by jurvetson

Seeing Your Company as a System
[Via Ackoff Center Weblog]

Much-needed guidance on making companies more employee-centered, adaptive, and capable This is an article from Strategy+Business by Andrea Gabor: … No matter how disparate the causes of failure, there is always a common thread: somewhere, somehow, management has let its attention slip…

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Many of the failures we have seen over the last few years – the financial industry, the housing industry, the oil industry – have arisen because the organization involved are being run like a ‘machine’ – push lever X to get result Y. A better approach in these complex setting is to view the organization as a living organism – where small changes in initial conditions, coupled with network effects, can result in disparate, somewhat stochastic, outcomes.

We have done a great job over the last century solving the problems that could be attacked with a ‘machine-based’ management approach. What we have left are the really complex problems where a wide variety of levers can be manipulated with often unexpected outcomes.

Few problems involving complex processes can be solved by moving a single lever. One point of attack will not provide a solution. In fact it often create problems elsewhere in the process.

Today’s complex world requires a different approach, one that overcomes the faults of the ‘machine-driven’ management approaches. This article serves as a nice introduction to the works of Russell Ackoff and others that describe a systems-based approach to management.

Key to this approach is a view of employees that seems to be anathema to many:

All the works mentioned in this guide have been linked to higher performance. Yet their focus on the expertise of ordinary employees remains a hard sell in many companies, because it requires an enormous long-term commitment to training and to local control and knowledge sharing.

Moreover, employee-centered systems organizations need to develop trust — between supervisors and employees and among employees who have to work together to understand and improve the system. Making this work takes skillful management. Indeed, many quality improvement efforts in the U.S. failed because they absorbed rigid process guidelines but failed to build in flexibility.

Management approaches utilizing complex systems thinking require a relationship with employees, especially those most directly engaged with complex problems, that few companies seem to be able to foment. Yet those organizations that can accomplish this will be able to successfully deal with much more complex problems than those that can not, producing an advantage that will be hard for ‘machine-based’ thinking to overcome.

Part of what SpreadingScience tries to do is educate organizations about human social networks, helping them understand how to leverage new technologies to identify and empower the people they need in order to solve complex problems. We help them understand how to adapt their tools to make it easier to support a network-driven management style, and allowing the organization to solve a greater range of complex problems.

The companies that can accomplish this will have a selective advantage over those who can not.

  

I’ve been working on a series of seminars. I hope to announce more of them soon but I have the first one ready.

You’re not crazy. You are innovative. will examine the disruptive innovators in a community. These people are absolutely critical for the introduction of new ideas into an organizations – ideas that could make or break the success of the company.

Yet often these people are seen more for their disruptive activities rather than their innovation. The majority of the community – the people who simply get things done – views disruption negatively because it changes their workflow, making it hard to simply get things done. Doers distrust disruptors.

This seminar will explore how human social networks adapt to change and why the disruptors are so often not listened to. It will demonstrate that the social networks of disruptors and doers look very different and how Web 2.0 tools can be used to identify members in each group.

It will also provide insights into human social networks that can empower disruptors, making it easier for their innovative ideas to traverse a community and have the major impacts that they should.

The next class in Seattle will start soon. I can also provide seminars for groups. If you would like to attend, send us an email.

I’m going to shoot for recovering a pace of at least one blog post a week. I’ve been really busy working on some exciting ideas for SpreadingScience that I hope to announce shortly.

I do post much more frequently on my personal blog – A Man with a PhD.

by NeoGaboX

Apple’s Incredibly Efficient Growth
[Via Daring Fireball]

Steve Cheney analyzes Apple’s R&D expenditures and acquisition pace:

Organic growth is the term coined for growing internally, not via merger or acquisition. Apple has embraced this strategy over its existence, averaging only about 1 acquisition per year during the past 25 years. In contrast — during the past four years alone — Microsoft bought 45 companies, Google 40, and Cisco 30.

Microsoft spent seven times as much as Apple on R&D over the past four years.

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I saw this while working at Immunex – a well-designed and well-run company with a culture of innovation can beat larger, more well-funded companies every time.

Big Phama outspent us by a huge amount, and had many more people working on the same projects, yet we continued to get things done before them. Same with Apple.

It is possible to grow quite large and still maintain this culture. It helps tremendously if the guys at the top are not sales or marketing types, who generally seem to have no clue about rapid innovation and efficient management design.

Buying companies sucks away energy that could have been more efficiently used. It seems that MBAs think the mergers and acquisitions are the way to grow. Immunex did not think so and neither does Apple.

by davidgsteadman
Will anyone be able to compete with Apple’s revolutionary iPad?
[Via MacDailyNews]

“If you want to buy a consumer-friendly tablet computer today and you don’t want to purchase Apple’s iPad, you’re pretty much out of luck,” John D. Sutter reports for CNN.

