The Cellular Business Model 2010

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The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations

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The Cellular Business Model 2010

  1. 1. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations Author: Steve Garnett Contributor: James Deeley 4J Consulting © 2010
  2. 2. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Table of Contents Introduction 4 The Cellular Business Model 8 Agile Lean Thinking 14 Open Book Management 19 Pattern Theory 22 Cloud Computing 24 Summary 28 Bibliography References 32 Biographies 33 Table of Figures Figure 1: The Cellular Business Model 8 Figure 2: Status View of Cells 13 Figure 3: Scrum Sprint Cycle 16 Figure 4: Seeding Diagram 17 Figure 5: De-coupling Diagram 18 Figure 6: The Life of Software 19 Figure 7: Open Book Management 21 Figure 8: Pattern Usage 23 Figure 9: Cloud Computing 25 Figure 10: Animoto Case Study 26 Figure 11: Fixed Cost Model 27 Figure 12: Variable Cost Model 27 Figure 13: Status View of Cells 29
  3. 3. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Throughout this paper when referring to the Cellular Business Model, I will use examples based around a software development company, as this is where my experience lies. The reader is encouraged to consider and speculate on the adoption of the Cellular Business Model within their own areas of experience and expertise to assess its potential use in those industries.
  4. 4. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Introduction There is a long-standing relationship between the strategies tactics of warfare and the strategies tactics of business. Terrorism is the latest warfare strategy to be adopted, and today’s terrorist organisations reflect key capabilities that corporate entities aspire to: • Global infrastructure • Clear vision objectives • Global profile • Worldwide success coverage “ War is the oldest form of competition between ” human organisations; business is a relative newcomer. There were no large business organisations (with a few exceptions, like Britian’s East India Company) until a couple of centuries ago. Humans have been fighting wars for millennia and war has driven the evolution of techniques for organising, supplying, leading and motivating large numbers of people. Carl von Clausewitz
  5. 5. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 As a student of business, with a passion for agile and lean thinking (explanations to follow), I have been considering the abundance of waste within large organisations. The bureaucracy, governance procedures, multiple layer management hierarchies, complexity, politicking, and size, all contribute to impede organisations. They become slow to market, narrow in perspective, and are reduced to becoming dinosaurs awaiting oblivion… or merger, acquisition, management buy-out, government bail-out etc. Hypothesis Established in the late 1980’s Al-Qaeda (“The Base”) has a membership of 50,000 people and operates in circa 65 countries. The group aims to overthrow ‘un-Islamic regimes’ that they believe oppress their Muslim citizens and replace them with genuine Islamic governments.1 They have the finance, capabilities and the will to succeed. “ An Organisation that maximises return on ” investment, builds up the world’s most recognisable brand name overnight, creates synergy between PR message and HR recruiting, attracts motivated loyal employees who make the ultimate sacrifice to extend the mission into new markets and keeps expanding despite the world’s most hostile environment is every manager’s dream. One manager turned this dream into a reality: Osama bin Laden. Hans van der Weijden 1 National Consortium for the Study of Terrorism and Responses to Terrorism website.
  6. 6. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Al-Qaeda has evolved into a Cellular Terrorist Organisation (CTO) and has been described as a horizontal, agile, low-cost producer of terrorism.2 This model is not new. It was first established by Louis Auguste Blanqui during the Napoleonic era and later adopted in the 19th century by Irish and Russian revolutionaries. There are 3 elements to the Al-Qaeda model: Activist Staffers (the actual members of the operational cell), Boundary Spanners (consultants liaising between different cells) and the Network. To counter these terrorist organisations, governments employ special forces teams such as the SAS, Delta Force, and US Navy Seals. These teams are well funded, well trained, with clear objectives vision, clearly identified roles and a clear set of rules of engagement. Both terrorist cells and special forces teams share the ability to act decisively without recourse to higher decision makers, so long as they are within their mission parameters and rules of engagement. “ Rather than comparing (war) to art we could ” more accurately compare it to commerce, which is also a conflict of human interests and activi- ties; and it is still closer to politics, which in turn may be considered as a kind of commerce on a larger scale. Carl von Clausewitz 2 The Business of Terror: Conceptualizing Terrorist Organizations as Cellular Businesses
  7. 7. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Surely, with the criticality of the missions of these teams, and the need for high performance, autonomy and cohesion, the logical evolution would be for business entities to adopt these strategies and tactics? Having had the privilege of working with some exceptional teams both in my military and business careers, I have been developing a model for maintaining and scaling the agility and efficiency of small teams to large scale software development corporations, and working out how we can learn from the unwanted success of terrorist organisations. This paper This paper sets out to describe the Cellular Business Model and goes on to explore how a combination of key business practices could be employed in order to implement a corporate structure based on the cellular terrorist organisation. These practices include Agile Lean thinking, Open Book Management, Pattern Theory and Cloud Computing.
