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© Totally Optimized Projects 2015 Building more flexible and adaptive organisations: Risk, resilience and execution © Totally Optimized Projects 2015
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Black Swans 3

Jul 31, 2015

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Page 1: Black Swans 3

© Totally Optimized Projects 2015

Building more flexible and adaptive organisations: Risk, resilience and execution

© Totally Optimized Projects 2015

Page 2: Black Swans 3

© Totally Optimized Projects 2015

Conclusion: To be resilient you have to be excellent at executing change

1. Understand and then apply the concept of Path Dependency to understand what has to occur for your organisation [1] to work “just right” and thus what you must do to become

– more inherently resilient to disruptive events and also

– responsively resilient and able to recover should one occur

2. Shift the management style to be Outcomes driven to drive processes “what are we really trying to achieve here” then drives the thinking through the process - “this is how we do it”

3. Use Outcomes-based planning techniques to define the implementation plans to remediate fragile points and also to build resilience

4. Shift from Tacit knowledge to Codified knowledge (but with a clear understanding that mental models have limitations)

[1] Or the stakeholders that you serve

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© Totally Optimized Projects 2015

Black Swans – impossible to predict?

“Black Swan is used to refer to very low probability and high consequence events that are difficult to predict or prevent and can result in truly catastrophic outcomes”

We may not be able to predict the trigger event…

But

The consequences and implications are (too) often predictable

IF we have the thinking techniques and take the time to think things through…

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© Totally Optimized Projects 2015

Path Dependency – a concept ‘tacitly’ known by everyone The formal and informal definitions of Path Dependency

Path Dependence “explains how the set of decisions and options possible at any point and for any given circumstance is limited by the decisions one has made in the past, even though past circumstances may no longer be relevant.”

http://en.wikipedia.org/wiki/Path_dependence

That Famous Irish JokeA tourist asks one of the locals for directions to Dublin.

The Irishman replies: ‘Well Sir, if I were you, I wouldn’t be starting from here’

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© Totally Optimized Projects 2015

Define what the organisation looks like when it’s working “just right” - Desired Outcomes

When executing a project or strategy, Desired Business Outcome statements describe where you are going and what you are trying to achieve!

“clear specific measureable statements which describe everything that is important in the future business-as-usual end-states when everything is working just right”

Example Desired Business Outcome statements

Desired Outcome Statements

Our Customers orders are correct with the right stock item, quantity and price, based on a shared synchronised price catalogue

Customer Claims/returns result from physical damage only, i.e. claims for incorrect product, wrong quantity, obsolete stock or other errors disappear

We can track an order through all steps between the customer and us, from order issue to order payment

The starting point

• Streamlined order invoicing processes end-to-end

• Ability to track action and reduce claims

• Ability to track order and payment status at all times

An example from a B2B project

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© Totally Optimized Projects 2015

8. Enterprise IS Strategy implement

Geographic Load Balancing between the two data data

centres (Planned Delivery

2012)

1a. The EIS ICG Rolling Capacity Business case

delivers additional hardware capacity required for EMS virtualisation into Virtual Machine

Farm

Outcomes delivered by the separate project “Enterprise IS Strategy” are shown (in green)

4. We operate with full BUSINESS CONTINUITY for

ENHANCED MAPPING SERVICE, consistent with its

importance as our key strategic business, by

implementing Automatic Failover, which distributes

the load 1 to 1 between the 2 data centres and requires

no manual intervention when a disaster occurs.

Case Example |Enhanced Mapping Services - Disaster Recovery Project

5a. Supplement the existing dedicated EMS hardware with new physical hardware in DR5b. Or Create supplementary hardware as ”Virtual” in DR only.

8. We have asleep-on-the-couch DR using virtualised staging

which needs periodic disaster testing.

(another dead end!)

6. We duplicate the existing hardware

environment to create the DR site.

These “dead-end” paths (in

brown) were assessed and rejected in the EMS-DR Feasibility

7. We replace the existing EOL hardware

in 2 years (a dead End!)

