Month: October 2008

Musing about tipping points and connectors

I loved this story from a Malcolm Gladwell and Tipping Point perspective. [My thanks to @monkchips for tweeting about it].

Whatever your political persuasion, do take part. There is something for all of us to learn from such experiments, so can I encourage you to participate in what Hjortur is doing? Visit IfTheWorldCouldVote.com and do what you feel you must.

Hjortur’s Australian tale reminded me of some of my early experiences after I started blogging ‘externally”. In those days I had a ClusterMaps plugin, and I could actually tell who was lighting up what. That dot in New Zealand is so-and-so who went back there. That one in the Caribbean is so-and-so on vacation. And so on and so forth.

Soon I expect we will be able to do that with far greater ease than we can imagine today. Especially if we keep taking part in experiments that show us how it all works at a simple yet meaningful level.

Musing gently about traffic and information and buyers and sellers

One of the themes that recurs quite often in the conversations I have is that of the next 50 billion devices. While people argue about the next 3 billion people getting connected, and while people wander around in a strange attitude of believing that the internet is nothing more than an illegal distribution vehicle attacking Hollywood, I get more and more intrigued by how information is becoming “live”.

Take this for example:

It’s a representation of the buses in Bangalore. [My thanks to @abhilash for letting me know via Twitter].

As you hover over the bus icon, you can see its location, bus number, current speed and some sort of unique reference to the vehicle itself. Looking at it, my natural reaction was to want more. Like “how crowded is it?”. Information that is not that easy to collect today, information that will become easier and easier to collect over time. And assimilate. And report. And display. Allowing each of us to make more informed decisions.

I travel around London using a variety of vehicular and ambulatory options: I don’t drive. That does not mean I don’t use a car; when I do use one, someone else has to drive. Comes from never learning how to drive. When I was growing up, if you were rich enough to have a car, you tended to be rich enough to have a driver. And so I didn’t learn then, and what with one thing and the other, I’ve never done so since.

When I travel around London, one of the things that amazes me is the apparent emptiness of the bendy buses; I’ve assumed that it is because of the time I travel, which tends to be early or late rather than peak. But then I think to myself: if I was running the bus network, would it not be possible to be more “just-in-time” with the whole thing? I know that buses do get rescheduled and repurposed, but I sense that everything could be more efficient if there was better information given to the people who decide.

Today it is not just about information to the centre but also to the passengers. As they, the passengers, make more and more informed decisions, everything should work better.

So there’s a metamorphosis going on. Stage one is where information is “automatically” collected and passed to the “centre”, allowing apparently better supply decisions; stage two is when this information is also passed to the edge, allowing the demand side to operate more effectively. But this is the static web, this is classic web.

What excites me is stage three, when the demand side can signal its intentions to the supply side cheaply and accurately and dynamically. And the supply side can respond cost-effectively. This has not yet happened, but the early signs are there. P2P collection of information on-the-fly; an extreme case of such information is the intention or signal.

There’s been talk of the Intention Economy for quite some time now, the issue is more about how to make it happen. The VRM movement has been working on this for a while now. As the power to collect and provide relevant information moves from the core to the edge, we will see this happen more and more. That is what the promise of the participative web is all about. The power of VRM, the power of the intention economy, all these rely on the ability of the edge to provide better information about tomorrow.

We have spent too long dealing with better information about yesterday; we have to get more and more involved in a world where we have better information about tomorrow.

Learning about why people don’t adopt opensource

I’ve been consistently intrigued by the reasons people give for not using opensource, and by the vehemence and passion generated by all concerned. [Don’t you find it amazing that from the very start, the word “opensource” has conjured up images of long-haired pinko lefty tree-huggers in tie/dye t-shirts with the compulsory cigarette-floating-in-coffee-cup? What a feat of marketing by incumbent vendors.]

Over the last decade or so, I’d formed my own opinions as to why people refused to adopt opensource, largely based on observing what I saw around me. Anecdote and hearsay, even if underpinned by experience, doth not a formal study make, but for what it’s worth, I’ll share them here.

