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 Situation Normal,
 Everything Must
      Change

Leading Edge Forum                             March 2011
Situation Normal, Everything Must Change ...


              1                       2                          3

       Business/IT         Business/IT Relationship   The Consumerization of
       Co-evolution             Management                        IT
   How are business and     How can Enterprise IT        How are consumer
 IT changing each other?    add more value to the       technologies and the
                                organization?          Internet affecting both
                                                      the firm and central IT?


               4                      5                          6

  Organizing IT for the    The Changing Nature of            Business
         Future                     Work                   Sustainability
  What will the retained   How will management,         How can IT be used
   central IT function       employees and the          to help make firms
       look like?          culture of the firm need             more
                                 to change?              environmentally
     ... this is what I do ...                               friendly?


      Leading Edge Forum                                                March 2011
... Starting with diffusion ...
                   Everett Rogers
Rate of adoption

                       1960s
                                            Geoffrey A. Moore
                                            Crossing the Chasm




                                                          Time
Total Adoption
                                                  Diffusion Curve




                         Everett Rogers
                 Diffusion of Innovations, 1962
                                                  Cumulative

                                                                ... and
                                                               diffusion
                                                               curves ...


                                                                     Time
Total Adoption

                             Telephony


                             + Mature


                               ... we can hint
                 Evolution    at a pattern of
                                 evolution ...



                                      Time
... by abolishing
Ubiquity
           time, we can clearly           Utility Service
             see that pattern.
                Now, we have
            correlation, data ...            Commodity

                      Product                 Service



                                    Custom built
           Innovation
                                                   Certainty
Ubiquity
           Demand
           (user competition)

                                     io n
                                at
                           it is
                        o d                    ... and

                     m m                    causation ...

                Co
                                    Improvement
                             (supply competition)

                                             Certainty
No Data   No Causation    No Correlation

                                            Cloud
                                 Web
          Client Server


Mainframe



            ... unlike those who just make this
                          stuff up ...
Ubiquity
                     Attitude
                            Technology
                 Factors
           Concept
                      Suitability



      ... unfortunately we                 How NOT
     can't say when things                  when ...
     will change (we abolished
         time). Fortunately

         barriers exist, ...
                                         Certainty
... Unfortunately IT isn't
Ubiquity
                N. Carr          one thing ...


                                         Cost of Doing
                                           Business




           Competitive
            Advantage
                           P. Strassmann
                                      Certainty
Consumption
Ubiquity

                                       "Perspective"



   ... and there is a difference
       between consumer and                 Brand
      producer perspective ...              (+ lifestyle)


                             Production
                            "Perspective"


                                             Certainty
... even the creative
    process can have      Commodities
                                                    Operational Advantage
  different effects ...   don't become
                          innovations ...




"Creative Process"                             Feature
                                            Differentiation
    Invention
                                                              Novel practice
                 Idea                                           creates ...
                                            Genesis

    Discovery
Future Worth
                     ∝
 ... and there is an inherent
  link between future worth
                                   1
                                Certainty

       and uncertainty ...
Time keeper
                              Camera Phone
Ubiquity
                      Address book

                                         Calculator
                                     Internet

                                 Digital music player
                                Radio

                               GIS

                           Social Network

                          Augmented Reality

                                    ...
                        Social Gaming     and many devices
           ID Card
                                          bundle multiple
                                           activities ...
              Health Monitor

                                                      Certainty
DANGER!
Complexity
 DANGER!
 ... which is why examining evolution is
                complex ...
... Fortunately
Ubiquity
           Economies of scale (volume operations)
           Focus on core (outsource)
                                                                   evolution creates
           Pay per use (utility)                                  common benefits ...

             efficiency

                                                        consumption
                                                                    Agility (Self Service)
                                    Opportunity (long tail, co-evolution, price elasticity)
                                   Innovation (creative destruction, componentisation)



     William Stanley Jevons, 1865


                                                                           Certainty
Joseph A. Schumpeter
Ubiquity
           ... and consequences ...                    (1883 - 1950)




                   + Efficiency
             (not reduced budgets)



                                      Accelerated
                                       Innovation


              + Agility
                                        Herbert A. Simon
                                          (1916 - 2001)


                                                      Certainty
... these impacts
Ubiquity
                            Software
           Less Visible     Platform
                                             increase as you
                                             move to higher
                          Infrastructure    order systems ...



