Stakeholder Alignment

Strategy without tactics is the longest route to victory. Tactics without strategy is the noise before defeat.

Sun Tzu

The way to be successful in a company is to do something that matters to someone who matters. To test the validity of this assertion, consider the alternatives.

The first is for you to spend time doing stuff that doesn’t matter to the people who matter. If the work you’re doing does not matter to the executive leadership in your company, you face a choice. On one hand, you can get on board with something that does matter to them. Drop what you’re doing and find a different team, a different role, or a different project that does matter to them; or redefine what you’re doing so that it fits better with the stated direction and values. On the other hand, some soul searching may reveal that your passion for that misaligned project or process is so consuming, persistent, and fierce that you simply do not want to give it up. In that case, you must convince the executive leadership that it must change, or you can leave the company for one that shares your passion or start your own.

Projects that don’t matter to the people who matter are misaligned. These projects will keep you employed for a short time perhaps, but they are not likely to complete, and will not advance your organization or your career. Eventually, someone will ask about that little project line item on a budget spreadsheet. If no one in the conference room knows what it is or why we’re doing it or who the customer is, it will be sidelined and cancelled. Being on the team of misaligned projects wastes the time and resources of both you and the organization.

The second alternative is to do stuff that does matter, but only to people who are not the leaders. The leaders set the strategy—the technical and business direction—and expect it to be executed.

In both of these scenarios—even if your personal contribution is strong, and you show up every day with conviction and do your best—if your project is misaligned, it will be cancelled. If somehow you and your team do cross the finish line with a misaligned project, that day will see your meagerest rejoicing,¹ as it will highlight something that was previously thriving only because it was under the radar. If you are associated with projects that don’t matter to people who matter, it dramatically lessens your own chances of being viewed as a strategic, go-getting up-and-comer in the organization. The impact to the company is that resources are hidden or misspent, delaying the chance to complete the strategic projects.

If your organization has a proliferation of projects that don’t matter to the people who matter, it must gain alignment so can spend its resources working on stuff that does matter. Organizations that cannot do this fail.

Therefore, you must be sure that you have the support of the most powerful leader you can. The most technical or highest-ranking leader in your organization will likely be the CTO or CIO, or in smaller organizations, the VP of IT. It goes without saying that there is no meaningful technology strategy without their support. However, their support alone is not enough. You must also have the highest-level executive’s support, or the probability is high that your strategy will stagnate and suffer. It is the noise before defeat.

In my view, the best leaders and the best-led organizations are sharply focused on strategy, and the projects they fund and the customers and partnerships they pursue all logically follow as consequents from this strategy.

Yet not every leader recognizes the centrality of strategy. Your president or EVP or SVP may change direction quickly, without notice, chasing any dollar waved in front of him for any customer or attractive project that comes along. He may have an unhealthy relationship with partners, vendors, or customers, resulting in an inability to see himself as master of his own fate. He may simply lack the focus and tenacity to stick to a plan that spans longer than a quarter. These are very difficult working conditions for the strategically minded architect.

Executives in some organizations may ignore or even show outright contempt for strategy. They proudly act on instinct and inspiration, and consider any strategy as the work of bureaucrats or dreamers disconnected from the real world, or as something quaint and cute that best belongs on the shelf to collect dust with the rest of the stuffed animals. People can enjoy the freewheeling lifestyle and moderate success that sometimes accompany this mode, but this is not how market leaders are typically made.

Alternatively, your executive leaders may not have quite such an adversarial view, but still may not understand the importance of your technology strategy. But regardless of what it is, you must understand your highest leader’s view on strategy. This is the only way to know where you’re starting from. Typically, leaders will readily sort themselves into strategic, or something else. That “something else” will lurk in the guise of “intuitive” or “deal-driven” or “operational” or too busy to think about the future. If your CEO or business unit president or Chief Whatever Officer is not interested or well versed in strategy, you can still be successful, but will have a longer, harder road ahead of you. If this person shows outright contempt for strategy, my estimation of the probability of your success is low. In that case, my recommendation is that you put down this book, stop caring about strategy, and ride the roller coaster until it goes off the rails, or, if you find yourself now inspired and steadfast in the joys and fruits of strategy, find a more clueful organization to work for.

