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Organizational Intelligence,[object Object],Richard Veryard January 2011,[object Object],How Can IT Fix the Problems of Stupid Organizations?,[object Object]
Abstract,[object Object],Twitter tag #orgintelligence,[object Object],Organizational intelligence is a critical measure of the management capacity of an organization in a demanding competitive environment. ,[object Object],IT has a critical role in maintaining and improving organizational intelligence.,[object Object]
Structure,[object Object],Twitter tag #orgintelligence,[object Object],Situation: Characteristics of intelligent organizations,[object Object],Problem: How intelligent organizational succeed (and stupid ones fail),[object Object],Implication: How IT contributes (possibly) to organizational intelligence and stupidity,[object Object],Need: Leadership role for IT in improving organizational intelligence,[object Object]
What is organizational intelligence?,[object Object],Ignore important signals from the environment,[object Object],Cannot discriminate between the important and the trivial,[object Object],Respond incoherently to crisis,[object Object],Oscillate wildly between extremes,[object Object],Fail to learn from mistakes,[object Object],Innovate slowly and painfully,[object Object],Detect and interpret weak signals of possible significance,[object Object],Mobilize coherent response to complex opportunity,[object Object],Rational approach to risk and uncertainty,[object Object],High-quality decision-making throughout the organization,[object Object],Collective learning and innovation,[object Object],4,[object Object],Stupid Organizations …,[object Object],Intelligent Organizations …,[object Object]
Org intelligence as whole-system property,[object Object],Very clever people, who don’t talk to each other,[object Object],Very sophisticated technology, poorly wired together,[object Object],Patterns of interference,[object Object],(2+2=3),[object Object],Good people, who work well together,[object Object],Good technology, used well,[object Object],Patterns of collaboration,[object Object],(2+2=5),[object Object],5,[object Object],Stupid organizations may contain ,[object Object],Intelligent orgs may contain ,[object Object]
Org intelligence as sociotechnical property,[object Object],How do we know what is going on?,[object Object],How do we understand what is going on?,[object Object],How do we act upon what is going on?,[object Object],How do we remember things?,[object Object],How do we communicate things?,[object Object],How do we learn from experience?,[object Object],All of these capabilities are both technical (dependent upon an array of devices) and social (dependent on other people).,[object Object]
Symptoms of stupidity,[object Object],7,[object Object],Choke,[object Object],Inability to access existing capability.,[object Object],Denial (Kettle Logic),[object Object],“Problem, what problem ?”,[object Object],Guesswork ,[object Object],Acting in the dark.,[object Object],Meddle ,[object Object],Tinkering and management interference without understanding.,[object Object],Muddle ,[object Object],Confused by overlapping and conflicting narratives.,[object Object],Panic ,[object Object],Overtaken by events.,[object Object],Policy-based evidence ,[object Object],Finding data to support or justify ,[object Object],Ignoring any contrary data. ,[object Object],Repetition / Oscillation ,[object Object],Repeating same mistakes without learning. ,[object Object],Going backwards and forwards between two problems without permanently solving either of them.,[object Object],Short-Sighted / Tunnel Vision ,[object Object],Narrow focus on a single short-term goal,[object Object],Inability to consider broader or longer-term vision.,[object Object]
8,[object Object],Information,[object Object],Gathering,[object Object],Decision,[object Object],& Policy,[object Object],WIGO,[object Object],(what is going on),[object Object],Learning& Development,[object Object],Knowledge& Memory,[object Object],Simple intelligence loop,[object Object]
Information,[object Object],Gathering,[object Object],Decision,[object Object],& Policy,[object Object],WIGO,[object Object],(what is going on),[object Object],Learning& Development,[object Object],Knowledge& Memory,[object Object],Complex intelligence loop,[object Object],9,[object Object],Sense-Making,[object Object],Communication & Collaboration,[object Object]
Organizational intelligence requires six sociotechnical capabilities,[object Object],Information Gathering,[object Object],How well does the organization collect and process information about itself and its environment?,[object Object],Sense-Making,[object Object],How well does the organization interpret and understand itself and its environment?,[object Object],Decision-Making & Policy,[object Object],How effective are the (collective) processes of thinking, decisions, policy and action?,[object Object],Knowledge & Memory,[object Object],How does the organization retain experience in a useful and accessible form?,[object Object],Learning & Development,[object Object],How does the organization develop and improve its knowledge, capabilities and processes?,[object Object],Communication & Collaboration,[object Object],How do people and groups exchange information and knowledge? How do they share ideas and meanings?,[object Object],10,[object Object]
11,[object Object],“Perhaps you have already seen memos from me or others here about the importance of the Internet. I have gone through several stages of increasing my view of its importance.”,[object Object],“Exponential improvements in communications networks … the Internet is at the forefront of this”,[object Object],“Now I assign the Internet the highest level of importance.”,[object Object],Microsoft Example,[object Object],Bill Gates “Tidal Wave” May 1995,[object Object]
