Perez, Double Bubble trouble

What I am trying to do in this post is to determine exactly where we are in the Information & Communication Technology Revolution. Is it over, are we half done, or is the best still to come. Is it as Professor Carlota Perez suggests a "Sustainable Global Knowledge Society Boom" that we find ourselves in? And if so where are we in terms of that boom? Much of our research in the past six years has been on the faith that Professor Perez' theories would, eventually, become valid. It is now very clear, to me, that she is exactly right. Therefore, where is it precisely that we stand in terms of this Information & Communication Technology Revolution (ICTR) and transition, here in January 2010.

The 35 posts that have been written on Professor Perez' work can be aggregated on this label. I recall reading many times that she did not believe the 2000 dot com meltdown was violent enough to cause people to want to change. She consistently suggested that more would have to happen in the finance area, and that housing would probably be the area that it did show. This going back to at least 2005.

This paper argues that the two boom and bust episodes of the turn of the century—the internet mania and crash of the 1990s and the easy liquidity boom and bust of the 2000s—are two distinct components of a single structural phenomenon. They are essentially the equivalent of 1929 developed in two stages, one centred on technological innovation, the other on financial innovation. Hence, the frequent references to that crash, to the 1930s and toBretton Woods, are not simple journalistic metaphors for interpreting the ‘credit crunch’ and its solution, but rather the intuitive recognition of a fundamental similarity between those events and the current ones. The paper holds that such major boom and bust episodes are endogenous to the way in which the market economy evolves and assimilates successive technological revolutions. It will discuss why it occurred in two bubbles on this occasion; it examines the differences and continuities between the two episodes and presents an interpretation of their nature and consequences. p. 779

1. Introduction

This previous quotation is text that to my mind is the same since we started following her theories. Accurate and prescient. Perez parses down the nature of this dual crash into what she calls Major Technology Bubbles (MTB) and Easy Liquidity Bubbles (ELB). Both are necessary in order to impose the scale of changes necessary to make society move on to the higher value economic order based on, in this case, the Information & Communication Technology revolution (ICTR).

This paper proposes to distinguish major technology bubbles (MTBs) as a special class of bubbles that constitute a recurring endogenous phenomenon, caused by the way the market economy absorbs successive technological revolutions. They are different both in nature and consequence from the bubbles induced by excess liquidity from whatever source and from thePonzi finance moments identified by Minsky. p. 780

and

History has given us the ideal laboratory: an MTB—the 1997–2000 internet mania—followed by the easy liquidity bubble (ELB) of 2004–07. The fact that they took place in rapid succession provides us with clearly comparable and compatible data. Yet it also suggests that they are strongly connected and interrelated. p. 780

In terms of where we stand today, we are overcoming the immediate consequences of both of these market collapses. These phenomena are thankfully "complete" in Professor Perez' mind. Complete in the sense that they do not require any further market collapse in order for the changes be made in the marketplace. If there is no other shoe to drop, we can continue on this journey knowing that the pain will not escalate from here.

2. Major technology bubbles as endogenous phenomena

The computer industry has been profitable, and a major part of our lives for the past 40 years. Are these past 40 years the benefits that we should expect as the effects of theICTR? I hope not. If this were the end of the ICTR we should expect to have our dog food delivered from the fine people at www.pets.com. Not the type of value that I think the Users andCISP need to provide the oil and gas producers.

An MTB is not an accidental event. It regularly occurs midway along the process of assimilation of each technological revolution. It is the paroxystic culmination of 20 or 30 years of market experimentation, centred on new breakthrough technologies and spurred by the extraordinary profits produced by them. p. 780

To think that we are only half way is the news that shows we have a long time left to travel on the ICTR. A specific technology that we are using now is the agile development methodology. One in which the writing of software is up to 500% faster then just a few years ago, a methodology which was substantially faster then the previous iteration. From a development point of view, we are only beginning to develop software much faster and that is much more usable. Reflecting that there is more to come from theICTR. 

The ensuing collapse not only results in the return to more sensible real values and a reconnection with the real economy; it also signals the end of a period when financial capital is in control of investment to a period in which control passes over to production capital. p. 780

As Perez predicted, financial capital grew too large in terms of its share of the global economy. With not enough work to do, they found ways to amuse themselves and the consequences are reflected in today's economy. Perez had consistently stated that financial capital would recede to be replaced by "production" capital to fuel the remainder of theICTR.

