Neural Business refers to a company's decision to mimic brain design and structure rather than the traditional power sharing structure around functional lines. Neural companies organize around distinct processing nodes and spheres designed to handle messages from highly specialized sensors. By organizing around learning, decision making, and recall the company remains adaptive and is capable of maintaining its edge in a rapidly changing world. Is your Organization Neural?
Text of How to Create a Neural Organization
Neural Business and OODA, 21st Century Business In the Evolving Network Centric World LTC(R) Michael A. Lucky LaChance
Neural: having the characteristics of an electrically excitable cell that processes and transmits information to the cortex Network: a group of two or more cells with interconnecting lines of communication O-O-D-A The cyclical process of Observing, Orienting, Deciding and Acting to gain insight, knowledge and ultimately a position of advantage. Definitions 2O-O-D-A 1Neural Network
Both structures are composed of distinct nodes processing regions and communication channels to accomplish any set of tasks. Both receive inputs from highly specialized sensors, and each is capable of rapid learning and adaptation Is your Organization Neural? The Paradigm http://thinkaurelius.files.wordpress.com/2012/05/wikipedia-category-structure.png?w=500 Brain Neural Network
Neural Organizations Are: Adaptive Create vast interconnected functional spheres of influence and connectivity in order to learn and maintain . Collaborative Readily share knowledge between nodes and seeks out cross functional assessments and engagement Speedy Maintain speed of decisions in order to learn, observe and orient faster Decisive Acts to shore up assumptions and initiate the next OODA cycle 4Decisive 3Speedy 2Collaborative 1Adaptive
Network Structures Knowledge Nodes People or Systems in the organization where functional information is exchanged, observed, or transmitted to another part of the organization. Nodes serve as highly specialized sensory transmitters and receptors of data and knowledge across the organization. (technology enabled) Lines of Communication Routes of information and knowledge transmission between nodes (internal and external to the organization) and knowledge spheres Knowledge Spheres Like the brain, knowledge spheres (processing centers) receive sensory data from highly specialized collection of sensory cells (knowledge nodes). Knowledge spheres provide unique perspective and highly specialized processing to the cortex (company). 1Nodes 2LOCs 3Spheres
The Skills (Enzymes) Information Management The art and science of cataloguing and retrieving elements of data and knowledge Sense Making The art and science of discerning meaning and purpose from seemingly purposeless action, facts and data. Knowledge Management The art and science of assessing critical insight gaps and the targeted acquisition of new insight Decision Management The art and science of knowing when and if to decide and the art of anticipating outcomes Action and Situation Management The art and science of synchronizing activities and monitoring progress to achieve desired outcomes 5Action Management 4Decision Management 3Knowledge Management 2Sense Making 1Information Management
The Process Observe Compare assumptions against reality Orient Discover patterns, consider options, anticipate immediate outcomes Decide Make a choice to do something differently Act take positive measureable steps towards accomplishing the indented outcome4Act 3Decide 2Orient 1Observe Air Force Colonel John Boyd (1927-1997) first coined the term OODA Loop to describe a high stakes, tactical combat decision-making pattern.
