Sunday, November 30, 2014

On the impact of CEOs

There is a popular idea of the CEO as the lone mastermind directing the fortunes of a company, playing a game of chess against the CEOs of other companies. In some cases, more often the exception rather than the rule, this appears to be the case. But I want to talk about the rule not the exception.

To begin with, we need to tackle this idea of the lone CEO. I've often faced situations when discussing gameplay where the CEO would respond "I'd love to do this but my management won't let me."

The first time you'll hear this it is often a shock. Surely the CEO has absolute power in an organisation? Alas, no. In many cases the power within an organisation is shared with the board and with lower levels of management. It is difficult to estimate how widespread this phenomena is or how much impact it has. Techniques vary from examining the role of the CEO, the titles of the CEO and whether the CEO was a founder or an insider / outsider. The answers usually vary from around 30% to 50% of companies having a 'strong CEO' i.e. one that can directly exert their will on the organisation and even then, this question is often hotly debated.

What is interesting, is there "no evidence that firms with powerful CEOs have on average worse performances than other firms" (see Powerful CEOs and Their Impact on Corporate Performance - Renee Adams). Instead these firms tend to be a mixture of the best and worst performers in the market. But how much is this difference?

Again, answers on these vary depending upon the examination, the definitions used etc. I've seen distributions of 15% to 25% of strong CEOs being top performers, the same amount being underachievers and everyone else roughly where the market is.

Of course, there are other ways of examining the impact of CEOs. For example, there has been considerable work on the impact of CEO death (compared to other executives) on the performance of a company. Whilst there has been shown to be a correlation between death and subsequent poor performance of the firm, an intellectual leap is often made that this correlates to the CEO having a positive performance. The problem is one of 'infantilism'. If a strong CEO exists, an organisation may well be ill prepared to cope with decision making for a short period of time due to the previous dependency. You cannot therefore simply assume that a negative performance is due to some beneficial impact of the CEO as opposed to a dependency on the role.

Another issue is that of situational awareness and competition. In previous work (looking at the levels of situational awareness vs action in 160 high tech companies) then, it has been noted that situational awareness and strategic play are not uniform and high levels of situational awareness and strategic play are associated with positive market cap growth (see figure 1).

Figure 1 - Awareness vs Action


Unfortunately, in the wider market it is estimated that less than 30% of large companies undertake any form of scenario planning and less than 4% have any means of visualising the landscape they compete in. Without this, strategic play appears to be more about copying others, gut feel, story telling and astrology than it is to chess. However, this is also an issue of competition because poor strategic play and situational awareness only matters when competing against others with better strategic play and situational awareness.

So, what's the impact of the CEO?

Currently that's an impossible question to answer. However, if we assume that between 30% to 50% of CEOs are 'strong CEOs' (i.e. power resides within them rather than elsewhere) and that between 15% to 25% have a positive impact, you can (as a rule of thumb) say that 4.5% to 12.5% have a positive impact. The remaining 87.5% to 95.5% have little or no effect at all, if not negative.

On the question of executive death, we cannot assume these figures demonstrate a positive influence (as opposed to a negative impact due to loss) due to the potential for 'infantilism' within an organisation. The issue regarding low situational awareness would also imply that the number of CEOs having a positive strategic benefit is low, however even in a game between blind chess players there will be winners and losers. Hence, for many markets the lack of situational awareness won't have a significant impact on outcome because all competitors lack situational awareness. Even astrology gets it right, sometimes.

Overall the data (which is far from conclusive) suggests to me that the impact will be at the lower end of the scale based upon the level of strong CEOs, performance differences and poor situational awareness. I'd put the figure at around 5% of CEOs having a significant, repeatable impact. This issue of situational awareness is also not confined to the CEOs but impacts other C-levels and can be exhibited by the tendency of strategy to simply emulate others.

So, whilst in some corners of industry the image of the "lone mastermind directing the fortunes of a company, playing a game of chess against others" seems reasonable and can appear to have a significant impact, this is not the rule. In most cases it would appear that replacing the CEO might have a short term detrimental impact (though this may well be due to infantilism of the organisation and the need for the role not the person) but the overall longer term impact appears negligible. You could just replace them with a random person from the street on the understanding that the power structures in the organisation would cope admirably. 

