In fact, our mind limitations are visible especially when we do not know how to distinguish significant input from noise. Take for example sleeping in a tent in a forest. Every sound will make you alert, and you will need a couple of days before you will learn how to ignore things.
Our mind behaves exactly like this in all situations, even in business. Lack of proper filtering, or, in other words, lack of appropriate models, leads to analysis paralysis, where deciding takes too much effort.
We, as humans, are terrible at dealing with a large amount of information. Our short term cognitive skills allow us to focus on a very limited set of simple objects or parameters at once.
In such a situation, managers will fall back on memes, rules of the thumb or gut feelings, which is more or less equal to tossing a coin.
This is why it is so important to stop thinking about any company as a monolithic object, which it is not.
As a matter of fact, each company consists of a number of dependent and interconnected components. Realising this, and defining component boundaries reduces complexity. It is no longer necessary to diagnose all potential effects of a given change, as the modification is wrapped and limited to a single component.
Seemingly global change has just become local, cutting off many potential analysis branches.
Unfortunately, some changes are visible to other components, and therefore affect them. If some activity suddenly changes, all dependent components have to be adjusted. Plain dependency visualisation can help you make the impact analysis faster.
Both concepts, componentisation and visualisation, are foundations of Wardley Mapping technique, which can help you make better and faster decisions. So, why not to learn it?
"I wisely started with a map, and made the story fit. The other way around lands one in confusion and impossibilities." This JRR Tolkien quote reflects one of the most important truths about the human mind – it is very focused on the ‘here’ and 'now', and external support is required to do great things.
I would like to say I knew what I was doing four years ago, but the truth is, I had no clue. I just knew that being an IT professional in central Europe and working a long way from customers (another not so wise choice of the past) was preventing me from doing any great things. When the opportunity arose to join my friend’s start-up, I knew it was something that I had to abandon my quiet and predictable life for, to do my best, and hope that I would not have to return to my previous job. My then employer had promised to take me back if the start-up did not work out, which was a great insurance policy that I could not thank them enough for.
And then I came across one of Simon Wardley's presentations that showed exceptional gameplay of one company. For contrast, I decided to use my previous employer as a case example, which pointed out some major strategic mistakes. Knowing I could no longer return to the company with this new knowledge, I started living two lives; by day working on regulatory aspects for a small Fintech institution, and by night learning how to map. I created WardleyMaps.com and the first version of the mapping software tool. I then applied my mapping knowledge to my day job, and discovered how the financial market will be transformed. This was one of the most unpleasant moments in my professional career, because mapping has shown that the entire field of currency exchange is just a temporal bubble that is about to burst, and existing constraints did not leave a lot of room for manoeuvre.
With the birth of my second child, it started to become increasingly difficult to run wardleymaps.com at night and play regulatory checkers during the day. Fortunately, Leading Edge Forum agreed to give me shelter, so I abandoned Fintech and banks, and turned to maps for good.
Over the last nine months, I have used my experience of learning mapping to create a self-paced, online mapping course, How to Stop Self-Harm and Get Fit. At times, it was a difficult battle as mapping is a big subject, and boiling it down for the newcomer takes time. For those of you that have signed up for the course already, we hope you are finding the tutorials helpful and we welcome any comments/feedback you may have. For those of you not enrolled thus far, the technique can be used for a variety of different business cases; from helping discover and understand elements of your business strategy to examining financials and economic patterns and to anticipating and making better strategic-decisions. Each of these has a huge potential to change the way we do business.
Maps continue to have a very strong impact on me, and I have used them to manage the second, improved version of the mapping tool. The tool got multi-user support, mechanism for discovering duplication and ability to create submaps for any given component, so important when doing breadth-first analysis. Sign-in today and let us know your views.
I have also started working with Poznan University of Technology, where I am dissecting maps into smaller parts to fully understand how they impact our cognitive skills, and how to boost them further via the tool. What is more, I also map my skills in order to find out what I should learn next. Today I can’t buy anything significant without first creating a mental map!
Although sometimes I would like to forget about maps, especially when the results are not in line with my emotions. For example, I love do-it-yourself movement, yet I know that custom-building commodities is a waste of time, so my soldering iron has been idle for quite some time.
If you are willing to try to change your business, enrol in the course today with the early bird rate.
Just be warned – what is seen, cannot be unseen.
Chris Daniel, Mapping Consultant, Leading Edge Forum
It looks like a press has already decided - smartwatches did not win customer hearts and wallets like smartphones did. However, I would not jump to conclusions here. What we are seeing is a very transitional state.