The process follows a basic stable sequence: irruption of the revolution, two or three decades of a turbulent installation period ending in a major bubble collapse, then arecomposition of the socio -institutional framework that regulates finance and sets the conditions for the final deployment period, a time of more organic growth that lasts until maturity and exhaustion are reached, setting the stage for the irruption of the next technological revolution (Perez, 2002 [2003], 2007). p. 781

Perez is clear how this will happen.

It is because of human resistance to change and organisational inertia in existing institutions that the introduction and diffusion of the new technologies and their best practices has to be forced by ferocious competition and by the high profit pressures imposed by the stock market. p. 781

Review of the ideas that comprise the Draft Specification. The strategy and business model of this software development. The User and CISP focus on creating a community, having that community direct the development of the software. Are all built upon using the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer. Producers that join us will have a higher level of performance vs. those that remain in their current form. Software firms such as SAP and Oracle will have difficulty meeting the demands of an innovative producer. Competition in both the performance of the producer and the systems that support them will be the means in which change is exercised.

From the confrontation between them will emerge the novel leaders and the industries that will serve as engines of growth of the economy. At the same time, the experience in using the new technologies, especially the new infrastructures, will result in a different set of best practice principles for efficiency—a new techno-economic paradigm—applicable to all other industries and serving to overcome maturity and increase productivity across the whole economy through more efficient equipment, better organisational models and much wider market reach. p. 781

So competition is how the benefits of the Information Technology Revolution (ITR) come about. When will this happen?

2.3 The unwitting role of the MTB

Did we miss it? Are we too late, or too early? Here is where I think some confusion is a natural course of the events we have been through. There are two boom bust cycles occurring at the same time. We are finishing off the Deployment phase of the WWII boom driven by the age of the automobiles, oil and petrochemicals. And secondly transitioning from the Installation to the Deployment phase of theICTR.

Technology has been a big part of the problem. Over building the worlds fiber optic networks was a large part of the demise of many companies on the NASDAQ exchange. This was necessary, but also not part of the real advantages that society would garner. Those advantages would occur as the existing industries used the fiber optic cable in new and innovative ways. 

So that is how the market system revitalises the economy every half century or so. When a set of new technologies reaches exhaustion of products, productivity increase and markets (as mass production did in the late 1960s and early 1970s), financial capital abandons its old clients and joins the new entrepreneurs, giving strong support to technologies that had been in gestation for years but limited by the prevailing paradigm (Perez, 2002 [2003], pp. 27–32). The financial success of this process leads to theMTB , which not only intensifies the full experimentation with the new technologies and the modernisation of most industries, but also fosters over-investment in the new infrastructures. p. 789

What Professor Perez is saying is that their can't be "not enough fiber optic networks". There can only be too many or none at all.

These usually need to reach full coverage to be effective and thus require high up-front investment and take time to become profitable. It is the switch to short-term gains during the bubble that attracts the necessary capital to be poured into the infrastructural networks of each revolution. p. 789

Google, Apple, Oracle and Cisco are new-era companies that became household names in the run up to the dot com meltdown. Perez suggests these firm make for a new and necessary aspect of the modernization of the economy.

When the boom and bust of the MTB mark the end of this installation period, most of the economy has been modernised, ample coverage of the new infrastructure is in place and new corporate giants are ready to lead the expansion by taking full advantage of the new potential. But by this time, the financial world will have acquired the habit of being in control of investment and of getting constant high returns. Quarterly profits will have become the main measure and production companies will find themselves forced to avoid long term projects and to constantly deliver short term gains. For this reason, the golden age of more harmonious growth—or deployment period—that follows in the last two or three decades of each surge of development will depend on the capacity of the State to restrain the financial casino that typifies the bubble and to hand over power to production capital, allowing its longer term horizons to guide investment once more. This has usually involved changes in the financial architecture and in the incentive structure of investment. pp. 789 - 790

We see a clear definition of the time frame that we are in. New leaders have established themselves. The MTB and ELB have occured. The installation and overbuilding of the networks and technologies to drive the future. The continued pressure to performance based on quarterly earnings. The need for financial reform, hopefully only started last week. Everything that is difficult seems to be behind us. The harmonious growth of the golden age is upon us and we will use these technologies to the benefit of society, people and organizations. 

