I’ve recently been introduced to a useful tool that helps me make better decisions based on business strategy and value. The great thing about this tool is you don’t have to be a manager or executive in order to use it. People at every level of an organization make decisions in their day-to-day activities that can have profound effect on organizational success. This tool is called the Purpose Alignment Model and it was created by CIO Niel Nickolaisen. Using this model, teams can discover the purpose and strategy of their overall organization, and then make decisions based on that purpose.

The Purpose Alignment Model

The model consists of two axes with regions divided into four quadrants. First, the “‘market differentiating” axis displays the degree to which a particular activity differentiates you in the marketplace. In other words, this activity helps you gain market share. These are the things that make you “different” or “special”. The second axis is the degree to which activities are mission critical. In other words, while they don’t help you gain market share, these activities are important and the business will be put at risk if they are not done well.

About the Quadrants

• The highly differentiating, highly mission critical activities are the truly differentiating activities of the organization. These are the activities where the organization needs to excel and innovate and be the best. Creativity and experimentation in tactics and analytics to measure the success of these activities should abound in this quadrant.
• The highly mission critical, low differentiating activities are “parity” activities. While these activities are highly valuable to the organization, they do not derive their value from being unique or special. On the contrary, these activities derive value from adhering to industry best practices and standards and being simplified as much as possible.
• Highly differentiating activities that are not mission critical require some thought to determine if they should be taken on or not. These are opportunities to partner with another entity to add this capability and eventually move it into the “differentiating” quadrant.
• Finally, anything that doesn’t differentiate you and isn’t mission critical is something you should stop doing.

Applying the Model

The first thing you have to do is determine the one or two things you do that are truly differentiating for your organization. Yes, it will be only one or two things. You can’t be the best at everything.

The next thing you do is find out where your activities fit into the model and agree to treat them accordingly. Don’t be disheartened that a lot of activities fall into the “parity” quadrant. Just understand that simplifying and standardizing parity activities will free capacity for you to use your creativity to excel at your differentiating areas.

More Information

I’ve just provided a brief introduction to this model here and I highly recommend the following resources for more information.

Breaking the Project Management Triangle – InformIT article

Four Things a CIO Can Do To Deliver Immediate Business Value – Video presentation hosted on on24.com. Requires registration with an email address to view. It is about 50 minutes in length but very entertaining. This is the only place I know of where this presentation can be viewed. I searched for a YouTube version with no luck.

What do you think of Nickolaisen’s model? In what ways do you think it might help your organization make better decisions? Do you disagree with the model? Do you think I need art lessons? Please feel free to share and comment.