Aquila Audax. Photo Credit: Wikimedia Commons

Aquila Audax. Photo Credit: Wikimedia Commons

In Spain we have an old proverb: “God creates them and they come together”. In English the most similar proverb is: “Birds of a feather flock together”. The English version has got a reference to the race; however, the Spanish one has not. It is more generic, and it can be applied to any human characteristic.

The meaning of the proverb tries to show that individuals with a certain characteristic finally will be together because they will have finally similar preferences. I like the Spanish version because it is not related to the DNA, and it is more useful to analyze classic problems of people classification with computer algorithms.

We are living in a world where the classification of individuals is commoner than most people think, and computers are usually following that popular principle.

While in occidental societies any classification from race would be not considered politically correct, many IT systems could be following that directive automatically.

One of the most common and simple classification algorithms is known as the algorithm of the nearest neighbor. Many computers try to classify any new object searching for the nearest object in the space of characteristics, and then it is automatically classified in the same group as the nearest object.

The validity of this method depends on how many characteristics are involved and defining the space of characteristics, and how they are measured in order to provide a mathematical distance.

Some years ago, I was working in a company as innovation manager. Human resources department hired a new girl to work with them. She was living in same street I was living and I grew. One day we meet in the bus stop. As she was a work colleague, I said her hello. She asked me why she never saw me before. My answer was that I always studied in private schools far from that street and later I went to a far city in order to work after the university. It seems that the nearest neighbor algorithm does not fit well this situation.

Social networks are getting information like location every day about people and then they classify people from those properties in order to provide advertising; however, I was a living example that this is not a good way of classification.

If DNA is not politically correct, and neighboring location is not good enough, how can we make a good classification?

First of all, the nearest neighbor algorithm cannot be taken in a literal sense. A good classification is searching for neighbors in the space of characteristics where physical location can be only one of them as most. The same sentence in a mathematical context can be very far from the meaning of that sentence in a social or political context. A problem arises when you are using mathematics to analyze social situations. Something that is very common with social networks. We can see that the solution can be very different if the project is driven by a mathematical scientist or by a politician due to the different use of the language.

On the other hand, we need to improve the algorithm. There is another algorithm more complex that can be used instead. It is known as k-nearest neighbor. The algorithm is similar, but now we are searching for the group that has k elements nearby. Although it is better than the simple nearest neighbor, it is prone to the same errors.

A good classification depends on how the space of characteristics is defined and how the information is gathered and distributed. This can be more important than the algorithm itself.

Automatic IT systems for classification are not only a matter of IT algorithms implementation but a matter of system design mainly. Artificial intelligence provides techniques to cope with more complex situations; however, it cannot be good enough if the system is not properly designed in terms of selection of characteristics and the required information.

Computer scientists have spent several years analyzing classification problems with mathematical optimization algorithms and the introduction of AI techniques as neural networks, however, these techniques will not provide a good result if the system never was properly designed selecting the proper characteristics required to solve the classification problem. A good system would be got from a good IT engineering instead of only good programming. System architecture is at least as important as computer algorithms.

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Brain Training. Photo Credit: Public Domain

Brain Training. Photo Credit: Public Domain

Sun Tzu thought that a war must be won before the fight: “In war, the victorious strategist only seeks battle after the victory has been won, whereas, he who is destined to defeat, first fights and afterwards looks for victory”.

The planning of activities, as many other common activities in the business world, proceeds from the military activity. Although this kind of thoughts is useful for the business world, it is very important to establish a difference between business competition and war. There are several things to be considered:

  • The aim of a strategy for war usually is the total defeat of the enemy; however, the aim of a business strategy is to improve the positioning of the company.
  • In a classic warfare scenario there are two factions, while in a competitive market the number of competitors can be huge. Business strategy usually is more complex than warfare strategy in a conventional scenario because of the number of involved organizations and the links among them. On the other hand, it is true that modern geopolitics is making more complex day by day too.

Competition is a thing that is not very easily simplified. We cannot eliminate easily a competitor when he is better than us although that fact would make our life easier.

Classic business strategy is many times inspired by military one. This must be done being very cautious, although many principles of military strategy could be useful for business activity.

Sun Tzu said for instance that a way in which a ruler can bring misfortune to his army is “by attempting to govern an army in the same way as he administers a kingdom, being ignorant of the conditions which obtain in an army”.

This sentence is very interesting to start a discussion: Is business activity similar to govern an army, or similar to govern a kingdom? Many businessmen would say that it is different to both activities, and they, probably, are right. Sun Tzu’s previous sentence can be applied to business. A business cannot be administered like a nation because while they are in a competition while public administration is a pure monopoly, however this fact does not imply that a business must be governed like an army because workers with labor contracts have not the same compromise with the organization than a soldier who has made a pledge of allegiance.

