Purpose Alignment Model Background & Use
The Purpose Alignment Model was created by Nick Nickolaisen and is therefore also called the Nickolaisen Model. The model is used to help people prioritize work based on purpose. It helps us define the purpose of product or project work that we are considering. When we know the purpose of the work we are able to organize the project to attain the purpose of the work. It is also used to ascertain the purpose of business decisions and designs around purpose.
The purpose of certain decisions and designs is to differentiate the business in the market that it operates in whilst the purpose of other decisions is to attain and maintain parity within the market. Activities that don’t require us to be the best in the market with regards to that offering either necessitates outsourcing it to a partner to achieve differentiation in the market, or they don’t deserve much attention at all.
The Quadrants Explained
Activities in the differentiation quadrant are meant to make the organization excel. These activities are leveraged to increase market share and maintain that position (competitive advantage) in the market. So you would want to excel at these activities as this is what sets you apart from the competition. These activities should be your company’s claim to fame and are usually an extrapolation of your strategy. Underinvesting in these activities will weaken your market share. Therefore, it is wise to invest your creativity into these activities.
The parity quadrant refers to activities that enables you to achieve and maintain parity (equality or similarity) in the marketplace. Thus, your organization doesn’t create any competitive advantage by performing these activities better than what is expected. Having said that, remember these activities are mission critical to your organization so do not underinvest or neglect these activities. Usually these activities represent themselves as candidates for streamlining and optimization, as complexity in this domain is indicative that you are over investing here. Overinvesting in the Parity quadrant typically prohibits resources from being invested in areas that actually matter.
Certain activities are non-mission critical for the organization but can still differentiate the organization from the rest. To generate more market share from these activities is to outsource these to a partner for whom these activities are differentiating and combine efforts to create this differentiation.
Those business activities that are neither mission critical nor differentiating should be performed as little as possible. These activities are aptly named the “Who Cares” activities.
Where do we use The Purpose Based Alignment Model?
The model works well when we need to do any of the following:
- Defining strategic and tactical business and IT plans
- When we need to align business and IT priorities
- When we have to evaluate, plan, and implement large system projects
- With feature and functionality design
- Managing project scope
- Reduce resistance to process improvement initiatives
- When we need to reduce waste
The Purpose Alignment Model provides us with a simple way to determine which activities to concentrate on, and also how to deliver them.
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