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The inability of the computer industry to match what Apple has done over the last 30 years is simply amazing. Apple continues to see where the market is moving and then leaps ahead of its competitors to define the market, rather than simply follow it.

As this post mentions, Jobs and Apple have defined the personal computer interface three and maybe four times – Apple II, Mac, OS X and iPhone/iPad. At each stage, the interaction between the user and the computer became more intuitive and easier.

Apple also defined much of the way computers looked – Apple II, Mac, Powerbook, iMac, iPhone/iPad. Not only have they been largely responsible for how we interact with a computer, they have defined how computers look.

People have been talking about selling tablets for 6 or 7 years. Yet here Apple is again, not only defining the market but selling a ton of the devices, leaving everyone else to try and catch up to something that they really have no clue about.

Why has no one else been able to do that in 6 years? How was Apple able to essentially create a new market?

Apple has always had the unique ability to take something really complex – the creation of a computational device that people can use – and find a way to simplify it. It takes a lot of hard work to accomplish this, but also an ability to manipulate really complex ideas in ways that few organizations are capable of.

Watching other organizations try and define this is like watching blind men describe an elephant – it must be the light weight; it must be the touch screen; it must be the apps. None of them understand how to present a complex device that requires innovation at all stages, not just one.

It requires the creation of an organization that can synthesize large amounts of information and make wise decisions.

Just think what the world would be like if Apple had not existed? I would nominate Jobs for man of the last half century. Not merely because of his individual abilities – which are prodigious – but because he has also been able to leverage the mass creativity of his employees.

One important aspect of all the organizations that Jobs has been associated with is the large number of named individuals that are found in the development of any of the innovations.The names of the Mac developers for Apple are well known. Same at NeXt or at Pixar.

The actual people involved in much of the innovative changes are given their recognition.The Wikipedia article about the Mac lists over 15 people, all with links, who were involved in the development of the computer. The one on the development of Windows lists not a single name.

Coincidence?

Read about the days of the development of the Mac and you see a group of wildly creative people solving difficult problems. Read about NeXT, where Jobs experimented with corporate organization as much as he did with computer programming, or simply observe what happened with a company like Pixar, where the creative geniuses were able to create an entirely new art form using computers, leapfrogging ahead of all their competitors.

The ability to take a core group of creative individuals and harness them to an awesome task is not easy. I wrote about this is a series on Synthetic Organizations – Part 1, Part 2 and Part 3.

Marty Baker at Creativity Central broke down some of the principles seen at Pixar and also can be seen at Apple:

Pixar’s Operating Principles can be distilled down to 3 principles.

1. Everyone must have the freedom to communicate with anyone.

2. It must be safe for everyone to offer ideas.

3. We must stay close to innovations happening in the academic community.

In the Innovator’s Dilemma, Clayton Christensen discusses the difficulty organizations have in utilizing disruptive technology in novel ways. The dilemma is that often the same processes that helped make them successful now prevent them from making the leap to a new technology set. See Clay Shirky’s article on the collapse of business models for some examples.

Even when they know that they have to change and even what the changes must be, they almost always fail in making the leap.

That is mainly in the way they are organized, how they are run and the types of communities they represent.

Yet companies that have Steve Jobs organizing them seem to have been able to do this. Apple defined personal computing, it defined the graphic user interface, the laptop, the MP3 player, the smartphone, the tablet computer. Pixar defined computer generated animation.

By creating organizations where innovations are not shuttled through layers of middle management, with each layer sucking the originality out, Jobs has been able to drive disruptive innovations rather than react to them.

The most amazing thing to me is that Apple has succeeded in being a market leader during two separate paradigm shifting market wars – first the graphical user interface wars between Apple vs Microsoft and now the Internet as interface wars between Apple vs Google. Microsoft’s inability to become a major player in the new way of the world is an example of corporations failing to make the leap, of suffering the Innovator’s Dilemma.

Yet Apple is right there, leading the way as the market makes another decision about the future course of computing. Apple may not win but the course it charts drives decisions in ways that no other company of the last half century has.

Now the market must find ways to respond, to be more innovative than Apple.

Without Apple driving the industry to be creative – how in the hell do we keep up with Apple – we would not be where we are today. It makes one wonder where we would be if Jobs had not been forced out at Apple by a sugar-water salesman. We may only just now have gained where we would have been without those 10 lost years.

by cliff1066™

Use Microblogging to Increase Productivity
[Via HarvardBusiness.org]

Are you using Twitter to reach your customers and followers? Do you update your status on Facebook several times a day? Maybe you daily ask questions of one of your specialized LinkedIn groups?

