OUR PRELIMINARY SPECIFICATION MAKES SHALE COMMERCIAL. THROUGH AN INNOVATIVE BUSINESS MODEL SUPPORTING THE JOINT OPERATING COMMITTEE, WE PROVIDE OIL AND GAS ASSETS WITH THE MOST PROFITABLE MEANS OF OIL AND GAS OPERATIONS, EVERYWHERE AND ALWAYS. ENABLING THEM TO ACHIEVE ACCOUNTABLE AND PROFITABLE NORTH AMERICAN ENERGY INDEPENDENCE.
OIL AND GAS’ VALUE PROPOSITION IS AT A MINIMUM, LEVERAGED TO THE POINT OF 10,000 MAN HOURS PER BOE. WE KNOW WE CAN, AND WE KNOW HOW TO MAKE MONEY IN THIS BUSINESS.
Professor Dosi’s article discusses the role of innovation in the market economy and assumes companies in a free market are willing to invest in science and technologies to advance the competitive nature of their product offering or internal processes. The key aspects of Professor Dosi’s theories that make them directly applicable to oil and gas are the innovation theories application to earth science and engineering disciplines. These disciplines are key to the capability and success of oil and gas firms search, and production of, hydrocarbons. The investment in science and technologies is with the implicit expectation of a return on these investments, but also, to provide the firm with additional structural competitive advantages by moving their products costs and / or capabilities beyond that of the competition. Professor Dosi note:
Thus, I shall discuss the sources of innovation opportunities, the role of markets in allocating resources to the exploration of these opportunities and in determining the rates and directions of technological advances, the characteristics of the processes of innovative search, and the nature of the incentives driving private agents to commit themselves to innovation.
We have asserted in People, Ideas & Objects that higher commodity prices are a re-allocation of the financial resources towards the innovative producer. This is reflective of the changes from the easy energy era, to one that will be dominated by the earth science and engineering capabilities of the innovative producer. What is necessary is for producers to build People, Ideas & Objects Draft Specification which will enable them to align their resources towards innovation. That alignment being the movement of the compliance and governance frameworks of the hierarchy to the legal, financial, operational decision making, cultural and communication framework of the Joint Operating Committee (JOC).
One of the difficulties in reviewing this paper is the comprehensive nature of its content. I recall how difficult it was to review during the Preliminary Research report, and it appears to have only maintained its degree of difficulty. The content of the paper is accurately reflected in this following quotation.
The discussion will aim to identify (a) the main characteristics of the innovative process, (b) the factors that are conducive to or hinder the development of new processes of production and new products, and (c) the processes that determine the selection of particular innovations and their effects on industrial structures.
Recall two of our four research questions are to determine if the processes of innovation are able to be reduced to a quantifiable and replicable process, and, does the JOC facilitate the means to innovate. It would appear to me that the selection of this paper to review these research questions. Was the reason we are / were able to answer these difficult questions. Professor Dosi notes:
There are two major sets of issues here: first, the characterization, in general, of the innovative process, and, second, the interpretation of the factors that account for observed differences in the modes of innovative search and in the rates of innovation between different sectors and firms and over time.
For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.
The Preliminary Research Report reviewed a variety of papers that fall under the topic of Structuration. What is this and why is it important to People, Ideas & Objects and the innovative oil and gas producer. Here are excerpts from the review and how they affect this project.
Professor Anthony Giddens initially published “The Constitution of Society: Outline of the Theory of Structure”, Berkeley, University of California Press and his theory is well articulated through the following excerpt from “Using the Structurational Model of Technology to Analyze an ERP Implementation” by Olga Volkoff, of the Richard Ivey School of Business.
From the perspective of structuration theory, adaptation is the joint effect of the actions of individuals and the institutional structures within which those actions take place. Structures such as business strategies, organizational culture, reward and control systems, patterns of communication, and professional norms both enable and constrain the daily activities of people, but do not wholly determine them. At the same time, while individuals can choose to act in ways that will either reinforce or alter those structures, their choices are not independent of the structures within which they take action. This “duality of structure” - the recursive (re)production of institutional structures through the ongoing daily social practices of individuals - allows change to emerge in ways that are not wholly predictable.
I think within this quotation we see the reasoning why the oil and gas producers have such difficulty in meeting the demands of innovation. The Joint Operating Committee holds the “actions of individuals, and the institutional structures” that are not recognized by the ERP systems that are available in the marketplace. Therefore you have two disparate organizations, the JOC and the bureaucracy, operating in two different structures, creating conflict and contradicting one another.
Giddens’ theory of structuration is further define by Professor Wanda Orlikowski’s 1992 comments: “the duality of structure refers to the structure of social systems: human actions create a social systems institutional properties and these properties then serve to shape future human actions.” The notion of structuration has three aspects.
It refers to a social process that involves the reciprocal interaction of humans with the structural features of an organization.
Human actions are enabled and constrained by structures, yet these same structures are the result of previous actions.
Structural properties mediate human action and, at the same time, are reaffirmed through human use. In other words, institutional properties are both the medium and the outcome of interaction.
The Preliminary Research report looked at structuration from the perspective of how the current oil and gas organizational structure is defined through the social, legal and environmental influences that provide that structure, and of how the organization in turn provides structure to the social and human elements. People, Ideas & Objects are focused on building ERP systems that identify and support these organizations.
The JOC has explicit legal, ownership, financial and procedural authority and control of the field operations as the standard of operations and conduct in oil and gas, on an international basis. Financial investment in an oil and gas property qualifies for participation on the committee where the operational control is agreed to and implemented. This research asserted that this operational control has significant implications on the internal operations of the participating organization. The facility design, capital budget, legal agreements and the decision making processes are constrained, Giddens’ theory would suggest, by a variety of forms and structures that comprise the basis of operations for the entire industry.
Strategy and structure are mental constructs, important not in themselves, but for their impact on the people in the organization. Strategy and structure are also the vehicles for focusing attention.
Clearly stating that by moving the compliance and governance frameworks of the bureaucracy to be in alignment with the legal, financial, operational decision making, cultural and communication frameworks of the JOC. This realignment will eliminate the conflict and contradictions that occur between the two organizational constructs. This realignment will also increase the attention and focus of the individuals involved within the producer firm and the JOC, and by moving compliance to be in alignment with the operational decision making authority, accountability is enhanced. Lastly, as we will document as this review progresses, innovation is enabled.
Another key component of Giddens theory is that there is an inherent risk of failure if the progress of one element is out of step with the other two. Society, organizations and people need to move in lock step to avoid failure. This has been explicitly interpreted for the purpose of this research that the progress of society and people is either inhibited or facilitated through the actions that form the organizations. Currently individuals and society are dictating larger volumes of energy be sourced and provided by the market. If the bureaucracies that exist today, are unable to meet these demands then we will most certainly see failure.
For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.
The Preliminary Research reports third research question builds on the probable positive outcome of the second question. That being, if innovation can be reduced to a quantifiable and replicable process “Will the Joint Operating Committee facilitate the means to innovate?” In addition to having the scope and understanding of the processes of innovation quantified and replicated. The breakthrough from this research question is that the Joint Operating Committee is the ideal organizational construct to facilitate innovation. I will highlight two key points in this post, and follow up with much more detail throughout our ongoing review.
The two key points are simply ideas and decisions. Two elements that can not be handled by computers. Ideas and decisions are the higher level work that humans need to be involved in, with computers taking over the repetitive and transaction oriented activities.
