jdubray
02/03/13

Revisiting the Conway Law

 

 This is a cross-post from my new blog "unRelated". 

The Conway Law seems to be getting a renewed interest lately. In 1968, Mel Conway, then, a manager of peripheral systems research at Univac, devised:

"organizations which design systems ... are constrained to produce designs which are copies of the communication structures of these organizations"

This seminal paper is definitely worth a careful read. Mel's predicates are so visionary that we could easily believe that our ability to create complex systems has not improved in over half a century.

That being said, it might be timely to ask whether the boundaries of the Conway Law are still valid and if its context has changed. 

Insight Before Communication

 

Leadership tends to focus on the culture and structure of an organization to drive towards desired business outcomes with the expectation is that a better culture and enhanced structure will lead to an effective communication. Actually we are so desperate in our quest to find a better culture that some people go as far as suggesting that "stealing" (ideas) become socially acceptable.

It is interesting to see that in the process nearly everyone rounds off insight, often assuming a perfect ability to gain the correct level of insight into a system design or a question. Mel touches that topic slightly before focusing exclusively on the relation between communication channels and the structural aspects of an organization:

It is a natural temptation of the initial designer to delegate tasks when the apparent complexity of the system approaches his limits of comprehension. This is the turning point in the course of the design. Either he struggles to reduce the system to comprehensibility and wins, or else, he loses control.

I understand that culturally, anyone who questions his or her insight, let alone someone else's insight, will pay a high price for it. We often cover up a deficit of insight as a mere communication disconnect as everyone seeks to appear intellectually sufficient. Mel's predicate is both foundational and consequential because it anchors our perception that insight can't be elaborated and somehow, like knowledge, directly correlates with power. That thought is pervasive in modern organizations where the Sinofskys of the world strive as long as their levels of comprehension and control enables the organization to deliver something. I find it fascinating that 50 years apart, Mel was searching to answer the question "How Do Committees Invent?" and the prevalent culture in corporations like Microsoft or Apple abhors the "Design by Committee" process.

Can we still afford to round off insight? How and what can we really communicate without the proper insight? Don't we spend way more time communicating our insight rather than elaborating it? How many companies fail to benefit from the collective intelligence of their organization?

The Context of Design has Changed Significantly

 

I don't want to appear condescending to an era of incredible achievements but systems do evolve and new kinds of systems require new levels of insight to elaborate proper designs. Back then, most innovations were product centric. From the mid 80s and well into the late 2000s, innovation became service oriented, and today we are rapidly moving towards an "activity oriented" innovation model.

activity-oriented

fig 1. From products, to services to activities

In a product-oriented world, consumers are left to compose individual products to create higher value use cases. In a service-oriented world, businesses identify some of these high value combinations and deliver them "as-a-service" to their customers. The advent of Mobile platforms makes it now possible to design systems that integrate readily with the activities customers are trying to accomplish.

In an activity oriented world, the "edges" of a system take on a disproportionate importance in the design compared to their relative sizes. The focus is no longer on systems and subsystems or even their orchestration into valuable services. The focus is now on understanding every activity customers are trying to accomplish and delivering a set of products and services that will directly integrate with these activities. The design of that integration, that edge, could be, actually, will pretty much always be, far more complex than the design of products and services that support them. You don't design "User Experience" as you design systems from subsystems. Designs need to start from the appreciation of the point of view of the end user, not just from the perceived value of a service or a product.

That change is profound because the design of an edge requires all constituents to cooperate and depart from the unidimensional mindset of product and service centric organizations. Any inefficiency in the scope or variety of edges will have a huge impact on the success or failure of the overall design. In an activity-oriented world, the ability to harness the collective intelligence of your organization directly correlates to your success.

This evolution towards more integrated systems has lead to the emergence of a new homomorphism between the type of insight different groups of people can elaborate and the structure of their organization. Even the very structure of our education system and hence hiring policies are now driven by that homomorphism.

It may not have been true when Mel wrote his paper, but today it is all too common for a group to formulate requirements based their insight to drive the design of other teams. As this new homomorphism developed  the relationship between systems and subsystems, as well as the relationships between products, services and activities made it nearly impossible to devise a structure that would nurture an appropriate level of communication with the goal of achieving a shared understanding.

shared-insight

fig 2. From insight to shared insight

As the levels of shared or aligned insight decrease so does the ability to create compelling and sound designs. Insight gaps develop as organizations tend to focus on building what they can understand as a subset of what their leaders can comprehend. Worst of all, some elements of the design can be built undetected until they fail their organization entirely.

A deficit of insight can be so costly to an organization and its shareholders that it should be accounted for in its balance sheet.