It may also be the case that your leadership understands well enough that it must have a strategy, and you have simply been tasked with creating or contributing to your organization’s technology strategy. That’s a fortuitous first step, and saves you the work of convincing them that strategy matters. That’s a hard row to hoe.

Stakeholder Matrix

Different stakeholders have different roles within your strategy project. The frequency and type of interaction you have with each of them depends on the nature and focus of your strategy. Consider your work from their point of view. Is their support important to its success? Do they have knowledge or expertise that could improve, refine, and strengthen your strategy? How much will your strategy change their processes or daily work once implemented?

Once you have your stakeholder list, add two columns to it:

• Influence
• Impact

Influence refers to how important this person’s support is. What is her ability to change your direction, impose new priorities, dictate critical aspects, ensure your funding, or otherwise determine constraints for your technology strategy? It’s the degree to which she can impact your strategy.

Impact, on the other hand, refers to the degree to which your strategy, as it becomes realized, will impact her. For example, your strategy will have a high impact on the developers now using an aging technology stack if you’re proposing to consolidate on a single modern toolset. If you are introducing a services strategy, you must be closely engaged with the product management team. If your strategy involves outsourcing nondifferentiating systems to vendors, this may impact sales and HR. Of course, these are simply examples and depend on what your company does.

Now that you have these two additional columns, use them to score each stakeholder on a scale of 1 to 5 for his or her influence and impact.

Generating 2×2 Matrices

We’ll do a lot of generating 2×2 matrices, the four-quadrant charts that plot values to help drive decision making. The basic process is that you enter the values in Excel, create a bubble chart, and then color the backgrounds to create the quadrants.

See http://bit.ly/2MlCIpr for a tutorial or download my template from http://www.aletheastudio.com.

You can now use the scores to plot your stakeholders on a 2×2 chart with influence on the y-axis and impact on the x-axis. It contains four quadrants, as shown in Figure 5-1:

Monitor

Those who are relevant enough to make the list, but have comparatively low scores for both influence and impact.

Maintain confidence

Those who have high scores for influence but low scores for impact.

Keep informed

Those who have low scores for influence but high scores for impact.

Collaborate

Those who have high scores in both influence and impact.

Figure 5-1. Once your matrix is complete, the names will appear in the quadrants

Here is how you work with the stakeholders represented in each quadrant:

Monitor

Ask them on a regular basis about changes in their worlds and what they see coming, and note what might inform your work. Check in with them occasionally and informally regarding your progress. Broader understanding of what you are doing and why will create additional groundswells of support that may be handy later.

Maintain confidence

Invite them to executive steering committees for your technology strategy. Send them reports on your activities. Be sure they understand your milestones and know how you are doing with respect to achieving those. Ensure they understand and approve your metrics for success. Ask about trends or insights they have that might modify your strategy. Follow up on their continued buy-in on the Roadmap. Discuss your progress and funding regularly in some detail in one-on-one meetings.

Keep informed

Include them in an email distribution offering occasional updates on the strategy. Invite them to broad forums such as a town hall where you are presenting an update. Talk with them about work they might have to prepare, such as communications, trainings, deck updates in their departments, or other materials they might have to create as your strategy progresses. Go to their department meetings to present specifically to their team. Discuss the strategy and progress with them at cocktail parties.

Collaborate

Actively work with these people on a regular basis in full partnership to co-create the ideas and execution plans within your strategy. 

Now you’ve got a strong understanding and representation of the organization. You may need to update this from time to time as people come and go, get promoted, and change positions, depending on the length of your project. But now you are well prepared to quickly get things done in parallel threads.

RACI

Now that you have created your Stakeholder List (see “Stakeholder List”) and Stakeholder Matrix (see “Stakeholder Matrix”), you have the raw material for helping you collaborate and communicate about your technology strategy project.

RACI is an acronym originating at the Project Management Institute (PMI). It stands for Responsible, Accountable, Consulted, Informed. These are classifications for the participants in your project.

We make a separate document for the RACI instead of just adding to the Stakeholder Matrix. That’s because though there will be some overlap, these lists tend to have different people on them.

