economics

Invention (Innovation) Not Strategy Creates Renaissance – Moving from Darwinian Adaptive to Generative Transformation

Invention (Innovation), Not Strategy Creates Renaissance. Most Darwinian concepts does not engender to developing creativity, and so to innovation. Instead it is about strategy for developing dominant position, this is not a sustainable model as history has shown. Instead, Enterprise Architects should begin reinforcing energy into lost opportunities in innovation and explore to create newer territories.

In the recent times, we saw the fall of Michael Porter’s ideas around corporate Darwinism. His company during the past two decades influenced the CEO’s with trickle down ideas and C level were enamoured by it, as it helped them device system giving them enormous clout. Suddenly the landscape has changed, the market response has been very different, from what the CEO’s sought. This is because Darwinian theory does not sustain. Inorganic decisions are not working. From recent HP’s fiasco (Autonomy acquisition), it is much evident how corporates are massively faltering. Decade back, Carly Fiorina then HP’s CEO sought EA framework based on Darwinian adaptive principles as a way to achieve business enablement. It has not worked. It is now exactly a decade since she introduced. Theories developed on Darwinian dominance has been flawed and it is now much evident. Porter’s company recently declared bankruptcy. Those ideas are history.

What killed Michael Porter’s Monitor Group
http://www.forbes.com/sites/stevedenning/2012/11/20/what-killed-michael-porters-monitor-group-the-one-force-that-really-matters/

Check out interview with Carly’s Darwin EA framework to create adaptive capabilities.

http://www.hp.com/hpinfo/execteam/speeches/fiorina/forbes04.html

Based on flawed ideas, corporates employed resources targeting to achieve market dominating capabilities. Against this landscape, IT unfortunately has been delivering diminishing return. To overcome the value struggle that IT could offer, various schemes in the industry has been probed. Especially, TOGAF itself has been maturing to develop dialogue for IT from being across LOB service provider, cost to profit center, to more ambitious as business enabler. The argument of Nicholas Carr’s IT Does Not Matter when seemed almost true, ideas around creating EA driven strategic operating model emerged. Jeanne Ross book on EA as Strategy – Achieve Competitive Advantage

These ideas are getting outmoded. The essence of creating sustainable business model is to keep throttle on innovation. Challenges still remain to solve or probably discover newer opportunities by innovation that creates generative system, which intrinsically allows for emergence.

Check out Jeanne Ross discussion on EA – IT in context of business transformation

MIT’s Ross on How Enterprise Architecture and IT More Than Ever Lead to Business Transformation

In my mind, even Jeanne dwells on conventional wisdom. She is not discovering newer landscape. She discuses to improve the leverage to achieve strategy for transformation. The question is why/ which / what / where/ when strategy and how transformation and finally what outcome??

Dealing with thoughts like these, EA is not a domain of IT alone. EA is an integrative subject that brings together several disciplines to solve both macro systemic and micro functional concerns. EA can be used to reimagine and repurpose architectures including those realized by IT.

Another concern that EA must tackle in its value proposition is the value it can help achieve at system level. The GDP related to digitization has been in the increase. However, what is not evident is the “productive” impact of the digitized portion of the GDP. Meaning what activities in the digitized world are essential to mankind’s survival, are productive GDP. Innovations are required in increasing the potential of the productive GDP driven by IT. This argument is crucial.

In my view, EA can offer a great leverage to reimagine future, besides achieving leverage in the existing operating model. In pursuit of such mission, EA does not belong to “IT” alone. What we need is generative and not mere adaptive transformation efforts. It is in generative system, where integrative disciplines will work to allow for tacit knowledge creation. It is this tacit knowledge that will trigger emergence of newer opportunities, creating emergent architecture.