2. ENHANCED MAPPING SERVICE is re-factored

from physical dedicated hardware to virtualised hardware environment in the VM farm. EMS

load capacity flexes to meet traffic demand.

OR 1b. This Project

contributes any new hardware needed for EMS-DR to the Virtual

Machine Farm

0. The completed Proof of Concept for Virtual DR approach provides a clear understanding of hardware capacity needs for EMS-DR and the changes required to software components for the new platform

3 ENHANCED MAPPING SERVICE operates with DISASTER RECOVERY

through ACTIVE-ACTIVE Load distribution, where the LIVE data centre and Disaster Recovery centre

are both active all the time, sharing the load on

a ratio of 5 to 1.

EMS-DR Project Outcomes are shown (in blue)

When you link outcomes in a path dependency roadmap you can easily see how to get ‘there’ from ‘here’

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© Totally Optimized Projects 2015

The detailed roadmap narrative “joins the dots”

“We need to move from dedicated physical hardware to Virtualisation (see Outcome 2 on the roadmap)

Currently, the Enhanced Mapping Service is hosted on physical hardware in Production.  

By contrast, the selected solution uses virtual hardware in both the Production and DR data centres. This yields two immediate benefits. – It provides costs savings over having duplicated infrastructure because hardware

utilisation can be managed much more effectively.– It allows EMS capacity to be quickly scaled up (or down) according to changes in

demand.  

Virtualisation has numerous other widely understood cost and speed-to-market benefits (refer “Sensis Online VMWare Benefits 1.0.ppt” document – attached). The use of virtualisation in this project aligns EMS with this IT strategy for faster-better-cheaper delivery.

 One consequence of moving to a virtualised, Active-Active environment is that some EMS components need to be modified or replaced to operate in a distributed manner across data centres.”

Case Example | Enhanced Mapping Service Disaster Recovery

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© Totally Optimized Projects 2015

Once you know where you are going and the path dependency you then have a choice

You can avoid this …

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© Totally Optimized Projects 2015

Desired Outcomes Where are we going What are we trying to achieve

Current State

PrepareActivitie

s

ImplementActivities

ClarifyActivitie

s

SustainActivities

Desired Outcom

e

Current stateWhere are we now

What do we need to discover?What don’t we know

What do we need to do?To get ready and then implement

How do we make it sticky?Make it sustainable and deliver benefits

By systematically planning how to get to where you want to goThe TOP® Change Identification Framework

Desired Risk

Outcome

Current Risk level

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© Totally Optimized Projects 2015

An Outcomes Roadmap can show you where you are vulnerable (or how to fix things when they break)

Major new systems were installed in Oct 2012 “broke” the organisation

“There is significant rework through out the system as the business change process was not done prior to the system being introduced so jobs/ processes/ new system do not align”

“We made a conscious decision to “ram the system in” but now we must do roles and processes now and identify where the system was poorly designed”

“The new systems have “broken” the links to the old processes”

“Different screens/ systems show different numbers for the same data”

“Scale of problem not certain – may be large or minor to fix. We don’t know”

“Spatial/ Maximo/ Fixed Asset register data is not up to date or correct so planning is dodgy and in-field staff have to visit sites so that they can plan jobs”

“Systems Operators work in an environment of info vacuum, with “occasional rumors of myths that may or may not reflect truth”

An Electricity Utility Case Study

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© Totally Optimized Projects 2015

In three weeks we got from confusion to clarity An Electricity Utility Case study

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© Totally Optimized Projects 2015

Twenty seven senior managers knew what they were trying to achieve

And therefore how to fix the organisation - a shift from ‘tacit’ to ‘codified’ knowledge

An important transferable lesson this was what “broke” this organisation

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© Totally Optimized Projects 2015

Codified in written form

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© Totally Optimized Projects 2015

tacit knowledge

DefinitionUnwritten, unspoken, and hidden vast storehouse of knowledge held by practically every normal human being, based on his or her emotions, experiences, insights, intuition, observations and internalized information.

