Spotting the Next generation ...

For the best part of a decade I've worked on how business activities evolve from genesis through to products to commodity. As activities evolve then practices (such as management methods) that are applied also have to change which is why one size never fits all.

I've also demonstrated how this process of evolution creates a cycle, with commoditisation enabling further genesis (as in innovation of new activities) and the importance of inertia barriers in regulating this cycle.

These cycles also appear at the macro-economic scale and they're known as Kondratiev waves, however even more localised cycles (i.e. specific to an industry) tend to be associated with organisational change.

Hence with the commoditisation of the means of mass communication (i.e. the internet), new forms of organisation appeared known as Web 2.0. These companies had different activities, practices, strategies and structure to the more traditional, enterprise organisations that existed before.

In general terms, this cycle of evolution and its interaction with inertia barriers creates three economic eras - peace, war and build. During the peace era, sustaining change is particularly high, companies fight to maintain their relative position and inertia barriers to change help support the status quo.

The war era occurs when an activity evolves from one state (such as products or rental services) to another (such as commodity or utility services) and during this time disruptive change dominates whilst inertia barriers become a hindrance to survival. Companies literally are fighting to survive, often against their own internal culture and inertia to change.

So during the last IT war, caused by the evolution of the means of mass communication, these new web 2.0 organisations formed and the rate of disruptive change was high. Those traditional, more enterprise like companies that were impacted but survived the war had adapted and learnt many of the lessons of web 2.0. Today, social networking, social media, rich internet applications are the norm.

However, cloud computing - which is nothing more than the evolution of a wide range of activities from products (and rental services) to commodity (and utility services) - has initiated a new era of war.

The models predicted (and this is what we found) that there are three main forms of IT organisation in the wild - the traditional enterprise who have adapted, the web 2.0 players and a new breed of Next generation companies. The practices, activities, strategies and organisational memes of these Next generation are the ones which will tend to diffuse and dominate our industry.

The underlying framework, models and principles of how this works is part of a report I'm finishing for the LEF. Including in-depth surveys of over a hundred companies, it provides a reasonable hypothesis of organisation evolution across activities, practices and strategies. I say reasonable because it's more than postulation as there is data that demonstrates the pattern but this is not peer reviewed, the sample sizes are small and hence its only a reasonable hypothesis and requires a good dose of scepticism.

I'm not going to go through the report but I thought it might be useful to just comment on how to identify the Next generation in general terms.

If your organisation :-

• embraces change and is acutely aware of inertia barriers
• has primary goals based upon disruption of existing markets and growing ecosystems rather than a focus on profitability and growth into emerging geographical markets
• views commoditisation not as a liability but an opportunity
• operates through small, highly empowered teams building and creating services
• builds and exploits ecosystems by enabling others to build upon its services
• uses data analytics rather than metrics to determine action
• continually challenges and removes processes
• understands evolution and avoids one size fits all mentality
• builds distributed systems designed for failure that use commodity IT where possible
• considers itself to be as, if not more, efficient than Amazon
• games behaviour both internally and externally
• views culture as malleable and focuses on talent density
• views open source as a tactical weapon
• is seen by others to be simultaneously highly innovative, customer focused and efficient despite what Porter said on the subject

... then you're Next generation. If this isn't you, you're not. If you're not, then just hope this war doesn't stretch into your industry or that IT isn't a major barrier to entry into your space or this hypothesis is completely wrong.

I've provided a comparison between the traditional enterprise and the next generation in the following table.

Along with retail, media, travel firms and others who have already suffered in the last war - we should see software products & hosting, insurance and retail banking dragged firmly into this one.
Of course, along with this war era comes a build era, a golden age where the genesis of new activities flourishes and we see periods of frenzied growth.

The cycle is continuous, and the next major war after this one should be related to the commoditisation of the manufacturing process itself ... now, that'll be a big one. For me, this is personally important as it creates an opportunity to test the hypothesis.

