A New Age of Digital Exploration

The first question you may have here is what do I mean by “digital exploration”? Is exploration being disrupted by digital, or does digital require exploration? The answer is yes to both. Although the focus of this piece is on the latter, my thinking about it was triggered by the first. In 2013, my son, Jeremy, was named one of National Geographic’s “Emerging Explorers of The Year”. This was not for grinding trudges dragging dugout canoes through tropical areas, although that was to follow, but for his work in data visualization – translating unimaginable blurs of information into something we can see, understand, and feel—data made human through visualizations that blend research, art, software, science, and design.

img_2788aAs a result of this, and meeting another National Geographic explorer, Steve Boyes, Jeremy became one of the four leaders of the Okavango 2014 expedition (that’s him on the left) – the first ever live-data expedition  across Botswana’s amazing Okavango Delta. Like the expeditions of old, they were pushing into the unknown, in search of measurements but, unlike previous expeditions, they used a set of open-source tools to develop a system that puts every piece of data collected onto the web, in near real-time, for anyone in the world to use and share. This data included wildlife sightings, water quality measurements, and the four leaders’ exact GPS location, heart rate, and energy consumption.

As I reflected on this expedition, and how it was positively disrupting exploration, I went back to thinking about how our use of technology has evolved and continues to evolve. I started to question how I have been describing this evolution. I have described, as depicted in the image below, three stages of evolution: the automation stage, which I characterized as the appliance era; the information stage, characterized as the rewiring era; and the transformation stage, characterized as the rebuilding era.

Slide1

I have always felt uncomfortable with the term transformation – a much over-used and abused word. When the initial version of this image appeared in The Information Paradox, almost two decades ago, it was being used to describe the implementation of ERP, CRM, SCM etc. While these were certainly complicated endeavours, and often required significant organizational change (a requirement usually recognized too late and poorly managed), they were primarily about integrating information, and making it more accurate, accessible and timely. There were  proven practices available to do this, although, they were all too often not adopted, or adopted too late. They did not essentially change what organizations did – they just did it differently and, hopefully, better. It certainly involved major organizational change, but was hardly transformational.

Since that time, there has certainly been real transformation in a number of industries, including entertainment, media, communications, retail and consumer goods, financial services, automotive, as well as around the edges of others, but we are now seeing this happening, or at least the potential for it to happen, across all industries. Indeed, across all organizations, public or private, large or small. This is taking us into unknown territory – moving beyond a complicated world to a complex one. One in which :

  • Technology itself, how technology is delivered, how it used, and by whom are changing at an ever-increasing pace;
  • Everything and everyone will be connected, anywhere, any time;
  • Technology is increasingly embedded in everything we do, and in ourselves;
  • Everything is becoming “smart’ – phones, cars, houses, buildings, cities, etc.;
  • Robots, cognitive computing and machine learning play an increasing role;
  • We are becoming increasingly embedded in everything technology does;
  • Data is available about everything;
  • Analytics are available to anyone; and
  • Everything is available as a service.

This increasingly complex world is moving us to  the next stage of evolution in our use of IT – exploration, as illustrated in the images below.

Slide1This first figure adds the exploration stage to my original three. This is a somewhat different and more fluid stage, as what emerges from the exploration stage could become a combination of automation, information, and transformation type uses of IT. In the next image I take a degree of licence in  integrating the four stages with the concepts of David Snowden’s Cynefin Framework – an analytical, decision-making framework based on understanding the nature of the systems you are working with – simple/ordered, complicated, complex or chaotic, and selecting the appropriate approach and practices to manage them.

Slide2The first three of the Cynefin system types: simple/ordered; complicated; and complex are  mapped to the four stages. Automation, and some basic examples of the information stage map to simple/ordered. Some of the more integrated information and simple transformation map to complicated. Broader transformation and exploration map to complex. The mapping again draws on David Snowden’s work in positing that best practices are appropriate for the simple/ordered systems, proven practices can be selected based on analysis and/or expert opinion for complicated systems, and new/novel practices emerge during the exploratory era.

