Why Every Company Needs a New Type of Operating System Enhanced with Artificial Intelligence


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Kyield founder Mark Montgomery on top of NM Oct., 2016, taken by Betsy Montgomery with their dog Austin

 

The Amazon acquisition of Whole Foods represents yet another confirmation of our rapidly changing business environment driven by opportunities at the confluence of technology and network dynamics. Although only the latest in a powerful trend initially impacting in this case the grocery industry, the business and technology issues driving the strategy are relevant to most and serves as a reminder that digital convergence is not confined to traditional thinking or industry lines.

A sharp devaluation of public grocery companies followed, so apparently many investors share concerns highlighted in the current HBR article “Managing Our Hub Economy”, which warns that “most companies will not become hubs, and they will need to respond astutely to the growing concentration of hub power”. The devil in the details for management is how to respond astutely. The answer is largely an AI OS.

A recent article at MIT SMR describes the complex operating environment: “The Five Steps All Leaders Must Take in the Age of Uncertainty”:

These ecosystems are nested complex adaptive systems: multilevel, interconnected, dynamic systems hosting local interactions that can give rise to unpredictable global effects and vice versa. Acknowledging the unpredictability, nonlinearity, and circularity of cause-and-effect relationships within these systems is a notable departure from the simpler, linear models that underpin traditional mechanistic management thinking.

One of the reasons for the attention in this latest combination is the integration of virtual networks with physical locations, which has been a priority for many companies, including Kroger, which shares many of the same zip codes as Whole Foods. A few days following the announcement Kroger Chairman and CEO Rodney McMullen revealed that he wasn’t surprised: “you could tell that Amazon wanted to do something from a physical asset standpoint and I think Whole Foods is a great fit for them.” Kroger is a well-managed company known for wise use of analytics, which is reflected in McMullen’s advice to investors: “you should assume that we look at any potential opportunities”.

We needed a new operating system” – Doug McMillion, CEO of Wal-Mart Stores, Inc.

The question is will traditional methods be sufficient moving forward? The answer may be found in part by looking at the world’s largest retailer. Wal-Mart was viewed as one of the most stable companies before Amazon entered their core lines of business, eventually leading to the recent conclusion by Wal-Mart CEO Doug McMillon: “We needed a new operating system”. The company recently paid $3 billion for an e-commerce component of a new OS in Jet.com, which may seem excessive to those of us unaccustomed to managing a half-trillion USD in annual revenue, though represents a relatively minor investment if it works well.

Unfortunately for 99.99% of businesses, investing $3 billion in a native e-commerce platform is not an option, particularly one experiencing significant losses. Very few of the remaining .01% could consider doing so for a partial OS. Even Walmart’s bold actions appear insufficient when we consider that the acquisition of Whole Foods was powered less by the core business of Amazon or Whole Foods than the bold manifestation of what was previously learned, resulting in an entirely new and much better business model in AWS (see article on spinning off AWS). Amazon’s strength is its ability to learn rapidly, recognize potential, and then convert and realize interconnected opportunity to new offerings in a fiercely competitive manner.

Competing in such a hypercompetitive and rapidly changing environment can be especially difficult for companies thinking and behaving in a linear manner. The retraining for me personally that began in our lab in the 1990s was a profound voyage initiating from a relatively high level. The technical training and transition involved a sharp learning curve that has only become steeper and more intense with time.

Native platforms are quite different than corporate networks that have evolved incrementally over decades. Understanding related opportunities and risk many years in advance is a critical challenge. One must peer through an asymmetrical prism constructed from tens of thousands of hours of total immersion and make bold bets that are well timed, particularly with AI systems.

Among many lessons learned is that the network economy is not only interconnected, it is also multidimensional and pre-programmed. When managed optimally and competitively the entire experience of the customer is an obsession with little deference for traditional lines.

Important considerations for an AI OS

1 – A competitive AI OS will be necessary for most to survive

Essentially all the evidence we see with mid-size companies to market leaders across most industries is that a strong AI OS is rapidly becoming the new competitive bar. If a company doesn’t have a competitive AI OS platform and the competition does, it will likely negatively impact the entire organization and each individual within it, as well as customers and partners. Google and Amazon are examples of companies that appear to be employing some functions similar to those found in our Kyield OS. While leadership and corporate strengths are critical, employing advanced AI systems is among the most important improvements any organization can make. The question really is how and when.

