Thanks to Paul Thomas, guest-blogging at the Cognitive Edge, a networked organization focused on applying complexity theory in practical ways to complex issues and organizational problems.

(Dr Thomas is founder of the complexity theory think-tank organization DNA Wales, Head of Leadership at the Business School, University of Glamorgan and is also the BBC Wales ‘Business Doctor’. Paul works with private and public sector organisations of all sizes, including multi-nationals, trying to show them there is another way to run the workplace.)

The title is lifted from the Cognitive Edge blog (extract below).

I have not yet read the Macleod Report (I’ve skimmed through it) ) but it seems that the Cognitive Edge blog post lays out yet-another-argument for coming to terms (or grips, or whatever) with the probability that it (social computing) will become the main way of carrying out the bulk of non–routine knowledge work.

Oh .. and of course I don’t think that all management concepts and activities should be dropped holus-bolus.  I do, however, think, that managers everywhere should start really trying to understand the new social dynamics and methods of constructing pertinent knowledge that are now available, and making thoughtful and sensible decisions about why and how people get engaged with getting things done on purpose.

I know, I know .. it sounds like heresy to not constantly "tinker" in order to improve processes, efficiency and effectiveness.  After all, we’re all familiar with concepts like continuous improvement, orthodox performance management schemes, Six Sigma, reengineering, etc. 

However, how many of us have often wondered about whether or not people have an orientation towards doing things better, easier, faster, cheaper, if we find ways to honour their desire to do good work, to be respected, to make meaningful contribution, to be heard … 

Maybe (in some or many instances) there’s too much structure, too many goals, overly rigid mindsets and worldviews … not enough questions, not enough debate, too few mistakes (how many discoveries or innovations are preceded by mistakes?), not enough "failing faster to learn faster", not enough acknowledgement of the deep motivations of people to serve others and do more useful and meaningful work, etc. ?

There’s a reason why the word "unleashed" gets used so often in books, articles and conversations about organizational effectiveness .. and I don’t think it means turning a horde of web-bots loose onto the organization’s processes.  It has something to do with people and their motivation and guidance.

Anyone else ever wonder ?

I think that’s what this report from the UK government suggests.  But I will have to go beyond skim-reading it to confirm that guess.

What do you think ?

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MacLeod Review says people potential should be ‘unleashed’

[ Snip ... ]

The MacLeod Review of employee engagement, commissioned by the Department for Business, has said workers need to be properly involved in the future of their firms.

Author David MacLeod said he wanted to see people’s potential “unleashed” and said engagement was a key to innovation and competitiveness. Apparently the report’s authors were told during their research that “trust works two ways” and that not trusting staff had a negative impact. They were also told it was people, not machines, which made the difference to a business.

Responding to the report employment relations Minister Lord Young said: “Workers know better than anyone how the firm they work for can improve, innovate and succeed.”

If this all sounds familiar, that’s no surprise.There’s nothing radical, or even new, about this report.

[ Snip ... ]

Of course people are the key to a company’s success. Of course the best people to ask for a solution to a company’s problems are those within it and on the frontline. And it stands to reason that if you haven’t got everyone in the organisation fully behind what you’re trying to achieve, you’ve got less chance of achieving it.

The Government says it accepts the report’s recommendations and now there’ll be an action plan to deliver them.

Now that the message is becoming more mainstream, maybe those who run our organisations will forget their management tools, and constant ‘tinkering’ with the system and finally wake up to the fact that this is the only way to make them fitter for the future.

Let’s hope they don’t just pay it lip-service, and they actually do it.

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Deloitte Declares We Are in a “Media Democracy”
Bill Ives

Dean Takahashi at Venture Beat shared with us a summary of a recent Deloitte survey on the state of media. The report concludes that, “We’re living in a media democracy, where no single form of media dominates the attention of Americans. It’s also an age where everyone contributes to the media, not just traditional media companies.” The last part is old news but I find the first part more interesting.

There has been discussion about whether blogging will continue in the age of Twitter. I have mentioned, as have others, that they have different functions and complement each other. Twitter may take away a few of the functions of blogs but there are many left that cannot be handled by Twitter.

There has been very few times where a new media actually completely replaces an old one. Each new advance in communication technology expands the possibilities for knowledge capture and distribution. In each case it took a while to understand the possibilities and the requirements to enable them. Take text or writing for example: the invention of the phonetic alphabet around 700 B.C. enabled a number of unforeseen and unintended capabilities.

