Thoughts on 'value' in the Value Chain

In Wardley Maps there is a concept of value in the value chain.

It is important that the value is actually fleshed out when discussing a map.  The typical scenario shown in a Value Chain map is that Utility is better than Product.

There is an argument to be made that the perceived value needs to be understood in relationship to the actual value.

For the purpose of this exercise, I'm going to use a standard anchor in Wardley Maps, power.

Power can be attained in a multitude of ways and there are multiple aspects of value related to power.  I'm using specifically Utility Power (from the local electric company) and rooftop Solar as the example.

I will not get into the artificial mechanism of turning rooftop Solar into a "utility like" solution.  I'll leave that up to the sales guy that comes around once a month...

The basic concept is:

• The value chain helps make a decision
• Use power from a Product perspective or from a Utility perspective (see figure 1)

Figure 1.  What a Value Chain describes

This is the choice, the value chain helps make a decision, use power from a Product perspective or from a Utility perspective.  

To make a choice, you have to know what value you desire.  Where do you get "additional value" (Figure 2).

The value may be tied to specific capability or need.

Figure 2.  Additional Value

When you consider Rooftop Solar Power generation, which is arguably a product (Figure 3) and power from the power Company which is a utility, they each have a specific purpose

Figure 3.  Rooftop Solar vs Power Company

Because one is a product, the value may be enhanced by an external mechanism

• One Example, a battery in the garage
• Another Example, selling power back to a provider

The other is enhanced with an internal mechanism (you don't get the choice)

• An example:  Utility Company creates a new generation station (or buys power from a new generation station)

Figure 4.  Enhanced Value

With that as the definition, lets talk about the choices available:

Choice 1:  Value Decision Utility (Figure 5)

Making a decision to go only with Utility Power is a value decision

• Paying for what you use

Undesired Effect: monthly utility bill, infrequent but possible outages, brownouts

Figure 5.  Using Power company only

Choice 2:  Value Decision for Rooftop Solar (Figure 6)

Making a decision to go only with Rooftop Solar is a value decision

• Being able to eliminate a Utility Bill or going “off Grid”

Undesired Effect: Its possible to run out of stored power, Costly Installation

Figure 6.  Rooftop Solar

Choice 3:  Value Decision Both (Figure 7)

Making a decision to go with both Solar and Utility is a value decision

• Eliminate power Outages

Undesired Effect:  Power is more expensive 

Figure 7.  Both Solar and Utility

Conclusion:

It is important to understand the need and outcome

It is vital to understand the value desired

Choosing incorrectly has undesirable effects

Noise before failure

A doozy of a quote from @swardley

Overly Domesticated

My latest favorite quote, this from @snowded

Orientation and the sad face

Without orientation, strategy will make little sense.

Consider the scenario where it is vital that you get to a destination.  You’ll need a map.  Orientation of the map will potentially change the meaning, or the perceived meaning, of the directions you’ll move.  The tried and true method of orienting a map is to identify correct orientation of the map, utilizing the “compass rose” or other cardinal direction indicator.

By Abraham Cresques - This image comes from Gallica Digital Library and is available under the digital ID btv1b55002481n, Public Domain, https://commons.wikimedia.org/w/index.php?curid=15582034

If you’re using a GPS, that’s all well and good.  GPS has orientation built-in*.  If you’re using verbal directions, the directions are as important as the starting point, but I digress…

Without Orientation, there is no situational awareness and the strategy is specious at best.  Furthermore, motion is not well defined. Directions are difficult (kind of like verbal directions above).

Consider the OODA that Simon Wardley created to describe the two types of why and you’ll immediately discover orientation.  

By @swardley, Wardley Maps, https://medium.com/wardleymaps/on-being-lost-2ef5f05eb1ec

In the simplest of measures, you conduct yourself around this strategy cycle by gut feeling and often without even knowing about it.  There’s nothing wrong with this, it’s actually how people operate and will continue to until our #AIOverlords take over.

It is far more problematic when the actions affect other people.

What happens in business, possibly more than we care to admit, is the ‘Gut feeling’ becomes the action of purpose.  As described by Powermaps.net (edited), the ‘why of movement’ is eliminated from the decision process.

From:  https://twitter.com/marcusguest/status/1177303050303737857

History and life have taught us that this method works individually, but when it’s applied to a group action, the consequences are roughly as successful as reading tea leaves.  This because decisions that are ‘Gut feelings’ are based objectively on purpose.

For anything larger than an individual, this causes disorientation.  Leadership should position the business and the people for movement, expecting some result.  What they end up doing with gut feeling is expressing the purpose and then wonder why the action was not well executed. 

It takes planning, understanding the climate (which includes things like financial, business, technological, etc).  It takes planning, understanding WHAT movement causes WHAT result.  And that "WHAT result" is so very important in determining your effectiveness...

On twitter, I jokingly said that if Simon had drawn this OODA slightly differently, the effect would have exemplified the traumatic result of gut feeling on strategy, as a cute emoticon that would have further exemplified the poor results of the ‘gut feel’ action.  Here’s what I was thinking….

* https://twitter.com/JeffGrigg1/status/1177551001261359104, brings up the lack of software attributes in simple gps vs integrated navigation software and the execution of α in modern systems. (edited)

The IT Toolbox #007 - Definitions #3 - drink the SHIFDX

Drinking the sugar high inducing flavored drink mix.

