The Intelligent Enterprise

Is your enterprise sufficiently intelligent?

All organizations have varying degrees of intelligence. The question is does our enterprise have sufficient intelligence relative to competitors to remain viable, and if so, are we executing on that intelligence in the most prudent and competitive manner??

In the public sector, an intelligent enterprise translates to remaining economically sustainable while meeting the needs of constituents, keeping people safe, and/or the ability to defend against adversaries and win wars. For businesses leaders it’s not terribly different in terms of serving customers and ability to survive, though we measure value creation and performance in the private sector primarily by revenue, profitability, and valuation.?

A sustainable competitive advantage today essentially requires a more intelligent enterprise than competitors, some of whom may have significant advantages in other areas such as capital base, talent, scale, and market power. The question then is how can a particular enterprise achieve and maintain competitiveness, which is the primary focus of our work and this newsletter.

Origin of the Intelligent Enterprise

The use of the term intelligent enterprise can be traced primarily to the late James Brian Quinn who was a?highly respected professor?at the Tuck School of Business at Dartmouth College.?Professor Quinn wrote the seminal book Intelligent Enterprise: A Knowledge and Service Based Paradigm for Industry, published in 1992.?

“From now on, Quinn documents, intelligent enterprises will derive sustainable advantage from knowledge and service-based activities that leverage intellectual assets. They will increase value through technological sophistication, better knowledge bases, more creative customer responsiveness, and the unsurpassed management of human and intellectual capital that competitors cannot reproduce.”??—?Forward from the book?Intelligent Enterprise (1992)

Professor Quinn’s work overlapped several disciplines, including knowledge management, organizational management and engineering. His idea of an intelligent enterprise went well beyond what one might assume by the two words intelligent enterprise. His vision included entirely new business models driven by talented people and new types of services and outsourcing, not unlike what the cloud model is today even though it wasn’t yet invented in 1992.

His theory on the intelligent enterprise has aged well. When Quinn’s book was published in 1992, a small group of tech companies closely associated with the intelligent enterprise theory were achieving several billion dollars per year in sales and growing rapidly with valuations in the tens of billions of dollars. Of the companies cited as examples in the book, including?Merck, Honda, Apple, Boeing, and Walmart, only Boeing has underperformed, speaking to the need to apply intelligence to decisions, systems, and cultural management.?

Perhaps most telling, two of the companies most closely associated with the intelligent enterprise today didn’t exist in 1992 — Google and Amazon, and Microsoft was still a young company, reaching a market cap of $35 billion in 1995. By the end of the decade, Microsoft would be worth 20 times more. Quinn’s prediction for outsourcing, increases in services, and top talent have been realized. His book describes how talented people wouldn’t need to work for any particular company, and that companies would be “voluntary organizations” top talent would want to join to “achieve more of their personal goals”, which effectively describes the current situation for top tier talent.?

Confluence of people and technology

I suspect it will not come as a surprise to most reading this that the two most common strengths we’ve found in high performing companies are exceptional people and superior technology applied competitively. High performance incumbents also have considerable market share, strong brands, efficient production, and well-established distribution, but sustaining high performance is nonetheless challenging, and often unsuccessful.?

When?Standard Oil became the first billion-dollar company, it was broken up into 34 companies in an antitrust ruling by the U.S. Supreme Court in 1912. The combination of spin-offs was valued at 6% of all listed companies in the U.S. at the time. Energy companies are much more intelligent today, investing heavily in next generation technology, R&D, and?new ventures, but technology companies are considered to have the highest overall intelligence quotient today based on value, though that could change in the near future with hybrid tech companies in energy, healthcare or biotech.?For example, Google,?Sumitomo Corp.,?and Chevron (a spin-off of Standard Oil) recently?invested $250 million in?TAE Technologies Inc., a nuclear fusion company based in southern California. When Fusion is achieved, it will radically disrupt the energy industry and transform our economy.

In mid–2021, the top five tech companies represented nearly a quarter of the value in the S&P 500. As of July 21, 2022, the top five tech companies were valued at $8.16 trillion. While the big tech market power represents?systemic risks to the economy,?and I think requires regulatory action, one can make the argument that many other companies haven’t remained competitive.?