Now, I'm not suggesting you do this on an individual basis - particularly because you might unfortunately remove a person who is the exception and does create a significant impact. However, the argument that we cannot enforce a greater gender balance at the board level (as has happened in Norway) due to the importance and experience of these people is highly questionable in my opinion. I've not seen data that supports the idea that the commercial world would suffer due to such a change. In fact, it suggests there will be little negative impact on the performance of those companies. If anything the impact (due to diversity) may well be positive.

Until such time as someone can conclusively demonstrate that the existing cadre of CEOs have an overwhelmingly positive impact on performance, I'll hold the view that a short sharp shock (e.g. regulation requiring immediate gender balance in the board, at senior levels and employment of women as CEOs) is not only beneficial from a societal viewpoint but will not adversely effect the performance of industry in the long run. The argument that there aren't enough women with the calibre and experience to be chess playing CEOs is bogus in my opinion. 

Most CEOs don't play chess.

Saturday, November 29, 2014

Fool's mate in Business

I'm in the middle of writing up some work and I thought I'd spend a bit of time explaining how utterly ridiculous strategy is in many organisations. I know people like to talk about chess in the boardroom but most of the time it's more like equal parts of copying others, alchemy, astrology, story telling and gut feel.

To illustrate this, I'm going to explain one super simple move which should never work but does - almost all the time. This move, I'll call Fool's mate. 

Now since this move is in play in various industries, I'm going to use a hypothetical example to demonstrate it. I'll start with a map of a particular media industry (see figure 1).

Figure 1 - Map of the Media industry


From the map above, I've highlighted certain parts. First, the company sells its content (i.e. shows) through both aggregation sites and its own branded efforts. The shows themselves come from a pipeline with constantly evolving content - it's starts as a novel show and then becomes a sold or acquired format. The distribution mechanisms are shown but what I'll focus on is the artistic direction side which defines the type of novel shows produced.

In this case, the shows are produced by creative studios, of which there are a limited number. This creates a constraint and as a result the cost of producing shows is quite high. Ideally, if you were the company commissioning and distributing shows then you'd like to see a more fluid and competitive market. However, those same creative studios will resist any drive to commoditising their field. I've marked this all up in figure 2 including a red arrow for how you'd like to change it and a black bar for the inertia the studios would have against this.

Figure 2 - Commissioning vs Studios


The creative studios themselves have a constraint which is talent and access to production systems. This relationship is shown in figure 3. By commoditising the production systems, you should therefore be able to increase the talent pool and drive the creative studios towards more of a commodity creating a more fluid market. 

Figure 3 - Exploitation of Underlying constraints


Now, those companies involved in providing production systems (i.e. the physical studios themselves, the equipment etc) aren't going to be happy about a commissioning company entering this field and trying to make it more of a commodity. They will have their own inertia (shown in figure 3 above) and resist.

The creative studios should of course resist this change as well because the effects on their industry (e.g. reduced barriers to entry) are so obvious. However, if they were absolutely clueless then they might support it because it reduces their cost of production i.e. they're thinking in the immediate short term and not the strategic outcome. 

Such a deliberate move by a commissioning company - the chess equivalent of Fool's mate - should never work but it does, in industry after industry. Yes, I am saying that companies often support the commoditisation of an underlying component or constraint without realising this will reduce barriers of entry into their field and ultimately commoditise them. Companies seem to act thinking of the short term with no understanding of the impacts to themselves. 

Most of the problem appears to be that companies cannot see the environment (i.e. they have no map) and aren't used to any actual form of strategic play. To be honest, this is like stealing candy from a baby except the candy is worth millions or billions. What is really frightening, is it takes a couple of hours to map out and work out such a play. There is no way on earth you should be able to get away with this and I'm afraid it gets worse.

This particular move is one of a set of very basic approaches (see figure 4). I'm always surprised by how many companies don't even use these basics in a co-ordinated fashion. This is kindergarden stuff in the world of strategy and we're going to see a lot of big name casualties over the next decade caused by truly poor gameplay.

Figure 4 - The most basic attacking & defensive moves.


However, the death of companies is not the point of this post. What I'd like people to realise is that many companies have little or no strategy and they're not actually used to playing the game. They instead rely on communication tools like SWOT or Business Model Canvas (which are both great communication tools) that lack any context. 

These companies aren't playing chess against each other, they have very little idea what the board looks like. Which, if you're a start-up is great news. Don't fear the giants, they're easier to take out than you'd expect.