2  – An organization OS is not a computer OS

Many different types of operating systems exist. A few minutes of reading my book (condensed version) Ascension to a Higher Level of Performance will highlight the difference between the Kyield OS and a computer OS. The standard system is focused on universal issues common to all organizations, individuals, and networks. We have good reason to believe Kyield is among the world’s competency leaders in knowledge systems, which is a sub-specialty of artificial intelligence.

Our focus is a thin yet broad and very deep specialty with little overlap to most others, including AWS, Azure, and Google (Kyield OS integrates well with most others). Although executed with software, the Kyield OS is a ‘low code’ system compared to a computer OS and more dependent upon data and algorithmics. The system operates in the background with a simple natural language interface for corporate, group, and individual administration. The Kyield OS is transparent, non-intrusive, and interoperable so that any function can be added as needed in a highly efficient manner.

A recent note from a Fortune 50 CXO exemplifies the need from a slightly different perspective in response to our recently released HumCat offering—a new model for prevention for human-caused catastrophes, including cyber prevention.

I like your idea of an Operating System. I’m so convinced that the world is too complex and getting more complex every second that human beings cannot manage it in the right way anyway… Now, it is time (for the Kyield OS), otherwise we are on the hook of dark side of cybernetics—cybercrime or cyberwar and nobody can defend us.

3  –  Reinventing AI system wheels is not wise

As I shared with a Fortune 20 team recently, while it may be extraordinarily easy to underestimate the amount of tradecraft and secrets for such an endeavor, it is nonetheless foolhardy to do so (hence the AI talent wars). Fortunately for our customers, we’ve done the bulk of the heavy lifting. It was two decades ago this year that Kyield was originally conceived in the lab as an authentic invention (Optimizing knowledge yield in the digital workplace).

Many research and consulting reports on AI systems are available, and they have improved significantly over the past two years (See reports by MIT SMR & BCG and Nordea as recent examples), but caution is warranted. Some consulting firms are still advising to start small and experiment in areas that no longer need experimentation. Although generally appropriate five years ago, it is increasingly dangerous today as the competitive gap due to AI systems is expanding rapidly.

A good example of an ongoing experiment was highlighted in the WSJ CIO Journal: “Swiss Re Bets AI Can Help Workers Cope with Complexity of Reinsurance”. The goal is admirable, achievable and sounds impressive until reading the subtitle: “The company’s 100 data scientists and AI experts are building software that can read documents on their own.” This is not a new technology. If the article is accurate it appears that Swiss Re is spending between 10-100 times more for a small fraction of the functionality found in our Kyield OS. Other options also exist for the specific function described that would likely be much more wise than a custom effort.

Our friends at Swiss Re are far from alone. Munich Re publishes an IT radar report (with a nice diagram) based on research that “systematically analyzes opportunities, trends and technologies, and provides an ongoing insight into which technologies could be relevant for Munich Re and our customers from a very early phase”. In the current 2017 report Munich Re places predictive analytics in adoption phase while advanced machine learning and robotics process automation in the trial phase. These and other recommendations may raise some eyebrows. Predictive analytics has been deployed for many years as has advanced machine learning for specific purposes. If one is competing with a technical leader—and increasingly most are, waiting too long can be a fatal error. The first mover position, however, is not always an advantage, so such decisions need to be situation-specific.

4  – Method and sequence of adoption

To date the super majority of investment in AI systems have been strategic resulting in a few notable successes. We have also witnessed large and costly errors, including in M&A, VC, internal development, and in system designs and business models by vendors.

Horizontal systems like our Kyield OS serve as an efficient platform to unify the organization and ecosystem. Ideally a native AI OS should be adopted first. Quite apart from significant IP liability risk, since our standard system is focused on universal issues for every type of organization, with improved productivity, security, and prevention, it is difficult at best to justify internal custom efforts that replicate any of this functionality. Strategic functions are best built on top and/or integrated with our networked platform OS so that the organization and ecosystem operate in an optimal manner.

