Clever is Cute as Sustainable is Wise

If the financial crisis confirmed anything, it is that the majority of humans are followers, not leaders, and that leaders throughout our society have yet to capture the significance of technology to their members and organizations.

One of the primary causal factors cited by thought leaders in studying crises is poor leadership, to include those who accept misaligned or conflicted interests. When we see “skimming off the top” in others we label it corruption, yet few see it in themselves at all, or choose to ignore it, resulting in the same outcome. While balance is obviously needed for survival—indeed managing that balance well is key for modern leaders, when we over-emphasize short-term profits, we then elevate the influence and power of those who are skilled at winning very short-term battles, rather than long-term wars. I have personally experienced that strategy in organizations and observed it in many others; it doesn’t end well.

One problem with the short-term leadership model is that the skills for software programming, instant trading, manipulating markets, or otherwise amassing great wealth quickly, does not necessarily translate to good leadership in a private company, government, or stewardship in philanthropy. Indeed, in my own observations and those of many others, quite the opposite is often true, yet our information institutions instruct society to emulate the clever rather than the wise. Should we be surprised then at the trend line of manipulation, polarization, and ever deeper crises?

Unlike the early days of the industrial revolution, in the second inning of the information revolution we now understand that most of the challenges facing the human species are long-term in nature, so we must realign our thinking and structures accordingly, including financial incentives and leadership development. Alas, since the long-term has been greatly compressed by consistent failure of short-term behavior, our entire species must now learn to act in the short-term on behalf of our mutual long-term interests. Easier said than done in our culture. The good news is that it’s quite possible…tick-tock, tick-tock, tick-tock.

The process of identifying, mentoring, and recruiting strong leaders often consists of conflicting advice that tends towards self-propelling cultures, regardless of organizational type. In addition to skill sets and track records sketched from misleading data, leaders are often selected based on ideology, dysfunctional networks, and susceptibility to peer pressure, instead of independent thought, good decision making, and wisdom.

Given the evidence, a rational and intelligent path would be to reconstruct our thinking and behavior surrounding the entire topic of leadership and organizational structures, and then tailor that thinking specifically for the environment we actually face, with tools specifically designed for the actual task. For many cultures, such a path begins by emerging from deep denial and embracing evidence-based decision making. Once emerged from the pit of denial, they soon discover among other truths that resources are not infinite after all, personal accountability is not limited to the inefficiencies of organizations, and that both the problems and solutions we face are inextricable from computing, organizational management, and personal accountability. Only then will the path to sustainability began to take shape in the vision field in sufficient form to differentiate the forest from the trees.

Yet another of the many disciplines related to this topic defines psychosis as a “mental disorder characterized by symptoms, such as delusions that indicate impaired contact with reality”.  An appropriate translation of insanity might be “refusal to adopt tools and models designed to achieve sustainability”, aka survival.

If this sounds familiar in your organization, it could well be traced to your leadership development model and process, for leaders are the decision makers who have budget authority. Perhaps it’s time for your organization to redefine strategic from clever to wise, and synchronize the organizational clock with present-day reality?


Semantic enterprise elevator pitch (2 min video)

Thoughts on the Santa Fe Institute

A topic of considerable thought, discussion and debate for many of us long before a series of ever-larger crises, the Santa Fe Institute (SFI) chose the theme of complexity in regulation for their annual meeting this week. Prior to sharing my thoughts on the important topic of simplifying regulation in a future post, which will be covered more extensively in my book in progress, I want to focus a bit on SFI.

I was fortunate to attend last year’s 25th anniversary meeting at SFI, but this year I was only able to view the final full day via webcast, which was excellent. The official SFI about page can be found here, although having written many of these descriptions myself; I’ve yet to write or read one that captures the essence of the organization, people, or contributions, so please allow the liberty of a few additional lines in first person.

I have been following SFI regularly for over 15 years, and since moving to Santa Fe nearly two years ago have had many interactions. SFI essentially pioneered complexity as a discipline, but has also been a leader in what I refer to in my own work as a mega disciplinary approach to discovery, without which frankly many researchers and their cultures can become blinded, and discoveries stalled, with R&D performing substantially below potential.

One of several strengths at SFI is their ability to draw from a very broad universe of scholars, each of whom is a leading expert in a specific discipline, but also share an interest in complexity theory—which affects everything else, as well as the need to work across disciplines to optimize learning.