Slide3While, as proven and best practices emerge, the nature of systems may change, i.e. they may become a combination of simple/ordered, complicated and complex, this last figure shows that when we attempt to apply best practices to a complex system, the result is the fourth Cynefin system type – chaotic. In today’s complex digital world, while proven practices are emerging, most of what we are doing is still very much exploratory in nature.

 

 
As organizations move into the digital world, they will still have simple/ordered systems, although most of these may be XaaS in the Cloud, and complicated systems, some/all of which may also be in the Cloud, but an increasing amount of what they do will be in the complex space. In this space, it will not just be just practices around delivery of products that will be emerging, but also new models of how work is organized, managed, lead and governed. It is, or should be becoming clear that our traditional industrial-age, top-down hierarchical control-oriented approach to leadership and management is simply not cutting it, and certainly won’t do so in a digital world. The engagement level of employees with their organizations is abysmal – ranging between ~13-30% (and its not much better for managers). This is sometimes attributed to generational differences, particularly the rise of the “millennials”, and is certainly not helped by the rising disparity between C-Suite pay and that of the median worker. However, I don’t believe that the aspirations of millennials are any different than mine were when I started work over 50 years ago.

What has changed is the global and social context within which we live and work. We are more globally aware and socially connected, and have 24/7 access to pretty much unlimited knowledge, information and expertise. We are exposed every day to how other organizations are already embracing technologies, including social, mobile and analytics, enabling greater engagement and two-way communication with and between employees, and orchestrating self-managing teams who can work collaboratively in a much more agile and responsive way with limited but relevant and appropriate oversight. Organizations who are “democratizing” their approach to leadership and governance – letting their people use their brains again.

We know what the future of work could be, but don’t see that anywhere close to being universally realized. The challenge ahead is to break out of the straightjacket of more than a century of hierarchical, siloed industrial age mindsets at work which are controlling, mistake-averse and “know it all”. To evolve them into mindsets that are enabling, learning and willing to try new things and fail. To move to a more agile and inclusive approach to governance, leadership and management. A value-focused, data and analytics driven, agile, sense and respond approach that transcends functional and organisational boundaries, and engages employees, customers and other key stakeholders – locating accountability and decision-making at the most appropriate level (based on the principle of subsidiarity), while supporting decisions with broader and more knowledgeable input.

All this is will require a fundamental rethinking of how digital businesses are governed and managed, and the capabilities that are required to ensure and assure that the use of technology contributes to creating and sustaining business and societal value in the digital world Replacing current top-down, hierarchical and siloed processes with leadership across and beyond the C-suite with leadership capabilities recognized, nurtured, and empowered throughout organizations. It will all be part of a new era of digital exploration and transformation.

Does this mean that we have to throw out everything that has come before? No – but we do have to question everything? We do have to look at everything with the understanding of “what could be”, not “what has been”. We have to be careful here not to “throw the baby out with the bathwater” – this must all be done without losing sight of the fundamentals of governance as described in Back to the Basics – The Four “Ares” and A Value-Driven Framework for Change.

Moving beyond IT Cost to Business Value!

I have been meaning to read KPMG‘s From-cost-to-value-2010-global-survey and today’s CIO Article by Beth BacheldorOutsourcing IT Must Create Value Worth More than Simply Savings, combined with a break between working on a couple of case studies (yes, of course, about value from IT) gave me the opportunity to do so. I don’t intend to review the whole document – it’s only 32 pages, many of which are pictures – but I do want to highlight and comment on what I see as the key points.

