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Playing Chess with Companies simon wardley @swardley @lefep LEF with text bubbles
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Playing chess with Companies

Aug 11, 2014

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Business

Simon Wardley

Slides from OSCON tutorial covering basic situational awareness, mapping and gameplay.
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Page 1: Playing chess with Companies

Playing Chess with Companies

simon wardley@swardley

@lefepLEF

with text bubbles

Page 2: Playing chess with Companies

DANGER!Will Robinson

DANGER!Alas this will be

complex ... ... so I've added some text bubbles (orange).

Page 3: Playing chess with Companies

Why?

How to?

So what?

Gameplay

Learning

What I'll cover ...

Page 4: Playing chess with Companies

strategy was the most critical factor to their organizations

future

97% of Executives in HBR Study, Feb 2014

What people say ..

Page 5: Playing chess with Companies

STRATEGY

Most companies have documents covering ...

Page 6: Playing chess with Companies

Purchasing Decisions

(Oracle vs SAP)

Rip out ...

Page 7: Playing chess with Companies

ImplementationDetails

(Private vs Public)

and ...

Page 8: Playing chess with Companies

OperationalDetails

(SLAs)

and ...

Page 9: Playing chess with Companies

TacticalChoices

(BYOT)

Page 10: Playing chess with Companies

How? What? When?

Because this is all ...

Page 11: Playing chess with Companies

Why?

Vague

What is left is ...

Page 12: Playing chess with Companies

Everyone else is!67% of successful companies do ...

Normally we do stuff as ...

Page 13: Playing chess with Companies

Everyone else is!67% of successful companies do ...

Past was no different ...

Page 14: Playing chess with Companies

198462 Companies for

you to emulate

Page 15: Playing chess with Companies

Backward causality

If A does B and A is successful ...

If you do B, you too will be successful.

THENThis is what

most strategy is ...

Page 16: Playing chess with Companies

Q. Why does a General bombard a

hill?

Ask yourself ...

Page 17: Playing chess with Companies

... because 67% of other successful generals bombard

hills?

Page 18: Playing chess with Companies

Err... no! In the military we use ...

Page 19: Playing chess with Companies

Where?

Maps tell us ...

Page 20: Playing chess with Companies

Why?

Where?

Page 21: Playing chess with Companies

Why?

Where?How?

What? When?

Page 22: Playing chess with Companies

Where? Why?

Situational Awareness

In Military ...

Page 23: Playing chess with Companies

Where? Why?

Situational Awareness

How?What?

When?

Action

In Military ...

Page 24: Playing chess with Companies

Where? Why? How?What?

When?

In Business ...

67% of successful companies do ...

Business is usually a tyranny of action over situational awareness ...

Page 25: Playing chess with Companies

Does it matter?

Page 26: Playing chess with Companies

I’d rather have a first-rate execution and second-rate

strategy any time

Jamie Dimon, CEO of JPMorgan Chase

Typical business doctrine ...

Page 27: Playing chess with Companies

execution is the key to a strategy’s success - is as flawed

as it is popular.

Professor Roger L. Martin, The Execution Trap, 2009

How it stands up to scrutiny ...

Page 28: Playing chess with Companies

Str

ate

gic

Pla

y

(AW

AR

EN

ES

S)

Uses Open to Compete (ACTION)

I looked into this problem in 2012 ...

Page 29: Playing chess with Companies

Str

ate

gic

Pla

y

(AW

AR

EN

ES

S)

Uses Open to Compete (ACTION)

Bubbles size represents number of

companies ...

Page 30: Playing chess with Companies

Str

ate

gic

Pla

y

(AW

AR

EN

ES

S)

Uses Open to Compete (ACTION)

Players

+ve MRKT CAPOver 7 years these companies showed ...

Page 31: Playing chess with Companies

Str

ate

gic

Pla

y

(AW

AR

EN

ES

S)

Uses Open to Compete (ACTION)

Chancers

-ve MRKT CAP

Players

+ve MRKT CAP

... whilst these didn't. Key was strategic play.

Page 32: Playing chess with Companies

NB

97% of execs consider strategy to be critical to future success

Lack of situational awareness has a negative impact on market cap

Most business strategy is a tyranny of action over

situational awareness

Page 33: Playing chess with Companies

How do I improve

situational awareness?

Page 34: Playing chess with Companies

Why?

How to?

Onto the next bit ...

Page 35: Playing chess with Companies

xyz

xyz

xyz

xyz

xyz

xyz

xyz

xyz

xyz

1,2,3,4,5

1,2,3,4,5

1,2,3,4,5

People

Activities Practices

Data

Capitalxyzxyzxyz

xyzxyzxyz

xyz

xyz

xyz

1,2,3,4,5

1,2,3,4,51,2,

3,4,

5

Organisation

Organisations consist of ...

Page 36: Playing chess with Companies

xyzxyzxyz

xyzxyzxyz

xyz

xyz

xyz

1,2,3,4,5

1,2,3,4,51,2,

3,4,

5

OrganisationBox and Wire

We usually try to make sense of this

with ...

Page 37: Playing chess with Companies

Like this ...

Page 38: Playing chess with Companies

Or this ...

