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Agility—Modeling Response Proficiency
Contrary to popular belief, regulated utilities are in competition—for meeting compliance norms and customer expectations established by others, and for securing energy, M&A opportunities and competent management against others. Management, too, is in competition now—for job-retention—as new liabilities test Board Member patience, and as best-practice awareness tests Commissioner's tolerance.
More than one wag has called this Agility series an oxymoron. Others have said it was talking to people who don't want to listen about things they don't want to hear—regulation buries inefficiency in the rate structure, and deregulation focuses initiatives on short term cost cutting and short term profits—they said.
Cheap shots not wholly underserved, but they don't apply to everyone. Some do care, evidenced by what they are doing. Agility isn't their stated goal, but it is the end result. Effective business and operational practices are what they focus on—ones that enable the enterprise to deal with the dynamic reality of business and operational environments. When they speak of the initiatives they've led, it is clear that they set out to improve responsiveness, with the intent to lower costs, improve reliability, increase customer satisfaction, and meet new compliance standards.
Response of any kind consumes resources, costs money, takes time and incurs risk. Generally there isn't a choice of responding or not—so the issue comes down to response proficiency. Can response be made a non-issue, a standard operating procedure, an affordable, predictable experience—rather than a risky, chaotic event?
Clear evidence says yes. Early interest for agile enterprise in the manufacturing sector prompted the "Sounds good but show me one" reaction. The answer came in An Agile Enterprise Reference Model, With a Case Study of Remmele Engineering1. That reference model profiled 24 business practices at Remmele that were deemed generally critical for industry at the time. Each was scored for its response proficiency. Proficiency was measured against a five-level maturity model, with demonstrated capability examples justifying each score. Remmele did not score high in all, but in their industrial sector they scored high in those that mattered—with an underpinning of sound practices.
The previous article in this series2 introduced a metric framework that showed response measured in four dimensions: time, cost, quality, and scope; and a response-category framework that showed four types each of reactive and proactive response. Hundreds of case studies done at the Agility Forum show that proficiency matures sequentially through these frameworks. Response maturity is evident by where a given business practice lies in this progression through the five stages. Determination is simply made from discussion with the people involved in each practice—listening as they speak of how past response events were dealt with.
A Response Proficiency Model can be constructed for any enterprise (called a Change Proficiency Maturity Model in the Remmele analysis). The resultant picture isn't often pretty. Remmele didn't like theirs at first sight—but they led their industry—and that's quite sufficient. Both business viability and business excellence is determined today by the ability to respond effectively to the business environment—relative to how well others respond competitively.
When you don't know where to go, any path will satisfy. When you don't know where you are, it's hard to choose a path. Response proficiency modeling provides a visible decision base. It displays areas of sufficiency, areas for improvement, and areas for urgent attention. It provides a knowledge base for strategy and priority, and evidence of good governance. An industry benchmark for comparison would help, but its lack doesn't negate the values of knowing where you are and where you might usefully go. A process for building your own model is explained in chapter eight of Response Ability—The Language, Structure, and Culture of The Agile Enterprise3. A brief outline of the profiling framework follows.
Accidental Stage (0): proactively stumbling, reactively chaotic.
The Accidental Stage is characterized by the lack of any response-process recognition, yet response manages to occur. The actual process is ad hoc: typically exhibiting false starts and retries, unpredictable completion dates and costs, surprising results and surprising side effects.
Repeatable Stage (1): proactively occasional, reactively safe.
The Repeatable Stage is typically based on “lessons learned” from past response activities. A few specialists and talented SWAT teams are recognized for prior successes and trusted to respond in acceptable time frames.
Defined Stage (2): proactively competitive, reactively confident.
The Defined Stage begins to recognize formal response processes with documented procedures. The number of successful responders is broadened as procedure, rather than "natural" talent, becomes appreciated. Response metrics are identified. Procedures at this stage are typically rigid, based on studied experience and analysis.
Managed Stage (3): proactively aggressive, reactively sure.
The Managed Stage is characterized by the appointment of response managers with established responsibilities, though they may neither be called nor recognized as such. An evolving knowledge base of response process fundamentals begins to emerge, appreciation for the corporate response-process is widespread, rigid procedures are loosened, and predictability becomes the norm. Preemptive capabilities begin to emerge.
Mastered Stage (4): proactively formidable, reactively automatic.
The Mastered Stage is characterized by a principle-based deep appreciation of adaptability, an understanding that process alone is not sufficient, and a conscious engineering and manipulation of the structures of business practices and organizational infrastructures. Like a flock of birds swooping and turning as a unit, corporate response loses its event nature and becomes constant and graceful fluid motion.
The model frameworks employed in the Remmele case study established a general tool for any company in any industry. Critical business practices to populate the framework are of course time and industry dependent, and can be framed across the enterprise or within specific areas. For consideration, a cross-enterprise set of business practices might include:
The issues shown might be the initial issues one particular company senses. These issues will change as more experience and capability shift the focus to more advanced issues. Items are bulleted here, so they do not convey the depth of explanation needed in a complete issues/requirements analysis. Note that the issues are more staff and departmental capability oriented than technology oriented. The lack of a specific technology is not the nature of the issue.
What practices do you think need profiled?
An Agile Enterprise Reference Model, With a Case Study of Remmele
- Attributed Copies Permitted - Essay #68 -
First Published as
Utility Agility - Modeling Response Proficiency - Part 5,
1/7/05, UtiliPoint International
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