have recognized strengths, they represent a piecemeal approach. There is a need to integrate these capabilities to achieve that strategic business technology alignment because most of these methods do not really focus on the goals and objectives of an enterprise. Balance Scorecard is a performance measurement methodology, Six Sigma or Lean are quality improvement methodologies mostly used in manufacturing, and so on...

BTM may sound like an evolved IT governance concept, where business and IT are in tune in an effort to support and realise the enterprise strategy. But does it really differ from an Enterprise Architecture which sometimes may also be considered as being the glue between various methods/methodologies?

Some questions may quickly arise...Is BTM just “better IT Governance” or simply a different way of naming an Enterprise Architecture? And does TOGAF® support BTM? BTM like Enterprise Architecture aligns activities which remain pure business and some pure technology, but most activities intertwine business and technology such that they become indistinguishable. It also guides and supports enterprises to these various states.

The precepts of Business Technology Management have been developed and refined by BTM experts working with such think tanks as the BTM Institute and the International Institute of Business Technologies (IIBT).

Business Technology Management addresses four critical dimensions of enterprise-wide strategy.

1. Process

This first dimension refers to the institution of a set of robust, flexible and repeatable processes, broadly defined as:

• General quality of Business Practice: Doing the right things
• Efficiency: Doing things efficiently, quickly with little redundancy
• Effectiveness: Doing things well

The TOGAF® 9 ADM is an example of such processes with its associated governance framework.

2. Organisation

Management processes are more likely to succeed when it refers to the establishment of appropriate organisational structures, establishing a structure in which every member understands the scope and responsibilities of his or her role, and decision rights. Something perfectly addressed during the Phases Preliminary and A of TOGAF®.

Organizational structures may include

• Participative bodies involving senior level business and technology participants on a part-time but routine basis (e.g. Business Technology Investment Board). TOGAF® suggests the creation of an architecture board who participate with the key business stakeholders.
• Centralized bodies requiring specialized dedicated technology staff (e.g. PMO).
• Need-based bodies involving rotational assignments dealing with particular efforts (e.g. PMO, Project Management teams).

Both last bodies would be identified during Phase F: Migration Planning and Phase G: Implementation Governance

3. Information

Valid, effective, timely provision of information is a prerequisite in effective decision making. Information must be delivered in a way that is comprehensible to non specialists as well. Data and metrics must be available. This would be addressed by the Communication Plan defined in the TOGAF® Architecture Vision’s phase taking into account the stakeholders needs, the communication mechanisms and timetable. Measurements and metrics may be included for strategic and operational objectives.

4. Technology

Effective technology can help connect the other three dimensions. The idea is that technology plays a vital role in all processes and can enable timely information sharing, improve co-ordination between members of an organisation and makes processes easier to execute. This covers automation of tasks, reporting, analytics and integration between management systems. In Enterprise Architecture, this would be covered by the interoperability requirements identified by the business and the identification of appropriate solutions in the TOGAF® Phases E and F, such as BPM suites and BI products.

Business Technology Management (BTM) Capabilities

A BTM capability is defined as a competency achieved by combining each of the above dimensions and creating repeatable management processes that are executed with the appropriate organizational structures, using an effective information architecture.

Business Technology Management defines 17 of these specific capabilities, each grouped into one of four functional areas.

Governance and Organisation: These capabilities are focused on the enterprise’s CIO and business executives concerned with enterprise wide governance of business technology. It ensures that business technology decisions are effectively identified and executed, meet the needs of the business, manages the risk and give proper consideration to regulatory, legal and industry requirements. TOGAF® addresses all of this in the Preliminary Phase and the Architecture Vision, where an enterprise architecture governance framework is created.

Managing Technology Investments: This sits with PMO and business executives who are concerned with the selection and execution of the right business technologies initiatives and fulfil their objectives. The enterprise understands its current IT capabilities, what is currently available and what it is working on for the future. This is equally addressed during the Phase F: Migration Planning.

Strategy & Planning: These capabilities ensure that the CIO and business executives make the most appropriate moves to synchronise technology and business, both reducing complexity and planning for future developments. Enterprise Architecture and TOGAF 9 undoubtedly support these capabilities; you may refer to the previous article How Strategic Planning relates to Enterprise Architecture.

Strategic Enterprise Architecture: This capability must be developed to support this functional area, ensure that appropriate information and documentation exists that can describe current and future business technology environment within the enterprise. As we observed, TOGAF® as an Enterprise Architecture framework includes most of the capabilities mentioned above!

The BTM Maturity Model

A maturity model describes how well an enterprise performs a particular set of activities. These capabilities are useless without a method by which to measure their effectiveness. The BTM Maturity model is aligned with the de-facto standard from CMMi and use the five levels of maturity of all the four dimensions. Here again the Architecture Capability Maturity Model from TOGAF® 9 may be used to evaluate these capacities. We would identify the area most in need for improvement.

Level 1: enterprises execute some strategic business technology management processes in ad-hoc way. These enterprises typically manage processes in a simple task-based manner.

Level 2: enterprises attempt to assemble information for major decisions, and refer to IT on decisions for technology implications.

Level 3: enterprises are ‘functional’ in BTM.

Level 4: enterprises have achieved full BTM implementation. Their capabilities ensure that there is strong alignment between business and technology decision making.

Level 5: enterprises have achieved the ‘Holy Grail’ of BTM. They are good enough to know when to change the rules to maintain strategic advantages over competitors.

To implement its business strategy, the enterprise requires particular operational capabilities as described above and clearly it appears that Business Technology Management can be supported by Enterprise Architecture. TOGAF® 9 is in reality addressing all of these 17 BTM capabilities grouped in functional areas, identified by the four dimensions and work as a management framework to clarify required enterprise business needs. Companies having implemented BTM should consider using TOGAF® 9 as the way of rightfully pursuing alignment of technology with the business and support a Business-Agile enterprise.

