By Brian Lucas
Dedicated to Joseph P. Wisdo (1951-2013) Colleague, Friend and Humanitarian
“Ideals are like stars; you will not succeed in touching them with your hands. But like the seafaring man on the desert of waters, you choose them as your guides, and following them you will reach your destiny.” – Carl Schurz
Since the early 1980s, many organizations suffered wild swings between a starboard of success and a port of failure; others sailed a steady if variable course one leg at a time. Like well-run ships, they steered successfully avoiding the shoals and sandbars of social, economic and turbulent business change, as wealth and production began to migrate to newly industrializing economies abroad. We must accept the fact that rapid change is a constant companion with us today. If your enterprise is not agile enough to respond to the change, it won’t survive. Persistent vision along with consistent leadership are the guides needed in an agile enterprise to keep it safely on course to success and knowledge is the key to being operationally effective.
First let’s talk about some of the aspects of change. There are many waves in the ocean of change that we are being subjected to such as social, environmental, economic and technology. For example, the rapid changes in computing technology alone were present since the 1980s and still are rampant today. This single factor alone has had a dramatic influence. In many ways, though this change has been astounding, it is not unpredictable as we see in Moore’s Law. Personal computing has exploded since it’s birth. The IBM 5150, the first model of the IBM PC, was released in 1981. Following on its footsteps, the Commodore 64, had sales of more than 17 million units in 1982–1994. The Macintosh 128K, the first commercially successful personal computer to use a graphical user interface, was introduced in 1984.
Now we have technology like laptops that use special turbo boosts and sport high-end clocks at 3.0GHz with Intel i7 Core processors. A single laptop like this has almost 70,000 times more computing power than the computers that were used aboard the Apollo mission spacecrafts which operated at only 0.043MHz and had a paltry 64Kbyte of memory. Pundits are now predicting that even this technology is archaic, and talk about 2013 as the end of the laptop.
While change is essential to growth, it doesn’t mean you are a piece of flotsam adrift on a wild economic sea. You need the guidance of a strategic vision and the consistency of leadership to implement it. How do you develop a realistic vision for your enterprise? You simply answer the question: “What will your company be known for and how will the public judge you?” Your vision should cover what your organization values. Values motivate everything in an organization by incubating culture. Cultures drive policies and priorities and provide a framework in which decisions are made. They also paint a picture of how the business wants the world in which it operates to be.
A vision’s focus is on the future, a destination that is never actually achieved, only steered towards. It is the inspiration that causes employees to want to do their best. The vision must cover beliefs that are shared amongst all the stakeholders of an organization. All good visions have two components that are shining stars to navigate by. The first is the concept of mutual success for employees and clients as well as the business. The second is an unflagging commitment to ethics and quality. We have seen some drastic failures and even implosions from people and companies who have lost their way because they did not have these values as their strategic guides.
From the meltdown of Enron to the lapses at Toyota many companies of all sizes have run aground. Even whole industries like the automotive and financial industries suffered almost complete failure. Some claim this was due to the mismanagement of executives. Yet these very same people are often lionized as business high flyers and economic geniuses. Yet others, piloted by fiscal prudence, sailed through these waters seeming unscathed by the sharp corals of change that gutted so many other large seemingly unsinkable businesses. The benefits of managerial agility must be balanced by strategic vision if you actually intend to arrive at a destination. How many organizations during the internet boom could have survived had they followed these principles? This is a very important concept and something too many businesses forget. There is some contention that only a small organization can be agile, yet this is an inherent aspect of politics rather than size.
Regardless of size, your organization should be a lean one with a low management contingent. Wages and salary costs for management, professional and other related items were 69.5% in 2012. That’s far too much for an agile organization. A good rule of thumb is, if you draw a line through your organization’s compensation costs separating management from the rest of the work force and your management costs are greater than 20% you are not empowering or engaging your employees. The bottom line is you are not agile. Your ship, regardless of size, must be lean in order to be a nimble and agile one.
There are also some significant advantages in being nimble to keeping your enterprise in the private sector or to taking it back there, if it has gone public. It interesting to note that at this time even some very large companies in the information technology market, like Dell, are looking to return to their privatization roots. You do need a certain critical mass to tackle large projects or technically sophisticated endeavors. You can achieve this, however, by means of a virtual corporation instead of a single brick and mortar company loaded with hierarchy and bureaucracy.
Now let’s talk about the importance of knowledge. While you must remain nimble you also need to know how to respond quickly and directly to a client’s changing needs. This is a knowledge centric era of today, where it is all about having the right person in the right place at the right time doing the right thing. That requires ubiquitous knowledge and organizational fluidity. For businesses that operate in the higher strata of knowledge working, it is even more important for your future to also build a level of both sophisticated and raw intellectual power, that is unbounded by political hypocrisy and organizational hierarchy.