-- Addition

The importance of where over why

One thing I'd like to also reiterate is the importance of where to attack. Why is a relative statement i.e. why here over there and so any strategy should start with the where. In figure 5, I've marked on the two "wheres" that you could attack.

Figure 5 - Where can we attack


One "where" is to attempt to commoditise the creative studio space. The problem of course is the constraints will still exist, the creative studios will resist and you'll be in direct competition with the studios which you use as suppliers etc. In all likelihood, you'll probably create a war on talent and end up increasing your cost of program production.

The other "where" is to attempt to commoditise the production systems. You'll have resistance from the vendors in that space but assuming the creatives studios don't understand the game, they'll probably support you (for reasons of short term reduction in their costs). You could deploy an open approach here (e.g. open source, open hardware, open APIs) and the effect of commoditising this space is likely to reduce both the constraints caused by expensive production systems but also the talent constraint by making it easier for people to get into the field. The net effect will be to commoditise the creative studio business - which is what you're after.

So, you have two "wheres". The "why" you should attack one over the other should be self obvious by now. 

As a word of warning, if you ever employ a strategy firm then if they start talking about the importance of why, simply ask them to explain the "where" to you first. If they bluster, you know you've got a dud. Get rid of them quick - they're costing you oodles and you'll get nothing of real use.

PS. Don't ask me for strategy advice / consultancy - I don't do this, I'm not a gun for hire. I research on behalf of the LEF members. My ONLY advice to you is learn how to map and play the game.

Friday, November 28, 2014

There are many chasms to cross ...

Consider the evolution of an activity such as computing infrastructure. Let us start with the genesis of the act of modern digital infrastructure (arguably the Z3 in 1943) and progress through the waves of improvement and disruption that have followed until eventually we end up with a commodity provided through utility services.

The evolution of an act isn't a smooth process but has many released improvements each of which will diffuse in society. If you examine the diffusion curves for each improving version, they generally have different time length and market sizes (i.e. they're not uniform, each goes to 100% adoption of a different applicable market) - see figure 1.

Figure 1 - Diffusion of multiple improving states of an act - from A1 to A5

However, by examining ubiquity of an act and certainty (i.e. how complete, well understood and well defined an act is) then you can measure this progress of evolution. I've provided an illustration of this in figure 2.

Figure 2 - Evolution of an act - from A1 to A5
So, if we think of computing infrastructure then :-
  • We started with the genesis with the Z3
  • We have multiple custom built examples e.g. LEO as companies and individuals explored the potential.
  • The act of computing infrastructure evolved (i.e. became well defined and widespread enough) that the first products (e.g. IBM 650) appeared.
  • We had multiple waves of ever improving products. Some of these waves disrupted previous products - mainframe, minicomputer, server.
  • Overlapping this time, we had the introduction of rental services.
  • Computing infrastructure became so widespread and well defined that commodity servers were introduced (volume operations based, highly standardised etc).
  • Being widespread, well defined and with a suitable delivery mechanism (the internet) then computing infrastructure became provided as utility services (e.g. Amazon EC2).
Now, it's important to understand that the evolution curve is made from hundreds of diffusing and ever improving versions, some of which disrupted past examples and some which were incremental improvements.

So, where is the chasm in this? There are many chasms not one. If you think back we've had chasms for utility computing, client / server, mini-computing, mainframe and even the original adoption of computing. During this time, computing infrastructure (as in the act) hasn't changed - it's still all about provision of compute processing & storage. Just the mode of operation and delivery mechanism has evolved.

So when you look at the evolution of technology (e.g. figure 2) then there isn't a single chasm. Evolution has many hundreds of diffusing changes involved each with potentially their own chasm. Hence when you think of computing infrastructure then :-
  • There was a chasm in the early stages (the original computers).
  • There was a chasm when computing went from custom built to products.
  • The have been multiple chasms involved with each major product change (mainframe, minicomputer, client/server etc) as the act evolved.
  • There was a chasm involved in the introduction of commodity servers.
  • There was a chasm involved in the introduction of utility servers.
If you're looking for the chasm involved in the evolution of computing infrastructure, I'm afraid you won't find one - you'll find many, almost as many as there are separate diffusion curves (for each evolving instance) and examples of incremental and disruptive changes.

Fortunately, from a perspective of mapping - there exists only one evolution curve. Which is why we can map a business. Without a single evolution curve then mapping would be impossible (this is why we can't map over diffusion, hypecycle, system of record / engagement etc).