Jamie Dimon is one CEO who has been?investing heavily in recent years?to transform JPMorgan Chase & Co. into a more intelligent enterprise. Another CEO investing heavily is?Doug McMillon?at Walmart.?Caterpillar,?Deere,?UPS, and many other companies have also invested heavily in intelligent business units, if not the entire enterprise. Despite inefficiencies and increasing redundancy in custom EAI, these and other market leaders are more competitive than most of their peers.?

Regarding the age-old debate of which is more important, people are clearly more important than technology as they manage relationships and make all of the important decisions, including use of technology. However, it’s also true few large enterprises could survive today without competitive use of technology, including the efficiencies of networks, data management, and increasingly EAI.?

KYield’s approach to an intelligent enterprise

Our KOS is a manifestation of?my own vision, which is conceptually similar to what professor Quinn envisioned, but rather in an executable manner. The KOS is intelligent, enterprise-wide, and continuously adaptive. The KOS is an EAI OS based on the theorem I developed in the late 1990s, yield management of knowledge, which combines mathematics and programmable data with algorithms to optimize the enterprise.?

KYield was featured by Forrester about a decade ago in a report on the future of business intelligence (BI). While the KOS does have some similarities to BI —we provide relevant intelligence, the differences are significant. BI apps are typically limited to financial data for analysts, whereas our DANA app (Digital Assistant with Neuroanatomical Analytics) delivers pre-rated data tailored to the needs of every employee in the business unit or organization. A data tuner regulates the quality and quantity of information for every individual depending on their inputs.

The KOS is a modular, distributed system, which has been technically viable for a few years now. The cost continues to drop while performance rapidly improves due to a combination of billions of dollars invested in components by the industry and our internal R&D. Today the cost of the KOS is comparable to many other enterprise SaaS systems.

Top 10 KOS attributes

1. Enterprise-wide data governance with precision data management
2. Tailored intelligence to the needs of each individual?
3. System-wide security, prevention, and enhanced productivity
4. Visual graphs and charts for networks, productivity, projects, and workflow
5. Intuitive prescient search tailored to each individual
6. Personalized learning for every individual
7. Protects the privacy of individuals and property of the organization
8. Positive health programming for well-being and retention
9. Simple natural language interface for admin
10. Easily expandable to partners and customers

Conclusion

The KOS is not a computer OS, but rather an enterprise OS that tailors data to each entity in an interactive manner. We've spent the past 25 years in R&D to achieve an intelligent and competitive enterprise in the most efficient and easy-to-use manner possible, while protecting the interests of organizations and individuals. The KOS was designed with integrity. We employed the scientific method free from any conflicts. Evidence guided the construct of the system. The KOS is worthy of trust.

The KOS is available today in an enterprise license substantially based on the number of people in the business unit or organization. We offer deep discounts for scale to encourage CEOs and their teams to make the DANA apps available to all employees. Our research provided overwhelming evidence why it's wise to include every employee. We are as flexible as possible within the confines of physics, economics, and the rule of law. Although we can license the system and support with consulting, I highly recommend a turnkey install across the enterprise.

As I shared with several management teams in leading companies this year who are considering installing the KOS in 2023, the cost of the system is irrelevant when compared to the ROI of any of the embedded functions over time.

Recommended Reading?

• The Intelligent Enterprise a New Paradigm, by?James Brian Quinn (JSTOR)
• Making the Most of the Best,?by?James Brian Quinn, Philip Anderson,?and?Sydney Finkelstein (HBR)
• Strategic Outsourcing: Leveraging Knowledge Capabilities, by James Brian Quinn (SMR)
• Intelligent Automation Fuels Digital Ambitions?(Deloitte)
• McKinsey Technology trends outlook 2022?(McKinsey)
• The cloud computing giants are vying to protect their fat profits?(Economist)
• The Two Faces of China’s Surveillance State?(WSJ)
• Machine Learning at the Edge: The AI chip company challenging Nvidia and Qualcomm?(VB)
• How to turn AI failure into AI success?(VB)
• Why every company needs a new type of OS enhanced with AI?(KYield)

ABOUT THE AUTHOR?

Mark A. Montgomery is the Founder and CEO of?KYield, Inc., a pioneer in AI systems, and inventor and architect of KYield’s two primary AI systems: the KOS?(EAI OS), and the Synthetic Genius Machine.??He can be reached at [email protected].