Bob and Ted's Excellent Adventure (The Biologist's Tale of Risk and Uncertainty)
Bob Scoble Esq. and Ted “Theodore” Logan are about to embark on a new technology start-up venture when a mystical figure with a fondness for beagles and the Galapagos Islands appears before them, promising great prospects for their new business if they first agree to accompany him on a unique adventure. They accept. Spotting a theme common across the many amazing conversations they have subsequently, Bob and Ted decide to follow the XP principle of doing extreme amounts of the practices that work: they implement the world’s first completely Darwinian complex systems risk management program.
Using triangulation techniques from observable market data, I will argue that the distribution of true business value derived from technology projects follows a power law. I will summarise the differences between environments that display power law and normal distributions, focussing in particular on the consequences for risk management. (8mins)
I will then give a brief overview of the principles of evolutionary biology. I will describe how natural selection can be viewed as a risk management engine for complex systems, and apply it to the field of agile software delivery using the notion of “user story as meme”. Amongst other conclusions, I will highlight the importance of project failure isolation boundaries as the key to defensive programme management. (22mins)
In an attempt to keep the subject matter entertaining and the audience engaged, the above ideas will be presented in the style of a “Bill and Ted” adventure. We will follow the main characters as they learn about complex systems from Vilfredo Pareto and Benoit Mandelbrot; discuss causation and predictability with David Hume and Edward Lorenz; learn risk management theory from Harry Markowitz, and evolutionary economics from Joseph Schumpeter. Finally they will get the lowdown on natural selection from Richard Dawkins and Daniel Dennett.
In the final part, I will focus on the practical implications of these ideas. This will include a discussion of real options theory, decision tree analysis, and the consequences for application design in terms of analytics integration and management instrumentation techniques. (10mins)
Time permitting, there will be a short Q & A session at the end.
- Improved IT risk awareness
- Understanding of real option theory and decision tree analysis
- Increased ability to generate business value in uncertain market conditions
- Links to real options analysis spreadsheet and user docs that will be posted on my blog