What is the “knowledge centric era”? The answer once again goes back to the internet’s infancy. For the last 30 years the information services and technology business has strived to evolve its knowledge. Information Technology has advanced as much as or more so than any other industry in our history. This quest for knowledge was a splendid example of feedback. It serendipitously drove the quest for knowledge itself, namely via the internet. Ah the wondrous internet… let’s take a step back once again to the early 1980s when I first started working in business. Back in 1982, the Internet protocol suite (TCP/IP) was standardized on and the world-wide network of fully interconnected networks called the Internet emerged.
ARPANET, the world-wide web’s father, was expanded in 1981 when the National Science Foundation (NSF) developed the Computer Science Network (CSNET) was the first iteration of the internet. Then in 1986, NSFNET provided access to supercomputer sites from US based research and education facilities. Later on commercial Internet service providers (ISPs) surfaced throughout the late 1980s and early 1990s. Finally the Internet was commercialized in 1995, when the last restrictions on the use of the Internet to carry commercial traffic were removed.
Since the mid-1990s, the Internet has had a revolutionary impact on culture and commerce. We have seen the rise of near-instant communication spoken of by Alvin Toffler in Revolutionary Wealth via electronic mail, instant messaging, Voice over Internet Protocol (VoIP) “phone calls” and two-way interactive video calls. The World Wide Web’s seeming limitless discussion forums, blogs, social networking, and even online shopping sites with comments and recommendations has arguably had more impact on mankind that any other technology in history. It’s a fact that more data is being transmitted at higher speeds over fiber optic networks operating at either 1 or 10 Gbit/s. The Internet’s takeover over of the global communication landscape is almost complete: in 1993 it communicated 1% of the information flowing through two-way telecommunications networks in 2007 more than 97% of the telecommunicated information was communicated in this fashion.
All this free, ubiquitous access to information has made everyone smarter – the technology industry, businesses, vendors and partners and not the least by any stretch – customers. Customers of all types from individual retail consumers to knowledge working executives in hi-tech industries all have so much ready access to information, consumable resources and international vendors that even the simplest transaction screams with competition. Competition makes the economic seas run fast and requires you to be agile.
Competition is not based solely or even primarily on cost, but both true and perceived “value”. The true value is the amount that a buyer is willing to pay for an item. It changes from time to time and from place to place. However, the perceived value is based on a customer’s opinion of a product’s value to him or her. It may have little or nothing to do with the product’s market price, and depends on the product’s ability to satisfy his or her needs or requirements.
It is the perceived value that is most interesting. Customers will purchase a product at a greater cost if they perceive it to have superior value to them. As consumers, be they individuals or companies, become better informed, they shift more from true value thinking to perceived value thinking. This is due to the fact that they are being influenced by factors other than cost such as quality, durability, sustainability and even ethical responsibility.
Take for example, the early explosion of off shore services. Early projections had all work following the wave of cheap labor as it washed around the planet in a west to east direction. This did not provide the value many expected. Some businesses, after investing heavily in this course, reversed direction. Some companies not only survived the hurricane force winds of offshore outsourcing, but steadily grew in size and most importantly competency and strength in the face of this competition. Note the emphasis on competency which equates to knowledge.
Let’s define knowledge a bit more for clarity’s sake. Knowledge is different from data and information. Data represent observations or facts out of context, and therefore is not directly meaningful. Information is the result of placing data in some meaningful context usually with a distinct message or meaning. I am going to skip over the concepts of knowledge becoming understanding and understanding becoming wisdom here for brevity’s sake. Knowledge is that which we believe and value based on the accumulation of information through various means such as experience, communication or inference. Knowledge can be both as a thing to be stored and manipulated and as well as a process of applying expertise based on the knowledge. As a practical matter, organizations need to manage knowledge as both an object and a process.
Knowledge can be tacit or explicit. Tacit knowledge is tenuous. It is subconsciously understood and applied. It can be difficult to articulate. It is usually developed from direct experience and action, and shared through highly interactive conversation, story-telling and shared experience. Explicit knowledge, in contrast, is more precisely and easily articulated. Although it is more abstract, it can be more easily defined, transferred and shared. Explicit knowledge is playing an increasingly large role in organizations. It is considered by some to be the most important factor of production in the knowledge economy.
Knowledge also ranges from general to specific. General knowledge is broad, often publicly available, and independent of particular events. Specific knowledge, in contrast, is context-specific. General knowledge, like explicit knowledge, can be more easily and meaningfully documented and exchanged, especially among different knowledge or practice communities.
