Doug Engelbart's    Colloquium at Stanford

An In-Depth Look at "The Unfinished Revolution"

Engelbart: Michael, do you hear me?

Hart: I can. 

Engelbart: Ok, great. We hear you. Very good. I told them that you were a vice-president of something at Citigroup. Do you want to clarify that a little. 

Hart: I would if I could clarify it for myself. I am the vice-president of information systems and strategies. It means trying to get an initiative together for a corporate portal development. That  would bring our 189,000 employees to one essential exchange. Where they can transact shear  analytical information and hopefully transfer these information assets. Hopefully we will get to  leverage those assets and grow our collective knowledge. 

Engelbart: That is great. I told them that you have been interacting with us since last spring. Is that right? 

Hart: That is right. 

Engelbart: So you know some of the vocabulary. Did you watch the first session, were you able to watch it? 

Hart: I saw the last part with Jeff. Jeff from SUNN. I've been on the phone with Rick from Boston, and we have been discussing. 

Engelbart: Is Rick going to be joining us? 

Hart: He is on the line now. 

Engelbart: Hello, Rick. 

Rick: Hello, everybody. 

Engelbart: So Rick, mysterious voice out of the room, tell us who you are. 

Rick: I am Rick Wanborg. President and founder of ....(inaudible) ...intellectual and capital exchange. It was founded five years ago from research that I had done at ....(inaudible) research  center for information technology and strategies. In addition, I am on faculty at the school of  management at Boston University. I also participate in the knowledge economy. 

Engelbart: That's great. Rick, I think that we ought to tell you that your voice has been breaking up. I think everyone could basically understand it, but I assume that the audio people will be  working on that. I told everyone that you'd agreed that you would be on, but that you don't have a  prepared script and you want to be in the dialogue. Sometimes you have tuned in a bit to what has  been going on. Rick, did you manage to hear the first hour and a half. 

Rick: Unfortunately I had another meeting that I attended, but I saw the last ten minutes. I thought that stuff was very eloquent. Engelbart: What we warned you two about is that we would like to hear about large organizations such  as Citigroup and some of the issues in the bootstrapping that we talk about. We came up with this  concept that it looks like we ought to have a value proposition to tell whoever it is inside  Citigroup that would have to decide how much to invest in the C and B activities. Also working on  the outside with NICs and MetaNICs. That has been an ongoing concern around here. That is one thing,  if we could start some dialogue on that. Michael are you prepared with your question? 

Hart: Just so that you know that we are breaking up, we have a large echo with everything that we say. I have to pause at every opportunity so that I can hear. Essentially we have a difficult  problem with coordinating individual and isolated teams of improving what we can do. There are  189,000 people scattered around the globe in a hundred and fifteen countries. Many of those people  are engaged in a duplicate activity. Then in lies a very obvious improvement opportunity. We have a  quality movement in place, we have people involved in very traditional accounting practices that  look at matrix to define how we do our work and where there are opportunities to engage in  improvement. We have isolated areas of human resource management where change incentives entrain to  improve the structure and alignment of the organization and how we go after strategy. We have had in  the past, Total Quality Management. We have enormous information assets, varying from intellectual  property rights in the form of trademarks and brands. There is an enormous list of intellectual  capital assets. No where is there one single repository or one single initiative to try and  coordinate or track and account for these softer assets. Nowhere is there a single program to  attempt to measure the positive effects or improvement efforts. As such, there is an enormous amount  of duplication, an enormous amount of wastage. We need now to build a case to show that these assets  can be brought together in a structured taxonomy and be accounted for and measured for growth. That  these disparate information assets, these desperate processes and these desperate improvement  initiatives collectively have greater value than there individual parts. 

Engelbart: Can I ask you a question to relieve you a bit? You listed some significant problems, I would guess are very right candidates for the corporate corporation to remedy. Are those things that  you think, to any significant extent, things that your company would be willing to find answers for  in a collective thing, like with other financial outfits, joining a NIC and finding answers to some  of those problems in common? 

Hart: There are two schools of thought on that. The most prevalent is in the security conscious camp. Have more incentive to look at competitive intelligence. The competitive intelligence in  itself is an information asset. They would prefer to keep ideas and process and information goods  away from competitors. Then spending their budgets more wisely in going after competitive  intelligence. Any attempts to look at collaboration in those people's minds is met with opposition.  There are areas that are more generic. They involve people management, organizational development  and logistics. These things seemed to be less competitive and less propriety and it is where we  don't have competence as a population of banking or financial services or insurance experts. We  would look to share with best practitioners in those areas. We would look at being or making  comparison to the best in the logistics, human resources, or other areas that we seems to not be  competent and not aligned with our core practice of asset transformation. 