The current situation of smartwatch producers is represented on the map below.
Maps are imperfect when it comes to user representation, so I have to explain this map a little bit. Current smartwatch sales seem to be driven by users having one user need - "Be cool". For those people, their gadget does not have to do anything in particular. It is enough if it will increase their owners level of coolness. Some brands have here very easy job (yes, Apple, I am pointing at you), but it does not change the fact, that not everybody is willing to pay $349 to increase their perceived social status, hence that market size filled pretty quickly.
Other people expect that a $349 watch will do something useful, and those seem to be currently quite dissapointed, as smartwatches can only display notifications. Inputting data, thus any more advanced two-way communication, is a pain due to the very limited size of watch.
Fitness fans have discovered that smartwatches do not really nail it, and in addition to that there is a strong competition from dumb fitness trackers, which do their job.
So, our map will be much more accurate if we represent in this way:
Two things must happen to boost the sales of smartwatches.
First, the input method must be changed to something much more convienient. I do not expect a direct mind-to-machine connection anytime soon, but voice input seems to be achievable in the close future.
The problem with this future state is that the notification part will require too much of our attention. We need some kind of personal assistant that will offer context based notifications. If we add operating system to the picture, we get the final battlefield landscape:
Now, we have three important players here, with maps very similar to the Battlefield above.
Google is handling the situation quite well. It owns a very advanced virtual assistant that is already present on smartwatches, it has a very broad set of auxiliary databases , to name just a few - maps, weather, locations, wifi networks paired with locations. Integrations are key to the VA efficiency - it needs to learn when and what we need, the more detailed context - the better.
What is more - Google has completely isolated the smartwatch makers throuch very strict licencing of Android Wear - the only allowed modification is building custom watch faces, which is brilliant move. All makers acts as free labs for Google, Google controls users through VA, and when the time will be right, it will just promote their own watch that will be a copy of the best watch available in the market.
The biggest challenge for Google - finding a business model. Smartwatches are too small to display ads, and VA displaying context notifications means that Google will have very little space to advertise.
The worst scenario here is that service providers will pay Google to promote their services.
I would not trust a VA that will tell me to buy chocolates instead of buying flowers for my wife because someone bid higher.
Apple builds great watches, and decent Siri, but it is very closed to external integrations. It is understandable, as Apple tries to protect own services, and does not want to let any 3rd party in. This is a problem for people using external services - they will face a tough choice - to migrate everything or to not buy Apple watch. I would be afraid of putting off people who would like to buy Apple watch but are not willing to dive deep from the very beginning.
Main challenge of Apple is to keep its own elitist status and at the same time to open for 3rd party services.
This is the player that makes the show interesting. Samsung refused to play Google's game, and created its own operating system. This move, from one point of view, is great, because it makes a room for VA, but on the other hand, it leaves a huge gap in apps.
Samsung has plenty of challenges - it needs to focus on VA instead of copying wrong approach of Siri. Apple model is just ineffective here. Also, more external apps and wider adoption of Tizen would not do any harm to Tizen.
I am definitely not buying a smartwatch yet, as I need to see who wins the war of virtual assistants.
As previously mentioned, my work on the Mapping portal was always a side project, with my primary role being in the Finance sector. With time being squeezed on both professional and personal fronts, and with little time to spend on WardleyMaps.com, it was time to reset my priorities.
Today, I am pleased to announce that situation normal, everything must change.
I have now left my job in Finance and am delighted to join Leading Edge Forum (the home of Wardley Maps with Mr Simon Wardley himself!) as a Mapping Consultant.
I am extremely excited to now be able to spend my time developing an industrialized mapping training service with an emphasis on ‘removing self-harm’ and using mapping to get the basics right. We believe this training will drastically reduce the time required to get started with mapping, and build a course that will bring real value to visitors from Day 1.
I will also build out the Atlas mapping tool to include aggregation data, cheat sheets and the addition of strategic markers. The tool will also form part of our workshops, both online and in our in-demand, formal onsite workshops. The tool will support all use cases used in the course and will remain open source as it is today.
Last but not least, as you may have noticed, wardleymaps.com is no longer a community page but an official property of Leading Edge Forum.
Please check back regularly for updates and subscribe to our newsletter to keep up to date.
I look forward to bringing these updates to you in order that we can bring Wardley Maps to the masses!
Have you ever wondered why sending money to a country using foreign currency is so expensive?