The intimate size and environment of SFI is no doubt partially responsible for attracting so many leading scholars to contribute and engage. After living in Santa Fe, visiting the campus and attending multiple events, with a great many exchanges with larger institutions for 30 years, I can certainly understand the appeal for permanent faculty, visiting scholars, post docs, and business network members.

This year’s event was organized by Chris Wood and David Krakauer, who are two individuals at SFI I have had the pleasure to get to know recently (forgive my informality here; it comes natural). David heads up the faculty and Chris divides his time between research, administration, and running the SFI business network. These two represent a diverse faculty and also make an interesting combination, with Chris being the calm diplomatic type while David exudes sufficient rebelliousness at times for me to wonder, despite his brilliance, how he prospered at Cambridge (due to my own rebel instincts and frustration with academia), until reflecting on his current role. It is precisely the challenge when shepherding deep diversity that brings out the best in people; one of several skills David demonstrates when leading groups.

A good way to learn more about SFI from afar is to view a sample of their research online, including videos. Their model, however, like many—is not perfect, as the institute is substantially dependent on donations in what has been a very uncertain time and economy of late, so for those who may be seeking a worthy tax deduction this year, I would urge you to consider a donation.  For larger corporations and foundations, I recommend exploring the SFI business network, which is similar in many respects to the experimental virtual network I operated in the late 1990s, but also benefits from the physical conference interactions throughout the year, not just with SFI scientists and staff, but also with other business network members. Several of our network members have also been business network members of SFI, so I have known quite a few over the past dozen years, including Franz Dill on our Kyield advisory board who represented P & G for many years at SFI. For corporate and foundation executives in particular, I highly recommend viewing a short video interview with SFI Vice President Nancy Deutsch to explore relationship options.

Unlike universities and federal labs that grew large physical empires with massive overhead, the small size of SFI, fewer conflicts, independence, location and talent attract exceptional human quality, providing a rare situation certainly worth preserving and improving. My hope for SFI is that the community and entity will continue to adapt, evolve, and forge a strong and diverse financial structure that could become a model for the future.

While it may not always be obvious to some of my colleagues in business and finance, the independent theoretical research produced by SFI is essential for thinking through and eventually helping to overcome the world’s most pressing challenges, which is from my perspective excellent long term strategic alignment for any mission statement.

Mark Montgomery
Founder & CEO

Myths and Truths about Innovation

In my daily filtering of news and intelligence, I usually find one or more quotes on innovation that blatantly abuses the term for some other agenda. While such efforts are obvious to me, they are obviously not obvious to many or presumably such attempts would not receive so much digital ink. It’s an issue that has bothered me for many years, with almost daily reminders so this morning I am taking a bit of time to clear the air.

What innovation is, but is rarely reported to be

  • A highly complex system when functioning well

  • An essential foundation for economic security and job creation

  • Reflected by a substantially new  improvement, method, or function

  • Rarely revolutionary, although often disruptive & threatening to some/many

  • Can also be defined as invention and/or V/V, but often is not

  • Individually can range from extremely simple to extremely complex

  • Can be sourced either from individuals or within group (s)

  • A creative process usually requiring discipline and inspiration

  • Often described by great innovators as a spiritual experience

  • Substantially dependent upon cultures and tools

  • Affected by incentives and disincentives; macro and micro

  • Driven by motivational factors, which must be tailored

  • Increasingly dominated by digital workplace architecture

  • Substantially a bottom up process, not top down

  • Impacted by CEO leadership within and across organizations

  • Copied every day by predators worldwide

  • Harmed by unstructured/open systems in the long-term (exploitation)

  • Often killed internally by combination of apathy, dysfunction, and fear

  • Usually dependent upon wisdom of customers and distributors for adoption

  • Often requiring salesmanship for adoption

  • Normally requires substantial investment to market in sustainable manner

  • Highly susceptible to distractions, noise, and multi-tasking

  • Negatively impacted by organizational layers

  • Damaged by large administrative budgets (5% good – 40% fatal)

  • Often killed by industry eco-systems due to protectionism

What innovation is not, but is quite often spun to be

  • Related to R&D budget size, unless a super collider, space shuttle, etc.

