Communication of Risk
Posted on: January 26, 2012
- In: Innovation
- 5 Comments
Innovation and Project Management are interlinked with each other.
Project dynamics keep changing and innovation is an integral part of the same. Innovation is a changed way that is incorporated to have the objective accomplished in a better manner rather than following a same old way. This innovation is required to achieve better results.The incorporation of the changed way (innovation) requires the usage of Project management principles.
Innovation equals necessity. We can’t solve problems following the same way that we did in the initial stages. This applies to the problems that are faced throughout the project. Change management is part of project managment and change is innovation.
Project Management is empowered by the following phases:
a) Formulate
i) Create the passion for Project Management
ii) Have the transition strategy in place
b) Creativity
i) Innovation within organizational strategy and the governance
ii) Design the operational model
iii) Engage the persons
c) Implementation
i) Integrate the process
ii) Learn from failures
iii) Continuous innovation
Any innovation should be strongly correlated with the following:
a) Stake holders’ mission
b) Stake holders’ strategy
c) Stake holders’ capability
What is exactly required to bring in innovation in the Project Mangement ?
a) Innovation is every ones’ job
b) Strong and passionate to execute
c) Right priorities
d) Link with the regular operations
e) Dynamic teams
f) Diplomacy
g) Question the assumptions
h) Invent – Re-invent – Repeat
i) Simplicity
j) Connect (Communication)
k) Enable learning from failure
l) Shield innovation teams from day-to-day activities
m) Direction need to come from the top
n) Breat all pre-conceptions
o) Encourage questioning
p) Communication with purpose
q) Shape the future ; Just dont read.
What is compliance and how does it work ?
a) PMBOK standards –> Innovation methodology
b) Policies become the guidelines
c) Triple constraints become the results
d) Outcomes become the sustainability
e) Senior leaderships’ interests become the ultimates users’ needs
Innovation of project management is an interpersonal process. How does it work ?
a) Stakeholders’ cannot be chosen. This is like kids chosing their parents.
b) Stakeholders’ engagement has to happen on a regular basis
c) Each and everything in project managment can be innovated:
i) Standards
ii) Research
iii) Education
iv) Regulations
v) Metrix
d) Any communication will be centered around innovation. Role of talented worforce is needed.
e) Energy needed to re-invent
Continuing from my Innovation Roundabout post, I have heard from experts that systematic innovation methods including TRIZ and its variants can be viewed as a bunch of lateral thinking techniques. While on the surface there may be similarities there are several differences. Let me try to list a few here
| Factor | Lateral Thinking | Systematic Innovation |
| Where does it operate | Primarily operates on the mind | Operates on the mind but targeting a specific system |
| How does it work | Breaking several blocks/barriers to creativity including those hard assumptions and early judgments | Works removing what the practitioners call as psychological inertia (PI) and is usually split into definition and solution phases for breaking |
| Which part of the brain operates predominantly | RHS | LHS |
| Does it work for specific opportunities/problems | It does, but does not guide in specific directions. It only provides an overall thinking framework. | Specific tools are available for specific types of problems, and there is extensive knowledge base available that will guide you through to get to solutions. |
| Any Dependency | Way too much dependency on the creative insight | Way too much dependency on translating principles, parameters to specific contexts. Ultimately heuristics in a cryptic language much like Unix for the beginner. |
| How do I know if it will work | Not much help here | Provides averages, order from across domains as principles that has worked |
| Process | No Process | Systematic but not a sequential process |
Thoughts that I want to leave you with are
- From the school of thought of evolution of technology/systems do not consider creativity/lateral thinking as any reason at all, however consider/emphasize constraints, lack of resources, survival as the major reasons for variation and hence innovation.
- When you consider the biases it may actually encompass both lateral thinking barriers and systematic innovation psychological inertias. Even after breaking them all, still does not provide sufficient conditions for innovation.
- Naturally creative people (your call in finding this bunch) don’t need either. From my experience as facilitator, what I have seen is logical/LHS oriented people tend to pick up systematic innovation methods effectively.
What is your take?
- In: Idea | Strategy
- 19 Comments
We today live in a world of abundance; a world engaged in fierce pricing wars, markets crowded by products, on demand services, a world which is fast converging and the business houses merging with each other to fight a new war – the war against the ‘customers’ better known as ‘Co-opetition’. Co-opetition today has shown us a new road which lands us into Oligopoly. But the question is what next? What happens when every sector will be ruled by a handful of powerful corporations who decide to co-opete than compete, collective monopoly? Or will it even reach such a stage.
