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Introducing the LOTUS enterprise

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For some time now I have been working on developing a framework for the Agile Enterprise – recognizing how the emerging enterprise is more than just Social or Open, or driven by purely a temporal innovation in technology. So, here are my thoughts on how this all comes together. I will elaborate more as I go forward, so consider this a high-level introduction, and of course, would love to engage you in a conversation too.

Enduring advantage is the result of enduring capability – it is an outcome of something more fundamental. I believe that such enduring capabilities do not result from emulating the ‘best practices’ of others, captured in prescriptive/normative checklists. In that spirit my answers here are guiding principles only.

The fundamental characteristic of such an enterprise is Adaptability – which results from three critical abilities:

Cognitive Excellence,
Collaborative Excellence, and,
Learning Excellence.
The first two capabilities, give an enterprise the ability to sense and respond appropriately to the context in which they find themselves.

Cognitive excellence gives it strategic foresight, the ability to anticipate and discern patterns and discover opportunities – to give a few examples. Collaborative excellence is the foundation of the open, creative enterprise at all levels.

Excellence is the result of Practice, and organizations that practice these two disciplines, a concept that is embedded in the notion of Learning Excellence, will be able to remain agile. They usually do so by establishing explicit or implicit Centers-of-Excellence.

An Agile enterprise, has utmost clarity in its Strategic Architecture – it is clear in its Purpose, Mission and has a set of Design/Guiding Principles which it refines through Learning as necessary. Most importantly, it exists to serve, and thereby is focused on its clients.

An Agile enterprise in the ever increasing complex environment of the future, is what I call a L.O.T.U.S enterprise:

Living – modeled on organic principles
Open – an in with flexible boundaries, open, diverse and inclusive, usually an extended enterprise – It expands its ‘value spaces’ – creating and capitalizing on cognitive and collaborative surpluses.
Technological – More than just an efficient user of technology, it is a master at embedding technology in its being. It co-evolves with technology.
Ubiquitous – It is increasingly present widely in space and time, global, mobile and dispersed
Social – It recognizes that all enterprises, value producing and consuming systems are essentially human and social.
Finally, an Agile enterprise has mastered the fine art of living on the edge as well as having a stable core. It knows how to walk the tightrope of Exploration and Exploitation, not considering it a dilemma, but moving effortlessly between the two with a fine sense of timing. Those organizations that focus on Exploitation Excellence invest in disciplines such as 6-Sigma. Those that are Exploration focused think of things such as Open Innovation.

The Agile Enterprise is also a master in creating innovative value – through its products and services and through its Business Models.

Sustained Excellence and Enduring Strategic Advantage are the privilege of those who invest for advantage over time, rather than just the here and now.

Engineering or Liberal Arts?

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This morning I came across an article in TechCrunch by Vivek Wadhwa on where investments in education should be focused – Engineering or the Liberal arts?

Wadhwa an entrepreneur turned academic, was initially inclined himself towards the engineering side of the debate. Bill Gates in a recent address, according to the article had argued that education investments should be diverted from the Liberal Arts since they do not contribute to innovation or job creation. Steve Jobs of Apple on the other hand had talked about his company’s work being a synthesis of Technology, Engineering and the Humanities. Wadhwa in his own research at Duke University, has found that successful entrepreneurs and innovators do not necessarily have a background in Engineering or Technology and often come from diverse non-technical fields. He does state though that graduates with liberal arts degrees have a harder time in the employment market. He however advises his own children and students to follow and excel in their own sources of passion – implying perhaps the importance of excellence and its role in employability and success.

I completely agree with Wadhwa’s position on this topic. Like Wadhwa my own background is in Engineering. I spent several early years of my career designing and building sophisticated industrial control systems. I enjoyed that experience significantly and was proud of the contributions we made to society and the economy. I learned a lot about the design and engineering of complex systems in the process, particularly from German, Swiss and American engineers with whom my company in India collaborated. (In particular I still treasure the rigor and discipline involved in building such systems, and worry that the same rigor is often not seen in the Information Systems building discipline – however, that is besides the point for this post).