All is not lost, however, for those who have experimented in overlapping areas. The modules within the Kyield OS creates the data structure needed for compliance and then populates across the network in a manner designed to execute the functionality within the system as efficiently as possible, including for accuracy, integration and financial efficiency.

Conclusion

As important as external competition can be in this environment, the degree to which displacement will occur is dependent on a number of factors. All things being equal otherwise, the outcome primarily depends on the incumbent’s actions, its people, systems, and processes. Even though some companies may seem well positioned, the fundamental economic and business environment is rapidly changing. To the best of my awareness, survival from this point forward will essentially require a strong AI OS for the super majority of organizations.

Mark Montgomery is the founder and CEO of Kyield, originator of the theorem ‘yield management of knowledge’, and inventor of the patented AI system that serves as the foundation for Kyield: ‘Modular System for Optimizing Knowledge Yield in the Digital Workplace’. He can be reached at markm@kyield.com.

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An open letter to Fortune 500 CEOs on AI systems from Kyield’s founder


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Since we offer an organizational and network operating system—technically defined as a modular artificial intelligence system, we usually deal with the most important strategic and operational issues facing organizations. This is most obvious in our new HumCat offering, which provides advanced technology for the prevention of human-caused catastrophes. Short of preventing an asteroid or comet collision with earth, this is among the most important work that is executable today. Please keep that in mind while reading.

In our efforts to assist organizations we perform an informal review on our process with the goal of improving upon the experience for all concerned. In cases where we invest a considerable amount of time, energy, and money, the review is more formal and extensive, including SWOT analysis, security checks and reviews, and deep scenario plans that can become extremely detailed down to the molecular level.

We are still a small company and I am the founder who performed the bulk of R&D, so by necessity I’m still involved in each case. Our current process has been refined over the last decade in many dozens of engagements with senior teams on strategic issues. In so doing we see patterns develop over time that we learn from and I share with senior executives when behavior causes them problems. This is still relatively new territory while we carefully craft the AI-assisted economy.

I just sent another such lessons learned to a CEO in a public company this morning. Usually this is done in a confidential manner to very few and never revealed otherwise, but I wanted to share a general pattern that is negatively impacting organizations in part due to the compounding effect it has on the broader economy. Essentially this can be reduced to misapplying the company’s playbook in dealing with advanced technology.

The playbook in this instance for lack of a better word can be described as ‘industry tech’, as in fintech or insurtech. While new to some in banking and insurance, this basic model has been applied for decades with limited, mixed results over time. The current version has switched the name incubators for accelerators, innovation shops now take the place of R&D and/or product development, and corporate VC is still good old corporate VC. Generally speaking this playbook can be a good thing for companies in industries like banking and insurance where the bulk of R&D came from a small group of companies that delivered very little innovation over decades, or worse as we saw in the financial crisis, which delivered toxic innovation. Eventually the lack of innovation can cause macro economic problems and place an entire industry at risk.

A highly refined AI system like ours is considered by many today to be among most important and valuable of any type, hence the fear however unjustified in our case. Anyone expecting to receive our ideas through open innovation on these issues is irresponsible and dangerous to themselves and others, including your company. That is the same as bank employees handing out money for free or insurance claims adjusters knowingly paying fraudulent claims at scale. Don’t treat the issue of intellectual capital and property lightly, including trade secrets, or it will damage your organization badly.

The most common mistake I see in practice is relying solely on ‘the innovation playbook’. CEOs especially should always be open to opportunity and on the lookout for threats, particularly any that have the capacity to make or save the company. Most of the critical issues companies face will not come from or fit within the innovation playbook. Accelerators, internal innovation shops and corporate VC arms are good tools when used appropriately, but if you rely solely on them you will almost certainly fail. None of the most successful CEOs that come to mind rely only on fixed playbooks.

These are a few of the more common specific suggestions I’ve made to CEOs of leading companies in dealing with AI systems, in part based on working with several of the most successful tech companies at similar stage, and in part in engaging with hundreds of other organizations from our perspective. As you can see I’ve learned to be a bit more blunt.

  1. Don’t attempt to force a system like Kyield into your innovation playbook. Attempting to do so will only increase risk for your company and do nothing at all for mine but waste time and money. Google succeeded in doing so with DeepMind, but it came at a high price and they needed to be flexible. Very few will be able to engage similarly, which is one reason why the Kyield OS is still available to customer organizations.