                      Stronger
                                           Accelerated
                                            Innovation
               Big Data
    Mash-ups
                                               Certainty
Ubiquity            Transition
                    Confusion
                    Governance
                    Trust
                    Security
                    Transparency   Outsourcing
                                   Suitability

           Disruption              Competition
                                   Lock-in
           Relationships
                                   Second Source
           Skills
                                   Control
           Political Capital
           Investment
                                    ... but evolution
                                       also creates
                                   standard risks ...
                                         Certainty
... then again you
Ubiquity
                                      Market                    have no choice ...

                                                               Pay per use




                                              ure
                                                               Focus on core




                                              ss
                                          Pre
            Prof. Van Valen                                    Economies of scale
       “Red Queen Hypothesis”
                                                               Speed to market
           The need to constantly
           evolve in order to stand
              still relative to a      You
           surrounding ecosystem



                                      Transition Costs Vs Operational Disadvantage




                                                                        Certainty
Consumerization
                               ... and sometimes
                              this can impact you
                                from an outside
                                   ecosystem ...

Enterprise Ecosystem


                                        Aggresive
                                     commoditisation
      Consumer Ecosystem
Ubiquity
                         Disruptive to Existing
                                Vendors
                                                                  Effect make originate
                                                                   outside competitive
                                                                        ecosystem
                   + Efficiency
             (not reduced budgets)



       ... but in general ...                            Accelerated
                                                          Innovation


             + Agility                            Reduced Barriers to
                                                    Entry in other
                                                      industries


                                                                        Certainty
... of course, organisations deal with
Frequency

               many activities and hence they have a
                                shape ...




            Innovation   Custom built   Product     Commodity
Frequency

             Dynamic                              Repeatable
             Deviation                              Standard
             Uncertain                                Known
             Emergent                             Predictable
             Serendipity                          Procedural
             Worth                                     CODB

             Chaotic                                 Linear
                         ... the extremes of which have
            Innovation
                               different properties ...
                              Custom built   Product    Commodity
... evolution in effect creates a
Frequency

                                            virtuous circle ...

                         Commoditisation
                          User & Supply Competition




                             Innovation
                             Creative Destruction
                              Componentisation

            Innovation     Custom built     Product       Commodity
H. Pixii, 1832                       National Grid, ‘30s



Turing ‘36                                      PowerEdge, ‘02
                               IBM 650, ‘54

               Z3 ‘41
                                                                  Amazon EC2 ‘06


                                            Siebel SIS ’94
                    DBM ’80s


 Customer                                                    Salesforce ’02 (10.6%)
Centric ‘70s


                                                             ... which we all
                        MyDex ‘08
                                                               experience ...
VRM ‘06

       Innovation          Custom built           Product             Commodity
Chaotic              Transition                   Linear




       Lists                    Siebel SIS ’94

 Customer DBM ’80s                              Salesforce ’02
Centric ‘70s
                            ... of course, as an activity
                             evolves, its characteristics
                                      change ...
    Innovation   Custom built         Product         Commodity
Frequency

                                                6 Sigma
            ... which is why
            one size doesn't
                 fit all ...



                                                     Reduce
              Reduce                                Deviation
             Deviation
              Innovation   Custom built   Product     Commodity
... ditto ...
Frequency


            Agile




     Encourages
      Deviation                                   Encourages
                                                   Deviation
            Innovation   Custom built   Product      Commodity
VS
  Survival Tomorrow                            Survival Today
                           Innovation Paradox
          Survival today requires ‘coherence, coordination and stability’.

          Survival tomorrow requires the replacement of these erstwhile
                                    virtues.
... there are no                           Salaman & Storey
   viable magic
   Innovation ... Custom built
     bullets                              Product              Commodity
... and typical
1. One size fits all             problems are caused
                                  by trying to use
2. But it worked for           them? bullets ...
                                  magic

3. Outsourcing failures.
                                      ... your methods
4. Business Alignment.                  need to adapt
                                       as the activity
5. Management Yo-Yo's.                     evolves ...