The Situation

The Federal Enterprise Architecture (FEA) has well defined reference architectures which are readily understandable by architects familiar with such frameworks as Zachman and the Department of Defense Architectural Framework5 (DODAF). The Federal CIO Council has provided high level advice on process in its FEA Practice Guidance and the Federal Segment Architecture Methodology (FSAM).

However, the frameworks and process guidance by themselves do not seem adequate. Architecture teams are spending much too much time in unnecessary planning because they lack process information at the proper level of granularity. Architects lack a common language with which to speak to vendors, consultants and even among themselves as EA teams.

A Potential Solution Augment Federal EA practice with TOGAF

The Open Group Architecture Framework (TOGAF) is rapidly growing worldwide. Eighty percent of Fortune 50 corporations have adopted TOGAF as their architecture framework. Four hundred entities within the UK government use TOGAF, with three of the largest ministries making the heaviest use. In the United States, New York State has recently committed to TOGAF. Given this success, architects working within the Federal government may wish to consider using TOGAF to supplement the FEA Practice Guidance and the FEA.

The uptake of TOGAF is a direct result of its ability to address specifically those difficulties faced by architects attempting to work with the FEA. The TOGAF Architecture Development Method (ADM) is a well defined, granular process which guides architects through major phases (and steps within each phase) with objectives, inputs and outputs clearly specified. Artifact templates and examples are available. TOGAF provides a common language with which team members from diverse backgrounds can communicate. Communication with vendors and consultants is also greatly simplified.

TOGAF maps well to the FEA, the FEA Practical Guidance and to FSAM, and some popular EA tools have both FEA and TOGAF modules. The TOGAF ADM can also be mapped to DODAF. A proposed mapping has recently been provided in an Open Group white paper₁ . This is significant because many architects working with the FEA have had previous experience with DODAF.

This paper will discuss both TOGAF and US Federal EA practice at a high level, and then use the Vision and Business Architecture Phases of the TOGAF ADM to show the potential value of TOGAF in describing government business architecture. The approach will be descriptive rather than critical, as a way to open discussion on the subject.

What is TOGAF?

The Open Group Architectural Framework actually has very strong Federal roots. The U.S. Department of Defense (DOD) developed the Technology Architecture For Information Management (TAFIM) in the 80s. Deciding to retire TAFIM in the early 90s, DOD approached members of the EA community because DOD thought the intellectual property was valuable and worth maintaining. The Open Group accepted and renamed TAFIM. It released the first version of TOGAF in 2001.

TOGAF is maintained and updated by a consensus process in The Open Group’s Architecture Forum. TOGAF Version 8 was released in 2006, updating TOGAF from a technology architecture to an enterprise architecture with much greater emphasis on understanding business imperatives before developing more technical architectures. Version 9, released in 2009, increases this business orientation and provides further process and content detail.

The Architecture Continuum

In producing architectures using TOGAF, the architect proceeds from a very generic Foundation Architecture (e.g. the five reference models of the FEA) to a very specific organization architecture (e.g. the Grant segment architecture of a specific agency). The work proceeds through what TOGAF calls the Architecture Continuum, narrowing the Foundation Architecture by looking at Common Systems Architectures (e.g. email or security architectures) and vertical industry architectures (e.g. housing or finance industry architectures). Architects find building blocks (depicted as blocks in figure 1) as they proceed through the continuum and assemble them into their own Organization Architecture.

Figure 1 - TOGAF Architecture Continuum

The Architecture Development Method

The actual means of choosing and assembling these building blocks – of proceeding through the continuum – is the Architecture Development Method. The ADM begins with a Preliminary Phase in which architects set up the overall architecture program and goes into cycles of eight phases in which individual architecture projects (e.g. a data center consolidation or the grant segment architecture for a particular agency) are undertaken (figure 2 ).

Figure 2 - TOGAF Architecture Continuum

The Content Framework

One of the innovations in TOGAF 9 is the addition of a Content Framework, which is tied both to an explicit metamodel and to the well proven ADM. Federal TOGAF users gain considerable leverage by linking the ADM to the Reference Models of the FEA and will be able to more easily and flexibly create metamodels. They can also tie artifacts defined in the Content Framework to their own metamodels and to the phases of the ADM as they populate their versions of the five Reference Models of the FEA. Because the TOGAF Metamodel is modular, it is ideally suited to assisting architects to define and model within segments.

Looking at the Metamodel will help aid understanding of the final presentation of the content framework.

Figure 3 - TOGAF Metamodel

The Metamodel is closely related to the ADM. Figure 3 shows how the highest level building blocks map into the structure. This is useful to Agency architects because it is consistent with component-based architecture, an essential element of Federal EA practice.

Figure 4 - Modularity of the TOGAF Metamodel

The modularity of the TOGAF Metamodel also helps achieve component‐based architecture. Figure 4 shows how the core of the Metamodel can be augmented by extensions. If your Agency is doing a SOA implementation, then adding the ‘Services’ and ‘Governance’ extensions may help you develop a workable metamodel without using every possible element.

In this Taxonomy of Views diagram (Figure 5), all artifacts described in TOGAF 9 are mapped to the Phases of the ADM and to Core and Extension portions of the Metamodel. It gives the architect a starting point from which to add Federal or Agency specific artifacts.

Figure 5 - Taxonomy of Artifacts

Using TOGAF for Enterprise Architecture in the Federal Government

This section describes how EA teams can use the TOGAF ADM to develop and implement FEA‐based architecture projects within Federal Agencies.

