Open Source as Innovation Platform

It would be no surprise that I subscribe to Jonathon Schwartz' web log. The CEO blogger from Sun Microsystems. Jonathon is way out there in terms of his devotion to open source. And is the reason that Sun has opened most of their software openings. He has undertaken to write a series of blog posts on the methods that Sun is using to commercialize their open source offerings and how it sells hardware. Moving to the video format might not really work for him, you can view the three posts here, here and here, I would recommend that you subscibe to his blog here.

I found something that was said, or maybe it was the way it was said that made me realize another of the many benefits of open source solutions. Picking winners. I have been in this "business" of technology in one form or another since 1992. I refer to those days as the wild wild west. Nothing but gunslingers, bandits and posies. If you thought you missed something, believe me you didn't. 

The idea was you needed to get a big vendor interested in your ideas, code or customers. This was prostitution at the highest level of business. Those that where anointed by the vendors from California, would rightly strut themselves a bit faster then other lesser software providers / hardware vendors. These were the days and if you were lucky the relationship would last upwards of a few years before your customers and vendors quietly found themselves and their allegedly better business arrangements. 

Used and abused you leave the software industry and hope that one day it will mature into a real business. In my case I saw that Intellectual Property could provide a reasonable safe guard to the antics of the western minded, but when combined with open source, it was a good time to get back into the software business. Now how does that relate to the Sun CEO weblog video series. 

There is no picking of winners and losers. There is just doing the business of doing the business. If you have a good idea, you win. If you have a bad idea, hopefully you'll keep trying until you get it right. No more of this so and so has supported what's-his-name. Just do your job the best that you can and let the upside depend on your skills to add value. You don't need to get into the rut of trying to impress and promote someone into a business they should have been in if they hadn't been sleeping. All this as an added feature of open source software.

If you were looking for a place where the open source world would help in the oil and gas industry, look no further. Please join me here. 

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The Internet @ twenty.

There is a video presentation of Tim Berners-Lee at the TED Conference in February 2009. (Click on the title of this entry for the video.) In the video he discusses his actions and concerns regarding his development of the World Wide Web. Many have claimed, including vice - president Al Gore, to have invented the web, but only Tim Berners Lee is recognized as doing so. Nighted by the Queen, Sir Berners-Lee notes in this video that the web will soon be 20 years of age, and that indeed it was recognized on Saturday March 14, 2009.

Berners-Lee worked for CERN, the group responsible for the Large Hadron Collider. His work at CERN demanded that a solution to the large volume of visiting physicists who were working there. Specifically Berners-Lee was concerned about the loss of kowledge through the large turnover at CERN. I think this parallels the potential loss of knowledge in the oil and gas industry. One that is addressed in the two modules of the People, Ideas & Objects Research & Capabilities and Knowledge & Learning . 

Berners-Lee goes on to talking about the future of the Internet and the role that data will have in that future. Asking what would happen if linked data were more readily available. And simply stating people would use it and make new and innovative ideas from it. Scientists in many disciplines have theories and ideas, but no data. He noted the efforts of dbpedia and I would add Freebase.com.

In People, Ideas & Objects two modules address the need for additional data. The Performance Evaluation (Joint Operating Committee) and Analytics & Statistics Modules (Firm focused.) Each working from one of the two different perspectives of the People, Ideas & Objects application. Please join me here . 

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McKinsey on the New Normal.

Here we have another in a very long line of papers from McKinsey & Company. (Click on the title of this entry for access to the paper.) Economically we are in something that is not a recession, that should be easily concurred with by anyone in the world. When did the last recession question the viability of GM as a going concern. Or, CitiBank and AIG being bailed out for the nth time. 

Ian Davis, the author of this article and the managing director of McKinsey & Company lays it on the line. Change is in the air and no one is immune from the disruptions being brought about. This article is a conversation starter, the discussion begins with the economic context being raised. 

