September 6, 2008

Management Improvisation

Normally, management authorizes actions based on information. But the most frequent and expected connotation of the word "manage" is the word "control".

Given that management is undertaken to provide some assurance of "success", this connotation may be why management effectiveness is most often sought in terms of proof of control. The problem with this attitude is that it ignores more than half of the range of opportunity that is available to deliberately effect valuable progress in an endeavor.

In the framework below, a much fuller range of management is identified, in a way that puts "control" in context -- and shows it to be not only more varied than we typically allow it to be, but also that it is accompanied by important complements and alternatives for driving progress. To start with, the framework shows how the usual old notion of "control" is probably contained by items (left column) that are not best called control but rather "organization".

As seen here, a new semantics of "controls" is proposed (and explained later below). And still, the value of controls is to promote success.

A simple observation that may capture the ambitions about success in management is this: if it takes scoring to win, intending to score is more essential than planning to win. In management, progress is essentially like scoring. Given that, strategy is fundamentally about how to enable progress under the prevailing circumstances -- which in turn means that as circumstances change, strategy dynamically identifies and solves the problem of sustaining an ability to progress.

This readiness to improvise the action -- to take the "fast break", acknowledges that the circumstances of the game are all incidental within the basic boundaries that others play within as well. That is, within the same standing set of boundaries, many separate games are played -- and one game never necessarily predicts the next even if it winds up resembling it.

In that regard, what may be most difficult about competitive strategy is, first, to identify the boundaries that most matter; and second, to invent relevant actions within that awareness. In a competitive situation, much of what truly surprises the competition is an action that they didn't foresee because they hadn't identified the pertinent boundaries yet. (This is exactly why we often tend to speak of game-breaking competitors as being outfits that "change the rules"...)

Arriving at the necessary awareness is the product of surveillance and analysis, to which much dazzling and complex effort is formally dedicated now through business intelligence and knowledge management.

But the framework above imagines it more simply. It is not hard to see that the three forms of "management affects" -- controls, influences* and standards -- correspond respectively to knowledge, communications, and references -- are different modalities of common information that generate authority and action. The question is, how are the modalities currently being used?

So, what we get from this framework, mainly, is another perspective from which to assess how we manage now and whether the right modes are applied in the right ways.

Along with showing how information figures in, the framework helps show that the nature of management authority ranges (bottom to top) from being externally objective (standards) to being more cooperatively elective (influences) to finally being internally directive (controls). This tracks the application of recognized authority from its lightest to its heaviest.

The layout of the framework also corresponds (left to right) to the difference between micromanagement (organization) and macromanagement(improvisation). From that viewpoint, when we think of managed action as execution, the span of potential methodologies shows up being quite broad. Assumptions about what is needed to realize a strategy are challenged by showing that taking management more "micro" is possibly an inhibitor, but really just a supporting option, not a defacto requirement. For example, we have to allow for the possibility that individual contributors, rogues or artists -- left unbridled amongst changes -- may be enough, or even best.

In short, the old notion of control is really micromanagement. And as argued by the framework here, a big implication is that micromanagement and strategy are possibly allergic to each other or at least require arbitration -- a thought that may be the cause of some fresh assessment of management.

* While the word "influences" seems somewhat forced here (and may be replaced in the future), the intended sense of it is as a degree of imposition, here being neither benign (like standards) nor compelled (like controls).

Posted by Malcolm Ryder at 4:57 PM

August 16, 2008

Why Leading Thinkers Won't Be Thought Leaders

In the ideas game, cutting edge thinkers are typically too far ahead of the approval criteria for implementers, and since "thought leaders" derive their credibility from the probability of implementations occurring, most leading thinkers don't become thought leaders.

To get probability on their side, leading thinkers usually have to choose to think about something that approvers already want to implement.

This certainly distresses the notion of "innovation", except within the sense of "infusing the accepted with newness". But that is not an outright knock on anything; it simply points to a reason for having the notion of "pragmatic innovation".

Much leading thought throughout history has been pretty rapidly dismissed as "impractical", which of course should have meant "unable to be put into practice"... But with 20/20 hindsight we are able to know at least that what is undoable for one outfit is merely inconvenient for another. And yet another may have no resistance to the idea at all and let it rip, wherefore the popular "disruptiveness" tag in the vocabulary of the betting pundits who track ersatz innovators.

Thought leadership is safe. It doesn't carry along with it the stockades, burnings-at-the-stake, smear campaigns, or other proven techniques used to enlighten leading thinkers about their impracticality. In fact, when you get right down to it, thought leaders are "voted into office", more or less like successful consultants, which means that they are the product of followers, not vice versa. This explains why the best-known thought leaders hardly ever have a hardluck story about finding followers...

In the other camp, leading thinkers sprout of their own accord and may carry on for quite some time with no followers at all. Some leading thinkers get lucky: they wind up being befriended either by a thought leader or by an influential producer who can spell "pragmatic" but isn't worried about it for the time being. But conventionally, the bridge between leading thinkers and thought leaders is the kind of engineering called "R&D".

The problem is that if R&D is not funded well enough, then the bridge may not reach all the way across. So the issue mainly comes down to who will sponsor the way that the R&D is adequately funded.

Leading thinkers really are often into fundraising, but a lot of fundraisers aren't any good at it. In a healthy organization that wants to be progressive as well, the case for funding thought leaders is not so hard to make, but the exceptional organization strategizes funding of its leading thinkers.

Posted by Malcolm Ryder at 9:28 AM

August 10, 2008

The Decisive Moment in the Garden of Good and Evil

My Strategy to win the Presidency

So, how do you get it going at such a late stage in the race?

The first part is to pick my Vice Precedent. Eventually, I’ll get caught for something, right? and why not just tell people what it is in advance, especially if it's something that's just more me? Thanks to the internet, people are confused... there’s no longer any sense of priorities amongst most of the self-indulgences that actually get us from Monday to Tuesday and from Tuesday to …

…. oh, you meant vice “president”… hmm, in that case, it would have to be the guy from truTV, Marc Juris, executive vice president and general manager, who showed me that if you can’t be the head, at least keep it on straight. For example, the other day he was saying, "Reality has a connotation of not being real, of being phony… We felt that because (our programming) was real, we couldn't call it reality." There aren’t that many people running around with that kind of clarity now.

The second part is I’m going to play the gender card.

How does that make sense? Wouldn’t you be running against two men?

Well, what difference does that make? The point is, I accuse them of being guys, and then they both screw up their responses to that more than I screw up mine. That’s what voters care about.

What’s the third part of your strategy?

It’s very simple, a call to action, but it might be hard because it calls for breaking a tough habit. When you’re president, you should have a limited number of Stupid Points to work with, not term limits. If you spend up all your Stupid Points too fast, you’re out! and someone with fewer Stupid Points should take over. This might not be the other person from your party who is hanging out in the other wing of your big white house. Think about it, if it’s your party at your house, and your party gets seriously boring, people need to be able to go to another party at somebody else’s house, right? Really, it’s not such a new idea, but we can’t be wimps about it.

Is that it? Any other parts?

Well, aside from the challenge of getting enough ME-dia attention, I’m working on getting an additional line added to the list of nominee names on the ballot, right below the third party candidates. If I’m successful, it should just say “Surprise Me: __________________”

(Happy Birthday Diana! xo - M)

Posted by Malcolm Ryder at 3:22 PM | Comments (0) | TrackBack

The Foucault Funk

The Michel Foucault Postmodern Blues (here)

Category: Stuff That Totally Speaks For Itself. (here)

Some actual music, too. (Copyright Gary Radford, Marie Radford, and Stephen Cooper.) (there)

But if you can't drag your butt to the site, there's at least this excerpt:

Verse three is based on Foucault's response to the charge that his work changes constantly. Foucault responds: "What, do you imagine that I would take so much trouble and so much pleasure in writing, do you think that I would keep so persistently to my task, if I were not preparing - with a rather shaky hand - a labyrinth into which I can venture, in which I can move my discourse, opening up underground passages, forcing it to go far from itself, finding overhangs that reduce and deform its itinerary, in which I can lose myself and appear at last to eyes that I will never have to meet again. I am no doubt not the only one who writes in order to have no face. Do not ask who I am and do not ask me to remain the same:"

That's what I call a smackdown.

Posted by Malcolm Ryder at 3:15 PM

July 5, 2008

Beyond the Spin: Measure What You Give

Does your organization really measure what you give, or does it mainly spin what you measure?

Bruce MacEwen's industry-leading website Adam Smith, Esquire offers an opportunity to gaze into the abyss of metrics and walk away without jumping. In the article
"How High Quality Are Your Lawyers? (How Can You Tell?)"
a close reading shows contrasting business models contesting notions of "performance @ cost" and "value @ quality". In the competitive situation covered, one upstart model strategically goes after a chunk of the opponent's business by bringing customers the performance/cost equation, surprisingly leaving the traditionalist competitor to justify how pricing for that same chunk of business could rationally be based on value/quality. What makes this all interesting, notes MacEwen, is the idea that 99% of what the traditionalist does is what the upstart can steal away.

For those of us who fell out of the old hot habit of saying "disruptive innovation" once a month, this looks like news, but not new news. Still, there are some fresh perspectives worth bringing to this contest.