My favorite explanation is that banks want to charge huge fees for those services, because their clients are likely to accept that fact.
A typical bank client pays close attention to the services that he uses often (and fees associated with then are negligible), but rarely looks at the currency exchange rates or international transfer prices (because (s)he does not expect to use them often).
This fact is mercilessly exploited by banks, and a single international transfer can literally double your commissions during a year. There are, however, three things that banks need to be careful about:
But there is another aspect of international money transfers - it is a consensus based protocol. A bank willing to transfer money to another country needs to appropriate central bank, which then passes money to corresponding central bank, which then passes them to the receiver's bank. There are always at least four banks involved, and a whole lot of other central banks just confirms the transfer (consensus).
You should be wondering at this point how those banks communicate with each other. Well, the simple answer is that they communicate through a private, secured VPN delivered by SWIFT.
I must admit I admire the SWIFT company. They support currently over 10500 financial companies and process over 15 000 000 messages per day . I was not able to figure out exact pricing, but I have found multiple providers offering shared network access points, so I guess SWIFT messages are expensive.
Now & The future
Two things are happening simultaneously:
Things cannot be reversed. A major cost factor will go away together with SWIFT (the latter is trying to fight changes by lowering prices by 30% between 2010 and 2015, imagine their margins). Without that cost, banks will be able to compete with alternative payment providers, but they will not want to.
Cheap international transfers will be a deeply buried option that will be accessible to financially savvy customers, while the rest will have standard (and expensive) service enabled.
In other words, if you do not want to be shaved by your bank, better pay close attention to the services it does not advertise!
Maps introduce a concept of three attitudes, from pioneers to town planners. Pioneers love risk and experimentation, town planners take care about volumes, and settlers are just in between. Those attitudes do not represent components, as components do not care about risks, those attitudes represent people that take care about components.
Components have evolution phases.
It is important to match proper attitudes to appropriate components. Pioneers are great when working on Genesis components, Settlers are great when working on Transitional, and Town Planners are great when working on Utility components.
Therefore, in the ideal situation, assuming that every components require the same number of people, a company with a value chain like this:
should have 1 group of Pioneers, 3 groups of Settlers and 2 groups of Town Planners.
The point is: the company is not a homogeneous environment and cannot be a Pioneer, Settler or a Town Planner.
I started my adventure with the Atlas more than a year ago. I had a goal - to build a tool that would allow for semi-automatic map analysis. It was supposed to identify key opportunities, risks and inefficiencies.
Of course, my system was not able to process a map it was not aware of. I was planning to build a simple click & drag editor to make drawing maps a no-brainer.
One day I implemented this functionality:
The editor works as I expected, but it turned out I missed a very, very tiny detail - misclicks. Clicks are used to create components, create their dependencies, mark actions and drag components. Having so many features connected with one contextless input mechanism is dangerous.
The number one reported issue was 'accidental node creation'.
This issue turned out to be unsolvable. The clutter was growing as new features were taking shape. I was not able to introduce nested maps exactly because of this.
I had to give up and look for a new metaphore.
The new editor uses a very traditional pallete mechanism, which is a source of new components. If you want to add an internal component to your map, you drag it from pallette and drop in a place of your choice.
If you want to move any component, you need to tell the editor that you will be moving them by selecting 'Move' action. This is not that simple as click-and-drag, but it totally removes acciddental component creation. As a side effect, further growth was unlocked. It will be very easy to add more components (or create so demanded undo functionality).
The new editor is still under construction, but you may test it out by adding hash to your map url:
Let me know what do you think!
Evolution of activities has three main phases:
Adopting the right methodology is difficult. Make a simple experiment - enter your IT department and tell them they will be using 6-sigma from now on.
'6-sigma' is considered to be a dinosaur. A methodology of the past put in a row with waterfall.
If you want to introduce 6 sigma to people, do not mention it. Cut out a component suitable for 6-sigma, select '6-sigma' type of people, and let them work uninterrupted.
Sit down and watch what will happen, because this is one of the most amazing things I have seen.
Agile will be bent, then bent again, and then twisted. The team will proudly introduce the most important 6-sigma principle (hypothesis->data->decision->action) while loudly declaring they are still agile.
There is one thing to remember - make sure the component is small, because only then will you have reasonable confidence that your team and the task are consistent. The bigger component you define, the bigger are chances that some part of it is truly agile and requires experiments.
Therefore you should be focused on one thing - how to cut your system/organization into proper and consistent components. You do not need to worry about bi-modal or three modal approach. This will appear spontaneously in your organization if you have proper components (and keep agile/6-sigma consultants away).
