Mc David Innovation Forum 2


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Presentation I gave at the Innovation Imperative Forum in Hong Kong.

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Mc David Innovation Forum 2

  1. 1. Innovating Social Enterprise Through New Social Technologies Hong Kong 31 March 2009 Doug McDavid
  2. 2. The Big Ideas • The era of services • People as the source of value • Social enterprise • Social technology • Architectures
  3. 3. It’s a good time to be focusing on social enterprise Innovation Deployment Crash Irruption Maturity Frenzy Synergy • Formation of Mfg. industry The Industrial Panic 1 30 • Repeal of Years 32 Corn Laws 1771 1829 1797 Revolution opening trade • Joint stock companies Age of Steam Panic 2 30 • Industry exploits economies 1873 26 Years 1829 1847 and Railways of scale • Separation of savings, Age of Steel, Electricity Depression 3 27 Years 30 investment banks 1875 1920 1893 and Heavy Engineering • FDIC, SEC • Build-out of Interstate Age of Oil, Automobiles Crash 4 30 highways Years 45 1908 1974 1929 and Mass Production • IMF, World Bank, BIS Current period of Age of Information and 5 1971 Collapse Institutional Adjustment Telecommunications Source: “Technological Revolutions and Financial Capital, Carlota Perez, 2002 “The turning point has to do with the balance between individual and social interests within capitalism. It is the swing of the pendulum from the extreme individualism of Frenzy to giving greater attention to collective well-being.”
  4. 4. We are in an era of services dominance % of U.S. employment Evolving to new dominant logic – services-centered – Away from goods exchange agriculture – Toward exchange of intangibles manufacture Skills (S) specialization services Knowledge (K) Processes – Customers buy offerings rendering services that create value Service: “[the] application of specialized competences (S & K) through deeds, processes, and performances for benefit of another entity or the entity itself […]” Stephen L. Vargo & Robert F. Lusch, “Evolving to a New Dominant Logic for Marketing”, Journal of Marketing, Vol. 68 (January 2004), 1–17 Some might say it has always been the era of services “The great economic law is this: Services are exchanged for services…. It is trivial, very commonplace; it is, nonetheless, the beginning, the middle, and the end of economic science.” Frederic Bastiat, 1860
  5. 5. Service Science: Grand Challenge Problem Discover a Moore’s Law for service system improvement More win-win interactions, more value Requires investment roadmap Service System/Network 1. People Computational System 2. Technology 3. Shared Information More transistors, more powerful 4. Organizations Requires investment roadmap connected by value propositions
  6. 6. Service Science: First Small Steps Progress Toward Service Science… • Education – 200+ courses, programs, or degrees established in 50+ countries – 12 centers, seminars, or groups established • Government – 11+ programs for service research and education in 11 countries – $500M+ committed worldwide • Industry – SRII established to promote service research and innovation agenda, with sponsorship from IBM, Oracle, Xerox, Microsoft and others • Association Service SIGs – AIS, INFORMS, AMA, etc.
  7. 7. Service Science: First Small Steps
  8. 8. A proposed Platinum Rule for effective services: • Provide results for clients that meet their desires – Foundation: Knowledge of what clients, as human beings, desire in order to further their well-being – Corollary: Anticipate desires they don’t yet know they have
  9. 9. It’s not just services -- other key factors and trends are converging to emphasize the social nature of enterprise • Proliferation of human and ecological problems - local to global • Increasingly globalized economy • Systematically undercapitalized and underestimated potential of people – treated as factors of cost, not value-creators • Enterprises are increasingly fragmented, and reintegrating in the form of ecosystems of specialized firms – widespread outsourcing – global supply chain networks • Financialization of the global monetary production economy • On-line marketplaces, like EBAY, for previously undervalued assets. • Mash-up world of Internet technologies make global markets commonplace • Ubiquitous communication networks and continuous connectivity • Projection of self in everyday life – Personal branding – Has a dark side – e.g. Choi Jin Sil, a S. Korean actress, hounded to death by web posts
  10. 10. The fundamentally social nature of enterprise • Enterprise is: “a purposeful or industrious undertaking” – • At the heart of enterprise is human desire • The purpose of enterprise is to foster well-being • “There is a fundamental insight underlying all management sciences. It is that the business enterprise is a system of the highest order: a system whose parts are human beings, contributing voluntarily of their knowledge, skill and dedication to a joint venture.” – Peter Drucker (2004) • Enterprise architectures are based on autopoietic systems – Interplay of closure and openness – Ongoing co-creation between the parts and the whole, within self-created boundaries – It’s not necessarily “life” as we know it • Biological • Social • Technological
  11. 11. With the social enterprise we are dealing with the softest (and most challenging) situations * •Hard technology relates to the tools, implements, machines, devices and equipment that are the physical embodiment of technology, and/or technological process based on engineering techniques and principles … •Soft technology, in contrast, is the ‘scaffolding’ (support systems, group process techniques, design methodologies, decision making processes) for individual and collective self-determination … •The development of soft technologies goes hand in hand with the appearance of new challenges and opportunities in society We need to consider why it is that we have not met the challenge of matching technological intelligence with a commensurate advancement in sociocultural intelligence and wisdom. * Alexander Laszlo and Kathia Castro Laszlo, various publications
  12. 12. What do you see here?