When I made a career transition into the Information Services industry, I increasingly realized the role and importance of socio-technical systems. Success with information technology required a greater understanding of the people and social aspects of organizations. Over the years of work in the IT industry, I was involved in building information systems that touched nearly all aspects of creating Innovative, Smart and Collaborative enterprises. Delivering successful outcomes with Information Technology necessarily demanded a keen insight and knowledge of the people side of the equation.

We all know that enterprises exist for customers (Levitt). Businesses design Value Creating Systems to help their customers solve problems. What customers value and how they consume and experience value too requires sophisticated understanding of human psychology, motivation, desires etc, requiring us to understand various social and psychological aspects of the value interface.

It is only through the purposeful and meaningful synthesis of our understanding of these vectors – the human, organizational and technological, can we build socio-technical systems that deliver sustained value. It is through the understanding of the enterprise as a socio-technical system can we build an Agile enterprise that can participate in sustained value creation by being Smart, Innovative and Collaborative.

In my mind too, the debate of Engineering vs. the Liberal Arts therefore is misleading. We continue to move at an accelerated pace into a world where only holistic systems that incorporate and integrate humans will succeed. The humanists will have to work side-by-side with the engineers to create a better world. We need everyone involved in that process. There will be jobs for the liberal arts too, for their will bring critical skills to the value equation and companies that do leverage those competencies will be in business long.

Developing a Social Business Strategy

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The term strategy in the context of Social Media or Social Business has different connotations. I distinguish between three types of ‘strategies’

Business Strategy – or rather a Social Business Innovation Strategy
Execution Strategy, and an
Operations Strategy
I will describe here what you need for a ‘social media’ Business Strategy.

Once you have the foundational stuff in place, namely a good understanding of how social media works (viral mechanisms, influence etc), where the opportunities are, what is happening in your industry, your markets, in particular customers etc, and you also understand the implications for executing such a strategy and what it will mean to operationalize your new solution/s – you are ready to develop a Social Business Strategy. These foundational exercises are in the nature of an Exploration or Discovery. They help you get a sense of the overall landscape and what the opportunity looks like.

Even though one could describe the process of developing a business strategy in several steps, here are three high-level steps one goes through in its development.

Step 1: Identify the opportunities and align with your strategic priorities:

You have to identify the specific opportunities for your enterprise: It is very important to base your strategy in your own context and align it with your strategic priorities.

So one of the first steps is to identify all the possible ways in which you could use Social Media – whether it is in Marketing, Customer Service or Product Development. (I am focusing here on the external perspective, since you are using the term ‘social media’).

If you are thinking broadly, then perhaps you would also want to consider Enterprise-internal opportunities. In fact, in order to be successful with any of the externally-oriented opportunities, you will necessarily have to think systemically, and include internal functions as well.

Develop a framework for assessing value – often it is more than just economic. In any case you will need this to justify some kind of a ‘ROI’ – at least in order to systematically assess what you should or should not pursue.

Step 2: Assess your readiness to address the identified opportunities

Based on your work in Step 1, there might be several opportunities you could potentially pursue, however, you have to pick those that you are likely to succeed at.

You should assess your organization’s prior experience with introducing similar change – particularly if you have no prior history of working with “social technologies”.

There are a number of new concepts and competencies involved when working with social media. Assess therefore whether you have the necessary competencies.

All your stakeholders might not be comfortable with the implied changes. Assess the changes and impacts that the opportunities could have on your organization and who and what that might affect.

In particular you need to assess if your customers would be willing to adopt the new solutions and what would motivate them.

In the assessment exercise, do include technological readiness. Some of the detailed implications of technology might not be apparent till you get to the design stage though.

Step 3: Developing a Strategy and a Road Map

Now that you have a good understanding of the opportunities, the value they will create for your business, and the ability of your organization to execute successfully, you have a prioritized shorter list of what you can successfully pursue.

Identify those from this list that provide the most value and are easiest to implement for your first forays, and develop a road-map to implement the rest over time.

It is also very critical to develop a set of design principles – design not being limited to technology, but all aspects of the new solution.

Establish metrics for success and put in place a good governance strategy to guide and lead the program.

You now have enough substance to build a strategy, and to mobilize all the stakeholders to back you.

Finally, strategy is an iterative process – things will change as you deploy and learn, so be open to revisit and change – quickly!