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Deloitte’s organisational consulting has for some time now been involved in employee engagement and organisational change, and so its practitioners in those areas will understand more of the emerging sociology of the networked workplace environment than the other major consulting firms.  And of course, not to miss a beat, all the other major firms will all be out there now telling customers they have found a new ball to kick around, i,e, social computing.  They will come up with logical responses wherever there seems to be a growing market.  But beware of these firms’ response, in my opinion.  If you want to know why, email me.

Is the general awareness of the effects of using computers, the Web and the easy sharing and consumption of information flows beginning to reach a critical mass ?  Bill’s blog post would seem to suggest so.

And I’ll argue, as I have done for some time now, that the spread and penetration of social media use into organisations large and small will lead to some major changes in the practice of leadership and management (Will Enterprise 2.0 Drive Management Innovation?, FASTForward, January 10, 2008) and slowly but surely the impact will be (or should be) the increased democratisation of many organisations.

My favourite astrologer does not agree … but we all know horoscope forecasts are somewhat suspect, right ?  But short-term, I can see the logic … in uncertain and ambiguous times, many people like the feeling of increased certainty offered by direction and control.  Just ask Lou Gertner what was the hardest part of the IBM turnaround in the early 90’s .. he’ll tell you "upward delegation"

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"In 2009, hierarchies will grow, democracy will ebb–"might is right" and pragmatic choices win."

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But indeed some form of democratisation reaching through a wide range of human activities, including work in an enterprise, seems inevitable.  The only alternative, I suggest, is the eventual use of information technology to control almost everything knowledge workers do, reducing computing activities to completing forms and updating various reports.  That does not seem too likely, but I suppose its true that you can’t predict the future.

Do you want your workplace to become more democratic than it is today ?  How will your workplace engage you a year from now … two years from now … five years from now ?

I was interviewed a bit more than a year ago by WorldBlu (Annual World’s Most Democratic Workplaces) founder Traci Fenton about the impact of social computing on organisational democracy.  If we believe that "knowledge is power" and that the days of a few people at the top of organisations taking all the decisions and telling everyone else how to do things are numbered (John Cambers of Cisco clearly believes that’s the case, and is not sacrificing organisational effectiveness with that belief), then it’s clear that eventually shifts in traditional organisational power will be more frequent, more observable, and carry more implications for major changes in the ways people are led and managed.  Gary Hamel clearly believes this is the case, as he outlines in his most recent book The Future of Management.

I’ve used this quote from business strategist and futurist Stan Davis before, but in this context I am not ashamed to repeat it because there are some very long term shifts underway for all of us, as the Deloitte study is beginning to recognize.  The media we use to work and interact with others is fundamentally different than it was at the end of the do com boom, and it ain’t going away.

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While there wasn’t something called social media or social computing back then, here’s Stan Davis on organizing in the future, from the 1987 book Future Perfect:

"Electronic information systems enable parts of the whole organization to communicate directly with each other, where the hierarchy wouldn’t otherwise permit it.

What the hierarchy proscribes, the network facilitates: each part in simultaneous contact with all other parts and with the company as a whole. The organization can be centralized and decentralized simultaneously: the decentralizing mechanism in the structure, and the coordinating mechanism in the systems.

Networks will not replace or supplement hierarchies; rather the two will be encompassed within a broader conception that embraces both. We are still a long way from figuring out the appropriate and encompassing organization models for the economy we are now in."

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Here’s Stan catching up to the Web 2.0 world ("catching up" isn’t quite the right term … outlining what he think with respect to the most recent development so n the Web is probably better

Decision-making over the past quarter-century has continually moved from the center to periphery, down hierarchies to where decisions are carried out. Current technologies, especially of the Web 2.0 world, have moved that decision-making even further, overwhelmingly beyond firms’ boundaries and into the physical and mental space of the customer.

The differences between the two worlds are striking.

Whereas information is still hoarded and protected in companies, it is freely shared and reused in the connected Web 2.0 world. Hierarchy and command still rule the day in most organizations, while individuals are self-organizing, loose and flat.

Other shifts are from command & control to adapt & evolve, from provider-generated to consumer-generated content, from vertical to horizontal organization, and from an ‘audience-’ to a ‘community-’ approach to customers.

