factual knowledge:
Can we escape the Red Queen effect?
There's a powerful image that resonates in corporate boardrooms around the world - the image of the Red Queen running faster and faster just to stay in the same place. Adaptation in a world of more rapid change implies running faster just to stay in same place.
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Each year an annual conference called Supernova is held to discuss the impact of technology on the world. Lots of deep thinkers attend, many of whom have actually worked in the real world and can therefore pontificate and bloveate meaningful analyses. I've attended occasionally in the past but wasn't able to attend this year. However John Hagel of Edge Perspectives posted several observations predominantly based on his own presentation at the conference. They can be rather esoteric to those of us in the knuckle-dragging manufacturing world, but enlightened leaders may want to at least mull them over a bit. The world is changing, like it or not. John's observations are actually thought-provoking questions.
Questions are often as valuable as answers It's appropriate to step back occasionally and reflect on what we don't know, rather than simply sharing what we know. In times of rapid change, asking the right questions is often as important as the answers - at least they help us figure out where we might start looking for answers.
So let's here are the paraphrased versions of a couple of his more interesting questions.
What if there is no equilibrium?
We all understand that the component technologies of our new infrastructure continue to advance at exponential pace. In fact, this is the one central difference between this new generation of infrastructure and all the previous generations of infrastructure that shaped our economies in the past. All of these earlier generations were characterized by a major technology breakthrough, followed by the adoption of key standards and a diminishing rate of performance improvement.
Our new infrastructure defies this pattern and proceeds with exponential rates of performance improvements. Here's the paradox: at the same time, we cling to traditional equilibrium concepts and institutions that emerged and prevailed in more stable times. Nathan Mhyrvold highlighted in his talk yesterday the contrast between the exponential advance of technology performance and the linear thinking of most executives. Clayton Christensen got the attention of the business world with his perspective on disruptive innovation - but even that is a punctuated equilibrium view - it holds on to the assumption that equilibrium will eventually return.
Early conventional wisdom suggest that these architectures should focus on agility and flexibility, but that misses the real opportunity - balancing agility with the persistence and stability required to build and deepen long-term trust based relationships. Being able to discern what needs to change and what needs to remain stable may be the greatest challenge of all.
I find the key phrase to be "the real opportunity - balancing agility with the persistance and stability... being able to discern what needs to change and what needs to remain stable..." That is what many lean companies are doing. They focus on standard work and defined, repeatable processes while also leveraging the power and magic of kaizen and kaikaku. Always agile, always changing, but still standardized.
Can we escape the Red Queen effect?
There's a powerful image that resonates in corporate boardrooms around the world - the image of the Red Queen running faster and faster just to stay in the same place. Adaptation in a world of more rapid change implies running faster just to stay in same place.
Product and process innovation only provides temporary relief for the Red Queen effect as companies become more adept at copying the advances of others. We need to harness institutional innovation and move from scalable efficiency to scalable learning so that we can begin to learn faster and find ways to get ahead of the pack in a more sustainable fashion.
This time the key statement is "harness institutional innovation and move from scalable efficiency to scalable learning." Taking advantage of the knowledge, creativity, and experience of people rather than treating them as a simple set of hands that needs to be optimized in a quest for additional efficiency. Contrast how true lean companies grow by leveraging their employees and utilizing the additional capacity created by lean efficiencies to how companies like Whirlpool lay off and then re-hire less experienced people in the desire to save a few financial bucks. Companies that chase low labor from country to country without fundamental innovation and improvement are Red Queens.
How are pull platforms likely to evolve?
As the pace of change accelerates, we are in the midst of a broad transition in terms of how we access and mobilize resources. As JSB and I have written elsewhere, we are moving away from push programs that attempt to forecast demand and make sure that the necessary resources are available when and where needed. In their place, we are seeing the emergence of much more flexible pull platforms that help people connect with the resources that are most relevant to them whenever and wherever they need the resources.
Push programs treat people as passive consumers (even when they are producers like workers on an assembly line) whose needs can be anticipated and shaped by centralized decision-makers. Pull platforms treat people as networked creators (even when they are customers purchasing goods and services) who are uniquely positioned to transform uncertainty from a problem into an opportunity.
The pull platforms that we now have are only the earliest stages of development. To harness the full potential of these pull platforms we will need to move to much more robust federation governance structures that accommodate services from a growing number of independent and diverse participants. The lean manufacturing approaches of leading edge manufacturers succeed only because they dramatically narrow the number of participants. Different governance structures are likely to be required to scale pull platforms.
We've blogged about the "pull economy" before. That's lean, pure and simple, and in my view is probably the most disruptive as well as critical change already in progress.
John Hagel poses many more similar questions. Take some time to read them here.
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