When I take a step back, I see a different picture. I see the world being ruled by groups of individuals than corporations. I see a world where the end customers to these big corporations coming together and deciding to service themselves and others needs. I see conjoint sets of ‘crowds’ working together as a team and servicing various commercial needs of a distributed market which is no more tied to a brand but to the best combinatorial product of price/speed to market/flexibility/value creation/service.
Let me develop this model by stating few disruptive innovations in the near past which forms the platform for this theory:
– Virtual/Distributed teams: A powerful concept which allows people from across the world to come together and work on a common objective
– On demand model: Pay for what you use – when you use it
– Crowdsourcing: Random collection of people to work together on a project
– Web 2.0: An open collaboration and communication network
– Powerful handheld devices: Extreme computing power available for cheap and miniaturized
– Cloud computing: Low cost high performance hardware/software platforms available as pay-as-you-go
– Open technology: Compatibility across multiple devices/platforms/software
– Commoditization: Everything available for lesser prices everyday to end users
and the list goes on…..
Now imagine in this world of global recession, shrinking economies, reducing jobs, increasing uncertainty; what will individuals start doing? Either they can sit up and aspire that some government somewhere is coming for their rescue (which is a seductive fairy tale) or depend on the majestic organizations to create jobs (who by the way has nothing to do with making peoples’ life better).
When we would have reached the pinnacle of chaos and uncertainty for the present day economic systems, we the humans will do what we do best; evolve! Individuals with niche skills and specialized experiences will come together to create ‘gangs’. These ‘gangs’ will have diversity, skills, specialization, experience, courage, desperation, resources and best of all ideas! Many such ‘gangs’ will start emerging across geographies and they will start integrating themselves just like a viral network, geographical and cultural boundaries will no more be limitations but welcome changes. People will now be fighting against the giant corporations, against their control and dominance; a fight for survival will then bring in a new era of a ‘knowledge war’.
These ‘gangs’ will start using all the disruptive technologies and concepts at hand and create new business models, which will be cheaper, faster, better and more value to consumers. They will start interacting directly with the market without any mediator in the middle further reducing the speed to market and cost of operations. They will be prompt in support and diverse by geographical & cultural values. But above all, they will leverage the most important thing that will rule the ‘next world’, the power of ‘collective innovation’!
gang of gangs
Innovation Roundabout
Posted on: October 18, 2010
- In: Management
- 2 Comments
Business revolves around costs (to provide a service, to build, of transaction, to sell etc), benefits (several dimensions of benefits to the user, to the investor, to the world etc exist too) and risks (again varied dimensions here as well). While innovation revolves around problems/opportunities and ideas.
Tying business and innovation together will mean you are aware of the right problem to attack in an industry with the large set of ideas that you know how to get.
To find the right problem is easy, ask the investor or the end user. Problems will always be contextual and have very specific constraints (physical, structural, financial, scientific). When you start around an innovation roundabout, every round should elevate you to the next level.
Imagine a real world roundabout with lot of traffic and you are one among them, but if and when you can fly, you are slightly elevated say to the level of say a dragon fly and you are able to avoid all the traffic down below. But when you stop at this level, even this new level will slowly get traffic and you cannot move around as freely as you started. You need to elevate yourself a little bit more.
Solving problems from an elevated level is alright, but the problem is how to elevate oneself. Here is where systematic innovation methods come into play, there are many and one that I have been practicing for more than 3 years now has its roots in Russia.
We will see what these methods actually accomplish in the upcoming posts.
- In: Idea
- 4 Comments
The world has been changing and so have we. From the times of the Stone Age to Reverse Mortgage has been a long journey, 26000 years? While we keep living in this ‘structured’ system of ours and keep toiling forward in time, it looks like the nature and the bigger system has a fresh start on its mind. When I start to think of this ‘fresh start’, I cannot but invariably think about how the economy and transaction systems might shape up in such times. To understand that, we will have to understand the fundamentals of this ‘fresh start’ a little bit more in detail.
