What are good foundations for understanding business, in an age of pervasive digital information? I’ve found systems science to be helpful, and ended up on a path where I’ve become deeply involved with the International Society for the Systems Sciences. The origins of this trajectory started at IBM in 1997 with the Seiad First-of-a-Kind project, leading to a 2-year assignment through the Advanced Business Institute.
In 1997, I had moved out of the IBM Consulting Group — the services unit that became IBM Business Innovation Services, and then IBM Business Consulting Services — into a Sales & Distribution unit (in the Boston area) called "Consumer-Driven Solutions". This business unit had the ambition to bridge the gap between clients in the retail and consumer products industry segments (as defined by IBM). In the confluence of changes at IBM, I led a proposal to lead a First-of-a-Kind project, that included customer-facing consultants from the Object Technology Practice of IBM Consulting Group1, scientists from the Watson Research Center2, and industry experts hired as consultants into the Consumer-Driven Solutions unit3.
The Seiad project essentially had three goals:
- Develop an industry reference model for consumer supply chains — think Procter & Gamble with Walmart, or Procter & Gamble with Kmart, in an IBM-led initiative that predates Collaborative Planning, Forecasting and Replenishment;
- Develop a system envisioning tool — that was known for some time as Enterprise Builder; and
- Put the industry reference model into the system envisioning tools
The time frame to do this was twelve months, but after five months, the project was wound down, due to some managerial accounting issues inside IBM. (The way that internal funds flowed, our project sponsor would have been penalized on cash flow management, rather than being lauded for innovativeness). From a research perspective, however, the end of the project was a blessing in disguise. In my collaboration with Ian Simmonds, we discovered that we had hit a really hard problem. Producing deliverables on a month by month schedule actually precluded tackling the opportunity to get to the root of problem.
The essential issue was one of rigour. Business people are notoriously bad at describing what really happens in business. In their defence, business is a practice, so good business people just do what’s right, which can be different from their accounts of what they’re doing. On the other hand, software developers — particularly those who were doing modeling with object methods in 1997 — needed a clear understanding of the entities and relationships within the business. Ian grilled me on this. I had spent 8 years in university undergraduate and graduate programs (with a strong foundation in management information systems and business strategy at the doctoral level), and I had problems being rigourous. It was no wonder that we went through cycles like this:
- Step 1: Spend an entire day interviewing an industry expert (e.g. an ex-vp of a department store retailer). Build an business object model. Play it back to him. Confirm completeness. "Yes, you’ve got it!"
- Step 2a: Start a new day with another industry expert (e.g. an ex-buyer from a specialty toy retailer). Begin with a description of the model, as developed so far. Ask what he thinks. "That’s a very interesting model. However, that’s not how it really works. Let me describe what really happens".
- Step 2b: Analyze. Create another business object model. Confirm completeness. "Yes, you’ve got it!"
- Loop back to Step 2a.
In effect, we found it impossible to create a model sufficiently stable to represent processes that happen between consumer goods manufacturers and retailers every day. Every time we thought we had captured the model, another industry expert would suggest something different.
To try to understand more about foundational business concepts, we reached out to Steve Haeckel, who was on the faculty of the Advanced Business Institute. (Steve has now retired from IBM, and this meeting predated the Adaptive Enterprise book by two years.) On July 30 and 31, 1997, three of us (Ian Simmonds, Doug McDavid and David Ing) hung out at Palisades, and had several discussions with Steve Haeckel, in between other commitments that he already had. In the generous exchange of ideas, we alternated between being mystified at the confidence that Steve portrayed in the way business should be designed — now well enshrined in the Adaptive Enterprise book — interspersed with three-way debriefings where were confused (and somewhat outraged) that Steve seemed to have some foundational understanding that we didn’t.
The thing that we were missing was a common foundation for understanding organizations and information systems. The root that Steve Haeckel gave us was systems theory. Organizations are systems. Certainly, information systems are systems. Do you really understand what a system is? How is an information system different from an organizational system? What do they have in common?
I attended a seminar by Russell Ackoff on systems thinking in management in Natick on September 17, 1997. The Seiad project started getting signals about winding down in October 1997. At the end of 1997, I was fortunate to have established a dialogue with Al Barnes — then the "provost" at the Advanced Business Institute — who had some discretionary funding available for me to work with Steve Haeckel, on assignment in 1998 and 1999, as the Adaptive Enterprise book was being created. This assignment led to my attending the 1998 Annual Meeting of the ISSS, which I continue to cite as the single best educational event of my life. I contributed lots of web page digests on the ISSS web site, … and the rest is history.
In the two years at Palisades, I continued my research with Ian, and eventually founded the Systemic Business Community, as an especially focused subgroup of the Special Integration Group on Systems Applications in Business and Industry at the ISSS. The ISSS has proven to be a continuing education for me. Every time I think I’ve got things figured out, I always learn something new.
3The Consumer-Driven Solutions sponsor was Ron Hovsepian. Subject matter included Demos Zacharia, John Bonn, and Jane Theodore.