How A Product of 1980's Bureaucracy Can Keep Your Business Agile

In the 1980’s, the US Department of Defense (“DOD”) had a problem. Many of their software development projects were running over budget and behind schedule. What seemed to be very capable vendors during the bidding stage ended up being woefully unprepared to deliver on what they had promised. The DOD commissioned the Software Engineering Institute (“SEI”) at Carnegie Mellon University to study the problem and find a solution. What SEI developed was a complicated set of surveys which would be aggregated into a single rating of a vendor’s capabilities. The solution they created was called the “Capability Maturity Model.”

I can hear the eyes rolling now. How can a complicated system of surveys—developed at a time when tight rolled jeans, permed hair, and BUM equipment sweaters were in style—possibly help an agile 201x startup stay agile? Well, it can’t. However, the final capability rating is a quick way to evaluate any part of any company on the fly.

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The model is extremely simple at this high level. There are five levels of process maturity ranging from non-existent to highly optimized. At the lowest level, one would expect to see high key man risk and ad hoc processes while at the highest level there would be a minimal dependency on a single person (it may be dependent on a position/role but not the individual in that role) and improvement would be continuous and based on established feedback channels.

At first glance, the CMM seems like a good way to evaluate processes that produce things (product manufacturing, software development, customer onboarding). However, I said previously that I used this as a quick way to evaluate every part of a company. It is. To demonstrate, let's go through an example.

Strategy Capability CMM Example

What process does the company use to develop and evaluate the overall business strategy?

  • Level 1 = Strategy is the sole brainchild of the founder/CEO and is not regularly reevaluated.
  • Level 2 = Strategy is the sole brainchild of the founder/CEO and is discussed in a cursory fashion on an inconsistent basis. Day to day decisions are not directly weighed against the strategy.
  • Level 3 = Strategy is discussed at yearly strategy sessions in a cursory fashion as something to “get through” before lunch or the after-party. Day to day decisions are not weighed directly against the strategy unless the strategy backs up an unpopular decision in which case it is used as a tool to win the argument and is then quickly ignored.
  • Level 4 = A strategy is defined and discussed in a cursory fashion at strategy sessions. Day to day decisions are usually weighed against the strategy but the strategy itself is rarely if ever changed.
  • Level 5 = The appropriateness and effectiveness of the strategy is constantly monitored via established feedback channels. Every person in the organization understands the strategic direction and uses it in their day to day responsibilities. A serious strategy evaluation is conducted on, at the very least, a quarterly basis. Strategy decisions are based on quantitative data and the strategy is forward-looking—taking into consideration industry trends, firm SWOT analysis, and the purpose of the company.

When viewed through the lens of the CMM, a seemingly “non-process” business function is suddenly very clearly a process dependent capability. This is possible for almost any function from human resources, to sales, to funding. “The CMM isn’t applicable here. It isn’t a process.” really means this process is at a Level 1. More importantly, this example gives us the opportunity to disprove the notion that defined processes mean “not agile.” Rather, having a set process for reevaluating previous decisions sets the stage for proactive business moves that will keep you ahead of the competition. Stable processes allow the business to remain nimble.

Like Troll dolls and Chuck Taylor’s, the CMM still has a place in the modern world. It just has to be viewed with the correct perspective. I highly recommend using the CMM as a quick way to determine which processes in a business need to be strengthened to gain a dominant market position and stay there.

Best Regards,

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