On this occasion, such regulatory and institutional changes have had to wait until the collapse of a second, much greater and more global boom and bust. p. 790

These points are clear in Professor Perez' writings, what is different this time, to the four other great surges, is that it occured in a two step process, the dot com meltdown and the financial crash of 2008.

5.2 The double bubble and the full consequences

The unique characteristic of having two bubbles collapsing has consequences of its own.

What came after the internet bubble collapse was not the restructuring of the real economy that tends to occur in the aftermath but a casino revival that only fulfilled part of that task. p. 800

and

After the meltdown of this second bubble, the actors in the real economy—both producers and consumers—see themselves as the direct victims of the false promises of the casino and its disastrous consequences. Finance has done its job and overstayed its welcome at the helm of investment; it is time for production capital to take over and to fully unleash across the world the wealth-creating potential already installed. This will require governments to once again design appropriate policies and provide the general guidelines. pp. 800 - 801

Right here, right now. This is where People, Ideas & Objects and the Community of Independent Service Providers, the user groups and the innovative oil and gas producer all fit. Now is the time to begin this journey and build the applications defined in the Draft Specification. That is what is at stake, and that is the opportunity.

Nevertheless, the conditions are not necessarily all set for this change. Several authors have pointed out that finance has come to dominate the economy to an extent that could be termed ‘financialisation’ (see Arrighi, 1994; Dore, 2008; Krippner, 2005; van Treeck, 2009) and that this constitutes a fundamental change in the market economy. p. 801

This last point doesn't necessarily apply directly to these communities. However it is interesting to see that these technology giants, Oracle, Apple, Cisco and Google do not see their enhanced role in the economy.

On the other hand, the emerging leaders of the new production capital, the new ICT giants that would serve as engines of growth of the world economy and shape the deployment period, are yet to recognise and wield their power and influence in the course of events, nationally and globally. If in the fourth surge the chief of General Motors could rightly say that what was good for GM was good for the USA and viceversa; today the global ICT companies could say that what is good for them is good for the world economy. Yet they do not seem to be questioning the leadership of finance or vying for a place at the top. Whatever their participation, the outcome will be resolved in the political arena. p. 802

What's good for Apple or Oracle or Google or Cisco is good for the economy.

6. Conclusion: the special nature of MTBs and the policy challenge

The fundamental implication of the interpretation presented here is that what we are facing is not just a financial crisis but rather the end of a period and the need for a structural shift in social and economic context to allow for continued growth under this paradigm. Both globalisation and national prosperity will depend upon and be shaped by the longterm solutions implemented to face the challenges posed by the current recession. p. 803

If you are an investor or shareholder that would like to participate in this new economy and support the development of these applications, please follow our Funding Policy & Procedures. And if you are a user that would like to be involved in building these applications or become a member of the Community of Independent Service Providers please join us here.

Technorati Tags: People's Perez Community CISP Innovation

And we're back

Something happened in the blog that caused the "Post Pages" feature of the blog to fail. I have turned that feature off and if you now select any individual post, it will render. A related problem was occuring with the comments feature. That too has been remedied. Selecting another post within a post will not render and this is being worked on. Those accessing content through a reader are redirected to a interim page that will let you click through to the current post. Please resume normal reading patterns. ;)

Complex Adaptive Systems

Today I'm opening a new line of research in this blog. We are now turning the corner and beginning the process of becoming an organization that builds the application defined in the Draft Specification. Back as far as May 2004, in the Preliminary Research Report, self-organizing teams have been part of this software development project. Not just the software developers, the self-organizing and adaptive team concepts are being applied to the User groups and the Community of Independent Service Providers. With this post I'll begin aggregating this research on the "Agile / Scrum" Technorati Tag, and Label.

