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Situation Normal Everything Must Change


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A very rough and extremely condensed summary of my three hour OSCON 2011 tutorial on business evolution, cloud, new forms of organisational patterns, tactics, and competition.

Published in: Business, Technology

Situation Normal Everything Must Change

  1. 1. A summary of my OSCON 3 hr Tutorial on ... Situation Normal, Everything Must ChangeLeading Edge Forum March 2011
  2. 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. 3. ... Starting with diffusion ... Everett RogersRate of adoption 1960s Geoffrey A. Moore Crossing the Chasm Time
  4. 4. Total Adoption Diffusion Curve Everett Rogers Diffusion of Innovations, 1962 Cumulative ... and diffusion curves ... Time
  5. 5. Total Adoption Telephony + Mature ... we can hint Evolution at a pattern of evolution ... Time
  6. 6. ... by abolishingUbiquity time, we can clearly Utility Service see that pattern. Now, we have correlation, data ... Commodity Product Service Custom built Innovation Certainty
  7. 7. Ubiquity Demand (user competition) io n at it is o d ... and m m causation ... Co Improvement (supply competition) Certainty
  8. 8. No Data No Causation No Correlation Cloud Web Client ServerMainframe ... unlike those who just make this stuff up ...
  9. 9. Ubiquity Attitude Technology Factors Concept Suitability ... unfortunately we How NOT cant say when things when ... will change (we abolished time). Fortunately barriers exist, ... Certainty
  10. 10. ... Unfortunately IT isntUbiquity N. Carr one thing ... Cost of Doing Business Competitive Advantage P. Strassmann Certainty
  11. 11. ConsumptionUbiquity "Perspective" ... and there is a difference between consumer and Brand producer perspective ... (+ lifestyle) Production "Perspective" Certainty
  12. 12. ... even the creative process can have Commodities Operational Advantage different effects ... dont become innovations ..."Creative Process" Feature Differentiation Invention Novel practice Idea creates ... Genesis Discovery
  13. 13. Future Worth ∝ ... and there is an inherent link between future worth 1 Certainty and uncertainty ...
  14. 14. Time keeper Camera PhoneUbiquity 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. 15. DANGER!Complexity DANGER! ... which is why examining evolution is complex ...
  16. 16. ... FortunatelyUbiquity 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. 17. Joseph A. SchumpeterUbiquity ... and consequences ... (1883 - 1950) + Efficiency (not reduced budgets) Accelerated Innovation + Agility Herbert A. Simon (1916 - 2001) Certainty
  18. 18. ... these impactsUbiquity Software Less Visible Platform increase as you move to higher Infrastructure order systems ... Stronger Accelerated Innovation Big Data Mash-ups Certainty
  19. 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. 20. ... then again youUbiquity 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. 21. Consumerization ... and sometimes this can impact you from an outside ecosystem ...Enterprise Ecosystem Aggresive commoditisation Consumer Ecosystem
  22. 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. 23. ... of course, organisations deal withFrequency many activities and hence they have a shape ... Innovation Custom built Product Commodity
  24. 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. 25. ... evolution in effect creates aFrequency virtuous circle ... Commoditisation User & Supply Competition Innovation Creative Destruction Componentisation Innovation Custom built Product Commodity
  26. 26. H. Pixii, 1832 National Grid, ‘30sTuring ‘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. 27. Chaotic Transition Linear Lists Siebel SIS ’94 Customer DBM ’80s Salesforce ’02Centric ‘70s ... of course, as an activity evolves, its characteristics change ... Innovation Custom built Product Commodity
  28. 28. Frequency 6 Sigma ... which is why one size doesnt fit all ... Reduce Reduce Deviation Deviation Innovation Custom built Product Commodity
  29. 29. ... ditto ...Frequency Agile Encourages Deviation Encourages Deviation Innovation Custom built Product Commodity
  30. 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. 31. ... and typical1. One size fits all problems are caused by trying to use2. But it worked for them? bullets ... magic3. Outsourcing failures. ... your methods4. Business Alignment. need to adapt as the activity5. Management Yo-Yos. evolves ...6. Innovation vs Efficiency.Innovation Custom built Product Commodity
  32. 32. Grow Die Competitor Your Compete Company Evolve ... and your company Consume is more like an Produce organism competing Reproduce in an ecosystem ... BusinessEnvironment Competitor
  33. 33. ... you have energy stores, actors and activities ... Agents Capital Financial Physical Activities Human Social ... and everything is in flux ...
  34. 34. DANGER!Complexity DANGER! ... which is why management is complex ...
  35. 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. 36. ... and how consumptionFrequency 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. 37. ... and how a new activtyFrequency 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. 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. 39. No, I dont know its ROI.... and why we go wrong ...
  40. 40. .... and why we cant avoid gambling (uncertainty), despiteLifecycle ... our best efforts ... = hypecycle + Value Curve ... creates expectation curve
  41. 41. ... because advantage only occurs before the "slope of enlightenment" ... Ad van tag + e+ e- tag - =N ullvan tage A dvanAd