People don’t use opensource for one (or more) of seven reasons:

  1. They hate the principle. Such people are uncomfortable with the concept of opensource, they tend to get hung up with the free-as-in-gratis rather than the free-as-in-freedom, and they feel that somehow the very nature of their existence gets undermined by the use of opensource. It’s unAmerican, it’s McCarthyist, it’s even (hush your mouth) Communist. And don’t you know it’s already illegal in Alaska? Where will the world go to if everyone started using free things? Opensource users are stealing from the mouths of people who work hard everywhere. The very idea! These people are hard to convince, but when convinced experience Road-To-Damascus moments. Work on them, it will pay off.
  2. They believe it’s insecure. [Again, a wonderful feat of marketing, excellent management of the metaphors and anchors and frames around opensource.] Quite a common response. Code that everyone can use, that anyone can change, that no one owns? Open to inspection by all? How on earth could that possibly be secure? It’s all a plot to bring down the capitalist world as we know knew it. Solvable by education.
  3. They’re out of their comfort zone. This tends to be the response of steady-state professionals in IT departments in many organisations. If it works, why try and fix it? Why force yourself to take responsibility for the integration, deployment and support of something, when you can pay someone else to take care of it all? They’re risk-averse and responsibility-shy; understandable, defensible, this can often be solved by education.
  4. They know a better way. These are people who point to the end-to-end control that Apple/Microsoft has, and how that gives people more choice and a better experience. [Yes, I’ve always wanted to drive my car on railtracks, ensure that the wheels fit precisely on the tracks, and go by car only to the places the railway takes me. ?!?] Solvable by education.
  5. They don’t know about it. These people have been cocooned away so effectively that they aren’t even aware of the options they have. Totalitarian rule. Most probably they aren’t allowed to go on to that dangerous place, the internet, where they might see strange places and maybe even catch exotic diseases. If they do have connectivity, it’s locked down to a small number of cleared sites. Mozilla is definitely not one of them, and even Sun is banned. Solvable by education.
  6. They can’t do what they want with it. To me, this is one of the most understandable objections. They use something that’s proprietary, they’ve built a whole pile of things around the proprietary thing, and now they can’t function without it. It’s hard to replicate elsewhere or using anything else. It’s not just the applications, you have to think about the processes, the training, everything. I almost buy this. Almost. But all you need to do is imagine you are in a merger or takeover, and all this changes. There is an imperative to move, and all the excuses disappear. So while I have sympathy for this view, I am aware of how fragile it really is. The best way to solve this one is to simulate a merger or takeover involving a firm that does not use what you’re using.
  7. The move represents serious operational risk. Puh-leese. Find the remaining deckchairs on the Titanic, and get them on it. They will happily move them around until iceberg time.

The out-of-comfort-zone concept is well described here, by chuqui, in a post written exactly two years ago. I guess for many of you all this is too anecdotal, too ephemeral. What you hanker after is facts. Good solid academic research on why people don’t use opensource.

This is your lucky day, because that’s precisely what this post is leading on to. There’s an intriguing article on the subject in the latest issue of First Monday, my favourite peer-reviewed webzine. Here it is:

Reasons for the non-adoption of OpenOffice.org in a data-intensive public administration

The study makes a number of general yet interesting points, amongst them:

  • the likelihood of pro-innovation bias in innovation studies
  • the fact that most studies focus on the adoption of innovation rather than reasons for not doing so
  • the understanding that non-adoption is not the mirror image of adoption.

The meat of the study is really worth getting into. The authors looked at a case study around the Belgian Federal Public Service Economy, a public unit that looked at OpenOffice but then decided to stay with Microsoft Office as their principal office toolset. Interestingly,

….the organisation opted for a hybrid approach, in which OpenOffice.org is installed on users’  workstations as a document convertor. This ensures that users can correctly open ODF documents on their workstations. OpenOffice.org is, however, not supported by the IT department.

So the “organisation” went for a solution that is, at least in part,  “not supported by the IT department”. The plot thickens.

It’s a very interesting case study. There were three key projects:

  • introduction of a target platform for business critical application development
  • selection of a platform for business intelligence
  • standardisation of software offering Office-style functionality

Everything was set up right for the decision to go opensource. The European Commission had mandated that an ISO standard had to be used for exchanging documents by September 2009, and Open Document Format (ODF) was the only approved ISO standard. Belgian public sector companies were under pressure to save costs, and this increased the bias towards OpenOffice. And the manager in charge was a known sympathiser.

Just in case this wasn’t enough, the FPS Justice and the Brussels Public Administration, two similar public sector organisations in Brussels, had just opted for OpenOffice.