It is increasingly clear that the current downturn is fundamentally different from recessions of recent decades. We are experiencing not merely another turn of the business cycle, but a restructuring of the economic order.

and 

The question is, “What will normal look like?” While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. The new normal will be shaped by a confluence of powerful forces—some arising directly from the financial crisis and some that were at work long before it began.

What will the oil and gas industry look like after this economic phenomenon is finished? Good question. I have suggested many times that the People, Ideas & Objects software applications are the destination vision that the energy industry will be moving too. To assist in defining what the vision is not; I have asked if "anybody believes that the bureaucracy remains in control in 2020"? The answer is of course that will not happen. But "how" and "what" does the oil and gas producer change to? If it's not the People, Ideas & Objects application, and the Joint Operating Committee then I would be surprised. 

Davis makes it clear that the companies that are in distress with high debt levels will more then likely cease to exist. And, there are companies that will survive but not in their current form.

For some organizations, near-term survival is the only agenda item. Others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal. The question is, “What will normal look like?” While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. The new normal will be shaped by a confluence of powerful forces—some arising directly from the financial crisis and some that were at work long before it began.

and

Either way, the reality is that around the world governments will be calling the shots in sectors (such as debt insurance) that were once only lightly regulated. They will also be demanding new levels of transparency and disclosure for investment vehicles such as hedge funds and getting involved in decisions that were once the sole province of corporate boards, including executive compensation.

Looking at the situation today, it is difficult to argue his point about the level of government involvement in business. This seems to be a much more palatable fact then it has been even in the most recent past. Nonetheless the governments enhanced compliance and involvement in business is probably a given. The need for a higher level of compliance to be handled in the People, Ideas & Objects Draft Specification is therefore a given as well.

The Compliance and Governance Module provides a different and higher level of compliance in comparison to systems like SAP and Oracle. As proposed, in conducting the business of the business in the Joint Operating Committee has a variety of compliance requirements that could and should take place at the time of the transaction. 

Compliance is not a direct action of the management, but a fallout of the activities undertaken by the Joint Operating Committee's. This difference in perspective will be a necessity in the future of these systems. If it takes the current management all their efforts and resources to meet the Sarbane's Oxley requirements, you can be assured they are unable to undertake "more" regulations in the future. This latter statement being proved by the fact that the shareholders are unable to be satisfied by the companies compliance efforts.

Through it all, technological innovation will continue, and the value of increasing human knowledge will remain undiminished. For talented contrarians and technologists, the next few years may prove especially fruitful as investors looking for high-risk, high-reward opportunities shift their attention from financial engineering to genetic engineering, software, and clean energy.

This much is certain: when we finally enter into the post-crisis period, the business and economic context will not have returned to its pre-crisis state. Executives preparing their organizations to succeed in the new normal must focus on what has changed and what remains basically the same for their customers, companies, and industries. The result will be an environment that, while different from the past, is no less rich in possibilities for those who are prepared.

The richness of the possibilities is available to those that join People, Ideas & Objects. Please join me here. 

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New Growth Theory

In an Op-Ed by Thomas Friedman in the New York Times entitled The Inflection Is Near? Friedman asks if the economy is undergoing a fundamental change.

What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”

Professor Paul Romer of Stanford University wrote his Reason Magazine 2001 article on New Growth Theory . People, Ideas & Things were the new elements of economic growth. Replacing the traditional economic growth variables transportation, communication and financial resources. 

That's the reason or justification for calling this project People, Ideas & Objects. Its about new growth in the energy industry. Using the Joint Operating Committee to define new and innovative ways of making the oil and gas industry more profitable and productive. Please join me here in taking the Draft Specification to the next level, the Preliminary Specification , and know that I am looking for the People to make this real.

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Security in the Draft Specification

We are beginning to build some traffic in the Draft Specifications knol. Which is the Google service I am using for the public access to the systems definition. The first module that people run into is the Security & Access Control Module. This is for a number of reasons. 

Security & Access Control will be the first module that is built in the People, Ideas & Objects. It is necessary to ensure that the users, producers and developers in the system have a high level access and ensure the security of the interactions and transactions that are undertaken in a secure manner. 

