There’s been a fairly lengthy argument on the LinkedIn business-architecture list about the role and meaning of ‘value’ in business-architecture. As usual, most of the US contingent leapt off onto the red-herring of ‘shareholder-value’, which to me is almost completely irrelevant to the actual design and structure of a business-architecture – it’s an outcome, not an input as such.
After much back-and-forth – and a constant struggle to detach the discussion from the US obsession with ‘shareholder-value’ – I finally managed to get at least some of the contributors to understand that values are some of the key inputs to an architecture. At this point, one of contributors tossed in what I can only describe as a lame attempt at a justification for architectural incompetence:
In my work I usually don’t create the many-layered value model that you do. I go right to the heart and relate tactical decisions to tangible value.
I’d have to say that I was shocked but not surprised. Three instant comments:
- it’s talking about price, not value;
- it’s going to the head (analysis), not to the heart (value); and
- it’s describing business-strategy and/or business-tactics, not business-architecture.
What’s still needed is a solid focus on the actual topic, namely value in business-architecture – in other words, the values-architecture that underpins the business-architecture itself.
To illustrate this, consider that statement “I usually don’t create the many-layered value model that you do”. A simple question: would you trust a purported architect who said “I’m going to use metal and glass in your building”, without any explanation or analysis as to why those materials would be used? Or what calculations underpin the choice of properties for the metal, or solar and other characteristics of the glass? Would you be concerned that there’s no ‘many-layered model’ behind the design, for example no apparent awareness of the need for resilience against earthquake or severe-storm, because though those are relatively rare in the short-term, they are highly likely in the medium to longer term? Would you trust an architect who regarded a many-layered, multi-faceted model of the building as irrelevant to the architecture-development and subsequent design and implementation? Would you trust an ‘architect’ whose only concern was price? I would hope that the answer would be ‘No’…
Which is why, like any real architect, I do insist on models that demonstrably assess all of the key factors in play in an architecture design.
So: some suggestions towards a Values Architecture 101:
#1. Values are subjective, not objective; they are feelings, not things.
#2. Values are the literal drivers for a business-architecture: they are the winds that blow across it, the rivers that flow through it, the forces that shake the ground beneath it. Values are the actual links in any value-chain or value-web. As with a physical building, the business-architecture cannot ignore those forces – it must be designed around them.
#3. Values are primarily qualitative, not quantitative. Where it is necessary to describe values in quantitative terms, it is usually best to use simple 1-5 scales or the like; anything else is likely to introduce ‘spurious precision’, which is both misleading and dangerous.
#4. Any attempt to ‘objectivise’ values – such as by ‘valuation’ into a price – will always be based on hidden assumptions. Because of those hidden-assumptions, transforms to price etc are non-reversible, making it impracticable or impossible to derive the underlying value-factors by reverse-engineering from the valuation itself. Hence in architecture it is always best to model the values as values, in order to surface those hidden-assumptions.
#5. An enterprise (or extended-enterprise, reaching far beyond the ‘enterprise’ of the business itself) coalesces around a core value (the ‘vision’) and a cluster of related values and derived principles. These values represent the choices – conscious and unconscious – of the stakeholders in the enterprise, and are context-dependent. These enterprise-choices describe and define the ecosystem within which the business will operate. Amongst many other possible stakeholder-roles, a business will typically place itself in a ‘supplier’ role within that enterprise.
#6. The core of the business’s relationship with other stakeholders is its set of ‘value-propositions’ – which, by definition, incorporate key concepts of value to and with the respective stakeholders. The business-model, operating-model, organisation-model etc are artefacts that are derived architecturally from the value-propositions and their underlying values.
#7. A business has a value-relationship with every stakeholder in the enterprise, whether or not this is made explicit via a value-proposition. It is extremely dangerous – especially in the longer-term – to ignore the implied relationships with enterprise-stakeholders not explicitly referenced in value-propositions.
#8. Pseudo-values such as ‘shareholder-value’ may be derived from the architecture, but usually play no direct part in the architecture.
Enough to start with, I hope?