Evolution, risk management and the history of the 12” single

Julian Everett, BBC Worldwide

Get down, baby!

• Evolutionary theory: memes

• Natural Selection: complex systems risk engine

– Similar to Monte Carlo methods for financial risk

• Real options: control meme expression

• 10,000ft view on subject matter

• Investor-centric perspective

Overview

Memes

• Unit of cultural information

• Evolutionary context

• Richard Dawkins:

– “Selfish Gene” (1976)

• Example: 12” Single format

The Lifecycle of Memes1. Uncertainty 2. Meme Biodiversity

3. Dominant Meme4. “Zombie” Meme

Extended Phenotype: 12” single

User Story Memes

• From MMF Backlog to Componentised ROI Model

The Lifecycle of ROI Components

• What should we express and when?

• Valuation = (Value * Probability) – Cost

Optimal Exercise Point

Memes and the Sigmoid Curve

Extended phenotype: ROI Component

Conclusion: What We Learnt

• Always model in £, $, ¥, etc

• Always seek to maximise valuation

• Keep It Simple: reflexive risk models

• Failure containment over attempting to ensure project ‘success’

• Limit liability over perfect risk models– Incremental releases, JIT investment

– Refactor over re-write

– Avoid “big architecture”, design for change

• Analytics: data over conjecture

Conclusion: What We Want To Do Next

• Improve analytics integration

• Better market analysis

• Shared ownership of Organisation Backlog– It’s OK to kill a dead business idea

• No more “Customer”, redefine “Stakeholder”

• Stop focusing on “IT Projects”

• Liquidity and domain volatility

For more info…

• http://julianeverett.wordpress.com

• http://finance.groups.yahoo/group/real_options_discussion

Evolution, Risk Management and the History of the 12” Single (Agile 2009): Reading List

Evolutionary Theory

Richard Dawkins The Selfish Gene (1976), The Extended Phenotype (1982), Replicators and Vehicles

http://www.stephenjaygould.org/library/dawkins_replicators.html : all about memes

Daniel Dennett Darwin’s Dangerous Idea (1995)

JMK Alexander Evolutionary Game Theory (2003) http://plato.stanford.edu/entries/game-

evolutionary

Lifecycle of Memes/History of Ideas

Ludwik Fleck The Genesis and Development of a Scientific Fact (1979): criminally under-recognised

work of genius!

Arthur Koestler The Sleepwalkers (1959): excellent history of scientific ideas up to the Enlightenment

Matt Miller The Tyranny of Dead Ideas (2009): former Clinton aide declares war on zombie memes

Philip Evans and Thomas Wurster Blown to Bits: How the New Economics of Information Transforms

Strategy (1999): nice story of zombies on the rampage at Encyclopedia Britannica

Raman Kannan: Anticipating and Leveraging the Future:Surfing the Sigmoid Curve

http://bluehawk.monmouth.edu/monmouth/academic/dna/sigmod.htm

Carayannis and Wetter (2004): The Nature and Dynamics of Discontinuous vs. Disruptive Innovations

and the S-Curve: Technology vs. Market Pull & Push Forces and Learning Curve Effects

http://www.iamot.org/conference/index.php/ocs/4/paper/view/547/70

Buffy the Vampire Slayer (1992): business development metaphor that definitively sets out the

responsilbilies of the project “stakeholder” as zombie killer (or not!)

Complex Systems

Paul Ormerod Why Most Things Fail: Evolution, Extinction and Economics (2005): massively

influential as regards the ideas in this presentation, written by former director of Economic

Assessment Unit at the Economist

I. Prigogine The End of Certainty (1997)

M. Buchanan Ubiquity : Why catastrophes happen (2000)

Benoit Mandelbrot and Richard Hudson The (Mis)Behavior of Markets: A Fractal View of Risk, Ruin,

and Reward (2004)

Andriani and McKelvey Beyond Gaussian Averages - Redirecting Management Research Towards

Power Laws http://www.dur.ac.uk/resources/dbs/faculty/working-

papers/BeyondGaussianAverages19Jun06.pdf

Other: Finance, Economics, Technology

Levitt and Dubner Freakonomics: ARogue Economist Explores the Hidden Side of Everything (2007)

engaging exploration of various commonplace scenarios in terms of economic incentivisation.

Incentives define the fitness landscapes of micro-economics, thereby specifying selective advantage

and strongly influencing behaviour.

Thomas McCraw Prophet of Innovation: Joseph Schumpeter and Creative Destruction (2007) the

story of Keynes’ great rival, a wild hedonist who characterised market dynamics as the result of a

“perennial wave of creative destruction”

Foster and Kaplan - McKinsey & Company Creative Destruction (2001), and reviewed in Guardian by

John Elkington at http://www.guardian.co.uk/Archive/Article/0,4273,4217741,00.html

Ft.com Technology There’s no success like failure http://www.ft.com/cms/s/2/ad85e10c-10bf-11db-

9a72-0000779e2340,dwp_uuid=4dce8136-4a24-11da-b8b1-0000779e2340.html

Jeff Atwood Faily Early, Fail Often http://www.codinghorror.com/blog/archives/000576.html

Martin Fowler The New Methodology

http://martinfowler.com/articles/newMethodology.html#PredictiveVersusAdaptive

Alan Kelly A New Governance Model for Agile Work http://www.e-

technologymanagement.com/tm/index.php?view=article&catid=39%3Aagile&id=234%3Aa-new-

governance-model-for-agile-work&format=pdf&option=com_content&Itemid=81

BeyondBudgeting.org Transforming Financial Planning in Small & Medium-Sized Enterprises (2007)

http://beyondbudgeting.org/bb-briefing/node/74

Music

Sheryl Garratt Adventures in Wonderland (1999)

Frank Broughton and Bill Brewster Last Night a DJ Saved My Life (2000)