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Optimization for Innovation Conference – Call for Participation

I’m working with the Business Ecology Initiative (BEI) on a new Optimization for Innovation Conference series.  The inaugural conference is “Optimization for Innovation: Reset; Joint Business & Technology Actions for the New Normal”:

As the world economy emerges from a painful recession, organizations are confronted with the challenge of retaining bottom-line diligence, while pursuing market sustaining and gaining innovation, in an environment riddled with uncertainty, increased regulation, consumer reluctance and tighter credit. This is the “new normal.” To execute in the “new normal,” organizations are seeking new ideas and techniques to optimize business operations and foster business innovation.

At the inaugural Optimization for Innovation conference, executives, senior-level practitioners, experts and thought leaders will share real-world experiences and pragmatic 90-day action items to harvest savings and trapped value from existing processes, resources and capabilities. The conference will consist of a combination of invited guest speakers, keynotes, case studies, presentations and tutorials.

By attending this conference, direct reports and senior staff of the COO, CFO and CIO will learn:

• How leading organizations are optimizing for innovation
• Business Optimization Techniques and Practices
• Business & Technology Partnership Models
• Business Performance Analysis and Measurement Practices
• Business Risk Identification & Mitigation in a Connected World
• Business-Technology Enablers

The conference is December 6 – 8, 2010, in Santa Clara, CA USA.  December 6 is tutorials.  December 7 & 8 are full conference days. 

This morning, we issued a call for participation.  We are seeking proposals for presentations including (but not limited to) the following topics:

Program Topics

• Optimization for Innovation Success Stories
• Business-Technology Reset: Optimization for Innovation
• Governance Models for the New Normal
• Business Analytics as Optimization Foundation
• New Normal Linchpins: Business-Tech Savvy Professionals
• Business-IT Alignment is a Dead-End
• Business Optimization Techniques

Tutorials Topics

• Instituting a Business Performance Measurement Framework
• Cyber Risk Analysis: Assessment, Policy, & Economics
• Business Process Modeling and Business Instrumentation
• Lean / Six Sigma in the New Normal

Presentations and tutorials proposed should be geared toward an audience comprising direct reports and senior staff of the COO, CFO and CIO. All presentations and tutorials  must include a 90-day action plan for attendees to pursue post-conference.

The submission deadline is August 13, 2010. Please note, submissions that are direct pitches for product or services will not be considered. Submissions should be prepared in English, containing the following information:

• Presenter name, title and affiliation
• Presenter Bio
• Session Title
• 2 - 3 paragraph description of proposed session
• 3 - 5 bullets on what attendees will learn
• Target audience characteristics: role, skill and industry
• 90-day action plan items

Submit abstracts as described above to Program Chair Brenda M. Michelson (me) via e-mail.

[Disclosure: The Business Ecology Initiative is a client of my firm, Elemental Links.]

Cloud Watch now underway… Lawyers, Data and Money

This week, I’ve started up the Cloud Watch section of Elemental Cloud Computing.  Cloud Watch items are snippets from cloud computing industry news, business and technical publications, and thought leaders.  These snippets may be as short as a 140-character tweet, or as long as a few paragraphs.  Cloud Watch items will be posted throughout the course of the day, and may be expanded as more voices and sources cover a hot topic.  Cloud Watch items may include a short Elemental Cloud Computing perspective.

The opening cloud watch items are a mix of business and economics, and data, contracts and legal issues:

• Bessemer’s 8th of Cloud Computing and SaaS: Leverage and monetize the data asset
• Workload Metrics: Business Transactions per Kilowatt?
• Microsoft Exec: Customers Embracing "Cloud Computing" <– But whose?
• GigaOm: 10 Open Source Resources for Cloud Computing
• Lawyers, Clouds and Warrants
• McKinsey to CIOs in ‘New Normal’: Rethink Procurement…
• Irving Wladawsky-Berger: Cloud Computing is Relevant for (mostly) everyone
• Joyent is First in China: Launches Commercial Cloud Computing Platform

From Elemental Cloud Computing, there several ways to follow the cloud watch.  The Current Cloud Watch section on the homepage, the Cloud Watch tab of the Recent Posts navigation element in the sidebar, the Cloud Watch tab of the site navigation, via the Cloud Watch or Full Site feeds and email, and on Twitter. 