Why do we want to do this? I am of the belief that the software code that defines and supports the innovative oil and gas producer will never be static. Constant change and improvement are a necessary underlying requirement of supporting the earth science and engineering capabilities of the oil and gas producer. A producer may discover through using the many Marketplace modules; other ways of doing things that are more effective. Just because this new method may be a 10 fold increase in the way things were done before, doesn't mean that another doubling isn't just around the corner. A committed software developer and user community is a cornerstone of the innovative oil and gas producer, and what People, Ideas & Objects is structured to achieve.

Another reason we are doing "Complex Adaptive Systems" (CAS) is the fact that the scope and scale of the application modules is beyond what can be achieved in the traditional ways of organization. Add to that the demands of the energy marketplace will soon outstrip what the producers can deliver. There will soon be the need for an acceleration in performance of the oil and gas industry, that is multiples of today's performance. If engineering and earth sciences required $1.00 per barrel of oil in 1997 they may need $15.00 today and $40 in the very near future. Much of this may be solved through faster computers, the point is weather your using a slide rule or a supercomputer the volume of engineering, and earth sciences is fixed and growing, logarithmically.

We see today's pricing of oil and gas supports this growing technical requirement. I am not of the opinion that management of oil and gas companies are even concerned about this issue. They have been able to increase revenues and profits for the past 5 years on the basis of doing nothing. Their actions have put us behind the eight ball in terms of delivering this software in a reasonable time frame. It is needed now, and they are all the wealthier by messing things up for the world economy.

Complex Adaptive Systems is a team concept that has enabled the software teams to approach 500% increases in performance, and there will be more in the near future. Applying these concepts to the design and architecture of the Users and CISP will provide similar metrics. And yes, I see the Joint Operating Committee being the Complex Adaptive System that it is. Having an industry operate on these principles is what is required to supply the world with the energy to fulfill what is possible. If your an investor or shareholder in oil and gas and wish to support financially these teams, please join us here. And if your a user that sees this type of application providing the solution to the industry, please join us here.

Technorati Tags: People's Agile-Scrum Development CISP User

Keep an eye on the...

First, I continue to have difficulties with rendering individual pages. This occurs when any other post is selected from the text within a post, the blog archive to the left and through a reader. I continue to work on this problem and please excuse the bug. To access the content on the blog you'll need to go to http://innovation-in-oil-and-gas.blogspot.com. (I also want to highlight yesterday's post of McKinsey video of Jim Wallis again, as I don't think it rendered properly within the feed readers.)

This next week we are moving into the busiest part of the technological companies 2009 full year earnings. Keep an eye on the leaders in the Information Technology space, Apple, Oracle, Cisco, Microsoft and Google. All of these firms, due to the industry that they are in will be reporting spectacular earnings. Google reported on Thursday that their advertising revenues were up and earnings were up at spectacular levels for the quarter. Not bad for an economy that barely functions otherwise.

These earnings are important to show the Users, Producers and members of the Community of Independent Service Providers (CISP) that People, Ideas & Objects is the real growth area of the economy. Last year Professor Carlota Perez published a number of papers that I am in the middle of reviewing. Clearly she has been exactly right in terms of where we are in this economic transformation. Everything that she has been saying for many years is in play and these will be highlighted in my review of her papers.

People don't want to change if there is no need to. The times today show that the industries that benefited from the last 70 years, the era of energy, are challenged not by there demise. Oil and gas will be around for hundreds of years. They are being challenged on the basis of their organizational structure which must change in order to compete. Those that don't follow on with the necessary changes will be left behind. What Perez is showing here is that there are two types of firms in today's economy. The Apples, Google's and Cisco's in new industries that are necessary to bring on the new technologies. And the old industry businesses that need to re-organize in order to become more competitive based on the new Information & Communication Technologies.

National Public Radio published a graph that shows where the future jobs, and in which industries, growth will occur. The graph is based on data from U.S. Bureau of labor Statistics. Although it is difficult to predict what the future will be in these fast changing times. The contrasts are stark. What Professor Perez has shown us is that good data in the hands of a very good researcher can provide a strong road map. Society owes much to Professor Perez.

Professional & Business Service                           +23.3%

Impressive jobs growth but looking into the subcategories of Professional & Business Service shows where and how the Users and CISP will find their skills in high, very high demand.

