February 23, 2012
The nature of the relationship between customers and firms has changed dramatically. For over a hundred years, companies have assumed that consumers are an undifferentiated mass. Lately, we have moved through different degrees of market segmentation. Today, we have reached a point where the latest interaction technologies are creating an entirely new dynamic between the firm and the people we used to call consumers. Tomorrow firms will compete in making unique customer experiences possible.
The traditional approach was that the firm created value and then exchanged it with its customers. This firm-centric view of value creation is now being replaced by customers’ contextual experiences and co-created value. Value is created in interaction, but outside the corporate firewall. Even if a company is dealing with a very, very large number of customers, the firm must focus on one customer at a time.
We are in a world in which value is determined by co-created experiences – all a bit alike but all a bit different.
During the still (mentally) prevailing industrial era, most firms were vertically integrated. It was only around twenty-something years ago that firms started to source components from outside, from suppliers on a large scale. Today it is natural to rely on global supply chains. This is because the business goal is to access the most competent, knowledgeable sources and paradoxically, at the same time the lowest-cost producers. Access to resources and resource allocation is today by default multi-vendor, crowdsourced and global.
The changing relationships with customers and vendors are the main drivers behind the new ecosystems for communication and participation.
These trends also explain the situation we are in at the moment. The network is the architecture of work. People need to communicate and participate in order to invite contributions and to co-create unique experiences. It is about the relational view. It is not necessary to own the contributing parties. Capacity to connect and cooperate is what is needed. Cooperation is the new competition.
The world we live in today is in many ways the polar opposite of what we have been used to. The management challenge in the era of social media is to invite and combine the contributions of many in order to participate with one (at a time).
Thank you C K
Filed in Complexity, Interactive, iterative value creation, New work, Social Web / Social Media
Tags: Agile, C K Prahalad, Crowdsourcing, generic product, global supply chains, Human capital, interaction technologies, Interactive value creation, Internet, Iterative work, market segmentation, Participation, Self-organizing, Social business, Social Network, Social Web / Social Media, Transaction costs
February 19, 2012
Gregory Bateson argued that humankind’s fall from grace began through separations such as separating the self from the other, separating thought from emotion, separating the sacred from the secular and separating the subject from the object.
Today, there is new thinking that is based on the very latest findings in the sciences of complexity and sociology. These new approaches define a participative, relational perspective: we should speak about subjects interacting with others in the co-evolution of a jointly constructed reality.
In mainstream thinking, managers are understood as the prime originators of what happens in their businesses. The central concern is how the manager/subject gets the follower/object to act in ways that reflect the manager’s perspective. Management continues to see relationships in terms of influence and manipulation. The manager’s perspective is taken for granted in terms of what the facts are, and what is true or false. Employees are treated as instruments. They are less active and less knowledgeable although they can be sources of information for the manager.
In identifying management with science, two concepts were imported, which we now take so much for granted that we hardly notice them. There is the assumption of the autonomous, rational individual which corresponds with the atomistic view of society and the objectification of nature. The second concept that is imported into management is that of the objective observer who identifies causality and tests hypotheses like visions and goals based on these identifications. The objective observer is detached from the phenomena being studied. When this idea is imported into theories of organization, the manager is the objective observer who is supposed to act upon rationally formulated hypotheses about organizational success.
These assumptions have created the still prevailing subject-object understanding of organizational relationships. When a person is understood as a knowing individual she is being viewed as a subject, distinct from others, the objects. Relations are considered from the point of view of the subject and are instrumental in nature.
The social business/relational perspective to management views life and knowing from a different point of view: knowledge is socially constructed. Knowledge is not stuff accumulated and stored by individuals. Contextual interpretation takes the place of the objective fact. When knowledge and truth are viewed as social and temporary then constructions of what we call understanding or knowledge are always a part of what is going on.
Whether the social process is called leadership, management, networking, or communication, knowing is an ongoing process of relating. Social media best produce connectedness and interdependence as processes that construct collective authority and responsibility. Social media are most meaningful when giving voice to multiple perspectives, making it possible to seek out, recognize and respect differences as different but equal. Accordingly, reality in science is no longer viewed as a singular fact of nature but as multiple and socially constructed as David Weinberger writes in his newest book: “Too Big to Know”.
