6.4 Stage II: Developing the Foundations of the Final Technology Strategy

The overall objective of the second stage of the strategy project was to develop the necessary foundation for formulation of the final technology strategy. A lot of information had to be retrieved, read and made sense of, enterprise models had to be developed (according to the method M2), assessments had to be made to answer the questions, and alternative versions of the final deliverable had to be worked out. Most of the work (in terms of man-months) was spent in this part of the project.
The second stage may be seen as a diverging stage, with focus on being creative and open to differences in approaches and content. This as opposed to stage III (section ), focusing on integration and formulation of the final technology strategy (being a converging stage).

Stage II is presented in terms of workshop 1 (WS1, section 6.4.1), activities related to enterprise modeling in one of the work groups (WG Gas, section 6.4.2), workshop 2 (WS2, section 6.4.3), and finally a summary of activities in the PG running in parallel with activities in the work groups (section 6.4.4).

6.4.1 Workshop 1: Establishing the work groups

Workshop 1 (WS1) was a full-day meeting held early in January. Recalling , the workshop was the first in a series of three and was followed by a period of intensive work and communication between the project participants.

Purpose and participants

The overall purpose of WS1 was twofold: First, to organize the actors in the three work groups and make them start working, and second, to seek to develop a shared understanding among all project participants of the purpose of the technology strategy and the work to be done. Hence, a shared understanding of the project was also explicitly sought (O1), not only of the enterprise.

The actors taking part in the workshop were the process group, the three work groups, a representative from the BoT, a representative from the corporate staff, and representatives from four business units that already had developed technology strategies for their particular areas. All in all, there were about 55 actors at the workshop.

The work groups
Three work groups (WG) were formally established at WS1: All three work groups were expected to have close contact with and report directly to the process group. There was also considerable overlap between the process group and the work groups (all three WG leaders and some of the WG members also participated in the PG). The WGs and the PG also communicated through the project database and directly with each other (email, telephone, ad hoc meetings).
The corporate staff representative
The corporate staff representative worked with corporate strategy issues on a daily basis. His task was to present the first step in the method M2 51; an overview of the business challenges to the Statoil corporation.
The business unit representatives
The task of the representatives from the four business units was to present the strategies developed within their own units, in addition to offering some advice based on their own experiences with technology strategy development and dissemination.

Agenda and accomplishment of the workshop

The workshop was conducted in accordance with the agenda that was worked out and distributed in advance. Hence, the agenda provides a good overview of WS1:
1. Introduction to the workshop
The introduction to the workshop provided background information about the project and purposes of the workshop. Various facts, like the existence of a Lotus Notes database, were provided, together with a vision of how the technology strategy ought to be a natural part of the way decision makers work. Hence, the importance of usefulness and applicability of the strategy was stressed.
2. Customer expectations and requirements
The BoT representative stressed two needs that the strategy project had to address: The need for improved business understanding and the need for holistic thinking. Both needs concerned the organization on the whole, not only the project groups. Although not explicitly associated with enterprise modeling by the BoT representative, they are clearly objectives of enterprise modeling (O1 and O4, respectively).
3. Method and terminology
The PG representative presented the main steps in the method M2 and definitions of the most central terms. Some claims made in the presentation were the following:
4. Presentation of the corporate business strategy
The corporate staff representative provided an overview of both the history of the company and the current and future business challenges. His presentation was very convincing and clear, as was also commented by PG members after the presentation.

The presentation was essentially an act of storytelling (A22) -- how Statoil had evolved, what had been the important decisions, the current activities in Statoil, strengths and weaknesses, and future challenges and changes to the company. The presentation was closed by a number of questions asked from the audience. The questions expressed needs for clarification, doubts about the validity of elements of the story and comments on possibilities. These were countered or commented upon by the representative. Hence, the session was not mere presentation of the reality seen by the representative, but just as much presentation of the views held by the audience.

The staff representative was also allowed to say a few words after the official agenda had been closed. He wanted to summarize his impressions from the workshop and state what he perceived to be the most important issues for the process group and the work groups to engage in.

Examples and metaphors were two artifacts that he asked the project groups to develop. By examples he meant short stories illustrating how technology had been used and played a decisive role in successful operation, or alternatively and equally important, how opportunities had been wasted due to lack of technology or a strategy. By metaphors was meant alternative images of the organization and their behavior. His main concern was the pedagogical aspect of the strategy -- to make people really understand the technology strategy and implications to the organization and work processes (i.e., to be able to internalize the organizational reality envisioned by the strategy).

