Let there be no doubt about it: every industry will be disrupted. The timing may differ and the impact may vary from one sector to the next), but not one single company will escape the upheaval the digital revolution is causing.
Enterprises need to arm themselves for the changes that are coming, and as our recent Information Generation survey showed, business leaders admit they are not future-ready yet. Customers’ changing habits are forcing them to adapt processes, implement organizational changes and evaluate the role of IT.
Last year I had the privilege of reading a beta-version of “The Network Always Wins’, the third book by thought leader and visionary Peter Hinssen. As the book is now becoming widely available, I revisited it and was struck by one of the points Hinssen makes on the ‘thermodynamics of organizations’. According to the author in a recent Forbes blog, “those who will survive disruption are those who understand when to be fluid and when to be frozen. Both are very different but complementary organizational models which are inspired by the natural laws of thermodynamics.”
Hinssen basically distinguishes three stages in the life cycle of a company: they move from being superfluid to fluid and frozen. The fourth phase is when an enterprise stops innovating and no longer adapts to changing market situations. That is when they become rigid. Rigid as in ‘rigor mortis’ and that’s usually when it all ends. Seeing Hinssen put companies into these three (or four) categories made me think about the state of IT in many an enterprise. After all, IT departments go through phases too as they grow along with the company.
Start-ups and grown-ups
IT at start-ups is mostly superfluid: they are in full development of new ideas end new products and IT will follow wherever the young starter is going. The equipment used is often very cheap and especially in technology start-ups, the IT staff tinkers with hardware and (open source) software to get the most out of their investment.
In fact, that’s where a lot of innovation is born. Just remember where Hadoop came from. Not from a large enterprise where business demands drove the CIO to innovation. No, Hadoop was born at Google when that company was still in its infancy and developers created the Google File System and Google MapReduce to establish efficient and reliable access to data, using large clusters of cheap hardware. At small outfits, everyone is the CIO and decisions on where IT is going, are often taken by the company founders themselves.
As a company develops, it migrates from superfluid to fluid. This is not an overnight change, but a gradual, silent evolution. Perhaps someone will be appointed IT Director or CIO and, gradually, processes will be set up and IT will really get organized in a structured way. Procedures will be put in place, quality control will be tightened. After all, the superfluid phase cannot be continued forever, if you don’t want to let things get out of hand as the company grows and takes on more staff.
The trick lies in keeping control, while also retaining flexibility to evolve with the new demands market conditions and both internal and external customers impose. In this third stage of the thermodynamics of IT, parts of the infrastructure will be frozen and will not change that often. Adaptations will be incremental and, ideally, you will get an overall situation that Gartner calls ‘bimodal’: a large number of IT-assets are stabilized and controlled, while other elements remain flexible and open to innovation. As Hinssen points out, there is no obligation to keep a fluid state continually, organizations will switch back and forth between frozen and fluid.
I hope none of my readers finds his (or her) IT department in the terminal state in the thermodynamics of organizations, namely rigid. In fact, that’s the situation you get stuck in when IT has become the master at saying ‘NO’. ‘No’ to new business demands, ‘no’ to technological advances, ‘no’ to every sensible question… The CIO of a rigid division is only interested in following the strict rules that he has set. Procedures dictate what can be done, and that’s preciously little. This is the ideal environment for ‘Shadow IT’ to develop: confronted with the corporate ‘negaholic’ that the CIO has become, business users turn to the cloud and use their credit card to purchase IT services. The CIO has effectively dug his own grave.
The right balance
As a vendor, we face a dual challenge: on the one hand, it is our obligation to avoid becoming rigid ourselves and, on the other hand, we need to provide our customers with exactly the right products and services that enable them to switch back and forth between a fluid and a frozen state. To my mind, the hybrid cloud model that we are propagating allows just that, offering the right balance between agility and flexibility and the ongoing requirement of trust and control.
Jacques Boschung, EMC