In a relational model identity is constructed from being in relationships, being connected, as contrasted with the mainstream view of identity through separation. Knowledge of self and the other thus becomes viewed as co-constructed.
The relational view sees networking and social media as conversational processes of meaning making. Here, people who network may be regarded as seeking to understand the meanings of the others’ contributions. To do so, they would have to give up the assumption that they and others necessarily mean the same thing by the same terms or expressions. A manager, when networking, would be asking questions that invite others to make explicit what is usually left tacit. In the end it is a process of movement of thought on the basis of multiple perspectives.
For Bateson and many others, re-engagement is essential for recovering wisdom and long-term vitality. This requires re-connecting with participative ways of knowing, with others as part of the self.
Thank you Gregory Bateson, Doug Griffin, Ralph Stacey, Kenneth Gergen, David Weinberger and Katri Saarikivi
Filed in Interactive, iterative value creation, New work, Social Web / Social Media
Tags: Activity streams, Communication patterns, Complexity, David Weinberger, Doug Griffin, Emergence, George Herbert Mead, gregory bateson, Hegel, Kenneth Gergen, leadership management, Ralph Stacey, Self-organizing, Social business, Social Media Strategy, Social Network, Social Web / Social Media
January 29, 2012
When we think about business structures, many of us picture an organizational chart or the layout of an office building. A structure often refers to the physical arrangement of things, the parts making the whole. What we have missed so far is an understanding of the business structures that can foster faster learning and help us work better with information. Conventional structures don’t address knowledge-related challenges as effectively as they do problems of measuring input and output or accountability.
What social media have helped us to do is to link and coordinate unconnected activities or initiatives addressing a similar information domain. There have also been great successes in diagnosing recurring business problems whose root causes cross unit boundaries. We know that the problems we face today are too complex to be managed by one person or one unit. It requires more than one brain, one point of view, to solve them.
Sharing a practice or sharing an information domain requires regular interaction. Work is interaction and the new business structures should be built on interdependence and communication.
Almost all business communities started among people who worked at the same place or lived nearby. But co-location is not necessary any more. The Internet has changed that. Interdependent people forming a community can be distributed over wide areas. What then allows people to work together is not the choice of a specific form of communication, face-to-face as opposed to email or social platforms, but the existence of a shared practice, a common set of situations. What lies at the core of those situations is the need for different perspectives requiring interaction.
When you design for live interaction, you cannot dictate it. You cannot design it in the traditional sense of specifying a structure or a process and then implementing it. As many have experienced, communities seldom grow beyond the group that initiated the conversation, because they fail to attract enough participants. Many business communities also fall apart soon after their launch because they don’t have the energy to sustain themselves.
Communities, unlike business units need to continuously invite the interaction that makes them alive.
Community design is closer to iterative learning than traditional organizational design. Live communities reflect and redesign themselves throughout their life cycle. The design should always start with very light structures and very few elements.
What is also different is that good community architecture invites many kinds of participation. We used to think that we should encourage all the community members to participate equally. Now we know that a large portion of the network members are and should be peripheral. In a traditional meeting we would consider this type of participation half-hearted, but in a network a large portion of the members are always peripheral and rarely contribute. Because the boundaries of a live community are always fluid, even those on the outer edges can become involved for a time as the focus shifts to their area of particular interest.
Because conversations and communities need to be alive to create value, we need an approach to management that appreciates passion, relationships and voluntary participation. Rather than focusing on accountability, community design should concentrate on energizing, enriching participation.
The new structures and new designs are about communities continuously organizing themselves around shared information, shared interests and shared practices. Business is about doing meaningful things with meaningful people in a meaningful way.
More: “Lead like the great conductors“
Filed in Design, Digital work, Interactive, iterative value creation, New work, Social Web / Social Media
Tags: Agile, Architecture of work, Communication patterns, conventional structures, cross unit, David Weinberger, Digital work, Emergence, Esa Saarinen, information domain, Interactive value creation, Internet, Iterative work, Knowledge management, live interaction, Network, Organizing, Participation, Self-organizing, Social business, unit boundaries
December 31, 2011
I have recently heard people say: “I have a great job.”; “I love what I am doing here.”; “He did it in a beautiful way.”; “I work in lovely surroundings.”; “I work with nice people.” Conventional analysis of organizations is dominated by a rational tradition that ignores aesthetics, yet life is pervaded with beauty as these people proved.