Scientific Research & Development Services           +25.3%
Computer Systems Design & Related Services         +45.3%
Management Scientific &
                    Technical Consulting Services             +82.8%

Conversely the Natural Resources,
                    Construction & Utilities                     +11.9%

People, Ideas & Objects has followed Professor Perez since 2005. We are in the mode of providing the oil and gas producers with the new way to organize around the Joint Operating COmmitte, the natural form of organization of all producers. If your a Producer that wants to participate in this new era of oil and gas, please join us here. And if your a user who would like to participate, please join us here.

Technorati Tags: People's CISP Change Technology Perez

Open Source, with a twist.

Although People, Ideas & Objects is a project that subscribes to many of the principles of open source software. We don't qualify under any of the currently existing Open Source Initiatives approved licenses. My two concerns regarding this project are that the ability to run the binary of the applications be limited to People, Ideas & Objects exclusively. I am also concerned with the industries desire and behavior of parsing "opportunities" to have multiple companies "compete" for the crumbs they leave for service providers in the oil and gas industry. These competitive strategies have left all of the power in the hands of the bureaucracy as to what and when a project will get funded, implemented and deployed in the oil and gas industry. Name a good oil and gas accounting or ERP application in the market space and you'll see the results of the oil and gas industries micro management of the software vendors. This 1950's style of management is inappropriate for the oil and gas companies to continue. They have enough to do in this new age of costly energy to be concerned with the competitive makeup of any of their service industry providers. Please see the Resource Marketplace Module for further information on how this is handled in the People, Ideas & Objects application.

However, in order to provide the security and stability of the application it needs to be subjected to as many "eye-balls" as possible. This provides the innovative oil and gas producer with assurance that there is no inappropriate code contained within the application. What "our" license will provide is the ability to inspect, test and review the code, but not to run the binary.

At this point in time, lets also be clear of how the application binary will be provided to the innovative producers. The cloud computing concept is in its infancy, but I see no other way then to run an application of this size any other way other then on the cloud. Oracle has recently termed the phrase "industry in a box" and that applies clearly to the application modules of People, Ideas & Objects. The size of this application may have several thousand members of the Community of Independent Service Providers and multiples of this being their employees, millions of users, tens of thousand of producers, hundreds of thousands of Joint Operating Committee's and tens of thousands of service industry firms.

An application of this size can not be undertaken by multiple vendors. The intellectual property that supports the Draft Specification is a result of my six years of dedicated 14 hours per day of research. To come up with a competitive offering someone is going to have to come up with a different hypothesis and build it through research such that it solves the industry problems in similar ways that the People, Ideas & Objects Draft Specification does. This too will take them six years and will have to be done by people who are sworn not to have, or will ever, read any of the material in the Preliminary Research Report, Draft Specification and this blog. Good luck.

Clearly the ability of the industry to sponsor multiple applications like People, Ideas & Objects is not within what could be practically done in the time frames available to them. No doubt management will attempt to do so, and I wish them good luck. Focusing the energies on this one project will be a challenge for all concerned. Diluting our efforts with competing alternatives will only cause the industry to expend more cash and time. This is primarily due to the fact that an innovative oil and gas producer does not garner any competitive advantage from using their ERP system. People, Ideas & Objects focus is to provide the innovative producer with the most profitable means of oil and gas operations.

It is however, not the basis of whether the producer will earn any profits. Their profits are based on focusing their energies on applying their ever increasing scientific and engineering capability toward their unique and mutually exclusive asset base. People, Ideas & Objects provides this natural way of operations but cannot take credit for a producer being profitable when it has nothing to do with the science or assets of the producer firm. What I can assure the innovative producer is that whatever the decisions and assets look like, using People, Ideas & Objects will ensure these assets earn the most profits then either SAP or Oracle. That is People, Ideas & Objects competitive offering.

I am pleased to note that yesterday Sun and Oracle have received European approval for their merger / acquisition. Sun has been our hardware and software (Solaris, Java, NetBeans, GlassFish and others) vendor. Now with Oracle being part of the mix, its important to note that the two technologies of theirs that are being added to this project. The first is the Oracle Database, the place where I was indoctrinated on relational theory, and Oracle Coherence. We will not be using any of the Fusion Middle Ware products and as such are able to maintain the blank slate approach to this most unique of industries, oil and gas.

