In his article “How to win when you don’t know the rules” Atos Chief Engineer Darren Austin highlighted the pressures being introduced to enterprises by phenomena such as ‘Bring your Own’ (BYO) and how constant revolution in the consumer space accelerates the need to embrace yet control adoption and new business models. The importance of Cloud Computing, paralleled with the need for business to identify its core data and maintain ownership of information is something with which I am in agreement.
The discipline of identifying core enterprise data and ensuring its adequate governance should of course come under the auspices of Enterprise Architecture. The essence of the enterprise is certainly a great deal less rigid than it was 10-years ago. I see a number of core trends driving the change, namely: sophistication of consumer technologies and consumers themselves, the rise of Web2.0 and the psychology shift in the ‘democratisation of everything’. People rarely want to do what they are told and really only toe the line if a) there is a large penalty for non-compliance or b) the prescribed practices make sense, are efficient and make lives easier. Harnessing the creativity that freedom manifests is a really smart move.
Over the last 10 to 15 years we went from non-existent, poorly or tightly coupled application integration right through the evolutions of EAI, SOA and latterly RESTful Architecture. In a pre-Web2.0 environment however the ‘walls of the enterprise’ were significantly less porous and we were focussing on integration issues consistent with our placement within an ‘integrated enterprise maturity model’. It should be of little surprise that our focus was on vertical integration, i.e. integration of enterprise systems exclusively or predominantly concerned with internal systems. As I mention, this was an important building block and the BYO revolution and the sea change of social media and Web2.0 were yet to land. Innovation thinking was equally vertical and remains stubborn in its appetite for change.
Fast forward to the present day… Enterprises have scaled the maturity model and in many cases (although there are significant exceptions) have adequately integrated core business systems. Social media has been an amplifier for what I term “Externalisation of Enterprise Thinking.” If Joshua were planning a modern day assault on Jericho the ‘horns of social media’ would be his weapon of choice. Tunisia and to an extent Egypt demonstrated that entire national systems could be swept away by social pressure using its amplifier, social media.
Vertical thinkers are forlornly jamming appendages into the breached cavities of the enterprise defences. This approach however will not work, and the pressure of competition and the democratisation agenda will see them fall as assuredly as repressive despots. Reacting quickly to charging circumstances is life-extending and understanding the potential for horizontal integration and horizontal innovation is important. Horizontal thinking is a critical business skill. Understanding core data and information retention helps outline constraining parameters for patterns that will guide the enterprise in a sideways push towards new opportunities.
A number of years ago problems were pervasively approached using secretive, internalised and introspective means. Joy’s law in the high-tech industry states “No matter who you are, most of the smartest people work for someone else”. Tapping into the knowledge that sits outside of the enterprise and having a process to cross-fertilise internal innovation strategy is therefore important and increasingly prevalent. Having an enterprise architecture framework that recognises this challenge is a differentiator. It breaks down old closed (vertical) innovation thinking of ‘we know best’. A key limitation of vertical innovation is the lack of ability to leverage external knowledge and expertise in newly emerging fields within internal innovation processes. The drivers influencing the move from closed (vertical) to open (horizontal) systems include: the dynamics of a “flattening world” and globalisation, the emergence of new capabilities which quickly become critical in many industries, evolution of information technology, the march of commoditisation, massive shifts in demographics and unpredictability and impact of change. The enterprise is not only packing and moving into the cloud, it is becoming increasingly omnipresent in social networks and innovation ecosystems.
Open Innovation is about leveraging cooperation between people belonging to different organisations but who are ready to contribute to a common project. This cooperation is based upon motivations which differ significantly from traditional process based tasks. Open Innovation recognises that vertical integration as a sole strategy is weakening and that useful knowledge is widely dispersed and can be leveraged for competitive advantage (from virtually any source). Ideas can filter into innovation funnels via ‘bi-directional semi permeable membranes’. To create and manage these membranes we need enterprise patterns for a ‘wall-less enterprise’. This means radical new thinking in terms of horizontal integration with partners, suppliers, competitors, academia, third sector organisations and many others.
Von Hippel notes that it is not necessarily first to market that will succeed. I concur with the wisdom that it will be the enterprise first to market with the right business model that will dominate. Externalising your thinking and defining integration patterns horizontally across your innovation ecosystems is a critical next step.
If you’re not looking sideways, you’re not really looking forwards. Certainly refactor towards the cloud, but equally recognise that the core essence of the enterprise must be defined and retained and that on and off ramps between symbiotic ecosystems are exciting new patterns for the sophisticated horizontal thinker.
Article first published on the Atos CIO Blog, June 2011.
Further Reading on Innovation Thinking
- The Innovator’s Dilemma (Management of Innovation and Change)
- Innovator’s Solution, Revised and Expanded: Creating and Sustaining Successful Growth
- The Innovator’s DNA: Mastering the Five Skills of Disruptive Innovators
- The Innovator’s Prescription: A Disruptive Solution for Health Care
- The Innovator’s Method: Bringing the Lean Start-up into Your Organization