Friday, January 04, 2019

How to make the extraordinary, normal

Digital strategy consulting has a simple task to carry out.  A little situational analysis reveals that the job of digital strategy consulting is to turn the extraordinary into the everyday.

When we fail to do this we force customers into a chasm of uncertainty which they resort to filling with often inappropriate products. They look for magic.

A look at this Wardley map of evolution, (below) applicable to most products or services, gives us a way of exploring the digital strategy landscape.

Digital is maturing from novel toward common along the Ubiquity axis.  We will return to how far it has actually moved along that axis to help explain the tensions we may otherwise miss. But what we can be certain of is that demand is increasing and that means the movement is toward Common.

On the Certainty axis it is harder to see movement away from the Genesis zone. Companies are testing the water, feeling their way with agile here, lean there, new tools but same ways of working almost everywhere... There is no certain way of doing or being digital yet. Not by some distance.

Strategy is on the whole built from experiment. And while productisation is a mantra within most consulting houses, the reality is customisation built upon rapid-iteration experiments. Making those rapid iteration cycles more effective is state of the art in digital strategy right now. And that's because certainty remains low.

To summarise to this point: There is a greater demand for ubiquity than there is market capability to productise its response. Referring to the map below, it feels to me like we are high enough up the Ubiquity axes for products to be the norm, but on the Certainty axis, we have hardly got out of Genesis.


From Simon Wardley: via https://blog.gardeviance.org

Understanding this situation helps us better plan our response. My (badly drawn) map below illustrates both where it feels to me we are (X), and offers a response to what the evolutionary drivers suggest is the direction our customers will want us to take. Note, the product and custom boxes have contorted offering a much larger overlap than ordinarily expected (compared to the original, above). This is my take on responding to the distortion of current high demand vs current low supply.

X marks where we are now - market trend indicates the direction of evolution we must respond to 

It suggests that we have to respond with products which help take our customers further along the Certainty axis. 
To do this we should offer and embrace
  • A clear role for digital consulting - Responding to the need of moving the customer to greater certainty, enabling them to take advantage of genuine productisation as it emerges (essential to the value-building activities of creating higher-order outputs - just as custom nuts and bolts enabled the building of higher order products customers could actually use and value).
  • Hybrids of custom build and productisation (applicable to each nut and bolt - eg managed innovation, human insight-centred design, customer experience design, product lifecycle, eco-system build etc)
  • Greatest customisation where the customer has least certainty.
  • Active strategy teams combining diverse cultures; disruptive creatives (Wardley's Pioneers who will create the new) alongside those who will grow the market (Wardley's Settlers). 
That's just a start list. But it is at least one against which we can start a sensible discussion about what we supply versus what the customer needs, and, as always, I welcome your builds.

For more on Warldey Mapping start here: https://en.wikipedia.org/wiki/Wardley_map



Wednesday, December 19, 2018

Consulting faces a digital reset


Disruption creates opportunity. In the challenges to our cherished business models and organisational norms there is the requirement to act.
The burning bridge beneath our feet prompts us to make significant and often rapid movement. Just such a moment has arrived for the consulting world.
Platforms enhanced by AI are making application development, business process engineering and customer management all things a business can now do for itself - shifting the role of technology consulting. (in large part out of the door).
New ways of working are giving everyone in the business (and from IT) access to human insight, ideation and rapid innovation - blurring roles and delivering organisational adaptability to align with the needs of the digital world.
And these two drivers alone would be significant enough to force a change in perspective.
But add to the plans in the UK to overhaul regulations in respect of the big four accountancy firms and business as normal faces an existential threat.
KPMG has already announced is will no longer offer consultancy to businesses it audits. It, like the others, has been down this road before.
The Enron scandal in the US prompted a break-up and realignment that resulted in Atos, BearingPoint, Cap Gemini. and a merry go round of acquisitions, rebrands and bankruptcy. Accenture while moving first, was born out of the same climate of concern over  operating models.
So we can expect to see great change in the market.
And with this comes the opportunity to reconfigure consulting for the digital world.
In many ways the industry is late to the party. Digital has wrought its disruption to media, retail, travel, utilities, even government.  Now the consulting business has the opportunity to press its reset.
I believe that means becoming genuinely digital. Digital first. Because all business is becoming digital.  Business is changing/has changed the way it thinks about value, about customer, about experience, about responsiveness (to market mastery).
That means consulting must identify its own a clear value proposition that makes sense in a digital world - understanding its place in what are no longer supply chains or value chains, but eco-systems.
  • It means setting a strategic position as a value hypothesis to be tested through rapid iteration with customer insight at the heart.
  • It means embracing new ways of working and making them the way to work from pitch to delivery - emphasising customer-led design, agility and market responsiveness
  • It means changing KPIs to deliver the open, collaborative, trust-building behaviours required of organisational vs individual performance.
  • It means addressing digital capabiltity and capacity short-falls in creative and scalable ways (see also blurry people)
  • It means establishing the legal and commercial frameworks to support rapid partnership models and value-led billing models
  • It means organising around product/service design, development and life-cycle management
  • It means tackling ambiguity head on - with minimum viable organisations from which to scale out fast, enabled by blurry people and responsive products and services
Make no mistake - when disruption comes knocking at this scale, incremental change will only delay the inevitable. The start-up mentality IS the digital mentality.

