Saturday, April 19, 2014

Zero Hour MPs

I've submitted an e-petition to the UK Treasury on zero hour contracts for MPs. Once I have the link I'll put it up here.

The proposal is as follows ...

"In a time of austerity, we need to encourage community involvement and efficiency in the political process whilst promoting innovation in technology, a UK growth sector. The proposal is that all MPs should be put on zero hour contracts. On arrival at the House of Commons, constituents will vote (e.g. via mobile phone app) on whether their MP is needed for the day. For Ministers and Shadow Ministers, the entire electorate can vote.

If it is determined that an MP is needed then a standard daily rate plus expenses covering travel costs will be provided. Special exceptions for non attendance (e.g. overseas trips) are allowed.

Voting mechanism should be distributed online and developed through a funded open source effort encouraging community participation and technology innovation. Voting daily on whether an MP is needed should stimulate both community involvement in politics and focus MPs on delivering user needs.

The system should also be extended to the House of Lords."

Link ... to be added.

According to the Chartered Institute of Personnel and Development, employees are happier on zero hour contracts and it would therefore not only be unfair to deny our MPs the right to enjoy such privileges but by introducing them we could hopefully create a more participatory environment.

Friday, April 18, 2014

The wow of mapping

So far, I've covered then good bits of mapping - namely focus on user needs, coping with change, effective management of complex environments and contracts, better scenario planning and strategic gameplay, improvements in communication and risk management and the ability to identify opportunities from system level to policy - along with the Amazing aspects of mapping of better situational awareness (correlated with market cap growth) & organisational learning, initiation of potentially more effective organisational structures and heightened ability to anticipate change.

The above is a 'kick ass' list of business superpowers however it is nothing compared to what's next.

If you haven't read those two posts - STOP! Go read both of them - the good bits of mapping & the Amazing aspects of mapping - and then return.

The conclusions of this post are also the most controversial because the examples are rare in the extreme and data is very thin. However, if this concept is right then to give the 'wow' a title then it has to be :-

1) Organisations don't need one culture, they need three.

First, a bit of background. I noticed this effect first in 2004 when I implemented the first early prototype of a Pioneer, Settler and Town Planner structure in Fotango. Of course, back then I was experimenting without a clear understanding of why the new structure improved our efficiency and innovation so effectively. I do now, or at least I have a pretty good idea why.

To explain why, we need a little bit of a journey. First, when mapping a business you need to get people involved in the organisation to do the mapping and preferably large numbers of them. This is because one of the axis of evolution is certainty and it's actually difficult to precisely say where something is on such an axis. You can use the wisdom of the crowd effect (see Marquis de Condorcet) but this requires each voting member to be 'more likely than not to make a correct decision'. Hence it has to be people experienced in the business and the environment itself i.e. there's no general consultancy gig in mapping and if any consultant offers to map your business ... run away. Of course, you can get strategy advice once you've mapped but since most big strategy firms I've met tend to fail at getting the ten good point right ... run away. It's always way better to learn to play chess for yourself.

Now, once you've mapped a business you still have a problem ... bias. Having watched and collected maps from different companies, I've noticed a tendency of companies in similar industries to think in similar ways. This is a probably a side effect of competing against each other, people moving between companies in an industry and industry specific conferences.  Hence what is considered advanced modelling techniques in the oil and gas business is not the same as what is considered advanced modelling techniques in the high tech industry. Though I don't have enough data to categorically state this (yet), it would appear that not only do you have early adopters and laggards within industries but entire industries can be early adopters or laggards. However, within a laggard industry there will be companies that consider themselves to be early adopters because they're comparing to their competitors. A bias exists towards the industry norm.

Hence if you take mathematical modelling techniques, let us hypothesise that the rough order is high tech > media > retail > finance > pharma > oil and gas. Then not only will you have early adopters and laggards in each of those sectors but the sectors themselves will exhibit differences. Hence a company in the finance industry which considers itself a 'early adopter' might dismiss a high tech company moving into their industry but can often find themselves competing against a beast they're poorly equipped to deal with. The problem with this bias is that the delta between industry sectors may well be growing (this is part of a current research examination).

Now, putting bias aside for moment, I want to now turn to profile. If you take all the maps of a company, by simply counting frequency of components at different stages of evolution then you can generate a profile. At the moment this is a very imprecise and highly polluted technique (because of bias) but it gives us a 'flavour' to how a company views itself.

The interesting aspect of a profile, is that each section requires different management techniques and methods. It was an awareness of this that led me to the pioneer, settler and town planner structure (PST) in the first place. See figure 1.

Figure 1 - Pioneer, Settler and Town Planner

So rather than organising by 'type' of components grouped into functional departments (such as IT, Marketing, Finance & Operations), under a PST structure the company organises by 'evolution' and components flow from one group to another through a process of theft. For more details read here.