As seen in the diagram below, the different models above are easily distinguished by what they actually offer, making it inappropriate (for managers) and intellectually dishonest (to customers) for either of them to masquerade as the other. Customers buying into cost/performance are investing in the promise of efficiency, while those buying into value/quality are investing in the promise of reliability.

In MacEwen's article, we are sensitized to the problem that high-prestige value/quality law service firms institutionalize a significant unmanaged cost in the form of "available overachievers", against which these firms then build a hedge by charging premium prices beyond rational evidence of economy for the customer. But what is sold as the justification for this pricing? Their quality?

To be sure of avoiding management posturing, "quality" here must mean only one thing: adherence to the promised appropriateness of the deliverable versus the stated need. Consider that meaning against the question of what it takes to get quality: the value/quality firm proposes that by exceptional capability they eliminate the risk of not getting quality. Therefore, the key variable that this firm actually addresses is unpredictability in the customer's need. As an operational tactic, the value/quality firm hoards talent in order to avoid outsourcing and to presume agility.

But the cost/performance firm basically argues (by demonstration) that legal work requires only competency to sufficiently meet most stated needs -- not a matter of being exceptional but instead simply correct for the task, which eliminates unnecessary effort from the equation right off the bat. Of course this presumes a degree of predictability in scope of need -- and agreement on the scope becomes the main feature.

The discussion above intends no effort to offer a wisened critique of law firm strategy. That said, on the surface there are no truly important differences between marketing professional services in law versus other disciplines where subject matter expertise is the raw material and advice is the product.

Idiosyncracies in the legal services industry will of course provoke distinctive problems and solutions there, yet these are probably driven more by the state of mind of the customer - which is the underlying important difference because it is the competitive arena. Oversimplifying MacEwen's article, the difference between the value/quality firm and the cost/performance firm is that the former sells confidence while the latter sells credibility.

Are there spats? One accusing the other of con games, and the other accusing the first of being incredible? MacEwen's article says yes; but what is further interesting (per evidence of the illustration above) is the opportunity that both types of firms can objectively profile themselves on common ground (efficiency, capability, reliability and acceptability) -- and use those profiles to determine how to optimally segment and grow a shared market. When they don't do that, you can bet it isn't because the customers don't care.

Posted by Malcolm Ryder at 9:59 AM

June 27, 2008

Do As I Do, Not As I Say

The McKinsey gang's ongoing interest in behavioral economics leads from time to time to email alerts about articles that lead off like this:
Hidden flaws in strategy

"Why do top managers, steeped in theories of good business strategy, still make bad decisions? While ignorance and hubris sometimes play a role, the brain itself—how we think—is also a culprit. Insights from behavioral economics help explain why we don't always think rationally and how our logical flaws can lead to bad strategic decisions."

On a day like today, when the stock market dropped over 300 points, the catchiness of that intro is in the contrast between the confidence we want to have in logic and the confidence we want to have in our ability to use it.

Getting strict, we might have to say that when strategy is based on logic, strategy is interpretive -- because in different hands, the same logic might lead to different strategy and/or different strategic outcomes.

But why doesn't it make just as much sense to place the first faith in the strategy and then find the logic to execute it? Well, it does; it's just that in this mode, the "strategy" is not a performance; instead it is a proposition that supplies the point of view to be used when managing functions.

McKinsey's discussion seems to be poised to warn us away from the problem of management personalities corrupting objectivity, and further, poised to argue that this should be the right warning because we can assume that there is usually going to be sufficient objectivity to correctly navigate to the correct destination. That is, the most prominent assumption that we can read into the McKinsey caution is that it's not cool to split from the plan. Logic shall bear decisions and decisions shall bear the plan and the plan shall be righteous.

But isn't that still letting the bad boys off the hook? Levity aside, coaches bring the game plan to the players knowing this: that the players actually have to play, which means that the players will improvise their way to the opportunity to comply, if they understand the strategy -- "strategy" which is again essentially a point of view and not a performance prescription.

Strategy is about belief in the value of your position. It is esentially about where you're going to be, and why you're going to be there. Because of that, any position within a hierarchy of operational dependencies can be a strategic position. In effect, a position represents the opportunity, so the most direct way for a leader or manager to damage the potential of a strategy is to make decisions that inhibit or prohibit the players' opportunity to align and coordinate their compliance to the strategy.

Because of that, we want a model of coaching to rely on, not just retraining (or re-straining) of senior staffers to the logic-decision-plan mode. We want an observation-design-motivation mode just as much if not more. We want the sideline clipboard.

Posted by Malcolm Ryder at 11:21 PM

April 29, 2008

Information Overdrive

Profitability through information management gets fresh illumination and color on Page 8 of the March 2008 issue of BPMStrategies, where Tom Dwyer, VP of research for the Brainstorm Group, walks us through a 21st-century operational blueprint in his article, "Using BPM, BDM, and SOA To Create A More Agile Supply Chain".

In the Brainstorm illustration on that page, the title of the Venn diagram (below) suggests that a blank area in the top center intersection would have been labelled "Actionable Insight".

The question we first posed to Dwyer was: shouldn't this intersection be titled "Policy Compliance" and stand as the third factor, instead of "actionable insight"? One can readily argue that a full reckoning of profit and advantage (the very central theme) must include this risk management dimension, and it proves to be so in actual practice but simply has (typically) more influence as a constraint than as a lever.

In a brief offline interview, Dwyer replied, noting how his system works:

"The point that I was making was to identify three elements that contribute to profitability by optimizing the management and execution of a supply chain... The three I chose were all meant to be levers or enablers to achieve higher profit... [Within those three] the combination – or intersection – of intelligent applications built on a responsive infrastructure and accurate, timely data is what enables 'actionable insight'... I would agree that achieving policy compliance at the lowest cost would definitely impact profits... but I would not choose the constraint of policy compliance over the enabler of actionable insight. "

Interpreted with lots of wiggle room, Dwyer's descriptions in the BPMStrategies article strongly suggest that the role of agile technologies is to generate transparency [largely internal] across the heterogeneous organization -- while the role of integrated real-time data is to generate transparency [largely external] across the organization's multichannel embrace of suppliers and customers. Respectively, albeit oversimplified, this amounts to an organization knowing what to do and how to do it, complemented by knowing what it should be acting on and why. In both cases, timeliness of correct information is critical. But to highlight the most important issue, it is the matter of being actionable that makes being insightful worthwhile.

Additional consideration of Dwyer's formula leads to this summarization: knowledge management, business intelligence and performance management may converge to drive sustainable competitive winning, if you know how to make them converge. We view this as a matter of management information systems being deployed strategically rather than just tactically.

Strategically deployed, the information must allow the enterprise to identify and leverage its positioning, capability, and internal alignment, so as to understand whether revised operational mechanics are appropriate to the actual environment of the organization's practice.

To put this back into the proper original context of Dwyer's discussion: the improved mechanics in question are driven by business process management (BPM), business decision management (BDM) and service oriented architecture (SOA). The strategy challenge is to realize and exploit the correspondence of these approaches with the management of information. For example:

Development: SOA : Process efficiency

Production : BPM : Performance Effectiveness

Research : BDM : Actionable Insight

In a follow-on to this discussion, we could consider the recently published arguments in The New Age of Innovation by C. K. Prahalad and M. S. Krishnan on how global resource networks represent the new supply chain mechanics and how the arguments express the information/mechanics correspondence. For example, in the coverage of the book provided by Information Week's Bob Evans, the key idea noted is that Darwinian forces of customer-centricity require transformation of a supply process into a service, causing the B2B (business-to-business) supply chain linkage to operate more in B2C (business-to-consumer) mode -- which changes the kind of information necessary to manage success. Says Evans: "resources must be shifted continually... " and "processes must be shifted from a focus on millions of customers to the individual."

Punchline: for many enterprises, the prospects of future success resemble hitting a moving target from a moving launchpad. To be able to execute that strategy, there will first need to be a strategy for enabling the execution.

Posted by Malcolm Ryder at 7:09 AM

April 26, 2008

Inciting Insight

In the big picture of purposefulness versus accidents, management accommodates a coincidence of things that ought to make a difference, such as designs, events, and states. Information systems grind on each of these, going both deep and wide. But what matters is whether management orchestrates a convergence of those things. Is such orchestration forcing the issue, or is it simply the way these things actually turn out to have meaning?

It's customary to eschew information overload; but the key to their useful combination is not the specific information compared, rather how the available information is positioned in the overall scheme of interpretation. As seen in the picture above, intents and impacts which superficially represent "how things are going" will relate in terms of the "5 W's and How". Seeing the certain blending of factors here, it is easier to realize that most insights will be moments of correlation that are the prize for maintaining ordinary but diligent awareness in a variety of ways.

But just like money, insights are mainly worth the use to which they are put. So, whether this big picture describes the competency of an individual savvy person or of an enterprise, it tells something about being strategically capable but the goods are in the doing after the learning.

Posted by Malcolm Ryder at 6:15 PM

April 19, 2008

The Innovator's Real Dilemma

Jessica Stillman at the new BNET1 blog rounds up research from Accenture, the Conference Board, and Wharton to talk about why Fostering Innovation Stumps Executives ...

