Tuesday, April 26, 2016

Why most businesses aren't playing chess and aren't generals.

When you start playing chess, you quickly discover there's a lot of learning to be done from the rules, to the gameplay to even your competitors behaviour. What is absolutely central to this learning is the board itself.

When you look at a board, it has certain characteristics which enable learning :-

1) It is visual, though with play you tend to create a mental model and don't need to see the board
2) It is context specific i.e. the game in hand which enables us to learn from one game to another
3) It has an anchor which is the board itself which enables consistency
4) You have the position of pieces relative to the anchor i.e. position on the board
5) You can visualise movement.



Now with these characteristics, you can even determine the rules of game by simply just playing it. However imagine an alternative view such as a box and wire diagram.



The diagram is certainly visual and context specific. It has a form of position (i.e. connectedness between pieces) though no anchor and no way of visualising movement. You cannot use such a diagram to effectively learn the rules of the game or even gameplay.

If two players met using these different forms then, well it should be obvious who will tend to win especially over time.



Now think of a military map. Again the same characteristics appear. It's visual, it's context specific (the battle at hand), it has position relative to an anchor (the compass) and you can visualise movement.



It's easy to navigate with the above and correct where the map is wrong i.e. head NW from Athens for a distance of 90 miles and you'll find Thebes is actually further west. You can improve the map and share with others.

The characteristics of the map also help us to learn forms of battle e.g. flanking movement, pincer, the use of landscape and force multipliers to name but a few. You could of course represent the environment in a different form e.g.



The above is certainly visual, it is context specific, it has movement but without a meaningful and consistent anchor then we have no real position. It's difficult to work out how to go from Athens to Thebes in the above diagram other than "move from slightly rocky to further from the coast and more agricultural". That could be in any direction and so we don't really understand the relationship between things.

Imagine two generals fighting a war with these two different visualisations. It should be fairly obvious who is going to have the upper hand and who is going to have troops wandering around  the countryside going "where are we?"


In both the chess and military map example, the difference between the two visualisations is the quality of situational awareness (i.e. our ability to understand the landscape, our competitors and anticipate change).

If you can visualise a context specific environment with both position and movement then you will have a higher quality of situational awareness than someone who cannot. You will be able to more effectively communicate and determine strategy, it will enable greater co-ordination and alignment but most importantly you will be able to learn context specific gameplay, universally applicable doctrine and the rules of the game more effectively. 

When fighting those using a vastly lower quality of situational awareness then you will thrash opponents over and over. They'll spend most of their time trying to get their troops walking in the same direction assuming they can even work out what direction they should be heading.

If you look at an organisation, it's a melting point of people, activities, practices and data and to understand it you will need a visualisation that is context specific (not all organisations and markets are the same) with both position and movement. 



You can use such a map to co-ordinate, to align, to organise, from operations to capability and even determine and communicate strategy in much the same way you can use any map to do this. You can also use Wardley maps to learn context specific gameplay, doctrine and the rules of the game.

So, here's the rub. The overwhelming majority of companies have no maps of their business or competitive environment. They have lots of things they call maps (i.e. box and wire diagrams) but whilst they might be visual and somewhat context specific (if you're lucky), they invariably do not have position and movement. On the rare occasion they have some form of position, they generally don't have a consistent anchor.

As a result if you walk into a businesses you can normally discover symptoms of this such as concerns over lack of alignment, communication problems, difficulty in determining strategy (which as a consequence deteriorates to simple meme copying, gut feel and highest paid person's opinion) and almost without exception there is no mechanism of learning.  

In the worst examples when these companies are under pressure, the symptoms turn into desperate wishful thinking and almost praying to memes to save them i.e. "if we [fix the culture / fix the structure / build an ecosystem /  go agile / go digital etc etc] then we'll be alright"

Fortunately for them, many of these companies survive because this situation often occurs across entire industries. It's ok to suck as long as your competitors do. As a result a small company like Adallom can use a bit of actual situational awareness to just walk into the security industry and help itself to a $300M+ exit or a company like Canonical (i.e. Ubuntu) can just help itself to the cloud industry without barely a shot fired by past giants. You should have no fear of large companies in most industries though there are the obvious ones to avoid (e.g. Amazon).

"But I have a map" I often here people cry and then show me a strategy map or a business process map or a trend map or a value stream map or a 2x2 such as a SWOT. No, you have a nice diagram which has very niche uses and can be extremely useful in those niches.  However without position and movement then whilst it's better than nothing it's certainly not what I'd be using for strategic play, co-ordination, communication, learning and organisation.

Examples of things which are often called maps but are not what I would consider optimal for strategic play and learning (including reasons) :-

Business Process Maps



I happen to like business process maps. Often the anchors can be very wobbly but because they lack movement they aren't very useful for strategy, organisation or communicating direction. However, very good for understanding the "as is" and extremely helpful in building maps.

Strategy Maps

Very useful for thinking about elements involved but without movement then not very helpful in terms of strategy and learning. Quite good at exposing what the company "thinks" is important and sometimes useful in exposing user needs.

Value Stream Mapping


Excellent for flow and one of my favourite (NB, you can determine flow in Wardley maps). Still, I like value stream maps but you have to be really careful not to go around making the ineffective more efficient. Also not much use for strategy or learning context specific play because there is no movement. However, good at what they do i.e. improving flow.

Tube maps, Trend Maps etc.




Lots of different variations on these. Perfectly fine for discussing opinions on future trends but from a strategy, operational, organisation and communication point of view then next to useless. Usually a random categorisation of things without context, position or movement. Can be helpful in getting people to agree on a taxonomy and usually provides a useful list of things to think about

I'm afraid, despite the pretence ... most businesses aren't playing anything like a game of chess and most are acting like generals who think that understanding the environment is not important and that the key to success is to copy what 67% of other generals are doing.  Look! They're bombing hills. Go find a hill so we can bomb it! They've got a Chief Bombing Hill Officer, quick, lets employ a CBHO!

Just go find someone from the military and ask "Do you think situational awareness is important and are maps useful?"

