Thursday, August 21, 2014

Basic rules of mapping

I've been asked for a basic set of rules on mapping. Tough question, so I thought I'd simply write down the process by which I develop my own maps. This isn't a list you should follow in stepwise order but instead a continual set of guiding principles to be applied. Be warned, it's rough notes.

Focus on Needs
The most important part of any map is the user need. Take care not to confuse this with your own needs, they are not the same. Needs change over time, new needs can appears as activities evolve. Don't ever think needs stand still. If you have multiple types of users then there's nothing wrong with creating multiple maps.

Meaningfully Tiny.
When mapping you should always aim to break down systems into as small a components as possible. In some cases you might want to have a high level component and then go and create a separate map for it e.g. a high level map (think world atlas) and then more detailed maps for components of interest (think street view).

Act Appropriately
When looking at a map, you want to do the minimal possible for creating whatever it is that you've mapped. Look to outsource commodity components or consume utility services. However, for those things you need to build then use an appropriate set of methods e.g. agile for development of novel components, six sigma if you're building an industrialised service, lean if it's a product in between.

Challenge Constantly
Whenever you have a map, share it with others. Get them to question the map, challenge the assumptions and you need to listen! Look at the outside market, especially mature markets. Challenge biases. Remember the map is fluid, things will change over time.

Order! Order!
When using your map to plan your attack and try and change a market or to build and exploit ecosystems or to use any of a hundred different tactical approaches then remember the order!
  • Where before Why - understand where you can attack first.
  • Why before How - understand why you should attack one space over another.
  • How before What - determine how you're going to approach (the tactical plays) before the what of action.
  • What before When - determine what you're going to do to make this happen before finally adding in the when.

Good Enough
No map is ever perfect. You can spend a lifetime trying to perfectly map something by which time it has all changed. The purpose of a map is to improve situational awareness and it doesn't take a great deal to do this. Think hours, maybe days when mapping before you start to act. Longer than that and you're taking too long, though obviously if it's your first time at mapping then give yourself a bit of leeway. Remember your map isn't going to stand still, it'll change.

Adapt to Facts 
To repeat - No map is ever perfect -  be prepared to change it, to iterate, to adapt to the situation on the ground, to events as they happen and to new sources of information. A map is a fluid instrument. 

Record what worked, what didn't and what patterns emerged. Maps are fundamentally a communication and learning instrument as opposed to a pretty visualisation for a presentation. They're often messy but that's not a bad thing.

Probably the most important rule of all. You can't learn about mapping by reading about it. You have to go and do it, you have to try it. It's a bit like playing chess, there's only so far that reading books will get you. Eventually you have to play the game.

It's not really a catchy list but I thought it might help some. 

Tuesday, August 19, 2014

A corporate strategy guide to taking a holiday.

Today, I announced to my partner I had devised a corporate strategy for taking a holiday. 'What' we were going to do was take one and 'How' we were going to do it was 'By Plane' and 'When' - next week!

Sam, gave me one of those steely eyed stares, followed by the question 'Why?'

Quick as a flash, I responded 'Because 67% of other people have holidays!'

'And where are we going?' came the reply.

'No idea' I exclaimed, adding 'But I've got the why, how, what and when sorted. I've even created a story for this, would you like me to explain?'

Copying others is not a strategy!  Why is a relative term i.e. why here over there. If you don't have an understanding of where you can go, where you can attack then everything else - no matter how well crafted the story is - is basically pointless. 

Of course, understanding where requires some form of map even if it is one that has become embedded in our consciousness. If I had said, 'Where should we go on holiday - Tuvalu or Transnistria?' then I'd suspect a few alternative 'wheres' would have been suggested after which we'd end up discussing 'why' one over another. 

Whenever someone produces a strategy document you should first ask them to explain the 'Why?' of the strategy BUT before they start, interrupt and say 'Before explaining the Why we chose one set of options over another, can you first explain where we had the option to attack?'

If you're feeling evil, ask them to show you a map of where you could attack and where you currently are.

Keynes vs Hayek

The problem when looking at economic change is that predictability is not constant. By predictability, I mean our ability to assign an accurate probability that an event will occur. As activities evolve they transition through different economic states - one of peace, one of war and one of wonder. Those different states have different types of predictability.

