Business Strategy

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For better value, change your values

Air Force Lt Col Dan Ward has another great piece on how to break out of the cycle of acquisition programs that are ever more expensive, ever later, and in many cases, ever more irrelevant. Obviously the first two make the third just that much more likely.

Perhaps to better accommodate the crowd here at Fast Transients, he’s done this one in graphic novel format: The Comic Guide To Improving Defense Acquisitions. (2.9 MB PDF)

Pay close attention starting at around page 8, where he explains how orientation (which calls “values,” as in “things we value”) shapes our decision making. So if, as he writes, we value complexity, perhaps as a sign of sophistication (or — my interpretation — because we can hire more people thereby increasing profit and political pull), then we’ll focus our efforts on justifying the complexity and the additional cost and time it implies rather than trying to make things simpler.

[Check out Mark Thompson’s comment over at Time’s Battleland.]

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How to put yourself out of business

This belongs in the “don’t they ever learn?” department. A company breaks its explicit promise to customers for its own (internal) convenience:

“Android users outraged over Motorola’s broken promise.”

I don’t know what to say.  What is it about corner offices — real or virtual — that makes people go stupid?

The worst part is not the customers who believed them and got stiffed, or even people like me who, reading this, will be most reluctant to do business with Motorola in the future. Fact is, I probably wasn’t a serious prospect anyway. The worst damage is the message such behavior by senior executives sends to the people within Motorola, that what can only be described as serious ethical failure is OK, if it makes money for the company in the short term.

Because Motorola’s handset business is owned by Google, one has to wonder where the rot will stop.

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The least expected

The third intention in Patterns 132 reads: Select initiative (or response) that is least expected. The standard explanation is that the least expected response will produce surprise which we can then exploit. Seems obvious, but if you think about how most organizations pick their actions, it’s by some formula or just what they’re comfortable doing (“If sales are down, lower prices.”)

In war or the martial arts, surprise often produces disorientation and a moment of confusion and hesitation. This leads people to assume that time is of the essence, that we need to operate at a faster tempo than opponents to keep them off balance. This can be a powerful tactic, as Boyd explains in an “illuminating example” in Strategic Game, pp. 39-44.

But operating at a faster tempo isn’t strictly necessary, especially in forms of conflict other than war. But the “unexpected” effect can still work when, for example, you can let the opponent’s imagination do your dirty work for you. A great example of this is the chess match between then-reigning word champion Garry Kasparov and the IBM computer Deep Blue in 1997. The computer made an unexpected move:

“It was an incredibly refined move, of defending while ahead to cut out any hint of countermoves,” grandmaster Yasser Seirawan told Wired in 2001, “and it sent Garry into a tizzy.”

Turns out that the unexpected move was the result of a bug in the software, but the effect on Kasparov was decisive:

The irony is that the move had messed with Kasparov’s mind, and there was no one to fix this bug. (emphasis added)

“Kasparov had concluded that the counterintuitive play must be a sign of superior intelligence,” Campbell told Silver. “He had never considered that it was simply a bug.”

If we are able to operate at a faster tempo, we can decrease the time opponents have to figure things out, to operate inside their OODA loops, and pump up ambiguity, but the effect works even when this isn’t possible.

Note that the unexpected move was the result of an error in the software, which was corrected between games. Errors have produced similar effects on the battlefield — Boyd would often cite the Union attack on the center of the Confederate lines at Missionary Ridge that launched Sherman on the road to Atlanta.

Did a Computer Bug Help Deep Blue Beat Kasparov?  Klint Finley, Wired, September 28, 2012

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Dr. Linda P. Beckerman

I just found out that Linda Beckerman died last September 18.

Linda was a close colleague when we were both at Lockheed Martin in Marietta, GA.  She was one of the most creative people I have ever known, in the “How in the world did you think of that???” category. Let me give one example:

One day, the president of the company told our boss that he wanted the mail system fixed. This may not sound like much, but in a large organization like Lockheed, spread out over a number of buildings, mail was the lifeblood of the company. A few facts about the case:

  • This was well before the Internet, and our internal e-mail system was slow and cumbersome. Attachments were problematic at best.
  • It typically took between 3 days and never for physical mail to go between departments. Probably the origin of the term “snail mail.” At the IBM building downtown, employees on different floors were known to send company mail via FEDEX, that is, through Memphis.
  • We were a union shop, so it was an offense even for staffers to walk down the hall with company mail

What she did, which I thought was brilliant, was not design a better mail system, but come up with a process that got the unionized employees in the mail room to create (evolve might be better) a new system.  How good was it? When 100% of our mail was routinely delivered the same day it was collected, we quit measuring. To better appreciate this, one of the first things I had been warned about in my company orientation session some five years earlier was the pitfalls of company mail.

You can read all about Linda’s solution in the paper we wrote.

Linda is probably best known on the Internet for a paper she wrote on the nature of war, “The Non-linear dynamics of war.” After leaving Lockheed Martin in 1989, Linda moved to Orlando, where she was, among other things, a game designer, dog walker, and ultimately head of a systems engineering effort for SAIC.

She was unique; she will be missed.

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Back to agility

Finally, after the Tour de France, Wimbledon, and the Olympics.

Interesting series in the Wall St. Journal that illustrate Boyd’s General Theory of Agility (subscription required).