Remeber: Your task is to cut out proper components.
1. Board members are successful people...
and success is the best sign they are right. They have worked hard, made right decisions so they trust in their judgement (as we all do). However, the world is not constant, it changes all the time.
What was good for yesterday, may not be good for today, and will be a disaster tomorrow. Success is a bad advisor.
2. No upper manager will accept income decline. EVER.
A good strategy is a strategy that incorporates at least two factors - current situation and possible advancements. Typical business evolution starts from an idea validation. Today we call it 'a startup'. But once the idea is validated, the niche is open, and the business is likely to succeed, often not thanks to management, but despite it.
Yet, what is opened, must be closed. And if the core niche closes, one has two choices:
3. It is easier to find a company that does the hot thing
New job can give you a solid boost if you know what to look for. Fortunately, rules are pretty simple and were outlined in the article I wrote some time ago. You need to understand that while you cannot change the company strategy, you definitely can look for a company that is about to make all the mistakes. Such a company has proven business model, solid sources of income, too much cash and things good for you will come - free lunches, hefty bonuses, awesome entries in CV (+780% growth y/y) and dwarf tossing.
There is just one rule - do not get attached. You know that you are there because it is very beneficial for you, not for the company. But nobody will ever find out.
Learn how to prepare a strategy for a company. Even if you will not change anything in your current company, this knowledge may change your life.
By the way - this was one of the most difficult articles I ever wrote, because it outlines a successful strategy for job hopping and let's you get away with it. On the other hand - you'll become a parasite. You decide whether to follow that route.
Anyway, regardless of your motivation, start your adventure with strategy right now!
Payment cards were invented at the beginning of XX century, evolved at great speed for 50 years, and since more or less 1950 become stagnant. Of course, their adoption is much wider and a lot of small innovations is happening, but they are still the same cards we had in 1950.
The drawing below shows components required to make a card payment in the most popular scheme.
But do not get fooled by the simplicity, each of those components is a complex component that requires a lot of certifications (and capital). And Visa/Mastercard networks are critical to the money flow - they connect acquirers with issuers, and tell your bank where the money should be sent.
The problem with Visa/Mastercard is that they are unquestionable kings of payments. It is nearly impossible to compete with them, because one would have to build entire acceptance infrastructure (plenty of terminals) and issuing infrastructure (people who would actually use new payment mechanism). There were multiple attempts to do that, but even the best competitors were not able to leave country level.
Yet, Apple seems to be in a very good position to throw down the gauntlet to Visa and Mastercard. Look at the next drawing (2):
Apple cleverly isolates users from their payment cards. You still need them to make a payment, but you no longer see them. Once Apple will built a critical number of users, it may introduce an Apple terminal - a very simple device that will accept Apple Pay.
Note that at the point presented at Drawing 3, Apple holds two important components required to make a payment. The Apple Pay is pretty popular (because it is attached to iPhone/iWatch), and terminals are getting popular. Users do not care about the underlying components. Apple can simplify the value chain.
Cutting out Visa/Mastercard is simple for an organization that will hold sufficient infrastructure. There will be only one 'banking' component left - the bank account. And this could be offered by Apple in order to make a good integration with Apple Pay.
So, at this point I am convinced that Apple is in a good position to enter finances.
The bad (or good, it depends) news is that Apple has no experience in banking, and there is only a couple of banks that could be partnering with the Cupertino company.
But I can imagine Apple buying a payment institution (that can hold accounts but cannot grant credits). That would let Apple to control a significant chunk of global payments.
Would you trust Apple (iBank) ? Will we see more tech companies going to finances?
BTW. Android Pay cannot mimic this, because of the fragmentation. Multiple terminal issuers would have to work with multiple Android Pay vendors, so at least simplified Visa/MC-like solution would be needed, and therefore such a solution cannot be much more effective than existing ones.
Edit March 2016
There is one thing that I have not considered earlier, and which changes my perspective on Apple - Apple is and needs to stay exclusive, and therefore it cannot built a product for masses.
Being a somewhat luxurious brand means that Apple can win only a small fragment of the payment market, and this is not enough to strike a deal with many different acquirers and cut out Visa and MasterCard.
Said that - Apple Pay is a nice feature for Apple users, but being alone is just a nice feature.
But if Apple released Apple Pay as an open solution... things could change significantly. We would see many wearables with Apple Pay, and that would open the possibility to negotiate with acquirers...