The Paradoxical Faces of Strategic Design

Welcome to the ultimate in “chicken and egg” — solving for outcomes, structures, timelines, and influence all at once…

The disciplines of UX, Digital and Service Design are increasingly finding themselves in situations where they have to address ever bigger design questions for organisations. At the top of the stack rests strategic design — the application of design thinking to the entirety of an organisation.

And this is a field that is by no means new — indeed design thinking to shape whole organisations has been on a fashion loop in senior management circles on almost precisely a decade-long rhythm since the late 1960s. It’s probably fair to say that strategic design is not even a discipline, at least not formally. It’s more truthfully described at the moment as a set of affiliated techniques — some focused on corporate strategy, some on business architecture, on management cybernetics, on ‘organisational scale service design’, on target operating model design, on cultural change, on operations research… there are others. What is clear is that the design community is evolving in this direction, and its forcing the examination of the real fundamentals that has made the philosophies underpinning design in the context of technology so successful, but equally so difficult to apply at the top of the organisational shop.

So this post is really the beginning of a series to try to examine these fundamentals, and to try to fashion some sort of sense from my own experiences in the field over the past decade and a half.

Let’s start with how to start, beginning with somewhat of a paradox.

Plato’s Chicken and Egg

Business thinking has evolved in a way that tends to separate:

• setting the right goals (usually the preserve of strategy);
• deciding the right human and technological business structures (usually the preserve of enterprise and business architects); and,
• formulating plans to realise the above (usually the preserve of project managers).

This used to make some sense. These disciplines evolved from different start points to solve different types of question. In many ways they have been successful at addressing some of the complexity that modern organisations currently face. The problem is that these seemingly distinct disciplines are, well… not. And they never were. They’re all one thing.

We like putting things into categories. In fact it turns out that we have to put things into categories in order to be able to think. We then often build huge cathedrals of thought around these categories. However, too often in real life the categories are either gross simplifications (i.e. there are more categories than we think), distractions (they are irrelevant) or are imagined (things that seem many are actually few, or one). Thinking in a ‘plastic’ way about categories can be confusing or tiring. Most of the time we seek to save energy by keeping to the categories we’ve been given. But as with so many things in design, this is a trap that slows down our ability to solve problems. We find it hard to leap across the categories and make connections. The structure itself causes us to interpret the total in a skewed way. A more sinister angle: who ‘gave’ us the categories in the first place?

A-ha moments are often the result of realising either a distinction — that a thing we thought was one thing is actually two or more; or (and usually more satisfying), a unity — that something we thought was two things are actually one. Most strategic design frameworks establish platonic categories for thinking about how to decompose an organisation, routed in neat and tidy mutually exclusive, collectively exhaustive groupings. We need these frameworks to navigate the breadth of concerns needed for strategic design. Some areas (for example, organisational design) are entirely meaningless without such rigour. But they are not sufficient; they restrict synthesis, they underplay redundancy, they obscure interactions, feedback and synergy. And of course none of them could possibly claim to be ‘the truth’ — if so why are there so many!

Let’s get more practical. Applying many of these frameworks, whilst helpful for ‘getting your head around’ the design space, do not help with the reality of the egg-chicken-egg-chicken relationship between outcomes, structures and plans. The trick is to realise that those three things are themselves constructs, a crutch used by the mind to help us think through things that are really complicated. And it’s within our gift to re-conceive the problem.

The categories are an insidious enemy. A handbrake. We have to learn these distinctions to the extent they are useful. Then we have to vigorously unlearn them.

Unpicking the paradox #1: One design…

Proper strategic design has only a single design subject.

We need to think about outcomes, structures and our sequencing as aspects of this single artefact and is the subject of a strategic design enquiry. Crucially, the approach needs to be non-reductionist. That means it is not the case that just thinking about the stuff in each part of the framework separately and then putting it together will achieve a satisfactory answer (if anyone does this in strategic design its a surefire sign of a fraud). Everything is connected. There is a category of one.

The distinguishing feature of this unity is the boundary between environment and design scope. Usually in strategic design (but not always) this scope is the entire full organisation. The environment around the organisation is a mixed bag of actors and forces. Some of these belong to traditional strategic analysis: suppliers, customers, competitors, government regulators, substitute products & services, acquisition targets, predatory acquirers. It also includes the “PESTLE” type analysis: states and trends across political, economic, social, technological, legal and ecological concerns. It may also include parts of the organisation not under design consideration: parent/child organisations or shared services. At its most fundamental, strategic design is about achieving a strong and enduring fit with the environment. This variety is a key distinction from UX or Service Design doctrine, which would seek to put the user (often, but not always the customer), which is only one facet of the environment, at the top of the hierarchy.