List broad categories of work down the lefthand side:

Responsible

These people do the hands-on work to complete this task. Depending on the nature of the items in your work list, this can be any level of title.

Accountable

These people are answerable to executives for this item being delivered on time with appropriate fitness and quality. May be a VP or director.

Consulted

These are subject matter experts on some aspect of the system. They are not directly on the hook for doing the work. They may make local decisions or certain aspects that you seek them out for. They’ll give advice such that their ideas will change your work, the design, or otherwise modify your strategy. Identifying the right Cs on a project is the difference between a lot of buy-in and a robust product, and something more tepid. If you’re making new software, you should likely consult the CISO’s office.

Informed

This is a one-way street. You update these people on project status, and they don’t have a say or a recommendation about the work you’re doing and can’t change it. This category might include the VP of tax so that he’s aware of your project and can look you up when it’s time to determine if he can apply for an R&D tax credit.

In the column headers across the top of the RACI spreadsheet, list who is involved in the project in each of these four ways. To complete the spreadsheet, enter an R, A, C, or I at the cell intersecting which person is assigned that role for that item. Not all of the cells will be filled in. For each work item, you must have exactly one person assigned as accountable for each item. For the other items, at least one person must be assigned to each of the four roles. Typically, there are one or more responsible people, several consulted, and several informed. The completed RACI document looks like Figure 5-2.

Figure 5-2. A typical RACI spreadsheet (source: Wikipedia)

The primary mistake I see people make in RACIs is the temptation to assign multiple people as accountable for a given item. Because the accountable person is typically a VP, or someone with the power to stop or change the definition of that item, or to build the team involved, she must have decision-making authority, and her boss must have the convenience of going to one leader capable of creating the outcome and reporting on progress. Yet assigning multiple accounting parties seems to happen every time people start to make a RACI. Still, you must force yourself and the team to pick only one accountable person for each item. It is tempting to do otherwise because it seems democratic, and multiple stakeholders may have a vested interest in the outcome, or a team may be shared. But it’s likely a sign that you have not defined the task properly. Inspect the task with the team to see if it needs to be recast or split. If upon inspection it truly is the proper definition and level of granularity, and two leaders still seem right, pick the one who has the most control or vested interest in the outcome of that item.

RACIs are very valuable and often underused. On the surface, technologists might view them as too obvious or superfluous to bother creating. They might dismiss the RACI as busy work that doesn’t matter. If you find yourself tempted to do so, I urge you to reconsider and to take the time to create the RACI. You can often get it done in a short time, and you will refer to and refine it throughout your project as things become clearer.

The RACI clarifies the first two of the following key aspects of any project (the last two are represented in the vision and the project plan):

• What are we doing?

• Who is doing it?

• When must we do it?

• Why are we doing it?

That’s going a long way for very little investment.

Life Cycle Stage

Companies, like living creatures, have a life cycle. They’re created, they grow, they enter maturity, they decline, and eventually they reach the end of life. Every company that exists is at some point within this life cycle.

Companies, like people, stay in these different stages for different periods of time. It’s important for you to know at what stage your company currently is, how long it has been there, and how long you estimate it’s likely to stay there before moving to the next.

The reason this matters is that there are typically different levels of value associated with companies at different points in their life cycle. That sense of value creates a level of willingness to pursue innovation. This is typically very high in the beginning of a company’s life, when it’s trying to create a new product and gain market share or create a market. It’s usually more cautioned and considered in mature companies, and all but absent in companies in decline. Knowing the stage you’re in gives you a sense of how much work you’ll have to do to get something done. It also gives you some guidance on what your tech strategy should be about.

Determining your company’s current stage is easy. If you’re in a public company, you can read the 10-K report. This report is required by the Securities and Exchange Commission and details the financial performance and the outlook for future earning prospects. There are quarterly earnings statements posted, and quarterly earnings calls that anyone can listen to or read transcripts of. This gives you a good idea of where your company might be. What you’re looking for are specific revenue numbers. Figure 5-3 illustrates the basic flow of each stage, but it’s just for rough guidance.

