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Tuesday, July 31, 2007

Minimizing Enterprise Entropy - Using the OOF

Enterprise Entropy

Many large enterprises are struggling to come to grips with Global Innovation Complexity (GIX), which requires fundamental shift in the organization structure. Although many enterprises have opened their structures, however, the thinking of the people/leaders continues to be hierarchical rather than networked. The new world needs a rapid shift to networked thinking in the organizations. The problem is - a solution that may look optimal in a specific time period may loose its efficiency and in fact validity in a world where technology has advanced into hitherto uncharted waters. It is impossible to re-architect the enterprise with every technological advance. Enterprises advance by adopting new technologies in piecemeal fashion. Business processes are changed and Information and knowledge bases changed in a form and use that is typically unpredictable. It is this continuous piecemeal improvement to get quick solutions and may be business value that creates the enterprise entropy – a measure of disorder in the enterprise. The enterprise becomes extremely connected spaghetti of business processes, people, IT applications, computer networks, multiple customer channels and multiple supplier connections.

A dynamic, thriving, living enterprise of today is a remarkable system of wonderful complexities. The complexities evolve over a period of many years, many initiatives, multiple technologies, and multitude of people, multiple mistakes and learning. The initiatives result in processes that have tacit knowledge embedded in people, departments and specific organization structures. The processes have legacy IT applications as a source of processed data, information, knowledge and decision enabling actions. There are many new technologies that have been appended or enmeshed in this structure through careful adoption and adaptation. The result have been in creating further complexities as the enterprises have IT applications of multiple age profiles working together in business processes to create an enterprise.

When one juxtaposition this thriving, complex and dynamic enterprise in a globalizing world the complexities increase exponentially. In the globalizing world, the economics of the business demands that skills, capabilities and even knowledge should be leveraged from across the geographies provided these geographies are connected through robust data and information networks. In such a scenario it becomes exceedingly difficult for CXO’s to not to explore the options of global optimization strategies. This is more so, as the benefits that can be generated through leveraging of the global village if done right can create order of magnitude differences in bottom line performances. Thus we have the widespread trends of outsourcing and further off shoring – to follow the sun so that one designs a 24x7 enterprise. If one looks at the questions of what to outsource/offshore it becomes clear, that one need to understand the inherent complexity of the enterprise architecture.

The enterprises will face three important problems in tackling these questions –Complexity - Fundamentally we deal with complexity by partitioning the process into manageable functions, creating boundaries and interdependencies. The size of these functions (number and complexity of work steps) is determined by our ability to control/manage the work steps. There is a tendency to take responsibility for only the work we can control. Because of this, for the people doing the work, functions becomes the purpose of the work. Bureaucracy and ritualized work soon follow. Functions become optimized at the expense of the overall organizational purpose. Soon the individual functions become desensitized to the overall organizational purpose, become resistive to change, compete for resources, and blame problems on other functions they are most dependent on. The organization becomes unable to adapt quickly to changing markets, organizational learning stagnates and organizations start decaying.

Constant Change - The second factor is that the world we live in is constantly changing. Future is approaching us faster than history is leaving us. Any organization that is not constantly adapting to this change is progressing towards elimination. In other words there is no perfect organization, no optimal work flow, no optimal measures, and no ideal vision. What is needed is holistic purpose driven adaptation to an ever changing environment. Organizations, processes, measures, and visions only have value as structures that help us adapt. People adapt more quickly than structures. Only the learners will inherit the future. Hence incorporating the change lenses in the enterprise at all levels is the only way to embrace future.

Fuzzy Common Operating Picture – Because of the focus on the function the specific person, role, department, has a fuzzy visibility of the end to end process. The partitioning of roles within the enterprise puts people in conflict. That conflict can be seen most clearly at the boundaries of their roles, ritualized work practices with localized sense of purpose. How do we share responsibility for achieving the enterprise (shared) purpose?

The OOF (Offshore-Outsourcing Framework)

There have been simplified versions of years of wisdom in defining and designing an enterprise using different models. We describe three such meta-models of the enterprise, each with increasing complexity of parameters and interactions of these parameters.

People, Processes, and Technology (PPT) How does an enterprise connect these three building blocks for creating lasting business value for the customers is a major requirement for creating differentiation? Building this architecture requires a comprehensive understanding of what people skills and knowledge, and how these skills, roles and capabilities are stitched in business processes that flow into each other and out of the enterprise into customers or suppliers. How technologies can be leveraged and exploited to achieve connectivity of people and processes to achieve fundamental business objectives is another dimension. This involves major strategic decisions and operational actions, and a continuous re-evaluation as the technologies change rapidly.

Strategy Processes Organization Technology (SPOT) – This framework requires that besides the PPT the strategy of the organization in the marketplace is an essential component of the enterprise design. How an enterprise create the strategy and generate options and execute these options in the dynamic world make a difference to the success and failure. Further, it is not only the people, but how they are organized – the structure of the enterprise, the departments, the roles etc, that play a much important role in maximizing the capabilities of the people.