From all that I have been reading, listening and viewing; one thought stands out amongst all diversity of concepts is that the human race will have to unlearn and re-learn the essence of life on this planet. That they will have to learn to live together in balance and harmony with the rest of the system. This is a missed concept today for varied reasons, one being the economic and commercial system designed by us which depends on tangible currency. The nature of tangible currency is that it gets measured by volume. What if there was a currency which could be measured by its quality i.e how good the currency was rather than how much? Would that help? Would that then change the way we think, trade, work, earn and spend? From these string of thoughts comes my idea of ‘Social Credits’, may be called by better relevant (read fancy) names like ‘Goodness Points’ etc.
The idea is to bring two things together, two such diverse things which have generally worked against each other in the current system; ‘commerce and humanity’. What if our commercial system was structured in such a way so as to support humanity, goodness and wellbeing of all? What if the way we earned and spent would compliment social welfare rather than a carnivorous approach like today?
I am trying to imagine about a commerce system where the two basic functions; that of ‘earning’ and ‘spending’ would create a win-win situation for both parties involved in a transaction, and cascades further down the transaction system making everyone profitable. One of the issues of the current system is only one party involved in a transaction of two will profit from the transaction. What if we could change that and get both parties profitable?
I will use an example to further illustrate the concept: Assuming I earn 1 point for helping an old woman cross the road, or 2 points for helping a lady carry her groceries etc. An ‘Earning Index’ could be set up which would then identify how much points could a person earn for what activity. Similarly, points earned for growing food or cooking and serving people could be more; functions related to basic needs will have more points associated to them. Now let’s say, the only way to ‘buy’ someone’s favor is by spending your ‘Social credits’; which could only be ‘earned’ by doing some good deeds or servicing a need of other people. This system gives us the flexibility offered by our current system but also maintains the sanity and goodness of our age old barter system. Now the magic in this system is in the fact that more the people’s ‘needs’ increases (which is a natural phenomenon of our race), they land up doing more good to the people around them.
At the outset, this theory might sound stupid to most; since being within the current system it would be difficult to imagine such a system. However, a closer look would reveal that this system supports the basic weaknesses of our race like greed, needs, desire, cofrruption etc. (which I do not guess will be easy to eradicate from our species); but converts the final output of the system by offering an alternate transactional system and exchange medium. Imagine DowJones trading based on ‘Goodness points’ rather than dollars? GDP being calculated based on how good the people of the country has been to each other, interesting isn’t it.
But I guess getting this new system into our current structure is near impossible, we might just have to wait for the ‘next age’ to dawn upon us and re-think our fundamentals!
- In: Innovation
- 2 Comments
Search engines have set the rules of the game for the last decade; changing the way people do business and live their lives. Google has undoubtedly been at the top of this game and commanded respect. Every corporation will agree that Google today is an integral part of their business model as much as in the lives of people across the world. Today if you take Google out of the equation, more than 70% of the organized sector will face slowdown and more than 20% might just shut down. Google score more than 80% in Corporate social responsibility as per people internationally, which indicates that Google is directly influencing peoples’ lives across the globe. It is in some ways commanding their brand consciousness, demands, interests, buying psychology and commodity prices.
Today, any successful organization has a strategy to tackle Google and bend it in their favor, without which their brand equity would fast erode. Companies have spent millions in building their ‘Google friendly’ image, IT infrastructure and eMarketing campaigns and have been rewarded with a piece of the customer’s wallet. Companies have been reaping these benefits for years now and their ‘Google friendly’ strategy has generated new revenue streams and untapped markets. Now imagine if all this changed overnight!
Yes, I am talking about a new world that is coming into existence. Yet another disruptive technology which is going to hit the corporations so hard, that it will change the very fabric of internet! The bright new world of Web 3.0!!!
While companies and professionals are going all gaga about the power and precision of Web 2.0 and webinars are talking about the new opportunities it has to offer; very quietly a group of people are working intensively to create a new world, a world which will change the very way the biggest and best search engine works today. Web 3.0 is a concept which is way beyond the realm of Web 2.0, in its true sense the next ‘Constructive Destruction’. While this will bring new opportunities and completely new paradigm shifts on how the internet operates, it will also make billions of dollars worth technology obsolete overnight.