  • Related to politics, with rare exception

  • Nearly as impacted by physical location as many claim

  • Necessarily related to degrees and formal education

  • Protected by society, justice system, or organizations

  • Better in large organizations—quite the opposite is usually true

  • Necessarily recognized by customers, particularly until tested

  • Helped by bureaucracy in any way, shape, or form

  • Usually assisted by ubiquitous IT, unless theft is factored as beneficial

  • Necessarily of higher quality in academia, gov, or corp labs

  • Easy, durable, or normally of a short duration

  • Helped by exploiting the most creative

  • Necessarily adopted even if badly needed or invaluable

  • Impossible to measure, track, visualize, and incentivize

  • Well served by current IT systems and/or most organizations

Hidden costs of complexity in the enterprise

Often is the case when consuming fresh evidence that the truism is reconfirmed: what is not visible is far greater than what is; in terms of opportunity, risk, and cost. Few concepts are so profoundly transformative when this string of characters begins to take shape in the mind’s eye.

Unlike biological evolution where logical adaptation occurs over many generations, the dominant complex systems on earth today are driven by technology, evolving very rapidly, and of course subject to human manipulation.

From competitive advantage to utility tax

Similar to healthcare, education, and finance where complexity creep has been manipulated for long periods until surpassing sustainability, enterprise software has become primarily a game of ‘heads I win; tails you lose’ for those paying the bills. While the first generation of enterprise software provided a strong competitive advantage to early adopters, the bulk of systems have long since resembled a tax on admission.

Today most leading enterprise systems offer a competitive advantage to very few organizations where innovation is focused on optimizing commoditization, scale and capitalization; not products, service, or improvement. The result is a breakdown in product design, tragically to include a negative influence on innovation for customers worldwide.

The tipping point for market dysfunction in the enterprise occurred more than a decade ago when most of the innovation began to be outsourced to consumer ventures in Silicon Valley that serve a very different purpose for a different customer. Even if the majority of SV VC firms and young social networking entrepreneurs understood the needs of organizations, globally adopted consumer technology cannot provide a competitive advantage to organizations. It should be obvious that if everyone is using the same rigid programs with little if any adaptation or customization, then the advantage falls only to those with scale.

Another sign of market dysfunction in IT more generally is visible by comparing cash generation of industry leaders with their competitors. A recent article in the WSJ revealed that nine tech companies generated $68.5 billion in new cash during the Great Recession while the other 65 competitors in the S&P 500 generated $13.5 billion combined.

The war chests at IT leaders tells a different story for each company, including recent product success at Apple, the power of the network effect with Google on the Web, effectively managed monopolies, and an economy dominated for many years by investment banks, weak regulation and judicial enforcement, and last but not least; apathy in enterprise customers. I argue that this level of consolidation of market power isn’t good for anyone, including the stockholders of those with the largest war chests as the dividends are either very small or non-existent, with the majority performing poorly in stock appreciation.

Need for ‘market farming’

It’s essential to understand the difference between proprietary applications and proprietary standards, particularly relating to network effect, market power and systemic risk. IT architecture in the network era is of course global and largely unregulated outside of minimal anti-trust enforcement, with voluntary standards bodies, so it should not be surprising then that proprietary standards still dominate enterprise computing, or that proprietary systems are manipulated for self gain. That is after all the fiduciary duty of public companies with bonus incentives, stock options, and careers dependent upon same.

Of course it’s also true that given government’s terrible track record in regulating technology, combined with nationalist conflicts that too-often suffocate innovation with protectionism, very few of the vastly divergent stakeholders in the ecosystem favor increased regulation, which leaves us with the heavy lifting of systems design and market education to attract intelligent decisions by early adopters in an environment that is predatory to new entrants. Markets do eventually depend upon well-informed customers acting in their best interest, even in expert professional roles; particularly in markets dominated by lock in.

From the perspective of a consultant and venture capitalist who coached hundreds of businesses of all sizes on defending against predation, it is an understatement that enterprise customers need to take a far more proactive role as experts in market farming. The financial incentive to do so is certainly sufficient, as is the risk in not doing so. Until such time that more effective global governance of standards is enforced, however, national governments, non-profits, consumers, and especially CIOs have a special responsibility to be proactive as ‘market farmers’ within the IT ecosystem.

Ownership of data

In the modern world, data represents knowledge, security, identity, health, and wealth. Those who control proprietary standards within the network effect in an unregulated environment not only can extort a high price of entry to the utility, but can also greatly influence if not control ownership of data. We see that often today on the public web (see LinkedIn’s license agreement for an example).