In the PST world there is no IT, Finance and Operations others than subset specialisms of PST. When implementing this structure, people appear to be attracted to different parts of the profile. I'm not going to say there are different characteristics of people but a tendency of people to be happier with certain parts of the profile. Also the cultures of each part are different - pioneers operate better in an environment which is different to town planners. Finally, each part of the profile is important for a company's current and future health.

Hence I was piqued by Lou Adler's post on there being 'only four types of jobs in the world' because in a PST world (based upon evolution) there are only three.  Oh and for reference the difference between Lou's post and the much earlier PST structure is the Pioneers are the builders, Settlers are the improvers, Town Planners are the producers and contrary to Lou's assertion, all three groups contain thinkers. I've seen more recent work (at Greenwich University) which seems to support this structure further.

However, this is not the key point. I happen to have created and experienced a PST structure and seen equivalents and whilst there isn't enough data to statistically prove it is vastly better beyond reasonable doubt, it is more inline with how things evolve and my experience tells me it is a vast improvement in terms of innovation and efficiency.

But there is a significant wow which I slipped in the above. That wow is that under structures like PST (and equivalents) then a single company requires three separate cultures to work effectively. In much the same way there is not a single size fits all management method for projects, there is not a single size fits all for culture. There maybe common elements but the culture and type of people for each stage is different. 

This is pretty much counter to everything which is written on organisational culture today. That's the big wow of mapping and if you're embarking on a mapping journey, this is where it will lead you. I know because I've been there.

Oh, and why wow? Because if the above is right, then there are far more effective organisational forms than what exists today. Companies like Amazon, Google, Facebook etc aren't the permanent titans that people make them out to be. They can be taken.

Oh, and what happened to Fotango? Well, as far I know it was a bunch of strategy consultants that persuaded the parent company the future was in 3D television and variants thereof rather then the stuff Fotango was doing in 2005 - namely 3D printing, mobile phones as camera, platform as a service, server side javascript, automation, continuous deployment, infrastructure as a service, nosql like object data stores, online visual scrapbooks ... oh, it was a depressingly long list. 

I'm not a fan of big name strategy consultancy firms. In my world they take the 'kick' out of 'kick ass'.

The amazing aspects of mapping

In the previous post I covered the good bits about mapping - namely user needs, coping with change, effective management of complex environments and contracts, better scenario planning and strategic gameplay, improvements in communication and risk management and the ability to identify opportunities from system level to policy. It's not a bad list and I have examples of all.

However, now I want to discuss the amazing aspects of mapping.

1) Situational Awareness & Organisational learning
It turns out that mapping is incredibly useful for organisational learning particularly in aspects of gameplay because it provides a common language and a way of examining, recording and testing changes in an economic environment. This is actually a pretty big deal. However, it works because it helps increase situational awareness of an environment and this in itself turns out to be fairly massive.

Some time ago, I undertook a study of companies in the high tech industry looking at their level of strategic gameplay (i.e. understanding of their environment and those of competitors) against action which in this case was manipulation of the market through open means whether open data, open source, open hardware or even open APIs (NB all APIs are 'open' since they cannot be copyrighted).

This I plotted on a bubble chart (the bigger the bubbles the more companies involved) and then examined market cap changes over the last seven years. The results are show in figure 1. Basically the upshot is that situational awareness and strategic play are strongly correlated with market cap growth. 

Figure 1 - strategic play vs open as a means of manipulating markets.

The best of the bunch (who have high levels of strategic play and use open as a weapon) I nicknamed Players. The worst (who exhibited neither), I call Chancers

Now, often people talk to me about 'open by default' to which I'll respond that being 'open by default' or not being 'open by default' has little to no correlation with success in terms of market cap growth. What matters is the level of strategic play and those with good strategic play who tend to use open as weapon show the highest market cap growth.

The importance of this is that it demonstrates that situational awareness (i.e. knowing where to attack and why to attack one space over another) is more important than action (i.e. the how, the what and the when'). This was curtly summarised in Professor Roger L. Martin response in the Execution Trap to Jamie Dimon's doctrine - “Dimon’s doctrine - that execution is the key to a strategy’s success - is as flawed as it is popular.”

Well, the idea that 'execution is the key to a strategy's success' is fundamentally flawed and the data says the opposite. Key is situational awareness.

2) Structure
Whenever you start mapping a complex environment, because it has multiple components at different stages of evolution then you tend to start to treat components individually e.g. in the case of HS2 (high speed rail) then you tend to use multiple methods rather than single size methods.

Figure 2 - Multiple methods in HS2

This approach of breaking down complex environments into component systems has a tendency to result in teams being organised around components. Such principles of component based organisation are embedded in concepts like the USAF FIST (fast, inexpensive, simple and tiny) approach and Amazon's Two Pizza approach and both appear to be highly effective.