Many architects see EA in the Federal Government as comprised of the five reference architectures published in 2007 as the Consolidated Reference Model 6(CRM). Although these models are central to architecture in the Federal space, other structures and processes are also important. In terms of structure, the Federal Enterprise Architecture Framework, based closely on the work of Zachman and Spewak, provides high level guidance. The FEA Practice Guidance, published in 2006, gives process advice, also at a high level, and fits the FEA into the context of other activities such as capital planning. Federal bodies, notably Department of Interior [DoI), have created more granular process descriptions, and templates for many artifacts. DoI’s Methodology for Business Transformation (MBT) forms the basis for a cross‐agency initiative called the Federal Segment Architecture Methodology (FSAM).

Federal Enterprise Architecture

“Led by OMB, the purpose of this effort is to identify opportunities to simplify processes and unify work across the agencies and within the lines of business of the Federal government. The outcome of this effort will be a more citizen‐centered, customer‐focused government that maximizes technology investments to better achieve mission outcomes.”

The FEA defines five Reference Architectures as shown in Figure 6. Like TOGAF, the approach is business‐driven and component‐based (TOGAF building blocks are similar in concept to FEA components).

Figure 6 - FEA Reference Models

Mapping the FEA Practice Guidance to the TOGAF ADM

The FEA Practice Guidance provides a high level process which is expressed in the upper portion of Figure 7. The Phases of the TOGAF ADM map directly to this process as shown in the lower portion of the diagram. If EA teams within an Agency are in the position of having good management support, they will be able to use the ADM to create a high level roadmap to a future state for the entire Agency. Fortunately such a roadmap is required by the White House Office of Management and Budget (OMB). Agencies are assessed yearly against its presence and quality. After describing this roadmap, the EA team would then begin a number of targeted projects, using the ADM, which either describes segments of the Agency EA or some high value project at a lower level.

Figure 7 - Performance Improvement Lifecycle FEA Practice Guidance

Mapping FSAM to TOGAF

The Federal Segment Architecture Methodology (FSAM) promises a practical path to guide agency architects as they develop segment architectures. The TOGAF ADM, with its accumulation of industry best practices, offers a level of process detail that can save FSAM implementers planning time and result in architectures and solutions that are more responsive to agency strategy. The TOGAF Content Metamodel, new in TOGAF 9, offers touch points to FSAM regarding content. It describes more than fifty discreet artifacts (each having variations) that map to the metamodel and to the ADM.

The conceptualization of segments in TOGAF 9 (Figure 8) helps show how segments fit into the overall EA effort of an agency or department. The cube represents the whole of an agency’s EA. The top level is a strategic overview of the EA, including all subject matter and through the full planning horizon ‐ but at the shallowest level of detail. The Segment level looks at chunks of subject matter at a high level of granularity. It also looks at ‘as is’, ‘to be’ and ‘transitional’ states for the segment. All of this is done at a deeper level of detail than the strategic architecture. The lowest level is that of Capability (FSAM calls this level “Solution”). This is closely tied to the notion of Capability Based Planning, already in use by agencies such as FEMA. Subject matter within segments is described here, so granularity is lower. ‘As is’, ‘to be’ and ‘transitional’ states are described. The level of detail is much more granular.

Figure 8 - Architecture Landscape

Figure 9 shows how a first high level, strategic sweep of the agency using an ADM cycle, spawns several cycles describing Segments. Although these Segment cycles are shown in the diagram as being ADM cycles, they could just as well be FSAM cycles. These FSAM cycles can be modified to make maximum use of the accumulated experience of TOGAF. The Segment cycles then spawn Capability cycles, using the ADM again.

Figure 9 - Using the ADM at 3 Levels

The ADM should be considered for both that Strategic sweep (a cycle which few agencies ever get around to doing) and for the architecting of Capabilities, whether these be ones discovered during the Segment definition, or are \'low hanging fruit\' that are described to meet specific stakeholder concerns. Describing segments themselves can be done using FSAM, tailored with TOGAF specifics.

There are two approaches to using TOGAF with FSAM.One is to use the FSAM five steps as the basic model and map the ADM and the Content Metamodel to it. The other is to use the process of the ADM as the basic process model (already mapped to the Content Metamodel) and map the five FSAM steps to it. The former approach will fit almost all agencies. Figure 10 shows a high level mapping of the ADM to FSAM.

Figure 10 - Mapping FSAM to the TOGAF ADM

Using TOGAF to Describe a Federal Business Architecture

TOGAF can be used to describe any of the five FEA domains. This section shows how Phases A and B can be used to describe an agency’s business architecture at the strategic, segment or solution level, aligning with the agency’s BRM. Although it is beyond the scope of this paper, these ADM phases can be mapped in detail against FSAM Steps 1 and 2. When implementing FSAM, it may be a good practice to cross check against the TOGAF ADM steps in the corresponding Phases.

To focus the discussion here, the example of grants offered through Agency X to eligible residents will be used. The assumption is that Agency X has already developed a strategic roadmap in an initial ADM iteration. It then developed a Grants segment architecture using either an ADM cycle, an FSAM cycle or some combination of the two. This segment architecture was based on Grants.gov, the first of many cross‐agency architectures described by the OMB. The agency will now conduct a solution level (or what TOGAF calls “capability” level) iteration of the ADM to describe, build and deploy the capability to disburse grants. The capability to disburse grants is a capability distinct from, for instance, the capability to process grant applications.

Architecture Vision Phase

Figure 11 shows the discreet steps of the ADM Vision Phase. All architecture projects start at this phase, whether they are conducted at the strategic, segment or solution (capability) level.

