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agile or dead

30,000’ view

30,000’ view

agility as key competence

30,000’ view

agility crucial to better institutions

30,000’ view

why?

30,000’ view

accelerating change institutional incompetence inspirations for gov2.0

the “so what”

agility is our abilities to detect, understand and capitalize on change

better and more agile institutions detect, understand and capitalize on change

quick choice

or

(and it’s getting harder to stay on top)

because even though we like graphs like this

because even though we like graphs like this
because even though we like graphs like this

overall institutional performance looks like

5%

3.5%

2%

0.5%

this

5% 3.5% 2% 0.5% this 66 68 70 72 74 76 78 80 82 84 86

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(which should scare you)

45 minutes, 234 more slides

(hope you’ve had your coffee)

some ground rules

fast and interactive

so interrupt at will

100% agreement == FAIL

/me

us navy lockheed martin arcade games video games second life annenberg school for communication, usc emi music entrepreneur, board members, advisor

big, complex orgs

us navy lockheed martin arcade games video games second life annenberg school for communication, usc emi music entrepreneur, board members, advisor

I mention these to establish my non-hippy cred before talking about communities and collaboration

small, agile

us navy lockheed martin arcade games video games second life annenberg school for communication, usc emi music entrepreneur, board members, advisor

some common elements

using technology invention, development, cultural transformation communication to create products people love

/you

i will assume you rely on

mobile email sms social networking twitter

do you regularly

post to a blog update your status play online games spend time in virtual worlds

know anyone who still prints out email?

know anyone who still prints out email?

tell them the asteroid is coming

tell them the asteroid is coming
tell them the asteroid is coming
tell them the asteroid is coming

this is gov20la

30 seconds on agility

developed in response to waterfall and other a priori development techniques

assumes you don’t and can’t know what you want at the start of a project

so develop as little you can as a time, then test the results with customers before moving forward, rinse and repeat

requires a certain fearlessness ability to experiment comfort with (little) failures

when I talk to government agencies about agility, I often get “we can’t do that”

want to focus on the tools of government

data regulation bully pulpit commercial excitement

going to talk about these tools in terms of the most innovative institution I know

wait, not that version

need to go back a few years

specifically, one Matthew Fontaine Maury

specifically, one Matthew Fontaine Maury (thanks to Prof. Dr. Herbert Bukert, University of St. Gallen, for

(thanks to Prof. Dr. Herbert Bukert, University of St. Gallen, for introduction to this history)

joined navy in 1825

joined navy in 1825

spent 14 years sailing Atlantic and Pacific Oceans

and relied on the standard FAQ of the time

Bowditch’s Practical Navigator

Bowditch’s Practical Navigator

he was frustrated, because it didn’t help him answer the questions he wanted to ask about navigation

so, he taught himself spherical geometry and applied it to his navigation and practical exams

with predictable results

it went over the heads of his examiners and his naval career stalled

then things got worse

stuck ashore, frustrated with the status quo, what was Lieutenant Maury to do?

he started blogging

he wrote a series of articles entitled “Scraps from the lucky bag”

where he argued for the establishment of a Naval Academy to promote professional training, better process, and need for improved navigational tools

his bosses didn’t like his blogging

they exiled him to the Navy Depot of Charts and Instruments

failing to recognize and leverage change is not unusual institutional behavior (we’ll come back to Maury in a moment)

gaps, especially during technological discontinuities, are very difficult to discover internally

are you watching and understanding change?

questions to think about

who will first know if the rules change:

customers, partners, or employees?

who is responsible for capturing this knowledge?

how will you collect it?

how will you act on it?

how are we handling change today?

looks ok, we see clear year-over-year labor productivity gains

2.5%

2%

1.5%

1%

year-over-year labor productivity gains 2.5% 2% 1.5% 1% 60’s 70’s 80’s 90’s 00’s the 2009 shift
year-over-year labor productivity gains 2.5% 2% 1.5% 1% 60’s 70’s 80’s 90’s 00’s the 2009 shift
year-over-year labor productivity gains 2.5% 2% 1.5% 1% 60’s 70’s 80’s 90’s 00’s the 2009 shift
year-over-year labor productivity gains 2.5% 2% 1.5% 1% 60’s 70’s 80’s 90’s 00’s the 2009 shift
year-over-year labor productivity gains 2.5% 2% 1.5% 1% 60’s 70’s 80’s 90’s 00’s the 2009 shift

60’s

70’s

80’s

90’s

00’s

the 2009 shift index, hagel et al

so we’re good to go, right?

not even close

5%

3.5%

2%

0.5%

return on assets

5% 3.5% 2% 0.5% return on assets 66 68 70 72 74 76 78 80 82

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the 2009 shift index, hagel et al