When we consider the changes in the oil and gas industry, particularly from the point of view of an expanding understanding in the earth science and engineering disciplines. The Joint Operating Committee is designed to generate ideas and make the decisions for the producers represented, making it the ideal organizational construct to support the successfully innovative oil and gas producers. Building ERP systems like People, Ideas & Objects Draft Specification that identify and support the JOC are what’s required to facilitate that innovation.
In terms of idea generation, collaboration is the ideal means in terms of identifying and solving problems. Contrasting the difference between collaboration and consensus is an important point. Consensus is when the majority can agree on a certain decision or direction. Collaboration is when the best solution is being sought by those with a mutual interest. I see the JOC using collaboration as a means to find the innovative solution and making the decisions based on a consensus of understanding.
The operational decision making framework of the industry is with the Joint Operating Committee. What becomes very clear in reviewing Professor Dosi’s paper is that decisions play a critical role in innovation. Professor Dosi states that not all efforts are successful, many fail, and from the failure sometimes the most important lessons are learned, and everyone inherently understands this. The ability of an industry to learn through their collective efforts will mitigate the subsequent similar failures and their costs, and enhance the success over a larger population of companies.
Some of the advantages of using the Joint Operating Committee that were listed in Preliminary Research report were;
All participants are motivated equally. Financial opportunity drives consensus.
The JOC is the legal, financial, operational decision making, cultural and communication frameworks of the oil and gas industry. All the internal processes tacitly support this fact.
The participants in the JOC hold significant technical and managerial capabilities.
The scope of the operational authority of the JOC is constrained by the participants financial interest in the property. The JOC’s formation is traditionally formed around a geographical area, is traditionally limited in its geological and areal extent. This naturally limits the focus of the committee to that facility. The JOC is therefore financially motivated, has the appropriate level of focus, has the operational decision making authority and brings together the collaborative idea generation and consensus building needed of an innovative organization.
For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.
The second research question within the Preliminary Research Report was, Can the scope and understanding of the process of innovation; be reduced to a quantifiable and replicable process?
The short answer to this question is yes, most definitely. Which is significant news to most people. People, Ideas & Objects has consistently stated that high commodity prices are the reallocation of the financial resources to enable innovation. We stand at a point in time where the oil and gas industry will change to an innovation based and focused industry. Fascinating times.
It would be difficult to summarize the entire answer to this research question in one post. During the next few months of our review we will be better able to answer this question. Readers in the mean time can also review the Preliminary Research report.
The paper that was used to answer this research question was Professor Giovanni Dosi’s “Sources, Procedures and Macroeconomic Effects of Innovation” September 1988, Journal of Economic Literature, Volume XXVI pp. 1120 - 1171. If you have access to JSTOR or other databases I would highly recommend that you download and review the paper.
Professor Giovanni Dosi makes the statements that,
“The search, development and adoption of new processes and products in market economies are the outcome of the interaction between”:
“Capabilities and stimuli generated with each firm and within the industry of which they compete.”
The capacity to enhance reserves of oil and gas is significantly more challenging than as little as five years ago. Exploitation is generally expected to continue, however, an enhanced role for various degrees and types of exploration is expected to commence. The energy frontier brings many new risks and complexity in the area of technical, political and the environment. These account for much of the changes in stimuli and capability that Professor Dosi states are required to facilitate further innovation.
Secondly, the microeconomic trends associated with changes in the relative prices of outputs. Oil and gas prices are beginning to reflect the scarcity, importance and value of these commodities to society.
Dosi notes the second influence to enhanced innovation is;
"Broader causes external to the individual industries, such as the state of science in different branches, the facilities for the communication of knowledge, the supply of technical capabilities, skills, engineers etc.”
Innovation and science are iterative upon each other. As the pace of development in earth science and engineering innovations increase, these will have an accelerating effect on the development within the sciences which of course, will lead to further innovations.
These points are only the tip of the iceberg. Professor Dosi’s 1988 paper is renowned for its impact on business innovation. Over the next few months as our review of the Preliminary Research Report and Draft Specification progresses. We will be spending a significant amount of time in Professor Dosi’s paper.
For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.
In addition to the Preliminary Research Reports hypothesis and conclusion, noting the Joint Operating Committee is the “natural” form of organization, there were a handful of research questions that were answered in that report. The four questions and their updated answers will be posted here over the remaining part of this week.
The first question was simply, “Has the hierarchy’s value expired?”
This may seem to be an unfair question, but one that most people will have firm opinions on. Alan Murray, Deputy Managing Editor of the Wall Street Journal wrote an interesting piece on the topic in Saturday’s Wall Street Journal. Within the article he documents many of the issues that organizations face. However, it’s the quantity and quality of the comments to the article that show the scope of the debate on the hierarchy’s future. One can clearly see the two camps forming and the ability to influence each other is at somewhat of a stale mate. Opinions are well formed with differing perspectives of the same facts, note the discussion regarding the development of Boeing’s 787 aircraft. This argument has only begun.
Those who believe that we will continue with the hierarchy number in the minority at this point in time. Those that support the hierarchy would assert, correctly, that their needs to be some form of replacement governance model. You just can’t eliminate the well defined model that governs the oil and gas producers organizations. Although we had not developed an alternative in the Preliminary Research report, we eventually did publish the Military Command & Control Metaphor (MCCM) that provides the replacement governance model for both the Joint Operating Committee and producer firms.
By adopting the well understood military chain of command. Applying it over the producer firms involved in a JOC. Allows teams comprised of members from different firms to operate as required within the specific JOC. This pooling of the available technical resources replicates in many ways the manner in which the NATO countries military resources are able to operate.
The ability to pool technical and scientific resources from several of the producers participating within one JOC is critical. Each firm currently have dedicated technical resources and capabilities built within each producer firm. The luxury of having each firm with mutually exclusive technical resources may be over. With each barrel of oil requiring progressively more earth science and engineering, the demand for these resources may begin to outstrip supply. Additionally the time required to train new earth scientists and engineers does not provide for the potential retirement of the brain trust. These resource constraints can be resolved through the use of the MCCM and pooling of the technical resources of the producer firms.
Therefore, the answer to the question for the oil and gas producer is the hierarchy’s value has expired. It is a model that deals with the firms needs, but ignores the JOC. What the successfully innovative producer needs is a governance model that deals with both the producer firm and the JOC’s that they have an interest in. (Particularly when the operational decision making framework resides with the JOC.) For further reading on this topic please review the MCCM of the Draft Specification.
For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.
Starting with today’s post we will begin a process of reviewing the data, information and ideas that makes up People, Ideas & Objects and the Draft Specification. This will provide readers with a thorough understanding of the elements that make up this project. These posts can be aggregated by selecting the Review label.
People, Ideas & Objects began with the Preliminary Research Report’s hypothesis asking “if the Joint Operating Committee (JOC), modified with today’s information technologies, provides an oil and gas concern with the opportunity for advanced innovativeness.” The critical breakthrough in the research’s conclusion is the “industry standard JOC is the “natural” form of organization for oil and gas where the participants of the committee are supported and augmented through the diversity and availability of the remaining organizations team members. A greater alignment to this conceptual model would facilitate the desired innovation.”
