Thanks for the nominations everyone. So our vote this month is between:
Put the Customer at the Edge of your Organisation by Andy Nairn
From a Lower Base by Phil Adams
Why Your Innovation Contest Won't Work by Tim Kastelle
The Power of Dreams - Sushi Style by Neil Christie
Why We Like by Mike Phillips
What Screens Want from Frank Chimero
And you can vote below:
Frances Coppola has an excellent post talking about the legacy systems problem that besets the banking sector, pertinent in the context of the RBS systems outage that meant that for 3 hours on Monday no RBS customers could access cash or process card transactions of any kind.
She describes how technology investment has traditionally been focused on building front-end applications, meaning that the core systems that run the basic banking processes have not been upgraded. So inspite of the huge increase in processing power and storage capacity in modern IT systems, banks like RBS still have massive traditional mainframe computing systems at their heart.
The thing that prevents these old systems being replaced outright, she says, is their sheer size, complexity and criticality. Over time, the huge cost and risk involved in replacing them has meant that these organisations have adopted a system of 'wrapping' - effectively treating the core legacy system as a black box which remains largely untouched whilst a 'shell' of additional applications that create customer interfaces, point-of-sale functionality, settlement processing and even real-time updates are created around it. These newer applications rely heavily on the information contained within the core system but over time build complexity upon complexity as the 'shell' gets larger, issues of technological compatibility and connectivity have to be worked through, and customers rely on them more and more.
This means that there may well be divergence in the financial information presented to customers and that which appears to the bank (before reconciliation occurs), the potential for system errors and data corruption grows, and the risk of significant failure just increases over time:
"The more fragmented your systems architecture, and the more it relies upon stable interconnections between different technologies, the riskier it becomes...the "pasta rule" still applies: the more your systems architecture looks like spaghetti, the higher risk it will be."
The CEO of RBS admitted yesterday that the company had been failing to invest properly in its systems for decades. A big reason for this, says Coppolla, is that "infrastructure is boring and the cost of replacing it is a hit to short-term profits", so in effect "they've reduced their balance sheet risk, but not their operational risk." Banks that are focused instead on rapid expansion have the very real potential of building up a patchwork of incompatible technologies, and failing to invest in suitable time or resources for systems support or proper integration:
"It's rather like the risk of a major operation (which could result in death but might lead to full recovery) versus medical treatment to control symptoms - you get iller but you don't die, at least not for a while."
As long as it keeps on running, as long as it's easier to patch it up or build a workaround, the longer it goes on, the more complex the interdependencies become, and the risk and the associated costs build.
In the case of huge banking systems the risks can elevate to levels which have implications for the whole economy, but this kind of legacy systems issue is not confined to the banking sector. In my experience (more recently incuding that gained from working with Econsultancy on digital structures and resourcing, and agility and innovation - see below) legacy technologies are quantifiably the single most significant barrier to making companies fit for purpose for the modern digital world in which they find themselves.
And of-course we're talking here not just about the technology, but the policies, practices, skills and behaviours that surround it. The consequences of an overly short-term focus on profits may be far greater than is visible to those looking in from the outside.
It's time to nominate the good posts that you've read over the past month for Post Of The Month. You can leave nominations in the comments below or send them direct. As always I have a starting list but do add to it and I will put them up for a vote in the usual way. So my starting list is:
Put the Customer at the Edge of your Organisation by Andy Nairn
From a Lower Base by Phil Adams
Why Your Innovation Contest Won't Work by Tim Kastelle
The Power of Dreams - Sushi Style by Neil Christie
And you can nominate your favourites below.
Two months after the disastrous launch of Healthcare.gov, the site has improved to the point where it is running but there is still lots to do. Such a shame that this had to happen to such a key initiative, and it was in such stark contrast to the adept use of technology that we witnessed in the Obama campaign under Harper Reed.
