Why do companies exists? Why do they have the size they have? Howdoes the company conclude what should be done internally and what should be left to the market? Nobelprice winner, Ronald Coase has studied these basic questions. Coase has found that the answer to these questions is the fact that companies do some tasks more effectively than the market. According to Coase, do companies exist because the cost to organize and sustain them are lower than the costs of transactionsbetween individuals on the open market And companies grows until the cost of performing a single additional transaction internally is just as high as buying it externally.
Up until now the development of the digital technology has stimulated the growth of companies. Computers and networks has made it possible to grow not just locally but also globally. But the development of technology not only makes the companies more effective. It also makes the market more effective. The cost of transactions decreases for almost every product, in some cases dramatically. And it decreases much faster on the open market. According to Larry Downes and Chunka Mui this leads to:
“The Law of Diminishing Firms,” which states that “as transaction costs in the open market approach zero, so does the size of the firm.” From Unleashing the Killer App: Digital Strategies for Market Dominance, by Larry Downes and Chunka Mui.
So, does this mean that we are moving towards single person companies? No way Jose. We humans are flock animals and we like to hang out together. The transaction cost is only one parameter in defining the size of a company. But there’s a balance. Some claim, that the ideal company doesn’t have more than 150 employees.
Even if the new connectivity that we are experiencing today, levels the playing ground. I still believe the tribal society will exist and continue to prosper. We will see new tribal configurations and on new levels. What will change though, and in some ways has started to change already. Is why we want to work for a specific company or organization.
In the not-so-distant old-days, we worked for a living, for food on the table. Today, particular in the connected part of the world, these reasons are not the primary ones anymore. There are other reasons why we want to belong to this or that tribe. Values. Values are also one of the most influential forces today.
The fundamental values expressed in three words:
FUN, FUN, FUN
One Size Does Not Fit All
For several years now, the leading ERP vendors have tried to convince us that One-Size-Fits-All. Companies like SAP, JD Edwards, Baan, and Intentia has made us believe that this is really the case and it’s almost like a natural law. We have heard that tailor made systems are much more expensive and even dangerous. How come organizations fell into the trap, embracing the One-Size-Fits-All model, when we are not accepting it in any other areas (except for maybe our tennis socks)?
Costs. In the late 80s and early 90s the Information System costs started to rise above previous levels. And with the increase in use of PCs, the cost increase was accelerated. At the same time, organizations did not view their IS as a core process. Only as a cost center. And cost centers should be limited and reduced in size. So what could be reduced?
To develop and maintain systems you need people. Often you need people with different specialties to maintain your systems. And as maintenance is a major part of all system costs, how compelling was it not to listen to all the sweet talks from various vendors. The costs would be reduced and you didn’t need any people to take care of your systems.
So what happened? Were these so called standard systems the grail that saved us from all rising costs and eliminated all our problems. No way Jose! Instead of reduced costs, most organizations experienced an even higher increase. But what was even more serious, was that the so called standard system didn’t support the business processes. Instead the business processes had to be adopted to the new system.
The following picture depicts the evolution of the process/system model. At the moment we are at the “Turnkey” phase. Also known as the One-Size-Fits-All phase. What’s significant about this phase, is that the control is out-sourced.
Another significant feature of the One-Size-Fits-All system, is that it is very costly to upgrade or modify. Often these systems are so called integrated systems. Which means, that if you have to upgrade one part, you have to upgrade the rest as well. It’s like if you want to replace your microwave oven, you have to replace the whole kitchen. Cupboards, sink, stove, fridge the lot. An expensive endeavor to say the least.
When we realize that IT is a core process of any organization. And when we come to insight that the most important issue for any organization is to be able to provide:
Then we will see less of One-Size-Fits-All systems and less of IT out-sourcing. We will move towards Components and Modularized systems, that grows with the organization. That are Best-of-Breed systems, aligned with the Business Processes. The upgrade and modification costs will be low to moderate.
The Success Framework
The Success Framework focuses on some fundamental questions.
Other Books by Leif Trulsson
Leif Trulsson is the author and co-author of the following books on application development:
In Value Driven Development I explore three principles that are easy to understand and easy to implement. You will learn how these principles allow you to address the underlying problems. You will find out how these simple principles help you to increase value and profitability and the ability to compete. With these principles you will be able to deliver more with less!
In part 9 of The Success Formula, we will look at Inspiration.