Innovation – factors in Medicine and Engineering

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I was reading an article in Co-design – “How one surgeon is reinventing the female breast”. The article talks about how a doctor in Sugarland, TX is re-inventing breast surgery and weight-loss therapy using ideas from engineering.

Gary Horndeski, went to medical school in order to avoid military service according to the article, but continues to draw upon his prior background in Engineering in his surgical practice.

The article illustrates one of the key concepts of innovation – that diversity is a great source for ideas and should be deliberately practiced.

Gary also talks about how the regulatory or governing environment within the field of practice, affects innovation:

Medical procedures in America change slowly because of the fear of malpractice lawsuits. “The medical establishment here wants small, not radical changes,” Horndeski says. “But in engineering, you design what you want to build to work, without the same fear of being sued. That’s why there’s more innovation in medicine happening overseas, where it’s less litigious.”

There are reasons why the regulatory environment in medicine is the way it is, but it is also interesting to note how, the lack of such inhibitors in other countries might enable them to leap forward in terms of innovation. Clearly there are implications for ethics here. Would we consider using innovations from sources where they might have used questionable practices?

One last observation has to do with the fact that it took ten years of experimentation and slow improvements in techniques for him to bring his approach to a reasonable level of satisfaction. Would this development have accelerated if it had been practiced by a group of doctors or several doctors in different places? Should engineering education be included in surgical training? Should engineers be a part of surgical staffs in hospitals?

The Discipline of Innovation – Choosing an Approach

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There was the following question on Quora today:

Many Innovation strategies could prove effective, including Producer Innovation, Open Innovation, [Lead] End-User Innovation, Employee-Driven Innovation, Combinatorial Innovation, Accidental Innovation, and even Imitation. How does one optimize the innovation mix?

Here was my response:

Indeed there are many approaches to Innovation such as you have listed here, but I can safely say, that they were not all successful for those who tried them (the failures are never documented), and there is no mention of the context in which they were successful.

If you are looking to develop an Innovation Strategy, I would suggest you spend considerable time and energy on understanding your own context well. I will not elaborate here on what understanding your context means, other than looking at internal and external factors that prevail and determine your strategic priorities.

What is the nature of innovation that is appropriate for you? Do you need to consider Business Model Innovation, Service/Product Innovation or, Process Innovation – which aspect of your enterprise are you focused on or needs attention. I am assuming you are not looking to create conditions and wait for emergent innovation to happen, but a deliberate approach to addressing strategic priorities.

Social Business and P&L

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A Business Enterprise is always interested in building a healthy P&L. As circumstances change, internally or externally, it looks for new ways to reinvent itself and its offerings.

Social Interventions, or rather, as I like to refer to them, ‘Open/Social/Digital’ interventions can contribute to a much higher sophistication and complexity of designs, both in terms of its value offerings, such as services and the design of its own structure and systems, becoming more agile and responsive in the process.

These interventions therefore are something organizations must look at and examine whether they are applicable to their context, and in particular, whether they can help them with their P&L objectives. I suggest they examine broader models of defining value, but that is another story.

Leading the discussion with a presumed intervention as a solution would be, just as an illustration, similar to asking – “We now have CAT-scan technology – what would it take to get every human to use it”?

If we engage our business leaders in discussions that lead with where it is in their business they have reached an impasse, when they cannot compete effectively, they are losing market share, suffering from a high-turnover, or are not able to attract the appropriate workforce – then it becomes easier to relate that to the P&L, and eventually to how O/S/D could help.

It does not only have to do with critical challenges, the opportunity could also have to do with growth and innovation, which in my opinion is the exciting part of what is happening!

If none of these conditions exist, one will not be able to sell any new paradigm, and perhaps it is not even required.

On the other hand, if you believe that Social Business approaches could help, then I would suggest something in the nature of Education to begin with, if people do not already see the value.

Innovative Capability and Cognitive Excellence

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Innovation is on everyone’s mind these days, and there are just as many opinions on how to become innovative. I was just reading an article on the Technology Review Blog – Four Principles for crafting your Innovation Strategy.