What are your ‘Rings of Defense’?

I’d like to attribute this recent ‘catching up on my reading’ to long sunny summer days in my Adirondack chair, but no such luck.  On the few rainless days, Zephyr has commandeered my chair.  Despite these obstacles, I’ve still managed to find time to read, and share some interesting articles.  Today, an article in June’s Fast Company caught my attention.  The article is entitled “Through the Fire” and shares strategies Cisco, Corning, IBM, Intel and Schwab are using to survive in the current economic crisis, and emerge even stronger as the economy rebounds.

Of the profiled companies and strategies, Corning's Rings of Defense clicked with me.  I can see the connection to business architecture, the business of IT, and business IT alignment.  [As readers know, I prefer “business-IT integration”, but I’ll go with the crowd this once.]

Corning’s Rings of Defense (emphasis is mine)

“If anyone should be able to build a shatterproof fortress, it's Corning. But during the telecom crash earlier this decade, the specialty glassmaker for everything from medical devices to consumer electronics to cars saw revenue nosedive from $7 billion to $3 billion in 18 months; Corning almost burned the village trying to save it. "We vowed never to let that happen again," says president and COO Peter Volanakis. Corning's executive team, the same senior managers as during its epic fall, instituted an early-detection system to identify signs of trouble as well as four "operational rings of defense" to help it manage through a crisis in a measured, strategic way.

The first step? A good offense. Corning created its own market-research system, relying not just on its customers but also on its customers' customers, even checking stores to measure demand for the products it helps to create, such as LCD TVs. Corning also stockpiled cash, which enabled it to absorb a $400 million loss in the fourth quarter of 2008 without selling off part of its business, as it had to in 2002 to make a debt payment. And it helped that the company modeled worst-case scenarios and a response to each.

As trouble started brewing last year, Corning implemented its first ring of defense: discretionary spending cuts, reduced production, and hiring limits. As things got rapidly worse through the fall, management quickly implemented the second and third rings: shorter work weeks in Europe and Asia, limiting its use of contractors and temps, and, finally, layoffs. But as hard as it was to trim the staff by 13%, that was a far cry from the telecom crash, when it shed 21,000 of its 43,000 workers. This crisis feels more under control, the actions "more thoughtful," Volanakis says.

Most important, Corning has avoided the last ring, which would include reducing its $630 million annual R&D spending. Its lifeblood is new products, such as those it's aggressively pushing this year -- scratch-free touch-screen glass for cell phones and laptops, smaller next-generation data centers, and a laser-light engine that turns a laptop into a projector. "We're an R&D-based company," Volanakis says. "R&D is the absolute last thing we'd cut."”

So, what stood out to me?  First, the use of scenario planning.  A long standing practice to envision the future and craft responses, which unfortunately many companies neglect to do when things are going well.  Clouded by ‘bubble fever’, perhaps.  From a recent WSJ Article:

“Use of scenario planning rose following the 2001 attacks, to about 70% of executives surveyed by consultants Bain & Co. in 2002, up from 30% in 1999. Since then, Bain's surveys have found fewer executives using the tool, though the consulting firm expects heightened interest this year, because of the recession.

"It's sort of like flood insurance," says Michael Raynor, a corporate-strategy expert at Deloitte Consulting LLP. "Everybody runs out and buys flood insurance the year after the flood."”

The second thing, was the “rings of defense” concept.  The diligent and deliberate articulation of responses, in this case cuts, that provide short-term relief, while protecting the future, in Corning’s case, R&D.  Too often, in bad times, unilateral cuts are made, disregarding long-term implications.

So, my questions for you to consider:

1. Does your organization do scenario planning?  Is this purely a business activity?  Or does IT participate?  Is the practice extended to the business of IT?

