Wednesday, March 28, 2012

The "Two-in-a-Box" model for strategic planning

This week's reading concentrates on the planning process for strategy. The article 'Real Value of Strategic Planning' [1] talks about preparing individuals to make strategic decisions rather than preparing a general strategy. One of my previous employers, Cognizant Technology Solutions, uses a unique "Two-in-a-Box" (TIB) [2] model for strategic planning that I felt was really effective. It uses both the concepts of preparing a stand alone strategy as well as relying on your gut feeling to take run time decisions.

The TIB model basically states that two people will be responsible for every client. In most companies, especially ones dealing with the offshore software development model, the delivery manager is responsible for keeping the client happy as well as making sure that the offshore product delivery is according to schedule (notice how these things are related to each other). In Cognizant, each client had two delivery managers. One was "onsite" and interacted with the client while the other one was "offshore" and handled the product delivery and schedule. The benefit of this methodology was that it used both aspects of strategic planning as discussed in the article [1]. The overall strategy was decided at the Business Unit level and all the delivery managers were involved in it. However, the client interaction and the offshore team management were different from each other and required a seperate strategy for day to day management which was decided by the individual delivery managers based on their experiences and gut feeling.

To generalize the strategy on a company level, the "onsite" person is the Client Partner (CP) [3] who is part of the relationship management team. He [4] generally has an MBA and is responsible for communicating the needs of the client to the offshore team. The Global Delivery Manager (GDM) is the other person in the TIB model who is technically inclined and has experience leading large technical teams. The GDM changes the strategy for delivery schedules, product features, etc. based on inputs from the CP and the offshore Project Managers. While he is involved in and keeps in mind the overall strategy for the Business Unit when taking these decisions, he is not binded by the strategic model for the smaller day to day decisions. For example, if the overall strategy of the BU is to increase revenue by $3 Million for 2012, then the decision to postpone internal product delivery by 1 week will not be affected. This lets each manager in the TIB model have the independence to make run time decisions without the need to consult additional people.One of the benefits of TIB is that each manager develops expertise in his own field and prepares himself to take strategic decisions based on past experiences rather than depending on the overall BU strategy as in most organizations. This prepares resources within the organization that are specialized in their fields and can be tapped for global projects in the future based on their expertise rather than local availability (The Cognizant 2.0 or C2 project).

From my experiences, I could see this is an effective model for a technology based firm with an offshore office. However, whether this will work for firms that are localized (have their clients in the same country) or are smaller in size (the cost associated with duplication of resources in the TIB model) is something that is open to discussion.

[1] The Real Value of Strategic Planning (Kaplan and Beinhocker, MIT Sloan Management Review, Winter 2003)
[4] 'He' used as a representative pronoun throughout the article

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