This is an interesting situation to ponder: making choices about how much to invest in innovation , versus in knowledge management and, separately, business intelligence as other paths to insight. Overall, what the organization is mainly after -- where the real money rests -- is the insight, whatever the path. But the current thinking about management priorities indicates that insight is pretty hard to come by, so lesser-beaten paths to it are also getting a lot of attention.

One challenge that surfaces, somewhat amusingly, is the presumed need to be innovative about how to foster innovation. For example, given that "innovation" is so easily approached as "creativity", it is not surprising that at places where real urgency comes from competition against either industry rivals or the budget, the idea of stimulating the worker's right brain with art experiences can gain some real traction.

But perhaps everything new is old again... The simplest way to assure that innovation is "fostered" is to provide
(1.) a clear statement of why the company will consider something to be "innovative" and...
(2.) a clear statement about what circumstances will cause the innovation to be rewarded in a way that directly benefits the individual(s) involved.

Generally, if company leadership can't get that much communication together and abide by it, then most other "fostering" efforts are essentially arbitrary.

Furthermore, this effort should not be confused at all with management's concern about how to measure the innovation's impact on the company's performance. The performance impact issue is not something that should be making innovation special. Any management team that rewards "performance impacts" with bonuses should simply add innovations to the mix of things that can be clearly accounted for as contributors to better performance. Meanwhile, innovation is about doing things differently to create opportunity; but execution is about doing things a certain way to hit performance targets.

This is where managers have to get real: if they will not reward innovators for being innovative, as opposed to making the reward conditional upon performance increases, then people will learn that innovation is not worth the effort at this organization. So in step (2.) above, the "circumstances" to be declared must start with something other than performance metrics.

Posted by Malcolm Ryder at 8:42 AM

March 23, 2008

Suddenly, It All Made Sense

Finally, that track that everything went off of, and where to get back on.
For the hi-res view, click here and go full screen or print.

Posted by Malcolm Ryder at 6:42 PM | Comments (0) | TrackBack

I'ma Get Open Source on Yo' Ass

Yahoo joins Google and builds a nonprofit to run OpenSocial so that the OpenSocial developers can have a freezone for exchanging "intellectual property assets" without a moola market. As the Associated Press stated on the Yahoo website, "the idea behind the Google-initiated OpenSocial platform is to create a common coding standard for the ['social tools'] applications so they work on hundreds of Web sites."

We decided to look up the meaning of "tools" to be confident of the richness in the breaking story. Using Yahoo's search engine, we kept coming up with entries like this exemplary one from Dictionary.com:

tool - noun: a person manipulated by another for the latter's own ends

No avoiding the thought that Yahoo would now be Google's tool; so we used Google's "Web Definition" search functon to see what happened. The search on "define tool" ripped in under two seconds to the most appropriate place we can think of, the socially open Urban Dictionary:

1. tool 4455 votes up, 517 votes down

One who lacks the mental capacity to know he is being used. A fool. A cretin. Characterized by low intelligence and/or self-steem.

3. tool 1708 votes up, 443 votes down

someone who is a complete idiot/ one who is used by other people, and usually dosen't even realize it/ someone who can't think for themselves/ an asshat.

People who wear huge logos on their shirts are tools.

This would be a good moment to mention that Google has given up its rights to the OpenSocial branding, as part of the deal. No fools in Gtown central.

Clearly you can be a tool without being a social tool; so how wack it is that three of the most powerful companies in the free world are aggregating the tools. This might make them social, but a better question is this: does going social on a social network make you a tool if you weren't one already?

The sports pages of the conventional business press can be expected to focus on that, backhandedly, in their ongoing coverage of the market strategy smackdown between the G force and MondoSoft. But of course, that's hardly the key story.

The key story will be the one that inevitably will break on the non-profit NPR when someone looking for a job at Google tries to sue Google for using their social site residue as an excuse to not hire them -- residue found on hundreds of websites thanks to the easy proliferation path of OpenSocial.

"So, Mr. Lovitz; how do you explain your involvement in this August 2007... occasion... at the Omega Hip VIP room?"

"Uhh... Acting!"

Posted by Malcolm Ryder at 6:42 PM

March 18, 2008

The End of Irrational Execution

Faisal Hoque, Chairman of BTM, appeared in Baseline Magazine with a brief discussion on the three elements needed for "Transformation: Inertia to Agility" (BTM innovates new business models and enhances financial performance by converging business and technology.)

As usual, Faisal offers a wonderful summation of what levers to throw and why to throw them. Here, he observes innovation, efficiency and abandonment.

Sound familiar? Perhaps the most interesting aspect of his article's proof point -- Amazon -- is that it shows how far we have recovered from the dot com era assumptions, particularly when it comes to understanding that in a business we actually have to get paid for making people happy. What Hoque really pins down, though, like a refreshed road marker, is that the "making" part is not the business, but is instead the competency.

Amongst the problems in the mix, the inertia that Faisal details is arguably the description of how business frustrates competency (“We have to meet this quarter’s numbers or we’re toast.” ), while on the other side of the coin Hoque highlights how competency, through enterprise architecture, can drive a business ("the first step is to get a clear picture of the entire enterprise...").

Meanwhile, that flashback we easily have on older preached wisdom like "Fail Faster!" and "Destroy Creatively!" still seems to apply, but the difference is that we have actual history on that now. The history begs the question, "why are only the exceptions successful?" Hoque's answer looks to be a turnaround on the old saying "If you don't know where you're going, it doesn't matter how you get there..." The turnaround is, "If you don't know how to get there, it doesn't matter where you're going." But we can't make the mistake of joining the casual crowd exuberance for "execution": the point is that enterprise architecture is the competency enabler that then delivers execution for the business.

Posted by Malcolm Ryder at 9:01 AM | Comments (0) | TrackBack

March 16, 2008

Innovation by CIOs: the Same Old Same Old

Proposed: Business is built on IT, and CIOs know more about what IT could offer to innovation, so they should drive the innovation.

On the one hand, it looks good on paper. It's not new, but it seems to make sense.

On the other hand... wait, where IS the other hand?

The CIO Insight Discussion hosted some talk from industry analysts Forrester and kicked off followup commentary.

Reader Jon McAdams had left an earlier comment there that saved the rest of us some writing... So I'll segue from some of what he was pointing at.

CIO's who don't feel very "chiefly" should rightfully question whether their compensation is in line with how they'll actually be measured. But in the world of performance measurement, speaking truth to power is personally relatively expensive. How do you afford it? There's the dilemma.

Proposed: Any CIO who wants to use the word "Innovation" more than once a business quarter should be prepared to provide the definition of what innovation is, by distinguishing its flavors from each other: the planned, the authorized, and the actual. If the CIO is a decision maker in all three dimensions, then there is, fortunately, no dilemma; there's just execution.

But in execution, there are two tracks to follow: priority, and production. If the CIO is not being paid to decide and validate their alignment with each other, then again there is, unfortunately, no dilemma. There's just the matter of whether other people around the CIO want to know what's real or not before they take the actions they actually take.

Let's face it, giving action orders to the "head of IT" doesn't require having a CIO or being realistic. Meanwhile, getting orders can be done with one hand tied behind your back. But being held responsible for the consequences of someone else's higher up decisions is clearly not a prescription for being the chief.

Posted by Malcolm Ryder at 10:59 AM | Comments (0) | TrackBack

January 9, 2008

Run That By Me Again?

It's only January, but here, from Datamation, by Mike Elgan, is the most important IT article of the year, so designated because it whacks the pollution of communication that eventually separates responsibility and authority at the worst possible times.

Where Annoying Tech Buzzwords Come From
http://itmanagement.earthweb.com/cnews/article.php/3720391

Posted by Malcolm Ryder at 5:55 PM | Comments (0) | TrackBack

July 31, 2007

The DnA of Knowledgebased Producers (Pt. 1)

Pretty much everyone recognizes "R&D" -- research 'n' development -- as a discrete activity with a special place in supporting the future prospects of the business.

Even so, the explosion of literature on how hard companies find it to make profitable sense of their desire for "innovation" certainly suggests that the expected output of R 'n' D is too often either missing or mystifying.

The current official wisdom is that these companies need to step up to an innovation *process*. This is pretty difficult to argue against, since management will likely not finally be tolerant of any sustained activity that can't be designed as such. So the emphasis shifts quickly to wondering what the process should be like, especially in terms of how to link it to other "normal" incumbent management processes.

If there is a flaw in this attitude, it is a fundamental flaw. By definition, innovation must be derived from having a supportive perspective on a change to a designated status quo. But since "perspective" and "status quo" both call for awareness based on presumptive ideas (which we'll call knowledge), the problem to solve about innovation is not to generate "auto-magic" extension of *activity* called R or D. Instead, the problem is first to understand why innovation would be the true nature of any outcomes, and then to look into how to breed it or at least capture it as it occurs.

It is in that light that the framework below provides the corrective lens spotting the place where innovation would emerge on the scene. It represents an important shift away from the presumption of R 'n' D and moves instead on the basis of Design and Application, or D 'n' A.

This organizational DnA breaks out the issue with a cross reference of the two key elements of design (concept and form) versus the two key elements of application (specification and implementation).

The shorthand supported by this framework is for representing the range of circumstances that might be "innovative" in character. Typically, these circumstances will include (a) new items on old contexts, (b) old items in new contexts, or (c) new items in new contexts.