  2. With very few exceptions, primarily industry-specific R&D, we are far more experienced in AI systems than your team or consultants. With regard to the specific issues, functionality, and use cases within Kyield that we offer, no one has more experience and intel I am aware of. We simply haven’t shared it. Many are expert in specific algorithmics, but not distributed AI systems, which is what is needed.

  3. A few companies have now wasted billions of USD attempting to replicate the wheel that we will provide at a small fraction of that cost. A small number of CEOs have lost their jobs due to events that cost tens of billions I have good reason to believe our HumCat could have prevented. It therefore makes no sense at all not to adopt.

  4. The process must be treated with the respect and priority it deserves. Take it seriously. Lead it personally. Any such effort requires a team but can’t be entirely delegated.

  5. Our HumCat program requires training and certification in senior officers for good reasons. If it wasn’t necessary it wouldn’t be required.

  6. Don’t fear us, but don’t attempt to steal our work. Some of the best in the world have tried and failed. It’s not a good idea to try with us or any of our peers.

  7. Resist the temptation to customize universal issues that have already been refined. We call this the open checkbook to AI system hell. It has ended several CEO careers already and it’s early.

  8. Since these are the most important issues facing any organization, it’s really wise to let us help. Despite the broad characterization, not all of us are trying to kill your organization or put your people out of work. Quite the contrary in our case or we would have gone down a different path long ago.

  9. We are among the best allies to have in this war.

  10. It is war.

Mark Montgomery is the founder and CEO of Kyield, originator of the theorem ‘yield management of knowledge’, and inventor of the patented AI system that serves as the foundation for Kyield: ‘Modular System for Optimizing Knowledge Yield in the Digital Workplace’. He can be reached at markm@kyield.com.

Independence Day Lessons on Adaptability and Survival from the Ancestral Puebloans


Aroma Pueblo, by Betsy Genta-Montgomery Copyright 2016

Aroma Pueblo by Betsy Genta-Montgomery Copyright 2016

July 4th, 2016

The photo above represents a learning opportunity especially relating to survival and adaptation. Recently completed by my wife Betsy[i], the artwork was inspired by our visit to the Acoma Pueblo a few months ago, which is one of the oldest continuously inhabited communities in North America. Ancestors of current residents have lived on top of a 360-foot tall rock tower since 1150 A.D.

Their previous home was located on an even more formidable tower across the valley similar to the rock mesa in the center of Betsy’s art piece. Legend has it that a bolt of lightening shattered the steep rock steps leading to their old village so the Acoma people moved to the current location.

Other than the occasional battles with other Native American tribes, the Acoma people lived for generations at a time in relative peace until interrupted by major events that would change the course of history. The first major event occurred in the form of a 50-year drought that forced the Ancestral Pueblo peoples from the Chaco Canyon to other locations throughout the Southwestern U.S.

A second history-changing event for the Pueblos began with the arrival of the Spanish around 1540. The relationship between these two very different cultures was peaceful for several decades until a series of mishaps led to the horrific Battle of Acoma Pueblo. After two days of traditional warfare, modern technology in the form of cannon proved decisive for the Spanish in winning the battle. Tragically, the Spanish officer in charge ordered savage retribution followed by many years of slavery, ultimately leading to the bloody Pueblo Revolt eight decades later when tribes joined together and drove the Spanish out of the region.

Taken together, the Acoma Massacre and Pueblo Revolt represent an extreme case of leadership failure that decision makers from all walks of life can learn from. A single horrific decision by one military leader on a single day nearly two centuries before the American Revolution still brings pain and influences decisions throughout the region over four centuries later, and no doubt influenced many a negotiation.

The centuries that followed offered more turmoil for the region under the control of Spain, Mexico, and then finally the United States in 1848, but today the Acoma people are applying modern business methods in making the best of a challenging situation, seizing opportunities, and improving their future while preserving their cultural roots and traditions. The Acoma Pueblo own and operate cultural facilities at ‘old Acoma’ as well as the Sky City Casino Hotel and travel center, which is a significant employer and economic engine on I-40 between Albuquerque and Grants, New Mexico.

