Business Motivation Model

The Business Motivation Model (BMM) is a great tool for assisting with this, as it provides us with a check-list of topics to investigate.

At a high level it covers the vision and goals (the Ends), the mission and strategies (the Means to reach the Ends), the Influences (external and internal) that affect the organisation, and the Assessments we undertake to understand the risks and rewards we can realise from these Influences.

SWOT analysis

One of the common tools available that assist with this assessment, is SWOT analysis. This mostly acts as a checklist, ensuring that we consider internal as well as external influences, and understand that these can range from positive to negative, from Strengths and Weaknesses (internal) to Opportunities and Threats (external) — typically represented in a four-square grid:

Assessing the external influences with a PESTLE

Unpicking this further, there are several approaches for assessing these internal and external influences; one of the most common–from an external aspect–is the PESTLE analysis model. As you would imagine, the word PESTLE is an acronym for six essential topics to consider.

• Political factors include government interventions in the economy.
• Economic factors include growth, inflation, interest rates, etc.
• Social factors include growth in the population, education, etc.
• Technological factors include automation, rate of change, etc.
• Legal factors include laws on consumer protection, employment, etc.
• Environmental factors include weather, climate change, etc.

Introducing MORTAR for the internal factors

We need to complement this with a corresponding model for internal factors. One of the most common is the McKinsey 7S model, which provides a summary of important internal factors that influence an organisation’s success. However, keeping on the theme of PESTLE, I would like to propose MORTAR (another acronym, to aid memory):

• Mission factors include the plan devised to achieve the vision and goals
• Organisation factors include the way the organization is structured and reporting lines
• Resource factors include the procedures and systems that staff use to get the job done
• Team factors  include the roles, capabilities, skills, and competencies
• Approach factors include the style of leadership
• Rites and Rules factors include core values, internal culture, and behaviour

Notes on levels of abstraction: I am aware that this articles presents a model within a model within a model (PESTLE and MORTAR within SWOT within BMM) and that can be as obscure as Winston Churchill (and later John F Kennedy) describing something as a “riddle wrapped in a mystery inside an enigma”, however abstraction is in the very nature of models — they simplify an area of study to make it easier to digest, and you know that simplification is stretched when it’s based around a set of letters, so don’t take it too seriously; nevertheless, such models do help us to more easily recall what is covered and act as a checklist.

Well, relax!

The exam is easy … compared to the application, that is.

Nearly every CBAP^® I’ve spoken to has agreed that the application itself was the most onerous part of the experience – especially if you have to go back 10 years to be able to claim enough hours. Who has timesheets from 10 years ago, right?

Well, back when I was going through the same process, I designed a spreadsheet that not only helped me collect and collate all the right information for the whole application, it also took care of working out how many hours were spent on projects from 10 years ago.

Given that the figures I would be submitting were guesses and averages, it was important to me that the I could robustly defend the approach I had taken, which meant I was ultra-conservative on the number of hours I could claim. Let me explain.

Non-work days

The first issue to resolve was how much of the year was made up of work days. A few formulae took care of that, allowing for weekends, public holidays, annual leave, training, and sick leave – I was left with 220 working days for the year. My subsequent research is that this figure is fairly standard (although some have it as low as 200). This gave me a ratio, so that I could then estimate how many working days there were likely to be between any two given dates.

Non-BA hours

However, it was not enough to then multiply that by 8 hours (or however long is you standard working day). A certain amount of everyone’s day is taken up by interruptions. Sometimes we’re thankful for them and sometimes they irritate, but either way they cannot be counted as business analysis. Allowing for breaks, phone calls, emails, and walk up interruptions – I was left with an effective working day of 6 hours (see I was being hard on myself).

Now out of those effective working hours, how many of those were spent on BA tasks?