  8. 8. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 The Cellular Business Model Mirroring the Cellular Terrorist Organisation, the Cellular Business Model is based on the creation of small, highly autonomous, highly skilled teams supported by a strong network. Where Al Qaeda has the 3 elements of cells composed of Activist Staffers, Boundary Spanners and the Network, so the Cellular Business Model has Business Cells, Pattern Units and a Knowledge Network. BUSINESS CELLS PATTERN UNITS Figure 1: The Cellular Business Model The current hierarchical corporate structures that dominate our economies have been in place for over 200 years and were
  9. 9. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 notably supported and defined by Max Weber during the 1800’s. Even though Weber was considered a champion of bureaucracy, he understood and articulated the dangers of bureaucratic organisations as stifling, impersonal, formal, protectionist and a threat to individual freedom, equality and cultural vitality. “ Max Weber can be interpreted as a champion ” of bureaucracy... in other portions of his work, however, Weber also drew an extraordinary negative portrait of bureaucracy as stifling force in modern life. Fritz Ringer In the 21st century, we need to evolve. Hierarchical enterprise structures were requisite for the 19th century, should probably have evolved in the 20th century, and are certainly out of date in the 21st century. Enterprises today need to focus on creativity, speed to market, data, intellectual capital, technology adoption and agility (defined as the ability to react to threats and exploit opportunities). The Tenets of the Cellular Business Model: • Clear vision objectives • Financial transparency • Direct correlation of employee effort to profit loss • Transactional cost model for elasticity of demand • Autonomous units of 6-10 people • Seeding de-coupling • Treasure experience
  10. 10. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 At a macro-level, the Cellular Business Model is a corporate entity established as a cluster of autonomous profit-making teams, fed, nurtured and supported by central pattern units. The Cells Much as Al-Qaeda has established cells or activist staffers, from agile lean thinking we create cells that consist of teams of 6-10 people of defined skill-sets derived from the vision and objectives of the cell. For example, a software development cell may contain a sales finance resource, experience designer, developers, a tester and a technical writer. Principles and practices such as producing shippable product every iteration and the focus on product quality found within agile development, support rapid delivery cycles and speed to market. Every role within the cell contributes directly to the profit or loss of that cell keeping waste to a minimum. The cell remains de-coupled and autonomous from the other cells in the company with the primary objective of creating profit through software development. The Pattern Unit The Pattern Unit acts much as the Boundary Spanners in the Al-Qaeda network; a liaison and contact point for the various cells. We amplify the learning through the use of pattern language for software and organisational structures. The Pattern Unit provides a suite of development practices, organisational structures, sales marketing and distribution capabilities for the cells to use. Examples may include information and contacts for establishing Hardware as a Service, XP development practices, budget and finance tools, employment contracts, prospect databases and collaboration tools. 0
  11. 11. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 This knowledge is electronically stored and distributed and essentially acts as the foundation of the network between pattern units and business cells. Throughout the operating period, the central pattern unit observes, records and collects successful patterns based on the cell’s activities and provides guidance where requested based on activities of other cells within their cluster. The ratio of Pattern Unit to Business Cell would be established through experience, but the goal would be for 1 Pattern Unit to support 10 Business Cells. This would maintain a 10% waste level for whatever size of corporate entity. Each cell then becomes an autonomous unit, a profit-centre, a revenue generating entity. As Business Cells succeed so the patterns are gathered, optimised and pollinated across the rest of the swarm. Unsuccessful cells are killed off, and the remains kicked over for any remaining value from the shippable products and a new cell formed elsewhere. Focussed Vision and Objectives From the theory of Open Book Management, we provide each cell with a clear and unequivocal financial view of the cell, its costs and its expected returns. Every member of the cell is left in no doubt of the objectives of the cell and where they contribute to the profit and loss. Each cell then reviews its progress against the PL on a regular basis to maintain focus and direction.
