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Modelling Intelligence in Complex Organizations

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Modelling Intelligence in Complex Organizations

  1. 1. Organizational Intelligence<br />Richard Veryard January 2011<br />Modelling Intelligence in Complex Organizations<br />
  2. 2. Abstract<br />Twitter tag #orgintelligence<br />Organizational Intelligence can be modelled as a set of cognitive loops … <br />… integrating human, social and machine intelligence within a sociotechnical system or enterprise.<br />These models provide a useful analytic perspective on business viability and survival. <br />What are the implications of this approach for requirements engineering and organizational change?<br />
  3. 3. Traditional Divide<br />Smart people<br />Smart organizations<br />Smart machines<br />Smart systems and networks<br />Human Intelligence<br />Machine Intelligence<br />Organizational change<br />Requirements engineering<br />
  4. 4. Challenging the Traditional Divide<br />
  5. 5. Reductionist view:Cognition only makes sense for individuals<br />Only individual people can “know” and “understand” things.<br />Organizational cognition is an aggregation of individual human cognition.<br />Perception<br />Knowledge<br />Learning<br />Intelligence<br />Individual<br />Collective<br />
  6. 6. Holistic view:Individuals inhabit systems<br />What we know (or think we know) depends critically on our environment<br />Social systems<br />Technical systems<br />Organizational cognition is not an aggregation of individual cognition.<br />More?<br />Less?<br />Completely Different?<br />Individual<br />Collective<br />
  7. 7. The Illusion of Individual Performance<br />
  8. 8. Talent Myth<br />The success of an organization depends on a few highly talented individuals.<br />Reliance on “talent” can destroy an organization.<br />See for example: Malcolm Gladwell’s analysis of Enron<br />Belief<br />Observation<br />
  9. 9. A sociotechnical perspective<br />Sociotechnical systems can be decomposed into social subsystems and technical subsystems.<br />The subsystems of a sociotechnical system are themselves sociotechnical.<br />Reductionist View<br />Holistic View<br />
  10. 10. Sociotechnical Cognition<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 />
  11. 11. Historical ExampleGalileo  Newton <br />Galileo’s observations used a new optical device.<br />Galileo didn’t know how the device worked, so his calculations were wrong.<br />Newton understood optics, corrected Galileo’s theory.<br />
  12. 12. Modern Example: Google<br />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. <br />A. A. Milne<br />What happens if you use Google as your primary lens for viewing the world? (Many people do.)<br />Do you understand the “optics” of how Google works? (Most people don’t.)<br />
  13. 13. 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 />
  14. 14. From Water Cooler to Internet<br />14<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 />
  15. 15. From Dashboard to Control Room<br />15<br />
  16. 16. Business example: Transport Network<br />What is the operational state of the line? <br />Are the drivers in the right place?<br />Are the trains in the right place? <br />Is there a risk of breaching performance targets?<br />Control room displays and dashboards<br />Automatic scheduling software<br />Telephones, personal contact<br />etc<br />Questions<br />Control subsystems<br />
  17. 17. Three strategies<br />Several interacting operational subsystems with complex side effects<br />Train timetable<br />Driver roster<br />Signals<br />Deconfliction<br />Central optimization<br />Distributed intelligence (“power to the edge”)<br />Challenges<br />Approaches<br />
  18. 18. Exploring system properties<br />Robust<br />Efficient<br />Variation<br />Intelligent<br />Efficient / Effective<br />Variation<br />Operational System<br />Management System<br />Requisite variety<br />Requisite Variety: The more “complexity” you have on the left side, the more “power” you need on the right side.<br />
  19. 19. Planning and Coordination Challenge<br />Normal Timetable<br />Defines “ideal” operationDefines variation tolerances.<br />Normal Operations<br />Within operating limits defined by normal timetable.<br />alert<br />restore<br />Complexity Increases<br />Emergency Timetable<br />Plan (or fragments of plan) available when normal timetable breaks down.<br />Includes transition plan for returning to normal timetable.<br />Abnormal Operations<br />Outside operating limits defined by normal timetable.<br />invoke<br />
  20. 20. Typical responses to crisis<br />Reduce operational complexity<br />Provide skeleton service<br />Drop non-essential tasks<br />Significant fall in operational performance.<br />Call in higher levels of management<br />Are they any better at solving complex problems? Maybe not, but it’s what they’re paid for.<br />Complex interaction with other agencies<br />Aargh!!<br />Simplification<br />Escalation<br />
  21. 21. Intelligence Strategy<br />Attempts to “solve” these complex problems centrally using a single integrated set of (dynamic) planning and (re)scheduling tools.<br />Optimized schedule<br />Real-time optimization<br />The problem-solving capacity of the system is distributed across several autonomous subsystems, each supported by human and machine intelligence.<br />Directed Intelligence<br />Collaborative Intelligence<br /><br /><br />
  22. 22. Towards the Network-Centric Business“Power to the Edge”<br />22<br />improves<br />Robustly Networked Workforce<br />Information<br />Sharing<br />Based on Alberts & Hayes<br />dramatically<br />improves<br />Quality of Information<br />Information Sharing and Collaboration<br />enhances<br />Shared Situational Awareness<br />Mission<br />Effectiveness<br />Collaboration<br />Shared Situational Awareness<br />enables<br />Self-Synchronization<br />
  23. 23. Many cycles of learning<br />Reflex (sub-second)<br />Automatic responses to urgent events – e.g. safety cut-out.<br />Correction (minutes, hours)<br />Sorting out complex operational problems<br />Prevention (weeks, months)<br />Identifying systemic improvements<br />Experimentation<br />Note the different tempi associated with these three cycles<br />23<br />
  24. 24. Collaboration Requirements<br />Adequate technology<br />good communication tools, etc,<br />Good use of technology<br />Social protocols and habits<br />knowing when to send a message to whom<br />knowing how to send a clear message<br />And embedded in business process.<br />Not Only<br />But Also<br />
  25. 25. What is intelligence?<br />An ability to make sense of complex situations and act effectively<br />An ability to interpret and act upon relevant events and signals in the environment<br />Ability to develop, share and use knowledge relevant to its business purpose<br />Ability to reflect and learn from experience<br />Collective, not just individual<br />People fully engaged in their organizations<br />Effective use of appropriate tools<br />Effective coordination of people and systems<br />
  26. 26. 26<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 />
  27. 27. 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 />27<br />Sense-Making<br />Communication & Collaboration<br />
  28. 28. 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 />28<br />
  29. 29. Some pieces of the puzzle …<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 />
  30. 30. 30<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 />
  31. 31. 31<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 />
  32. 32. 32<br />Sense-Making<br />Information<br />Gathering<br />Knowledge& Memory<br />Learning& Development<br />Communication & Collaboration<br />Knowledge Management Loop<br />
  33. 33. 33<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 />
  34. 34. 34<br />Sense-Making<br />Learning& Development<br />Knowledge& Memory<br />Communication & Collaboration<br />Enterprise 2.0 Loop<br />
  35. 35. Requirements for Organizational Change<br />ALL THE WAY FROM<br />more effective and relevant information gathering <br />…<br />THROUGH TO<br />rich and productive learning and development<br />Differentiation<br />Better ability to respond to relevant variation in the demand environment<br />Integration<br />Better ability to act coherently, in a joined-up manner<br />More intelligence<br />Achieving better outcomes<br />
  36. 36. Operational Differentiation<br />Degrees of Differentiation<br />Retail Example<br />36<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 />
  37. 37. 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 />37<br />
  38. 38. 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 />38<br />customer<br />intelligence<br />attenuation<br />amplification<br />customer operation<br />
  39. 39. CapabilityCoordination<br />intelligence coordination<br />39<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 />
  40. 40. Supplier Segment<br />40<br />Customer Segment<br />Buying?<br />Promotions?<br />Customer Segment<br />Store Layout?<br />Integration Pathways<br />
  41. 41. Differentiation and Integration<br />41<br />Integration<br />Which route to improved intelligence?<br />Which route to improved intelligence?<br />Differentiation<br />
  42. 42. … and more<br />Evening Talk January 12th (BCS BISSG) free<br />One-Day Workshop February 9th (Unicom)20% discount for members of LASEORS<br />OrgIntelligence.BlogSpot.com<br />Future Events<br />Other Material and Links<br />

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