New E-Book: Ascension to a Higher Level of Performance


Power of Transdisciplinary Convergence (Copyright 2015 Kyield All RIghts Reserved)

Power of Transdisciplinary Convergence

Ascension to a Higher Level of Performance 

The Kyield OS: A Unified AI System

By Mark Montgomery
Founder & CEO
Kyield

I just completed an extensive e-book for customers and prospective customers, which should be of interest to all senior management teams in all sectors as the content impacts every aspect of individual and corporate performance.

Our goals in this e-book are fivefold:

  1. Provide a condensed story on Kyield and the voyage required to reach this stage.
  2. Demonstrate how the Kyield OS assimilates disparate disciplines in a unified manner to rapidly improve organizations and then achieve continuous improvement.
  3. Discuss how advances in software, hardware and algorithmics are incorporated in our patented AI system design to accelerate strategic performance and remain competitive.
  4. Detail how a carefully choreographed multi-phase pilot of the Kyield OS can provide the opportunity for an enduring competitive advantage by establishing a continuously adaptive learning organization (CALO).
  5. Educate existing and prospective customers on the Kyield OS as much as possible without disclosing unrecoverable intellectual capital, future patents and trade secrets.
TABLE OF CONTENTS
INTRODUCTION  1
REVOLUTION IN IT-ENABLED COMPETITIVENESS  2
POWER OF TRANSDISCIPLINARY CONVERGENCE  3
MANAGEMENT CONSULTING  4
COMPUTER SCIENCE AND PHYSICS  5
ECONOMICS AND PSYCHOLOGY  9
LIFE SCIENCE AND HEALTHCARE 10
PRODUCTS AND INDUSTRY PLATFORMS 11
THE KYIELD OS 11
THE KYIELD PERSONALIZED HEALTHCARE PLATFORM 12
ACCELERATED R&D 13
SPECIFIC LIFE SCIENCE AND HEALTHCARE USE CASES 13
BANKING AND FINANCIAL SERVICES 14
THE PILOT PROCESS 15
EXAMPLE: BANKING, PHASE 1 17
PHASE 2 18
PHASE 3 18
PHASE 4 18
CONCLUSION: IN THIS CASE THE END JUSTIFIES THE MEANS  21

To request a copy of this e-book please email me at markm@kyield.com from your corporate email account with job title and affiliation.

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New Video on Kyield Enterprise – Data Tailored to Each Entity


White board video presentation on Kyield Enterprise


Kyield founder Mark Montgomery provides a 14 minute white board presentation on Kyield Enterprise and the Kyield Enterprise Pilot

Strategic IT Alignment in 2012: Leverage Semantics and Avoid the Caretaker


A very interesting development occurred on the way to the neural network economy: The interests of the software vendor and the customer diverged, circled back and then collided, leaving many executives stunned and confused.

The business model in the early years of software was relatively simple. Whether an individual or enterprise, if the customer didn’t adopt the proprietary standard that provided interoperability, the customer was left behind and couldn’t compete—a no brainer—we all adopted. By winning the proprietary standard in any given software segment, market leaders were able to deliver amazing improvements in productivity at relatively low cost while maintaining some of the highest profit margins in the history of business. This model worked remarkably well for a generation, but as is often the case technology evolved more rapidly than business models and incumbent cultures could adapt, so incumbents relied on lock-in tactics to protect the corporation, profit, jobs, and perhaps in some cases national trade.

Imagine the challenge of a CEO today in a mature, publicly traded software company with a suite of products that is generating many billions of dollars in profits annually. In order to continue to grow and keep the job, the CEO would need to either rediscover the level of innovation of the early years—as very few have been able to do, play favorites by providing some customers with competitive advantage and others with commodities—occurring in the enterprise market but risky, or focus on milking the commoditized market power in developed nations while pushing for growth in developing countries. The latter has been the strategy of choice for most mature companies, of course.

Doing all of the above simultaneously is nearly impossible. Killer apps by definition must cannibalize cash cows and public company CEOs have a fiduciary responsibility to optimize profits while mitigating risk, so most CEOs in this position choose to remain ‘dairy farmers’ either until retirement or are forced to change from emergent competition. In discussing one such incumbent recently with one of the leading veterans in IT, he described such a CEO as “the caretaker”. For enterprise customers this type of caretaker can be similar to the one we hired a few years ago to protect our interests when we moved to the Bay area, returning to a property that was uninhabitable after messaging ‘all is fine’ (beware of the caretaker wolf in sheep’s clothing).