  12. 12. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 “ Military tactics are like unto water; for wa- ” ter in its natural course runs away from high places and hastens downwards... Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions. He who can modify his tactics in relation to his opponent and thereby succeed in winning, may be called a heaven-born captain. Sun Tzu Elasticity The technology infrastructure for a cell to develop and distribute its software on a global scale without significant capital expenditure is afforded by the use of cloud computing. The development, test and production environments are provided through Hardware as a Service (HaaS), the product itself could be built on a Platform as a Service such as the Google AppEngine, and the product could be distributed on a Software as a Service model. As the customer base grows, the ability to serve a wider audience increases on a transactional basis enabling a cell to respond effortlessly to elasticity of demand.
  13. 13. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Tying It Together The entire organisation is a cluster, swarm, honeycomb of individual, autonomous teams of 6-10 members, with each team functioning as an independent profit centre. Much as poor performing or inadequate terrorist cells and special forces teams will fail, so the company’s individual cells are killed off if they do not achieve profitability. Figure 2: Status View Of Cells Companies achieving this cellular model would have the flexibility, adaptability, speed to market and open-minded perspectives required to function on a large scale in rapidly innovating markets. The following sections introduce Agile Lean thinking, Open Book Management, Pattern Theory and Cloud Computing to the reader to illustrate how a sustainable Cellular Business Model could be established.
  14. 14. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Agile Lean Thinking About Lean The origins of lean date back to the 1970s at Toyota where they established the Toyota Production System which spread through- out their sales and distribution operations in the 1980s. In 1990, Womack, Jones Roos published “The Machine that Changed the World” which established the term “lean”. Lean, because the Japanese business methods used less of everything – human effort, capital investment, facilities, inventories and time – in manufacturing, product development, parts supply and customer relations. Typical results from adoption of lean principles and practices that can be directly attributable to the profit and loss account are: • Inventory (working capital) reductions of +75% • Cycle time reductions of 50% - 90% • Delivery lead-time reductions of 75% • Productivity increases of 15% - 35% per year • Defect reductions of 50% per year, with zero defects performance possible 3 The principles of lean can be applied to any organisation and sector and are founded on seeking perfection through seeing the 3 www.gembutsu.com, What Are The Benefits Of Lean And Long Will It Take To See Results?
  15. 15. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 whole, empowering the team, amplifying learning, reducing waste, delivering as fast as possible, deciding as late as possible and building integrity in. About Agile In February 2001, at a lodge in the Wasatch Mountains of Utah, luminaries in the field of software development representing a number of different development methodologies established the Agile Manifesto. Manifesto for Agile Software Development We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value: Individuals and interactions over processes and tools Working software over comprehensive documentation Customer collaboration over contract negotiation Responding to change over following a plan That is, while there is value in the items on the right, we value the items on the left more.4 One of the agile methodologies is Scrum which is becoming a widely adopted and recognised software development methodology. Scrum promotes self-organising teams of 6-8 members, iteration of development, retrospective, face to face communication, 4 http://agilemanifesto.org
  16. 16. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 continuous improvement, delivering increments, and having clearly defined vision, objectives and “rules of engagement” - and it works. MEETING ING DA NN ILY LA TP ST AN IN PR D S UP G LO ACK PRODUCT OWNER TE PRODUCT B PRODUCT INCREME TEAM MEMBERS SCRUM MASTER UPDA NT IVE STAKEHOLDERS USERS Figure 3: Scrum Sprint Cycle CT PE OS SP TR RI NT RE RE RINT VIEW SP POTENTIALLY SHIPPABLE PRODUCT SPRINT CYCLE Scrum is easy to understand and adopt for small teams, the problems arise when scaling scrum for 5 teams, 10 teams… 80 teams. The thought leaders in this area prescribe solutions such as seeding teams and the de-coupling of requirements and architecture.