One of the main problems in many businesses is to get people be involved in the strategic decisions of the company. A citizen is like a shareholder of a country that has the right to vote about how the nation must be governed; however, a worker has not that legal capability. The directorate must create a working environment that let the worker to feel he is contributing to make something great providing value for him and for other ones.

fgfs-pyb-catalina-madrid

Overflying Madrid City with Flightgear Flight Simulator. Photo Credit: Public Domain

Innovation is one these words that in a certain period of time all people have in mind. In the previous decade there was not a company without the word innovation in its values. Every company wanted to provide new products as a way to increase the sales. A company without an innovation department was a company considered a failure. This decade, however, has been defined by a different word: global crisis. Crises imply a need to reduce risks and innovation is an activity inherently risky. This fact has produced a change of paradigm. Many authors have alerted about the complexity increase produced by innovation, and the typical rationalization of resources required in a crisis has produced a reduction of the innovation budgets in many companies.

Thinking in the complexity changes driven by innovation is a good practice; however, thinking in some kind of evilness around it is a great error. Innovation can be a strategic tool as good as in the 90’s to change a company, and crises usually demand changes in any organization.

What is required now is not a new vision about innovation but modern methods to manage it. In this decade we have seen that innovation does not produce a better positioning of the company automatically. We can only assure that it will provide a change, it is positive or negative it must be considered from many viewpoints.

We usually think that the change produced by any innovation will be positive because we are thinking in technological terms. If innovation produces a technological advance, it will be a competitive advantage. Although this is true, many other things must be taken into account.

If we have an electronic device fed by a battery with a certain voltage and current supply and we change the battery with another one with same voltage and more current supply capability, we will have an advantage but the device will be working like in the former case. It will continue providing the same current at a higher cost, because the current depends on the voltage of the battery and the electric load at the device.

In the same way, innovation only will be used if the market is prepared to take advantage of it. Innovation management is a managing function that tries to adjust the offer to the demand for both the offer and the demand side. Innovation management is searching for new technology offers and trying to create new demand for any new technology. Our decade should have been the decade of innovation management because crises must not be faced through the elimination of activities but through better management. In some cases, better management will imply the elimination of activities and in other ones will not.

The new paradigm of innovation will require new ways to analyze the effect of innovation on the robustness of the business, and more control about how innovations fit markets. The recent crisis has shown that the role of the innovation managers must be nearer the strategic directorate and the CEO than before.

Innovation management never has been a matter of technological development only but a matter of thinking about what we must develop, how we must develop it, where and for whom.

Additionally we must think now that there is another aspect that should be considered: how innovation is affecting the structure of our business changing the relationships among suppliers and clients, because a change in the value chain of the business is changing the global risk of the company.

If we look at the current innovation trends we can see that most of them proceed from technologies that arose in the previous decades but could not be used in the markets due to a lack of demand and development capability. These are two examples:

  • Internet of the things: Internet protocols TCP/IP were developed at the 70’s, however, it was necessary to have larger communications networks and smart devices in order to think about a real development of it.
  • Virtual Reality: Computer Vision was born in the 60’s, however, it has been necessary to improve the microprocessors to get real time.
  • Deep learning, big data and Artificial Intelligence: AI exists in computer science from the 50’s. Neural networks are from that decade, however, for its development large computers and a large source of accessible data has been required.

The offer side limits have been overcome, but, now it is the turn of working on the demand side. Is the world really prepared for IoT and VR? Probably, it is, but this development will need a great effort to become true. The case of Big Data and AI probably has a larger demand yet.

Those innovations can change not only a few businesses but even the entire world, in the same way as internet did it. Those kinds of changes will impulse changes in all businesses that will have to be properly analyzed and managed.

 

Portrait of Napoleon Bonaparte with Imperial Outfit

Portrait of Napoleon Bonaparte with Imperial Outfit. Public Domain

A name is only a word that designates an object or individual. What makes our organization different is not the name but the identity. Identity is not defined by the name but it is defined by values. The values define how our organization behaves.

Europe can be seen as a name or it can be seen as the identity of a group of people. A national identity is void if it has not got a set of values different to its surroundings.

Europe is the result of the evolution of the ashes of the Roman Empire and the evolution of Christianism. Are the values of the French different to the values of the Italian or the Spanish? There are differences of language, but there are not many differences of values.