Sunday, November 16, 2014

How we used to organise stuff ..

In the early days, we used to apply one size fits all methodology because we didn't know better (see figure 1, which is a system provided in a map form). We used to yo-yo between methods but in 2002, most of us in the open source world had gone "all agile" whilst the enterprise was mainly "all waterfall and all outsourcing". Under such a model, the IT organisation is one large hierarchical department and one attitude. Be warned, single methods fail to deal with evolution and tend to run into excessive change control cost overruns.

Figure 1 - circa 2002 - One size rules all, OK!

By 2004, in the open source world, we had learned that one size fits all didn't work. We had started to work towards the use of multiple methods. We knew agile was suitable in the early stages of evolution of an act but we also knew six sigma was better for more evolved activities. The foolhardy amongst us had started to organise by this "bimodal" fashion with groups such as common services or systems and development (see figure 2). Under such a model, the IT organisation is two groups in a hierarchy and two polar opposite (usually competing) attitudes - a bit more "bipolar" than anything else. Be warned, these structures tend to fail to hand over activities and lead to lack of industrialisation of common components, spaghetti junction and platform rewrites. 

Figure 2 - circa 2004 - Bimodal rules all, OK!

By 2005 to early 2006, many of us had learned that the jump between the novel and the industrialised was too large. We needed a third group and a different set of methods, techniques, culture and attitudes to cope with this. Structures that took this into consideration started to appear, in some cases we formalised the "missing" group in our "bimodal" structures e.g. we went from development and common services to development, framework and common services. This three party system was also applicable across the entire business as a pioneer, settler and town planner structure (see figure 3). Under such a model, the IT organisation is three groups and three overlapping attitudes which can be made to work in concert through the use of theft (i.e. enforced evolution). Be warned, such three party structures contain strong hierarchies and still tend to create large groups creating communication and other issues.

Figure 3 - circa 2005 / 2006 - Trimodal rules all, OK!

By 2007 to 2009, we had started to learn that we needed to divide our organisations into self organising cell based structures e.g. a starfish model, two pizza models etc (see figure 4). Under such a model, the organisation is broken into many small groups but it has no specific attitude and no means of dealing with evolution. Be warned, whilst many of the communication and growth issues are better handled, the lack of means of managing evolution can create problems itself. The structure itself still has a hierarchy for management of the cells (often through fitness functions i.e. defined criteria for performance) but the cells themselves are autonomous.


Figure 4 - circa '07 to '09 - Cell based structure rules all, OK!

Sometime around 2012, a few of us had started to look at deliberately combining both cell based structures and using three party concepts to cope with attitude, heavily using techniques developed in the military to create more adaptive structures (see figure 5). Under such a model, the organisation is many small groups and three overlapping attitudes which can be made to work in concert through the use of theft (i.e. enforced evolution). The structure blends both attitude and aptitude with autonomous cells operating in a management hierarchy. 

Figure 5 - circa 2012 - Adaptive structure rules all, OK!

By 2014 ... be warned, this process is ongoing. The above leads naturally to administrative structures (covering training, culture and attitude) along with what can be loosely described as "battle groups" formed to implement a line of business. The closest there is to something that remotely resembles this sort of structure can be found in military organisations which have had many hundreds of years to learn how to combine attitude, aptitude, hierarchy and autonomy into a useful structure. The majority of organisations are still at the very beginning of one department and one attitude. 

Three things to note ...

1) Don't think for one second anyone knows the best way of organising stuff in business - we don't. All we know are better ways than the past. Anyone who tells you they have the perfect way is talking horse.

2) Mapping an environment really helps with organisation or at least the exploration of the possible ways we might organise.

3) The use of mapping and high levels of situational awareness is a necessity for coping with evolution unless you have exceptionally talented people who understand that things evolve (i.e. they have their own mental models, can cope with inertia etc). Without extremely good situational awareness then I'd suggest you go for a cell based structure and hire rock star developers who work well with others.

Friday, November 14, 2014

How to get to Strategy ... in ten steps!

I was asked by someone whether I could help with a particular strategy. My response, was rather simple ... you do steps 0-9, I'll help you with ten ... all in graphical form. There really isn't much point to start with step 10 until you've done all the previous steps.