Having to go back over 10 years, I drew on projects where my role overall was more of an analyst/programmer, through to pure business analysis consultancy. For each project, I estimated anywhere from 20% to 95% of my tasks were business analysis (even here, I strove to ensure that I didn’t slip into assuming 100% on BA tasks).

From that, I was able to count up the number of hours to claim, and ensured that my claim would have just over 8,000 hours – just in case an audit did decide that some projects were lower than I claimed, I should still be able to achieve 7,500 hours.

CBAP/CCBA study groups

Now that I’m working with other people chasing their own CBAP^® or CCBA™ dream, I find that this is still a common struggle, so I have shared the workbook I developed with others and had some great feedback, which has been incoporated along with adjustments for Business Analysis Body of Knowledge^® BABOK^® v2.0.

If you would like to use this too, you can download a copy of the CBAP^® application workbook free (under a Creative Commons Attribution-NonCommercial-ShareAlike license). Hope this is useful for you, and more than happy to answer any questions you might have.

http://www.davidjcmorris.com/wp-content/uploads/2011/09/CBAP-application-workbook-v1-3.xls

Good luck with your own CBAP^® or CCBA™

IIBA^®, BABOK^®, and Business Analysis Body of Knowledge^® are registered trademarks owned by International Institute of Business Analysis. CBAP^® is a registered certification mark owned by International Institute of Business Analysis. Certified Business Analysis Professional™, Certification of Competency in Business Analysis™, and CCBA™ are trademarks owned by International Institute of Business Analysis. These marks are used with the express permission of International Institute of Business Analysis.

Why are big organisations so risk-averse?

Big organizations ‘play’ with huge amounts of money and have many people dependent on them, so they have to ensure that any investment they make is wise.

As individuals we have many options to choose from when we decide what we do with our own money: we can keep it under our mattress, where it will progressively decrease in value (relative to what it can buy over time); we can invest it in a (traditionally) safe option like a normal savings account, where it will attract interest, but often barely about the inflation rate; so we know that to get significant returns on our money we have to invest it in options that have less certainty about them, i.e. may go down in value as well as up, but when they do go up, boy they can fly.

Different people have different attitudes to risk, which is why most financial firms have a range of investment types to suit all tastes, many offering ways of balancing a client’s money across several categories, from safe to risky.

Now, when this is multiplied up, a big organisation has many people, each with their own attitudes to risk; when you combine that with the fact they’re dealing with other people’s money, you often end up with an approach that suits the lowest common denominator, i.e. the most risk-averse will likely take precedence.

How do big organisations seek to avoid risk?

Once we accept that organisations are going to be risk-averse, we then have to consider what behaviours this generates.

Thinking back to a personal example again: when we buy a car, if we are risk-averse we might decide to spend ages thinking about it, reviewing write-ups about cars, thinking carefully about what we’ll need the car for (family, dogs, towing, sports equipment, etc. etc.), shortlist some; then maybe we’d sleep on it, for a while, for a long while, before finally taking the plunge. This is because we’re really not sure if we’ve thought about everything we need, whether we know all the options, and we want to avoid buyers remorse, that feeling the next morning when you pull out of your drive and see another car that just looks like it would be so much better!

Now again, multiply that up, in a big organisation, where the most risk-averse will hold sway, that same careful step-by-step approach makes so much sense doesn’t it? How can people think of committing all their resources and money onto a project before they’re really sure that they know exactly what they want it to do, look like, etc.

Or does it? Is there another way?

Understanding how personal attitude to risk is magnified and distorted when you scale it up goes some way to explaining why many big organisations still adhere to a largely predictive and plan-driven approach to minimise risk; because on the individual level it is common sense that people should nail what they want to do before they start; when you scale that up to the organisation level, wanting to avoid risk at all costs often drives an uber-waterfall approach.

There is another way

If these typical risk-averse behaviours led to perfect results, eventually, then although they have to wait longer, it would be worth it.  However, with so many projects still failing to deliver promised benefits, on time, to cost, and of consistent quality: something is clearly wrong with this picture.

