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