Said even more briefly, when something old or new is used in a new way, there is apparent innovation. But this situation of associating some item or function with a usage will have included interesting particulars. For example, how did the idea for the association arise? What criteria established the practical acceptance of the association? How was it recognized that a new association -- proposed or found -- was possible and/or meaningful?

What the DnA framework exposes is the way that the intersections of design and application generate innovation and position it for leverage. Here are just some of the observations that match the framework:
- Inspiration: borrowing details from an existing specification provides us with inspiration.
- Invention: reconnecting the details in a designated arrangement generates our invention.
- Innovation: even without a prior invention, the decision to implement the inspiration can drive forward progress in an explicit attitude of accommodating new methodology and goals. (e.g., inernal organization or reorganization)
- Orchestration: to actually execute the accommodation, the arranging of feasible adaptations and options generates the output that can "go to market"... Without this orchestration, there is little reason to expect that either an invention or an innovation would have a channel of delivery to appropriate recipients. (e.g., external organization or reorganization)

One test of the framework is scalability -- meaning that it works, and works the same way, regardless of whether the trip from concept to delivery is only the few microseconds needed to blurt out in a useful language a sudden original thought, or instead is the many months in a cycle of product or corporate reorientation in its industry's marketplaces. Either way, the producer's initial efforts, in DnA, may not necessarily result in innovation; but given the material effects of Design (already perhaps "keepers"), we can always try to move from the framework's left to its right in Application and reach different and/or more "marketable value". These movements, including Form (e.g. models), Specification, and Implementation are easily recognized as domains of knowledge that are typically extant in the organization regardless of how well they are currently managed. Meanwhile, a producer may move within the framework in many different actual paths; one of the most typical paths to innovation means taking a concept through invention and various orchestrations to arrive at an innovation; but this is not the only path necessary or possible.

This knowledge-based perspective in no way displaces RnD from a position of critical importance. Instead, it helps to clarify that RnD is "instrumental", yet is not the point at which target value is primarily generated. The products of RnD (engineering) are not ready to be valued; instead they need to go on through to DnA where the value gets defined through the knowledgeability of the producer.

The important pattern of progression that hosts the emergence of innovation along with other productivity will begin with a *motivation* to manipulate the status quo. Something about the way things already are leaves something to be desired -- in other words, a perceived "need"... Illustrated left to right, the full progression goes on to look like this:

[End of part one. All images copyright 2007 Archestra / Malcolm Ryder]

Posted by Malcolm Ryder at 11:17 PM

July 14, 2007

The Radical Evidence of Artistic Research

Everyone who has ever argued about something is familiar with the challenge, "Prove what you know!"

This provokes a popular and creepy confusion. Taken to its extreme, the challenge even shifts its own point -- from establishing "truth" as a quality of knowledge, to estabishing proof as a quality of technique. That is, what is really demanded is not so much the absolute veracity of the ideas but the circumstantial reliability of "expertise". In that way, for example, the mode of scholarly evidence is allowed to overrun the confidence in artistic opinion. Yet when time has passed and reality aligns with artistic opinion, that opinion is seen (in hindsight) as being "foresight" and -- belatedly if not quite posthumously -- granted its due value, except of course by those who going forward want to co-opt the credit.

What is artistic opinion? Most people recognize it as "intuition", and this discussion recognizes intuiton as knowledge. In what follows below, the point is not to discuss opinions about art but instead to discuss the nature of the labor of formulating and presenting an idea. Two of its three key considerations will be that: (a.) this labor is artistic; and, (b.) the opinion produced by it is a form of knowledge.

The third consideration? When it comes to accepting things offered as "knowledge", we worry only because we need relief from the anxiety of uncertainty. But if we discover that we don't need the anxiety, then uncertainty is not a bad thing per se, and instead it becomes intellectual freedom that allows new knowledge to occur.

Still, looking briefly at the phenomenon of art works is helpful in setting the stage for recognizing this . A work of art "proves" something, but actually all that it proves is its own mechanism of conveying what it is about. That is, it's "proof" is essentially structural, more or less in the same way that a math equation is... but the structure takes its significance (literally, its ability to convey an idea) only from the context of what it is concerned about. The key question about a given work of art is, "why is (or was) its structure important?" And the correct answer will be primarily about that why, not a substitute answer describing the how. The "why" answer will wind up describing what concern was the one to which the structure was responding as it developed -- thus providing the context for understanding the importance of its "how".

In large part, this is what many people can find to be so exactly aggravating about an artwork -- either that it is not apparently concerned with what the observer is concerned about, and/or that the choices made by the artist to develop the responding structure are unexplained. Since there is vastly more art, and vastly more variety of art, than a typical single person has experienced and reached familiarity with, it is not at all improbable for a given artwork to be "about something in a certain way" where the observer is sympathetic neither to what it is about nor to the way it is "about it"...

In moments like that, the observer may have the high anxiety of uncertainty -- of possibly being fooled by something that doesn't actually try to successfully mean anything; by something that might be just "going through the motions" without detectably bothering to try to convince us even that the motions are taken seriously.

But with that same moment there may instead be the challenge of confronting knowledge that one simply didn't have before. And to avoid observer cynicism about the unfamiliar, the moment calls for realizing that not all things can be known the same way.

As goes with art go other presentations of ideas as well.

It might be considered fair for an observer to always ask the presenter to push an unfamiliar idea at least half of the distance towards being familiar knowledge. If the observer wants to accept the idea, and the presenter wants the idea to be accepted, then why not go at least 50/50 on the effort? The answer would be that the producer has typically done far more work already just to produce the artifact for the first time, than has the observer to become exposed to it for the first time. It would appear that the workload starts out with a huge imbalance, as the producer's "half" may not ever be balanced by an equal effort of observation on the observer's part.

The way that this balance is achieved, however, is not by the observer waiting for the presentation to occur and then giving it "equal time" -- but instead by the observer having already behaviorally invested in intellectual openness to new forms of knowledge before the presentation occurs.

For too many serious-minded people, the ability to accept some given presentation as "knowledge" is all bound up in an insistence on some particular technique of "proof" in presenting evidence. In the heat of the moment, their comfort leans, let's say, towards academic footnotings and away from unfettered idiosyncracy. Said differently, it is a competition between citations of historical factversus proposals of theory. In order for theory to be accepted as (conventional) knowledge, the burden of "proof" must be lifted in the form of historical citations. Science, not art.

Well, interestingly, the history of science has the characteristic of revealing that theories are often more reliable representations of truth than is the "evidence" dug up to support them -- simply because in the heat of the moment, the conventional program for generating the evidence just can't get it right, and much later, after that program has been abandoned, the theory is admitted by some other means (e.g. a better program). That is, scientific revolution has always been much more a story about our ability to know something, than about whether what we thought we knew was "actually the truth"... Certainly we do believe that we now know vastly more than we did even thiry years ago -- but the bigger story remains that we now have many more ways of knowing something than we did before. Re-inventing investigation is actually the key to knowledge breakthroughs. And investigation is essentially about actions, not about results.

Let's run with this a bit: the basic activity of knowledge acquisition is the thought process, which is what allows a way of knowing something. What is tricky about a thought process is that if the process is being invented, too, then it is more highly uncertain what it will allow us to know, and meanwhile it can be quite difficult to know whether the current process is conclusive. This is strongly reflected in the saying "a work of art is never finished, rather, it is just stopped"...

But to put things more to our point, when the process reveals something to us, we often hit the pause button and show off what was revealed so far. These exhibits (or "findings") are the knowledge in the moment. From there, they may or may not be formatted for re-presentations. Another option is of course to formalize the process so that the revelation can be re-produced.

Preserving findings for future reference stages the occasions where they may later come off as being "predictions" (literally, "said before"). Case in point: this article you are currently reading is content in the Archestra repository, where the bulk of the material to be found is, persistently, findings from an artistic research mode rather than from an organization of empirical evidence. Even the oldest of the Archestra content, going back to about 1996 origins, most frequently states or argues circumstances in some combination of "what if" and "as if" postures, seeming speculative and not academically rigorous. Yet the oldest of these ideas and assertions are sometimes only now showing up as "valid" in the conventional broad publishing of consulting firms, corporate marketing (especially by IT firms), and the like -- venues where there are customers who immediately demand "prove it!" because, for these customers, investing in uncertainty is an unacceptable risk. Typically, consultants and marketers, once they decide to collect conventional evidence for a theory, kill a significant amount of time and/or money doing that before they bet their business on it. The major point here is that those efforts are not about turning something into knowledge that wasn't knowledge already; instead they are about turning exposure to existing knowledge into adoption of it.

It's a nasty marketing habit to call those conversions "thought leadership", but no one wants to leech the fun out of marketing. At least today -- thanks to the web or other modern tools of exposure, surveillance and access -- we can more likely watch where ideas are actually coming from and get beyond the less benevolent artifices of "intellectual property".

To return to the beginning of this discussion: is there any reason to avoid identifying intuition and opinion as "knowledge" ?? The usual rap against them -- lack of credibility or objectivity -- is so rooted in anxiety over uncertainty that the rap should be discounted except in certain practical circumstances like heart surgery or legal contracting. The supposed alternative -- empirical evidence and testing -- is a power play, but it is so vulnerable to the capriciousness of competition and politics that it, too, should be discounted as an automatically correct default.