Figure 11 - Steps for the Vision Phase

The second step results in the Stakeholder Map artifact, a matrix common to TOGAF and FSAM. It shows stakeholders in the grant disbursement capability, their concerns; how they rate in terms of power and interest, and the artifacts and deliverables they will need to be able to fulfill their roles. Most, if not all, of these artifacts can be chosen from the Taxonomy of Artifacts (Figure 5) – this is one of the great tools of TOGAF 9.

Figure 12 - Value Chain Diagram

In the ‘Development of Architecture Vision’ step, architects will typically conduct a workshop with stakeholders, the result of which will be Vision Document. This will include the Stakeholder Map and a Value Chain Diagram (Figure 12). This diagram shows how primary activities or capabilities contribute to grants - or whatever goals the agency is aiming for. It will also include a Solution Concept Diagram.

Figure 13, showing a pencil sketch concept of the proposed architecture. Information related to the steps on business transformation and risk will also be documented in the Vision Document.

Figure 13 - Solution Concept Diagram

Business Architecture Phase

Now that a vision of the target state – in this case the capability of Agency X to disburse grants – has been defined, architects can describe the business elements of the capability in detail. (Figure 14) shows the detailed steps involved.

Figure 14 - Steps of the Business Architecture Phase

In the first step architects refer back to the Stakeholder Map, validate its conclusions regarding the artifacts stakeholders will need to see, and consider what modeling techniques to utilize. Process flow can be described equally well with the Unified Modeling Language (UML) or Business Process Modeling Notation (BPMN). The choice of which to use depends mainly on its usefulness for the stakeholder, although other technical issues of interest to the architect may be considered also. TOGAF is modeling language and tool agnostic.

Using the selected artifact templates – and many are available from the Open Group for download – the architects now model the chosen artifacts for the baseline architecture, but only to the extent needed to support the target descriptions. The team then describes the target state of the grants disbursement capability to as great a level of detail as required by the stakeholders.

Having both baseline and target views of a set of artifacts, the team can now conduct a gap analysis between each of the artifacts. This will be combined with gap analyses in Application (Service Component in FEA terminology), Data, Technology and Performance Architectures and used in Phase E, Opportunities and Solutions, to create a meta-gap analysis. This will be used as the basis for choosing technologies to outsource, buy or build.

The team then creates a high level roadmap which shows how the building blocks (a key concept in TOGAF and equivalent to “components” in FEA) are to be moved from the baseline to the target state. They resolve impacts this new business architecture may cause, and they conduct a stakeholder review to validate models and ensure continued buy-in.

It is easy to see the usefulness of many of the TOGAF artifacts. Catalogs are lists that form the source material for Matrices and Diagrams. These are the catalogs, for which descriptions and templates are available for download, specifically geared toward the business architecture:

• Organization/Actor Catalog
• Role Catalog
• Business Service/Function Catalog
• Process/Event/Control/Product Catalog
• Contract/Measure Catalog
• Driver/Goal/Objective Catalog

It is easy to see how a list of organizations with all the roles associated with them would be Indispensible in describing a grants disbursement capability. The same is clear with a list of locations.

Matrices show the relationships between entities listed in catalogs. Figure 15 shows an Actor/Role Matrix. This artifact shows which actors perform which roles, supporting definition of security and skills requirements.

Figure 15 - Actor/Role Matrix

The Business Function/Data Entity Matrix (Figure 16) shows relationship between data entities and business functions. Using this artifact enables architects to assign ownership of data entities to organizations and understand the data/information exchange.

Figure 16 - Business Functions to Data Entity Matrix

For the grant disbursement capability, this artifact will support gap analysis. It will assist in determining whether any data entities are missing and need to be created.

The Business Interaction Matrix (Figure 17) depicts the interactions between organizations and business functions across the enterprise. It highlights value chain and dependencies across organizations. Showing how business services relate to each other across organization units will help architects identify how application services and components will trace to business functions.

Figure 17 - Business Interaction Matrix

The Business Footprint Diagram (Figure 18) is a very useful artifact for use with the highest level stakeholders. It describes the links between business goals, organizational units, business functions and business services. It then maps these to technical components delivering the desired capability. In the case of the grants disbursement capability, architects could show high level business stakeholders the relationship between their highest level goal and the technology components that would be needed to actually achieve it.

Figure 18 - Business Footprint Diagram

The Service/Information Diagram (Figure 19) shows information needed to support business services. It also shows what data is consumed by or produced by a business service. It forms the basis of elaboration in Phase C. If architects understand how information flows through business services needed for the grants disbursement capability, they will be in a better position to describe it later in logical and physical terms as they describe the data and service component architectures.

Figure 19 - Serive Information Diagram

Other artifacts described in the Taxonomy include some with which most architects are familiar, including Organization Decomposition Diagram, Functional Decomposition Diagram, Process Flow Diagram and Business Use Case Diagram. There is also considerable overlap with artifacts called out by FSAM and DODAF.

In the last step of the Business Architecture Phase, the team will write the business portion of the Architecture Document, which will include all baseline and target artifacts and gap analyses.

The Remainder of the ADM

The Agency X EA team will have described the vision for a grants disbursement capability. They have also described the business architecture using artifacts that stakeholders both want to use and are able to understand. Now they are ready to describe the Service Component Architecture and the Data Architecture (Phase C). After this they are able to describe the technical infrastructure on which applications will rest. Phases A-D have been conducted as much as possible on a black box, technology and vendor neutral basis. At this point the team has a fully architected the grants disbursement capability.

In Phase E, Opportunities and Solutions, the team will place all the gaps relevant to the grants disbursement capability identified in a single matrix, and choose technology/vendor options to fill the gaps. Once these solutions are identified, the team places them in priority order and identifies transition architectures – interim projects which reduce the risk of delivering all capabilities at once. Phase F is when detailed migration planning is carried out, including cost/benefit and risk analysis, as well as creation of a detailed plan.