Gosh, Wardley Maps sound so perfect! (added in response to the comments)

As I've said numerous times before, my maps are Babylonian Clay tablets. They are imperfect, primitive and will be replaced by something better by someone else. This was the point of making the mapping technique creative commons share alike - to show an unencumbered path free from constraints and demands by authors, consultants etc.  I do have a bias towards them (as noted in the comments) because I've been using them for over a decade and so yes, much of what is embodied in a map has become intuitive to me. On that part, the comment is perfectly reasonable.

The maps are fundamentally a communication tool, the only people who can map are yourselves (don't hire consultants) and I'm afraid, it's one of those things you're just going to have to dive in and learn. The only book that I'm aware of that is dedicated to mapping is this one which is provided by the Wardleymaps.org group. It is based upon various of my posts, it is creative commons and no, I'm not involved with them.

However, that said ... yes, the subject matter is complex. There's a lot to learn, in the same way that chess isn't intuitive to the newbie. You can't just sit down and play chess. It takes an awful lot of practice just to get to grips with the game. If you want to embark on this journey, a set of useful posts can be found here.

Saturday, April 23, 2016

On Europe

In the near future, I have to vote on whether I wish the UK to remain within the European Union.

I love Europe but then I'm biased because I’m European. I’m British and always will be. But this is not a question of identity but of Union. It’s also the first time, being 48 years old, that I’ve ever been asked the question. For most of my life, I’ve been within the European Union, I’ve voted for MEPs but I’ve never chosen whether I wanted to be.

I’ve heard plenty of arguments from both sides - the leaves and the remains - and the question has vexed me. I’ve been told about immigration threats but immigration isn’t a threat, it’s a benefit. I know the lazy use it as an excuse to hide mismanagement of housing, social and service policies but that’s all it is  - something to blame for other failings. I live a land with low population densities in the countryside, a growing economy and plenty of room if people choose to make that happen.

I’ve heard the arguments of cost but whilst we’re talking of billions in payment, we have billions in rebates. There are many benefits from the Union - the freedom of movement, co-operation on science to workers' rights. We’re stronger as a larger union and there’s no solid reason to believe that any “savings” won’t be flittered away on tax breaks.

I’ve heard the arguments on security, we may tighten our borders but we also co-operate with others. I can’t see that co-operation changing much either way. I can’t see a convincing case we’d be safer.

I’ve heard the arguments on trade both with our European partners and potential future hypotheticals. I can’t see we’d actually stop trade with Europe if we left, the UK is an important destination but we also lack trade negotiators and what guarantee do we have that such future trade arrangements might happen? I would suspect there’d be some fall-out especially if the threats of consequences - also known as vengeance politics - happened.

I know that EU is subject to extensive lobbying by corporate interests, we’ve seen this first hand with the decision by the EC to suddenly declare open standards as FRAND. It’s a minor  and trivial point for most but one which could have profound impacts on open source software.  It’s also one we fought against lobbyists in the UK only to find it snuck in via the “European Union route.” 

But then, how many times has our own Government introduced legislation via "Europe" and then declared back home that they are forced to take this legislation because "Europe" says so.  Whilst, the UK has a good record on transparency it is not uniform and it is lazy to think that backroom deals and hushed secrets on international trade agreements (TTIP) are a Union problem and somehow distant from us.

I know Obama has urged us to stay but then that surely is in the self interest of the US, its Gov, its multinationals and its military. I was of course dismayed by the ridiculous, trifling and offensive arguments by Boris, rambling on about Churchill’s statue and Kenyan heritage. But then offensive is not an uncommon word when listening to some of the views of those who want to exit and the nationalist propaganda they peddle. 

I know I’m being bombarded by fear and uncertainty. If we leave Europe then millions of jobs will be lost, we’ll lose international status, become a rogue state of little Englanders and bigots. That’s not the country I know but then I understand that one way to silence people is by “association” to undesirable characteristics and one way to coerce is through fear and uncertainty. I saw the same games played in Scotland.  We will probably lose some jobs, maybe some trade, maybe some status - I’m sure there will be downsides to leaving. But I’m weary of the old tales of doom and gloom - “if you stop non doms then your entire economy will collapse” or “If you introduce this legislation then all the banks will move to Hong Kong”

There’s is however, one thing I never weary of. Democracy

It is an ideal which though never truly reached, we should always strive for. We, the people, lend our members of parliament the power to make decisions over us. We do this through elections. It’s a power they have to give back and which we grant to new MPs. We are not constrained by policies and choices of the past, we have parliamentary sovereignty.  These powers, as Tony Benn once said, must be returned undiminished.

But this is the first time I am voting on the European Union. We have a body known as the European Commission that is not elected, that we (the people) do not grant authority and power to but instead it is appointed and has taken power signed in treaty after treaty. It governs many policies from agriculture to trade. It makes trade deals. It has close associations to industry to corporations and we have no recourse. We cannot vote it out.

Except this one time.

I will not willingly surrender power to unelected undemocratic institutions. If all the bodies of the EU, if the EC was elected then maybe things would be different but they’re not. As much as I want to see a strong Europe, I have been given a chance to change something that has ruled over me without permission and has taken power with no apparent intention to give it back.

So, I am faced with a choice. 

I could decide to continue to hand over power to bodies that include unelected undemocratic institutions in return for keeping the status quo, maybe a bit of wishful thinking that we can change it but lets be honest it would really be about that bit of extra security and keeping the economy ticking along. Who wants to upset the apple cart? But then I’m not the only one effected because this was done to me. My parents generation handed my power away cheaply to unelected officials such as the EC who now govern many aspects of my life.  

To vote to remain, I would be doing the same to my son that was done to me. What would I say when he was older - I took away your power and gave it, without your permission, without thought for your future to unelected bureaucrats for a bit of security, safety and better job prospects?

I would rather die. 

Democracy is not something to be given away, to be sold, it is something incredibly precious that we keep for future generations and it is worth fighting for. I don’t care what the impacts are, I don’t care if we all end up poor but I’m sure some of you might. For me, the only way forward with democracy is more democracy not less.

There are many reasons, many attractions and many comforts that urge me to vote to remain in the European Union. There are vile people voting against it for the most atrocious, bigoted and nationalistic reasons.

