The Dynamic Enterprise
I’m in the airport in Victoria on my way back from giving a talk sponsored by the Office of the CIO in the Government of British Columbia entitled “Enterprise-Scale Business Transformation with SOA and BPM”. Increasingly, I’m seeing efforts around large-scale Business Transformation involving the dynamic system of Business and IT.
In my talk, I asked the following question:
How do you achieve “Business Transformation” in a system that:
* Is exceedingly interdependent (or in the words of the CIO here, “tangled”)
* Responds unpredictably and dynamically to change
* Is complex enough that no single human is capable of understanding it all
In short, a system that exhibits dynamic complexity as well as high-order entropy. I have an elegant solution for this problem, but this blog entry is too short to contain it.
One Continuous Mistake
I’ve seen lately many methodologies that depend on “objective data” and measurement to align organization. Don’t get me wrong, measuring the business value of any activity is a way to align activity in a paradigm of continuous improvement. I’ve long been an admirer of Toyota Kaizen, whose principles of long-term employment, respect for the individual, empowerment and “Moving Forward” (continuous improvement) are based on a balanced and “lean” adaptation philosophy that evolves dynamically with the business environment. Not only has this facilitated the transformation of Toyota from a car maker to a hybrid car maker, but it powered their transformation from a maker of mechanical looms to a carmaker after World War II.
The granularity of the improvement cycle is a key success factor in using continuous improvement as a paradigm for business transformation. This is because a short cycle reduces the risk expose to certainties that “simply aren’t so”. @bmichelson @mtdonahue tweeted it very well by saying:
Walking on water and developing software from a specification are easy if both are frozen – Edward V Berard
What is of higher value in transformation of dynamic systems is not how you succeed, but how you fail. The ability to fail continuously and improve continuously is the secret to transformation. This requires the organization to firstly overcome fear of being “locked in” to static business processes and governance policies. Unlike the old infrastructure, the new infrastructure of Business Transformation is based on continuous improvement on short cycles and thus empowers active participation and collaboration in the shaping of optimal process. As Toyota knows, nobody knows more about process optimization than those who execute the process.
Mechanisms need to be in place for lowering the cost of failure. Short cycle times address this (borrowing from Agile), but also things like Cloud Computing’s Elastic payment model dramatically reduce the cost of failure. The era of huge IT failures should be replaced by the era of distributed intelligent transformation. Thousands of microscopic iterations of process improvement managed within a frame of trust and coordination.
An airplane is continuously off course, but also continuously reorients towards its best sense of where it’s going. As such it is capable of optimizing itself both locally (to avoid weather features and air traffic) and globally (to reduce fuel consumption and travel time). This dynamic interplay of local and global optimization is in the sweet spot for the transformational agenda.
There is no “I” in IT…oh wait yes there is.
I’ve had the great pleasure to read @davegray and his insightful post about a general theory of Information Relativity
The lovely insight here is the fundamental lack of separation between information and intention. I keep seeing transformation methodologies that depend of “objective information” to align organization, but this insight helps us to understand that information (the “difference that makes a difference”) is different from data and that the transformational power of information is inextricably intertwined with principles of presenter bias, observer bias and other key factors.
A nice commentary by toothpastefordinner.com
Nowhere is this more evident in the emergent behavior of “KPI Gaming” that manifests in organizations who have successfully implemented organizational alignment through continuous measurement of Key Performance Indicators, and have tied those KPIs to individual and organizational incentives, job descriptions and roles and organizational structure. I spoke with a CIO in Australia who bragged about how dramatically he improved project delivery time to get a fat quarterly bonus, but received a wink and a “no comment” when I pressed him on whether he rescoped any projects in order to get there. Obviously if you cut one project into 10 you can deliver projects “ten times faster”.
This connects with the idea that “direct observation” of reality is rare and almost always mediated through our past experience and the filter of social expectation, culture and near-instantaneous mental reinterpretation. Mediation is a fundamental pattern that underlies scale in organization, as it provides a way to enforce policies, culture, route information and detect patterns. Routing information means that the organization gains the ability to amplify inspiration and best practices, while policy enables organization to enforce best practice and define itself. Of course the “mediation” pattern in Service Oriented Architecture typically involves placing a piece of hardware and/or software in the path of message flow, but there are technical architectures that perform mediation functions embedded in the endpoints.
For humans, embedding organizational culture, policy, pattern detection and information routing in the endpoint means fostering a culture that understands deeply when to escalate issues, when to share information, where to share information and when to report, stop or perpetuate behaviors. This internalization of behavioral patterns, habits and culture allows organization to achieve what Peter Drucker refers to as the goal of organization: “To enable ordinary people to do extraordinary things.”
Lorraine Lawson wrote in her blog today:
“Honestly, I’d rather write about anything besides governance, particularly SOA governance.”
This post explores the concept of Federation, the balance of regional and central authority as the differentiation between Governance and Management. Ultimately this brings me to Daryl Plummer’s folk definition of Federation which is:
“What do I have to give up in order to be a part of something bigger”.
Linking that with Drucker’s “organization enables ordinary people to do extraordinary things”, one is led to the hope that scale does not equate to life-sapping and stultifying constraint and that the autonomy that one yields to belonging is amply compensated by the scale and longevity (legacy in the positive sense of the word) of Enterprise. Although both Dilbert and “The Office” suggest that the sacrifice is your life in exchange for 20 pieces of silver, we must envision a world where great problems can be addressed at great scale.
Cycle time for continuous improvement empowers the individual to make changes in their local environment and thus experience empowerment and ownership. It’s only the rigidity of policy and process that leads to the snuffing of the individual life-force in the Enterprise.
Or perhaps Mother Teresa is right and we cant do any great things, we can only do small things with great love.