5. Presentation of existing technology strategies
A statement made by all four representatives was that effective involvement and sell-in of the strategy would be difficult to achieve. To make people really understand and get engaged in the process was seen as the major challenge to the project groups.

The need for improved business understanding (O1) was restated by two of the representatives, and holistic thinking (O4) was also stressed by one of the them. To illustrate the need for holistic thinking, a drawing of physical infrastructure on the Norwegian continental shelf was presented and the relationships between some of the elements discussed in more detail. The drawing is discussed below (M3).

6. Organization and kick-off for work groups
After the summary held by the staff representative, a number of the participants left the workshop. Only the work groups and the process group stayed to plan and organize the work schedule ahead. All actors were given about 1000 pages of documents 51; existing strategies, copies of foils from the meeting, the status report developed by the process group, formal guidelines for strategy work in Statoil, description of a technique for effective group work, etc. Also included was the project plan M1 and the method foil M2.

The work groups then met for about an hour, discussing their mission and how to proceed. Administrative tasks, like presentation of actors, election of a group leader and planning the next meetings were also accomplished.

After the work group meetings, they all met in plenary and summarized their plans and how they understood their own role. The workshop was then closed.

Model of physical infrastructure -- M3

One of the representatives from the business units introduced an enterprise model in his presentation -- a drawing of the physical infrastructure related to gas production at the Norwegian continental shelf (M3, see figure 6.5). The model includes all major physical installations of a gas production chain: Reservoirs, production platforms, pipelines, processing plants, compressors, gas stores, household customers (small) and industrial customers (large). Similar models had also been developed for the oil, methanol, and petrochemical business.

These models were not developed as a part of the technology strategy project, but adopted from previous projects in the organization. The introduction of the model did not cause any discussions of validity or requests for clarifications.

Figure 6.5: Drawing of physical installations in gas production in the North Sea -- M3
(text in Norwegian)

Concerning actual use of the M3 model, the presenting actor placed the model on the overhead projector and used the it to structure his presentation (A23, O7). The important part of the information he presented was not in the model, but in his oral presentation (concerning research areas along the production chain). This is a noteworthy observation on the use of enterprise models, as it reoccurred in a number of settings and with a number of different models.

6.4.2 Enterprise modeling in WG Gas

As the method that had been developed by the process group (M2) prescribed enterprise modeling as a step in the project accomplishment, and the method was to be carried out by the work groups, the activities in one of the work groups -- WG Gas -- were studied more closely to observe how they developed and used their models. The WG held five formal meetings during the month proceeding WS1.

The presentation of enterprise modeling in WG Gas starts with an overview of the WG actors, followed by an enterprise model that was developed and used extensively by the WG throughout the project (M4). The presentation is closed by an outline of additional observations relevant to enterprise modeling.

Participants in WG Gas

WG Gas was comprised of 8 actors. They were all experienced people that had worked in the company for some time, and all worked within the gas business (one of the actors was a chief engineer). The actors had been chosen so that they in combination covered the whole production chain.
Two of the actors worked in organizational units related to gas resources and production, one of the actors worked with transport systems and distribution, one with refinement, one with sales and marketing, and three with research on elements of the gas business.

Two of the actors also participated in the process group (the WG leader and the chief engineer) and had taken part in the preparations. Later, a third actor from WG Gas also joined the PG. Hence, the overlap between the groups was significant.

Intermediate work group model of the production chain - M4

The first outline model of the Statoil business created by WG Gas is presented in figure 6.6. The production chain can be recognized as running from left to right, and the "sales & markets" ellipsis located down below the chain symbolizes that there are customers willing to buy all kinds of intermediate products.
Figure 6.6: Intermediate enterprise model by WG Gas -- M4

The model was created by the work group leader and remained unchanged except for some minor discussions concerning the "Distribution" element ("Distribution" was decomposed into two more specific elements). Also, initially, the "Sales & markets" was placed after "Refinement", but was moved as a consequence of recognizing that all intermediate products have customers. Note the match between the model elements and the professional backgrounds of the WG actors.

For each of the elements of the M4 model, an additional matrix was developed. Each matrix provided an assessment of strengths, weaknesses, opportunities, threats and critical success factors for competing in the specific area given by the enterprise model. These matrices were also considered to be part of the enterprise model.

The M4 model was mainly used for structuring (O7). Examples of tasks that imply structuring include:

An observation from WG Gas was that all the elements in the M4 model received comparable amounts of attention. Areas that were outside the professional interests of the WG members were not discussed to the same degree. 

