There is little doubt that the business environment is changing faster than at any other time in history. The recent book from Peter Evans-Greenwood, The New Instability, argues that shift in the economy is a response to technology introduced over the past few decades. Written from the perspective of business transformation, Evans-Greenwood uses examples from virtually every industry to argue that it is how you partner rather than what you own that defines success in the digital era.
Some leaders believe the best response to volatile business environments is to focus on operational excellence, in fact even going so far as to design and operate the enterprise as a living computer. Evans-Greenwood argues that the key to success is agility and business relationships, two things that require less rather than more systems. Information Technology can be an operating platform for agility or it can lock-in existing ways of working.
Arguably, many organisations’ claims that they are innovating with Big Data is actually an example of inward-facing operational excellence. I am reminded of an article by Steve Lohr in the New York Times: Sure, Big Data Is Great. But So Is Intuition. Lohr, who is a proponent of Big Data, traces its lineage back to Frederick Winslow Taylor’s “scientific management”.
Both Evans-Greenwood and Lohr argue that a war of data algorithms which is limited to the same datasets will naturally deliver diminishing returns.
What the “unbusiness”, or enterprise that is unburdened by a focus on its assets, delivers is the freedom to find innovative relationships. While organisations such as Twitter and Craigslist are obvious exemplars of this model, it is more interesting to read the case studies of businesses such as Kogan Technologies and Rolls Royce (the aircraft engine company, not the maker of luxury cars).
We are introduced to the partnerships that both Kogan Technologies and Rolls Royce have formed to find new and innovative ways of managing expensive assets.
None of the success stories we are introduced to in The New Instability could have achieved their goals using conventional tools such as Business Process Management. I’ve made the case many times before that much of the value of organisations is in their complexity. Any governance model that tries to force every situation into a limited number of responses by necessity reduces individual innovation and value.
Most of the investments we’ve made in enterprise technology, such as Enterprise Resource Planning, Business Process Management and now Big Data were started as ways differentiating the businesses that were the early adopters. Beyond the first wave of implementation, most organisations seek to build on existing design patterns to manage costs. What starts as an innovation quickly becomes a ticket to play and certainly doesn’t allow any business to respond to the next wave of instability.