Inspiration and motivation is the fuel that makes us tic. Money is a motivator if you don’t pay enough, but you can take the money out of the equation by paying people enough. Researchers at MIT, Chicago School of Economics, and at Carnegie Melon University have found that there are three factors that lead to better performance and personal satisfaction:
Autonomy
Mastery
Purpose
Autonomy, mastery, and purpose are what fuels inspiration.
During my professional career, I have always viewed every position or job I had as my company. I was running the company Leif Trulsson (autonomy) and my goal was to excel in everything that I did (mastery) and deliver the best possible service (purpose). In the beginning it was a one man company, but as I later became a CIO I viewed the whole IT department as an autonomous company and my aspirations was for the whole department to excel and under the given circumstances deliver the best possible service to our customers and at an unbeatable price/performance. And we did, and in the process we had a lot of fun.
So, feel inspired and have FUN! Some might even say if it’s not fun it’s not worth doing. In fact, inspiration fuels a whole industry, the entertainment industry.
The Success Formula – lays the foundation for success.
We need to increase both the Return on Investment for the business and the Return on Experience for the individual and the team. That’s the true reward.
And remember, we need to celebrate!
The Success Formula- Part 8
In part 8 of The Success Formula, we will look at Commitment.
“I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth. No single space project in this period will be more impressive to mankind, or more important in the long-range exploration of space; and none will be so difficult or expensive to accomplish.” President John F. Kennedy in a special address to a joint session of Congress on May 25, 1961.
As I mentioned before IBM’s three Basic Beliefs were Respect for the Individual, The best Customer Service, and Pursuit of Excellence. These three beliefs were also a commitment to both its employees and its customers. These were really strong commitments not only on a corporate level, but also very much so on an individual level, and the customer’s needs really did come first.
The commitment to quality and to excellence gave IBM its unique strength. Even though cost was never an issue, cost issues were never ignored, but the focus was rather on price/performance. This meant that every option was considered in ensuring that the optimal solution was achieved. This was also the essence of the famous THINK campaign created by Thomas J Watson. The result was a unique degree of flexibility, coupled with intellectual application, which could then be overpowering to the outside world.
”Just because you are a character doesn’t mean that you have character.” The Wolf, Pulp Fiction
The two most important key success factors in running IT projects are user involvement and sponsor support. Both these two factors are also commitments on the part of the users and on the part of the sponsor. Projects that lack these two commitments are more likely to fail than projects that have these commitments.
In January 2009 a new CEO took the helm at Procurator. His experience of successful IT projects was not very good to say the least. What he didn’t understand though, was the critical impair and success factors involved, and the very important role that he himself played in the make it or break it of projects.
Without the right sponsor support, any significant project is almost certainly doomed to fail. It’s the sponsor that sets the agenda and if the CEO is not backing up corporate wide projects in a clear and active way, the organization will take notice of this and will behave accordingly.
The new CEO at Procurator had never, according to himself, experienced any successful IT project. However, before he arrived at Procurator there had been more than 20 successful corporate wide projects during the previous three years. And sure enough, the first major project during his watch failed and he was personally very much responsible for the failure, as he made all the mistakes in the book and then some. In fact, it was totally impossible to succeed under the circumstances that he created. It’s funny how often self-fulfilling prophecies becomes just that: self-fulfilling.
For me personally it was a double defeat. It was the first time in more than thirty years that a project that I was leading failed. The cost to me personally was even higher, as I due to the environmental factors ended up in the ER with a stress related heart arrhythmia, which later forced me to retire from my job due to health reasons.
Commitment is the for-better-or-for-worst part. We need the whole heart to be with us. We need to be committed. We can believe in anything we want, but if we don’t put our heart and mind to it, the chance of success is very dim.
The Success Formula- Part 7
In part 7 of The Success Formula, we will look at Belief in what we are doing.
You can be anything you want to be, if you only believe with sufficient conviction and act in accordance with your faith; for whatever the mind can conceive and believe, the mind can achieve. – Napoleon Hill
No matter how confident we are or how secure we feel, if we don’t believe in what we are doing we will not succeed. We have to feel it in our hearts that it’s the right thing to do. You might have the skill and talent to do or achieve what it is that you set out to do, but if you don’t believe that you will succeed you wont. The lack of belief and trust in your own (or the teams) ability becomes a self-fulfilling prophecy.
The Success Formula- Part 6
In part 6 of The Success Formula, we will look at Confidence.