Tacit knowledge is integral to the entirety of a person's consciousness, is acquired largely through association with other people, and requires joint or shared activities to be imparted from on to another.

Also called informal knowledge.

Read more: http://www.businessdictionary.com/definition/tacit-knowledge.html#ixzz3Gpyk6ead

codified knowledge (aka explicit knowledge)

DefinitionArticulated knowledge, expressed and recorded as words, numbers, codes, mathematical and scientific formulae, and musical notations.

Explicit knowledge is easy to communicate, store, and distribute and is the knowledge found in books, on the web, and other visual and oral means. Opposite of tacit knowledge.

Read more: http://www.businessdictionary.com/definition/explicit-knowledge.html#ixzz3GpzFoSSJ

Codified knowledge enables everyone to be “on the same page”Tacit versus Codified knowledge

Page 15: Black Swans 3

© Totally Optimized Projects 2015

Outcomes “what are we really trying to do

here”

The Path Dependency “how are things are linked and

interdependent”

Then you will find that people automatically and non-consciously will do the activities needed

You give people a map and a compass…

If everyone in the organisation has codified knowledge about

Page 16: Black Swans 3

© Totally Optimized Projects 2015

Pay attention to mental models that are used to codify knowledgeOne very famous mental model – “the Quantity Theory of Money”

MV = PT

Where • M is Money Supply, • V is Velocity of Circulation, • P is Price level and • T is Transactions or Output.

“As monetarists assume that V and T are determined, in the long run, by real variables, such as the productive capacity of the economy, there is a direct relationship between the growth of the money supply and inflation.”

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© Totally Optimized Projects 2015

Hmmm – beware! Mental models have limitsMoney Velocity is NOT constant!

MV = PT The map is not the territory

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© Totally Optimized Projects 2015

When the wheels fall off

1. Codified understanding of Path Dependency will help people focus step-by-step on what must be done to recover

2. When processes fail under stress, people become (remain) resourceful if they understand the desired outcomes – “what are we really trying to achieve here”

3. Outcomes-based planning techniques help think through the “unthinkable”

4. When knowledge is codified people can act independently but all head in the same direction

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© Totally Optimized Projects 2015

Some thoughts – what can I do next week

1. Shift your own management technique to “posing questions”

2. Start to define your desired outcomes

3. Work out what your path dependency is - the outcomes dependency roadmap

Three things will make a difference

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© Totally Optimized Projects 2015

TOP® Outcomes definition technique

Replace search platform

Improve relevancy of TradeDir search resultsStreamline internal accessibility

Maximise value derived and reported to paid TradeDir digital advertisersFacilitate third

party access to business and govt listings

Replace unix platform due to support

Grow usage of TradeDir & NameDir listings

Improve advertiser ROI

Improve user satisfaction

Improve reportable advertiser ROI

Across a range of existing and new digital devices

Enable TradeDir to more evenly distribute search queries to paying advertisers

Improve relevancy score . 75% Improve user

satisfaction scores - success > 75% - Found first attempt > 60%- Match > 80%

Grow by 94.7 million searches

Establish a network of websites/ apps which use TradeDir & TradeDir

More equitable e share of TradeDir search queries to paying advertisers Provide new

scalable platform

Provide internal search for TradeDirOL and TradeDirM Provide external API for Bus and Govt listingsProvide external API for Bus and Govt listingsProvide publisher support

Develop publisher incentive payment

Capability framework/ processes and resources for managing SEARCH

“Oracle and Scribe” gets the contents of a brain on a page

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© Totally Optimized Projects 2015

Replace search platform

Improve relevancy of TradeDir search results

Streamline internal accessibility

Maximise value derived and reported to paid TradeDir digital advertisers

Facilitate third party access to business and govt listings

Replace unix platform due to support

Grow usage of TradeDir & NameDir listings

Improve advertiser ROI

Improve user satisfaction

Improve reportable advertiser ROI

Across a range of existing and new digital devices

Enable TradeDir to more evenly distribute search queries to paying advertisers

Improve relevancy score . 75%

Improve user satisfaction scores - success > 75% - Found first attempt > 60%- Match > 80%

