C-Level Innovation as Collaborative Business Transformation - Archestra Research

1. C-Level Innovation
as collaborative business transformation
An archestra notebook
© 2014 Malcolm Ryder / archestra research

2. In the following discussion, the statements and
illustrations are descriptive representations based on
extensive field observations. Their intent is to abstract
and categorize observations that were found to be
broadly applicable across a wide-range of businesses,
by size and type.
The information offers logical summations, whether
general or specific, for the purpose of encouraging
ongoing recognition in additional future cases, more
commonly in a diagnostic manner. No assertion or
warranty of prescriptive validation is implied or
intended. While aspects of the discussion may prove to
be evident in given cases, the discussion itself may be
modified and reissued at any time.

3. Assumptions
• Executives are responsible for assuring that the current and future opportunities
of the business make sense in timeframes needed to succeed.
• Due to technology and its enablement of innovations, the timeframe between
what works now and what will work next seems to be ever-shrinking. Fewer
businesses have substantially privileged information about market demands, and
fewer businesses are able to catch high-speed leaders of applied new discoveries
by acquiring their same capabilities.
• As a result, new capabilities, if acquired, are most likely to help if they power new
distinctions differentiating the business presence in the market as another kind of
"market leadership", which really means bringing a special kind of value into the
market.
• Acquisition of capabilities is a basic responsibility of executives for supporting the
realization of future opportunities based on creating that value.

4. Organizing Executive Attention
• Executive roles make the most sense when it is understood that the real-time
accountability of certain issues is assured by a role. The assignment of the
accountability becomes a "primary", not an exclusive, responsibility. The primary
responsibility leverages relevant contributions made by other roles. Other roles,
meanwhile, have different primary responsibilities.
• The interaction of the roles is essentially teamwork, but this "Team" concept
makes sense only in the context of a designated actual pursuit. The basis of the
team structure (organization) is a delegation of responsibilities to be coordinated.
• In contrast, what makes the “Work” a collaboration (execution) is the co-
operation of the responsible parties.
• Creating and maintaining the necessary value of the business requires a way to
assure that co-operation occurs in terms of the coordination needed to support
the value.

5. CEO:
business
modeler
CFO:
business
resourcer
COO:
business
engineer
CIO/CSO:
business
processor
CMO:
business
driver
CTO:
business
designer
Knowledge
Focus
Align
implementation of
model to
opportunity within
governance and
agreements
Develop and
manage capital for
operational
investment or
consumption
Build and deploy
organizational
structure with
functional
compliance to
strategy
Automate and
support applied
systematizations
of processes
Select, prioritize
and navigate
engagement with
prospects in
markets
Identify new
technological
modes of business
enablement
Key Interest ROI Assets Resources Services Relationships Platforms
Supported
effects
Agreements Agreements Methods Methods Interactions Interactions
External
impact areas
Positions Sources Partners Networks Channels Utilities
Internal
impact areas
Risks Allocations Workgroups Systems Communications Infrastructure
Roles Modeling (typical)
©2014MalcolmRyder/archestra
C-team members have predisposed attentions that
need to become synchronized contributions.

6. Coordinating Change
• A model of coordination provides the common reference allowing the executive
team members to decide how to use their contributions. As the idea of a
coordinating model applies generically to "strategy", the model in question here
is strategic, while being more specially focused on the problem of exploiting
ongoing change for value.
• Coordination supports a game plan that shows how actions and events drive
conditions towards desired outcomes.
• A single model for driving value to market can be iterated in many ways. A major
goal is to consistently associate executive roles with the need for and timing of
those iterations.

7. The Portfolio Overview
• Executives are always involved in portfolio-type decisioning, where investments
are being made in different ways for different kinds of opportunities to reach
various desired future conditions.
• To make the investment decision, the general effort is to study the risks of not
gaining the future state, the probability of being effective in supporting the
pursuit, and the confidence in both of the above.
• As a result, the portfolio decision includes risk-based prioritization, ROI-based
investment, and knowledge-based expertise. The portfolio is not about finance
but about capability. The decision method is applied to all kinds of opportunities.
• Opportunities compete with each other to gain a permanent place within the
boundary of overall available money during time. For example, in the I.T. world,
the “opportunity” to keep the lights on must make it within the boundary, but the
opportunity to transform for the competitive future must also make it within the
boundary.

