Esko Kilpi on Interactive Value Creation

The art of interaction, the design of digital and the science of social complexity

Month: January, 2010

Knowledge management and lifestreams

Social sciences are concerned with understanding and representation of what is going on and what has happened.

Earlier, social scientists took great leaders, cultures and social structures as the topics to be explained. The contextual nature of those topics was a less interesting concern. More recent approaches to social phenomena can be summarized as trying to understand temporality and the process of becoming, a live movement in time that either gives rise to viability or makes us slowly, or rapidly, obsolete. How does this happen? How does continuity happen? How does change happen? What creates agility and vitality? The lifestream of individuals and corporations is the new focus area. Lifestreams are also called activity streams. These are voices against the corporate rhetoric stressing the need for continuous reinvention, without any need to respect the past or even know where you come from. Continuity is seen as just the dead form of the past and memories belonging to the private world of old sweethearts and childhood summers.

Memories do matter. Memories are representations of the past that are manifested in the present, sometimes unconsciously, and carried forward into the future.  Accordingly, what is happening as we live on, is forgetting. There are many things and lessons learned that we should not forget. Taking an extreme example: There have been many instances in political history where powerful people have tried to erase the memory of what has happened. This was the case with the Nazis and the case with Stalin re-writing history. In both cases it led to a determined attempt to remember, as a protest, and as means to ensure that such things could never happen again.

In business and management studies, the questions of becoming, remembering and forgetting are not only new concerns. They are the essence of modern knowledge management.

Corporations are outsourcing their activities and downsizing at the same time as the baby boomer generation reaches retirement.  The growing concern is what is lost as a consequence? The statement arousing fear was: “People are walking out of the door and taking their knowledge with them.” The solution to this problem then was: “Let’s extract knowledge from the people and put it in databases. This way the individual knowledge is transformed into corporate knowledge.” This never really worked. It was the doomed dream of the IT-school of knowledge management.

Lifestream is the visualization of progress

There is fear about memory loss in business, but there is also the opposite fear that memory produces practices in the present that should best be forgotten. Anthropologists claim that reproduction of the past is easier than change. This often leads us into situations where the past is no longer an adequate guide in the present, leading to a situation where the knowledge asset turns into a liability.

The location of these assets in the corporate world has been databases and the process of knowledge management has been the production, maintenance and retrieval of written documents. These documents and databases then are the main resources for reflection and re-use. However, “remembering” does not happen until the documents are actually worked with. Files are assets only when used. A book is just a pile of paper before it is opened. Knowledge related practices should therefore be much more in the focus than the form and location of data storage.

Knowledge intensive work takes place in communication. The process of knowing is the process of communication. The most important knowledge management challenge is to understand what takes place in that interaction: what is being discussed? What is not discussed, what is silenced? Who is included in the conversation, who is excluded? The most important measurements are how the common narrative develops, how fast, and where to? An organization should be seen as a pattern in time, a lifestream, a continuing story without beginnings. Everything we do is built on what has happened before.

New people join this narrative and people leave. Work is dynamic participation and influencing how the story develops towards the future. Without understanding where we come from, our history, it is impossible to know whether we move at all, whether the flurry of daily activities is actually keeping us stuck in repetitive patterns without any progress. The same people having the same conversation again and again, as seems to be the case in politics today.

Our past, together with our intentions for the future are present in the daily, mundane actions and interactions that often pass without notice. Lifestream is the ongoing storyline.

Lifestream is the means for pattern recognition to help create the future we truly desire.


Thanks @chrismessina for your thoughts.

Transforming Ideas to Customer Value

Economic growth is about value added. In manufacturing it was adding value as a transformation process from physical raw materials to physical goods. Economic growth today is still about value added. The difference is that the generic, homogeneous raw materials of the industrial era, are unique ideas in the creative economy. The transformation process is also a very different kind of a process than in the past. The industrial process was a linear, sequential chain of predictable acts. In creative work, it is a non-linear, iterative, unpredictable, complex movement of thought.

