Introduction

In the first decade of the 21st century, as the profession of business analysis was just coming of age, the global economic crisis served as a wake-up call. In his introduction to the 2010 Global CEO Study, Samuel J. Palmisano, chairman, president, and chief executive officer of IBM Corporation, said that the biggest challenge CEOs are facing is the network of complexities brought about by the Internet and the global economy. CEOs in the study said their organizations are not equipped to effectively manage this uncompromising complexity because they do not have the creative leaders they need.

What we heard … is that events, threats and opportunities aren’t just coming at us faster or with less predictability; they are converging and influencing each other to create entirely unique situations. These firsts-of-their-kind developments require unprecedented degrees of creativity—which has become a more important leadership quality than attributes like management discipline, rigor or operational acumen.

What does this alarming level of complexity and the need for extraordinarily creative leaders have to do with the emerging discipline of business analysis? If indeed we are faced with a competitive and economic environment unlike anything that has come before, and if enterprises today are not equipped to cope effectively with this complexity in the global environment, and if business analysis is all about understanding the needs of organizations to remain competitive, then it seems as if the gale-force global economic winds are causing two new business disciplines to converge: business analysis and complex project management. And there is a new leadership role that might well be filled by the enterprise business analyst, a leader focused on business/technology optimization through the development of innovative solutions. The business analyst’s leadership is a strategic resource that, if used appropriately, can unleash in organizations around the globe the innovation and creativity needed to meet 21st century challenges.

THE LOOMING STORM

In the face of rising complexity and multifaceted and multilayered problems, the pressure to perform is greater than ever. Those who acquire and master business analysis capabilities will more effectively react to and preempt changes in the marketplace, capitalize on complexity, and flow value through the enterprise to the customer, thus remaining competitive. Today, we struggle to operate in a web of organizational relationships and interconnected systems. The emergence of the global economic and information network and the transition from labor-based to information-based organizations is marginalizing our traditional hierarchical structures, often replacing them with virtual sets of connections and partnerships. Businesses are rejecting traditional management organizations to create complex communities comprising alliances with strategic suppliers, networks of customers, and partnerships with key political groups, regulatory entities, and even competitors. Business processes and supporting technology have become more interconnected, interdependent, and interrelated than ever before.

We are in the middle of a transformation that is creating turmoil and disorder while companies are struggling to leverage the dynamics of the new economy: new business models, unprecedented change, unparalleled complexity, rapid innovation, and new leadership capabilities to convert strategic business needs into innovative products and services.

NEW BUSINESS MODELS

Noted futurists Don Tapscott and Anthony Williams, authors of the book Wikinomics, predict the rise of “mass collaboration” as the new business model that will replace the current corporate model. While this may not be the case, the conventional wisdom about how best to organize business must be rethought and reexamined. “We have both a need and an opportunity to devise a new form of economic organization, and a new science of management, that can deal with the breakneck realities of 21st century change,” Tapscott and Williams write. Our 21st century business models must be “more like the marketplace and less like corporations of the past. [Business] will need to be flexible, agile, able to quickly adjust to market developments, and ruthless in reallocating resources to new opportunities.”

In the face of the radical changes that are needed, we are falling behind: 63 percent of IT professionals say the United States has lost its position as a global IT innovation leader. Among the top reasons cited for the decline:

Offshoring of jobs

Failure of the U.S. educational system to prepare students in science, technology, engineering, math, creativity, problem solving, and critical and systems thinking

Lack of a cohesive national policy in technology areas (mobile payments, smart electricity grids, transportation systems, green computing)

Dearth of technology leadership at the executive level.

UNPRECEDENTED CHANGE

According to the Wall Street Journal, “We are in an economic climate where decades-old corporations like Lehman Brothers and Bear Sterns can disappear overnight, while new ones like Google and Twitter can spring up from nowhere.”

In the midst of this chaos, organizations are addressing the pressures of whirlwind change, global competition, time-to-market compression, rapidly changing technologies, corporate inertia, and yes, uncompromising complexity. Business systems and consumer products are significantly more complex than in the past, and for many reasons the projects that implement them are also exceedingly complex. To reap the rewards of significant, large-scale business/technology innovations designed to not only keep organizations in the game but make them a major player, we must find new ways to not just harness but to capitalize on complexity.

UNPARALLELED COMPLEXITY

In IBM studies conducted at the turn of the 21st century, CEOs consistently said that coping with unrelenting change was their most pressing challenge. While change management is still a major problem, the conversations with CEOs in the 2010 IBM study indicated that complexity was their primary challenge. CEOs reported that they operate in a world that is substantially more volatile, uncertain, and complex than ever before. Many shared the view that incremental changes are no longer sufficient in a world that is operating in fundamentally different ways and at Internet speed. The 2010 IBM study revealed that organizations are faced with an extraordinary combination of pressures to deliver increased revenue in traditional terms (through added profits, avoided costs, lower taxes, higher productivity, less employee turnover, less risk exposure) and to constantly generate brand-new revenue channels and sources of customer value to continue to thrive. They cannot rely on simply offering more of the same.

