It never was all about the economy -stupid

Context Shocks - as Covid19 demonstrates time and again - reveal trends that the system was already aligned to generate.
We have seen it in distributed working, reimagining of the city, targeted education etc.
Another very significant one reveals itself in the level of state intervention required when markets fail in their primary task - to allocate resources vs human need.
This is an interesting challenge to the western political hegemony - in which the tendency is toward 'In The Market We Trust'. It has seemed there is no problem the market couldn't handle.
But rather like a Prime Minister 'taking personal control' of any and everything that appears to be going off the rails, it turns out - somewhat ironically, that the market only has a limited amount of political capital to spend. And it is all spent out.
The massive scale of state intervention around the world (another £100bn of quantitative easing announced in the UK yesterday) reveals a trend to truth - that the role of The economy is subservient to the Government, not the other way around.
The capacity and necessity of massive state involvement illustrates this truth.
And this trend to truth reveals another, just as important. The state intervention is to meet the needs of people. Given our perilously constrained resources - it is also to meet the needs of the planet. There's no people, government or economy without the planet.

So, the content shock of Covid19 gives us a new context in which to experience, and in this new experience we can imagine, and are starting to observe:
The role of Government is to gather insight about the needs of people and planet.
The role of the economy is to gather insight about the needs of Government and the needs of people.
The role of the economy is then to respond to the needs of Government (and people and planet)
The role of Government is then to respond to the needs of People & Planet.

With this we do at least have a simple way of describing the systems goals. Feedback loops flowing between people and planet, between Government and Economy and all combinations thereof will need to be understood and managed in order to steward the right outcomes.
But at least we can establish some clarity about who and what the outcomes are intended to benefit.
It never was about all about the economy - stupid.

Coding the economy to cut the high price of low cost

Photo by Ray Hennessey on Unsplash

The allocation of resources - and the cost of optimising that allocation - has always been humanity's most profound challenge. Artificial Intelligence may offer our best solution - but only if we are prepared to think globally.

Capital and the market model it sustains has been held up as our best bet for resource allocation for centutres. Yet capitalism and its governance are not necessary states by any means. They are emergent properties of the complex adaptive system we describe as the economy.

One transaction allocating value does not capitalism make. Multiple ones at scale can. Just as a molecule of water is not a wave, let alone a tidal force. These are emergent properties of complex adaptive systems.

The interactions within the system are what creates those emerging properties. Change those interactions and the properties change.

The best modifier we have had to date has been Government intervention - taxes, laws, welfare etc. But complex aqdaptive systems are notoriously difficult to tinker with. Think of the butterfly effect as applied to weather (another complex adaptive system).

So a Trump here or a Brexit there is going to have some impacts, but predicting exactly who, where and what feels the chill wind is a somewhat more exacting science than knowing that change will come.

As our economy has become more connected (and decentralised) it is becoming more anti-fragile. Make no mistake the economy will keep on functioning no matter what governments do. The question is can it be controlled somehow to ensure the emergent properties are desirable for humanity?

As we head towards quantum computing and ever more intelligent automation the point looms at which decisions to allocate resource will patently be better handled by machines.

Our machines will be better able to calculate the global economic costs of each transaction. They will factor for the environment as much as for human need. If we code that in.

But this is going to be a greater race for power than military applications of AI. Those who choose not to take part will be at significant compertitive disadvantage to rivals.

So the pressures to allocate to meet immediate human gratification will be huge. Only through global agreement on total costs will we give our children a chance.

Landing a man on the networked moon

Gordon Brown's plans to 'create innovation and personisation (is that customer-centric for the public sector?) in the delivery of public services will require rather more than faster broadband and a centre to understand and exploit the semantic web.

"Companies that use technology to interact with their users are positioning themselves for the future, and government must do likewise. Mygov marks the end of the one-size-fits-all, man-from-the-ministry-knows-best approach to public services.
"Mygov will constitute a radical new model for how public services will be delivered and for how citizens engage with government - making interaction with government as easy as internet banking or online shopping. This open, personalised platform will allow us to deliver universal services that are also tailored to the needs of each individual; to move from top-down, monolithic websites broadcasting public service information in the hope that the people who need help will find it - to government on demand."

Gordon Brown, PM. read full transcript

For Government,this is truly a mission on the scale of landing a man on the moon.

Not because it seems almost impossible to do, but because the scale of change, the number of barriers to overcome are so large, that essentially the UK system of government, the control from the centre model that matched the industrial age, must be utterly transformed to match the demands of the networked age.

I fear the announcement Brown made today in London is fundamentally too focused on the technology, too little on the organisational changes required to deliver the vision.

The UK Government, like every other government, like every other business, like every other organisation, must be redesigned on the principles of a networked business to deliver its purpose through a platform approach.

In this way they reduce the transaction costs of making things happen; turning a shared idea into an efficient 'fit' through the bringing together of communities of purpose.

There are no hard edges to networked organisations. There can't be. To scale and to enable they have to go beyond traditional boundaries. And they are not made by technology.