One of the best takes on it came from Clay Shirky who, in typically erudite form, talked about the gulf between planning and reality. His point was about how cultures that make it difficult to pass bad news back up the line, that fail to adopt test and learn approaches with technology, that stick to rigid waterfall processes and thinking, build up huge risk:
"An effective test is an exercise in humility; it’s only useful in a culture where desirability is not confused with likelihood. For a test to change things, everyone has to understand that their opinion, and their boss’s opinion, matters less than what actually works and what doesn’t".
The result was a bloated site that reportedly had 500 million lines of code. It's worth checking out the remarkable visualisation that David McCandless put together comparing that to the codebases for things like the Space Shuttle, the Large Hadron Collider, entire operating systems, and even the total DNA basepairs in a Mouse genome (apparently over three times smaller).
Rather than avoiding failure, says Shirky, the lack of early and aggresive testing simply stored it up. Rather than taking smaller, acceptable risks in public early on, they accumulated risk. It was not simply a procurement problem, it was a management and a cultural problem:
"The vision of “technology” as something you can buy according to a plan, then have delivered as if it were coming off a truck, flatters and relieves managers who have no idea and no interest in how this stuff works, but it’s also a breeding ground for disaster."
There was an interesting counterpoint to this in the form of the guiding principles that have just been published by the Government Digital Service in the UK, for a technology transformation programme they are running to showcase a different way of delivering technology to the civil service. Apart from the laudable degree of transparency that is exhibited here, the principles speak of the fundamental need not for rigid, detailed, up-front planning processes, but of flexibility. Worth repeating them in full:
we will start with user needs: until we understand what users across the Cabinet Office want and need, we won’t start buying things
we will design with choice and flexibility in mind: there will be many and different needs across the department so we will offer technology solutions that fit individuals and teams
we will be transparent throughout: we will be open about decisions and actions so our users and stakeholders understand why we’re taking a certain approach
we will architect loosely coupled services: we are not building a “system”; we are delivering a set of devices and services that can be independently replaced. A key success measure for the programme is that we should never have to do it again
we will favour short contracts: technology changes rapidly and we believe the age of the long-term contract is over. We need to be able to swap services in and out as the need arises
we will bring the best of consumer technology to the enterprise: modern devices and cloud applications are built to be intuitive and flexible with minimal need for training. We believe business technology should be the same
we will make security as invisible as possible: we are working with CESG and GSS to ensure all services are secure to new Official level. However, appropriate levels of security shouldn’t get in the way of the user experience of the services
we will build a long-term capability: technology delivery doesn’t end with the programme. We will not be handing the services over to a single outsource vendor in 2015, but instead will be bringing digital skills back into the department
Amen to that.
Proof, if it were needed, about the degree of hype surrounding so-called 'big data' this year came in the form of the analysis done by John McDuling in Quartz of the transcripts from investor conference calls and presentations from more than 5,000 companies. 'Big Data' had been mentioned during 841 separate calls/presentations this year, up 43% from the 589 times that it featured last year. This was a much larger increase than other corporate buzzwords like 'the cloud'.
I liked the point that Christopher Mims made on Quartz a few months back that what a lot of companies call 'big data' really isn’t that big. The term, he says, is usually used by consultants and IT companies that want to sell big pieces of kit (and consultancy). The hallmark of big data are the kind of server clusters that can crunch huge quantities of data concurrently, and yet the kind of problems solved by engineers at even the most data-hungry firms can often be dealt with by the capacity of single server or even PC (Mims references this paper from Microsoft research appropriately called 'Nobody ever got fired for buying a cluster'). The danger of a disproportionate focus on the scale of data is innappropriate application of technology, unnecessary complexity, and avoidable confusion. Ironically, a potentially far more significant and pressing issue than technology is the current and looming talent shortage in data analysts.
One of my favourite non-fiction books is Dan Pink's Drive. It's a cogent, convincing and convention-challenging argument about the limitation of money in driving performance and satisfaction in the workplace, and how what really motivates us is autonomy (the ability to make decisions that can make a difference), mastery (how people can be rewarded for progress, and getting better and better at what they do), and purpose (working towards a vision or purpose that is important to us). Intuitively this makes a whole bunch of sense, but Pink supports his arguements with plenty of studies and research.