Operating Model – Have Fed Agencies abandoned creating “Enterprise Transition Plan” ? ETP is challenging for the OCIO

Enterprise Transition Plan – Line Of Sight – Operating Model

Ref:- FEAC Institute, FEA Guidance, INGINE INC, Srinidhi Boray[/

Conceiving a coherent modernization plan and executing them has always been a challenge for OCIO. Enterprise Transition Plans generally documents the visions, goals, capabilities at the strategic level and then progresses to envisage “target conceptual architecture”, while planning for tactical efforts working through the mechanisms of architecture lifecycle needed to transition towards the target enterprise conceptual architecture. This results into creating the “roadmap”. The documents that holistically speaks to organizationals capability in reaching such a roadmap is the “Enterprise Transition Strategy”.

Reading the Enterprise Transition Strategy following should be evident:

Organization’s maturity and competence to perform and embrace the future capabilities

Organization’s present constraints in delivering the needed “capabilities”

The profile of the architecture cross sections (segments) needing modernization to develop the intended “portfolio of capabilities”

Investment Profile – planned to executive segment modernization

The governance structure and mechanism that engages the different functional capabilities, such as leadership – management, lines of businesses, enterprise architecture, capital planning and program management. This group together develops and vets – strategic plans, tactical plans and implementation plans governed by following  life cycles

  • Performance Management (Architect, Invest, Implement)
  • Architecture Segment (Notional, Planned, In-Progress, Completed)
  • Release Architecture (sadly mostly do not plan this – it is here interdependence of architectures or capabilities are realized and maintained)
  • Capital Planning (Preselect, Select, Control & Evaluate)
  • Investment (mixed, steady state, Development, Modernization & Enhancement -DME)

A “Sequence Plan” along with “Implementation Plan” is developed to reach the desired Target Architecture (temporal perspective)

Finally Operating Model – The most important component – it assimilates all the decisions chosen for creating an operating leverage, that creates degree or order of leverage to deal with inherent systemic complexities against the efforts of creating economy of scale in delivering the enterprise capabilities essential for delivering the enterprise mission.

More discussion in below link in creating Enterprise Transition Strategy

https://ingine.wordpress.com/2008/12/06/ea-framework-for-transition-planning/

Transformation Framework Capturing an Operating Model

https://ingine.wordpress.com/2012/08/03/transformative-enterprise-architecture-framework-connecting-strategy-tactical-operational-execution-implementation/

Mike Whitney: There is No Recession There is Demolition

Another Classic Example of Gaussian Distribution :

“During eight years of the Bush Administration, the 400 richest Americans, who now own more than the bottom 150 million Americans, increased their net worth by $700 billion. In 2005, the top one per cent claimed 22 per cent of the national income, while the top ten per cent took half of the total income, the largest share since 1928.

“Over 40 per cent of GNP comes from Fortune 500 companies. According to the World Institute for Development Economics Research, the 500 largest conglomerates in the U.S. “control over two-thirds of the business resources, employ two-thirds of the industrial workers, account for 60 per cent of the sales, and collect over 70 per cent of the profits.”

… In 1955, IRS records indicated the 400 richest people in the country were worth an average $12.6 million, adjusted for inflation. In 2006, the 400 richest increased their average to $263 million, representing an epochal shift of wealth upward in the U.S.” (“Wealth Inequality destroys US Ideals” Don Monkerud, consortiumnews.com)

via Mike Whitney: There is No Recession .

Game Theory : The essence of Enterprise Architecture is about establishing a “Dominant Strategy”

There is Darwinian in the below idea; however more congenial idea is Generative having more systemic congruent results

Same ideas can be repurposed in a better way.

The essence of Enterprise Architecture is about establishing a “Dominant Strategy”, that best achieves ‘economy of scale’. The economy of scale will apply to each of the architecture design decision selected. The set of design decisions that leads the architecture planning from strategy to tactical and from tactical to execution needs to converge to a dominant strategy engaging all the stake holders led by a cohesive mechanism of Governance.

Note: EA is about discussing the largest picture of the enterprise. Hence, any decision made must ensure that it lends sufficiently across the enterprise while increasing its “reuse”. This means ‘economy of scale’. All decisions, including the technical design decisions must yield a better ‘return on investment’ from optimized ‘performance vs cost’ perspective.