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It would be interesting to learn what you think.

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In a previous post I mentioned a growing awareness of the impact of the interconnected digital infrastructure and digital natives on the Enterprise 2.0 market.  The publication of this Aspen Institute report is to me just one more piece of evidence that it’s real and growing … and it’s a credible source (though not quite a tangible case study

David Bollier reports from his OnTheCommons blog about "The Rise of Collective Intelligence: Decentralized Co-Creation of Value as a New Paradigm in Commerce and Culture” (pdf) published by the Aspen Institute.

It may be that the serious jargon of the term "collective intelligence" will put some (or many) off, but increasingly it seems to be becoming clear that the interactive social construction of knowledge put to use in response to constantly dynamic markets is demanding some new business logic, new points of friction with which to fashion transaction and new ways of designing and managing the work that leads to the creation of economic value.

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The Rise Of Collective Intelligence

Most forwarding-thinking businesses are starting to realize that they need to come to terms with the open Internet environment. This means making some radical changes in how they think about markets, how they structure their own enterprises and how they treat customers.

[ Snip ... ]

On the Internet, people have acquired considerable powers of their own. They have developed their own sustainable micro-cultures. They can create their own commons to carry on conversations among peers and develop new forms of reliable “collective intelligence.”

This bottom-up knowledge empowers ordinary individuals to approach market transactions on a more equal footing with sellers, who have historically had greater market power and knowledge. The commoners are able to capture more of the knowledge they create, and use it to their own advantage. Indeed, the commons can be regarded as a source of cutting-edge R&D for companies, as MIT professor Eric von Hippel has shown in his book, Democratizing Innovation.

The phrase that the conference used to describe this phenomenon is “decentralized co-creation of value.” It means that the market is not the sole source of value-creation; dispersed online communities are now sources of value that businesses must collaborate with in order to generate value.

The commons stands on a more equal footing with the market. Instead of all “value” coming from centralized players like corporations, increasingly, value is coming from the “ends” of the Internet – the periphery, where new ideas and innovations first materialize. Value comes from individuals, and groups of individuals, operating in the free space of the commons, where overhead is low to nonexistent, and creativity is not regimented to service prearranged market niches. Thanks to the Internet, social niches are becoming “staging areas” for viable niche markets, a phenomenon also known as the “Long Tail.”

All of these developments create a real crunch for traditional large corporations because large companies like to have extreme control. That’s how they deliver predictable results to investors and protect their brand reputation. But on the Internet, control and predictability are not viable strategies. In fact, they are counter-productive.

Value is generated by having less control. Customers won’t trust a company that tries to use digital rights management or bullying tactics to assert too much control. In a sense, companies are not just competing against other companies, but against the freedoms of the commons.

The challenge for businesses, then, is to develop new sorts of “open business” models that can respect the social dynamics of the Internet, while still monetizing certain forms of value (e.g., selling advertising to the Web users who like your site). Companies have to realize that brands are forms of socially created value; brands are not simply the result of advertising and image campaigns. Online communities create and promote a brand every bit as much as mass media.

One of the most fascinating parts of the report is about the next generation of computing, often known as “The Cloud.” Bill Coleman, the entrepreneur who started BEA Systems and recently started the Cassatt Corporation, describes the Cloud as the convergence of voice, data and video in a networked system that also combines computing, telecommunications and the Internet. You plug your computing appliance into The Cloud – and all your data and stuff is “there,” not on your personal computer.

Everyone at the conference agreed that the current trends in economics and technology will make The Cloud inevitable. Software and hardware will become commodity products, computing will become a service provided by very large utilities, and a handful of these Cloud providers will eventually put the telephone service industry, the cable industry and Internet service providers out of business.

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I have been for some time been calling the emergent organizing principle that I believe underpins the necessary new business logic and models, derived from social-interaction-driven market niches, "wirearchy" – a dynamic two-way flow of power and authority based on knowledge, trust, credibility and a focus on results, enabled by interconnected people and technology.

I am heartened this report has come out (emerged, let’s say) from a group of bright and aware people at the Aspen Institute.  I suspect that it makes those of us who feel something big and different is going on bit by byte, link by link … a bit less iconoclastic.