Confidence is the launch pad that enables us to get off to a good start in our quest for success. Clarity, respect, trust, honesty, and reward create a sphere of comfort and security and are the pillars and foundation for achieving success. Together they make us feel confident and secure in our roles and abilities, and the team’s ability as whole.
Confidence means trusting our self and/or our team’s ability to succeed. Confidence is a state of mind, and an essential ingredient in achieving success.
This is a good beginning, but it’s not all. To complete the formula we also need three more very important ingredients.
The Success Formula - Part 5
In part 5 of The Success Formula, we will look at Reward.
When I talk about reward, I’m not referring to the kind of hefty bonuses that we’ve seen in the last decade or so. That kind of reward is definitely not good for either the moral nor what’s best for the business or organization as a whole. That’s pure greed and nothing good has ever come out of greed.
Reward in this context is on the other hand good for the morale. To celebrate success and advancement strengthens team spirit and can act as the glue between project team, users, and sponsors. Many are the projects where a good get-together has worked as a catalyst and platform for further communication and collaboration in the project and thus contributing to the success of the project. But even a tap on the shoulder or a word of appreciation works wonders.
In the old IBM, the IBM that the Watsons built, reward and incentives were an important part in motivating and rewarding the employees for their contributions. Also spouses where, at least once a year on a local level, part of this appreciation.
Reward and appreciations don’t have to be on the grand scale like the old IBM HPC (Hundred Per Cent Club; for successful sales personnel), but could be a modest Dinner for Two or some other more modest token of appreciation. It was never the financial size of the appreciation that mattered, but the appreciation it self.
The Benefits of Using a Business Analysis Framework
By using a Business Analysis Framework (see Figure 1) we can establish:
Business Goals
Business Views
Abstractions (areas/views)
Perspectives (separation of concern)
Business Definitions
Business Information
Business Roles & Responsibilities
Business Rules
Business Operations
Business Infrastructure
Figure 1. The Business Analysis Framework
The Success Framework
The Success Framework builds upon “A Framework for Information Systems Architecture”, by John Zachman published in an 1987 article in the IBM Systems journal.
The Zachman Framework summarizes a collection of perspectives involved in enterprise architecture. These perspectives are represented in a two-dimensional matrix that defines along the rows the type of stakeholders with the columns the aspects of the architecture.
The Zachman Framework is an Enterprise Architecture framework, which provides a formal and highly structured way of viewing and defining an enterprise. It consists of a two dimensional classification matrix based on the intersection of six communication questions (Why, Who, How, What, When, and Where) with six rows according to rectification transformations.
The Success Framework builds upon the Zachman framework, but also extends it with two additional perspectives/views (see Figure 2):
The Objectives/Scope perspective; the strategic view
The result/benefit perspective; the value view
Figure 2. The Success Framework
Abstractions and Perspectives
Each perspective focuses attention on the same fundamental questions, then answers those questions from that viewpoint, creating different descriptive representations (i.e., models), which translate from higher to lower perspectives. The basic model for the focus (or abstraction see Figure 3) remains constant. The basic model of each column is uniquely defined, yet related across and down the matrix. In addition, the seven categories of business architecture components, and the underlying interrogatives that they answer or address, form the columns of the Success Framework and these are:
The data description – What
The function description – How
The Network description – Where
The people description – Who
The time description – When
The motivation description – Why
The results/benefits description – Value
Figure 3. The Abstractions/Views
The Business Anatomy
By using the focus area/abstraction questions, we can translate these questions into relevant business parts that forms the business anatomy (see Figure 4).
WHY – Represents the Leadership focus which in turn focuses on vision & mission, values, strategies & goals, policies
WHO – Represents the Organization focus and its focuses on roles & responsibilities, competence & capabilities, relations, development & satisfaction
WHAT – Represents the Information & Analysis focus and its focus on information management, measures, and analysis
HOW – Represents the Process & System focus and its focus on product & service processes, business process, support processes, functional requirements
WHERE – Represents the Infrastructure focus and its focus on locations, requirements, influences, interfaces
WHEN – Represents the Timing focus
VALUE – Represents the Results focus broken down into customer satisfaction, employee motivation, partnerships, and business results
Figure 4. The Business Anatomy
By using a framework we can mitigate the complexity and provide a holistic approach to translate between different perspectives and views. The framework is also an excellent tool for performing analysis of the current operations and provide a framework for where we want to be in the future.
Figure 5. Multiple stakeholders - Multiple views
Figure 6 illustrates the relationship between different stakeholders and different views.