In Phase G the team writes a contract to assist solution teams and carries out compliance reviews against the contract. The completed grants disbursement capability is deployed in this phase. Phase H is dedicated to Change management. The Agency X EA team helps the Architecture Board determine whether change requests are major enough to require re-entry into the ADM, or whether they can be sent back to solution teams for minor fixes.

Conclusion

The use of TOGAF in government could create considerable improvement in present practice. The TOGAF ADM maps well to FEA/FSAM, and provides needed process detail. It supplies, in a well defined taxonomy, templates and examples which supplement those available currently to Federal architects. Because of this, TOGAF simplifies communication within architecture teams, and with vendors and consultants.

TOGAF is currently the de facto industry standard for enterprise architecture in the private sector, and is growing rapidly in influence in the public sector. It is an open standard, and is technology and vendor neutral. It is largely descriptive rather than prescriptive, and is purposely intended to be tailored. It is also inexpensive to use. It is free to download and considerable consulting resources are available with little ramp-up time needed. Towards the end of 2010 there are more than 12,000 TOGAF Certified Architects globally, many of these within the community of Federal contractors.

References

1. TOGAF 9 - http://www.opengroup.org/togaf
2. FEA - http://www.whitehouse.gov/omb/e-gov/fea/
3. FSAM - http://www.fsam.gov/fsam-enterprise-architects.php
4. FEA Practice Guidance - http://www.whitehouse.gov/sites/default/files/omb/assets/fea_docs/FEA_Practice_Guidance_Nov_2007.pdf
5. DODAF - http://cio-nii.defense.gov/sites/dodaf20/
6. Consolidated Reference Model - http://www.whitehouse.gov/sites/default/files/omb/assets/fea_docs/FEA_CRM_v23_Final_Oct_2007_Revised.pdf

There are many activities which can be included in such efforts:

• The use of industry Business Reference Model (or Business Process Reference Model), a reference for the operational activities of an organization, a framework facilitating a functional Lines of Business, such as
• The Federal Enterprise Architecture Business Reference Model of the US Federal Government
• The DoD Business Reference Model
• The Open Group Exploration and Mining Business Reference Model (https://www.opengroup.org/emmmv/uploads/40/22706/Getting_started_with_the_EM_Business_Model_v_01.00.pdf)
• Frameworx (eTOM) for Telco companies
• The Supply Chain Operations Reference (SCOR®) model
• The SAP R/3 Reference Model
• The Oracle Business Models : Oracle Industry Reference Model for Banking, (IRM), Oracle Retail Reference Model
• And others...
• The use of organization specific Business Reference models
• The use of Business process improvement methodologies
• Lean, a quantitative data driven methodology based on statistics, process understanding and process control
• Six Sigma, a methodology that mainly focuses on eliminating bad products or services to clients by using statistical evaluation
• Business Process Reengineering, which in reality is a facet of BPM
• The understanding of Business Change Management, the process that empowers staff to accept changes that will improve performance and productivity
• The understanding of Business Transformation, the continuous process, essential to any organization in implementing its business strategy and achieving its vision
• The use of Business Rules Management which enables organizations to manage business rules for decision automation
• The understanding of Business Process Outsourcing (BPO) services to reduce costs and increase efficiency
• The support of Business Process modeling and design, which is illustrated description of business processes, usually created with flow diagrams. The model contains the relationship between activities, processes, sub-processes and information, as well as roles, the organization and resources. This can done with many notations such as flow chart, functional flow block diagram, control flow diagram, Gantt chart, PERT diagram, IDEF, and nowadays with the standard de facto notations such as UML and BPMN
• The support of BPM tools and suites implementation. With the right, process models can be simulated, to drive workflow or BPMS systems, and can be used as the basis for an automated process monitoring system (BAM)
• The support of Business Activity Monitoring (BAM), the ability to have end-to-end visibility and control over all parts of a process or transaction that spans multiple applications and people in one or even more companies

To combine Business Process Management and Enterprise Architecture for better business outcomes is definitely the way forward, where BPM provides the business context, understanding, and- metrics, and Enterprise Architecture provides the discipline to translate business vision and strategy into architectural changes. Both are needed for sustainable continuous improvement. When referring to Enterprise Architecture, we would mainly refer to Business Architecture. Business Architecture involves more than just the structure of business processes. It also entails the organization of departments, roles, documents, assets, and all other process-related information.

Business Architects may be defining and implementing the Business Process framework and, in parallel, influencing the strategic direction for Business Process Management and improvement methodologies (e.g. Lean, Six Sigma). The business process owners and Business Analysts are working within their guidelines at multiple levels throughout the organizations’ business process. They have roles and responsibilities to manage, monitor and control their processes.

An important tool in developing Business Architecture is a Business Reference Model. These types of models are enormously beneficial. They can be developed in the organization to build and extend the information architecture. The shared vocabulary (verbal and visual) that emerges from these efforts promotes clear and effective communication.

To illustrate the touch points between Enterprise Architecture and Business Process Management, I have illustrated in the table below the synergies between the two approaches using TOGAF® 9.

In this table, we observe that, there is a perfect match between Business Process Management and the use of an Enterprise Architecture framework such as TOGAF. BPM is often project based and the Business Architect (or Enterprise Architect) may be responsible for identifying cross-project and cross-process capabilities. It can be considered as being the backbone of an Enterprise Architecture program. We can also add to this, that Service Oriented Architecture is the core operational or transactional capability while BPM does the coordination and integration into business processes.