This is worth a little unpicking — some might see that as blasphemy. User-centric design has the emphasis it has for green-field organisations as it is the pre-requisite for initial viability. This becomes insufficient once the business model has been proven — i.e post scaling. Users change. How is your organisation positioned to understand their future behaviour? How does your organisation stay on top if everyone is employing cutting edge design skills. Although we’re not there yet, disciplines like service design and UX are destined to become hygiene factors not differentiators. As industries mature, the typical role of regulation tends to increase and then dominate — think pharmaceuticals or banking. Note the actors and forces do not stay nicely in their categories. Suppliers are users are regulators are the government (totally true in the case of the Defence industry). In real life the environment is a changing network with many-to-one relationships to the set of possible categories.

Strategic design then is about enduring viability. This requires answering three questions:

• What are the touchpoints that the scope has with the environment and what touchpoints are desired?
• What is the resources are needed and what human and technological ‘algorithm’ needs to be running to maintain both the touchpoints and their likely rate of change?
• Given the organisation “is where it is”, and given the rate of access to resources, how does the organisation metamorphose to that desired position?

Straightforwardly, the strategic designer’s brief is to solve the design — a kind of Rubik’s Cube — for these three questions in parallel.

Unpicking the paradox #2: Three faces…

So this Rubik’s cube requires the parallel solution to three elements: Outcomes, Structures, Plans. Let’s unpack what needs to be solved for each:

Outcomes: Harvard defines these as the “difference made by a pattern of outputs”. Indeed it is an order of magnitude simpler to manage outputs than to manage outcomes. That is because outcomes are emergent properties of collections of outputs. All the important UX and Service Design effort to create a fantastic customer experience can disappear if some unscrupulous supply chain issues torpedo the carefully built up perception of the brand. It doesn’t matter what design intent happened at the lower level, the lack of design intent at the higher level ends up negating the designed for outcome. Because of this, outcomes encompass all of the things that result from the design, intended or otherwise. If it is an outcome that was intended, that’s a goal accomplished. Well done. But — and this is so important — outcomes are not limited to goals. Designs have side-effects which are also outcomes. These could be a more defensive supplier base; a slew of lawsuits; a set of awkward PR problems; maybe an overloaded workforce; or the unintended outcome par excellence — ecological impact, whether this be local pollution or contribution to climate change. The conscientious strategic designer owns their side effects and takes responsibility for them as part of the design process.

Structures: This has been the typical domain of business design. It concerns the organisation and relationship of different resources to each other. Historically, this has involved a collection of disciplines, including: architecture (which has been around for millennia) and concerns spaces and places; “organisation design” which has been included in hyphens not for disparaging effect, but more to note that as a discipline this has tended to focus not on the whole resource set of a business but on the relationship of individuals within hierarchies, teams, tribes or networks (also around for millennia — the Romans did it — albeit that many business texts seem to think it was invented in 1960s); and, enterprise architecture which applies design to the flow of information through, and human interaction with technology (this actually was invented in the 1960s). The proto-disciplines of operating model design and business architecture have begun the formalisation of the fullest description of the structure. Many frameworks exist (Ashridge on Operating Models gives a fairly exhaustive view of what the major consultancies use), but in general they have two key similarities:

• a refrain that the strategy comes first; and,
• a collection of headings that can broadly divided into resources (an organisation’s hardware — including people) and its script (the part-technical, part-anthropological algorithm that enables the organisation to produce its outputs and produce itself over time).

The latter point is many people’s idea of strategic design. Arranging the resources of an organisation into some kind of scheme, and then writing some instructions for how those resources are to interact. Naturally the strategy comes first, how can one determine whether what that scheme and instructions does is what was intended?

Here’s where the link to outcomes becomes insidious. Maybe that structure aligns with an intended outcome but produces unintended ones that are disastrous. Maybe the structure is fragile — i.e. it breaks catastrophically upon overloading. Maybe the structure is elastic — i.e. it shows no warning signs of breaking, before it just…breaks. Elastic, fragile organisations are really very bad. Maybe the structure is insufficiently flexible — i.e. it can accommodate only narrow sets of environmental conditions. Maybe the intent was wrong in the first place? Does the structure allow for a change of intent? Good strategic design focuses on structures that can mostly simply accommodate these second and third order effects.