Having this as the first module also helps us test the module in a live setting. Eating our own dog food as the developers like to say. The Security & Access Control Module is made up of the various Sun Microsystem products known as Identity Management. The strategy in this development is to have Sun, who I think have a significant vested interest in making their products work, implement and manage this modules development and support. 

In an nutshell that is the critical aspect of the beginning of this module. When operational we can then begin the difficult task of implementing the Military Command and Control Metaphor into the generic Sun Microsystem Identity Management Tools. (Also part of the Security & Access Control Module.)

The point of this entry is to suggest that the reason the boring and painful discussion at the beginning of the Draft Specification is there for a reason. The importance of the module in terms of its timing and security needs. Those that are interested in many of the oil and gas attributes should just skip the Security & Access Control Module and start with the Partnership Accounting Module . 

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It's Official, Everyone is an Entrepreneur

Reid Hoffman is on Charlie Rose talking about his company LinkedIn. Its not surprising that I just highlighted the LinkedIn service on Tuesday's blog post. This is a must view video, and keep in mind that everyone is an entrepreneur, entrepreneurs work in communities and People, Ideas & Objects is the community for those people that work in oil and gas. Please join me here.



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Our Governance & Compliance Framework

One area that I have not touched on recently is the Compliance & Governance Modules attributes. I think the key attribute that makes People, Ideas & Objects more functional and higher in performance is the Military Command & Control Metaphor that is incorporated in the Draft Specification.

Lets face it, the hierarchy is in control and has been extremely effective and efficient for over 100 years. It has been the great innovation of the Twentieth Century and deserves more respect than what I frequently belittle it as in this blog.

It also needs to know that it's time to go. Retirement is the right thing to do for the global economy to proceed in new organizational directions and methods. This is also what I think this current economic depression is. The old dying off for the new to take over.

What is the "new" and what can it do to replace the inefficiently efficient hierarchy. If we consider the "installed base" of how things operate around the world. Our Governance Model will have to be a method of organizational structure that competes with a very well established culture. And that is what the Military Command & Control Metaphor (MCCM) is capable of doing. And why it is selected as the alternate Governance structure of the People, Ideas & Objects software application modules.

The advantages we gain in adopting the MCCM are significant. The Joint Operating Committee is the organizational representative of the oil and gas partnership. A partnership that operates systemically and culturally throughout the industry. Occasionally some oil and gas assets are owned exclusively by one producer, but those situations are rare. When it comes to risk mitigation and extending the aerial extent of the operations, partnerships are a necessity.

The cultural equivalent to the hierarchy is the MCCM. People understand the rank and file of the Military far sooner then they are exposed to a hierarchy. For at least half the population, the MCCM is well ingrained by the age of five.

One advantage we see in representing a property with an MCCM. Traditionally the ability for the one producer that is designated operator is required to undertake all the necessary capabilities to manage the property. This has lead to the building of redundant and mutually exclusive capabilities in each and every producer firm. This creates the false expectation that the industry needs more talent. Whereas I think there is concurrence in the industry that it needs to more effectively deploy the resources they have, more so then acquiring new talent.

If there were a pooling of the resources of the partnerships. Then the MCCM will enable the pooled resources to operate in much the same fashion as NATO's member countries assign resources. What country is willing and capable of helping out and then the planning and assignments can be parsed out. What is necessary for these to happen is the elimination of the designated operator classification, and an ability to cost the pooled contributions to each producer in their correct or equalized ownership share. These are done in the Partnership Accounting Module of the People, Ideas & Objects Draft Specification.

A critical part of the success of the MCCM is the Community of Independent Service Providers (CIPS). They are the authors of the People, Ideas & Objects application and the people that will be providing the resources to be pooled in the JOC. They, operating their own independent services business', with the People, Ideas & Objects software in which they designed, are constantly enhancing, are the people that the producers of the JOC will be looking to fill the various and necessary roles.