What we should see as the means of manufacturing becomes more of a commodity (driven by 3D printing, printed electronics and hybrid printers) is a high degree of disruption in manufacturing industries as inertia barriers to change are broken by new entrants whose practices will be remarkably different from the existing players. The practices of these Next Next generation of company will diffuse and become the norm.

If this hold true, then I'll have enough to finally put the work up for peer review - having initial data (covering 4,000 data points), a hypothesis which describes a pattern from that initial data and has been preliminarily shown to exist in this current war through a survey (providing in total over 6,000 data points across 100 companies) and finally a pattern which is predictive.

If it doesn't and is falsified then it's back to the drawing board. The downside is I'll have to wait many years (possibly as much as a decade) before the next war starts ... if only companies were more like bacteria that I could grow in a lab.

Next phase of research ...

Many years ago, I produced the ubiquity vs certainty curve to describe the process of how business activities evolve. It took 4,084 data points to create the curve and more details about this topic can be found here.

Currently, I'm researching into how organisations evolve. After conducting a number of general and then specific interviews (creating a thousand data points), I've been able to create models of evolution which hopefully I'll be using in future presentations.

However, I need to collect more data to test the models and either verify or falsify them and hence I've put a general survey online : [Link to Survey]

The presentations that I give at various conferences are based upon this process of hypothesis and testing, so if you have ever found my work useful (such as my various talks at OSCON on cloud computing, see below) then I would be very grateful if you could take 10-20 mins to complete it.

Depending upon the results and validity of the models, I'm aiming to give a number of talks next year on how organisations evolve combined with techniques to exploit this. Naturally, I'll be blogging about the findings as well and the survey does allow you to provide an email in case you'd like a copy of the overall results.

[Link to Survey]

Thanks

Simon Wardley

OSCON 2010: "Situation Normal, Everything Must Change"

Preparing for war

Following on from my post on ecosystem wars, I thought I'd discuss some techniques and tactics to use. However, before I do, I need to first describe the organisation that I hope you work for. If this doesn't describe you and your organisation then the techniques and tactics probably won't make sense and I can save you the trouble of reading the next post.

Once again, my apologies to regular followers or attendees of my presentations, this post is just scene setting and so it runs the danger of teaching grandma to suck eggs.

I'm going to assume you're battle hardened, you realise that business is all about warfare and you've got a keen eye for competition. You've probably done a stint in the typical organisation, scratched your head over some of the practices and ultimately found yourself in a new sort of company (possibly created by you).

You understand what an organisation is. Rather than making the mistakes of the past and simply grouping people, activities and methodologies into generic structures such as IT, Finance, Marketing - you've taken the time to look. You may well have profiled your organisation (see figure 1) and identified those activities you consume, those activities you sell and those activities which act as barriers to entry into your industry.

Figure 1 - Profile (click on image for higher resolution)

You know the importance of ecosystem and how this can both accelerate innovation and reduce your risks. You might be using a model akin to ILC (innovate, leverage and commoditise) to grow and keep a vibrant ecosystem around your products and services (see figure 2).

Figure 2 - ILC model (click on image for higher resolution)

You know full well that methodologies have to change with lifecycle because characteristics do and how activities are interconnected (see figure 3 & 4). One size never fits all isn't effective hence you don't engage in the typical debates of this vs that, agile vs six sigma, push vs pull - you know you need both.

Figure 3 - How Characteristics Change (click on image for higher resolution)

Figure 4 - How Methodologies Change (click on image for higher resolution)

You also recognise that not everyone is the same, you have different types of people :-

• Your pioneers are feverishly imaginative, often chaotic in nature, constantly exploring and they create the crazy stuff. They work on a cadence of weeks, maybe months and they fail often and miserably but they're never afraid to experiment. They want to push things out there, they're infectious, they can even be hazardous. They're not a "safe" pair of hands but you don't want them to be. Every now and then they create your future source of competitive advantage, though you don't know it until it starts to be adopted by the wider ecosystem. They are your Da Vinci's.


