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How Can IT Fix the Problems of Stupid Organizations?


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How Can IT Fix the Problems of Stupid Organizations?

  1. 1. Organizational Intelligence<br />Richard Veryard January 2011<br />How Can IT Fix the Problems of Stupid Organizations?<br />
  2. 2. Abstract<br />Twitter tag #orgintelligence<br />Organizational intelligence is a critical measure of the management capacity of an organization in a demanding competitive environment. <br />IT has a critical role in maintaining and improving organizational intelligence.<br />
  3. 3. Structure<br />Twitter tag #orgintelligence<br />Situation: Characteristics of intelligent organizations<br />Problem: How intelligent organizational succeed (and stupid ones fail)<br />Implication: How IT contributes (possibly) to organizational intelligence and stupidity<br />Need: Leadership role for IT in improving organizational intelligence<br />
  4. 4. What is organizational intelligence?<br />Ignore important signals from the environment<br />Cannot discriminate between the important and the trivial<br />Respond incoherently to crisis<br />Oscillate wildly between extremes<br />Fail to learn from mistakes<br />Innovate slowly and painfully<br />Detect and interpret weak signals of possible significance<br />Mobilize coherent response to complex opportunity<br />Rational approach to risk and uncertainty<br />High-quality decision-making throughout the organization<br />Collective learning and innovation<br />4<br />Stupid Organizations …<br />Intelligent Organizations …<br />
  5. 5. Org intelligence as whole-system property<br />Very clever people, who don’t talk to each other<br />Very sophisticated technology, poorly wired together<br />Patterns of interference<br />(2+2=3)<br />Good people, who work well together<br />Good technology, used well<br />Patterns of collaboration<br />(2+2=5)<br />5<br />Stupid organizations may contain <br />Intelligent orgs may contain <br />
  6. 6. Org intelligence as sociotechnical property<br />How do we know what is going on?<br />How do we understand what is going on?<br />How do we act upon what is going on?<br />How do we remember things?<br />How do we communicate things?<br />How do we learn from experience?<br />All of these capabilities are both technical (dependent upon an array of devices) and social (dependent on other people).<br />
  7. 7. Symptoms of stupidity<br />7<br />Choke<br />Inability to access existing capability.<br />Denial (Kettle Logic)<br />“Problem, what problem ?”<br />Guesswork <br />Acting in the dark.<br />Meddle <br />Tinkering and management interference without understanding.<br />Muddle <br />Confused by overlapping and conflicting narratives.<br />Panic <br />Overtaken by events.<br />Policy-based evidence <br />Finding data to support or justify <br />Ignoring any contrary data. <br />Repetition / Oscillation <br />Repeating same mistakes without learning. <br />Going backwards and forwards between two problems without permanently solving either of them.<br />Short-Sighted / Tunnel Vision <br />Narrow focus on a single short-term goal<br />Inability to consider broader or longer-term vision.<br />
  8. 8. 8<br />Information<br />Gathering<br />Decision<br />& Policy<br />WIGO<br />(what is going on)<br />Learning& Development<br />Knowledge& Memory<br />Simple intelligence loop<br />
  9. 9. Information<br />Gathering<br />Decision<br />& Policy<br />WIGO<br />(what is going on)<br />Learning& Development<br />Knowledge& Memory<br />Complex intelligence loop<br />9<br />Sense-Making<br />Communication & Collaboration<br />
  10. 10. Organizational intelligence requires six sociotechnical capabilities<br />Information Gathering<br />How well does the organization collect and process information about itself and its environment?<br />Sense-Making<br />How well does the organization interpret and understand itself and its environment?<br />Decision-Making & Policy<br />How effective are the (collective) processes of thinking, decisions, policy and action?<br />Knowledge & Memory<br />How does the organization retain experience in a useful and accessible form?<br />Learning & Development<br />How does the organization develop and improve its knowledge, capabilities and processes?<br />Communication & Collaboration<br />How do people and groups exchange information and knowledge? How do they share ideas and meanings?<br />10<br />