6. Innovation vs Efficiency.

Innovation   Custom built   Product      Commodity
Grow
              Die              Competitor
    Your      Compete
  Company     Evolve
                             ... and your company
              Consume
                                 is more like an
              Produce         organism competing
              Reproduce        in an ecosystem ...

  Business
Environment               Competitor
... you have energy stores,
   actors and activities ...
                               Agents
             Capital
          Financial
           Physical
                               Activities
             Human
              Social

  ... and everything is in
           flux ...
DANGER!
Complexity
 DANGER!
 ... which is why management is complex ...
Frequency
              Chaotic               Transition           Linear



                                           ... to fully manage how
                                          activities evolve you need
                                              to understand both
                                                consumption and
    Consume




                                          production perspective ...
    Produce




              Innovation   Custom built     Product      Commodity
... and how consumption
Frequency
                   Chaotic           Transition
                 of an activity can co-                         Linear
              evolve with production ...        Architecture (how we consume)
                                                           and infrastructure (what we
                          Best Architectural Practice
                                                                  consume) co-evolve
                                (scale-up, N+1)

                               Infrastructure
    Consume




                                                        Cynefin

                  Novel Practice (distributed
                                                                   Best Practice
                  system, design for failure)
    Produce




                               Infrastructure

                 Innovation       Custom built          Product             Commodity
... and how a new activty
Frequency
              Chaotic                  Transition           Linear
                                   (novel practice) can create an
                                      operational advantage ...

                                                            Raw
                                    Old Best Practice    Ingredients
                                             Furnace &
                                             Grinding
    Consume




                   Float Glass
                Novel Practice
    Produce




                           Operational Advantage
                                                                  Window
              Innovation      Custom built         Product       Commodity
.... with this we can identify what practices fit ...
Frequency


            Experiment                   ROI             Best Practice


                                    Customer
               Adapt                                     Standardise
                                      Focus


             Take Risks                                   Avoid Risk
                                 Market Driven
             Fail Quick                                  Price vs QoS


              Network               Ecosystem             Regiment
             Innovation   Custom built         Product      Commodity
No, I don't
                  know its ROI




.... and why we
   go wrong ...
.... and why we can't avoid
                       gambling (uncertainty), despite
Lifecycle ...                our best efforts ...




                       = hypecycle




   + Value Curve ...        creates expectation curve
... because advantage only
                     occurs before the "slope of
                            enlightenment" ...



            Ad
            van
               tag
        +
     e+




                 e-
   tag




                    -
                                      =N ull
van




                                 tage
                           A dvan
Ad
... but we can exploit
these relationship to
create more effective
       patterns of
                                 Commoditise
                                            Undifferentiated
     organisation ...                      to Utility Services


                        Innovate
   Worth
           ∝        1

               Certainty



                            Leverage
                                   Adoption (Ecosystem)


  Innovation      Custom built   Product            Commodity
Innovate                   Adapt


              Experiment
                                    Leverage
                                   to identify future patterns
 Take Risks
                                                Customer     Market
                                                  Focus      Driven
Network



                                       Best
                                     Practice      Commoditise
                                     Price vs
                                                   Standardise
                                       QoS
... we see these
 patterns in the
     cloud ...                       enable next wave
+ High rates of Innovation


                Speed               + Reduced cost of gamble

                                    + Efficiency
         (identify & commoditise)

                                            ... and new
                                          factors appear
       Size                                to be critical
(increases innovation)                     for success ...



                              Feed
                              (Sustain)
... but cloud isn't just
   about new patterns.                         Utility
As competition crosses a                       Service
 boundary it is almost
  always disruptive ...             Always disruptive


                                A         B
                  Sometimes disruptive




    Innovation   Custom built       Product      Commodity
"Success is a lousy teacher"
                                                     Bill Gates
... because past success
creates inertia barriers
       to change ...




      Personal                    Success
                                                   AMZN not
                                                 encumbered by
     Organisation                               previous business
                                                   models in
                Institutional      Markets       infrastructure

   Innovation    Custom built     Product      Commodity
... and in this disruptive
    phase, new tactical
   games are also being
         played ...
                                    Core (CRM)


                                                         ILC



                                                       Barrier to
                                                         Entry

                Social CRM
                     differential



   Innovation     Custom built       Product     Commodity
... including Tower (new
core revenue) & Moat (area
devoid of differential value with
   high barriers to entry) ...