Finally there are several types of knowledge, each of which may be explicit. Knowledge about something is called declarative knowledge. Knowledge of how something occurs or is performed is called procedural knowledge. Knowledge why something occurs is called causal knowledge. Shared explicit causal knowledge, often in the form of organizational stories, enables organizations to coordinate strategy for achieving goals or outcomes. This is directly tied to vision. You will recall that this all started with vision. You not only need to know what the vision of the destination’s port is and have the persistent leadership to keep you heading in that direction, but you must have all the knowledge necessary to operate the ship and chart a course towards it. And remember when you are steering on these turbulent economic seas, fraught with shoals of recessions and hurricanes winds of change – to keep agile!
Joe Wisdo passed away, February 14th, 2013. He was one of the finest examples of an ideal family man that I have ever known. He was also a humanitarian in the finest sense dedicating much of his time to quietly and unselfishly helping those less fortunate than himself. He was always positive and encouraging. I never heard him say a bad word about anyone the entire time I knew him which was far too short. His absence will be so deeply and personally felt across a broad spectrum of family, relatives, friends, colleagues and even perfect strangers to whom Joe commonly performed one of his acts of uncommon kindness. How much better would the world be if more of us were like him. I ask all of you who read this to do one act of kindness to a perfect stranger in Joe’s name to honor his life. -Brian Lucas
Joe’s wife kindly shared with me the fact that this dedication and all the comments the gentle readers made promising to perform a good dead in Joe’s name has brought her family comfort and helped them deal with their loss. May all those who took the time to comment and make this pledge be blessed a thousandfold in return. – Brian Lucas (April 2013)
 That’s an agile principle small iterative steps in an every refined directions versus massively committed “Hail Mary” plays.
 Things that are actually achieved are covered by goals and objectives.
 See http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/auto_industry/index.html
 A consistent vision along with unshakable ethics keeps an organization on track. Believe in what you do, have fun, take care of your customers and then make some money. Often those business people who put the last item first end up not achieving financial success strategically. By not pursuing profit at the expense of your ethics you can enjoy financial success strategically.
 Yes, I have said I am not sanguine about lean. I was referring to methodology not organization structure.
 Like Keeping Agile
 Even faster speeds are available.
 Just look at LL Bean’s history.
 See http://blog.thehigheredcio.com/2011/06/21/why-outsourcing-fails-part-1-capability-and-maturity/
 This is one reason why I chose the parable concept in a Tale of Two Companies and it has proven to be very popular.
Impressive recounting of modern business history. I am always amazed at how a great writer, and I don’t use the word great lightly, such as yourself is able to create a summation of a complex subject so succinctly. To continue your analogy, whenever a person or a company looses their moral compass they end up on the shoals eventually. Whether it is sooner or later, a simple grounding or a fatal sinking, it happens. Because there was less choice in the years before the internet and the global market, this took longer. Now it can happen almost overnight, depending upon what business you are in. I am not a religious person, but I respect your request and promise that on this very day I will find the opportunity to perform a kind act for a stranger in Mr. Wisdo’s name and help keep his legacy alive.
I almost wish you had written this as a series of articles it was so educational.
What a thumbnail education on the last 50 years in IT combined with a morality lesson. I’ll sign up for a good deed as well.
I wish you were the captain of our ship Brian. Our CEO is out of the dark ages. You can’t disagree with him and the managers are all control freaks! The organization is so hierarchic its military dark ages. I am leaving as soon as I get a bit more experience.
Quite a capsule of education that you have doled out to us here Mr. Lucas. It makes me as the question have you ever been a teacher? My real question is can you expand upon how you see social media affecting business and what are the CSFs to a successful social media policy?
This was a very lyric and lucid statement on ethics and business and the need to use positive envisioning to direct an enterprise’s operations. I am most impressed with your knowledge and writing skill Mr. Lucas.
Can I direct a question to you on this subject to your email. It concerns our company and I do not want to air it publicly?
Brian you are the best blogger in the blogosphere!!!!! Please email me!!!
Brian somehow you manage to take complex and confusing subjects and make the simple! And always their seems to be a strong moral thread in whatever you do. Would you mind if I ask you a personal question about your religious beliefs?
I felt the need to comment on this post, because I enjoyed reading it so much. I am a retired high school principle and now I am fulfilling my dream of sailing. While surfing the internet for sailing post, I ran across this. Curiosity got the better of me and I read it – twice! You have a truly marvelous give of communication Mr. Lucas. What is more important is you have ideas worthy of communication. There are endless streams of young minds out there waiting for the knowledge you possess. With it they can build a much needed better future. Please continue to share your knowledge with others!
serious but fun to read
Great summation about business. Puts much of the complexities into a broader perspective that is easy to understand. It seems everything and everyone needs to be agile to be successful and happy today.