The fact that the technology enables transparency and connectedness like never before IS critical. But the desire for, and organisational design for, transparency and connectedness (for sharing; for scale through participation; for search to discover and help us organise through connecting us and our data; and for enabling the always on/not-always-available nature of the web (asychronous/synchronous) is the critical part - not the technology enabling it.

So Government - and all organisations aiming for longevity in this networked world of ours - must adapt (funny how my diagram below looks a little like rocket... perhaps it could land a man on the networked moon...):

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Angry of Percy Street

I'm fuming.

I've just wasted more than an hour on a call which could have lasted 30 seconds. If the caller had been upfront and honest.

An organisation called me because they had been 'given my name' in association with my work with NinetyTen and CitizensOnline (at least that's what they said). They felt we should be introduced to senior people in the UK Government to help effect change after the next election.

They asked questions about what I/we do. They listened carefully as I outlined the impact of the network on every aspect of our lives - and how what we do focuses on creating new efficiencies through social technologies.

They asked how we could see ourselves and our services fitting in with local government and national government requirements and processes.

And when I asked what they needed from us they said a 650-word document about what we do, to place in front of Public Sector commissioners (the people with the purse strings).

It would be part of a book (a page in fact) guiding these commissioners in what needs to change.

Oh - and that'll cost me £3995.

Stunned.

I'm angry (image by darrenhester) for a number of reasons:

1. I feel like a fool. I feel fooled. I was (mis)led on to believe there was genuine interest among senior government officials in trying to make sense of the power of collaboration, of wikifixing, of a platform approach to the organisation. In fact I was being asked to buy an advertorial. A 650-word listing. The whole approach was disingenuous and as far from transparent as I ever want to try to see through.
2. This is no way to serve the community of commissioners this content is intended for. Serving the community FIRST is a guiding principle in media for me. To do this you get the best, most relevant content you can get from all sources, rivals included. Certainly NOT JUST FROM THOSE WHO WILL PAY.
3. As a UK taxpayer, I'm concerned at the implication from the vendors of this listing that commissioners will spend public money based on a company's appearance (or otherwise) on a paid-for listing (you say 'book', I say ad listing.) Any UK public sector commissioners that does should be shown the door for both negligence and incompetence.

For the record, those of you with an interest in public sector (particularly commissioners), a number of 90:10 consultants have deep experience of working with UK Governments at both national and local level.

We use listening technologies to discover people who care about issues and use social tools to bring them together and surface their concerns to enable improved efficiencies in the production, marketing and delivery of products and services.

We don't need to appear on a paid-for list to tell you that. If you'd like to know how we can help you, give us a call, drop us an email, let's meet face to face. Ninety Ten awaits.

Just don't expect us to show up in a book sent to you free any time soon.

Tip for everyone else on planet earth: If you are expecting me to pay to create your content say so right up front. It'll save us both a lot of time.

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Communities of purpose are the business units of the 21st century: Now as a wiki

Just created a wiki version of my white paper: Communities of Purpose are the Business Units of the 21st Century, in response to a handful of requests and because we can make it better than I did!
Find it here: http://fasterfuture.wetpaint.com
You will need to create an account, just to avoid anonymous editing. I hope you'll join in.

Does your face fit? Business plans and the fitness landscape

The idea of the economy as a complex adaptive system (as popularised by The Origin of Wealth) can be, well, complex.
One of the key learnings, for me at least, is the idea that business plans more often than not fail before they even get to be tested for fitness by the place they are intended for: the market.

In a networked world, you can substitute the term community for market (at least a fully empowered co-creating community, you can).

If the economy is evolutionary then it finds the 'most fit' by a process of selecion, amplification and repetition.
In evolution this happens in the environment. In the economy the environment isn't the boardroom - it is the fitness landscape of the market/community.

It's just another important reason we should find ways to make the silo walls of the company permeable - particularly when it comes to your business plans. Yes, I think that does mean reaching out to the community the plan is meant to serve when it comes to creating it. And letting that community make the selections. You can help with the amplification and repetition.

Actors as business plans.
The adaptability of the plan is also critical. Imagine you're a jobbing actor going from audition to audition. The fitness landscape (the selection process) is the director and his honchos.
If you look right for the part, you get the gig, if you don't, you don't.
The more adaptable you are (the better an actor you are, I guess) the more often you will be able to change your performance to meet the needs of the role. You can shape how well you fit. You learn from the feedback you get, and do more of what got you the gig next time (or less, or try another strategy next time, if you failed).
Selection, amplification and repetition.

If you sit alone talking into the mirror and try to decide for yourself how good you are, all alone, it's unlikely you'll improve. And when you go to that audition the market is more likely to say no.

Has your boardroom got mirrors or open doors?

From fear of the random to joy of complexity

Thanks to a free download over at MobHappy I've been discussing the Black Swan with colleagues.
If you haven't read the Black Swan - go get a free summary download now.
There are similar ideas also to be found in The Origin of Wealth. Simply, big changes are caused by unusual events that no one saw coming.
Confused of Calcutta makes the point in another way today, quoting Howard Schneiderman:

When you turn down a request for funding an R&D project, you are right 90% of the time. That’s a far higher rate of decision accuracy than you get anywhere else, so you do it.