When using BPM tools and suites, you should also consider the following functionalities: workflow, enterprise application integration, content management and business activity monitoring. These four components are traditionally provided by vendors as separate applications which are merged through BPM into a single application with high levels of integration. The implementation of a BPM solution should theoretically eliminate the maintenance and support cost of these four applications resulting in reducing the total cost of ownership.

Business Architecture provides the governance, alignment and transformational context for BPM across business units and silos. Enterprise Architects, Business Architects, Business Analysts should work together with BPM teams, when approaching the topic of Business Process Management. BPM efforts need structures and appropriate methodologies. It needs a structure to guide efforts at different levels of abstraction (separating “the what“ (the hierarchical structure of business functions) from “the how” (how the desired results are achieved), a documented approach and structure to navigate among the business processes of the organization, i.e. a Business Architecture. They also need a methodology such as an Enterprise Architecture framework to retain and leverage what they have learned about managing and conducting BPM projects.

What is Value?

Imagine that you have found a unique product for which you believe is a need in the market. You are dreaming of getting rich quickly and want to go ahead straight away. But wait, how are you going to fund this project? You will need to buy equipment to create the product. And how are you going to pay for marketing and sales? You slowly realise that your “get rich quickly” dream might not be that easy. Before you make a decision on the new business you will need to ask the question whether your project creates value.

In order to fund the project you may need some money. As an owner you may provide some of this money and lend it to your company (equity). You may even find others (shareholders) who are willing to put money in your company (equity). However, this might not be enough and you may need to borrow money from the bank as well (debt). The bank and investors don’t provide their money for free. They want to see a healthy return. Suppose you managed to borrow 10,000 dollar against 10% interest. This means that at the end of the year you need to pay back 1,000 dollar to shareholders and debt holders to finance your project. This also means that you need a return on your project of at least 1,000 dollar (10%) to pay for the money you borrowed. However, if you expect to make exactly 1,000 dollar then you won’t add value and you should not go ahead. Not doing the project would give you the same result. So shortly, your project’s expected return needs to exceed the cost of capital for your project. If this is the case you will create value, otherwise you will destroy value.

Value management

Leaders at all levels of an organisation make decisions on a daily basis that impact value creation. These decisions can be on capital investments, mergers & acquisitions, foreign investments, financial structures, executive remunerations and obviously IT investments. All these decisions will have an impact on the company as a whole and is reflected in the market value of a company (total value of all shares outstanding). For example, if a listed company announces a major project then the increase in the value of shares should reflect the expected additional value created by that project. It is therefore essential that organisations have a comprehensive value management system in place to help them to manage and create value.

Value for whom?

Value created will accrue to shareholders (owners) of the company, but what about the customers, suppliers and employees? Every company knows that it is important to value its customers, employees and suppliers. However, a company can only raise shareholder funds when they make a healthy return. If the company doesn’t manage to create healthy return then its sources of finance may dry up and it might not be able to fund its activities anymore. There are not many investors that don’t want a return on their investments. Creating value does not happen in isolation. Having healthy relationships with customers, employees and suppliers is a necessity for creating value. So the one doesn’t go without the other and the company has to find the right balance if it wants to sustain long-term value creation.

Profitability

Leaders in companies want to know how their decisions will impact value creation. There are a few key measures of profitability that leaders can use, depending on where they sit in an organisation. For example, an executive, whose pay package contains a large amount of shares, may look at ROE (Return on Equity). The Sales executive may be looking at ROS (Return on Sales), which is the profit per dollar of sales. Or in other words, how efficient does sales activity generate profit. IT is often measured by ROA (Return on Assets) because IT assets support the creation and delivery of products and services. The more efficient IT can deliver products and services for the organisation the more efficient IT is. This measure shows the profit of every dollar we put into IT assets. So, if we can bring IT cost down and keep the net revenue level of the company the same then we are more efficient as an IT organisation, our ROA goes up, and we add more value, right? Well, it is slightly more complicated then this. Measuring profit doesn’t necessary create more value. In fact profits are accounting measures of benefit and may not translate in cash. Value management is only interested in cash benefits. There are many organisations that reported large profits just before they went in receivership.

Managing Risk

Leaders deal with many complex decisions and it doesn’t get easier in value management. Not only do profitability measures relate to each other, the sources of capital (capital structure) also have an impact. Managing value inherently involves managing risk, which adds to the complexity of decision making as a leader. For example the cost of debt of a company can be deducted from the company’s income before paying tax (the interest tax shield). This saves the company tax and therefore reduces the cost of financing and leaves more money for shareholders. So you may think that financing the company’s capital on only debt might be a great solution. However, by doing this, the company increases its financial risk, the increased risk of not being able to pay the interest back in time. If a company takes on a lot of debt then customers and suppliers may become reluctant to buy or supply goods. They don’t’ want to take the risk of you not being able to deliver or pay. The result will be that your sales will go down and eventually it will offset the savings from your capital structure.

Not only do leaders deal with financial risk but also other risks related to the company, such as economic, political, competition, and operational risk. Your debt holders are not that interested in your risk as long as you pay your interest back at the end of the year, but shareholders are. Shareholders bear the additional risk because they are paid after tax and interest is deducted from the earnings. Obviously they want to be compensated for the additional risk and will therefore require higher returns for their investment than banks or other debt holders. This means that risks can be articulated in terms of value and therefore integrated with our value management.

Leading for value creation

As a leader you will have to make many decisions that either create or destroy value. These decisions are roughly in two areas; you have to decide what you are going to invest in for maximum value creation and decide on the right capital structure to finance these investments. At the end of the day you want your company’s expected returns on investments to exceed the cost of financing these investments.

Value management is a very comprehensive and exciting practice, which sits at the heart of every organisation. An effective leader has a clear understanding of what adds value to an organisation.