• Your town planners build the core of your company and the components which your pioneers develop upon. They build the solid, useful and beautiful and they're obsessed with getting things better, faster, more efficient and more reliable. They're meticulous, methodological and geniuses who hide worlds of complexity behind standard interfaces. They're ultra reliable, your "safe" hands and they work on a cadence of months, even years. They provide the operational efficiency which you can use to bury your competitors. They are your rock, they are your Vitruvius'


• In between, you've got your settlers. They watch the landscape, your competitors and spot the patterns which are going to either disrupt an existing revenue stream or reduce some barrier to entry. They constantly take innovations away from the pioneers and force them to move onto the next thing. They'll drive that innovation into the wider ecosystem, spin it out or fail it fast where necessary. They adapt to the changing environment and adopt what's growing. They've always got their eye on pushing a growing trend towards the town planners. They listen to the ecosystem and whilst they don't create the future or build the cities, they play the games of tactical warfare which are so essential to survival. They are ruthless to your competitors, nurturing to your own ecosystem and you're just glad they work with you. They are your Machiavelli's.

You probably identify yourself with one group and you could probably have read down the list of your employees naming which group they belong to. You didn't have to, they told you.

You've long given up on trying to create departments with a mix of Da Vinci's, Machiavelli's and Vitruvius' and listening to the constant arguments within those departments about how to best run IT or whatever they're assigned to do. You understand they won't agree, they never will.

You understand that outsourcing a department may get rid of the arguments but you'll end up removing sources of competitive advantage. It's better to let the town planners outsource those activities that can be removed.

You've given up making speeches about the need for innovation or efficiency, you know you need both. You've also realised that you need to nurture both pioneers and town planners to do this and you have to let them use the tools they need to get the job done. You understand those tools are different. One size fits all seems a long distant and best forgotten memory.

Hence you've probably decided to structure yourself around change and have groups like pioneers, settlers and town planners - though you'll call them something else. You've probably discovered the alignment issues between your old groups was an artificial construct of how you organised yourself. You've probably also realised the importance of the settlers in managing change and wondered why you didn't do this before.

You've almost certainly realised you want the best Da Vinci's, Machiavelli's and Vitruvius' to compete and hence focus almost religiously on high levels of talent and acquiring the best, no matter where they are in the world. You remove any and all unnecessary vestiges of the old world - expenses, timesheets, standard company laptops and so forth and instead have instilled a culture of respect.

You're going into a war. You want your people fighting and you want them to have the tools they need. if you can't trust your people to fight on your side then you don't want them. Your management reflects this, your organisation reflects this, your people reflect this. It feels vastly different from the old ways you remember.

If this is you, then the next post on tactics will make sense and we can go on to explore some of the actions being taking by the big players in our ecosystems.

Pioneers, Town Planners and those missing Settlers.

All business activities evolve, they share a fairly common lifecycle described in the following diagram. From innovation, to custom built examples, to productisation (including the appearance of rental services) and finally to commodity (including utility services).

Figure 1 - Lifecycle (click on image for higher resolution)

As those activities evolve, their properties change from a chaotic to a linear extreme. In the chaotic stage, the activity :-

• deviates from what has existed before and is a novel practice.
• is dynamic and constantly changing.
• is rare and poorly understood.
• has high levels of uncertainty and it is not possible to predict future outcomes.
• has no market data, competitor analysis or well understood trends.
• has characteristics which emerge as we learn about it.
• is strongly affected by serendipity, chance encounters and discovery.
• is a potential source of future worth, differential and hence competitive advantage.
• is a gamble

By the linear stage, that same activity has evolved and:-

• is mature and rarely changes.
• is standardised with a wealth of best practice.
• is commonplace and well understood.
• has a high degree of certainty and known impacts.
• has an abundance of market data, competitor analysis and trends are well known.
• has well defined characteristics.
• has well defined procedures and plans for implementation.
• is a cost of doing business with little or no differential advantage except through operational efficiencies.
• is a known quantity.