Figure 6. Matching perspectives and views
The Success Formula - Part 4
In part 4 of The Success Formula, we will look at Honesty.
Honesty should be everybody’s constant core value, but unfortunately it seldom is. Honesty is the bond between Respect and Trust, and when that bond brakes the whole foundation that success rest upon tumbles.
Honesty is the guardrail and an essential quality of clear communication. By being honest both to ourselves and others we show integrity. By being honest we play by the rules and we do not try to taint or mislead in any way. Sometimes honesty hurts, but at the end of the day it’s the only way to go.
In his book Good To Great, Jim Collins concludes that the Great companies by “confronting the brutal facts†are brutally honest with themselves. They do not let personal investments in ideas or past practice get in the way of reality. They create what Collins calls, “a climate of truth”. But at the same time they have an unwavering faith that they can succeed.
In Good To Great, Jim Collins also lists four basic practices in creating a climate where truth is heard:
Lead with questions not answers.
Engage in dialogue and debate, not coercion.
Conduct autopsies, without blame.
Build red flag mechanisms that turn information into information that cannot be ignored.
Unfortunately though, the same does not hold true for mediocre companies.
“Oh, what a tangled web we weave, When first we practice to deceive!” [Sir Walter Scott]
“Honesty is the first chapter of the book of wisdom.” [Thomas Jefferson]
Honesty must be more than a policy, it must really be one of your constant core values.
A Genius has past away
Today we all learned that one of our times greatest geniuses and visionaries has past away.
Steve Jobs has left us a legacy that has changed the way we interact with digital content, whether it is computers, smart phones, tablets, or animated pictures. His visionary qualities can not be underestimated, and hopefully Apple will continue its path despite the loss of its guiding beacon.
The Success Formula - Part 3
In part 3 of The Success Formula, we will look at Trust.
All healthy and sound relationships are built on trust. Trust is like a bond or a life-line, and trust needs to be earned. It takes time to build trust, but it can be ruined and gone in a fraction of second. Trust is also tightly intertwined with both respect and honesty. Take away any of these core values and what ever you are trying to build will come tumbling down.
Trust is such a vital part of our daily life, that we don’t even think about it. When we take our car to the road we trust the road signs and that other drivers stick to the traffic rules. When we board an airplane we trust the pilot and crew that they will safely bring us to our destination and we entrust them with our most valuable possession, our lives.
We hopefully also trust our government and other local or federal authorities, but in many countries that’s not the rule of thumb. Even in a “developed” democracy it’s often more a rule than an exception, that we really cannot trust our so called leaders. Unfortunately powers corrupt, and real leadership is probably the most scarce resource of all.
But to be successful in almost any endeavor we need to build upon trust. In any successful team or organization the level of trust is very high. We trust the leadership and fellow teammates that they will always do their very best for the team/organization. Also on an individual level we need to trust our own abilities, skills, and knowledge. High achievers always have a very high level of trust in their own ability, and success can never be attained if we lack in trust.
When I joined the Customer Engineering department at IBM back in 1977, my first manager was what I call a rug-sack manager. He was not very supportive, and when you where on a customer call with a machine failure, he would call you every 15 minutes to check how things where going. This was really annoying, because every time he called you, your thought process was interrupted and you almost had to start the problem determination process all over again. He would also be easily fired up if the customer called him and expressed concerns about the fix progress. The problem he had, was that he didn’t trust you, at least not well enough to let you do your job in the best possible way.
My second line-manger was the complete opposite. He was always 100% supportive and had complete trust in you. He knew that if you couldn’t fix it within the expected time frame, you would call for help. This he also reassured any worrying customer that would call him. The complete trust that my second line-manager showed me and the other Customer Engineers in our group, was to become my own guiding principles years later as I became a manager myself.
Sometimes however, trust can almost become a burden. When I, during a number of years during the 1980s, was Country Specialist for IBM in Saudi Arabia, I was bestowed which such levels of trust, that I more or less received a cult status. Some of my colleagues had such great faith and trust in me, that they where totally convinced that if only I showed up at a site that had a serious system down problem, all problems would be solved. And I was lucky, because I managed to live up to these expectations every time I was called in as second line support, even when we faced some very difficult cases.
But not everyone are able to live up to the expectations that are put on there shoulders. We’ve seen this for example in the sports world, where not everyone have the right mental strength to live up to the trust that has been bestowed upon them. So we need some moderation. Trust is good, but we also need to offer assistance to those whom we trust and have faith in.