So if this is how the industry operates why does it need People, Ideas & Objects Draft Specification, its software development capability and associated user communities? The difficulty is that today’s ERP systems do not recognize the existence of the Joint Operating Committee. This stands in contrast to the fact that the JOC is the legal, financial, cultural, communication and operational decision making framework of the industry. Every internal and external process of a producer tacitly recognizes these frameworks. However, the organizational focus has become centered on the compliance and governance frameworks of the royalty, tax and SEC requirements of the producer firm. What the Preliminary Research Report determined, and the Draft Specification implements, is the movement of the compliance and governance frameworks into alignment with the five frameworks of the JOC.
For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.
There are a large number of papers that have been published highlighting the work of Professor Alfred P. Chandler. Chandler's work can best be summarized as providing an historical context of the American corporation over the 19th and 20th Centuries. To start this review I want to highlight a few papers of interest, the reason we are beginning this review, and what we hope to gain from a review of the history of the corporation.
The first paper provides us with an understanding of the scope and scale of Chandler's historical work. The paper is written by Professor David C. Mowery from the University of California at Berkeley. The paper is entitled "Alfred Chandler and knowledge management within the firm". This will be the first paper we review as it provides a strong basis of the historical record that Chandler established. This paper also acknowledges Richard R. Nelson, David Teece, and William Lazonick for comments.
The second paper to be reviewed is written by Professor William Lazonick and is entitled "The Chandlerian Corporation and the theory of Innovative Enterprise". Mowery's and Lazonick's papers will be the first two papers that are reviewed. All of Chandlers works can be aggregated by using the Chandlerlabel when the reviews are published.
The reason to go back and look at the history through the works of Chandler and others is to gain an appreciation of why things are done the way they are today. As Mowery states: "By highlighting the historical forces that underpinned the growth of the large industrial firms that dominated the global economy for much of the 20th century, Chandler's work will enable future scholars to better understand the new factors that are transforming the 21st-century economy." Or in other words, those that fail to learn from history are doomed to repeat it.
These reviews will be conducted in addition to a number of other researchers works. We have a large, strong group of authors that we are now following, and I have over 20 papers that I will be reviewing.
March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 30 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.
McKinsey have published an interesting document that analyzes the ways and means that organizations make decisions. This is particularly relevant to the work at People, Ideas & Objects as we are first of all, asking the investment community to fund these developments, and secondly setting up how users will be able to build the systems that they want. Both requiring what McKinsey calls "bet the company" type of decisions.
The larger point that the document asks and suggests, is what are the best ways for companies to make decisions? Noting a series of biases that are part of behavioral psychology, McKinsey documents that process is the most important element in making decisions. No news here as People, Ideas & Objects is user based developments where the users, using only the Draft Specification, determine their best ways to proceed. The only other constraint that is placed upon the user community, and particularly the Community of Independent Service Providers, is that they fulfill the objective of provide the innovative producer with the most profitable means of oil and gas operations.
I would highly recommend to the user communities they read the McKinsey document. This is the type of value that can be added to People, Ideas & Objects, and hence the greater oil and gas community through user research into the best ways and means of proceeding with this important and quite exciting task.
March 31, 2010 is the deadline for raising our 2010 operating budget. After which a variety of consequences, such as financial penalties and a loss of one years time will occur. Our appeal should be based on the 30 compelling reasons of how better the oil and gas industry and its operations could be handled. They may not be the right way to go, but we are committed to working with the various communities to discover and ensure the right ones are.
People, Ideas & Objects is about innovation in oil and gas. Energy has become substantially more difficult now that the easy-energy era has passed. Innovation in the Earth Science and Engineering disciplines is where the difficulty and value reside. How do we develop an organization that facilitates and supports these sciences and innovations. The Preliminary Research Report determined that the Joint Operating Committee (JOC) is the appropriate organizational construct to enable innovation. This implying a level of interdependence between producers represented in the JOC.
Professor Wanda Orlikowski's Model of Technological Structuration was used in the Preliminary Research Report to determine that software defines the organization. To change the organization requires the software to be built first. Using Baldwin's Mirroring Hypothesis suggests that we will also need to develop an interdependent organization within People, Ideas & Objects to develop that software.
Scholars in a range of disciplines have argued that mirroring is either a necessary or highly desirable feature in the design of development projects, but empirical research shows that some projects deviate from strict mirroring, seemingly without harmful effects. In this paper, we formally define the mirroring hypothesis, describe its theoretical underpinnings and systematically review the empirical evidence for and against it. Our review includes 129 studies spanning three levels of organization: within a single firm, across firms, and open community-based development. Across these levels, the hypothesis was supported in 69% of the relevant cases, but not supported in 31%. It was most strongly supported within firms, less strongly across firms, and often violated in community-based development settings. p. 1
It is in the review of those 129 studies that our ability to see the Mirroring Hypothesis, or to be precise, the exception noted and developed in Professor Baldwins paper, is directly applicable to the work being done in People, Ideas & Objects. Therefore, in many ways, defining what and how the organization of users, developers and members of the Community of Independent Service Providers will operate to build this software.
The exceptions in turn were of two types: In four cases, closely collaborating teams within single firms created modular systems comprised of independent components. More surprisingly, in 28 cases, independent and dispersed contributors made highly interdependent contributions to the design of a single technical system (or sub-system). Based on a detailed analysis of the latter 28, we introduce the concept of actionable transparency as a means of achieving coordination without mirroring. Contributors achieve actionable transparency by embedding their design in a centralized system with a shared design language and near-real-time updating, where everyone with an interest in improving the design has the right and the means to act on it. We present examples from practice and then describe the more complex organizational patterns that emerge in lieu of genuine mirroring when actionable transparency allows people to “break the mirror.” p. 1
The exception to the Mirroring Hypothesis is teams comprised of independent and dispersed individuals can provide the desired interdependency that we are seeking in the innovative oil and gas producer.
1 Introduction
The authors provide a definition of what innovation consists of. A definition of innovation that reflects what will be necessary in both the innovative oil and gas firm, and the innovative systems development communities of People, Ideas & Objects.
Innovation is a process in which people define problems and then actively develop new knowledge to solve those problems (Nonaka, 1994). p. 2
Building on this definition, what will be required to ensure that the dispersed and independent contributions of People, Ideas & Objects will enable the interdependence necessary in the software. Or as Baldwin suggests that we "break the mirror".
Responding to these gaps, this study makes two key contributions to the literature. First, it defines the mirroring hypothesis, explains its theoretical roots, and then systematically and critically reviews the empirical evidence pertaining to it. Second, it synthesizes observations from a large number of cases that violate the hypothesis to explain when and how development organizations can “break the mirror.” pp. 2 - 3
and
By contrast, the second type of exception poses a deeper theoretical challenge. In traditional development organizations, people have relied on spontaneous face-to-face communication, physical collocation, and formal authority to coordinate highly interdependent design tasks. The paradigmatic form of organization for developing an interdependent design is a highly interactive team, working in close proximity, employed by a single firm (Allen, 1977; Clark and Fujimoto, 1991; Sanchez and Mahoney, 1996; Chesbrough and Teece, 1996; Baldwin and Clark, 2000). However, the large number of counter-examples revealed by our study immediately raises the question, how are interdependent design decisions and tasks coordinated in the absence of face-to-face communication, physical collocation, and formal authority? pp. 3 - 4
If we go back to our review of Professor Baldwin and von Hipple's paper in late 2009 and early 2010, "Modelling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation". This paper compared various forms of innovation by producers, innovation by individual users and open collaborative innovations. We learned that user contributions were freely given when the user understood and contributed to a design when they would receive greater value from the design then what they contributed. People, Ideas & Objects maintains the identity of users are "hidden" from the bureaucracies who do not want this project proceeding. And lastly the tools, policies and procedures of making contributions to People, Ideas & Objects maintain what the authors call "common ground". These are the components that will make the project successful.