Now consider that software exports generate large, efficient import engines for currency in headquarter countries, thus placing those national governments in strategic alignment with the incumbents in the short-term (often dictated by short-term politics); and another entire dimension appears that is rarely discussed, yet very strongly influences organizations worldwide. This situation can influence governments in protecting and reinforcing perceived short-term benefits of commoditized market leaders over critical long-term needs of organizations, markets, and economies. It is not inaccurate to suggest that national security is occasionally misunderstood and/or misused in the decision process on related policy.

Monopoly cultures think and act alike, whether in the public or private sector, which is often (eventually) their undoing, unless of course they adopt intentional continuous improvement. This is why creative destruction is so essential, has been embraced internally by most progressive organizations in some form, and why customers should proactively support innovators and farm markets towards sustainable diversity. Despite what may appear to be the case, the interests of incumbents in enterprise software are often directly conflicting with the interests of the customer.

While the theory of creative destruction has roots in Marxism, the practice is a necessity for capitalism (or any other ism) today due to the natural migration of cultures and economies to seek security and protection, which in turn takes us away from the discipline required for continual rejuvenation. We embrace creative destruction in what has become modern global socialism simply because very little innovation would emerge otherwise. Competitive advantage for organizations cannot exist in rigid commoditization of organizational systems as we see in software. Simply put—whether at the individual, organizational, or societal level, we should embrace creative destruction for long-term survival, especially in light of our current unsustainable trajectory.

Which brings us to the present day emergent neural network economy. In our modern network economy we simply must have interoperable software and communications systems. The global economy cannot function properly otherwise, so this is in everyone’s interest, as I have been saying for 15 years now. The overpowering force of the network effect would place any proprietary standard in an extortion position to the entire global economy in short order. The current danger is that functional global standards still do not exist while national interests can align perfectly in the short-term with proprietary standards. That is not to say, however, that proprietary languages and applications should not be encouraged and adopted—quite the contrary—open source suffers similar challenges as standards in terms of competitive differentiation. Rather, it only means that proprietary technologies cannot become the de facto standard in a network economy.

In peering into the future from my perch in our small private lab and incubator in wilds of N AZ more than 15 years ago, the need for standardized structured data becomes evident, as does the need for easily adaptable software systems that manage relationships between entities. Combined with the data explosion that seems infinite, it was also obvious that filters would be required to manage the quality and quantity of data based on the profiles of entities. The platform would need to be secure, not trackable for many applications, reflect the formal relationships between entities, and set the foundation for accountability, the rule of law, and sustainable economics. In addition, in order to allow and incentivize differentiation beyond the software programmer community, thus permitting market economics to function, the neural network economy would require adaptability that is similar to that which takes place in the natural, physical world.

I suggest then while nascent and imperfect, semantics is the preferred method to achieve alignment of interests in the emergent neural network economy, for it represents the building blocks in structured data for meaning in the digital age, resting at the confluence of human and universal languages, and serving as the functional portal to the neural network economy.

Finally, as the humble founder and inventor, permit me then to suggest that Kyield is the optimal system to manage semantics as it intentionally achieves the necessary elements for organizations to align and optimize their digital assets with the mission of the organization, containing adaptable tools to manage the relationships between entities, including with and between each individual and workgroup.

May 2012 deliver more meaning to you, your organization, and by extension our collective future.

Best of Kyield Blog Index


I created an index page containing links to the best articles in our blog with personal ratings:

Best of Kyield Blog Index.

From the trenches: on tech analysts and software patents


On analyzing technology

One of the most destructive messages our culture broadcasts is that proposed solutions that cannot be reduced to 140 characters shouldn’t move forward. If that policy were enforced in decades past, most of the important technology companies wouldn’t exist today. Concepts can be compressed, but that doesn’t necessarily mean they will be understood. Most of the simple problems were solved long ago. Unfortunately, very few are capable of understanding complex solutions prior to a polished end product, including the world’s leading analysts who passed on most of the big wins early on. So if we intend to move forward as a species, we better craft a new policy and improve methods for developing solutions to the actual complex problems we face. My advice to other founders has long-been to ignore the noise, focus, and do your best to attract employees, partners, customers, and investors who have done their homework and have the capacity; much easier said than done with next gen tech across the ever expanding valley of death.