Engelbart: How would they judge about where they would look for organizations that would have best practices? 

Hart: If we could think simply of supply change we could talk about procurement. We would spend three to five billion dollars a year on information technology investment in a given year. We also  have to support a large operational infrastructure, and that includes all of the supply and  real-estate procurement. These are areas that we have only begun to make a business of that, given  the scale and scope of the enterprise. These are not practices that insurance companies or bankers  or stockbrokers have had to engage themselves in. Given the increasing scale and scope of the  enterprise, we find ourselves engaged in very complex business. That is outside from in the core  practice of transforming assets. 

Engelbart: If you are looking at a giant like that, if you ever start looking at your improvement infrastructure. Would that be viewed as an oddity? If someone like you said maybe we ought to take  stock and see what it is. 

Hart: It is to take stock of ourselves internally and say whether or not we have an infrastructure. Do we actually have an improvement infrastructure. We have made as I said earlier, attempts at total  quality management, and at business process for engineering, and all of the management ideas that  come about with those. I don't believe despite strong endeavors in the highest places of the  organization, that those programs every have taken root long enough for the good that is supposed to  come of them to be realized. There have been isolated cases of very high performance across the  globe, it doesn't ever reach the level of the collective. There is always better and worse  practitioners with in the organization. I would take quite a concerted effort and quite a deliberate  investment in the infrastructure to support that effort. To A build on winning and demonstrating  best practices internally to gain leverage from those and give momentum to a program, and bring  further examples to a central improvement program. I would think that their first steps would be to  support improvement communities with in our organization. For there to momentum with in the  collective, with in the group. We would probably be better served to start looking at microNICs with  in the organization. Those NICs could look at collaboration and cooperation externally as well as  looking at best practices that were relevant, and relevant to them externally and then bring those  experiences of the microNICs to a more collective group. Wide initiative. 

Engelbart: Sound workable. Any comments? The first time I got to thinking about communities was while I was working with Donald Douglas. I began to realize that any time that there was a  significant improvement action they had to have people on it from different divisions to represent  their part. It is a really different kind of project. More like a community. That is when I got  particularly interested. I can appreciate that part from my experience. 

Hart: I think that there is also an difficulty for people to easily translate good experience in one area and bring it directly into their own context. I looked recently at attempts that we have made  to improve communication. Everywhere we looked there are obstacles in the way to getting better at  the way we communicate and improving our improvement work in that line alone. As we put metrics  around effectiveness in communication and measured how good we are or how poor we are in  communication. There are groups that shown poorer performance, but they are having difficulty in  translating that into immediate remedies. There are always obstacles. 

Engelbart: Is there any one big place in that corporation that you would just push the doorbell and say that we would like to talk to you about your improvement infrastructure. 

Hart: It would be good and it might be interesting. I was thinking more about the supply chain in terms of technology in terms of the integration that is going on with enterprise resource planning.  Given the transaction capability and the rules based and transparent nature of that technology  coupled with the web, may give us a superb improvement infrastructure. Not only does it improve the  internal lines, but it also improves that external communication with traders and suppliers with in  our value chain and with in our supply chain. We are getting increasing activity with our external  parties from customer through supplier. We are able to get increased transparency and information  about the activities that are involved in the supply and value chain. There is an indirect benefit.  We are getting a lot of improvement data and information that we are now able to leverage, that we  didn't expect in our initial investment, into the supply chain. 

Rick: I think what you are edging towards to solve that problem on improvement is really dealing with some of the overall cultural issues of some of the large global companies. You can build the  best infrastructure, and put in some programs like Total Quality Management, and the rest, but it is  the culture that you need to build so that people know that it is good to go and find better  practices and better ideas for improvement. I always reflect on one global company who's CEO truly  believes that people should be learning faster and better from others. One of the ideas he invoked  was the Stealing Idea Award. He gave out an award ceremony and gave it to those people who stole  ideas. Whether internally or externally, it was something that sent a signal that it was quite ok  not to be innovative and always trying to come up with new ideas. It is quite ok to grab ideas that  were very usable for other groups. That is one of the toughest things to deal with. Especially with  the size that Citigroup is. That the cultural ambivalence from learning from other groups, vs. being  the creative source of new ideas. 