  17. 17. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Seeding De-coupling Seeding prescribes the growth of a large team organically over a longer time period. Essentially the first scrum team is created and operates for a defined period. Then this initial team is broken up and its members become the first members of multiple new teams i.e. a team of 8, becomes 4 teams of 2 and other members are added to these 4 teams. Figure 4: Seeding Diagram De-coupling is about removing as many inter-dependencies and relationships between pieces of work, products or operations as possible. This will enable each team to work not in isolation, but
  18. 18. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 with a relative freedom to achieve their objectives over a given period e.g. iteration. Figure 5: De-coupling Diagram This diagram illustrates that through decomposing a product, we can de-couple architecture or business requirements, or any other element to reduce the inter-dependencies between collaborating teams in order to de-couple them and allow autonomous activity. These lean and agile concepts of small teams, clear objectives, seeding and de-coupling are fundamental to the cellular business model. However, for an enterprise, by themselves, agile teams do not constitute sustainable, profitable, business concerns, we need to add to our model.
  19. 19. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Open Book Management On one of my first agile projects, some members of the team were discussing the lifecycle of a piece of software and the quotation “Every line of software has an ROI” evolved. The premise is that any piece of software may last between 3-15 years or more. • How many iterations does it go through? • How many tests are run against it? • How many times is its documentation updated? • How much support does it require over its lifetime? INITIAL PROJECT Figure 6: The Life Of Software BUSINESS CHANGE REQUEST BUSINESS CHANGE REQUEST INTEGRATION BUSINESS CHANGE REQUIREMENT REQUEST BUSINESS CHANGE REQUEST DECOMMISSIONING SUPPORT ACTIVITY COST TIME All these elements are costs attributable to the code. How well is it architected, structured, commented, and are tests automated or manual? How risky and expensive is it to change the code at a later date? Software is a living, breathing entity, it is conceived, designed,
  20. 20. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 tested, developed, tested, deployed, supported, changed and eventually dies. What is the return? How many transactions does it facilitate, what will it cost to maintain? These are the questions that must be considered when designing and coding software which is why agile development practices are essential to gain a return on the product. Leading on from this initial thought, the question arises of what is the ROI of an employee? Often within larger enterprises, day to day work has no direct or transparent correlation or relationship with the Profit Loss account of the company. Do you know which line on the PL your activities influence? Can you state what value you contributed last quarter? For some people this is easy such as a direct salesman, but what about developers? What do you contribute to the bottom line? How can you improve your contribution to the company? And if you don’t know how you contribute, how can you make informed decisions for the better of the company? What should the quality levels be? Are you building a Rolls Royce for a Skoda brand? This problem is brilliantly highlighted and demonstrated in the book The Great Game of Business by Jack Stack. He established the idea of “Open Book Management” back in the 1980’s when he was part of a management buy-out for a manufacturing firm. In order to achieve the buy-out the company took on considerable loans from banks. He opened up the books to the workforce, explained the financial situation and provided very clear and concise targets with everyone knowing exactly what they had to 0
  21. 21. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 achieve and how their performance affected the overall company performance. There were weekly company-wide reviews of financial performance so that every employee understood how they were contributing and what their focus should be. Figure 7: Open Book Management The direct understanding by the workforce of the financial situation helped deliver phenomenal success. Employees should and need to be more aware of the results of their actions, and be directly accountable for their performance. The days of ignorant workers are over. Most software developers have degrees in their pocket, so understanding the basics of where they contribute to revenues or
  22. 22. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 costs, and adjusting their behaviour and performance to match the needs of the business, should not be a major obstacle to overcome. Anyway, to expand on the previous statement from all those years ago… “Every line of code has an ROI every employee has an ROI” – Steve Garnett 2009. The tenets of financial transparency and the direct correlation of employee effort to company success are fundamental to the Cellular Business Model. We have now discussed small teams with direct financial accountability, but how do we maintain the knowledge and experience of these autonomous teams and ensure it is shared across the organisation? Pattern Theory A key element to the Cellular Business Model is centred on Pattern Theory. This is probably the most significant development in process design and intellectual capital capture in the last 50 years and yet remains virtually unheard of!
