Welcome to the Chapter 3 summary of Simon Wardley’s free book on mapping.
Simon, describing his experiences in 2005, takes us through the next step of the strategy cycle, shifting from Landscape to Climate. He describes 7 climatic patterns — external factors, like common economic patterns or competitor actions, that change the Landscape. These are forces that can’t be stopped, but they can be influenced, used, and exploited.
Pattern 1: Everything Evolves.
All components evolve from left to right as a result of supply and demand competition. As long as there is an advantage to be sought, evolution will occur.
Pattern 2: As Things Evolve, Their Characteristics Change
The first digital computer was invented in 1943. In its genesis, it was scarce and poorly understood. We didn’t really know yet what it would be good for, but there was potential for future value and competitive advantage.
Digital computing turned out to be useful, so it improved and diffused over time into the utility form we have today — standardized, commonplace, and a value that is well-understood. No longer a competitive advantage, but a cost of doing business.
This process happened not only to computers, but also to photographs, electricity, nuts and bolts, and even Penicillin. Everything evolves, and if it survives, its characteristics will change.
The evolutionary characteristics cheat sheet offers greater detail about the characteristics at each extreme and everywhere in between.
Pattern 3: No One Size Fits All
The entire spectrum of component evolution must be actively managed.
The uncharted space is about exploring and experimenting. Change is normal, so the focus is to reduce the cost of change. Building in-house with Agile methods works well here. For purchasing, a Venture Capital based approach is appropriate.
As the component shifts into late custom, we move from exploring to concentration on what we’ve found. Our focus changes to learning and reducing waste. Lean methods work well here, as does outcome-based and Commercial-Off-The-Shelf purchasing.
Once the component crosses into the industrialized space we focus on mass production and reducing deviation. Outsourcing is safer here, and Six Sigma and other formalized frameworks work well.
Any significant system will have components spread across all stages, and there’s no one single method or approach that fits them all. Instead of following a devotion to a particular method, we can pick the right one for each component.
Pattern 4: Efficiency Enables Innovation
As components evolve, they enable new higher order systems to appear. The simplicity of standardized building blocks creates the stability needed for rapid change and a diversity of new components built on top.
It’s worth noting that as a component becomes commodity and standardizes, further improvements are largely hidden behind the “standard” form of the interface. For example, your electricity supplier might switch from natural gas to wind turbines, but as far as you can tell from the plug (the interface), everything’s the same. The rest of the value chain behind that interface is basically invisible.
Pattern 5: Higher Order Systems Create New Sources of Worth
As higher order systems appear as a result of industrialized components, they become potential future sources of new worth. For instance, as electricity became a utility, it enabled future worth like television, computing, and radio. The likelihood of higher order systems being successful, however, isn’t certain. Simon mentions Thomas Edison’s electric pen and Gaugler’s refrigerating blanket as two examples. We only know for sure which higher order systems are valuable in hindsight.
Simon clarifies that ideas have social value, but it’s their implementation that has the potential for economic value. He defines “commodification” as this transformation from social to economic value, not to be confused with “commoditization,” which is more in line with the process of evolution.
Pattern 6: No Choice on Evolution
If a company creates an advantage, it dials up the pressure on the companies around it to adapt. This effect is Van Valen’s “Red Queen Hypothesis” in action. For example, as Henry Ford’s system for mass production evolved, many other industries took note and copied it. As a result, mass production is no longer an advantage. But were that not the case, every good other than Ford vehicles would still be handmade today.
Pattern 7: Past Success Breeds Inertia
Though the Red Queen might force adaptation, companies will fight to maintain their past successes. Since the transition between uncharted and industrialized is associated with high profitability, a successful company will resist the pressure to industrialize for fear of losing that source of wealth creation — this is known as inertia.
New entrants, not encumbered by that past success, can initiate a change. It’s why Amazon, a “company that sells books” could outpace VMWare to industrialize computing infrastructure. It’s a common pattern in history, and many past giants don’t survive.
The basics of these 7 climatic patterns offer enough for us to explore the first map.
Point 1 — Simon’s online photo service was moving into the product stage, meaning others would begin to adapt and compete. Survival was concerning, without some new differentiator.
Point 2 — The ability to create a private cloud, as well as the size and profitability of the compute industry, signaled that someone might attack it and shift it into utility.
Point 3 — Compute hardware and rental suppliers would resist the change, and someone unencumbered by existing product or rental models would likely be first to move.
Point 4 — The same story was likely to play out with coding platforms.
Point 5 — These utility coding platforms would eventually run on utility compute.
Point 6 — These utilities would enable many new, higher-order systems. Regardless of the specifics, these new systems would undoubtedly result in many new sources of worth and many more failures.
Armed with the map and these climatic patterns, Simon and his colleague, James Duncan (who Simon credits as the co-creator of mapping), could anticipate an incredibly fundamental change to the computing industry. With all their assumptions made visible on the map, they could begin planning how to move.
If you followed along in Chapter 2 and made your own map, have a go at applying the 7 climatic patterns we learned here to see what you can anticipate. Here’s a list for reference, along with many more patterns we’ll learn about in the future. Up next, Simon moves on to describe Doctrine.
To read the rest of Simon’s book, or to get started with Wardley Mapping for yourself, visit LearnWardleyMapping.com.
I'd like to say a special thanks to the LearnWardleyMapping Patreon members, especially our Professional members, Hacker Ben, Tor Christian Klaussen, and Mario Platt. Thanks for making this possible!