Now the change doesn't usually happen overnight but the act of mapping and breaking down systems into logical components appears to trigger this structural change over time. So rather than having one big team dealing with a system, we end up with many small teams dealing with components and an emphasis on the importance of interfaces. Alas, at the moment I don't have enough examples to significantly confirm this effect but I'll mention it because it's certainly an amazing effect of mapping if the trend continues. 

Figure 3 - Breaking down complex systems into logical components appears to initiate a structural change.

3) The Future isn't as unpredictable as we think
One of the most delightful aspects of mapping is in organisational learning and how it can be used to discover common re-occurring economic patterns. For example, how competition drives a cycle of peace, war and wonder which occurs at both macro and micro economic scales. Now, it turns out that some aspects of the economy (e.g. genesis of the novel and new) are highly unpredictable but industrialisation and the shift from product to utility is predictable. In some cases you can say what is going to happen but not when and in others when something will happen but not precisely what. However it's quite uncommon for things to be entirely random though it's extremely hard to predict individual players move as opposed to industry trends.

One particular aspect of this that interests me is how new organisational forms (e.g. fordism, american system, web 2.0) appear. By understanding the economic forces at work (from punctuated equilibriums to co-evolution to inertia), I was able to predict when the next generation would start to emerge though not precisely what they would look like. 

Hence by use of population genetic techniques at roughly the right time, I was able to discover a phenotype (characteristics) of the next generation. I published a summary of the work here but for those just wanting the results rather than details, then table 1.

Table 1 - Traditional vs Next Generation Companies.

So along with the Good - namely user needs, coping with change, effective management of complex environments and contracts, better scenario planning and strategic gameplay, improvements in communication and risk management and the ability to identify opportunities from system level to policy - then the Amazing aspects of mapping are better situational awareness (correlated with market cap growth) & organisational learning, initiation of potentially more effective organisational structures and heightened ability to anticipate change.

These are all 'kick ass' superpowers in business but that's nothing compared to the wow. Which is the next post.

Thursday, April 17, 2014

The good bits about mapping.

There has been a number of posts on mapping recently, most notably on 'Mapping the way to a strategy' by James Findlay (CIO of HS2) and 'Revolutionising Digital Public Service Delivery' by Judge's Business School in Cambridge.

Mapping is a large and sometimes complex subject and you'll find ample information on this blog. A good place to start is here. However, in the next three posts, I'm not going to cover how to map, nor the basics of value chains and evolution. Instead I want to talk about the conclusions of mapping - ten good, three amazing and one absolute wow. 

The good bits about mapping are as follows.

1) Focus on user Needs
Mapping inherently focuses an organisation on user needs because the entire value chain used in mapping is a chain of needs. Such a practice is useful because value comes from meeting the needs of others.

Figure 1 - Maps and User Needs

2) Cope with change
Maps are designed to cope with one of the basic rules of competition - that everything evolves - hence maps continuously adapt. The evolution axis reflects how complex environments are constantly changing due to supply and demand side competition.

Figure 2 - Maps and Change

3) Assist in managing complex environments
Maps allow you to see how evolved something is and therefore the most appropriate methods of management. All things evolve from an uncharted to an industrialised space and there isn't a one size fits all method such as agile or six sigma or in-source or outsource. Instead there's multiple methods, each of which are appropriate at different states of evolution. An example of this multiple method approach is the management within HS2 (high speed rail).

Figure 3 - HS2 (High Speed Rail) Maps and methods of management.

4) Enable efficient contract management
Maps enable you to visualise contract arrangements. This is particularly difficult to do with large scale specification documents and box and wire diagrams. In the below example, the contract arrangement for a huge Home Office project was mapped in an afternoon. What this showed was a particular contract due to its depth and width ran severe risks of cost over-runs if management methods were misapplied. This has now been fixed.

Figure 4 - Contract Arrangements in Home Office

5) Assist in scenario planning
Maps enable you to ask what if questions, to examine potential scenarios such as what happens when a component evolves from product to more commodity? They enable you to test potential impacts of changes.

Figure 5 - Scenario planning in the security industry

6) Help in identifying opportunities
Maps allow you to compare to others (whether business units or competitors) and hence more easily identify potential areas of differentiation, opportunities for efficiency and common shared services.

Figure 6 - Comparison between different business units for the same value chain

7) Enable strategic gameplay
Maps enable you to identify where you can attack and the tactical games that you can play from building of ecosystems, exploiting the inertia of others, constraints, use of open as a weapon, undermining barriers to entry and targets for disruption. There's a whole array of tactical games and dark arts than can be deployed by an experienced player.

Figure 7 - Ubuntu and gameplay in the cloud

8) Provide easy communication
Maps are inherently simple, you don't even need to know what the points mean in order to have a discussion about an environment. Maps also turn out to be surprisingly useful for explaining a business environment and getting everyone in an organisation to understand any strategy played.