In addition to visiting with the friendly people at the old pueblo, who graciously welcomed a diverse mix of international tourists during our Easter weekend tour, we also enjoyed visiting the San Esteban del Rey Mission. A Catholic mission founded in 1629 that required 12 years to complete, the church is 150 feet long with vigas spanning the entire 40-foot width. The timber used for the vigas were harvested in the San Mateo Mountains 30 miles to the north and were transported by the Acoma people by foot. The adobe walls of the church are seven foot thick at the base on one side and five on the other. Adjacent to the church is their historic cemetery made of soil carried manually up steep steps carved out of the sandstone cliffs.

My takeaway

The Acoma people and their story represent a fine lesson for business and community leaders in adapting to radical changes beyond their control, despite extreme culture clashes and harsh environments. Lessons learned from the Acoma Pueblo can no doubt be applied to many around the world (see UNM business case summary).

Among the most important responsibilities each of us face during our brief life is taking charge of our own learning. Only then can we begin to make decisions as independent thinkers free from indoctrination, conflicting interests or agendas of others, which is prerequisite to becoming mature adults and valuable citizens prepared to contribute, particularly in a democracy in the vital role of informed citizens and consumers. This responsibility to others and ourselves never ends in our conscious lives, so we should grasp opportunities to learn and grow at every reasonable opportunity.

Leaders have a greater responsibility to practice continuous learning in order to maintain a high state of awareness in relevant matters; particularly in the type of highly complex, tumultuous and hypercompetitive environments we face today. Those few I consider great leaders then apply wisdom gained from experiential learning to rise above short-termism to contribute more to our world than they extract.

Although much easier to claim sustainability than to achieve, important lessons on stewardship can be learned from other cultures and eras. Our Founding Fathers of the United States for example studied many cultures and governance models before collectively deciding on a specific type of democracy in our constitutional republic.

Visiting the Acoma Pueblo

The old Acoma Pueblo is located about 60 miles west of Albuquerque a few miles south of I-40 on a good paved road. We spent the night at one of several motels in Grants, NM on our visit, which is a pleasant 40-minute drive by car. Visitors must park at the Sky City Cultural Center located at the base of the rock tower, which houses the Haak’u museum, Y’aak’a Café, gift shop and conference rooms, providing an experience similar to a national park. Walking tours are regularly scheduled with a short mini bus ride from the cultural center up to the village, which consists of over 250 family-owned dwellings still without water or electricity, some portion of which are still full-time residents with the remainder used by families during cultural and religious ceremonies.

About the author:

Mark Montgomery is the founder and CEO of Kyield, which has been a pioneer at the confluence of human and machine intelligence for two decades.

[i] Though quite similar to ‘Old’ Acoma Pueblo, it is not a replica. Betsy has a unique style of mortar sculpture over wood with different thicknesses for depth perception and shapes, natural woods, and oil paint.

Revolution in IT-Enabled Competitiveness


Four Stages of Enterprise Network Competence

Most current industry leaders owe their existence beyond basic competencies and resources to a strong competitive advantage from early adoption of systems engineering and statistical methods for industrial production that powered much of the post WW2 economy. These manual systems and methods accelerated global trade, extraction, logistics, manufacturing and scaling efficiencies, becoming computerized over the last half-century.

The computer systems were initially highly complex and very expensive, though resulted in historic business success such as American Airlines’ SABRE in 1959 [1] and Walmart’s logistics system staring in 1975 [2], which helped Walmart reach a billion USD in sales in a shorter period than any other company in 1980.

As those functions previously available to only a few became productized and widely adopted globally, the competitive advantage began to decline. The adoption argument then changed from a competitive advantage to an essential high cost of entry.[3]   When functionality in databases, logistics and desktops became ubiquitous globally the competitive advantage was substantially lost, yet costs continued to rise in software while falling dramatically in hardware, causing problems for customers as well as national and macro global economics. In order to achieve a competitive advantage in IT, it became necessary for companies to invest heavily in commoditized computing as a high cost of initial entry, and then invest significantly more in customization on top of the digital replicas most competitors enjoyed.