You can replicate this experience inside your organization. There are a number of internal solutions that allow employees to share messages and information with each other, including Yammer and Socialtext. Laurence Smith, Vice President of Global Learning & Development at LG Electronics in Seoul, Korea has become an advocate of Yammer as a way to drive greater innovation in the design of the company’s training programs.

Just a few years ago, Smith says, “when we wanted to revise a classroom training program, we would write a survey, send this to all business unit HR leaders around the world, analyze the results and then use this input to design a new pilot.” The total time elapsed was several weeks to several months and often yielded limited feedback.

But today, Smith and his team start a conversation on Yammer and use tags to create a dialogue with employees. One program in the development stage is FSE (Foreign Service Executive) Soft Landing. It’s targeted to managers assigned to a new country who need to understand the local culture and norms.

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Companies are beginning to see that microblogging approaches can have real value behind the firewall. They are useful fro rapid information dispersion across a variety of devices as well as providing simple ways for people to carry on ad-hoc discussions.

Socialtext continues to have the greatest number of useful social media tools for corporations. and at a very reasonable price also. By making these conversations explicit, not only can the company leverage the information it can also harness the knowledge of all its employees.

And by having everything time stamped, everyone knows who should get the credit for great new ideas or helpful information.

I figure that I may be getting some traffic from the Huffington Post article so an introduction.

I’ve been working in the field of biotechnology since the early 80s, spending 16 years as a researcher at Immunex, the premier biotech in the Seattle area until it was bought by Amgen. It was an incredible crucible of top-notch researchers working with little money to find cures for important diseases. There were, I believe, less than 50 employees when I started and several thousand when I left. So I had first hand knowledge of many of the needs of a small biotech as it grew. I was a small part in the development of a biologic that changed people’s lives – ENBREL.

I left Immunex when Amgen finalized the merger and spent some time thinking about what to do next. Luckily Immunex stock options, which were given to all Immunex employees when I started, provided some economic buffer. I worked with the Washington Biotechnology and Biomedical Association on several projects and helped form a philanthropic organization called the Sustainable Path Foundation, where I am still a Board member.

I started a blog called A Man With a PhD, something I continue to this day, as well as a science-based blog called Living Code for Corante, that Forbes picked as the 3rd best Medical blog in 2003.

In 2004, I became the third employee of a startup biotechnology company called Etubics. As VP in charge of Research, I did everything from ordering lab equipment, growing cells, negotiating contracts and having to fly cross country to talk with suppliers. All while trying to raise money so we could have a hope of producing the vaccines that I believe can change the world.

So I got to see firsthand and at the highest levels, what it takes to start and run a company. I left last year as the company was entering a new phase, where clinical development and manufacturing were at the forefront and research was on the back burner. Not only were these areas I did not have a lot of expertise or interest, but I also was pretty well burned out. The stress of a small company is enormous, particularly in an industry where it takes over 15 years for a therapeutic to get from the research lab to the patient.

I left to pursue one of my real passions – how to understand why Immunex was such a powerhouse of research, why it is was one of the few biotech companies started in the 80s to produce a blockbuster drugs, along with several other good drugs, and whether this could be replicated.

That is what SpreadingScience is about – how to create organizations that are resilient to change, that can adapt in ways that increase the successful outcomes need. You can read some of the material or follow my blog to get an idea of how I am accomplishing this.

I expect some traffic from people following the Huffington Post article about Peter Rubin.

I always get a few butterflies in my stomach when I talk with a reporter who contacts me out of the blue. As with most things, trust is important. Also, I have a tendency to babble a lot on the phone, especially when talking extemporaneously, so I always worry if I will say something that does not exactly fit what I really mean. I hope I did not sound like too much of a Pollyanna.

I think Arthur did a reasonable job, particularly since he was talking with me for the first time and having to deal with my speech patterns.

The point I had is that I’m torn because there are vitally important reasons for some companies to need the expertise of some people so I do not want to prevent access to their expertise. But I also do not ant to see people using their position, particularly if it is a tax=payer supported one, to simply enrich themselves.

How to remove the latter without harming the former?

One big point I made to Arthur Delaney, who was the reporter that called, was that openness and transparency are a huge part of solving what is a difficult problem. Shining a light into this process makes it much less likely that people will game the system. Not impossible but less likely.

It seems to me that much of the misbehavior that many people partake in comes from the fact that they can carry out this bad behavior, and escape its consequences, because is happens in the dark, behind the scenes.