Strategic Planning means different things to different people. The one constant is its reference to Business Planning which usually occurs annually in most companies. One of the activities of this exercise is the consideration of the portfolio of projects for the following financial year, also referred to as Project Portfolio Management (PPM). This activity may also be triggered when a company modifies its strategy or the priority of its current developments.

Drivers for Strategic Planning may be

• New products or services
• A need for greater Business flexibility and agility
• Merger & Acquisition
• Company’s reorganization
• Consolidation of manufacturing plants, lines of business, partners, information systems
• Cost reduction
• Risk mitigation
• Business Process Management initiatives
• Business Process Outsourcing
• Facilities outsourcing or in sourcing
• Off shoring

Strategic Planning as a process may include activities such as:

1. The definition of the mission and objectives of the enterprise

Most companies have a mission statement depicting the business vision, the purpose and value of the company and the visionary goals to address future opportunities. With that business vision, the board of the company defines the strategic (e.g. reputation, market share) and financial objectives (e.g. earnings growth, sales targets).

2. Environmental analysis

The environmental analysis may include the following activities:

• Internal analysis of the enterprise
• Analysis of the enterprise\'s industry
• A PEST Analysis (Political, Economic, Social, and Technological factors). It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning, identify the strengths and weaknesses, the opportunities and threats (SWOT).

3. Strategy definition

Based on the previous activities, the enterprise matches strengths to opportunities and addressing its weaknesses and external threats and elaborate a strategic plan. This plan may then be refined at different levels in the enterprise. Below is a diagram explaining the various levels of plans.

To build that strategy, an Enterprise Strategy Model may be used to represent the Enterprise situation accurately and realistically for both past and future views. This can be based on Business Motivation Modeling (BMM) which allows developing, communicating and managing a Strategic Plan. Another possibility is the use of Business Model Canvas which allows the company to develop and sketch out new or existing business models. (Refer to the work from Alexander Osterwalder http://alexosterwalder.com/).

The model’s analyses should consider important strategic variables such as customers demand expectations, pricing and elasticity, competitor behavior, emissions regulations, future input, and labor costs.

These variables are then mapped to the main important business processes (capacity, business capabilities, constraints), and economic performance to determine the best decision for each scenario. The strategic model can be based on business processes such as customer, operation or background processes. Scenarios can then are segmented and analyzed by customer, product portfolio, network redesign, long term recruiting and capacity, mergers and acquisitions to describe Segment Business Plans.

4. Strategy Implementation

The selected strategy is implemented by means of programs, projects, budgets, processes and procedures. The way in which the strategy is implemented can have a significant impact on whether it will be successful, and this is where Enterprise Architecture may have a significant role to play. Often, the people formulating the strategy are different from those implementing it. The way the strategy is communicated is a key element of the success and should be clearly explained to the different layers of management including the Enterprise Architecture team.

To support that strategy, different levels or architecture can be considered such as strategic, segment or capability architectures.

This diagram below illustrates different examples of new business capabilities linked to a Strategic Architecture.

It also illustrates how Strategic Architecture supports the enterprise’s vision and the strategic plan communicated to an Enterprise Architecture team.

Going to the next level allows better detail the various deliverables and the associated new business capabilities. The segment architecture maps perfectly to the Segment Business Plan.

5. Evaluation and monitoring

The implementation of the strategy must be monitored and adjustments made as required.

Evaluation and monitoring consists of the following steps:

1. Definition of KPIs, measurement and metrics
2. Definition of target values for these KPIs
3. Perform measurements
4. Compare measured results to the pre-defined standard
5. Make necessary changes

Strategic Planning and Enterprise Architecture should ensure that information systems do not operate in a vacuum. At its core, TOGAF 9 uses/supports a strong set of guidelines that were promoted in the previous version, and have surrounded them with guidance on how to adopt and apply TOGAF to the enterprise for Strategic Planning initiatives. The ADM diagram below clearly indicates the integration between the two processes.

The company’s mission and vision must be communicated to the Enterprise Architecture team which then maps Business Capabilities to the different Business Plans levels.

Many Enterprise Architecture projects are focused at low levels but should be aligned with Strategic Corporate Planning. Enterprise Architecture is a critical discipline, one Strategic Planning mechanism to structure an enterprise. TOGAF 9 is without doubt an effective framework for working with stakeholders through Strategic Planning and architecture work, especially for organizations who are actively transforming themselves.

Leadership and environment

People who are a successful leader in one situation are not necessarily successful in another situation. Different organizations are likely to require different styles of leadership and organizations may need various leadership styles during their lifespan. Leadership crises within fast changing environments is most prevalent in start-ups. Entrepreneurial leaders often compromise their business when they move from innovative to professional leadership, which is one of the largest failure factors of young organizations. They never learn to delegate and give responsibility to management and get submerged in the business detail of their creation. It is therefore important for successful leaders to have a strong awareness of the changing environment and situation they are in. Some leadership theories (such as situational and contingency theories) believe that the environment is one of the most important aspects of leadership and determines how leaders will act.

Leadership and behaviour

Although the environment is an important factor, you can still make a decision how to act in certain situations. Kurt Lewin, a German-American psychologist, was one of the pioneers of the behavioural approach. He identified three types of leaders based on how they made decisions: Autocratic leaders who make decisions without consulting; Democratic leaders who make decisions after input from their team; and Laissez-faire leaders who leave decision making largely to their teams. The approach clearly describes associated environments so that you can choose which behavior to employ in which situation. For example, Laissez-faire leaders would be most effective in situations where teams are highly motivated and capable and don’t need close supervision.