The network era began in the 1990s with the commercialization of the Internet and Web, which are based on universal standards, introduced a very different dynamic to the IT industry that has now impacted most sectors and the global economy. Initially under-engineered and overhyped for short-term gains during the inflation of the dotcom bubble, long-term impacts were underestimated as evidenced by ongoing disruption today causing displacement in many industries. We are now entering a new phase Michael Porter refers to as ‘the third wave of IT-driven competition’, which he claims “has the potential to be the biggest yet, triggering even more innovation, productivity gains, and economic growth than the previous two.” [4]

While I see the potential of smart devices similar to Porter, the potential for AI-enhanced human work for increased productivity, accelerated discovery, automation, prevention and economic growth is enormous and, similar to the 1990s, while machine intelligence is overhyped in the short-term, the longer term impact could indeed be “the biggest yet” of the three waves. This phase of IT-enabled competitiveness is the logical extension of the network economy benefiting from thousands of interoperable components long under development from vast numbers of sources to execute the ‘plug and play’ architecture many of us envisioned in the 1990s. This still emerging Internet of Entities when combined with advanced algorithmics brings massive opportunity and risk for all organizations in all sectors, requiring operational systems and governance specifically designed for this rapidly changing environment.

This is a clip from an E-book nearing completion titled: The Kyield OS: A Unified AI System; Rapid Ascension to a Higher Level of Performance. Existing or prospective customers are invited to send me an email for a copy upon completion within the next month – markm at kyield dot com.

[1] https://www.aa.com/i18n/amrcorp/corporateInformation/facts/history.jsp

[2] http://www.scdigest.com/ASSETS/FIRSTTHOUGHTS/12-07-26.php?cid=6047

[3] Lunch discussion on topic with Les Vadasz in 2009 in Silicon Valley.

[4] https://hbr.org/2014/11/how-smart-connected-products-are-transforming-competition

New paper: Optimizing Knowledge Yield in the Digital Workplace


I am pleased to share a new paper that may be of interest:

Optimizing Knowledge Yield in the Digital Workplace
A new system design for thriving in the data-intensive universe

From the abstract:

The purpose of this paper is threefold. First, it briefly describes how the digital
workplace evolved in an incremental manner. Second, it discusses related structural
technical and economic challenges for individuals and organizations in the digital
workplace. Lastly, it summarizes how Kyield’s novel approach can serve to provide
exponential performance improvement.

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

Semantic enterprise elevator pitch (2 min video)


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: markm@kyield.com

Happy holidays to you and your family– MM

Alternatives to the CKO, continued….


This post is a continuing discussion (Chief Knowledge Officer, or CKO) in response to Franz Dill’s post on his blogThe Eponymous Pickle.

There is so much history surrounding this issue (CKO) that I would write a book series about it if I had time. After years of running a management consulting firm, which we then converted to a knowledge systems lab and incubator, I found myself working increasingly as a citizen volunteer attempting to convince the U.S. Government to adopt advanced knowledge systems. The conversation began in the mid-1990s and then reached decision levels when so many of the world’s leading thinkers and analysts joined our online learning network from ’97 to 2000. Among dozens of other topics, we offered a high quality global news filter on KM, complete with intel briefs, and companion discussion list. With each major crisis since that time we’ve been able to confirm that with a state of the art semantic system in place those crises could have been avoided, and most probably would have been. The result is that if the U.S. had invested tens of millions a decade ago, we may have saved trillions of dollars by now, and thousands of lives.

KM started as a sincere early science that combined the research in learning organizations with information technology, which became far more complex for everyone with the commercialization of the web. Unfortunately, KM became a trendy buzz phrase and consulting practice before the majority offering services could even define it. Global self- accredited organizations sprouted up and many universities began offering PhD programs in KM before it had matured into a professional practice. In fact, of the many doctoral theses I reviewed on related topics in the1990s, a work in progress by Michael Sutton then at McGill University was among the most interesting, for it looked at the university programs themselves, which required deep consideration of the science and practice. I recall a pleasant meeting with Dr. Sutton and his wife when they visited Sedona, AZ during this time. Dr. Sutton is now assistant professor at Westminster in SLC — his completed thesis is available here (5+ MB pdf – a must for serious students and practitioners) .