Page 39: Playing chess with Companies

Q. Strategy?

Problem is the box and wire diagrams tell us nothing ... the meaning is within the text

of the boxes.

If you don't know what a WPS is, then it's of no use.

Page 40: Playing chess with Companies

Business Speak

Technology Speak

?&!A?

Alas we use multiple forms of box and wire for the same organisation

... causing all sorts of translation issues.

Page 41: Playing chess with Companies

Map

xyzxyzxyz

xyzxyzxyz

xyz

xyz

xyz

1,2,3,4,5

1,2,3,4,51,2,

3,4,

5

Organisation

What we want ...

Page 42: Playing chess with Companies

How?

Page 43: Playing chess with Companies

xyzxyzxyz

xyzxyzxyz

xyz

xyz

xyz

1,2,3,4,5

1,2,3,4,51,2,

3,4,

5

Organisation

Val

ue

Ch

ain

Val

ue

Ch

ain

Val

ue

Ch

ain

Organisations consist of ...

Page 44: Playing chess with Companies

Let's pretend your business is making ..

Page 45: Playing chess with Companies

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

User needs ... i.e. what they want

Supplier needs ... i.e. what you need to make it

happen.

Page 46: Playing chess with Companies

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eUSER

Needs

CUP  OF  TEA

User need is for a 'cup of tea'

Hence YOU need to have the capability to make a cup of tea ...

Page 47: Playing chess with Companies

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eUSER

Needs

CUP  OF  TEA

Needs

HOT  WATERTEA

NeedsBut a cup of tea needs many things (tea, hot

water etc)

... there's a lot more but I'm keeping the

diagram simple

Page 48: Playing chess with Companies

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eUSER

Needs

CUP  OF  TEA

Needs

HOT  WATERTEA

Needs

KETTLE

Needs Needs

WATER

POWER

Needs

You can build a chain of needs and the

capabilities required to meet those needs.

Page 49: Playing chess with Companies

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eUSER

Needs

CUP  OF  TEA

Needs

HOT  WATERTEA

Needs

KETTLE

Needs Needs

WATER

POWER

Needs

What customer cares about ...

If your power goes, the customer only cares that they don't get a 'cup

of tea'.

Page 50: Playing chess with Companies

Photo Storage

Data Centre

Power

Payment

Web Site

Platform

Fotango

CRM

Image Manipulation

Compute

2005

Company I used to be CEO of ...

Quite some time ago ...

Page 51: Playing chess with Companies

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Photo StoragePayment

Fotango

Image Manipulation

I took the box and wire diagram and turned it into

a value chain ...

Page 52: Playing chess with Companies

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Photo Storage

Data Centre

Power

Compute

Payment

Web Site

Fotango

Image Manipulation

Customer Relationship

System (CRM)

Platform

Page 53: Playing chess with Companies

Change!

The problem with simply using value

chains is ...

Page 54: Playing chess with Companies

Nokia

Nokia today is not the same as Nokia yesterday

or Nokia Tomorrow

Page 55: Playing chess with Companies

The problem with change is new stuff

appears ...

Page 56: Playing chess with Companies

Early Adopter

Laggards

Everett Rogers, Diffusion of Innovation 1962

... and spreads.

Page 57: Playing chess with Companies

It's Random!

So, change ...

Page 58: Playing chess with Companies

Evolve

Not quite ...

Page 59: Playing chess with Companies

Evolve

Things don't just diffuse they evolve ...

Page 60: Playing chess with Companies

A[1]

E.g. new thing appears ...

Page 61: Playing chess with Companies

A[1] A[2] A[3] A[4] A[5]

Evolution

... then we get better versions of it.

Page 62: Playing chess with Companies

Time

App

licab

le M

arke

t100% adoption A[5]

100% adoption A[2]

100% adoption A[1]

100% adoption A[3]

100% adoption A[4]

Time for A[5]Time for A[2]

Evolution is hence multiple waves of

diffusion for improving

versions. Problem with diffusion

curves is they have different applicable markets and time

to diffuse.

Page 63: Playing chess with Companies

Time

App

licab

le M

arke

t100% adoption A[5]

100% adoption A[2]

100% adoption A[1]

100% adoption A[3]

100% adoption A[4]

Time for A[5]Time for A[2]

Ubiquity of A1 to A5

However, as things evolve they

become more ubiquitous ...

Page 64: Playing chess with Companies

Time

App

licab

le M

arke

t100% adoption A[5]

100% adoption A[2]

100% adoption A[1]

100% adoption A[3]

100% adoption A[4]

Time for A[5]Time for A[2]

Maturity of A1 to A5

... and more mature or 'fit for purpose', 'good

enough'.

Page 65: Playing chess with Companies

Maturity?

So can we measure ...

Page 66: Playing chess with Companies

It's mature!

Not it's not!

Difficult, if something is mature (e.g. a brick) we quickly agree but ask is a 'smartphone mature' and ...

... arguments break out.

Page 67: Playing chess with Companies

Stacey Matrix

Best way of understanding the

argument is ..

Page 68: Playing chess with Companies

Stacey Matrix

Key is certainty.