  42. 42. ... but we can exploitthese relationship tocreate more effective patterns of Commoditise Undifferentiated organisation ... to Utility Services Innovate Worth ∝ 1 Certainty Leverage Adoption (Ecosystem) Innovation Custom built Product Commodity
  43. 43. Innovate Adapt Experiment Leverage to identify future patterns Take Risks Customer Market Focus DrivenNetwork Best Practice Commoditise Price vs Standardise QoS... we see these patterns in the cloud ... enable next wave
  44. 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. 45. ... but cloud isnt just about new patterns. UtilityAs competition crosses a Service boundary it is almost always disruptive ... Always disruptive A B Sometimes disruptive Innovation Custom built Product Commodity
  46. 46. "Success is a lousy teacher" Bill Gates... because past successcreates inertia barriers to change ... Personal Success AMZN not encumbered by Organisation previous business models in Institutional Markets infrastructure Innovation Custom built Product Commodity
  47. 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. 48. ... including Tower (newcore revenue) & Moat (areadevoid of differential value with high barriers to entry) ... Tower Moat Innovation Custom built Product Commodity
  49. 49. ... the use of opensource as a tactical weapon ... Infrastructure aims to create a competitive marketplace with a larger ecosystem Innovation Custom built Product Commodity
  50. 50. Broker Exchange Assurance... even side stepping an oncoming barrier ... Innovation Custom built Product Commodity
  51. 51. Steve Jobs Jeff Bezos Creative DisruptiveLeadership Leadership ... which leads to the question of leadership ...Innovation Custom built Product Commodity
  52. 52. ... even when factorsare in place & benefitsare clear, its not only Factors vendor inertia which slows the change ... + Efficiency Vendors Success + Innovation + Agility Innovation Custom built Product Commodity
  53. 53. Transition Disruption ... but customer inertia Outsourcing through perceived risks ...Innovation Custom built Product Commodity
  54. 54. ... so activities often Pressure build up behindthese barriers until breached by an organisation not encumbered by Cluster previous models initiating a flood of Resistancedisruption, a state of war, ... disruption / war Innovation Custom built Product Commodity
  55. 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. 56. ... each with different characteristics i.e. those inertia barriers are beneficial in the state of Peace ... MarginInnovation Custom built Product Commodity
  57. 57. ... and the largest examples of these state changes can be seen as K-Waves ... Margin Disruption Growth
  58. 58. "War" CEO "Peace" CEO"Build" ... this leads some to talk about "Peacetime" vs "Wartime" CEO ...Innovation Custom built Product Commodity
  59. 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. 60. ITFrequency ... 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. 61. ... and attempts tocreate homogenous structures ... Lifecycle Lifecycle We are IT. Lifecycle
  62. 62. Experiment ... from people whoTake Risks themselves have Lifecycle different characteristics ... Network Lifecycle Pioneer Lifecycle
  63. 63. Best Practice Avoid Risk Lifecycle... polar opposites ... Regiment Lifecycle Town Planners Lifecycle
  64. 64. Lifecycle ROI ... creating structures withExperiment internal conflict Best Practice Lifecycle that are further highlighted by virtual teams ... Lifecycle
  65. 65. Pioneers Settlers Town PlannersFrequency ... Hence, by organising along lifecycle (innovation, custom built, product, commodity), not only does evolution become clear ... Consume Produce Innovation Custom built Product Commodity
  66. 66. ... and management is one of controlling flows and barriers ... TownPioneers Planners SettlersInnovation Custom built Product Commodity
  67. 67. Pioneers Settlers Town Planners "War" "Peace""Build" ... even the phases should become more controllable ...Innovation Custom built Product Commodity
  68. 68. Pioneers Settlers Town Planners Creative DisruptiveLeadership Leadership ... and the right styles of leadership can be applied ...Innovation Custom built Product Commodity
  69. 69. Pioneers Settlers Town PlannersFrequency 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. 70. Pioneers Innovate Settlers Leverage Town Planners Commoditise ... the right patterns ...
  71. 71. Pioneers Settlers Town Planners BrokerExchange Assurance ... enabling more effective tactical plays ... Innovation Custom built Product Commodity
  72. 72. 1. One size fits all ... and avoiding the mistakes of the2. But it worked for them? past ...3. Outsourcing failures.4. Business Alignment.5. Management Yo-Yos.6. Innovation vs Efficiency.Innovation Custom built Product Commodity
  73. 73. ... problem is, doing this makes management hard ... Requisite Variety The system must be able to equal the number of statesin 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. 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) ... SameWe suck atmanagement here
  75. 75. ... fortunately we dont live in a world of ... Situation Normal, Everything Stays the Same.Leading Edge Forum March 2011
  76. 76. ... but ... Situation Normal, Everything Must ChangeLeading Edge Forum March 2011
  77. 77. ... here we looked at how different organisation can exploit these factors to their advantage ... Summary ... ... if you werent there, you missed it ... and no, theres no video, book or whitepaper because ...
  78. 78. ... I might be a "researcher", talk about thetactical use of open source & give conference talks on how to disrupt others but in reality ... twitter : @swardley... Im an arms dealer in organisational tactics andmanagement weaponry aka organisational warfare. ... this presentation is just basics. Leading Edge Forum March 2011