See Notes Page An Architecture for Stewarding Enterprises

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See Notes Page An Architecture for Stewarding Enterprises L. Keith Mc. Caughin and B.

See Notes Page An Architecture for Stewarding Enterprises L. Keith Mc. Caughin and B. E. White, Ph. D. Krona - Kongsberg Kunnskap og kulturpark Home of Buskerud and Vestfold University College 1 Copyright 2016 Brian E. White IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

Outline �Introduction �Definitions �Corporate Enterprises �On Relationships Between Variables �Complex Systems �Enterprise Architecture and

Outline �Introduction �Definitions �Corporate Enterprises �On Relationships Between Variables �Complex Systems �Enterprise Architecture and Stewardship �Conclusion �References 2 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Introduction � Stewardship balances bad and good aspects of, respectively �

See Notes Page Introduction � Stewardship balances bad and good aspects of, respectively � � � Exclusive ownership (at the expense of others) Striving for wealth ownership (which stimulates development). Enterprise architecture (EA) uses principles from Complex adaptive systems (CASs) � Integral philosophy � Systems engineering (SE) to guide stewardship. � � Most of what we say about enterprises and EA applies to � � � 3 System of systems (So. S) Complex systems (CSs). Classical, traditional, or conventional SE pays insufficient attention to stewardship, and this leads to failures. IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Definitions (1/2) � Enterprise: � � � � All these definitions

See Notes Page Definitions (1/2) � Enterprise: � � � � All these definitions apply here to some extent. � Architecture: A well-considered plan for guiding development. � � � It must be established early on. A good architecture will not change much. EA: An architecture applied to an enterprise. � � 4 “ 1 a: a plan or design for a venture or undertaking b: an undertaking that is difficult, complicated, or has a strong element of risk c: a unit of economic organization or activity d: any systematic purposeful activity or type of activity 2 a: readiness to attempt or engage in what requires daring or energy b: a bold energetic questing spirit c: independence of thought” EA can be used for any and all enterprises. Many enterprises recognize stakeholders. IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Definitions (2/2) � Stewardship: A steward takes good care of something.

See Notes Page Definitions (2/2) � Stewardship: A steward takes good care of something. S/he does no harm. � Good stewardship creates enterprise value among stakeholders. � This goes beyond profit, to all stakeholder interests, including public. � � Holon: Something that is simultaneously a whole and a composition of parts. Much (most everything? ) is made of (or includes) holons. � Ken Wilber has said: “Reality as a whole is composed of holons. ” � � Holarchy: A hierarchy of holons. � 5 If all instances of a holon cease to exist, then all the holons they were part of must also cease to exist. IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Corporate Enterprises � Russell Ackoff said the purpose of a corporation

See Notes Page Corporate Enterprises � Russell Ackoff said the purpose of a corporation is to maximize value for all stakeholders including � � � � 6 Shareholders Governmental bodies Political groups Trade associations/Unions Communities Financiers Suppliers Employees Customers Competitors. Profit is necessary but insufficient for this purpose. Focusing on profit is like saying the purpose of a person is to breathe! Stakeholder theory concerns management and business ethics that address values and morals in operating an organization, i. e. , stewardship. IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page On Relationships Between Variables (1/3) � Interdependent variables form circular relationships

See Notes Page On Relationships Between Variables (1/3) � Interdependent variables form circular relationships and affect enterprises in their stewardship development. � Integration/differentiation, for example (see next chart) � Without an effective differentiation there can never be a meaningful integration � Any integration implies the existence of some preceding differentiation. 7 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

Opposing Pairs as Complements 8 11/4/2020

Opposing Pairs as Complements 8 11/4/2020

On Relationships Between Variables (2/3) See Notes Page Control vs. Autonomy 9 IEEE System

On Relationships Between Variables (2/3) See Notes Page Control vs. Autonomy 9 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

On Relationships Between Variables (3/3) See Notes Page Return vs. Value 10 IEEE System

On Relationships Between Variables (3/3) See Notes Page Return vs. Value 10 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Complex Systems (1/4) Power Law for Extinctions and Impact of Strategy

See Notes Page Complex Systems (1/4) Power Law for Extinctions and Impact of Strategy on Fitness 11 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

Complex Systems (2/4) Fitness Limits See Notes Page � Paul Ormerod said: � “…

Complex Systems (2/4) Fitness Limits See Notes Page � Paul Ormerod said: � “… the shareholder-based organization has reigned supreme. [But cooperative organizations] evolve over time by … natural selection. … Some variants can indeed become successful and survive, but there may be inherent limits on how much fitness they can develop. . ” � Some business organizations live over 100 years; some die early. � “The average life expectancy of a Fortune 500 multinational corporation or its equivalent is between 40 and 50 years. ” � Ormerod characterizes this: “The probability of failure, …, is known to be highest when the company is first formed. It then falls away rapidly … [and] … is … unrelated to … age … � Soon, …, the value of more experience falls to zero. … the probability of failure in the immediate year ahead is virtually the same. ” � 12 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