The main goal of the Governance, is to lead the dialogue that an enterprise riddled with complexities is engaged in,  towards a –“Dominant Strategy”. In many ways the array of events that Governance trigers, while working towards converging the decisions to a cohesive set of results, is similar to the behavioral probabilities  studied in Game Theory.

When a system is riddled with constraints, especially when  ‘money’ as  a resource is scarce, then it dominates the decisions needed to achieve the strategy. A system’s behavior  is governed by both micro and macro considerations. There is a threshold until which the system is probabilistically stable and is not affected by the micro behavior. After a certain threshold the micro behavior is unable to sustain the desired macro outcomes.

When Scarcity arises – Economics is Hot

Dominant Strategy

A strategy is dominant if, regardless of what any other players do, the strategy earns a player a larger payoff than any other. Hence, a strategy is dominant if it is always better than any other strategy, for any profile of other players’ actions. Depending on whether “better” is defined with weak or strict inequalities, the strategy is termed strictly dominant or weakly dominant. If one strategy is dominant, than all others are dominated. For example, in the prisoner’s dilemma, each player has a dominant strategy.

Introduction to Game Theory

Only Essential Matters – When IT Budget is shrinking

 

Architect will be forced to think economics first and then technology. Also, architecture will be about leveraging the existing infrastructure and then plan IT spending for only the essentials. ART in Architecture will still matter. The above curve looks like a bell curve. This is another example of extreme linearization resulting into gaussian distribution.

Extreme Linearization results into Extreme Disparities

Extreme linearization leads into extreme exponential distribution resulting into extreme disparities. Top 20% in US earn 50%  income and own 85% wealth. The rest of the 80% earn the rest of 50% and own only 15% of wealth. The question is what or who is EA serving. The 20% or the 80% of the population or is it the income or to the wealth. Or, all put together.

In the context of TARP and the percentages of tax paid by different demographics – who is paying whom? Those who shored up losses by the marginalizing the working class receiving the bail-out?  In other words, to the losses white collar contributed, how much is the blue collar paying in bailout.

Recent Article

Concentration of wealth in hands of rich greatest on record

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BY DANIEL TENCER

Published: August 15, 2009
Updated 1 day ago

The wealthiest 10 percent of Americans now have a larger share of total income than they ever have in records going back nearly a century — an even larger amount than during the Roaring Twenties, the last time the US saw such similar disparities in wealth.

In recent years, the fact that differences between rich and poor are the greatest they’ve been since the Great Depression has become a popular talking point among liberal-leaning economists.

But an updated study (PDF) from University of California-Berkeley economist Emanuel Saez shows that, in 2007, the wealth disparity grew to its highest number on record, based on US tax data going back to 1917.

According to Saez’s study, which Nobel prize-winning economist Paul Krugman drew attention to at his New York Times blog, the top 10 percent of earners in America now receive nearly 50 percent of all the income earned in the United States, a higher percentage than they did during the 1920s.

“After decades of stability in the post-war period, the top decile share has increased dramatically over the last twenty-five years and has now regained its pre-war level,” Saez writes. “Indeed, the top decile share in 2007 is equal to 49.7 percent, a level higher than any other year since [records began in] 1917 and even surpasses 1928, the peak of stock market bubble in the ‘roaring’ 1920s.”

By comparison, during most of the 1970s the top 10 percent earned around 33 percent of all the income earned in the United States.

The contrast is even starker for the super-rich. The top 0.01 percent of earners in the US are now taking home six percent of all the income, higher than the 1920s peak of five percent, and a whopping six-fold increase since the start of the Reagan administration, when the top 0.01 percent earned one percent of all the income.

There is no consensus among economists on whether large disparities in income lead to economic disruption, but it is hard to ignore the correlation between rising income inequality and the onset of economic crisis. The last time the US saw similar differences in income was in 1928 and 1929, just before the start of the Great Depression.