But does this mean that neither approach should be embraced? No, only that they are peer opportunities that both need to be understood before either is tolerated or used.

As a matter of "knowledge management", a responsible party must be able to determine what is really being asked for, whether what is received is appropriate to the request, and whether the request is appropriate to the circumstances in the first place. Education (exploring thinking) and execution (acquiring results) are simply not the same thing. Even more basic: does the requester need truth or instead a belief? Facts or confidence? Insight or accountability? As a knowledge provider or cog in the knowledge provision machinery, is your responsibility to provide insightfully truthful facts, believably confident accounts, or some other blend? Can you tell the difference, and is what you provide even the right thing for the recipient to be using?

Posted by Malcolm Ryder at 8:32 AM | Comments (0) | TrackBack

April 28, 2007

Knowledge as Capital

The McKinsey gang examined corporate performance on two fundamental indicators of sustained competitive advantage—revenue growth and profitability—over an 11-year period from 1994 to 2004. Their finding:

"...we found that ...nine companies had higher market-to-book ratios than their competitors did. (The M/B ratio is a measure of corporate performance that compares a company’s market cap with its book value.)...the top nine performers strongly preferred organic growth: they made few acquisitions and divestitures when compared with other companies in their industries...
In our view, their ability to generate value from knowledge-intensive intangibles (such as copyrights, trade secrets, or strong brands) represents a good starting point for further exploration of their superior performance."

Just connecting the dots.

To connect them yourself, log in at The Elusive Goal of Corporate Outperformance -- McKinsey Quarterly 28 April 2007

Posted by Malcolm Ryder at 6:28 AM | Comments (0) | TrackBack

March 18, 2007

Lies, Damn Lies, and Innovation

"Improvement" is always near the top of our agenda, if we think we can have it. But meanwhile, method and performance are so deeply intwined in our thinking that we have a hard time untangling the language to think about them differently. The problem with this is that we are so reluctant to give credence to alternative methods. We see something being done differently and actually think that it can't be successful because of that, until proved otherwise.

Because of the misunderstanding, scientific management is still amazed by the vaguery of creativity and innovation, and with 20/20 hindsight struggles to find their formulae.

This pursuit of formula is legitimized by what is thought to be the example of science, which accounts for nature (the essence of creation) in the metrical way. We then generalize the practice to our professions when we need similar balm for our uncertainties... and (except in marketing) we push back against accepting theory without the proofs. To get closer to the truth, we'll sign up the experts -- people on whom we can impose performance standards as our paid proxies -- to bring academic proofs to the problem.

The enduring vanity of academia, as opposed to intellectualism, is the scientific method. Ironically, the scientific method accumulates a shroud of dificult esoterica that obscures what may be its most important characteristic: good science is essentially democratic. The whole point is to lay it out so that anyone who follows the instructions can do it. It's just that it is often really hard to follow the instructions. So when it comes to scientific experts, we wind up commissioning their stamina even more than their knowledge.

The alternative approach to credence is evidenced by the great artists and athletes of any time, who's business of constant microinnovation under pressure is their working definition of performance. What underpins their performance is experience and the consciousness of that experience -- and there they have the key reference needed to justify their claims: the school of hard knocks. Getting back to science, it isn't really the metrics that drive things, is it? It's the experiments!

No reason to discount the "excellence of expertise"; on our budgets there often isn't enough to go around. But the "genius of experience" is equally valid, established through a different mode. The thing is, for most of us, genius is actually no less accessible than academia is, and practically speaking, it is "most of us" that cause something to happen with what we can get. Until we use what we can have, we can't discredit it. When it comes to pursuing improvement, the real difference is in whether we want to prove something or whether we just want the proof.

Posted by Malcolm Ryder at 4:12 AM | Comments (0) | TrackBack

November 1, 2006

The Innovative Simplicity of Complexity

Writing about innovation in the October 15 issue, CIO Magazine's Mike Hugo states, "It's too bad innovation doesn't happen from hard work alone; but... at the heart of every innovation there is... the moment of inspiration. "

He caps it off by saying, "Inspiration occurs when a certain combination of ideas suddenly reveals a simple underlying pattern that ties the work together and expresses what the work is about... Finally, remember that innovation is an art more than a science."

I like the attention drawn to artists as model practitioners of innovation. And Hugo's article is all about how artists work to capitalize on inspiration. But let's not get fooled into the idea that the "sudden revelation" that he calls inspiration comes from something other than hard work, too.

It can't be a surprise that as a businessman he lands on "simplicity" as a keynote of "inspiration". In effect, he suggests that complexity obscures the onset of inspiration, which in turn delays or prevents "true innovation" -- at least until someone orchestrates the complexity into a moment of simplicity.

This is an appealing argument because it resonates with the frustration and triumph of getting new things implemented. In fact, what Hugo actually winds up mostly talking about is how we should manage ideas into actual production. Along the way he emphasizes the notion that achieving simplicity in design (i.e., "the work") leads to production success, and that (in a business context) the product's economy of scope equals "innovation".

Despite the appeal, a lot is left loose in that presentation. Let's tighten it up.

For starters, his is not a good general definition of innovation. It might be true that a certain idea offers a breakthrough in efficiency that for some organization will be a new experience or capability -- in which case that "breakthrough" aspect would be the value of the idea for that organization. If the shoe fits, wear it. But efficiency doesn't make the idea absolutely innovative. In many organizations, an idea with the impact Hugo describes might simply be an "improvement".

Second, and more importantly, if (as Hugo argues) simplicity is achieved through "orchestration", then we need to know what the orchestration is about. Otherwise, we're left at this famous intermediate point of pain:

So what about this orchestration? As more and more executives are told to take responsibility for "innovation", a wise path for them would be to avoid reinventing the wheel and go learn something from R&D, who do this stuff all the time. The point: inspiration is cultivated. In fact, it's cultivated from experience; and experimentation is possibly the most important of those experiences.

Of course, making experimentation affordable is an issue. (We're encouraged to think of it in terms of ROI, not just in terms of expense.) But more importantly, what we have to do here is to understand where simplicity matters.

So... last, but not least, consider the difference between complexity and complication. Complexity is about the necessity of the many elements combining for one effect. (A high-performance football team is complex.) Complication is about the inclusion of unnecessary elements in the combination. (The famous Rube Goldberg contraptions are complicated.) Complexity almost always risks being complicated; but design, when faced with complexity, is usually quite intent on removing complication -- not automatically determined to remove complexity.

In science and math, which like to account for all the complexity we can stand, the related notion of "elegance" is extremely important. At Dictionary.com, "elegant" gets the following definition:
#6. (of scientific, technical, or mathematical theories, solutions, etc.) gracefully concise and simple; admirably succinct.
Going this route, Webster's New World Dictionary 2nd College Edition adds that "simple" means "having few parts or features; not complicated or involved." (Definition #2)

As of this writing, an excellent demonstration is found on Wikipedia.com:
"In modern notation, simple expressions can describe complex concepts.
This image:

is generated by a single equation."

(http://upload.wikimedia.org/wikipedia/commons/thumb/0/02/Pic79.png/180px-Pic79.png)

Here, it is literally obvious that the effect (the image) is possible only through the combination of its many parts; but the logic of the combination is what is simple. The design work went into discovering that logic. It's not the image pattern (the effect) that is simple; it's the logic pattern (the cause). And what is the punchline here? Simplicity generates complexity. Where this matters versus Hugo's observations is as follows:

(Hugo) "When you find a simple combination of workflow processes and technology that can satisfy a wide variety of business requirements, then you have an innovative design."

Well, no you don't, not really, or not necessarily. You might just have a good design, or a versatile design.

And about those requirements: products everywhere are constantly upgraded by meeting a variety of so-called "requirements" (i.e., adding enhancements) that come in from all over and later get distributed together in a new "release". But what matters is how many of those enhancements add up (together) to a more singular important advance for most users. FInally, most product releases are not innovations unless they're used somewhere -- or in some way -- that they haven't been before.

What needs to be examined in the business context is threefold:
- Where is innovation valuable? Just being new doesn't automatically mean being valuable. By definition, value is in the significance of the difference that the newness offers.
- Where is complexity valuable? In general, when complexity allows a benefit that is otherwise not available, it should be managed, not arbitrarily reduced.
- Where is simplicity valuable? Simplicity is valuable when, as a cause, it provides a less complicated way to get the needed effect.

If we sum this up, we can easily conclude that the most valuable kind of innovation is this: something new that simplifies even more the way to get as much complexity as is needed for the benefits to kick in.

Posted by Malcolm Ryder at 8:27 AM | Comments (0) | TrackBack

August 22, 2006

The three flavors of Innovation

Talking about innovation is a way of talking about applied creativity. Most often, things being called innovation fit into one or more of these categories:

Category A - new solution applied to old problem
Category B - old solution applied to new problem
Category C - new solution applied to new problem

There's a set of first impressions that roughly correspond to the character of those "creative" categories; respectively:

a - "breakthrough" realizations
b - "ingenious" cleverness
c - "inspired" visions

But in practice, here are other important typical aspects that distinguish them. Another aspect that distinguishes the types are the modes by which they are usually expressed.