Because of ™ and © we should probably call it SHIFDX.

It is the tendency by people to indulge in exuberance, especially when it comes to marketing information.

In general, it's an important part of the technology industry, because it gets the word out about new technologies.

In specific, it leads to very poor business decision making.

Consider every decision made in the early hype of a technology and where that technology fits in the solution stack today.

Odds are:

     A) it made its way along an evolutionary path and the hype died off - we actually figured out what it was really good for

     B) it isn't what the marketing perception projected - it does something in the realm of what marketing said

     C) it is being impacted by a new technology/integration/abstraction - someone figured out an enhancement or better way of making/doing

     D) it is either WAY cheaper or WAY more expensive - yeah, go figure you have to experience it to actually understand what it cost

     E) except for the companies that created the product, the market changing benefit has ... changed

My suggestion, if you're going to "drink the SHIFDX", do it in moderation and make sure you hand your keys to someone until you're sure you can drive again.

The IT Toolbox #006 - Multi-Cloud Strategy

A multi-cloud strategy is half-way between two types of thinking.

It's also not thought of as an optimal technical solution for a business problem.

But, it's the only way for late majority users to adopt the new technology lifecycle.  It's also the elephant in the room.

Let's start with Roger' bell curve:

Figure 1.  Roger' bell curve.  credit:Wikipedia.org

Conceptually, the businesses that are going to use a public cloud strategy effectively are the ones that are arguably already using it.  They were the innovators, AWS, Google, Azure, etc.  What's interesting, in the case of the first two, the lifecycle that lead to public cloud was an arbitrage of their excess capacity.  A way to wring out more value from already in place infrastructure.

The "earlies" saw this as a starting point for their needs.  Through consumption of a defined model of delivery, their use cases fit the new lifecycle model.  At any relative scale, public cloud was a way to reduce the business decision of build vs consume.  Netflix is an incredibly good example of an "early", using the new lifecycle model literally made it possible for them to concentrate their effort more specifically on developing their product.

The late majority has a different business problem than the innovators and the "earlies."

They desperately want to be able to take advantage of the advances they perceive in the technology change:

Figure 2.  Enterprise Virtualization vs Public Cloud - Link

I've previously described the state of advancement of enterprise virtualization vs @swardley 's Public Cloud map using his technique (above).  

The difference under the Wardley mapped model though, is that the Use Case doesn't align cleanly.

It is also why there's a contentious argument in the minds and words of business owners.

During the peak of expectations, we hear statements like this:

     "We're moving our workloads to public cloud."

     "We'll be 100% public cloud in 2 years."

In despair, the story changes.

      "Public cloud is too expensive."

      "Public cloud is not secure."

      This is also why Workload (or Cloud) Repatriation occurs.

With enlightenment, the story changes, yet again.

     "We're implementing with hybrid cloud, so we can take advantage of new technologies and techniques."

Today, anyone that says they are moving from legacy to hybrid cloud is perceived as a laggard.

Consider this:

When a business from the "earlies" in public cloud moves to hybrid, it is a conscious business decision. It's thought of as forward thinking. 

     Consider the infrastructure necessary to deliver Netflix today.  It's not pure public cloud.  In order to meet the content delivery goals with their customers, they built a Content Delivery Network (CDN), integrated with their platform.  It is hybrid. 

     When the public cloud innovators and the "earlies" start to invest in on-prem workload execution, it is hybrid.

Multi-Cloud Strategy is meeting in the middle ground.

     It is a legitimate tool in the #ITToolbox.

     The immediate future is hybrid.

IoT - Wardley Maps WAR strategy

This conversation starts from Chapter 9, of WardleyMaps where it might be useful to use a map to look at the influences of predictability on a specific topic.

The next weak signal leading to predictability from Figure 106, future points of war, is what I'm looking at for Internet of Things (IOT).

I'm using a map that I've been toying with for a while.  The concept is relatively straight forward, what actions will lead to the industrialization of IoT?

We'll first start with what the map looks like for one aspect of IoT, I'm choosing data presented of some value to the user.

Figure 1. IoT User Visualization - Wardley Map

The second thing we should discuss is where value is derived.  Arguably, value is different to different people.  From an IoT customer's perspective, the value of the Visualization is far more visible than that of Power, Data Center or the computers it houses.

Therefore, if you're building IoT capability, the areas in the upper left are the areas you're going to want to invest in.  A simple representation of this idea on a Wardley Map looks like Figure 2.

Figure 2.  High, Moderate and Low Value on a Wardley Map

  The third area leads directly to pace, derived somewhat from Figure 2 and relevant because areas of attack should be at the pace required by the results.  Basically, don't lay siege to an entrenched industry, find the weak points for quick wins.

Figure 3.  Methods overlay on a Wardley Map

The concept is relatively simple.  Do you attack an IoT investment area in a Lean/6-Sigma area, that is already well entrenched and likely not to change rapidly, Figure 4

Figure 4.  Slow attack areas on a Wardley Map

 Or, do you attack an IoT investment that is in a rapidly changing area where it's using something like Agile Methods.  An area where the feedback to new method/enhancement/capability can be established in a very rapid method and is likely familiar to newer companies/organizations.  Figure 5.

Figure 5.  Fast attack areas on a Wardley Map

With that perspective, the WAR over IoT will be conducted, in general, in this area.  Figure 6.

Figure 6.  Iot WAR on Wardley Map