Platt Perspective on Business and Technology

Innovation, disruptive innovation and market volatility 27: innovative development at the business-to-marketplace collaboration level 5

Posted in macroeconomics by Timothy Platt on August 31, 2016

This is my 27th posting to a series on the economics of innovation, and on how change and innovation can be defined and analyzed in economic and related risk management terms (see Macroeconomics and Business, posting 173 and loosely following for Parts 1-5 and Macroeconomics and Business 2, posting 203 and loosely following for Parts 6-26.)

One of the most powerful, and I add essential resources that a business owner or planner can hold, in innovatively advancing their business, is a set of tools that they can use for mapping out and understanding their business as it is now, and both structurally and functionally. Visual tools, and tools that support visualization of business organizations and their functional interconnections can be particularly valuable here, and especially where that means being able to spot and trace your way through the unexpected. Insight gained there can make the essential difference in knowing where a business needs to change and evolve, and where it can find its greatest opportunity for business process innovation – and even for business model evolution as a whole.

Let’s consider for the moment, specific areas in a business that call for change and innovation. And I begin addressing that array of requirements and needed priorities with what can become the most overtly and even compellingly obvious, and certainly when one of these points of challenge overtly erupts on you: single points of failure and their points of origin in a business.

But choke points that are at increased risk for turning into foci for single points of failure to erupt from, only represent a perhaps more dramatic example of what needs to be looked out for in this. The slower but with time equally damaging impact of smaller friction and error creating inefficiencies and small disconnects that require repeated ad hoc work-arounds, can and do take similar toll, even if not as overtly or dramatically. Ultimately, all of these adverse events and all of these vulnerability points where adversity can emerge, can and do limit a business for its flexible capacity to perform in meeting its marketplace and customer needs. And all of these adversities: already realized and still just at-risk potential, serve to reduce its competitive strength and threaten its long-term viability as a going concern.

I began explicitly discussing business visualization tools in this series, in its Part 25 and Part 26, where I discussed the strengths and limitations of the traditional table of organization tree model representation. And in contrast to that, I began to introduce a visually more complex and novel, but nevertheless effective functional representation tool and approach, that I first introduced in this blog in a concurrently running series: Intentional Management, (as can be found at Business Strategy and Operations – 3 and its Page 4 continuation, as Postings 472 and loosely following.) I identify this conceptual tool, and tool set as causal linkage mapping, and see in particular, that series’ Part 30 and following for a foundation discussion of this approach to business visualization.

I stated at the end of Part 26, that I would continue its line of discussion here in this next installment:

• “Where I will delve more fully into causal linkage mapping and its application to this context. And my goal there is to offer an approach that would flexibly address the scalability and the business model complexity issues that I raise here as being overly challenging to a more traditional tree model business representation.”

I start pursuing that here, assuming as background reference for this, the notes that I offered on causal linkage mapping in Intentional Management. And I begin it by way of at least categorical example by reimagining a complex-structured business with in-house consulting and matrix management elements, using causal mapping.

Basically, what I do in my causal mapping approach to business operations of this type, is to map out all operational processes: all normative and exception handling processes that are operationally in place as at least recognized and planned for contingencies, into networks of input, business activity, and output, with that mapped onto nodes in the business where this activity takes place. Here, I propose taking the logical step of mapping those nodes and the processes that connect them to the table of organization and to organizational nodes that are found there, where those activities take place. And this of necessity also means mapping those causal linkage nodes and their processes to the patterns of oversight and management that set priorities and goals and that determine which of those processes are going to be followed and when and where and with what priorities, and on what tasks and by whom.

• If you replace a business’ table of organization with a functional activity and supervision network representation of the type I discuss here, you can accommodate feedback and cross-connectivity that I write of here too. But the cost is that this can only be represented in its entirety, at least for complex systems that do not fit easily into a tree model, in three dimensions and as an interconnected feedback-driven system.
• But if you take this approach, you can excerpt out pertinent regions and patterns from the whole, in simpler modeling representations that can be depicted as more two dimensional slices through the whole.
• And there for example, even a business that is largely matrix management oriented can in most cases be largely mapped at least for its overall supervisory and management process flows in such two dimensional slices. It is just that a slice that focuses on who is task-by-task supervised by whom, and a slice that focuses on who is overall performance reviewed by whom might look very different from each other.
• And simply considering the first of these analytical slice options as itself representing a range of possibilities, a slice that focuses on who reports to whom for completion of project-specific “in-house consulting” tasks, and particularly on more commonly carried out, recurring tasks that would be performed by members of an actively matrix-managed team for its “core repeat customers,” would probably look very different than a slice that focused on new and emerging recurring task patterns and their project owning stakeholders.
• The first of these might be seen as representing a current baseline starting point for how a business routinely sets and carries through on its in-house specialty work, where an in-house consulting approach would be more cost-effective. While the second might be seen as a representation of where the business is changing and evolving for this, as its workflow needs for these types of tasks change.
• For a third possible slice here, consider one that would focus on and capture more routine “within-team” housekeeping tasks, which might or might not actually be supervised by the specific home-base managers that those teams and their members are performance reviewed by. Many in-house consultant employees also perform work for and through their “home base” offices and for their direct performance review managing supervisors too. Mapping and understanding this type of work flow pattern and doing so in comparison to the types of more in-house consulting oriented slices just noted, can be used to help identify resource allocation bottlenecks and limitations, where a business might in effect be competing with itself as it pursues both in-house consulting and more traditional, within-lines of supervisory authority work patterns.

I am going to continue this discussion in a next series installment where I will focus on two sets of issues. The first is one that I raised in passing at the top of this installment: scalability. I have in fact already at least briefly touched indirectly on that topic here, for example in the last bullet point, above, where scaling up a business and its resource base would be one possible approach for resolving the type of resource competition impasse that I raise the possibility of there. I will more explicitly delve into the issues of overall business growth and strategically planned scalability in my next posting to this series.

The second topic of discussion that I am at least now planning on starting there, is one of how to actually deploy this type of approach. A simple tree structure table of organization, as a two dimensional pattern, is easy to print on paper as a static representation, frame behind glass, and post on a senior manager’s or executive’s office wall as an indicator that they must be hard at work considering the “big picture” – where it can otherwise remain ignored. A causal linkage map approach is of necessity a primarily three dimensional-requiring visualization of an enterprise and it is of necessity a changing, dynamic one. And it only becomes possible to fully create or use this type of resource when it can be represented in both two dimensional slices and three dimensional, more fleshed out overall representations. This is where virtual reality imaging tools and their data representations come into their own, and it is the type of application of that technology where at least for business analysis and planning purposes, virtual reality imaging might find its killer app.

I will at least begin to more fully explore the first of these two to-address points in my next series installment, and I am planning on at least noting the second of them there too, with a goal of more fully exploring both. Meanwhile, you can find this and related postings at Macroeconomics and Business and its Page 2 continuation.

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