Figure 8 - Map for a TV company

9) Mitigate risks
Maps also turn out to be extremely useful in identify points of risk within an environment whether this is contract risk, risk of mismanagement, risk of change, constraints or inertia.

10) Have the granularity I need
Finally maps, can be altered in granularity depending upon whether you're looking at policy level, a business unit or tactical games within a system.

Now in terms of competition then if I'm more able to effectively deal with user needs, constant change, management of complex environments and contracts whilst having better scenario planning, strategic gameplay, communication, risk management and the ability to identify opportunities from system level to policy ... then you've got a problem. In practice this only happens when a company using maps (or an equivalent mental model) is competing against companies running on specifications and box and wire diagrams (e.g. IT systems diagrams, business process maps etc). Fortunately that's quite a lot of companies.

However, these are just the good bits about mapping. The Amazing aspects and one Wow are much more dangerous and I'll cover the Amazing in the next post.

Wednesday, April 16, 2014

'The best summary post that you've done' ... on mapping.

Things appear and diffuse in society through diffusion curves of ever maturing versions of the act. Product A1 leads to a better Product A2 and so on, until it finally becomes more of a commodity (or utility if suitable). These diffusion curves follow a s-curve shape and have an exponential component.

However, many of the curves (A1 to A5) tend to be related to products leading us to a misperception that since the time for products is long then the time to convert to utility will be equally long. This creates a period of overlapping conflict between the product view of the world and the more commodity / utility view of the world.

Figure 1 - Diffusion curves of A1 to A6
*example A1 to Aabove is not real data but a hypothetical.

Whilst diffusion curves are not identical over applicable market and the same time frame, you can graph evolution by measuring over ubiquity and certainty. What drives the process is competition both demand side (which drives ubiquity) and supply side (which drives certainty).

Figure 2 - Evolution of A1 to A6
*example A1 to Aabove is not real data but a hypothetical.

You can then draw a map of the environment and overlay common economic factors e.g. the evolution from the uncharted space (the rare, uncertain and changing) to the industrialised (the common, the defined, the static) and the change of properties this involves. Included in this is how evolution not only drives efficiency but also through the provision of ever more standardised interfaces enables the development of higher order systems which enables future but uncertain sources of wealth (e.g. electricity enabling TV, radio, computing etc).

 Figure 3 - Map of A1 to A6

*example A1 to A6 above is not real data but a hypothetical.

Of course, competition doesn't happen in isolation and the improvements to efficiency (+e), agility in building higher order systems (+a) and hence ability to create new sources of wealth (+w) create competitive pressures for others to adapt. This pressure only increases as more adapt. This mounting pressure creates a punctuated equilibrium between the past and future. Hence the early exponential aspect of diffusion curves.

 Figure 4 - Pressure to adapt mounts as others adapt.

Alas we have inertia to change due to past success. There are over 16 different forms of inertia to be considered.

 Figure 5 - Inertia to Change

We can now take into consideration inertia, the competitive consequences of evolution (+e, +a, +w), the increasing pressure to adapt, the exponential nature of change, the properties of each stage of evolution (uncharted vs industrialised) and the impact of diffusion curves (time for product vs time to utility) to determine an overall pattern of economic change. This has three components - peace, war and wonder and it has a corollary in Hollings adaptive renewal cycle which is unsurprising given the work on evolution is driven by competition effects (as with nature).

 Figure 6 - Peace, War and Wonder from A1 to A6

*example A1 to Aabove is not real data but a hypothetical.

This pattern of peace, war and wonder occurs both at a micro and macro-economic scale. The larger waves (known as Kondratiev waves) are determined by whether the component that is evolving impacts many value chains (i.e. common components such as mechanical components, power, money and computing create large macro waves). The pattern of peace, war and wonder and its characteristics is reflected in the work of Carlota Perez with Wonder covering eruption & frenzy, Peace covering synergy & maturity and War being the phase between one wave and the next.

 Figure 7 - Peace, War and Wonder at a Macro-economic scale.

Understanding the basic patterns, mapping environments and exploiting how to alter the position of pieces on the map is an essential part of strategy. The effects of which are dramatic, as demonstrated by an examination of 100+ companies I undertook back in 2011/2012.

 Figure 8 - Strategic Play and effect on Market Cap over a 7 yr period.

* Examination of high tech leading companies, bubble size refers to number of companies in this group.

Unfortunately most companies have poor situational awareness (understanding of where and why) compared to action (the how, what and when) as exhibited by strategic documents. The main culprit for many of the problems faced is the box and wire diagrams we tend to use to try and understand the jumbled mess of activities, practices and data that represent organisations.