The worlds of manufacturing-based added value and ideas-based added value require very different thinking and skills. In the creativity-based world we live in, it is not about reductionist job roles and narrow, clear responsibilities any more. Everybody needs to to take part in the onward movement of thinking. You have to know what the live, future-creating ideas are and how to take part in the conversations in a value-adding way. This is independent of what you do, or the organizational unit you belong to.

Economic success in creative work is the result of the inspiration, energy and interest you create, the cool factor; to fail is to find no one interested in what you try to achieve. Successful ideas and arguments are the one’s that capture people’s attention. Paradoxically you always need people who agree, but equally, you need people who don’t think like you. Thinking develops best through friction, argumentation and negotiation.

Ideas-based value added is interaction that is always based on working with differences. The requirement for efficient work is thus not necessarily to have common goals or to reach agreements. Thinking always clusters, in synchronous groups, but more importantly, asynchronously, over time. A person with an idea worth pursuing will give rise to an interaction chain in time, held together in comparable chains of supporters and opponents. The new management task is to understand (1) the speed of the movement of thought (2) what is being discussed, (3) the quality and cool factor of that conversation, and (4) how ideas actually develop towards (customer) value. Thinking does not take place inside independent people but in rich, continuous interaction. The richer the interaction, the more economic value added is potentially created.

Firms are formed and networked links initiated around exciting new thoughts. The onward movement of thinking occupies the most limited and important things there is: our focus. What we focus on, is called our attention space.

The attention space is the new metaphor for the industrial process and the corporate office. It is a “place of the mind”. It is an expression of focus and the live movement of our thinking. For an entrepreneur or a start up, it is always the most important real-time measurement of what is actually going on. The driving force behind power and change is competition for room in this space. The role of leadership is to influence the conversations occupying the attention space, the mind of the organization.

The management task is to enhance the speed of the interactive movement of thought, expressed as the entrepreneurial capacity for transforming ideas into customer value.


Networked knowledge requires new habits of participation and new habits of communication

Most of the information on the Internet is worthless to the majority of people. This obscures the transformative change going on at the moment. People are storing less and less information “inside”, inside computers, in private folders or in their memory because there is a new, better alternative: in the always on, always connected world, information is available “outside” on the Internet, more easily and more cheaply, with considerably smaller search costs. This is causing a fundamental shift in the way we manage information, use our ICT tools, or understand the competencies needed in the knowledge-intensive economy.

Before the Internet and efficient mobile communication devices, most professional occupations required individual competencies that in most cases had accumulated over years. This experience base, often called tacit knowledge, was used to retrieve answers from memory and to independently solve situations arising at work. Knowledge was situated in the individual. In order to help individuals cope with the challenges of everyday life, individual competencies needed to be developed. Our whole education system is still very largely based on independent individual learning and knowing.

The cognitive load of work has increased as a result of manufacturing giving way to knowledge-intensive work. As a consequence, the content of work is changing from generic, repetitive practices to contextual, creative practices. This makes the individual experience base, by default, too narrow a starting point for efficient work. Experiences can be a huge asset but experiences can also be a liability, creating recurrence where there should be innovation. Knowledge work is not performed by independent individuals but by interdependent people in interaction. A new way to understanding work and competencies is unfolding: many knowledge workers claim that today they can know, on demand, by communicating with their network and retrieving answers from the Internet, more easily than from their own “inside” sources.

Knowledge used to be understood as the internal property of an individual. Today knowledge should be seen as networked communication. This requires us to learn new ways of talking about education, competencies and work itself. What is also needed is to unlearn the reductionist organizing principles that are still the mainstream. Work is communication and the network is the amplifier of knowledge.

The process of communication is the process of knowing. You can only know what you are doing in conversation. If we want to influence the process of knowing we need to develop new habits of participation and new habits of communication. This is what the new interaction technologies and tools allow us to do. This is also where agile practices impact on knowledge work in a similar way to that in which lean practices impacted on manufacturing. The creation of new habits of agile participation and new habits of communication is the primary focus of my research and my practice.


Thank you Doug Griffin for thinking and working on this with me.