The four principles attributed to Joseph Schumpeter, author of the concept of Creative Destruction, are:

“Think big, start small, fail quickly, scale fast”,

The article goes on to describe the experience of the Netflix founder and CEO Reed Hastings, about how he experimented with a number of business models early on, killing those that were not effective, always guided by a ‘grand vision’ of what he envisages was possible. The article also comments that enterprises do not have a good process to emulate what Hastings did.

That comment got me thinking, easier said than done. What exactly is the capability that can discern what is a worthwhile trail to follow, and, when it does conduct experiments, which of those to ‘nip in the bud’ and which ones to encourage.

The example of Hastings as an innovator, while remarkable, is still the story of one brilliant mind. A lot has been written about the attributes of an individual innovator – the curiosity, the vision, the ability to take risk, the persistence and so on. Most of these processes in an enterprise are collectively managed. The challenge enterprises face is to replicate these very capabilities as a collective entity. And, it is there I believe that it falters.

On the one hand, the enterprise needs a well-honed ability to quickly spot important emerging trends and in particular the confluence of trends that will likely have a significant and interesting impact on its own business models and trajectory. Such an ability would in some cases lead to the ‘grand vision’ that Hastings enjoyed. If it is shared widely enough, it could become the conviction and generate the commitment to provide consistent guidance in the course of its experimentation and initial faltering steps. I see this competence as “Cognitive Excellence”.

Of course, we know that it is not enough to have insight and vision, but an organization then needs the ‘character’, the gumption to take risks and the persistence to work on the idea till it can make it work, and once again, ‘cognitive excellence’, to recognize when a pursuit needs to be abandoned.

So while we admire the abilities of people like Hastings, the urgent work in front of us as enterprises, is to practice and develop a keen sense to identify the big opportunity and to spot early when ones experiments are not on track to lead to the vision.

Is Community Inevitable

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2013

When the topic of discussion is Social Business, it is almost inevitable that the term ‘Community’ will also be mentioned. There was a time when the terms were almost used synonymously. You see people breaking away from the ‘community’ pack now, increasingly talking about ‘social business’ instead.

I was wondering why the term ‘community’ became so popular in the first place. I believe the credit goes to the marketing function/discipline, which has been one of the most pioneering and widespread users of social technologies in the enterprise. Most of their efforts are of course directed externally, to the customer base and markets, whether to drive marketing messages or to create loyalty and retention.

Communities are notoriously difficult to build. Sometimes they already exist and the challenge is mostly to move them to an online environment and then make the transition significantly more interesting and valuable. In other cases, there is no extant community and one must seed, nurture and grow one online.

Since customer communities in most cases are sponsored by an interested enterprise, it must necessarily design them and intervene in their life in order to ensure that they meet the enterprise’s purpose, in other words, exercise some form of control.

The criticality of the role of “Community Managers” follows from this strategic objective, and is linked to the achievement of the stated purpose. However, even though customers do not come in a single form, external customer communities, to a large extent can be considered homogenous, at least in the sense of the enterprise’s objectives, and the role of a Community Manager becomes quite apparent.

The internal perspective is however completely different. If an enterprise has been around for a while, it probably already has a community even though there might not exactly be a prevailing sense of community – two different connotations of the term. The use of social technologies can go a long way in encouraging and fostering this desired sense at a broader and more pervasive level.

However the challenges of implementing social initiatives inside the enterprise are totally different than those dealing with external entities.

An enterprise uses a number of different social forms in the accomplishment of its business purpose. These include teams, groups, communities of practice, communities of interest and so on. Some of these forms are formal while others are informal.

Social business initiatives should not necessarily presume the social form, such as ‘community’. The appropriate form should be the outcome of design, or emerge from the fulfillment of a bottom-up need. Each design, with whatever social form it uses, should be accountable to its business purpose. And, this accountability cannot be delegated to some ‘community manager’ somewhere. It is integral to the management of the business function, just as it was when hierarchical structures were the norm. ( Hierarchies are still an appropriate social form to use in some cases, as are matrices etc!).

So, what does the term Enterprise Community Manager really mean – Is this person then someone who is responsible for driving a new initiative across the enterprise? Perhaps the role then is of a Product Manager and a facilitator. Perhaps this person is more appropriately the fountainhead of a “Center-of-Excellence”. Each definition brings with it a different perspective on what is expected of this role – A driver of Innovation, a Creator of Capabilities or a Program Manager. Sometimes it is the creation of a Community. I have always believed, that calling things appropriately is very important to the realization of purpose and the fostering of a Practice.

