Innovating Social Enterprise

Through New Social Technologies

Hong Kong 31 March 2009

Doug McDaviddougmcdavid@Gmail.com

The Big Ideas

• The era of services

• People as the source of value

• Social enterprise

• Social technology

• Architectures

It’s a good time to be focusing on social enterprise

Irruption

The Industrial

Revolution

Age of Steam

and Railways

Age of Steel, Electricity

and Heavy Engineering

Age of Oil, Automobiles

and Mass Production

Age of Information and

Telecommunications

Frenzy Synergy Maturity

Panic

1797

Depression

1893

Crash

1929

Dot.com

Collapse

• Formation of Mfg. industry

• Repeal of Corn Laws opening trade

• Joint stock companies

• Industry exploits economies

of scale

Current period of

Institutional Adjustment

• Separation of savings,

investment banks

• FDIC, SEC

• Build-out of Interstate

highways

• IMF, World Bank, BIS

1

2

3

4

5

Source: “Technological Revolutions and Financial Capital, Carlota Perez, 2002

Panic

1847

1771

1829

1875

1908

1971

1873

1920

1974

1829

Crash

30 Years32 Years

30 Years26 Years

30 Years27 Years

30 Years45 Years

“The turning point has to do with the balance between individual and social interests within capitalism. It is the swing of the pendulum from the extreme individualism of Frenzy to giving greater attention to collective well-being.”

Innovation Deployment

We are in an era of services dominance

� Evolving to new dominant logic – services-centered

– Away from goods exchange

– Toward exchange of intangibles

� Skills (S) specialization

� Knowledge (K)

� Processes

– Customers buy offerings rendering services that create value

� Service: “[the] application of specialized competences (S & K) through deeds, processes, and performances for benefit of another entity or the entity itself […]”

Stephen L. Vargo & Robert F. Lusch, “Evolving to a New Dominant Logic

for Marketing”, Journal of Marketing, Vol. 68 (January 2004), 1–17

“The great economic law is this: Services are exchanged for services…. It is trivial, very commonplace; it is, nonetheless, the beginning, the middle, and the end of economic science.”

Frederic Bastiat, 1860

Some might say it has always been the era of services

% of U.S. employment

agriculture

services

manufacture

Service System/Network1. People 2. Technology3. Shared Information4. Organizations

connected by value propositions

Computational System

More transistors, more powerful

Requires investment roadmap

More win-win interactions, more value

Requires investment roadmap

Service Science: Grand Challenge ProblemDiscover a Moore’s Law for service system improvement

Service Science: First Small StepsProgress Toward Service Science…

• Education– 200+ courses, programs, or degrees

established in 50+ countries

– 12 centers, seminars, or groups established

• Government– 11+ programs for service research

and education in 11 countries

– $500M+ committed worldwide

• Industry– SRII established to promote service

research and innovation agenda, with sponsorship from IBM, Oracle, Xerox, Microsoft and others

• Association Service SIGs– AIS, INFORMS, AMA, etc.

Service Science: First Small Steps

http://www.ibm.com/university/ssme

A proposed Platinum Rule for effective services:

• Provide results for clients that meet their desires

– Foundation: Knowledge of what clients, as human beings, desire in order to further their well-being

– Corollary: Anticipate desires they don’t yet know they have

It’s not just services -- other key factors and trends are converging to emphasize the social nature of enterprise

• Proliferation of human and ecological problems - local to global • Increasingly globalized economy • Systematically undercapitalized and underestimated potential of people –

treated as factors of cost, not value-creators• Enterprises are increasingly fragmented, and reintegrating in the form of

ecosystems of specialized firms– widespread outsourcing – global supply chain networks

• Financialization of the global monetary production economy• On-line marketplaces, like EBAY, for previously undervalued assets.• Mash-up world of Internet technologies make global markets

commonplace• Ubiquitous communication networks and continuous connectivity• Projection of self in everyday life

– Personal branding– Has a dark side – e.g. Choi Jin Sil, a S. Korean actress, hounded to death by

web posts

The fundamentally social nature of enterprise• Enterprise is: “a purposeful or industrious undertaking”

– http://www.onelook.com

• At the heart of enterprise is human desire

• The purpose of enterprise is to foster well-being

• “There is a fundamental insight underlying all management sciences. It is that the business enterprise is a system of the highest order: a system whose parts are human beings, contributing voluntarily of their knowledge, skill and dedication to a joint venture.”

