Adler on Data Governance
Today, we the global Information Governance Community are announcing that we are publishing the Data Governance Council Maturity Model under an open source copyright (for non-commercial purposes) on a website called www.infogovcommunity.com. The purpose of the website and the publication is to invite the world to participate in a crowdsourcing project to involve thousands of Information Governance practitioners from around the world and help the global community to update the Maturity Model and broaden the definition of Information Governance.
The site is powered by Chaordix, a fantastic company to work with. We've been working together in a two-month beta test of crowdsourcing in which the Council reviewed the site and submitted ideas each week which Chaordix took and implemented. What you see today is a product of Community interaction and technology.
Take a tour. On this site, you can interact with peers from around the world in the time and timezone most convenient to you. You can use the Maturity Model to self-assess your organization's capabilities, work on topics to define Best Practices, and establish your credentials as a leader in the growing international market known as Information Governance.
Check out the leaderboard, where the best and brightest can see how their ideas are recognized by the community, or the blog where longer ideas are published to inspire insight and discussion. Infogovcommunity.com brings together Information Governance and Social Networking to inspire innovation for the common good.
The site is brought to you buy IBM but supported by the Community for the Community with a self-funding subscription model. Starting on September 1st, Community members will pay $299/year for individual membership and $699/year for corporate membership to cover the yearly costs of maintaining the site.
Please join us for an international crowdsourcing experience!
In May 2006, the IBM Data Governance Council used poster board and sticky notes in an oak paneled room in the Chateau Frontenac in Quebec City to create the categories, elements, and levels in the first version of the Maturity Model. About 35 people
participated in that process in Quebec, and perhaps another 50 more in subsequence meetings.
On September 14-16 2010, the Council will use social networking crowdsourcing technology to include a global community in a discussion about the Maturity Model - Live!
Brainstorming ideas in the room will be transcribed immediately into the topics on www.infogovcommunity.com.
Suggestions and comments from practitioners all around the world will be relayed to the participants in the room.
Of course, this venue is awesome, and there is no substitute for live, face to face, communication. But if you can't travel to Tamaya, and spend three fabulous days with The Council in the Desert, you can still tune into the action by going to infogovcommunity.com.
In the room or in Rangoon, you can watch the ideas flow and chime in live or tune in later and add your views.
Either way, what you contribute will impact the community and change the Maturity Model. Synchronous or Asynchronous, this meeting is the beginning of a global dialog on Data Governance Maturity.
What we do in the room will make a difference. And what you contribute from your own room will make a difference.
Please join us in Tamaya or online at www.infogovcommunity.com to capture the best ideas from the Global Information Governance Community, contributed for the Community and published in an open-sourced IBM Data Governance Council Maturity Model.
Steven B. Adler
IBM Data Governance Council
Boston is America's most European City. Sorry San Francisco. Hills and Fog are not a substitute for Culture and History. The scale of Boston, with its rivers, sea, beaches just beyond the harbor, and easy access to fields, forests, and farms on the periphery make if feel like Hamburg or Stockholm. I've been to Boston a dozen times, but most often for just a day. I know Logan very well. Last week, I discovered Boston for more than a day.
A great city! Who knew nice people lived in a civilized city North of New York?! <mock sarcasm>
On Tuesday, we drove up from NY and discovered that Boston is a six hour drive up during rush hour and a 4 hour drive back before. On Wednesday, I was a speaker at the MIT Information Quality Industry Symposium in an afternoon session lasting 40 minutes. I arrived a lunch and found the event starting just after in a square building on Amherst Street on the Cambridge campus. About a hundred people filled a large tiered classroom. Many familiar faces and some old friends. We traded "what's up" stories in the lobby on low black sofas while chowing on salty sandwiches and chips. The US Army was the keynote speaker and some army chaps were in the lobby talking about Army things. Data Governance Aficionados were comparing the US Army to the British Army, who had just won a Data Governance Best Practice Award at the Wilshire Conference in San Diego last month.
Funny coincidence...all ideas are derivative...
My presentation was about www.infogovcommunity.com and The Six Easy Steps to Smart Governance and it was very well received. I like to present. Doesn't matter what mood I'm in before I stand up I always step up about three steps higher when I start talking. Its the audience that feeds me. Not the adoration, center of attention. I need the feedback. Every time I present I learn something new from the audience and its that interaction that makes presentations so much fun for me.
On Wednesday, my audience gave fantastic feedback and it took me all weekend to process what I learned.
Information is a Tool.
Wow. I can't tell you how many "Information is an Asset" presentations I've sat through where some IT Architect is trying to persuade the audience and herself that Information is an Asset with a value that can automagically be calculated. Someone out there is working on fantastic formulas that will produce THE ULTIMATE INFORMATION ROI CALCULATION and win a Nobel Prize.
Ain't gonna happen. Here's why:
1. Value is dependent on price. Information has a value when there is a pricing mechanism and a market in which it buyers and sellers can interact. Movies, Music, News, and Software are all examples of INFORMATION that is sold with prices in markets. Economists have already developed pricing formulas for consumer behavior in markets. Cobb-Douglas Utility Theory captures these interactions nicely. In a market, both buyer and seller benefit so outcomes are equal.
2. Corporations have no internal markets. IT professionals are mostly eager to assign value to Information because Applications and Information are the primary work products of their lives and they want their life work to have meaning beyond their jobs and paycheck. But without internal markets for buyers and sellers to establish pricing mechanisms, Corporations can't assign anything but abstract values to information.
3. IT uses Unit Cost of Labor (Thank You Karl Marx) to assign the value of IT work products. The Unit Cost of Labor identifies the human contribution to value creation.
Information is an Asynchronous Asset and it doesn't have to be right to be valuable.
IT professionals are so hopelessly enamored with "The Single Source of Truth." IT is a belief system but that doesn't mean that verified information is always valuable.