Page 69: Playing chess with Companies

Certainty?

So can we measure ...

Page 70: Playing chess with Companies

Certainty

Type I II (key) III (key) IV

PublicationType

Refer to the wonder of the thing, described in

terms of impact

Refer to building, construction and

awareness

Refer to operation,

maintenance and feature differences

between different examples

Dominated by use i.e. what is

built with this or on top of this

including guides for maximising

use.

Meaure Volume Volume

Yes by looking at how publications change ...

Page 71: Playing chess with Companies

Certainty

Ubi

quity

Certainty = f (Volume Publications [Type II + III], Mature Volume [II + III])

Ubiquity = f (Actual Market Adoption, Mature Market Adoption)

We can then measure ubiquity over certainty

and ...

Page 72: Playing chess with Companies

0%

25.00%

50.00%

75.00%

100.00%

0% 25.00% 50.00% 75.00% 100.00%

... spend 6 months in the British Library in 2007, repeating this

endless times for lots of activities.

Then add back in the publication domains

and ...

Page 73: Playing chess with Companies

Certainty

Ubi

quity

Custom Built

Commodity

ServiceProduct

Utility

Genesis Evolution

... confirm a pattern first discussed at Foo

Camp in 2004.

Page 74: Playing chess with Companies

Certainty

Ubi

quity

Emerging

Best

Good

NovelPractice

Also applies to ...

Page 75: Playing chess with Companies

Certainty

Ubi

quity

Divergent

Modelled

Convergent

Un-modelledData

Also applies to ...

Page 76: Playing chess with Companies

Certainty

Ubi

quity

Hypothesis

Accepted

Theory

ConceptKnowledge

Also appears to apply to ...

Page 77: Playing chess with Companies

Correlation ≠ Causation

BUT ....

Page 78: Playing chess with Companies

Certainty

Ubi

quity

De

man

d

Supply

Competitio

n

Turns out the entire model is driven by ....

... both supply and demand competition

Page 79: Playing chess with Companies

Value Chain(describes organization)

Evolution(describes change)

Now combine ...

Page 80: Playing chess with Companies

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Photo Storage

Data Centre

Power

Compute

Payment

Web Site

Fotango

Image Manipulation

Customer Relationship

System (CRM)

Platform

Page 81: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Photo Storage

Data Centre

Power

Compute

Payment

Web Site

Platform

Fotango

Image Manipulation

Customer Relationship

System (CRM)

Page 82: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Online Photo Storage

Data CentrePower

Payment

Web Site

Platform

Fotango

CRM

Online Image Manipulation

Compute

Map2005

My first map. Based upon my Foo Camp idea,

admittedly before I knew if the evolution

axis was real or not.

Page 83: Playing chess with Companies

Why?

How to?

So what?

Onto the next bit ...

Page 84: Playing chess with Companies

1) Needs

So why care ...

Turns out maps are great for identifying ...

Page 85: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

User Need

Sell

Differentiate

Like user needs ... they're at the top of

the map!

User needs are what we sell and try to differentiate on.

Page 86: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Supplier Need

User Need

Sell

Differentiate

Consume

Efficiency... and supplier needs.

Page 87: Playing chess with Companies

A random big - REALLY BIG - Government

project ...

Big specification documents and lots of

Box and Wire

Alas, no-one can clearly articulare the user

needs ...

Page 88: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

User

Spend an afternoon to create a 'Wardley'

map of the entire project ...

Page 89: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Need

... easy for everyone to see

user needs

Page 90: Playing chess with Companies

2) Change

'Wardley' maps also deal with change ...

PS. I call it Wardley maps because there are other things called Value Chain Maps / Strategy Maps / Digital Maps etc and it makes it easier for people to know who's to blame

for this stuff.

Page 91: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eTake a map ...

Page 92: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Competition

... everything changes due to competition.

Page 93: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Uncharted

Everything starts over here ...

Page 94: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Chaotic

Uncertain

Unpredictable

Changing

Different

Exciting

Future Worth

Differential

Uncharted

... and has these properties.

Page 95: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Ordered

Known

Measured

Stable

Standard

Dull

Low Margin

Essential

Industrialised

... and ends over here.

... with these properties.

Page 96: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Uncharted

Chaotic

Uncertain

Unpredictable

Changing

Different

Exciting

Future Worth

Differential

Industrialised

Ordered

Known

Measured

Stable

Standard

Dull

Low Margin

Essential

Note, properties are polar opposites.

Page 97: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Lean

Uncharted Industrialised

SIX SIGMA / OUTSOURCE

StrongWeak

AGILE / IN-HOUSE

Strong Weak

... which is why there is no such thing as a one size fits all

management method

Page 98: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Lean

Uncharted Industrialised

SIX SIGMA / OUTSOURCE

StrongWeak

AGILE / IN-HOUSE

Strong Weak

Salamon and Storey Innovation Paradox

This creates the ...

Page 99: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Future Survival

Innovation

Agile, in-house

i.e. future survival depends upon ...

Page 100: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Future Survival

Innovation

Agile, in-house Surivial Today

Six Sigma, Outsource

Efficiency

.... but surivial today depends upon

NB. Polar Opposite methods

Page 101: Playing chess with Companies

However, most companies can't see the

landscape ...