I think the concept of using the Military Command & Control Metaphor is ready, and should be used in the Governance Framework of the oil and gas industry. These are the ideas that are included in the vision as detailed in the Draft Specification of the People, Ideas & Objects software application. Two related concepts that should be discussed soon are the enhanced division of labor and the natural separation of markets and firms. With the JOC being the market, and the producer of course being the firm. Please join me here in this worthwhile cause and I'll certainly do my best to make sure this content finds the people that will make this happen.

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Show me the money.

This community is all nice and good but to sustain it in the long, and short term, money is what makes the world go round. This post is about where and how that money is made and distributed to the People in the community who contribute their ideas and hard work in making this software and the Community of Independent Service Providers real.

In my ever-ending flip flopping on how the Preliminary Specification gets started. I now note the need to pay the people for their time in building this software. They must and will be compensated form their first day. This will slow down the development and delay the start-up. However, it is important to ensure that the realness of the project is viable from a commercial point of view on day one. Those that have been keeping close score, this is a change in the policy of this development.

Previously it was thought the earlier start-up might be achieved by the Community of Independent Service Providers investing their time in establishing their business offerings and contributing to the specifications. Although now they will be compensated for their time in developing and defining the software, the time they spend in establishing their business offerings (as members of the Community of Independent Service Providers). These are investments that will have to be undertaken themselves. The other point is that it keeps the clarity of the Intellectual Property (IP) clearer and cleaner. I'll have more to write about the IP in this development in a future post.

So where is this money to pay the users in this software development going to come from. I have made it quite clear that I hold certain Canadian producers responsible (our four piggies) for the attempted theft of the IP of using the Joint Operating Committee. It is also the large bureaucracies that are challenged by my overt statements that they are redundant and failing their stakeholders. Not good to challenge the clients of the business.

The money for this software development and community comes from the producers. Those that are currently invested in many of these failing oil and gas firms. And are being wiped out financially from these self absorbed management types. I have referred to this new clientele as the disgruntled oil and gas investor. And challenged the readers of this blog to find anyone that believes the bureaucracy will be operational in 2020. They may also believe that this is just another recession. The corporation and its highly layered hierarchy are a dying mode of organization. Today with the new Information & Communication Technologies producers can be better managed through this community. So please join me here, and understand that this content is looking for you.

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"Content will find you."

Writing a blog and pushing the idea of using the Joint Operating Committee is somewhat of a passive activity. You promote your ideas and marvel at the distribution and the growth of your statistics. The Internet, as a medium, is quite spectacular in compressing time lines and achieving things in a short period of time.

I've had this idea floating around in my mind that this passive method of aggregating users is the wrong approach. Particularly now as I have set 2009 as the point in time that I and 100 users begin the work on defining the Preliminary Specification and Community of Independent Service Providers. How do I go about doing this, sourcing these people.

Then from the back of my mind I remember the comment made by Cisco CEO John Chambers that "Content will find you." Interesting, I certainly have content. From the original idea of using the Joint Operating Committee (JOC) to the detailed Draft Specification which I think lays out a pretty clear vision of the significance of moving to the JOC. Content we have, therefore we have to actively go looking for the users. Chambers exact quote is as follows .

People talk about devices... but we think it's about the network. It will move from a generation about data and voice, more to visual networking, wired and wireless. We think the key content will find you, and we see changing business models reflecting this.

I think he is right. And indeed we have to switch gears in order to begin the task of getting the people necessary for this critical next step of defining the Preliminary Specification and building the Community of Independent Service Providers.

Great idea, how do we implement it. I have advertised with Google off and on and if you've had the opportunity to use those tools you'll agree their effectiveness is unquestionable. But they are relatively slow in terms of meeting the criteria of developing the Preliminary Specification and Community of Independent Service Providers. We need something more direct.

How do we find the people with the oil and gas operational experience and business development experience to make the oil and gas industry and the service industry operate based on the vision of the Draft Specification? I had set up a LinkedIn account last summer and determined that the "social networks" were more of a social then a business thing. I recently had the opportunity to check LinkedIn more thoroughly and have come away with a renewed appreciation.