The management summary states “In the next few years, CIOs envision a shift in focus from cost efficiency and compliance to value creation and innovation“. I will avoid launching into my usual rant here, but would suggest that those CIOs who are not already well into doing this should be seriously reviewing their career options. The summary goes on to say “The days when IT was seen merely as a means of improving efficiency seem behind us. These days, IT contributes directly to realising the business strategy and has a central role in management. According to CIOs, this requires the distance between the business and IT as small as possible.” Again, I’ll hold the rant, but in organisations who ‘get it’, this has been the case for many years.

The survey goes on to present “eight clear conclusions” which I believe, ranting aside, organisations and their leaders would do well to heed. I will not go through each of these, but rather provide an overall summary (where I have included statements directly from the conclusions these are in bold):

  • IT is no longer about cost cutting – it is about creating value – IT value dominates the CIO agenda. Absolutely! Study after study show, and my experience would certainly support that organizations that are laser-focused on value outperform those that fail to do so. However, there is a danger here of falling into “the tyranny of ‘or’ vs. the beauty of ‘and’ trap, i.e. forget cost and think about value. The survey recognizes this saying that “Cost optimization remains important“. Of course it does and must continue to do so. We should always be looking for opportunities to reduce costs – but must do so in the context of value. The fundamental question that we should be asking is: Are we maximizing the value of our investments in IT-enable change (see my next bullet for more on this) such that we are getting optimal benefits, at an affordable cost, with a known and acceptable level of risk? The underlined words are carefully chosen. If we attempt to maximize all benefits, many of which are in conflict with each other, the result is sub-optimal. If we seek lowest cost, risk goes up. If we avoid risk, we fail to make the changes required for our organizations evolve and grow. Leading into the next bullet, as a Chief of Staff of the US Army once said: “If you don’t like change, you are going to like irrelevance even less.
  • IT value is not only about technology – people are the success factor behind IT value. Right on! IT, in and of itself has no value beyond what you can get for it on ebay – as we discussed in The Information Paradox, it is the change that IT shapes and enables that creates value. It is how we manage and use technology – more specifically how people use the information that technology provides – that enables that change and creates and sustain business value. How well this is done determines the success or even the very survival of organizations. This is far too important to be abdicated to the IT function but, unfortunately, all too often – in organizations that don’t ‘get it’ – this is the case. As the survey says: “Successful IT value creation needs to integrate and align the organization’s Technology, Processes and People agendas…CEOs and CIOs need to ensure that sufficient importance is attached to these aspects during project initiation.
  • Do not expect IT value from a CIO with an operational profile. A CEO once asked me “Why is it that whenever my CIO talks to me he only wants to talk about technology?” My response was “Because you let him!” As the survey points out: “The daily focus of a CIO depends to a large extent on the sector in which he or she operates. In addition, the results show that a CIO’s agenda is also determined by his position in a organization.”  There is, however, also the question of the CIO’s ‘comfort zone’. While somewhat unbelievable, given how long we have been talking about this, it is  regrettably true that there are still many CIOs who either don’t want to engage appropriately with the business, or are simply not capable of doing so. On this topic, KPMG provides a view on CIO competencies: “A CIO should have four important competencies. First, the ability to think like the organization’s customers and to understand clearly what they want. Second, the ability to obtain a good understanding of relevant technology trends and identify their specific business benefits. Third, the ability to manage IT investment for value creation. Finally, the ability to connect well with the organization’s business leaders, to help them unravel he mysteries of technology.” Although not a highlighted conclusion, there is an interesting discussion in the document on the merits of rotating people between IT and the other parts of the business. I have long been a proponent of this and echo the comments of Maarten Buikhuisen, IT Director Western Europe for Heineken Breweries when he says: “The general manager of the future has worked in IT.” (Tesco’s new CEO would certainly be a recent case in point.)

The survey covers a number of other topics, including process improvement, risk and compliance, and new ways of working including collaborative tooling and cloud computing, but I will restrict my commentary in this post to the above. Overall, ranting apart, I found the survey to be a very useful and well written document – one that is relevant to all executives, not just CIOs. They would do well to read and study it carefully.