Platforms breed resilience

February 18, 2009

It’s interesting to be working with a client exploring the implications of platform engineering in reducing the risk of introduction of new technologies.  I did some work years ago with a manufacturer of agricultural machinery developing a sophisticated process by which ‘platform owners’ were responsible for developing a portfolio of ‘key modules’ in their platform portfolio.  So, for example, the owner of transmission platforms had a roadmap of the future evolution of vehicle transmissions (gearboxes, differentials, power take-offs), expressed in terms of power levels, durability, expected availability dates and so on.  The product development managers then developed a new product, say a tractor due for launch prior to the next harvest (and, indeed, mapped out the plans for next few generations of products) by reference to what was available from the platform managers over the timescale of interest.

As well as all the obvious advantages of having a mechanism to negotiate launch dates, performance, budgets, pricing and resourcing across the organisation, this approach kept development risk within the platforms and enabled the product development managers to worry primarily about system integration risk.  The result was an organisational ability to hit product launch dates with very high consistency.

The extension of this, which we’re exploring now in a completely different context, is the management of the risks of bringing bleeding edge technologies into an organisation. Now the platform managers become the ‘customer’ and are able to articulate their performance needs and their tolerance for risk (feasibility, performance, reliability etc).  The developers of the specific technologies that might contribute to platform performance describe their plans for bringing the technology to fruition.  When, with what level of performance, over what timescale and with what confidence.  Now the platform managers and the technology developers are able to prioritise work with a clear line of sight between technology promise and product performance – and are able to articulate risk management strategies (such as fall-back options) explicitly.

In summary, the linkages between platforms and products enables explicit management of product development risk, and the linkages between new technology advocates and platforms enables explicit management of technology development risk.  Another aspect of combining management of innovation and management of resilience.

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As we look at innovating for resilience we see striking commonality in the cultural attributes that help organisations to be resilient and those that support innovation.  The strategy level is, of course, critical in setting priorities and in directing people’s attention.  We’re working on this now, but herein lies the challenge of the trade-off between efficiency and robustness.

Several processes are common to resilient organisations and to good innovators.  For example processes that support the gathering and interpretation of business intelligence.  Such a process supports the active gathering of faint signals enabling early detection of threats – and also of opportunities.  As ever, the key to effective business intelligence lies in how the data is assimilated into a rich picture that can be shared, debated and interpreted.  With a rich picture defined it becomes possible to identify the bits of data that fit and, crucially, the bits of data that don’t.  And for both the resilient and the innovators, it’s the data that doesn’t fit that matter.

The process by which innovative companies evaluate the feasibility and attractiveness of new ideas is critical to the effectiveness of their innovation.  A process that is too ‘stringent’ or too demanding tends to kill off ideas, not because they are bad ideas but because they cannot be fully characterized.  Similarly a process that is too lax wastes resource and makes it difficult to see the wood for the trees.  Similarly, resilient organizations have good processes to assess threats, striking the right balance between pursuing those that are significant even if not fully understood, without wasting resource by tracking too many.  And in both cases, the best, the most resilient and the most innovative have the ability (process and culture) to revisit and rejuvenate assessment of dormant threats / ideas if new evidence emerges suggesting new significance

We see similarity in the cultural attributes of innovators and of those that aspire to be resilient.  The proactive drive of a culture towards innovation is aligned with a drive towards resilience.  A critical attribute is the cultural freedom (both permission and encouragement) to reframe pictures of the world, to articulate and explore different mental models.  Doing so enables the resilient firm to notice and assimilate weak signals that give early warning of risks and threats and enables the innovative firm to spot opportunities. By contrast, companies with more restrictive cultures seem to adopt fixed models and the pressures against re-framing lead to discarding the weak signals that don’t fit the expected patterns.

There is great value in an organisational environment in which people feel safe to flag up problems.  In a resilient organisation this enables issues to be addressed early and, more importantly, for patterns to be noticed before systemic minor issues escalate to crises.  For innovators it enables everybody to flag problems that can be solved or opportunities that can be addressed.  It becomes evidence of a company fully engaged in the innovation mindset.  In how many cases do people conclude that they won’t bother to comment, either because the messenger gets shot or, more insidiously because ‘nothing will happen anyway’? (No comment on the UK banks and the current debate about whistleblowing.)