To answer this question, in Section 5, we take a closer look at the twenty-eight exceptional cases in which independent contributors developed highly interdependent designs. We find that in all such cases (1) the contributors had compatible motivations and no severe conflicts of interest with respect to the ultimate use of the design; (2) the contributors worked in or created a framework that gave them expectations of good faith and some protection from harmful actions by other contributors; and (3) most importantly, the contributors maintained a significant shared understanding or “common ground” with respect to the design (Clark, 1996; Srikanth and Puranam, 2007). Common ground was sometimes created using analogues of traditional coordination mechanisms—e.g., electronic communication, temporary collocation, and informal, status-based authority. But we also find that independent contributors often coordinated their efforts implicitly by using development tools that made the design-in-progress both transparent to and actionable by all members of the group. p. 4
Yesterday in Part I of our review of this paper we documented the concept developed by the authors of Actionable Transparency. Actionable Transparency is the necessary ingredient to dispersed and independent developers to maintain high levels of innovative development. This ingredient is therefore not only desirable for People, Ideas & Objects, but also the innovative oil and gas producers.
The concept of actionable transparency is the main theoretical contribution of this paper and the focus of Section 6. As we define it, actionable transparency captures the extent to which everyone with an interest in improving a given design has the right and the means to act on it, i.e., to change it and see what effects the changes have. p. 4
and
In effect, anyone with access to the archives can “see” what’s going on without needing direct input or assistance from others. Actionable transparency requires not just that people can access and make sense of the archives and source materials, but also that they can contribute to the evolving design. p. 4
As the authors have noted "Actionable Transparency" has broken the mirror. Although the independent contributions develop an interdependent system. The breaking of the mirror would indicate that an innovative oil and gas producer would not be supported by these types of activities. Here the authors note that genuine mirroring is not achieved, but something more desirable, valid and valuable.
In the presence of actionable transparency, it is common for more complex relationships between system design and organizational structure to emerge in lieu of genuine mirroring. p. 4
In summary, based on three recent papers that we reviewed. [Orlikowski's paper and Structurational Model of Technology, Professor Baldwin's and von Hipple, and this paper] we are able to conclude the methods and means that People, Ideas & Objects software development methodology will successfully develop the modular Draft Specification. Which in turn will enable and support the innovative oil and gas producer to employ the interdependence inherent in the JOC.
From this study, managers may conclude that mirroring is a common and effective way to achieve coordination, but it is not the only way. In the presence of compatible motivations and frameworks supporting expectations of good faith, there are new ways of building common ground, based on digitized designs, electronic archives, automated test suites, and instantaneous transmission of text, data and pictures. These alternative means, which support what we have called actionable transparency, can be used as complements or substitutes for mirrored forms of organization. Managers of development organizations within and across firms and in open collaborative groups, who choose or are required by circumstances to “break the mirror,” should be aware of these alternative means of achieving coordination. p. 33
and
We have shown that while mirroring is common in practice, it is not universal. Independent, dispersed individuals and firms can successfully collaborate on highly interdependent tasks if they have compatible motivations and expectations of good faith and can maintain a shared understanding of the evolving design. Actionable transparency can sustain an ongoing shared understanding of a design amongst far-flung contributors, thus is an important means of collaboration in the digital age. p. 34
A new working paper has been released by Professor Carliss Baldwin and Lyra Colfer. This paper "The Mirroring Hypothesis: Theory, Evidence and Exceptions" is something that we should have written about before, however time is an issue. What is interesting about this paper is that it is Professor Baldwin's co-author, Lyra Colfer's Doctoral Dissertation. Her Dissertation has been abbreviated into one paper that provides substantial evidence that the methods being used in the development of People, Ideas & Objects software applications. Are not just valid, but also valid for the oil and gas industry at large.
In Part I of our review of this paper, I want to introduce the hypothesis, discuss the authors definition of Open Collaboration and note how People, Ideas & Objects deviates from their definition. And lastly in this first part, talk at length about a concept called ActionableTransparency.
The authors define the mirroring hypothesis as;
The mirroring hypothesis asserts that the organizational patterns of a development project (e.g. communication links, geographic collocation, team and firm co-membership) will correspond to the technical patterns of dependency in the system under development. Thus the hypothesis predicts that developers with few or no organizational linkages will design independent system components, while developers with rich organizational linkages will co-design highly interdependent system components. (The hypothesis claims a correspondence between organizational structure and technical architecture, but allows causality to flow in either direction.) p. 1
Open collaboration as it is called in this paper is defined as:
In an open collaborative development project, product design information, such as software source code, is placed in the public domain. Independent entities including individuals and firms contribute voluntarily to the design, according to their own private needs and interests; they self-select their contributions without relying on managers or market prices to guide them (Raymond 1998, 2001; Benkler 2002; von Hippel and von Krogh, 2003; Weber 2004; Lakhani and von Hippel, 2009). The open collaborative literature extrapolates from these observations, and uses the mirroring hypothesis to predict the structural form of products created in these settings. p. 12
A clarification is necessary to reconcile People, Ideas & Objects differences to this definition. That is the source code is not placed in the public domain. The costs associated with development are too high to expect a volunteer group to be able to identify and build the necessary scope of an application of this size. Access to the code is made available, however, with the desired benefit that the direction the application takes is determined by the user groups based on their needs. I detailed the differences between People, Ideas & Objects and pure Open Source developments in a recent post.
This difference between the definition and our development do not preclude us from learning from this paper and applying its conclusion. On the contrary, I think that the difference between the theoretical and commercial world, in terms of the conclusion, is negligible, and its conclusion is precisely applicable.
6 Actionable Transparency
"Actionable Transparency" is a term that has been coined by Professor Carliss Baldwin. As we will see in Part II of our review, the authors determine that the situation that we fall within "break the mirror" and it is through the concept of Actionable Transparency that we find the results of this research interesting and applicable.
In The Age of the Smart Machine, Shoshana Zuboff (1988) observed that the increasingly information-based nature of industrial work has radically increased its “transparency.” She argued that, when auto-generated archives constitute a near-perfect surrogate for the activities that generated them, access to those archives provides “universal transparency” into what others are doing (pp. 315, 356-361). In effect, anyone with access to the archives can “see” what’s going on without the benefit of direct input or assistance from others. p. 28
Google would certainly subscribe to this theory. If everything is discoverable, then we certainly have a different approach to how we do things.
Material transparency denotes the mere disclosure of information. By comparison, conceptual transparency requires not only that contributors can access the information, but also that they can make sense of it (cf. Wenger, 1990). Finally, actionable transparency requires not just that they can make sense of it, but also that they can act on it (cf. West and O’Mahony, 2008). p. 28
We come to a problem in the development of the People, Ideas & Objects systems that the needs of one user can not necessarily be met through a generic design. I would assert that we are not seeking a generic design, but one that deals with the unique nature of the oil and gas industry as represented in the Joint Operating Committee. How this comes about is unknown, however, lets accept that we can have a multitude of different opportunities and options available to users of the system. If we make the assumption that it is possible, I think we can see in these authors work that Actionable Transparency is the solution.