Page 102: Playing chess with Companies

SIX SIGMA

StrongWeak

AGILE

Strong Weak

OR

YoYoSo they tend to ...

"We're Agile" OR "We're Six Sigma"

Page 103: Playing chess with Companies

Outsource

SIX SIGMA / OUTSOURCE

StrongWeak

Or they tend to ...

Apply strong methods because they want to "Know" what they are

getting ...

Page 104: Playing chess with Companies

Outsource

Incur excessive change control

costs

Some parts will be efficient

SIX SIGMA / OUTSOURCE

StrongWeak

Of course, same results happen for complex

projects ...

Page 105: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

3D Visualisation

Land Registry

Data CentrePower

Platform

HR

Customer

GISCustomer

Customer

Compute

ERPM

FinanceBIM

Web site

RISK

CRMWISE

PIMS

Incur excessive change control

costs

Some parts will be efficient

If you look at the underlying map you

can see why ...

This stuff is stableThis stuff will

change

Page 106: Playing chess with Companies

That map is from High Speed Rail 2 (HS2) ...

Page 107: Playing chess with Companies

3) Management

Which brings me onto ...

Page 108: Playing chess with Companies

What they used to use to manage HS2 with.

Page 109: Playing chess with Companies

Q. How To Manage? Difficult to answer with box and

wire ...

Page 110: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

3D Visualisation

Land Registry

Data CentrePower

Platform

HR

Customer

GISCustomer

Customer

Compute

ERPM

FinanceBIM

Web site

RISK

CRMWISE

PIMS

So they mapped HS2 ...

Page 111: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

3D Visualisation

Land Registry

Data CentrePower

Platform

HR

Customer

GISCustomer

Customer

Compute

PIMS

ERPM

FinanceBIM

Web site

RISK

CRMWISE

outsource to utility suppliers

LEGEND

Sharepoint

... now its easy

Page 112: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

3D Visualisation

Land Registry

Data CentrePower

Platform

HR

Customer

GISCustomer

Customer

Compute

PIMS

ERPM

FinanceBIM

Web site

RISK

CRMWISE

outsource to utility suppliers

use off the shelf products

LEGEND

Sharepoint

Page 113: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

3D Visualisation

Land Registry

Data CentrePower

Platform

HR

Customer

GISCustomer

Customer

Compute

PIMS

ERPM

FinanceBIM

Web site

RISK

CRMWISE

outsource to utility suppliers

use off the shelf products

build in-house with agile techniques

LEGEND

Sharepoint

Page 114: Playing chess with Companies

4) Risk Management

Also maps help with ....

Page 115: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

User

Big project ... mapped ....

Page 116: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eAgile, In-House

CO

Off the Shelf Product

Six Sigma, OutSource

Sensible use of methods ...

Page 117: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Now it's important to treat things as granular

components ...

Page 118: Playing chess with Companies

Why? See ...

Page 119: Playing chess with Companies

Co

mp

lex

ity

Idea

Goodness

Problem is, people have ideas

Page 120: Playing chess with Companies

Goodness

Co

mp

lex

ity

+ features They then expand the idea ...

Page 121: Playing chess with Companies

Goodness

Co

mp

lex

ity

+ features

They then over expand the idea ...

Page 122: Playing chess with Companies

Goodness

Co

mp

lex

ity

FIST

FIST counters this by breaking large systems into fast,

inexpensive, simple and tiny ...

Page 123: Playing chess with Companies

Condor Cluster

e.g. want to build a super computer ...

Page 124: Playing chess with Companies

1,753 PlayStation 3s

... build it with these.

Page 125: Playing chess with Companies

Harvest Hawk, idea to combat operations in 18

months

FIST has been used in many places ...

Page 126: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

So treat components on your map individually ... You can even

enforce this with rules like

'Two Pizza' (see Amazon)

Page 127: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Don't treat large systems as one

thing ...

Page 128: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Treat as a group of smaller

components ...

Page 129: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Contract X

So when we looked at the contract arrangement for the

project ...

This was too deep and wide

Page 130: Playing chess with Companies

But ... specifications and box and wire

wouldn't have shown this

Only mapping did

Page 131: Playing chess with Companies

5) Communication

Maps are also good for ...

Page 132: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Creative Studios

Traditional Media (DVDs etc)

Customer

Leisure TimeAggregator

Branded

Commissioned Acquired

Internet Broadcast

Artistic Direction

Production Talent

Production Systems

Market Analysis

Content

Web Site

Streaming Service

Recommendation Engine

CRM

Web Server

Compute

Power

Content Pipeline

TV COMPANY

maps make it easier to talk about what an

organisation does ...

Page 133: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Creative Studios

Traditional Media (DVDs etc)

Customer

Leisure TimeAggregator

Branded

Commissioned Acquired

Internet Broadcast

Artistic Direction

Production Talent

Production Systems

Market Analysis

Content

Web Site

Streaming Service

Recommendation Engine

CRM

Web Server

Compute

Power

Content Pipeline

TV COMPANY

Q. Strategy?

and to talk about ...