Now all businesses consist of a mass of activities, each of which may be at different stages of their lifecycle (stage of evolution). You can map a single business by examining the components involved in a line of business and their stage of lifecycle. You can also examine broader effects by plotting the frequency of activities at different stages of lifecycle thereby creating a profile for an organisation or an industry. This is shown in the figure below, to which the chaotic, linear and in-between stage of transition has been added.

Figure 2 - Profile (click on image for higher resolution)

The techniques which you use to manage each of the phases of profile (chaotic, transition, linear) are entirely different because the fundamental characteristics are different. Which is why no one size fits all approach to management exists. For example, agile development approaches are ideal for the innovation (chaotic) and early transition phases but are superseded by more structured approaches such as six sigma in the late transition and commodity (linear) stages. You can't apply one size fits all without either hampering innovation or impacting efficiency. You need multiple techniques, multiple types of people and even multiple cultures. Alas we ignore it.

In many areas of management, this creates a constant yo-yo between one extreme approach and another such as : agile vs six sigma, networked vs hierarchical, push vs pull. The answer is invariably you need a balance of both. The trick is to learn when to use each.

Given all this, here are my questions :-

1. Since lifecycle is constant and the properties of activities change as they evolve through their lifecycle, why do we organise ourselves around type of activities (e.g. IT, Finance, Operations) especially as a "typed" approach leads to outsourcing of inappropriate activities, misapplied techniques & alignment issues between groups?

2. Why don't we organise ourselves instead by lifecycle with specialist groups managing each stage of lifecyle regardless of the type i.e. an organisation based upon Pioneers, Settlers and Town Planners?

3. Most companies have Research & Development groups (equivalent to Pioneers) and common or shared service groups (equivalent to Town Planners) but Settlers seem to be invisible. Why is this? Who manages the transition from innovation to commodity in your organisation?


-- Update 8th March 2015

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

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

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

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

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

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

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

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

I owe Robert Cringely a debt of thanks and hence the update.

-- Update 4th May 2016

These days I use terms such as uncharted to describe the more chaotic and industrialised to describe the more linear.

Words of advice ...

If you are going to the Enterprise 2.0 Conference in Boston, then whatever you do, don't miss Jenny Ambrozek's session on the 10th.

Jenny is one of smartest people I know and an absolute pleasure to talk with. I was so delighted when we were able to persuade Jenny to come and speak at Enterprise 2.0 Summit at Cebit and the session she ran was truly spectacular.

The highlight of the Cebit conference was Jenny, Euan and Dion on stage together. I'll be catching up with Euan and Dion at Web 2.0 Strategies in London on the 12th.

If anyone can record Jenny's session, I'd appreciate a copy.

[Additional note: I've just realised that Jenny is speaking at E2.0 Open, which is the FREE part of the Enterprise 2.0 Conference. If you're in the area and you can't afford to pay the conference pass fee, don't worry, you don't have to. It's worth checking out E2.0 Open, they seem to have a really good lineup.]

Hyperlinking ...

More and more people seem to be discovering connections between a wide variety of themes such as enterprise 2.0, web 2.0, SOA, commodification, BPO, cost, community, commoditisation, knowledge management, architecture of participation, worth, freedom of expression and enquiry, competitive advantage, cost of doing business, radical innovation, ubiquity, barriers to entry, open source, open innovation markets, XaaS, organisational structure and issues with outsourcing.

This is all good news, as these are all intertwined themes and should be explored together.

Let me show a simple example of such connections. Innovations whether radical or incremental are the main long term source of competitive advantage and can occur across all organisational functions of a business. Hence you will constantly get incremental and radical innovations in the operation of a utility computing environment. However if computing infrastructure is increasingly seen as a CODB (cost of doing business) due to its ubiquity, then such innovations will trickle through to consumers via price competition between such providers, assuming you have a competitive utility computing market. Obviously for providers there will be a constant battle in improving operations.

So I recently came across a post by Andew Mulholland who blogs for CapGemini that "Competitive advantage is shifting from the cost management of transactions in the back office to business optimisation in the front office and the external market."