Figure 5-3. Life cycle value stages

The following are some basic guidelines; these are in no way hard-and-fast rules. Companies have hiccups and turnaround efforts, change how they report revenue, and so forth. So you can’t just read one number and know the answer. Longstanding companies can enter dark periods and then get a leader with a different vision and create renewed energy, introduce a great new product, and emerge successfully. So anything goes, but let’s look at some broad categories as a guide:

• If your company made 5–8% more revenue than it did last year, you may be in a mature company. These companies tend to be well established. They may have long-term customer contracts. They may have saturated market, having sold their flagship product so well that now there’s no one left to sell it to. That means the business will be looking for alternate growth strategies. Its sales pipeline may be dry, and so it may be looking for greater share of wallet—the business term for how much money you’re getting from a customer versus your competitors or other vendors. The company may be looking for ways to cross-sell. In that case, a tech strategy that foregrounds platforms or focuses on stickiness, or quick-win add-ons to the existing product, could be relevant and lucrative.

• If your company made 8–15%, look at its revenues from the previous years. This could be strong growth, or a sign of slowing down, depending on the charts. This will likely be a soul-searching strategy season for your company in which it must figure out carefully how to position itself for sustained growth. Expect a pivot of some kind, and be sure to stay close to your executives to know how this should inform your technology plans. Expect fluidity and volatility, and ensure your tech strategy aligns with this pivot by focusing on agility in the system, such as microservices or improved Agile development methods.

• If the company made 20% or more, it’s likely in growth mode. Your strategy might focus on getting to market quickly and strengthening your core. If you have deadbeat products that aren’t performing, do you resurrect them or kill them off? Explore this further in the Core/Innovation Wave pattern (see “Core/Innovation Wave”).

• A company whose revenues are on a continuous downward trend, or which is growing at 0–5%, is likely in the declining side of maturity. Employees tend to expect a 3% raise every year just for showing up. If your company is growing at 3%, and a primary cost driver is labor, it’s not growing at all. Ask why this is happening. Look at what in your tech product portfolio you can repurpose quickly. To know how to focus your strategy in this case really requires careful planning, and using more of the patterns here to create a more holistic strategy will be important. It will also be important to focus your strategy on cutting costs. However, you must consider how your strategy will positively impact both top-line revenue and bottom-line costs.

Companies with negative revenue growth tend to go into a spiral: they have to cut costs to make up for missing revenue, which leaves no money to innovate, which makes them lose more customers and more revenue. This is a tough one.

If you’re in a private company, leaders tend to be tight-lipped about the financial performance of the company, and it can be difficult to determine what stage you’re in. Consider how long you’ve been in business, ask some executives if they’ll divulge the revenue numbers, especially in comparison with recent years, and have them characterize it.

This is a simple pattern: you determine the life cycle stage your company’s in, and then use the preceding guide to informally consider how should shape your insights and hypotheses. These are some relevant questions you could consider at different stages of the life cycle:

Introduction

Can you expand from one key customer to other customers in the same market? How can you properly time your investments in help so you can grow rapidly without overinvesting? How can you get your name out there and acquire more customers? This is survival mode, and you are all about revenue.

Growth

Here the concerns shift a bit. To grow substantially, you’ll be considering expansions. New market, new products, new customers. This means you’ll need to consider automation strategies, but balance that investment as more opportunities and customer feedback change your product. Do you need to update your product to include more internationalization or localization features? How are you examining your processes for efficiency? How do decisions get made now? Is the culture getting away from you? How can you deal with the fact that “what got you here won’t necessarily get you there”? How can you reuse certain aspects of the business? Have you mastered your product quality? It’s not only about revenue now, but about cost management as well.

Maturity

At this point, a company has significant market share, is a known leader in some area, enjoys recurring revenues from its scaled business model, and can reasonably manage costs. That means it has a target on its back, and a set of existential questions before it: How can it expand into other markets in order to diversify its kingdom? It will have taken some time to reach this stage, and the world has been changing. What are the environmental threats as suggested by a PESTEL (see “PESTEL”)? What substitutes might be introduced, even by a company with no direct aim of toppling you? What competitors are squarely aiming for you and your customers, and what are their methods, and what threats do they present as suggested by the Five Forces (as described in “Porter’s Five Forces”)? How do you stay relevant? Your processes are all in place; your employees, suppliers, and customers have all come to expect certain things; and yet you must in a sense reinvent yourself without losing your ground, to prepare for continued growth and defend against the threats.