Page 134: Playing chess with Companies

Take a box and wire ...

Page 135: Playing chess with Companies

Expand it ... Do you know what this is?

or this?

Page 136: Playing chess with Companies

AE

BC

D

I'll assume you don't know exactly what those things were, so I've recreated the

same box and wire but using letters.

Page 137: Playing chess with Companies

Q. Outsource?C

D

AE

B

Outsourced

Should we do this?

Now to ask two questions ...

Why was this a disaster?

Page 138: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

A

E

BC

D

Now turn the diagram into a map ...

Page 139: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Q. Outsource?

A

E

BC

D

Outsourced

Why was this a disaster?

Should we do this?

You can probably answer these now

Page 140: Playing chess with Companies

6) Scenario Planning

Maps are also good for ...

Page 141: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eAccess System

Authentication

Biometric2 Factor

User / Pwd

Login

Log History

Compute

Physical Servers

Design for Failure

Authorisation (ACL)

Permission

Monitoring

Recommendation (VRM)

Capability (Credentials)

Trust

Rule Based (2 way)

Rule Based (1 way) User

Reporting

Identity (me)

Identity (provider)

Control System

Customer Customer

Security Company ...

Page 142: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eAccess System

Authentication

Biometric

2 FactorUser / Pwd

Login

Log History

Compute

Physical Servers

Design for Failure

Authorisation (ACL)

Permission

Monitoring

Recommendation (VRM)

Capability (Credentials)

Trust

Rule Based (2 way)

Rule Based (1 way) User

Reporting

Identity (me)

Identity (provider)

Control System

Customer Customer

Play 1 - Commodity Identity

Should I do this?

Page 143: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eAccess System

Biometric2 Factor

User / Pwd

Login

Log History

Compute

Physical Servers

Design for Failure

Authorisation (ACL)

Permission

Monitoring

Recommendation (VRM)

Capability (Credentials)

Rule Based (2 way)

Rule Based (1 way) User

Reporting

Identity (me)

Identity (provider)

Control System

Customer Customer

Authentication

Trust

Play 2 - Gamble on Trusted Authentication

Or this? (actually high risk)

Page 144: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eAccess System

Authentication

Biometric2 Factor

User / Pwd

Login

Log History

Compute

Physical Servers

Design for Failure

Authorisation (ACL)

Permission

Monitoring

Recommendation (VRM)

Capability (Credentials)

Trust

Rule Based (2 way)

Rule Based (1 way) User

Reporting

Identity (me)

Identity (provider)

Control System

Customer Customer

Play 3 - Trust as a Service

Or this? (actually very high risk)

Page 145: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eAccess System

Authentication

Biometric

2 FactorUser / Pwd

Login

Log History

Compute

Physical Servers

Design for Failure

Authorisation (ACL)

Permission

Monitoring

Recommendation (VRM)

Capability (Credentials)

Trust

Rule Based (2 way)

Rule Based (1 way) User

Reporting

Identity (me)

Identity (provider)

Control System

Customer Customer

Maps help you work out a way of attacking

a market, opportunities and

'what ifs'.

Page 146: Playing chess with Companies

7) Comparison

Maps are also good for ...

Page 147: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eTake a map ...

Page 148: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eAnd another ...

Page 149: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eAnd another ...

you can find opportunities between them

Page 150: Playing chess with Companies

A

B

C

D

E

F

For example - a process from a

company

Page 151: Playing chess with Companies

Business Unit FR

A

B

C

D

E

F

One business unit in France

Page 152: Playing chess with Companies

Business Unit GB

A

C

D

E

F

One business unit in Great Britain

Page 153: Playing chess with Companies

Business Unit FR & GB

A & A

B

E & E

D & D

F & F

C & C

Overlap them. It tells you France does B which GB

doesn't

Page 154: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

A

E

D

BC

F

Business Unit FR

Now take a map of French business unit

Page 155: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

A

D

C

E

F

Business Unit GB

Take a map of GB business unit

Page 156: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

A & A

E

D

C & C

F

E

D

B

F

Business Unit FR & GB

Overlap them ...

Page 157: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

A & A

E

D

C & C

F

E

D

B

F

User Needs

Business Unit FR & GB

Take a look at user need.B is a differential that only FR

does

Page 158: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

E

DF

E

D F

Differential

LEGEND

B

A & A

C & C

Business Unit FR & GB

Page 159: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

E

DF

E

D F

Differential

LEGEND

Area of Efficiency

B

A & A

C & C

Business Unit FR & GB

But also we have three potential areas of efficiency ...

Page 160: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

E

DF

E

D F

Differential

LEGEND

Area of Efficiency

Common / Shared

B

A & A

C & C

Business Unit FR & GB

... and two potential shared services.

Page 161: Playing chess with Companies

Business Unit FR & GB

A & A

B

E & E

D & D

F & F

C & C

The box and wire didn't tell you anything about

efficiencies, shared services or what B was.

Page 162: Playing chess with Companies

Why?

How to?

So what?Learning

Now the next bit ...

Page 163: Playing chess with Companies

Maps are great for learning, what

worked, what went wrong ... this is something most

organisation truly suck at.