Figure 9 - The box and wire

All of these problems can be improved through the use of maps. However, mapping is only the start of the journey. Then you need to learn how to play chess between companies (and how to organise around evolution) and alas this is not something I can cover in a single blog post.

However, I'll be talking on this subject at OSCON.

PS. The title change was courtesy of @cpswan

For more reading on 
1) How to create a value chain - see here
2) Evolution - see here
3) Some of the basics - see here
4) The overall process - a long and somewhat rambling set of posts which never was completed and which I've since tidied up terms - see here
5) The finer details - hmmm, sorry ... somewhat scattered throughout this blog over the last seven years.

Tuesday, April 15, 2014

Why Map?

In comparison to box and wire diagrams (IT system diagrams, business process maps etc) then ...

Friday, April 04, 2014

On Mapping and Licenses

I was recently asked a question on licensing of the mapping technique. 

I developed the mapping technique (and the later work on evolution) initially for my own use in 2005 and later refined this in 2007. I have always published the technique under creative commons license. The license I use is known as CC BY-SA 3.0

What this means is that you are free to copy the mapping technique and make derivatives of it under the same license. Does this mean I expect you to open up any maps you create? No. Only the technique, derivatives of the technique and anything which is built upon the technique whether guides or otherwise.

If you don't like that, well ... you can always create your own technique? It only took me several years of thinking about the problem and collecting data to demonstrate the effect. I gave it to the community as a gift as the community has given me so much. Do likewise.

As for writing a book - well, I've started again in my spare time. You can read part of my earlier effort here through a series of posts. As for workshops, I currently do these for LEF members and speak on the subject at Open Source Conferences such as OSCON. I will look at running more public workshops on this subject at some point in the future.

Thursday, April 03, 2014

Creating a value chain

The first part of mapping is to create a value chain. This is a chain of NEEDs. You start with the User need and determine the components needed to meet these needs and then any subcomponents that those components need ... and so on.

I often use the example of a cup of tea in tutorials / workshops. I've provided a simple and incomplete example of this in figure 1.

Figure 1 - a chain of needs.

It should be noted that :-

a) The value chain represents a chain of needs with the top being the user (i.e. the people we provide)

b) Things are valuable to others that NEED them.

c) The chain can have cascade effects e.g. if POWER is down then the USER won't get their cup of tea. However what the user cares about (and hopefully pays for) is the cup of tea.  The user doesn't care about your power supplier. As the supplier of the cup of tea then power is your problem. Your power supplier is in effect 'invisible' to the user and the only thing the user cares about is whether you deliver on their cup of tea. If the power fails then the user problem is you failed to give them a cup of tea - this is what is 'visible' to them. 

When mapping, it's important to start with USER needs and by that I mean what they need and not what you need i.e. starting of with a top level need of profitability or branding will lead you down the wrong path as I can guarantee you that most USERS don't have a top level need of making you profitable.

Tuesday, March 18, 2014

Daisy Chains and HR

One of the most interesting aspects of the recent Satoshi Nakamoto saga is how an experienced computer engineer near Silicon Valley has not been able to find gainful employment in the industry for a decade despite a massive shortfall in skills?

It's interesting to me because a friend of mine was recently made unemployed. They had twenty years of coding experience, proficient in many modern languages but had great difficulty in finding a job. Fortunately that's now been resolved through personal contacts. 

My friend's problems in finding employment were threefold.

1) Age
First, they were over 40 years of age and unfortunately our industry suffers from a 'culture of youth'. I can sort of understand that in non mathematical based industries where a pre-occupation with data doesn't exist but in computer engineering than given the idea that the youth are more innovative is based upon extremely flawed concepts then I'm surprised it exists.

Alas, in my experience the HR departments of companies (with obvious exceptions such as the amazing work being done by Google's People Analytics) are not often populated with mathematically questioning folk but instead rely on more 'softer' skills. If they were then we probably would not have dubious schemes like Myers Briggs (MBT) being used despite being disproved as practically worthless in the 1970s by Barnum responses (aka Forer effect) and being rejected by the US Army. However, this is not the case, these myths exist and age is an issue but not the biggest one.

2) Loyalty
The second issue is tending to stick in a job for a long time. I'll explain why in the next section.

3) Not having a job
Not having a job is usually the biggest problem in getting a job particularly in industries where recruitment consultants are rife. To explain why, lets take two candidates for a job :-

1) Candidate Sarah has 20 years of directly relevant experience, a tendency to stick with a company for a long period of time and has been unemployed for six months. They are happy to accept $70K per year.

2) Candidate Sue has 10 years of mostly relevant experience, a tendency to leave a job after a few years and is currently employed. They are after $120K per year.

Which candidate would you put forward as a recruitment consultant? Well, I'm sorry to say that Sue is the most financially attractive for multiple reasons of which salary is the least important. The real reason why Sue is the most attractive is if they take the job then they leave a new vacancy to be filled i.e. their current employment.