The modes range across types A through C. To track the differences clearly, consider these examples:

a - technical automation (e.g., photo-copiers) -- most similar to "processes"
b - scope extension (e.g., photography as art) -- most similar to "genres"
c - semantic invention (e.g., Helmut Newton's photography) -- most similar to "idioms"

And here, in parallel, are the conventional strategic business corollaries, ways that business makes itself innovative, with some actual examples from business:

a - positioning -- leverages context. Putting the browser everywhere, on the desk, on the phone, on the car dashboard, on the refrigerator...

b - core competency -- leverages knowledge. Ballet instructors teaching pro football players about stance and balance; UPS teaching other companies about logistics.

c - defensible differentiation -- leverages uniqueness. The Segway.

Meanwhile, the challenge of successfully innovating is overcome differently depending on what type of innovation is at hand... so the best choice of approach must be considered against its odds:

a - new solution applied to old problem: adoption
b - old solution applied to new problem: execution
c - new solution applied to new problem: compliance

While those options are not mutually exclusive in the moment of opportunity, they do show that there is (not surprisingly) the risk of picking the wrong innovation approach and its attendant resources for the possible circumstantial value of just being "new". So, as it turns out, from the management perspective, innovation must be designed.

Posted by Malcolm Ryder at 6:45 AM | Comments (0) | TrackBack

August 21, 2006

Innovative Disruption

This just in. For those of you who trust the trade mags, proof that the main cause of business problems is... doing business.

While 60% of the "innovation" ideas come from business unit leaders, according to the "winners" most of the resistance to those ideas comes from businesss unit staff. Since the staff were presumably led to the win, uhhh, what happened to the staff?

Ohhhh kayyyyy.

(Source: CIO Magazine, which you'll assume has some kind of copyright on the source material -- but not on the combination of materials as re-presented here, since I made the point of the juxtaposition when they didn't.) (On the other hand, don't try this trick at home, just because you saw it here.)

Posted by Malcolm Ryder at 5:28 PM | Comments (1) | TrackBack

August 5, 2006

Write Once, Read Many

And now, from the folks who brought us People Process Technology, this just in. The world's oldest computer chip, custodianship credited to the IBM Museum of Technology.

NOT.

Hey -- remember "PalmScript" ?

"Etch-A-Sketch" ?

"Unified Modeling Language" ?

"Moses" ?

"Bite marks" ?

Credits
Concept: Renee Ryder Mellon
Artifact: A tablet, said to be 7K yrs old, found in Bolivia. Look it up here...
Picture: belongs to the Associate Press. Bug them, not me.

Posted by Malcolm Ryder at 12:16 PM | Comments (0) | TrackBack

June 16, 2006

I.T. Been Berry Berry Good To Me, Part Two

Our colleague Howard Hastings writes in:

Fundamentally, I agree with your concluding statements: that statistics from "the analysts" based on relatively small survey samples using questions of a naturally subjective nature are NOT very useful - unless accompanied by the explanations (read: deep and broad thinking) behind those questions and the final premise.

HOWEVER, I believe that the CIO Magazine article highlighting the Forrester numbers largely misses the key point - "IT Decision Makers" are NOT well positioned to properly and successfully influence the business (i.e. innovation).

Why? For those of us who "stumbled" into IT from business backgrounds it isn't that difficult to understand - IT people too often can't/won't adjust their own mindset and delivery to effectively communicate and/or work with business people. Essentially, "logical thinkers" generally don't see the need to empathize with the "targets" of their ideas … the notion that "experts" should be required to understand the motivations and perceptions of mere "users" is, in itself, irrational.

Anyone familiar with "personality typing" (Myers/Briggs, Keirsey, et al) will easily recognize this behavior and the inherent challenges it represents.

That said, I would strongly question the validity of successful innovation driven by "IT Decision Makers" being awarded a score of .200!

I suspect that most, if not all, of the innovation success came as a result of IT being TOLD that they needed to achieve a particular objective. Anyone who has been involved long enough in IT at senior levels who can be reasonably rational with themselves will admit that technology itself addresses AT MOST 30% of the overall solutions to business problems. The rest comes from people, processes, knowledge/content, etc. -- H.G.H.

Which reminds me of what I left out last time... the best examples of IT effectively driving innovation are examples where the use of IT was the actual basis of the innovation. But this still leaves two other issues to deal with. One of them is that the innovation might have been a highly successful output of IT, but the business built on the innovation might still be pretty poor business. The other is that there is a difference between innovative technology and innovative use of technology -- the point being that just saying "I.T." doesn't tell you much about what is actually happening. For more on this difference, search Archestra for the discussions on (a.) operations and competency; and on (b.) invention versus innovation.

Posted by Malcolm Ryder at 1:06 AM

March 3, 2006

Driving IT Bang for the Buck: Evolution, Improvement, or Innovation?

When we think of effective IT spending, we're focused on making the best current use of the money, given competing alternatives or emerging options. But increasingly, the basis of effectiveness in business spending on IT proves to be in how the business manages its reliance on IT.

Sometimes we don't have enough visibility of legitimate alternatives and options. The urgency of our attention to the purpose that justifies the spend means that this lack of perspective could be left unsolved. But for that reason, a diligent evaluation practice looks for opportunity costs that should be factored in. As part of this diligence, what remains to be emphasized even more is not how the IT will make the organization work, but rather how the organization is going to make the IT work.

I.

In the full cycle of management, the business first conceives and identifies why IT is needed before it makes any other decisions. To avoid taking the need for granted, this first decision means describing the business model in terms of what potentials are granted it by available IT. That is immediately followed with a forecast of how sustainable those potentials are -- which necessarily means identifying and selecting how to make them sustainable.

When that architectural aspect is clarified, the next part of the decision cycle must create a "delivery" organization that can constructively practice the architecture. This means two things:
- establishing the sources and resources that will produce the infrastructure from the architecture, and
- establishing the processes that will link IT production cycles to business operating cycles.

At that decision stage, reliable design and reliable production easily wind up being qualifying criteria used to distinguish the various opportunities, organizations and risks that the business will incorporate as the elements of realizing of its model.

Thus, investments in their incorporation aim to relate reliability to the goals of business. That aim immediately offers a perspective from which a high-level assessment of the current business investments might be done. Normally this makes us think of metrics; but as pictured below, the main point is to allow the perspective to stage comparisons and guide questioning. Here we might just catalog known commitments by critical business goals.

II.

Those commitments might then involve or indicate spending on IT. But, as described there and below, the associated "IT investments" are not about IT per se but rather about the application of IT. We can understand the idea of "application" by considering the purpose of the IT utilization.

- At the highest level of distinction, the business goals of incorporating the opportunities, organizations and risks are recovery, health or growth.
- Within each of those goals, sub-goals are development, maintenance, and change.
- And within each of the subgoals, another sub-level features assessment, design, and control.

Consequently, it is possible to ask questions at the management level such as, "Can we control the maintenance of our health?" or "Can we assess the development of our recovery?"

These are not IT questions -- but they are questions that present opportunities for IT to enable successful management outcomes. In turn, management is focused on enabling successful business outcomes.

Taking that framework of IT incorporation as the main perspective, it is easy to appreciate that business utilization of IT is nearly always altering something -- either a behavior or a current state.

The importance of how IT is managed, though, is in how well IT supports management's ability to intentionally change how the business can behave. (From here on we'll consider "change" in this larger context.)

III.

The observation just made emphasizes that we can and should compare the kinds of value offered by different classes of change, and then associate IT's effects to those values -- as contributions.

To demonstrate that, compare evolution, improvement and innovation.

Relative to each other, these kinds of change differently affect the state of the business:
- evolution permanently modifies the fitness of the business's model to the dynamics of the environment in which demand develops;
- improvement modifies the fitness of its conduct to the current and targeted demand;
- innovation modifies the fitness of its output to the needs of the environment's population.

According to perceived conditions regarding recovery, health or growth, business executives must determine when any of these three modes of change requires higher-priority attention. A timely reaction is mandatory, but proactive change is potentially strategic to optimizing the benefit versus risk of those conditions. That may result in new or extended initiatives to create the necessary related sponsorship and opportunity, including competencies and technical support that might drive spending.

To support a proactive stance, a good device to have would be a framework for envisioning, monitoring and ultimately predicting circumstances that we can agree will signify a need for change. Not coincidentally, those circumstances have the look and feel of key ideas offered within the business justifications for IT spending. That device might look like the following:

IV.

But given those considerations, executives and managers together should ask the "big picture" questions -- for example, whether an improvement initiative is the most likely candidate to produce better recovery, as opposed to an innovation initiative. At the same time, it is important to recognize that one kind of change may be an element of another kind and acquire priority that way. After all, form allows conduct, and conduct (i.e., production) allows product. As another more specific example, innovation may accelerate evolution, and improvement may create more opportunity (security, income, knowledge, etc.) for innovation. Thus, an improvement initative can strategically foster the goal of accelerated evolution. But likewise, the requirements for supporting an adopted innovation may obsolete improvement efforts dedicated to earlier production, eliminating that legacy cost while potentially releasing resources for new purposes.

These interrelationships are characteristic observations in portfolio management.

IT management must be focused on applying IT to business operations present and future. On the one hand, it is typical that an IT budget might be evaluated in terms of how much spending goes to "maintenance" versus "R&D" and so forth. Those generic classes correspond to how IT responds to the business requests for support.

But the rollup of dollars into those classes can easily obscure the more important and time-sensitive issue of whether the right things have been selected for maintenance, or the right things are being pursued through R&D. By calling for a distinction between wise spending and merely approved spending, we get to a conversation about how management leverages IT for the business -- as opposed to mere responses. In that conversation business and IT organizations together find the logical path to measuring the effectiveness of the decisions, and to measuring how much that effectiveness was worth.

The view that unifies their concerns is not one about how "IT investments create business value", but rather one that business value subscribes IT.

Posted by Malcolm Ryder at 8:16 AM | Comments (0) | TrackBack

January 31, 2006

The History of the Future

Picture from 1954 Popular Mechanics Magazine
This picture is before you knew what a computer was or probably before some of you were born!

Be sure to read the caption below the picture.

Posted by Malcolm Ryder at 7:12 AM | Comments (0) | TrackBack

January 10, 2006

Innovation, Invention, and Interventions for Improvement

In the post-cost-cutting era, no improvement is more popular but elusive than gaining "sustainable competitive advantage."

Any one of its three parts is hard enough to deal with. And though their combination is even more daunting, it is practically irresistable. Why? Because as a justification for whatever else we do, it's pretty hard to beat.

We especially love the idea that we can do it over and over. And after all, what point does our old favorite continuous improvement have if it does not fortify the maintenance of advantage?

On closer look, just agreeing on what the phrase "sustainable competitive advantage" really means is a good trick in itself. We have to parse it carefully to be sure we go after the right problem...

For example: each part of the idea merits its own auditing: Are we competitive? Is our competitiveness creating an advantage? Is the advantage sustainable? This is the typical line for performance evaluations.

But some see the problem a bit differently: Do we have an advantage? Is the advantage making us competitive? Is our competitiveness sustainable? This is the line for launching new organizations, products, or ideas.

Today, the second interpretation has really come into its own, with "Innovation" being the major mantra. Is innovation always justified?

I. Change how you Change

On the surface innovation certainly seems like a good development. In real improvement, changes are always made and the changes have to matter. With an innovation, one might either change the rules a bit and scoot ahead of "the pack", or simply "break through" the status quo to hit a goal line before others do.

But most often, improvement calls for a change that is not even an innovation. Because we work ambitiously in increasingly complex circumstances, what we make is usually more likely to demand our attention to incumbent defects, omissions and errors. Also, due to shifting circumstances, improvement may not be significant if it is rendered only ephemeral. These points -- complexity and variation -- suggest that improvement should be tackled strategically.

As a strategic problem, improvement is challenging to solve mainly due to the way complexity and uncertainty affect the design effort for the solution. Navigating through the challenge, we respond to complexity (choices) and uncertainty (surprise) by making changes that can easily leave things different but not necessarily better. So how often can we say that innovation is strategic?

All innovation is pursued under the umbrella of improvement. To establish innovation as the most likely capture of value from action, the whole issue of what is "better" first demands some up-front declaration of what is really needed -- from which we can see innovation not just as a capability, but more importantly as an opportunity to solve the "right" problem.

II. Cause and Effect

The ambitions of having a "disruptor" or a "breakthrough" have often stayed separate, although without deep thought it might appear that they both lie at the end of the same "path of improvement". That is, we take it for granted that we know the path : innovation is a premeditated effort to produce something unprecedented.

But there may be some debate -- for example, as to whether a given "innovative" effect was intentional or accidental; that makes us look back for differing causes.

An innovative effect is often mainly a matter of using something old in a different way, or something new in an old way; along that line, accidents and luck both count as sources. But those point us at the more general idea of discovery -- what many people could later call innovation.

Against the status quo, a discovery is notable precisely because it is a change. But often the discovery of some new usage or effect remains only with the discoverer, especially if the discovery held no importance to the discoverer beyond the moment that it occurred.

Meanwhile, as they say, necessity is the mother of invention. Contrasting with discovery, invention is considered to be a more explicitly intentional effort for a certain lasting effect.

Of the two paths, invention is of particular noteworthiness to self-consious planners and innovators, but "invention" and innovation are only sometimes the same.

We politically reserve the term "innovation" for changes that impact arenas much wider than the laboratory of the change-agent -- in more or less the same manner that we reserve the term "IP" for referencing a situation that presumes distribution of content beyond the creator. This also affects our sense of where to get innovations.
And whether the innovation really means anything in terms of improvement will depend on the reception it gets in the arena to which it is delivered.

Not all arenas will be equally hospitable to the innovation; so (as all marketers know), if we want to get real value from the innovation, we first do a little forecasting of who cares about the innovation's impact.

Thus, the idea of attaining sustainable competitive advantage from innovation should be looked at in terms of confidently identifying where there is a need for certain kinds of change.

III. How new gets better

To help with the identification, we need a high-level view that tracks the "value chain of change" underlying an innovation's effectiveness. What happens? How do we make it happen when we want? Where do we want it to happen? Why?

Overlaying that sequence, we bring our three-part "improvement" goal: sustainable competitive advantage. Typically, sustainable signifies control; competitive signifies effective; and advantage signifies leverage -- so when the sequence above works best for us it supports all three parts.

Intentional improvement therefore presumes attention to how each point in the chain ought to support or increase the final control, effectiveness and/or leverage needed.

IV. Getting There from Here

Planned improvement always presumes control of change itself, while bringing a perspective that gauges the difference between the current position and a future position. It idealizes the path from point A to point B; but in real life, other distracting stuff usually happens along the way. It becomes necessary to anticipate where that stuff can come from, so we have to be able to understand that the "single path" results from our exposure and reaction to multiple influences -- the combination of why we do what we do, and where we are when we do it.

Planned improvement works hard to integrate those two influences and thereby control change. The following illustration shows how the corresponding issues of execution and position are combined in a single view.

In the planning sense, this picture shows the operating environment as a "current state engine": a set of "parts" -- material elements and action components -- that are manipulated in a defined change.

- Execution is composed of the managed interactions between the parts.
- Position (breadth and locations) is composed of the scope and range of the effects of that management.

That means we can directly relate position and impact. Since value is attributed to the impact, innovation's path to value goes through "position".

But since position is a result of execution, we have to look at execution as a way to understand innovation.

V. Paving the Path

In managing the state of operations, there is continual decision and action.
- Decisions select material elements -- i.e., Functions, Resources and Costs -- that determine the scope of what will be done, how, and to what extent.
- But using the action components -- i.e., Implementation, Allocation and Regulation -- we translate that scope into range , thus determining where operational impacts will occur.

By that same arrangement, the entire change value chain is attentively traversed. Therefore, at this general level, there is an inherent ability to do new things.

But management first sees to it that the action components give the material elements a regular interaction that approaches a "steady state". In each practical iteration:
- Implementation relates Functions and Resources ;
- Allocation relates Resources and Costs practicall; and,
- Regulation, closing the loop, relates Costs and Functions.

In designing a steady state, functions are designated first, then resources are proposed to support the functions and costs are derived to support the resources. Otherwise, the functions are not seen as viable and they get revised. These selections may be finalized through trial and error or by investing adequately in already known designs. Bringing about this alignment for the purpose of achieving a targeted future state is what the design of the controls on change --i.e., the design of the solution -- is supposed to do. The future may or may not need to be different from the present.

When change is intentionally pursued:
- management first alters the arrangement of functions, resources and costs -- manipulating or intervening by using implementation, allocation and regulation. - If that doesn't work, then new selections may be made in functions, resources and costs.

The designer can face challenges to both the activities and materials intended. They typically crop up in the form of complexity and uncertainty, which may force trade-offs and risks -- some of which might mean that the ideal outcome is compromised although still remaining useful. Naturally, management wants to minimize the need for compromise.

Invention within design is often all about finding a design that can overcome the customary challenges. The ambition of an innovation is all about finding a design that gets to the solution without the customary challenges.

VI. Likely Obstacles

Acknowledging that there may be multiple iterations (cycles) of effort needed, the general idea in "improvement" is to navigate from current point A to future point B, minimizing interruptions and tangents.

Invention and innovation may play big roles in getting to point B, but of course their occurrence will be helpful only if they produce differences that really matter while not unreasonably increasing risks.

We can't underestimate the importance of risk, because it can increase uncertainty and complexity, or even simply prevent change. Risk is perceived and real, and comes in various flavors and degrees.

For example: in the "continuous" improvement scenario, invention is a challenge to the composition of an incumbent plan of alignment. Literally, the manager may see the invention and ask, "what am I supposed to do with this?" and/or "why should I allow this?" Notably, invention can suggest that current efforts are solving problems the wrong way. Invention and management work most directly on the functions, resources and costs.

The effort to streamline and ensure the alignment similarly means that innovation itself is a challenge -- to accountability. Innovation may alter or even contradict the terms of the incumbent or legacy design, calling the design's interconnections (and/or their customary effectiveness) invalid for the need of most current importance. Innovation can suggest that current efforts are solving the wrong problem. Innovation and accounting work most directly on the implementations, allocations and regulations.

Finally, even improvement itself can be misguided. For example, one principle that has been proven in many situations is that "perfect is the enemy of good enough." This reflects the challenge of correctly prioritizing the goal of an effort.

Thus at every level of our intention to change, we have a contest of ambition and risk:
- improvement versus priority;
- innovation versus accounting; and
- invention versus management.

VII. Invention versus Management

Usually, we focus on improvement with the assumption that priority is not in debate.

To win the other contests, we proactively identify and influence the contestant activities: invention and management, or likewise innovation and accounting.

As solution designers, our task is to select the activities and then orchestrate their relationship to each other. We also want our design to be open to ongoing verification and validation. Therefore, from a perspective of change-control, the selections should be modeled, and the orchestrations should be monitored.

However, before any specific discipline or school of pratice is imposed on the design, consider "fundamentals" that are common across all specialties.

For example: we should identify the two different activities by their "essential" and distinguishing natures.
- the essence of the Invention effort is in design, development and deployment.
- Management's essential task targets are control, maturation and change.

Meanwhile, the key influences on invention and management are knowledge efforts -- Search and Research.
- Search: discover, define and classify.
- Research: assess and adopt.

The following table lays out those fundamentals, illustrating a responsibility or opportunity for improvement as approachable through invention and/or management.

Here, Search and Research tasks drive coverage of concerns that are characteristic in both Invention and Management approaches, producing four distinctive quadrants of interactions to coordinate. Parenthetically, the diagonals crossing the quadrants suggest "layers" of re-engineering that exist between Assessments (which often propose needs) and Control (which satisfies needs). But across the horizontal rows, we see that Search is instrumentally linked to modeling, while Research is likewise linked to monitoring.

Without this picture, we might have assumed the reverse -- i.e., that search is about monitoring, and research about modeling. But here we can see why that is not the case. Search must be about the nature of the thing being sought, otherwise we find the wrong thing; we need an identity of what to look for. Research must be about the importance of finding that thing, otherwise there is no value from knowing about it; we need a reason to look for something. Models express identity; monitors express reasons. As knowledge instruments, they expand our awareness of identities and reasons, thus enabling change, thus enabling improvement.

VIII. Innovation versus Accounting

As solution designers we also attend to identifying and influencing implementations, allocations and regulations. A different set of concerns applies here, but modeling and monitoring are terms that link this second group to the above.

Now, the view is on innovation and accounting, which like invention and management might be adversarial but can be complementary if their co-operation is understood. (Here, "accounting" means an investigation that establishes accountability.)

Again we start our considerations with fundamentals rather than with any branded discipline or practice.

First there are basic identities to establish:
- The essential nature of innovation is to remodel something within a given context. (Innovation naturally exploits the modeling in search, if search is provided.)
- Accounting, meanwhile, essentially aims to confirm compliance with a set of permissions or priorities. (Accounting naturally exploits the monitoring in research.)

Meanwhile: the key influences on innovation and accounting are demand contexts -- Needs and Requirements.
- Needs: responses make selections from choices, per an objective
- Requirements: responses incorporate selections per an operation

This following table illustrates the overlay of those issues.

In this picture, we see improvement described as a matter of decision-making about responsiveness. Overall, it shows four different things that can be changed in order to respond to a demand.

More specifically, Responsiveness is being exercised from two perspectives: innovation, in which new kinds of responses are conceived or proposed; and accounting, in which validation is applied to determine whether responses are appropriately directed. Across the horizontal row for Needs, we see strategy represented. And across the Requirements row, we see planning.
- With the responsibility for synchronizing expectations and tolerances, strategy addresses control.
- With the responsibility for reconciling the application of new responses with the forms in which they can be produced, planning addresses effectiveness.

In bringing that to light, this picture is another interesting reversal of typical presumptions: strategy is usually associated with a targeted effectiveness, while planning is associated with control. But here the point is that strategy sets the boundaries around the influence of potential responses, in order to direct them to a goal; meanwhile, planning organizes available resources and commitments to optimally format and support opportunities to respond.

IX. Improvement vs. Priority

The four pictures above expose major touchpoints at which management interventions will alter the position and execution of the current state towards the target state, and thus will moderate improvement.

For example: paradigms and policies, classifications and deployments, or functions and allocations -- all offer different locations and depths at which to intervene, while also soliciting the involvement of readily identified roles or members of the organization.

It's likely that all of these various items are already underway in the organization for one reason or another. The above illustrations provide an argument for how they would logically influence each other to engineer "improvement".

We said the ideal improvement frames the problem like this:
Do we have an advantage? (leverage)
Does the advantage make us competitive? (effectiveness)
Is the competitiveness sustainable? (control)

From the argument of the pictures above, planning turns out to address effectiveness, and strategy addresses control. But what about leverage? How do we identify initial advantage?

When we ask the question, "do we have an advantage?" here's what we are really asking:

"Do we have a characteristic ...
that we can dramatically exploit, in order to ...
change circumstances such that, ...
for what we want to gain, ...
our resulting beneficial options greatly outweigh our inhibitors?

Implementation, allocation and regulation together turn functions, resources and costs into a particular business operation. This is a matter of how those parts are aligned.

Production within that alignment provides the actual responsiveness to demand. The potential responsiveness is what we identify as competency, and in that light, we recognize the alignment as the basis of competency. The impact of the responsiveness changes circumstances in a way that is appropriate to the demand. Meanwhile, the alignment can host more than one kind of response, and any given response may be hosted more or less well. This means that there are multiple competencies to consider.

Planning aims at leverage by selecting and fortifying a potential competency, protecting it with strategy, and using it to allow the organization a highly convenient position with respect to demand.

To create leverage, that selected competency must, like a fulcrum, also allow actual responsiveness under demand to multiply the influence of the organization's position. This influence is measured in terms of the beneficial options -- or in other words, opportunity -- created by execution from the position.

The simplest way to envision this magnification of effectiveness is to imagine that more demand is being satisfied through the execution.

But to get to that effectiveness, the savvy organization targets "improvement" efforts for locations showing increases of important demand that it can satisfy more readily than can competitors.

The key to performance in this will be deliveries to those locations. But the underlying critical success factor is the working definition of demand. According to how demand is defined, the locations will change. Innovation reconceives the demand -- thus proposing not only the locations but also a new target relationship of competency and priority.

Posted by Malcolm Ryder at 5:02 PM | Comments (0)

January 5, 2006

Infrastructure, Information and Innovation - Who's on First?

"Business improvement" is an easy ambition to have but often hard to act on effectively, because it is so vague. However, the beginning steps of defining it are well known -- they always include deciding what are the needs and requirements of the business.

Yet too often that yields to confusion bred by habitual thinking, political and religious energy, risk-aversion, and inexperience. Each of those different influences is a considerable threat to "improvement" if it distorts a constructive path of change. However, all of them can be dealt with through the same review of basics that help identify why anything should change.

The outcome of the review is clarity on what kind of change is most likely to constitute meaningful improvement.

I.

As a rule of thumb, needs are recognizable as what effect must be obtained from activity; requirements are recognizable as how the effects must be achieved.

This is how we can understand that even when "everything was done correctly", the result may be unusable or unacceptable. In such cases, the mistake is often that needs were not adequately translated into requirements because the nature (persistence, priority or timing) of the need was not strongly enough determined. This uncertainty allows the "wrong" requirements to be derived, because the requirements do not actually solve the right problem even though they drive downstream impacts inviting not only failure but the "law of unintended consequences".

Paralleling the importance of that distinction, the key difference between capability and competency is that capability addresses requirements while competency addresses needs.

Because of this difference, when "business needs" change it is the type and strength of competency that must first be determined.

On the other hand, business requirements may be changing even when needs are not, and this should be addressed with capabilty.

The message to the business improvement crowd is that the organization's leaders must confirm the right problem to solve before it decides "the right way" to solve anything.

Meanwhile, for managers the most interesting aspect of the relationship between needs and requirements is that an inability to satisfy requirements that support a need can actually force the need to change. That is, if a party's capabilities leave its problem effectively unsolvable, the party must then either reposition itself to make the problem irrelevant, or it must suffer consequences that will alter its circumstance in ways that most likely reset its agenda. Either way, the needs will have changed.

In effect, business actually predicates its success on "picking the right needs"... That is, its needs come from a position that the business takes in order to have certain advantages, and it typically organizes itself around the needs of the position. Thus, unless the position is intentionally changed, the business is actually reluctant to have needs change! This focus on a status quo encourages a mindset of, primarily, attention to planned capability over competency. But capability improvement will prove to be no more important than competency improvement.

II.

Business looks to "IT" to provide capability that is appropriate for needs. The business value of managing IT is in that it manages a "resource", which in this case involves managing both the quality and delivery of information and of technology. But the key responsibility of that management is not to select the "correct" information; rather it is to establish and operate technology that assures quality and delivery of information.

A strict understanding of that scope of responsibility makes it easy for us to identify that "information technology" is different from, but accompanied by, "information process".

Information process, for example, determines what information should exist, where it should exist, when, and why -- in utilization. Information technology is then employed to enact and defend those decisions. A typewriter doesn't decide what to put on the paper, but it enables putting the right thing on the page.

If we extend this idea by using customary business mantras, we ultimately also distinctly consider "information people". Information people determine whether information is valuable or not. They must determine which information (from that which is available) should be accepted, and what purpose demands the acceptance.

Information people operate with a chain of dependencies -- they need information proces