Whilst this specific premise is highly questionable, the overall post "Mesh working rather than Matrix working" is relatively interesting.

Why interesting? Well, you can literally read how Andy is making the connections to some of the themes above. It's almost a written diary, as he tries to "tie together the pieces".

I find it fascinating that he talks about the " Mesh of people and systems is potentially a never ending huge open environment extending externally as well as internally rather than the closed internal world of Matrix working." which implies a constantly free-forming and fluid organisational structure. Whilst "the relationships in Matrix working are always pre determined, fully defined and use known data." implies a more structured approach.

This suggest a need for an organisational structure to match a change from uncertainty to certainty and from undefined to defined. Now this is something that I would agree with.

I also noticed he blogged recently about value vs cost. Now, I'm not actually interested in whether I find his analysis convincing but rather that he makes a strong distinction between cost and value (or worth), which is something I would agree with.

Andy also seems to be exploring the XaaS world, barriers to participation, the distinction between CA and CODB and the need for different mechanisms of management and governance. All fascinating areas - an overview of my thoughts on these subjects can be found in my web 2.0 talk.

Interesting person - I'm curious to which connections he will make.

I'm starting to see why Richard George used the term hyperlink when describing making connections between things.

Of course, you always start with amateurs (it's a novel and new field) and then the professionals (amateurs with experience) come in later on to tidy up the mess. It's the same with any innovation - whether it's a product or a process.

Howl at the moon ...

My first article "The sum of all fears" has been published in the Butler Group Review - it's a review of the underlying processes behind web 2.0. Obviously I'm delighted and hopefully my second article will also be out soon.

Anyway, I thought I'd take some time to write a little more about the book I'm writing on understanding your landscape, coherence and its origin. It all stems from conflicts which I'd noticed in the business world. Be lean and mean but yet be a great company to work for; be innovative and high speed but plan in detail; create value but focus on cost. Combine this with concerns over aligning to the business strategy and most organisations seem fairly schizophrenic (multiple changing and overriding personality types) or at least bipolar (mood swings between extremes).

Let's look at the business strategy first. Most business strategies to me are very noticeable for what they miss out rather than what they include. Any business is a mass of potential competitive advantage (CA), transitional and cost of doing business (CODB) activities. However most business strategies emphasise the differential, the competitive advantage whereas the cost of doing business is often diminished.

Now let's bring that skewed strategy down to the level of a function such as IT. As said before a function is a mass of connected activities (products and processes) with each activity at its own stage of its own S-Curve of evolution between idea and ubiquity, from novel and new to commonplace, from uncertain to certain, from undefined to defined, from dynamic to static and from barely repeatable to easily repeatable.

Most organisational functions seem completely unaware of what stage of evolution their activities are at, even assuming they are fully aware of what activities they do or what their users actually need in the first place. Most functions would have a hard time splitting their activities into potential CA / Transitional and CODB.

As any activity moves through its S-Curve then the characteristics of that activity change and the methodologies, culture, finance and governance needed to manage that activity change as well. Most organisations seem unaware of this and manage by function rather than by stage of evolution.

To this recipe for disorder we need to add the latest trends. For example outsourcing, a sensible option if you are outsourcing a commoditised and ubiquitous activity to an environment containing multiple providers and second sourcing options. A fairly hit and miss affair if you are outsourcing a function or parts of a function without any knowledge of the stages of the activities that it contains. In the latter case you are likely to be outsourcing innovative activities with appropriate skills and capabilities along with commoditised activities. The net result of this reduces any benefits from outsourcing and in some cases can actually weaken the organisation's position. There are similar problems when it comes to corporate innovation (all these ideas are wrapped up in the framework which I've spoken about at various conferences). These problems are solvable but you need to understand your own landscape and for some reason, which evades my attention, most seem to be actively ignoring it. To the cooking pot of confusion, now add a splash of skewed business plan and hey presto ....

