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The End of Senselessness

 

We’re trying to build a future on inadequate structures from the past. For all the silicon-based “intelligence” permeating every aspect of our lives, we still live in a brutally dumb world. That dumbness is starting to cost us—dearly. Every day, executives valiantly try to conduct smart business in a dumb world of wretchedly inadequate information and antiquated communications. It’s as if we’re wandering through the uncharted jungles of the 21st century with reconnaissance reports and walkie-talkies from about 15 years ago.

The vision we need is not in itself new. It has been freely available at least since the 1950s, when such thinkers as Jay Forrester (System Dynamics) and MIT’s Norbert Weiner (Cybernetics andThe Human Use of Human Beings) wrote landmark books describing a world transformed by automation, machine intelligence, and optimized systems.

If you applied this vision in a practical way to business, it might simply be called “electronic commerce.” But we don’t mean the e-commerce of the dot-com era. We have that today, and it’s not e-commerce at all. At best, it’s “e-shopping”—simple mechanisms that make certain B2C and B2B transactions, performed by human beings, somewhat easier, somewhat more convenient.

Genuine e-commerce re-thinks the whole relationship of people and devices to business systems. It must be built upon true, across-the-board digital automation, accomplished by enabling everyday electronic devices to communicate with and control each other, along with a whole new generation of information tools (“killer apps”) for managing rich, vast streams of meaningful data. The goal is to network devices into electronic commerce systems that are self-sensing, self-controlling, and self-optimizing—automatically, without human intervention. It would not be far-fetched to call them “self-aware.”

Inside such systems, reliable and blindingly fast microprocessors do what they are very good at doing (and what people are very bad at doing): digesting billions of data-points, talking to each other about the data, and controlling each other based upon the state of the data. All in a matter of nanoseconds. Human beings cannot do this, nor should they; this incessant stream of ongoing business information should be “invisible” to people. At the same time, all this invisible machine activity makes the state of (i.e., the information about) a business’s assets, costs, and liabilities vastly more visible to managers and to the decision-making process—when decision-makers need or want to know.

Such systems will open an entirely new portfolio of “killer apps” that will transform the way business is done around the world and profoundly improve customer satisfaction and vendor profitability. This represents an entirely new life for the IT and telecom industries—one that will literally dwarf their roles today.

We call this phenomenon “Smart Systems and Services”

The only problem is that most organizations today are a bit like “deer in the headlights” when it comes to understanding how to discover, design and develop Smart Systems.

Existing schemas, institutions and approaches for new venture development are, for the most part, broken. The complexity of interdependent relationships and related timing required for new growth ventures in the Internet of Things arena only compound the challenges.

Large organizations have many rules and policies that often seem completely disconnected. We have created language, business processes and systems that seem to be a triumph of technique over value and performance. Consequently, most businesses today are organized around functional disciplines that only interact on an “as needed” basis.

Today, knowledge and expertise largely resides in functional silos and systems dispersed across organizations. Acting singularly, functional organizations are constrained by the resources under their control. Legacy processes and habits inhibit any natural ability to communicate and work together to solve big problems or create new solutions. In many companies, lean practices have been applied so aggressively that people are simply consumed by “running the business.” It restricts their ability to harness the collective intelligence available throughout a company and its networks to ensure timely decisions and creative solutions.

The Smart Systems Design Framework 

 

Download the Smart Systems Design Storyboard

In our work, we see ‘disconnects’ around us all the time – between people, functions, organizations and leadership. This reminds us that life and business are complex, and as new business designers and developers, we must resist the seduction of simplicity and the safety of Byzantine processes and decision models that allow good ideas to fade too quickly. In this environment growth is dependent on interacting in new and creative ways. Linking functions by breaking down the barriers to communication is the first step, but it can’t stop there. The key is building collaborative networks.

Against this background, we believe design needs to transcend discrete product or service innovation. Assuming that the role of design is only about making existing products or services more attractive no longer works. Business designers need to creatively imagine fully developed systems and whole marketplaces. Companies need to envision the design role as one that can address product, service and business systems.

Design, as well as strategy, is concerned with creating values and making them visible, not to mention profitable. Business strategy and design today need to extend to the experience that customers will have with connected products, services and spaces and therefore must integrate the processes and systems that are behind these experiences. The convergence of design with strategy and related innovation processes will inevitably lead to a new integrated set of processes, methods and disciplines — the advent of what we call Smart Systems Design.

What is required develop Smart Systems business models?

To discover, design and develop innovative Smart Systems, organizations must consider all the elements involved and the context they fit into. The benefits that will flow from the recognition that traditional strategy and product development protocols will not meet the needs of a connected business are nearly infinite.

Smart Systems Design integrates multidisciplinary processes and methods in new ways. It is a new field that connects organizations and customers in novel ways:

  • Smart Systems are informed and supported by complex network and information interactions that are are truly about “real-time” user experience;
  • Smart Systems are based on business models that are wholly new and different;
  • Smart systems are driven by integration of the physical and virtual worlds;
  • Smart Systems drives new levels of personalization as well as participatory design and interactions; and,
  • Smart Systems directly informs services with new information value.

This piece was originally published in the Smart Systems Newsletter: Sign up here to receive our newsletter