Microsoft Example,[object Object],Review of history,[object Object],Weak signals becoming stronger,[object Object],Gradual shift of opinion,[object Object],Pivotal shift in direction,[object Object],Evolving strategies,[object Object],Collective responsibility,[object Object],Any large organization faces a huge number of challenges, both large and small.,[object Object],Success of organization depends on achieving a good enough response to a good number of these.,[object Object],Key Points,[object Object],General Implications,[object Object]
Some organizations don’t need much intelligence,[object Object],Too much intelligence may be “overkill” or “overhead”,[object Object],Organizations can survive by following simple predictable patterns,[object Object],Simple predictable patterns create vulnerability,[object Object],Intelligence is vital to survival,[object Object],13,[object Object],In simple stable environment …,[object Object],In complex dynamic environment …,[object Object]
How much intelligence do we need?,[object Object],Multi-Sided Markets,[object Object],Demand Volatility,[object Object],Globalization,[object Object],Falling rate of profit (?),[object Object],“Fly-By-Wire” Business,[object Object],“Requisite Variety”,[object Object],Business Complexity,[object Object],Management Capability,[object Object]
Operational Differentiation,[object Object],Degrees of Differentiation,[object Object],Retail Example,[object Object],15,[object Object],Zero variation. ,[object Object],No differentiation between customers. One size fits all.,[object Object],Fixed segmentation.  ,[object Object],The retailer identifies a number of (fixed ) market segments, and assigns each customer to the appropriate segment.,[object Object],Dynamic deconstruction . ,[object Object],Differentiation based on the detailed actions and inferred intentions and context of customers.,[object Object],Customer Management,[object Object],Customer,[object Object],Purchase,[object Object],Segment,[object Object],Context,[object Object]
Progressive Differentiation,[object Object],Anonymous Customer,[object Object],Customer Identified at Checkout (Loyalty Card),[object Object],Customer Behaviour Tracked Inside Store (RFID),[object Object],?,[object Object],Retail Example,[object Object],Your Industry,[object Object],16,[object Object]
Capability Intelligence,[object Object],Focus on the most relevant differentiators.,[object Object],Sufficient range of responses to differentiators.,[object Object],Coordination between variety of perceived differentiation and variety of response.,[object Object],Feedback loops to improve relevance and accuracy of differentiation.,[object Object],Feedback loops to refine responses.,[object Object],Progressive elimination of unnecessary or irrelevant complication, along with exploration of new opportunities,[object Object],Success Factors of Effective Differentiation,[object Object],Customer Management,[object Object],17,[object Object],customer,[object Object],intelligence,[object Object],attenuation,[object Object],amplification,[object Object],customer operation,[object Object]
CapabilityCoordination,[object Object],intelligence coordination,[object Object],18,[object Object],customer,[object Object],intelligence,[object Object],product,[object Object],intelligence,[object Object],store,[object Object],intelligence,[object Object],staffing,[object Object],intelligence,[object Object],amplification,[object Object],amplification,[object Object],amplification,[object Object],amplification,[object Object],attenuation,[object Object],attenuation,[object Object],attenuation,[object Object],attenuation,[object Object],customer operation,[object Object],product operation,[object Object],store operation,[object Object],staffing operation,[object Object],operation coordination,[object Object]
Supplier Segment,[object Object],19,[object Object],Customer Segment,[object Object],Buying?,[object Object],Promotions?,[object Object],Customer Segment,[object Object],Store Layout?,[object Object],Integration Pathways,[object Object]
Differentiation and Integration,[object Object],20,[object Object],Integration,[object Object],Which route to improved intelligence?,[object Object],Which route to improved intelligence?,[object Object],Differentiation,[object Object]
IT = information AND technology,[object Object],Advanced technologies, tools and platforms for information processing and communication,[object Object],Effective use of information and communication across enterprise systems,[object Object],Not Only,[object Object],But Also,[object Object]
How does your organization discover what is (really) going on?,[object Object],Enterprise applications and corporate databases,[object Object],Dashboards and reports,[object Object],Management accounts,[object Object],Management by walking around (MBWA),[object Object],Water cooler,[object Object],The Internet,[object Object],Formal systems,[object Object],Informal systems,[object Object]
From Water Cooler to Internet,[object Object],23,[object Object],Blogger,[object Object],Delicious,[object Object],Facebook,[object Object],Flickr,[object Object],Google,[object Object],Linked-In,[object Object],Twitter,[object Object],Yahoo,[object Object],How do such devices change the way we exchange information and ideas? Better, worse, or just different?,[object Object]
Tools for organizational intelligence,[object Object],The collective intelligence of an organization can be improved by appropriate technologies used in appropriate ways.,[object Object],Most large organizations use these technologies, but fail to join them together or use them effectively.  ,[object Object],Business intelligence, data mining and analytics,[object Object],Event processing,[object Object],Knowledge management / content management,[object Object],Process improvement & performance management,[object Object],Social networking,[object Object]