There is only one reasonable reason to vote against remaining in the European Union and that reason is democracy. However, that reason trumps everything else. So will I cower under fear and uncertainty, be concerned about what people might think through association or even hide in one box rather than tick another. No. 

I am not voting against Europe, I am voting against the undemocratic institutions, the executive of the European Union - the European Commission - and all the technocrats and structures (e.g. the EuroGroup) that have been forced on others.

I have been given a chance to take power back from the unelected, to increase democracy rather than diminish it for both myself and future generations. I will seize that chance. 

I will vote to leave the European Union.

I will still be a European.


Added 23rd April 2016

I was asked the questions :-

1) Do you think the UK might leave the EU?

Very unlikely. Nothing is impossible but this is in the realms of fantasy land. If this is keeping you up at night then stop worrying. It'll almost certainly be a landslide for remain.

I have to vote with my conscience and I cannot vote for less democracy, I have to vote for more. However people have many reasons for which they will vote and being a democracy you just have to accept that what matters to you will often not matter to most people. 

In all likelihood, the overwhelming majority will vote based upon shorter term concerns such as jobs, mortgages, trade and the economy and not questions of democracy. It might be of paramount importance to some but that doesn't make it universal. It also doesn't mean that others are wrong. People have different concerns and democracy itself is probably not going to be high up on that list. I wish it was but that's just life, that's democracy for you, suck it up.

If you're hoping that the UK will be some beach-head of change, a beacon of revolution then I suspect you're in for a rum night. We're a nation of shopkeepers, we like the peaceful life and a piping hot cup of tea. We're not marauding vikings. We see a queue and we stand in it whether we need to or not. There is nothing wrong with this, it is perfectly reasonable to vote to keep the status quo if that is what is most important to you. Mine is a vote of principal, a vote of conscience on a very specific and important issue to me.

2) The EC and the EC President are democratic as they are elected by MEPs, it's no different from the civil service [or in some cases people will say 'cabinet'] in the UK!

The EC and the EC President are appointed. Yes, the European Parliament does get a veto (i.e. it has to approve) but neither the commissioners nor the EC president are elected representatives (by you and me). They are not even MEPs. The EC also initiates legislation in the EU.

In the UK, civil servants work for departments (e.g. health, justice, work & pensions) and those departments have a secretary of state (a minister responsible). The secretary of state is appointed by Government from MPs i.e. the convention is that each department has a head who is a named individual that has been elected by and is accountable to the people and then appointed by the Government of the day which itself has been elected by and is accountable to the people.

Those secretary or ministers of state can and do lose their position at elections. In the last election, we lost several ministers in charge of departments along with a few cabinet ministers e.g. Vince Cable and Danny Alexander. For reference the composition of the 95th cabinet can be found here. So if someone tells you that the EC is just as democratic as the UK Cabinet (which is often claimed) just ask them for a list of EC commissioners that have been removed from office by public elections. You'll be waiting for that list for a long time but [spoiler alert] the answer is ... none.

Also, for reference when you're told that MEPs vote on EC commissioners, people often forget to mention that it's on the entire team of commissioners and there's a lot of "compromise" that goes on.

It should also be noted that unlike the EC, civil servants don't initiate legislation only members (MPs) do. The EC and the Civil Service are not similar in terms of democratic accountability nor do they hold the same functions. Oh and no, I'm not particularly happy about quangos, chief execs and privatised departments either but then I'm not voting on those issues.

3) But the EC is accountable to MEPs!

Oh, what can I say? I know, I won't. I'll let someone else spell it out.

From New EU trade secrets law could jail whistleblowers

According to the transparency group Corporate Europe Observatory, a key group of MEPs from the centre-left Socialists & Democrats (S&D) party were persuaded to vote in favour of the new directive believing they had a firm commitment from the European Commission that new laws would be brought explicitly protecting whistleblowers.

But that's not how things worked out: "By voting for the trade secrets directive, the S&D lose everything: after the debate, and contrary to their demands, the Commission said last night that the legal provisions on this issue in article 5 of the [trade secrets] directive are strong enough. In other words, no need for a directive to protect whistleblowers."

Yes, even your elected representative (i.e. elected by you, though often not directly but through proportional systems with a party choosing) such as MEPs get told "on your bike" in diplomatic terms by unelected (i.e. not elected by you but appointed) officials. There isn't even a convention for commissioners to be chosen from people you've elected (e.g. MEPs). Power to the people! Unfortunately for those poor MEPs, it's the unelected officials of the EC that get to initiate legislation, hence the MEPs can't do anything about it. Well, they can ask but from the above the EC has said "no" or more accurately "no need". Yes, your MEPs (voted by you) get told you don't need this by people not voted by you. Power to the People etc etc.

Just to be clear, there's a lot of MEPs trying to do a good job on our behalf. However, the use of procedure (e.g. "dirty political tricks") to the weak ability to initiate law (in general it is allowed to ask the EC to submit a proposal unless specific treaties give the parliament the right of self initiation) should cause concern.

4) Wouldn't getting rid of the House of Lords be more democratic?

Unfortunately, I have not been asked to vote in a referendum on the House of Lords. Of course, if I was asked then I would respond as I do now - more democracy, not less. I would be voting for an elected second chamber. 

Naturally, if this referendum was on the House of Lords instead of the EU then someone could argue "Well, the EC isn't elected by members of the public but instead appointed by your elected representatives and I don't see you trying to get rid of the EC, so why would you vote against the House of Lords" ... because I happen to believe in democracy, that power is given by the people and the measure of a democracy is the ease at which ordinary people can get rid of those in power. Whenever an opportunity is presented to give more power back to the people, I'm going to take it. I'm certainly not going to agree with an argument of the form "it's broken over there and so we should keep this broken thing over here".

5) Shouldn't you vote remain and help reform EU?

We will almost certainly vote to remain and I will at that point join DiEM25 and support the campaign for a more democratic Europe. However, I won't vote against my conscience because of some wishful hope of future change. I'm asked to vote on 'what is' and not 'what might be'. Whenever I'm given the opportunity, I will vote for more democracy over less democracy every single time. In my 48 years of life, this is the first opportunity I have had regarding the EU question. I won't squander it.

