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Modelling Intelligence in Complex Organizations

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  • 1. Organizational Intelligence
    Richard Veryard January 2011
    Modelling Intelligence in Complex Organizations
  • 2. Abstract
    Twitter tag #orgintelligence
    Organizational Intelligence can be modelled as a set of cognitive loops …
    … integrating human, social and machine intelligence within a sociotechnical system or enterprise.
    These models provide a useful analytic perspective on business viability and survival.
    What are the implications of this approach for requirements engineering and organizational change?
  • 3. Traditional Divide
    Smart people
    Smart organizations
    Smart machines
    Smart systems and networks
    Human Intelligence
    Machine Intelligence
    Organizational change
    Requirements engineering
  • 4. Challenging the Traditional Divide
  • 5. Reductionist view:Cognition only makes sense for individuals
    Only individual people can “know” and “understand” things.
    Organizational cognition is an aggregation of individual human cognition.
    Perception
    Knowledge
    Learning
    Intelligence
    Individual
    Collective
  • 6. Holistic view:Individuals inhabit systems
    What we know (or think we know) depends critically on our environment
    Social systems
    Technical systems
    Organizational cognition is not an aggregation of individual cognition.
    More?
    Less?
    Completely Different?
    Individual
    Collective
  • 7. The Illusion of Individual Performance
  • 8. Talent Myth
    The success of an organization depends on a few highly talented individuals.
    Reliance on “talent” can destroy an organization.
    See for example: Malcolm Gladwell’s analysis of Enron
    Belief
    Observation
  • 9. A sociotechnical perspective
    Sociotechnical systems can be decomposed into social subsystems and technical subsystems.
    The subsystems of a sociotechnical system are themselves sociotechnical.
    Reductionist View
    Holistic View
  • 10. Sociotechnical Cognition
    How do we know what is going on?
    How do we understand what is going on?
    How do we act upon what is going on?
    How do we remember things?
    How do we communicate things?
    How do we learn from experience?
    All of these capabilities are both technical (dependent upon an array of devices) and social (dependent on other people).
  • 11. Historical ExampleGalileo  Newton
    Galileo’s observations used a new optical device.
    Galileo didn’t know how the device worked, so his calculations were wrong.
    Newton understood optics, corrected Galileo’s theory.
  • 12. Modern Example: Google
    A third-class mind is only happy when it is thinking with the majority. A second-class mind is only happy when it is thinking with the minority. A first-class mind is only happy when it is thinking. 
    A. A. Milne
    What happens if you use Google as your primary lens for viewing the world? (Many people do.)
    Do you understand the “optics” of how Google works? (Most people don’t.)
  • 13. How does your organization discover what is (really) going on?
    Enterprise applications and corporate databases
    Dashboards and reports
    Management accounts
    Management by walking around (MBWA)
    Water cooler
    The Internet
    Formal systems
    Informal systems
  • 14. From Water Cooler to Internet
    14
    Blogger
    Delicious
    Facebook
    Flickr
    Google
    Linked-In
    Twitter
    Yahoo
    How do such devices change the way we exchange information and ideas? Better, worse, or just different?
  • 15. From Dashboard to Control Room
    15
  • 16. Business example: Transport Network
    What is the operational state of the line?
    Are the drivers in the right place?
    Are the trains in the right place?
    Is there a risk of breaching performance targets?
    Control room displays and dashboards
    Automatic scheduling software
    Telephones, personal contact
    etc
    Questions
    Control subsystems
  • 17. Three strategies
    Several interacting operational subsystems with complex side effects
    Train timetable
    Driver roster
    Signals
    Deconfliction
    Central optimization
    Distributed intelligence (“power to the edge”)
    Challenges
    Approaches
  • 18. Exploring system properties
    Robust
    Efficient
    Variation
    Intelligent
    Efficient / Effective
    Variation
    Operational System
    Management System
    Requisite variety
    Requisite Variety: The more “complexity” you have on the left side, the more “power” you need on the right side.
  • 19. Planning and Coordination Challenge
    Normal Timetable
    Defines “ideal” operationDefines variation tolerances.
    Normal Operations
    Within operating limits defined by normal timetable.
    alert
    restore
    Complexity Increases
    Emergency Timetable
    Plan (or fragments of plan) available when normal timetable breaks down.
    Includes transition plan for returning to normal timetable.
    Abnormal Operations
    Outside operating limits defined by normal timetable.
    invoke
  • 20. Typical responses to crisis
    Reduce operational complexity
    Provide skeleton service
    Drop non-essential tasks
    Significant fall in operational performance.
    Call in higher levels of management
    Are they any better at solving complex problems? Maybe not, but it’s what they’re paid for.
    Complex interaction with other agencies
    Aargh!!
    Simplification
    Escalation
  • 21. Intelligence Strategy
    Attempts to “solve” these complex problems centrally using a single integrated set of (dynamic) planning and (re)scheduling tools.
    Optimized schedule
    Real-time optimization
    The problem-solving capacity of the system is distributed across several autonomous subsystems, each supported by human and machine intelligence.
    Directed Intelligence
    Collaborative Intelligence