Some attempts to join the pieces …,[object Object],Business Intelligence,[object Object],Command and Control,[object Object],Knowledge  Management,[object Object],Business Process Mgt,[object Object],Enterprise 2.0,[object Object],shown in following slides,[object Object],There is a little industry associated with each loop, each offering some useful tools and practices.,[object Object],But none of these loops provide the complete picture.,[object Object],Loops,[object Object],Assessment,[object Object]
26,[object Object],Sense-Making,[object Object],Information,[object Object],Gathering,[object Object],Decision,[object Object],& Policy,[object Object],WIGO,[object Object],(what is going on),[object Object],Knowledge& Memory,[object Object],Business Intelligence Loop,[object Object]
27,[object Object],Sense-Making,[object Object],Information,[object Object],Gathering,[object Object],Decision,[object Object],& Policy,[object Object],WIGO,[object Object],(what is going on),[object Object],Communication & Collaboration,[object Object],Command and Control Loop,[object Object]
28,[object Object],Sense-Making,[object Object],Information,[object Object],Gathering,[object Object],Knowledge& Memory,[object Object],Learning& Development,[object Object],Communication & Collaboration,[object Object],Knowledge Management Loop,[object Object]
29,[object Object],Information,[object Object],Gathering,[object Object],Decision,[object Object],& Policy,[object Object],WIGO,[object Object],(what is going on),[object Object],Learning& Development,[object Object],Knowledge& Memory,[object Object],Business Process Management,[object Object]
30,[object Object],Sense-Making,[object Object],Learning& Development,[object Object],Knowledge& Memory,[object Object],Communication & Collaboration,[object Object],Enterprise 2.0 Loop,[object Object]
Who is responsible for intelligence?,[object Object],Information Technology?,[object Object],Enterprise Architecture?,[object Object],Knowledge Management?,[object Object],Operations Research?,[object Object],Human Resources?,[object Object],Innovation?,[object Object],Strategy?,[object Object],31,[object Object]
IT has a key role in improving organizational intelligence,[object Object],The value that IT can bring to business is not just from automating clerical tasks and enabling large-scale global operational processes…,[object Object],… but also from enabling and supporting management processes such as coordination and innovation.,[object Object],Not Only,[object Object],But Also,[object Object]
New Challenges for IT,[object Object],“These are the standard things we pay attention to in our business.”,[object Object],“Here are the systems and dashboards that focus management attention on these standard things.”,[object Object],Alert and aware. Always open to weak signals.,[object Object],Building flexible tools and platforms to support exploration and experimentation.,[object Object],FROM,[object Object],TO,[object Object]
New Challenges for IT,[object Object],We collect and control information as an asset.,[object Object],We give management the information they ask for. How they use this information is up to them.,[object Object],We understand how effective use of information contributes to business outcomes.,[object Object],We support the whole information  decision cycle.,[object Object],From abdication,[object Object],To engagement,[object Object]
New Challenges for IT - Example,[object Object],We provide people with the facility to send and receive email.,[object Object],Ambiguous and misdirected emails waste time and attention, and reduce management effectiveness.,[object Object],Better social protocols for email would benefit the organization.,[object Object],And for some purposes, there are better tools than email. ,[object Object],Situation,[object Object],Opportunity,[object Object]
New Challenges for IT,[object Object],Providing systems and reports and dashboards and tools and platforms,[object Object],Helping the organization,[object Object],With all these tools ,[object Object],To use information ,[object Object],Intelligently,[object Object],To the benefit of the organization.,[object Object],Not only,[object Object],But also,[object Object]
New Role for IT?,[object Object],Chief Information Officer,[object Object],Chief Intelligence Officer,[object Object],from,[object Object],to,[object Object]

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How Can IT Fix the Problems of Stupid Organizations?

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Editor's Notes

  1. The collective intelligence of an organization can be improved by appropriate technologies used in appropriate ways to tackle the inherent complexity of modern business in a dynamic environment.  These technologies include business intelligence, event processing, knowledge management, process improvement and social networking.  Most large organizations use these technologies, but fail to join them together or use them effectively, so there is a huge missed opportunity here for IT.  Ultimately, the value that IT can bring to business is not just from automating clerical tasks and enabling large-scale global operational processes, but from enabling and supporting management processes such as coordination and innovation.  Organizational intelligence is a critical measure of the management capacity of an organization in a demanding competitive environment, and IT has a key role in improving organizational intelligence.  This talk will provide a roadmap for IT to make a strong contribution to business viability and survival.
