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Blockchain will change the world. Or not.

Blockchain will change the world. Or not.

Twice this week, people have relayed to me incredible promises for the power of blockchain and how it will change the way we do everything. This is quite some feat for a technology that few people understand, even in principle, and even fewer can describe with clarity.

I have a number of issues with this idea. It’s not that I don’t think blockchain has great potential. There’s a clear attraction in the robustness of its distributed nature and the potential for transparency that represents. I can see how it might be valuable for managing contracts and deeds — matters of public record that don’t necessarily have tight privacy concerns around them.

But blockchain is an architectural choice, not a technological solution in its own right. It is one way we might choose to tackle particular problems, and one of many. It is suited to some situations and not to others — like the storage of personal data.

However well encrypted it may be, you cannot store personal data in a blockchain-based system and comply with the General Data Protection Regulations (GDPR). The regulations may change, though I’m not totally convinced that they should. Even if they do, it will take a long time.

Why Blockchain is not like IoT or AI

It’s great that people are enthused by the idea of a technology and its potential applications. But blockchain is quite different to other technological buzzwords doing the rounds at the moment, like AI and IoT (internet of things).

These are much broader classifications of groups of technologies (at least in the way that the terms are commonly used — academics might object to broader uses of the term ‘AI’). This leads to criticism that they are nothing more than marketing terms, and sometimes that is fair. These terms don’t define single architectural choices, but rather opportunities to tackle new problems, or address old ones differently. Within these definitions your solution can be endlessly tailored to the challenge at hand.

But say you’re going to apply blockchain technology to a particular problem and you are dramatically narrowing your range of choices — perhaps beyond what is wise.

Blockchain will change some worlds

There will undoubtedly be some industries for which blockchain is a revolutionary technology. Some people will get incredibly rich off the back of it. Ultimately, perhaps it will prove to be a good basis for alternative currencies. But it isn’t some universal technological panacea that will solve everything. While it might changes some worlds, it won’t change every world.

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Innovation for future business

What does innovation mean to you?

“It’s the realisation of ideas, the translation of possibility into material value. The old adage about 99% perspiration is true in my experience through a number of start-ups. The idea is the easy bit. Making it real takes sweat, and investment.”

This was my answer when asked by TheBusinessDesk recently what innovation meant to me. But I realised it was one of many possible answers.

Innovation is something that every almost company seems to be chasing at the moment, driven in part by excitement about what is possible, and in equal measure by fear of impending disruption and how business will change in the future. These are equally valid motivations. No-one wants to be blown away by Schumpeter’s gale, and that weather front seems to be approaching every organisation, if it hasn’t already hit.

Innovation buzz

It’s easy to be cynical when there is so much buzz around an idea, particularly in business where fads seem to fly past faster than new fashions. But I genuinely believe that high frequency change (as distinct from a more generic argument for accelerated change) justifies renewed focus on innovation for future business, in proposition, process, and culture.

So what is innovation? And what is it not?

For me, what it is not, is exclusively new ideas. Ideas are frankly ten a penny. Great ideas may be rarer, but to be honest, there are plenty floating around out there. What is generally lacking, is application. Whether it’s a new idea, an old one, or often one borrowed from another place, the key to innovation is making it count.

Fail fast?

Innovation is not always about success either. ‘Fail fast’ has become another over-used term, often with too much emphasis on the ‘fail’ and not enough on the ‘fast’. Because ‘fast’ in this context also means ‘cheap’.

We are better equipped than ever to experiment with advanced technologies, and every business should encourage its people to do so, but only within a framework that maximises the chances of success and learns lessons from the natural proportion of failures. Failing fast without learning lessons is just wasting time.

Creating a culture

Innovation may be cheaper now, but it’s not free. That’s why innovation needs support from leadership, and committed expenditure. There is a natural overhead that comes with change, and every business model focused on sustainable success should be budgeting for it.

Putting budget aside is a great starting point for a culture of innovation. It says that you are committed. Package this budget in a framework that encourages feedback, speculation, and experimentation, and you are beginning to create the right environment.

Iteration & recombination

Innovation also doesn’t have to be about big steps. Many smaller steps can be just as valuable, if not more so. This is particularly true in organisations that have lacked a culture of innovation, and where assembling financial and political support for major change can be time-consuming and draining.

Smaller steps can start to build up a track record of evidence, demonstrating progress and value. And these small steps particularly don’t need to be about original ideas: small iterations of existing processes and structures can rapidly improve efficiency and customer experience, and eliminate frustration.

One of the cheapest and easiest forms of innovation is the application of other people’s innovations to your organisation. Cloud applications are particularly easy to bolt-on to existing processes, and while uncontrolled, this type of ad-hoc procurement risks a future IT nightmare, it can be a great business model for rapid prototyping.

Future disruptive innovation

Disruption and innovation are terms that have become so over-used as to lose their meaning in this accelerated time. But even without this desensitising effect, they are broad, imprecise terms that do little to describe the acute nature of the challenge that some sectors are facing, or the effort required to address those challenges.

I recently spent time with a collection of terrifyingly bright people at Accenture’s Dublin innovation centre, The Dock. When I say terrifyingly bright, I mean people with decades of academic and commercial experience with artificial intelligence and other cutting-edge technology, people who left prestigious academic institutions to tackle more practical technological challenges.

I’m glad to say that despite their intelligence, they too wrestle with the language of change. But I picked up a few nuggets that I found useful. I thought you might too.