For example, in the peace state (the time of products and rental services), we know that evolution towards more of a commodity will occur because evolution is driven by competition which depends simply upon the aggregate actions of all players. There is a high predictability [P] of what will occur. The problem is, that evolution involves stepwise changes which depends upon the actions of individual actors and hence the predictability [P] of when the change will occur is low.

So, let us take an activity (I've drawn this in figure 1 below). A[1] is an act that is evolving through competition and has various stages from A[1] to [A4]. We can often say what will happen (e.g. it will become more of a commodity), just not when. Keynes is right, we can predict macro effects e.g. the P[what] but so is Hayek, those changes depend upon individual actors actions, hence P[when] is low.

Figure 1 - Predictability and the economic cycle.

Now, as the act evolves from A[4] to A[5] and becomes more industrialised (normally represented by either commodity or utility services) it initiates a state of war in that industry. This has known effects including disruption of past vendors stuck behind inertia barriers, co-evolution of practice forcing changes to organisation and a rapid increase in novel activities (e.g. B[1]) leading to a state of wonder. Now this 'war' phase is usually reasonable predictable in terms of what will happen and through weak signals also when this change will occur i.e. P[what] and P[when] are moderate.

The state of wonder however has high P[when] i.e. we can often quite precisely say when it will occur. However what will appear? Well that's another matter. The P[what] is low as the novel activities are uncertain by nature, they have the navigational characteristics of uncharted spaces.

So with electricity, as with computing, as with many industries, the P[what] of the act itself becoming a commodity (e.g. A[5]) are quite well known and we can literally reel off the standard effects. But the P[what] of any new higher order systems (e.g. B[1]) built upon this commodity component is low. 

We can say what the effect of computing becoming a utility is likely to do but not what magical wonders will be built upon it.

Now, here is the fun part. When you start to examine predictability e.g. P[what] & P[when], you can categorise different areas of change. It's not all the same - see figure 2.

Figure 2 - P[what] vs P[when] - draft, incomplete, changing

Furthermore when you start to examine multiple points of change, you discover that various aspects of the economy are not in the same economic state - see figure 3.

Figure 3 - Economic state of various points of change - draft, incomplete, changing

Then, when you combine the different points of change plus what is and what isn't predictable with the value chain of different industries, you start to discover that changes themselves can be simultaneously sustaining and disruptive to different industries - see figure 4.

Figure 4 - Impacts of changes on various industries - draft, incomplete, changing

So, this leads me back to the whole issue of Keynes vs Hayek. Our economies aren't in one state but different parts are in multiple states, varying between industry in how they're being impacted by multiple points of change at different stages of evolution. In certain circumstance this can manifest itself as larger business cycles but the application of a single method to a market by treating the market as one thing is fundamentally flawed. 

I'm not pro Keynes or pro Hayek, I'm pro both. I view it is necessary to use multiple methods simultaneously based upon deep situational awareness. It's no different to agile vs six sigma, insource vs outsource or push vs pull. With any large complex system, it's never one but both - see figure 5.

Figure 5 - multiple methods on a single large complex system - an old map of High Speed Rail IT.

I strongly view competition as the key element of ... competition. This requires the use of both free market and Government interference for reasons of market failure which includes market under investment, inertia to change etc. The effective use of Government force (the guiding hand) however depends upon good situational awareness. But where better to gain good situational awareness of changes from the market itself?

Alas when you examine the technology industry, then you find situational awareness (as exhibited by strategic play) is not uniform but varies from the good to the fairly atrocious - see figure 6.

Figure 6 - Market variation in strategic play in high tech industry.

But beyond often poor situational awareness, what you quickly learn is that when companies become large and successful then the one thing they don't appear to like is change. Organisations are not good at managing change, they are generally not designed to do so and they become enamoured of their existing business models and practices. Even the financial markets exhibits rampant inertia to change. Many would act in ways to limit competition, forming oligopolies or monopolies where possible, using everything from lobbied regulatory barriers to intellectual property to establish a steady state. 