Material and conceptual transparency do not imply actionability, however. Just because a potential designer understands a design doesn’t mean she can act on it. However, if she has the right and means to customize her own private copy of the design, then she has more room for action. The ideal form of actionable transparency goes even further: the designer can combine her changes with a host of others’, in near real-time, while at the same time guarding against design conflicts and catastrophes. Thus the concept of actionable transparency captures the extent to which everyone with an interest in improving the design has the right and means to act on both their own copy and the master copy of the design. pp. 28 - 29
The concept is well captured in the conceptual form of Open Source code improvements in People, Ideas & Objects. The issue of scope and scale are addressed through the ownership of the intellectual property and the means to fund these developments. Otherwise I see no difference.
What does actionable transparency achieve that conceptual transparency cannot? As indicated at the beginning of the paper, design is a process in which people define problems and then draw on their stores of knowledge and generate new knowledge to solve those problems (Simon, 1981; Alexander, 1964). Much design-relevant knowledge is tacit and initially inaccurate (Nonaka, 1994), consisting of conjectures of the form: “if I change the design this way, these things will happen.” “This way” and “these things” are generally tacit hunches, which are not well-articulated even in the mind of the designer (Bucciarelli, 1994). Yet if a conceptually transparent design is also actionable, conjectures of this type can be tested, evaluated, and new conjectures generated quickly and efficiently. There is no need to make the conjecture comprehensible to another person. There is no need to persuade someone else that a new idea is worth trying, risking failure and embarrassment. Interactions between the designer and the design (embedded in a system of archives and test suites, etc.) are all that is needed to generate a new trial and new knowledge. p. 29
In the Preliminary Research Report Professor Giovanni Dosi's work showed that innovation was messy. Many failures and wrong approaches would be taken, that it is this process of failure that helps to define the successful approaches.
Moreover, if a technical system is actionably transparent to several or many designers, experiments can go on in parallel and concurrently across many designers, who can then learn about and use each other’s changes via the system itself. (See Lakhani and von Hippel, 2009 on “optimistic concurrency” in open-source development.) This form of concurrent, recombinant experimentation creates a very rapid and powerful “generator-test” cycle. Such cycles, sometimes called “variation-selection -retention” cycles, lie at the core of all Darwinian evolutionary processes, including those found in theories of organizational change and evolutionary economics (Campbell, 1969; Simon, 1981, pp.128-130; Nelson and Winter, 1982; Anderson and Tushman, 1990; Tushman and Rosenkopf, 1992; Nelson, 1995). Thus actionable transparency can speed up the processes of design evolution, thereby increasing the rates of innovation and improvement for the system as a whole. p. 29
It is necessary to state how the unique way in which the intellectual property of People, Ideas & Objects enables "Actionable Transparency". I as author of the original Preliminary Research Report, this blog and other writings earned the copyright to the ideas that are expressed. Users, the Community of Independent Service Providers and others are monetarily compensated for their contributions. In essence I am purchasing the ideas that are generated based on the original ideas expressed in the research and blog. The aggregate copyright of all of the ideas is then licensed to the users and members of the CISP's, developers and others, such that this type of interaction, experimentation and development is possible and I would suggest encouraged. I in turn use the copyright to generate the funding from the producers.
The cost of coordinating an organization or team is sometimes equated with its communication complexity, that is, the number of messages that must be passed between members in the course of getting the work done (Brooks, 1975). Mirroring and actionable transparency in a shared system have very different implications for communication complexity. Given a team of n agents working on a fully interdependent design, the cost of coordination via mirroring is n2 n. For the same number of agents and design structure, the cost of coordination via actionable transparency falls to 2n: each agent only needs to manage his or her information exchanges with the system. p. 31
What is the effect of this conceptual model?
In the presence of actionable transparency, it is common for more complex organizational patterns to emerge in lieu of genuine mirroring. We describe these patterns below. p. 31
Part three of our review of Professor Carlota Perez' "Technological Revolutions and Techno-Economic Paradigms" focuses on the organization. People, Ideas & Objects are building software that aligns the compliance sub-frameworks and governance frameworks of the hierarchy, with the five frameworks of the Joint Operating Committee. The hierarchy represents the Tax, Royalty and SEC sub-frameworks. These sub-frameworks are being moved to the Joint Operating Committee to align with the legal, financial, operational decision making, cultural and communication frameworks of all producers. This alignment eliminates the need for the hierarchy and its very ugly cousin the bureaucracy. In addition the Military Command & Control Metaphor is used to replace the governance framework of the hierarchy.
This alignment of the oil and gas firm and market frameworks, around the Joint Operating Committee, is a common-sense proposal that strikes everyone with the "but of course" response.
7. The emergence of a techno-economic paradigm
It is clear in my mind that I believe the Information & Communication Technology Revolution (ICTR) will have a remarkable impact on productivity in oil and gas. This is however, not a shared belief.
No matter how important and dynamic a set of new technologies may be, it only merits the term revolution if it has the power to bring about a transformation across the board. It is the techno-economic paradigm (TEP), being articulated through the use of the new technologies as they diffuse, that multiplies their impact across the economy and eventually also modifies the way socio-institutional structures are organised. p. 194
In Professor Perez' writings it is explicit that the reason for these transitions from one organizational structure to the next is due to competition. The competition coming from the new technologies applied to existing industries. For example, the age of steel enabled new ship builders with larger hulls and faster speeds to eliminate the needs for boat makers based on wood and other materials.
7.3 New organizational models
The alignment that is being captured in the People, Ideas & Objects software would not be possible ten years ago. It probably is only attainable with the tools and architecture that is available today in the Oracle technology stack. The Joint Operating Committees have existed "virtually" as a means for companies to deal with the unique characteristics of the partnerships represented. To move the industry to this new method of organizational structure is only possible with the demand for more efficient systems.
Finally, the TEP incorporates the criteria for best organisational practice. As the new technologies transform work and consumption patterns, they also transform the way factories and businesses are organised. Regular practice in the use of these technologies and in relating to the new conditions in the market contributes to the establishment of new principles of organisation that prove superior to the previous and become part of the new common sense for efficiency and effectiveness. P. 197
A common sense for the industry to move from the Joint Operating Committee being virtual to more tangible, focused and innovative. Two of the primary benefits of this transition is the alignment of operational decision making with the compliance framework. Achieving for the first time in oil and gas, direct accountability. This has the secondary follow on effect of identifying who within the organization is continually making the same mistakes and who is building the value. It is critical for an innovative producer to have these attributes, and it is clear why the bureaucracy has fought so hard to eliminate People, Ideas & Objects from the marketplace.
In each case, the paradigm shift in organisational and business logic becomes widespread and modifies business models and strategies so that the ones that are more compatible with the general logic of the new paradigm prove to be more successful, become highly visible and are increasingly imitated. Thus the TEP is further enriched and the process is self-reinforced. P. 198
What the bureaucracy should consider. Is now the time when this common sense organizational construct, the Joint Operating Committee, be supported and defined in the software of People, Ideas & Objects, based on the Oracle technology stack, with the dynamics of the high-cost era of energy upon us, and the associated disruption of the financial markets defining a new world order? Is this the time that the bureaucracy should stand and fight for its turf, or concede and actively support this software development project?
