Adaptive Management SystemOverview

Joe ArteagaIBM Business Consulting Services

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ContentsContents

Overview of Adaptive Management Overview of Adaptive Management System Modules:System Modules:

– Enterprise Design SystemEnterprise Design System

– Commitment Management SystemCommitment Management System

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Adaptive Management SystemAdaptive Management System-Background-Background

Technology support for commiment management coordination Technology support for commiment management coordination was envisioned by Stephan Haeckel in was envisioned by Stephan Haeckel in Adaptive Adaptive EnterpriseEnterprise:Creating and Leading Sense-and-Respond Organizations:Creating and Leading Sense-and-Respond Organizations

Why an Adaptive Management System ?Why an Adaptive Management System ?– In the Adaptive Enterprise, the Sense and Respond Organization In the Adaptive Enterprise, the Sense and Respond Organization

can not be managed in the Command and Control Hierarchical can not be managed in the Command and Control Hierarchical Model, and therefore needs an approach for effective Model, and therefore needs an approach for effective Coordination of CommitmentsCoordination of Commitments

A proof of concept version called Sense and Respond Support A proof of concept version called Sense and Respond Support System was developed in 1999 by David Ing and Joe Arteaga System was developed in 1999 by David Ing and Joe Arteaga

A full version of the system was then developed for client A full version of the system was then developed for client testing and led to the Adaptive management System which is testing and led to the Adaptive management System which is comprised of two modules to manage the context of the comprised of two modules to manage the context of the system as well as the coordination of the commitments:system as well as the coordination of the commitments:– Enterprise Design System(EDS)Enterprise Design System(EDS)– Commitment Management System(CMS)Commitment Management System(CMS)

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The Adaptive Management System The Adaptive Management System supports the 3 key leadership supports the 3 key leadership accountabilities based on Adaptive accountabilities based on Adaptive Enterprise TenetsEnterprise Tenets

1. Creation and continuous adaptation of a 1. Creation and continuous adaptation of a viable organizational contextviable organizational context

2. Establishment of a commitment 2. Establishment of a commitment management system to coordinate the management system to coordinate the behavior of people in accountable rolesbehavior of people in accountable roles

3. Population of roles with the right people3. Population of roles with the right people

Stephan H. Stephan H. HaeckelHaeckel

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Key Prescriptions

Reward based on risk and scope of outcomes

Technology for commitment coordination

Dynamic capability capacity

Capability dispatching

Clearly bounded

empowerment

Who owes what to whom

Purpose-down design

Encapsulated subsystems

Continuous renegotiation

Knowing earlier

Purposeful system design

Customer-back design

Strategy as structure

Adaptive Enterprise Tenets

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The Adaptive Management System The Adaptive Management System addresses both the Context and addresses both the Context and Coordination components of the S&R Coordination components of the S&R Model. Model.

COORDINATIONCommitments

Sense &Respond

Model

CONTEXTPurpose and Bounds

Operational Signals

EXTERNALSIGNALS

ADAPTING

EDSEnterprise Design System

CMS - Commitment Management System

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The roles in an Adaptive The roles in an Adaptive Management SystemManagement System

System Leader(RfB)

System Designers

System Monitor

Roles

Clients

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Enterprise Design SystemEnterprise Design SystemCreating the Context:Creating the Context:

System designers [re]create System designers [re]create Organization Purpose and Organization Purpose and BoundsBounds– ConstituentsConstituents– Reason for Being Reason for Being – Governing PrinciplesGoverning Principles– Guiding PrinciplesGuiding Principles– Roles and AccountabilityRoles and Accountability– HLBD DiagramHLBD Diagram

System Leader Declares new System Leader Declares new context to People in Rolescontext to People in Roles

EDS allows EDS allows Management/memory of Management/memory of design versions and related design versions and related signalssignals

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Commitment Management Commitment Management System OverviewSystem Overview

Commitment Protocol to support all four phases and Commitment Protocol to support all four phases and states define, negotiate, perform and assess states define, negotiate, perform and assess

Supports renegotiation through withdrawalSupports renegotiation through withdrawal Integrated with EDS Rfb, GP, HLBDIntegrated with EDS Rfb, GP, HLBD Personal Dashboard Personal Dashboard Commitment ReportsCommitment Reports Supports two types of commitmentsSupports two types of commitments

– To provide a capability – fill a roleTo provide a capability – fill a role– To provide a deliverableTo provide a deliverable

Captures emergent rolesCaptures emergent roles Supports external commitments with a non CMS partySupports external commitments with a non CMS party

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The Commitment Management Protocol supports The Commitment Management Protocol supports the complex task of creating and coordinating the complex task of creating and coordinating specific customer-back value chains based on specific customer-back value chains based on the HLBDthe HLBD

Client

Role Types andAccountabilities

Dispatcher

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Commitment Management Commitment Management System DashboardSystem Dashboard

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Commitments are made in the context of the Reason for Being and Governing Principles