This resistance to change, these attempts to limit and undermine competition have their counterpart in our social structures where those who have amassed the greatest wealth and income inequality attempt to maintain that position. Whether social or industrial both effects if left unchecked have the same consequence, the limitation and eventually stagnation of competition. Alas, the market exists beyond one nation and such stagnation can only lead to collapse. All nations are in competition and if you allow yours to stagnate either through social or industrial inaction don't expect another nation to return the favour.

There is a fundamentally important role of Government in maintaining competition and interference where necessary. The libertarian ideal of a rampant free market is as much of a fantasy as the centrally planned system, ignoring the importance of inertia and competition combined with the gravitational effect of wealth (it tends to accumulate) and human nature. Both systems will tend to inhibit competition through the establishment of an oligarchy.

However, I don't believe we've seen yet seen the most effective forms of Government organisation. Certainly China seems to exhibit signs of high situational awareness and gameplay. Others tend towards more dogmatic and singular methods. At some point in the future, I suspect we will all learn that multiple methods are needed to manage an inherently complex and evolving environment. But managed it must be, both in terms of industry and society.

In the meantime, when it comes to Hayek vs Keynes - I agree with both.

P.S. Don't confuse this with agreement with Friedmanism.

Monday, August 18, 2014

Income inequality, growth and mobility.

Income inequality is a useful tool for encouraging competition and progress. But, with income inequality there comes privilege through access and opportunity (i.e. better education for children) and a tricky issue that wealth tends to gravitate towards wealth (i.e. the return on capital depends upon how much capital you have).

However, a fairly high range of income inequality appears supportable as long as there exists opportunity and such opportunity is expressed through social mobility. The thorny issue is that those who have amassed wealth tend to want to reduce social mobility i.e. they want to maintain it for them selves and their offspring. They don't say this directly, they believe in opportunity but they just don't seem willing to accept that such opportunity for everyone means that they or more importantly their children must also fail. So wealth has a tendency throughout history of concentrating within a privileged elite.

From a competition perspective, some inequality is good as long as you have social mobility. You not only want to encourage people in a society but give them the opportunity. Governments have to play the role of rebalancing the desires of the elite with the overall interests of the nation and this is nominally achieved through taxation and investment. Of course, the elite would want you to reduce the state and taxation despite most innovation in a society being government funded. More often than not, the elite have the power to do this.

So, rather than ending up with the most able people, we tend to end up being run by those born into privilege. In the pursuit of maintaining privilege and wealth, we often reduce taxation and thereby innovation in our society. The masses are left watching a society where income inequality grows, growth stagnates and opportunity declines. Overall, the state of competitiveness in a society reduces and this process then continues until a death spiral causes societal collapse. Everyone loses, especially the elite.

This has happened numerous times in history. Decline of a nation is normally preceded by decline in social mobility and excessive concentration of wealth in an elite. On the other hand, the most prosperous times for a society, the points of 'growth' are usually associated with high levels of social mobility and somewhat more moderate income inequality.

Why do I mention this? Well, when I look at China (both inequality and mobility) and compare to the US then there's only one conclusion I can come to. The US is a train wreck about to happen. Ruled by an often inherited elite (an oligarchy) that is quite happy to run the society into the ground to maintain their own position? They probably don't even see it this way. Maybe they think it's just how the market works or maybe they just don't think? I know some are questioning the wisdom of this - the pitchforks are coming - but the inertia to change is building and becoming embedded. 

It can only be a matter of 10-15 years before this becomes generally apparent, that China will dominate technology and Silicon Valley will decline in importance. This isn't happening overnight, by my reckoning then 2025 - 2030 is when the wheels start coming off the tracks. There is almost nothing you can do about it or certainly will be allowed to do about it. In any case, the US and Silicon Valley have both had extremely good innings. Of course, for some it will be a great shock - they've become habituated to the idea that the US dominates as though this is some sort of steady state, alas competition and the role of nations is much more fluid over time.

Could the US fix the problem? Of course. Will it? Of course not. The very things you need, higher taxation and re-distribution through government investment are the very things the elite and their media machines are dead set against. The only real question for me is whether China gets the crown or whether we in Europe can nick it in time. Obviously I'm hoping for the latter and the next decade will be crucial for this.

Saturday, August 09, 2014

From ecosystems to open source to force multipliers - I've been a silly billy.