As we continue I’ll post some more of the evolving thinking.  I’m working on another project exploring best practice in interdisciplinary innovation.  It is uncovering how best to harness a range of expertise and the role of discipline expertise in broad teams.  For both the innovative company and the company seeking resilience the skill lies in combining a capacity to recognise the need for expert opinion and insight coupled with a willingness to canvas a range of viewpoints.  That way you avoid tunnel vision and access different and informed viewpoints.  Watch this space for development here.

Innovation and resilience

February 3, 2009

Just starting an interesting exploration of the interplay between innovation and resilience in the corporate world.

Whereas before there has been a focus on efficiency as an outcome of innovation, evidenced by ‘lean-everything’, we’re now seeing an increased awareness of the importance of resilience.  Is there potential for innovation to contribute instead, or as well, to resilience?

What do we mean by resilience?  In this context I mean the organisational capacity to survive the unexpected and, extending it slightly, to thrive in times of volatility.

There is considerable prior thinking about resilience, embodied in the concept of the ‘high reliability organisation’.  In our work we’re also finding that people have, for some time, been aware of the gradual loss of flexibility in their organisations.  For example, the simple fact of being ‘mean and lean’ has meant there is no spare capacity to explore opportunities as quickly and effectively as necessary.  Indeed, one organisation notes that its most scare resource is ‘management attention’.  With no spare capacity there how can one expect to respond effectively to opportunity or threat, especially when they arrive quietly and without fanfare.  As a measure of agility, how far ahead would you have to book a meeting to get key people together in your organisation?

So some of this exploration is about

  • detecting change early enough to respond,
  • having spare capacity that can be marshalled and directed to assess threat or to explore opportunity,
  • having a bit of ‘fat’ in the organisation so that when times become lean the organisation doesn’t destroy itself trying to survive.

What is the role of innovation in this?
The whole domain of detecting faint signals, collecting fragments of information and insight and building an intelligence picture is a well-explored area in its own right.  There’s lots of good practice, processes and tools available there.  The same is true of maintaining capacity for exploration and assessment.

What has not been considered is how innovation strategy might change to encourage innovation directed towards increasing the resilience of an organisation.  This is the topic for the next several posts.

One element is the propensity to explore and experiment.  I’ve coupled these two to capture the idea of a sequence of experiments, in which direction is chosen based on the outcomes from the previous work.  This, of course, differs greatly from a world in which a fully quantified business case must be agreed before an exploratory project can be undertaken.  How many opportunities, which may have enhanced corporate survival, were killed off because the answer wasn’t known at the outset? So, does your innovation strategy enshrine (and protect) some exploratory experiments?  And does your innovation process allow for projects that don’t yet have all the numbers for the business case.

Another element is the development of new capabilities.  Do you recognise and credit the creation of new capabilities, themselves a source of option and perhaps future robustness, in looking at proposals for innovation?  Do you plan for, budget for and manage for the internalisation of the new capabilities delivered by your innovation efforts? Or does everything except the deliverable get wasted?

Parallelism?  Wasteful and a duplication of resources, or an opportunity for different experiments and a comparison of ideas and findings?  Note also the necessity for a critical mass of knowledge and practice to keep it refreshed and self-sustaining.  That’s why a cutback below that critical mass will result in a decline (or collapse) of capability.

As this work continues I’ll muse further on the implications, but here are two more directions we’re exploring:

Combining risk management and innovation – integrating risk management across the organisation and moving beyond ‘compliance’ by finding new approaches

When cuts have to be made, looking at the priorities and the approach.  Is this done pre-emptively ‘to stay ahead of the curve’, is it done in a planned manner that makes specific assumptions about how much cutting is needed in order to preserve and manage the rest, or should it be adaptive?  One client of mine maintains that they can see the future won’t be good and they’ve planned for that, trimming costs to meet that scenario.  Beyond two years out they can’t see how bad it might be, but they think there’ll be little upside.  So they have a strategy that caters for a slow recovery.  But, at the same time they’re wary of cutting, destructively, for a future that may not be as grim as feared.  That’s planning resilience.