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Tags: Collective intelligence, new business logic, new business models, ROII, Return On Investment in Interaction, cloud computing, co-creating value, decentralization, wirearchy, hierarchy

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Here is Kilkullen on how the “Donut” works in the Terror context:

I find it fascinating when I find that someone I don’t know has seen the same as I.

One of the cleverest people I know is John Robb. Here is a nugget from him that clarifies this point:

Here’s three simple insights for organizational success in a chaotic, complex, and hyper-competitive environment (and a way to use the wisdom of crowds to unearth talent that you need to thrive):

• The best people (to solve any given problem) don’t work for your organization. A corollary to this: if you don’t have the best people working for you, you will fail.
• Use transparency and the marketplace to find the best people located outside your organization (simple test: whose ideas capture the greatest mindshare within your organization?). NY City’s contest is a great example of using transparency as a means of finding great talent.
• Buy all of the time they have available.

NOTE (on when being good isn’t enough): Another trend is that an increasing number of problems are information/knowledge intensive. This means that an old rule from the software world applies: a couple of great programmers are more valuable than a room full of good ones. Apply this rule to any complex information-intense problem you face and you will get much faster, cheaper, and better results.

None of us have the best people for any of the myriad issues that confront our organizations. But the best people do exist. Why not use the “Donut” to bring them in to help you?

Here is a clip from Chorus line showing the process – note that really experienced dancers are struggling. Imagine if on the night the music changed?

Here is a clip from UFIT – see how the group transition from one move to another. The class lasts for an hour and nothing is choreographed and most of the class are just regular folks.

I think that this shows me the essential difference between an energetic organization and a machine organization.

With social media you too can dance

As I have been attending my client UFIT’s classes recently I have had a “Donut” moment. All at once the theory leapt into reality.

The picture above gives you a rough idea of the set up. As a newbie, I hang out trying not to be seen on the periphery. Gord is in the centre. Seen from this angle it would appear that we all follow him. But in practice this is not possible.

In practice, you have to follow the folks in the inner ring. These folks tend to be not only very experienced but are amplifying what Gord does. Note the guy in the red shirt – he is in the centre but is not connected. he is in effect working against the energy.

We have just noticed that while the instructor has to be energetically powerful, she or he is not very effective unless they have attracted this inner circle to themselves. We see this with new instructors – who have all the moves etc but not disciples. When Julie came as a guest to Charlottetown from her home base in Summerside, she brought her inner circle that has even named itself – Team Sweaty!.

Julie is a great instructor but having her Crew with her lifted the entire experience. It appears that the inner circle interact with each other and with the point in the centre. They create a “Sun” that attracts the outer rings with their “light”, energy and gravity.

So what does this mean?

I think that it means that we can now see how to operate the new organizational model. The new model is not a mechanical model that has friction and demands effort. It does not have to control every move and component. It is “Energetic”. If the centre and the inner circle are dense enough and in tune enough – the resulting energy will fill the system. My bet is that such an insight is behind the new reality of the 1% Rule for Networks such as for Wikipedia.

If we are correct – all of the current organizational theory can be thrown out the window. The current theory is like the old Ptolemaic (put the Earth in the centre) system. It was OK for a less complex world. But once people traveled around the globe – it became too complex. (They had to use very complex math to make it work giving the planets little orbits called epicycles) Our current organizational theory is based on a fallacy as was the Ptolemaic system – human organizations are not mechanical or kinetic – they are energetic. We all “Know” that really. Think of the days when the boss in at the office or away – think about the difference in “feel”. To make a mechanical system work, you have to have a non complex environment. A mass market ideal can be seen as being essentially “simple”.

But in a complex reality – as our interconnected world is today – a simple mechanical model can only work by making the processes over complex. Imagine trying to choreograph a UFIT class? The only way a UFIT class can work is an an organism that is connected energetically.

People moan on all the time about how hard change is. That is because in a machine model change is hard – it demands that parts are broken or that too much effort is put in choreography. But in a UFIT class, or in an organization that is set up energetically, change is fun, is easy and is natural.

So what then is the new work of the leaders in the energetic model?

• The person in the centre has to listen to the music and feel the energy of the system – they have to not only have the moves but be in tune with the group
• The person in the centre has to have their own Team Sweaty or inner circle. This group also have to be able to know the moves and to listen well.
• The larger and the more connected Team Sweaty is – the more powerful the energy is to attract the system
• So the organization is simplified as the Copernican Revolution simplified the universe. All the leader has to do is to hold the key ideas and attract and nurture the inner circle – the resulting energy will drive the system. No more attempting to choreograph and drill every part. Most of the effort, friction and labor goes away. With it most of the cost and the anguish.