Companies can potentially stay at this stage indefinitely, as long as they are sharply focused on operational management. But they won’t grow without doing something different.

Decline

Companies do not have to decline, though of course most do eventually. The companies that cannot find a successful answer to these existential questions of reinvention will enter a death spiral of cost management, which prevents research and development and innovation, which precipitates stagnation and irrelevance, which continues the vicious cycle.

This analysis is but one input of many we’re discussing to help direct how your strategy should be focused, or at least what it should take into account; that’s all.

Value Chain

Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities a firm performs in designing, producing, marketing, delivering, and supporting its product. Each of these activities can contribute to a firm’s relative cost position and create a basis for differentiation.

Michael Porter

In 1985, Michael Porter, whom you met earlier as the father of the Five Forces, wrote a book called Competitive Advantage: Creating and Sustaining Superior Performance, as a follow-up to his 1980 book, Competitive Strategy: Techniques for Analyzing Industries and Competitors (both from Free Press). Both books became classics within management circles and offered a new framework called the Value Chain.

One purpose of the Value Chain is to help you understand where your bread is buttered. That is, it divides the world into value creation and support to illuminate where value is created and where it isn’t. You should be crystal clear on what your company does to create value, what products they sell, and to whom. If this sounds too obvious to say, it’s surprising how this is not always clear, especially depending on your products and industry.

Let’s look at the framework itself, shown in Figure 5-4.

Figure 5-4. Porter’s Value Chain

The image envisions a company as a series of inputs, a transformation at each step, and subsequent outputs along the chain that work together to provide value and realize profit. Let’s unpack each of the five major activities leading to profits:

Inbound logistics

Receiving raw materials from suppliers to the plant

Operations

Transforming the raw materials into valuable products

Outbound logistics

Getting the products from the plant to market

Marketing and sales

Getting the products from the market into customers’ hands

Service

Repairing or correcting or improving the products after they’ve been purchased

You examine each point in the chain to find opportunities for improvement and deliver the maximum value for the minimum cost, and in so doing create a competitive advantage. Businesspeople are used to doing this sort of thing. But if you as a technologist approach your architectures with this in mind, you can create more value for your company.

Growth-Share Matrix

The Growth-Share Matrix is also known as the “BCG Box.” It was created by Bruce Henderson in 1970 for the Boston Consulting Group. It was intended as a tool to help companies analyze and manage their portfolios. Its purpose is to help companies allocate resources.

Here are the four quadrants. Depending on the size of your company, this matrix can be used to view products in your portfolio or entire business units:

Cash cows

These have low growth but high market share. These are your successful, mature products in an established industry and mature market. You milk them for the cash they consistently bring, and they’re fantastic because they don’t cost much to keep running. You don’t want to invest much in these products, because the opportunity for further growth is limited if the market is not growing. You won’t see a great return on additional money, even though these products are cherished. These parts of the business tend to be used to fund innovations or startup areas in the business.

Question marks

These are the problem children. The market is growing, but this product has low market share. These are typically young products or startups. You must ask why they are not more successful. Do they just need more time, is the market too crowded, has a competitor gained on you with better features or stability, are customers not interested in your product, or have substitutes emerged? The job here is to determine how to turn them into stars by getting more share. This usually requires big investments and can be a tough decision. If after years of investing they can’t grow, they become dogs. So these are the ones to focus your analysis on.

Stars

These products enjoy high market growth and high market share. They’re big and getting bigger. These are where you invest and protect. But continuing growth requires continuing capital investment. Your hope is that you can dominate the market and these become cash cows.

Dogs

These products have low market growth and low market share. Stop investing and retire them.

The Growth-Share Matrix is shown in Figure 5-5.

Figure 5-5. The Growth-Share Matrix

You can use this matrix in your portfolio planning and strategy season exercises. You should at the least be aligned with the strategy team on the placement of the applications. Do not make grandiose plans to make a lot of upgrades and feature enhancements in dogs.