Many recruitment consultants I've known make their living from creating daisy chains i.e. they tout Sue to the employer whilst at the same time quietly preparing another candidate (e.g. Bob, preferably employed) for Sue's job and finding another candidate (e.g. Alice, preferably employed) for Bob's job. Think of it like a house chain but with people. 

Alice -> Bob -> Sue -> New Role.

Daisy chains create huge benefits. Firstly, there's the financial benefit if you take 10% on annual salary for everyone jumping role in the chain.

Second, it can help strengthen your relationship with the employer / client. Take for example Sue. The employer might not know Sue is looking but you do. You can prepare the 'perfect' candidate Bob and turn up at the right time when the employer discovers that Sue is leaving and before any job has been advertised. A quick, 'I know someone who is perfect for this' and you can probably get an interview done in a few days.

You then repeat the trick with the employer of Bob and all down the chain. Each time, with each employer (aka client) it helps strengthen your position as the goto person and you can help reinforce this - 'remember the time when Sue left, I found you Bob in less than a day' etc.

From talking to people in the industry, my understanding is that daisy chains are common practice. In some cases, these chains can be ten people long and ideal candidates are those which tend not be loyal for long periods of time i.e. repeating chains is also a fairly common practice.

If you have a chain such as 

Dave (junior) -> Alice (senior) -> Bob (team lead) -> Sue (manager) -> New Role (director)

and you shift everyone, pocketing 10% of annual salaries, you end up with 

Dave (senior) - Alice (team) - Bob (manager) - Sue (director)

All you have to do is wait a couple of years, assuming you've managed to populate your chain with people who don't tend to stick around and then you can repeat it by finding Sue an even more senior job.

Dave (senior) -> Alice (team) -> Bob (manager) -> Sue (director) -> New Role (VP)


Dave (team lead) - Alice (manager) - Bob (director) - Sue (VP)

Loadsa money ... daisy chaining and managing such chains is where the action is at. 

Until this is somehow resolved, then the golden rules of getting in a job in IT tend to be a) don't grow old b) don't stick with an employer for a long time and most importantly c) have a job in IT. In terms of progression, make sure you get yourself on a good daisy chain and so be friendly to your recruitment consultant however unpalatable that seems.

Saturday, March 15, 2014

On mapping and the evolution axis

For a long time, I've been using maps of industries, businesses and systems to determine gameplay, management, learning of economic forces and how to manipulate markets. The map has two axis - one of value chain (which represents a recursive set of needs from user needs to supplier needs) and the other of evolution. See figure 1.

Figure 1 - a map of HS2

The first maps I produced were in 2005 and at that time whilst I suspected and had examples of a pattern for evolution (from the genesis of an act to commodity provision) , I actually had no way of describing why it occurred. At that time, I was familiar with concepts like diffusion (adoption over time) but this provided no consistent pattern for change - the diffusion curve of one instance of an activity is not the same as the diffusion curve of another if measured on identical axis. See figure 2.

Figure 2 - Different diffusion curves for maturing instances of the same activity

The solution to the problem occurred during a chance set of conversations in which I noticed that whilst people could agree whether something was a commodity when it came to products and something novel (i.e. the genesis of an act) then disagreements abounded. This led me back to the Stacey Matrix (see figure 3, this version is a simplified diagram created by Brenda Zimmerman).

Figure 3 - The Stacey Matrix

The Stacey Matrix is useful in discussion of how groups agree and what peaked my interest was the use of a certainty axis. This coincided with something Everett Rogers had said that activities evolve through multiple waves of ever improving and more mature examples.  A key part of evolution seemed to have something to do with certainty.

Hence in 2006 and 2007, I spent a great deal of time trying to determine a measure for certainty for an act. It was by looking in detail at publications of journals and papers on activities that I noted how they changed with time.  In examining a core set of activities and 9,221 related articles, I was able to categorise the articles into four main types - see figure 4.

Figure 4 - type of articles

I then developed a measure of certainty that used the volume of articles of type II and type III produced relative to the total volume of articles when that activity is commonly described as a commodity.  I used that reference point (when the activity was commonly described as a commodity) to examine how ubiquitous the act was and then compared past market adoption and publications against this measure. The result was the common pattern shown in figure 5.

Figure 5 - Ubiquity vs Certainty 

Now, when examining each of the types of the publication used to manufacture the graph - it became clear that each type of publication was related to a stage of evolution.  See figure 6.

Figure 6 - Types of publication and relationship to evolutionary stage

By overlaying the types onto the ubiquity and certainty curve and extrapolating the ends (i.e. when something is novel we have very little information on it), I was able to finally produce in 2007 the evolution curve (see figure 7 below) which demonstrated the pattern which I had used in mapping (see figure 1 at the top). It was shortly after this, I was able to demonstrate the reason why the pattern occurred was simply the interplay between supply and demand competition. .