– Peter Drucker (2004)

• Enterprise architectures are based on autopoietic systems– Interplay of closure and openness– Ongoing co-creation between the parts and the whole, within self-created

boundaries– It’s not necessarily “life” as we know it

• Biological• Social• Technological

With the social enterprise we are dealing with the softest (and most challenging) situations *

•Hard technology relates to the tools, implements, machines, devices and equipment that are the physical embodiment of technology, and/or technological process based on engineering techniques and principles …•Soft technology, in contrast, is the ‘scaffolding’ (support systems, group process techniques, design methodologies, decision making processes) for individual and collective self-determination …•The development of soft technologies goes hand in hand with the appearance of new challenges and opportunities in society

* Alexander Laszlo and Kathia Castro Laszlo, various publications

We need to consider why it is that we have not met the challenge of matching technological intelligence with a commensurate advancement in sociocultural intelligence and wisdom.

What do you see here?

Not all wealth creation can be traced back to commodities or survival mechanisms.

If you’re him …

… this is what happens.

Through new technologies and new institutional structures, new forms of propertification are coming into existence

Kim Slocum and Randy L. Thomas, “The Healthcare Information Technology Industry—Past, Present And Future”, February 2003 - http://www.himss.org/content/files/proceedings/2003/Workshop/workshopM_slides.pdf

Any source of wealth must somehow be recognized as property by players in the economic system

Communities are asset-rich

• People are the source of value, and through communities they identify their personal capital

• The highest form of capital is developed via problem-solving services– These highest-value types of capital are developed through intellect and

insight– Much of the wealth of communities literally exists in their own minds

• Every knowable thing (once known) is a form of capital– Each of these forms of capital is a potential seed for a community

• There is static and dynamic value in communities– Static value is a snapshot of people, assets and social infrastructure– Dynamic value is realized as community interacts internally and externally – The value of communities arises from people’s interactions

• Value creation through community emerges from an abundance of problems and problem-solvers rather than scarcity of resources

• This idea reverses the premise for insurance: underwriting potential rather than underwriting the risk of loss

A new source of opportunity is based on certain properties of communities

• A community is a bounded sociality

• A community can be seen as a field …

… or a plasma

• Communities are like standing waves – forming and collapsing

• Value creation occurs in a structure we provide as a containmentvessel

http://www.jet.efda.org/pages/fusion-basics/fusion2.html

A community vault is the containment vessel for value creation

Past

Asset usages

Future

Declared assets

Historical performances

Payments

Category

Projects

Performativeaccords

Assets in a category

Liquid Contract position

Liquid Contract position

X-ray of an asset

Asset name:

Value adjustment

Owner:

Description:

Asset type:

Categories:

Initial value:

Liability:

Limitation to liability:

Date declared:

Currency:

Value adjustmentValue

adjustmentValue adjustment

Demurrage eventDemurrage

event

PerformativeaccordPerformative

accord

PerformancePerformance

Performance valuation

LC inclusionLC

inclusionLC inclusion

LC spread position allocation

LC spread position allocation

LC spread position allocation

Reputation evaluation

Asset complementarity

Asset commitment

There are many socially-focused dimensions of business architecture

• Eco-systems• Organization structures• Processes and procedures• Practices• Social networks• Roles and accountabilities• Institutional architecture• Brand architecture• Cultures• Decision architecture• Social bonds• Meaning• Communities and boundary objects

A view of the semi-conductor industry ecosystem

1985

DistributorDistributorDistributor

DistributorDistributorDistributor

SemiconductorManufacturerSemiconductorSemiconductorManufacturerManufacturer

Capital Equipment

Manufacturer

Capital Capital EquipmentEquipment

ManufacturerManufacturer

Indirect SupplierIndirect Indirect SupplierSupplier

Technology Reseller

Technology Technology ResellerReseller

ComponentManufacturer

ComponentComponentManufacturerManufacturer

Raw Material Supplier

Raw Material Raw Material SupplierSupplier

System OEMSystem OEMSystem OEM End User

2003

Service Provider

FoundryAssembly

& TestContract

Manufacturer

FablessDesign/

IP House

System Design House

Created by Denis Mathias, BCS partner.

Organization structure

reporting relationship

Organization

Manager

Organization

Manager

Organization

Manager

Organization

Manager

Organization

Manager

Organization

Manager

reporting relationship

Process and procedural models

A well-known macro-architecture framework is Stafford Beer’s Viable Systems Model.