                                                     Tower



                                              Moat



   Innovation        Custom built   Product      Commodity
... the use of open
source as a tactical
       weapon ...


                  Infrastructure




                    aims to create a
                       competitive
                   marketplace with a
                    larger ecosystem

 Innovation   Custom built           Product   Commodity
Broker

  Exchange

           Assurance


... even side stepping
      an oncoming
       barrier ...
    Innovation   Custom built   Product   Commodity
Steve Jobs


                            Jeff Bezos

 Creative                         Disruptive
Leadership                        Leadership


             ... which leads to the
                   question of
                  leadership ...
Innovation   Custom built       Product   Commodity
... even when factors
are in place & benefits
are clear, it's not only                        Factors
 vendor inertia which
 slows the change ...                                  + Efficiency
                                     Vendors



                                         Success
      + Innovation


                     + Agility




    Innovation        Custom built        Product     Commodity
Transition
                Disruption




   ... but customer inertia             Outsourcing
       through perceived
            risks ...



Innovation   Custom built     Product     Commodity
... so activities often                  Pressure
    build up behind
these barriers until
    breached by an
    organisation not
    encumbered by
                               Cluster
    previous models
 initiating a flood of                          Resistance
disruption, a state of
         war, ...
                                 disruption / war

   Innovation   Custom built        Product         Commodity
Creative Leadership             Disruptive Leadership

                                        disruption / war
          margin / peace




  growth / build

                             ... one of three states:-
                                 Build (creative leadership),
                                     Peace (margin),
 Innovation   Custom built      War
                               Product (disruptive Commodity
                                                   leadership)
... each with different characteristics
             i.e. those inertia barriers are beneficial
                       in the state of Peace ...


             Margin




Innovation      Custom built   Product      Commodity
... and the largest examples
 of these state changes can
    be seen as K-Waves ...


                     Margin



                               Disruption


         Growth
"War" CEO
             "Peace"
              CEO

"Build"
 ... this leads
              some to talk
    about "Peacetime" vs
     "Wartime" CEO ...


Innovation    Custom built   Product       Commodity
Frequency


                                  ... but large organisations
                                 produce many activities and
                                  hence have multiple fronts
                                    many in different state
                                        (build / peace / war) ...
    Consume
    Produce




              Innovation   Custom built     Product        Commodity
IT
Frequency

                                         ... the situation is only made
                     Admin                  more complex by how we
                                          organise ourselves (generally by
                     Business              type of activity i.e. business / IT ) ...




            Innovation    Custom built          Product             Commodity
... and attempts to
create homogenous
    structures ...
                      Lifecycle




                      Lifecycle

       We are IT.



                      Lifecycle
Experiment
               ... from people who
Take Risks        themselves have      Lifecycle
                      different
                 characteristics ...
 Network


                                       Lifecycle


             Pioneer

                                       Lifecycle
Best Practice


                           Avoid Risk
                                  Lifecycle


... polar opposites ...
                           Regiment


                                   Lifecycle


    Town Planners

                                    Lifecycle
Lifecycle

                  ROI


                 ... creating
              structures with
Experiment   internal conflict    Best Practice
                                         Lifecycle

             that are further
               highlighted by
             virtual teams ...

                                           Lifecycle
Pioneers                 Settlers             Town Planners
Frequency




                    ... Hence, by organising along lifecycle
                         (innovation, custom built, product, commodity),

                   not only does evolution become clear ...
    Consume
    Produce




              Innovation    Custom built       Product           Commodity
... and management is one
  of controlling flows and
        barriers ...




                                           Town
Pioneers
                                         Planners
                        Settlers




Innovation   Custom built      Product   Commodity
Pioneers                 Settlers         Town Planners


                                         "War"
             "Peace"



"Build"                ... even the phases should
                               become more
                              controllable ...

Innovation    Custom built     Product       Commodity
Pioneers                Settlers        Town Planners




 Creative                          Disruptive
Leadership                         Leadership

               ... and the right styles of
                    leadership can be
                        applied ...

Innovation   Custom built     Product        Commodity
Pioneers               Settlers            Town Planners
Frequency



            Experiment                  ROI             Best Practice

                                    Customer
              Adapt                                      Standardise
                                      Focus

            Take Risks                                Avoid Risk
                                    ... along with the right
                                Market Driven
            Fail Quick                     methods Price vs QoS
                                                    ...