The Success Formula - Part 2
In part 2 of The Success Formula, we will look at Respect.
When I came to IBM back in 1977, one of the three Basic Beliefs was Respect for the Individual. The other Basic Beliefs where: The best Customer Service and Pursuit of Excellence, and together they formed the foundation for IBM growing into one of the worlds true and great industrial giants, and by many viewed as a “best managed company”.
The following are three quotes on respect from Thomas Watson Jr., the former chairman and CEO of IBM.
“There are many things I would like IBM to be known for, but no matter how big we become, I want this company to be known as the company which has the greatest respect for the individual. (1957)” – Thomas Watson Jr.
“If IBM is to continue to be strong, to grow, and to bring profit to all of us in the company and to our customers and stockholders, we must be certain — constantly — that we are headed in the right direction, making the right decisions, and treating every employee with respect. (1961)” – Thomas Watson Jr.
“We accept our responsibilities as a corporate citizen in community, national and world affairs; we serve our interests best when we serve the public interest. We believe that the immediate and long-term public interest is best served in a system of competing enterprises. Therefore, we believe we should compete vigorously, but in a spirit of fair play, with respect for our competitors, and with respect for the law. In communities where IBM facilities are located, we do our utmost to help create an environment in which people want to work and live. We acknowledge our obligation as a business institution to help improve the quality of the society we are part of. We want to be in the forefront of those companies which are working to make the world a better place. (1969)” – Thomas Watson Jr.
Though many viewed the three Basic Beliefs as some of the reasons that IBM started to fumble back in the late 1980’s and early 1990’s, I personally don’t believe that. I firmly believe that it was rather the loss of focus on the three Basic Beliefs, together with a change in the core business model that was the root of the problems. The key to IBM’s success was never about computers or technology, but about people and processes, and a mindset in the “pursuit of excellence”. As Jim Collins, the author of Good To Great, points out: “IBM stumbled badly in the late 1980s because it drifted from its core values (which it should never have abandoned) while remaining too rigid in its strategies and operating practices (which it should have changed far more vigorously).”
Personally, the three Basic Beliefs of IBM are so ingrained in me, and I strongly believe that if you adhere to these beliefs you just can’t fail. But this is where so many organizations fail. Since leaving IBM in 1997, I have come across a number of executives and companies that haven’t got a faintest idea what respect stands for or is about. Just as the three Basic Beliefs of IBM was part of IBM’s DNA and made it a great company, the lack of respect in an organizations DNA is a severe handicap.
So what does Respect mean?
“Do unto others as you would have them do unto you.” In other words treat others the way you yourself want to be treated. Unfortunately though, many employers regard their employees the same way as they regard any other assets or products that may be used, abused or discarded at will. But on the other hand, some employers like i.e. IBM did, have embraced their employees and made them partners in the growth of the company.
As I said in part 1, everything starts and ends with leadership. So also when it concerns respect. It is my duty as leader to instill the values and create the circumstances/environment for the team or organization to succeed. If I have done that, I can expect the team members to function to the best of their ability and fulfill established, well defined, and obtainable goals. Under these circumstances, we may very well expect success from the individual or the team. However, if we for various reasons, place an individual or team in an untenable or impossible situation in which the individual or team will fail to fulfill expectations, that would be an act of disrespect.
I have met business leaders, that treat their employees with utterly disrespect, and as though they are less significant than themselves. They lie, cheat, deceive, and harass others as though they are supreme and more important than others. They don’t seem to understand, that any time they are behaving deceptively or cruelly they are acting with disrespect and disregard for others.
Two other core values, trust and honesty, goes hand in hand with respect and I will come back to these in part 3 and 4.
The Success Formula represents the foundation for building a successful organization. Whether it’s in business, sports, or any other endeavour doesn’t matter. The core values and principles are the same, and that’s why we can view it as a law, as laws are universal and apply everywhere.
In a series of posts, I will walk you through the core elements of The Success Formula, and in this part 1, we will look at Clarity.
A good friend and former colleauge of mine use to say, that everything starts and ends with leadership. This also happens to be a vital part of The Success Framework and it’s also what Clarity is all about. True leadership is about formulating and making very clear a number of key components. Because without Clarity you and your team/organization are fumbling in the dark.