While admittedly the per capita figures are skewed by the relatively small population in NZ, the absolute numbers reinforce that for a country of this size, we are at the forefront of professionalising the discipline; which speaks volumes for the approach taken by IIBA NZ in supporting business analysis professional development — particularly with our CBAP Accelerator Programme, an intensive 13-week study group mentored by CBAPs.

The 2009 NZ Business Analysis Baseline survey indicated that NZ still has some way to go in recognising the role and value of business analysis, so we have been running several programs to promote better understanding. We hope these initiatives alongside increasing the number of CBAPs will show an improvement, so we will be running a 2010 survey soon to look at this.

If you would like to know more about these programs or how you could work toward your own CBAP, please feel free to contact me or start a discussion here.

CBAP Summary Listing

Sources:

• Wikipedia: List of countries by population
• IIBA: CBAP Listing (as at August 2010)

Business analysis is the set of tasks and techniques used to work as a liaison among stakeholders in order to understand the structure, policies, and operations of an organization, and to recommend solutions that enable the organization to achieve its goals.

We’ve been exploring this more as we’ve been working on the Agile Extension to the BABOK, and recently Kevin Brennan (our Product Owner) suggested modifying this to make the discipline of business analysis sound less like a translator of business and technical jargon.

So, here is an alternative shorter suggesion:

Business analysis defines the capabilities that enable an organization to deliver value to its stakeholders.

What are your thoughts?

• Is this clear enough?
• Would everyone know what is meant by capabilities, stakeholders and value (see recent post on business value)?

Clearly this definition would still be expanded to talk about the tasks and techniques, but as a rallying call there is some real strength in the simplicity and minimalism of this definition — and it also neatly includes business architecture within the scope too, which is a good thing.

Let’s get a discussion going…

The Agile Extension team, with Kevin as the Product Owner and myself as the team lead (Scrummaster), have been hard at work — identifying the key areas that differentiate business analysis on projects following agile practices compared to traditional/waterfall approaches.

This first release, written by Dennis Stevens and me, acts an overview of this work and will form an introduction to the extension itself as it is progressively developed. The extension can be downloaded from the IIBA website, and we welcome your feedback on our work so far.

It has been a pleasure to work with the team on this important initiative to assist the business analysis and agile practitioner communities, and although I have now resigned as the team lead I intend to stay involved as this work continues.

Download the Agile Extension to the Business Analysis Body of Knowledge

http://iiba.info/AgileBABOK1

The Agile BABOK Extension team

• Susan Block
• Kevin Brennan
• Pascal Van Cauwenberghe
• Steve Erlank
• Ellen Gottesdeiner
• Shane Hastie
• Marsha Hughes
• Ali Mazer
• Maureen McVey
• David Morris
• Luiz Claudio Parzianello
• Dennis Stevens

Related articles:

• on InfoQ
• on jaxenter

The discussion started with a definition of business value as “something that increases revenue, protects revenue, or reduces costs“ –  based on the work of Chris Matts and Anthony Marcano.

While this provides a firm basis for assessing whether any proposed business changes will add business value, it is solely focused on money so might lead to short-term thinking and would not work as well for non-commercial organisations, i.e. governmental and charitable.

Dennis Stevens suggested including “position the organisation for the future” as a way of building value for the longer term, which definitely adds a good perspective — although this can be interpreted as simply building something now to deliver some other meaning of value later.

Ellen Gottesdiener went on to propose adding “improve service, meet regulatory requirements, and marketing” to build a rounder perspective.

This intrigued me. How could we expand this definition to work for governmental and charitable organisations too, based on experience working in these sectors rather than theorising? And just what do we mean by business value when we use the term.

Business Value

To understand what we mean by the term business value, it’s worth looking at what we mean by value in the first place.