6) What is the right thing to vote for?

That is something that only you can decide for yourself. Regardless of how you vote, I would hope you take the time to find what is important to you and vote on that principle whether its democracy, freedom of movement, trade deals or even your own security. This is an incredibly important decision. There is no right or wrong or as Blair said "sensible choice", democracy isn't about that. You have the vote, it's your decision and you have been given this chance. Decide on what matters to you and vote.

7) Are you anti-Europe?

No, I'm pro Europe. However being pro-Europe, being a European does not mean I have to be pro a particular political institution such as the European Union and its related bodies (e.g. the EC). If I was voting on whether we should have a democratic federal Europe then I could easily find myself voting for it as long as it means more democracy, more accountability to the people, more transparency to the people. But I'm not voting on that.

8) Are you right wing?

No, I'm old labour.

9) If you're old Labour surely you want the European Union?

I'm fully aware that Conservative & UKIP MEPs tend to fail to block legislation far more often than Labour & Liberal MEPs e.g. 87% of the motions that Conservative MEPs were opposed to they failed to block, 95% for UKIP and about 36% for Liberal etc.

For me, I could go - "well, that's great because that's more inline with my political view than against it".  That might be my interest and I could make a pretty good argument that it's in the common interest across Europe (based upon my political views) and convince myself that it's ok because I'm getting more of what I want. But that's hardly democracy or an excuse for the deficit of democracy within the EC.  That's the really tough part of democracy - accepting that if you have it, you may actually get less of what you wanted.

I completely understand those who would argue that the EU has a tempering effect on the excesses of politics at home by allowing more socialist and work friendly policies. I also understand the hotbed of corporate lobbying that the EU / EC are. But as I said, this is a vote of principal and I'm for more democracy, not less.

10) What is your view on free movement?

My view is rather simple and as I'm frequently told "idealistic" along with other choice words. One planet, one people i.e. universal, worldwide free movement. But this isn't a referendum on free movement, it's a referendum on a political institution and for me that means issues of democracy are paramount.  Yes, I'm fully aware of the benefit that the EU and free trade has made to free movement and this is wonderful, I would hope it would be maintained. Yes, I can make an argument for voting to remain purely on the basis of fear that leaving EU would mean less free movement especially given some of the comments by the Leave campaign. However, that still won't overturn why I'm voting the way I am.

On the issues of immigration and asylum (which is where this normally leads), I view immigration as a benefit and I'm saddened by our response to the current crisis. I am perfectly aware that not everyone shares this view, please don't feel the need to explain to me why I'm wrong.

11) Would anything change your view on voting Leave?

A commitment to more democracy would always change my vote. For example, a binding commitment from the EU for :-
1) Full and immediate transparency in ALL decision making, treaty negotiations and documents of all EU institutions, councils & groups.
2) Compulsory register for lobbyists, public record for all meetings with any official.
3) All commissioners to be elected by the public of that nation state by 2018 in free and open elections.
4) A constitutional assembly by 2018 with the absolute commitment to a Sovereign European parliament elected by the public by 2020 and a European constitution built on citizens rights, enacted by citizens.

Something like that would certainly swing my vote. However, as it stands (and promises don't cut mustard) then the more democratic option is to leave.

12) Are you against the European Convention on Human Rights?

Absolutely not. I'm a huge supporter of both the European Convention on Human Rights (ECHR) and the Council of Europe (CoE) which is a non law making body that is focused on democracy, rule of law and human rights and policies treaties in such areas.

We are not voting on the CoE or the ECHR. If we leave the EU that does not mean we leave the Council of Europe or the European Convention on Human Rights. The EU and the CoE are different institutions. There is a connection, as far as I remember, that a country has to be a signatory to the ECHR before joining the EU (I believe it is part of the Copenhagen criteria).

13) Isn't your objection really that EU uses a different form of democracy? 

An extremely good point and possibly to the nub of the matter. Yes, I'm strongly in favour of parliamentary sovereignty and yes, I realise this is not the ONLY way to do democracy. It may not be a coincidence that countries like UK, Netherlands, Finland and Sweden have all had issues with the EU / EC structure and that all these countries have a history of parliamentary sovereignty. There may certainly be a cultural element to this. It's an extremely good question and I do not have an answer but it certainly makes me think. The question of course now becomes, am I willing to accept a different form of democracy for the common interest? That I need to mull over.

Monday, April 18, 2016

The robots are coming ... for whom the bell tolls.

I often read articles about how machine intelligence and robotics will replace basic roles in society, they will become the new drivers, the new waiters, the new hospital porters and nurses of this world. But is this likely? And if they are going to replace jobs then whose job are they most suited to?

With questions like this I tend to look through three lenses - ability, cost and acceptability. Does it have the ability to do a better job at a reasonable cost and would we accept it? For example, let us take the idea of a waiter. Certainly there's some mileage in terms of a marketing gimmick to begin with but humans are surprisingly good at taking orders, delivering food and cleaning up tables. Humans are also relatively cheap compared to the current cost of machine intelligence and robotics to replace them and in general though we might be able to trust a robot to deliver our food, would the banter be the same and would it be as socially acceptable to customers? Beyond the gimmick, I doubt this change will happen for quite a long time.

However, there are other groups where ability, cost and acceptability are far more positive for replacement. One possible candidate is that of the CEO. The CEO? Of a company? Surely not? Well, I think so. Lets go through the reasons.

Ability

From my experience, most CEOs tend to demonstrate poor situational awareness, an inability to decipher doctrine from context specific play and the boardrooms are more akin to alchemy, gut feel and whatever is popular in the HBR than to chess playing masters. Various studies have questioned the impacts of CEOs e.g. Markus Fitza's study demonstrated that the CEO effect on firm performance varies little from chance

From my own work, I noticed a connection between situational awareness, action and performance back in 2012. This was from Silicon Valley companies which are supposed to be top of the game. When I broadened examination outside of the Valley, I found situational awareness tended to decline.