Compressive Disruption

One, from Accenture Digital’s MD Arabel Bailey, was the idea of ‘compressive disruption’. This neatly describes to me the effect of increased competition that technology enables by lowering barriers to entry into markets. Many companies are finding shards of their profitable business shaved off by new entrants, or seeing non-traditional competitors start to squeeze their margins, coming in from other countries or adjacent industries. That sense of compression seems to neatly sum up the effect this has on a business, boxing in their opportunities in the future market.

Above and below

The other was from Aidan Quilligan, global leader of Accenture’s ‘Industry X.0’ practice. He neatly broke innovation down into ‘above the line’ and ‘below the line’, in terminology that will be familiar to any marketer. In this case, below the line innovation is about addressing the cost base. Above the line innovation drives new revenue streams.

Most people are focused on below the line activity — at least initially. In an ideal world, resources released by this investment are redirected into above the line innovation. Though that might depend how much work you do below the line, and whether you do it fast enough.

How will business change in the future?

Ultimately, innovation is about survival. As Schumpeter said, “[Capitalism] is by nature a form or method of economic change and not only never is but never can be stationary.”

If you want your organisation to survive and thrive then innovation for the future is critical. Create a culture of innovation by assigning clear budgets to it, by inviting contributions from across the organisation, and by creating a framework within which ideas can be tested, evaluated and applied or discarded as appropriate, rapidly and cheaply.

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Building the Future Council

Building the Future Council

My recent post about the future council gained a lot of attention, so I thought I’d share more of the thinking that I’ve done so far. What might it look like when you re-orient a council around people and places, rather than services?

This thinking started with a question from a council chief executive a few years ago, but was actually refined through work with a medium-large (£250m turnover) corporate. Despite being very different organisations on the outside, once you got under the skin their problems were very similar. All of this work combined now forms the Stratification framework that is part of the Applied Futurist’s Toolkit.

Fundamental units

The first thing to identify in the council’s case was that the fundamental unit of organisation was services. The whole organisation had been assembled by bolting services onto the side of the existing organisation, and even the radical transformations driven by austerity had not really changed that architecture. As long as it persisted, there would be massive ‘parallelism’ in the way the organisation operated, preventing efficiencies but more importantly, fragmenting data and adding friction to service, analysis and communication.

As I wrote about in the last post, the first and most important step was to re-orient the organisation around the citizen rather than the service. But we also had to recognise that this didn’t cover everything: a significant proportion of the council’s work is also place-centric, with granularity ranging from a single bin, to a building, to a whole street or park.

Hence we were left with two fundamental units that could be cross-indexed: people, and places.

Unifying the citizen interface

Unifying the customer interface

With the citizen at the centre of the organisation, it was clear that we needed to unify the customer interface. The multiple touchpoints of the old architecture were highly inefficient, creating confusion, cost, disparate data and a governance nightmare, with little oversight.

A unified customer interface means a common written language style, with content written to the appropriate standard for the majority of the audience. It means ensuring that there is a single answer to each question, not multiple, conflicting answers. It means using a common design language to help those with limited English or poorer vision to understand information, whether presented in a face to face, written, digital or video context.

A unified customer interface means a coherent view of that experience across communications channels, using insight from contact centres to drive digital development, and vice versa.

Ultimately it led to the proposal of new internal agency, equipped with the skills and resource to handle these tasks, where previously responsibility had been distributed across multiple teams.

Making services more transparent

Creating coherent service units

Behind the unified communications layer sit the services, the core propositions of the council: education, public health, adult social care, environmental services, highways, revenue and benefits — obviously these will vary depending on the type of council.

I don’t pretend to be an expert in the delivery of any of these services. But one thing was clear when looking at them and their interactions inside the organisation: it was hard for them to understand each other’s work and for leaders to really understand their performance.

As organisations grow and develop over time their activities often become more complex on the inside and opaque from the outside. Complex isn’t inherently bad: these teams are dealing with challenging issues. But the lack of transparency makes many things harder: partnering with other teams, reporting success, analysing failure, inducting new staff.

We created a template to help these teams revisit their understanding of their core processes, their inputs, outputs and key metrics so that the could be more easily communicated to others. Sort of a paper ‘API’, that described how you might interact with them. Ultimately, it would be good to turn paper into code.

Creating a common data layer

A common data layer

Underpinning the unified customer interface and more transparent interaction between services is a shared data layer. Once you acknowledge that there are only two fundamental units that the organisation deals with — three if you count numbers (finance) — it’s clear that the council needs many fewer software systems and databases than it has acquired under a service-oriented architecture (not this SOA).

The realities of the current estate, data protection legislation, and security choices may mean that you don’t actually condense everything down to a handful of systems. But as a notional vision, a unified data store of people and places is valuable because of the business value it can drive. Most people have few interactions with their council, and those they do have are relatively mundane — even automatic. But for those people who need more intensive support, more coherent information can drive much more effective intervention: earlier and more targeted, meaning better for the citizen and cheaper for the council.

External API

External interface wrapper

The nature of the post-austerity council is that much of its work is commissioning, either to third parties or to its own services companies. Streamlining these interactions is less important than streamlining the customer interactions, but nonetheless valuable. Building a largely-digital wrapper that allows the two way flow of information for commissioning, payments, the sharing of data, and the monitoring of SLAs, would speed the flow of information right through the organisation, and ideally improve the delivery of services.