Another widely used model based on the behavior approach was developed by Robert Blake and Jane Mouton. Their Managerial Grid helps you decide what leadership style to use, depending on your concern for people versus your concern for production or task. They defined five leadership styles; country-club style, team style, middle-of-the-road style, impoverished style, and produce-or-perish style. Each style helps you understand your own leadership behavior and how to change it to meet the needs of the situation.

Leadership and personality

Many other models have been developed based on the behavioral approach and it is clear that the most successful leaders are those who are able to adapt their behavior to the situation they are in. New research based on statistical analysis across many leadership studies confirms this; it shows that individuals can emerge as leaders across many situations and tasks. Also, it shows that there is a strong relationship between leadership behavior and personality characteristics. This leads to the Trait theory, which argues that successful leaders share a number of personality characteristics. Obviously, the world of today is completely different from the recent past. Your ability to influence is far more important today than twenty years ago when seniority, position and status were more important. Also, leadership across cultures, as a result of further globalization, requires a very different set of competencies. So what are the main characteristics of highly successful leaders today?

Intelligence Quotient

IQ tests have long been part of the instruments of recruitment officers to \"filter\" applicants for leadership positions. IQ refers to pure cognitive ability and is one of the factors that determines whether you will be able to become a successful leader. However, IQ is a threshold, you need a certain amount of it to be able to succeed but IQ alone doesn’t get you there.

Technical skills

People in your team will look to you for information and experience. It will be much harder to build credibility and trust without this. If you lead an enterprise architecture team and don’t have a clue about the subject, then it will be almost impossible to build a collaborative team and align the team with the direction of your organization. But, again, technical skills alone don’t get you there.

Analytical and Coordination skills

Even more important than your IQ and technical skills are your analytical and coordination skills. Many of you will move from individual contributors in teams to leaders of teams. As an individual contributor you are dependent on your own knowledge, skills and experience. As a leader you are dependent on other people’s knowledge, skills and experience. Your ability to coordinate other people’s capabilities becomes more important than your own capability. Remember what organizations are in the first place; “organizations are tools that permit groups of human beings to aim at and achieve goals that would be far beyond the reach of their powers as individuals” (see last month’s article about Power and Politics). As a leader you have to align people’s interest with the direction of the organisation and create collaborative teams. Moreover, you need to be able to see your team within the fabric of the whole organisation.

Interpersonal skills

While IQ and technical skills are threshold capabilities, interpersonal skills will often set you apart as a leader. Personality, attitude and associated behaviour are key. Your personality is jointly influenced by genetics and environmental factors such as family, culture, and social status. Personality is not static but the way we think, feel and behave continues to evolve over your lifetime. It is largely a social construct and relates to how we interact with and influence other people. So what does the personality profile of a successful leader look like?

Behaviours of successful leaders

There is potentially an unlimited amount of characteristics that can be used to describe personality. Many of these characteristics show a reliable correlation so we can group them into aggregated dimensions. A good example of this is the widely accepted Five Factor Model (FFM) which uses five broad dimensions to describe personality. These five factors are Openness, Conscientiousness, Extraversion, Agreeableness and Neuroticism. Each factor contains a cluster of correlated specific personality characteristics. Together they can provide an accurate description of your personality. Psychiatrists use their own additional personality descriptions to make assessments and diagnoses, such as narcissistic, paranoid, schizotypical, antisocial, sadistic, passive-aggressive and obsessive-compulsive. In this article we limit ourselves to the key common characteristic dimensions that are found in successful global leaders:

Direction Setting

Direction setting is your ability to communicate and instill a clear compelling direction for the organization, for all stakeholders, across multiple functions and across different cultures. This requires a global mindset and strong awareness of economics and politics. You should also feel comfortable in multi-cultural teams, be able to shape culture and instill trust across the organization.

Team building

Building teams is a large component of the overall capabilities of a leader. Aligning people with the vision of the organization and building collaborative teams with associated management structures, ownership, responsibility and accountability will be essential. You will be a role model and need to know how to inspire people and energize teams.

Conscientiousness

Conscientiousness is used in many psychometric tests because it is a very good predictor of performance. It relates to your ability to motivate yourself, show self-discipline, tenacity, carefulness, aim for achievement, thoroughness and organization. Or in other words, whether you are efficient and organized. You will need to be role model in your team and you will need to set a personal example that employees respect, trust and follow.

Emotional Intelligence (EI)

Emotional Intelligence is vital and probably the most important dimension for effective and successful leaders. Those who are emotional intelligent are very likely to become better leaders. According to Peter Salovey and John Mayer (1990) emotional intelligence is “a form of social intelligence that involves the ability to monitor ones own and others feelings and emotions, to discriminate among them, and to use this information to guide ones thinking and action.” Their model has five domains: self-awareness, self-management, motivation, empathy and social skills.

Daniel Goleman popularized the term emotional intelligence in the mid-90s and claimed that EI was very powerful in predicting life success. He first agreed with Salovey and Mayer’s five domains but later simplified these into four domains where motivation is merged into the other four domains:

1. Self-awareness – the awareness of your moods and emotions. This is the first step to self-management. If you are not aware of your emotions then it is very hard to manage them.
2. Self-management – this involves controlling emotions and using your emotions selectively in communication; adapting to changing circumstances.
3. Social awareness – this is your awareness to others\' emotions and perspectives.
4. Relationship management – this is your ability to inspire, influence, and develop others while managing conflict. This comes down to your social skills and empathy.

What can you do to improve?

In my April article called “Leadership – how to get to the top”, I described various ways to improve your leadership. Same as overall leadership development, becoming more emotionally intelligent is an experiential process. You can only become a better leader by being a leader. It is a long term commitment. If you are an introvert today then don’t expect to become an extrovert overnight. Your success depends on other people so involve them in your development.

-- He was a self-made man who owed his lack of success to nobody -- (Joseph Heller).