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Commitment Management Commitment Management System ReportsSystem Reports

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BenefitsBenefits Reduce ambiguity Reduce ambiguity Propagation of RfB and Governing Propagation of RfB and Governing

PrinciplesPrinciples Role interactions are explicitly Role interactions are explicitly

documenteddocumented System design feedback signals are System design feedback signals are

capturedcaptured Raise authenticity, trustRaise authenticity, trust Increase speed of adaptationIncrease speed of adaptation Increase customer orientationIncrease customer orientation Move leadership to people in accountable Move leadership to people in accountable

rolesroles Allow emergence within the purpose and Allow emergence within the purpose and

bounds of the organizationbounds of the organization

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To commit or not to To commit or not to commitcommit

Until one is committed, there is Until one is committed, there is hesitancy, the chance to draw back, hesitancy, the chance to draw back, always ineffectiveness.......always ineffectiveness.......

the moment one definitely commits the moment one definitely commits oneself, then Providence moves oneself, then Providence moves too.too.

GoetheGoethe

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Commitments represent organization Commitments represent organization accountability and interaction accountability and interaction performance performance

Complex social dynamicsComplex social dynamics Heavily dependent on Heavily dependent on

Org. CultureOrg. Culture Level of Authority and Level of Authority and

Accountability Accountability Involves:Involves:

– OutcomesOutcomes– KnowledgeKnowledge– MeaningMeaning– Trust LevelsTrust Levels– EmpowermentEmpowerment– TeamworkTeamwork

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Coordination of commitments helps Coordination of commitments helps govern sense and respond govern sense and respond organizationsorganizations

Commitments are made but not necessarily completed/delivered

Commitments are completed but not assessed by customer roles

Commitments are not renegotiated when the situation demands it

Clarity of outcomes is not there, making commitments hard to keep track of

Difficult conversations about lost/failed/not required commitments

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Organization dynamics that detract Organization dynamics that detract from good commitment managementfrom good commitment management

Lack of Clarity in Context?Lack of Clarity in Context? Matrix organization?Matrix organization? Lack of Clarity in Goals, Roles, Lack of Clarity in Goals, Roles,

Processes?Processes? Lack of Trust between people?Lack of Trust between people? Over Capacity – ‘wearing too many hats’?Over Capacity – ‘wearing too many hats’? Inability to Prioritize?Inability to Prioritize? Micro Management?Micro Management? Changing priorities? Changing priorities? Organizational Politics?Organizational Politics? Limited ability to Negotiate Limited ability to Negotiate

Commitments – due to lack of power, Commitments – due to lack of power, lack of knowledge, limited negotiating lack of knowledge, limited negotiating skills?skills?

Lack of consequences re not following Lack of consequences re not following through on commitments?through on commitments?

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People in a conversation commitment People in a conversation commitment may undergo or experience many states may undergo or experience many states or emotionsor emotions

Things which affect ability to [renegotiate

Authority or lack of Confusion on outcome Risk adversity level Motivation - ‘Get it

done’ desire Lack of Knowledge Fear for job

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Commitment Management Commitment Management ProtocolProtocol

CUSTOMER ROLE DEFINE

SUPPLIER ROLE

REQUEST

PERFORM

AGREE REPORT

NEGOTIATE

ASSESS

ACCEPT

A commitment is a negotiated agreement between two people to produce (and accept if produced) a defined outcome in a way that satisfies a specified set of conditions

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Negotiation of Commitments- Definition Negotiation of Commitments- Definition

Commitment: def:– An agreement between two roles to produce

(and accept if produced) a defined outcome that satisfies a specified set of conditions (Conditions of Satisfaction (COS)).

Types: Fill a Role, Produce a Deliverable Composed of:

– Outcome Statement– Customer and Supplier Conditions of

Satisfaction– Date(s)

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Negotiation of Commitments- Negotiation of Commitments- characteristicscharacteristics

always has a customer and supplier each party has accountability:

– customer to accept deliverable– supplier to produce

authenticity -sincerity, clarity– say what you mean– mean what you say– know what mean

support withdrawal and renegotiation bilateral commitment and conditions of

satisfaction for assessment

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A simplified view of the CMS processA simplified view of the CMS process

DRAFT

Proposal

ActiveCommitment

CompletedCommitment

Accepted

OPENING

NEGOTIATION

EXECUTION

ASSESSMENT

CLOSED

Save Draft & Close

Save & Notify Other Party

DRAFT

Withdraw

Counter

Agree

Withdrawn

Counter

Customer Marks

Complete

Supplier Marks

Complete

Mark Under Renegotiation

MarkAccepted

Mark Rejected

Rejected

Deadlocked

-Renegotiation fails before end date

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Negotiating a Commitment between Negotiating a Commitment between two roles – e.g. a Parent and Teachertwo roles – e.g. a Parent and Teacher

Teacher

Parent

To provide children with quality education

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Negotiating a Commitment between a Negotiating a Commitment between a Parent and Teacher with a COUNTERParent and Teacher with a COUNTER