Saez also broke the numbers down by administration, and found that while the wealthiest few saw their incomes rise as quickly during the Bush years as they did during the Clinton years, the same was not true for the rest of the population.

Saez suggests that the economic growth seen on paper during the Bush years was little more than an illusion for the vast majority of Americans, who saw their income grow much more slowly in the 2002-2007 period than they did during the Clinton years.

During both expansions, the incomes of the top 1 percent grew extremely quickly at an annual rate over 10.3 and 10.1 percent respectively. However, while the bottom 99 percent of incomes grew at a solid pace of 2.7 percent per year from 1993–2000, these incomes grew only 1.3 percent per year from 2002–2007. As a result, in the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth.
Those results may help explain the disconnect between the economic experiences of the public and the solid macroeconomic growth posted by the US economy since 2002. Those results may also help explain why the dramatic growth in top incomes during the Clinton administration did not generate much public outcry while there has been an extraordinary level of attention to top incomes in the press and in the public debate over the last two years.
Saez, who this spring won the prestigious John Bates Clark Medal for economists under 40, links this disparity to the Bush tax cuts, noting that “top income tax rates went up in 1993 during the Clinton administration (and hence a larger share of the gains made by top incomes was redistributed) while top income tax rates went down in 2001 during the Bush administration.”

TWO MORE RECESSIONS?

The economic crisis that has taken hold over the past year isn’t over, and the world could in fact see two more recessions before the crisis is finally over, says the chief economist of Germany’s influential Deutsche Bank.

Norbert Walter told CNBC that investors are worried about the health of the US dollar, and many countries are facing difficult financial problems because of overspending by governments on bailouts and stimulus. Those things combined could push the world economy downwards not once but two more times in the near future, he said.

“I believe that the rescue packages brought on have been so costly for so many governments that the exit from this fiscal policy will be very painful, very painful indeed,” he said. “Some of us are already talking about a W-shaped recovery. I’d probably talk about a triple-U-shaped recovery because there are so many stumbling blocks here to get out of this.”

“The world is in trouble,” Walter told CNBC.

In Lack of Theories – Planning will be along a Straight Line

Light bends in a gravitational field

Einstein's prediction (1907): Light bends in a gravitational field

Enterprise Architecture as a discipline promotes a framework of theories useful for planning the enterprise behavior. It might take years for verifying a theory; but in lack of it, manifold years will be needed to salvage the wrong done. In lack of theories the planning will be along a straight line, completely missing what mind should have uncovered and rather relying on what meets the eye. Furthermore, while acknowledging that planning is not moving along a straight line, it also must factor that random action exists that gives rise to unpredictability. This means detecting actions that leads into fragments and anticipating consequence due to them is very important both in structure and in behavior.

Most important among all other theories in the realm of EA is ‘Theory of Constraints’. Per ‘Programmed Cell Death’ A Constraint provides information about the current state and why it evolved into its present state from the past. Also, it provides inference into the possible future state. TOC also ties into system dynamics that can be explained by entropy. All these together has a consequence in terms of the behavior, especially with the probabilistic determinism at macroscopic level and indeterminism at microscopic level. The all encompassing behavior of the enterprise as an instrument with no beginning and end is explained by ‘implicate order’, which also accounts for generative transformations by unfoldments the DNA of which exists enfolded. All encompassing means an inclusive and a pluralistic architectural framework.

Checkout: Creative People At Work – Tribute to Einstein’s Thought Experiment – “Traveling On a Beam of Light”.

https://ingine.wordpress.com/2008/12/01/creative-people-at-work/

Emergence of Universe – Thought Experiment that traces the origin of Universe and where possibly it might go. This is study of generative transformation.

https://ingine.wordpress.com/2008/12/06/enterprises-in-generative-transformation-akin-to-universe-life-cycle/

9 Billion Dollar Scientific Experiment – To verify the creation of world. Why do we need this? Keep asking this billion dollar question (that is 9 times manifold, 1000 times manifold – a million dollar question)

TARP for White Collars and a Harp for Blue Collars

Is TARP a Trap?

