|By Jason Bloomberg||
|August 15, 2014 09:45 AM EDT||
Imagine for a moment you’re in the woods, trying to climb to the top of a nearby mountain – only you’ve lost your way, and you’re not sure where the mountain is. So you get the bright idea: simply walk uphill until you can’t walk uphill any more. At that point you’ll be at the top of the mountain, right?
The answer, of course, is perhaps, but probably not – and in any case, the strategy of always walking uphill is an unquestionably poor technique for finding your way to the top of a mountain, given the unpredictable nature of the terrain. After all, this strategy will simply take you to the top of a nearby hill. Only if you’re exceptionally lucky will that hill end up being the mountain you’re looking for.
This hill-climbing story illustrates the problem of local optima: any optimization strategy that focuses on improving the current situation may not lead to the best solution. So, how do you find the best solution? Well, it depends. Perhaps you can see the mountain from where you are, but perhaps not. Maybe you simply have to RTFM (read the frickin’ map), assuming you have one, and you can identify your current location. Or perhaps you should set off in a random direction for a random amount of time, see where you end up, and then try going uphill – repeating as often as necessary. Eventually you’re bound to hit upon the mountain, right? Bottom line: there is no straightforward answer.
The reason this Cortex is spending time climbing mountains is because the local optima problem affects most Digital Transformation initiatives, since the majority of such initiatives are centered on some kind of optimization activity: optimize the customer experience, or optimize the integration of Web and mobile, or optimize the organization’s use of social media, etc.
If you set a goal based upon starting where you are today and heading in a direction that will improve the current situation, you will likely reach a local optimum. But it probably won’t be the true optimal strategy, because, of course, some competitor will end up beating you to the top of that mountain – a mountain you may not have even known about until it’s too late.
Nevertheless, managers love optimization strategies, because they lead to positive business outcomes, and positive business outcomes lead to cash bonuses. And after all, labeling such optimizations as Digital Transformations is generally accurate, as you are using digital technologies to change your business somehow. But we’re still missing a big part of the transformation picture: disruption.
Disruptions shake up the status quo in some unpredictable direction, much like the random walk approach to finding the mountain peak. They can help you avoid the problem of local optima, but even so, there’s no telling if they will take you any closer to your goal. The challenge for Digital Transformation initiatives, therefore, is to leverage – or even introduce – disruptions in a way that will actually help you find that highest mountaintop.
But disruptions are inherently unpredictable and risky. External disruptions – sudden changes in the marketplace, geopolitical environment, available technology, etc. can occur at any time, and even internal disruptions, including reorganizations, changing management policies, new management, etc., can lead to unpredictable results. What’s a risk-adverse manager to do?
Intuition tells us that disruptive transformations are potentially much more likely to help us achieve our strategic goals than optimization transformations, even though they appear to be much higher risk. Do we stick to optimizations, comfortable in the business outcomes we can achieve, even though we may miss the mountaintop? Or do we place a bet on a disruptive transformation, even though it feels like a plunge into chaos? Perhaps we have no choice, as an external disruption may force us to take the riskier path. How do we manage our Digital Transformation then?
Enter Complex Systems Theory
Some background: Complex Adaptive Systems are self-organizing systems of systems that exhibit emergent properties, which are properties of the system as a whole that aren’t properties of the component subsystems. The central principle to all of Intellyx’s research is that the enterprise is a complex system consisting of people and technology subsystems, and business agility is an emergent property of the organization as complex system. The challenge of Agile Architecture, therefore, is influencing people and technology in such a way as to achieve business agility, rather than the chaotic behavior that large organizations typically exhibit.
Many natural phenomena can be explained in terms of emergent behavior, from the construction of beehives to the effects of DNA. The analogue in nature we’ll use in this Cortex is the power of natural selection that enables species to adapt to changing environments.
As complex systems consist of component systems and their relationships, we can think of such systems as networks. In the case of evolution, the components are individual creatures in an ecosystem; for us, the components are people and technology systems. Sometimes the connections (or edges, in network-speak) between components are tight, for example, within family groups, or loose, as they might be between different groups. In the case of an enterprise, tight connections between people include hierarchical reporting structures, behaviors that result from formal governance policies, etc., while loose connections would refer to interactions between people in different teams or in different parts of an organization. Similarly, tight connections between technology systems would include traditional integrations between systems, while loose connections indicate interactions between loosely coupled systems that are architected properly for inherent flexibility.
