The MIT Center for Digital Business
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Center for Digital Business Research Seminar
NE25 - 7th Floor (5 Cambridge Center)
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Wednesday, March 11 2009 - 11:45 AM-1:00 PM
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MIT Sloan School of Management, the Center for Digital Business,
the Center of Collective Intelligence and the
Center for Information Systems Research
Welcome:
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Presenter: Steve Brewis - Business Architect, BT Design
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The Problem of Organisation
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Abstract: A business that creates a value exchange which needs to be accomplished by more than one person faces two problems, how to divide up the labour and how to coordinate their efforts. For this to be done effectively is what lies at the heart of management cybernetics - the science of effective organization. For a small business comprising a small labour pool <5, all co-existing in the same space and time, the problem of labour division and coordination can be solved intuitively. For a large business comprising of a very large labour pool > 100,000 and also distributed in time and space the problem cannot be solved so easily. Indeed many of the problems faced by manufactures and service providers is that their operating models have become so complex that it has become harder ad harder to generate profitable revenues. Entanglement is one of the main drivers behind the enterprises unnecessary organisational complexity. Everything is strongly connected to everything else, in a business without a organising rationale it is easy for this complexity to proliferate and get out of control. This is evidenced in many businesses where layer upon layer of product, processes and organisation have been added to their operating models in order to grind out incremental returns and although each incremental decision can usually be justified on its own, the aggregate revenue benefits often fail to compensate for the overall future costs that will arise from this increasing complexity. As organisations enter the 21st century, the source of competitive advantage is increasingly human resources. This may sound strange in a technological age where machines do more and more of the work, but it is precisely technology that creates this dependence on human resources. Remember the headlines a few years ago 'Deep Blue Vanquishes Kasparov'. The brawn of a machine finally triumphs over the human brain. The battle occurred within a very small and well defined problem space bounded by eight rows and eight columns while using a very small variety of pieces executing predefined moves with a simple objective of capturing the king. Given that the programming of moves started decades ago and that the conquest of a pre-defined and limited problem space by the computer required all the technological prowess that Deep Blue could muster this event serves as a reminder of what machines cannot do. Technology is knowledge-driven. It is all about understanding how things work and being able to exploit that knowledge to solve customer's problems. The challenge is therefore left with the business to bring out the best of its people in terms of innovation and creativity. However for this to happen an organisational revolution is required that needs to perform the same function as did the agricultural revolution by releasing people from a life of subsistence so that their cerebral energies can be re-focused into more effective areas for the business. This brief introduction brings us onto my main theme, what is the 'problem of organisation' surely business are no more than a 'self organising ensemble of people' interacting with one another with the ultimate aim of delivering something of value to the customer. The impression seems to be that organisations 'just happen' without any consideration to what other purposes they may serve. This research looks at the challenges any 'Organisational Architecture' must tackle and gives the background methodology that could be used to create one.
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Bio: Steve Brewis has held a number of Senior Management Positions over the past twenty years. His main interests concern him with how science can help in steering complex business systems through large and highly volatile commercial landscapes. Currently he is responsible for the design and implementation of the Operating Model for British Telecom. His academic background in Mathematical Modelling, Control Theory, System Dynamics, Knowledge Engineering, Artificial Intelligence and more recently Management Cybernetics has him well equipped to undertake such a challenge.