So rather than being a Darwinian competition of survival of the fittest where all conquering CEOs battle each other in a game of wits, there's another less charitable way of looking at this - survival of the least incompetent. It's governed by the same rules but rather than a positive chess like game of survival, it's more random with the occasional hero characters. A bit like the brawl of new players in fantasy role playing.

When I started modelling competition between actors, I found a disturbing similarity between competition between blind actors using chance and what is happening to company age of leading companies (results of various tests compared to real life shown below). I tend to therefore side with the view of Markus Fitza. 


Given that situational awareness can be improved, that doctrine and context specific play can be learned and we've seen first hand the experience of companies failing to understand basic lessons and being disrupted by highly predictable change (e.g. cloud) then we have to ask whether this is just inertia, blindness or caused by some other motivation?  CEOs are not daft people but then neither are fund managers and the vast majority were outperformed by simple trackers of financial indices. From my experience, this is an area where machine intelligence might vastly improve on the performance of the incumbent workers.

Cost

The other upside of replacing the CEO with machine intelligence is cost. Unlike your average waiter, CEOs aren't cheap - they tend to be very expensive. Now, whilst Marissa Mayer's performance at CEO of Yahoo has not been bad (despite what many think, the company has maintained its revenue and grown its share price), the question becomes whether this has been worth the speculated $365 million for 5 years of work.  It doesn't actually matter how much the final figure is, we simply know it'll be a lot. In general, there's a lot more money on the table replacing the CEO than there is your average worker.

Acceptability.

But CEOs lead us! You wouldn't trust a robot! Well, that tends to be the idea in the hallowed walls of management thinking. But we're already becoming directly used to machines taking life and death decisions for us in areas such as driving cars. Most people tend to be motivated by autonomy, the ability to gain mastery, purpose (as in direction) and financial rewards. Using cell based structures, maps and other tools (e.g. pioneer, settler and town planners) then it should be possible for most to create such an environment. A machine can as easily as a human manager direct a cell of pioneers to go do what they are good at by exploring an uncertain area to see what is found. Equally, at the other extreme a machine is just as capable of telling a cell of town planners to look at industrialising something and it is even more likely to take rational decisions without inertia and sentimental motivation or past political capital. Also, a machine is perfectly capable of learning the basic economic patterns that apply to an environment. The failures of companies such as IBM, HP and others in cloud are executive failures, human error against highly predictable changes. 

At Canonical (Ubuntu) we simply exploited the predictable in order to take us from a small fraction of the market to 70% of all cloud computing in around 18 months, and Ubuntu has maintained that position since. Had we been up against machines rather than human executives then I'm not sure we could have got away with it and we certainly couldn't have used inertia against others. I somehow doubt people will have a problem with machine intelligence as the CEO if it leads to more stability, more security and the ability to enhance autonomy and mastery. Given these conditions I suspect many would happily cheer for our robot overlords - "hey, are you're still running with that old Cyberdyne systems CEO? We've just installed the new HAL 9000, it comes with better stock performance and added EQ with moral imperative subroutines. Everyone is really happy."

Except of course, there's one group that wouldn't cheer - those desiring to be CEO or those who are CEO. This would be like turkeys voting for Christmas. If such a change was to happen then it would have to be through testing first in startups and then activist investors. 

However, given all the roles that could be replaced then on a basis of ability, cost and acceptability then the average CEO seems as good if not a far better bet than your average waiter. There are always exceptions to rules but it's certainly worth thinking about.

Update 18th April

Since this kicked off a particular discussion, it's time to come clean.

I chose the CEO as the 'sacred cow' of management thinking. However, on a ability, cost and acceptability basis then there are many attractive targets from lawyers, to finance, to hospital executives. There are many areas of white collar work that appear more financially attractive to replacement by machine intelligence and in many cases, I do mean replacement and not additive because the bar is so low, the costs are high and it would be acceptable.

We've already got companies working on industrialising contract writing with AI, we already have robo finance / investment advisors and I don't see that robo managers are that big a hurdle to jump. There's just more margin, more profit to be made in this space and the idea of robo nurses to waiters - complex tasks which humans are good at and can do cheaply - just doesn't seem to make that much financial sense at this time.

In my view it's not the blue collar workers that need to be immediately worried about robots / machine intelligence but instead the white collar workers who think they're not the target. Of course, this does open up questions about what the world will look like if it's all managed by robots but we'll leave that to another post.

Monday, April 11, 2016

Anticipating change

So, you've managed to identify user needs, create a map, you have an understanding of what terms mean and a basic understanding of the strategy cycle including doctrine vs context specific play. Before we can get into the details, we need to more fully understand our environment and that means climate but at least with an understanding of landscape we can move onto the next step.

The journey so far

 

There are many common patterns that impact our context (as in our landscape) and knowing this helps you anticipate change. This is the common list of patterns which we will go through in posts one by one, each one I'll add a link to the post and a short description here.

In order, they are :-

Everything evolves

Characteristics change

No one size fits all

Efficiency enables innovation

Increased stability increases agility

Higher order systems create new sources of worth

Capital flows to new areas of value

No choice over evolution

Creative destruction

Success breeds inertia

Inertia increases the more successful the past model is

Inertia kills

Not everything is random

Economy has cycles

Two different forms of disruption

Competitor's actions will change the game

Most competitors have poor situational awareness

Change is not always linear

Shifts from product to utility tend to demonstrate a punctuated equilibrium

Co-evolution

A war (point of industrialisation) causes organisations to evolve

Efficiency does not mean a reduced spend

Speed of developing higher order systems by re-combining lower order components accelerates with industrialisation of lower orders

Evolution to higher order systems results in increased energy consumption

Evolution of communication mechanisms can increase the speed of evolution

Patterns can be applied across contexts

Future differential value is inversely proportional to certainty. 

... when we get to this point, I'll write a post showing how you can use these patterns to anticipate change. After which we will be in a position to talk about universal doctrine before moving onto context specific gameplay. At the very end of this (rather long) journey, we will finally be able to have reasonable discussion on culture without all the usual hand waving that accompanies that topic.

