Addressing new challenges

In the 21st century, work happens in a social network system. That system is a composition of multiples systems interacting with each other.

“The 21st-century business will have to overcome the challenges of customers seeking high-quality, low-cost products, and be responsive to customers’ specific unique and rapidly changing needs”. Bunce and Gould 1996

“Agility requires the capability to survive and prosper in a competitive environment of continuous and unpredictable change by reacting quickly and effectively to changing markets, driven by customer-designed products and services”. Cho et al. 1996

In the 1990s, the Lean Institute presented the concept of Agile Manufacturing (AM). Purpose of AM was to be a “new post-mass production system for the creation and distribution of goods and services”. The problems that the future of manufacturing was to have the “ability to thrive in a competitive environment of continuous and unanticipated change and to respond quickly to rapidly changing markets driven by customer-based valuing of products and services”. That concept changed the way to address car manufacturing by creating a universal “organ-bank”. For Volkswagen Group as an example, you can find platforms and engines shared between brands like VW, Audi, Skoda, Seat and Porsche; and crossover models of each brand. The consequence of that Product Development strategy was the ability to deliver every three years of new models instead of ten years in the 1980s

The name “agile” has been taken from AM by Mike Beedle at the conception of the Manifesto for agile software development. The intention was to apply that concept for concise life cycle development in the software industry. These points will be addressed more deeply in the next chapters.

Prof. Dr Peter Niedschmidt in “Mitarbeiterführung Auf dem Prüfstand — Führungshandeln” members that Ancient greeks had three ways to reality:

      • Theory (theoretical sciences): hypothesis, falsification, verification or trial and error until you find a pragmatic solution, mathematic, giving some outcome like philosophy, musicology, mathematics, chronology.
      • Praxis (Practical sciences): negotiation, human negotiation, “make it happen”, influencing, delivering each time customs. The right word at the right time, acknowledgement giving Kairology, Politics and Ethics. Praxis has nothing to do with practice, which is “Poiesis”. Praxis is negotiating. Negotiating is not doing; it is influencing, inspiring, guiding, initiating. Here you are creating reality.
      • Poiesis (Poetic sciences): building, preparing, fixing, adaptation, configuration, everything relating to crafting workspace: the craft knowledge to transform into products, engineering, processes. That knowledge is dependent on evolution and becomes mostly obsolete after a couple of years once the technology has evolved. 

The evolution of work changed the way how people are thinking, how customers are behaving (read the paragraph on VUCA). The world has become “Complex”. The term “Complex” refers to how the world is acting and not how its nature is. It means that the amount of information available is too essential to have the right decision and often these pieces of information are also very contradictory.

How to deal with Complexity? How to control Complexity? Unfortunately, you cannot control Complexity at all. You are controlling means restricting the interactions in a system with the consequence of breaking it down. In Complexity, “Theory” and “Poiesis” ‘doesn’t work. You can influence a Complex system, guide it, inspired it. It is the domain of “Praxis”.

“Praxis” ‘isn’t learned in an MBA; it is based on experience and resilience.

Those new challenges are not in technology or “agile”, and they are in human interactions. The consequence of social interactions in a global network is the desire for more democracy. We all are witnessing that desire when reading or watching the news. What we call “revolution” is a leadership crisis when the government follows a different agenda than to protect and serve the people (demos).

‘I’m writing those lines in 2019 at a moment of change in enterprise organizations. The technology is ahead of the leadership mindset helps “big Data” or digital platform organizational models. The last decades, leaders only focused on getting growth through technology and tools while reducing the costs of craftsman. “Praxis” was considered as low-value soft skills. Now, digitalization comes out to something different than “technology”. Digital means interacting directly with the customer, listing to it, serve it. Digitization (Industry 3.0) coupling internet-of-things with ERP systems and Business Intelligence are automatising most of the transactional works delivered by experts. These challenges are falsely addressed through more Theory or more Tools showing to the network called “Enterprise” that leaders are just managing a situation. ‘That’s sad.

An example is “Digital transformation”. When I was working at SAP, the leaders have already been introduced to the Stern Steward model. That model is decomposing; the organization is three layers:

        • The platform: the infrastructure that allows the interaction between “sellers” and “providers”.
        • The Plexus: the governance instance, enabling that interaction through simple rules. 
        • The Swarm: some “one-shot” projects creating momentum on the platform or addressing a change.

That model is using the multi-side platform strategy. COMPARE, and CONTRAST, supply-side and demand-side are ensuring growth when they are mixed.

Dancing with the system is now essential. Kruse says that the 21st century has to resonate in the order. That resonance can be handled through “Praxis”. Snowden explains, on the other hand, that a complex system is resilient, and a leader should be a “constructive-irritant”.

As a summary, 21st-century work leads to improve the whole organization of an enterprise to enable Complex behaviour. The structure becomes a very light container allowing the emergence of multiples systems. The main challenges are:

        • Learning self-organization
        • Shared accountability: self-organization means that every agent of that system are accountable
        • Authority shift to the system and not a single person
        • Systems are not permanent and are evolving
        • Systems are emergent
        • You can have multiple layers of systems.
        • Key is the interaction of agents in that system

“Digital platforms” architecture are inspiring the organizational change to maximize the network effect of 21st-century enterprises. In his class at MIT, Prof. Geoffrey G. Parker (Platform Revolution) initiate the idea that Open Innovation principles are supporting that transformation.

Closed Innovation Principles

Open Innovation Principles

The smart people in our field work for us.

Not all smart people work for us; so no need to find and tap into outside knowledge.

To profit from R&D we must discover, develop and ship it.

External R&D can create value; internal value is need to do so.

If we discover it, we will get it to market first.

We don’t have to originate the research in order to profit from it.

If we are the first to commercialise an innovation, we will win.

Building a better business model is better than getting to market first.

If we create the most and best ideas in the industry, we will win.

If we make the best use of internal and external ideas, we will win.

We should control our Intellectual Property (IP) so that our competitors don’t profit from our ideas.

We should profit from others use of our IP, and should buy other’s IP when it fits to our business model.

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