The Tools we Use to Communicate Impact Designs Negatively

 

The tools we commonly use to communicate would certainly influence Mel's conclusions. Popular knowledge tools (office suite, mind maps, requirements management solution ...) allow us to express ourselves with a greater productivity, but they may also hamper communication much more than we think. Why? The very structure that we use to communicate interferes with our ability to elaborate insight and ultimately designs.

For instance mind maps assume a hierarchical set of relationships, this is unfortunate because most of the relationships in the physical world are not hierarchical. That view seems to be directly inherited from Mel's era where we could still design products in terms of systems and subsystems. Similarly, when we use some "slide-ware" every system looks like a set of layers and when we use "row-ware" such as Excel or any Requirements Management tool to capture and communicate requirements, we cannot effectively represent dependencies, let alone track the elements of the design impacted by these requirements. These artificial knowledge structures are biased and negatively impact our ability to design a system.

Probably, the most important issue introduced by knowledge tools is that none of views that we create are representing any kind of dynamic behavior. How can we create an effective shared understanding between such a wide spectrum of people when everything that we communicate is using the wrong kinds of relationships and lacking even the most elementary dynamic view? Especially when we consider that human languages are poorly equipped to communicate relationships and dynamic behaviors.

A Call for Action

 

We must consider Insight and Communication separately. Mel's proposition looks attractive:

Research which leads to techniques permitting more efficient communication among designers will play an extremely important role in the technology of system management.

Yet, research that would lead to techniques permitting a more efficient elaboration of insight would have a far greater impact on the system designs.

Organizations should value teams that excel at elaborating insight. This is where education and HR policies should focus.

We have to collectively drive towards closing any insight gap and expand our shared understanding to a level that is compatible with success.

We need new tools and approaches that enhance our ability to elaborate insight.

The path to insight is not as hard as it looks, from federating intuition, to developing perception to growing appreciation and ultimately formulating the vision. Never again, should an individual feel that a group is limiting the design of a system. Never again, should the design of a system be limited by an individual. Never again, should a design reflect only a fraction of the insight of the overall group of designers.

 

My Favorite Quotes from Mel's Article

there's never enough time to do something right, but there's always enough time to do it over.

there is a homomorphism from the linear graph of a system to the linear graph of its design organization the realization by the initial designers that the system will be large, together with certain pressures in their organization, make irresistible the temptation to assign too many people to a design effort

One fallacy behind [the Accounting theory of management] is the property of linearity which says that two men working for a year or one hundred men working for a week (at the same hourly cost per man) are resources of equal value.

As long as the manager's prestige and power are tied to the size of his budget, he will be motivated to expand his organization.

Probably the greatest single common factor behind many poorly designed systems now in existence has been the availability of a design organization in need of work.

Elementary probability theory tells us that the number of possible communication paths in an organization is approximately half the square of the number of people in the organization. Even in a moderately small organization it becomes necessary to restrict communication in order that people can get some "work" done.

To the extent that organizational protocol restricts communication along lines of command, the communication structure of an organization will resemble its administrative structure. This is one reason why military-style organizations design systems which look like their organization charts.

Research which leads to techniques permitting more efficient communication among designers will play an extremely important role in the technology of system management.

the very act of organizing a design team means that certain design decisions have already been made, explicitly or otherwise. Given any design team organization, there is a class of design alternatives which cannot be effectively pursued by such an organization because the necessary communication paths do not exist. Therefore, there is no such thing as a design group which is both organized and unbiased. Every time a delegation is made and somebody's scope of inquiry is narrowed, the class of design alternatives which can be effectively pursued is also narrowed.

Coordination among task groups, although it appears to lower the productivity of the individual in the small group, provides the only possibility that the separate task groups will be able to consolidate their efforts into a unified system design.

It might conceivably reorganize upon discovery of a new, and obviously superior, design concept; but such an appearance of uncertainty is unflattering, and the very act of voluntarily abandoning a creation is painful and expensive.

This is a cross-post from my new blog "unRelated"

The winds are turning, listening to Tim Cook, Cooperation (which we prefer to Collaboration) seems to be the new direction.

"my deep belief that collaboration is essential for innovation"

That's not new, humanity would probably still be hunting and gathering if cooperation was not at the foundation of what makes us human.

The problem though is that we seem to circling back. Nick Wingfield wrote in his recent article in the NY Times:

One concern in getting rid of forceful executives like Mr. Forstall and Mr. Sinofsky is that their employers will begin developing products by committee, rather than in the sometimes heated crucible of clashing personalities, where someone with the strongest vision can prevail.

What's the difference between "Cooperation" and "Developing Products by Committee"? We believe that BOLT can help your turn a failed approach to innovation (Develop by committee) into a successful one (Cooperation).