Aesthetic considerations can sometimes be of decisive importance. Apple products and the Nokia N9 attract people the same way that the theory of Einstein attracts scientists – by virtue of their sheer elegance.
Organizations are social constructs. They are nothing but constructs to which people are drawn in pursuit of some purpose. Healthy organizations are a concept of relationships to which people are drawn by beauty, values and meaning, along with the freedom to pursue them cooperatively. Healthy organizations enable more than constrain.
Unhealthy organizations are a concept of relationships into which people are forced by birth, necessity or manipulation. Unhealthy organizations constrain more than they enable.
The concept of the social organization has intensified the debate as to whether competition or cooperation should rule in business. But competition and cooperation are not mutually contradictory. In the new design of work they don’t have opposite meanings. They need to be complementary. In every aspect of a healthy life we paradoxically do both at the same time. No successful social endeavor has existed without combining the two.
But sometimes things have not worked out.
The idea of cooperation went mad in socialism leading to an unhealthy and false pursuit of equality and left us with centralized, totalitarian governments enslaving their own citizens. Competition has also gone mad in many capitalist countries, which has led to mindless self-interest and left us now to cope with the results of the irresponsible abuse of people and natural resources.
We need new thinking beyond the old dichotomy: The political left lacks any convincing narrative in the post-socialist world. The right tells a story in which greed is the dominant human motivation and markets actually mean gambling.
The Internet era has proven that we are capable of working together competitively/cooperatively and building social communities that some time ago many would have dismissed as impossible dreams. Thus we don’t yet have a good idea of what cannot be done by connected people working together in new ways. Changes in existing organizations and the evolution of new ones will have characteristics in common. Just as natural systems like the human body are not vertical hierarchies with each part superior to another in ascending linear order, neither will organizations of the future be structured that way. This is not to say that all present industrial organizations are doomed but the models we use to describe the world around us are.
We need a new vocabulary beyond the models of industrial production and separatist, mechanistic concepts of a corporation.
The emerging organizations cannot be portrayed in two dimensions on a traditional organizational chart. They are closer to the networked organization of neurons in the brain. Yet, even these dimensions are not enough without the aesthetic dimension of doing a beautiful work.
The next challenge is to design a beautiful business.
Happy, Beautiful New Year!
Thank you Dee Hock and Thomas Kuhn.
December 23, 2011
2011 was a year of major breakthroughs. The creative economy is here and looks very different from what we have been used to. I try to sum up some of the most important findings of the year.
The industrial logic was most vividly captured in the idea of the value chain. Value creating activities were sequential, unidirectional and linear. In the model, value was not really created but added step by step. The output of one task was the input of another. The image of work was the assembly line, meaning that work could be fragmented and individual performance goals could be set for each worker. The world was all about people and boxes separated from one another.
Physical tasks can be broken up in a reductionist way. Bigger tasks can be divided by assigning people to different smaller parts of the whole. For intellectual tasks, it is much harder to find parts that make for an efficient division of labour. Intellectual tasks are by default linked and complex.
Reductionism does not work any more.
Knowledge workers are often put in a position where they have to negotiate some understanding of what they face. The same event means different things to different people. The cognitive opportunity lies in the fact that as we don’t all select the same things, we don’t all miss the same things. If we can pool our insights in a creative, enriching way we can thrive in the complex world we live in. The challenge is that people often treat the existence of multiple views as a symptom of a weakness and conflict rather than as an accurate and needed sign of uncertainty.
Social interactions also play a role in shaping our brain. Repeated experiences sculpt the synaptic connections and rewire the brain. Accordingly, our relationships gradually frame the neural circuitry. Being chronically depressed by others or being emotionally nourished and enriched has lifelong impacts. Our mental life is co-created in an interconnected network. The human mind is not located and stored in an individual. Rather, what we have called the individual mind is something that arises continuously in relationships between people.
Supportive, energizing and enabling patterns of interaction have proven to be the most important explanation behind creativity and business success. The quality of action is always constrained/enabled by the quality of the interaction. The lines between the boxes matter more than the boxes! Communication either accelerates or slows down. Communication either creates value or creates waste. Communication either creates energy and inspiration or demeans and demotivates.