Clarity is about formulating:
Clear leadership
Clear vision
Clear mission/purpose
Clear values
Clear goals
Clear strategies
Clear roles and responsibilities
Clear and transparent information and communication
Clear rules, policies and principles
Clarity is about eliminating any doubts, and makes life so much more easy. And still, this is where so many organizations fail. In fact, I know companies that for many years didn’t have any overall goals, or any strategies for that matter. And ofcourse they failed, miserably to say the least. So instead off being on the path from good to great, they were on the path down mediocracy way.
Some executive managers that I’ve met through the years, even believes in Mushroom Management, in other words keep everybody in the dark and spread the shit on them. Personally, I believe in full transparency. If anyone is old enough, and skilled enough to work for the organization, they are also capeable of hearing the truth, which I’ll cover in a later post.
One of the keywords here is purpose. You can have very clear goals, but if the purpose is murky or there is not defined a clear purpose at all, the goals are really irrelevant. As they say at Toyota – always ask why five times. Why are we doing this? Why are we going in the direction that we are going? Why are we having these rules, policies, and principles? Why are we hiring this person? Why, why, why, why, why?
Asking WHY helps eliminate any doubt and makes things even more clear. So be like the young child – ask why!
Move to Spain - Part 1
The first step of our Move to Spain project is on the way.
Selling our house here in Sweden is the first step towards realizing our Move to Spain project, and that part is now on its way. It took the real estate agent Malmöhusmäklarna about a month to get the house on Internet, but now we are rolling. We also have a scheduled date set to the 15th of May for anyone who is interested in the object. Watch Full Movie Online Streaming Online and Download
Remember: If you’re not visible you don’t exist.
The first day of my new life
Yesterday was the first day of my new life! After more than five, very hectic, years as CIO at Procurator AB in Sweden I yesterday went on a long, well deserved, vacation.
“So what are you going to do?” – is the most common question I’ve got in the last couple of months. Usually I say that I’m going to retire, but I really have  a number of plans. But what I really mean by saying that I’m retiring, is that I will not be employed anymore. I’m actually embarking on two new projects:
Move to Spain
Generate monthly income streams.
The Move to Spain project has started in that sense, that we have engaged a realtor in the sub project of selling our house. When that’s done, I will fly down to Costa del Sol and start looking at interesting objects. My wife and I have already got the NIE numbers, which you need to be able to purchase a property in Spain. This means that when our house is sold, we can act very swiftly if we want to.Roblox Hack No Survey No Download
So why are we moving to Spain? For the climate. Where we live in Sweden right now, is a very beautiful place with lots of QoL (quality of life). We live in a pine forest only 150 meters from a very nice sandy beach in the most southern part of Sweden known as Falsterbo Näset. And those of you who have been to this part of the world, you know what I’m talking about. But – and this is the big BUT, the climate in Sweden is not the best in the world, and when you get older you really suffer during the winter months. If I could, I would really love to move back to California where we lived for a couple of years in the nineties. But that’s to far away from children and grandchildren, so Spain and Andalucia it is. It’s the closest to California we can get in Europe and the climate is really nice to us sun-hungry northerners.
The Generate monthly income streams has also started, and I have a number of Internet based projects going on, where this site is one of them. A sub project within the Generate monthly income streams is going back to what I once used to call my retirement project, and that is generating profits on options. And if you are interested in how you can profit on options, please take a look at Trading By The Numbers. By investing about 15 minutes a day, you can really create a monthly income stream for yourself.
Admittedly, I have lost money on options, but that’s because I deviated from my own rules and from my own gut feeling. But if you follow the advise given in Trading By The Numbers you could probably generate up to 20% return on invested capital on a monthly basis.
Before I go, I’d like to tell you about a spooky little thing that happened on the evening/night of my last working day. I have an old granny’s clock that once used to belong to my grandmother and it’s been running fine ever since I got it. But on Tuesday night April 19th, 2011 it just stopped running, and I just can’t get it to run anymore. Maybe it’s a sign from my since long past away grandmother or maybe it’s just a coincidence, who knows. But I see it as a good sign, that now I’m embarking on my new life.
So – Hasta La Vista and I’ll keep you posted on the progress of my new projects.
Leif
The Universal Forces
So, where are we heading in this warped age? Are there “New Rules for the New Economy” like Kevin Kelly claims in his “Twelve dependable principles for thriving in a turbulent world”, or are we just seeing familiar universal laws applied closer to home base? Is there really something like a New Economy, or is it just so, that we now are experiencing the forces of the universe? Or is it all because the Wall has come down, like Thomas Friedman writes in his book The Lexus and the Olive Tree?