  23. 23. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 “ The earliest patterns of human organisations ” have roots in military organisational structure. Coplien Harrison In the 1970s an architect, Christopher Alexander, prescribed a pattern language for towns, buildings and construction, and each pattern solved a problem by adding structure to a system.5 A pattern might be described as a system structure that has solved a specific problem within a context in multiple instances and environments. The pattern approach promotes the tenets of incremental repair and piecemeal growth, building on experience and attentiveness to quality of life. Figure 8: Pattern Usage For me, the fundamental value of Patterns is that they represent successful experience. Patterns describe a problem area and a solution architecture that has been implemented previously in multiple instances and environments. Pattern Theory has evolved to cover not only town and building architecture but also software development and organisational design. Patterns have a usable template within which organisations can record the success of systems, processes and structures within their own experience. That is, a means to capture tacit experience 5 A Pattern Language: Towns, Buildings, Construction
  24. 24. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 and intellectual property of successful ventures within the organisation. Basically, rather than re-inventing the wheel, or trying to solve the problem context through intellect and creativity, patterns provide a tried and tested solution that has worked for that particular problem context numerous times. 40 years on, one would have expected all large corporations to have terabytes of patterns about every facet of their business, to maintain the tacit knowledge and experience of long-standing corporations. Without pattern adoption and the “treasuring” of experience and knowledge, the Cellular Business Model cannot function effectively. Having established the potential for multiple, autonomous, financially independent teams, and a means of sharing intellectual capital across these teams, the final area to discuss is how small teams can establish global footprints as we have seen terrorist cells achieve. Cloud Computing Being an “expert” on agile development, I am, like many of my peers, extremely frustrated at the lack of understanding of what agile is about and the vacuous rhetoric flooding the web. Similarly,
  25. 25. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 the hype engine is gearing up in reference to Cloud Computing and “The Cloud”, so I decided to do some research of my own. Basically, the cloud doesn’t exist… yet! The vision of a single entity providing software, data, processing power, storage, transactions, identity, security, social collaboration and communication through the web across multiple devices is not here yet. Figure 9: Cloud Computing But… through my research I have bumped into Software as a Service, Hardware as a Service and Platform as a Service and there is an interesting opportunity here. Most of the current drivers towards Cloud Computing centre on cost-cutting and “giving the problem to someone else” and with multi-tenancy the cost savings can be passed on to the customers. What is more interesting is what we can learn or adopt from the Animoto model. Animoto provides its customers with the means to create high quality music videos. In April 2009 the company began social marketing through Facebook and their users per day went from an average of 5,000 to a spike of 750,000 in just 3 days.6 6 http://blog.seattlepi.com/amazon/archives/142569.asp
  26. 26. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Figure 10: Animoto Case Study Through traditional hosting agreements and structures, the ability to accommodate this volume without any planning or foreknowledge and maintain a satisfactory user experience would not be possible. However, Animoto’s product was architected as “Software as a Service” and the hosting had been set up on the Amazon Elastic Compute Cloud (EC2) “Hardware as a Service” model. The result is that a very small company was able to scale up extremely rapidly, without an upfront investment, on a transactional basis and without adding to their fixed costs. It is the ability for a small business entity to have a global presence, on a transactional or variable cost model. What? Imagine you’re a software product vendor providing software as a service and currently you’ve got 200 corporate customers. There’s some good publicity, or major move in the market place and demand goes up. You need to invest heavily in your infrastructure and workforce to support the additional demand. The cost of these assets becomes part of your fixed cost model, which means that you always need to sell enough of your product to cover the volumes established during this bullish period.
  27. 27. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Figure 11: Fixed Cost Model But what if you had very low fixed costs? What if all your infrastructure, platform, licensing, development and test environments, application and integration costs were on a per transaction/variable cost model? Figure 12: Variable Cost Model Barriers to entry fall, small, autonomous, development teams of 6-10 people could serve global customer footprints on a per transaction basis. Apple and the iStore, Amazon EC2 and Google EngineApp are already beginning to exploit this capability! What impact will this have on traditional business models? Transactional cost models and the elimination of fixed costs is a fundamental tenet of the Cellular Business Model.
  28. 28. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Summary The strategies and tactics of war have been shaping and influencing the way businesses operate for centuries. The human race has been waging war for millennia, and in doing so creating new technologies, command and control structures, logistics supply chain processes and advancing communication capabilities. The 20th century has seen an evolution in warfare from conventionally armed, vast, structured, multi-layered armies to small guerrilla and terrorist warfare strategies and tactics, using advanced technologies, nuclear and biological weapons. The effect of this in the 21st century is the ability for extremely small units to have huge impact and influence on a global scale. Terrorist organisations are successfully waging war on a global scale and achieving their objectives in a hostile and challenging environment. The Cellular Business Model borrows elements from the structures and operations of terrorist cells. Each business cell is provided with the vision, objectives, roles, skills, resources and patterns to function successfully as an independent profit-making entity.