Figure 7 - the evolution curve.

I then gave a series of talks on this in late 2007 and early 2008 using the curve to explain the impacts of cloud, 3D printing and highlighting some other common economic patterns e.g. how organisations evolve, how you can exploit ecosystems to manage the future etc. However, as backward as this process sounds it's actually quite normal for a pattern to be 'noticed' and found useful well before any evidence or model demonstrates whether that pattern might exist or is entirely false. In my case mapping was based upon a pattern I noticed (pre 2004), that had proved itself useful (post 2005) and this was well before I had any solid model behind it (2007).

It doesn't mean the pattern is right, just that I've yet to find a better one. I'm sure I'll find some examples which break the model at some point in time - though after 7 years, I'm still looking.

How to fix bitcoin

There are many things to be admired about bitcoin - its simplicity, the convenience, the ability to create plaforms for new forms of transactions, its flexibility and the public nature of the block chain.

However, I'm not a fan in its current form and I've written about the negative impacts of bitcoin if left unchecked (i.e. no strong Government intervention) because there is one unfortunate side effect - its impact on taxation. The problem is bitcoin addresses can be used to obfuscate ownership. After a $100 million heist last year and despite the efforts of the community, the thief has yet to be found. Regardless of the public nature of the block chain, identity can be obfuscated effectively.

This creates the problem because bitcoin represents a cash based society where who owns the cash is difficult to determine and the cash can disappear across legislative borders almost instantaneously. It's like a 'cash in hand' environment but without the risk of being caught with a pile of cash in your safe at home nor caught handing over a wad of notes in the middle of a transaction. In practice at scale, it is relatively easy to transact in bitcoins in a way to obfuscate your involvement such that it becomes impracticable for anyone to trace this even though the block chain is public. Taxation on goods and income in such an environment becomes 'voluntary' and competition creates pressure for the avoidance of taxation especially because of the ease in which this can be done. The net result of bitcoins growth will be a reduction in taxation for income and goods with an increased reliance on land and citzenship tax. But not everyone makes a good living and how can you have a welfare state when everyone can claim income poverty regardless of whether they have millions in value from bitcoins?

Bitcoin in its current form will lead to the future dismantling of all such state apparatus.

Now, whilst some might welcome the reduction in the state caused by a loss of taxation, the state is THE key economic driver of innovation, prosperity and social mobility. The laissez faire economic system is an extreme mindset of some of the more ardent supporters of Freidmanism and the Chicago School. There is no basis for assuming a beneficial society can be created without the state and in all likelihood it'll lead to a future consolidation of wealth, extremely low levels of social mobility and weak economic performance compared to countries that use a more mixed method. From a competition viewpoint this is not a good position.

So how do we fix bitcoin? Well, the state could introduce its own state backed crypto currency but an alternative solution is to simply ensure that ownership of the addresses are public and state verified. This can be done with bitcoin as it stands through draconian legislation requiring all addresses owned by its citizens to be a matter of public record. In China, this is already happening and traders are required to register their addresses.

Yes, this means high levels of transparency on what you spend and buy. You might accuse the state of surveillance but by making the addresses a matter of public record then everyone can use the public block chain to see what others are buying. The advantage of such transparency is that taxation (in terms of income, goods bought and wealth) becomes more feasible. We can have the benefits of transparency with a flexible, convenient and platform based currency along with a strong state, taxation and welfare.

The downside - a loss of privacy. 

However, given a choice between :-

Option 1) privacy, flexibility, convenience and a platform for further innovation VERSUS a lack of transparency on ownership, lack of taxation, a weak state, poor social mobility and poor economic performance.

Option 2) flexibility, convenience, platform for further innovation, transparency, taxation, strong state, better social mobility, better economic performance VERSUS a lack of financial privacy.

Then I go with Option 2) every time. I take the view that a loss of financial privacy through greater transparency is a small sacrifice compared to the potential benefits gained. 

Hence, I'm not a fan of bitcoin in its current form, left unchecked I consider it a form of economic weapon with likely severe consequences for the state. But even such a system can be manipulated to public benefit and I am in favour of crypto currencies in general.  The more disastrous impacts of bitcoin can be mitigated by creating a public register of addresses with state verified ownership and requiring by law all transactions to use such addresses.

It's time that this Pandora's box was fixed to benefit the state. I'd strongly recommend all Western Governments to follow the example set by China and start to bring bitcoin and other crypto currencies under a measure of control through the use of transparency. In this case, by public registers of addresses.

It is better to do this now than to wait until bitcoin and other cyrpto currencies spread further and the introduction of such measures becomes politically unfeasible. At this moment in time - though there will be lobbying against such transparency - the introduction of a register is an option. With such measures then at least we have the opportunity in the future to apply transaction taxes to a citizens use of the currency. There are other issues with bitcoin but the worst effects can be mitigated if Governments act now.