75% drop in RoA in 40 years

institutional incompetence

accelerating institutional incompetence

13%

-15%

return on assets

13% -15% return on assets 11% top quartile bottom quartile 1965 1981 2008 the 2009 shift

11%

top quartile bottom quartile
top quartile
bottom quartile

1965

1981

2008

the 2009 shift index, hagel et al

and lest winners feel confident, topple rate more than doubled

only 8 of largest 25 companies in 1999 remain in top 25 in 2009

on the plus side, it appears that we do collective recognize the problem

where “we” == “public markets”

6% annual growth in volatility

0.025

0.02

0.015

0.01

0.005

6% annual growth in volatility 0.025 0.02 0.015 0.01 0.005 72 74 76 78 80 82

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the 2009 shift index, hagel et al

so where has this value gone?

5%

3.5%

2%

0.5%

so where has this value gone? 5% 3.5% 2% 0.5% 66 68 70 72 74 76

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the 2009 shift index, hagel et al

consumers high value employees

radically decreasing technology costs mean barriers to entry are vanishing
radically decreasing technology costs mean barriers to entry are vanishing

radically decreasing technology costs mean barriers to entry are vanishing

combined with a proliferation of tools to help, it is easier than ever before to remix, aggregate, and compete

combined with a proliferation of tools to help, it is easier than ever before to remix,
combined with a proliferation of tools to help, it is easier than ever before to remix,
combined with a proliferation of tools to help, it is easier than ever before to remix,
combined with a proliferation of tools to help, it is easier than ever before to remix,
combined with a proliferation of tools to help, it is easier than ever before to remix,
combined with a proliferation of tools to help, it is easier than ever before to remix,
combined with a proliferation of tools to help, it is easier than ever before to remix,

and institutions aren’t keeping up

just like the Navy didn’t keep up with Maury

stuck ashore, crippled, career over

except the depot stored more than old navigational equipment

except the depot stored more than old navigational equipment

first tool of government: data

governments collect stuff

every naval ship was required to submit its log at the end of a voyage

thousands of ship’s logs

thousands of ship’s logs

weather, winds, and currents for every day that every US Naval vessel was at sea

so he started collating

so he started collating

and found patterns

and found patterns

and blogged his results

so, in 1844, we have a world-wide project creating value from the aggregation of previously valueless data

by watching, understanding, and measuring the actions his customers were already taking, Maury created new information that helped them

so, let’s compare the actions of the US Navy in 1844 with a modern example

let’s say, the record labels

revenues peaked in 2000, generally declined since

pre 2000

pre 2000
pre 2000
pre 2000
pre 2000

post 2000

post 2000
post 2000

direct result of Moore’s Law driving decreased costs and increased connectivity

this is a new world

but change is hard to manage

CD revenues skyrocketing, new technology teams experimenting at some major record labels (EMI Massive Attack album delivered via stream)

Internet bubble pulls tech talent and knowledge away (David Bowie’s “Hours” via download from EMI)

Revenues peak

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Napster Recession begins Revenues decline

iTunes

Guitar Hero

EMI goes DRM free

Rock Band/iPhone Games as music drivers iTunes rich digital packages

CD revenues skyrocketing, new technology teams experimenting at some major record labels (EMI Massive Attack album delivered via stream)

Internet bubble pulls tech talent and knowledge away (David Bowie’s “Hours” via download from EMI)

Revenues peak 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Napster
Revenues peak
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Napster
Recession begins
Revenues decline
iTunes

Guitar Hero

EMI goes DRM free

Rock Band/iPhone Games as music drivers iTunes rich digital packages

CD revenues skyrocketing, new technology teams experimenting at some major record labels (EMI Massive Attack album delivered via stream)

Internet bubble pulls tech talent and knowledge away (David Bowie’s “Hours” via download from EMI)

Revenues peak

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Napster Recession begins Revenues decline

iTunes

Guitar Hero

EMI goes DRM free

Rock Band/iPhone Games as music drivers iTunes rich digital packages

CD revenues skyrocketing, new technology teams experimenting at some major record labels (EMI Massive Attack album delivered via stream)

Internet bubble pulls tech talent and knowledge away (David Bowie’s “Hours” via download from EMI)

Revenues peak

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Napster Recession begins Revenues decline

iTunes

Guitar Hero

EMI goes DRM free

Rock Band/iPhone Games as music drivers iTunes rich digital packages

what could have been learned and built from this trend?

what could have been learned and built from this trend?
what could have been learned and built from this trend?

or telecommunications adoption rates

5,000

5,000 Mobile Fixed Line 4,000 3,000 2,000 1,000 0 1998 2000 2002 2004 2006 2008
Mobile Fixed Line
Mobile
Fixed Line