             Network               Ecosystem              Regiment

            Innovation   Custom built         Product      Commodity
Pioneers   Innovate

           Settlers    Leverage

                            Town Planners
                             Commoditise



                      ... the right patterns ...
Pioneers                Settlers           Town Planners




          Broker

Exchange

        Assurance

                             ... enabling more effective
                                   tactical plays ...
 Innovation   Custom built        Product      Commodity
1. One size fits all              ... and avoiding the
                                    mistakes of the
2. But it worked for           them? past ...

3. Outsourcing failures.

4. Business Alignment.

5. Management Yo-Yo's.

6. Innovation vs Efficiency.

Innovation   Custom built   Product      Commodity
... problem is, doing this makes management hard ...


                     Requisite Variety
  The system must be able to equal the number of states
in the input with at least an equivalent number of states
                in the regulatory process
                                           Ashby’s Law



                         Solutions. Either
                   a) Make Management complex
                   b) Pretend everything is the
                              same.
... BUT the process of simplification (e.g. one size fits all,
 KPIs everywhere) only works if we all agree to do this

               (therefore no-one gains an advantage) ...




                                              Same
We suck at
management                                    here
... fortunately we don't live in a world of ...




 Situation Normal,
 Everything Stays
     the Same.

Leading Edge Forum                                   March 2011
... but ...




 Situation Normal,
 Everything Must
      Change

Leading Edge Forum                 March 2011
... here we looked at how different organisation can
      exploit these factors to their advantage ...




  Summary ...
   ... if you weren't there, you missed it ... and no,
   there's no video, book or whitepaper because ...
... I might be a "researcher", talk about the
tactical use of open source & give conference talks
      on how to disrupt others but in reality ...


  swardley@csc.com
  twitter : @swardley
... I'm an arms dealer in organisational tactics and
management weaponry aka organisational warfare.


                       ... this presentation is just basics.
  Leading Edge Forum                                       March 2011

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Situation Normal Everything Must Change

  • 1. A summary of my OSCON 3 hr Tutorial on ... Situation Normal, Everything Must Change Leading Edge Forum March 2011
  • 2. Situation Normal, Everything Must Change ... 1 2 3 Business/IT Business/IT Relationship The Consumerization of Co-evolution Management IT How are business and How can Enterprise IT How are consumer IT changing each other? add more value to the technologies and the organization? Internet affecting both the firm and central IT? 4 5 6 Organizing IT for the The Changing Nature of Business Future Work Sustainability What will the retained How will management, How can IT be used central IT function employees and the to help make firms look like? culture of the firm need more to change? environmentally ... this is what I do ... friendly? Leading Edge Forum March 2011
  • 3. ... Starting with diffusion ... Everett Rogers Rate of adoption 1960s Geoffrey A. Moore Crossing the Chasm Time
  • 4. Total Adoption Diffusion Curve Everett Rogers Diffusion of Innovations, 1962 Cumulative ... and diffusion curves ... Time
  • 5. Total Adoption Telephony + Mature ... we can hint Evolution at a pattern of evolution ... Time
  • 6. ... by abolishing Ubiquity time, we can clearly Utility Service see that pattern. Now, we have correlation, data ... Commodity Product Service Custom built Innovation Certainty
  • 7. Ubiquity Demand (user competition) io n at it is o d ... and m m causation ... Co Improvement (supply competition) Certainty
  • 8. No Data No Causation No Correlation Cloud Web Client Server Mainframe ... unlike those who just make this stuff up ...
  • 9. Ubiquity Attitude Technology Factors Concept Suitability ... unfortunately we How NOT can't say when things when ... will change (we abolished time). Fortunately barriers exist, ... Certainty
  • 10. ... Unfortunately IT isn't Ubiquity N. Carr one thing ... Cost of Doing Business Competitive Advantage P. Strassmann Certainty
  • 11. Consumption Ubiquity "Perspective" ... and there is a difference between consumer and Brand producer perspective ... (+ lifestyle) Production "Perspective" Certainty
  • 12. ... even the creative process can have Commodities Operational Advantage different effects ... don't become innovations ... "Creative Process" Feature Differentiation Invention Novel practice Idea creates ... Genesis Discovery
  • 13. Future Worth ∝ ... and there is an inherent link between future worth 1 Certainty and uncertainty ...
  • 14. Time keeper Camera Phone Ubiquity Address book Calculator Internet Digital music player Radio GIS Social Network Augmented Reality ... Social Gaming and many devices ID Card bundle multiple activities ... Health Monitor Certainty
  • 15. DANGER! Complexity DANGER! ... which is why examining evolution is complex ...
  • 16. ... Fortunately Ubiquity Economies of scale (volume operations) Focus on core (outsource) evolution creates Pay per use (utility) common benefits ... efficiency consumption Agility (Self Service) Opportunity (long tail, co-evolution, price elasticity) Innovation (creative destruction, componentisation) William Stanley Jevons, 1865 Certainty
  • 17. Joseph A. Schumpeter Ubiquity ... and consequences ... (1883 - 1950) + Efficiency (not reduced budgets) Accelerated Innovation + Agility Herbert A. Simon (1916 - 2001) Certainty
  • 18. ... these impacts Ubiquity Software Less Visible Platform increase as you move to higher Infrastructure order systems ... Stronger Accelerated Innovation Big Data Mash-ups Certainty
  • 19. Ubiquity Transition Confusion Governance Trust Security Transparency Outsourcing Suitability Disruption Competition Lock-in Relationships Second Source Skills Control Political Capital Investment ... but evolution also creates standard risks ... Certainty
  • 20. ... then again you Ubiquity Market have no choice ... Pay per use ure Focus on core ss Pre Prof. Van Valen Economies of scale “Red Queen Hypothesis” Speed to market The need to constantly evolve in order to stand still relative to a You surrounding ecosystem Transition Costs Vs Operational Disadvantage Certainty
  • 21. Consumerization ... and sometimes this can impact you from an outside ecosystem ... Enterprise Ecosystem Aggresive commoditisation Consumer Ecosystem
  • 22. Ubiquity Disruptive to Existing Vendors Effect make originate outside competitive ecosystem + Efficiency (not reduced budgets) ... but in general ... Accelerated Innovation + Agility Reduced Barriers to Entry in other industries Certainty
  • 23. ... of course, organisations deal with Frequency many activities and hence they have a shape ... Innovation Custom built Product Commodity
  • 24. Frequency Dynamic Repeatable Deviation Standard Uncertain Known Emergent Predictable Serendipity Procedural Worth CODB Chaotic Linear ... the extremes of which have Innovation different properties ... Custom built Product Commodity
  • 25. ... evolution in effect creates a Frequency virtuous circle ... Commoditisation User & Supply Competition Innovation Creative Destruction Componentisation Innovation Custom built Product Commodity
  • 26. H. Pixii, 1832 National Grid, ‘30s Turing ‘36 PowerEdge, ‘02 IBM 650, ‘54 Z3 ‘41 Amazon EC2 ‘06 Siebel SIS ’94 DBM ’80s Customer Salesforce ’02 (10.6%) Centric ‘70s ... which we all MyDex ‘08 experience ... VRM ‘06 Innovation Custom built Product Commodity
  • 27. Chaotic Transition Linear Lists Siebel SIS ’94 Customer DBM ’80s Salesforce ’02 Centric ‘70s ... of course, as an activity evolves, its characteristics change ... Innovation Custom built Product Commodity
  • 28. Frequency 6 Sigma ... which is why one size doesn't fit all ... Reduce Reduce Deviation Deviation Innovation Custom built Product Commodity
  • 29. ... ditto ... Frequency Agile Encourages Deviation Encourages Deviation Innovation Custom built Product Commodity
  • 30. VS Survival Tomorrow Survival Today Innovation Paradox Survival today requires ‘coherence, coordination and stability’. Survival tomorrow requires the replacement of these erstwhile virtues. ... there are no Salaman & Storey viable magic Innovation ... Custom built bullets Product Commodity
  • 31. ... and typical 1. One size fits all problems are caused by trying to use 2. But it worked for them? bullets ... magic 3. Outsourcing failures. ... your methods 4. Business Alignment. need to adapt as the activity 5. Management Yo-Yo's. evolves ... 6. Innovation vs Efficiency. Innovation Custom built Product Commodity
  • 32. Grow Die Competitor Your Compete Company Evolve ... and your company Consume is more like an Produce organism competing Reproduce in an ecosystem ... Business Environment Competitor
  • 33. ... you have energy stores, actors and activities ... Agents Capital Financial Physical Activities Human Social ... and everything is in flux ...
  • 34. DANGER! Complexity DANGER! ... which is why management is complex ...
  • 35. Frequency Chaotic Transition Linear ... to fully manage how activities evolve you need to understand both consumption and Consume production perspective ... Produce Innovation Custom built Product Commodity
  • 36. ... and how consumption Frequency Chaotic Transition of an activity can co- Linear evolve with production ... Architecture (how we consume) and infrastructure (what we Best Architectural Practice consume) co-evolve (scale-up, N+1) Infrastructure Consume Cynefin Novel Practice (distributed Best Practice system, design for failure) Produce Infrastructure Innovation Custom built Product Commodity
  • 37. ... and how a new activty Frequency Chaotic Transition Linear (novel practice) can create an operational advantage ... Raw Old Best Practice Ingredients Furnace & Grinding Consume Float Glass Novel Practice Produce Operational Advantage Window Innovation Custom built Product Commodity
  • 38. .... with this we can identify what practices fit ... Frequency Experiment ROI Best Practice Customer Adapt Standardise Focus Take Risks Avoid Risk Market Driven Fail Quick Price vs QoS Network Ecosystem Regiment Innovation Custom built Product Commodity
  • 39. No, I don't know its ROI .... and why we go wrong ...
  • 40. .... and why we can't avoid gambling (uncertainty), despite Lifecycle ... our best efforts ... = hypecycle + Value Curve ... creates expectation curve
  • 41. ... because advantage only occurs before the "slope of enlightenment" ... Ad van tag + e+ e- tag - =N ull van tage A dvan Ad
  • 42. ... but we can exploit these relationship to create more effective patterns of Commoditise Undifferentiated organisation ... to Utility Services Innovate Worth ∝ 1 Certainty Leverage Adoption (Ecosystem) Innovation Custom built Product Commodity
  • 43. Innovate Adapt Experiment Leverage to identify future patterns Take Risks Customer Market Focus Driven Network Best Practice Commoditise Price vs Standardise QoS ... we see these patterns in the cloud ... enable next wave
  • 44. + High rates of Innovation Speed + Reduced cost of gamble + Efficiency (identify & commoditise) ... and new factors appear Size to be critical (increases innovation) for success ... Feed (Sustain)
  • 45. ... but cloud isn't just about new patterns. Utility As competition crosses a Service boundary it is almost always disruptive ... Always disruptive A B Sometimes disruptive Innovation Custom built Product Commodity
  • 46. "Success is a lousy teacher" Bill Gates ... because past success creates inertia barriers to change ... Personal Success AMZN not encumbered by Organisation previous business models in Institutional Markets infrastructure Innovation Custom built Product Commodity
  • 47. ... and in this disruptive phase, new tactical games are also being played ... Core (CRM) ILC Barrier to Entry Social CRM differential Innovation Custom built Product Commodity
  • 48. ... including Tower (new core revenue) & Moat (area devoid of differential value with high barriers to entry) ... Tower Moat Innovation Custom built Product Commodity
  • 49. ... the use of open source as a tactical weapon ... Infrastructure aims to create a competitive marketplace with a larger ecosystem Innovation Custom built Product Commodity
  • 50. Broker Exchange Assurance ... even side stepping an oncoming barrier ... Innovation Custom built Product Commodity