So let me repeat. Public sector organisation. In Brussels, the heartland of European bureaucracy. Needing to reduce costs. Needing to move to ODF. Led by a sympathiser. Surrounded by OpenOffice adopters.

With me so far? I guess so. Until I tell you what they did. They went for Microsoft Office. With the ODF plugin developed by Sun.

As I said, interesting case study.

Three things stood out for me. One, the decision making process appeared flawed. Project 2, the decision to go for a specific business intelligence platform, was “guided by the fact that [the platform] offers powerful integration with Microsoft Office”. How could this decision be taken before the decision to choose between OpenOffice and Microsoft Office?

Two, the decision appeared to be driven by heavy users rather than the regular users. The heavy users were the ones who carried out serious data-intensive activities, and had built a plethora of tools using the development platform around Microsoft Office. These tools were hard to price in terms of migration costs, and there was a lot of fear and doubt related to conversion and compatibility in general.

Three, no detailed TCO analysis had been made. I quote:

It should be noted, however, that some factors obscured the actual level of [these] potential cost savings. First, some of the licences for Microsoft Office had already been purchased, and were considered to be sunk costs by the FPS Economy. Second, our informants indicated that the TCO for OpenOffice.org could not be estimated precisely, due to the uncertainty regarding the cost of the conversion of applications and macros. Hence, during the project, no detailed TCO analysis was made.

But you know what? All that pales into insignificance when you read the next line:

This is consistent with the results of previous studies that showed that organisations found it difficult to assess the TCO of OpenOffice.org, even after having performed the migration (COSPA, 2005; Drozdik, etal, 2005, Russo, et al, 2003; Ven, et al, 2007a, b; Wichmann, 2002)

Wow. People have carried out studies that prove that it is hard to work out the TCO for OpenOffice.org. Hmmmm. Anyone have meaningful TCOs for the alternatives?

Invented here

Times are hard. And when times are hard, every firm has four choices:

  • Stop Doing Something Completely
  • Continue to Do Something, Just Less of It
  • Start Doing Something New
  • Do Something Differently

Stopping doing something completely is hard. Each firm is made up of values and relationships, habits and processes, people and culture, all built around their specific products and services and territories and markets. Firms that are global in scale and reach tend to operate shared-service models and matrix structures; it becomes considerably difficult to work out the precise impact of exiting a product or service or territory or market.

Accounting and related decision support systems tend to be built around jurisdictions and territories, using regional conventions or, at best, regional interpretations of global conventions; employee regulations and rights also follow fault-lines that are regional; the healthy contention envisaged in the matrix turns into open conflict. Presentations and spreadsheets circulate like snake-oil, accompanied by the requisite snake-oil salesmen.

In such an environment, good information is hard to come by, and as a result good decisions are hard to make. A few do get made. But for the most part, companies tend not to exit products, services, territories and markets in entirety. The things that do get stopped tend to fall into the category Yesterday’s-Necessities-Just-Became-Today’s-Luxuries, things that can be stopped despite the escalation of matrix war.

As a result, instead of Stopping Doing Something, many firms go for the Continue to Do Something, Just Less of It Option. Because Doing Less of Something is Easy. Targets get handed out, “haircuts” are cascaded down, and Death by A Thousand Cuts becomes the norm.

My sense is that the haircut is a losing strategy, it is just a way of improving the optics while staving off the inevitable for a short period. Haircuts are intrinsically the lazy man’s response, management-by-spreadsheet. There tends to be no real management involved (and even less leadership). Why do I say this? Reducing budgets and targets and tolerances is a reasonable thing to do, provided there is no cascade of the reduction. For it is in the cascade that a dereliction of duty occurs, an abdication of responsibility. Cuts are fine, haircuts are not. Adjusted targets need to be held at the highest practicable level in the organisation, and every attempt to cascade should be met with severe resistance.

Having said that, cutbacks are reasonable things to do, especially in environments where payroll and SG&A are the two biggest discretionary expense categories. Travel and entertainment are the traditional early targets, and this is a good thing. What is less good is the tendency to cut back on training and on graduate hiring, these can be short-sighted.

It was John Maynard Keynes who said:

For the Engine which drives Enterprise is not Thrift but Profit

So if you have to resort to cutbacks, try and remember Keynes’ words. Otherwise you may land up saving a lot of “cost” but, in the process, losing the firm.