Shifting a system from high connectivity to low connectivity increases evolutionary change. Furthermore, disruptions also lead to increasing rates of evolutionary change, in particular when the system exhibits low connectivity. Such change leads to adaptation to the disruptions in the environment, so combining low connectivity with disruptions leads to periods of rapid innovation and adaptation. However, when a system retains its high connectivity during periods of disruption, that system is less likely to evolve, and thus won’t adapt to the change. Extinction, of course, is the eventual result.
The lessons here for enterprises seeking Digital Transformation are straightforward. In order to foster high levels of innovation that lead to adaptation to both internal and external disruption (in other words, behavior that gets you to the top of the mountain), you must foster an organization with low connectivity and furthermore, give them flexible, loosely coupled technology tools. In such environments, teams have the leeway to self-organize, and their innate creativity will foster innovations that will lead over time to the best solutions. And the role of management in this process? Give people the right tools and get out of their way.
The Adaptive Flexibility Matrix
For our Digital Transformation efforts to be successful at achieving our strategic goals (as opposed to optimizing for short-term business outcomes), we must embrace disruption, loosen the connections between people and take steps to make our technology loosely-coupled and flexible. Such transformation is a tall order to be sure, and many organizations seeking it drop the ball in one way or another, as shown in the chart below.
Adaptive Flexibility in Digital Transformation Initiatives
The chart above maps both technology and people in an organization from less flexible to more flexible. If neither are flexible, of course, then transformation is impossible, and you’re stuck in the lower left corner.
One mistake companies make as they try to get out of this corner is to focus on building or buying more flexible technology, without going through the more difficult cultural and organizational shifts that lead to more flexible people. Such companies move across the bottom of the chart from left to right, and end up with “tone deaf” digital efforts – yes, they may have mobile interfaces and social media, but perhaps their mobile technology isn’t responsive, their social media strategy puts off or angers customers, or they drop the ball on the human side of Digital Transformation in some other way.
Another common mistake is to undergo a digital initiative in the face of inflexible technology: moving from lower left to upper left on the chart. In these organizations the digital team leaves the recalcitrant tech behind, separating the digital efforts from traditional IT – which leads to dangerous pitfalls for any digital effort.
The reason why successful Digital Transformation initiatives are so deceptively difficult is that organizations must change along both axes at once in order to achieve the upper right hand corner, which has all the elements the complex system of the enterprise requires to build innovative, self-organizing teams that can both respond to disruption and leverage it for competitive advantage – in other words, achieve the business agility that drives all true transformation.
The Intellyx Take
If you understand how with the proper initial parameters, complex systems can lead to high levels of adaptive innovation in times of increased disruption, then the argument in this Cortex makes complete sense. However, it is deeply counterintuitive when you place it into the context of traditional management approaches.
Unfortunately, much of the Digital Transformation thought leadership available today comes from management consultants, who spend much of their time advising executives. “Digital maturity requires strong leadership to drive change!” trumpets MIT Sloan Review. “Successful [Digital Transformation] does not happen bottom up. It must be driven from the top!” exclaims Capgemini (exclamation points added, but boldface was all theirs). Such consultants have that perspective, of course, because they have to present a story executives are comfortable with.
In contrast, this Cortex should make traditionally-minded executives (namely, the ones who purchase management consulting) extraordinarily uncomfortable. Stop managing hierarchically. Instead, spin off autonomous, self-organizing teams. Don’t fear disruption. Instead, embrace and drive disruption. Change reporting structures. Move people around. Rethink governance. Revamp HR policies and procedures. Get rid of all the scar tissue in the organization that is getting in the way of innovation. Let people self-organize and let them figure out how to adapt to disruption on their own. The leadership we really need is likely to be quite different than the leadership the consultants are talking about.
To old guard executives, this approach sounds like a recipe for chaos. However, complex systems theory has a whole chapter on chaos as well, and the old guard has it backwards. In fact, chaos describes the status quo at most large enterprises – bureaucracy, empire building, the absence of a single source of truth, inflexible legacy technology, and rigid processes that stifle the best and brightest. Instead, this Agile Architecture approach leads to emergence – business agility in the face of any disruption, self-organization that leads to adaptation and drives innovation. Isn’t that the Digital Transformation you’re really looking for?
Image credit: ThenAndAgain
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life sett...