In this context, value is something that is delivered or realised by activities we undertake. In value chain theory, this could be the outcomes from a lean value-driven process. But this definition starts to get self-referencing — defining something by using the word you’re defining is like saying ‘blue is a shade of blue’ — so we need to stop and think about what we mean by value.

What is value?

Value is a quality in something that makes it desirable. According to value theory, value can be imbued with obligations (what people are expected to deliver), worth (what people will pay for it), and satisfaction (how people feel about it) — and should be assessed from both the provider and receiver perspectives.

What is value to organisations?

The first value that an organisation should recognise and strive for is that for which they were founded — their prime directive — this will vary from organisation to organisation, but can be summarised at a high level according to the sector in which they are active — commercial, governmental, and charity (firstly from a long-term view):

Commercial organisations: return a dividend for their shareholders and grow the long-term net worth.

Government organisations: meet their statutory obligations. NB: This is also a factor for commercial and charity organisations, but not primary.

Charity organisations: work toward their founding principles — put poor children through college, support professional development, eradicate malaria, improve the health of sex workers, whatever.

For organisations that face customers (arguably all, to one extent or another) it will also be about maintaining appropriate levels of service. For commercial organisations — customer service that delights; for government organisation — meeting their citizens’ expectations; for charity organisations — keeping them alive (for example).

In the short-term, however, sometimes these long-term objectives are often overridden or modified.

Commercial organisations will sometimes engage in pricing policies that squeeze their margin (profit) — for example, in an attempt to force a competitor out of business — most business thinkers agree that this is a no-win game, but many organisations still feel obliged to do it at times.

Governmental organisations will sometimes deliberately adopt policies that will disenfranchise or disadvantage some, because political policy has been changed and they are obliged to implement it even when it appears to be at odds with their remit — so statutory obligation can override service commitments.

Charity organisations will sometimes stop providing their services in certain locations because it is unsafe for their staff/volunteers — so the wellbeing of their staff can override their founding principles.

A working definition of business value

Achieving or delivering value can be any one of the following — and depending on the type of organisation, the balance of each of these will vary (i.e. whether they are primary or secondary drivers):

• Reduce/avoid cost
• Maintain/protect revenue
• Increase revenue
• Meet statutory and other obligations
• Strive for appropriate levels of service
• Protect and develop staff

All of this the better to achieve their prime directive (whatever that might be).

As I review this list now, it bears a striking resemblance to the four classes of benefits/value from benefits mapping and the balanced scorecard — financial, customer, staff, and operational.

So turning that around, I would like to propose a definition…

Business Value is anything that contributes to an organisation’s stated primary goals, e.g. increase or protect revenue, reduce/avoid costs, improve service, meet regulatory/social obligations, achieve market strategy, and develop staff.

• Organisation’s stated primary goals: all organisations should have a clearly articulated statement about why they exist and how they define success (i.e. the vision, mission, and goals statement); everything that is claimed as business value should be directly attributable to the organisation’s stated primary goals; if a project doesn’t deliver something that contributes toward one of those it doesn’t have a sound business case.

The following are examples of goals that could be important to any organisation; the precise mix will depend on the type of organisation and the sector within which they operate (commercial, governmental, or charitable/volunteer):

• Increase revenue: make more money, raise more taxes, increase sponsorship/donations
• Protect revenue: retain customers, fight off competition
• Avoid/reduce costs: streamline operations, operational efficiencies in the value stream, better links with suppliers
• Improve service: ensure that products and services meet the needs of real customers, enable a service experience that meets expectations or even delights
• Meet regulatory/social obligations: do the right thing legally, environmentally, and socially, protecting the company from risk of fines, bad press, or losing key leadership — also encompasses corporate social responsibility (CSR)
• Achieve market strategy: build brand recognition and market share, enter new markets, implement good product development roadmap
• Develop staff: recruit and retain the best people, train and develop them to be the best they can be, support them with appropriate remuneration and benefits

For those that are keen on mnemonics to remember definitions, this could be abbreviated as:

• OG IR PR AC IS MO MS DS

for which picture an ogre practising on his mother’s Nintendo DS.