Thursday, November 13, 2014

Bimodal IT - the new old hotness

I've recently come across a concept known as Bimodal IT. I couldn't stop howling with laughter. It's basically 2004 dressed up as 2014 and it is guaranteed to get you into a mess. So we better go through it.

I'm going to start with a map. Now, as we know the map of a business contains many components organised into a chain of needs (the value chain) with the components at differing states of evolution. As components evolve, their properties change (from uncharted to industrialised) and different methods of management become appropriate (see Salaman & Storey, the Innovation Paradox, 2002). Hence components in the uncharted space use in-house, agile techniques, quick release cycles, highly iterative etc. Whereas those more industrialised components tend to be six sigma, ITIL, long release cycles, heavily standardised etc (see The Sum of All Fears, Butler Group Review, Dec 2007).

When it comes to organising then each component not only needs different aptitudes (e.g. engineering + design) but also different attitudes (i.e. engineering in genesis is not the same as engineering in industrialised). To solve this, you end up implementing a "trimodal" (three party) structure such as pioneers, settlers and town planners which is governed by a process of theft. Ok, this is all old hat, circa 2005 and I've summarised it in figure 1. 

Figure 1 - Map of components in a business


So lets speed on and discuss what's wrong with bimodal.

The problem with bimodal (e.g. pioneers and town planners) is it lacks the middle component (the settlers) which performs an essential function in ensuring that work is taken from the pioneers and turned into mature products before the town planners can turn this into industrialised commodities or utility services. Without this middle component then yes you cover the two extremes (e.g. agile vs six sigma) but new things built never progress or evolve. You have nothing managing the 'flow' from one extreme to another.

For example, you start off with a new platform designed for the future on top of which your pioneers build new things. But unfortunately pioneers aren't usually so good at making rock solid and mature products, they're more pioneering. Of course, your town planners won't want to industrialise something which isn't a rock sold and mature product, it's too uncertain for volume operations. You end up with this stalemate that the new thing never gets turned into an industrialised service. Instead what happens, is something even newer gets built on top of your non industrialised component. And this continues with new things built on layers of components that are not fully industrialised. It becomes kludge on top of kludge on top of kludge.

Eventually, after five years or so then this creates spaghetti junction. It is an environment which becomes unmanageable - performance sucks, reliability disappears and costs spiral. You get everyone to together and the new idea is always to build the new "platform for the future". You then spend vast sums of money, create the new platform and repeat this exercise all over again.

This has occurred in almost every company that I've seen in the last decade using bimodal approaches for any period of time. I've seen many billions blown on the same mistake of pursuing solutions which fail to cope with evolution (e.g. one size fits all, outsource everything, bimodal etc) - we will have R&D over here and shared services over here and it will all work! Think again. Its why people use alternatives such as a cell based structures or a trimodal system (e.g. pioneers, settler and town planners) or a combination of both. 

The whole purpose of the settlers is to productise i.e. to take the early stage work of the pioneers, and iteratively mature it until the town planners can finally industrialise it. They are absolutely essential to the functioning of such structures. Remove it at your peril.

Of course, bimodal is still "better than the madness of one size fits all" (e.g. agile everywhere or six sigma everywhere). Maybe in the short term but you're still going to end up with SNAFU. So, think trimodal. Be a bit more 2005 than 2004, even though it's 2014. Create a virtuous cycle of theft (see figure 2).

Figure 2 - Pioneers, Settlers and Town Planners


On that note, I can't believe people are flogging Bimodal IT as something new in 2014, that's taking the piss. Next week Gartner researchers will be telling us they've just invented the "internet" or the "wheel". Be under no illusion, bimodal plus time can go horribly wrong - seen it, done it, bought the T-Shirt.  Let me just reiterate that point. I'm telling you from the experience of having used both bimodal and trimodal forms over the last decade that bimodal is not what you want to do.

Apparently though Gartner's bimodal model has both pioneers and settlers in 'mode 2' group and Town Planners in 'mode 1' group. Whilst the language Gartner use - industrialisation, uncertain, non linear - is all familiar, the justification of combining these groups to form a bimodal is highly suspect in my view.

When I wrote my Butler Group Review Article in May 2008 on the need for use of multiple methods within an organisation (e.g. Agile and more "Waterfall"), we already knew back then that you couldn't organise by this bimodal fashion because of the problems it had caused. You need that missing middle (the settlers) that dealt with the transition.