Grow by 94.7 million searches

Establish a network of websites/ apps which use TradeDir & TradeDir

More equitable share of TradeDir search queries to paying advertisers

Provide new scalable platform Provide internal

search for TradeDirOL and TradeDirM

Provide external API for Bus and Govt listings

Provide publisher support

Develop publisher incentive payment

Capability framework/ processes and resources for managing SEARCH

Search Relevancy

Hardware / technical

Thirdparty access

User satisfaction Usage

Search Capability Management

Internal access

Distribution of search

Digital interfaces

Publisher use

Advertiser ROI

“Jigsaw Puzzle Sort” untangles and clusters the ideasTOP® Outcomes definition technique

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© Totally Optimized Projects 2015

Outcome statements are assembled into a dependency roadmap – the narrative is used to test it is correct

Advertisers will see that through our TradeDirectory Search Network, we will provide them with improved quality leads and so they will be willing to continue to advertise further in the TradeDirectory listings.

Users searching for supplier information will feel that TradeDirectory provides them the most appropriate and relevant information (with satisfaction scores over 75%) to support them in selecting a business to meet their needs

We will grow usage of TradeDirectory & NameDirectory

business listings by making it easier for

3rd Party publishers to access our business

listing content through an easily accessible

API and which shares revenue to create

incentives to use our data.

We enhance the people, tools &

processes used to measure, monitor, test so that we are constantly improve search capability

and results

We replace an End-of-Life (EOL) search platform with one which a scalable to increasing volumes and configurable. The changeover is a seamless transition from old to new for all our websites & other 3rd Party users of our API.

Now we can see clearly – “Why is that important” and “how it all fits together”

TOP® Outcomes definition technique

Page 23: Black Swans 3

© Totally Optimized Projects 2015

To accelerate learning, you can use simple techniques which increase Brain Plasticity

It takes 21-28 elapsed days to grow new neural connections. You can accelerate the

learning process and the growth of Dendrite Spiny Protuberances by using some simple techniques.

1 Attention/ Intention

2 Question /Answer

3 Association

4 Repetition

5 Fertilization

6 Modeling

7 Pattern Matching

8 Priming

9 Immersion (Saturation)

These EngineeredThinking™ techniques are embedded in TOP’s tools, techniques and processes to increase the speed and quality of the ideas developed.

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© Totally Optimized Projects 2015

The neuroscience basics—building “vision” and “expertise”

Your Brain sees in pictures

It has Six (6) levels of functioning One at the Conscious Level and Five (5) levels of Non Conscious activity

Your brain is growing new cells and new neural connections all of the time

Most behavior occurs automatically as a result of the neural connections stored at the non-conscious levels of the brain.

‘Expert’ aka ‘Tacit’ knowledge is also stored at the non-conscious levels of the brain

All learning involves the growth of new neural connections between the brain cells — Dendrite Spiny Protuberances (DSPs)

All the performance characteristics of the brain are physical and changeable — IQ, creativity, problem solving ability, achievement ability.

The accelerated learning techniques are based on these

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© Totally Optimized Projects 2015

Extra thoughts if there is time

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© Totally Optimized Projects 2015

A single point of vulnerability - what happens in a disaster when people no longer have a sense of direction?

It’s not just the Eskimos who have the problem

“The hunter had been leading the way along traditional routes, guided by the winds, water currents, animal behaviour, and features such as the uqalurait, snowdrifts shaped by prevailing winds from the west by northwest.

Like London taxi drivers, Inuit hunters spend years acquiring the knowledge needed to find their way in their environment, part of a culture in which “the idea of being lost or unable to find one’s way is without basis in experience, language, or understanding—that is, until recently,”

http://thewalrus.ca/global-impositioning-systems/

What happens when people can’t find a route away from a bushfire?

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© Totally Optimized Projects 2015

It really is that simple

© Totally Optimized Projects 2015