Most analysts who have studied Kyield, reported on it, and/or attempted to label our work were not prepared for the task and could therefore not be in a position to grasp it. This was not entirely unintentional on my part as I learned the hard way long ago to withhold enough information to make reverse engineering difficult. While many are familiar with the potential benefits of exposing and promoting trade craft and IP, few are aware of the risks involved, and those tend to be the ones we need to be concerned with as they are often employed by giant competitors in one form or another. The world has changed; the biggest threat to incumbents are start-ups with ground breaking technology and/or strong innovation, and as we’ve seen in many cases– almost any tactic is employed when enough power or money is at stake. This is obviously a serious problem for anyone who must divulge sufficient information in order to build products, and by extension everyone who depends on a dynamic and diversified economy.

Software patents

I’ve been waiting on standards to mature since the mid 1990s and on the patent application process since April of 2006. Both systems are dysfunctional as they are manipulated (largely by exploiting weaknesses) by mature incumbents who are threatened by invention and innovation. That doesn’t mean, however, that we need less protection for original creative work, rather that we need more protection, of a different type, and much improved.

IP theft and copying of original work products is an enormous problem that is doing massive damage to our economy today, which is unfortunately largely invisible to the super majority of citizens. The IT industry has frankly been an enabler both in choices on architecture and in attempting to manipulate the legal and political system (often with great success). The IP challenge is symptomatic of structural challenges in the U.S., and increasingly related to economic deficits, education, and healthcare. The incumbents and gatekeepers who have de facto veto power through the political process, legal system, and technology are often threatened by any actual improvement to the system, so they tend to be extremely proactive in their defensive tactics, representing a classic negative spiral to broader society. IT has been commoditized across the world in systems we all use and innovation has been severely curtailed, with very little ability for most to establish differentiation, which is essential for survival in a market economy. This situation directly impacts every major challenge facing our world today.

Some software companies, software developers, venture capitalists, and academics have publicly denounced intellectual property rights for software and processes. While each of the common arguments have valid points, we don’t see many independent inventors claiming they need zero protection, and they are the stakeholders who matter in this debate–for the future of everyone else. I suspect that large numbers of authentic creators have simply opted out due to the lack of protection and justice–I have heard from many creative inventors and engineers through the years who are otherwise employed.

I agree that we need foundational reform in IP, part of which is reflected in Kyield, but I see a much higher probability of technical innovation providing solutions to these challenges than our current political system. Indeed, with the current state of our political system, the primary risk is that legislation surviving the dysfunctional process tends to compound challenges for small, independent inventors, as small and micro entities have lost power in our political system. Those arguing against patents seem to be missing two crucial points:

  • No other viable option currently exists to protect original work beyond encryption with specific apps, while most of our challenges are systemic

 

  • Software is increasingly the primary medium to affect and deliver improvements in our society and global economy

 

I too almost gave up on the patent system–it has been among the most frustrating experiences of my life, both in dealing with the system itself and the byproducts created by a failing IP/legal/political system. Any system that averages many millions of dollars to defend a patent no longer serves individual inventors, obviously. However, I came to the conclusion that as dysfunctional as our patent, legal, and political systems are, the probabilities of real reforms surviving are substantially enhanced with patent protection as it is unlikely that any of the other models for reform will work, quite a few of which have now been tested. We obviously need a new IP system that is based on sound technical infrastructure with properly aligned incentives and protection for the individual inventor. Our Kyield system represents a substantial leap forward in the right direction, but it’s only a cornerstone in the foundation (for IP in society-it is a holistic knowledge system).

The chief obstacle to real improvement is that technical gatekeepers are also patent trolls who are threatened by improvements to the system. All decision makers need to think long and hard about this situation, not least of whom are those focused on internal defense instead of solving the problems of others. Eventually this deteriorating situation will have negative consequences for everyone. The most obvious immediate threat is a stagnating global economy. With global market power comes global responsibility. The IT industry has a lot of maturing to do before it can live up to its responsibility in the global economy, as do both developed and developing governments.

I have studied the topic of IP systems in detail with the various hats of a citizen, entrepreneur, consultant, incubator operator, venture capitalist and inventor. I see no viable, sustainable alternative to a functional personal property rights governance structure.

