Category: Innovation Page 1 of 2
Great article on patterns by Kris Meukens here.
My slightly self-indulgent reply is below. I’ve always been fascinated by how our understanding of IT and organisational design in general seems to follow the same path of Christopher Alexander’s works on the design and architecture of the built environment.
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I think it’s interesting to see the parallel and delayed timeline between “patterns” as they evolve in built architecture theory, versus patterns in IT.
I’m not an expert in either but I see the history of patterns in built architecture through the lens of Christopher Alexander:
- Notes on the Synthesis of Form (1964, year 1). Starts to describe what later came to be known as “patterns”.
- Notes on the Synthesis of Form – Preface to the first paperback edition (1973, year 9). Already starting to rebel against those who focused on “design methods” as a meta study and assets “I reject the whole idea of design methods as a subject of study, as I think it is absurd to seperate the study of design from the practice of design”.
- A Pattern Language (1977, year 13). These are fully formed patterns with the notion that they can be combined to create designs. It’s not a simple mix and match – still leaves room for a design process.
- The Nature of Order (2003, year 39). Doesn’t exactly reject patterns but focuses on wholeness, a set of qualities, and a set of structure preserving transformation that help designs unfold.
- The Battle for the Life and Beauty of Earth (2012 – however focuses on 1985, year 21). This focuses on two world views that he saw as in battle – one of which was opposed to his style of building.
Reading “Battle” in particular makes you feel our current understanding of patterns and our obsessions with Agile, Design Thinking, etc mean we are in the equivalent of year 25.
Reading the above article feels like we’re heading towards the equivalent of year 30. I mean this as a compliment.
Good article, including the simple fact:
In the industrial company of the future, there won’t be a separate IT department.
From: http://www.strategy-business.com/article/The-Thought-Leader-Interview-Bill-Ruh?gko=9ae51
Interesting to see the progression of ideas from academia through to government.
Take for example “cognitive biases”:
- 1972 – Academic work – “The notion of cognitive biases was introduced by Amos Tversky and Daniel Kahneman in 1972” from here.
- 2011 – Popular work (~40 years later) – ““Thinking, Fast and Slow” spans all three of these phases. It is an astonishingly rich book: lucid, profound, full of intellectual surprises and self-help value.” – from here.
- 2015 – Mainstream in business (?) (4 years later) – “research suggests that there are a number of cognitive stumbling blocks that affect your behaviour, and they can prevent you from acting in your own best interests” – from here.
- 2016 – Government (impressively, only 1 year later) – “As human beings, we think we make rational decisions every day, but in fact, we’re all seeing the world under a set of behavioral illusions that can really muck up our decision making. These are called cognitive biases” – from here.
Well done to the DTO folks for making that last leap impressively fast.
LONDON Nine of the world’s biggest banks including Goldman Sachs and Barclays have joined forces with New York-based financial tech firm R3 to create a framework for using blockchain technology in the markets, the firm said on Tuesday.
Commonwealth Bank of course joined earlier.
from: http://www.reuters.com/article/2015/09/15/us-banks-blockchain-iduskcn0rf24m20150915
From my old notes. It should be a simple process to identify the opportunity space for innovation – in mobility for example – whereby a quick view of the total potential set of benefits can be identified. It’s then just a matter of investment priorities and execution. Simple, right?
I would have loved to have seen the presentation that’s been given some positive press here. Westpac are putting some meat around their transformation agenda after having learnt from the experiences of other banks.
Many of these large scale transformation programs (think ERPs, CRMs, core systems replacements, etc) have a tendency to teach the organisation about a product. The whole organisation will learn how to implement that product – they’ll learn it’s strengths and weaknesses, and the right and wrong ways to successfully exploit them. Those in the organisation who aren’t part of the solution will at least learn that they have an opinion about these things.
Now, the actual benefits of these programs aside, this is a strange way to for your organisation to spend a few years. These programs become a distraction that take up executive, management, and operational attention. But what if you changed the conversations so that rather than learning about a product, you completed the same program but what you where really doing was learning about your customers and how to better orientate your organisation towards their needs?
I think the approach Dave Curran has managed to convey (again, based on the reporting – I wasn’t there) starts to do that. This approach means that effort is first and foremost about the customer. Now I’m the first to say it’s not that simple. There is still a lot of work to make that vision operational. But it completely changes what the organisation will primarily be learning during program.
The key lessons now will be about customers – what Westpac knows about them, what they don’t, what decisions they are making every day, and how that might be understood by Westpac staff when making their decisions. The other lesson they will be learning is how technologies they already have, combined with technologies available in the market, can be used together to support various customer scenarios. Not trying to find “the best” solution without any context, but trying to design solutions across a well informed view of what is important to customers.