2. Has your organization articulated rings of defense?  Is there general knowledge of what business activity should be in the center, protected by the last ring?

3. Has your IT organization articulated its rings of defense?  Do the IT rings, the activities and capabilities being protected, align with the business rings?  Or, do the IT rings subvert the business rings?

Software from Walmart? Water from IBM? Giants, adjacent markets & tech providers

This week, the talk will be about Cisco boldly entering the blade server market and the end of co-opetition as we know it:

“Cisco's chief technology officer, Padmasree Warrior, says the company has moved boldly in the past, and suggests the old rules are changing. "We're going to compete with H-P. I don't want to sugarcoat that," she says. "There is bound to be change in the landscape of who you compete with and who you partner with."

Battles are breaking out across the industry. Within the past year or so, H-P has fueled a new rivalry with IBM in tech outsourcing by buying services giant Electronic Data Systems Inc. Microsoft set its sights on Internet-search giant Google Inc. by attempting to buy Yahoo Inc. Sun Microsystems Inc. is moving beyond its core market in servers and software to take on database-software leader Oracle Corp. Later this month, Dell Inc. says it plans to introduce new data-center management software that will compete with existing offerings by H-P, IBM and others.”

Of course, that is interesting and important news.  And I completely get the drivers of wanting to win in the data center and the convergence of data center technology – compute, networking and storage.  

However, I find myself interested in what I’d categorize as ‘recessionary moves of giants with cash, guts and (relatively) decent stock prices’.  Namely, recent adjacent market moves by Walmart and IBM.

On March 12, the WSJ reported that Walmart will start selling electronic medical records software, installation and maintenance, to single physicians and medical practices via Sam’s Club:

“Wal-Mart said it is forming a partnership with computer maker Dell Inc. and closely held software maker eClinicalWorks to offer a lower-priced medical records system, plus installation and maintenance, through its Sam's Club membership warehouses. Sam's Club would be the one-stop contact for any physician follow-up questions about the system. The questions would then be routed to the appropriate person at Dell or eClinicalWorks.

"Whether it is a single physician or a physician's group who comes to us, we can offer a system that enables them to electronically prescribe medication, set appointments, track billings and keep records," said Gregg Rossiter, a spokesman for Wal-Mart.

The system, expected to be available at the clubs in the spring, will cost $25,000 for the first installed system, and $10,000 for each additional system, plus $4,000 to $5,000 a year in maintenance costs.

The more complex systems cost about $40,000 for the first installation in a small physician group, said Kent Gale, founder of Klas Enterprises LLC, a research company for health-care technology.”

As I shared via Twitter, this is an installed offering, not a cloud offering, like the patient oriented Google Health.  That tweet led into an interesting discussion on compliance in the cloud, which is exactly why companies such as Sonoa Systems exist.  But, I digress.

In what’s nothing more than conjecture, I’d speculate that Walmart’s investment in EMR software is related to its in-store health clinic initiative.  If so, it’s a good way to capitalize on an internal investment -- something more organizations should consider.  If not, then it’s possibly a harbinger of software offerings to come.

On March 13, the WSJ (amongst others) reported that IBM is “embarking on a new business venture in which it will help manage water resources, an attempt by the technology giant to further expand its footprint outside traditional computer services.”

“The new business…will design and install systems of sensors and back-end software to monitor water pipes, reservoirs, rivers and harbors, according to Sharon Nunes, who heads the Big Green venture.

IBM has been touting its ability to help create a "smarter planet" by designing systems to monitor physical world activities such as electricity flows and traffic patterns. "There's a lot of stress on water systems around the world. With a limited supply, you'd better be able to manage it," said Ms. Nunes. She estimates that information technology for water management could become a $20 billion market.”

Sure, you could say that IBM selling IT for water management is business as usual, but the truly interesting part of this announcement is the research development:

“In a related development, IBM researchers said they have created a new desalination-membrane technology that goes beyond current systems and removes arsenic and boron salts from contaminated ground water, making it safe for humans. Desalination membranes filter out salts, allowing clean water to pass through.