Now, I haven't read Gartner's recent research on this subject (I'm not a subscriber) and it seems weird to be reading "research" about stuff you've done in practice a decade ago. Maybe they've found some magic juice? Experience however dictates that it'll be snake oil and you really need to separate out the three groups. I feel like the old car mechanic listening to the kid saying that his magic pill turns water into gas. I'm sure it doesn't ... maybe this time it will ... duh, suckered again.

--- Update 14th Nov 2014
One thing I haven't made clear in this post and need to is where did the idea of implementing a three party, trimodal way of working such as pioneer, settler and town planner come from?

From my perspective then the origin of deliberately implementing this structure was James Duncan, now a CTO within UK Gov.  It started all those year ago, back in the days of Fotango when I was CEO. I was frustrated by several things - how the organisation worked, the lack of any competitive map to describe our environment , the compete blah of what was called strategy etc.  I'd shown James my work on mapping and evolution. We worked together on this to refine the whole Fotango plan. It was a time of exploration for me and James was my cohort in this (which is why I use the term Wardley-Duncan Map occasionally.  Well, credit is due).

However, it was James (who was the CIO) that proposed to me a three party structure within IT. It sounded right, I couldn't say why but I was happy to go with it and I was delighted by the outcomes that resulted. I then started to fold the rest of the company into this model. Now, I'm not saying others didn't have a similar model just from my perspective it was James Duncan who started this particular aspect of my journey. Sometime around 2004.

It's also true that back then I couldn't fully explain why the trimodal approach worked so well - in fact many of our successful experiments were hard to explain. All we had was the practice and the result. It took a bit longer for all the aspects of mapping and evolution to become clearer before the reasons why it was a good move stood out. I mention this because mapping, the use of multiple methods, the work on ecosystems, open source and organisations - all started with practice & observed outcomes first. Understanding why came a bit later.

--- Update 14th Nov 2014
One final thing to mention, my disapproval of bimodal IT assumes that CIOs are trying to use it to fix a problem by using a flawed approach. I've now come across an example where it is more being used to "bolt on innovation" in much the same way that some companies are not adapting to digital but instead "bolting on a CDO". This is akin to adding lipstick to the pig.

I'd argue that this indicates an additional organisational need which is removal of its technology leadership. In such cases, a CDO is not only needed but should replace the CIO. But how do you now?

Well, next time you have the chance to chat with the CIO, just ask what they think of the Bimodal IT approach. If they're positive, that's fair enough it's not too deadly a sign. But use the vernacular and ask "When our Sprinters have created something new, then overtime it'll become like the stuff the Marathon runners provide. How are we going to manage that?"

If the response is "they'll just hand it over" or you get hand waiving warble or you get any sign of confusion then you know you probably own a well lipsticked pig.

-- Update 8th March 2015
A bit of digging in the old memory banks, brings me to Robert X. Cringely's book, Accidental Empires reissued in 1996, page 235 - 238. Copying some quotes from that book (which I recommend people go buy and read), the ideas of pioneers, settlers and town planners are all there. I knew it had come from somewhere.

Think of the growth of a company as a military operation, which isn't a stretch, given that both enterprises involve strategy, tactics, supply line, communication, alliances and manpower.

Whether invading countries or markets, the first wave of troops to see battle are the commandos. Commando's parachute behind enemy lines or quietly crawl ashore at night. Speed is what commandos live for. They work hard, fast, and cheap, though often with a low level of professionalism, which is okay, too, because professionalism is expensive. Their job is to do lots of damage with surprise and teamwork, establishing a beachhead before the enemy is even aware they exist. They make creativity a destructive art.

[Referring to software business] But what they build, while it may look like a product and work like a product, usually isn't a product because it still has bugs and major failings that are beneath the notice of commando types. Or maybe it works fine but can't be produced profitably without extensive redesign. Commandos are useless for this type of work. They get bored.

It's easy to dismiss the commandos. After all, most of business and warfare is conventional. But without commandos you'd never get on the beach at all. Grouping offshore as the commandos do their work is the second wave of soldiers, the infantry. These are the people who hit the beach en masse an slog out the early victory, building the start given by the commandos. The second wave troops take the prototype, test it, refine it, make it manufacturable, write the manuals, market it, and ideally produce a profit.  Because there are so many more of these soldiers and their duties are so varied, they require and infrastructure of rules and procedures for getting things done - all the stuff that commandos hate. For just this reason, soldiers of the second wave, while they can work with the first wave, generally don't trust them, though the commands don't even notice this fact, since by this time they are bored and already looking for the door. While the commandos make success possible, it's the infantry that makes success happen.