Most people – not all, I’m not that much of an idealist – may modify their misbehavior if they know that others can see it. And if they know that there will be consequences if they do misbehave.

There are lots of important, legitimate reasons for organizations to need the expertise of a range of people who have worked in government or for a company or for an NGO. To be successful, specialized expertise is sometimes needed. This expertise can be critical, particularly for small companies.

We need to make sure that those types of interactions are not harmed.

Real openness should not harm them. At least I hope not.

How to start a movement: Derek Sivers on TED.com
[Via ED | TEDBlog]

With help from some surprising footage, Derek Sivers explains how movements really get started. (Hint: it takes two.) (Recorded at TED2010, February 2010 in Long Beach, CA. Duration: 3:10)

Watch Derek Sivers’ talk on TED.com, where you can download this TEDTalk, rate it, comment on it and find other talks and performances from our archive of 600+ TEDTalks.

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I talked about this a few weeks ago. well, it turns out the Derek Silvers gave a TED talk in February and here it is. So you can see the actual fellow who put the video together.

A very informative three minutes.

by kaibara87

The opinion piece I wrote for Xconomy has been published. Luke Timmerman asked me on Monday to examine the bill and the sections that impacted the Biotechnology industry. I had not even realized there were parts of the huge healthcare reform bill.

I started writing on Monday evening and got Luke my version by about 1 PM on Tuesday (I had to take my car to the shop for its 15,000 checkup or I would have been done sooner). Luke had some edits and it was ready by early evening.

Everything was done using online technologies. Even 5 years ago it would have been hard to put this all together in such a short time. I essentially started from zero on the specifics (I mean how many people have actually read any of the healthcare reform bill itself?), educated myself rapidly, used my background of 25 years in the industry to form an opinion and composed the piece. I then carried on a ‘conversation’ with Luke to get it into final shape.

I found the relevant parts using Open Congress’s interface, which allows you to link to specific paragraphs, as well as leave comments. It presents a unique way for citizens to interact with the legislation that our Congress is working on. Not only are there links to every piece of information one may want, there are also links to news stories, and other facts (Like the Senate version has over 400,000 words.)

Without this web site, it would have been very difficult to even find the sections dealing with biotechnology, much less try to understand them, It was very easy to search for the relevant sections and get an understanding of what they really said. I read a few articles online to get some other viewpoints and then wrote my opinion of the sections.

The fact that the biotechnology industry now gets 12 years of market exclusivity for its products, several years longer than for the small molecule drugs sold by pharmaceutical companies, is really a pretty big deal.

There has been uncertainty for several years over this time frame, with the FTC feeling there should be little or no market exclusivity outside of the patent time frame to the industry’s organization, BIO, which wanted at least 12 years without regard of patent considerations.

Not knowing just how long a time period a new biologic might be free of competition can have a large effect on determining which therapeutics make it to the market place. Now those who model the value of a product have much surer time frames to work with.

I do not think the bill is as friendly to those companies hoping to create ‘generic’ biologics called biosimilars. While it does delineate a path to government approval, the legislation does not make it easy. There are some substantial costs for getting approval of these products. They may not be very much cheaper than the original therapeutic itself. and they do not get any real exclusivity for their products in the end.

For many possible follow-on biologics it will simply be too expensive to take them to market. The large costs incurred while doing this will also make it harder for them to take market share away from a biologic, which has had 12 years of unfettered ability to market itself and its positive results to the customers. at least market share based on cost.

And, as I read the section dealing with patent issues, I became even more aware of the hard road for these follow-on generics. In order to get patent issues dealt with before the follow-on biologic is marketed, the patent holders/licensees of the original drug must be furnished the same information that is submitted in the application to the FDA – the results of clinical trials, assays to determine the follow-on biologic’s potency, stability, etc.

It seems to me that this could open up all sorts of shenanigans. And it appears to be more than regular generics have to do. From what I could determine, a company hoping for approval of a generic simply has to provide the patent numbers that cover the drug it is proposing to market. I could find nothing to indicate that it must turn over all the data of the generic to its direct competitor before going to market.

How many companies will be willing to provide their direct competitor with all the information present in its application to the FDA? It seems to me a place where some mischief could occur.

Now, I did not have time to review the complete history of these sections. I’m sure I could find all the committee testimonies on these parts. Perhaps someone out there has more detailed information. I’d love to pull an Emily Litella and say “Never Mind.”

So, this bill settled something really important for the biotech industry and, while bringing some clarity to the idea of biosimlars, also introduced some possible complications.

I have to say it was fun to use the power of the Web to investigate the issue and form some opinions. Using technology to move information around faster is part of what SpreadingScience does.