I've done numerous different talks over the last decade often with the same title - it's an old joke of mine. These talks have covered everything from the use of IT as weapon, to open source, to manipulation of markets and the importance of ecosystems and platform plays. Yes, there's a lot of common memes throughout. But in looking back, I realised that almost all the talks could have been improved if I had simply introduced mapping. 

The reason why I didn't do this before was because I didn't think it was important preferring instead to use other graphical means. It was purely by accident that I discovered that people didn't understand mapping which followed a rampage on my part to explain it to everyone. Silly billy.

Anyhow when I compare the videos from ...

PRE the accidental realisation (i.e. just before)

2010 - OSCON

2011 - STRATA

POST the accidental realisation (i.e. just after)

2013 - Alfesco Summit

2014 - OSCON

I can see now that not talking about mapping earlier and focusing purely on the economic patterns was a mistake. Note to self - must do better next time and stop assuming everyone knows this stuff. In my defence for those earlier presentations, the concept of mapping was probably too much of a leap and some of the presentations do actually contain mapping constructs - I just didn't explain it properly.

By the way more slides and details on mapping are provided here

A new photo

I don't photograph very well. 

I'm not exactly what you'd call a 'looker' especially with the wonky eyes (one tends to wander off when it's bored), the scruffy beard, the unkempt features, the lack of sleep and the shockingly poor teeth (I'm a smoker who is English ... never a good thing). Let's face it ... even my mum calls me a 'wreck'.

Still, Trav Williams at Broken Banjo Photography was taking speaker photos at OSCON and has somehow managed to create something decent. I'm assuming this involved hours of photoshop along with excellence in photography. Well, I now have a new headshot ... welcome to the new 'me' ... which is almost identical to the old me, even with the same tweed jacket, check shirt, cords etc etc etc.

Monday, August 04, 2014

On the accidental use of mapping

For those who know me, I've been using a technique called mapping to compete against other companies for a considerable amount of time

What you probably don't know, is that I actually thought everyone was doing this. It was by pure chance I found out that this wasn't the case.  Several years ago, I was sitting down with Liam Maxwell (UK Gov CTO) and explained a problem using a map. Liam's response was 'How did you do that?'

My immediate thought was that he was asking how did I solve that problem. It quickly transpired that the question he was asking was 'How did I do that mapping thing'. It was shortly after this that I discovered that something I thought everyone was doing turned out be to something that very few people did.

Mapping is a powerful technique in my opinion for everything from project to risk management, from strategy to gameplay, from organisation to culture, from scenario analysis to comparison. It might not be everyone's cup of tea but I'd always recommend that you give it a try.

I've provided three links, a keynote (OSCON), the slides from a 3 hour tutorial (OSCON) and a simple step guide to get started.


Tutorial Slides

For a step guide, start here.

Also, if you do find it useful, don't forget to say thanks to Liam Maxwell (without whom, I'd have continued thinking everyone was doing this and probably not have said quite so much) and also say thanks to my partner in crime, James Duncan. Do remember this work is provided under creative commons share alike. These maps are often nicknamed 'Wardley Maps' which I do appreciate.

Finally, don't forget to say thanks to CSC's Leading Edge Forum who have allowed me the time over the last couple of years to perform some important tests including a population study on organisational evolution and the delta between companies in terms of gameplay (see figure 1)

Figure 1 - Gameplay.

* Note, size of the bubble represents number of companies occupying that position.
* The data for figure 1 is not CC licensed.

Sunday, August 03, 2014

Recommended reading list on strategy.

I keep on being asked what business books I'd recommend about strategy and gameplay? First, you need to understand that I've been using mapping for almost a decade and generally I find most companies gameplay is awful. Contrary to popular belief CxOs aren't generally playing some complex game of chess but instead picking moves in the dark with no idea of what the board looks like. 

Alas, this isn't entirely their fault. I blame the endless gibberish on strategy, leadership and organisation that seems to be commonplace. I used to suffer from this overload of nonsense when I was a CEO. For my sins, I now own several hundred business books on strategy. This doesn't mean they're all bad, many have neat ideas though admittedly the vast majority are tripe.