Robert Allen, a chemist at IBM's Almaden, Calif., lab said that his team found a way to put a polymer designed for immersive lithography -- a technique for making semiconductors -- into membranes that reject the toxic salts. He said arsenic contamination is a problem in some water supplies in Texas, Turkey, Bangladesh and China. IBM expects to license the technology rather than make desalination plants itself.”

For a quick overview of the breakthrough, check out this youtube video.

This move comes days after CEO Samuel J. Palmisano addressed, in the chairman’s letter of IBM’s 2008 annual report (pdf), the economic climate:

“We’re not looking back, we’re looking ahead. We’re continuing to invest in R&D, in strategic acquisitions, in growth initiatives—and most importantly, during these difficult times, in our people.

In other words, we will not simply ride out the storm. Rather, we will take a long-term view, and go on offense. Throughout our history, during periods of disruption and global change, this is what IBM has done. Again and again, we have played a leadership role. We have imagined what the world might be, and actually built it.

We find ourselves at such a moment now. This is an inflection point—both in the course of modern technology and economic history, and in the nearly 100-year journey of IBM. As someone who has been here for more than a third of that journey, I can tell you that it presents the best opportunity I have seen in my IBM career to align those two trajectories in very powerful ways.”

What else does this “inflection point” have in store for us?  Who will our primary IT providers be?  And will IT be their primary business?  Curse or not, we do live in interesting times…

 

Illustration: Since the market collapse, Walmart & IBM have consistently outperformed the Dow.

[Click on Chart to enlarge]

 

[Disclosure: None of the companies mentioned in this post are direct clients of my company, Elemental Links.  However, Cisco, IBM, HP & Sun are sponsors of the SOA Consortium, which is a client of Elemental Links.]

Fortune: Jim Collins on turning crisis into opportunity

Since I haven't harped/amplified on the critical role of talent in tough times in awhile, I thought I'd highlight a couple of tidbits from a recent Fortune interview with Jim Collins on How Great Companies Turn Crisis into Opportunity.  The sub-head sums it up pretty well "In troubled times a business needs enduring values, the best talent, and an ability to "zoom out" an see past the chaos in front of it."

And yes, I suppose with my mantra of taking a holistic view and then acting pragmatically, I could just as well emphasize the "zoom out" message, but it was the following excerpts on talent that caught my attention. (emphasis is mine)

Fortune: So what did they [enduring companies] do to get through the tough times?

Collins: ...The other thing worth mentioning is that these companies, when they went through the Depression, really understood that it was the caliber of their people that would get them through. If there's a storm on the mountain, more important than the plan are the people you have with you.

...If you go back in history, a few companies used difficult times to bolster their legions of talent. After World War II, all the government labs were shutting down, and engineers were streaming out. Hewlett-Packard was actually going through a layoff. But at the same time, Bill Hewlett and Dave Packard said the greatest opportunity they ever got wasn't technology; it was the opportunity to hire those engineers.

Fortune: But in a time of no credit and slowing demand, how does a company afford to bring people in?

Collins: [Hewlett-Packard's] answer was, How can we afford not to do it? You have to make the wherewithal. If you do not find a way to get those great people, you're not thinking long term enough. In the long-term research into tumultuous environments that Morten and I are doing, we find that great companies manage for the quarter-century...

Fortune: How do you distinguish the truly great talent from the rest?

Collins: The right people don't need to be managed. The moment you feel the need to tightly manage someone, you've made a hiring mistake.

The right people don't think they have a job: They have responsibilities. If I'm a climber, my job is not [just] to belay. My responsibility is that if we get in trouble, I don't let my partner down.

The right people do what they say they will do, which means being really careful about what they say they will do. It's key in difficult times. In difficult environments our results are our responsibility. People who take credit in good times and blame external forces in bad times do not deserve to lead. End of story.

The interview is a good, quick read.  Check it out.