Environment

Present

FutureIntelligence

Co

ord

inati

on

Control

Policy

Op Unit 1

Op Unit 2

Op Unit 3

From: Rudolf Kulhavy, From Banks to Banking: Architecting Business Performance Transformation, 2005

Ontologies create a semantic bridge between business communities

Conversations

Commitments

Contracts

Transactions

Corpus of business content

Lexicon

Implicit Ontology

Explicit Ontology

UpperOntology

A semantic architecture disambiguates meaning between business terminology and IT manifestations

Generic business concepts

Industry-specific extensions

Ontological models

Terminology models

Information systems modelsObject model

E/R modelReverse-engineered

model

A high-level view of a semantic architecture

BusinessSituation

BusinessPurpose

BusinessCommitment

BusinessOutcome

BusinessRole-player

BusinessFunction

BusinessResource

BusinessBehavior

BusinessLocation

constrainsmotivates

defines

alterssenses

supports fulfills

mandates

negotiatesgoverns

produces incorporates

performs

manipulates

facilitates

houses

Is assigned as

Invokes and

sequences

Based on: "A Standard for Business Architecture Description" D. W. McDavid, IBM Systems Journal, v. 38, no. 1, 1999.http://www.research.ibm.com/journal/sj/381/mcdavid.html

enacted by

A simple example shows various types of boundary objects that span business language communities.

Name:

Question:

Answer:

Question:

Answer:

Template

definitionPersonnel management

Employee

Personnel hotline agentCall

tracking

system

HR

professionalism

Hotline group

Benefits department

Employee

database

COBRA

benefits

Paper

notes

Post-It

1. Employee #

Procedures

Procedures

Escalation

From: Cherbakov and McDavid, Boundary Objects to Bridge the Gap, PLTE, 2005 (RBV080) -- Based on: Mark S. Ackerman and Christine Halverson, “Organizational Memory: Processes, Boundary Objects, and Trajectories,” Proceedings of the Thirty-second Annual Hawaii International Conference on System Sciences, IEEE, 1998.

Name:

Question:

Answer:

Question:

Answer:

Business ServicesSupports enterprise business process and goals

through businesses functional service

Enterprise Service Bus

Interaction Services

Enables collaboration

between people,

processes & information

Process Services

Orchestrate and

automate business

processes

Information Services

Manages diverse data

and content in a unified

mannerDevelopment

Services

Integrated

environment

for design and

creation of

solution assets Partner Services

Connect with trading partners

Business App Services

Build on a robust,

scaleable, and secure

services environment

Access Services

Facilitate interactions

with existing information

and application assets

Management

Services

Manage and

secure

services,

applications &

resources

Infrastructure Services

Optimizes throughput, availability and utilization

Ap

ps

&

Info

As

se

ts

Service Registry

SOA Foundation Reference Architecture

• Basics– Store and retrieve

– File service and document sharing

– Versioning

• Tracking interactions– Hits

– Click-throughs

– Cookies

• Content types– Textual, graphical, and audio

– Still vs. active.

• Accessibility– Search

– Tagging

– Ontologies and controlled vocabularies – Text analytic

• Boundaries– Zones of availability on a various scales.

• Intranet• Extranet • Internet• Access control

– Links

• Threading– Text chat – Voice

– Video

ICT Architecture considerations for sociable technology

• Communication modalities– Broadcast

– Narrowcast

– Pointcast

– Peer-to-peer

– Publish and subscribe

• Interactions– Real-time or asynchronous

– Two-way or multiple participants

• Complex ICT services– Calendar

– Work allocation,

– Groups

– Automated message origination

– Decision-making.

• Opinions– Rating

– Ranking

– Rewards

– Reputation

• Visual design

• Commerce– Advertisements

– Purchasing software

• Openness to integration

SmallBlue

understanding your social network, locating expertise

� Mechanisms to locate skills and affinity groups across IBM

� Capture tacit knowledge without requiring user to proactively enter data in a separate repository

� Bring transparent and secure information sharing to Notes and Sametime

Bee Hive: virtual office walls and desks

� Shared pictures of company events, families and friends, and “What I did on my vacation”

� Jokes, philosophies, experience reports

� Ad hoc events convened electronically

Virtual World Games

Open Source Software Development

Social Networking

Defense, Medical, Corporate, Entertainment

Collaboration, Training, Distance Learning, Marketing

Virtual World Technologies

• Manner of use– Artifacts

• Utilitarian or aesthetic• Past, present or future• Real world renderings or fanciful creations