Page 164: Playing chess with Companies

Pattern 1

Efficiency enables Innovation

You can use maps to learning basic economic lessons and patterns ...

Page 165: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Inte

rfac

e

Agility

Efficiency

Competition1) As things evolve through competition they become ...

2) But they also enable more complex systems to appear.

Page 166: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Inte

rfac

e

Electric Lighting

Radio

Television

Electricity

For example

Page 167: Playing chess with Companies

ComponentisationHerbert Simon

This effect is known as ...

Page 168: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Inte

rfac

e

Future Worth

Past Value

1) But these more complex systems

are sources of future worth

2) the old less evolved approaches ... disappear.

Page 169: Playing chess with Companies

Creative DestructionJoseph Schumpeter

This destruction of past and creation of new future

sources of value is called ...

Page 170: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Electricity

Computing

Analytics

Intelligent AgentsIt's essential for

technological 'progress'

Page 171: Playing chess with Companies

Pattern 2

Choice is an illusion

Page 172: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Inte

rfac

e

Agility

Efficiency

Competition

Future Worth

These are powerful forces ...

Page 173: Playing chess with Companies

Pressure

+efficiency

+agility

+worth

Trickle ...

If you're competing against someone more efficient, agile and able to create worth ...

... they create pressure for you to change.

Alas, this pressure...

Page 174: Playing chess with Companies

Quickly mounts up as more adapt

Page 175: Playing chess with Companies

... FloodBecoming a

Page 176: Playing chess with Companies

“Red Queen”

The need to constantly evolve in order to stand still

relative to a surrounding ecosystem

Prof. Van Valen

This is known as ...

Page 177: Playing chess with Companies

$0

$7,500

$15,000

$22,500

$30,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Analyst Estimates for AWS Revenue

Million

1.5%

+8 yrs

Take Cloud - Yuk.

Look at AWS end quarter estimates and

then x4 ... annual forward run rate.

NB. Ben Black proposed the idea for EC2 to Bezos in 2003

By End 2011, forward run rate = 1.5% of

server market.

Page 178: Playing chess with Companies

$0

$7,500

$15,000

$22,500

$30,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Analyst Estimates for AWS Revenue

Million

6%

+10 yrs

By End 2013, forward run rate = 6% of server

market.

Guess where end 2016 might

be?

Page 179: Playing chess with Companies

$0

$7,500

$15,000

$22,500

$30,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Analyst Estimates for AWS Revenue

Million

Punctuated Equilibrium

+3 yrs

40-50%?

This is known as a ...

Just continue on the doubling rate ... slows

down a bit later.

Page 180: Playing chess with Companies

Pattern 3

We have Inertia

Page 181: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Past Success

Inertia

Pass success always creates inertia to

change ...

Page 182: Playing chess with Companies

Disruption of Past Norms

Transition to the New

Agency of the New

Business Model

Change of business relationship (loss of

social capital)

Investment in knowledge capital

Suitability Declining unit value

Loss of existing financial or physical

capital

cost of acquiring new skillsets

Lack of second sourcing options

Data for Past Success

counteracts

Loss of political capital

Investment in new business

relationships

Lack of pricing competition

Resistance from rewards and culture

Threat to barriers to entry

Changes to governance,

management and practices

Loss of strategic control

External financial markets reinforce existing models

+Inertia

Lots of different types of inertia - bit of

research I did back in 2010.

Page 183: Playing chess with Companies

Disruption of Past Norms

Transition to the New

Agency of the New

Business Model

Change of business relationship (loss of

social capital)

Investment in knowledge capital

Suitability Declining unit value

Loss of existing financial or physical

capital

cost of acquiring new skillsets

Lack of second sourcing options

Data for Past Success

counteracts

Loss of political capital

Investment in new business

relationships

Lack of pricing competition

Resistance from rewards and culture

Threat to barriers to entry

Changes to governance, management and practices

Loss of strategic control

External financial markets reinforce existing models

+Inertia

Lets look at this one

Page 184: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Compute(Product)

Take an activity ... like compute ... when it was

a product

Page 185: Playing chess with Companies

Evolution

Compute(Product)

I'm going to ignore the value chain bit for a

moment, to make my diagram easier

Page 186: Playing chess with Companies

Evolution

Novel Practice (Scale Up)

When compute was a product we developed novel

architectural PRACTICES e.g scale-up for capacity, N

+1 for resilience and disaster recovery tests for

failure testing

Page 187: Playing chess with Companies

Evolution

These spread ...

Page 188: Playing chess with Companies

Evolution

Best Practice (Scale Up)

... becoming best practice.

Page 189: Playing chess with Companies

Evolution

Compute(Utility)

BUT the act of computing evolved becoming more

of a commodity and eventually provided as a

utility ...

Page 190: Playing chess with Companies

Evolution

Novel Practice (Scale Out)

... this enabled novel practices to appear ... e.g. scale-out for

capacity, "design for failure" for resiliences, chaos engines (e.g. monkeys / gorillas) for failure

testing.

Page 191: Playing chess with Companies

Evolution

These spread ...

Page 192: Playing chess with Companies

Evolution

Product

Co-Evolution

Best Practice

Utility

Best Practice ... becoming best

practice.