Starting Doing Something New is also hard to do. In most firms, there is some concept of capacity planning, however rudimentary or makeshift. And firms tend to operate at perceived full employment. So in order to do something new, you have to stop doing something old. The immune system of the firm tends to be at the enterprise equivalent of DEFCON Five by this time, making it hard to stop things “organically”. As discussed earlier, making strategic decisions to stop doing something is also hard.

Having a separate focus on invention and creativity can solve this problem, but that too is hard to do. There are alienation, isolation and ivory-tower-thinking risks.

Which brings me on to Doing Things Differently. Covering a multitude of options, ranging from outsourcing and offshoring to the introduction of real innovation within the firm. Which leads to the Immune System response of Not Invented Here. I am reminded of an article written by Joel Spolsky maybe seven years ago, headlined In Defense of Not-Invented-Here Syndrome. It’s well worth reading. As is, coincidentally, Jeff Atwood’s recent take on the same issue, which can be found here.

Both Joel and Jeff make the point that whatever you believe your core business function to be, you should do it yourself. Deciding what is core and what is non-core is a hard thing to do, especially in an organisation with shared-service models. One man’s meat is another man’s poison, one man’s ceiling is another man’s floor. And one man’s core is another man’s non-core.

I would rather paraphrase what Spolsky and Atwood said: Figure out what you’re good at. Check that there is a market for what you’re good at, that people want to pay you for doing it. Then make sure you do it. From your perspective, everything else should be non-core. So get others to do the rest, focus very hard on what you’re good at.

Which brings me back to my old opensource rule-of-thumb:

  • If the problem is universal, look to the opensource community for a solution
  • If the problem is domain-specific, look to the “commercial” community
  • If the problem is unique to your firm, look to your own resources

I think that every CIO should be looking hard at the tools being used to solve universal problems, and to make sure that opensource components are used aggressively. There is no better time.

Remember, the objective is to reduce costs, not heads. Given the option, what would you rather do? Fire people or increase your use of opensource? Think about it.

Just freewheeling about buying and selling

This is one of my more provisional posts; in it I bare my thoughts somewhat more vulnerably than I am normally wont to do, because it is about an important subject. I’ve been thinking about it for some time now, which means it is a long post. It’s rambling and woolly because it is provisional. Francis Bacon, in one of my favourite quotes, said:

If a man will begin in certainties he shall end in doubts; but if he will be content to begin in doubts he shall end in certainties.

I am content to begin in doubts. With your help I shall end in certainties. This is that kind of post.

Marshall McLuhan is meant to have said something along the lines of:

“I don’t know who discovered water, but it certainly wasn’t a fish.”

Fish have no understanding of water. Fish have no understanding of fire either.

Every one of us has a problem recognising what we’re immersed in; sometimes, because we’re so immersed in something, we also have a problem recognising things beyond that which we’re immersed in.

Take “abundance economics”. We don’t understand it. Why? Because we’ve all been brought up to understand and respect “scarcity economics”. Which seems to go something like this:

  1. It’s all about supply and demand.
  2. Uh, wait a minute. Isn’t it all about supply, provided you can corner the market?
  3. So, if you could somehow continue to stoke up demand while controlling supply….
  4. …Yes, it’s all about supply and demand. Provided you control the supply and excite demand.

Everyone understood it. And everyone played the game. And scarcity economics was seen to thrive. God was in His Heaven, and all was Right with the World. Just as long as you were a Seller and not a Buyer.

We have all been brought up in such a world. Become the seller in a seller’s market. Or be a wimp, a wuss, a loser. Caveat emptor. Morituri te salutamus. Monopoly is a game played by lawyers and regulators, and the customers always lose. Antitrust is just a US variation of the same game: same players, same losers.

Sellers traditionally look to create scarcity. When the goods for sale are physical in nature, this is not hard to do. All you had to do was to corner the market and hoard the goods. This happens all the time. Diamonds and oil. Gun mountains and butter mountains.

That’s the way it’s been. A seller’s market. Scarcity rules OK.

In a world based around scarcity economics, with everything under seller control, things are made to slow down. There’s a QWERTYing of the seller-buyer interaction, a direct consequence of disproportionate seller power. Which is what leads to nonsensical constructs along the lines of Assembly Line. Any color you like. As long as it’s Black. Warehousing and inventory management are nothing more than “legitimate” hoarding. Hoarding by sellers.