  • 22. Towards the Network-Centric Business“Power to the Edge”
    22
    improves
    Robustly Networked Workforce
    Information
    Sharing
    Based on Alberts & Hayes
    dramatically
    improves
    Quality of Information
    Information Sharing and Collaboration
    enhances
    Shared Situational Awareness
    Mission
    Effectiveness
    Collaboration
    Shared Situational Awareness
    enables
    Self-Synchronization
  • 23. Many cycles of learning
    Reflex (sub-second)
    Automatic responses to urgent events – e.g. safety cut-out.
    Correction (minutes, hours)
    Sorting out complex operational problems
    Prevention (weeks, months)
    Identifying systemic improvements
    Experimentation
    Note the different tempi associated with these three cycles
    23
  • 24. Collaboration Requirements
    Adequate technology
    good communication tools, etc,
    Good use of technology
    Social protocols and habits
    knowing when to send a message to whom
    knowing how to send a clear message
    And embedded in business process.
    Not Only
    But Also
  • 25. What is intelligence?
    An ability to make sense of complex situations and act effectively
    An ability to interpret and act upon relevant events and signals in the environment
    Ability to develop, share and use knowledge relevant to its business purpose
    Ability to reflect and learn from experience
    Collective, not just individual
    People fully engaged in their organizations
    Effective use of appropriate tools
    Effective coordination of people and systems
  • 26. 26
    Information
    Gathering
    Decision
    & Policy
    WIGO
    (what is going on)
    Learning& Development
    Knowledge& Memory
    Simple intelligence loop
  • 27. Information
    Gathering
    Decision
    & Policy
    WIGO
    (what is going on)
    Learning& Development
    Knowledge& Memory
    Complex intelligence loop
    27
    Sense-Making
    Communication & Collaboration
  • 28. Organizational intelligence requires six sociotechnical capabilities
    Information Gathering
    How well does the organization collect and process information about itself and its environment?
    Sense-Making
    How well does the organization interpret and understand itself and its environment?
    Decision-Making & Policy
    How effective are the (collective) processes of thinking, decisions, policy and action?
    Knowledge & Memory
    How does the organization retain experience in a useful and accessible form?
    Learning & Development
    How does the organization develop and improve its knowledge, capabilities and processes?
    Communication & Collaboration
    How do people and groups exchange information and knowledge? How do they share ideas and meanings?
    28
  • 29. Some pieces of the puzzle …
    Business Intelligence
    Command and Control
    Knowledge Management
    Business Process Mgt
    Enterprise 2.0
    shown in following slides
    There is a little industry associated with each loop, each offering some useful tools and practices.
    But none of these loops provide the complete picture.
    Loops
    Assessment
  • 30. 30
    Sense-Making
    Information
    Gathering
    Decision
    & Policy
    WIGO
    (what is going on)
    Knowledge& Memory
    Business Intelligence Loop
  • 31. 31
    Sense-Making
    Information
    Gathering
    Decision
    & Policy
    WIGO
    (what is going on)
    Communication & Collaboration
    Command and Control Loop
  • 32. 32
    Sense-Making
    Information
    Gathering
    Knowledge& Memory
    Learning& Development
    Communication & Collaboration
    Knowledge Management Loop
  • 33. 33
    Information
    Gathering
    Decision
    & Policy
    WIGO
    (what is going on)
    Learning& Development
    Knowledge& Memory
    Business Process Management
  • 34. 34
    Sense-Making
    Learning& Development
    Knowledge& Memory
    Communication & Collaboration
    Enterprise 2.0 Loop
  • 35. Requirements for Organizational Change
    ALL THE WAY FROM
    more effective and relevant information gathering

    THROUGH TO
    rich and productive learning and development
    Differentiation
    Better ability to respond to relevant variation in the demand environment
    Integration
    Better ability to act coherently, in a joined-up manner
    More intelligence
    Achieving better outcomes
  • 36. Operational Differentiation
    Degrees of Differentiation
    Retail Example
    36
    Zero variation.
    No differentiation between customers. One size fits all.
    Fixed segmentation.
    The retailer identifies a number of (fixed ) market segments, and assigns each customer to the appropriate segment.
    Dynamic deconstruction .
    Differentiation based on the detailed actions and inferred intentions and context of customers.
    Customer Management
    Customer
    Purchase
    Segment
    Context
  • 37. Progressive Differentiation
    Anonymous Customer
    Customer Identified at Checkout (Loyalty Card)
    Customer Behaviour Tracked Inside Store (RFID)
    ?
    Retail Example
    Your Industry
    37
  • 38. Capability Intelligence
    Focus on the most relevant differentiators.
    Sufficient range of responses to differentiators.
    Coordination between variety of perceived differentiation and variety of response.
    Feedback loops to improve relevance and accuracy of differentiation.
    Feedback loops to refine responses.
    Progressive elimination of unnecessary or irrelevant complication, along with exploration of new opportunities
    Success Factors of Effective Differentiation
    Customer Management
    38
    customer
    intelligence
    attenuation
    amplification
    customer operation
  • 39. CapabilityCoordination
    intelligence coordination
    39
    customer
    intelligence
    product
    intelligence
    store
    intelligence
    staffing
    intelligence
    amplification
    amplification
    amplification
    amplification
    attenuation
    attenuation
    attenuation
    attenuation
    customer operation
    product operation
    store operation
    staffing operation
    operation coordination
  • 40. Supplier Segment
    40
    Customer Segment
    Buying?
    Promotions?
    Customer Segment
    Store Layout?
    Integration Pathways
  • 41. Differentiation and Integration
    41
    Integration
    Which route to improved intelligence?
    Which route to improved intelligence?
    Differentiation
  • 42. … and more
    Evening Talk January 12th (BCS BISSG) free
    One-Day Workshop February 9th (Unicom)20% discount for members of LASEORS
    OrgIntelligence.BlogSpot.com
    Future Events
    Other Material and Links

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