European Union, as an organization, is a recent invention however a united Europe is an historical concept that has never been abandoned from the Roman Empire and it has been tried several times along history from the greatest countries of the continent. The Spanish Ruler Carlos I was crowned Emperor of the Holy Roman Empire with the name Carlos V. Napoleon Bonaparte tried to conquest all Europe, and the expansionist zeal of Germany in the XIX and XX centuries is well known. The current European Union is a way to join the countries of Europe based in democracy. It supposes a different try of joining the European identity to a political organization.

In the last years, we are seeing how people defending the national identities are increasing their influence in the European politics. However, the odd issue behind this fact is that national identities are growing on the discourse of the defense of the traditional values that are common in every European national state. Those discourses should be promoting the union instead.

Looking at this fact we could understand that people perceive that European Union is destroying the European values instead of protecting them, and then, to recover the initial spirit of the current Europe should be a priority of the European politicians trying to preserve the union.

An organization is not built around money but around values. A classic strategic planning is done through three important matters: mission, vision and values. Money is secondary. When the money becomes the primary thing, you can assure that there is a great problem inside the political organization. The Spanish philosopher Ortega y Gasset though that rich people have not got power because they are rich. The truth is the contrary thing: Powerful people have money because they are powerful.

Money is a secondary matter in an organization because it provides a power limited to a single use, however, knowledge provides an unlimited power in time. Money always moves from people without power to people with power in a natural way. That is the reason why liberal democracies were established in order to put a limit to the power of rulers, avoiding that money could move indiscriminately from people (without political power) to rulers (with political power).

In Europe most people do not know strategic planning. The European national states exist before the definition of the concept of strategic planning. They were never built on a formal document. Unlike other countries like USA, modern constitutions of the European countries are subsequent to the existence of the political organization. And any attempt of union was defined in the head of a certain ruler instead of on a paper. For instance, Napoleon, considered a great strategist, had a clear vision about a union of Europe under the French domain. His problem was that many other people did not share his vision. Organizations fail when many people at the organization do not share the vision of the rulers. In a group, success or fail is a matter of common strategy, instead of a matter of money as some people without business knowledge think.

In a business organization, the strategy is defined by the directorate in the same way as the first politicians of USA defined its constitution; however, this is not valid for the European states. People have got and know a shared set of values and a way of working, a new set of values cannot be imposed without a great conflict between rulers and people. Europe cannot be built from the vision of a single ruler or country unless he can be smarter than Napoleon Bonaparte and he can have a better army than him. European rulers should think about if their abilities are better or worse than Napoleon’s ones before trying to define any vision of a united Europe against the classic values of the European. And farther values, strategy requires that the strategic actions are related to the actual capabilities of the organization and managing staff.

Unlike national states, European Union has been defined with a strategy, with a mission, a vision and a set of values. And only those countries that share them can be a part of it. Europe must go back to its values. It must to put values over money, and finally, as usual, money (and votes) will flow towards the people with actual power to preserve them.

Planboard Planning. Photo Credit: Wikimedia Commons

Planboard Planning. Photo Credit: Wikimedia Commons

Some years ago I defined an innovation project as the proper basement to support ideas and to manage the development of innovation and its internal and external dissemination in order to get the essential characteristic of any innovation system that it is to make easy what is difficult. In more modern words, a project is an organized way to reduce the complexity of any activity.

I advanced that the project is the main way to control the risk of the activity. In other words, we can say now that reducing complexity we are limiting the risk of the activity. Going farther, I mentioned that innovation project is a special kind of investment project where there is more than a bounded risk, there is an inherent uncertainty. This inherent uncertainty must be balanced through a more rigorous definition of tasks. In other words we need to reduce the internal uncertainty of the defined activity to balance the total addition of internal and external uncertainty, because we can do nothing on the external one.

Complexity management is not new, however, in the recent years, new methodologies and approaches have appeared in order to make this activity more effective from the use of science.

Complexity management as science let us to understand better how we can improve in our investment decisions but this is not anything against the reduction of complexity organizing activities through projects.

Any activity to improve the future must be planned in a project or a set of them because the future is uncertain and our modern societies are driven through very complex activities. Project management continues being the best way to reduce complexity. We only need to add complexity management techniques to the definition of projects in order to make our work simpler instead of more complex.

A project is only a planned route to turn an idea into something real. Projects make our life simpler and they let that we can live far from uncertainty and risk. We cannot imagine an engineer working without an engineering project, a business man working without a business project, or a political party working without a social project. If there is no project, there is no work, and then there is no value for the society where they live.

Once we have understood this, we will be able to analyze which project is better to comply with its aim, or in other words, which project is less complex and which project produces a less complex result. This can be done through complexity measurement techniques.

The complexity of the project will define its capability to reach the result. The more complex the project is, the more difficult its management is and the more difficult to reach the aim is. On the other hand, different projects can drive to different results producing different amount of complexity and uncertainty.