4,000

3,000

2,000

1,000

0

1998

2000

2002

2004

2006

2008

Internet Mobile Broadband 0 1999 2001 2003 2005 2007 100 Cellular 75 50 25
Internet Mobile Broadband
Internet
Mobile Broadband

0

1999

2001

2003

2005

2007

100

Cellular

75

50

25

in the future, will we communicate by

a) cell?

b) fixed-line broadband?

c) mobile broadband?

what are users telling us?

speaking of telecom, second tool: regulation

Maury realized how much better the results could be

he saw great value in publishing the data "in such a manner that each may have before him, at a glance, the experience of all."

conveniently, John Quincy Adams agreed

conveniently, John Quincy Adams agreed

Maury created standards for reporting meteorological data and Adams endowed the Naval Observatory

Maury created standards for reporting meteorological data and Adams endowed the Naval Observatory

so collation was easier and more accurate

his data got better

a lesson here:

when at all possible, write less code, gather more data

quick question: who’s cheaper, a silicon or a carbon employee?

especially if you can get data more easily

especially if you can get data more easily

(google talks about this a lot)

(google talks about this a lot)

let technology can help you

bully pulpit

Maury had all of the US Navy data, but wanted more

so he did what anyone would do in this situation

he created a conference and gave the keynote

he created a conference and gave the keynote

where he offered his data to any nation that submitted their ships’ logs in his standardized meteorological format

within 5 years, nearly the entire world was sharing their data with the Naval Observatory vai Maury’s meteorology API

(quite literal example of rising tide raising all boats)

and gives a clue about what future institutions need to look like

where are the real boundaries of your institutions?

maybe they aren’t where you think

product
product
design
design
sales
sales
customers
customers

maybe they aren’t where you think?

product
product
design
design
sales
sales
customers
customers
maybe they aren’t where you think? product design sales customers edge of company?

edge of company?

are communities reviewing, recommending, or reselling?

product
product
design
design
sales
sales
are communities reviewing, recommending, or reselling? product design sales edge of company? customers

edge of company?

customers
customers

are communities remixing?

product
product
design
design
are communities remixing? product design edge of company? sales customers

edge of company?

sales
sales
customers
customers

where could you put the line?

product
product
where could you put the line? product design sales edge of company? customers
design
design
sales
sales

edge of company?

customers
customers
where could you put the line? product design sales edge of company? customers

if customers are acting as partners, need to recognize it and act on it

partners require different levels of trust, support, engagement, information, etc if they to succeed

benefits if you do collaborate

what can you do with fully engaged partners?

what behavior matters?

5,000

Mobile Fixed Line
Mobile
Fixed Line

4,000

3,000

2,000

1,000

0

1998

2000

2002

2004

2006

2008

Internet Mobile Broadband 0 1999 2001 2003 2005 2007 100 Cellular 75 50 25
Internet Mobile Broadband
Internet
Mobile Broadband

0

1999

2001

2003

2005

2007

100

Cellular

75

50

25

what technologies are they bringing into the workplace?

second life? skype? facebook? twitter? gmail?

are you trying to run a closed desktop ecosystem?

(good luck)

and you’re missing a chance to learn!

(think universities and walkways)

but if you really want to live on the edge

second life

second life
second life

what is second life?

what is second life?

a user-generated virtual world

a user-generated virtual world

game-like technology, but not a game

game-like technology, but not a game

3d, persistent web blending virtual and real

3d, persistent web blending virtual and real

built by a multinational, gender-balanced audience

built by a multinational, gender-balanced audience
built by a multinational, gender-balanced audience
built by a multinational, gender-balanced audience

user generated content

almost unheard of in 2000, now well demonstrated in SL’s case, drove economic and customer growth produced enormously beneficial/long-lasting press

the keys to the kingdom

user generated

user generated

the unexpected

the unexpected

really unexpected

really unexpected

and more

and more
and more

sharing data created a network effect and high virality, granting him access to more and more data

it brought agility into his sytem ensuring a cycle of data collection, release, measurement, and improvement all with feedback from customers

of course, more data and Maury’s obsessive eye for detail let to unexpected consequences

studying harpoon designs he found that many whales in the Pacific had been previously harpooned in the Atlantic (and vice versa)

he saw this as strong evidence of a navigable Northwest Passage

he saw this as strong evidence of a navigable Northwest Passage

he was correct, of course

(he just had to wait for global warming to open the passage in 2006 and 2008)

in 1845, not so much

which didn’t go well for Sir John Franklin, HMS Erubus, or HMS Terror

which didn’t go well for Sir John Franklin, HMS Erubus , or HMS Terror
which didn’t go well for Sir John Franklin, HMS Erubus , or HMS Terror

but the search for the Northwest Passage was only one example of new data leading to commercial excitement