Value Net – Co-Optetion Framework – This framework looks at the Value net of the enterprise from the market perspective. The Value net includes the customers, suppliers, competitors and complementors as defined by Nalebuff and Brandenburger in their book Co-opetition. This framework gives an externalized perspective to the architecture of the enterprise whereas the first two frameworks are more of internal perspectives. Using these three frameworks, one can decipher with sufficient level of details, the structures, processes, people, and the market scenarios in which the enterprise is placed at a particular moment in its history. Technological connections between, people, processes, customers, suppliers, etc, are really the key to the enterprise architecture. These technological connections in the form of enterprise architecture stitch together people, processes, applications, data/information stores, knowledge repositories; design capabilities etc and provide services/products to the customers. Enterprises that glue these pieces through multiple technological solutions and adapt these solutions in the changing market scenarios by crafting solutions using current technologies are able to create better value with more profits.

We offer the Offshore-Outsourcing Framework (OOF) to take care of enterprise entropy.

Wednesday, July 18, 2007

Innovating Customer Value Disciplines

There have been many instances when we dont know what our customers need. Further, it comes as a bigger surpise when we realize when the customers themselves dont know what they need.
Organizing the customer's knowledge of their needs with respect to Supplier kowledge of customer needs, I propose a four-quadrant framework -
1. First Quadrant is called Know-Know - In this perfect knowledge/information scenario - the focus of the supplier and customer should be on Delivery efficiency
2. Second Quadrant is called Know-Unknown - In this quadrant focus of supplier should be on Customer-Intimacy.
3. Third quadrant is called Unknow-Known - Supplier can make generate lot of gains in this quadrant - however it requires one level above customer-intimacy - which I call Orchestrated Customer Learning.
4. The Fourth quadrant is called Unknown-Unknown - This is the most difficult arena as it requires a deep dive into Customer Value net - through Customer Intimacy and Orchestrated Customer learning.
Bfailures emerge when we focus on delivery efficiency when actually we are in fourth quadrant. That is where the Indian IT companies are making a grave error. They have been fantastic to work in quadrant 1. I call them Quad-One Companies - It is altogether a different skill set and mind set that is needed to play in Quad-two and Quad-three. However to play is Quad-four - one needs deep engagement, long term views and continuous innovation.
The ICVD Framework (Innovating Customer Value Disciplines) and specific details are available if you send an email to me (

Tuesday, July 10, 2007

Book Release function –
In the Temple of My Heart by Urmil Satyabhushan
Sri Jayadeva Institute of Cardiology , Bangalore
30 June 2007

I must say that I have participated in many book release functions, however, this one happen to be unique in more ways than one. The writer, her subject, the context in which the book was created, the main protagonists and the reasons for which this book emerged, once again came together in this event. The genesis of this book “In the Temple of My heart” by Urmil Satyabhushan lies in the events of exactly a year back, when the writer had to undergo angioplasty procedure using three cypher stents. In the words of Padamshri Dr. C. N. Manjunath who performed the operation in the SJIC, “It is not always easy to get a skilled doctor with wisdom and humanitarian qualities. Similarly it is also difficult to get a lovable and appreciable patient like Smt. Urmil who stands out as a unique example to patient community”.

This unique resonance achieved between the doctor and the patient provides an exemplary demonstration of how one can emerge out of crisis situations that the modern life keeps subjecting us to. The book illustrates how crisis situations can be channeled into creative manifestations. This is the hallmark of innovators of the world. I study Innovation in my professional life and also consult on imbibing Innovation in global organizations. However, the result that Urmil Satyabhushan has produced – the book – gives a unique revelation of process of real-life innovation through creative expression of pain and love. I believe, that the unbelievable ability and human qualities of the “The healer” – as the writer calls her doctor have played an unknowing yet a very powerful role in fructification of her pain into the book.

The book has five parts. If one studies these specific parts from a different perspective, these are nothing but a five step process which can be used as a framework for innovation in any other scenario. This is an unbelievable by-product of the book. Part I – The Wounded Heart, describes the pain, the events and the first hand account of experiences of the writer as she went through the journey of pain. In every innovation, one needs to go through the events, to feel the pains first hand is the basis for innovation as well. In Part II – The Healer, the wounded heart finds a healer. It describes how the healer speaks the language of heart. The healer loves the wounded heart. The writer says, “The healer cares like a mother holding the tender heart of the patient in his string hands”. Part III – The Memory Lane, describes how the crisis and healer’s love and care transcends time to take the patient to her past and look at how her near and dear ones have faced their crisis in the past. When one innovates, one looks at existing solutions and searches for solutions that others have created to solve the problem that the innovator faces at the current moment. Part IV – The Resolve, describes how the protagonist realizes that the strength has to come from within to endure and cross-over the crisis. Hope and light are inherent ingredients of transforming crisis into solutions that can take the patient through the healing process. She says,

My Resolve
I can still Walk
Song Bird
Seeds of Love
At last came the oasis

The solution emerges – it is discovered by the heart if it has inner resolve. Finally in Part V – The Faith, the writers tells that, “It is the faith which can move the mountains”. Immense faith in oneself and in divine power makes one strong to execute the solution and keep on moving on the chosen path.

So dear friends, it is indeed a refreshing experience to understand this process of studying one’s wounds and pain, search and find the healer, look at your past for those who have faced their own crisis, have inner resolve that leads to discovery of the solution, and keep the faith in your inner strength to transcends any crisis successfully. This book is really an expression of love – which anyway is the cure for all diseases.

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