Fact is, quite often lies are just as valuable. Two examples:
1. In the old days, The Department of Labor compiled monthly unemployment data based on the percentage of the workforce that wasn't working. That made sense. Unemployment means "people who want to work but can't find work." But in the 1990's the standard was changed to include only the people filing for unemployment benefits each month. This rate excludes members of the workforce that are working less than 20 hours a week, people who have stopped filing their weekly claim for unemployment benefits, the elderly, and those who have dropped out of the workforce entirely. So naturally, the new number is much lower than the old number. How low? The current rate of unemployed is 9.5%. However, if you include those working less than part-time, those who recently stopped filing for unemployment benefits, and those who dropped out of the workforce entirely the real rate of unemployment is 22%.
What's the difference? 9.5% is a recession. 22% is a depression. Information is a tool used by policymakers to achieve a goal and the outcome is not equal.
2. In May 2003, Ebay restated its earnings from 2000 and 2001 but didn't tell anyone. It appears that someone in the accounting department "discovered" a $127 million loss both years and retroactively restated earnings. They hid the restatement in their SEC filings. From a "Single Source of Truth" perspective, one could argue that the restatement demonstrates the value of trusted information. But I don't think that's the truth. I think the reporting of lower losses was a GOAL of ebay and the chart shows that the under-reporting had the effect of protecting the stock from significant declines during a recession. The truthful reporting of the losses during the bull market of 2003 had no negative impact on the stock. So it looks like ebay hid the truth when it benefited them and revealed the truth when it couldn't hurt them.
And who could blame them... after all using Information as a Tool to achieve policy goals is the whole point of Governance. And this is where I say to my IT friends that you won't be successful with Data Governance if you don't give up the hopelessly naive belief that a single source of the truth is a the goal of Data Governance.
Data Governance is a Business Process
The Goal of Data Governance is to achieve business goals - cutting costs, improving revenue, reducing risk. As we've seen above, the information doesn't always have to be "right" to achieve these goals. That's why Data Governance is a business process and not an IT process.
Try to make Data Governance into an IT process like some sort of application development lifecycle and you will fail. Not because the process is wrong. Because the assumptions are wrong.
Human Nature is at the Heart of it
This week, my wife and I visited the Bank. Its amazing how defensive retail bankers are these days when talking with their customers. And they should be! Money is free and these guys are charging nearly 5% for mortgages for the best rated buyers. But beyond the mortgage discussion, our friendly banker brought a good idea to us - Debit Cards for our teenage sons. It teaches them responsibility with money, he said, how to budget with what they have. And of course it gives the bank two new debit cards that earn small fees with every purchase, not to mention ATM fees at other banks... But of course, Debit Cards are fact of modern life and as much as we'd like to keep our kids kids and not indulge them in the consumer culture of America yet we need to be modern parents too.
So we brought the idea home during the Saturday BBQ dinner in the backyard. "We went to the bank today..." the conversation began. "And we are thinking about getting you both Debit Cards..." At the banking bit, my kids started paying more attention to their burgers than us. Banks are boring. But as soon as the Debit Card idea surfaced, WOW! My kids know what Debit Cards are - its a BENEFIT. As soon as the conversation turned to a BENEFIT for them, they were alert, animated, inquisitive. They wanted to know how would it work, when would they get money, how much, how often, what happens when the money runs out, where can they spend it, how do they get it?
How much was the big topic. Kids, all kids, are smart. They began negotiating from the getgo. My wife and I hadn't talked about how much, and they knew it. They wanted to hear what we were thinking. How much? Ben, the oldest, wanted to set the floor for negotiation. "Just what are you thinking?"
Net: When benefits are at stake in any discussion, negotiations are competitive and you have to arbitrate between self-interest and the common good. Because you can't afford how much the other party WANTS because WANTS are infinite.
That's where Governance comes in. You compare the situational needs of each party to sustainable goals of the program and you make a decision. Based on the goals. In a business process. With Six Steps.
Information is a Tool. When you use it its an asset for YOU. Not always for the other guy.
Thank you MIT.
DataGovernor 120000GKJR Tags:  six white governance to steps smart paper 2 Comments 5,835 Views
Manila is an ancient Spanish colonial city with American influences and a culture all its own on the rim of Asia. It takes several visits to appreciate that despite appearances and a host of American shops, businesses, and call centers, Manila is not a larger Honolulu, and the Philippine people are not just nicer Hawaiians. The culture, like the heat, is soft and pervasive and gently unique. The foreign influences, like the rain during the early June rainy season, hide behind clouds.
Two weeks ago I made my third trip to Manila, and hosted a Data Governance Council Maturity Model workshop in a modern hotel conference room for 25 customers spread across 10 tables of round. In my 8 hour presentation, I integrated the Maturity Model into the Six Steps to Smart Governance using both OpenOffice and the IBM Application Roadmap Tool (ART). Customers used laptops with the ART tool running to score their respective levels of maturity and I explained how the Maturity Model provides benchmarks to assess current and desired states of Maturity from which the Six Steps can be used to govern the use of data in a more scientific and repeatable way.
I've given these two presentations often, mostly in shorter conference presentations, but at least 12 times a year if not more. I constantly update my presentation with current examples and anecdotes to keep the material fresh but also to keep myself fresh and avoid the self-boredom of redundancy. But to each new audience, the material is fresh and I'm always amazed at how the Maturity Model transforms conversations from abstract theory to relevant practice.
I present five to seven charts then go to the ART tool and we run through three to six sub-categories of the model. Organizational Structures/Summary, Data Quality/Processes, Stewardship/Accountability, Risk Management/Accountability. During these phases I read the content for each level of Maturity and simulate a to-be and desired state by moving the slider bars over. Most of the audience hears my words and ignores my gestures. They are engulfed in a personal assessment of their own Data Governance maturity. Huddled over the laptops, they discuss their perceptions of the model levels, argue about what the terms mean, relate the observed behaviors of 50 companies in North America and Europe to their own habits.
