Monday, April 11, 2011

Future Enterprise- The Big Picture

David Hunter Tow- Director of the Future Enterprise Research Centre argues that seeing the big picture is essential for the survival of the future enterprise.
Seeing the Big Picture- relating the enterprise’s role within its physical and social environment, will become increasingly vital for its survival in the future. It will not be sufficient to plan one, two or five years ahead. Although near-term planning is essential, understanding the big shifts likely to impact our planet and future civilization, will be essential inputs to creative planning, adaptive agility and risk avoidance.
Take Google for example. Many of its acquisitions such as YouTube and Maps were made with the longer term potential in mind rather than short term profits. These were strategic targets that fitted with Google’s general philosophy and could mesh with its long term goals. It was understood that eventually there was a high likelihood of a major payoff and therefore immediate profitability from these acquisitions were not a priority.

Accurately predicting the longer term future has always been seen as problematic, since the Delphi Oracle was shown to have made her forecasts under the influence of laughing gas from an underground aquifer. So there’s been an assumption that’s it’s an impossible mission and why bother as long as the next three to five year profit forecasts are on track.

Most forecasting textbooks traditionally list a number of well-developed techniques based on- time series projections, regression analysis, Delphi and scenario expert options, artificial neural networks and simulation modelling. But these have usually failed miserably to predict the future in times of abrupt change within the broader physical, social or economic environment; such as recent extreme disasters, the global financial crisis or the Arab democratic revolution.

In fact enterprises- even the biggest, have a poor history in seeing the big picture. For example, IBM, didn’t see the looming shift to personal computers and let slip one of the most strategic opportunities in modern times; handing operating software- DOS, ideal for managing desktop computers, to a small startup- Microsoft. And it almost repeated this failure with the advent of the Internet, ignoring its potential until it realised everyone else had embraced the ability to go online to the world. Only its enormous base of mainframe systems saved IBM from oblivion.
And in more recent times there was Ford and GM. Both went virtually bankrupt and had to be bailed out by the US Government because they would not or could not see the obvious shift in consumer sentiment to smaller cars with lower fuel usage. And then there was Lehman Brothers and Citibank and Fanny Mae which also thought they were invincible and too big to fail.
And the list goes on and on. So what’s the problem?

In all the above cases, enterprise management ignored the signals coming loud and clear from their environments via consumers and customers, through a combination of ignorance and arrogance. In the meantime other more agile companies such as Microsoft and Toyota picked up the signals and exploited the opportunities. But then Microsoft almost lost the plot to Google by not seeing the emerging power of the Internet as the dominant driver of information in today’s society.

In other words, the problem is that many companies, particularly those that are dominant in their industry sectors, begin to believe their own rhetoric; that they can manipulate the market according to their whims and wishes, with consumers eventually falling into line, perhaps with an extra push from of a persuasive enough advertising campaign.
This may work in the short term, but if they continue to fail to adapt and evolve, going against the flow and focussing only on their past history through a prism that becomes increasingly self-reflective, such organisations will eventually lose sight of the big picture and reality. This is despite often employing hundreds of strategic analysts, planners, marketing gurus and forecasters, as well as deploying the most advanced computing systems on the planet.

The bigger the enterprise therefore, the more likely it is to live in a bubble of its own making, believing its own internally generated myths. So despite the use of the latest business intelligence software busily scavenging for patterns generated from past customer and financial data, standard industry forecasts and the odd focus group, the analysis will be virtually useless as guide to an uncertain future and as an adaptation tool in the face of looming disasters.

And inevitably without being aware of the bigger but often more subtle shifts in their global environment, such enterprises eventually end up on the edge of a financial precipice without a safety net.

But still many of the latest forecasting trends reinforce this suicidal behaviour by extrapolating trends or variables from past datasets or building scenarios based on narrow parameters.
To understand the future therefore, it will be essential for an enterprise to also understand and be aware of reality at a far deeper level, beyond traditional business boundaries. Many of the most seemingly complex patterns of reality and life are derived from simple rules, based on the science of fractals, chaos, networks, quantum theory, computation and evolution.

Our increased understanding of simple structures such as the human genome allows us to gain exquisite insight into the enormous complexity of life and the cause of many diseases; while understanding chaos and network theory allows us to better manage ecosystems and improve our prediction of disasters- both natural and man-made.

So being able to see the bigger picture and understand its ramifications is vital for the survival of the future enterprise. But how does a system traditionally steeped in conventional narrowly focussed management techniques change its mindset? The major social and physical drivers are not always as obvious as global warming, globalisation or cyber-revolutions.
One critical part of the process involves integrating disparate, often unrelated sources of information and trends across multiple domains of knowledge and expertise. This goes well beyond traditional business intelligence and analytic techniques and comes under the new category of Macroscopic analysis.

The sciences are increasingly using the lens of the macroscope in innovative ways to support collaborative research and gain big picture perspectives in disciplines such as biology, cosmology, ecology and quantum physics. Macroscopes are flexibly updatable combinations or bundles of cyber infrastructure software, algorithms, web services, computing resources and toolkit plug-ins supporting computational analysis and workflows, capable of facilitating the synthesis of vast amounts of research information from thousands of databases around the world. They perform meta-analyses to discover relevant patterns and make predictions to solve critical puzzles such as the genetic causes of cancer and the nature of dark matter. And then going one step further they combine interdisciplinary trends across for example, astronomy and biology, to create new domains such as astrobiology, to determine the likelihood of other life forms existing within the universe.

Now business is also realising the value of applying the benefits of macroscopes to better see the big picture and avoid disaster.
Business macroscopes will provide a much more holistic view of complex information and knowledge sets, detecting significant risks and trends from multiple, often unrelated sources as in the sciences; derived not just from historical enterprise transactions and analyses, but from disciplines that have never before entered the organisation’s lexicon, such as climate change and social networks.

In other words, macroscopes are like giant biological filter feeders, such as whales. Vast flows of water containing micro-organisms and detritus are constantly pumped through the animal’s filtering system and assessed for their value; with only the residues necessary for the animal’s energy and survival retained. It is a largely an automatic process and so it will be for the enterprise once the architecture and parameters have been established. Instead of water, vast flows of complex information and events will be analysed to determine those fluxes most relevant to the organisation’s well-being and survival.

Implementing the macroscope in business will involve integrating it into the fabric of the future enterprise and its IT support systems. This will be a daunting task, but the templates have already been established in the form of the rigorously tested service-oriented architectures such as the Open Services Gateway initiative and Cyber Infrastructure Shell - OSGi/CIShell, which support the interoperability of applications and services by allowing dynamic plug and play integration of independent web service, algorithm and tool components.

Science used to lag the business community in its use of standard tools and innovative computational practice. Now it’s the reverse. Enterprises need to adopt the insight and rigour that science has had to apply to meet the high standards of proof required by society, based on the scientific method.

So now science and business are partners- in lockstep, applying the same computational methods and intelligence to secure their futures and never losing sight of the big picture.

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