Teacher

Parent

To provide quality Education

Counter COS:Will teach Math and English, but not Religion

COS:Math and Religion

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Negotiating a Commitment between the Negotiating a Commitment between the Parent and Teacher- AGREEParent and Teacher- AGREE

Teacher

Parent

To provide quality Education

COS:Will agree to Math and English

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Linking of Outcomes- List viewLinking of Outcomes- List view

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Complexity - Multiple SystemsComplexity - Multiple Systems

CommitmentRole

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Declared System Operating Time X+1Declared System Operating Time X+1

CommitmentRole

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Declared System Operating Time X+2Declared System Operating Time X+2

CommitmentRole

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Linking of Outcomes- Zoom in Linking of Outcomes- Zoom in

Commitments

State of commitment

Person A

Completed Commitment as supplier

Incomplete Commitment as supplier

Rejected Commitment as Customer

Active Commitment as Customer

Withdrawn

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Linking of Linking of Outcomes- Outcomes- VisualizatioVisualizationn

CommitmentPerson in Role

ContainingConstituency

Prescribed Leadership 1

1.1

1.21.3

1.1.3

1.111.1.2

1.1.4

1.4.1

1.4

1.1.5

1.3.1.1

1.4.1.2

1.3.1

1.3.2

1.2.21.2.1

1.2.31.2.3.11.2.3.1.1

1.2.3.1.1.1

1.2.1.11.2.1.1 1.2.1.2

1.2.1.3

1.4.1.1

1.3.1.1.1

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Linking of Outcomes View Subsystem Linking of Outcomes View Subsystem IntegrityIntegrity

State Status ColorPrescribed Leaderhip Purpleconversation Opening Brownconversation Negotiating Browncommitment active bluec active bluei caution yellowcc completed blueii incomplete yellowci caution yellowic caution yellowca active bluecr caution yellowcca active blueccr caution yellowccaa accepted greenccar caution yellowccrr rejected redWithdrawn Withdrawn black

PrescribedConversationComplete=cIncomplete=iAccepted=aRejected=rWithdrawnRenegotiated

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Coupling of Outcomes View Coupling of Outcomes View 1. Prescribed Commitment (Leadership)1.1. Commitment to outcome for 1(active)

1.1.1. Commitment to outcome for 1.1(active)1.1.2. Commitment to outcome for 1.1(active)1.1.3. Commitment to outcome for 1.1(wdrew)1.1.4. Commitment to outcome for 1.1(ic)

1.1.4.1 Conversation for Commitment to Outcome 1.1.4(Negotiation)

1.1.5. Commitment to outcome for 1.1(ccar)

1.2. Commitment to outcome for 1(active)1.2.1. Commitment to outcome for 1.2(active)

1.2.1.1. Commitment to outcome for 1. 2.1(active)1.2.1.2. Commitment to outcome for 1.2.1(active)1.2.1.3. Commitment to outcome for 1.2.1(active)

1.2.2. Commitment to outcome for 1.2(ci)1.2.3. Commitment to outcome for 1.2(ic)

1.2.3.1. Commitment to outcome for 1. 2.3(ii)1.2.3.1.1. Commitment to outcome for 1.2.3.1(icr)

1.2.3.1.1.1. Commitment to outcome for 1.2.3.1.1ccrr)1.3. Commitment to outcome for 1(ic)

1.3.1. Commitment to outcome for 1.3(ii)1.3.1.1.Commitment to outcome for 1. 3.1(ccaa)

1.3.1.1.1 Renegotiated Commitment to outcome for 3.1 Supplier Onus(ccaa)1.3.2. Commitment to outcome for 1.3(ccaa)

1.4. Commitment to outcome for 1(ic)1.4.1. Commitment to outcome for 1.4(ccr)

1.4.1.1. Renegotiated Commitment to outcome for 1.4.1 Customer Onus(ccaa)1.5. Conversation for Commitment to Outcome 1.1.4(opening)

ContainingConstituency

Prescribed Leadership 1

1.1

1.21.3

1.1.3

1.111.1.2

1.1.4

1.4.1

1.4

1.1.5

1.3.1.1

1.4.1.2

1.3.1

1.3.2

1.2.21.2.1

1.2.31.2.3.11.2.3.1.1

1.2.3.1.1.1

1.2.1.11.2.1.11.2.1.2

1.2.1.3

1.4.1.1

1.3.1.1.1

Adaptive Management System Adaptive Management System DemoDemo

Enterprise Design SystemEnterprise Design System

Commitment Management Commitment Management SystemSystem

ReportsReports

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Contact InformationContact Information

Joe ArteagaJoe Arteaga

Managing ConsultantManaging Consultant

BCS Strategy & Change ConsultingBCS Strategy & Change Consulting

Toronto, CanadaToronto, Canada

416.478.8175416.478.8175

jarteaga@ca.ibm.comjarteaga@ca.ibm.com