8. Deciding on Capabilities
The portfolio of commitments to capability must literally
provide for a future-orientated iteration of the model for
meeting conditions of future value, and likewise a present-
orientated iteration of the model for current value
management.
The key difference is that support of conditions for current
value should expect to have an end-of-life, while support of
future value should expect to have an assertively ready
foundation. Meanwhile, the challenge is to make the co-
existing support productive going forward, because businesses
cannot run backwards through time…
A high-level capability assessment would compare the
expectations that characterize the main scenarios of support
for the conditions required for value. A portfolio addresses
expected levels of risk, return and knowledge associated with
the scenarios going forward.
In particular, innovations, whether created internally or
procured externally, must become contributors to capability.
Also, they should go through a portfolio analysis that weighs
the difference between gaining a proprietary versus non-
proprietary advantage in delivering the target value of the
business to the market.
Portfolio
Decision
1. Prioritization
2. Investment
3. Expertize
Risk
ROI
KM
Current
conditions
Future
conditions
Future
support
Current
support
1. Medium
2. Medium
3. High
1. High
2. High
3. Medium
1. High
2. Medium
3. Medium
1. TBD
2. TBD
3. TBD
© 2014 Malcolm Ryder / archestra

9. ISSUE GOAL PURSUIT
JUSTIFY in: OFFER via: PRODUCE with:
WHAT/WHY: Distinction Usage
Profile
Promotion Development
HOW/WHEN: Capacity Catalog Provision Logistics
The Basic Value Model
The model of the business value, simplified into a framework, explains what
the business will use to achieve the distinction and capacity needed to take
and hold a competitively successful position vis-à-vis the market demand.
The high-level framework identifies six areas where executives should decide
and align their intentions, means, and plans. The collective decisions make up
the C-level view of how it matters that the business is in the markets.
©2014MalcolmRyder/archestra

10. The C-Team:
CEO, COO, CMO
In one scenario (among many possible combinations), the C-team co-operates by taking
responsibilities as follows:
• CEO: the Business Modeler -- sets and approves a definition to be realized for
implementing each of the six areas
• COO: the Business Engineer -- builds the instance of the model as specified under CEO
direction
• CMO: the Business Driver -- navigates the business in real time through the demand
conditions of the market
As a result, in this scenario the CMO is in a position to feed back opportunity assessments
(viability) to the CEO and effectiveness assessments (feasibility) to the COO.

11. Problem: making and keeping an advantage in
ability to meet market preferences…
Changes occurring within any of
the six main elements of the
business model can alter the
available connections between
demand and supply. These
changes may be intentional or
unintentional…
Depending on changes, prior
established connections, even if
still necessary in certain cases,
may be insufficient to satisfy the
required overall strength of
competitiveness throughout
unintentional changes.
© 2014 Malcolm Ryder / archestra

12. Re-Modeling for Business Value
In this discussion’s form of the business value model, any of the six main elements may
change, as either a re-envisioning or a refinement of the overall model. By definition, these
changes are systemically important – like variables in a formula.
The possibility of making changes intentionally is therefore weighed against some
corresponding measures of high-level outcome. These high-level "measures" are a
specifically defined concept of the business’s “value in the Market".
In this concept’s definition:
• "value" means "the significance of the difference",
• the difference is the combined distinction and capacity maintained in the market,
• and the significance is the impact that the difference has, NOT primarily defined as
financial results but instead as advantaged competitive opportunity.
The business must strategize and execute this value in the market(s).