Oracle and I have a bad history together. They are single-handily responsible for much of the management of the applications intellectual property in this fashion. In 1993 we signed a comprehensive agreement to jointly develop oil and gas systems for Canadian producers. In 1997, after expending mine and others capital, Oracle Energy was announced. We chose to move to make our applications operate with Price Waterhouses oil and gas applications and said good bye to the likes of Oracle. Oracle Energy was quietly put six feet under in 2000. So here we stand, again.

If there is an opportunity to resurrect the 1993 agreement between Oracle and People, Ideas & Objects, I'm there. An application of this scope needs the resources of Oracle to be a fundamental aspect of its deliver-ability, reliability, accessibility and security. The only thing I would ask Oracle to make this happen is they recognize the market space of the energy marketplace is People, Ideas & Objects. Provide me with some compensation for their activities in 1993 to 1997, and together we can make this real.

Oracle stands to earn significant revenues and profits from the licensing of Java, Databases, Computer sales, service and support. IBM also wants this business, however, I feel the market is best served by Oracle and expect that they are the most capable. Oracle, here is my email address. If I here from you before March 31, 2010 the business is possibly yours.

This is why we are Open Source with a twist. For more information on Open Source and its benefits, please review this recent Sun interview. If these strategies resonate with your firm, please support these developments here. If your a user, or maybe want to be come part of the Community of Independent Service Providers, please join us here.

Technorati Tags: People's Open-Source Oracle Sun
 

McKinsey, A Conversation With Jim Wallis

In the Preliminary Research Report Professor's Anthony Giddens Structuration theory was reviewed alongside Professor Wanda Orlikowski's Structurational Model of Technology. These suggest that organizations, people and society move together or there is failure. In May of 2004 this appeared to me that the organizations were failing both people and society and that as a result, failure of one of the three components (people, society or organizations) would occur. The financial crisis is the failure of the organizations. They have failed in so many ways it is difficult to list them all. Until today.

McKinsey have an unbelievably good video that deals with this topic. People are angry and do not want to see things continue in the fashion that they are. This is captured in this video very elequently. Enjoy!



Technorati Tags: People's McKinsey Change Orlikowski Code-of-Conduct Community Leadership

McKinsey, Competing Through Organizati...

This is a follow on post to Professor Don Sull's video. Scroll down to the blog entry for December 21, 2009 entitled "McKinsey, Strategy Through Turbulence". My apologies for the continued technical difficulties. I have opened the root page of the blog to show the last 100 posts. Individual posts will not render. I believe it has something to do with changes that Google made to Blogger-in-Draft which appear to be on their radar. Until this is fixed please use only http://innovation-in-oil-and-gas.blogspot.com.

In the closing two paragraphs of this document, Professor Sull states the following.

A downturn brings hard choices into stark relief, provides an external rationale to justify difficult decisions, and offers “air cover” with external stakeholders (including investors and directors) to reverse previous decisions. In the current market, senior executives should consolidate their major initiatives into a single list and make the hard choices needed to select a handful that are truly critical. To ensure that everyone gets the message, they should communicate the priorities throughout the entire organization, along with a list of initiatives that are no longer key objectives, to ensure that people do not waste resources on unimportant matters.

To suggest that the oil and gas industry hasn't changed in the last decade would be a fairy tale. Revenues have escalated to 400% currently, and peaked at over 700% of what they were a few short years ago. Now costs of oil and gas operations and capital investment are following the same pattern. Those that are able to remain agile and innovative are being rewarded with higher cash flows and most importantly higher profits. We will soon see what the earnings of the bureaucratic firms look like for all of 2009. I think then the writing will be on the wall to do something about it.

In many ways doing "more" has failed. Drilling more wells then the previous year did nothing to increase the reserve life index. Its time to take stock of what the approach will be for the next 20 years. If Exxon is correct that there will be an extra $20 trillion in capital invested in the next 20 years, then this time horizon is what we should focus on. Addressing the systems that identify and support the Joint Operating Committee are proven in this research to provide the value necessary for producers to succeed in this harsh environment.