If you're feeling that this is complex, that's because competition is, despite our attempts to dress it up in 2x2s. We've twenty seven common economic patterns, sixteen different forms of doctrine and around seventy different forms of gameplay (depending upon how much stamina I have to write this all) to go through. This isn't even the exhaustive list but ultimately this will be a journey into situational awareness not trying to cover up the complexity as simple.

I know this stuff off by heart, I live it and I use it at both national and international levels but then I've been doing this for a decade. It's always amazing to experience how much you can do to manipulate a market. I want to try and expose that to you all but we need to start somewhere, so climate it is.

Do remember, no model is ever right but some are temporarily useful. 

On user needs and listening to customers.

I've discussed a number of topics recently from the terms I use in mapping, to the importance of position and movement and the difference between context specific play and universal doctrine. Now, I'd like to turn my focus to one of the most important parts of mapping - the anchor.

A map contains a chain of needs described with the concept of movement (i.e. evolution) but the most important question of all is where does this chain of needs start from? To begin with, lets looks at that strategy cycle again but this time focus on purpose.

The Strategy Cycle


One thing to note is your purpose is not fixed but transient. It is altered by your actions along with the actions of competitors e.g. Nokia was a paper mill but at some point, someone decided it would become a plastics manufacturer. There is no such thing as "core" in business, it's just some things are more transient than others. The willingness to accept this, to identify and exploit new opportunities and abandon (or at least diminish) past focus is known as the Pivot. Ask Twitter (from the famous MP3 sharing site by Odeo) or Flickr (from the gaming company Ludicorp that failed to produce the game).

Secondly, your value chain (which I describe using maps) is not isolated but part of a sea of value chains. The outputs from your value chain maybe used as inputs into one or many other different value chains. Naturally, others outputs will be your inputs.



Hence a couple of things. Since your user need is normally the input into someone else's value chain then your user need is a component. This means it can be of any type (e.g. activity, practice, data or knowledge) or combination thereof. This also means it evolves as with all other components.

Those inputs can be to value chains of companies or end consumers (the public) or even your own staff. Therefore the position of pieces on the map will often change according to which user perspective you are looking at. In order to simplify I examine the customer of what we provide and then add onto the map the needs of other types of users. I also ask the question "Do they need us or do we need them?"

Hence, in Fotango, we needed engineering staff to provide the components of our services. Those engineers had their own needs (e.g. a positive working environment, good pay etc). As CEO, I had a duty to not only meet the needs of our customers but also the needs of our employees. 

For illustration, I've taken a very simple map, added engineering and one specific need. Yes, you can argue about the position of pieces but that's the point of a map - it exposes assumptions and enables collaboration & challenge.


Now, the thing of "a positive working environment" can be an entire map. In other words, components in high level maps can be decomposed into multiple components underneath. Therefore maps are recursive and high level maps are like an atlas of the world whereas a low level map can be viewed as the equivalent of a street map or a building map.

In some cases a component will simply hide complexity (i.e. there are many components underneath this), in other cases a single component can be an aggregate of many. In the following illustration then accounting system is an aggregate of many components.





So :-
  • what we consider "core" is transient.
  • the focus of the anchor is user need.
  • the user is primarily our customer (whether a company or public) that we are trying to serve the need of.
  • the needs evolve.
  • there are other users and needs which can be mapped (usually we need them).
  • the needs are components consisting of type.
  • maps have granularity and the concept is recursive.

Often we can find opportunities in not only unmet needs (things which should be provided but aren't) or in newly discovered needs (the uncharted space) but also within our value chains there are components that can be usefully provided to others but aren't. It should also be obvious that failing to meet the needs of your consumers when competitors do meet those needs is usually a bad idea.

But how do we work out those user needs? This is extremely tricky because we bring our own biases to the table. The first thing to do is to understand that you're talking about user needs not your needs i.e. you might need to make revenue and profit but that is NOT your user need. By meeting the needs of your consumers then you hope to make revenue and profit, not the other way around.

The best way I've found for determining user needs is to start by looking at the transactions an organisation makes with the outside world. This will tend to give you an idea of what it provides and what is important. The next step is to examine the customer journey when interacting with those transactions. By questioning this journey and talking with customers then you will often find what is really important e.g. the need to get from A to B plus the need for some social status from the thing.

You'll usually find pointless steps or unmet needs or unnecessary needs being catered for. It's really important however to distinguish between "What consumers say they want" and "What they need". This last part is a mix of data collection, art form, collaboration and discussion. I've yet to find a really good and consistent mechanism for breaking this out.

One mechanism I've found to be exceptionally useful, especially when dealing with corporations as customers, is to go and map out their landscape. In most cases I find companies have no idea what their user needs actually are and hence if you're a supplier to these companies then in discussions they are mainly talking about things they want and they think are necessary but with no real clue as to what is. You can often find entire new opportunities for business by mapping out their landscape if you're so inclined.

Discussion and data collection is a key part of this, so talk with your consumers, talk with experts in the field and try to refine the map from there.  However, here's the gotcha - in many cases they're all wrong! Gasp? What do you mean they're wrong! There are two important areas where invariably the consumers and the experts are usually wrong, they also happen to be two of most crucial for economic gameplay and survival. 

The first area is in stage transition e.g. when something shifts from custom built to product or more importantly from product to commodity (+utility). The problem is that the pre-existing installed base will have inertia to the change (more on the types of inertia here). Invariably they'll tell you they need a whole bunch of stuff they don't need because they're fixated on a legacy world of products. To see through this then you need to get to grips with co-evolution (more on this here) and realise that what they actually NEED is volume operations of good enough in the case of product to utility shifts. This is different from what they'll tell you. Be vary wary of the legacy mindset.


The shift from product to commodity (+utility) is an extremely large and profound change due to the number of value chains it can impact. Companies often get disrupted by this despite the fact that it can be anticipated and defended against. The problem is that companies have such poor situational awareness that they can't distinguish between the two most basic forms of disruption - unpredictable product vs product substitution and anticipatable product to utility substitution. For most, it's all the same. Failing to get to grips with this can break the company and this failure happens regularly at a very grand scale.

