Part I – Preconceived Notions
First, there were the dinosaurs, but they got too big and died…
Then apes, walking, fire, farming, religion, government, empire, enlightenment, capitalism, industrialization, computation, networking, porn, social media, cloud, and AI happened.
None of which means very much at all in the eyes of the universe.
But it does mean that eating and having a roof over your head requires money, and that requires a structural solution to the tension between acceleration and risk.
Acceleration
Optimization is not innovation. When we step back and look for innovation, what we see are right-angle deviations from the direction a culture is moving that dramatically alters the future fortunes of that culture. Fire, farming, money, writing, mathematics… the early tech tree is all innovations. Miss out on just one and your civilization probably doesn’t make it. No easily domesticated work animals probably doomed the Western Hemisphere’s indigenous civilizations – there’s only so much work you can do with a llama or alpaca, and it is a lot less than what you can do with an ox or a water buffalo or a horse. When we zoom back into the present day, we see less innovation because the consequence of innovation has moved over time from changing human’s relationships to the physical world to their relationship with the things we build, then on to their relationship with the way we improve our social interactions, a finally to our relationship with the opinions that others have of us. In other words, the focus of our innovations changed our physical power, then our financial power, then our cultural power, and then our reputational power. It’s not clear what, if any, innovation humanity can create that will alter our future fortunes aside from dealing with the damages to the biosphere that may endanger our ability to remain the dominant species on the planet. When we have all the power, across all four domains, all we can do is lose power or find a new domain. That is the BIG picture.
Alongside it is the equally vital realization that, with some exceptions in bio-medical and theoretical physics, there are no problems for which we don’t have solutions, only solutions we choose not to pay for. That is the Solved Problem Principle.
Therefore, we can understand all human activity on the planet not it terms of innovation but of optimization. People optimize to increase capacity for independent action, meaning, and joy. Nations optimize to increase dominion, stability, and sovereignty. Firms optimize to increase productivity, profitability, and market share. But all do this within the overall scheme composed by the BIG picture and Solved Problem Principle.
Optimization for firms in the information age is provably describable as follows: Information Technology Performance improvements directly lead to Business Performance improvements that result in greater productivity, profitability, and market share.
The key task for anyone engaged in the buying, selling, or making of goods or services then is to discover and accelerate the IT Performance issue that allows the firm to do what they do but more efficiently and effectively. Then do it again, and again, and again. In this way, all companies are tech companies, because it is only by improving their information technology that they can improve their value, and consequently their capital power.
Risk
To do this, the first step is to realize, institutionalize, an internalize that control is an illusion that does not help achieve acceleration to capital power; only resource allocation and risk taking matter. We cannot avoid risk (fortune favors the bold, after all), but we can “risk well” by choosing what, how, and how much we risk. This transforms risk from something that happens to you, by the whims and desires of the Fates, into something that you measure and manage. Likewise, we can allocate resources into solutions that exist, which immediately solves problems while leaving open the door for later optimization, and choose to make decisions about breadth of effort instead of engaging in diffusion and risk (poorly) failing in many areas over succeeding in one. This demands we know who we are and why we are doing what we do, and through that identity, transforms resource allocation from something that causes stress into something that nurtures grit.
Workloads
Workload is one of those meaningless jargon terms that we invent to mean anything and nothing at the same time, like architecture or AI or rizz. Let’s be clear about what we mean: A workload is a collection of tasks, processes, or jobs that a system needs to execute to fulfill its purpose.
Not the form factor. Not the package. Not even the program. The purpose. How you get the job done is a technology decision, to be sure. You could use a PDP-10, a Xerox Alto, an Apple II, a Blackberry, a laptop, a VM, or a room full of 8th graders. Which technology you choose doesn’t matter… until it does.
Caring about technology performance is how things start to break, particularly in ways you cannot predict, prevent, or, in some cases, even comprehend. This is inevitable because caring about technology performance for the sake of improving business performance to increase capital value causes you to add and add and add and add and add until we’ve built a castle, with soaring towers and gleaming walls. But we don’t know what lies at the base of the tower, why it’s there, or how it works.
Every IT system in the world today is like this: generations of abstraction so deep that they become inscrutable, so tall they become unassailable, so fragile that a single block will bring it all down if it’s removed. Lightning coursing through sand pretending to be alive is potent, dangerous, beautiful, and intoxicating. But more than anything, it is uncontrollable.
This creates a state of the world where there are four kinds of roles that people adopt in their relationship with information technology:
- the Builders who keep adding layers of bricks at the top of the castle.
- the Burglars who re-imagine the building for the purpose of breaking the rules.
- the Blind who don’t know they are living on top of a tower or how fragile it is.
- the Bracers who are trying to keep the tower from falling.
How to cope
Re-frame the world through the lens of organizational challenges, which have little to nothing to do with technology choices and are the same for everyone. All dysfunctional organizations are alike; each functional organization functions in its own way, to paraphrase Tolstoy.
Imagine an organization as three layers:
- At the bottom is where the foundational infrastructure of the firm resides. Here is where the real assets live, where the invisible, bubbling, hyperactive chaos of the interface between the infrastructure and the uses of that infrastructure is, and where the real work happens. This layer is defined by ambiguity, and by how the people and the organization creates clarity in response to that ambiguity.
- The next layer is where the functional services used and provided by the firm reside. Here are the processes, the programs, the procedures. Here is where you find most of the decisions, and where the organization brings itself into being; if it cannot be at this layer, it fails. This layer is defined by complexity, and by how well the people and the organization isolates functions to suppress complexity.
- The top layer is where the world experiences the firm. Here is the product, the marketing, the demonstration of value, and of values. Who the organization is. This layer is defined by volatility, and by how well the people harness that volatility and transform it into stability for themselves and for the world.
All three layers are submerged in an ocean of uncertainty that seeps into everything, defining the organization as a whole by how well the people transform vast uncertainty into focused lucidity.
At each layer there is a pair of challenges. The first order challenge is the daily work that can be controlled within the organization, while the second order challenge is external and largely uncontrollable. How well each of these are met determines the success or failure of the organization to achieve those defining victories over ambiguity, complexity, volatility, and uncertainty.
| Layer | 1st-order | 2nd-order |
| Experience | Friction | Externalities |
| Functions | Resource Allocation | Realizing Business Intent |
| Foundations | Toil | Shortage of Skilled Labor |
Friction is the daily opponent of business leaders and marketing executives alike. Overcoming resistance to the vision of what a company can become, or to how a product can change your life is the job, and removing friction with structure, ease, simplicity, or lubricant is how you achieve success.
Externalities is a term of art in economics for the side effects of activities that effect you but you didn’t choose to be a part of. Through no fault of your own, things happen to you, and you have to deal with them. It might be catastrophe, it might be politics, it might be the changing whims of a fickle public. Whatever it is, it isn’t something you can avoid, predict, or control, because it is the very definition of volatility. And it can spoil all the work you’ve done to overcome friction and set your organization up to achieve success if you aren’t prepared to cope with it when it arrives at your door.
Resource allocation is just that, choosing where and how much of a limited amount of something to use. This is management in it’s purest sense. And allocating resources to chop big things into small things, keep small things from becoming big things, and making sure everything remains in motion is what you do to suppress complexity. Doing this with a plan, discipline, and without friction is the difference between good management and hair-on-fire-plates-spinning-balls-in-the-air-chaos-monkey-is-in-charge management. If you know, you know.
Realizing business intent is what every bad manager thinks they are doing instead of allocating resources to fight chaos. But it’s also what makes the difference between a well managed company that’s merely suppressed chaos, and one that is putting a dent in the universe. Where resource allocation deals with the what and the how, Realizing Business Intent deals with the why. It is picking the right targets, choosing the right small things to make big, and the right parts to cut off when making big things into small things. It is what provides acceleration as a reward for winning against chaos.
Toil is the manual, repetitive, tactical, and automatable work that scales linearly (or super-linearly) but lacks lasting value. The necessity of doing it never goes away, but the reward for doing it never gets bigger than the first time it was done. Toil is the cost in the cost center. Toil is the boot camp and crucible of your culture. Toil is where the clarity that you need to overcome ambiguity is hiding. Eliminating toil is the single most clarifying thing you can do in the foundational layer to transfer value up and out of the organization to the people who get to experience what you’re offering.
A shortage of skilled labor in the world might mean that you aren’t going to get experts walking in off the street. That is a problem that is directly proportional to how much toil you have. The more toil you eliminate, the fewer hands you need to keep the infrastructure running, and the more you’ve grown your own skilled workers. Now it’s up to you to convince them to stick around.
(2025 – a note about the unreliability of machine labor: robots and programs might be about as good at some things as mediocre humans, but they aren’t stable, and that volatility creates uncertainty, which creates complexity, which creates ambiguity, which is expensive. And while humans learn at relatively fast rates for relatively small costs, LLMs do not learn very well or very quickly, and training new models is absurdly expensive. So thinking that trading a shortage of skilled labor for the unreliability of machine labor might be enticing, but so far it probably is a push.)