Of course, such a choice would lead us along a path of radical transparency should crypto currencies succeed and dominate. All financial transactions would be public record. Hiding wealth and avoiding taxation would become difficult at best. With a few clicks I would be able to discover the inner workings of most companies, who they paid, who they were paid by - from lobbyists to the normal course of business.  There's probably a lot that people don't want to share but the choices are bleak - either a laissez faire system and all that it creates or a level of radical transparency that we've never experienced before.  I'm in favour of the latter.

Friday, March 14, 2014

On Government IT

There is a tendency of people to grasp onto one size fits all management methods for any problem whether it's agile, six sigma, lean or ITIL. The problem of course is that any large scale system (whether an IT system or a line of business or even an industry) contains many different components (activities, practices and data) which are at different stages of evolution. The method you need to use depends upon the stage of evolution because characteristics of the component change with evolution.

Hence for example, the genesis of something is highly uncertain, constantly changing and needs an agile approach due to its uncharted nature (it's a voyage of discovery). However, the provision of a commodity is all about volume operations, efficiency, standardisation and removing deviation for what is essentially industrialised. There is no one size fits all management method for complex system, you need to use a mix of methods.

But how do you decide what to use? Well, to do this you need to map out the environment. In order to map out the environment you need to first create a value chain starting with visible user needs (i.e. not what you want to create but what users actually need). In fact, the value chain is simply a recursive expression of needs. At the top are users and their needs with high level components that meet this. Underneath this are the subcomponents which meet the needs of higher level components and so on.

With a map you can then determine how something should be treated i.e. which methods to use. Maps also turn out to be essential for strategic play, risk management, cost mitigation, organisational learning and a whole bunch of other stuff but then that's hardly surprising. If you're playing a game of chess, your play will only be improved if you actually look at the board.

In figure 1 is a map of large complex project with user needs clearly marked at the top. Unfortunately due to the nature of the project, I can't give you more details than what is provided (i.e. what the components are).

In figure 2 the same map broken into how you treat components. The use of agile on one side, the use of highly structured methods on the other. Remember that the map is constantly evolving from left to right due to supply and demand competition and hence how you treat something will change over time.

In figure 3 the same map is broken into contracts by logically grouping components together. This is actually a useful technique for purchasing, mitigating cost overruns, ensuring the right methods are used and organisation (e.g. two pizza models, FIST etc).

Figure 1 - Map with User Needs.

Figure 2 - Map with Methods

Figure 3 - Map with Grouping

So why do I mention this? 

I occasionally hear people spout that UK Gov IT is somehow political, too focused on cutting costs and too focused on agile. Well, the above is a map from a very large Government project. I have several of these, some of which are being very actively used from management methods to strategic play. To say, UK Gov IT is all about agile and cost cutting is highly naive. It's normally the sort of thing I hear from large vendors who are annoyed that they can no longer just chow down on UK Gov as a soft target. 

What I see in UK Gov IT is the emergence of highly advanced techniques using multiple management methods, high levels of strategic play and a focus on user needs. Of course, it's not uniform. Some are well down this journey whilst others haven't started. This is all normal for an organisation undergoing significant changes. However, have no doubt that this change is occurring. 

Hence when I read ...

“The Government has no vision for digital Britain – the report that Labour delivered in the last year of our Government, Digital Britain, has yet to be superseded.  Four years on the opportunities are different and we are not even beginning to reap the positive benefits of the way in which technology can change our public services."

“Rather than addressing these challenges ad hoc and reactively, we need a framework for the relationship between the people and their data, government and digital."

“Which is why I am pleased to announce today that Labour will be acting where this Government has so comprehensively failed, delivering a new version of our Digital Britain report to be published before the next election.” 

My only comment is ... what a complete load of tosh. It's almost as daft as the statement I heard recently that to solve IT failures you need more specifications. It smacks of extremely poor situational awareness and understanding of the problems at hand.

On politics, well my involvement in writing the 'Better for Less' paper is well known. What is less well known is my strident political views. I'm 'old' Labour and I say that with absolute pride. My heroes were Michael Foot, Tony Benn and Arthur Scargill. I view the market system as a tool, not an ends. But politics never come into any discussion that I've been involved with. It has always been about 'user needs' and 'better for less'. It has been apolitical.

Tony Benn once said 'the Labour Party isn't believed any more because people believe it will say anything to get votes'. I'm one of those people and stopped voting New Labour a long time ago because it no longer represented my party. 

I don't believe that this Government has 'no vision for digital Britain' and its changes in Gov IT have 'comprehensively failed' because New Labour tells me so. I see quite the opposite and I'm glad.