An indication of the importance of the relationship between the background and interests of people in the project group and the issues discussed occurred when one of the work groups were fortified with an actor working with information technology. This event resulted in significantly more attention being directed towards IT. The observation was also made and stated by the leader of that work group.

An observation related to M4 was that the validity of the model was never questioned -- it was created once and adopted without any discussions or problems (just as the M3 model had been). Another observation was that the modeling language used for the matrices associated with M4 was tailored to the needs perceived to exist in the strategy project (success criteria, strengths, weaknesses, etc.) Hence, the WG developed their own modeling language. The same occurred in the other two work groups -- all three groups developed models of the production chain, and all three models looked a bit different.

Outline of activities in WG Gas

The main motivation for studying activities in WG Gas was to identify activities that could be categorized as acts of enterprise modeling. The following observations played a role in modeling (particularly in the sense-making part):
1. Categorization of assessments -- A12
Although the work group experienced few problems with representation of the overall gas production chain, they encountered some problems with assessments of strengths, weaknesses, etc. How to categorize a given element was not obvious, and the same problems were experienced by the other two work groups as well.
Is deregulation of markets an opportunity or a threat? On one hand, it may be considered an opportunity, as Statoil may enter markets that are closed at the current point in time. On the other hand, deregulation is a threat, as competitors may enter Statoil's markets.
2. Enactment of the strategy development method -- A24
The work group started out by following the strategy development method M2 as ordered by the process group (including the actors participating in both the PG and WG Gas). However, as the work progressed, the questions of M2 and the accompanying techniques were experienced as difficult to answer and employ. The problem was to make the assessments required to answer the questions. Either the assessments were on a too high level of abstraction, or they became too many to be effectively handled in any diagram. The domain was just too complex at the required level of abstraction to be practically manageable using the techniques.
A metaphor proposed in one of the work groups was that making the assessments of importance and position of different technologies was to do the pools. The activities were characterized by the same degree of uncertainty and arbitrariness.

Difficulties with using the prescribed method were experienced and stated by all three work groups.

3. Summarizing -- A13
A frequent activity in WG Gas was to step back and summarize what had happened so far. Summaries were given as a part of presentations, when new actors occasionally took part in the meetings, in minutes from meetings, or when communicating with the other work groups or the process group.

Summaries seemed to play a particular role in the strategy development work, as the work process itself was rather unstructured most of the time. As noted above, the M4 model was used to structure discussions at a high level of abstraction, but the discussions within each element was at times rather chaotic. The work process had more character of posing questions than answering them, and that is consistent with the observation that the work group did not know the product they were going to develop (i.e., a work process dominated by design risk and information).

The role of summarizing as a part of presentations was also recognized explicitly by one of the WG actors:

"It is positive to have to present the problems, we have to think clearer then."
4. Additional objectives of enterprise modeling
Enterprise modeling as a part of technology strategy development was adopted without questions by WG Gas (and the other WGs as well). The perceived importance of creating descriptions of both current and future business activities in order to understand was stated repeatedly in discussions and presentations.

During meetings in WG Gas, two additional objectives or applications of enterprise modeling were stated:

When selecting the "Refinement" element in the M4 enterprise model, one of the WG actors wanted to have the business challenges, critical success factors, strengths, weaknesses, opportunities and threats related to gas refinement displayed on his computer screen. This was implemented in the final Web version of the strategy document (but using another enterprise model).

6.4.3 Workshop 2: Aligning the work groups

Workshop 2 (WS2) was held about three weeks after the first workshop. It was organized as a two-day session at a conference hotel, and all participants were expected to stay all the time (ensuring availability of actors).

Purpose and participants

The main purpose of WS2 was to present the work done in the WGs, and thereby align the three work groups. Another purpose was to prepare a presentation to the customer (BoT) to be held shortly after the workshop.

The participants were the process group and the three work groups. A total of 34 actors were present. The workshop was intended as a workshop, i.e., not just to inform each other of progress, but to work together for two full days.

Selected observations from WS2

A general observation from WS2 was that all three work groups had experienced problems with answering the questions as part of the M2 method. There were perceived difficulties with either being too concrete (and have to face considerable complexity) or too abstract (and superficial). In brief, some frustration had been built up, and the following issues either describe the manifest of the frustration or means to deal with it:
1. Use of terminology
The terminology that had been defined in the preparatory stage had been attempted applied, but was difficult to use. The terms defined in the terminology were used differently by different actors, and the definitions were difficult to remember. The terminology had not been internalized, it had not become a part of the professional language of the actors.
A specific observation related to the questions on the method foil M2 was the answers given when asking for assessments of competence, technology, technology driver and business challenge. In one situation, the same concept was categorized as being all of the above, indicating that their understanding of both the concept used in the question and the answer was not clear. 