  11. 11. 11<br />“Perhaps you have already seen memos from me or others here about the importance of the Internet. I have gone through several stages of increasing my view of its importance.”<br />“Exponential improvements in communications networks … the Internet is at the forefront of this”<br />“Now I assign the Internet the highest level of importance.”<br />Microsoft Example<br />Bill Gates “Tidal Wave” May 1995<br />
  12. 12. Microsoft Example<br />Review of history<br />Weak signals becoming stronger<br />Gradual shift of opinion<br />Pivotal shift in direction<br />Evolving strategies<br />Collective responsibility<br />Any large organization faces a huge number of challenges, both large and small.<br />Success of organization depends on achieving a good enough response to a good number of these.<br />Key Points<br />General Implications<br />
  13. 13. Some organizations don’t need much intelligence<br />Too much intelligence may be “overkill” or “overhead”<br />Organizations can survive by following simple predictable patterns<br />Simple predictable patterns create vulnerability<br />Intelligence is vital to survival<br />13<br />In simple stable environment …<br />In complex dynamic environment …<br />
  14. 14. How much intelligence do we need?<br />Multi-Sided Markets<br />Demand Volatility<br />Globalization<br />Falling rate of profit (?)<br />“Fly-By-Wire” Business<br />“Requisite Variety”<br />Business Complexity<br />Management Capability<br />
  15. 15. Operational Differentiation<br />Degrees of Differentiation<br />Retail Example<br />15<br />Zero variation. <br />No differentiation between customers. One size fits all.<br />Fixed segmentation. <br />The retailer identifies a number of (fixed ) market segments, and assigns each customer to the appropriate segment.<br />Dynamic deconstruction . <br />Differentiation based on the detailed actions and inferred intentions and context of customers.<br />Customer Management<br />Customer<br />Purchase<br />Segment<br />Context<br />
  16. 16. Progressive Differentiation<br />Anonymous Customer<br />Customer Identified at Checkout (Loyalty Card)<br />Customer Behaviour Tracked Inside Store (RFID)<br />?<br />Retail Example<br />Your Industry<br />16<br />
  17. 17. Capability Intelligence<br />Focus on the most relevant differentiators.<br />Sufficient range of responses to differentiators.<br />Coordination between variety of perceived differentiation and variety of response.<br />Feedback loops to improve relevance and accuracy of differentiation.<br />Feedback loops to refine responses.<br />Progressive elimination of unnecessary or irrelevant complication, along with exploration of new opportunities<br />Success Factors of Effective Differentiation<br />Customer Management<br />17<br />customer<br />intelligence<br />attenuation<br />amplification<br />customer operation<br />
  18. 18. CapabilityCoordination<br />intelligence coordination<br />18<br />customer<br />intelligence<br />product<br />intelligence<br />store<br />intelligence<br />staffing<br />intelligence<br />amplification<br />amplification<br />amplification<br />amplification<br />attenuation<br />attenuation<br />attenuation<br />attenuation<br />customer operation<br />product operation<br />store operation<br />staffing operation<br />operation coordination<br />
  19. 19. Supplier Segment<br />19<br />Customer Segment<br />Buying?<br />Promotions?<br />Customer Segment<br />Store Layout?<br />Integration Pathways<br />
  20. 20. Differentiation and Integration<br />20<br />Integration<br />Which route to improved intelligence?<br />Which route to improved intelligence?<br />Differentiation<br />
  21. 21. IT = information AND technology<br />Advanced technologies, tools and platforms for information processing and communication<br />Effective use of information and communication across enterprise systems<br />Not Only<br />But Also<br />
  22. 22. How does your organization discover what is (really) going on?<br />Enterprise applications and corporate databases<br />Dashboards and reports<br />Management accounts<br />Management by walking around (MBWA)<br />Water cooler<br />The Internet<br />Formal systems<br />Informal systems<br />
