Skydivers have tolerance levels. Scuba divers have thresholds. Business leaders have limits. Are you pushing the performance envelope of your digital strategy?
We’ve all heard the phrase, “pushing the envelope,” or, more completely, “pushing the edge of the envelope,” but knowledge of its origin is less common. This metaphor refers to extending the current limits of performance, to innovate, or go beyond commonly accepted boundaries. The phrase goes back to engineering references of a mathematical envelope or “flight envelope.” The term entered the mainstream shortly after Tom Wolfe’s book, The Right Stuff, in 1979. The book highlights aviation pilots engaged in U.S. postwar research with experimental, rocket-powered, high-speed aircraft. Even earlier, the Journal of the Royal Aeronautical Society had been using the term “flight envelopes” for aviation and aeronautics since 1944. Shortly before Wolfe adopted the term, Aviation Week & Space Technology magazine referenced how NASA pilots were pushing the flight envelope to 10,000 feet.
The envelope is a mathematical construct and represents the limits of an aircraft. The envelope is a graphical representation of speed versus load factor. Simply put, it quantifies the aircraft’s limits in terms of aerodynamic performance and structural integrity.
Pushing the envelope
The upper and lower limits of safe flight apply to other areas of life and business.
A typical skydive elevation is 13,000 feet. The jumper has a limit of about 60 seconds of freefall. It takes about 600 to 1200 feet of freefall to open a chute. There’s a minimum altitude limit: a skydiver needs 400 feet to open the reserve chute. Deploying a reserve chute at an altitude below 400 feet may have severe consequences.
A standard, technical dive—if there is such a thing—with scuba gear could be planned down to 275 FSW (feet of salt water) for 20 minutes. The required decompression time—which necessitates stopping at specific depths on the way up—would be 93 minutes: a total dive time of 113 minutes. The maximum time at a depth of 275 FSW is 20 minutes. Staying at the bottom longer than 20 minutes results in a decompression penalty, quickly exceeding the physical limits of humans.
Similarly, a business leader has limits.
Limits of strategy
Technologies have limits, and so do business strategies. Spend your time defining your team, department, and organizational operating model before setting the business strategy. Does this sound counter-intuitive? It’s not.
Products, services, and interactions have two factors in common—standardization and integration. The MIT Sloan Center for Information Systems and Research developed characteristics of four operating models:
- Diversification: low standardization, low integration
- Coordination: low standardization, high integration
- Replication: high standardization, low integration
- Unification: high standardization, high integration
Diversification encourages independent transactions with decision control landing squarely on the business areas. Coordination enables shared usage of customer and product information. Replication gives autonomy to business leaders with centrally mandated services. Unification integrates business areas globally, moving toward centralized decision making.
Acknowledge your organizational performance envelope
Creating value, building products, and innovating are exciting. These processes change how value is delivered. Creation starts with freeing your organization from the external constraints of materials, resources, and costs. Innovation, at its core, is about letting go of existing paradigms. Asking core questions about desired levels of integration and standardization help to ensure alignment across business partners.
- Are you servicing a global customer base?
- Do transactions impact multiple business partners?
- Is value realized at the business unit level or the organizational level?
- Do business processes connect at the local or global level?
- Are IT decisions made centrally or by individual business partners?
- Is there centralized control over business-partner operations?
- Are customers aligned to business partners or shared by business partners?
- Do business leaders have discretion over processes?
- Are data definitions standardized at the business-partner level?
- Do business partners share business services?
Select an operating model to set the frame for your organizational strategy. Organizational agreement on the importance of integration versus standardization is everything. Secure alignment on two primary questions:
- Is data shared among business partners?
- Are business processes shared between business partners?
Next, determine the most important future state of your business:
- Agile: to maximize flexibility
- Innovative: to ensure a creative process
- Expanding: to assure growth
- Scaling: to exponentially expand the business
Agile businesses are empowered with the diversification model. This model ensures that changes in priority are at the sole discretion of the business partner. Innovative businesses advance ideas with the coordination operational model. Autonomy over decision making can empower business partner to determine which innovations will best leapfrog business operational and strategic goals. This model also allows innovations to be shared across business partners. Expanding businesses benefit most from a replication model to allow the business to grow. Short-term growth is valued over long-term growth with the adoption of a siloed growth approach. Scaling businesses find the greatest value in the unification model. Growth is the priority, with uniform quality of scale being paramount.
Every model can result in highly effective organizations. While it’s easier to evaluate each model as a stand-alone approach, typically businesses are hybrids or a combination of two or more models. For example, a business might take a unification approach to security and privacy but adopt a diversification model for local expansion.
The two-dimensional model of mapping process standardization and integration is a great way to start strategic business discussions.
Acknowledge your organizational performance envelope
When we let go of frameworks that have guided decisions in the past, we must establish new boundaries. To what degree do we integrate our business? Do we have shared technologies services? Is this in the best interest of our organization?
Business envelopes provide a guide for organizational performance and business model structural integrity. Establish yours before you think about business strategies.