THE LAWS:
The development of the computer chip has for more than thirty years followed a formula devised by Gordon Moore. Moore’s Law, as it is also known as, says: “The computer capacity will double every eighteen month, while the price will remain the same”.
Another law that effects us in many ways is Metcalfe’s Law. This law was formulated by Robert Metcalfe, Ethernets inventor. Metcalfe’s Law says: “The power of a network increases geometrically by the number of connected computers”. What Metcalfe’s Law also says in a little different way is that: “The value of a network increases geometrically by the number of participants”. In other words, the more we connect the higher the value.
Yet another law that deals with the development of technology has been formulated by George Gilder. Gilder’s Law says: “The bandwidth will triple every twelve month for the next twenty five years” (Gilder’s Law was formulated in 1997).
What these laws tell us, is that not only do we get double our moneys worth every eighteen months or so and networking is the way of creating great value, but our Information Highways also triples in size every twelve months.
The decisive Forces:
Emotions
Politics
Religion
The Market
Time and Talent - The Power of 2
Time and Talent are our most critical resources. They also posses some common features, they can’t be reproduced and they can’t be recycled (at least not yet). When they are gone, they are gone. Wasted time and talent are gone forever and their levels of uniqueness are extremely high.
There is only one master of your time and talent“ you! Ultimately it is you who decide what you want to do with your time and talent. But remember, the clock is ticking.
What’s your unique talent? What are you good at and what do you love to do? These are the questions that you should ask yourself. If you love doing what you do and you excel at that, then there is really no limit to how successful you can get.
That is if you have the passion, stamina, and focus. Because the second you loose focus, you will fumble. And the minute you even think of giving up or your passion fades, you will stumble.
With this in mind, we can then formulate the Talent Success Formula as:
S = PA x FO x PE
Where:
S = Success
PA = Passion
FO = Focus
PE = Persistence
So, take your passion and make it happen and you can be joyful all the way to the bank.
Our most valuable assets
An organizations most valuable assets are the software and information that is embedded in systems and employees.
Information about money has become almost as important as money itself
– Walter Wriston, former CEO and Chairman of Citicorp/Citibank –
This famous remark, was formulated in the 1970s, now inscribed in the lobby of New York’s Library of Science, Industry, and Business. Walter Wriston was a true visionary. The former banker was regarded as the kingpin of modern American finance.
The basis for wealth has evolved from land to labour to information. We are witnessing the third great revolution in the history of the world. First came the Neolithic revolution in agriculture. Then the industrial revolution. Now we’re moving to an information society. Where the power is shifting. Today, intellectual capital is at least as important as money capital and probably more so. The problem is, that we don’t book-keep intellectual assets. But the market values it. The marketplace is capitalizing intellectual assets, while the accounting profession is not. That’s why Microsoft has a higher market value than e.g. GE.
The exchange of information has also gone through four revolutions. We are now in the midst of the forth great revolution. First came the ability to communicate through speech. The spoken language was the first great information exchange revolution. This was the first time that we could reproduce information. Even though it also meant, that the original message was gradually transformed every time it was exchanged (the feather-and-the-hen syndrome). Already now, we saw the first signs of the importance, value, and power of information and knowledge. In those days the shamans were the most powerful and respected individuals, because they had the knowledge about how to communicate with all the worlds, the upper, this, and the lower world. And they could read all the signs in nature.
Eons later came the ability to communicate through a written language. Now we could exchange information without the context of the original message being changed. This is also meant a shift of power. With the written information, the shamans power evaporated, and instead it was transferred to the issuer, and to some extent the holders/keepers of the information. The Jewish, Christian, and Islamic religions are all an example of this. But also the Roman empire was built on the ability to send written information to all corners of the empire. The power of reach had increased compared to the information distributed via the spoken language.
In the 15th century came the third great revolution. The printing revolution. This was the first time that we could reproduce information at a relative low cost. It is no coincident that the spread of the thesis of Martin Luther had such great impact only years after Gutenberg’s invention. The printing revolution also paved the way for other revolutions. Once again we saw a shift in power. This time from the issuer to the information itself. The power of reach was multiplied, and because of this, the effect of the information was also multiplying.