The recurring problems with terminology will be discussed in more detail in section and in the analysis in section , as the definition and use of terms are directly relevant to enterprise modeling.

2. Confused realities
Another observation from WS2 was a confusion of realities -- what is valid knowledge about the Statoil corporation and the environment that Statoil do business within? There were three kinds of realities observed in the discussions: The difference between realities is particularly important when making assessments -- e.g., what are the core competencies of Statoil today? How good are Statoil concerning health, environment and safety? In particular the difference between "as-is" reality and "should-be" reality must be recognized, as decisions otherwise may be made on false premises (i.e., when there is a mismatch between what is and what should be). If modeling a "should-be" reality, the distinction between a descriptive and a prescriptive model is blurred.

Some assessments concerning "as-is" reality were more like qualified "guesstimates" than documented facts. This was inevitable -- making the assessments would imply massive amounts of work, and the assessments were needed in a particular situation, in a meeting. Hence, qualified assumptions had to be made. When the actors were not sure about the domain, they referred to what "should-be" the case.

Recall that the actors participating in the strategy project were highly experienced and knowledgeable employees. Hence, the observation that assessments sometimes had the character of "guesstimates" had nothing to do with inexperienced actors.

3. Creation of intermediate artifacts -- A17
WS2 was dominated by activities categorized as attempts at making sense of aspects of the project -- the final deliverable, assessments, core competencies, etc.

One observation was the way of working: A number of intermediate artifacts were created, being simple drawings, diagrams, structured text, etc. attempting to structure the issues under consideration. The artifacts were created by one or a few actors, presented to the audience, providing feedback. While one actor was presenting his proposition, other actors might already be working on alternatives.

Another observation was that the intermediate artifacts were not necessarily compatible -- they were variants over a theme, but one artifact was not just a refinement of another. They included or left out different elements and structured the elements differently. Hence, the variation between intermediate artifacts was significant.

The method foil M2 had a number of intermediate variants. The question part of the method (step three) did not provide any easy-to-follow sequence, and different propositions for methods that included some or all of the questions were provided. They all attempted to provide a logically structured answer to the questions "what have we done? what are we doing? what are we going to do?".

Most of the intermediate artifacts remained intermediate -- they had very short lives and were not included in any of the deliverables. They played a role only in the sense-making process.

4. Summaries and storytelling
As a part of creating intermediate artifacts, summaries were frequently given (A13). When giving a presentation, actors often provided an account of what had been done to answer the questions or solve the problems earlier in the project as a part of their presentations. The summaries seemed to be effective and necessary to make once in a while to really understand the work so far.

Related to the creation of summaries, a number of stories (A22) were told during the workshop. The stories either reported on experiences from the use or provisioning of technology in the organization, or envisioned situations that would require some kind of action or information from the actors. Stories were also used for recapitulating work done in other meetings (A15).

One of the stories envisioned a hypothetical meeting with the Statoil CEO Harald Norvik in an elevator. If he asked the question "What is your proposal for Statoil's technology strategy?" and you only had the two minutes on the way up in the elevator, what would you say? The use of such a story exemplifies an attempt to extract the essence of the work performed in the project, i.e., a summary.
5. Use of creative techniques -- A8
Late in the first day of WS2, there was a discussion concerning what might be the drivers of technological development. A lot of answers were proposed, but none were widely agreed upon. There were also discussions on how to find the drivers (i.e., the methodical aspect).

The solution was to let one of the actors, a trained facilitator in use of creative techniques, organize and run the session. He proposed the use of brainstorming and concept clustering (classification) to arrive at an answer to the quest for technology drivers. The accomplishment of the brainstorming and concept clustering is discussed in more detail in sections 9.2 and 9.4.

The outcome of the session was 103 technology drivers divided into 13 categories. The session was judged by the participants as very satisfying and constructive (the facilitator stated that he sensed that they scored high on the "feel-good" factor).

The project groups had employed brainstorming in some situations earlier, but not as structured as under the supervision of the facilitator. They had also been loosely introduced to the Quality Function Deployment technique, but not used it to any degree (QFD is discussed in more detail in section 9.6).

6. Enterprise modeling as a means to improve decision-making (O6)
Improved decision-making based on improved understanding of the business (O6) was suggested as yet another purpose for enterprise modeling by one of the actors during WS2. By enterprise model was meant the overall production chain model M4 combined with the assessment matrices that had been developed for each element of the model. The following statement illustrates the actor's idea of how enterprise modeling may be used:
"Most people in Statoil are clever people. They will make the right decisions if they only realize what they and others are doing."
Hence, enterprise modeling was seen as a means to make people realize what both they themselves and their colleagues were doing, being an enabler of improved decision-making in the organization.