  13. 13. Not all wealth creation can be traced back to commodities or survival mechanisms. If you’re him …
  14. 14. … this is what happens.
  15. 15. Through new technologies and new institutional structures, new forms of propertification are coming into existence Kim Slocum and Randy L. Thomas, “The Healthcare Information Technology Industry—Past, Present And Future”, February 2003 -
  16. 16. Any source of wealth must somehow be recognized as property by players in the economic system
  17. 17. Communities are asset-rich • People are the source of value, and through communities they identify their personal capital • The highest form of capital is developed via problem-solving services – These highest-value types of capital are developed through intellect and insight – Much of the wealth of communities literally exists in their own minds • Every knowable thing (once known) is a form of capital – Each of these forms of capital is a potential seed for a community • There is static and dynamic value in communities – Static value is a snapshot of people, assets and social infrastructure – Dynamic value is realized as community interacts internally and externally – The value of communities arises from people’s interactions • Value creation through community emerges from an abundance of problems and problem-solvers rather than scarcity of resources • This idea reverses the premise for insurance: underwriting potential rather than underwriting the risk of loss
  18. 18. A new source of opportunity is based on certain properties of communities • A community is a bounded sociality • A community can be seen as a field … … or a plasma • Communities are like standing waves – forming and collapsing • Value creation occurs in a structure we provide as a containment vessel
  19. 19. A community vault is the containment vessel for value creation Past Future Category Asset usages Declared assets Assets in a category Liquid Contract position Historical Performative performances accords Liquid Contract position Payments Projects
  20. 20. X-ray of an asset Asset name: Asset Asset commitment complementarity Date declared: Owner: Description: Asset type: LC Performative inclusion LC Categories: accord Performative inclusion LC accord inclusion Currency: Initial value: Liability: Performance Performance Limitation to liability: Demurrage Value Reputation event Demurrage adjustment Value evaluation Performance event adjustment Value valuation adjustment Value LC spread adjustment position LC spread allocation position LC spread allocation position allocation
  21. 21. There are many socially-focused dimensions of business architecture • Eco-systems • Organization structures • Processes and procedures • Practices • Social networks • Roles and accountabilities • Institutional architecture • Brand architecture • Cultures • Decision architecture • Social bonds • Meaning • Communities and boundary objects
  22. 22. A view of the semi-conductor industry ecosystem Fabless System Service Design/ Design Provider IP House House Distributor Distributor Raw Material Raw Material Technology Supplier Technology Supplier Reseller Reseller Capital Capital Semiconductor Component Semiconductor Component System OEM Equipment End User System OEM Equipment Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Indirect Indirect Supplier Supplier Distributor Distributor Assembly Contract Foundry & Test Manufacturer 2003 1985 Created by Denis Mathias, BCS partner.
  23. 23. Organization structure Organization Manager reporting relationship Organization Organization Manager Manager reporting relationship Organization Organization Organization Manager Manager Manager
  24. 24. Process and procedural models
  25. 25. A well-known macro-architecture framework is Stafford Beer’s Viable Systems Model. Environment Policy Future Intelligence Control Op Unit 1 Coordination Op Unit 2 From: Rudolf Kulhavy, From Banks to Banking: Op Unit 3 Architecting Business Performance Transformation, 2005 Present
  26. 26. Ontologies create a semantic bridge between business communities Upper Ontology Explicit Implicit Ontology Ontology Conversations Commitments Contracts Transactions Corpus of business Lexicon content
  27. 27. A semantic architecture disambiguates meaning between business terminology and IT manifestations Terminology models Industry-specific Generic business extensions concepts Ontological models Information systems Object model Reverse-engineered models E/R model model
  28. 28. A high-level view of a semantic architecture senses Business alters Situation motivates constrains defines Business Purpose fulfills supports Business Business mandates Commitment Outcome governs negotiates incorporates produces manipulates Business Business Business houses performs Business Location Function Resource facilitates Role-player enacted by Invokes and sequences Business Behavior Is assigned as Based on: quot;A Standard for Business Architecture Descriptionquot; D. W. McDavid, IBM Systems Journal, v. 38, no. 1, 1999.
  29. 29. A simple example shows various types of boundary objects that span business language communities. Benefits department Template Personnel definition Procedures management Name: Question: Answer: Question: Answer: HR Procedures professionalism Name: Question: Answer: Question: COBRA Answer: Escalation benefits Post-It 1. Employee # Paper notes Personnel Employee hotline database agent Call tracking system Hotline group Employee From: Cherbakov and McDavid, Boundary Objects to Bridge the Gap, PLTE, 2005 (RBV080) -- Based on: Mark S. Ackerman and Christine Halverson, “Organizational Memory: Processes, Boundary Objects, and Trajectories,” Proceedings of the Thirty-second Annual Hawaii International Conference on System Sciences, IEEE, 1998.
  30. 30. SOA Foundation Reference Architecture Business Services Supports enterprise business process and goals through businesses functional service Information Services Process Services Interaction Services Enables collaboration Manages diverse data Orchestrate and between people, and content in a unified automate business processes & information manner Management processes Development Services Services Integrated Manage and Enterprise Service Bus Service Registry environment secure for design and services, creation of applications & solution assets Info Assets Partner Services Business App Services Access Services resources Apps & Build on a robust, Facilitate interactions Connect with trading partners scaleable, and secure with existing information services environment and application assets Infrastructure Services Optimizes throughput, availability and utilization
  31. 31. ICT Architecture considerations for sociable technology • Basics • Communication modalities – Store and retrieve – Broadcast – File service and document sharing – Narrowcast – Versioning – Pointcast • Tracking interactions – Peer-to-peer – Hits – Publish and subscribe – Click-throughs • Interactions – Cookies – Real-time or asynchronous • Content types – Two-way or multiple participants – Textual, graphical, and audio • Complex ICT services – Still vs. active. • Accessibility – Calendar – – Work allocation, Search – Tagging – Groups – Ontologies and controlled vocabularies – Automated message origination – Text analytic – Decision-making. • Boundaries • Opinions – Zones of availability on a various scales. – Rating • Intranet – Ranking • Extranet – Rewards • Internet • Access control – Reputation – Links • Visual design • Threading • Commerce – Text chat – Advertisements – Voice – Purchasing software – Video • Openness to integration
  32. 32. SmallBlue understanding your social network, locating expertise Mechanisms to locate skills and affinity groups across IBM Capture tacit knowledge without requiring user to proactively enter data in a separate repository Bring transparent and secure information sharing to Notes and Sametime
  33. 33. Bee Hive: virtual office walls and desks Shared pictures of company events, families and friends, and “What I did on my vacation” Jokes, philosophies, experience reports Ad hoc events convened electronically
  34. 34. Virtual World Games
  35. 35. Virtual World Technologies Collaboration, Training, Social Networking Distance Learning, Marketing Defense, Medical, Corporate, Open Source Software Development Entertainment
  36. 36. Taxonomy of usage of virtual world technology • Manner of use – Artifacts • Utilitarian or aesthetic • Past, present or future • Real world renderings or fanciful creations – Activities • Performance • Simulation • Collaboration – Simple meetings – Conferences – Joint development of intellectual content • Focus of use – Mode of engagement • Uses -- VW is used in conjunction with other activities • Within -- VW is the place to conduct business • About -- Virtual space is the business opportunity – Issues addressed • Long list, started on the next slide
  37. 37. Open for business – virtual world opportunity areas • Technology – Hardware, software, and hosting for VW • Physical world simulations – Power plants, refineries, etc. • Marketing – Branding statements – static displays, interactive events – Market research • Product sales – Channel for real-world products • Services – Social services – Public services by jurisdictions, non-profit, NGOs – Business services – Accounting, law, consulting, – Personal services – Medical, fashion, personal shopping – Education – Academic institutions and corporate education • Travel-cost offset – Commuting, long-distance travel
  38. 38. Molecule rezzers
  39. 39. IT-oriented simulations
  40. 40. Grand Slam tennis
  41. 41. Real World Retail
  42. 42. IBM Innovation Jam results: Funding for ‘3D Internet’ Lots of publicity
  43. 43. IBM Business Center
  44. 44. IBM’s entry into the virtual world was aided immensely by the New Media Consortium • The NMC complex of islands is growing rapidly • The original campus was the model for IBM’s Almaden Island
  45. 45. Rehearsal Services
  46. 46. You know you’ve ended a successful meeting when a party breaks out, complete with dance floor & disco ball. VUC weekly meeting adjourns outside Jacob Hall to salute Ada Alfa’s impending nuptials!