–MM

Key patent issued


My key patent for Kyield was issued today by the USPTO as scheduled earlier this month.

Title: Modular system for optimizing knowledge yield in the digital workplace

Abstract: A networked computer system, architecture, and method are provided for optimizing human and intellectual capital in the digital workplace environment.

To view our press release go here

To view the actual patent  go here

I will post an article when time allows on the importance of this technology and IP, and perhaps one on the experience with the patent system. Thanks, MM

Clarifying Disruption: Operations vs. Innovation


Part 1 of Series

The word disruption has multiple meanings in global business with the most commonly used definition some variation of “the act of interrupting continuity”.  Within the context of logistics, supply chain, manufacturing, IT, and other business operations, disruption is obviously an experience managers work diligently to avoid.  A good example of a recent operational disruption was caused by the Sendai quake and tsunami; a natural disaster which was unpreventable, but predictable and therefore can be mitigated with careful risk management planning.

In the context of innovation, however, and long-term economic survival, disruption can be paradoxical when “the act of interrupting continuity” of tightly controlled markets, stale products, and outdated business models is not an evil, but rather can be a savior to businesses, ecosystems, and economies, preventing eventual operational disruption, or as we’ve seen in many cases—complete failure.

Animal Instincts

Central to the theme of disruption in innovation is the nature of our species.  We humans tend to be creatures of habit even when presented with evidence that the behavior is self-destructive in the long-term.  In similar fashion, individuals and organized groups such as governments and corporations often refuse to change behavior even when continually presented with evidence that the cost of the short-term comfort zone may well be long-term survival, and of course fear and greed are ever present.

While resistance to change is often strongest in absolute monopolies, similar cultures are commonly found anywhere deep disequilibrium exists in the tension between security and progress, speaking to the need for competition.  Entire industries or regions can become static relative to the world quickly today, displaying little evidence of awareness in decision making.  Mix in a heavy dose of risk averse corporate cultures, conflicting (real and perceived) interests internally and externally, a bit of PR spin, and regional translation leakage between multiple native languages, confusion surrounding the issue of disruption becomes the norm rather than the exception.

History is overflowing with examples of the high costs of failing to intentionally disrupt the status quo with innovation.  A few recent cases that come to mind include:

Government

  • Failure to disrupt poor U.S. fiscal management and lack of accountability (in part with innovation) over a long period now threatens operational disruption

  • Failure to disrupt the U.S. healthcare and public educational system has greatly exacerbated the U.S. fiscal challenge, reflecting why prevention of negative spirals with continual improvement is so important

Mobile Technology

  • Nokia’s failure to maintain leadership in smart phones is now significantly impacting not just Nokia, but Finland’s national economy

  • Rim’s response to the iPad, which seemed unable to take the risk to cannibalize, failed to physically disrupt by tethering the Playbook with the Blackberry phone

  • Border’s failure to embrace disruptive digital publishing ended with liquidation

Offensive and Defensive Strategies

The need to disrupt static cultures, reform or replace decaying business models, and introduce competitive products is well known in management circles of course, so many kinds of offensive strategies, tactics, and systems have been crafted to overcome this age-old challenge, including motivational techniques, educational tools, recruitment practices, incentives, internal R&D, outsourcing, partnering, spin-offs, join ventures, acquisitions, IP licensing, and strategic venture capital. Quite a few companies have prospered through multiple business cycles employing a variation of all of the above in a persistent quest to achieve and maintain an optimal balance between growth and risk over the short-term and long.  The number of companies achieving mediocrity upon maturity is far greater, however.

One common method of defense is the formation of cartels, particularly with commodities or commoditized products that are susceptible to innovative new comers or companies moving into their markets.  Cartels and oligopolies can generate high margins for long periods of time and form very strong barriers to innovation, but eventually market and trade imbalances combined with innovation and conflicting interests of the members begin to fragment the cartel and erode market power, opening a window for competition that has proven to be healthy for incumbents, markets, and economies.  When economies stagnate, it’s generally a sign that incumbents have too much market power, usually achieved in part by manipulating the political processes, which is just one reason of many why corruption should be avoided.