The second area to note is that of the uncharted space. These needs are defined (on the evolution curve) as being both rare and highly uncertain. Which means unless you're using an ecosystem play as some form of future sensing engine then you're going to have to gamble and there is no consistent way of determining what the user ACTUALLY needs. It's the same with any component in the uncharted space - you have to gamble and experiment whether than component is something you are building or a user need that you're trying to meet.


So lets think about those user needs. When it comes to dealing with them then there are three different approaches according to the domains of uncharted, transitional and industrialised (more on the terms I use here). These three approaches are :-
  • In the uncharted space you have to gamble. Users and experts don't actually know what is needed.
  • In the transitional space you have to listen. Users and experts can guide you to how to improve the thing.
  • In the industrialised space, you have to be mindful of users and experts bias caused by the inertia of past success. You already know what is needed but it has to be provided on a volume operations and good enough basis.

If we go back to 2005 and when I started implementing the pioneer, settler and town planner structure (for details, this post from 2012 is good enough) then you'll note that under the "Happy with" section it says :-
  • Pioneers should ignore existing customers. They don't have a clue. We're exploring the uncharted space.  No-one has a clue. You don't know what you'll find and what might turn out to be useful. Gambling and gut feel should rule your world.
  • Settlers should listen to customers. Feedback, learning, constant improvement are your watchwords. Building what is useful is your motto.
  • Town Planners should build what is needed, which often means overriding existing customers inertia to change. Volume operations of good enough, empires of scale are your creed.


There has always been method to my madness. Oh, and it should by now be obvious why building a customer journey is nowhere near enough to determine what you should be doing. It's certainly way better than not even knowing the customer journey but ignore evolution at your peril.

Customer journeys are a bit like value stream mapping - a great tool but highly dangerous as you can easily make ineffective flows more efficient or in the case of customer journey build for unnecessary or biased needs. Ditto with business model canvas, an excellent tool which should be used at the end of a journey for confirmation & checking and not the beginning. I cannot emphasise enough how important a bit of situational awareness is. This requires position and movement!

But also remember that maps won't give you the "answer". They are primarily a means of communication and learning, for highlighting assumptions and common patterns. There are no "perfect" maps (even in geography) and maps must always be challenged.

Lastly, as a reminder - all the mapping stuff is creative commons share alike. The only people who can truly effectively map an environment are those who are immersed within it. Which means YOU have to map YOUR environment. Don't try and get a consultancy to do this for you. Learn yourself.

Sunday, April 10, 2016

On mapping and terms that I use

I'm often asked questions about specific terms in mapping, so I thought I'd write something on the terms I use. Lets first start with the strategy cycle (a derivative of Sun Tzu and John Boyd).

The Strategy cycle


When I talk about Context then I'm covering Purpose (who you are, moral imperative, where you fit into the entire picture) and Landscape (your map).


When I talk about your Environment, I'm not only talking about your Context but also how it is Changing (either common economic patterns, known competitor actions and things that can be anticipated). There are many context specific strategic plays but whether you play them is also influenced by your environment e.g. a competitor.  Hence, for example, I'm hardly going to play Fool's mate in chess against a competitor who is anything but a novice. 

How well you understand your environment (i.e. the context and how it is changing) is situational awareness. Fortunately in business, most companies are atrocious at this because they can't even see context, let alone try to understand or anticipate changes to it.


The most common tool I use to improve situational awareness is a map (basics of mapping can be found here). The map I'm using at a particular time to deal with a specific area of focus, I refer to as Actual.


Each map has three domains. The uncharted space where exploration and gambling is a must. The industrialised space where more certainty rules and the in-between space of the transitional. Each domain has different patterns of economic competition.



The map is also broken into four stages of evolution. 


Now each stage has different properties i.e. the characteristics of things are not the same. I say things because you can map activities, practices, data and knowledge (i.e. different types of things). I've covered this in a previous post on what's in a Wardley map and how to use a cheat sheet for characteristics to determine stage. However, for reference the following table provides the connections between domains, stages and types.


The map has an Anchor (the point it's built around). In my case, that anchor is the user and their need. In a geographical map it's the compass (this is north of that etc). 


Critically, a map also has position (relative to the anchor) and movement i.e. how things can change. I cannot emphasise enough how position and movement are absolutely essential elements of a map and a necessity for both understanding context and learning from it. Without position and movement then you have a nice diagram.


A map also contains many components which maybe of different types.


Each component has one or more interfaces to other components. Since this is a chain of needs, those interfaces are of the form A needs B i.e. things that our component needs and things that need our component.


Within the map there also various forms of flow along these chains. Such a flow can be financial, information or risk but remember, it's not enough to optimise flow - you need to think about the context and how evolved the components are. It's far too easy to make an ineffective flow more efficient because you're ignoring evolution.


So, to summarise, I've provided a simple table of terms I use.


Understanding context is extremely important for learning common economic patterns, universally applicable doctrine and context specific forms of gameplay. I've written some basics here but I'll cover more in detail over the next few posts.

Doctrine, Climate and Context Specific gameplay

One of the main advantages of mapping a competitive environment (for a basic introduction, read this) is it provides a mechanism of not only communication but learning. What you quickly discover is there a basic economic patterns and competitor actions which influence your environment (the Climate), there are universal approaches applicable to all (the Doctrine) and then there's context specific forms of Gameplay.

The context specific forms of gameplay are like pincer movements or Fool's mate in chess. They are applicable in only specific contexts unlike doctrine which is universal. Part of the problem with not mapping out the environment is that without a reasonable level of situational awareness then people simply copy others ... "we should do what Uber is doing!"

Alas, without that understanding of landscape then you've no idea whether the meme you're copying is universal or context specific. Hence my joke at OSCON last year on "Surge pricing for funeral parlours!"


The problem is the amount of context specific play vastly exceeds universal doctrine and so it's highly likely that if you simply copy another company then you'll be applying something to the wrong context. The mishmash of universal doctrine and context specific play is often best found in management consultant 2x2s, particular that most ridiculous of forms - the SWOT diagram.