A temporal pattern of networked intellect

Charles Darwin is reported to have written 15.000 letters during his career. The case of Charles D becomes interesting if we assume that he received roughly the same number of letters as he sent. Think about the time he spent reading and writing; think about the time he spent networking.  Would we have advised Charles to limit his time spent on social media and stick to his productive work? Perhaps not.

The history lessons taught in schools and leadership case studies taught in management education classes see the properties and ideas of particular persons as the drivers of the events that unfold in the world. Even today, this reinforces the common notion that history is made by outstanding individuals. But is it really so that if Newton had never been born, we would still be ignorant about gravitation?

The question we should ask is whether the great man theory of innovation, science and business really helps us to understand the world? Alfred Wallace, the British explorer and anthropologist published his version of the theory of natural selection at the same time as Darwin, or, as many claim, before him. Wallace had an impact on Darwin and among other things, prompted him to publish his work.

The interesting thing here is that a great idea matured in different places roughly at the same time.

However, the idea had a history. Both Wallace and Darwin based their studies on earlier work by the Augustinian priest and scientist Gregor Mendel. To be really fair, we should of course continue the chain and know who the nodes in the network were well before Mendel? So instead of talking about Darwinian evolution, we should really call it Darwinian-Wallacian-Mendelian-and-the-scientists-before-them, evolution!

People have always networked. Before the time of universities scholars depended largely on correspondence networks for the exchange of ideas. These communities, known as the Republic of Letters were the social media of the era, following the communication patterns of today astonishingly closely. Many researchers claim that one of the key success factors in science is the network of the scientist. This was also the case with Darwin. Historians claim that Darwin’s network was the decisive thing that tilted the focus towards him and not towards Wallace.

The better-networked scientist is the better scientist. The better-networked knowledge worker is the better knowledge worker. The better-networked student is the better student.

The main difference from the time of Charles Darwin is the efficiency of our tools for networking, meaning thinking together.

This is what Darwin used letters for, to think together with his network of contacts.  Over 6000 of those letters can be studied today at the Darwin Correspondence Project web pages. What is similar to the social media of today is the many casual, almost intimate letters Darwin sent, reflecting his own life and the life around him. Darwin did not make a distinction between his professional life and his private life in his approach to communication with his network. Perhaps we shouldn’t either.

A “man of letters” may today be a man of tweets, blog posts and Facebook, but the principle is the same: the size and quality of the network matters. What matters even more than the network, is networking, the way we use the network. In trying to understand what is going on, we should shift our focus from independent events and independent heroic people to networked temporality.  Even more than understanding networking, we should acknowledge the inherently creative commons nature of thinking and all development. Life is a temporal pattern of emotional and intellectual interaction.

We are our interaction.

The agile organization

The management approach to getting something done is to create an organization. If something new and different needs to be done, a new and different kind of organizational form needs to be put into effect. Changing the lines of accountability and reporting is the epitome of change in firms. When a new manager enters the picture, the organizational outline is very often changed into a “new” organization. But does changing the organization really change what is done? Does the change actually change anything?

An organization is metaphorically a picture of walls defining who is inside and who is outside a particular box. Who is included and who is excluded. Who we are and who they are. This way of thinking was fine in repetitive work where it was relatively easy to define what needed to be done and by whom as a definition of the quantity of labour and quality of capabilities. As a result, communication design created two things: the process chart and reporting lines.

In creative, knowledge based work it is increasingly difficult to know the best mix of capabilities and tasks in advance. In many firms reporting routines are the least important part of communication. Much more flexibility than the process maps allow is needed. Interdependence between peers involves, almost by default, crossing boundaries. The walls seem to be in the wrong position or in the way making work harder to do. What then is the use of the organizational theatre when it is literally impossible to define the “organization” before we actually do something?

What if the organization really should be an ongoing process of emergent self-organizing? Instead of thinking about the organization let’s think about organizing. If we take this view we don’t think about walls but we think about what we do and how groups are formed around what is actually going on or what should be going on. The role of management is then to define tasks and outcomes but not to say who does what. The new task for managers is to make possible a very easy and very fast emergent formation of groups and to make it as easy as possible for the best contributions from the whole network to find the applicable tasks, without knowing beforehand who knows.