However, are they good? I have one set of criteria for a good book. To be a good book then in my opinion, you need to comply with the following rules :-

1.   Don't have concepts dressed up as theories.
2.   Have some form of data / experience rather than just anecdotes.
3.   Don't use backwards causality. 
4.   Don't have poorly researched ideas.
5.   Understand and explain causation and not just any correlation.
6.   Don't have endless buzzwords with little or not substance.
7.   Don't promise the world but fail to deliver anything of use.
8.   Provide a mechanism for me to understand and learn from my environment
9.   Provide me with something I can concretely use.
10. Be an easy and enjoyable read.

The honest truth is of those several hundred business books that I own, well not one book meets those standards. I don't have a "good" business strategy book to recommend because ... there aren't any in my opinion.

Oh, wait ... there is one ... Sun Tzu, the art of war.  So that's my recommended reading list, it might be short but it's useful. It also happens to be a military book that has been co-opted by business.

Thursday, July 31, 2014

National interests

All nations are in competition but the governing force of nations is the interests of its society. Markets are a useful tool in achieving many of these aims but it should not be forgotten that the governing force of markets is self interest.

Where possible, a Hayekian approach of allowing markets to form with a light touch is desirable. But markets will exhibit modes of failure where self interest outstrips societal interests. In such cases, standardisation of a market, the use of regulation (see Adam Smith) or the deliberate forcing through investment (a Keynesian approach) become necessary. Markets often exhibit inertia to change, they are often short sighted and hence drastic changes have been required throughout history.

But intervention should not be the first step, a market should always be allowed to develop and where possible defacto standards allowed to grow as long they do not interfere with the societal interest nor impact the free functioning of the market.

Whilst the majority of ground breaking change comes from Government funding, the market has a very important role to play. The interests of individual players in the market should therefore not be allowed to interfere with the overall contribution to innovation by the market, no matter how paltry it might be.

This balancing act, the use of the market as a tool (rather than an ends) is a difficult but necessary art. Learning to game the market, to use it as a tool, to know when to invest, to know when to interfere, to know when to leave alone are not easy choices. Since our nations contain many lines of business then playing the game in different ways with different industries is almost always needed. In some you invest, in others you regulate.

But anticipating or exploiting markets effectively requires some understanding of the points of change along with a detailed understanding of the landscape. For example – the effects of big data, intelligent agents (e.g. self driving cars), 3D printing and nano-materials will vary between industries. In Transportation, big data may allow for more efficient competitors. But self-driving cars will introduce automated fleets and potentially disruptive competitors. 3D printing and nano-materials may also fundamentally alter the nature of what is transported and potentially be highly disruptive.

The same changes will have different effects in other industries, for example in Healthcare where all four points of change are likely to be adopted as sustaining changes rather than disruptive e.g. big data improving diagnosis, self-driving cars introducing more efficient ambulances, 3D printing allowing for organ creation and nano-materials impacting surgical devices and procedures.

In the case of Transportation, you might choose to take a Keynesian approach and invest in order to force companies to overcome their inertia and adapt to changes. In the case of Healthcare, you might choose a Hayekian approach (more hands off) for the time being. Effective management requires the use of multiple techniques specific to the market rather than blunt one size fits all approaches. You should never be Hayek or Keynes any more than a project should be Agile or Six Sigma. You need to be both. Despite the fervent belief of some that one is better, it's worth remembering the saying "Who cares if the cat is black or the cat is white, as long as the cat can catch the mouse. That's all that matters".

Understanding the landscape that industries operate in also allows a Government to anticipate the likely effects of points of change beyond simply noting that points of change are occurring. It allows for more effective gaming of the market assuming a Government can change it. Fortunately there are many means that Governments have at their disposal from investment, taxation, nationalisation, regulation and the all important 'do nothing'.

So why do I mention this? Because the loss of net neutrality has serious long term competition issues. The fragmentation of the internet into 'paid for services' can impact wider innovation. The choices Governments make whether to regulate, whether to nationalise, whether to use taxation and whether to allow market self interest to govern will all impact the future prosperity of those nations.

Hard choices need to be made including whether to do nothing. Personally, I'd keep a close eye on China as they seem to have built considerable experience in gaming markets to their favour and using the market as a tool for their own ends. Their ability to grow whilst balancing issues of social mobility is something to be highlighted.

