Adaptive Management System Overview

1. Adaptive Management SystemOverview Joe Arteaga IBM Business Consulting Services

2. Contents Overview of Adaptive Management System Modules: • Enterprise Design System • Commitment Management System

3. Adaptive Management System-Background • Technology support for commiment management coordination was envisioned by Stephan Haeckel in Adaptive Enterprise:Creating and Leading Sense-and-Respond Organizations • Why an Adaptive Management System ? • In the Adaptive Enterprise, the Sense and Respond Organization can not be managed in the Command and Control Hierarchical Model, and therefore needs an approach for effective Coordination of Commitments • A proof of concept version called Sense and Respond Support System was developed in 1999 by David Ing and Joe Arteaga • A full version of the system was then developed for client testing and led to the Adaptive management System which is comprised of two modules to manage the context of the system as well as the coordination of the commitments: • Enterprise Design System(EDS) • Commitment Management System(CMS)

4. The Adaptive Management System supports the 3 key leadership accountabilities based on Adaptive Enterprise Tenets 1. Creation and continuous adaptation of a viable organizational context 2. Establishment of a commitment management system to coordinate the behavior of people in accountable roles 3. Population of roles with the right people Stephan H. Haeckel

5. Who owes what to whom Purpose-down design Purposeful system design Clearly bounded empowerment Encapsulated subsystems Customer-back design Strategy as structure Capability dispatching Knowing earlier Continuous renegotiation Reward based on risk and scope of outcomes Technology for commitment coordination Dynamic capability capacity Adaptive Enterprise Tenets Key Prescriptions

6. The Adaptive Management System addresses both the Context and Coordination components of the S&R Model. EDS Enterprise Design System CONTEXT Purpose and Bounds Sense & Respond Model ADAPTING COORDINATION Commitments Operational Signals CMS - Commitment Management System EXTERNAL SIGNALS

7. The roles in an Adaptive Management System System Leader (RfB) System Designers System Monitor Roles Clients

8. Enterprise Design System Creating the Context: • System designers [re]create Organization Purpose and Bounds • Constituents • Reason for Being • Governing Principles • Guiding Principles • Roles and Accountability • HLBD Diagram • System Leader Declares new context to People in Roles • EDS allows Management/memory of design versions and related signals

9. Commitment Management System Overview • Commitment Protocol to support all four phases and states define, negotiate, perform and assess • Supports renegotiation through withdrawal • Integrated with EDS Rfb, GP, HLBD • Personal Dashboard • Commitment Reports • Supports two types of commitments • To provide a capability – fill a role • To provide a deliverable • Captures emergent roles • Supports external commitments with a non CMS party

10. The Commitment Management Protocol supports the complex task of creating and coordinating specific customer-back value chains based on the HLBD Role Types and Accountabilities Dispatcher Client Commitment Commitment Commitment Commitment

11. Commitment Management System Dashboard

12. Commitments are made in the context of the Reason for Being and Governing Principles

13. Commitment Management System Reports

14. Benefits • Reduce ambiguity • Propagation of RfB and Governing Principles • Role interactions are explicitly documented • System design feedback signals are captured • Raise authenticity, trust • Increase speed of adaptation • Increase customer orientation • Move leadership to people in accountable roles • Allow emergence within the purpose and bounds of the organization

15. To commit or not to commit Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness....... the moment one definitely commits oneself, then Providence moves too. Goethe

16. Commitments represent organization accountability and interaction performance • Complex social dynamics • Heavily dependent on Org. Culture • Level of Authority and Accountability • Involves: • Outcomes • Knowledge • Meaning • Trust Levels • Empowerment • Teamwork

17. Coordination of commitments helps govern sense and respond organizations • Commitments are made but not necessarily completed/delivered • Commitments are completed but not assessed by customer roles • Commitments are not renegotiated when the situation demands it • Clarity of outcomes is not there, making commitments hard to keep track of • Difficult conversations about lost/failed/not required commitments

18. Organization dynamics that detract from good commitment management • Lack of Clarity in Context? • Matrix organization? • Lack of Clarity in Goals, Roles, Processes? • Lack of Trust between people? • Over Capacity – ‘wearing too many hats’? • Inability to Prioritize? • Micro Management? • Changing priorities? • Organizational Politics? • Limited ability to Negotiate Commitments – due to lack of power, lack of knowledge, limited negotiating skills? • Lack of consequences re not following through on commitments?