The focal point in organizing is not the organizational entity one belongs to, or the manager one reports to, but the reason that brings people together. What contexts, activities and tasks unite us? What is the cause for interdependence and group formation? I like the mental picture of an organization without walls, rather like magnetic fields defined by gradually fading rings of attraction.

These contexts create transparent, permeable boundaries between them, not walls. Instead of the topology or organizational boxes that are often the visual representation of work, the architecture of work is a live social graph of interdependence and accountability. Our thinking about organizations is very much based on the old expensive and low-quality communication. The reality today is very different. Communication as the key driver in organizing is both high-quality and cheap. One of the biggest promises of social media is easy and efficient group formation!  It is just our thinking that is in the way of bringing down the walls.


Mobile phones, high definition and complexity

The future for mobile phone companies and telecoms industries lies in leveraging HD-audio and HD-video as the new primary media for knowledge work. The implementation of high-definition voice and high-definition video utilizing mobile broadband and mobile handsets is going to make the mobile phone a useful alternative in contexts that presently require getting together in a meeting room. I believe that voice and video derivatives for many to many communication are going to be the main ingredients of the office suites of tomorrow. The computing power of a modern high-end mobile phone makes it a viable alternative to a laptop as the primary tool of a knowledge worker. A mobile phones is no longer a phone. It’s now a mobile, internet-enabled device that also (occasionally) works as a phone.

There is a change going on at the moment from document centric thinking to communications centric thinking. It is only one of the results of the newer findings derived from the sciences of complexity. Organizations are about complex, wide-area interactions. The scientific modeling of these interactions demonstrates the possibility that efficient local communication between large numbers of people, with each participant responding to others on the basis of her own local goals and organizing principles, can produce coherent patterns on the global, organizational level.

The process of richly connected interaction has the capacity to produce coherence in itself, without organization-level goals and process maps. This suggests that high-quality interaction is sufficient to create coherent actions and development. The approach sees the organization as a process of ongoing organizing and construction of the future with the potential for both continuity and transformation at the same time.  More interaction and more divergent and richer local interaction increase the potential for novelty just as repetitive, narrow communication keeps people stuck.

The criticism of mediated interaction has been based on the fact that people communicate with each other not only with words, but through a conversation of gestures: movement, tone of voice and visual representation. This can be achieved through HD-video utilizing mobile devices in a much more efficient and faster manner than through high transaction cost office practices and document-centricity. The knowledge-based organization is a responsive, temporal process of iterations in continuous cycles of interaction. To enable this, IT today should not stand for information technologies but interaction technologies.

All conversations involve more than information; communication is full of feelings. When we communicate we share feelings much more than we share information. With the new HD and mobile approaches to communication these feelings can be as alive in mediated communication as in face-to-face interaction.

Akram Khan and Sylvie Guillem

Paul Cézanne once wrote that beauty in art is not created by the objects that are represented but by the relationships of line and colour. Relationships create tensions: tensions between line and colour, artistic perfection and “émerveillement”, meaning being enchanted like only a child can. Rigidity and fluidity. Shiva and Krishna. Kathak dance and classical ballet, and especially Akram Khan and Sylvie Guillem. To me, Akram Khan is the most gifted choreographer and dancer of his generation. Sylvie Guillem is perhaps the world’s most celebrated ballerina today.

An evening at the Finnish National Opera provided all this. “Sacred Monsters” was the meeting of two superstars (sacred monsters) and two dance forms, two different vocabularies. It was interesting to compare the speech vocabulary with the dance vocabulary: Khan a bit flippantly worrying about losing his hair, Guillem casually reflecting on learning Italian from children’s cartoons. And then the superb dance vocabulary of Khan’s fluid Kathak beat, combined with Guillem’s beauty and balance. Wonderful moments that perhaps only these two dancers can achieve: Guillem with her feet locked behind Khan’s back, leaning back, with both their arms in a flowing wave. A remarkable combination of strength and poetry.