Concluding WS2

The outcome of WS2 was a wealth of ideas and material to be used in the development of the technology strategy. The development method M2 had also been questioned and debated, so there was awareness that the method was not unproblematic.

The outcome of the workshop was presented to the BoT a few days after the workshop. Their feedback and other activities in the PG will be presented next.

6.4.4 Activities in the process group

The PG arranged meetings in parallel with the WG meetings. Efficient communication between the process group and the work groups was ensured by the previously mentioned overlap between groups, WS2 and finally the project database.

The following observations from the PG are relevant to enterprise modeling:

1. Studies of other organizations -- A16

Three of the PG actors, one from BoT, and the three WG leaders arranged a travel abroad to study how technology strategies had been developed and implemented in other organizations. One of their large suppliers and a first rate US academic institution were visited to learn more. The travel lasted about one week and was reported as highly successful to the rest of the process group and the customers.

The traveling actors brought with them a number of lessons and impressions from the travel, and one of them was the frequently stated need for shared understanding (O1) of how business is conducted in the organization. This was stated by both the supplier and the academics that were visited, and the travelers reported that the suppliers seemed to have this understanding of their own business. This was assessed from speaking to a number of different employees.

2. Development of a communication model -- M5

Two of the PG actors also worked on a communication model to be used in the project. describes the topmost level, and it was accompanied by a more detailed matrix referring to organizational roles within the company, what they ought to be contacted about (e.g., for comments upon a preliminary version of the strategy), how (i.e., the forum or medium to use) and when they ought to be involved.
Figure 6.7: High-level communication model -- M5

The communication model M5 can be read as follows: The large arrow marked with "Strategy development" represents the development phase of the project. During the development phase, there was internal communication in and between the project groups (the double helix) and frequent external communication with the rest of the organization (presentation -- A19 -- is denoted by vertical arrows outwards and feedback -- A20 -- by vertical arrows inwards). The external communication was mediated through dedicated workshops, a Lotus Notes database suited for both presentation and feedback, an organization-wide news bulletin, and "word of mouth".

When the final deliverable had been completed (the cloud in ), it was officially released for use and further comments in the organization (the project was entering the dissemination phase). Feedback was expected as decision makers gained experience from using the strategy, leading to improved versions over time.

An observation from the accompanying communication matrix was that face-to-face meetings were considered to be the most effective forum for communication of the technology strategy. The plan described 10 organizational roles that were to be involved, and meetings were proposed as the most suitable forum in all 10 cases. In three of the cases, the Lotus Notes database was listed as an additional forum. This indicates a strong belief in the necessity of high bandwidth when communication is intended to be two-way and intensive (presentation and feedback).

The Web version of the strategy (see figure 6.9) included dedicated feedback functionality, enabling people to comment on the strategy directly as they read it, via email or a bulletin board system. The Web version will be discussed in section 6.5.2.

The strategy document was to be accompanied by an organization development plan. This plan was intended to consider communication in the strategy dissemination phase in more detail.

3. Establishing WG Deliverable

In order to handle the challenges of creating a communication package instead of a traditional paper document, a fourth work group was established 51; WG Deliverable. They worked on formulation of contents, structure and layout of the final deliverable (both paper and a World Wide Web version). Most participants came from the PG. However, the structure and layout of the final deliverable did not receive much attention compared to contents. The major problem was to decide what to write in the final deliverable.

4. Discussing the development method

As opposed to the project plan M1, the method foil M2 and the accompanying techniques were heavily disputed. As observed in WG Gas, the main problem was that the work groups experienced great difficulties in trying to answer the questions on the foil and in using the proposed techniques to answer them (i.e., making the required assessments). Both the techniques and the questions made sense to the work groups, but they were difficult to apply in practice. The WG leaders reported the problems back to the PG, making M2 an issue also in the PG.

5. Feedback from the customer

After WS2, representatives from the PG had a presentation for the BoT. The BoT supported the decisions made in the PG, backing their work. Still, they were not completely satisfied with the use of terminology. The PG representatives were asked to use more examples to illustrate the meaning of terms.

6.4.5 Concluding the divergent stage

Stage II resulted in a vast diversity of intermediate artifacts and propositions for elements of the technology strategy, summarized in three intermediate deliverables, one from each of the three work groups. The following were observed in stage II: