Slamet Hendry

learningorg

Building a learning organisation

This post is my notes for a talk that I recently gave at a webinar organised by a friend.

Photo: Unsplash

I learned about learning organisation from Peter Senge's book – The Fifth Discipline – a long time ago. “A learning organisation is a company that facilitates the learning of its members and continuously transforms itself.”

In the book, he talked about five characteristics of learning organisation: Systems thinking, Personal mastery, Mental models, Shared vision, and Team learning.

Here, I share my lessons learned of the above characteristics from a different angle: – Feedback loop – Diversity – Lateral development – Body of knowledge – Continuous learning

Read more...

Leaders of tomorrow

Finding potential leaders and developing them require investment in time and resources. It goes beyond “training” programmes.

Each future leader is unique and flourishes best in a different way. We need to give each of them the due attention and cater to their individual development needs according to their uniqueness – not “one size fits all” approach.

Furthermore, the type of leaders we develop reflects the type of leaders we are, so we need to “walk the talk” and be authentic. As leaders, we need to keep learning and continuously improve to be better role models.

The leaders of tomorrow were planted yesterday. If we do not plant today, do not be surprised if we get no leaders in the future.

#learningorg

Inspiring Leaders

A few weeks ago during a HeForShe mentoring session, I discussed leadership attributes with my mentee. I asked her what she would like to be known for, 10 years from now.

And in the past few days, I thought some more about these attributes and reframed my thoughts to be more succinct. Here is my list: competent, visionary, and kind.

These attributes reflect the leaders who inspire me and the leader I aspire to be.

#learningorg

See also: The challenge of leadership and Your brand

Digital junk

Recently I wanted to install a new piece of software in my personal Windows laptop which had about 20 GB of free space. Unfortunately, the new software needed at least 100 GB.

So I went to the application list and checked each of the installed software on the machine. I removed all of the applications that I did not need anymore, but that did not get me much additional free space. Seemed fishy.

Then I went to check the disk usage for each of the folder group at the root. The Users folder was large, but I recalled that I recently purged a lot of files prior to this due to some other activity. So next I dissected the size of the sub-folders in Users folder.

The AppData sub-folder was huge. And I just uninstalled many applications. Something is definitely fishy.

I painstakingly checked each sub-folder within AppData. Turned out it contained sub-folders from all applications that was ever installed and uninstalled on the machine. This machine is 7 years old and started life as a Windows 7 and now runs the latest Windows 10. It has seen a lot of experimentation and application try out, so there were a lot of application data folders to remove. Manually.

In the end, I had about 105 GB of free space. In other words, I freed up additional 85 GB of space out 256 GB storage capacity. All this time, one third of the space was filled with junk.

Lesson learned

If it were my house' living room, I would have noticed it when a third of the space is junk and would get rid of it. Some people like to keep things around in their storage or attic or cellar thinking those might come to some use sometime in the future. But even they would not keep junk / trash around as in the case of my Windows laptop story.

Yet in this digital age, mobile devices and computers comes with bigger and bigger storage. It is easy to assume that when the storage space is full, we had it filled with things we digitally need and therefore we need to buy additional storage or new computer or new mobile phone.

But before we do that, verify first if we truly use everything that fills up our digital storage.

Even if we have the financial means to buy more storage or new device, it is a good habit to clean up the digital junks in our life from time to time. Be it in our computers or our mobile phones.

At work this can happen too

Yesterday I met with the Server team to discuss migration plan to the incoming new infrastructure. My team planned to decommission some applications, but less than two years ago, we already cleaned up our applications as part of server consolidation clean up.

Turned out my team had been monitoring that some applications were not used at all recently. And nobody in the Application teams knew who the business owners were, due to staff turnover and missing documentation. So the Server team turned off those applications and waited for who would shout.

Nobody.

So those applications will be backed up and archived but not migrated. If somebody shouts post-migration, we will find out why they need the unused application.

Even in business, digital junk exists and we need to vigilantly clean it.

#learningorg

Best tool vs optimal tool

I was looking for a cloud data storage solution recently and researched it on the internet. I read a number of product reviews with pros and cons. And then I read some users comments that provided some real world rebuttal of the reviewers assessments. These users used the product within their use cases longer than the product reviewers who used the product only a short time for the sole purpose of writing a review article for the internet. The perspectives from other users put the product reviews into context whether they are relevant or not for my use cases.

Context matters a lot, but context is often overlooked

When we want something, we research it to find the best product / service that we can buy for the specific use case. We buy it and then sometimes we discover afterward that the best product / service has other costs aside from the money we pay for it.

It is not necessarily wrong, if best performance or best value or best whatever is the one and only goal. But it is important to understand well: are we absolutely sure there is no other goal that we ought to consider within the context of the big picture?

We ought to avoid “local optimisation” that can degrade the overall expected benefit.

For example, let us say that we have two inter-dependent jobs that need to be done by two different tools and we bought the best tools we could find for each of the jobs: tool A and tool B. Great, so now we will get the maximum benefit when we put these two together, right? Not so fast. It depends on how well these two work together in managing the inter-dependent aspect of their jobs. We need to understand the short term and long term implication whether problem or additional effort or cost may ensue out of the integration between A and B.

Considering the full context, we ought to assess if A and B are still the tools of choice for the jobs, or whether alternative options will integrate more optimally to yield a better overall benefit.

Assumptions can mislead

This one is obvious, but also often gets overlooked. We want to be explicit about all our assumptions and understand how each assumption affects our decision making process. If our assumptions change, the optimal solution may change also, because what we need may turn out to be different.

As for my cloud data storage search, I challenged my assumptions and in the end I reframed my “jobs to be done” differently from when I started my initial research. By questioning my assumptions of what I need vs want, I reconsidered a solution that I excluded previously. This solution is not the technical best because it does not meet a few of my criteria, but it fits perfectly one criterion: simplicity.

Optimise for total benefit

The optimal tool balances trade-offs to maximise the total benefit.

“The whole is greater than the sum of its parts.” Aristotle

In my cloud example, the best tool is not the simplest and, for now, simplest is what I need. Therefore the optimal tool that I bought, in this case, is not the technical best, but I am happy with it, because it gives me the maximum total benefit.

#design #learningorg

Related post: Best practice can be wrong?

22 Nov 2017

Authentic vs. authenticated

Marketing gurus promote the ideas that we must position ourselves / our brands / our whatever as “authentic”. And as leaders, we must become authentic leaders.

Yes, but ..

You cannot call yourself authentic on your own. Authenticity does not exist in a vacuum: you need someone else to validate that you are who you say you are, i.e. that you are authentic.

Your opinion on your own authenticity matters little. Authenticity is attributed to you by the beholders based on what they perceive about you, not based on what you think of yourselves. And their perception of your authenticity is completely subjective to their expectation of how you act out your values or principles.

There is no need to make any claim about authenticity. Instead, decide which values or principles you stand for and act accordingly, day in and day out.

Then ask people and truly listen to their answers. (Do not try to justify yourself, but let their answers – even between the lines – be your mirror.) Are you acting or living according to the values or principles you stand for?

Yes = authentic

No = need to work on it

Avoid marketing B.S. and keep it simple. Go “walk the talk”.

#learningorg

Nov 2010

Adapting project at the speed of business

In large enterprises, implementing a new project can be slow. It can take years from when management has an idea to improve the business and initiates the project until the project starts delivering value. Sometimes, by the time the project finishes many business opportunities are lost or, worse, business condition may have changed unfavourably from when the idea was incubated. Increasingly, business condition changes at a faster pace than in previous years. Projects must adapt to keep up with the business reality and deliver value faster.

Companies in various industries have projects running in their organisations at any given year in some shape or form. It can be a new business initiative, a new IT project, a new building construction, a new product launch, et cetera, et cetera. Many companies also have project-based organisations to manage the projects on an ongoing basis and send their employees through certification process for project management (such as PMI, IPMA, or IPMC Global). Sounds good, but even in the best funded and most experienced project-based organisations, project delivery often plays catch up with the timing of business needs.

Almost invariably, business stakeholders ask that projects be delivered earlier than when the projects will actually deliver. Unfortunately, projects constraints means that some projects are destined to run long. And it is the long running projects that often face issues when business condition changes midstream through the project lifecycle. So how can these projects adapt to keep up with business changes?

Define upfront, and then measure for, short term and long term business objective

Long project exists because, many times, it simply cannot be delivered in a short period of time for good reasons. However that does not preclude such project from needing to deliver business value as early as possible. Upfront, the project success ought to be defined in concrete and measurable terms for the stakeholders, not only for the long term business benefits for which the project is justified on, but also for the short (or medium) term business benefits. Short term benefits are critical in building up and sustaining support for the project and also as validation that the project is on the right course.

Aim to deliver some practical business value as early as possible even to the point of trading in some theoretical long term big picture benefit. It is a balancing act between real tangible benefit versus potential benefit in the future (that may not be there anymore if the business condition change). Early return on investment also helps make management team be more fact-based in making decisions when the wind of change is blowing. Decisions can be made either to stay the course as the return is already proven, or change the course to improve the odds of maximising return, or stop the project when getting a return takes a leap of faith. Upfront discipline enables agility later on through the project lifecycle.

Break project scope into chunks of modular blocks (as modular as feasible)

Define the project roadmap into blocks of scope that may be executed either in sequence or in parallel or a combination of both. The blocks can build on top of each other, but each should aim to deliver business value instead of only at the end of the project. Essentially, modularity allows the project to be flexible when it needs to change course, without loosing too much on sunk cost.

At the same time, modularity needs to be managed guardedly to ensure efficiency is not sacrificed and that transition flows smoothly from one building block of the project scope to the next. The project blocks cannot exist as loosely federated project streams that act only for their own benefits, diverging from the unified business objectives of the project. Whether companies have defined “portfolio management” or “program management” (or whatever fancy name) process is less important than having the entire organisation understanding and being committed to the essential driver of the business benefits.

Agree on the decision makers and decision making process upfront

Large and long project is usually, or hopefully, strategic in nature. Decision making process can be rather straining due to the impact the project can have and the number of cross-functional stakeholders it entails. So involve the right stakeholders early, clarify and agree upfront who the decision makers are. Then engage them often throughout the project.

Even when who the decision makers are clear, some decision makers can be slow in making decision. A decision making process can help mobilise the decision makers. Decision making criteria needs to be clear and pre-defined upfront with rules to break a deadlock. Analysis paralysis is a luxury that cannot be afforded when project agility is called for.

Keep the big picture in mind

Projects in most companies are funded based on annual budgeting process (true for public companies and also for most private companies), but business change does not wait for the next annual budgeting cycle. Budgeting process imposes important financial discipline but it should not handcuff the project from delivering business value flexibly. At any time of the year, management needs to assess project changes (or new projects) against decision making criteria of what brings the most good for the organisation. Budget allocation should not be static as projects are prioritised and re-prioritised according to business realities.

Also prevalent in large organisations is the institutionalisation of project methodology. This is often done out of the desire for standardisation and scalability (a la factory model for projects). Project methodology is good but it needs to be balanced with pragmatism. It should not be applied to the point of slowing the project when it needs to change course.

“Planning is good, but not if it excludes the opportunity to be able to take chances when they come up.” (Chris Wright) #quotes

In conclusion, the overriding ideas of adaptive project are smart planning and continuous pragmatic decision making. Long projects would serve business stakeholders well by being adaptive according to business changes.

#learningorg #obxerve

Sep 2010

Reasons to use open source software

In early days of open source movement, fear mongers created the perception that open source software is not fit for large organisations. Despite the costs, commercially licensed software was seen as a safer alternative to open source and many arguments were brought forward to claim the hidden cost of open source software. Some corporate IT managers still think like this. And they are doing their companies a great disservice.

The open source software movement has matured to become a strategic enabler for corporate IT. Corporate IT needs to assess where open source software can help accomplish the company's business objectives. Here are top reasons why open source software, correctly managed, can be a strategic enabler.

Faster time from idea conception to proof of concept

A properly skilled IT department can often go from idea conception to proof of concept in as much time as their centralised purchasing department setting up and completing request for information / proposal process with commercial software vendors. Open source software is available at large for anyone to download and implement whenever and wherever. There is no need to wait for the software DVD or license key to arrive from any vendor. The software is ready to be implemented at once.

And since there is no external cost involved in doing the proof of concept, there is less political pressure to abandon the idea and move on to the next open source software or to the next idea. Open source software can bring about agility and efficiency.

Faster time from problem identification to resolution

Open source software is available complete with source code (i.e. human readable program). A properly skilled IT department can leverage the source code to troubleshoot a problem that arises within the software because they can investigate what went through the program. They can know where the problem is and what causes it.

And then there is the open source community. It is a community where knowledge sharing is treasured. And in strong open source community, help can come from the community in ways that are sometimes faster and more relevant than support coming from a vendor's hep desk.

Even better, once the solution is known the IT department can fix it themselves and rebuild the software, if needed. There is no need to wait for the software vendor to figure out what the problem is and come up with a fix. (Depending on service level agreement, the wait can be longer than when the fix is needed.) Open source software can lead to less dependence on external vendors.

Faster time from improvement availability to it being implemented

Commercial software vendors try to please all their customers, but unfortunately not all customers will get the improvements they want when they want them. Sometimes the commercial vendors will delay some new feature due to limited development resources (no matter how big they are). Sometimes they release them when there is no IT budget for software upgrade. Which means the users must wait for budget to be made available while making do with less efficient work-around.

This again is where the open source community shines. Development of the “new” or “improved” functionality can be done by any member of the community. People can develop it themselves and use it internally. Better yet, the development can be submitted back to the open source community for the entire community to adopt. In a thriving open source software community, feature growth is as fast as how active the members are at contributing back new development to the community. This can lead to faster access to more functionality.

Flexibility in choosing when to upgrade

This one is the other side of the coin from the point above. More often than not, it is better to upgrade software in line with its current release cycle. However, it is a fact of life that some software cannot be upgraded in timely fashion consistently, whether it is due to budgetary reason nor technical reason nor whatever reason. The issue with commercially licensed software is that they always terminate support for older versions which leaves corporate IT managers to decide whether to pay extra for the extended support (if it is even an option at all) or upgrade (not free either). If neither really is possible, then the company is operating the software at risk, because if there is a critical problem, it cannot get support from the vendor and it does not have the source code to fix it (see above).

This does not happen on a daily basis, but when it happens, it can be headache nonetheless. With open source software, there is a greater degree of control to upgrade when it makes sense to internal timetable as opposed to someone else's. Open source software can lead to more control over maintenance timetable.

Focus on software merits

Companies who avoid open source software are limited to evaluate commercial software during their software selection process. They might be missing a great opportunity to compare commercial software against equivalent open source alternatives. In many situations, open source alternative can be technically as good as the commercial software. Increasingly, more and more critical corporate IT capability runs on open source software. Open source software adds options to software selection.

~

Caveat emptor. Open source software is not a miracle cure. It does what it does best, but it is not to be used without proper assessment.

Here are some things to watch out for.

Know thy total cost of ownership

From the perspective of total cost of ownership, open source software is never free. And poorly managed, it can be as expensive as commercially licensed software. The key consideration is between fit of internal capability to do the work versus cost of hiring external skill to do the work. If neither of them is attractive compared to commercially licensed software (inclusive of all the external skill that often has to be hired too), then cost obviously is not a selling factor. Unless there is a real strategic advantage, then skip it for some other software projects.

There is also a danger that corporate IT function starts building every skill internally, instead of hiring external services, which eventually will lead to larger and larger internal IT headcounts. Eventually, this will be detrimental. So there is a fine balance that must be watched with discipline.

Know thy open source software

Not every piece of open source software is created equal. Barrier of entry is almost none, so there is a bewildering array of open source software out there varying in quality from mediocre to best-in-class. And the community behind the open source software is equally an important consideration. Without a good community behind it, long term maintenance cost may creep up over time.

Know thy legal constraints

Open source software comes in a number of license flavours. If the use of the software is not purely internal, then pick one that will fit the intended use. Open source license vary from liberal to restrictive. Legal departments are usually hung up by the restrictive licensed open source software, but there are many superb open source software with liberal license for the picking. Some are also offered with dual license, open source or commercial with commercial support. It really depends on a case by case, depending on the open source software choices in a given segment at a given time. It does change from time to time. If nothing fits, go commercial software. In short, license is a tactical consideration, but not a strategic show stopper.

~

Corporate IT strategy should be about focusing on long term business strategy and ways to execute it with speed, effectiveness and efficiency. Open source software has helped many companies deliver on those and it can help many more companies.

#learningorg #obxerve

Jun 2010

Talent mismanagement

If one searches for “talent management” on the internet, the results that come back are typically dominated by recruiting-oriented or human resource management search results. This probably reflects current prevalent practices in many organisations around the globe. However it seems to obfuscate one critical factor in any talent management i.e. the proactive involvement of senior leadership and anybody who manages employees. Anything less than proactive talent management can end up being talent mismanagement.

Corporate hallways are rife with stories where talented employees leave to the despair of their managers. Sometimes, team performance may suffer (sometimes significantly) for a prolonged period after the departure of a talented staff. And managers are often befuddled when this happens. They will give various reasons and many will fall into some predictable patterns.

I did not see it coming

In some very specific situations, this can indeed be the case, but it is very rare. For example when mandatory resignation notice period is very short and an employee literally out of the blue is compelled to quit, be it due to positive or negative reason. Aside from such rare cases, more often than not a manager should have sensed something.

When this does not happen, this can be a symptom that no real dialogue is happening between the manager and the staff, or not frequently enough. If there is no real dialogue in between annual performance reviews, then a manager will not sense anything coming, even when the staff has given hints or clues to his/her dissatisfaction. (This is no excuse either for virtual teams, because just like in a face-to-face meeting, a manager need to be as effective in maintaining open dialogue and in sensing subtle messages from the employees.)

I knew but there was nothing I could do

Why? What is meant by “could do”? There is usually several ways to address an issue; zero (“nothing”) that can be done could be a symptom of ignorance, incompetence, laziness, or structural organisational dysfunction. Ignorance, incompetence or laziness may mean that the manager is not that good, so it is possible that the talented employee will quit anyway someday. This is an issue that the manager's manager must address. Structural organisational dysfunction, on the other hand, may mean that the manager's manager, or even higher up, is dysfunctional (could be due to ignorance, incompetence, or laziness also). For example refusing to hire an extra headcount when the workload justifies the need or refusing to invest in better tools to make the team more efficient, etc, etc.

There is always something that someone can do. If it is important enough, then the manager needs to either do it or find that someone who can do it.

He/she is irreplaceable

Every staff is unique in what he/she brings to the organisation, but every job comes with job specification and competency requirements that an employee must meet. Any extra performance beyond that is bonus, whereby the employee deserves the recognition that he/she merits. But when the manager or the team relies on this “bonus” above and beyond the job specification and competency requirements, then something is wrong with the organisation. Maybe everybody is expected to give something extra so an extra headcount is not needed. (And the manager wonders why the star employee is not happy.) Maybe this causes the lazy team members (or manager) to not give their 100% and the manager neglects to address it. Et cetera, et cetera.

It is the manager's job to build the entire team and to help everyone improve so someone else can step in to perform the job. Even when resignation is not involved, this is a common situation, such as long vacation, maternity / paternity leave, etc.

I do not have time to recruit someone new

Everybody is working at their maximum capacity these days, so an additional effort to recruit a replacement is usually unplanned burden. This is a symptom that separates those companies with solid human resources business processes and those without. HR processes need to be transparent, smooth and fast. And there needs to be solid integration between operations and HR. For example, is the detailed job specification and competency requirements up-to-date all the time? Does HR know what questions to ask potential recruits for the job? Et cetera.