The US on the other hand appears to view the market in almost reverence, as though the market itself is some force for good. It wouldn't surprise me if the US drives ever closer to a laissez faire system. The distinction between the two nations is most sharply contrasted in their gameplay towards virtual currencies such as bitcoin.

Though many excuses are made, China's rise and eventually overtaking of the US as the world's dominant economic force and centre for innovation will almost certainly be down to better gameplay by the Chinese Government.  As the old curse goes, 'May you live in interesting times' ... well, the next decade should certainly be that.

Tuesday, July 29, 2014

Call it a gardener

In response to James Urquhart's post on the 'Enterprise Architect as an Enterprise Ecologist' and the following discussions on whether this is an Ecosystem ecologist or Enterprise ecologist, I'll repost a part of my January 2013 post on Ecosystems.

In essence the supplier encourages others to innovate, leverages the ecosystem to spot diffusion of successful changes and then commoditizes rapidly to component services. The cycle of Innovation – Leverage – Commoditise (ILC) is then repeated for subsequent higher order systems.

The component services are in effect your “platform” (though I prefer the term “garden”) around which you carefully nurture and grow an ecosystem. Like any gardener you’d have to balance this eating (or harvesting) of the ecosystem with the benefits that new components bring in growing it and the overall health of the garden (i.e. level of disquiet over the occasional munching session). 

If you're going to call the role something ... call it Gardener.

Sunday, July 27, 2014

When strategy makes me sad ...

Many years ago, I was CEO of a Canon subsidiary (between 2003 to 2007 having formerly been the CIO). Under my stewardship this profitable SME had developed the first PaaS (2005), an internal private IaaS (2003) and was involved in technology from the use of mobiles phones as cameras to 3D printing to online photo storage to ... well, there was a long list. There was an awful lot of future industry that Canon was poised to have a shot at owning.

However, these and a host of other capabilities including arguably one of the finest development teams in the world were all lost when the parent company decided to focus on 3D televisions, remove its European R&D capability and outsource all our services. Many of the areas of technology that I've subsequently been involved in over the years - from Cloud to Devops to Gov to Mapping - were strongly influenced by that group in Old Street, London. Of course, this was when Old Street was barren of technology companies bar that one troublesome, open source focused, hack day driven, agile company - Fotango.

So, what makes me sad? This report on "Canon Inc. Corporate Strategy Conference 2014". You see, I still have some fond memories of Canon and this report is disturbing reading.

First, the language is weak throughout - "Creating Outstanding Hit Products", "Concentrate on Technological Themes that will Lead the Way to the Future", "Develop game-changing products", "Capture needs of people that desire to take even better pictures" and "Secure overwhelming advantage" are more cries for help than actionable insight. The elements on developing a sales network in emerging markets reinforce this and seem to be one of those epic fails of sensible CEOs.

There are some good bits here, DNA diagnosis to immersive tech to PLED tech are all interesting spaces. It's also finally good to see 3D printing make a mention but given that I wrote my first report on 3D printing technology for Canon in 2003, it's over a decade late.  However, despite the good bits there is no obvious coherence to this. It's more a 'nice story' than a surgical strike.

I do worry about Canon. Substitution effects of smart phones, liquid lenses and other changes heading their way are going to be harsh. I met Fujio Mitarai all those years ago on the Canon Corporate Executive development program (Oct 2003) and immediately got into a warm discussion over the future of 3D printing etc. He is a really interesting person to talk to, a pleasant chap but I do fear for their future. I imagine it's going to be a tough old decade for them.

How to navigate without a map?

People often talk about competition between companies as being like playing a game of chess. Unfortunately it's a game of chess in which few are able to see the board i.e. the landscape that an organisation operates within. For the last decade, I've been using a mapping technique to describe competitive environments and exploited them accordingly.

But what if you don't have a map? What if all you have are box and wire diagrams like IT systems or business process diagrams? Well, without a map then the most common technique for strategy appears to be copy others (i.e. backward causality). Without a map, the most common technique for describing such a strategy is story telling.

There's actually a lot of precedents in the physical world. Before people had maps they often described the routes of long journeys through story telling. A recent example of this to come to light is the use of astronomical markers in Aboriginal songs.

So, how do you navigate without a map? Well, you tell a story.