Complex Systems (3/4) Evolutionary Enterprise Stewardship Development � � 13 See Notes Page A

Complex Systems (3/4) Evolutionary Enterprise Stewardship Development � � 13 See Notes Page A context for CSs is depicted in the next chart. � Moving toward the upper right embodies positive development. � Moving in the other direction indicates negative regression. � Extreme agency leads to loss of communion in stasis. � Extreme communion leads to loss of agency in chaos. � Within the fitness limits are � Hierarchical control and retention of return in agency � Autonomous self-organizing teams and sharing of value in communion. � Both tendencies are present in development or regression. � A fitness zone includes both in dynamic balance. � This is a goal of stewarding enterprises. Wilber outlines twenty fundamental properties characterizing holons. For example, enterprises maintain both their “wholeness” and “part-ness”. IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

Complex Systems (4/4) Evolutionary Context of Complex Systems 14 IEEE System of Systems Engineering

Complex Systems (4/4) Evolutionary Context of Complex Systems 14 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Enterprise Architecture and Stewardship (1/8) Enterprises as Holons � Enterprises transcend

See Notes Page Enterprise Architecture and Stewardship (1/8) Enterprises as Holons � Enterprises transcend from individual through family, clan, tribe, nation, state, etc. � We engage in enterprises that transcend individual friendships, clubs, etc. , through economic groups, e. g, businesses, partnerships, cooperatives, and corporations. � This is illustrated in the next chart. � 15 � In the stakeholder network of the outer, light-green oval, an enterprise can be an organization, conglomerate, or even a single person. � There can be any number of enterprises of each object type, e. g. , supplier, employee, public, or customer enterprises, in the network. � Each enterprise in this large, outer oval is a conceptual holon identified as a network node associating other enterprises by stakeholder type. A stakeholder enterprise, represented by the inner, darker-green oval in the center of this next chart can be included in one or more stakeholder type network nodes. � A stakeholder can be of any 1 to all 8 types indicated. � Each oval (including agents of a specific stakeholder type) in this subject enterprise is either a real or conceptual internal subdivision. � Many enterprises are organized to commune with stakeholders in this manner. � However, few coordinate their activities with a unified strategy. IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

Enterprise Architecture and Stewardship (2/8) Enterprises and Stakeholder Architecture 16 IEEE System of Systems

Enterprise Architecture and Stewardship (2/8) Enterprises and Stakeholder Architecture 16 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Enterprise Architecture and Stewardship (3/8) Stakeholder Tendencies � All stakeholders exhibit

See Notes Page Enterprise Architecture and Stewardship (3/8) Stakeholder Tendencies � All stakeholders exhibit varying degrees of: � Control: dominance over others � Autonomy: isolation from others � Return: satisfying others needs for profit � Value: satisfying needs with others’ products or services. Knowing their tendencies helps one appeal to them. � � 17 The eight stakeholder types typically have the following tendencies: � Owners: control (extroversion) � Employees: autonomy (introversion) � Suppliers: return (extroversion) � Customers: value (introversion) � Regulators: control and return � Public: autonomy and value � Competitors: return and autonomy � Collaborators: control and value. The more roles a stakeholder assumes the less important their primary tendency. IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Enterprise Architecture and Stewardship (4/8) Importance of Case Studies and Models

See Notes Page Enterprise Architecture and Stewardship (4/8) Importance of Case Studies and Models � CS properties/behavior cannot be fully known or predicted. � Thus, we rely on case studies, models, or concepts. � Decision-taking cannot be expected to outperform the quality of the model on which it is based. � So system thinking emphasizes the need for developing and improving models while discovering what works and what doesn’t. � Progress depends upon a experimentation and learning. 18 continual IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 cycle of 11/4/2020

See Notes Page Enterprise Architecture and Stewardship (5/8) Steps to Stakeholder Stewardship (1/3) �

See Notes Page Enterprise Architecture and Stewardship (5/8) Steps to Stakeholder Stewardship (1/3) � An organization must carefully select stewards, taking Personalities � Working styles � Enthusiasm/Receptiveness into account. � � The coordination effort should include Stewardship training � Continual performance evaluation. � � Enlightened owners will evolve to become stewards. � Through good stewardship, owners, individuals, or collectives will dissolve conflicts among enterprise stakeholders. 19 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Enterprise Architecture and Stewardship (6/8) Steps to Stakeholder Stewardship (2/3) �

See Notes Page Enterprise Architecture and Stewardship (6/8) Steps to Stakeholder Stewardship (2/3) � Review the enterprise strategic plan and answer the following: � � � Identify and map stakeholders to the transactional environment. Create, develop, and integrate strategies based on stakeholders. Identify the 20% of key stakeholders that represent 80% of the interactions. Categorize key stakeholders according to the eight stakeholder types. Understand key stakeholders. Prioritize key stakeholders and estimate the resources needed to address them. Characterize the stakeholder’s: � � � 20 Why does the enterprise exist; what is its mission? Who are the people who constitute the organization; what are their values; what is their culture? Where does the organization want to go; what is its vision? What must be done to succeed; what are the goals? How will the organization co-evolve with the transactional environment; what are the strategies? Importance to the organization Power in your relationship with them Potential to cooperate or compete with your objectives. IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Enterprise Architecture and Stewardship (7/8) Steps to Stakeholder Stewardship (3/3) �

See Notes Page Enterprise Architecture and Stewardship (7/8) Steps to Stakeholder Stewardship (3/3) � Determine a strategy for relating to each stakeholder type that dissolves conflicts. � Build/gradually transform the organization to effectively implement this strategy. � Referring to the next chart, the � “Minimalist” and “Self-Interest” philosophies are inappropriate for governmental enterprises. � “Social Contract” and “Stakeholder Management” philosophies describe current governmental enterprises. � “Stakeholder Stewardship” philosophy is recommended for enterprises – organizations evolving in their environment of stakeholders. 21 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

Enterprise Architecture and Stewardship (8/8) Characterisations of Several Organizational Philosophies 22 IEEE System of

Enterprise Architecture and Stewardship (8/8) Characterisations of Several Organizational Philosophies 22 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

See Notes Page Conclusion �Use principles of � Complex adaptive systems � Integral philosophy

See Notes Page Conclusion �Use principles of � Complex adaptive systems � Integral philosophy � Systems engineering. �Develop your enterprise from ownership to stewardship by creating value for all stakeholders. Thank You! Please provide me with your E-mail address if you would like a soft copy of all these charts and Notes Pages. 23 IEEE System of Systems Engineering (So. SE) 2016 Kongsberg, Norway, Sunday-Thursday, 12 -16 June 2016 11/4/2020

References [1] “Ownership, ” Wikipedia, The Free Encyclopedia, 8 April 2016. [2] “enterprise, ”

References [1] “Ownership, ” Wikipedia, The Free Encyclopedia, 8 April 2016. [2] “enterprise, ” Merriam-Webster, Unabridged Online Dictionary, 3 April 2016. [3] “Holon (philosophy), ” Wikipedia, The Free Encyclopedia, 2 January 2016. [4] K. Wilber, A Brief History of Everything, Boston: Shambhala Publications, Inc. , 1996. [5] “Ken Wilber, ” Wikipedia, The Free Encyclopedia, 8 April 2016. [6] R L. Ackoff, On Purposeful Systems: An Interdisciplinary Analysis of Individual and Social Behavior as a System of Purposeful Events, with Frederick Edmund Emery, Chicago: Aldine-Atherton, 1979. [7] E. R. Freeman, et al. , Managing for Stakeholders; Survival, Reputation, and Success, New Haven, CT: Yale University Press, 2007. [8] R. L. Ackoff, “From data to wisdom, ” Journal of Applied Systems Analysis, vol. 16, 1989. [9] J. Gharajedaghi, Systems Thinking: Managing Chaos and Complexity, Oxford, UK: Elsevier, 1999. [10] A. -L. Barabasi, Linked, New York: Perseus Publishing 2002. [11] P. Ormerod, Why Most Things Fail: Evolution, Extinction and Economics, New York: Pantheon Books, 2005. [12] J. H. Holland, (2006). “Studying Complex Adaptive Systems, ” Journal of Systems Science and Complexity, vol. 19, no. 1, pp. 1 -8. [13] P. Ormerod, “Trouble at Co-op Bank raises questions about fitness of the mutual model, ” City A. M. (online), 29 April 2013, 3 April 2016. [14] “The Lifespan of a Company, ” Businessweek (online), 3 April 1016. [15] P. Ormerod and H. Johns, “The Impact of Regulation in a Model of Evolving, Fitness Maximising Agents, ” Volterra Consulting, Ltd. , September 2001. [16] D. E. Beck and C. Cowan, Spiral Dynamics: mastering values, leadership and change, Oxford, UK: Blackwell Publishing, 1996. [17] R. J. Hopeman, Systems Analysis and Operations Management, Columbus, OH: Charles E. Merrill Publishing Co. , 1969, pp. 79 - 81. [18] R. L. Ackoff, The Best of Ackoff, Toward a System of Concepts, New York: John Wiley and Sons, 1999. 24 [19] A. Svendsen, Ann, The IEEE Stakeholder Strategy; Profiting from Collaborative Business Relationships, San Francisco: System of Systems Engineering (So. SE) 2016 11/4/2020 Barrett. Koehler Publishers, 1998. Norway, Sunday-Thursday, 12 -16 June 2016 Kongsberg,