Communication forms much more than informs.
What is now needed is to unlearn the reductionist organizing principles that are still the mainstream. Knowledge used to be understood as the internal property of an individual. Today knowledge should be seen as networked communication.
Work is interaction between interdependent people and the network is the amplifier, and at best a supportive and enriching enabler.
Filed in Digital work, Interactive, iterative value creation, New work
Tags: Architecture of work, Communication patterns, Complexity, David Weinberger, Doug Griffin, Elinor Ostrom, Esa Saarinen, George Herbert Mead, Kenneth Gergen, Marcial Losada, Pekka Himanen, Ralph Stacey, Self-organizing, Social Network, Yochai Benkler
November 26, 2011
Cathy N. Davidson has studied the way we make sense and think. Her claim is that we often end with problems when we tackle important issues together. This happens “not because the other side is wrong but because both sides are right in what they see, but neither can see what the other does”. In normal daily conditions, it may be that we don’t even know that other perspectives other than our own exist. We believe we see the whole picture from our point of view and have all the facts. Focus however means selection and selection means blind spots leading to (attention) blindness. We have a partial view that we take as the full picture.
This is one of the reasons why people in companies are often stuck in narrow, repetitive and negative patterns that provide them with numbing, repressive and even neurotic experiences.
The opportunity provided by social tools lies in the widening and deepening of communication, leading to new voices taking part and new conversations that cross organizational units and stale process charts.
According to Cathy Davidson, attention blindness is the fundamental structuring principle of the brain. Attention blindness is also the fundamental structuring principle of our organizations and our political system. We see and understand things selectively.
Knowing in the brain is a set of neural connections that correspond to our patterns of communication. The challenge is to see the filters and linkages as communication patterns that either keep us stuck or open up new possibilities.
The opportunity lies in the fact that as we don’t all select the same things, we don’t all miss the same things. If we can pool our insights we can thrive in the complex world we live in. In this way of thinking, we leave behind the notion of the self-governing, independent individual for a different notion, of interdependent people whose identities are established in interaction with each other.
From this perspective, individual change cannot be separated from changes in the groups to which an individual belongs. And changes in the groups don’t take place without the individuals changing.
Our attention is a result of the filters we use. These filters can be a mix of habits, company processes, organizational charts or tools. Increasingly these filters are social. They are the people we recognize as experts. Our most valuable guides to useful bits of insight are trusted people whose activities we can follow in real time to help us enrich our views.
Management research has focused on the leadership attributes of an individual. Leading and following in the traditional corporate sense have seen the leader making people follow him through motivation and rewards. The leader also decided who the followers should be.
Leading and following when seen as a relationship, not as attributes of individuals, have a very different dynamic. Leading in this new sense is not position-based, but recognition-based. People, the followers, also decide. The leader is someone people trust to be at the forefront in an area, which is temporally meaningful for them.
People recognize as the leader someone who inspires, energizes and empowers them.
Another huge difference from traditional management is that because of the diversity of contexts people link to, there can never be just one boss. Thus, an individual always has many “leaders” that she follows. You might even claim that from the point of view taken here, it is highly problematic if a person only has one leader. It would mean attention blindness as a default state.
We are now at the very beginning of understanding leadership in the new contextual, temporal framework. The relational processes of leading and following should be seen as temporary, responsive activity streams, not only on the Internet but also inside companies. They are manifested as internal (Twitter) feeds, (Facebook) updates and blog posts from the people you associate with.
Richer, more challenging, more exploratory conversations leave people feeling more alive, more inspired and capable of far more creative and effective action.
Thank you Cathy N. Davidson and Doug Griffin
Filed in Complexity, Design, Interactive, iterative value creation
Tags: Activity streams, Cathy N. Davidson, Communication patterns, Complexity, Doug Griffin, Facebook, Interactive value creation, Internet, Knowledge management, Organizing, Participation, Self-organizing, Social business, Twitter
November 20, 2011
“In the future, when the history of our time is written from a long-term perspective, it may be that the most important things historians will see are not technological advancements or the Internet, but the fact that for the first time a substantial and rapidly growing number of people had choices.” (Peter Drucker)
The industrial age was about limiting the scope of choices. This was accepted since the need to gather costly information and to communicate with low quality tools was minimized. Furthermore, as the scope of decision-making and action was narrowed, the learning requirements for workers and customers were limited, reducing the transaction costs of work. The efficiency contribution of mass production was in fact derived from these lower information- and communication-related costs.