A techno-economic paradigm is, then, the result of a complex collective learning process articulated in a dynamic mental model of the best economic, technological and organisational practice for the period in which a specific technological revolution is being adopted and assimilated by the economic and social system. Each TEP combines shared perceptions, shared practices and shared directions of change. Its adoption facilitates the achievement of the maximum efficiency and profitability and its diffusion provides a common understanding among the different agents that participate in the economy, from producers to consumers. P. 198
We will know the answer to these questions by March 31, 2010. The deadline in which the 2010 Budget & Planning commitments are due. People, Ideas & Objects are based on such a radically effective value proposition that the bureaucracies determination that no, this is not the time, should be seriously questioned as to who the bureaucracy works for.
8. Diffusion, resistance and assimilation of successive techno-economic paradigms
This conflict between People, Ideas & Objects and the reigning bureaucracy has continued unabated since September 2003. The time in which the proposed research be undertaken. Much has happened to make the research valid and the timing has turned in People, Ideas & Objects favor. Professor Perez suggests diplomatically this "organizational inertia" is at a cross roads as well.
Organisational inertia is a well known phenomenon of human and social resistance to change. In the market economy, however, inertia is overcome by competition, which, by showing the direction of success, serves as a guide to best practice and as a survival threat to the laggards. p. 198
This "survival threat" is a business issue that the oil and gas investor and shareholder should assess in the current market. Is the cost of supporting the software developments of People, Ideas & Objects worth the alternative means of organizing your oil and gas assets?
Even in the economy, under the pressure of competition, the profound and wide-ranging changes made possible by each technological revolution and its techno-economic paradigm are not easily assimilated; they give rise to intense resistance and require bringing forth even stronger change-inducing mechanisms. It is the younger generation that never learned the practices of the previous paradigm that most naturally adopts and applies the new principles. p. 199
It brings me great pleasure to be legitimately offering this opportunity. An opportunity that has far reaching consequences for all involved. What will the markets decisions be on or before March 31, 2010?
Eventually, the new TEP becomes the shared, established and unquestioned ‘common sense’ both in the economy and in the socio-institutional framework creating a clearly biased context in favour of the trajectories of the technologies of the revolution and their use across the economy. This adaptation generates externalities that operate as an inclusion–exclusion mechanism to encourage compatible innovations and discourage incompatible ones. This is an important part of the explanation of why change occurs by revolutions. Thus, techno-economic paradigms act as context shapers in favour of one revolution and—through over-adaptation—as hindrance and obstacle for the next. p. 199
The word revolution never had so much meaning as it does in this context.
Hence, each great surge of development involves a turbulent process of diffusion and assimilation. The major incumbent industries are replaced as engines of growth by new emerging ones; the established technologies and the prevailing paradigm are made obsolete and transformed by the new ones; many of the working and management skills that had been successful in the past become outdated and inefficient, demanding unlearning, learning and relearning processes. Such changes in the economy are very disturbing of the social status-quo and have each time accompanied the explosive growth of new wealth with strong polarising trends in the income distribution. These and other imbalances and tensions resulting from the technological upheaval—including a major financial bubble and its collapse (Perez, 2009)—end up creating conditions that require an equally deep transformation of the whole institutional framework. It is only when this is achieved and the enabling context is in place that the full wealth-creating potential of each revolution can be deployed. p. 199
9. Putting everything together: Regularities, continuities and discontinuities in technical change
One of the more refreshing attributes of Professor Perez' writings, is it just writes itself.
The vehicle of that wide-ranging change of direction in innovation is the techno-economic paradigm, which is a best practice model gradually emerging from practical experience in applying the new technologies. It indicates the optimal, most effective and most profitable way of making use of the new innovative potential. Each TEP articulates a basic set of principles that serves as an envelope encompassing the trajectories of individual technologies and shaping their preferred direction. The TEP propagates together with the new technologies producing the surge of development. Its influence extends from the business sphere to institutions and society so that, as its adoption advances, it becomes the shared common sense for decision making in management, engineering, finance, trade and consumption. This new logic and its capacity to increase effectiveness and efficiency eventually also shape institutional and social organisations, expectations and behaviours. p. 200
And this next paragraph has been a guiding principle to ensuring that the flexible framework for this revolution is enabled in the People, Ideas & Objects application and communities.
The mutual adaptation of technology and society through the social learning of the paradigm and the adaptive redesign of the institutional framework enables reaping the maximum benefit from the wealth creating potential contained in each great surge. But,when this potential is exhausted and a new revolution begins to emerge, those embedded habits and institutions act as a powerful inertial force and must be transformed to enable the next surge. This understanding of the influence of technical change on long term economic growth is one of the key contributions of evolutionary economics to the comprehension of macroeconomics as dynamic and historically shaped. It is no longer possible to ignore the specific technological revolution being diffused and its stage of deployment. p.200
And how pleasant and smooth this entire process can be.
On the view being described here, the notions of long run equilibrium and continuous progress are rejected in favour of more complex processes of overcoming multiple disequilibria originated in massive innovation, in internal differentiation within and between sectors, of creative destruction, assimilation, learning and unlearning successive technological spaces and best practice models and of reaching and overcoming maturity through successive surges of change. The changing rhythms of growth and the processes of structural change and increasing productivity in the economy can now be understood as driven by identifiable technical change and as shaped by the diffusion of successive technological revolutions. p. 200
Winners and losers will be assessed on such criteria. Where will the bureaucracy stand on March 31, 2010. Professor Perez reflects that these are not situations that are difficult to see. It is common sense.
Taken together, the micro, meso and macro views of how technologies evolve show that it is possible to recognise the nature of technology, its forms of evolution and its interrelations as an object for social science analysis and as a way of embedding economic theory in the dynamics of its interaction with technology and institutions in a changing historical context. p. 201
In the first part of our review of Professor Carlota Perez' "Technological revolutions and techno-economic paradigms" we learned many things about the economic situation we are currently in and how the "Sustainable Global Knowledge Society Boom" will affect us. Specifically how the energy industry has employed the process of innovation in "techno-economic paradigms" and how this could be accelerated using the Information & Communication Technology Revolution (ICTR) as suggested in the Resource Marketplace Module.
Note; as I write this second part, of this second document of Professor Carlota Perez, for just this year. Strategy + Business have published a new article of Professor Perez. It can be accessed here. [There is Exhibit 1 that is included in the document that has a "We are here" point on the "time" axis.] And Professor Carliss Baldwin just released a paper entitled "The Mirroring Hypothesis: Theory, Evidence and Exceptions". It is available here, and both papers will be reviewed on innovation in oil and gas as soon as possible.
5. Technological revolutions and techno-economic paradigms
In this second part of our review of Professor Perez' paper. We learn that her research is based on the impact of technology over the last 300 years.
It is possible to identify five such systems of systems since the initial ‘Industrial Revolution’ in England. Each can be seen as inaugurated by an important technological breakthrough acting as the big-bang that opens a new universe of opportunity for profitable innovation. Such was the case of the Intel microprocessor, or computer on a chip, initiating the information revolution. p. 189
For the purposes of our review of this paper the Internet is the technology that makes the ICTR robust for what Perez calls the "deployment" phase. In Part I of this paper we noted Professor Ludwig von Mises' comments that the Industrial Revolution was the solution to the problems facing society.
What distinguishes a technological revolution from a random collection of technology systems and justifies conceptualizing it as a revolution are two basic features.
The strong interconnectedness and interdependence of the participating systems in their technologies and markets.