more than anyone, one group of captains needed to go faster

the ’49-ers racing around Cape Horn to connect New York City and San Francisco

at the start of the gold rush New York to San Francisco took 200 days

contests and challenges were published focusing on the 3 month barrier

within 5 years, the time had been cut in half

1854 the Flying Cloud (89 days, 8 hours) a record that stood for 136 years

1854 the Flying Cloud (89 days, 8 hours) a record that stood for 136 years

Flying Cloud’s navigator was unusual

first, her name was Eleanor Cressy

second, she read Maury’s blog

she understood his data and bet her life and Flying Cloud on it

Eleanor Cressy drove institutional change

more challenging than anything else I’ve talked about

there is no description of institutional transformation that captures how difficult it is

because it is hard to be fearless

particularly to lead fearlessly

leading across discontinuities hard

problems with latency

stars build reputation before change sometimes, surfing a larger trend, not actually rockstars or, the world is different, so expertise no longer applies

sometimes, surfing a larger trend, not actually rockstars or, the world is different, so expertise no

was this growth due to skill or an externalities?

was this growth due to skill or an externalities?

does prior performance help you now?

does prior performance help you now?

are you bold enough to admit you aren’t the best leader?

can you get others to follow your example?

experienced navigators in 1854 didn’t believe they needed Maury

Cressy wasn’t limited by old thinking

Flying Cloud cut the New York to San Francisco time in half

so how can we keep up in an accelerating world?

we live in a world driven by Moore’s Law

we live in a world driven by Moore’s Law

Moore’s Law drives exponential change

(which we’re bad at understanding)

we’re poorly wired for exponential change

we’re poorly wired for exponential change

we predict linearly

we predict linearly

starting from a few data points we can’t help but linearly extrapolate

starting from a few data points we can’t help but linearly extrapolate

starting from a few data points we can’t help but linearly extrapolate

starting from a few data points we can’t help but linearly extrapolate

starting from a few data points we can’t help but linearly extrapolate

starting from a few data points we can’t help but linearly extrapolate

reality is exponential

reality is exponential
reality is exponential

so what we thought was a linear trend was actually the early part of an exponential

so what we thought was a linear trend was actually the early part of an exponential

resulting in less short-term change

resulting in less short-term change
resulting in less short-term change

but greater long-term change

but greater long-term change
but greater long-term change

leading to a fairly predictable sequence

leading to a fairly predictable sequence

“bob says his friends are using facebook”

“bob says his friends are using facebook”

“nothing there, fire bob”

“nothing there, fire bob”

“that zuckerberg kid was on 60 minutes. bob may have been on to something”

“that zuckerberg kid was on 60 minutes. bob may have been on to something”

“oh #$@!!”

“oh #$@!!”

just ask automakers

just ask automakers

every 18 months the number of transistors on a chip doubles

10 years of Moore’s Law == ?

120 months 18 months/double = 6.667 doublings

2 6.667 = 101.59

2 orders of magnitude

100

times cheaper, faster, longer lasting

100x is hard to imagine

100x is hard to imagine
100x mips, same size

100x mips, same size

100x mips, same size
100x mips, same size

100x mips, same size

100x mips, same size
100x smaller, same perf

100x smaller, same perf

100x smaller, same perf
100x more storage is > 2 terrabytes 100x battery life is 2 years of standby,

100x more storage is > 2 terrabytes 100x battery life is 2 years of standby, 1 continuous month of talking

also leads to radical cost reductions

100x cheaper is $2

also leads to radical cost reductions 100x cheaper is $2
all those computers are connected, mobile, and always available, driving even greater change

all those computers are connected, mobile, and always available, driving even greater change

you manage change with constant experimentation

which is hard

failure is a necessary part of an experimental culture

you have to be ready to

fail fast fail cheap fail publicly

it’s all about staying out of the weeds, having the flexibility to try new things, and managing changing requirements

1

n

odds of building

= the right piece of software

(where “n” is estimated time in weeks)

few actions as expensive as a covered-up failure

nota bene:

“experimental culture” does not mean “just try stuff”

experiments need expectations, reporting, and measured outcomes to avoid burning a lot of money

and a willingness to challenge

“my 30 years of experience means ” “we think next quarter will be ” “my opinion is just as valid ”

challenge “my 30 years of experience means ” “we think next quarter will be ” “my

recognition that the plural of anecdote is not evidence

which Maury and Cressy did

so, if the us navy of the mid-19th century can leverage viral marketing, metadata, and government to change the world

used standards, openness, and sharing to create increasing value for everyone in the network

adapted to change and surmounted institutional incompetence to apply agility

“we can’t do that” is no longer an acceptable answer

what are you going to do?

any questions?