Early on I found that the members of the Special Librarian’s Association (SLA) were among the most skilled at the functions organizations actually needed as the web grew exponentially; particularly those specializing as digital librarians. It may not be surprising then that Dr. France Bouthillier was Michael Sutton’s Dissertation Advisor. Dr. Bouthillier is a professor in Library Science and Information Studies at McGill University, which is one of the stronger programs worldwide. Academic KM programs have improved substantially in the past few years, although significant overlap still exists in KM, Organizational Management, Library Science, and CS, among others. It became obvious to me in our small pioneering lab that not only did we need better educational programs, skills, and tools, but more importantly we needed much improved system design.

When I joined the U.S. Gov CIO WG on KM, I quickly discovered an enormous difference in competency and culture within the agencies, some of which were predominantely focused on turf protection, careerism, and agency power rather than their true mission; as was clearly evidenced in the Katrina experience. I also discovered that some of the CIOs were focused on hardware, with very little if any understanding of the many other areas affecting organizational management, learning, productivity, and innovation; so it was foolhardy in many cases for the CKO to report to a CIO, which was the case for the entire U.S. Gov effort.

I then learned that any multi-agency effort — where the real need existed, must be placed on the WH agenda for any actual movement. After Katrina revealed blatant flaws in the system, I wrote a business case and submitted to agency heads, members of Congress, and many other leaders. We finally succeeded in achieving a mention for a generic KM system in the Katrina report, making the WH agenda for the first time, but nothing happened. Meanwhile, most other leading countries have adopted some variation of a national knowledge system, with the EU now leading the world in related investment. Australia recruited me a decade ago to discuss designing and managing their national system; an impressive $200+ million effort that was more advanced in many ways than the U.S. now — particularly in human systems, cross agency, and community-wide efforts. Australia has a smaller population, but is similarly dispersed and happened to sail through this global recession better than most — as did Canada — even given the more commodity based economies this connection is probably not a coincidence, based on my understanding.

So we continued to advance our own applied research, which includes a module that performs the functions of a CKO in the digital work environment we deemed necessary in what has been frankly a very chaotic working environment (a virtual CKO of sorts, although it does require a human to operate, set policy and security issues, and approve business unit modules.). Rob Neilson is one of our advisors — he was grandfathered in and approved by the DoD because he joined when he was consulting — now KM advisor to the Army. Rob was a pioneer in the CKO role where he held the position at NDU — although a decade old now and not nearly as deep as we have gone with functionality in the design since — his paper on the role of the CKO is still popular.

To say that it was challenging to overcome the design challenges in knowledge systems is a vast understatement; technical standards, meritocracy, alignment of interests, behavior, propogation throughout the organization, security issues, IP, rating systems, metrics, and more; each of which had serious challenges, and all interconnected both in terms of technical and organizational architecture. Did I mention culture?

We are focused on the corporate market now, where interest has been strong, particularly since the financial crisis provided ample motivation for smarter systems, but I am hoping that the Gov and Edu markets will finally embrace the state of the art and focus on their true mission rather than constructing barriers to improvement. There has been an effort to create a CKO for the U.S. Government, similar to the new CIO and CTO roles. I’ve been told by senior U.S. staffers that the CIO doesn’t have budget authority, which is the point where most of the turf problems are created — decisions on standards, silos are created, etc. I am not certain how effective a person with a title can be if they have no budget authority, if architecture is very poorly designed, and the tools are primitive relative to need. My position has been that far more can be accomplished by enterprise design.

A well designed architecture not only encourages departments to ‘talk’ to each other, but provides the opportunity and functionality within system parameters (regulations), improves on economic efficiencies/sustainability, improves innovation, and enhances security substantially. When properly designed such a system can actually manage the learning yield curve of an organization with ‘valves’ for quality and quantity, and provide rich metrics to visualize the process and results in the entire organization. That’s what is possible today. It seems to me that the recent evidence is abundantly clear justifying such a system, as we have been saying now to all who would listen for over a dozen years.
A very important topic that deserves a brighter light with a deeper explanation and historical background.

Mark Montgomery
Founder & CEO – Kyield
Web: http://www.kyield.com
Blog: https://kyield.wordpress.com
email: markm@kyield.com
Twitter: @kyield