Hart: Just continuing on from that, Rick, we have found that trying to build a case for a knowledge exchange is centered on that very notion of incentive. The encouragement of competition or the  encouragement to behave in certain ways through a set of incentives has certainly given us business  support to improve efforts to invest in the exchange. The cultural aspects mean that around the  globe we have certain individuals and characters who are very selfish, in many respects, and there  isn't in their normal business activity and real need to share their knowledge. So, if you have  these highly skilled financial engineers that have very secretive relationships with a few clients,  and they are only doing large value transactions, small in number in a given period. They are not  given incentive to share their ideas with even their own internal organizational teams in London, or  in Singapore, or in New York. They will selfishly guard their innovative ideas, so that they are  first to market. It is the characteristics of their pricing, their product, and their market  dynamics that prevents them from working effectively on the exchange of any information or any  knowledge. So, the incentives have to be skewed to change the behaviors and change the cultures. 

Rick: I think that is one of the critical factors is finding the right incentives so that there is enough opportunity for people to exchange knowledge so that the overall benefits become available to  everybody. That is the key word, the exchange. If you can't find the incentives for people to get  value out of it, then there is less interest from anybody to collaborate or learn from anybody. I  ran into that at a large consulting firm that I work for, where we trying to build sharing of  knowledge. You would think that in the consulting world, that consultants would share gladly because  that is the core of their business. It is a knowledge group. But we had got successful by setting up  a program, where we told people that they could not participate unless they equally traded their  knowledge on clients and practices, and new methods. Unless they equally traded, they were  dis-invited from the group. Once you have got that agreement across with a group of partners of  senior managers, then it worked out quite well. I would assume, Michael, that you would find the  same things at Citigroup. 

Hart: Definitely. I could give and example, and I am trying to bring this back into the context of having an improvement community, how to underpin that with an improvement infrastructure. How to  have a set of measures so that you can have feedback on how you are improving. So that you can get  on to the next phase of improving your improvement process. As an organization becomes more diverse,  its internal market has to become extraordinarily strong, and increase competitive in order to fuel  that improvement process, but there need to be incentives for that to occur. It doesn't happen on  it's own. We get back to incentives to encourage certain desirable behavior. They may be in to form  of the selfish individuals that I was referring to earlier. Through the efficiency of a knowledge  exchange, or an information exchange. If they transact on this exchange, prior to going to the  market, not only will they get the bonus or royalty compensation, from the transaction that they  would have originated and completed, they also would benefit from the bonus or royal from any  subsequent transaction that comes as a result of another team with in the organization, selling that  into another market. It is not very difficult to set up the formula to make those types of  incentives available, it is more an issue to create that exchange to allow that to happen very  quickly and bring that level of efficiency to the internal market. It is necessary because the  products that these guys are creating have a very long product development. They are very costly. As  soon as they hit the market, their shelf life is very short, they can be de-engineered in two weeks.  Any premium that would be eroded by at least fifty percent with in a two-week time frame. 

Rick: I think that is very important. I have seen with in a few case studies that we have done at Boston University where people think that the job is done when they have the knowledge  infrastructure in place. I'll limit the definition of infrastructure as the technology and knowledge  processes, web capabilities, teleconferencing, and the rest. One company that we did a study of, we  looked at the net effects after they put in state of the art web communities, teleconferencing, they  wanted to hook up all of their engineers world wide to solve fairly complex construction problems.  Their top engineers could be available to be on call to handle these construction issues. There was  one person who had a plant that he was supporting. He was a very bright person. Everybody knew that  he was the brightest on a particular aspect of engineering and so they hooked him up on  teleconferencing and everything else. He is being asked to show up a meeting twenty-four hours a  day, seven days a week, he has gotten no sleep. He has gotten none of his plant problems solved, and  then they wonder why all of a sudden he is not answering any of the calls, and not collaborating,  and supporting the rest of the corporation. What they found is there was not only not any incentive  for this person, but they weren't leveraging any of his expertise. Investing in leveraging some of  the common problems he kept solving over and over, in fact part of his problem was not just about  working twenty four hours a day, but it was about being bored about solving the same issues over and  over. That gets beyond the knowledge improvement infrastructure. It begins to get you into how do  you start dealing with the cultural issues, the incentive issues, and other things. So that you  leverage this very senior engineer. 

Engelbart: I am afraid we have to interrupt. We are coming to the end of the period. Some more questions come up in my mind, I think that some time off-line I will go after them with you with  them, Michael. 

Hart: I hope our contribution has been helpful. I hope that we have not gone off on too many tangents. 

Engelbart: We would like to come back and look at some things. The sharing of information. The important part in the strategy thing would be at the C level. This is different from the kind of A  level that we mentioned there. You have to get a specified C level activity going so that people  would recognize that. 

Hart: It would be interesting to see that immediate value. 

[  principal lecture]

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