What happens then is that the commandos and the infantry advance into new territories, performing their same jobs again. There is still a need for a military presence in the territory. These third wave troops hate change. They aren't troops at all but police. They want to fuel growth not by planning more invasions and landing on more beaches but by adding people and building economies and empires of scale.

Robert X. Cringely, Accidental Empires, 1996 (the reissued, I don't own the original).

What Robert called Commandos, Infantry and Police is what I later called Pioneers, Settlers and Town Planners. The two are identical except Robert was there much, much earlier. In fact 1993, a good ten years before I implemented the tri-modal structure and 21 years before Gartner came up with this rather lame bimodal concept.

I owe Robert Cringely a debt of thanks.

Monday, November 10, 2014

The Enterprise is slower than you think

In the late 1990s, I had taken an interest in 3D printing. It was one of the main reasons I joined Fotango (a small but failing online photo startup) because of my interest in the distribution of images.

In 2001, I was the CIO of Fotango and we were acquired by Canon. 

By 2002, we became an open source and agile (XP) development shop. We extensively used and provided web services. We lived online. We started to get involved more directly in open source projects particularly Perl. We built a centre of gravity to attract talent to the barren technological wasteland that was Old Street.

By 2003, I was the CEO. We operated an environment which had started to use mixed methods (i.e. we learned that Agile wasn't appropriate everywhere). We had introduced paper prototyping for design and worth based development techniques (known as outcome based techniques today).  We focused on the user need. We had BYOD, a wireless office, remote working. We had replaced the company intranet with a wiki and had started to explore alternative mechanisms of communication (core parts of what is now called Enterprise 2.0). We built multiple systems for others and we were profitable. 

By 2004, we had started developing our own private IaaS (though it wasn't called that back then). The system, which included creation of virtual machines through APIs and configuration management tools (based upon CFEngine) was known as Borg. We had developed continuous deployment mechanisms, extensive monitoring and started mapping our own environment to determine new game plays and opportunities. We had started running mini conferences. We had introduced conference funding, started to promote our open source work and started working on the idea of providing public API services.

By 2005,  we had simplified internal procedures such as HR (removed timesheets, holiday forms etc) and looked towards using commodity services where possible. We had launched the first iteration of a public Platform as a Service (this become known as Zimki the following year). We focused on industrialisation of key aspects of building a platform. We understood how to play an open source game, create a competitive market and exploit an ecosystem and their network effects. We had converted most projects to outcome based metrics, we had started to introduce a new organisational structure based on evolution, we had common web services running through dozens of large public facing systems.

So why do I mention this? 3D printing, continuous deployment, agile, mixed development methods, open source, building centres of gravity, cloud, building and stitching together small discrete web services (microservices), ecosystems, IaaS, PaaS, BYOD, Enterprise 2.0, Hack days (we introduced in 2006), focus on user needs, outcome based approaches ... these are all 'hot' words in the Enterprise today. 

But these "words" weren't born out of ideas but practice from a decade ago. Oh, if you think we were first - you must be kidding. We thought we were slow compared to our compatriots and competitors.

That is I'm afraid the point. I hear these words often spoken as something new within the Enterprise. Well, it maybe new to an Enterprise and it maybe new to some of your competitors but don't kid yourself that you're doing anything other than trying to catch up with where the edge of the market was a long time ago. The cutting edge of the Enterprise market is about a decade behind the edge of the market. An early adopter in the Enterprise world is still a laggard.

But why? Competition. 

You don't need to be near the edge unless your competitors are there as well. Which is probably why some traditional enterprise companies do so badly when companies like Amazon or Google move into their space. They're not prepared for the level of competition needed.

But that's why we need to adopt "3D printing, continuous deployment, agile, mixed development methods, open source, building centres of gravity, cloud, building and stitching together small discrete web services (microservices), ecosystems, IaaS, PaaS, BYOD, Enterprise 2.0, Hack days, focus on user needs, outcome based approaches" I hear some cry or more importantly their anointed consultants cry. 

It won't help you. Instead you need to think of the above list as stuff you've been doing for a decade (where the puck was) and work out what new things you'd have built on top of this during that time (where the puck is). Then you need to look forward five years (where the puck will be). That's where you need to be heading.