NB Practices often co-evolve with the

activity

Page 193: Playing chess with Companies

Evolution

LegacyEstate

New Estate "DevOps"

Product

Best Practice

Utility

Best Practice

Legacy means application built with best practice for a

PRODUCT WORLD

We gave this a name 'DEVOPS'

New Estate means application built with best practice for a UTILITY WORLD

Page 194: Playing chess with Companies

Evolution

LegacyEstate

New Estate "DevOps"

Cost

Product

Best Practice

Utility

Best Practice We want the benefits of

the new world ... efficiency, agility, new sources of

worth ...

But there is a 'cost' of re-architecting.

Page 195: Playing chess with Companies

Pattern 4

Inertia Kills

Page 196: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

DSC

Online Photo

Digital

Analog

As images changed from analog to digital, Kodak was first in with Digital

Still Cameras and Online photos

Page 197: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Digital

Analog

Fulfilment

Inertia

DSC

Online Photo

... but it's fulfilment systems created inertia

to the change

Page 198: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Guess who was first with video on demand online and guess who had shops! Guess who failed to deal with this.

Page 199: Playing chess with Companies

Pattern 5

Cycles

The economy has ...

Page 200: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Peace

As an activity evolves we get a state of relatively 'peaceful' competition between big vendors ...

Page 201: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Peace

... they build up inertia to change ...

Page 202: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Peace

... the act becomes suitable for commodity (+ utility)

provision ...

Page 203: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

WarPeace

Punctuated Equilibrium

... a new entrant (not encumbered by past) appears, a punctuated

equilibrium occurs and a state of war with disruption

of those stuck behind inertia barriers.

Page 204: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Inte

rfac

e

Peace War

Wonder

... also you get an explosion of higher order systems (new sources of worth, value) ... a time of

wonder.

Page 205: Playing chess with Companies

Peace

War

Wonder

the pattern of wonder, peace and war occurs

at both macro and micro scales.

Page 206: Playing chess with Companies

The Age of Electricity

The macro we call 'Ages' ...

Page 207: Playing chess with Companies

... these don't start with 'innovation'

but ...

Page 208: Playing chess with Companies

G. Westinghouse, 1886

... commoditisation of a pre-existing act.

Page 209: Playing chess with Companies

Causing an explosion of higher order

systems ...

Page 210: Playing chess with Companies

Dreams of magic, a time of wonder

Creating a time of wonder ...

Page 211: Playing chess with Companies

Unless you're in the 'old' industry.

Page 212: Playing chess with Companies

Pattern 6

Organisations Evolve

It's not just activities, practices and data

that evolve ...

Page 213: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Inte

rfac

e

Peace War

Wonder

Everytime we go through a cycle ...

Page 214: Playing chess with Companies

Evolution

Co-Evolution

Best Practice

Best Practice

Product Utility

We have co-evolution of practice ...

Page 215: Playing chess with Companies

Evolution

Estate

Peace

Product

Best Practice

... which means we have the old world

with the old estate ...

Page 216: Playing chess with Companies

Evolution

New Estate

EstateLegacy

Product

Best Practice

Utility

Best Practice

War... that becomes

legacy whilst a new estate is formed.

Page 217: Playing chess with Companies

Evolution

DIES

WINS

Utility

Best Practice

War

The old world then dies, the new world wins ... which means the new practices / methods become dominant.

Page 218: Playing chess with Companies

Evolution

Utility

WarElectricity

Fordism

Hence every cycle leads to a new form

of organisation.

Page 219: Playing chess with Companies

Evolution

Utility

WarCompute

Next Generation

Even today.

Page 220: Playing chess with Companies

0%

10%

20%

30%

40%We do not open that we

consider a source of differential advantage

Next Gen

Traditional

Strongly Disagree Disagree Neutral Agree Strongly

Agree

In some respects the new organisation are similar to the past ...

Page 221: Playing chess with Companies

0%

20%

40%

60%

Next GenTraditional

Strongly Disagree Disagree Neutral Agree Strongly

Agree

Our company deploys an open technology approach as a means of outmaneouvering

competitors

In others they are vastly different.

Page 222: Playing chess with Companies

Open source

Resilience

Failure Testing

Infrastructure

Learning

"Big" Data

Culture

Structure

Corporate Focus

Type

Str

ate

gy /

Tac

tica

lO

rgan

isat

ion

Act

ivit

y

Departmental

Inertia

Profit

Cost Reduction

N+1

Disaster Recovery

Analysts

Used

Enterprise Class

Service / Cell

Fluid / Gameable

Disruption

Weapon

Design For Failure

Chaos Engines

Ecosystem

Driven By

Commodity

Traditional Next Generation

Capacity

Deployment

Scale Up

Change Control

Scale-out

Continuous

Technique Single Mixed

Pra

ctic

e

This is the phenotype

Page 223: Playing chess with Companies

Why?

How to?

So what?

Gameplay

Learning

Now the fun stuff ...