  29. 29. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 The Tenets of the Cellular Business Model: • Clear vision objectives • Financial transparency • Direct correlation of employee effort to profit loss • Transactional cost model for elasticity of demand • Autonomous units of 6-10 people • Seeding de-coupling • Treasure experience Through the adoption of Agile Lean Thinking, Open Book Management, Pattern Theory and Cloud Computing, we can see how an enterprise could exist as a swarm of multiple, independent, autonomous, profit-making entities. Figure 13: Status View Of Cells The fact is that the Cellular Business Model has similarities and parallels with widely adopted business practices already in place today, such as franchise operators, business incubators and
  30. 30. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 business units as profit centres. This paper suggests taking the next step and evolving these practices to the extreme by creating a corporate entity entirely structured upon these principles. The business world is changing at a phenomenal rate, and yet our organisational structures and cultures are not responding or adapting quickly enough. Corporate strategy is no longer purely about research, analysis and long-term planning and investment, it is about making the business more able to cope with change. The Cellular Business Model achieves the level of adaptability and flexibility required to react to and exploit market opportunities. Our current “in-built” culture and mindset of hierarchy and centralised command and control is no longer fit for purpose. Market share will be eaten away until more innovative thinking is applied to corporate structures, governance and operating models. “ There is nothing more difficult to carry out, nor ” more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who could profit by the new order... (because of) the incredulity of mankind, who do not truly believe in anything new until they have had actual experience of it. Niccolo Machiavelli 0
  31. 31. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 More Information If you are interested in learning more or exploring the Cellular Business Model further please contact: steve.garnett@4jconsulting.com
  32. 32. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Bibliography References Alexander, Christopher, A Pattern Language: Towns, Buildings, Construction, (USA: Christopher Alexander, 1977). Clausewitz, Carl Von, On War, (Ware, Hertfordshire: Wordsworth Editions Limited, 1997). Coplien, James O., and Neil B. Harrison, Organisational Patterns of Agile Software Development, (New Jersey USA: Prentice Hall, 2005). Fleishman, Charlotte, The Business of Terror: Conceptualizing Terrorist Organizations as Cellular Businesses (Center for Defense Information, 2005). Niccolo, Machiavelli, The Prince, (New York: New American Library, 1952). Ringer, Fritz, Max Weber: an intellectual biography (Chicago 60637, The University of Chicago Press, 2004). Stack, Jack, The Great Game of Business, (New York USA: Currency Doubleday, 1992). Tzu, Sun, The Art of War, (Harrisburg, Pa: Military Service Pub. Co., 1944). Womack, James P., Daniel T. Jones, and Daniel Roos, The Machine that Change the World, (London, Great Britain: Simon Schuster UK Ltd, 2007). http://agilemanifesto.org/history.html http://www.start.umd.edu/start/ http://www.sviib.nl/interface/magazine/pdf/21_3_alquada.pdf http://www.tigweb.org/express/panorama/article.html?ContentID=5002
  33. 33. The Cellular Business Model: How Software Companies Could Learn From Terrorist Organisations 4J Consulting © 2010 Biographies Steve Garnett (Author) Steve started his career in the Royal Navy as a Communications Intelligence Analyst where he served home and abroad in operational environments for 9 years. He joined AIT as a developer and then spent 5 years with Conchango where he pioneered the use of Scrum and graduated from Henley Management College with a Masters in Business Administration in 2004. Only the 9th person worldwide to be Certified as a Scrum Practitioner, Steve has worked with Ken Schwaber the co-founder of Scrum and has held roles as Head of Software Development and Head of Technology E-commerce. Steve is currently an Independent Agile Consultant. James Deeley (Contributor) James Deeley is a senior Creative Strategist living and working in London. With over twelve years experience developing creative and strategic solutions for global industries and clients, he has extensive cross sector knowledge in providing digital brand and user experience centred delivery. He has lead projects for leading agencies throughout London, including Ogilvy One, LBi and Conchango (EMC Consulting).

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