If we look at a typical organization, we see 4 pillars: Leadership, Culture and Structure, Execution.

We all understand that cooperation and motivation are needed and obviously, the more the better.

The arrows on the diagram represent the major driving forces between the elements of an organization, however, each element influences every other element (for instance structure also influences innovation, or culture influences marketing, etc).

 

The problem Apple or Microsoft will face is that Culture and Structure are extremely difficult to change and when they change, they often change in an unpredictable way. A charismatic leader like Steve Jobs can impose a certain culture and most likely bypass or at least transcend the structure of the organization, but the very reason why people like Sinofsky and Forestall have succeeded is precisely because someone is needed to tame their intricacies and inefficiencies. These intricacies, inefficiencies and unpredictability are the very reasons why cooperation and motivation is so difficult to achieve and they are the reason why "developing products by committee" does not work.

BOLT takes a completely different approach to the problem. BOLT does not attempt to fix or even change the culture and structure of an organization. For the most part, we believe they are irrelevant to the organization's success.


BOLT drives cooperation and motivation through communication and insight. If we can change the way we communicate, we will change the way we cooperate, if we reach higher levels of insight into what needs to be accomplished the structure will adapt to deliver it, there is no structure, by itself, which can result in reaching higher levels of insight.

What could you expect if communication, insight, cooperation and motivation become the core of your organization? First, leaders can harness the collective intelligence of their organization when formulating the strategy. When the organization is involved at some level of the formulation, cooperation and motivation grow, and you can expect both innovation to improve and execution to speed up.

When everything will be said and done, the main contribution of BOLT will be the realization that Culture and Structure are irrelevant when trying to raise the level of cooperation and motivation, and ultimately to succeed, leaders such as Tim Cook or Steve Ballmer, and the organization as a whole need to focus on the way we communicate and raise, by all means possible, the level of insight into what it is trying to accomplish.

BOLT is the best tool to change the way we communicate and achieve higher levels of insight.

jdubray
12/04/12

B = mc2 is now available

Our latest book is available on Amazon Kindle. In B = mc2, we introduce a new, very innovative, Business Strategy Methodology: BOLT.

The iPad iBooks version will be published as soon as Apple completes the review process.

jdubray
11/12/12

Saving Groupon

    This is cross-post from my new blog "unRelated"

In the book, we analyze the respective strategies of Groupon and Living Social. These two companies are now in a fight for their life.

Before we start understanding how they could be saved and thrive, we'd like to restate the three major strategic forces that the Platform is driving:

a) "The Platform" is opening a market of 1B+ end users often with explicit relationship between each other.

b) The Platform is also accelerating the "decoupling" of business processes. What we mean by that, is today most companies are organized around a strong coupling of a few processes, their value is actually having optimized that coupling. Take the hospitality industry and look how airBnB is using that decoupling to create a major disruption, or retail, which has optimized inventory, catalog and order/payment processes and is about to be disrupted

c) The platform is enabling an unprecedented integration between the jobs consumers are trying to accomplish and the solutions that can be made available to them, just one thumb away. Furthermore, they can provide ample feedback about the products and services they consume.

If most companies understand a) they actually do not fully realize that, paradoxically, standardization in large end user market, is the best way to never find your market. As both the cost of acquiring customer and the cost of building solutions goes down significantly, standard solutions are competing against a mosaic of optimized solutions for everything type of customers and contexts. In Blue Ocean terms, you have to conquer an ocean, one puddle at a time. We'll come back on that point below, with specific examples.

So what does this all mean to Groupon and LivingSocial?

If we look at their ecosystem, we quickly realize that very little has been done to bring the suppliers of products and services in their business model. A lot of retailers could be doing just fine, when in reality the sales of some products are depressed, sometimes at a local level. Groupon and Living Social could start selling more traditional coupon campaigns independent of a retailer. They could also explore how relationship commerce (rCommerce) could be developed.

There is also one aspect of their business that we have identified as being critically weak: they do not focus on what the customer is trying to get done, either from a Merchant perspective or from a consumer perspective, they might actually not fully understand who is there is real customer? the merchant or the consumer? We stumbled upon a report from earlier this year, from PrivCo detailing why Groupon or Living Socials should buy these three companies. Interestingly, these three companies focused on the tasks that customers wanted to get done, rather than just organizing "campaigns".

Don't stop reading just yet, because these tips are nothing, absolutely nothing, compared to what Groupon and Living Social could become if they understood the role they could play by harnessing the three strategic forces above and in particular b) by becoming the main driver behind liberating the business processes that are at the foundation of commerce today.