So, particularly in the West, we were brought up in a world where sellers were encouraged to hoard and buyers were encouraged to borrow. After all, what does a buyer hoard? Money. Time. Attention. Intention. And most of the time, sellers work hard to make the buyer stop hoarding. (Make a sentence with “fool”, “money”, “soon” and “parted”). At university, it seemed to me that one of the key differences between the East and the West was that people continued to save in the East. The savings rates I was used to in India were phenomenal, and there was no credit to speak of. People spent a part of what they’d saved.

Which sort of leads me on to the real reason for this post. [And no, it’s not an attempt to link all this up to the credit crunch. Though there is a link.]

I think scarcity economics goes with selling, and abundance economics goes with buying. I think selling goes with things static, and buying goes with things dynamic. I think selling can be plastic and artificial, while buying tends to be real and authentic.

And I think Web 1.0 was all about the seller, while Web 2.0 should be all about the buyer. A static web enables artificial scarcities, while a live, participative web, like nature, abhors the vacuums so created. As a result, equal and opposite artificial abundances emerge.

Esther Dyson called it “the customer’s in control”. Before that, the Cluetrain had come to town, and people were beginning to understand the importance of authenticity. Since then, Hugh Macleod, Kathy Sierra, Tara Hunt, Seth Godin, Doc Searls, they’ve all preached elements of this in different languages. Languages like Creating Passionate Users. Languages like Social Objects. Languages like VRM.

Buying is participative; it’s about relationships and conversations, not transactions. Unlike selling, which is all about transactions.

For many years I’ve wanted to publish RFPs and RFQs and RFIs on the web, because it seems a sensible thing to do. Tell the world what you’re looking for, and help them come and find you. No lies and no cheating, just the facts.

But people railed against me when I said things like that. “You don’t understand procurement, that’s for sure. Don’t ever play poker, because you’d lose a lot of money. Transparency is for losers. There’s no point negotiating unless you’re prepared to walk away. You’re an idiot”.

I guess I am an idiot. Because I still think that way.

You see, scarcity economics is about hiding needles in haystacks; abundance economics is about making haystacks out of needles. What would you prefer?

The worlds of advertising and search are deeply intertwined right now. Not surprising, because they’re all immersed in scarcity economics and staticness and Web 1.0.

Search means something else altogether when it becomes about intention and not inventory. So does advertising, when it becomes about recommendation rather than rationing.

Every day, more and more people are becoming connected. Affordably, sustainably, ubiquitously connected. The move from sellers and inventory to buyers and intention is already happening. Social media in all its forms (blogs and wikis, IM, e-mail and Twitter, electronic social networks) help make this possible. Tools continue to emerge and improve.

In many firms, in many markets, in many societies, we’ve had a number of Emperor’s-New-Clothes words and phrases, words like “transparency” and “collaboration”. Words that were smoothly wheeled out to mean the opposite, and everyone went along with it. Why? Because we were immersed in Scarcity Economics.

Scarcity economics was all about making the customer pay for what you had to sell; if you had to drum up demand first, that was fine. It was called advertising. If the customer didn’t need it that was also fine, you weren’t running a charity.

Abundance economics is all about giving the customer what she wants and then letting her pay for it herself. The only thing you have to do is make it easy for her to tell you what she wants, and, when she does tell you, to listen.

Of course customers don’t always know what they want. Of course there will always be customers who want what they had yesterday, only faster cheaper better. Of course there will always be customers who want “faster horses“. Of course there will always be an Innovator’s Dilemma. Always?

Always is a big word. Maybe it gets smaller as we move from a seller’s world to a buyer’s world.

It’s all about choices. It’s all about choice. Customer choice. Choice based on recommendation, choice signalled as intention, choice executed in abundance.

To paraphrase Michael Schrage, innovation is what the customer buys, not what the producer sells. As we move into the new world, the very concept of the Innovator’s Dilemma begins to change. All this is happening, happening now. The future’s already here, it’s just unevenly distributed. But you know what? I think the credit crunch is accelerating the change.

I’m done for today. Flame away. And I will learn. This one has been a Long Time Coming, it’s going to be a Long Time Gone.

[An aside. Even if you hated this post, even if you disagreed with every word of it, go on, do yourself a favour, listen to the song I’ve linked to in the paragraph above. Superb stuff].

[Another aside, for the more literary-minded amongst you. I’ve linked to the Wikipedia entry for Browning’s Pippa Passes earlier in this post. Go read it. I knew the poem well, yet learnt something today.]