Our position with Kyield is that while we have every right and indeed a responsibility to protect our proprietary intellectual capital within our platform, we do not have the right to extend the power enabled by the platform over others. I would even go so far as to say that we have a responsibility to defend customers from others doing so to the best of our ability. Our power should only extend to the borders of our internal systems, beyond which we should embrace universal standards, so we do, even though they are far from perfect and extremely slow to evolve relative to need.

Networks are not new, they are just much larger, contain data representing far more than ever before, and are of course global. Nations created standards for electric grids presumably to prevent the electric companies from owning every appliance maker, if not their economy. The ‘extend and conquer’ strategy is predatory, obviously very dangerous to the global economy, and should therefore be regulated and aggressively enforced. Nationalist conflicts and protectionism have prevented proper regulation.

It’s my personal position that no one should have power over the languages used for public transactions, nor should any company or group of companies (or any entity including governments) have influence, power, or ownership of data other than the original owner of that data or those who have been granted the rights of use. Ownership and control of data is I believe a fundamental right for individuals and legal entities. It would surprise me if the U.S. Supreme Court failed to better clarify data standards and ownership at some point in the near future.

Of course standards bodies have a higher calling not only to manage the standards process properly within meaningful time constraints, but also consider the influence of conflicting interests on their financial model, as well as sustainable economics relating to adoption. I recently suggested to the W3C for example that their Wiki was insufficient for communicating the benefits of the languages the body created and approved. The response was that they didn’t have the bandwidth and that communications was up to vendors. The response fell well short of what leaders in science have been teaching for many years, suggesting to me that significant change was needed in the model and culture.

With very few exceptions, during the 15 years I have been observing the evolution of computing standards, it has been confirmed often that the IT industry is no more able to self-regulate than the finance or healthcare industries. I wish they could, but wishing doesn’t make it so.

Beauty of simplicity

Those who doubt the need for reducing complexity in our society probably haven’t spent much time working pro bono for a worthy cause that cannot be saved due to entrenched interests owing their existence to manipulated complexity. I have seen the dilemma many times during my career manifest in legislation where the individual interests of the few manipulate the outcome for the many, thereby threatening the whole, to include themselves eventually of course, with little or no apparent understanding of the impact of their self centered activism. The current political situation in the U.S. is obviously not what the Founding Fathers (and Mothers) intended, and indeed feared most.

A very similar dynamic evolved in computing over the past few decades, which I began to recognize in the mid 1990s when we converted our consulting firm to one of the first commercial Internet labs and incubators. It was only when I trained to become a network engineer and object oriented programmer that the degree of manipulation and systemic risk became apparent.

“Complicated systems and their combinations should be considered only if there exist physical-empirical reasons to do so.” –Albert Einstein

There have been reasons for the increasing complexity in enterprise software, but have been primarily limited to protecting cash cows and extending market share in the global network ecosystem. While economies of scale and Moore’s law pushed hardware costs lower, software costs escalated while arguably delivering less value, despite a massive reaction by open source. The parallel evolution in healthcare, education, and government in the U.S. was very similar; we were all paying more for less.

The problem today of course is that our collective resources can no longer afford even the status quo, much less the trajectory, from the costs due to manipulated complexity. In enterprise software, manipulated complexity also creates a very high maintenance cost now exceeding 20% of product cost per year in some cases, and of course a much higher level of security risk. This is a dangerous game and largely unnecessary.

One of the elements I liked best when reviewing the papers of the Google founders and later their early beta was the elegance of simplicity. Google was among the first substantial efforts in the Internet era to reduce a highly complex environment to a very simple interface designed for humans in their own natural language, and it worked very well indeed.

Ironically I found Google while searching for raw IP in an effort to achieve something similar for the enterprise, but enterprise data had not been converted to simple HTML like the public web, rather was subject to incompatible languages and data silos, and of course HTML lacked the ability to provide the embedded intelligence we were seeking, so we had a long wait for standards to catch up to the vision often associated with the semantic web. I like to think we used the time wisely.

Simplicity for the enterprise has not yet arrived at the station, but the train is full and fast approaching.

SFI video lectures on innovation

I came across a very interesting two-part lecture series on innovation this week that was conducted near my home last summer at the Santa Fe Institute.

The professor giving the lecture is Andrew Hargadon, who currently holds the Endowed Chair in Entrepreneurship at UC Davis. Professor Hargadon Blogs here, and a brief interview on the series is located here.

