Doug Theis Leave your comfort zone.

Summary: Venture capitalist, Fred Wilson, presents important business model innovations in enterprise technology. Corporate leadership should listen and learn.

Venture capital investor, Fred Wilson, is a keen and deep-thinking observer of enterprise software trends. During a talk at the LeWeb conference, in Paris, Wilson presented his framework for evaluating startup investments.

His ideas offer an interesting view for CIOs and CMOs who want to drive beneficial organizational change by innovating with technology.

Hierarchies vs. networks. Wilson presents the idea that “technology-driven networks of individuals” can replace bureaucratic hierarchies in some situations. Management in traditional organizations use a pyramid style, command and control communication structure to execute directives and receive feedback. However, when communication and transaction costs are sufficiently low, technology can enable information to flow without hierarchical intermediaries, creating a more rapid and efficient exchange of information than would otherwise be possible. This shift, from command-oriented to peer-oriented information flows, is having a profound impact in certain industries.

For example, Twitter has replaced the newspaper as source of news for many people. Instead of editors specifying stories and dispatching armies of reporters and photographers into the field, Twitter users gather and share news spontaneously, creating a broader network of sources than would be possible for any newspaper. In a refinement of this concept, Timeline Labs, founded by entrepreneur Malcolm CasSelle, analyzes social media data to surface real-time stories for television news; Timeline relies on peer sharing and data analytics to disrupt the traditional news room. Other examples can be found in industries as diverse as hotels (Airbnb) and music distribution (SoundCloud).

By replacing centralized hierarchies with distributed networks of individuals, technology can lower costs and dramatically increase operational efficiencies, compared to what is possible with top-down information flows.

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Ray Abide looks at the concepts of detail complexity and dynamic complexity in the context of business continuity planning.

Over an extended period of time, I believe that a conventional instinct is to add more specifics and detail to our business continuity plans. This may be guided by increasing complexity in the subject business or by our improved understanding and planning maturity brought about by plan exercises or experience gained by plan activation during a crisis.

While this increasing detail and texture in the plan may seem to be an improvement or an enhancement, it is only true if the incremental planning addresses the type of complexity that can be reduced or eliminated, in advance.

In Peter Senge’s 1990 book, The Fifth Discipline, an excellent text on the topic of organizational learning, Senge distinguishes between two types of complexity (pages 70-71): detail complexity and dynamic complexity. He defines detail complexity as the sort of complexity with many variables, which is what we typically think of when we think of complex issues. The second type, dynamic complexity, refers to situations where cause and effect are subtle, and where the effects over time of interventions are not obvious. Traditional planning methods are not effective in dealing with dynamic complexity as dynamic complexity is much more qualitative in nature than is detail complexity. The variables and their interrelationships do not readily lend themselves to a solution provided by a comprehensive task list or documented instruction set.

Before I read Senge’s book, I referred to the business continuity method of addressing dynamic complexity by developing a plan that was more of a roadmap than a recipe. The idea is that the roadmap would guide a recovery team allowing their expertise and experience to navigate ambiguity whereas a recipe infers that this is unnecessary if the team strictly adheres to an all-inclusive recovery plan or recipe.

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Espion predicts some key information protection, governance and ediscovery trends which will affect organizations over the coming 12 months:

1. Social discovery – a new frontier for the legal profession
The acceleration in the number of cases involving evidence from social media and the Internet (such as Facebook, Twitter, webmail, website data and YouTube videos), will put greater emphasis on the importance of employing best practices to collect, preserve and produce such online datasets.

Internet investigations and in particular social media, represent a new frontier for the legal fraternity. The scope for finding digital evidence such as photographs, status updates, a person’s location at a certain time, as well as content from social media accounts, will be an enormous burden on organizations.

2. Data breaches: anger will turn to action
High profile data breaches continued to make headlines throughout 2013. With each breach came greater awareness and understanding of often complex issues with the management of data becoming not just an IT issue but a business one.

Espion predicts that consumers will be increasingly savvy around personal data privacy issues and will lose patience with organizations that fail to act responsibly. 2014 will see those affected by breaches take even greater action – sharing their experience on social media and increasingly reporting to relevant bodies such as the Information Commissioners Office (UK) or the Data Commissioner (IRE).

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A Manhattan judge said that an accounting firm misappropriated a wealth manager’s cloud-based client list, in a case that illustrates the ambiguity that can surround how companies control third party storage.

Manhattan Federal Judge Robert Sweet said Weiser Capital Management LLC improperly took data from its former employee Debra Schatzki when it cut off her access to a database that contained her client business, after she was fired in 2010. But the judge stopped short of issuing a summary judgment in the case, which was first reported by the New York Daily News. The case goes to trial next month. An attorney for Weiser declined to comment on the case. “We don’t want to litigate through the media,” he said.

While centuries old law on information ownership still applies to new technologies, the cloud can sometimes muddy the distinctions of who has control the data, say legal observers.

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