13. Value of the modeled business in the market
There are three high-level measures qualifying the decisions to make intentional changes in the
value model. We will refer to this group of high-level measures as “Value Support” Measures.
These measures require the influence of additional stakeholders on the team.
In our scenario, addressing the measures pairs the CEO, COO and CMO each with working
partners, responsible for addressing designated measures.
ROLE Responsibility “Value Support” Measure PARTNER
CEO Business “modeler” Cost of the strategy (validated competitive position and ROI) CFO
COO Business “engineer” Quality of effort (business processes) CIO/CSO
CMO Business “driver” Priority of market engagement (market relationships portfolio) CTO
In these C-level pairings, the primary challenge to managing the business behaviors is usually the volatility of
numerous influencers on the market. Influencers are both external and internal to the business. Less-volatile
influencers make markets more predictable. More specifically, the challenge is: to avoid behavioral rigidity
that fails to accommodate necessary changes, while at the same time to sustain enough consistency to allow
business functions to rationally achieve goals. The C-team needs the ability to continually resynchronize.
© 2014 Malcolm Ryder / archestra

14. Producers focus on reliably meeting demand within the conditions of the market environment. The
strategy for continually leveraging those conditions has conventionally been cast in terms of
planned campaigns such as "hunting" or "farming" -- or in terms of planned procurement such as
by "engineering" or "programming“ a proprietary link to an existing supply. However, all of those
terms presume a manageable level of impact that the environment's complexity will have on the
probability of desired outcomes. More complexity and less predictability weaken the strategy.
Proprietary Past (Control)

15. Open Future (Agility)
Current market environments exceed the conventional assumptions about controlling
complexity – primarily due to the unprecedented levels of information access and of
technology innovation affecting expectations, products and production.
The resulting variability of influences in the market environment creates the need to focus
on continually regenerating connections between discoverable current sources of demand
and discoverable current sources of supply.
The effect is that markets are not persistently proprietary, but instead are increasingly
open.
This problem of needing real-time dynamic connectivity is almost always referred to as the
problem of Agility.
The proven terms of operation for this challenge call for Brokers and Agents to work
together. Relying on mutual discoverability, Brokers bring or hypothesize the requirements
for acceptance in the market, and Agents bring the availability of relevant fulfillments.

16. Agility & Collaborative Execution
Brokers bring or hypothesize the requirements for acceptance in the market, and Agents bring the
availability of relevant fulfillments. Together the brokers and agents make agreements on aligning
their interests over meaningful periods of time. This dynamic structuring of business is the effective
go-to-market capability; it features a persistent and timely presence as a facilitator in significant
opportunities – fortified by research and relationships.
The C-level team is a broker for its business with awareness of market requirements, and it is also
the agent of its business fulfillment capability. In this cooperation, the team is able to pursue the
distinction and capacity that is the basis of the business’s (industrial) success in the market.
In allocating responsibilities, the business brokers are most often (but not exclusively) the CEO, COO
and CMO; the business agents are most often (but not exclusively) the CFO, CIO/CSO, and CTO.
BROKER Responsibility AGENT Responsibility
CEO Business “modeler” CFO Business “resourcer”
COO Business “engineer” CIO/CSO Business “processor”
CMO Business “driver” CTO Business “designer”
© 2014 Malcolm Ryder / archestra

17. An especially radical transformation has
occurred due to the unprecedented
availability of powerful, ubiquitous tools
and services for information search and
data analysis. The combination of search
and analysis has immediately meant that
new profiles of meaningful demand
(product usage) and new sources of
relevant supply (production logistics) can
rapidly, if not spontaneously, find each
other (and customers) independently of
prescribed interventions by the business.
When the demand-side discoveries
converge with the supply side discoveries,
they interactively create options that may
lie outside of the business’s current
offerings and are not yet appearing in its
catalog nor in its development queue.
Problem: the imperative for Open Market Agility
© 2014 Malcolm Ryder / archestra
As brokers and agents themselves, the C-team wants to proactively
master search and analysis to sense emerging influences and
impending opportunities that should affect the business value model

18. Model
Elements
New “ordinary” scenarios Influencers Related Resources
Usage Profiles through easy exposure to vast amounts of information, consumers can self-
discover capabilities, options and preferences that they may not even have
previously acknowledged and that also appear to be viable
self-discovery social networking
Promotion having exemplary “preview” experiences is more common than ever due to rich
media and 24x7 connectivity to media channels
freemiums mobile apps, html5
Development "sourcing" and feature sets are both dramatically diverse and rapidly supplied
through current toolsets and more precision about functional scopes
mashups open source, PaaS,
agile
Catalog electronic storefronts with search engines glue together a tremendously wide
range and volume of choices in a virtual product category for which all category
members have the same delivery service level
aggregation e-payments, auto-
recommendations
Provision consumers can have provision largely auto-attended by non-invasive monitoring
that intelligently decides when and how to offer and/or supply something
digital streaming GPS, sensors
Logistics the mechanics of the supply process are largely engineered to move the least
amount of material necessary through make-and-ship over the least required
distance in the least necessary time, effectively giving higher just-on-demand
availability without significant errors
robotics Nano, 3D printing,
internet of things
Key lasting transformations can also occur within each of the six areas of the business model, creating more
new elements of possible interactions that become available for facilitation by brokers and agents.
Current market realities are recognizable in numerous related applied innovations that are quickly becoming
"ordinary" while also enabling entirely new interactive combinations. Interactive combinations of innovations
across the business model elements effectively offer new specific interpretations of the generic model.
©2014MalcolmRyder/archestra

19. Lasting Observations
• Markets change whether businesses change or not
• Changes, including innovations, have meaning in terms of how they
affect important capabilities to execute the model the business uses
to stake its value in the market
• Innovations occur in many forms and can change various elements of
the model asynchronously, requiring a collaborative effort by
managers to adapt
• Multiple innovations may combine inside and outside of the business,
to create, sometimes abruptly and/or definitively, new reasons to
execute business differently

20. CEO:
business
modeler
CFO:
business
resourcer
COO:
business
engineer
CIO/CSO:
business
processor
CMO:
business
driver
CTO:
business
designer
JUSTIFY:
Usage Profiles What/Why What/Why What/Why What/Why What/Why What/Why
Catalog How/When How/When How/When How/When How/When How/When
OFFER:
Promotion What/Why What/Why What/Why What/Why What/Why What/Why
Provision How/When How/When How/When How/When How/When How/When
PRODUCE:
Development What/Why What/Why What/Why What/Why What/Why What/Why
Logistics How/When How/When How/When How/When How/When How/When
C-Team Innovation Heat Map
Sensitive
Influential
Assertive
Mapping expectations is a method of communicating how the C-team will probably pursue their continual
re-synchronization as changes occur and become opportunities or risks in the business value model.
©2014MalcolmRyder/archestra
Strongly
Moderately

21. CEO:
business
modeler
CFO:
business
resourcer
COO:
business
engineer
CIO/CSO:
business
processor
CMO:
business
driver
CTO:
business
designer
JUSTIFY:
Usage Profiles X
Catalog X
OFFER:
Promotion X
Provision X
PRODUCE:
Development X
Logistics X
Connecting The Dots
C-team cooperation is constrained by both the ability to express the overall importance of possible changes to the
current implementations of the model, and by the relationships of team members as stakeholders in the model.
Iterating the business value model includes understanding
how innovations fit into generating distinction and capacity.
©2014MalcolmRyder/archestra

22. Recaps
• A currently active business model is a collaborative iteration of a system
• The business model is subject to changes originating both internally and
externally
• Changes such as innovations systemically affect the potential value of the
current model of the business in the market
• C-team members are distinct stakeholders differentiated by knowledge,
expectations and sensitivity
• C-level decisions about different elements of the model, including
innovations of them, need to align with an overall game-plan derived for
supporting the value of the model or for modifying the model
• Internal synchronization of the model requires the C-team’s motivation to
support the external market impact of the model