It is fascinating to watch! They don't want to move forward to new categories, as each level brings forward painful memories of immature practices, problems long festering needing change, and the re-awakening that they too are immature and can change with an external assessment.
Four years after its creation by a group of 50 visionary Data Governance Council members, the Maturity Model still inspires and provides fresh evidence of its value and relevance. It excites audiences all across the world, and as a benchmarking tool there is no comparison. Every time I do this I wonder to myself how this material can excite as it does. But it is the common awareness of ad-hoc, episodic, IT adventures, crises, and budget constrained fixes over decades that motivates people to realize that their situations are not unique and that only systemic solutions will work.
After all these years, Data Governance is a real global market and the real work to make it a success just now begins.
Thank you Manila.
DataGovernor 120000GKJR Tags:  governance process unified beliefs data tribes culture model 5,354 Views
Eight years ago, I was in La Hulpe Belgium for a training seminar. La Hulpe is a leafy village in one of the POSH suburbs of Brussels, near Waterloo, where Napoleon lost his final battle in 1815. Back then, IBM owned a Danish designed training facility nestled in the woods. It had spartan hotel rooms - single beds in mid sixties teak cosseted next to walls with small night tables and large windows facing mossy oaks and elms. There was a large auditorium, many good sized classrooms, a decent cafeteria, a good bar where I first tasted Belgian Ale, and wonderful trails through the woods. I remember this place as a part of IBM that sadly doesn't exist anymore, a collegiate history where education took place face to face. So quaint in retrospect.
The training seminar spanned two weeks, and I had a weekend in-between. In 1995, when I first joined IBM, I spent my first six weeks of employment in La Hulpe, studying the Insurance Application Architecture - an object-oriented data model for insurance optimization. Over the next five years of my IBM career in EMEA (working in Copenhagen) I spent months in Brussels and La Hulpe and got to know it extremely well. So on this weekend, I decided on something new.
I rented a turbo-diesel Alpha Romeo 146 and took off on the motorway - direction Bruges. Ghent lies on the motorway between Brussels and Bruges and I made a breakfast pitstop in that city on a sunny Sunday in 2002. Ghent is a an ancient city like Bruges, with wonderful streets, canals, old buildings and churches. It is perhaps less famous than Bruges but no less charming. My decision to stop there eight years ago would prove more important than I could have realized at the time. In many ways, one short experience in that city changed my world view in profound ways.
It was about 11am by the time I got to the city center and found parking. I had a camera in hand, and was prepared for sightseeing. My parking spot was on the outskirts of town and I had to walk far to reach the center. Modern balcony apartment buildings on tree lined streets with shops below gave way to older buildings with stucco walls and flower boxes. Along the way, I stumbled upon a darkened 15th Century Church. The walls were black, the flying buttresses grey, and the outer door was open.
As I stepped inside, I heard voices and I froze. It was Sunday. 11am. Mass was being celebrated. I speak German and Danish. I can understand some French and Dutch. But Flemish is beyond me. During the day, an empty church is a museum of art and architecture. It requires no involvement. You stroll through and admire ancient imagination.
At this moment, I thought about turning back. "I don't belong, I'm not part of this community, I don't speak the language, it's not my religion."
I went in anyway. When you travel you can either be an observer and stay in your bubble, or you can jump into other people's lives and be a participant - to try and understand the world through someone else's eyes, ears, and heart. You can't do that on the outside looking in. You need to be on the inside.
It was a massive space inside, and only a small group of 20 or so seated in the first three pews near the priest. No one paid any attention to me sitting several rows behind. It was a catholic service. I'm not catholic. It was in Flemish. Mircea Eliade calls such moments historical archetypes - the temporary suspension of historical time - because each group repeats a ritual and in doing so connects back in time to other groups who repeated the same ritual. There was incense, standing and sitting, singing and praying, communion and kissing. And it was beautiful.
After 30 minutes or so everyone got up, shook hands, and walked out into the bright light of a sunny spring Sunday. I told some Jewish friends about this experience later and they were shocked I attended a Christian service. The history of Jews and Christians in this world is not a good one. Blood and recrimination, persecution and ignorance mark most of it. My own grandparents fled Christian pogroms against Jews in Russia that killed many of their relatives. But I told them what I saw in that church was trans-formative. Not that I felt Christian at that moment, but that for the first time I experienced what they experienced in a service, transforming the church from a museum into a community, a living replica of human experience that the paintings fail to adequately describe.
You can't describe the world in a painting. No reference compares with being there in the moment.
Some years later, I was in Istanbul speaking at a conference on Compliance and Data Governance. The venue was in Maslak, the business center of Istanbul and after my speech I took the subway to Taksim and walked across the bridge to the old city. Constantinople it was called from 303 to 1455, when the Eastern Roman Empire ruled a vast swath of Africa, Arabia, and Southern Europe. They build the Hagia Sophia (Church of Holy Wisdom) in 457 and for centuries it was the largest free standing dome in the world. 1500 years later it still stands, but in 1455 the Ottomans converted it from a church into a Mosque as the city and the empire changed rulers and religions.
There are five other magnificent mosques in Istanbul and one can't possibly understand the city, the history, the ottomans, or the Turks without visiting them. My first was the Blue Mosque, just across from Hagia Sophia. It is just as massive, and like all Mosques you have to take your shoes off to enter. You sit on the floor in a mosque. There are no pews. The floor space is covered with rugs, the walls and dome are adorned with mosaic. There are no paintings, statues, or physical representations. Electric lights hang 30 feet above the floor in chandeliers that must have once held candles.