Akram Khan, speaking about this project, said: “I have spent my life studying and performing Kathak (the ancient North Indian dance tradition). It is the source of my creative process. Working with Sylvie Guillem is an exciting new challenge, giving me the opportunity to explore another classical dance language with one of its greatest practitioners, and as a result, creating a situation that will unearth the things that are most often lost between the old and modern world.” When Khan and Guillem danced side by side, it was interesting to note that I was often drawn to Khan’s dance rather than to Guillem’s, despite her beauty and grace. Is it a reminder that elsewhere too, there is inspiration, energy and richness in the things we forget – the sources of our creative process?

Crowdsourcing and the theory of the firm

A firm is normally seen as an entity that is separate from its members. After specific financial investments have been made, the firm is defined by the ownership of the physical assets and the power that the people who made these investments have. The owners choose their representatives, who choose the managers, who act as the “agents” of the “principals”/the owners. The managers then choose the workers. The most important role for the agents/managers is to serve the interest of the owners, the people who made the financial investment.

As a result of this model, the relationship between the company and the contributors of financial capital is very different from the relationship between the company and the employees. Employees are seen as a resource, although a human resource, thus differentiating human beings from other resources serving the value chain. The role of the employee/resource is derived from the value chain architecture. The management target here is a close fit between the skill set of the employee, the job role description and the value chain. Because of this close fit, when major changes are planned to the value chain, it is more often good news for the investors than for the employees.

The system of selling and buying people in large chunks as a result of management decisions about doing it inside the organization or outsourcing is today explained as cost saving. In the 17th century the very same system of selling and buying large chunks of people was called slavery.

The modern firm has developed into a perfect vehicle for financial contributions and as a toolkit serves the needs of financial investors well, at least in good times. As creativity and knowledge define success today, access to capabilities is as important for a firm as access to money. But, what if people mattered even more than money? What if it is going to get harder in the future to get knowledge workers’ contributions than to get financial investors’ contributions?

Should firms serve ideas and creativity more than they serve money?

Is the way we think about firms helping us to meet the challenge of the future or is the mainstream theory of the firm an obstacle for us? Firms are social and legal constructs. They are what we think firms are. Should we renew our old social construct of the firm being based on mass production and high capital costs to a newer version, a knowledge- and innovation-based view of the firm?

In the knowledge-based world we live in today, a knowledge worker is a knowledge worker because of a particular experience base. Being able to do knowledge work requires learning, very often a lot of learning, for a long time. Thus the capabilities of a knowledge worker can be seen as resembling accumulated capital, following the same kind of logic as we use when we speak about the accumulation of financial capital. However, I use the term “human capital” here only as a metaphor in describing the new relationship between a firm and its employees. Skills are very different from money. Knowledge work is always contextual. It matters who does what and with whom. The skills of knowledge workers thus cannot be seen as homogeneous resources or as generalized labor. Knowledge work involves specific contributions to specific tasks.

The knowledge-based view understands firms as contextual interaction, rather than seeing them as entities outside of that interaction. Neither is it helpful to prioritize financial investments above human capital investments in the future.  The knowledge-based view sees firms as continually evolving live networks of investments and interaction

Knowledge work is not job roles, but task specific contributions

A knowledge worker is thus always an investor. This means that in practice that we should not talk any more about the employer – employee relationship, when talking about knowledge work. Instead, it is an investment – investor relationship.

The challenge for the firm is to be inviting to as many contributions/investments, as possible, from as many people as possible. Another difference from the industrial model is the growing need to cross organizational and geographic borders when trying to optimally match tasks and skilled contributions. The basic logic of creative work is thus Internet-based global crowdsourcing.

The firm of the future may be 10.000.000 people working together for ten minutes.

Crowdsourcing is not about the company consuming the information outsiders produce. By communicating and creating more relationships, the networked business increases its intellectual capital as the nodes of the network do the same. The network acts as an amplifier of knowledge. The challenge for the knowledge worker is to take responsibility for the value and growth of her human capital and to plan her investment portfolio carefully. Work should always equal learning. As work requires interaction between people who need each other according to the context and the task, taking responsibility for human capital also requires taking responsibility for the value and growth of the human network.



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