19. People in a conversation commitment may undergo or experience many states or emotions • Things which affect ability to [renegotiate • Authority or lack of • Confusion on outcome • Risk adversity level • Motivation - ‘Get it done’ desire • Lack of Knowledge • Fear for job

20. Commitment Management Protocol

21. Negotiation of Commitments- Definition • Commitment: def: • An agreement between two roles to produce (and accept if produced) a defined outcome that satisfies a specified set of conditions (Conditions of Satisfaction (COS)). • Types: Fill a Role, Produce a Deliverable • Composed of: • Outcome Statement • Customer and Supplier Conditions of Satisfaction • Date(s)

22. Negotiation of Commitments- characteristics • always has a customer and supplier • each party has accountability: • customer to accept deliverable • supplier to produce • authenticity -sincerity, clarity • say what you mean • mean what you say • know what mean • support withdrawal and renegotiation • bilateral commitment and conditions of satisfaction for assessment

23. A simplified view of the CMS process

24. Negotiating a Commitment between two roles – e.g. a Parent and Teacher Teacher To provide children with quality education Parent

25. Negotiating a Commitment between a Parent and Teacher with a COUNTER Teacher Counter COS: Will teach Math and English, but not Religion To provide quality Education COS: Math and Religion Parent

26. Negotiating a Commitment between the Parent and Teacher- AGREE Teacher To provide quality Education COS: Will agree to Math and English Parent

27. Linking of Outcomes- List view

28. Complexity - Multiple Systems Commitment Role

29. Declared System Operating Time X+1 Commitment Role

30. Declared System Operating Time X+2 Commitment Role

31. Linking of Outcomes- Zoom in Commitments Completed Commitment as supplier State of commitment Withdrawn Person A Active Commitment as Customer Incomplete Commitment as supplier Rejected Commitment as Customer

32. Linking of Outcomes- Visualization 1.2.1.2 1.2.1.1 1.2.1.1 1.2.1 1.2.1.3 1.2.2 1.2.3.1.1 1.2.3.1 1.2.3 1.3.2 1.2 1.2.3.1.1.1 Containing Constituency 1.3 1 1.3.1 Prescribed Leadership 1.3.1.1.1 1.3.1.1 1.4 1.1 1.11 1.4.1.2 1.1.2 1.4.1 1.1.3 1.4.1.1 1.1.5 1.1.4 Commitment Person in Role

33. Linking of Outcomes View Subsystem Integrity State Status Color Prescribed Leaderhip Purple conversation Opening Brown conversation Negotiating Brown commitment active blue c active blue Prescribed Conversation Complete=c Incomplete=i Accepted=a Rejected=r Withdrawn Renegotiated i caution yellow cc completed blue ii incomplete yellow ci caution yellow ic caution yellow ca active blue cr caution yellow cca active blue ccr caution yellow ccaa accepted green ccar caution yellow ccrr rejected red Withdrawn Withdrawn black

34. Coupling of Outcomes View • 1. Prescribed Commitment (Leadership) • 1.1. Commitment to outcome for 1(active) • 1.1.1. Commitment to outcome for 1.1(active) • 1.1.2. Commitment to outcome for 1.1(active) • 1.1.3. Commitment to outcome for 1.1(wdrew) • 1.1.4. Commitment to outcome for 1.1(ic) • 1.1.4.1 Conversation for Commitment to Outcome 1.1.4(Negotiation) • 1.1.5. Commitment to outcome for 1.1(ccar) • 1.2. Commitment to outcome for 1(active) • 1.2.1. Commitment to outcome for 1.2(active) • 1.2.1.1. Commitment to outcome for 1. 2.1(active) • 1.2.1.2. Commitment to outcome for 1.2.1(active) • 1.2.1.3. Commitment to outcome for 1.2.1(active) • 1.2.2. Commitment to outcome for 1.2(ci) • 1.2.3. Commitment to outcome for 1.2(ic) • 1.2.3.1. Commitment to outcome for 1. 2.3(ii) • 1.2.3.1.1. Commitment to outcome for 1.2.3.1(icr) • 1.2.3.1.1.1. Commitment to outcome for 1.2.3.1.1ccrr) • 1.3. Commitment to outcome for 1(ic) • 1.3.1. Commitment to outcome for 1.3(ii) • 1.3.1.1.Commitment to outcome for 1. 3.1(ccaa) • 1.3.1.1.1 Renegotiated Commitment to outcome for 3.1 Supplier Onus(ccaa) • 1.3.2. Commitment to outcome for 1.3(ccaa) • 1.4. Commitment to outcome for 1(ic) • 1.4.1. Commitment to outcome for 1.4(ccr) • 1.4.1.1. Renegotiated Commitment to outcome for 1.4.1 Customer Onus(ccaa) • 1.5. Conversation for Commitment to Outcome 1.1.4(opening) 1.2.1.2 1.2.1.1 1.2.1.1 1.2.1 1.2.1.3 1.2.2 1.2.3.1.1 1.2.3.1 1.2.3 1.3.2 1.2 1.2.3.1.1.1 1.3 1 1.3.1 Prescribed Leadership 1.3.1.1.1 Containing Constituency 1.3.1.1 1.4 1.1 1.11 1.4.1.2 1.1.2 1.4.1 1.1.3 1.4.1.1 1.1.5 1.1.4

35. Adaptive Management System Demo Enterprise Design System Commitment Management System Reports

36. Contact Information Joe Arteaga Managing Consultant BCS Strategy & Change Consulting Toronto, Canada 416.478.8175 jarteaga@ca.ibm.com