SFI is kind enough to offer the two videos freely on the web, each of which is about 90 minutes in length. I watched both lectures within 24 hours of writing this so they are still fresh. I agree with about 90% of the lecture series and highly recommend it, but my recommendation will come with a brief critique and a warning regarding the other 10%.

The central point of the lecture from the historical review of innovation is that our history books are filled with innovators who are often mis-credited with inventions that were largely copied, stolen, or slightly improved versions of other’s work. In several cases he unveils the essential contributions of others who were generally not credited properly and lack celebrity, which is appreciated.

What bothers me about the message Andrew projects is that it’s very similar to the message coming out of finance in leading MBA schools a decade ago, which is sourced in cynicism– that there is no room for ethics or justice in business, that product quality is much less important than exploitation skills or market power, and creativity only matters relating to exploitation of others. While that has been largely true in the past, I reject that philosophy outright for the future, and particularly sourced from universities. Indeed, it is precisely because of that philosophy in so many of our MBA schools and board rooms that U.S. business is doing so poorly, and why Silicon Valley is experiencing a sea change, or a “nuclear winter”, as one leading VC partner described the valley before we both left.

Our society is quite skilled in pronouncing the obvious after the fact, supported by all manner of measuring tools, but we are severely challenged in measuring the invisible, which is often far more important. For example, while we understand the value to society of exploitation of other’s work in the past, does anyone have a clue to the enormous cost? What is the cost of not inventing? What is the cost of not sharing the most valuable science with those who exploit? Do we really think the smartest people in the world are fools? Apparently so.

The problem for venturing came to a head in the late 1990s as me-tooism reached epidemic proportions when the smartest people were exploited by the creatively challenged. Silicon Valley has been in various phases of decline ever since. The synonym for exploitation is ‘abuse’. It’s difficult to build the type of sustainable networks called for in this lecture when abusing partners or customers as the lecture also calls for. We are a networked world, increasingly aware, and SV no longer has a monopoly on venturing.

The culture of Silicon Valley often misses a key point that threatens their future. While they expect and demand enormous incentives for their work, many seem to misunderstand that the rest of the world needs incentives as well, and without the rest of the world’s support SV is toast; so a rethink of philosophy, culture, and modeling is past due. To some extent the same is true for the U.S., but truthfully my experience has demonstrated that most of this cultural problem is restricted to very few boardrooms in monopolist corporate cultures, very few business schools, a handful of VC firms, and a few firms on Wall Street. Everyone else in America seems to get it.

While it’s true that Microsoft and the early Apple were of these types of cultures, as were many others, I don’t think many thought leaders would agree that Apple isn’t focused on product quality today (Hargadon worked at Apple in the early 1990s), or much question that Microsoft needs to focus on authentic internal innovation in order to thrive in the future. The world today is much different than just five years ago and barely recognizable to the world of a decade ago.

I would like to see professors of entrepreneur programs focus less on exploitation and more on increasing structural integrity within innovation networks, which is essential. In Kyield for example we have focused on providing real incentives and protection for intellectual contributions, which builds trust, without which brilliant and creative people at best stop subsidizing those who have been trained only to exploit their work, and at worst begin to undermine the system in place, which is precisely what is happening to SV.

That said, the bulk of the lecture series is very good to excellent on the topic of innovation and the need for building strategic networks. While I disagree with Hargadon’s claim that “the network is the innovation”—to imply that Einstein and DaVinci are more irrelevant than an MBA student is ridiculous—it is a message that needs to be better understood, particularly in networked industries or regulated markets like computing, pharma, and energy, which is Hargadon’s specialty. More independent or stand alone innovations still require networks, but of a different kind.

The most valuable aspect of the lecture is the occasional focus on the enormous need for scientists and policy makers to focus research on markets, or the actual needs of people, rather than what scientists and politicians project from a conflicted chair. Our basic R&D system is wasteful and inefficient due in part to the culture and in part to poor investments that are simply impossible to adopt, whether for social, technical, or economic reasons. Granted that basic research is usually not intended to result in products, rather a better understanding, but it’s also true that the primary sponsor is broke in part because of the lack of accountability throughout the system. Fiscal discipline is absent in all of the scientific disciplines.

Part 1 of the lecture

Part 2 of the lecture

Mark Montgomery
Founder & CEO – Kyield
Twitter: @kyield

Systemic failure requires new holistic cure

As I scanned mass media’s response to the latest terrorist incident, I found very little evidence from representatives of our democracy either in government or journalism who understand the complex issues involved with prevention of systemic crises.