Most tourists huddle together in the back gaping at the space. But there are no restrictions on where you can sit, how you can sit, or what you can do. Except, you shouldn't talk much. It is very quiet. Moslems pray 5 times a day and I was there in the afternoon between prayers. There were a few people praying quietly and the overall impression one had was private contemplation.
I visited five other mosques in Istanbul that week. Outside, in the streets, protesters were railing against the islamic government of Recep Erdogan as he was installing his foreign minister as President. There were pro-democracy ralies, and many anti-American protests. The Turkish Army was sitting on the sidelines contemplating a coup, and the courts were considering constitutional appeals.
The Mosques were silent inside. People prayed, life went on. And it was beautiful.
The next week, I flew to Israel to visit customers in Tel Aviv and talk with IBM Researchers in Haifa. After the meetings, I drove to Jerusalem. We parked in East Jerusalem, near the Damascus Gate. Our tour guide was Palestinian and we were Jews. We did the Via Dolorosa (walk of Jesus), prayed at the Wailing Wall, and walked on the Temple Mount near the Dome of the Rock.
At the Wailing Wall, I met a lubuvitcher from Brooklyn. We talked about NY, Judiasm, and Jerusalem for a few minutes and he asked me if I would like to pray at the wall. I said yes and he led me to his trolly where he laced me up with a Teffilin on my head and fore-arm. The Teffilin is a wooden box with a microscopic copy of verses from Torah inside and leather bands that tie it to your body. They put a Tallit around my shoulders and Kippah on my head. I no longer can read ancient Hebrew so the men from the Chabad gave me an english phonetic version of a few prayers and together we walked to the Wall.
The Wailing Wall is the last remnants of the City of Jerusalem and the Second Temple of Solomon that remains since the Romans destroyed it in 70 AD during their sack and plunder of the city (from which they took enough gold to finance the construction of the Colosseum in Rome). The lowest blocks weigh 70 tons and they are massive. People have for centuries written small notes to God and inserted them between the blocks.
I put my hand on the wall and said the prayers. There were many other people nearby doing the same thing, repeating a ritual, suspending historical time. And it was beautiful.
Above us Moslem's were praying at the Dome of the Rock, where Abraham was persuaded to spare his son Isaac 5000 years ago. And nearby, Christians were worshipping at the Church of the Holy Sepulchre, on the spot where Jesus was crucified 2000 years ago. All so close.
These are three tribes with derivative roots. They share common ancestry and ideas. And each believes they are right and the others are wrong. They have fought and continue to fight savage wars against each other in the name of their beliefs.
Is there something that unifies them? Perhaps. Is there one way of living or doing things that is better than any other way for every human being and every human culture on the planet. I think not.
The best we can hope for is that people from different tribes, cultures, religions, and beliefs learn to appreciate what's beautiful about life regardless of how it is described.
My next challenge is Yoga. Buddhism is beautiful too.
DataGovernor 120000GKJR Tags:  greece governance transparency debt data risk 1 Comment 5,051 Views
On Saturday, I sat with an old friend at a secluded restaurant on a grassy river bank North of Bangkok. We are both actively engaged in the banking industry as observers, speakers, and peripheral participants. My friend has a more direct engagement with a Thai Bank but still as an adopted outsider. Lunch was excellent, and we sat on a wooden pier just feet from the river's edge as barges, trawlers, and all manner of ships slowly passed by with and against the current. A pair of large floor fans blew hot air our way and an umbrella shaded us from the searing sun playing tag with the clouds above. The heat in Thailand is soft, enveloping, pervasive, and quietly oppressive. You have no hope of resisting its dictatorship. Somehow the Thais have developed a sweating immunity to their own condition, whereas this Western visitor is deficient in that regard.
During lunch we compared current events in both Thailand, where the Red Shirts have barricaded themselves behind sharpened bamboo poles and tires doused with gasoline. Their encampment was many miles from our lunch spot, and indeed encompasses but a small corner of the entire city of Bangkok. Yet their determination to resist the current government, who themselves are only in power due to a similar incident involving a Yellow Shirt protest two years ago, has driven away western tourists and continues to cause confusion and insecurity in the highest elements of Thai society. And we discussed the Credit Crisis, Greek Debt, US Politics, and Regulatory Reform.
On Greek Debt, we discussed how the former Greek government hid the massive debt it had accumulated from EU Regulators (reporting a deficit of only 3.5% each year instead of the 12% it actually was accumulating), and how this massive amount came to light only with a change in government - when one group had an interest in reporting the bad data another group had an interest in hiding. Most today call this an act of Fraud, but it also has to be admitted that it was not just the former Greek government who had an interest in hiding their debt. The Germans, French, Belgians, and perhaps even the European Central Bank had an interest in ignoring the reality of Greek economic underdevelopment and overextension.
The data about Greek debt was available. Greece can't borrow on the black market. Their debt has to be issued in bond markets, and the amounts, yield, and maturity dates are all public record. Bond markets are largely transparent. But Transparency creates its own information asymmetries. First, the availability of information doesn't mean everyone collects the same amounts, has the power to use it, or knows what it means. Second, there is a private sector deference to public sector data aggregation, analysis, and reporting, and the public sector relies on static information reporting programs that limit source authentication, audit, and repudiation. These two behaviors allowed the Greek Government to report fraudulent deficit figures to the EU and the EU didn't bother to verify that information against publicly available market data.
One could argue that the construction and expansion of the EU Common Currency without adequate audit powers created an environment rife for fraud, but this is too easy. EU regulators could have at any time used data from bond markets to verify Greek debt. Why the EU didn't monitor the discrepancy between public reports and private market data has more to do with EU politics than Data Governance.