After less then a week of using it, clearly LinkedIn is the "Network" tool that will enable the Community of Independent Service Providers and their collaborative efforts in defining the Preliminary Specification. With over 376,281 users that have classified themselves as in the Oil & Energy industry classification, sourcing 100 people should be possible, if not easy. If you have not used LinkedIn I highly recommend you sign in. The people that are on LinkedIn are more of a senior level in organizations and it is not a social network per se. Oh and the reason that its so valuable is that people who are using it are paying a monthly fee to access the service.

"Content will find you" is a valid concept and one that will be applied in this development. So as opposed to just saying join me here, I'll also being saying I'm looking to find you. Here is my LinkedIn profile.

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Berkshire Shareholder Letter

We've all heard of the "Oracle of Omaha" Warren Buffett and understand his perspective on business. Lately he has taken some solid hits to his reputation with the high profile and large investments he made in Citibank and General Electric. Both being questionable in terms of judgement.

Nonetheless he has the clarity of thinking that provides a solid grounding of where we are and what may be happening to us economically.

“The economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond,” said Buffett. “Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so.”

The annual report of Berkshire Hathaway is available and down-loadable from here. The Wall Street Journal also has a review of the letter to shareholders here .

Is this recession really a depression? Have we seen a time when a recession has put so many homeowners underwater? Or watched the Japanese economies exports decline 45% year over year? A recession in which we have seen banks and auto manufacturers, media and almost every industry in such a decline that the poor performing companies are looking straight down the barrel of their demise?

Well actually yes we have. There have been many other periods of time in which the economy has been hit by a depression. The 1930's being the most recent. These are long wave economic theories that have been systemically analysed by Professor Carlota Perez. And I have applied them to the oil and gas industry in a variety of blog posts under the label Perez. The key takeaway from her theories is that there is economic stress, or shambles as Buffet calls it. This a necessary and productive time of renewal. The organizations that will come out of this decline will be more able to satisfy the needs of society and people. Something that the old economy styled companies where unable to do.

Professor Ludwig von Mises is famous for educating Professor Friedrich von Hayek in Economics. He also stated an important point pertaining to some of these long term economic cycles. And that is they are generally solutions to the problems of the day. Specifically he states that the "industrial revolution was the solution to the problem of mass hunger".
 

This puts in context the role of today's Information and Communication Technologies (IT). IT has for the past 40 years provided us with some of the solutions to the problems of the day. And we live in remarkable times as a result of these technologies. But there is so much more that is expected of them, and in many cases they have been systemically disappointing in terms of building specific value for organizations. With organizations unwilling to change or to adopt the new technologies to their fullest of potential, IT's impact has been limited. As a result we have barely experienced the value they could provide. I marvel at the stupidity of driving to the office in the morning. This activity consuming up to three hours of each individuals day, When in reality they were prepared and ready to work within 5 minutes of waking up.

We need these economic depressions to eliminate the weaker and less adaptive firms from the economy. In oil and gas I have written about the piggies and specifically about Canadian Natural Resources Ltd (CNRL). I have accused them of aggressively fudging their financial statements in the third quarter. They have lost Fidelity investments and this is the only news we have heard from them? They were to have their Horizon tar sands operational now, yet we only know that their is litigation with the contractor. With $26 billion in debt and greater then $3 billion working capital deficiency, these delays in reporting are evidence of the last moments of that organizations life. Say good bye to this pig.

The time in which people will be faced with the question "what do I do now" is answered with their involvement in this software development project. For a variety of reasons we need to begin the development of the People, Ideas & Objects software application. We have advanced as a society where the role of software in organizing is at a very high level. We have alternatives that make this choice very critical. We either build this software or regress to manual systems. A future that unfolds in a very bad way. We need to get moving with these developments, the time is brief, and we are not moving forward at this point in time. So please, join me here and lets build this software .

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