Page 224: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eAccess System

Authentication

Biometric

2 FactorUser / Pwd

Login

Log History

Compute

Physical Servers

Design for Failure

Authorisation (ACL)

Permission

Monitoring

Recommendation (VRM)

Capability (Credentials)

Trust

Rule Based (2 way)

Rule Based (1 way) User

Reporting

Identity (provider)

Control System

Customer Customer

To play the game you need to move a

piece ...

Page 225: Playing chess with Companies

Certainty

Ubi

quity

De

man

d

Supply

Competitio

n

Fortunately there are many ways to accelerate and deaccelerate competition

Page 226: Playing chess with Companies

Certainty

Ubi

quity

De

man

d

Supply

Open

Like Open Source

Page 227: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

+competition

OpenA

B

Customers

So you can move pieces on the map ...

Page 228: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

A

B

Customers

Patents

+competition

... and you can slow them down.

Page 229: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

A

B

Conditions* Concept* Suitable* Technology* Attitude* Attitude

Customers

FUD

+competition

Through numerous ways ...

Page 230: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

A

B

C

+Marketing

Customers

including attempting to create new

'needs'

Page 231: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

A

B

+Constraints

Customers

... and exploiting constraints.

Page 232: Playing chess with Companies

The rest of this presentation was examples of this and how to

exploit the situation. For those who attended one of the

workshops, a couple of diagrams for reminders ...

Page 233: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Ecosystem

Ecosystems are force multipliers ...

Page 234: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Leverage

Commoditize

Innovate

... if correctly used. THINK - Innovate,

Leverage, Commoditise

Page 235: Playing chess with Companies

Worth notingEcosystems if effectively used are

future sensing engines.

Be first to industrialisebut follow innovation

Page 236: Playing chess with Companies

Uncharted Industrialized

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e First Mover

Fast Follower

In other words, be first to create the

industrialised service, allow others to

innovate on top and mine consumption data.

Page 237: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

A1A2

Ecosystem

Tower

Moat

B1 B2

C1 C2

Don't forget to exploit competitors - Tower &

Moat.

Page 238: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

+competition

+competition

+competitionSince everything evolves ...

Page 239: Playing chess with Companies

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Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Where?

You have multiple 'where' to attack

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Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Platform

Why?

Mapping can tell you why one where over

another.

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Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Platform

Compute

Platform Utility

Compute Utility

Co-evolved management

tools and practice(Devops)

Physical Server

Server OS

Guest OS

New Applications(Developers)

2008This can have a powerful effect

Page 242: Playing chess with Companies

The only people who can map a business

are people within the business.

No consultants

Remember ...

Page 243: Playing chess with Companies

Val

ue

Ch

ain

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Vis

ible

Invi

sibl

e

Online Photo Storage

Data CentrePower

Payment

Web Site

Platform

Fotango

CRM

Online Image Manipulation

Compute

Map

Precision

Due to ...

Page 244: Playing chess with Companies

Marquis De Condorcet,1785

"each member of a voting group is more likely than not to make a correct decision, the probability that the highest vote of the group is the correct

decision increases as the number of members of

the group increases"

Wisdom of the Crowd

Page 245: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

eOn the issue of predictability ...

Page 246: Playing chess with Companies

Uncharted Industrialized

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Peace WarA2

B1

A1 A5A3 A4

CompetitionWhat?

What!

What!

When?

When!

When!

Some things are, some things

aren't ...

Page 247: Playing chess with Companies

There appears to exist an uncertainty principle in the economic cycle whereby

p(what) + p(when) ≈ 1

Not confirmed, but ...

Page 248: Playing chess with Companies

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

fitness functionfitness function

Cells

Aptitude (finance + marketing)

Unit (fitness function)We didn't get to organisation ...

... maps help with cell based

structures ...

Aptitude (finance + engineering)

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Uncharted Industrialized

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

fitness functionfitness function

Cells

Attitude?Attitude?

Unit (fitness function)

but there's an issue of attitude ...

Page 250: Playing chess with Companies

Uncharted Industrialized

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

fitness functionfitness function

Cells

Unit (fitness function)

... that allows for new forms of organisation

Pioneers

Settlers

Town Planners

Attitude

Page 251: Playing chess with Companies

Uncharted Industrialized

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

fitness functionfitness function

Cells

Pioneers

Settlers

Town Planners

Unit (fitness function)

Attitude

+ Aptitude (finance + engineering)

Cell has

+ Attitude(Town Planning)

+ Fitness Function

... for example ...

Page 252: Playing chess with Companies

Uncharted Industrialized

Genesis Custom Built

Product (+ rental)

Commodity (+ utility)

Evolution

Val

ue

Ch

ain

Vis

ible

Invi

sibl

e

Competition

Steals from Steals from

Unit (fitness function)

... that solve evolution by theft.

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+situational awareness

Units

+fitness functions

+fitness functions

Cells (aptitude & attitude)

Units Units

Executive

Attitude Attitude Attitude

Chief Pioneer Chief Settler Chief Town

Planner

Finance

Engineering

Operations

Marketing

+fitness functions

+populate

+fitness functions

steal from

3 x Cultures+enforces evolution

Work

+populate

Preparation

Ap

titu

de

Cells (aptitude & attitude)

Leading to ...

Page 254: Playing chess with Companies

@swardley