  2. The collective intelligence of an organization can be improved by appropriate technologies used in appropriate ways to tackle the inherent complexity of modern business in a dynamic environment.  These technologies include business intelligence, event processing, knowledge management, process improvement and social networking.  Most large organizations use these technologies, but fail to join them together or use them effectively, so there is a huge missed opportunity here for IT.  Ultimately, the value that IT can bring to business is not just from automating clerical tasks and enabling large-scale global operational processes, but from enabling and supporting management processes such as coordination and innovation.  Organizational intelligence is a critical measure of the management capacity of an organization in a demanding competitive environment, and IT has a key role in improving organizational intelligence.  This talk will provide a roadmap for IT to make a strong contribution to business viability and survival.
  3. http://demandingchange.blogspot.com/2010/05/symptoms-of-organizational-stupidity.html
  4. We may differentiate customers (and their behaviour and intentions) according to a number of factors, with greater or lesser granularity. Each degree of differentiation increases the complexity of the process. Under the right conditions, increased differentiation may produce better outcomes for the organization and its customers. Under the wrong conditions, differentiation merely adds complication, increases cost and risk, and may produce worse outcomes.There are arbitrarily many degrees of differentiation – these are just typical points on the curve.
  5. The introduction of the loyalty card represented a radical strategic shift for the large retail chains. Stores now had a formal basis for recognizing a customer as the same again. They can identify customers, and collect and analyze data about the behavior of specific customers. And they can use this analysis to differentiate the response to different customers. For example, different customers may receive different special offers. Amazon is of course well-known for its pioneering work in providing targeted information and deals based on a customer’s browsing and buying history, and creating new forms of associative information which may be reflected back to the customer.Obviously if the retailer can identify the customer as she enters the store, then this differentiation can be done as the customer browses, rather than only when the customer comes to pay. This is relatively easy to implement with online shopping (for example through the use of cookies); and there are various mechanisms that might achieve the same result in a physical store – perhaps face-recognition software in the store camera, or loyalty cards with RFID chips – if the obvious privacy concerns can be allayed.And if there are RFID chips on the goods and RFID scanners on the shelves, then the customer can be presented with information based on the stuff that is already in the shopping basket. Again this capability is very easy to implement for online shopping, and this stimulates retailers to build an equivalent capability for physical shopping. (This is an instance of an increasingly common generalization pattern: take a simple innovation from one channel and look for ways of implementing it in other channels. We then need to define a general structure for the data from different but equivalent sources, and render the data through a common service interface, to enable aggregation and comparison of data across channels.)
  6. Effective differentiation is a function of the intelligence embedded within the customer management capability. The greater the “quantity” of intelligence, the greater the capacity to differentiate effectively.For the sake of analysis , we may regard “Intelligence” and “Operation” as separate sub-capabilities of Customer Management.We can then identify the signals that pass between “Intelligence” and “Operation” , and the attenuation and amplification mechanisms that govern these signals.
  7. What are the events and information flows that help to join up the retail operation as a whole?Where is the strategic knowledge of the enterprise located, and how is it continuously development and effectively used? What are the mechanisms to support innovation and organizational learning?
  8. There are many different pathways for joining-up the business.How does a jar of organic baby food get managed alongside other jars (pasta sauce)?alongside other baby goods?alongside other organic produce?Wrong answer #1 – pick one of the above. Adopt hierarchical managementWrong answer #2 – pick two of the above. Adopt matrix management. Wrong answer #3 – swing erratically between different alternatives (oscillation)Correct answer – manage and coordinate all the relevant pathways. Adopt complexity management.Note – each of these pathways may be associated with a different capability area, and mobilizes a different kind of intelligence.
  9. Lawrence, P., and Lorsch, J., "Differentiation and Integration in Complex Organizations" Administrative Science Quarterly 12, (1967), 1-30.In this paper Lawrence and Lorsch develop an open systems theory of how organizations and organizational sub-units adapt to best meet the demands of their immediate environment. Organizations must balance differentiation and integration to be successful. Those companies who manage to achieve high sub-unit differentiation and yet still maintain high integration between sub-units seem to be best equipped to adapt to environmental changes.Groups that are organized to perform simpler, more certain tasks (e.g., production groups) usually have more formal structure than groups focusing on more uncertain tasks (e.g., research and development).The time orientation of sub-groups is primarily dependent on the immediacy of feedback from their actions. Thus sales and production groups have shorter time orientations than R&D.The goal orientation of sub-units is based relative to the part of the environment that affects them the most.http://faculty.babson.edu/krollag/org_site/org_theory/Scott_articles/lawren_lorsch_cont.html
  10. http://www.robertelliott.com.au/gallery.php?id=people