The capacity to transform profoundly the rest of the economy (and eventually society). p. 189
and
The capacity to transform other industries and activities results from the influence of its associated techno-economic paradigm, a best practice model for the most effective ways of using the new technologies within and beyond the new industries. While the new sectors expand to become the engines of growth for a long period, the techno-economic paradigm that results from their use guides a vast reorganisation and a widespread rise in productivity across pre-existing industries. p. 189
Demands for energy by everyone is escalating. Energy is oxygen to an economy. Any lack of energy to one country or another could have significant negative effects to their economic possibilities. We have seen through the research in this blog that the equivalent man hours of work contained within one barrel of oil totals 18,000 hours. Denial of energy seems to be unfair and unreasonable to those who have to go without. Energy at any price appears to be the deal of this century, and it is. Oil and gas is the business that we are in.
It therefore seems unreasonable to be constrained by energy. The bureaucracy has brought us to this level, and we have prospered, now we need to move faster and more innovatively. Using the ICTR to enable greater deliver-ability of oil and gas is what is possible.
Thus, a technological revolution can be seen more generally as a major upheaval of the wealth-creating potential of the economy, opening a vast innovation opportunity space and providing a new set of associated generic technologies, infrastructures and organisational principles that can significantly increase the efficiency and effectiveness of all industries and activities. p. 190
Oil and gas involves science. Earth sciences and engineering disciplines are the source of where the value is created and held in the industry. Innovations are based on the sciences and in turn fuel scientific discovery, just as discoveries lead to future innovations. How can this value generating process accelerate?
It is at this point, when the argument of the secretive ways of how the bureaucracy deals with ideas is noted to be decidedly counter productive. The process of hiding ideas has the negative effect of not identifying whom is responsible, and hence the reduction of monetary benefits to the discoverer.
If you believe that the next great innovation in oil and gas is going to pop out of some one's office, you might be waiting for a long time. The pursuit of ideas is hard and risky work. If an engineer thinks that he can provide the industry with a 2% gain in productivity by using his new idea, then he / she should be entitled to earn the rights too that idea as reward for the difficult, difficult work.
In the current bureaucracy "knowledge" is held by no one. If someone comes up with a good idea in new drilling technology; then the bureaucracy will sponsor three drilling companies to implement it. Great if your one of the three drilling companies, not so good if your the individual who thought of the idea and were not rewarded. That is the old way of doing business.
The Research & Capabilities Module replaces these secretive ways of the energy industry from a science and engineering perspective. To a proposed method in which the discoveries populate the Module immediately upon discovery. This does two things. First the individual is recognized with the discovery and earns the rights to his / her intellectual property. Secondly these innovations are known within the industry on which others can build upon.
Energy producers should be concerned with their two competitive advantages. One their land and physical asset base. Two, the capabilities they have within the earth science and engineering disciplines. If someone down the road just came up with an innovative way to engineer greater production, then hire them or their consulting firm to work on your assets and augment your capabilities.
We'll stand here at this point with no further development in the sciences and engineering of oil and gas until such time as those who spend the time, effort, money and energy to develop a new idea are recognized and appreciated by the oil and gas producers. If you think a budget-driven bureaucrat will be the one who breaks the next big idea, keep dreaming. Perez has the following to say.
The interconnection of the technologies of a revolution takes place at several levels.
They stem from the same areas of knowledge in science and technology and use similar engineering principles.
They require similar skills for their design and operation—quite often new ones.
They stimulate the upstream development of a common network of suppliers of inputs and services as well as interdependent distribution outlets.
Their dynamism is mutually driven through very strong inter-linkages, often being the main market for each other (the more growth and innovation there is in computers, the more growth and innovation there will be in semiconductors and vice versa).
Their diffusion generates coherent patterns of consumption and use so that the learning in one system facilitates the learning in the next and the installation of conditions for the use of one set of products becomes an externality for the next (once electricity comes to the home for lighting and refrigeration, it facilitates the adoption of radios and vacuum cleaners). p. 191
To reiterate the oil and gas industry will be the prime benefactor by eliminating this blind dark ether of where all good ideas disappear into. Oil and gas companies must become the consumers of ideas, not the destroyers.
A recent post suggested that there was a hesitancy in detailing too much about the user interface to be used in the People, Ideas & Objects application modules. Firstly, this design process that we are undertaking in the Preliminary Specification is about the oil and gas business, not about the new(er) technologies that have been developed. And this post is not so much about the technologies but how the user will interact with the modules being developed here. The interface, as Apple & Google have shown us time and again, is the critical piece in how people use their technologies. [Please stay with me for the full post as this requires some reader faith.]
Back in the dot com bubble much was made of the "Exchanges" that were being built. The market cap for these companies were in the billions and they would prosper through building the technology to facilitate exchanges of documents etc. Thankfully that era ended and we never saw these technologies get picked up. However, today the concept of exchanges is developing again. And they will fail. That is why they do not appear anywhere in the Draft Specification. What does appear are Marketplaces. Places where the people and technology live together in perfect harmony. Creative license is a treasure.
The hesitancy in posting about this is due to the fact that I see the People, Ideas & Objects user interface being exactly like the World ofWarcraft (WoW) user interface. Now that the non-believers have left we can speak to the advantages of this. If you've never seen WoW ask a teenager, actually any teenager, to look at their version of the game. It's brilliant. Note how the environmental variables, and pretty much anything can be accessed through small groupings of control panels. Each provides the user with the control needed to operate the game.
and
Just search YouTube for World of Warcraft and you'll be able to see the analogy I am trying to make here. Professor Wanda Orlikowski defines a term in her paper "Synthetic Worlds". In the Draft Specification there are at least four "Synthetic Worlds" that I want to quickly mention.
Any and all Joint Operating Committees oil and gas assets.
Each of these are Synthetic Worlds populated with the User defined environment. Each facility or oil and gas property is populated with a virtual representation. If a rig was drilling a new well, then the Synthetic World would emulate the actual activities on the rig. [Look to the Technical Vision of this project to understand how that happens.] Importantly, the interactions between people and their avatars, and other avatars, are supported by the design elements that can negotiate a contract, and design a transaction to have a fracing company come in and double the number of horizontal fracs based on what was discovered down hole.
The Petroleum Lease Marketplace might appear like an old "exchange" [bad word] where people are buying and selling. But in this instance it's oil and gas leases. And maybe their not buying or selling but pooling their interests with their neighbors to ensure they get approved for the gas plant they want to build. A producer may be selling off it's none core assets. A young engineer is looking for support to fund his dream of turning the Basal Quartz into the most prolific zone ever. These, all being in real time with people in the marketplace.
The Financial Marketplace module will handle the financial resources of the producers. If you don't like the billing you received from the previously mentionedfracing company, engage them in a virtual private meeting regarding resolution. Interestingly so, since were emulating real life virtually, we are also recording it, making it easy for the producer to show why thefracing costs are incorrectly billed.
The Resource Marketplace module where an oil and gas producer can find any type of service operation from the Community of Independent Service Providers, the service sector vendors like the fracing company mentioned, the employees the firms want to hire. All provided in a Synthetic World.
Now that I have provided full and complete certainty to my detractors, is this possible? Here we have Dr. Eric Schmidt who was the president of Sun Microsystems at one time, also CEO ofNovell at one time and has been the CEO of Google for the past 10 years has to say about Synthetic Worlds.
Everything in the future online is going to look like a multi-player game,” said Schmidt to this international audience. “If I were 15 years old, that’s what I would be doing right now.