Web 3.0 is a concept where you provide internet as a ‘customized service’ to a user. All this while, internet was a common platform and everybody has the same level of competitive advantage from using it. But now, things are going to change. It all revolves around the user, to be true. Web 3.0 is a technology which learns and adapts itself to the user’s psychology and presents itself in a way best suited for the user. So then, every user will see a unique view of the internet because every user is unique!
Web 3.0 is a framework where the search engine records the browsing trends, patterns and interests of the user over a period of time and uses that to ‘fine tune’ the search algorithm the next time user comes online. So now, I get to see search results, ads, contents, links which are very relevant to me as a person and customized to suite the search query I am using. It is a hybrid of the generic search algorithm and the ‘online DNA’ of the user. This will make targeted marketing very relevant and personal. To the extent that the search engine will now recognize a user’s buying power, buying behavior, interests, hobbies, habits, behavioral issues, social strata & recognition, field of work & professional success levels, academic acumen and various other parameters together to model a ‘digital DNA’ unique to the user and utilize it to personalize their search results.
A quick example: Assuming I am looking for a short vacation spanning 7 days only, with a budget of $5000. I want to go visit Venice but am not sure what attractions in Venice are of my interest.
Now Google will go on and find out what are the user’s interests by visiting various social media and networking websites. Eg: what are the categories under which the user submits his photographs in flickr, what topics does he discuss about most on blog sites/twitter, which industry does most of his friends belong from and how many friend does he have near Venice in Facebook, what type of restaurants does he normally search, what has been his buying behavior etc. This will provide Google with very intricate information about the user to the extent of food preference, hobbies, interest, financial status, frequency of vacation, friends etc and it will build a profile for the user. This profile then along with the search algorithm will be used to customize search preference for him.
How will this affect you? Well, for a start all that money you have spent into SEO will be lost. Not just that, all the content you have online may just not be relevant anymore to pull the kind of crowd you were pulling before. By design, some of your competitors (most probably the SMBs) will suddenly pop-up as more relevant options for your customer base and new brands will get created overnight! Knowledge management industry will be scrambling because all the knowledge it would have collected would have become obsolete overnight, buyer’s preference will change, pricing will get hit, new trends will immerge and entire industries will crash. All of a sudden bank’s attitude towards debt and interest rates will change, lending trend will change, newer borrowing options will come up and as a result more competition will be created. Customer bases will get fragmented; organized sectors will start investing into offline marketing campaigns as a protective measure and hence spending will increase, bringing down the margins even lower than today. All this will push the global businesses to change their business models, apply immediate defensive tactics, re-look at their strategies and change their outlook towards business fundamentally.
Good news is; you will not be the only one caught in this mess! But there will be smarter ones who would have seen this coming, understood the impact and would be ready to tackle it. So, are you ready for Web 3.0 yet???
Governance, Risk Management & Compliance 3 different entities which work as Silos: Misconception
Posted on: October 11, 2010
Most of today’s organizations feel that if they have a “Risk department”, an “Internal Audit Team” and a “strong Legal team “they are safe against everything but is it the case. I say No, having a resource team strong in their defined skill set is only one aspect of an equation and the remaining aspect is time, budget and coordination between the 3 (Risk Management Group, Internal audit team & Legal team) because Governance, Risk Management & Compliance do not act in silos, they are very much interdependent on each other.
Before we proceed let’s have a look what GRC stands for:
Governance: Continuous Monitoring of decisions based on which an organization is trying to achieve its vision (Long term) and Goals (Short term objectives).
Compliance: Identification & adherence to set of risks described as policies & guidelines by a regulatory body, whose sole purpose is to ensure the people’s, interest (Tangible & Intangible) in an organization for ex: SOx, HIPPA, NERC , FERC etc
Risk Management: An approach to manage a known risk (Governance (Decisions)/ Compliance (Risk associated with non compliance of compliance)) by limiting or reducing the impact/ likelihood of a Risk
Risk is the common factor which correlates Governance, Risk Management & Compliance
How & Why Risk is a common linking factor?
- Governance means smooth functioning, Organic growth (clean account books), employee, customer & shareholder’s satisfaction to be achieved through calculated Risks and through timely response to the market.
- Compliance is: Identification & adherence to set of risks described as policies & guidelines by a regulatory body, whose sole purpose is to ensure the Peoples, interest (Tangible & Intangible) in an organization. However, not likely the case in Enron, world Tell and for Tyco electronics. In plain simple terms “Governance” failed in all the 3 examples. But before we proceed lets understand what RISK stands for:
Risk is a deviation from a desired / calculated output when an input with respect to a process/ function is executed or “Effect of uncertainty on an objective “.
