By Haydn Shaughnessy
What businesses really need can be stated very simply. They need to treat their markets and processes as fluid entities and then find ways to shape activities that add value "in the flow" or "in the quality of social interactions at work".
How best to illustrate this though? It’s all very well to call out these terms but what is this idea of fluidity and why is it important.
In effect McKinsey, the world’s most prestigious consultancy, was talking about flow.
I’ve been writing about this idea of fluidity for about a decade. Nick Vitalari and I wrote about it in the Elastic Enterprise back in 2012. We talked about radical adjacencies but it is precisely the same concept as being “borderless”. It is only just catching on. However, that’s why the idea of “flow for strategy” and the concept of collective intelligence are important but overlooked ideas.
Modern business is plagued with a big information and belief problem. Remember that old conundrum: If a noise occurs in a forest when there is no-one there to hear it, has the noise really happened?
The fact is plenty of noise around "sectors without borders" has been made over the past decade but very few leaders were around to listen. They were in the forest called : "core competency of the firm", the diametric opposite of being borderless.
This is actually a collective intelligence problem. Collective intelligence is the opposite of authority handed down from above. It exists not because we distrust authority, though we might. It exists because of flow.
One of the things we point out in Flow is that the concept of collective intelligence has been corrupted by the idea of crowdsourcing, or the crowd somehow knows best or can act more efficiently. Collective intelligence says something quite different. It says: there is so much knowledge, so much information that the only hope we have of creating value from it is if we collectively shape it, and shape it continuously. It will always evade us, there will always be too much. But the right social interactions will allow us to capture value. Many brains are better than one but more importantly many conversations are needed to help us understand our possibilities and options.
Information is a flow or torrent and we need work environments where we can collectively shape it. We can only do that with big improvements in social interaction at work, the goal of Flow, the book.
The reason for this is partly to do with those "sectors without borders". Your markets are a target for any other smart company with an extensible business platform and a better grasp of what's going on.
Most leaders, however, have been schooled in the "core competency of the firm" way of thinking. In fact I regularly hear from companies, we must get back to the core. And I see colleagues write about innovation as a core v non-core activity.
A lot of the work that went into The Elastic Enterprise began with an analysis of business platforms that Nick was working on as early as 2006. The idea of a radical breakdown of vertical sectors goes back to the period 2008-10 when we were working together at the nGenera Think Tank but it predates my time there too. The nGenera team included people like Bob Morrison who were on top of this stuff as early as 2006.
These ideas are only just getting a full airing in places like HBR. And therein lies a danger. Unless you are in the Flow, and working with it, unless you believe in the culture of collective intelligence, you are going to be working with very bright and very persuasive consensus-forming institutions like the big consultancies and HBR. That means being up to a decade late with the most relevant ideas.
In the case of borderless sectors, the trend was already clear from about 2007. Apple into smartphones; Microsoft too. Walmart trying to open a bank around 2012. Google looking at autonomous cars. CISCSO going into social software.
We defined this new adjacency capability as:
A radical adjacency.... an acquisition or market move that takes the buyer or executing company into areas where its management team has no, or little, current experience.
Another feature of the change that I touched on in this 2013 PowerPoint is that innovation becomes narrower and multiplies in volume. At the time of writing that PPT, Samsung had over 150 different smartphones on the market, for a very good reason. As the global middle class has grown (and continues to grow) it wants better targeted products, services and experiences.
Nick and I wrote about this as the need for a new kind of optionality in strategy and continuous active strategy, iterating between product development and strategic planning, keeping both in a condition where they can be pivoted as and when the circumstances demanded. So more products (scope), inside a more dynamic strategy environment.
The purpose of Flow is to capture this culture or, rather, to capture ways that this culture can be developed and maintained, as well as to explain its benefits.
Optionality relies on having a very dynamic, business-oriented IT shop, so the most important feature really is to have IT folks who want to change stuff and who come into work to make things better. And are open to working with the business to demonstrate opportunity. Likewise business people need to open up to the Flow.
For CIO's, the benefit of flow is an environment where continuous delivery and continuous integration become feasible because people are attuned to what they can contribute to their new delivery environment. They are in the flow.
A key characteristic of flow is that decisions are not closed off; there is always the possibility for a change of mind if the evidence suggests it is wise to do so or if new ways of work arise. It is a culture for the ultimate in adaptability driven by the belief people have in each other and especially their leaders.
That might sound utopian and it does, and should invite, a discussion about beliefs. The new cultural elements that firms need come with a very strong emotional basis. You can only do good work if you believe in each other. You can only really get away with process-lite engineering and marketing if you have extremely good social interaction. We say, good decisions stem from good social interaction at work. And we need to make many more decisions as work processes become lighter and less like anchor points. That’s flow. The shaping of multiple decisions in real time.
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