Honourable mentions

The following have also contributed to the recent discussions on this: Prashant Gandhi, Shane Hastie, and Kent McDonald.

Hudson Smales, of Air New Zealand, opened the User Experience (UX) Masterclass conference – presenting how they brought user research and agile practices into their new product development process for the Skycouch.  UX Masterclass was organised by Trent Mankelow, of Optimal Usability.

Redesigning the economy class experience

Air New Zealand economy Skycouch, space to keep your children safe and happy

Starting from first principles — they realised that it did not make good long-term economic sense to compete for economy class customers solely on price, so decided to find out what would really make customers have a better experience on the longest consumer air journey in the world — Auckland to London.

From the beginning, it was clear that Air New Zealand were determined to base any changes on what was actually needed, by involving customers from the outset, developing a set of personas (illustrated with Simpsons characters) around the five key customer value drivers. This proved invaluable to convince their senior executives that not all travelers were ‘cocooners’ (Lisa) and ‘isolationists’ (Mr Burns) like them.

They simplified the five traveler personas into two main drivers — the need for social connectedness versus the need for privacy and quiet — sometimes in the same person at different times during the flight.

From their research and experience, it was clear that addressing seating in economy class was a vital element in improving the flying experience, but they had been using the same style of economy seating for some time.

How do you discover totally new seating concepts?

To generate the broadest range of ideas, Air New Zealand invited four NZ companies, under strict terms of confidentiality, to a three-day seatcamp — where they were tasked to create a number of ideas that would satisfy both of these criteria then build prototypes in a mocked-up cabin.

A number of really interesting ideas surfaced, and this enabled Air New Zealand to rapidly discount ideas around bunks above the seats, booths, and staggered seating.

From this, a few prototypes made it through to the next round, which was to try them in a real-world experience setting, simulating a long-haul flight — but real customers would struggle to see beyond the Heath-Robinson nature of the prototypes.

How do you test usability, if you cannot rely on real users?

Air New Zealand economy Skycouch, young couple stretched out on lie-flat seats

Testing consumer reaction to mocked-up web-pages can be a challenge, but it is achievable. Asking a real customer to sit in a polystyrene seat with armrests that don’t lift properly, however, will likely result in immediate rejection.

Working with NZ usability company Optimal Usability, Air New Zealand’s response was to use actors (who also had flying experience) who could then really simulate what it was like as one of the personas. This was highly successful, with the key elements of flights being simulated within an hour — from pre-flight entry and seating, taking off, safety announcements, meals (without the actual food), drinks, landing, and disembarking.

This enabled the seating to be refined so that subsequent rounds of usability testing became more real, to the point that real customers did become involved.

The resulting seat banks of three seats, christened ‘Skycouch‘, is another first for New Zealand, and will enable couples to sleep lying flat and parents to better manage their families. The pricing is expected to be around NZ$200 more than standard economy, and couples will be able to reserve the third seat for around half-price. While more expensive than standard economy, it will still be a clear price-break below premium economy.

The first flight to be fitted with these new seats will be the December 12 flight to Los Angeles.

Key learnings for innovative product development

Hudson ended by running through their key learnings from the experience:

1. There must be strong and clear leadership — it won’t always run smoothly, so it needs backing and drive to succeed
2. Draw your team from multiple disciplines and trust them to make decisions (and make occasional failures)
3. Whenever there is a crunch decision within the project, always trust your first instincts
4. Create a separate prototyping space, away from normal working environments, to keep your key team together and hide the mess and chaos
5. Ensure you have enough funding to keep going, even if it is only seeded until the next review

These echo many of the same learnings from agile software development projects over the last fifteen years, and it is great seeing so much success coming from organisations applying the same principles to tangible products and services.