How Japan Lost Its Electronics Crown

Japan’s Dimwitted Smartphones

Perhaps what’s most interesting is that we’re talking about a country and culture that had a strong influence on Boyd’s concept. The CEO of Canon, for example, once said that the trait he prized most was a “mind that does not stick.”

More details later, but for now, consider that if it can happen to these guys, it can happen to anyone.

 

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Make your competitors into great copiers

Copyrights and patents grant exclusive rights to those who create new products, works of art, or other things deemed to be especially beneficial to society. So what could be wrong with that? People who bring new creation to society should benefit.

But here’s the problem. As the new book The Knockoff Economy: How Imitation Sparks Innovation hints at, the data do not show that industries with strong copyright and patent protection are any more innovative than those without such barriers, which suggests that the concept of patents and copyrights may not be the engine of creativity and innovation that its advocates (esp. such groups as the MPAA and RIAA) promise.

The book, excerpted in yesterday’s Wall St. Journal, gives examples showing that industries such as fashion and pro sports, which do not enjoy the protections granted the publishing and recording industries, are beehives of innovation. If you stop to think about it, they have to be. When any innovation can be quickly and legally copied, only those who get really good at coming up with and successfully employing new ideas will thrive. As Boyd said, the key to surviving on your own terms is to be the best at building and employing snowmobiles.

You can easily see this under our current system, where Apple is in great danger of morphing from an innovative powerhouse to a company whose business is suing people. As I mentioned in Certain to Win, this is the Maginot Line principle applied to commercial competition. Like the famous Line, the better it works (and it worked great), the deader you are. Companies would be better served to follow Tom Peters’ advice to spin off their innovations into separate companies that would license them to all competitors. For one thing, this would be a wonderful device to stunt your competition’s ability to innovate. If your invention is really clever, you might consider making it open source.

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Closed means closed, whether insanely great or not.

From a recent article in The Register (UK):

We might continue to buy our Apple gear, but every time we buy a Samsung or Amazon or Google device, we’re going to be reminded why we don’t keep our content in iCloud, but instead keep it with Amazon or Google or Microsoft SkyDrive. These other services “just work.” Apple’s cloud? Not so much.

The author, Matt Asay, writes that his household owns: five Macs, two iPads, and four iPhones all running the latest OSes).

I’ve written before that Apple’s closed system is eventually going to get it into trouble, despite its insanely great hardware and OSes. A couple of days ago, my wife’s .me e-mail stopped working. We had moved her over to iCloud several weeks ago and it had been working fine. It stopped working on all platforms — iPhone, iPad, our two Macs, and through icloud.com, and whether accessed through our home network or over ATT mobile. She can log on to her account on icloud.com, but when she tries to check Mail, she gets a “Not available” message. When she tries to check from Mail on her computer or iOS devices, she gets an”incorrect username or password” message.

Because her system is over 4 years old, Apple support won’t talk to her. All we can tell from the discussion boards is that other people have the same problem. Other than the “send report to Apple” box from icloud.com, I can’t find any way to report the problem.

As I type this (on my MacBook), she’s busy converting all her accounts over to her new gmail address (I had already set her up on Dropbox). When Apple’s latest earnings were announced, she cheered.

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Positioning for the melee

Venkatesh Rao has another thought provoking post up at his Tempo blog. Go take a look and then come back here … Play close attention to his distinction between “planning” and “positioning” near the bottom of the piece.

Rao’s concept of positioning & melee moves seems similar to the military’s concepts of operational and tactical levels of war. Even more interesting for business — where these concepts of levels apply only by analogy — they appear to be closely related to shih, Sun Tzu’s framework for employing force or energy.  For those of you not familiar with shih, it’s the title of the fifth chapter of The Art of War and encompasses a variety of concepts including zheng / qi (cheng / ch’i). For an excellent intro, see David Lai’s paper “Learning from the Stones,” available from the Federation of American Scientists.

Continue reading →

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MNCCG

As in “many noncooperative centers of gravity.” It’s what you want to turn your opponents into because it can, as Boyd suggested, pump up friction and entropy and “impede vigorous activity.”

Boyd’s primary critique of Clausewitz, for example, was that:

Clausewitz did not see that many non-cooperative, or conflicting, centers of gravity paralyze adversary by denying him the opportunity to operate in a directed fashion, hence they impede vigorous activity and magnify friction. (Patterns of Conflict, 42).

Think about a 3-D assortment of metal balls connected by springs. You try to get the contraption to move and you’ll find that most of your energy goes into the oscillations among the weights. Now translate that effect to organizations.

Nice example of this effect in yesterday’s Wall St. Journal in an article about Nokia, whose decline is spectacular, even by the standards of modern hi-tech. Here’s the critical conclusion:

“You were spending more time fighting politics than doing design,” said Alastair Curtis, Nokia’s chief designer from 2006 to 2009. The organizational structure was so convoluted, he added, that “it was hard for the team to drive through a coherent, consistent, beautiful experience.”

From: “Nokia’s Bad Call on Smartphones,” Wall St. J., July 19, 2012, p. A1 (subscription required)

If your organization has fallen prey to MNCCG, it doesn’t make any difference what your strategy is—because you won’t be able to execute it—or how potent your research and manufacturing operations are because they won’t be producing many products that customers want to buy. As the article shows, Nokia spent vastly more on R&D than any other company in its industry, nearly four times what Apple did, and had developed a modern smart phone, with touchscreen keyboard and a tablet with wireless connectivity some seven years before the iPhone. But today, they are struggling, to say the least, just to stay in the telecommunications business.