– Activities• Performance • Simulation • Collaboration

– Simple meetings– Conferences – Joint development of intellectual content

• Focus of use– Mode of engagement

• Uses -- VW is used in conjunction with other activities• Within -- VW is the place to conduct business• About -- Virtual space is the business opportunity

– Issues addressed• Long list, started on the next slide

Taxonomy of usage of virtual world technology

• Technology – Hardware, software, and hosting for VW• Physical world simulations – Power plants, refineries, etc.• Marketing

– Branding statements – static displays, interactive events– Market research

• Product sales – Channel for real-world products • Services

– Social services – Public services by jurisdictions, non-profit, NGOs – Business services – Accounting, law, consulting,– Personal services – Medical, fashion, personal shopping– Education – Academic institutions and corporate education

• Travel-cost offset – Commuting, long-distance travel

Open for business – virtual world opportunity areas

Molecule

rezzers

IT-oriented simulations

Grand Slam tennis

Real World Retail

IBM Innovation Jam results:

Funding for ‘3D Internet’

Lots of publicity

IBM

Business Center

IBM’s entry into the virtual world was aided immensely by the New Media Consortium

• The NMC complex of islands is growing rapidly

• The original campus was the model for IBM’s Almaden Island

http://www.nmc.org/

Rehearsal Services

VUC weekly meeting adjourns outside Jacob Hall to salute Ada Alfa’s impending nuptials!

You know you’ve ended a successful meeting when a party breaks out, complete with dance floor & disco ball.

I chose to live in a place that has interesting neighbors!

Features of this location in the Yurim sim

• Near Jnana software• Art• Orientation trail• Meeting space• Professor from GWU• SL Herald managing editor• Space for the pirate ship …

The virtual world converged with the real world in the form of a visit to

Almaden Research Lab by a well-known RL and SL artist

The first time this presentation was given in 3D – on Info Island

Key aspects of the virtual world experience

• Interacting in a virtual world provides a strong feeling of being in the same place with other people

• There is an ability to distance oneself from current real life situations through projection of self onto an avatar

• Intimacy and trust are often easier to achieve in a virtual world• Anonymous interactions can be supported, if desired• Official hierarchy and rank can be downplayed or hidden• Virtual objects and environment can be used as a kind of “memory palace”• Shared vivid experiences are engaging and memorable• Serious work can be commingled with fun and entertainment• Objects can be uses as visual ontologies• Animation of avatars can express limited emotional nuance• There are infinite degrees of freedom to design the visual experience, from real life

replicas to fanciful things and places that could only exist in virtual space• It is possible to manifest community boundaries and boundary-spanning objects • Multi-media (streaming audio, video and machinima) close the loop between real world

and the virtual world• External application logic can be invoked from inside a virtual space• A game paradigm (competition with rules and constraints) is an option

Enterprise architectures are structurally coupled to ICT architectures

• We are operating from these definitions: – “Structural coupling is the term for structure-determined (and structure-determining)

engagement of a given unity with either its environment or another unity. The process of engagement which effects a ...history or recurrent interactions leading to the structural congruence between two (or more) systems". (Maturana, 1987)

– It is “...a historical process leading to the spatio-temporal coincidence between the changes of state” (Maturana, 1975) in the participants. As such, structural coupling has connotations of both coordination and co-evolution. (Thellefsen, on-line)

– Niklas Luhmann has repurposed Maturana’s concept specifically for social systems theory. Luhmann described structurally coupled systems as being in a state of mutual irritation and resonance. “Structural coupling is a state in which two systems shape the environment of the other in such a way that both depend on the other for continuing their autopoiesis and increasing their structural complexity.” (Moeller, 2006)

• Enterprises and technologies are rapidly co-evolving, enabled by such technologies as Web 2.0 and virtual worlds.

• The generation coming into the workforce expects to find such technical affordances in the workplace.

• Technology is not an inert enabler, but through an ecosystem of technological specialists is itself composed of an accountable set of human enterprises.

• Sociable technologies are coupled to the functions of enterprise that project the self of individuals and organizations into a globally open market of services and collaboration.

The enterprise in the clouds is the platform for 21st Century Innovation

Accounting Cloud

Collaboration Cloud

Transaction Cloud

Innovation Cloud

Marketing Cloud

Features and characteristics

• Cloud computing

• SOA-based

• Platinum rule of services

• People as source of value

• Standard processes

• Buying and selling as two

sides of the same coin

• Continuous close

Meaning Cloud