  23. 23. From Water Cooler to Internet<br />23<br />Blogger<br />Delicious<br />Facebook<br />Flickr<br />Google<br />Linked-In<br />Twitter<br />Yahoo<br />How do such devices change the way we exchange information and ideas? Better, worse, or just different?<br />
  24. 24. Tools for organizational intelligence<br />The collective intelligence of an organization can be improved by appropriate technologies used in appropriate ways.<br />Most large organizations use these technologies, but fail to join them together or use them effectively.  <br />Business intelligence, data mining and analytics<br />Event processing<br />Knowledge management / content management<br />Process improvement & performance management<br />Social networking<br />
  25. 25. Some attempts to join the pieces …<br />Business Intelligence<br />Command and Control<br />Knowledge Management<br />Business Process Mgt<br />Enterprise 2.0<br />shown in following slides<br />There is a little industry associated with each loop, each offering some useful tools and practices.<br />But none of these loops provide the complete picture.<br />Loops<br />Assessment<br />
  26. 26. 26<br />Sense-Making<br />Information<br />Gathering<br />Decision<br />& Policy<br />WIGO<br />(what is going on)<br />Knowledge& Memory<br />Business Intelligence Loop<br />
  27. 27. 27<br />Sense-Making<br />Information<br />Gathering<br />Decision<br />& Policy<br />WIGO<br />(what is going on)<br />Communication & Collaboration<br />Command and Control Loop<br />
  28. 28. 28<br />Sense-Making<br />Information<br />Gathering<br />Knowledge& Memory<br />Learning& Development<br />Communication & Collaboration<br />Knowledge Management Loop<br />
  29. 29. 29<br />Information<br />Gathering<br />Decision<br />& Policy<br />WIGO<br />(what is going on)<br />Learning& Development<br />Knowledge& Memory<br />Business Process Management<br />
  30. 30. 30<br />Sense-Making<br />Learning& Development<br />Knowledge& Memory<br />Communication & Collaboration<br />Enterprise 2.0 Loop<br />
  31. 31. Who is responsible for intelligence?<br />Information Technology?<br />Enterprise Architecture?<br />Knowledge Management?<br />Operations Research?<br />Human Resources?<br />Innovation?<br />Strategy?<br />31<br />
  32. 32. IT has a key role in improving organizational intelligence<br />The value that IT can bring to business is not just from automating clerical tasks and enabling large-scale global operational processes…<br />… but also from enabling and supporting management processes such as coordination and innovation.<br />Not Only<br />But Also<br />
  33. 33. New Challenges for IT<br />“These are the standard things we pay attention to in our business.”<br />“Here are the systems and dashboards that focus management attention on these standard things.”<br />Alert and aware. Always open to weak signals.<br />Building flexible tools and platforms to support exploration and experimentation.<br />FROM<br />TO<br />
  34. 34. New Challenges for IT<br />We collect and control information as an asset.<br />We give management the information they ask for. How they use this information is up to them.<br />We understand how effective use of information contributes to business outcomes.<br />We support the whole information  decision cycle.<br />From abdication<br />To engagement<br />
  35. 35. New Challenges for IT - Example<br />We provide people with the facility to send and receive email.<br />Ambiguous and misdirected emails waste time and attention, and reduce management effectiveness.<br />Better social protocols for email would benefit the organization.<br />And for some purposes, there are better tools than email. <br />Situation<br />Opportunity<br />
  36. 36. New Challenges for IT<br />Providing systems and reports and dashboards and tools and platforms<br />Helping the organization<br />With all these tools <br />To use information <br />Intelligently<br />To the benefit of the organization.<br />Not only<br />But also<br />
  37. 37. New Role for IT?<br />Chief Information Officer<br />Chief Intelligence Officer<br />from<br />to<br />
  38. 38. … and more<br />One-Day Workshop February 9th (Unicom)20% discount for members of BISSG<br /><br />Future Events<br />Other Material and Links<br />