The Growth-Share Matrix is a very familiar tool to many businesspeople. If you don’t spend too much time on it or treat it too seriously, it makes a nifty way to visualize where to focus your time and attention in a product management Roadmap.

Core/Innovation Wave

As shocking as it may be to hear, people don’t always automatically agree on what projects to fund and how much to fund them. Arriving at the answers for what systems, products, and projects to fund; what features to pursue; and how much of the pie each item should get is hard to determine and can be highly contentious. These matters are debated by product management, product development, architecture, strategy, IT, business operations, and finance, of course with a breezy executive dropping an occasional bomb on the proceedings on the order of, “Oh, didn’t I tell you? The leadership team just decided to move all the operations to the moon. Can you redo everything with that in mind?”

The process is sometimes fraught with ego and emotion. Worse, it’s played as a zero-sum game: if you get that $10 million, then that’s $10 million less for my project.

To create a modicum of order, the strategist will look for a list (or better, a 2×2 grid) to diffuse the intensity and bring data to bear. Enter the Core/Innovation Wave. This tool was shown to me by Sabre Hospitality Chief Strategist Balaji Krishnamurthy.

This pattern is useful if you’re considering a set of future projects, and you aren’t sure which ones to pursue or ask for funding for. Sometimes you want to get a quick idea of how complex it might be to do something. If it’s far from your core business or most mission-critical systems, then it may be something you’re not mature in, don’t understand well, and will need more time or more funding to pursue properly. This is even more true if the project you’re considering represents creating something entirely new to the world or to your organization.

During strategy season in late spring, you can use the Core/Innovation Wave as a planning tool to assist you in envisioning where the applications in your portfolio lie with respect to two key vectors: proximity to the core and innovation (see Figure 5-6). It’s useful in conjunction with an Ansoff Growth Matrix (see “Growth-Share Matrix”) and an Investment Map (see “Investment Map”) and Application Portfolio Management (see “Application Portfolio Management”).

Proximity to the core refers to how close this proposed project, acquisition, product, or feature is to your main business or your key applications. Proximity to the core means how mission-critical the application is to your division and your customers. How much revenue is generated by each application today, and how much revenue is expected to be generated? How much other stuff does it enable? The ones with the most are your core products.

The x-axis is Innovation: Does this feature already exist entirely, or a little bit but it needs modification, or not at all? How differentiating is it with respect to enabling your future? Like babies, innovative young projects need far more nurturing than they can give in return. Moreover, you will have a harder time reaching new customers, accessing new markets, and doing things differently.

Figure 5-6. Core/Innovation Wave

To use the tool, get a list of your applications, the companies you’re considering acquiring, or the projects you’re considering asking the board for funding to do. In the figure, the dots represent the scatterplot for each application or proposed product or proposed acquisition or activity. Consider them across these two axes.

You can use a chart such as this to score each item as shown earlier. When you’re done, layer over the waves to tag the priority level of the funding each should get, with a bias toward those in the upper right: these are the ones that are most innovative and closest to the core of your business.

The “waves” are meant to help you sort out your bubbles into general categories. For things that are close to the core and not innovative, you likely have many maintenance teams already working on them. You can staff those differently than innovative work that has little customer-facing, revenue-generating impact. You will need to fund that to ensure proper maintenance. The risk profiles are different, and the pioneering mindset, attitude, and maturity and talent of the individuals needed will be different.

You can also use this to help visualize a timeline projection, to help the executive and your teams talk with customers and present to their management. What work you will do in the next year? Next two or three years? It helps them start to conceptualize what the opportunity size might be, and why they should care.

Used in an executive slide, this chart can provide a wonderful opportunity for them to ask questions, understand broader strategic alignment, and see where your Roadmap is headed. You can show a set of pursuits you want to make in acquiring new technology companies to add to your platform.

It’s easy to get this done quickly, and use that as input to a more detailed Roadmap planning session with development management.

Note that you don’t have to use this tool only in strategy season once a year for big budget asks. The Wave also helps you sort other aspects of how to staff projects, and how much architectural attention to give them. You can use it just within your architecture team to determine where, and how extensively, you need to write architecture definition documents (see “Architecture Definition”) to support dev teams, or otherwise make specifications about toolsets and understand the emerging tech.

