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Archive for May, 2011

“The opposite of top-down is outside-in” is more of a slogan than a business case.

John Seddon and Vanguard have made the case as regards ‘failure demand’ and its associated costs, but there is an (erroneous) “we don’t have failure demand” counter to that, and the argument is practical rather than philosophical (yes, I know …).

Recently, two outstanding posts have made the business case with brevity and clarity.

Confused of Calcutta’s post Musing about sharing and social in business starts out bang on the nail, and then drives it home. Do read it, it is short and the logic is unarguable.
The opening is:
“To paraphrase Peter Drucker, the primary purpose of a business is to create customers, people who are able and willing to part with their money to buy goods and services from you.
To paraphrase Ronald Coase, the primary purpose of a firm is to reduce business transaction costs, principally the costs of information, search, contracting and enforcement.
Words like “sharing” and “social” are often treated as fluffy and ephemeral and Utopian and otherworldly, dismissed as being too pinko-lefty-tree-hugger to make business sense.
Which begs the question. What makes business sense?”

Esko Kilpi  has what looks like a technical post but is much broader. It starts out investigating the Coase logic further, and then gives a clear statement of the business impact of recent developments, beginning:
“Two aspects of work have changed dramatically. First, all financially successful offerings involve customization, or aggregation by the end-user. This means that companies must thrive in situations where very little information or communication can be made routine. Second, all successful firms are actively involved in emergent, responsive interaction with people “outside”: customers and network partners.
These firms understand that value is not created inside the organization but in the larger ecosystem they are one part of.”

The key text from a business point of view is ‘Corporate Agility’ by Charlie Grantham, Jim Ware and Cory Williamson.

They set out a systems approach to collaborative strategic management that brings together IT, People and real estate. (Wonderfully for an ergonomist, it includes an excellent section on the well-designed workplace – with references to Propst!).

There are numerous texts on the difficult task of aligning business and IT. Andrew McAfee is perhaps pre-eminent here e.g. this piece, and there is a good piece recently from Marc Strohlein.

Two points in conclusion. Gibson’s quote “The future is already here — it’s just not very evenly distributed” is true. I remember the IRG Network Solution saying much of this in 1984. The book is somewhere in the loft probably. And of course “It is not necessary to change. Survival is not mandatory.” – W. Edwards Deming.

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