Sequences: Sequences plural, as there are more than one set of meaningful “chains of events” in the business. At a minimum there tends to be three:

• An operational business process, the value chain, which is the chain of events that transform an array of inputs into meaningful outputs that customers buy, service-users use and/or is otherwise the primary reason for being for the organisation.
• A management process, the decision chain, which is the chain of events that observes the operational coal face, transforms this into actionable management information, and enables meaningful executive decisions to be made.
• A strategic process, the investment chain, which is the chain of events that sees the formulation of strategic moves, allocates capital to those moves, creates/coordinates projects to deliver elements of the move and monitors progress toward its associated objectives.

There can be more than one meaningful chain in each of these categories and these chains work a different rhythms throughout the business. The constant throughout these three sequences is time — a unifying currency across strategic design. The result of all of these sequences, each working to its own tempo, is to create almost a ‘symphonic’ set of patterns through the business.

For example, oil firms run an especially complex set of rhythms. The value chain contains a series of rhythms from the physical outflow of barrels, the commercial sale of barrels, the inflow of logistic supplies and engineering support, the placement of contracts and the provision of finance. The decision chain determines patterns of oil distribution, accelerates or slows down production in line with economic conditions, makes safety interventions and shifts the pace and targeting of recruitment. The strategic chain controls the investment in new oil platforms, both the pattern and approach to exploration, the rate and targeting of new product innovation, and the footwork to acquire and avoid/encourage acquisition.

For disordered organisations, these rhythms interfere with and diminish each other — assuming they work properly in the first place. Effective organisations establish these rhythms in a way that is self-reinforcing, amplifying the effects of each individually. Achieving this effect by design is especially rare. The strategic designer seeks to establish where these sequences resonate, to understand how changes to the design of the organisation change the music, and to create a plan — a pattern in time — that allows the intended structure and outcomes to play out.

Unpicking the paradox #3: The spiral

As with solving a real Rubiks cube, the strategic design conundrum can be addressed through applying an algorithm of sorts, set out below in the diagram below — the spiral which establishes the (loose) process for strategic design (after Gharajedaghi 2011).

This process is an abstraction of the repeated approach that a service designer, digital practitioner or even an evolutionist would recognise. At its heart is the concept of direct environmental feedback as the criterion for selection through multiple iterations. The process of iteration amongst all of the concerns is crucial because it is the complex relationships amongst environment, outcomes, structures and sequences that provides meaning and enables progress.

Being strategic design — this view of the environment necessarily needs to embrace concerns beyond the user, which is sufficient for initial viability and necessary but not sufficient for enduring viability.

As a strategist purist would contest, the first iteration needs to begin with a desired outcome in the context of a current environment that represents an opportunity for change. The outcome can only be articulated in terms of the impact on the environment (otherwise the outcome is arbitrary and meaningless). This leads into the first circuit of the loop, the purpose of which is simply to explore the relationship between the four concerns. In this loop the learning seeks to discover areas of interdependency, compatibility, balance and conflict. The purpose is to learn about the outcome, and potentially to re-frame or re-conceptualise the outcome so that it better fits with these now understood freedoms and constraints.

The second loop around the spiral is the loop of possibilities. This iteration seeks to learn about the structures and sequences that could produce the refined understanding of outcomes and to synthesise these together into a single strategic form. From this form, the shape of the structural forms (architecture) and sequencing forms (plans & processes) should naturally arise. This cannot be done at anything other than a basic level, and various parts of the problem will need to be sidelined as ‘black boxes’. The purpose is to establish a concept that has the potential to fit with the freedoms and constraints, even as this form brings to light a better understanding of them.

The form is also likely to have features that are ‘there’ in the mind of the designer, but not in an explicit fashion. The purpose of the third loop is to start to symbolise, visualise and exhibit the design so that people who are not the designers can interrogate it, and in so doing begin the process of further search and consensus. Interrogation with reality in this way is the more generalised approach to prototyping. Beyond this third iteration, the plan, the structure and the outcomes should be beginning to stabilise, to feel secure. At this point our previous specialisations and categories — hitherto a hindrance, are able to take facets of the design and to make them real. Iterations continue until either the outcomes are reached and a steady state is established with the environment — or more incisively, until the sequences and rhythms of the new design embed the strategic intent into the direction of the organisation.

A coping mechanism

Strategic design is not easy. Besides the ‘knowing where to start’ riddle, there are a bunch of other challenges — being the decathlete across different disciplines, navigating stakeholders who don’t hold the faith, speaking comprehensible language to those who build code, those who build people and those who build physical things.

If you’ve ever tackled anything resembling strategic design more than once or twice, you’ll be well aware of the (often infuriating) interrelationship between goals, plans and structures, and in all likelihood you will have gone through your own journey of pain trying to resolve the circular discussions.

Were you here first or was I?