I think too that if this is done right, the discussions won’t be broad sweeping generalisations. They won’t be “is this one monolithic system really customer focused?” Likewise, there shouldn’t be that tendency to continuously revert to “yeah, but what is a customer?” That conversation seems out-of-the-box but is typically only asked because the people in the room have never met a customer (!) so they revert to broad open questions rather than use their experience.
Done right, this approach will draw out rich, informed conversations that admit that we have to bring components together to support specific customer scenarios. It will draw out conversation about what we don’t (!) and ensure we find out. Done right, this approach keeps up the sustained momentum these programs need to do the hard work that will truly transform the organisation.
I have a few grounding concepts that I think are relevant here. They are quite simple in their nature but powerful as the basis for governing change. I’d suggest these should be established for the program.
The Customer Advocacy Office
We talk about the importance of customers all the time but often the question we don’t ask is “what is the business unit in our organisation that advocates for our customers?” I don’t mean lets give somebody the responsibility for customer and then split the role into “Contact Centre” and “Web site”. I mean real, serious thinking about customers. Being able to understand and back up with facts. Being able to offer targeted operational changes – backed by evidence – that will improve the experience of customers.
Customer Experience Campaigns
Your organisation is probably comfortable with marketing campaigns. But what if the concept of a campaign was expended to include any situation where your customer had a defining positive or negative experience with your brand? Customer Experience Campaigns apply the basic concepts that are used to manage a marketing campaigns to all of the individual experiences of your customers. This is actually really difficult, and really important. And it’s what we mean when we say we want to be customer focused – but do we actually do it?
Customer Information Management
There is a lot of work required to get a single view of a customer. There is even more work required to repurpose that view so that it highlights the information required for different groups to make decisions (i.e. single core data, multiple views). But that’s still not “customer information” – that’s just consolidating and presenting data effectively. A true responsibly for customer information management means knowing what you don’t know about your customers, and understanding the value of finding out. It also means understanding how modern technology allows us to understand and predict the complex decisions that our customers are making by using big, social, cheap, integrated data to act as a proxy for intimacy when you can’t always get inside your customer’s heads.
Customer Return on Operations
Things like Net Promotor Score (NPS) are great but they are the tip of the iceberg when it comes to using customer-driven metrics to improve your organisation. These “voice of the customer” metrics are great but they are “lag” indicators until you do the correlation required to make them “lead” indicators. Measuring you customer return on operations combines how your customers think you perform with how you think you perform. It’s hard, it takes a prolonged effort, but who could argue that it’s not important?
Competency Centre -based Business Transformation
Many transformation programs are top-down. This means they are limited to the types of transformation that you can achieve top-down. The Westpac approach will required a middle-out approach. There are many functions within the organisation that will need to be transformed to execute on the vision. Thankfully, competency-centre based business transformation is an excellent alternative to top-down transformation – if your transformation team “gets it”.
This approach also includes the question of which type of “core” you want your organisation to have (accounting, versus product customisation, versus customer hub). When you’ve done the right homework, you can then make clear and informed decisions on whether something is differentiating or not differentiating. This decision drives standardisation but it is so mixed up in a tight bundle or current power struggles it needs an informed third party to arbitrate.
I’m not saying just talk about the concepts above in the executive management team. I’m saying that in addition to the other governance required for this sort of program there are executive roles for each of the above areas. There are charters and terms of reference for each of the above areas. Each of these areas should be managed as a business capability where the executive in charge is responsible for working across functions so that the people, process, information, and technology all work together to support the capability.
By the way, I’m not sure I get the title “Dancing About Architecture” that the article I link to above uses. I’m assuming it’s a reference to the “Writing about music is like dancing about architecture” quote that I, like everybody else, mis-attributed to Elvis Costello until I just looked it up. It’s a nice image – the idea that you might use something other than architecture (such as your customers) to guide the direction of your architecture. You dance around (or “about”) your architecture so it knows where to look. Though by alluding to the music quote the author seems critical of the approach. Anyway – looking forward to part 2…
IT News is all about government intervention today.
Leading with stories on the London Taxi blockade and the likely unpopular stance of the AIIA to recommend not introducing legislation to address the so-called “Australia tax” on IT products and services.
It all comes back to innovation. Uber, who the Taxi drivers are complaining about, is innovating. They’ve developed a high quality service that customers want. They are disrupting an industry. They are doing what every management consultant has been telling them to do (though I’m not suggesting that’s why they’re doing it).
As usual, their competitors want protection from the government. Which seems unfair and all very anti-competative of the taxi drivers but I understand where they are coming from. They don’t just want protection – they want protection in exchange for the all of the regulation they have had to endure in the past:
“Why, asked the drivers, is Uber allowed to compete in an industry that is otherwise highly regulated?”
