Platt Perspective on Business and Technology

Building a business for resilience 22 – open systems, closed systems and selectively porous ones 14

Posted in strategy and planning by Timothy Platt on July 19, 2017

This is my 22nd installment to a series on building flexibility and resiliency into a business in its routine day-to-day decisions and follow-through, so it can more adaptively anticipate and respond to an ongoing low-level but with time, significant flow of change and its cumulative consequences, that every business faces in its normal course of operation (see Business Strategy and Operations – 3 and its Page 4 continuation, postings 542 and loosely following for Parts 1-21.)

I began working my way through a set of to-address points in Part 20 and Part 21 that I repeat here with some minor rewording, for continuity of discussion purposes:

1. Thinking through a business’ own proprietary information and all else that it has to keep secure that it holds.
2. While reducing avoidable friction where there can be trade-offs between work performance efficiency, and due diligence and risk remediation requirements from how information access is managed. This, in anticipation of discussion to come, means consideration of both short-term and long-term value created and received, as well as short-term and long-term costs.
3. And this means thinking through the issues of who gathers and organizes what of this information flow, who accesses it and who uses it – and in ways that might explicitly go beyond their specific work tasks at hand.
4. What processes are this information legitimately used in, and who does that work? With the immediately preceding point in mind, what other, larger picture considerations have to be taken into account here too?
5. And who legitimately sees and uses the results of this information as it is processed and used and with what safeguards for the sensitive raw data and the sensitive processed knowledge that are involved, where different groups of people might have legitimate need to see different sets of this overall information pool?
6. Think in terms of business process cycles here, and of who does and does not enter into them.

I addressed Point 1 of that list in Parts 20 and 21, and went on from there to at least begin to address its Point 2, in Part 21 of this series as well. More specifically, and certainly for my Point 2 coverage up to here, I have addressed these issues in terms of a specific case study example: a business-to-business printing company that I refer to here as Alphatext Design.

• At the end of Part 21, I stated that I would continue on from there by more fully and systematically considering the issues of communications and information sharing per se in an organization,
• And how changes in the de facto patterns of what is communicated and by whom and to whom in this, might increase or ameliorate friction in these systems.
• And I added that after addressing those issues, I will turn to consider Point 3 of the to-address list as offered at the top of this posting.

I begin doing that here with an at least brief and selective discussion of communications patterns in an organization, and by making a specific categorical distinction as to how they are organized and maintained:

Hard communications channels are formal business process and official communications pattern-driven, and become rules defined for what information can be shared with whom and under what circumstances, and essentially whenever an information access due diligence or risk remediation system is put in place.
Soft communications channels arise as employees network with and share information with colleagues outside of the scope of any formally considered hard communications channels in place, in order to more effectively carry out their jobs. These communications channels can be thought of as representing work-arounds of convenience and even of necessity. And they can become highly standardized too, and certainly where they are consistently found to work.

In a context of the type raised in my Alphatext Design example, consider the perceived need that can arise when Sales and Accounting staff members who are working with the same business clients, share information about them and even informally, and certainly where problems appear to be developing for those clients that would have wider significance for both Sales and Accounting, and for Alphatext as a whole. To take that out of the abstract, consider the need for both Accounting and Sales personnel at Alphatext to know if one of their regular clients is suddenly facing what might be a cash flow challenge and has had to ask for a change in the number of days receivable for billing, and how soon they have to pay for signs ordered and already delivered. If this is a really good, steady client that is simply hitting a short term difficulty, then giving them some timing help on their sales orders and payments due, might make them a strong and reliable client forever as their problems resolve and they can go back to their usual payments due schedules. And word of this to other potential Alphatext clients, that this is more than just a good printer: it is a good supply chain partner, might hold real value to this printing business too: viral marketing value can be all but invaluable here. But I posit this Sales and Accounting information and insight sharing as falling outside of those pre-considered and already planned for hard communications channels, and as taking place in a less formal and more flexible soft communications channel context – and even as the insight arrived at might require both Sales and Accounting input to bring it into focus.

• In this example, certainly, soft communications channel information sharing can reduce friction and misunderstanding and enable a smoother and in fact risk reducing response, and for both Alphatext and for their printing-requiring business customers.
• But soft communications channels, as more ad hoc and flexible information sharing routes are more risk-prone too and for their potential leakiness if for no other reason.

What does the emergence of soft communications channels say about a business? There are a number of possible answers to that question, but I pick up here on what is probably the most obvious: the more officially contrived and managed “hard-wired” channels in place in that business are not working all that effectively, and limit and thwart and even block real communications where they might in fact be essential and in at least specific, key areas of that business. So the employees and I add managers who hit those work performance and work completion barriers, created by a combination of their official information management and security systems in place, and their own information demanding problems, find other ways to communicate to get their jobs done.

How do these two communications systems arise? Let’s consider that from a new business’ day one, or at least from soon after that. Startups and early stage businesses, and smaller and more agile businesses in general often at least start out soft channel communicating, and generally as their basic approach. A more hard-channel approach would only arise if required in a specific overtly “need to know” context. And hard channel communications channels often only arise as a more generally followed approach when and as need for them becomes compelling obvious as the business in question goes through its learning curves and as it course corrects in response to them.

Larger and more structured businesses and I add businesses that are stringently outside-regulated for information security compliance, more generally follow hard communications channels approaches and certainly when their information flow significantly includes sensitive and confidential information such as personally identifiable client information or business trade secrets. But the rules based systems managing this can become hidebound and restricting and at least somewhat out of date too and certainly over time. So even rigidly enforcing hard communications channels-only businesses, can in practice find themselves functioning through at least some soft communications channels too, and certainly locally in their overall systems, in the manner of my Alphatext example.

And this brings me directly to Point 3, of above:

• And this means thinking through the issues of who gathers and organizes what of this information flow, who accesses it and who uses it – and in ways that might explicitly go beyond their specific work tasks at hand.

I have already begun addressing this here in this posting, in a hard and soft communications channel context. Hard channel access is at least formally regulated and most often by a combination of Information Technology as a department or service and a Risk Management office, or department. Soft here, can be seen as a synonym for “useful and even in-practice essential work-around,” or for startups and related “business as usual.”

I am going to further explore Point 3 in my next series installment, with these points of observation as a starting point. Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory.

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