Wednesday, November 28, 2018

The efficiency obsession - price isn't everything

Ross Hitchenor has written a great summary of a great session on the damaging impact of our obsession with efficiency.

Read it. I do think Professor Roger Martin's call for a switch away from efficiency towards resilience echoes Nicholas Taleb Nassim's valuable concept of antifragility.

And I'm glad that someone from the floor raised the ghost of Marx. Classical Marxist theory maintains that fewer people getting richer faster is a necessary consequence of unconstrained markets. Markets operating with perfect efficiency will always centralise capital. The market's ability to price-in cost should make it the ultimate resource allocator.


But it can only work if the price of each transaction reveals the total cost (including environmental and social impact). 

This requires rapid and insightful calculation and transparency on a global scale - as I wrote in a Linkedin article - Can We Code The Economy To Cut The High Price of Low Cost

Finally we may know the true cost of everything - and even its value.

Friday, November 16, 2018

Building in organisational adaptability

The way in which most businesses organise for value has a fundamental 20th century mass production design flaw. It constrains them from reaching both the capacity and capability to respond to the market at the speed our digital world demands.

It is specialisation.

Specialisation made a great deal of sense in a mass production world - enshrined in Adam Smith's pin factory, through Henry Ford's Model T and beyond.
But it presents a problem of friction for the modern, responsive organisation.

For example - if you have wonderful developers in one silo, and wonderful business leaders in another, you introduce a brake on responsiveness.
While you may have optimised your tech teams to develop, and your business teams to come up with ideas to value, in order to accelerate the generation of value these 'roles' should be more closely connected (as we see in Agile, Design Thinking, Lean Start-up, Holocracy and combinations thereof).
Specialisation made sense when neither party could easily access the skills of the other.

That has changed. Technology now enables business ideation. Technologies that enable one-to-one marketing, for example, can inspire businesses to ideate on the new models this supports. But the friction comes when tech delivery capacity and capability remain a bottleneck.

Those choke-points all too often force businesses back to 'as usual' when striving for new.
What is required is a way of giving business people technology skills and technology people business skills. In this way the organisation becomes more responsive to upturns and dips in  the requirement for both. It becomes built to adapt.

Pipe dream? Hardly - there are already many no-to-low code platforms and technologies which enable pretty much anyone with a laptop to develop their own applications and business process automation with nothing more than the lightest layer of additional coding*.
Business folk can be technology folk, too. At low cost. Minimum Viable Products can be crafted by the people with the vision and the insight - closing the strategy gap through direct and hands-on involvement.

And this cuts both ways. By applying managed innovation as a way of working (Agile, Design Thinking et al) Technology folk can become as enabled to access insight, set vision
and focus on value as their business colleagues.

Bringing both no-to-low code platforms and insight-led, human-centred managed innovation into your org, is a huge leap toward becoming a truly responsive organisation.

*I do not dismiss the importance of technologists. Even the best of these platforms 1. Had to be coded in the first place 2. Create their biggest bang for buck when some customisation is applied.

Wednesday, October 31, 2018

Coding the economy to cut the high price of low cost

Photo by Ray Hennessey on Unsplash

The allocation of resources - and the cost of optimising that allocation - has always been humanity's most profound challenge. Artificial Intelligence may offer our best solution - but only if we are prepared to think globally.

Capital and the market model it sustains has been held up as our best bet for resource allocation for centutres. Yet capitalism and its governance are not necessary states by any means. They are emergent properties of the complex adaptive system we describe as the economy.

One transaction allocating value does not capitalism make. Multiple ones at scale can. Just as a molecule of water is not a wave, let alone a tidal force. These are emergent properties of complex adaptive systems.

The interactions within the system are what creates those emerging properties. Change those interactions and the properties change.

The best modifier we have had to date has been Government intervention - taxes, laws, welfare etc. But complex aqdaptive systems are notoriously difficult to tinker with. Think of the butterfly effect as applied to weather (another complex adaptive system).

So a Trump here or a Brexit there is going to have some impacts, but predicting exactly who, where and what feels the chill wind is a somewhat more exacting science than knowing that change will come.

As our economy has become more connected (and decentralised) it is becoming more anti-fragile. Make no mistake the economy will keep on functioning no matter what governments do. The question is can it be controlled somehow to ensure the emergent properties are desirable for humanity?

As we head towards quantum computing and ever more intelligent automation the point looms at which decisions to allocate resource will patently be better handled by machines.

Our machines will be better able to calculate the global economic costs of each transaction. They will factor for the environment as much as for human need. If we code that in.

But this is going to be a greater race for power than military applications of AI. Those who choose not to take part will be at significant compertitive disadvantage to rivals.

So the pressures to allocate to meet immediate human gratification will be huge. Only through global agreement on total costs will we give our children a chance.

FasterFuture.blogspot.com

The rate of change is so rapid it's difficult for one person to keep up to speed. Let's pool our thoughts, share our reactions and, who knows, even reach some shared conclusions worth arriving at?