Fair point. Previous legislation has an impact of future expectations – remember that.
Back here in Australia, where Microsoft has admitted it is engaging in the horrendous crime of “charging what Australians could bear” – AIIA is recognising that legislation that caps prices will just as likely cause exits from the market as it will cause lower prices. Just like minimum wage legislation – however desirable in its intended outcome – can’t help but cause jobs to disappear.
But what if it’s not just that Australia can bear higher prices? What if this just plays to our pride in being a lucky and prosperous country? What if Australia’s payment of higher prices reflects an innovation challenge?
It’s not all about price elasticity. There is another major competitive force at work here – the threat of alternatives. Perhaps the reason Australia appears to bear higher prices isn’t because of the prosperity of the lucky country no matter how much we want to believe it.
Perhaps Australia is paying more for IT products and services because our knowledge of alternatives is less.
I’m a happy Apple customer so I’m not knocking Apple products at all. But Apple was slow to make a dent in the Asian market because there are so many other options there. Success in Australia’s limited option market probably helps fund expansion into Asia (speculation).
Knowledge and availability of alternatives is an important force in competition and therefore prices. I’d argue that availability isn’t a problem in Australia (though it might be if you tried to regular price) but rather the problem is knowledge of alternatives.
I’m not just talking about alternatives to Microsoft Office like OpenOffice, LibreOffice, Google Doc, etc. I’m talk about alternatives to Microsoft Office like focusing on the content! Like not needing to write a long complex document to get things done. Like maybe using Photoshop instead and creating something a little more visual.
I’m also talking about alternatives like experimenting with your digital channels to try out new integrations with your customers using the devices they already use. Rather than writing an internal document to explain to a disengaged management team something they should already know. Take that team to a customer site. Or at least show them the data you have collected about in-store traffic flow.
AIIA has the right idea. The legislative framework needs to create the environment for innovation here in Australia. Not to try and protect us from the companies we freely purchase products and services from. The Australian response doesn’t always have to be legislate, or boycott, or feel helpless. Sometimes it has to be – innovate.
I just found a nice overview diagram (nice in content, not in style) where I thought I’d solved the problem of creating a customer-centric organisation just by breaking the challenge into its components.
It’s a year or so old but to be honest it still looks about right:
PDF: The Problem of Customer Orientation is Largely Solved – if you have the will to implement
It’s often difficult to understand how your portfolio of projects is actually helping your organisation deliver to its strategic goals. The problem is that the projects in the portfolio often don’t play a part in ensuring the overall portfolio is easy to navigate and cohesive. You need linchpin projects in your portfolio to hold the others together.
Linchpin projects are different to other projects in the portfolio. Linchpin projects don’t have a business case in the traditional sense – because they are strategically placed into the portfolio to hold it together, identify risks across the portfolio, and steer cross-project decision-making.
Linchpin projects are value-seeking initiatives that raise the value of the entire portfolio. In fact, linchpin projects represent the new normal for combining operations and program management in the digital economy.
Your current portfolio
Your current project portfolio is probably made up of three types of projects:
- That subset of projects that had a strong enough business case to make the cut at the expense of other projects
- Projects that your organisation almost left too late, so are now critical – or projects that unanticipated changes in your operating environment have recently made critical, urgent, or “must haves”
- Big, chunky, game-changing programs that have been initiated following a strategic analysis & planning process. These are often more of a top-down prioritisation of investment rather than a fully formed project, until a more comprehensive analysis of the full impacts is performed
The decisions that initiated each of these projects aren’t always perfect. But you have no choice but to plunge ahead with the projects. However, each of these types of projects presents challenges to the management of your portfolio as a whole:
- You selected some projects at the expensive of others – but when and which of those forgone projects will become your next critical projects?
- Critical projects that have now become urgent will need to take shortcuts – but what ensures these projects understand the shortcuts that are available, or to plan the follow-on work required when the projects are complete?
- Strategic projects represent investment priorities which will have the greatest impact on your customers, asset utilisation, and business performance – but how do you incorporate the best knowledge you have of what influences these into the strategic project’s planning and execution? (Without putting all other projects on hold!)
Major projects versus linchpin projects
It’s a mistake to think of your major projects, or your strategic projects, as your linchpin projects. Major projects are often run as exceptions, so the transformational impact of these projects is often limited or followed by organisational fatigue or regression. Linchpin projects on the other hand inject specialised disciplines into the portfolio and in many cases don’t need to be large investments.
However, there is an opportunity for your major strategic programs to host a number of linchpin projects to get them started. The trick is knowing which linchpin projects you need…
Which linchpin projects do you need?
