December 17, 2014
What kind of world do I want? What kind of world do we want? This is the question that drives everything I do. For the last fifteen years, through two books, many videos, speeches, and much writing, I’ve been describing a better online world that has stubbornly refused to come to life. As I have pointed out, the online world we have is almost perfect for marketers and advertisers, but not for people. Earlier this year, I wrote about the personal data locker and its importance to the world. Here, I want to talk about the business side.
The Origin of Pull
For fifteen years, I’ve been describing a new way of doing business, in which companies don’t forecast what customers want and push inventory into their supply chains, but rather customers pull products and services through as and how they need them. It started with my third book, Futurize Your Enterprise (Wiley Business, 1999), about the customer-led company.
When I went to Adrian Zackheim, the visionary leader of Portfolio Press who published my fourth book, I told him the title would be Business 3.0. He said “That doesn’t tell me anything. Give me one active word that tells me what you’re trying to do.” Six months later, my book, Pull, came out.
Pull was about letting customers pull what they need, and in the process transforming most industries. Even though I point out several examples where it’s already working today — companies like Google, Zara, Amazon, Menlo Innovations — we’re still at the very beginning of this transition. (If Apple is any indication, we’ll be stuck with 20th-century business models for quite some time.)
The following video describes my vision for how a “pull” ecosystem works for individuals. Watching is optional, but I hope you will.
Work is Changing
We are learning that there are far more effective ways for people to work together than have been taught by business schools and management gurus. Suprisingly, we’re also learning that it can be fun and not stressful. Two methods stand out in particular:
- Lean, which comes from the manufacturing and continuous improvement culture at Toyota, focuses on building everything just in time, with little or no inventory. Lean focuses on taking waste out of the value chain, from order to cash, and helps manufacturers use resources efficiently.
- Agile, which comes from the software development world. If you’re familiar with rapid prototyping, agile carries the process further to rapid-iteration product lifecycle.
Besides myself, there are a handful of people in the world talking about using agile and lean methods for overall management. The books that have shaped business agility are on my book list. Two that are important for this discussion are:
The two main agile methodologies are scrum, which is time based, and Kanban, which is flow-based. Groups often combine these two into a kind of hybrid process that works well for their situation.
No matter how you do it, both agile and Kanban are pull-based systems. They work well if you know how to use them. This is why many agile product-development initiatives are failing — because they are building a pull engine inside of a push-based culture. All the agile coaches in the world can’t help companies if they only focus on IT departments.
A few companies are making it work rather well. Most of them are start-ups or recent start-ups. Their culture supports pull from one end to the other. These leading-edge companies are now thinking about scaling agile — putting agile processes to work at the top (portfolio), middle (program), and bottom (project) levels of an organization. Some of the pioneering work in this area is being done by Dean Leffingwell and is documented well on his web site. Klaus Leopold is another person leading the way.
My approach focuses on culture as the driving force for change. I encourage anyone who isn’t familiar with my work to explore my web site and short videos on business agility.
If Apple is any indication, we’ll be stuck with 20th-century business models for quite some time.
One thing that’s common to both lean and agile is that most teams use sticky notes and stickers on the walls to guide the work flow. However, as distributed teams and larger companies have adopted agile methods, several software companies now provide software that replaces most of the old project-management software. This software mimics the sticky notes but provides the benefits of software. We are just at the beginning of this new category; the leaders are companies like:
There are dozens more now. They all look like card grids:
Sticky notes and blue tape still have the most market share, but there are many advantages to using software: sharing, mining, accountability, research, tracking, etc. So this space is ripe for new developments, and I believe that as this category matures, a new platform will emerge.