The old model is like this steam engine. It’s big, noisy, hot and very very inefficient. It has to run on tracks on a schedule. There is little flexibility. The smallest mistake in scheduling can lead to a big crash. Without constant reinvestment of outside resources it cannot grow.

The new system is like this. It follows the 14 billion year old design that nature uses. It is so much more powerful than any machine. It is is a life creating system. It has a timetable measured in millenia.

So my friends the choice is clear and it is yours.

Do you want to run a railway or a solar system?

I think that I stumbled upon the something that may be missing this week as I was struggling with this question of why it is so hard for organizations to collaborate and to adopt social media. I think that the missing link is having the right context. Throughout history, technology has changed before the prevailing context. Two examples:

• In 1941, the French had more and better tanks than the Germans. But they were decisively beaten in days. Why? Because the French’s context for using tanks was still based in static defensive warfare – Tanks to them were mobile pill boxes. The Germans saw them as a raging offensive torrent. Same technology – different context – different result!

• All airlines except one – use the traditional model of mechanical “efficiency” – usually by playing off pilots with flight attendants versus ground staff versus check in staff. All airlines except one – thought that fleet unification or better use of technology – would save them money. Only one understood that the key to the single most important factor in keeping costs low – having the highest fleet utilization rate (Planes in the air versus on the ground – was not through efficiency but through collaboration on the ramp. Their entire organization is deigned to promote cross fertilization and collaboration. A host of rewards and penalties reinforce this aim. That airline makes more money that all the rest of the industry. None have been able to change their context to follow it – of course that airline is Souhwest.

My aha was this – If you introduce Social Media into your organization without thinking about the new context for enterprise – you will fail as did the French and the other airlines
So then what context?

When we use the word “Organization” we default to this model. An organization that breaks up work and people naturally into separate and competing parts. I say competing – because this is also how we allocate capital and resources – the parts compete for the attention of the “father” as kids do for the car keys. At the centre of this context is Budget and the idea that everyone and everything inside the department is “Property” that has to be owned by the Head. Hence my Feudal analogy.

This model excludes all externalities such as suppliers and customers. Departments will rather die that share resources with another department. Of course the people inside cannot collaborate – it is logical and wise that they don’t. For the real aim of the department is not the customer or even the larger good of the whole enterprise but the expansion and or the protection of the department itself. Hence the reason why most organizations in the end default into being self serving. They are designed to be so.
So what is the new organizational context?

I think it looks like the logo for Ross Mayfield’s Social Text. It’s intellectual father is Charles Handy. It is his Shamrock idea made real by Social Software.

In The Age of Unreason (1989) he proposed the Shamrock organisation as a business model. Many have tied the symbol to his Irish background. The shamrock has long been powerful in the Anglican Church of Ireland because of its apocryphal use by St Patrick as a symbol of the Holy Trinity.

For Handy the first of the three leaves represented the professional managers and administrators � the organisational core. This leaf is shrinking in size. The second leaf contained the contractual fringe. Its contributors to the organisation were vital, but they were outsiders. In the third leaf were those including the portfolio workers, as well as temporary workers and part-timers. They contributed much, but they could never be considered part of the organisation. Many didn�t want to be. They wanted jobs but not careers. They frequently worked for a number of disparate organisations. In Handy�s language they were like fleas feeding off elephants. The latter were the large organisations. This was an analogy he pursued in the autobiographical The Elephant and the Flea (2001).

Social Text’s logo sheds for me new light on Handy’s idea or an organic structure whose role id to get a lot of resources for much less cost that by having to own them all like a Feudal Lord.

Let’s briefly explore this idea in practice.

You are the president of a small Public TV station. Your staff is already maxed out with putting the existing world on air. How are you going to make the transition to being a public media company? You have no spare resources. You have only modest internal expertise in the new. You have no way of having God suddenly give you the money to create the new. But you know that if you don’t – you will be dead in maybe 5 years?

In part 2 – I will offer up how such a President could solve this paradox by using the Handy Model and Ross’s Pentogram as a guide. In the mean time – give this paradox a whirl yourself