  • 51. Steve Jobs Jeff Bezos Creative Disruptive Leadership Leadership ... which leads to the question of leadership ... Innovation Custom built Product Commodity
  • 52. ... even when factors are in place & benefits are clear, it's not only Factors vendor inertia which slows the change ... + Efficiency Vendors Success + Innovation + Agility Innovation Custom built Product Commodity
  • 53. Transition Disruption ... but customer inertia Outsourcing through perceived risks ... Innovation Custom built Product Commodity
  • 54. ... so activities often Pressure build up behind these barriers until breached by an organisation not encumbered by Cluster previous models initiating a flood of Resistance disruption, a state of war, ... disruption / war Innovation Custom built Product Commodity
  • 55. Creative Leadership Disruptive Leadership disruption / war margin / peace growth / build ... one of three states:- Build (creative leadership), Peace (margin), Innovation Custom built War Product (disruptive Commodity leadership)
  • 56. ... each with different characteristics i.e. those inertia barriers are beneficial in the state of Peace ... Margin Innovation Custom built Product Commodity
  • 57. ... and the largest examples of these state changes can be seen as K-Waves ... Margin Disruption Growth
  • 58. "War" CEO "Peace" CEO "Build" ... this leads some to talk about "Peacetime" vs "Wartime" CEO ... Innovation Custom built Product Commodity
  • 59. Frequency ... but large organisations produce many activities and hence have multiple fronts many in different state (build / peace / war) ... Consume Produce Innovation Custom built Product Commodity
  • 60. IT Frequency ... the situation is only made Admin more complex by how we organise ourselves (generally by Business type of activity i.e. business / IT ) ... Innovation Custom built Product Commodity
  • 61. ... and attempts to create homogenous structures ... Lifecycle Lifecycle We are IT. Lifecycle
  • 62. Experiment ... from people who Take Risks themselves have Lifecycle different characteristics ... Network Lifecycle Pioneer Lifecycle
  • 63. Best Practice Avoid Risk Lifecycle ... polar opposites ... Regiment Lifecycle Town Planners Lifecycle
  • 64. Lifecycle ROI ... creating structures with Experiment internal conflict Best Practice Lifecycle that are further highlighted by virtual teams ... Lifecycle
  • 65. Pioneers Settlers Town Planners Frequency ... Hence, by organising along lifecycle (innovation, custom built, product, commodity), not only does evolution become clear ... Consume Produce Innovation Custom built Product Commodity
  • 66. ... and management is one of controlling flows and barriers ... Town Pioneers Planners Settlers Innovation Custom built Product Commodity
  • 67. Pioneers Settlers Town Planners "War" "Peace" "Build" ... even the phases should become more controllable ... Innovation Custom built Product Commodity
  • 68. Pioneers Settlers Town Planners Creative Disruptive Leadership Leadership ... and the right styles of leadership can be applied ... Innovation Custom built Product Commodity
  • 69. Pioneers Settlers Town Planners Frequency Experiment ROI Best Practice Customer Adapt Standardise Focus Take Risks Avoid Risk ... along with the right Market Driven Fail Quick methods Price vs QoS ... Network Ecosystem Regiment Innovation Custom built Product Commodity
  • 70. Pioneers Innovate Settlers Leverage Town Planners Commoditise ... the right patterns ...
  • 71. Pioneers Settlers Town Planners Broker Exchange Assurance ... enabling more effective tactical plays ... Innovation Custom built Product Commodity
  • 72. 1. One size fits all ... and avoiding the mistakes of the 2. But it worked for them? past ... 3. Outsourcing failures. 4. Business Alignment. 5. Management Yo-Yo's. 6. Innovation vs Efficiency. Innovation Custom built Product Commodity
  • 73. ... problem is, doing this makes management hard ... Requisite Variety The system must be able to equal the number of states in the input with at least an equivalent number of states in the regulatory process Ashby’s Law Solutions. Either a) Make Management complex b) Pretend everything is the same.
  • 74. ... BUT the process of simplification (e.g. one size fits all, KPIs everywhere) only works if we all agree to do this (therefore no-one gains an advantage) ... Same We suck at management here
  • 75. ... fortunately we don't live in a world of ... Situation Normal, Everything Stays the Same. Leading Edge Forum March 2011
  • 76. ... but ... Situation Normal, Everything Must Change Leading Edge Forum March 2011
  • 77. ... here we looked at how different organisation can exploit these factors to their advantage ... Summary ... ... if you weren't there, you missed it ... and no, there's no video, book or whitepaper because ...
  • 78. ... I might be a "researcher", talk about the tactical use of open source & give conference talks on how to disrupt others but in reality ... swardley@csc.com twitter : @swardley ... I'm an arms dealer in organisational tactics and management weaponry aka organisational warfare. ... this presentation is just basics. Leading Edge Forum March 2011