Among the most informed voices I found on this latest terrorism incident is Eugene Robinson at the Washington Post who is one of few who apparently can see the broader problem with respect to counter terrorism. After asking a series of logical questions in his column, he suggests:

“If that’s how the system works, we need a new system.”

Mr. Robinson is correctly stating a fundamental truism; systemic crises require systemic solutions, or a new holistic system designed for the specific challenge. He closes the column with another statement demonstrating wisdom:

“I can’t escape the uneasy feeling that we’re fighting, and escalating, the last war — while the enemy fights the next one.”

Drawing from multiple disciplines in system design

From a system complexity perspective, which is invaluable during the design phase, I often compare large organizations like the U.S. Government to biological systems; one of several disciplines we draw from. In neurology for example, which is a highly complex system, a small percentage of mature adults have been found to experience something comparable to what has been occurring in the U.S. Government called multiple system atrophy (MSA). Unfortunately for MSA patients, no cure has been identified, so doctors can only treat symptoms.

Similarly, we have witnessed a crisis management structure in the U.S. for some time that only addresses symptoms, demonstrated in grand fashion during and after the financial crisis where meaningful reform has failed, despite an extremely dangerous crisis.

Unfortunately for U.S. citizens, one of the symptoms of a dysfunctional organization system is one that successfully defends against improvement. When one symptom is addressed, others tend to pop up in unexpected and often unrecognizable formats, until finally the patient dies from ‘complications’ associated with the underlying disease that has gone untreated.

Obstacles to adopting new systems, or cures

It’s no accident that new correcting systems are rarely adopted by our federal and state governments, and increasingly society as a whole. The protectionism manifests in powerful lobbies representing groups who have interests aligned with the status quo; not the country or its citizens.

We witnessed this protectionism visibly in another highly complex system—healthcare reform, which failed to address the fundamental problem of unsustainable costs already twice as high as any other peer country, and spiraling upwards out of control.

The current healthcare reform efforts may or may not eventually lead to lower costs, but clearly the inability to address the disease even in the midst of crisis (ICU) signifies not just a messy system often associated with our democracy in the past, but rather a failing system. I wish it were not so, but that is what the evidence suggests to me when comparing to a wide variety of other systems.

The best method I have found to measure system failure in states or countries draws from another discipline in economics where the purity of mathematics tells no lies. The U.S. has the capacity to balance the budget, but the system has failed to do so for decades, with the one exception being a temporary tax revenue windfall from the dotcom bubble in the Clinton era. Unless we adopt new and better systems, we will fail; it is indeed a mathematical certainty.

The current system so protects the status quo that it all but assures that new systems will not be adopted, particularly any system that is effective, thus either killing innovations or neutralizing functionality in the adoption process.

The protectionist strategy was clearly crafted incrementally over decades purposely to prevent precisely what is now desperately needed. Incremental reform is the favored tactic for maintaining the status quo in the least disruptive manner, whether in politics or information technology. Generations to come will live with the consequences.

Good news bad news prognosis

The good news is that I believe a cure exists for what is ailing the U.S. Government—I have called the system Kyield, which was designed at great personal cost and sacrifice. The bad news is that the inventor and majority owner (me) isn’t corruptible (actually my wife and my mother think this is good news — whether this is good for the patient or not remains to be seen), so it is highly unlikely under the current contracting or grant schemes that the cure will be administered to the ailing patient.

So it will require a non-traditional form of adoption outside the normal government contracting infrastructure for Kyield, or I suspect any other potential cure, to reach the ICU in an undiluted, effective form.

Related articles:

How to prevent the next Fort Hood tragedy, by design.

A use case scenario developed specifically for the DHS:

(MM: As I was preparing to post this piece to the blog President Obama held a press conference, blaming “human and systemic failures” in the Detroit incident, saying that the current U.S. system “is not sufficiently up to date.” Otherwise, “the warning signs would have triggered red flags, and the suspect would have never been allowed to board that plane for America.”  This is essentially what I have been saying for over a decade, including recently to members of his senior staff. )

Mark Montgomery
Founder & CEO – Kyield
Twitter: @kyield

Web 3.0 Leaders Look to the Year Ahead

Jenny Zaino at asked a group of us to provide predictions for 2010. An interesting mix and worth a close look, particularly for those seeking input from the front lines of Web innovation.