To give some examples, well that would be a rather long post, so I'll keep it short and fill in further posts later. I'll start by just giving three tables with examples of climate (economic patterns), doctrine (universal) and gameplay (context specific) with a reminder that you are operating in the "strategy cycle". These are far from an exhaustive list, this is just a taster.

Strategy Cycle


Climate (economic and competitor patterns)


Doctrine (universally applicable regardless of value chain and context)


Gameplay (context specific mechanisms, not universally applicable, choices have to be made)

Wednesday, April 06, 2016

Bimodal, dual operating system and bolt-ons.

I've just read this ZDNet article which describes me as holding a view that

"bimodal concept is flawed because it attempts to "bolt on innovation" rather than develop it more organically from inside the existing IT architecture irrespective of cloud services"

This is completely untrue.

When new things appear, we have historically tended to bolt on departments because our organisational structures are not designed to adapt. My current favourite example of this is the Chief Digital Officer but you could say the same about Chief Electricity Officer and other past transformations. Bolting on structures is a symptom of failure to build an adaptive structure. However, that is separate from my objection to bimodal & dual operating structures.

I'll go through my objections.

1) Practice. The concept of two extremes in organisations date backs to before 2002, and was noticeably highlighted in the Salaman & Storey innovation paradox.

”paradox is at the heart of innovation. The pressing need for survival in the short term requires efficient exploration of current competencies and requires ‘coherence, coordination and stability’; whereas exploration / innovation requires the discovery and development of new competencies and this requires the loosening and replacement of these erstwhile virtues”

Shortly after that time, I became CEO of a Canon subsidiary. I knew the single approach didn't seem to work well and so we tried a more dual structure in IT. What happened was almost warfare between the groups. The development group would create "new stuff" but the operational team wouldn't touch it because it was "flaky". It was not a happy time and after an initial promising start, things had rapidly degenerated into them vs us. Something was missing.

2) The Missing Middle. What was missing was the middle, the transitional stage between the genesis of something new and its industrialisation. To cope with that, we implemented a structure loosely based on Robert X. Cringely's 1993 book Accidental Empires which discussed the three different approaches. The terminology I use is Pioneers, Settler and Town Planners (PST). This worked and the problem had been the chasm between the groups was not only too big but by focusing on the extremes we had accidentally diminished the all important middle. I do mean all important - continuous and sustainable advantage comes from managing the middle not the ends. It seems that ignoring the process of evolution was not a good idea. Oh, and as with most of my work - yes, I've eaten my own dog food and by no means should you consider PST as the solution as no-one yet knows how to organise effectively and remain adaptive. You must accept that there is still some exploration to be done.

3) Spaghetti Junction. Whilst I had implemented the pioneer - settler - town planner structure almost a decade ago, spoken about it at many conferences, my focus in 2008 was diverted elsewhere - namely running strategy for Canonical. However, it was around that time I was asked to speak at an event where a large global company described their latest attempts to rebuild their "platform " because it was unwieldy. I was asked to have a look. The problem was simply they had built their platform with a dual structure and this inevitably leads to the never growing platform and spaghetti junction. I've written more about this here and it is something I've come across several times. It doesn't matter how good your technology is it won't fix your structure. Personally, you should focus on building a cell based structure first as per Haier or Amazon and worry about managing attitude later.

4) Ring fencing. More recently I've seen dual operating structures used as an attempt to ring fence change. In this case, you've got a very operationally run group (often with a non strategic CIO) and there is concern over the threat of this "new digital" bolt-on. The solution is seen as dual structure which is basically a way of saying "you digital lot can play with your crayons over there, don't disturb us". This is not healthy or helpful when faced with an evolving industry and just helps reinforce inertia.

5) Legacy. To compound things people having started to confuse "legacy" (which really should be called toxic IT) as being the role of one group. Not only is this dangerously misguided as to what legacy actually is and how co-evolution causes it (it can appear at different stages of evolution, more on this here) but now you are emphasising one group as the "future new" and one as the "past old". You might as well call them Eloi and Morlocks and give them axes. You're also in danger of highlighting one group as more important when in reality you need brilliant people in all. Furthermore you've buried the all important middle.

There is absolutely nothing good I can say about dual operating system structures as a universal doctrine. Not even as a transitional model. I hold a view based upon experience, practice and an understanding of the principles of evolution that such dual structures are over simplistic thinking. If you want to transition then go cell based first (e.g. Amazon's two pizza, starfish) and deal with attitude later. I'm quite convinced in this meme copying world that lots of companies will still jump on this as the solution and I suspect that some people will try to use it to prevent change to their empires. In my opinion, neither is good for the future welfare of an organisation.


So certainly organisations have historically tended to bolt-on departments for innovation but this is not new. The polar extremes in an organisation is also not new. Even organising by the extremes and the failure it causes is not new. In reality, it's so not new it's a decade old.

But that won't stop Gartner from promoting bimodal, the "new" (old) hotness and I'm mindful that if they said "The secret was to tie a yellow ribbon around the old oak tree" then some would empty Amazon of stock. They have their adoring fans. When they stuck to technology analysis, producing MQs and hypecycles (which are just aggregated opinion not some scientific measure of physical property btw) then I also generally found them harmless and occasionally useful. This new venture of theirs, I don't view in the same light.

As for Gartner's view that you have to "Go bimodal or go home", well I view this as reckless promotion. Also trying to link this particular form of structure with a technology evolution (e.g. cloud) is very questionable. Yes, organisations are needing to evolve and there is specific phenotype that is emerging that is caused by the underlying evolution of technology. I wrote about this many years ago, and for reference this is the result of that population study published to LEF members in 2011.



Now whilst the phenotype had companies gravitating towards mixed methods (rather than single) - the agile vs lean vs six sigma debate is rather past its sell by date - the structure was firmly heading towards cell based. Very rarely were companies considering attitude (as in the need for pioneers, settlers or town planners) and certainly I found no examples of companies promoting organisation by extremes and only rare mention of a concept such as "two speed IT". Hence I am highly suspicious of bimodal, I would have expected some references to organisation by extremes to have emerged even in those early days especially when the other phenotypic changes were so strong.

Caveat Emptor.