The plaform will force a decoupling of commerce processes in order to reintegrate them opportunistically to support the variety of tasks customers are trying to accomplish.This is what airBnB is doing to the hospitality industry and there will be major casualties in that area. What does it mean to retail? Take a combination of the Amazon's platform and the focus of Living Social on neighborhoods? What could they really accomplish together? (or what Google and Groupon could have accomplished together just as well).

People always make a purchase decision in context. Yet, hardly anyone knows about your context.Forrester released recently some numbers that show that today, Amazon commands 30% of all the product searches (with the goal of purchasing) and Google a mere 23%. Search is also increasingly being fulfilled by a mosaic of specialized solutions that better understand your context and provide actionable results (Yelp, OpenTable, TripAdvisor,...) while enhancing the search with reputation data. With the emergence of voice search, we can expect that most purchase decisions will soon start with a search, from your mobile device. Is there a better place to understand the context of your purchase than when you search for it?

Can Living Social drive the integration with local stores into the Amazon's platform, you bet, they are right there and can even use their existing business model to cover some of that cost. Could you imagine a day where, during the day, you collect the list of things you want to buy and by the time you get home, Amazon's platform would have optimized what you need to pick up, what it could deliver directly? I can, it is right there. It could even monitor the amount of calorie your family eats and recommend more appropriate choices. Could it be more integrated and perform more complex tasks? Could it answer the question: I want to spend $200 in groceries for the coming week, could you please tell me what to buy and show me the recipes to prepare the meals? It could even collect the kids favs ... though that's not hard to guess, or make sure purchases comply with some medical condition. You think we are that far off? think again, we are right there. This is true for almost anything within a family life. Living Social could help manage the entertainment budget, the travel budget and make 100% personalized suggestions. If I can afford it and reward myself or the family in the process, why would I not go for it? You see, neither Groupon nor Living Social understand what you are trying to accomplish, holistically, nor can they do it without the Platform behind.

From a merchant perspective, this should simplify inventory and order/payment processes, enabling retail to transform itself into a showroom where products are experienced and supported (repair, training,...). Don't you think merchants would love to spend their time in higher value activities? Do you think that Starbucks is using the time of their cashiers effectively when you  could have just ordered and paid from your phone? Don't you think cashiers could be instead talking about the latest products while you wait for your drink? trying to understand what you like? Yes, you get the picture, what Starbucks will do at some point for its stores, Groupon and Living Social have the potential to do it for retail altogether.

It is almost a crime to see these two companies dying with such an enormous potential and nobody to develop it. That is a win-win-win solution, the merchant wins by getting rid of ancillary low value processes, the end user wins by having a 21st century experience, Groupon and Living Social win by embracing the vision to transform commerce as we know it and harnessing the three strategic forces of the Platform.

 

    The book is progressing well and we have reached the review stage. I wanted to start giving some hints about BOLT because I feel this is something important. BOLT is a completely new form of Business Strategy methodology. The methodology is not fluff, not a set of patterns, or yet another 4 quadrant,  5 bubble or 7 letter diagram. After applying it directly in different projects, I can report that it looks very, very, promising, especially when it comes to innovating on the Platform. You can download a sample chapter here. Here is a quick summary of the conclusion:

It is a cliché to claim that the world’s complexity has reached unsustainable levels. Globalization made it even more complex by exposing further cultural and linguistic barriers. Solutions always appear to be poor compromises and often create new problems of their own. We can all witness that conflict is winning over cooperation,  status quo is often seen as more valuable than innovation and eventually, people feel they can only survive by focusing on their immediate, most visible, interest.

In a “A Rhetoric of Motives” Kenneth Burke defines Rhetoric as “a function that is wholly realistic and continually born anew: the use of  language as a symbolic means of inducing cooperation in beings that by nature respond to symbols.”

The tools humans invented thousands or even tens of thousands of years ago to communicate and cooperate are incomplete. Anyone participating in a corporate meeting, a town hall or a political debate where people wrestle with questions, issues and decisions, is faced with a constant communication breakdown which hampers progress, creates frustration, and ultimately causes entire communities, corporations or countries to fail before they can find solutions.

BOLT defines a new language, a language based on a foundational model of our world, which enhances communication and above all fosters cooperation in a multidimensional and dynamic world.

Our initial findings show that this new approach to communication is very effective to formulate and execute strategies. In a world of constrained resources, driven by dashboards and rigid structures, BOLT has the potential to restore cooperation and innovation as the core values of organizations by enabling them to:

  1. harness collective intelligence
  2. execute at unprecedented speed
  3. offer a diverse and adaptable set of products and services which can best align with their customer needs, just-in-time and just-in-place.

We expect BOLT to alter the structure of organizations significantly and foster the emergence of a continuous strategy function alongside innovation and marketing.

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