Maya in the global parcel delivery business

A few months ago we decided to produce a series of papers in story telling format to better communicate the value of our Kyield system for decision makers in large organizations, rather than the normal highly technical use cases written and consumed primarily within the scientific community: ‘Semantic Scenarios for the Intelligent Enterprise’.

I just posted a new use case in the series:  Maya in the global parcel delivery business.

While these cases are hypothetical in nature, they are based on countless conversations to include formal audits in my consulting firm that pre-date the commercialization of the Internet, and even productivity software, but involve highly sophisticated state-of-the-art technology– we are finally resolving these complex issues even if the world has yet to deploy them. In this case I have attempted to demonstrate several very important issues impacting all of us, using the stage of a fast growing emerging market and mobile workforce to illustrate the challenges and potential. A few of the issues I attempt to demonstrate include:

  1. The structural problems with intellectual property today, particularly in a wired world lacking security.
  2. Importance of innovation in the workplace, or more often lack thereof, and why.
  3. How to align interests between the individual, organization, and investors; critical as we’ve seen in the past 2 years.
  4. The consequences of not providing meritocracy and transparency in a hyper-competitive global economy.
  5. The benefits of attracting gifted team members in almost any industry, regardless of formal education.
  6. A lesson in how not being too greedy can indeed be the most profitable strategy, even in the mid-term.

I hope you enjoy the format and content. Feel free to email me with your thoughts in private:

Happy holidays to you and your family– MM

Preventing the next Fort Hood tragedy, by design

The recent tragedy at Fort Hood was only the latest in a series of crises that would likely have been prevented if the U.S. Government had adopted a logical holistic system design when I first began making the argument more than a decade ago. Since that time we’ve witnessed trillions of dollars and tens of thousands of lives lost; 9/11 and two wars, Katrina’s turf battles and incompatible communications, the mortgage bubble and global financial crisis, and now the Fort Hood massacre. The current trajectory of systems design and dysfunction isn’t sustainable.

“The care of human life and happiness, and not their destruction, is the first and only object of good government.” – Thomas Jefferson

While this particular tragedy is still under investigation, patterns are emerging that are very similar to previous crises, including 9/11. So let’s take a closer look at this event relative to what is currently possible with organizational design and state-of-the-art technology in order to better understand how to prevent the next crisis, for it will surely occur unless prevented by a logical holistic system design.

Crisis prevention by organizational design

It is true that some crises cannot be prevented, but it’s also true that most human caused crisis can be, particularly those that are systemic, including all cases cited here. In fact many tragedies are reported to have been prevented by intelligence agencies without our detailed knowledge, some of which would undoubtedly help inform our democracy if declassified, but we are still obviously missing preventable catastrophic events that we can ill afford to endure as a nation; economically or otherwise.

“In times of change, learners inherit the Earth, while the learned find themselves beautifully equipped to deal with a world that no longer exist.” – Eric Hoffer.

In each of the cases mentioned here, including Fort Hood, actionable evidence was available either on the Web or within the content of digital files residing on agency computer networks, but were not shared with the appropriate individuals or partners in the decision chain, usually due to careerism, turf protection, and justified fear of retribution.

It is difficult for leaders to understand that members in a hierarchical bureaucracy are often punished by micro social cultures for doing the right thing, such as sharing information or taking action to prevent tragedy. A good report from the field on 9/11 is Coleen Rowley’s Memo to FBI Director Robert Mueller in 2002.

Interests are not aligned: Denial does not a better system make

“The really valuable thing in the pageant of human life seems to me not the State but the creative, sentient individual, the personality; it alone creates the noble and the sublime.…” – Albert Einstein

The reality is that interests of the individual and that of the organization are often not well aligned, so system designs need to include intentional realignment. However, in the case of the Fort Hood massacre, red flags were so prevalent that many of us are asking the logical question: How explicit must a threat be before the systems will require action?

Red flags were hidden from those who need to know

In the case of Fort Hood, as was the case with 9/11, the U.S. Government apparently again experienced a data firewall between agency cultures, supported in previous cases by fear-induced interpretation of regulations and defensive micro cultures within agencies. The Washington Post reported that an FBI-led task force was monitoring emails of the suspect Army Maj. Nidal M. Hasan, some of which were shared with a Washington field office, but were not shared with the military, to include apparently Hasan’s supervisors who clearly were in the camp of ‘need to know’. A properly designed architecture as described in our recent hypothetical use case scenario for the DHS would have automatically alerted those in the decision chain who were pre-determined to ‘need to know’ when certain phrases are present, including the base commander and security officer in this case who may have prevented the tragedy in a manner that did not compromise the subject’s rights to privacy or freedom of religion.