The word cannibalism is sometimes used to describe what is often a difficult internal corporate process of intentionally replacing aging products that are still providing a significant portion of cash flow, with more competitive products. Another term used to describe disruptive innovation in the broader economy is creative destruction, popularized by Joseph Schumpeter in the 1940s, which describes the theory of replacing the old with the new in the entrepreneurial process. In the modern global economy, situations and cultures that allow progress without disrupting entrenched interests are quite rare.

In part 2 of the series, we’ll explore how innovation is beginning to revolutionize the innovation process in the digital enterprise.

Overcoming the Enterprise Differentiality Paradox


The low cost of replication with digitized products has long been known to be seriously disruptive in the music and publishing industries. However, the conflict between low cost replication of business software, rigid architecture, and customer differentiation relative to the broader economy is not generally well understood, although vitally important.

When enterprise software matured to the point of early adoption in the 1970s, it provided a substantial competitive advantage to those in a position to leverage wisely. Followers of the early adopters did so largely due to the perception by decision makers—based on compelling evidence—that adoption was essential to their future, and so the great commoditization cycle in enterprise software had begun. In the early 1980s a very similar pattern began with front office software, captured primarily by Microsoft, with commoditization slowly gaining strength in the 1990s.

While front office software could be neatly packaged and sold in storefronts or through consultants for desktop installation, back office systems for operations required on-premise customization and integration with incompatible systems, meaning a very large investment with ongoing maintenance, and high costs for adaptation. Within a few years, custom applications were increasingly sold as products, exploiting the nearly free replication costs, but this benefit was not without cost as wider adoption of back-office products soon began to erode the competitive advantage; the commoditization cycle was in motion.

In addition to the direct impact of commoditization on the software industry, which is well understood in business and finance, another dynamic was occurring that was considerably less visible and largely misunderstood, which is the impact on organizations when the vast majority worldwide are using the same operating and decision systems. As software systems became more ubiquitous, competitors in industry after industry were increasingly using similar systems, which began to extend the software industry’s commoditization to customers, and by extension the broader economy. This dynamic extension of commoditization evolved in conjunction with globalization and consolidation of industries over the past two decades. Indeed, the commoditization of business software acted as a catalyst to global consolidation of industries as business software customers were increasingly competing on price rather than value added differentiality. Competing on price alone with reasonably good management dictates outcomes that are primarily due to scale, particularly when automation systems are very similar between competitors; not quite singularity in the enterprise given the current maturity of technology, yet trending in that direction. Lack of differentiation does not a robust, durable economy make; competing on scale and price alone is a race to the bottom for everyone but market leaders.

This situation may at first appear attractive for business software vendors and their investors, particularly market leaders, as managing a commodity that has become essential can be a lucrative annuity. Dancing with complexity in technology, however, contains considerable risk of broken toes, particularly with software, which is anything but a finite resource. History has proven that substantial risk exists for incumbents that commoditize their customers.

Enter the Internet and Web, followed by cloud computing, and much smarter mobile adoption. Taken together with advances in hardware, software, semantics, analytics, and organizational systems, the opportunity to introduce truly adaptive enterprise computing in near real-time has finally arrived. It’s been a long voyage; one full of discovery and adventure which I hope will prove to have been worthy of our patience.

Innovation in the Enterprise


One of the better reports on innovation in the enterprise was published by PWC, so I wanted to share a link to it and provide a few comments.

Generally speaking this report supports most of the claims we’ve made at Kyield during our applied R&D journey, including knowledge systems, the power of semantic search, an integrated systems approach to the innovation challenge, and what the role of the CIO should be, among others.

What I do not see discussed is the importance of meritocracy, although to be fair to PWC they discuss it elsewhere in detail; nor is there much discussion on the need to protect the ideas of the best and brightest in social environments, without which those ideas are likely to exit and become disruptive.

In the digital world, despite the needs of individual members of the ecosystem, one cannot (nor should not attempt to) silo innovation from crisis prevention or meritocracy, meaning also the need to embrace management of internal cannibalism. Let’s not forget our important lessons of the broader needs of the economy with respect to creative destruction, or we will indeed likely continue to see a continuation of jumping from one systemic crisis to another. So while they have done better than most revealed publicly, it does not appear that they have completely mapped the innovation genome.

That said, this report by PWC is worth serious time and reflection. Their domain is after all, like thousands of other market leaders, frequently found in our web logs.

Mark Montgomery