Every government is comprised of politicians who owe their hold on power to public perception. Everyone in Europe played See No Evil, Hear No Evil, Speak No Evil on the subject of emerging market debt in the EU. The information was available. Net inflows of financing and debt accumulation can be gained by studying the bond markets. Public obligations in Greece are also no secret. Everyone in Europe knew that pension guarantees starting at age 50 in Greece were a ridiculous luxury in a country with such low productivity and wages.
Transparency and Reporting do not, in themselves, guarantee that anyone is using or validating information sources correctly. Every report needs to be validated with external sources, because Transparency is not the same as the Truth. If the EU wants to fix this structural problem in its own multi-nation confederation, it will need to create an independent auditor, like the US Government Accountability Office, whose role it is to audit member programs and reports, to discover waste and abuse.
All reported data must be verified. If we didn't learn this in the Mortgage Credit Crisis, now is the time to take it home in the Sovereign Credit Crisis.
Banks, Hedge Funds, and other investment institutions should not wait for the EU and other governments worldwide to get the audit role right. They should build their own Information Analytics programs to validate the assertions of governments as well as listed companies because what Greece did is not new. Fraud is a part of business.
Data Validation should be seen as an important part of Market and Credit Risk Measurement and Mitigation programs. This is where Data Governance and Risk Management intersect, and new technologies will be needed to make reporting aggregation and analysis easier and faster.
On the river, in Bangkok, I asked my friend if his bank monitored the market and credit activities of their Thai competitors. They do not. They expect the government to collect data from every bank, aggregate and report that to the banking community. And his bank reads those reports. I would argue that the events of the last three years clearly demonstrate that governments are not well equipped to be doing primary market data analysis on behalf of themselves or any industry. They lack the technology infrastructure and the analytical skill to make intelligent use of the data the market already provides and their political dependencies create natural conflicts of interest.
Businesses must perform their own due diligence to verify government reports and conduct primary market data analysis of every potential investment opportunity.
Unverified data should not be trusted. This is Data Governance Rule #1.
I'm writing this blog entry in my hotel room on the 14th floor of the Grand Hyatt in Jakarta, Indonesia. Traffic screams by the massive fountain circle outside in a constant torrent of horns. I've been here all of two days. Met a customer in town this morning, and yesterday we drove three hours to meet a customer in Western Java. I've seen rice patties, jungle, mountains, tea plantations, small villages and ways of life unchanged for centuries, glittering shopping malls with every brand available, fantastic office towers, and levels of luxury unembarrassed by poverty in every street. It is at once fascinatingly familiar and different at every corner.
This year, I've visited customers in Jakarta, Manila, Tampa, Columbus, Johannesburg, Dallas, Hamburg, Warsaw, San Francisco, New York, Brussels, and Cologne. And every where I go I hear the same stories, the same issues, the same needs.
Data Governance is a global market. Everyone is doing it.
Tomorrow I fly to Bangkok, where Red Shirts have held a government hostage for six weeks. On the edge of a knife, a nation split Red and Yellow, and I'm hosting a Data Governance Workshop for 2 dozen customers.
The market need is hotter than Red.
If your company doesn't have a program working today, it's a competitive disadvantage.
Don't wait. Just do it.
Every year, I teach a course at the Bucerius Law School in Hamburg, Germany. The Bucerius is the only private law school in Germany, and together with the WHU - the only private business school in Germany - we offer a Masters in International Business and Law, and it's in this program that I teach.
Each year we have have 55 students from around the world who participate in an intensive program for graduated lawyers and MBA's. they take 6 modules of courses and do a spring internship at a company in Europe or North America. I taught at NYU for a couple of years, but enjoy the international atmosphere at Bucerius better. It's a fantastic program.
Teaching is a bi-directional activity. My classes are always in workshop form. I bring some expertise to the class, and my students challenge my ideas and together we learn.
This year was special. In past years, the course was called "Data Governance." In January, I changed the title to "Smart Governance," and the change was more than cosmetic. The material was entirely new. I fashioned the course around a book called Smart Governance written by Helmut Willke. Helmut writes some very important ideas about how the knowledge society is changing national sovereignty and the rise of expert NGO's. Helmut's definition of Governance is one that I often quote - The communication activity of coordinating human beings to achieve common goals through collaboration." It's a brilliant sentence that succinctly captures so much. I extrapolated many of his theoretical ideas into what I think is a more practical Governance System that is the core of the Six Steps to Smart Governance. I used concrete examples of each step in class to contrast with the more theoretical use cases in the book. And I had the students prepare homework assignments geared around individual chapters in the book, asking them to write about their own experiences in this context.
This worked up to a point for the first two days. There were 12 students in the class meeting in the second cold week in January. Hamburg was shrouded in snow. The reading material is dense and difficult, but the class lectures were fun and interactive. On the third day of class, which was a Saturday morning, we were talking about the difference between a Governance System and the policies one would wish to implement. A Governance System is a scientific process by which people try to set goals, define measurement metrics, make policy decisions, communicate the policies, audit the outcomes, and seek to continuously improve.
Even with my best examples, the students found this concept of a Governance System hard to grasp. I searched for metaphors and examples, and could find nothing familiar they could latch on to. So I turned the example inward and transformed the class relationship from teacher/student into a Governance Council and asked the students to help each other to govern the course structure for the rest of the class.
We started with the grading process and the work assignments. I had planned on giving homework every night, for four nights, each being worth 20% of the grade and a short final paper also worth 20%. Students don't like homework, and frankly teachers don't like grading that much either. We had already had two assignments, each worth 20%, and I opened the discussion up as to what work to complete and how much each should be worth for the rest of class. I was a bit nervous about this surrender of power, but what ensued next was absolutely magical.
We discussed various options for about an hour, and in the end the students agreed to do no more homework assignments, a final paper worth 40%, and a participation grade worth 20%. It was not a radical solution, but the students had chosen it. It was their grading structure, and they felt empowered and energized that they made the decision. For me, it was a terrific solution as well because with the students feeling like they owned the grading structure all the teacher/class power structure and tension evaporated. We were now peers collaborating on a common goal.