The fourth revolution is the Internet revolution. Once again the power of reach has multiplied. The Internet revolution has all the features of all the previous revolutions in regards to information exchange: one-to-one, one-to-many, many-to-many, and many-to-one. But the most important elements of this revolution is interactivity and availability. It’s an Any Time World, and it’s Real Time. Sure we have seen both interactivity and availability before. But not on the same time and not on the same scale. The magnitude of reach and spread can now be compared to a biological process. The small world effect, which states that any two humans on the planet are linked with no more than six degrees of separation, is also changing. The degrees of separation is decreasing as more and more are getting connected. So how does this impact on the value of information, when information is available to almost everybody?
Once again there’s a shift in power. This time from the information itself, to the knowledge of how to manage the information. Not so long ago, the access to privileged information was limited to but a few. But not so anymore. With Internet, CNN, and all other information channels, the playing field has changed again. Like in the super-bowl, everybody in the arena has the same access to what’s going on. We might have different views of reference, but we have the same information at hand at the same time. So what then makes a winning team? It’s all about the ability to provide:
THE RIGHT INFORMATION TO THE RIGHT PERSON AT THE RIGHT TIME
We could call this Information Management. It is also what it boils down to when the quarterback makes his play. It’s of no use if a spectator on the 14th row in the B section knows what to do with the information at hand, if the quarterback doesn’t. It’s the decision he makes that’s important. And that decision is based on his level of skill, knowledge, and experience, also known as talent.
So the value of the information is in fact increased when we provide it to THE RIGHT PERSON AT THE RIGHT TIME. This leads us to the conclusion, that apart from the information itself,Time and Talent are the really critical resources. They also posses some common features, they can’t be reproduced and they can’t be recycled (at least not yet). When they are gone, they are gone. Wasted time and talent are gone forever. Their level of uniqueness are extremely high.
So when we combine the uniqueness of time and talent, with the abundance of information, we are creating even higher values. And the longer we can retain that unique talent, the higher value it will generate. In other words, we should opt for time and talent monopolies. Michael Jordan is an excellent example, he created such time and talent monopoly for the Chicago Bulls and himself. He created what I call a high level of uniqueness.
Of course, some might argue that, if we have a well defined and documented process, we will leverage the impact caused by time and talent. But I say no! Only to a very limited extent. Not even the most well documented process or text-book example, will ever compensate for the lack of talent and time. Every athletic coach in the world knows this. A game plan is out dated as soon as the ink has dried on the paper. And if you don’t have the time and talent to execute the plan, it doesn’t matter how many shelves of plans you have.
So if Information about money has become almost as important as money itself, then Information Management is the most strategic issue within any organization. But how do we quantify the value of information? Well, if you play on the horses, every horse is assigned an odds, and that odds will determine the value of the information depending on which horse is winning. The odds is actually an indicator of the level of uniqueness.
Picking the right horse is a form of Information Management. And the better you are at picking the high odds winners, the better the return. So Information Management is all about providing: The Right Information to the Right Person at the Right Time. And the Right Person could also be expressed as the Right Talent, or the right organization with the right talents.
But how do we quantify the value of Information Management in the world of business? Is it the market value, the profit margin or what? It all depends. It could be the market value or the profit margin or both. All depending on what kind of stakeholders we are.
Assessing IT Assets
How can organizations apply IT to enhance competitiveness? The answer lays in the development of an especially effective IT capability: the ability to control IT-related costs, deliver systems when needed, and effect business objectives through IT implementations. This capability derives from careful management of three key IT assets:
Highly competent IT human resource
Reusable technology base
Strong partnering relationship between IT and business management
The quality of these assets dictates the quality of IT planning, delivery, and support processes. And the quality of those processes influences a firm’s ability to deploy IT to meet strategic objectives.
The key objectives for IT management practices are to build IT capability that will consistently allow the organization to identify and implement opportunities to apply IT to strategic needs better, faster, or cheaper than the competitors. The value and inimitability of an organization’s IT capability depend on the status of their human, technology, and relationship assets.
If your company is not satisfied with the results of its investments in technology, perhaps it’s time to take a closer look at the design and structure of your IT organization. How well it aligns to your business objectives and helps you manage rapid change is vital to your company.
How does your IT organization serve your company? What’s its focus and direction? Where does IT fit today and where do you want it to be tomorrow?
Generating a relationship profile helps organizations to assess and analyze the role of IT within their organization. This gives an organization a map of where they want to be in the future.
Find out the three main principles of Value Driven Development
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Find out the three main principles of Value Driven Development
Learn the principles that are easy to understand and easy to implement. Learn how these principles allow you to address the underlying problems. Find out how these simple principles help you to increase value and profitability and the ability to compete. With these principles you will be able to deliver more with less!