I believe today is “Community Manager” day. It would be nice to reflect on what it means and build a larger community of Social Business Champions.

MIT and the art of innovation

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March 8, 2013

The title of my post takes from an articlein the Economist. When I saw the post in my Facebook newsfeed, I thought I was going to get some insight into what MIT had discovered were the secrets to innovation. The article begins with this quote by Susan Hockfield, the president of MIT.

“You start with some very bright people, let them hang out with other very bright people and allow their imaginations to roam,”

You might think you are going to be given some insight into the processes which have given the institution such a remarkable track record. As it turns out the article is primarily about an exhibition at the MIT museum that is part of the Institute’s 150th anniversary celebrations. You do not really get any insight into what MIT has discovered about innovation.

Perhaps the one major point I would take away was that MIT was involved or tasked with some real problems, in the process of addressing which its engineers and scientists came up with some interesting and often transformational innovations.

In that same context, it does help to be connected locally, such as MIT being connected with the city of Boston, which gave it some interesting challenges to work with. Perhaps I will go check out the exhibition as well.

Does that perhaps imply, that being local and what that brings in terms of relationships with people might contribute in some way to being able to take on and solve big problems?

Social Enterprise Maturity

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March 8, 2013

The maturity of an enterprise is always related to a Practice. Just as the original notion of maturity came from Software Development, in the case of the Social Enterprise, it should be linked to the ability of an enterprise to leverage the new models in business practices.

Here are a list of practices that I believe an Enterprise needs to master in order to progressively become more mature:

An Enterprise-wide understanding of the potential of Social Innovations – monitoring trends and understanding implications of trends for its own business. In short – Foresight, and Impact Analysis.

An enterprise must be able to build a ‘Case for Change’ – must be able to identify where in its business it makes most sense to use new approaches, what their value is and be able to create a compelling case that motivates all stakeholders. It should therefore have a practice around developing Strategies Road-maps, and mobilizing support for wide-ranging transformation.

Product Management and the introduction of Innovations in the Enterprise. This practice is not unique to Social Innovation, but if this is not a practice and well mastered, all non-trivial initiatives will fail.

Like all innovations, new ideas will need to be marketed and there must be a strategy to ensure adoption through the management of change.

There must be a disciplined approach to spreading successful new ideas throughout the enterprise, including the on-boarding of new segments of the enterprise. There must also be a disciplined approach to managing the overall road-map, ensuring that it is coherent and always aligned with Business Strategic priorities.

The Enterprise will need to master the design of Socially-calibrated solutions. Solutions must necessarily be holistic and systemic.

There are new disciplines such as Design Thinking and Co-design that should be practiced.

There is a new approach to creating Value, leveraging new organizational structures, and among other things it should all result in creating ‘experiences’ that ‘clients’ want.

Technology is just one part of this equation, certainly very important.

There is a new discipline to how these Social Solutions/Design must be Operated:

This goes to the notion of Open leadership, Community Management etc.These are new practices for most enterprises.

Operations is the heart of the value for the enterprise, for it is in Operations that the enterprise will realize intended business outcomes.

These must be systematically measured and interventions designed when desired expectations are not met.Therefore, the enterprise must master the art of designing social interventions that deliver the desired purpose.(Incentives, Motivations, Network Stimulation, Culture Change etc etc)

The entire Life-cycle of the ‘Solution/Design’ must be managed, from inception to growth and evolution.

Governance – needless to say, if this is to be a transformational initiative, then the introduction of Social Innovations must be linked to a strong Governance structure.

This includes the creation of new ‘Design Principles’ that the enterprise operates with and uses to make decisions, and things such as the creation of policies that encourage Open Participation etc.

Finally, the enterprise should commit to the Mastery of these Practices and should have some investment in a Center-of-Excellence or Practice. This practice, whether formal or informal must ensure that the organization learns from its initiatives and is therefore able to accelerate the leveraging of this new way of doing business.

These seven practices, should become the basis of evaluating maturity.