You have a situation in which you have lots of activities (which you may or may not be fully aware of) that you are often trying to manage with the wrong methods (as you are unaware of stage and how to govern by stage) in order to fit in with a skewed business strategy (which ignores most of what you do and what your user might need) whilst dealing with a bewildering array of trends from the outside environment for which no-one ever seems to give you a straight answer (as neither you nor anyone else is in a position to say what the effect is on your organisation without knowing the above).

Each time I read that paragraph, I feel shudders of arrogance and a dreadful feeling that I'm getting it all wrong. There are lots of smart people out there, lots of good business schools, lots of great thinkers but I keep feeling like the kid pointing at the naked emperor or the villager shouting "he's the werewolf!"

Now, I've been poring through the history books and every time I have come across a company which has moved away from a functional organisational design to one based around the evolutionary stage of activity - it has had dramatic positive effects. Unfortunately, this move has always been coincidental to some other activity and organisations have tended to lapse back into a functional approach over time. The more I research I do, the more evidence I gather. I am now more convinced than ever that the issues surrounding corporate innovation, outsourcing, alignment with business strategy and a host of other conflicts are all primarily due to a monumental howler in organisational design.

Before you call me barking mad ... I've been called those words at various points over the last decade when I've talked about commoditisation of IT, commoditisation of manufacturing processes, spime scripts, 3D printing, competitive utility computing markets, biological manufacturing systems, dynamic vs static methodologies, patents vs innovations, utility computing and others. To quote myself (from The sum of all fears) :-

"Innovations are dynamic problems and require dynamic methodologies such as agile development and a more worth focused VC-like approach to financing. By contrast, the use of utility services requires a focus on cost, standards and static methodologies. Unless you intend to stop innovating and give up on the long term source of profit for any organisation, then the IT department must find a way to manage both of these extremes. As commoditisation is ongoing, you’ll also need to continuously deal with the transition between these two extremes." 

I have the advantage that I've lived and breathed in an organisation that was designed around these three different stages of evolution. In fact, I was the one who re-organised the company. However, I'm no werewolf and I'm no seer - I just like history books - and so what worked for me may not work for you. But there isn't one idea in the above list whose origin can't be traced back over thirty years ago and yet we keep on repeating the same old problems.

A lunchtime interlude

Before I get stated on a discussion of the stack, I'd like to talk about the pleasant lunch I had today with a friend who is a research analyst. I discovered that something which I thought everyone had known for the last decade may not actually be that widespread.

Most organisations tend to spend more on CODB-like activities than necessary, because it is easier to justify, and less on CA-like activities because worth is such a difficult concept.

Since CODB-like activities are in the majority, then the correlation between investment and worth is generally broken.

I have been operating under the illusion that this was common knowledge. The revelation that maybe it isn't may help to explain some of my frustrations with our IT industry.

The ideas of worth which I discussed in earlier posts are not mine, nor are they new - they are an amalgamation of my "collective experiences" from others and in most cases are at least a decade old.

The main problem appears to be that most organisations do not segregate activities (into for example CA, transitional and CODB) and tend to instead use singular approaches to manage activities (such as cost focused). As discussed in earlier posts, this leads to the perverse situation that we tend to spend more than required on the necessities which don't bring value and less than required on things which might.

Customer: "I have $300 to buy some essentials like food and some books on finance. I'm hoping to improve my understanding of the field and therefore my prospects"

Sales Rep: "Certainly, now food is a necessity, something you really need."

Customer: "Of course"

Sales Rep: "Well, I have lots of studies here to show how much food is important to you. Everyone uses it you know?"

Customer: "Really, wow that's interesting. I can see food is really important."

Sales Rep: "Hmmm ... I don't seem to have any reports on why improving your understanding of finance will help you?"

Customer: "Well, it's just this idea I have. It's just a hunch, a gamble."

Sales Rep: "Sounds expensive especially if you don't know what the return will be?"

Customer: "Well, it was just this idea."

Sales Rep: "Are you sure you just want any old food? You look like a dyanmic, go-getting sort of person surely you want to compete with the best?"