Next came a discussion on what to write about for the final paper. I had in past classes asked students to prepare papers describing hypothetical governance models for banks or other commercial entities. But in this class, the idea that students could shape their grading structure quickly transformed the discussion into one about how the students would like to also participate more effectively in the governance of the Bucerius itself.
On the first day of class, I had taken the class list and befriended each of the students of Facebook. At the time I was just learning about Facebook myself, and thought it would be interesting to link up with the students directly. I knew some High School teachers who did the same with their students in the USA and wanted to see what it would be like to do it myself. The Bucerius students were amazed that I had done this and not only quickly befriended me but also told all their peers that Mr. Adler was on Facebook. What I saw over the next two days was that I was the only Professor or Lecturer at Bucerius who was on Facebook, though almost all the students were using Facebook for primary communication.
Bucerius, like a lot of universities worldwide, uses an IT system called CampusNet, which provides online classrooms where lecturers can deposit class materials and students can discuss them. It is slow, cumbersome, and hierarchical. The Bucerius Students were using Facebook instead to organize themselves and discuss their classes. They did this for two reasons; 1, Facebook is democratic in structure, and 2) it's fast, easy to use, and everyone is on it.
This proved to be a great example of one of Helmut Willke's central ideas - how hierarchical systems produce apathy from below. Given an opportunity, people will almost always gravitate towards more democratic communication systems in which they can openly express their ideas and communicate with anyone whenever they choose. This is a very important consequence of the Information Revolution. People, all over the world, are using Facebook to communicate across gender, race, and international borders, about important ideas. Their participation is not dictated by hierarchy, government, or inherited status. They are a market of communication and ideas, and their ability to self-coordinate and collaborate has very important consequences in the world.
This new form of communication - Facebook - became the focus of our class discussion on what to write about in the Final Report. Students wanted to influence how the Bucerius was governed. They lamented the fact that no other lecturers were on Facebook, that most lecturers in fact had not attended any of the classes of their peers. They wanted better IT support, to retire Blackboard. But most importantly, the students did not feel consulted regarding their needs and their relationship to the University. And this was the most fascinating part. Their experience on Facebook, interacting in a marketplace of ideas, had changed their expectation of their own role as students at the University. They saw themselves not as recipients of education from learned university professors. Rather they saw themselves as skilled professional peers in a bi-directional relationship of learning and they wanted a voice at the table.
My students wrote four excellent papers, describing new Governance System proposals for the Bucerius Law School. These are important ideas. They illustrate changing expectations in previously hierarchical relationships. Every University and every Business around the world should take these ideas very seriously. They are the future.
I have permission to publish one of them, under a Creative Commons copyright, and am doing so with full attribution. This paper comes from:
Johannes Becher, Germany
Courtney Fischer, USA
Zitto Kabwe, Tanzania
I encourage everyone to read it : Governance System for Bucerius Law School. They wrote a research paper. In it they proposed a system of governance that would take into account the measured needs of students each year and articulate those needs as policy. Will it change anything at Bucerius in terms of official Governance models? Perhaps not.
But what was written about is change that has already happened. Information technology like Facebook is providing an alternative mechanism for people to coordinate their activities to achieve common goals through collaboration. This mechanism has security flaws, IP issues, and can lead to significant opportunities for abuse. And despite all that, people will use it and their use will force all of us to change ever more rapidly just to keep up.
Lately, a lot of people are asking me about KPI's. What are they? How do we get them? Lets define as many as we can.
A Key Performance Indicator has to be unique, relevant, and insightful to be Key. It should tell you something meaningful, impart knowledge, about your operations that demonstrates clear business impact. It should be the final sum of many calculations, the square root and the root cause. And they should be few and constantly monitored.
If you are tracking more than 5, max 10, KPI's chances are many of them aren't that important. And if you're classifying nebulae like "how many meetings you're Data Governance Council has had" as a KPI you need a glossary exercise on what makes up a KEY PERFORMANCE INDICATOR.
Lets decompose the term to shed light on the components from the bottom up:
INDICATOR: This is a metric. A field in a log. The output of a sensor. Raw data collected from many inflection points in your information supply chain. In and of itself, it has little or no meaning. It is like each word in this sentence.
INDICATOR 1: IT
INDICATOR 2: IS
INDICATOR 3: LIKE
INDICATOR 4: EACH
INDICATOR 5: WORD
INDICATOR 6: IN
INDICATOR 7: THIS
INDICATOR 8: SENTENCE
INDICATOR 9: .
On their own, each word has a dictionary definition. But you don't get a complete thought unless you correlate them into a sentence.
INDICATOR = DATA
Examples of INDICATORS from the Data Governance World:
Interesting? Perhaps. Relevant? Who knows.
PERFORMANCE INDICATOR: To continue our grammatical metaphor, a PERFORMANCE INDICATOR is a sentence whose correlation of facts yields insight into what's going on. It is the result of mathematical analysis, where the sum is indeed greater than the meaning of the parts. You use Performance Indicators to tell you how the things you are measuring are performing. I know this is a self-fulfilling sentence, redundant and just so obvious. But a lot of people don't get this.
PERFORMANCE INDICATOR: IT + IS + LIKE + EACH + WORD + IN + THIS + SENTENCE + . = INFORMATION.
Information is a the organization of data into meaning.
PI = INFORMATION
RECORD RETENTION COSTS = ((((% PAPERDOCS x $STORCOST)+ (% EDOCS x $STORCOST)+ (% EMAIL x $STORCOST))))
Interesting? Yes. Relevant? Getting there.