My goal is to build a single model of a company and its information online, and have it interact with all the other data in the marketplace. I’ve already explained what differentiates true cloud computing from online backup. My belief is that agile software won’t be better than sticky notes until two important things happen …
First, we need ubiquitous displays. Sticky notes on the wall are great for talking over, for getting the bird’s eye view as well as the details of who is doing what in the coming hours and days. They radiate information, which is why so many of today’s startups use them. Sticky notes can effectively replace many meetings with a workflow for presenting a problem and arriving at a decision, then delegating tasks. I can only imagine software being able to do this when the actual walls are displays, and when all the little devices we carry around can interact with those displays. That day may be only 3–5 years away.
Second, we need interoperability. Even when scaled up to portfolios and programs, today’s agile tools are little more than helpful prioritizers and schedulers. But those in the scaled-agile world (and you could fit all of us into a church basement today) can see much more possibility than that. What will make agile work at scale is interoperability, so that each separate system can talk to every other system. We have some excellent use cases, but we will need more interoperability to go mainstream. This is what my book, Pull, is all about.
These enablers, I believe, will allow a new company to emerge as “the platform” for corporate processes and systems. This new platform will incorporate all of the necessary ERP functions in a pull system, so that every bit of information a company works with flows through the system — not just resources, processes, and people, but also money, credit, buyers, markets, rules, regulations, and much more.
… the online world we have is almost perfect for marketers and advertisers, but not for people.
A Pull-Based ERP Ecosystem
Today, the worldwide ERP market is estimated at around $300b. Today’s ERP behemoths and Six-Sigma go together well — if you want to become really efficient at the processes you needed two years ago and spend a lot of money doing it (with a reasonable chance of failure), this system is almost optimal. Just keeping today’s ERP software from breaking is a $50b business alone.
In contrast, a pull-based ecosystem will be based on a number of open data standards that let all companies’ computers speak the same language, without importing and exporting. This ecosystem is a large platform meant to house and manage tomorrow’s yottabyte-scale business data. It will be scalable from conception, able to handle everything from stock markets to accounting to planning and marketing. It will be flexible and adaptive. Think of it as a large full-scale data model of markets, producers, consumers, middlemen, and distributors, so that anyone looking at the model is seeing a real-time version of supply and demand. From walls to wearables, all the displays show this model, and everyone interacts with the data in real time. Using this model, you can literally see goods and services being created, shipped, purchased, received, used, resold, reused, etc. Most of the standards and kernels will be open source, but there will likely be several proprietary areas as well. The goal is for information to conform to the following general principles:
- Nothing is copied, ever.
- Turn documents into formatted data as much as possible (the more it’s repeated, the more formatting).
- Democratic format approval and release.
- Formats as a service (prevents format drift).
- Information flows through the system in its native formats, without translation.
- Manage permissions rather than moving data.
- Everything is pull based, even when it involves hundreds of partners.
Much of this is outlined in my book and my writings. (If you are interested in formats as a service, please contact me for a separate document.)
Today’s ERP behemoths and Six-Sigma go together well — if you want to become really efficient at the processes you needed two years ago and spend a lot of money doing it (with a reasonable chance of failure), this system is almost optimal.
In a pull-based system, everything is on a virtual card, and cards become part of a hierarchical (or networked) structure that carries information about every single thing the company is doing. (Those who remember HyperCard have seen a prototype.) Think of it as mountains and rivers of sticky notes, each one carrying information, each one can be opened into many sub-notes, so that a single model of the company’s work flow is sitting in the cloud and can be accessed on any device at any time. There are no copies and few print-outs. Displays are built into walls, tables, desks, and more. When you make a change to a card (assuming you have permission), everyone sees the data change immediately, and the effects ripple through the system in real time.
For example, let’s look at building, selling, and shipping a new airplane. In today’s world, an order for a new airplane results in a lot of documents being printed and sent around to different parties. Eventually, through a lot of human communication and a certain percentage of errors, an airplane gets built according to what the documents say. This is also true for a building or anything else large and custom.
Using a pull-based system, the order drives everything and most of the process is automatic. Since all the suppliers are on the same system, everyone is simply looking upstream for an order signal. When it comes, all the systems coordinate and the product or project is pulled through, with minimal documentation. In today’s systems, documents are necessary connective components — in tomorrow’s system, they are byproducts.