Customer: "Naturally"

Sales Rep: "Well this report says that if you increase your intake of blue coloured food, your performance ... as measured by athletes ... will increase. All the top notch people are using it - here's a client list"

Customer:"Wow, oh look I'm definitely more go-getting than Fred"

Sales Rep: "It's more expensive to buy blue food - quality always is - but it will give you the edge over others. I've got some ROI calculations for you and case studies if you like?"

Customer: "That's impressive it certainly explains the value. I can also see all these other people I know buying blue food. It certainly justifies the expense. Listen forget the books, just give me $300 of the blue food."

Sales Rep: "Not a problem. Would you like me to book you a session with one of our consultants to tailor the shade of blue required to create synergy with your own lifestyle and to maximise your advantage?"

Customer: "Sure."

Now, I'm not knocking the necessity to eat a well balanced and satisfying diet, but assuming you are fortunate enough to do so then food is just a CODB of living. If you want to improve life beyond this, you'll to need to look further up Maslow's hierarchy of needs.

It's a glib and somewhat turgid analogy, but It's no different with an organisation.

So when I first came across Paul Strassman's work in the 1990's that IT spending was not correlated to company value - it wasn't a shock, just empirical evidence showing this effect. I was delighted that someone had taken the time and effort to gather the evidence which showed what was plainly occurring in my day-to-day experience.

When much later Nick Carr published his article, I felt elation that finally we had a spokesperson willing to take on the insanity and the industry around it.

With the growth of open source, I expected as a side effect there would be a greater shift towards commoditisation of CODB-like activities and an acceleration in innovation and hence disruption of existing industries. So I was delighted when Andrew Mcafee published his report showing increased turbulence in the IT industry.

I expect that turbulence to increase as the "X as a Service" industry grows.

I was just part of the huge crowd who appreciated these breakthroughs to "sense and reason", who understood that the singular magic bullet approaches, the over-hyping of ROI and the sweeping broom of cost focus combined with an organisational inability to identify worth was at the heart of the problems.

After the discussion today - I'm starting to feel that crowd is either smaller or more quiet than I realised. Maybe I'm missing some critical point or a lot more discussion is needed?

Well, if I am operating under a delusion - it is probably best to continue ...

My personal blueprint .... Worth Part V

The general blueprint I use when dealing with such issues is as follows. First, I divide IT projects into three categories - CA, Transition and CODB. Then for each category I take a different approach :-

With CA like projects (i.e those which are novel and new in the industry, few examples in the wild, minimal whitepapers, some percieved value and relevant) then use more of a VC like approach (IT Finance) or Worth based development. Focus on worth and dynamic like processes for development (e.g. SCRUM, XP etc).

With CODB like projects (i.e. those which are common in the industry, necessary, lots of examples, lots of whitepapers, even conferences on the matter) then focus on cost reduction, standardisation and static like processes (e.g. Prince2 etc).

With Transition like projects (i.e. those betwen CA and CODB) then either:-

* If new to the field then calculate potential worth, risk and costs and then it's a judgement call - wait and adopt or disrupt.

* If already in the field then attempt to move your service to become the standard product for the industry and hence reduce cost of migration.

Now this is my method, there are many others ... this is not about which method is better. I used my own blueprint to illustrate what I believe is an important point:-

the type of approach which should be adopted depends upon the nature or the class of the problem you are trying to solve

It's not about one approach, a magic cure to solve all problems.

Blink ... did I miss something?

I'm following some discussions on organisational structure and development on the 21st Century Organisation Blog

Euan and Jenny have been very kind not to shoot my observations completely out of the water (thanks!) - there are some very smart cookies on this blog. Well worth a good read, it's certainly got me scurrying off to check up on stuff.

Excellent job, this is a field which my eyes are being rapidly opened on ... it's way more developed than I realised.

Last week, I thought I knew something on this field ... now I'm in the dark ages .... that information cycle has certainly speeded up again.