Not only are we facing systemic complexity, the very nature of change itself is changing. According to consultant Jonathan Wilson, “It is happening not just more quickly, but faster than ever. It is happening in new ways with more turbulence, less predictability. The key cause of the changing of change in business is the acceleration of the flow of information and the exponential increase in the number of connections within and between organizations.”

RAPID INNOVATION

Competitive advantage is now coupled with an organization’s ability to rapidly innovate and to change products and systems quickly as the marketplace changes. Information technology (IT) has finally come into its own and is now viewed as a critical component of innovation. Business change initiatives must not only deliver high-quality products faster, better, and cheaper (traditionally the responsibility of the project manager), they are also under intense scrutiny to positively impact the bottom line (increasingly, the joint responsibility of the project sponsor and the business analyst).

Clay Christensen’s book The Innovator’s Dilemma documents many examples of decades-old companies failing because they missed “game-changing transformation in industry after industry—computers (mainframes to PCs), telephony (landline to mobile), photography (film to digital), stock markets (floor to online)—not because of ‘bad’ management, but because they followed the dictates of ‘good management.’” The strategy consultant Gary Hamel tells us that big companies fail “not necessarily because they didn’t see the coming innovations, but because they failed to adequately invest in those innovations.” Hamel contends that companies that control large pools of capital need to act more like venture capitalists. And workers at all levels will need to really feel a drive toward creativity and innovation. One obvious example of a company that is doing this is Google. To foster innovation, Google engineers spend 20 percent of their time working on projects other than their current assignments.

NEW LEADERSHIP CAPABILITIES

In their quest to build the organizational capabilities needed to invest in innovation projects, organizations have discovered that the core competency of business analysis must be elevated in importance. Most organizations have invested handsomely in IT systems to help operate the business and capture business intelligence about the marketplace. Over the last two decades, organizations have also embraced the practice of professional project management. However, businesses are just now beginning to understand the importance of the leadership capabilities needed to convert strategic business needs into innovative products and services, to operate with speed and agility, and to try more disruptive approaches than ever before.

THE ENTERPRISE BUSINESS ANALYST

According to a Forrester Research study, business analysts in the first decade of the 21st century were mostly tactical and were either IT or business focused. The IT-oriented business analysts strove to improve operations through changes in technology and were mostly generalists, though specialist roles were emerging, e.g., process analysts and data analysts. At the same time, the business-oriented business analysts worked to improve operations through changes to policy and process, using techniques such as Six Sigma and business process improvement. These analysts were mostly functionally focused, improving departmental operations such as finance, marketing, or human resources.

The Forrester study also revealed that the industry will begin to groom and field more strategic business analysts, driving business analysis practice maturity from a focus on tactical efforts to more strategic endeavors. Emerging strategic enterprise-level business analyst roles include enterprise analysts, business architects, and business/technology analysts. (These roles are detailed in Chapter 1.) The enterprise analyst, the business architect, and the business/technology analyst are the future creative leaders CEOs are making every effort to find. The hallmark of these strategic analysts is not just understanding the business need but fulfilling it, not through incremental change, but through game-changing innovation and creativity.

UNLEASHING THE CREATIVE POTENTIAL OF THE BUSINESS ANALYST

Since there appears to be an insatiable demand for innovative products, services, business systems, and supporting applications, executives across the spectrum are adopting the practice of business analysis to increase the value innovative initiatives bring to customers and to the business. As we begin to understand that the root cause of far too many failed and challenged projects is our inability to manage complexity (see Figure I-1), we conclude that the talents, competencies, and heroics of project managers and technologists alone cannot drive innovation in these demanding times.

FIGURE 1-1. Why Businesses Cannot Manage Complexity

© 2011 By Kathleen B. Hass and Associates, Inc.

THE PROFESSIONAL BUSINESS ANALYST

For business needs and goals to be converted into innovative solutions that truly bring wealth to the enterprise, a stronger partnership must be built between the business, its partners, technologists, and the ultimate customer. That partnership is built by employing the practices of professional business analysis before and during the development of innovative solutions.

The CEOs of better-performing companies manage complexity on behalf of their organizations, customers, and partners. These CEOs have long recognized the need for innovation. But somehow they failed to acquire or groom the creative leaders needed to ignite creativity to negotiate the new economy. Organizations that successfully unleash the potential of innovation-focused strategic business analysts are learning how to not just manage complexity, but also to capitalize on complexity.

CAPITALIZING ON COMPLEXITY

According to the 2010 IBM report, winning CEOs and their teams are focusing on three transformational courses of action to capitalize on complexity.

The effects of rising complexity call for CEOs and their teams to lead with bold creativity, connect with customers in imaginative ways and design their operations for speed and flexibility to position their organizations for twenty-first century success.… To capitalize on complexity, CEOs.…

Embody creative leadership. CEOs now realize that creativity trumps other leadership characteristics. Creative leaders are comfortable with ambiguity and experimentation. To connect with and inspire a new generation, they lead and interact in entirely new ways.…

Reinvent customer relationships. Customers have never had so much information or so many options. CEOs are making “getting connected” to customers their highest priority to better predict and provide customers with what they really want.…

Build operational dexterity. CEOs are mastering complexity in countless ways. They are redesigning operating strategies for ultimate speed and flexibility. They embed … complexity [that creates value] in elegantly simple products, services and customer interactions.