As Professor Don Sull notes this economic downturn provides "air cover" to the management to do something to affect the culture of the company. Realigning the Tax, Royalty and SEC frameworks of the bureaucracy with the cultural, financial, legal, operational decision making and communication frameworks of the Joint Operating Committee. This change will increase accountability and innovation which I believe is why management have fought so hard to eliminate People, Ideas & Objects from the marketplace. Why work when the revenues are so handsome and we look so good. I think these "good old days" are ending and they may need the cover that Professor Sully talks about.

One final thought: economic crises can provide an ideal opportunity to invigorate the cultural transformation that is often needed to cultivate operational agility. For example, in the transition from good South Korean player to great global company, Samsung Electronics made most of its progress during the global recession of the early 1990s and the “Asian contagion” of 1997. Senior executives used these crises to renew a sense of urgency, justify unpopular decisions, and overcome complacency or resistance to change. Focusing on culture is critical because outexecuting rivals time and time again requires constant injections of urgency, effort, and enthusiasm. A performance-oriented culture helps induce such effort.

In my January 10, 2010 post I documented the comments of Mr. John Bogle, Professor Carlota Perez and Professor Wanda Orlikowski. These people were making the same point as Professor Sull is in the above quote. These also mirror the experiences that I have had in People, Ideas & Objects. Strong academic and sound business advise for management to get out of the way. The longer they take to begin these difficult processes the harder it will be for them to change. If your a shareholder or investor in oil and gas and believe that the industry would be better served by having the Draft Specification and Community of Independent Service Providers built, please join us here. And if your a user, please join us here.

Technorati Tags: People's Change Management Orlikowski Perez

Technical difficulties with individual posts.

Hello,

I am aware that individual posts, when selected from the blog archive to the left, or within text of other blog posts are not rendering any text or post specific information. Individual labels are working. I am working to fix this problem as soon as possible.

In the meantime, I have increased the "root" page from 15 posts to 100. Loading times are increased, however, more current posts will be able to be displayed. I apologize for any inconvenience.

Paul

Professor Baldwin and von Hipple VI

To finish off the review of Professor Carliss Baldwin and Professor Eric von Hipple's paper "Modelling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation". I feel it is appropriate to highlight just the final paragraph of the document. It speaks to all that we are working to do for the oil and gas industry.

We conclude by observing again that we believe we are in the midst of a major paradigm shift: technological trends are causing a change in the way innovation gets done in advanced market economies. As design and communication costs exogenously decline, single user and open collaborative innovation models will be viable for a steadily wider range of design. They will present an increasing challenge to the traditional paradigm of producer-based design – but, when open, they are good for social welfare and should be encouraged.

Please join us here.

Technorati Tags: People's MIT von-Hipple Harvard Baldwin Change

John Bogle on Accountability

The Wall Street Journal has an op-ed written by John C. Bogle, Founder and Former Chief Executive Officer of Vangaurd Group.

In a recent post covering Professor Wanda Orlikowski's paper, I documented the difficulty I have had with management of oil and gas companies. Suggesting in the Preliminary Research Report that they used the knowledge that software defines and supports organizations, therefore, you need to build the software first. As the means to ensure that they would never be challenged by never sponsoring software of the nature of People, Ideas & Objects. This was also intimated by Professor Orlikowski, will be documented in an upcoming post of Professor Carlota Perez and mentioned in the Wall Street Journal article today.

Professor Orlikowski states:

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).

Professor Carlota Perez states:

Organizational 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.

And Mr. Bogle notes

In short, far too many of our corporate and financial agents have failed to honor the interests of their principals—the mutual fund investors and pension beneficiaries to whom they owed a fiduciary duty. The ramifications were widespread—for the failure of money managers to observe the principles of fiduciary duty played a major role in allowing our corporate managers to place their own interests ahead of the interests of their shareholders.

All of these points are related and mirror my experiences in People, Ideas & Objects over the past six years. It is time for the energy investors and shareholders to get behind this software development project for their own purposes. People, Ideas & Objects provides a means for the energy shareholder to manage their oil and gas assets. Management are wrong and conflicted in making these decisions to support their personal positions. Mr. Bogle suggests the time is now "Then, I found few allies. Today, perhaps, this is an idea whose time has come." They have a fiduciary duty to their owners to do what is right. As Professor Perez notes, competition eventually solves this problem. It is therefore time to choose if your oil and gas company will be a leader or a laggard. 

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