So given how critical staff performance and motivation is to organisational performance, it seems strange that in most companies, so few organisational constructs are focused around these principles. Survey after depressing survey reveals a disturbing picture about how few of us are genuinely happy in our jobs. The latest one I saw was from Gallup who had surveyed 230,000 workers from 142 countries and found that only 13% of workers feel engaged by their jobs (feel a deep connection to their company and what they are doing), 63% are 'not engaged' (unhappy but not drastically so, but putting little energy in), and 24% are 'actively disengaged' (fundamentally dislike their jobs, and even seek to undermine what others are doing). It's a bleak, disheartening picture.
So I have a controversial theory. What if we took those fundamental principles about what really makes people productive and happy in their work, and put them at the centre of everything? What if we organised not just incentives around them, but the way in which we map organisational strategy to output, the way that we structure our teams, the way in which people work every day.
Let me give you some examples. Take autonomy. One of the fundmental tenets of agile thinking is self-organising teams. I've written before about engineering or tech driven cultures (such as that at Facebook) where rather than having a strictly top-down, hierarchical organisation of activity, the engineers decide what they want to work on and the Project Managers have to lobby groups of engineers to get them excited about their idea. This ensures a combination of top-down organisational strategy with bottom-up self-organisation which is both empowering and (I'm guessing) highly motivating. It's interesting to consider what will happen when more of that kind of empowerment through autonomy migrates out of tech teams and into the wider organisation (something which is already happening in some enlightened organisations I've spoken to).
Such cultures are also good at helping everyone feel responsibility for the product or end result, and the impact that activity can have on end result, which brings me onto my second example - mastery. The organisation of activity around small, nimble, multi-disciplinary teams that are focused on completing specific projects is not only empowering, but supportive, motivating, productive, and agile. Combine this with a high level of data transparency (including commercial numbers) that enables staff to see the direct impact of their efforts, and their improvements over time, and you really have something.
The final piece in this triumverate is Purpose, of which much has already been written. The example I use most often is Pixar, whose rate of success at the box office is unparalleled, and whose creative culture relies on an interpretation of leadership that is firmly routed in vision and purpose. Ed Catmull, Pixar President, has said: "We say we are director led, which implies they make all the final decisions, [but] what it means to us is the director has to lead.. and the way we can tell when they are not leading is if people say 'we are not following'.”
In this TEDX talk Dan Ariely (Psychologist, Behavioural Economist, Author of Predictably Irrational and others) talks about how people understand the importance of meaning but underestimate the magnitude of importance. And I think that's what companies do too. He ends with a fascinating point comparing Adam Smith's thinking (characterised by an industrial revolution type of repeatability, efficiency, a singular focus to tasks) with that of Karl Marx (the alienation of labour, how people need to feel the meaning in their work, how they think about the connection to what they're doing, and the outcome). In the industrial revolution, says Ariely, Adam Smith was more correct than Karl Marx, but now that we have switched to the knowledge economy, efficiency is no longer more important than meaning. As we move toward a situation where people have to decide on their own how much they care about or feel connected to their work, and what attention they pay to it, purpose becomes fundamental to success.
Complex Media have created another richly designed, infinite-scroll, immersive multimedia feature (it's getting to the point where we need a defined name for these other than 'doing a snowfall'). I don't know too much about it but it's noteworthy because it looks like it has been created as a commercial solution for Converse (and probably Champs Sports since merchandising and e-commerce links to their site have been integrated throughout).
There have been examples of publishers creating these kind of treatments for advertisers before now, and when the New York Times made The Jockey a while back, they integrated bespoke ad formats into the flow of the feature.
Some have questioned whether these kinds of immersive designs actually lead to more people reading the feature or add to the experience. It's a valid question. I don't have access to the publisher stats on these but I'd say it's like most things - the best examples enhance the richness of the reader experience, poorly executed ones just get in the way. As always when a new curve begins, the versions that come to market down the line will look very little like the early (in hindsight clunky) ones. But the fact that we're seeing so many and so much experimentation in this area would suggest that they're working well enough, and that publishers see them as not just a reader experience opportunity but a commercial one.