  47. 47. I chose to live in a place that has interesting neighbors! Features of this location in the Yurim sim • Near Jnana software • Art • Orientation trail • Meeting space • Professor from GWU • SL Herald managing editor • Space for the pirate ship …
  48. 48. The virtual world converged with the real world in the form of a visit to Almaden Research Lab by a well-known RL and SL artist
  49. 49. The first time this presentation was given in 3D – on Info Island
  50. 50. Key aspects of the virtual world experience • Interacting in a virtual world provides a strong feeling of being in the same place with other people • There is an ability to distance oneself from current real life situations through projection of self onto an avatar • Intimacy and trust are often easier to achieve in a virtual world • Anonymous interactions can be supported, if desired • Official hierarchy and rank can be downplayed or hidden • Virtual objects and environment can be used as a kind of “memory palace” • Shared vivid experiences are engaging and memorable • Serious work can be commingled with fun and entertainment • Objects can be uses as visual ontologies • Animation of avatars can express limited emotional nuance • There are infinite degrees of freedom to design the visual experience, from real life replicas to fanciful things and places that could only exist in virtual space • It is possible to manifest community boundaries and boundary-spanning objects • Multi-media (streaming audio, video and machinima) close the loop between real world and the virtual world • External application logic can be invoked from inside a virtual space • A game paradigm (competition with rules and constraints) is an option
  51. 51. Enterprise architectures are structurally coupled to ICT architectures • We are operating from these definitions: – “Structural coupling is the term for structure-determined (and structure-determining) engagement of a given unity with either its environment or another unity. The process of engagement which effects a ...history or recurrent interactions leading to the structural congruence between two (or more) systemsquot;. (Maturana, 1987) – It is “...a historical process leading to the spatio-temporal coincidence between the changes of state” (Maturana, 1975) in the participants. As such, structural coupling has connotations of both coordination and co-evolution. (Thellefsen, on-line) – Niklas Luhmann has repurposed Maturana’s concept specifically for social systems theory. Luhmann described structurally coupled systems as being in a state of mutual irritation and resonance. “Structural coupling is a state in which two systems shape the environment of the other in such a way that both depend on the other for continuing their autopoiesis and increasing their structural complexity.” (Moeller, 2006) • Enterprises and technologies are rapidly co-evolving, enabled by such technologies as Web 2.0 and virtual worlds. • The generation coming into the workforce expects to find such technical affordances in the workplace. • Technology is not an inert enabler, but through an ecosystem of technological specialists is itself composed of an accountable set of human enterprises. • Sociable technologies are coupled to the functions of enterprise that project the self of individuals and organizations into a globally open market of services and collaboration.
  52. 52. The enterprise in the clouds is the platform for 21st Century Innovation Features and characteristics Meaning Innovation • Cloud computing Cloud Cloud • SOA-based Marketing • Platinum rule of services Cloud Transaction • People as source of value Cloud • Standard processes • Buying and selling as two Accounting Collaboration sides of the same coin Cloud Cloud • Continuous close