In answer to those questions is it possible? Please refer back to the videos earlier. That rich of an environment has been in the game players world for the past number of years. Critically here is where Professor WandaOrlikowski pick up her research. Note that her discussion is based on the Sun Microsystems "Java" (imagine that) environment known as Project Wonderland. An "Open Source" (imagine that) development framework for business' to implement these technologies. Please see the Sun research documents here, here and here. And watch this video of Project Wonderland.
Before we get to Professor Orlikowski research I want to put one more critical aspect of the Draft Specification into play. The Military Command & Control Metaphor is a critical aspect of the Compliance & Governance Module and how things can work in the appropriate business sense. To suggest that anyone and everyone have access to a game players type of situation is ridiculous. The need to implement a key part of the organizations compliance and governance needs to be available. When we add that the JOC is representative of many producers we add an element that makes this scenario of a Synthetic World impossible. Add the layering of the Security & Access Control Module and the Military Command & Control Module in the Draft Specification, the problem is solved. The only requirement that I think we need to add is a means to visually identify the appropriate role and rank of each individual in the Synthetic World. [I'm thinking Star Trek Shirts with different colors and badges, oops there's my detractors again.] So that the representative from the fracing company can see that the avatar of the individual he is negotiating the contract with does have the authority to execute on behalf of the producer and the JOC.
One more paragraph and were at Professor Orlikowski's research. John Hagel posted an entry on how relationships and dynamics in the work place. His comments add another perspective to the discussion.
Drawing on a specific scenario from a contemporary workplace, I review some of the dominant ways that management scholars have addressed technology over the past five decades. I will demonstrate that while materiality is an integral aspect of organizational actively, it has either been ignored by management research or investigated through an ontology of separateness that cannot account for the multiple and dynamic ways in which the social and the material areconstitutively entangled in everyday life. I will end by pointing to some possible alternative perspectives that may have the potential to help management scholars take seriously the distributed and complexsociomaterial configurations that form and perform contemporary organizations.
Commenting on the scenario that is best represented in the last YouTube video above, Orlikowski states:
A normal day at the office for a software development team? Not quite. I have omitted an important detail. The Project Wonderland rooms, offices screens, and documents are part of an online, three-dimensional,immersive environment for workplace collaboration within Sun Microsystems, known as MPK 20. Within this graphically intensive virtual workplace, users interact in real time using audio, text and images, and they share applications and content from a variety of online sources.
In answer to the many of Professor Orlikowski's questions; people use marketplaces for everything. The marketplace is the boiling pot of research into the capitalist system. A system of organization and activity that everyone subscribes to.
The use of synthetic worlds for organizational activities such as distributed collaboration raises interesting questions for scholars -- how to make sense of a study of these in management research? What are some existing perspectives that might usefully be drawn on to do so? What new or alternative perspectives might be more relevant? What are the implications of choosing certain perspectives over others in accounting for and articulating particular issues and insights?
2. Established perspectives on technology in management research
Professor Anthony Giddens Structuration Theory was used in the preliminary research report. His theory identifies that People, Organizations and Society move in lock step with one another. If there is a difference in the pace of change of these three elements, a failure occurs. As I indicated in a recent post, ProfessorOrlikowski "Structurational Model of Technology" was used in the Preliminary Research Report to determine that society and technology are linked by "the duality of technology" and the "interpretive flexibility of technology". Please see the Preliminary Research Report for further application to the energy industry. The majority of Professor Orlikowski's work has been in these areas.
Three distinctive conceptual positions on technology are clearly evident in the management literature of the past few decades. In the first perspective, which I will characterize as absent presence, technology is essentially unacknowledged by organizational researchers and thus unaccounted for in their studies. In the second perspective, technology is posited to be an exogenous force -- a powerful driver of history having determinate impacts on organizational life. The third perspective, that of emergent process, technology is positioned as a product of ongoing human interpretations and interactions, and thus as contextually and historically contingent.
The value she has created with her ideas is in this fourth perspective of technology. What she in essence says is that dealing with organizations and technologies as separates, management research has to deal with them as one. This is the area of research that the Preliminary Research Report was able to determine that to change organizations, the technology or ERP system should be designed and built to identify and support the Joint Operating Committee. It is also the area where the management of the oil and gas companies, my detractors if you will, have used these ideas against themselves. Suggesting that they would not be challenged in their positions if the technology never changed. These ideas and their implication provide the support I need to appeal to the shareholders and investors in oil and gas to take thisperversion of Professor Orlikowski's work away from the management and eliminate them.
Recently, a fourth perspective of technology -- that of entanglement in practice -- has attracted interest within management research, largely influenced by longer-standing development in sociology and science and technology studies (Barad, 2003; Latour, 2005; Suchman, 2007). As I will describe below, this alternative perspective entails a commitment to a relational ontology that undercuts the dualism that has characterized but also limited much of the prior technology research in management studies. In particular, this perspective offers the potential to radically re-conceptualize our notions of technology and reconfigure our understandings of contemporary organizational life.
I believe it is very clear that the threat to management by technology has been significant and it is human nature for them to resist. I think the Project Wonderland, People, Ideas & Objects marketplace models and the many other supporting conditions prove that the technology will eliminate management. And it is the responsibility of people and society to ensure that organizations change to ensure they do not continue to hold everything back.
5. Conclusion
Professor Orlikowski sees the aberrant way in which management have approached technology. In her conclusion she intimates that management will continue to forestall the adoption of further research.
Confronted with synthetic worlds, these researchers will in all probability focus their attention elsewhere. And this choice has consequences for the value of organizational scholarship: "to the extent that the management literature continues to overlook the ways in which organizing is critically bound up with material forms and spaces, our understanding of organizational life will remain limited at best, and misleading at worst' (Orlikowski and Scott, 2008, p. 466).
Orlikowski shows us the way's and means to implement these technologies.
They will conclude, as I do here, by suggesting that the perspective of entanglement may be particularly useful for management research going forward. As contemporary forms of technology and organizing are increasingly understood to be multiple, fluid, temporary, interconnected and dispersed (Ciborra, 1996; Stark, 1999; Child and McGrath, 2001; Law and Urry, 2004), a perspective that renounces the categorical presumption of separateness is likely to offer a more useful conceptual lens with which to think about the temporally emergentsociomaterial realities that form and perform contemporary organizations.
Multiple, fluid, temporary, interconnected and dispersed. I wonder if this type of environment would make the average oil and gas worker more productive? I wonder if the producer would be more profitable here vs. say SAP or through Oracle Fusion? This is how I see the oil and gas industry being able to raise it's productivity to the level necessary to fuel the worlds demand for energy. If you are a producer that sees this as a reasonable way in which to proceed, then please support these software developments and the Community of Independent Service Providershere. And if you're a user that sees the benefits of logging into this environment as opposed to spending the two and a half hour ritual needed to get to work. Please, sell short the commercial real estate stocks you own and join us here.
Please note throughout these writings our reference to bureaucrats represents the CEO, CFO, COO and directors of the producer firms. These are the people that we see who have the authority to correct these issues and are the individuals responsible for the damage and destruction in the industry.
Please review this software applications Preliminary Specification, in which we provide an overall vision of how a producer would operate using the Joint Operating Committee as the key organizational construct.
If you are interested in joining People, Ideas & Objects user community then please follow this process. Lastly you can contact me at paul.cox@people-ideas-objects.com or (587) 735-2302 and (713) 965-6720.