Today, in contrast to people being content with limited choices, offerings need to be created to meet diverse, unique requirements.
For knowledge workers and customers the task of gaining the input needed for these situations is creating an entirely new environment. Creative learning is becoming the fundamental activity. It is not about consuming pre-determined content, passing tests or something with beginnings and ends. Learning is continuous transformation. It is the foundation for creative action. The ability to meet the needs of a situation better can only exist partially prior to the live moment. You can never be fully prepared in advance: success depends on how you are present and how you communicate.
What gives the edge is not what is already known by the individual, as much as the ability to solve problems that require real-time learning through live interaction. In increasingly complex environments learning curricula cannot be effectively designed beforehand. Needs and also solutions emerge responsively.
This view focuses attention on the way everyday conversations between people create the future. Organizations are self-organizing patterns of participation and communication through which coherent action and innovation emerge.
The concept of the social business builds on an agile, iterative framework. Learning is not related to meeting the requirements set by someone else, but is motivated and expressed through personal situational needs and aspirations. The idea of interactive competence also reflects the radical change in thinking that is going on. We are leaving behind the Western preoccupation with the autonomous individual and beginning to appreciate the importance of social processes and interdependence.
This understanding of competence suggests that the capability to act is a social process. The primary learning asset for a knowledge worker is interactive, reflective practice. The network is also a means for signalling: making one’s own learning visible not only to oneself, but also to others, thus creating a platform for comments, conversation, and even formal accreditation.
Learning happens in interaction between interdependent people. Competence, the ability to act more purposefully is the emergent phenomena resulting from that interaction. People are simultaneously forming and being formed by each other at the same time – all the time.
Thank you Riel Miller, Doug Griffin, Stephen Downes, Kenneth Gergen and Ralph Stacey
November 13, 2011
Technology does not determine social and organizational change, but it does create new opportunity spaces for social innovations like new employment forms. Partial employment for young unemployed people is becoming much easier than before, and truly global task-based work is becoming possible, perhaps for the first time in history.
The opportunity today is in new relational forms that don’t mimic the governance models of industrial, hierarchical firms. We are already witnessing the rise of very large-scale efforts that create tremendous value in a very new way. Coordinated value in the cases of helping Haiti or building Wikipedia type of platforms is the result of uncoordinated actions by a large number of individuals. People with different goals, different values and different motivations take part and co-create together.
The characteristics of the network economy are different from what we are used to: the industrial production of physical goods was financial capital-intensive, leading to centralized management and manufacturing facilities where you needed to be at during predetermined hours. The industrial era also created the shareholder capitalism we now experience. Having a great idea, or simply wanting to do something, was not enough to get one going. You needed a lot of money. In the network economy, individuals, interacting with each other by utilizing free or low cost social platforms and relatively cheap mobile, smart devices, can now create information products.
The production of information goods requires more human capital than financial capital. It is more about connecting with brains than connecting with money. And the good news is that you are not limited to the local supply. Work on information products does not need to be co-located. The architecture of work does not resemble a factory any more.
This is why decentralized action plays a much more important role today than ever before. The architecture of work is the network and the basic unit of work is not a process or a job role but a task.
Our management and organizational thinking is derived from the era of tangible goods production and high-cost/low-quality communications. These mindsets are not helpful in a world of widely distributed ownership of means of production/smart devices and ubiquitous connectivity.
“A corporation/employer exists to make money and the employee goes to work for the employer to make money.” Almost all economic theories have made the same assumption: the employer – employee relationship is necessary to make work possible.
We have taken that relationship as given. The other taken for granted assumption is that it is the independent employer/manager who exercises freedom of choice in choosing the goals and designing the rules that the members of the organization are to follow. The employees of the organization are not seen autonomous, with a choice of their own, but are seen as rule-following, dependent entities. People are resources.