You can also use it within a project team. As with many patterns here, you can consider this a fractal, and use it to help prioritize the work of your Roadmap within a single project or system. When you’re triaging features, which happens frequently, this can help you assign management or other oversight of the work, and determine places where you can try out new technologies or may need more time (if something is innovative and close to the core).

As management, you may look at items that are very innovative and see if you can carve out 5–10% of the team for some R&D work, and not load them up with commitments on the daily Roadmap. Otherwise, don’t expect the items to get addressed.

Don’t use this pattern on its own. Use it in conjunction with the Growth-Share Matrix and Investment Map. The Wave alone won’t make any decisions for you. But it will help frame the conversation as you have the budget planning and trade-off discussions, and will help you communicate easily to executives within the deck you’re building. 

Investment Map

You can’t do everything at once, and you can’t invest equally in All The Things. You must prioritize.

The Investment Map isn’t so much about money as offering a simple lens for the executive to view, in a quick and easy way, her portfolio of applications plotted against how you are thinking of planning the next year or so of work. It marries your current application set along with your emerging, innovative ideas for where you think the Roadmap should go. It will spur terrific conversations between product management, strategy, product development, and architecture about where your tech organization’s focus should be.

The purpose of the Investment Map is to help you temper and balance the exciting, cool things that you want to do, the level of difficulty and preparedness you’ll need to pull them off, how ready you hypothesize (see “Hypothesis”) the market is to receive them, and how big the barriers might be.

Here’s the process to create the map:

1. In a spreadsheet, list the items in your portfolio and list the ideas you have for work you want to do to create new products, enhance existing ones, or try a new technology. This could include major architectural changes to key systems that might require a project to complete.

2. Score them according to the two key vectors: how difficult will it be to do that item, and how ready, right now, are your current customers and the market you’re serving in general?

3. Generate the 2×2 matrix and label the quadrants.

4. Use it as input to team conversations, Roadmap planning, budgeting, and prioritizing.

5. Add it to a slide in your burgeoning Strategy Deck.

The result of this exercise will look like Figure 5-7.

Figure 5-7. The Investment Map

The first vector is how hard or easy something will be to do (which can include its novelty, risk, complexity, level of effort, budget requirement, number of critical unknowns, and so forth).

The second vector is how ready your customers are to receive it. For example, years ago a number of the big hotel chains wanted to add digital keys that could be sent to guests’ mobile phones on check-in. There were two barriers: the guests weren’t ready, and their franchising customers weren’t ready. There were some startups that offered this tech. But it was new, so it didn’t work perfectly. If a game on your phone doesn’t work, you can just turn it off. If you can’t get into your hotel room, that’s a bigger problem. Market research revealed that there weren’t enough people with smartphones—sure, tech company executives all had them as early adopters and could afford them. Even today, only 75% of Americans have a smartphone of any kind. But nearly everyone has to stay in hotels, and phones run out of juice, so you’d need the regular door lock anyway, which is expensive to hoteliers. So the idea, even though it was a good one and continues to trickle into the market today, was incredibly slow to catch on. A sizeable, pioneering investment here would have been a mistake, as neat as the idea was.

The Investment Map works great in concert with Growth-Share Matrix/BCG Box and the Core/Innovation Wave. You want to consider these during strategy season, and budget season, and Roadmap planning season. You might update this twice per year.

I won’t belabor this tool further since it’s not likely going to be used every day, and by now generating 2×2 matrices should be old hat for you. It’s just a handy, easy way to help drive general direction for both your current portfolio and future-oriented ideas.

Summary

In this chapter, we reviewed several patterns at the corporate or business unit level:

• Stakeholder Alignment (see “Stakeholder Alignment”)

• RACI (see “RACI”)

• Life Cycle Stage (see “Life Cycle Stage”)

• Value Chain (see “Value Chain”)

• Growth-Share Matrix (see “Growth-Share Matrix”)

• Core/Innovation Wave (see “Core/Innovation Wave”)

• Investment Map (see “Investment Map”)

In the next chapter, we’ll examine just a few quick patterns with a tighter focus: the departmental or organizational level within your company.