Think of it as a large full-scale data model of markets, producers, consumers, middlemen, and distributors, so that anyone looking at the model is seeing a real-time version of supply and demand.
Early Signs of Life
The following pieces of the puzzle are already falling into place:
- Scaled agile is already getting traction. The Scaled Agile Academy is already up and teaching courses. Scaled Agile has case studies and master teachers. You’ll find a short introduction to SAFe on Rallydev’s web site. My personal opinion is that it is very early days and we have a lot to learn. Eventually, I think this area will become much more blurry, with many different flavors and philosophies. I hope to see a Kanban version from the mind of David Anderson, who has hinted as much in his book, Kanban.
- Beyond Budgeting is just gaining momentum. Beyond Budgeting replaces the fictional practice of planning and projecting how much things will cost with a more flexible, progress-based approach that reflects the reality of finding what works as you go. I expect 2015 will be a big year for the Beyond Budgeting movement and hope it reaches more mainstream ears.
- Open APIs and the Open Data movement are starting to show how useful they can be. Many goverments (mostly cities) are opening their data to developers, letting thousands of apps and services use them for free. A service-based, interoperable, online ecosystem is just starting to emerge.
- Big Structure is just emerging. The world’s foremost expert on open-data interoperably is Mike Bergman. His web site, writings, projects, and influence are light-years ahead of the way most people think of data. I encourage you to explore big structure and learn from him.
There are other signs — progressive but small companies in innovation, decision science, experiments, agile consulting, data science, data visualization, API building, open data, lean transformation, executive coaching, and others. They are all struggling against much larger competitors for clients. Companies often hire them to do one small thing and then let them go, rather than let them put holistic systems in place.
Going to Market
To start as a software company would take a lot of cash, several pivots, and a lot of sales energy. I think the best route to market is to start a world-leading consulting company that gets the message out, builds the brand, and is seen as the leader in changing companies’ cultures and processes from push to pull. The beginnings of that consulting company are at the Business Agility Workshop web site.
An agency is an even better model. It’s early, but it’s just the right time to start this kind of agency — an umbrella organization that can acquire and build synergy among the various leaders in realizing the world of pull. It will take money, time, and conviction, but since most agencies today are chasing after diminishing margins, I believe the chance to build something different is compelling. If I had a backer, I would build an agency and put half a dozen companies under one umbrella. That would let us build a sales and marketing infrastructure and go to market together, stronger, and try to sell higher up the organization.
Using this model, you can literally see goods and services being created, shipped, purchased, received, used, resold, reused, etc.
One thing we’re learning is that once you aggregate all the data “exhaust” of a business in one place, it becomes more than an artifact. It becomes an interface for driving what happens in the real world, rather than recording it after the fact. Dashboards become control panels. This is key to the shift I’m describing.
The ERP platform of the future will be open and scalable, and anyone can build on it. There should be many surprises. A consulting company has a built-in market of customers to use as beta testers and the cash-flow to keep trying things to see what works. This should exactly correspond with the gradual shift of businesses from push to pull models over the next 20 years.
No One Said it Would be Easy
There will be plenty of resistance. There always is.
Soon we will be in the “anger” phase, and that will signal the start for visionary entrepreneurs to jump on the bandwagon and get in early. This post serves as the initial “white paper” that I hope people will look back on in 5 years and say that 2015 was when it really got going.
It’s a long shot, but it’s also a logical shot. You can imagine that this is how things are going to go anyway. ERP — even in the cloud — is a dinosaur that can’t get out from under its own weight. It’s might just be the right time to build that brand and iterate our way to success through trial and error. For inspiration, see Kevin Kelly’s recent piece, It is Not Too Late.
Dashboards become control panels. This is key to the shift I’m describing.
If you can help me build this dream, please contact me. If you believe in it, please help spread it. Please use the hashtag #pulltogether in refering to this page.
Where to go next? Try my two most popular pieces on Medium.com: