Back in 2001, Kathleen M. Eisenhardt and Donald N. Sull published a Harvard Business Review paper called “Strategy as Simple Rules.“   This was a great paper that spoke to the need for a few straightforward, hard-and-fast rules that
define direction without confining it.  It resonated strongly with my colleagues and I as the term “simple rule” as used in the paper correlated very closely with a consulting tool we used regularly and to great effect – that tool being “principles”.

Principles to Clarify Strategy

Principles surface and can ultimately clarify key questions of business strategy, operating model design and Enterprise Architecture.   Principles represent a small set of simple, direct, clear articulations of “the way we work here” – rules of the road.  An effective principle has “edge.”   Rather than simply stating a mealy-mouthed cliché, a good principle is one where rational individuals can argue for the principle or its inverse.

We will optimize our IT investments for the enterprise, rather than for individual business units or functions.

The principle above is powerful, especially if optimization for the whole was not previously the case.  You can see here that a rational person (perhaps the head of one of those business units who has historically had the freedom to optimize his or her IT spend for their unit) could argue the opposite (in fact, the opposite was the status quo, presumably a result of rational decisions by sound minds!)  However, many organizations reach a point where they need to rationalize IT investments, share common capabilities wherever possible, and move to a more integrated operating model.  In those cases, the principle above can be an effective way of surfacing the issue, driving the dialog and reaching consensus.

Often general, always actionable, effective principles help translate strategy into an action.  Effective principles:

From Simple Rule to Changed Behavior

While the power of a good principle (i.e., simple rule) to surface issues, drive dialog and reach consensus is important, that is typically insufficient to drive action and ensure behavior consistent with the principle.   Once the principle has been agreed, it is important to work through the key implications of each principle.  What will need to be different for the principle to become “the way things work around here”?   How will we need to act after the principles are in place?  What changes must be made to ensure that we act in accordance with the principle?

Some principles require new policies.  Some demand changes to governance models or decision rights.  Some demand attention to rewards, recognition and consequence management.  All effective principles should be accompanied by an underlying rationale explaining why the principle was adopted and why it is important.

Where do you see the need for a few “simple rules” that might better leverage IT capabilities and investments in your enterprise?  Tyically, these are found in “points of pain” – recurring issues that feel insane, and yet keep popping up like Groundhog Day.  How can you pull together the right set of stakeholders, and facilitate them through the development of principles to help fix the insanity?

Filed under: Change Management, IT Management, IT Maturity, Key Frameworks, Useful Tools Tagged: | Architecture, business outcomes, business strategy, business value, business-IT convergence, Business-IT Maturity, Enterprise Architecture, Principles, simple rules