“The status quo is the only solution that cannot be vetoed.” – Clark Kerr

One such semantic phrase for example that should probably be immediately shared with base commanders and counter terrorist experts would be: “communicating with known terrorists”. No one in the chain of command, including criminal investigators, should be empowered to prevent that information from reaching those in a position to prevent tragedy, whether a national security threat or localized. Indeed, logic suggests that local surveillance might be necessary in order to define the threat, if any.

Crisis Prevention by Technical Design

Among the many academic disciplines influencing modern enterprise architecture are organizational management, computer science (CS), and predictive theory, which manifests in the modern work place environment as network design, computer languages, and mathematical algorithms. The potential effectiveness of these disciplines depends primarily on three dynamically interrelated factors:

1. Availability and quality of the data

“A popular government without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy, or perhaps both.”– James Madison

The problem reflected in the decades-old phrase GIGO (garbage-in garbage-out) used in computer science influenced the holistic semantic design of Kyield more than any other factor. Rather than attacking the root of the problem at the source and investing in prevention, CS in general and consumer search in particular have teetered at the edge of chaos by combining clever algorithms and massive computing power to convert unstructured data (GI) to relevance (GO). While search and conversion of unstructured data has improved substantially in the past decade, it cannot compare to a logically designed QIQO (quality-in quality-out) system. Evolving to a QIQO environment from GIGO in organizational computing requires a holistic solution that is focused on prevention, improving work quality, and enhanced innovation.

It became apparent during several years of extensive applied R&D shortly after the commercialization of the Internet and WWW that embedding intelligence in files would result in far more functionality and efficiency, particularly within enterprise networks.

Without availability of high quality data that provides essential transparency while protecting privacy, the potential of enterprise computing is severely hampered, and in some cases has already become more of the problem than the solution. Once essential data is collected containing carefully tailored embedded intelligence, the task of preventing crises can be semi-automated.

2. Through data barriers

“It doesn’t work to leap a twenty-foot chasm in two ten-foot jumps.” – American proverb

Unlike other industries in previous technical revolutions, the U.S. has generally embraced a laissez-faire approach to technical standards, resulting in proprietary standards that are leveraged for market share. Unfortunately, the result in technology has been much like that in finance, although largely invisible with costs of inoperability transferred to customers. Unfettered innovation can have tragic consequences. In the network era, inoperable systems have increasingly contributed to some of our greatest challenges; including failure in crisis prevention, cost and inefficiencies in healthcare, and reduced innovation and productivity in the workplace. So in our case, even though voluntary standards are less than ideal, we’ve embraced the W3C standards for public transactions.

3. Data constructs and analytics

“Our major obligation is not to mistake slogans for solutions.” — Edward R. Morrow

Once the essential data is collected, many of our current great challenges in organizations become within reach:

  • Red flagging can be automated while protecting jobs and privacy.

  • Realignment of interests between the individual and organization.

  • Accountability and meritocracy is far more achievable.

  • Original work by individuals and teams can be protected.

  • Information overflow can finally be managed well.

  • Creativity and innovation can be enhanced.

  • Predictive and ‘what if?’ modeling /algorithms are much easier.

  • Formerly essential unknowns about the org become known.

  • The organization can become more adaptive to change.

  • Cultural management and continuous learning is manifest.

  • Rich visual metrics of formerly unknown patterns become routine.

Crisis Review

To his credit Secretary Gates has called for a system-wide review of the Fort Hood tragedy, which will coincide with reviews by the Army, White House, and Congress.

However, it would be irresponsible not to emphasize that the underlying stresses that likely contributed to this tragedy are directly related to failure in preventing previous crises. The result of previous failures to adopt logically functional systems is that our macro-fiscal situation in the U.S. is now so degraded that future prevention requires a much greater effort than would have been the case a decade ago.

Preventing systemic crises and related security (economic and warfare) are the foremost reasons for our government agencies to exist, and was the primary motivation for creating Kyield, even if the holistic design provides many other side benefits. The system problem has now been solved by design; but it has yet to be adopted.

“I am not an advocate for frequent changes in laws and constitutions, but laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times.” – Thomas Jefferson

Mark Montgomery