STANDOUT ORGANIZATIONS

An organization that embraces the roles of strategic business analysts (business architects, enterprise business analysts, strategy analysts, and business/technology analysts) to fill the void in creative leadership will produce the advances needed to succeed and become a standout organization, one that consistently delivers solid financial results even in economic downturns, has a revenue growth five or six times higher than its peers, and plans to get at least 20 percent of revenues from new sources. The IBM CEO study revealed that standout organizations have learned how to consistently mitigate complexity and convert it to opportunity by:

Navigating complexity superbly by tolerating change and adapting to it

Upsetting the status quo

Having confidence in their capabilities to prosper from complexity

Making decisions quickly, testing them in the market, and then making required course corrections

Pursuing iterative, ongoing strategy, requirements, and solution development

Reinventing their business analysis model often to adapt to lessons learned

Seeding creativity across their organizations.

BUILDING A CORPS OF CREATIVE LEADERS

Creativity is the premier skill requirement for the innovation-focused leader. Creativity is defined as the ability to generate innovative ideas and concepts and then to produce something original and useful. The process involves original thinking and then creating—generating something new. In creative thinking, there is not just one right answer.

According to creativity experts, “to be creative involves divergent thinking (generating many unique ideas) and then convergent thinking (combining those ideas into the best result).” But even creativity is not enough; our competitive climate calls for us to be purposefully disruptive, to continually reinvent our business model and our products and to foster bold, breakthrough thinking.

THE CREATIVE PROCESS

The creative process calls for us to keep going when surrounded by uncertainty and ambiguity by doing lots of experimentation, prototyping possible solutions, engaging in out-of-the-box thinking, testing ideas through trial and error, and keeping options open until the last responsible moment. Top creative performers exhibit “unusual visual perspective … an ability to synthesize diverse elements into meaningful products.”

The CEOs who participated in the IBM study stressed the relationship between integrity and creativity, the need for global thinking, and a strong focus on customers. It is important for organizations striving to mature the role of the strategic business analyst into that of a strategic innovator to identify strategic thinkers early and groom them as quickly as possible to unleash their creativity. Figure I-2 shows several of the functions of creative business analysts.

FIGURE 1-2. What Creative Business Analysts Do

© 2011 By Kathleen B. Hass and Associates, Inc.

Business analysts must possess special attributes to become innovation leaders and to be able to defy complexity with creativity. They must be action and outcome oriented, as well as focused and courageous. You will know them when you see them:

Sharing the project leadership role with the project manager

Creating and leading innovative requirements-integration teams

Influencing, swaying, and persuading groups and individuals

Embracing uncertainty and ambiguity

Taking risks that disrupt legacy models

Rejecting traditional management styles

Getting close to customers; bringing customers into the process

Using cost-benefits trade-offs based on customer needs.

ORGANIZATIONAL CREATIVITY

So what does creativity look like in organizations? Creativity in the context of standout organizations is about creative leadership—that is, the ability to shed long-held beliefs and come up with original and at times radical concepts and execution. It requires bold, breakthrough thinking. It isn’t about having one or two lone creative leaders at the top, but rather about creating a plethora of creative leaders by igniting the collective creativity of the organization from the bottom up.

Based on their 50 years of collective experience working with creative leaders worldwide, Navi Radjou, Jaideep Prabhu, Prasad Kaipa, and Simone Ahuja have developed some questions business analysts should address to help their organizations identify creative leaders who can cope with increasing complexity. We present these here to get your creative juices going.

What cultural, political, organizational, and technological barriers should your organization overcome if it has to develop a cadre of creative leaders?

What structures, reward systems, processes, metrics, and goals do you have in place to support creative leaders?

How do you encourage risk taking and learning from failure? How do you measure it?

Do you simply adopt best practices learned from industry leaders, or do you shape “next practices” that will make your organization the leader in the future?

How effective are you in partnering with customers, suppliers, employees, and even your competition to improvise “good enough” solutions?

PUTTING IT ALL TOGETHER: WHAT DOES THIS MEAN TO THE BUSINESS ANALYST?

Because the 21st century is rife with complexity, we need to learn how to leverage it—use it to our advantage. As the business analyst transitions from a tactical project-focused resource to an innovation-focused strategic asset, our organizations will begin to capitalize on the complexity that often leaves us baffled, perplexed, and challenged. It is no surprise that two new important disciplines are coming to life in the 21st century and spawning new roles: the complex project manager (CPM) and the enterprise business analyst (EBA). As these disciplines mature, CPMs and EBAs will form collaborative partnerships in their quest to defy complexity with creativity. This book focuses on the new creativity-focused enterprise business analyst.