TARP is not an inclusive system that addresses the blue collars. The auto industry still has to go begging, while the viscous white collared finance service sector gets blessed under TARP.

Hey! you poor blue collar insolent fool can’t you just twiddle on your HARP and sing your blues away. At-least as a rejoinder to the apathetic Nero who is happy fiddling TARP and stoking to your misery, despite having a amok run with your money, while you undeservingly did not dread the drudgery. Or, can you wake-up poor sloth fool, else the Machiavellians will drain you further clean.

 

Unemployed Harpist

Unemployed Harpist

Social Entrepreneurship – Change at Grass Root Level (George Foundation)

Enterprising uprising – social development – value to the citizens

http://www.tgfworld.org/home.html

 

 

 

Abraham M. George

Dear Friends,

I write to you today to ask for your support.  For the past 12 years, The George Foundation has committed itself to breaking the cycle of poverty that impacts some of the world’s poorest children.  Our school, Shanti Bhavan, has become a beacon of safety, hope and opportunity for children who would otherwise have no chance to succeed in life.  

Shanti Bhavan was founded in 1996 in a rural village outside of Bangalore.  It is a home and an exceptional school for 210 children from India’s lowest or “untouchable” castes.  The children come from families that face constant social discrimination; they are deprived of the opportunity to live with dignity, and do not have access to proper education, employment, basic health care and human rights.  Shanti Bhavan, a non-sectarian institution, offers both a loving home and a world-class education for all its children. 

Today, we face an immediate crisis.  Recent changes in financial markets have limited the extent to which our family contributions can fund the full operating cost of the school.  We are struggling to maintain current services and anticipate that the next 1-2 years will be particularly challenging.  It is during this period that we need the support of generous individuals like you.

Shanti Bhavan is currently operating at $20,000 per month, which includes residential care, food, clothing, medical services, academic programming and administrative costs.  While the staff remains dedicated to the mission, everyone is stretched to the maximum with cost cuts.  With the help of several volunteers from India and abroad, we have been able to fill teaching gaps and provide adequate attention to the needs of the children.


In addition, over the past 5 months we have launched a major drive to raise donor funds.  We initiated a Sponsor-A-Child program that seeks $1,500 per child, which covers all the needs of a child for one year at Shanti Bhavan.  So far, we have secured more than 20 full sponsors, and an additional 50 individuals and organizations have made other contributions to the school. 


Shanti Bhavan is a very special project that should never be allowed to die for want of money.  The children have already proven themselves: In last year’s high school graduation exam, all of our students passed in first classes in the highly rated ICSE national examination — the first time in history that an Indian school for “Dalit” children has achieved such success. 

These children are a testament to the potential of quality education and care to transform the lives of India’s poor.  They and future generations of Shanti Bhavan children will make a lasting impact on communities who otherwise have no means to become productive members of a global society.  These children, like yours and mine, deserve a safe place to learn and grow.  Please join me in ensuring that the school remains open and the children have a home.

As you know, Shanti Bhavan has been the focus of my life and my familys work for over a decade. However, Shanti Bhavan belongs to everyone, and the time has come for every well-wisher to share the responsibility.  We are grateful for the response from our network of friends and volunteers. It would be a great honor and joy to include your support in our efforts.  Please consider making a contribution toward the annual operating cost of the school or an endowment fund whose interest would cover our needs.

 

I make this plea to you at a critical juncture in the life of Shanti Bhavan. You may make your contribution on-line at www.shantibhavanonline.org, or by check.


Kind regards,
 
Abraham M. George

 

P.S.  Checks may be made payable to The George Foundation and mailed to:

 

   In the U.S.: The George Foundation                In India: The George Foundation

   121 Hawkins Place, PMB 192                        316, 3rd Block, 5th A Cross, HRBR layout         

   Boonton, NJ 07005                                         Kalyananagar, Bangalore 560043