When HR processes are solid all the way through and HR department is properly staffed, the additional burden would center around interviewing promising candidates – internal or external – and not much more. Hiring managers usually complains about recruiting effort because the prerequisites above do not happen. Obviously, HR needs to step up, but managers should also cooperate with HR even when they do not have any urgent need for HR services, i.e. do not wait until a staff quits.

~

Talent mismanagement is easy to do and, in organisations or teams that let this happen, talented employees would not want to stay. And without capable employees, execution does not happen well, no matter how good the company strategy is.

Talent management is only one side of the coin, where on the other side is succession planning.

Contrary to common perceptions, succession planning ought to be understood literally just that, when any employee moves on, what is the succession plan to replace that employee – no matter what his/her seniority in the organisation is. No organisation should under-estimate the challenges and impact when “lower pay-grade” or “less talented” employee leaves; it may not be high-profile but the impact can be surprisingly high nonetheless. As the saying goes, “a chain is only as strong as the weakest link”.

It is imperative that every organisation strengthens every link in its chains, i.e. its teams. The following list provides some proactive actionable recommendations.

  • Knowledge sharing: Everyone in the team needs to share their knowledge and make it a point also that it is one of the annual performance objectives. Do not intentionally let key knowledge to build up in just one person.
  • Investment in supportive tools: Record the team knowledge; it can be written, audio, video, etc. And make it easily recordable and accessible via easy-to-use tools.
  • Shadowing: Assign a second person as a backup throughout an assignment, not just during vacation periods. A designated backup is essentially the immediate successor in case an employee is sick or on vacation or leaves the organisation. This concept is the most difficult to swallow because it requires extra bandwidth usage, but management team who is willing to pay this insurance premium would be the one who are well positioned.
  • Rotation: Rotate the team members to do each others' roles from time to time. This builds up knowledge among the team members and can be a rewarding experience for the team.
  • Career path planing: Not everybody is able to be promoted, but for those who are talented and ambitious, they may not be happy to keep doing the same thing year in and year out. Understand their talent, track their progress and proactively plan their career path. If the managers will not do it, they will do it themselves and when this is the case, the path may lead to them joining other companies.
  • Competency development: Formal training programs are the norm, but often relegated to low priority status. Above average employees, as much as the average employees, would benefit from continuing education programs. Sometimes it also involves giving the employees a personal development goal (and the time to do it at work) by doing self-study or research toward their competency development.
  • Employee satisfaction survey: Conduct anonymous satisfaction survey regularly. The survey can be brief but it needs to be complete enough to cover 360 degree aspect of one's job, including colleagues, boss, customers, direct reports, etc. The survey helps give a snapshot of potential dissatisfaction and, over time, trends of their job satisfaction.

Talent management (in combination with succession planning), arguably, is the most important job of a CEO and every managers in the organisation. It has strategic importance and it should not be relegated to a low priority HR initiative. Do not wait until key talents leave the organisation to act on it.

#learningorg #obxerve

Apr 2010

Myths of early technology adoption

Being an early adopter for new technology is not for the faint of hearts. True. But often decision makers are subjected to fear mongering tactics that make it seems far riskier than it needs to be. Despite the best intention to measure return on investment, technology investment is wrought with political manoeuvres and myths, especially when the new technology is placed face-to-face against established technology. At the same time, it is unwise to dismiss the opportunities that can be made possible by new technology.

The latest technology is historically referred to as leading edge or cutting edge. Sometimes it is referred as bleeding edge, cynically referring to the pain and “bleeding” that the early adopters endure when implementing the latest technology. The phrase sticks, further reinforcing the perception that it is very risky to be an early adopter. What got lost in the message is: what did those “bleeding” companies do that made them “bleed”. Was it purely due to the technology or was it exacerbated by their mis-management of the technology adoption project?

Technology is a tool; it cannot perform or fail on its own. There is always the people factor that influenced the outcome – good or bad. And yet people misunderstand this factor and generalise away. This eventually creates a fog of myths.