Dec. 6, 2016 08:45 AM EST Reads: 7,115
Successful digital transformation requires new organizational competencies and capabilities. Research tells us that the biggest impediment to successful transformation is human; consequently, the biggest enabler is a properly skilled and empowered workforce. In the digital age, new individual and collective competencies are required. In his session at 19th Cloud Expo, Bob Newhouse, CEO and founder of Agilitiv, drew together recent research and lessons learned from emerging and established compa...
Dec. 6, 2016 08:30 AM EST Reads: 873
The WebRTC Summit New York, to be held June 6-8, 2017, at the Javits Center in New York City, NY, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 20th International Cloud Expo and @ThingsExpo. WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web co...
Dec. 6, 2016 08:30 AM EST Reads: 1,326
WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web communications world. The 6th WebRTC Summit continues our tradition of delivering the latest and greatest presentations within the world of WebRTC. Topics include voice calling, video chat, P2P file sharing, and use cases that have already leveraged the power and convenience of WebRTC.
Dec. 6, 2016 08:15 AM EST Reads: 1,667
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Dec. 6, 2016 07:15 AM EST Reads: 1,829
Extracting business value from Internet of Things (IoT) data doesn’t happen overnight. There are several requirements that must be satisfied, including IoT device enablement, data analysis, real-time detection of complex events and automated orchestration of actions. Unfortunately, too many companies fall short in achieving their business goals by implementing incomplete solutions or not focusing on tangible use cases. In his general session at @ThingsExpo, Dave McCarthy, Director of Products...
Dec. 6, 2016 07:15 AM EST Reads: 727
Businesses and business units of all sizes can benefit from cloud computing, but many don't want the cost, performance and security concerns of public cloud nor the complexity of building their own private clouds. Today, some cloud vendors are using artificial intelligence (AI) to simplify cloud deployment and management. In his session at 20th Cloud Expo, Ajay Gulati, Co-founder and CEO of ZeroStack, will discuss how AI can simplify cloud operations. He will cover the following topics: why clou...
Dec. 6, 2016 07:00 AM EST Reads: 830
The Internet of Things (IoT) promises to simplify and streamline our lives by automating routine tasks that distract us from our goals. This promise is based on the ubiquitous deployment of smart, connected devices that link everything from industrial control systems to automobiles to refrigerators. Unfortunately, comparatively few of the devices currently deployed have been developed with an eye toward security, and as the DDoS attacks of late October 2016 have demonstrated, this oversight can ...
Dec. 6, 2016 06:30 AM EST Reads: 1,120
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain. In this power panel at @...
Dec. 6, 2016 06:00 AM EST Reads: 482
Internet-of-Things discussions can end up either going down the consumer gadget rabbit hole or focused on the sort of data logging that industrial manufacturers have been doing forever. However, in fact, companies today are already using IoT data both to optimize their operational technology and to improve the experience of customer interactions in novel ways. In his session at @ThingsExpo, Gordon Haff, Red Hat Technology Evangelist, will share examples from a wide range of industries – includin...
Dec. 6, 2016 05:00 AM EST Reads: 1,651
"We build IoT infrastructure products - when you have to integrate different devices, different systems and cloud you have to build an application to do that but we eliminate the need to build an application. Our products can integrate any device, any system, any cloud regardless of protocol," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 6, 2016 04:45 AM EST Reads: 1,001
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Dec. 6, 2016 04:30 AM EST Reads: 1,935
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 6, 2016 12:45 AM EST Reads: 861
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.
Dec. 6, 2016 12:30 AM EST Reads: 1,201
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discussed how businesses can gain an edge over competitors by empowering consumers to take control through IoT. He cited examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He also highlighted how IoT can revitalize and restore outdated business models, making them profitable ...
Dec. 6, 2016 12:30 AM EST Reads: 4,593
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
Dec. 6, 2016 12:00 AM EST Reads: 909
"Once customers get a year into their IoT deployments, they start to realize that they may have been shortsighted in the ways they built out their deployment and the key thing I see a lot of people looking at is - how can I take equipment data, pull it back in an IoT solution and show it in a dashboard," stated Dave McCarthy, Director of Products at Bsquare Corporation, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Dec. 5, 2016 10:30 PM EST Reads: 1,062
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform and how we integrate our thinking to solve complicated problems. In his session at 19th Cloud Expo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and sh...
Dec. 5, 2016 08:45 PM EST Reads: 565
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
Dec. 5, 2016 07:45 PM EST Reads: 2,239
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Onalytica. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
Dec. 5, 2016 07:45 PM EST Reads: 2,100