Observe Orient Act Decide Observe Orient Act Decide Learning Zone Limited Options Effective Uncertain Shaping Zone Confident Ineffective Disoriented Focused Flexible Options Adapting Creating Advantage Reactionary Zone
O-O-D-A Principles 75% is a GO! Do not waste precious time and momentum on 100% certainty. Action will beget the last 25% insight and more One OODA cycle per quarter (minimum) The rate of decision making determines the pace of organizational learning, insight, adaptation and advantage Create an action culture Action begets knowledge which in turn provides market advantage OODA dislocates competitors When a company acts faster they dislocate and confuse the competition (market and temporal) OODA creates adaptive organizations Because Neural-Co is based on neural networks and focused on action, we are more able to adapt to the changing nature of the market 5Adaptation 4Dislocation 3Action 2Cycle Rate 1Certainty
Situational Awareness/ Management (Reporting and Communicating) Information Management (Catalogue and Retrieve) Sense Making (Meaning and Purpose) Knowledge Management (Assessment, Targeted Learning) Business Action (Synchronized, on Time/Budget) Decision Management (Right Choice, Right Time) Neural Spheres, Purpose and OODA Alignment Neural-Co
Neural-Co Organization Sphere IT Ops Finance Sales IT Infrastru- cture Marketing Data Steward Ops Data Steward Financial Data Steward Sales Data Steward IT Data Steward Operation Manager Financial Analyst BI Analyst CIO Marketing Data Steward VP Finance VP Ops Product Manager CTO COO CFO CEO VP Business Intelligen ce CEO COOCFO Communi cations Director COO Controller SVP Sales Product Dev Dir Ops Acct Mgr VP Marketing Marketing Manager Sales Analyst VP Planning Strategy
Information Management IT Infrastru- cture Marketing Data Steward Ops Data Steward Financial Data Steward Sales Data Steward IT Data Steward Mission The information management sphere identifies, tags and indexes business critical knowledge and data to support decision makers and analysts with timely information Identifies, tags, and indexes key data for the company. Manages data and system access Establishes security rules (HIPAA etc) Manages User Profiles Manages the company help desk 2 Duties 1Mission Sphere Sponsor : CIO Primary Node: Corporate Infrastructure Sphere LOCS: Data Stewards
Sense Making Mission Review and present plausible explanations, vignettes and or stories to reduce uncertainty. Monitors incomplete or unusual data and market phenomenon to support speedy decision making Serves as Neural-Cos primary analytical cell Utilizes enterprise data, collection and analysis and BI tools Reduces uncertaintyanomalies that prevent decision making Presents plausible explanations for observed activities & data Recommends methods to validate or invalidate conclusions 2 Duties 1Mission Sphere Sponsor : CEO Primary Node: VP Business Intelligence Sphere LOCS: Analysts Operation Manager Financial Analyst BI Analyst Marketing Manager Sales Analyst
Knowledge Management Mission: Identify, catalogue, prioritize and link to pending decisions, the most vexing and impactful questions that must be answered to facilitate further decision making. These requirements are called Priority Intelligence Requirements 2 Duties 1Mission Sphere Sponsor : COO Primary Node: VP of Planning/Strategy Sphere LOCS: VPs CIO Marketing Data Steward VP Finance VP Ops Product Manager VP Planning Strategy Neural-Cos primary Strategic/ Operational Planning Sphere Identifies knowledge gaps associated with courses of action Develops collection and analysis plans to fill gaps Proposes courses of action to achieve Neural-Co vision Proposes success metrics for COA Conceptualizes future states and alternative futures
Decision Management Mission: The Decision Management Sphere provides company vision, guidance, and decisions for Neural- Co so as to establish the market momentum, increase company value and retain temporal and positional advantage. 2 Duties 1Mission Sphere Sponsor : BOD Primary Node: CEO Sphere LOCS: Executives CTO COO CFO CEO Communicate the Neural-Co vision Coordinate and approve the Neural-Co mission statement Provide strategic direction and operational guidance Establish & monitor the Common Operational Picture (COP) Establish, track and report on decisions in time and space Make decisions in a timely manner
Action Management Mission: The Action Management Sphere plans and synchronizes operational goals and tactical programs, projects, plans, product development, and other business processes in order to achieve the collective effects and objectives of the Strategic plan 2 Duties 1Mission Sphere Sponsor : CEO Primary Node: COO Sphere LOCS: VPs COO Controller SVP Sales Product Dev Dir Ops Acct Mgr VP Marketing Develops, executes and reports on programs, projects, initiatives Coordinates action between spheres to accomplish the mission Responsible for Neural-Cos PD and training programs Manages daily activities
Situation Management Mission: The situation management Sphere monitors, and reports on internal and external events, activities, goals against key performance indicators to provide actionable data and situational awareness to the organization as discreet observations and data. 2 Duties 1Mission Sphere Sponsor : BOD Primary Node: Communications Sphere LOCS: Spheres and BOD VP Business Intelligen ce CEO COOCFO Communi cations Director
References: Col John Boyd : Discourse on Winning and Losing accessed 20 July 2014 http://www.ausairpower.net/JRB/intro.pdf LTC(R) Michael A. LaChance. Whiskey and Decisions Blog. Beer is to Whiskey http://organizationaldecisions.blogspot.com/2013/08/beer-is- to-whiskey-as-planning-is-to.html, Accessed 20 July 2014. Network Centric Organizations. Wikipedia accessed 20 July 2014, http://en.wikipedia.org/wiki/Network- centric_organization.