KEY PERFORMANCE INDICATOR
I'll make this short and easy. There is a reason this acronym starts with "K"
KPI = KNOWLEDGE
KPI's tell you things about things. It's the ueber analysis, the trend of change, the ups and downs of how PERFORMANCE INDICATORS oscillate over time. You want these KPI's to be few and you want everyone to know their name, hotly debating what they mean.
VALUE AT RISK is an example of a KPI. Before the credit crisis, 99% of bankers knew how to spell VAR, saw regular reports on VAR, knew VAR was very important, and made decisions based on VAR. VAR is a ratio of Risk. It is calculated from tens of thousands of INDICATORS, and hundreds of PERFORMANCE INDICATORS.
One or two people in a bank (not the CEO) maybe understand how VAR is calculated and where the data comes from. But that's not important. What's important is that monitoring VAR is KEY to understanding the RISK PERFORMANCE of a bank.
KPI's need to be like VAR. One number everyone cares about.
KEY PERFORMANCE INDICATOR: $ We are wasting on redundant storage costs
Interesting? Hell yeah! Relevant? Absolutely.
If you have more than 5 KPI's, most of them are either INDICATORS or PERFORMANCE INDICATORS and no one remembers or cares about them.
Make sure your KPI's really are KEY.
Yesterday was a beautiful day in Johannesburg. Sunny and warm, 67 customers met together at the Westcliff hotel from 8am to 6pm for the third IBM Data Governance Council Meeting in South Africa. The venue was an old hotel, stucco salmon walls, town-house style, snaking up a narrow cobblestone road to the top of hill overlooking the Johannesburg Zoo. It felt colonial, roman columns, marble floors, wisteria covered verandas, a gracious meeting space.
A tractor-trailer jackknifed on the motorway from Pretoria and many had horrendous traffic that morning. Still, from 90 registered, 67 showed up and the room, set in a double U, with two extra rows of chairs in the back was full to the brim. Amazingly, we started right on time, and from the first presentation to lunch we had a very interactive dialog. The room was full of large banks and insurers, government ministries, retailers, small service firms, and many IBM Business Partners.
We presented best practices from ABSA, Six Easy Steps to Smart Governance, and many use cases from Data Governance Health Checks. It was a morning meeting, 9 to 12:30, and the time flew. There were so many questions, and unlike the first meeting we hosted in Franschoek a year ago, the audience was more mature, asking not why Data Governance but how Data Governance.
What does a Steward do? Where do they report? How do we set KPI's? Do we start top down or bottom's up? What if Governance is a dirty word in our company? Can we call it assessment instead of audit? What can IBM do to help?
I've hosted so many Data Governance meetings around the world. What I saw yesterday morning was a South African market for Data Governance looking for practical advice and solutions. We knew we had a beautiful venue that in and of itself would attract many participants. What was so great was that so many came eager to learn, enthusiastic to contribute, and completely passionate about Data Governance!
We fired them up and they reciprocated. Some photos of the event can be found here. And a short video can be found here.
The white papers we distributed at the event , including two papers distributed with permission from Bucerius Law School Students, are available here.
We also recorded a Podcast with Sybase BI Practice and it is available here.
In the afternoon, 25 of us met privately to discuss how to write practice notes on Data Governance best practices for the King III Report on Governance. This work will be done by Council Members and it will have an impact on governance practices around the world.
My special thanks to ITweb for helping to organize such a terrific event, Tanya Douglas for selecting the venue and orchestrating all the details, Ocea Garriock for providing so much leadership in the South Africa Data Governance Council, Elize van der Linde for her continued passion and excellent best practices at ABSA, and Sunil Soares for his terrific sales support and companionship. It was a team effort all the way and we produced some terrific results.
We continued at a terrace until 6pm, discussing plans for our next meeting in Mpumalanga in August.
Last August seems like a long time ago. There have been so many miles traveled and so many purchases made since, that what I did on August 6th is beyond my recall. Amazon doesn't seem afflicted with the same memory challenges because yesterday I received a note from Amazon "customer service" notifying me that they would soon charge me for the 4 furnace filters I had not returned from my August 6th purchase. Sadly for Amazon, this was the last straw in an otherwise congenial relationship and the story, in all its data details, does illustrate the enormous challenges firms face today in understanding what their data means across many disparate systems.
As you can guess, I purchased some furnace filters from Amazon on August 6, 2009. They come 4 in a box and they are 25x20x5, and at that size the box costs $122 with shipping. Orderd on the 6th, a big box arrived on the 12th. Once opened, only one filter was apparent. A quick check to the account demonstrated that I had indeed ordered and paid for 4, but only 1 was sent. Try and call Amazon and you will find they have no number. In fact, trying to communicate with them is very difficult. An email form is buried in their site. I found it, and sent a note asking why they sent 1 when 4 were requested. Would the other three arrive shortly? I needed one urgently, but we use 4 a year so a full shipment was required.
Within a couple of days an apologetic note from Amazon was returned. They offered several attractive options:
1. Return the filter for a full refund.
2. Keep the filter and get a full refund.
3. Get a replacement shipment of 4 filters at no additional cost.
The first filter was already doing service in the furnace so taking it out didn't seem convenient. I still needed more filters for the winter, so getting 4 more for no additional cost was very appealing so I opted for that choice. In two weeks another large box arrived with the four filters. At this point I was very happy with myself and with Amazon and thought the matter closed.
Three weeks later, Amazon sent a strange note asking me to return the filters I had purchased. I didn't read it fully as I guessed it was a mistake and ignored it. A week later, Amazon debited $122 from my account for no apparent reason and when I checked my email I found another note explaining that since they had not received my RMA they would now debit my account for the purchased filters. I immediately sent Amazon a note asking why I was now being charged twice for the same filters. A day later, Amazon responded with an apology and claimed that they had two different customer service systems and the other one had somehow malfunctioned. Of course, this wasn't a straightforward transaction. I didn't just buy something and have it shipped. Amazon had made a shipping error and offered a non-standard solution that somehow didn't conform to their accounting system. Unfortunately, Amazon made their mistake my problem.
I thought the matter closed until yesterday, when I received another reminder note to send back my RMA Filters. I wonder what Amazon now wants with 2 dirty 6-month old furnace filters. I'd be happy to send them back along with all the household dust I can find because after this latest "customer service" snafu, furnace dust is about all that Amazon will be getting from me in the future.
The internet is the world's greatest strip mall. If one store can't meet your needs, there are others who will.
On Saturday, I took the train from Brussels to Cologne. The train is one of those modern ICE's - sleek, clean, quiet, and fast. The terrain through Belgium is hilly and the tracks pass over rolling fields, deep ravines, and wooded glens. As we neared the German border, the landscape leveled out and the train picked up speed, reaching 200 k/hr at one point. And as the small towns whisked by, I couldn't help think how magical it is to travel from Belgium to Germany via train with no border crossing and no passport control. It is so simple and easy, and without even a word you pass from one country to another.
This is a marvel of modern Europe, and it reminds me that the last 65 years are the longest period of peace in Central European history. Europeans have somehow, perhaps accidentally, realized a reality about modern warfare that has yet escaped the United States of America - modern war is Dumb Governance. For during the same 65 year period the United States has been involved in five large-scale wars lasting over 5 years each, 6 smaller military adventures, and of course one very long Cold War.
If you read my last blog post, you will understand my statement and reasoning that modern war is Dumb Governance. To paraphrase Von Clausewitz, war is the extension of diplomacy by other means. That is, it is an articulation of national policy - the communication of it.
Now back up a minute. If we have a policy that is communicated, according to the principles of Smart Governance it must also have had a decision-making process, some metrics and business case, hopefully either sustainable or situational goals, and some measurable results that we should care to compare to the goals.
In the old days, back before the industrial Revolution, it took 8 people working on farms to support two people working in cities. That meant that you had to have a lot of arable land and unskilled labor to support those cosmopolitan types in cities who made all the decisions. War then was one means to acquiring more arable land for civilized expansion. If you conquered more territory through war, you could expect to feed more city dwellers who produced more income via trade and crafts and that made your society wealthier.
In the early Industrial Age, this logic began to wane because industrial capacity isn't only dependent on land and labor. Its also dependent on capital, and capital tends to dry up when tanks cross borders. Of course, natural resources are also important to industrial economies. But warfare tends to be a fairly resource intensive activity so gains won on the battlefield can be difficult to hold and the net benefit of acquired resources can be undermined by the resource drain of battle.
In the Information Age, knowledge is power and both intellectual labor and capital flow so freely throughout the world that warfare gains on the battlefield don't provide sustainable balance sheet benefits. In fact, they are a net cost to any society waging war.
Think about it for a minute. On 9/11 the World Trade Center was blown up by heinous terrorists based in Afghanistan. Immediately, the United States sent 30,000 troups to invade that country. The stated goal of this policy was to protect Americans from terrorism. The measured need for the policy was the attack on 9/11. The policy decision was made by the President of the United States with full support of Congress and the American people. The policy was communicated with 30,000 American troops and a good contingent from international allies.
And the outcome? Eight years later, we are still occupying one of the poorest countries in the world with over 60,000 troops. Afghanistan is not even a real nation in modern terms. It is a tribal collage of small warlord controlled fiefdoms. Pakistan is barely a modern state, and Afghanistan is 40 years behind Pakistan. Kabul has 4 million people and 95% of them have no running water in their homes. The GDP is only $12.8 billion. It has no agriculture, no industry, few natural resources, no significant knowledge resources.
The war in Afghanistan has cost US Taxpayers $172 billion to date. That is 13 times the GDP of the entire country. We are spending more each year to wage war than Afghanistan is even worth.
Compare the Outcome to the Goals. From an economic perspective, it's a huge loss.
War today is a net economic loss for any country that wages it. Resource control is simply not worth the costs. The Europeans have figured that out. That the US could learn the same lesson...before we bankrupt our nation through warfare...
A recent study in the UK shows that education and wealth have a dramatic impact on life expectancy. Well educated and rich people can expect to live on average 7 years longer than their poorer neighbors. The Obama Administration would do well to pay attention to these demographic factors when considering healthcare reform. Adding 30 million uninsured Americans to the insurance rolls will reduce overall healthcare costs by providing better access to preventative care.
But an even more equitable solution would be to change the insurance premium basis from risk-based pricing to income-based pricing. Richer people should pay more for insurance not only because they can afford it but also because changing the premium basis from risk to income removes any option for denial of coverage based on pre-existing conditions.
Germany's healthcare system uses income-based premiums in a 3-tier model. In the first tier, a government plan provides basic coverage to the poor and unemployed. When you loose your job, you automatically drop into the government plan and your benefits are covered as part of your unemployment insurance. But the benefits offered in the basic government plan are really not desireable. In the second tier, private insurers compete in different industry markets using the government plan as a floor for coverage benefits. Premiums are based on income, and employers must match at least 50% of the premium cost, but many can and do offer more. The private insurers are all regulated in terms of their product offerings by the government and any medical practitioners or healthcare providers in the public system are available. In the last tier, Germany offers a fully private system in which premiums are based on risk (younger people pay less), and patients can only use private providers and hospitals.
The German system provides three levels of coverage - public, semi-private, private - with lots of competition, well regulated practices, and income based premiums for the 90% of the population. Its not a perfect system, as every system requires constant monitoring and dynamic steering. But it provides medical services far superious to the US system at far lower costs with social equity.
What I see in the current healthcare proposals in the Senate and House Bills are a hodge-podge of tactical solutions and a paucity of strategy. There are so many good healthcare systems that work throughout the world. Many use income-based premiums. Its a smart way to go.