Regardless of your organisation, the following linchpin projects should be in your portfolio. The characteristics of your organisation and current strategic direction will only impact the size and approach for each of these initiatives.
Project 1. Business capability based governance
Our organisations shouldn’t have a primary governance model that divides the organisation into functions and then constantly proliferates the need for cross-functional teams. Social enterprises don’t require this approach – so your organisation’s primary governance should be mapped to business capabilities, not functions. This is also the first step in ensuring “business/IT alignment” – by stripping back the historic and arbitrary separation that is the root cause of misalignment.
Project 2. Customer journey design & customer experience campaigns
If you can’t point to artefacts which describe an idealised view of how your customers experience your organisation, then you haven’t done enough thinking about your customers – and you have nothing to orient your organisation towards customer outcomes. Equally, if you can’t point to specific customer-facing processes, technologies, and metrics that continuously direct the resources of your organisation towards reenforcing positive customer experience and recovering bad customer experience – then your customer journey design is just sitting on a shelf!
Project 3. Asset life-cycle, utilisation, yield, and pricing
Airlines, hotel chains, mining companies, and farmers understand yield. They understand that large expensive assets must be effectively carved up to service the right customers, at the right time, and for the right price. In the digital economy this same process must be applied to every organisation’s assets. If you don’t understand the utilisation on your major assets, and how projects can impact this, then you are running a business that provides a higher cost product – or your are running a unsustainable business.
Project 4. Core shared data strategy, information asset governance, and decommissioning
Unmanaged, the information in your organisation can get out of control. We have access to so much technology – information technology – that is supposed to help us manage information. So why are there so many copies of the same documents? Why can’t we rely on information we receive from other departments? And what is cut-and-paste if not investment in the problem instead of the solution? The solution is to systematically discover and invest in information assets across their end-to-end lifecycle – focusing in particular on the “core shared data” that is key to coordination across business units. Oh, and don’t forget you can’t ever throw data away unless you know what it’s worth (i.e. Business value) – but some data you can’t afford to keep (i.e. Privacy Act).
Project 5. Combined process, information, and user forums – fit-for-purpose scorecards
Your employees know what is wrong. But there are few mechanisms for feeding that learning into operational improvement initiatives. Lean and Six Sigma ™ come to mind – but that’s just details. Whenever your process team talks to people who should be following processes – capture the reasons why they’re not! Whenever you find yourself questioning a decision an employee has made – capture the missing information that caused the wrong decision to be made! Whenever somebody throws their keyboard across the room – ask them why! Better still – combine all of this into a single session which uncovers what is wrong around this place.
Project 6. Innovation funnel, lean business case, and start-up support
Innovation, or rather an entrepreneurial culture, starts with hiring entrepreneurs. But what if you can’t keep them? There are three reasons you can’t keep them: 1. You don’t recognise the good ones – because you don’t have an innovation funnel. 2. You frustrate them – because there are too many barriers to implementing business cases for change. 3. They can get better, cheaper start-up support in the market. These things are easy to fix and can be funded to the extent that you value innovation.
Project 7. Voice-of-the-customer operational alignment – Customer Return on Operations
It’s pretty easy to gather basic voice-of-the-customer data. For example, you can just asked the simple “How likely are you to recommend us to your friends? And why?” questions at the heart of Net Promotor Score (NPS). The hard part is doing something about it. You need to systematically determine what parts of your operations have the most impact on your customers. Management of “customer return on assets” will tell you most of what you need to know about how your projects are impacting your performance – from your customer’s perspective.
Project 8. Competency centres and change levers – The Machinery of Business Transformation
There are two ways to transform your organisation: you could run a heavy transformation program, and then an even heavier organisational change management initiative – and hope you get both right. Alternatively, you can manage to a transformation agenda – vision – and a portfolio of integrated competency centres – collaboration and continuous improvement towards that vision. If you know your own organisation’s portfolio of competency centres, their service catalogs, their customers, and the most effective channels and levers of change for your particular organisation, then implementing your whole project portfolio, and avoiding unintended consequences, becomes much easier.
Project 9. IT federation: shrinking corporate IT and embracing shadow IT
Even with your primary governance now focused on business capabilities (see Project 1) you still need to manage IT. But the difference is you need to manage all IT, in the only way you can in a post-Cloud, outsourced, and BYO world – federated IT. Learn to manage IT without ignoring what is out of your control and you’ll revolutionise productivity within your organisation while spending less than you did on IT services, architecture compliance, and generally inconveniencing your stakeholders by trying to be the cost and standardisation tzar.
Project 10. Who are we: purpose, culture, communications, and performance
Engage, decide, communicate. There is always another opportunity to reinforce what makes your organisation unique. There are ways of doing this that improve performance. Try them.