Dependence is the opposite of taking responsibility. It is getting the daily tasks that are given to you done, or at least out of the way. We are as used to the employer choosing the work objectives as we are used to the teacher choosing the learning objectives. The manager directs the way in which the employee engages with work, and manages the timing and duration of the work. This image of work is easy to grasp because it has been taught at school where the model is the same.
In contrast to the above, digital work has brought about circumstances in which the employee in effect chooses the purpose of work, voluntarily selects the tasks, determines the modes and timing of engagement, and designs the outcomes. The worker here might be said to be largely independent of some other person’s management, but is in effect interdependent. Interdependence here means that the worker is free to choose what tasks to take up, and when to take them up, but is not independent in the sense that she would not need to make the choice.
The interdependent, task-based worker negotiates her work based on her own purposes, not the goals of somebody else, and chooses her fellow workers based on her network, not a given organization. The aim is to do meaningful things with meaningful people utilizing networks and voluntary participation.
It is not the corporation that is in the center, but the intentions and choices of individuals. This view of work focuses attention on the way ordinary, everyday work-tasks enrich life and perpetually create the future through continuous learning.
The architecture of work is not the structure of a corporation, but the structure of the IT-network. The organization is not a given hierarchy, but an ongoing process of organizing. The basis of work is not financial self-interest, but people’s different and yet, complementary expectations of the future, conditioned by their accounts of the past and developed skills.
The factory logic of mass production forced people to come to where the work is. The crowdsourcing logic of mass communication makes it possible to distribute work to where the people are, no matter where on the globe they may be.
Knowledge work is not about jobs or job roles but about tasks. Most importantly knowledge work can, if we want, be human-centric. Through mobile smart devices and ubiquitous connectivity, we can create new opportunities and a better future for millions of unemployed people.
It is possible!
Thank you Ralph Stacey, Doug Griffin and Yochai Benkler
Filed in Digital work, Interactive, iterative value creation, Social Web / Social Media
Tags: Architecture of work, Crowdsourcing, Doug Griffin, Elinor Ostrom, Interactive value creation, Internet, Ralph Stacey, Ronald Coase, Self-organizing, Social business, Task based work, Transaction costs, Yochai Benkler
September 23, 2011
Somebody recently asked me: “Why do we have to cooperate? I know my job. If I do my job and everybody else does his, we will be fine. The people I work with every day know what to do. I don’t get it why I need to be communicating with those other guys.”
Today’s organizations are complex systems that require continuous, responsive coordination to be effective. Work is much less repetitive than before. Job roles and work instructions can never be complete descriptions of what needs to be done. Work is not separate actions but connected tasks. It is all about links. Who needs to connect can never be fully planned in advance. Interdependence is contextual, situational. In order to be successful, the constantly changing people forming the organization have to be able to connect effortlessly.
The days when we could just do our own thing are over.
When it comes to understanding the organizations in which we work, most of us understand best our own jobs and the work groups we have been part of. As a result from individual, reductionist scorecards, most people are ignorant of the larger network in which they work. When problems arise, this unawareness of how things affect one another often leads to short sighted and suboptimal solutions. Issues are resolved in favor of just one point of view.
When the circle of involvement is larger many changes occur. When people see where they fit in the bigger picture they are able to see the interdependencies and are able to respond much, much faster to changing conditions. Our research shows that transparent processes are more than four times faster than corresponding processes where people just see their own part.
Any one person or any one function cannot meet today’s challenges alone. We need a community of people who willingly participate and provide their insights to address the increasingly interdependent issues. Cooperation is necessary because one person no longer has the answer. Answers reside in the interaction, between all of us.
The challenge today is engagement. Widening the circle of involvement means expanding who gets to participate. It is about inviting and including relevant, new and different voices.
The unfortunate misunderstanding is that engaging people requires managers to let go. As managers contemplate to widen the circle of involvement they sometimes believe that it means to have less ability to provide input based on their knowledge and experience. Paradoxically, engaging more people requires more from managers than the current management paradigm. Instead of being responsible for identifying both the problem and the solution, they are now responsible for identifying the problem and identifying the people whose voices need to be heard. Who else needs to be here? How do I invite people who do not report to me? How do I invite people from outside our organization?