That was borne out this week by the news that the New York Times are developing a full native advertising platform that comprises further integration of (transparently labelled) commercial content within editorial signposting, new storytelling tools to enable more commercial multimedia features of this type, real-time dashboards for advertisers, and a commercial content studio.
Native advertising formats that fit into the flow or stream of editorial content are naturally mobile friendly (look at Promoted Tweets or Posts) but they are almost a reformation of the old fashioned magazine advertorial. Similarly, whilst branded content is nothing new, these multimedia treatments are enabling publishers to apply their core skills in content creation in new and different ways. Despite the cynicism from some about the New York Times investing in creating multiple treatments of this kind, the interesting thing about what they are doing is that they are experimenting, developing learnings along the way and who knows, perhaps even creating good scalability and repeatability, and a whole new ad platform whilst they're at it. This kind of thing might not be the saviour of publishing or the future of advertising but I think it does create new opportunities and for that reason I'm sure we'll see a lot more of it.
I have some more news on Fraggl, the Twitter curation app I'm launching with the good folk at AdaptiveLab. We've now been live with an alpha test of the service for ten days and the feedback has been extremely positive from the alpha group, which I'm really pleased about. Right from the beginning our vision has focused around getting the right combination of human, social and algorithmic curation. It's been a real challenge to create an algorithm with the right mix of signals to successfully surface content which is representative of what the community has found interesting enough to share and talk about, and whilst it's not yet perfect it already seems to be creating lots of value for people.
We've already made some key developments since we started sending out our first emails. As well as fixing a couple of bugs, we are now able to include images sourced from the content which helps gives some more context to the links. We always name the source of the content, but have now made only the headline featured in the email clickable in order to keep it nice and clear how you can get to it.
We've also received some good feedback from our alpha testers which has informed our product backlog prioritisation. As a result of this we've already tweaked our 'I Must Share' button to pre-populate Tweets with the headline so that it's as easy as possible to share, and we'll be tweaking the algorithm a bit, and applying a filter to weed out any auto-tweeted content (Foursquare check-ins and the like) just in case. And we're now working on the website and developing a mobile friendly, responsive, single column version of the newsletter. Once this is all done we'll be going live with our public beta product, so exciting times. If you'd like to sign up for the beta, you can do so here.
At our last Google Firestarters we gave away a nice screenprint from our good friends at Scriberia to celebrate our tenth event. It's quite humbling for me to see it all laid out like that, and think about the range of subjects we've covered, the amazing speakers, and all the support we've had from the wider planning community who've attended, joined the debate, and contributed towards making it such a successful series of events. I've put together a page aggregating all the event write-ups here. Since March 2011 Firestarters has benefitted from considerable momentum, and most pleasing of all I think (and as Phil once very kindly said) there has been a real sense of community built up around the events.
That community aspect has always been very important both to our Google hosts and to me, and we've often sourced event themes from some of the attendees. Those event themes have always focused on the real challenges and opportunities facing our industry right now, and have facilitated and stimulated some great debate. We've also worked hard to vary the format of each session and have ranged from structuring an event around a single speaker to having eight rapid-fire provocations. So as we go into 2014, and start thinking about our third year of Firestarters events, we'd like to ask for your input into how we could deliver even more value from what we're doing.
We have a few ambitions. There are some people that I'd really love to have speak but somehow it hasn't yet worked out so hopefully we'll be able to sort that. And we've been toying with the idea of taking Firestarters on tour and looking at different locations, or even going international and doing/linking in with events in NYC, Australia, Asia perhaps. And maybe filming the events (although I do kind of like the idea that it all happens in that room at that one point in time).
But as always we'd really value your input and feedback. In particular I'd like to know what your experience of Firestarters is. Have the events proved valuable for you? Beyond that, we'd also like to know if there any subjects you think we should tackle that we haven't done yet, or if there is anything you think we should do more or less of. You can leave comments in the post or else contact me directly - any feedback is greatly appreciated.