As per COSO framework risk can be broadly classified into 4 different categories for an organization:
- Strategic Risk: Risk with respect to Vision/ Goal of an organization
- Operational Risk: Risk associated with execution of the strategy outlined as the Vision /Goal for an organization
- Financial Risk: Risk associated with finances to achieve the vision/ Goal of the Organization
- Legal Risk: Risk pertaining to regulation, compliances, law suits for an organization
Basically all kind of risks can be broken and segregated into these 4 categories and an operational plan can be devised to mitigate the same but if COSO framework is so simple then why do we need 3 different teams to handle “GRC”.
Lets again take a deep dive on how” Risk Mitigation” can be done:
- Inherent Risk: Every process/ function has a certain amount of risk associated with it for example: Driving a car; the biggest risk is “Accidents on Road”. I can kill someone or can get killed by someone but either way I am not going to stop driving.
- Control/ Mitigants: When a control/ Mitigants is applied on a risk, deviation from the desired output can be contained to a certain extent. In our driving example Mitigants can be your Air bags, ABS systems and etc technologies to save a human life even after the impact
- Residual Risk: Risk which has been controlled significantly but the deviation in the output is still there for example: we may not lose a human life in an accident any more but we still can’t rule out any significant damage to human body.
Risk Handling Approaches:
- Risk Avoidance: How can we avoid a risk? by not getting involved in it or by withdrawing from it
- Risk Sharing: Remember the old-time, when we used to be in school, Homework not done afraid of teachers scolding and then a complaint to parents and remember the geeky but business oriented boy/girl who is willing to do your work but with a cost.
- Risk Acceptance: The bold and a smartest way to handle a risk is by acknowledging it and formulating a plan (Time, Money & Resources ) on how to handle it.
But the most important question is how to be aware of risk which has a capacity to affect my business, organization, and my day-to-day operations:
Honestly, there is no sure way where you can get an update about new possible risks but even if we are aware about an event that has a high probability and impact. What actions to be taken under these circumstances: 7 Strep Approach towards an event which can possibly affect your business
- Identification: Identify all the possible risks which are associated (direct and indirect) with an event
- Assessment: Assess the identified risk based on Impact and the likelihood of occurring
- Prioritizing Risks: Prioritize a risk based on its impact and likelihood. A visual illustration is shown below:
Impact likelihood Matrix
- Formulating plan: Device a plan and work accordingly
- Ownership: Train your employees and let them know what they are supposed to do in a crisis
- Training: Train them periodically, so that they don’t get complacent or panic in a situation
- Update: Any event which is by far not recorded or covered in any sort of risk mitigation program should be stored and recorded and steps 2 to 7 should be repeated for it
The fundamental of GRC is risk and risk is associated with almost every function/ process or business unit which runs an organization. So our focus should be more on risks and should channelize our resources towards it.
Innovation by ‘Accident’!
Posted on: October 11, 2010
Innovation has a mind of its own. More that I read about the history of innovation and inventions, more I get convinced that it actually is accidental! From the times of the Newtons and Einsteins, we have seen that scientists and even geniuses have come across a finding by accident. And the reputation survives present times. However, while Innovation is accidental and little could be done there, can we not make the happening of these accidents more regular? In my mind, I see that implementing a well-defined Innovation management process could bring regularity in the ‘happening’ of Innovation in an organization. Every organization is unique and so is its workforce. Since Innovation is a direct output of the ‘inertia of creative thinking’ by one’s employees, by binding them within a process can bring more discipline, objectivity and speed towards innovation. While the quality of innovation is directly proportional to the level of intellect, diversity and inherent passion of the employees towards creating something new; a well crafted innovation management process can easily increase the volume of innovation/ides being generated and regularize the activity. While there could be structured measures to improve the quality of innovation within an organization, it is more important to build the habit of innovating within the business’s structure and employees. If this could be done in the right balance and evolved over time to keep pace with the changing eco-system; the organization becomes a ‘Idea factory’ and lead the business of tomorrow!
The following Framework presents the concept of ‘Continuous Innovation’ in a nutshell
Idea Management Process
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