And that’s fine. Except for the 10% of the time you’re wrong. When you’re wrong, you lose the company.

The 'frozen accidents' thesis described in the Origin of Wealth references Annie Oakley. At the end of her sharp-shooting show she would ask for a volunteer from the audience brave enough to let her shoot a cigarette from his (or her, I guess) lips.
Because few would ever be foolhardly enough to risk this, her husband would pose as an audience member, step forward and allow the show-stopping finale to take place.
However, on one occasion Crown Prince Willhelm of Germany confounded the usual routine and stepped forward when a volunteer was called for.
Annie had been on the sauce the night before. Now imagine if her trigger finger had been just a little shaky that day. Potentially world war 1 would never have happened... Germany wouldn't have been defeated, Hitler wouldn't have had a platform to prosper etc etc.

One frozen moment in time, one seemingly random chance, could have gigantic impact.
The difficulty for those of us trying to predict the future, trying to strategise... is that this kind of cause and effect can only be seen when you look backwards.

Derren Brown pulled off a great illustration on his Channel 4 TV series recently. He convinced a group of people he had a fool-proof system for backing the horses. His evidence - the results of his tips so far. The show focused on one woman who had used his system to back six winners on the trot. He now convinced her to gather all the cash she could borrow to back winner number seven.

Only once the bet was placed did he reveal to her how his system worked.

Imagine the speed with which her jaw hit the floor when he revealed that she was simply one of thousands of people who had been recruited for this TV programme. That each time he chose a race with six horses in. He gave one sixth of the group a different horse to back each time. Only 1/6th of the group could be right. The other 5/6ths were thanked for taking part and the remaining 1/6th divided by six once more, and given another tip (each 1/6th getting a different tip) and so on. Only the losers knew the system was flawed. The winners in each round were convinced it was a sure fire hit - and by the time race seven came round there were just a handful of excited punters left.

The fact was they had just got lucky in a random series - and now this last lady was putting her shirt (almost literally) on what amounted to no more than faith in a completely random outcome (in which she had a 5/6 chance of failing).

The Confused of Calcutta example could be seen as applying this to the backing (or otherwise) of R&D projects.

The Black Swan leads us to understand that those who have been stunningly successful in business (Bill Gates for example) do not have a secret we should all follow, instead they were in the right place at the right time to benefit from a series of random events (in Gates case it was the happenstance that IBM wanted an operating system, the people they wanted to work with preferred to go ballooning than meet with them and so Gates and Microsoft got asked as a second choice. Gates didn't even have experience of OS. He licensed someone else's. And in the end his company was worth more than IBM.

This sounds depressing for those trying to predict. And it is if you want certainty in the long run. But the case made by the Origin of Wealth suggests that the best solution is to make your company more able to cope with evolution, more able to evolve.

Rather than random events, The Origin of Wealth suggests that business plans are selected for fitness by the market. This is far from random. But it does involve trying things to see how well they fit the market, and changing them in response to the market. Bill Gates was the right individual to take advantage of the fitness landscape (the market) presented to him.

I would, as you might expect, substitute the word 'community' instead of market.

The Origin of Wealth argues the economy is a complex adaptive system - just as evolution is (it is the daddy of all selective processes). I suggest the web is a complex adaptive system too.
Which is why (as I've said before) we live in an age of the fastest growing company in history (Google). It is the arrival of a system of distribution and value creation (the web) which matches the evolutionary performance of the economy which has enabled this.

The problem for most of us is that company hierarchies and silos stand between our business plans and the community. The fitness of a plan is more often than not judged by the guys saying no 90% of the time (as in the Confused of Calcutta example), rather than the community of people for whom it is intended.

The challenge is to find a way to allow the community/market to make its own selections more of the time. In short, we must find ways to act more like complex adaptive systems ourselves - to enable evolutionary practices and processes.

Do your current processes and systems get in the way, or do they assist in this process?

An example:

A company measured its absence rate. Its overall absence rate had risen. It decided to impose a draconian regime of withdrawl of sickness pay across the board (just to be clear, we're not talking about anyone I work for).

Often our first response is to supply a one-size-fits-all solution. We seem to think it's fairest. Evolution doesn't.

The reality in our example was that the rise in abscence rate was accounted for by a pocket of localised lead-swinging (with most likely a viral effect... some people started taking time off, others locally perceived that as granting permission for them to do likewise). Dealing with the local issue slashed the whole company's over all rate. A fit solution for the particular environment.

Evolution isn't interested in what is fair - it doesn't share out a little bit of death across all organisms, or even across all species in hard times. And it doesn't do half pregnant.

Ready, fire, steer

Twitter is a goldmine sometimes. Luke Razzell of Blogfriends twittered 'Ready, fire, steer' as a strategic metaphor, not 'ready, aim, fire'.
I didn't need the context. It's a model for how non-linear, evolutionary business models have to function - that is - the ones that are the best fit for those two key complex adaptive systems - the web and the economy. Neat metaphor. Thanks Luke.