Success today is increasingly a result from skillful management of participation: who are included and who are not, who are excluded.
Another misunderstanding is that productivity will suffer if larger numbers of people are involved. The new social platforms and interaction technologies have dramatically reduced the cost of participation. Temporal communities can be formed to solve a problem or to tackle an opportunity easier, cheaper and faster than ever before – if people are invited and if people want to engage.
We all have the experience of teams discussing among themselves about what is working and not working. People often degenerate into blaming the parties that are not present. “If only the other group would get their act together!” This kind of thinking never produces learning, responsiveness and agility. Bringing more people into the conversation is essential. When you widen the circle of participation, you widen the solution space.
“If there are enough eyeballs, all problems are shallow” as Linus Torvalds put it
Filed in Complexity, Interactive, iterative value creation, Social Web / Social Media
Tags: Agile, Collaboration, Community, Complexity, Crowdsourcing, David Weinberger, Interactive value creation, Iterative work, Linus Torvalds, Paradoxes, Ralph Stacey, Self-organizing
September 6, 2011
Corporations are the dominant mechanism by which economic activity is organized in developed countries. Whether there are opportunities for leaner and more agile approaches to value creation in the corporate context, is hence a key question for the prosperity and well-being in the society.
The big move we are in the midst of is towards an economy that is more centered on information products than physical products. Examples of this are financial services, professional services in general and software.
The second transformative change is global access to relatively cheap and relatively high quality communication networks.
New communication technologies have always had a strong impact on the production of information. But this time the societal changes are huge. The Internet is the first communication environment that decentralizes the financial capital requirements of producing information. Much of the capital is not only distributed but also largely owned by the end users. Network servers are not very different from the computers we have at home. This is a complete departure from the model of TV broadcast stations and televisions.
The characteristics of the new economy are different from what we are used to: the production of physical goods was (financial) capital-intensive, leading to centralized management structures and the shareholder capitalism we now experience. The production of information goods always requires more human capital than financial capital. It is much more about finding brains than finding money. But the good news is that you are not limited to the local supply. Work on information products does not need to be co-located. If the task at hand is inviting and compelling, human capital investments can come from any part of the network.
This is why decentralized action plays a much more important role today than ever before. The architecture of work is the network and the basic unit of work is not a process or a job role but a task.
Our management and organizational approaches are derived from the era of tangible goods production and high-cost/low-quality communications. These mindsets are not helpful in a world of widely distributed value creation and ubiquitous connectivity.
The opportunity is in new relational forms that don’t mimic the governance models of industrial, hierarchical firms. We are already witnessing the rise of very large-scale collaborative efforts that create tremendous value. Coordinated value in these cases is the result of uncoordinated actions by a large number of individuals with different goals, different values and different motivations to take part.
The financial capital constraints on action meant that having a great idea, or simply wanting to do something, was not enough to get one going and trying it out. In the networked economy, information products can now be created and co-created in a human-centric way, by interdependent individuals, interacting with each other by utilizing free or low cost social media.
Technology does not determine social and organizational change, but it does create new opportunity spaces for new social practices. Some things are becoming much easier than before and some things are becoming possible, perhaps for the first time.
Pitching in the world that is built on the centrality of information and radical decentralization of intelligence may be more about justifying human capital investments than justifying financial investments. Perhaps start-ups in the future won’t even seek to create jobs at all because of their industrial-era nature, but may see themselves as platforms for all kinds of contributions from all over the network they are an active part of.
Thank you Margaret Blair and Yochai Benkler
More on the subject: The work of Yochai Benkler. The Atlantic on progress in life and job careers. A TED video on unintended consequences. Steve Blank´s great post on start-ups. Irving Wladawsky-Berger´s post on new style of working. Luis Suarez writing about the social enterprise. GigaOM: Do we need defined hours of work any more? The Atlantic: A Jobs Plan for the Post-Cubicle Economy. “From a container to a platform”; @Joi Ito’s blog post @ the MIT Media Lab. A very nice Cisco ad.
Filed in Digital work, Interactive, iterative value creation, Social Web / Social Media
Tags: Architecture of work, Crowdsourcing, Digital work, Interactive value creation, Internet, Network, Organizing, Self-organizing, Social Web / Social Media, Transaction costs, Yochai Benkler