Myth #1: Leading edge technology is unproven

When a technology is so new, leading edge implies that not very many companies or users would have bought and used it. However to state it is unproven, the statement needs to be understood in context. The burden of proof rests on both the vendor and the consumer. The vendor always have to back up their claim about their new technology and for that they will claim it in as narrow a scope as they can get away to avoid extra liability, while at the same time aggressively promising benefits to lure the consumer. Which means that most of the burden of proof needs to be born by the consumer, i.e. the consumer must prove that their intended use can indeed be performed to specification by the technology.

This is where many companies fail. Often, they do not have specification of their intended use or if they do, not good enough. Sometimes they do not even know or agree among themselves what the intended use is supposed to be. In the occasion that they have good specification, they may not have good and repeatable ways to test the technology against the specification. In other words, they themselves cannot prove if the technology can perform to their intended use or not.

In these cases, it is actually irrelevant whether the technology is new (i.e. leading edge) or widely used (i.e. established). If the technology implementation does not live up to expectation, they would blame the technology anyway. When the technology is new, they would claim the reason is because it is “unproven” and when the technology is not new, they would come up with other excuse.

Opportunities await companies or consumers who have the discipline in understanding and specifying their intended use of any technology and proving the fit methodically before actual use. These companies or consumers have the ability to try out any leading edge technologies that may benefit them ahead of their competitors, whether the pundits think it is proven or not.

Myth #2: Leading edge technology is for start-ups

The perception is that start-ups are more willing to take risks than larger companies. Out of necessity, this is often true. Ironically, it is actually the larger companies who usually have better means and resources to “prove”, prior to use, any promising new technology against their need or intended use – as discussed above. And this is the exact opposite of risky, because the fit for purpose can be assessed beforehand. Companies or consumers who think leading edge technology are not for larger companies are generally the same ones who were misled by myth #1 above.

Once any company or consumer can get over the provability complaint, it all comes down to standard portfolio risk management. Start small, start with non mission-critical use, start with change-ready users, or any combination of these. Then learn from the pilot project before enlarging the scope in order to make corrective actions. If the pilot project proves the new technology does not work for them, they can move on and use the knowledge for the next new technology evaluation.

Many large companies rely on analysts to help them “understand” new technologies and wait until it is in widespread use before they start trying them out. This approach is actually riskier than trying the technology hands-on when they are still new. First, analysts are blind to the nuances and complexity of a large company. They can only make generalisations of what large companies need and how a given technology will or will not fit their needs. Second, waiting means that other companies who successfully use the new technology will get the competitive edge over those who wait.

From the perspective of portfolio risk management, large companies have more cushion than small companies to take on the calculated risk of doing a pilot project on the new technology.

Myth #3: Leading edge technology gives less ROI than established technology

If the intended use is merely to maintain the status quo, then there is a lot of weight in this statement. But maintaining the status quo is the wrong objective. The objective should be about acquiring competitive advantage. And when observed in light of this objective, the ROI (return on investment) calculation takes on a different nuance and the time horizon extends longer.

When a technology is new, the market size is still relatively small and there is not enough economy of scale. So cost tends to be higher than established technology. And even with technology where economy of scale does not necessarily reduce price (e.g. computer programs), there are still the secondary services (e.g. availability of programmers) that are directly or indirectly affected by the market size and priced accordingly. This is basic supply and demand.

Therefore, new technology – due to relatively higher cost on the outset – its ROI needs to be assessed from the perspective of benefit in giving competitive advantage over the medium to long term. On its own, a new technology may not generate enough ROI. But when looked in the context of what it potentially brings to the company's competitive advantage, the medium or long term ROI will shift favourably.

~

The opportunity cost from the failure to use a relevant new technology for competitive advantage can be hard to recoup. At the same time, this does not mean that every new technology is relevant and needs to be implemented widely and immediately – far from it.

Leading edge technology brings an opportunity, not a promise. If it works as intended, does it have the potential to give competitive advantage?

  • Understand first the business need and how it affects competitive advantage.
  • Assess whether or not the new technology can satisfy the intended use.
  • Plan and execute a pilot project within the context of portfolio risk management.
  • Assess the ROI using medium to long-term perspective and adjust based on the learning from the pilot project.

Every decision maker needs to be curiously open minded and cautiously pragmatic at the same time.

#learningorg #design #obxerve