A Networked World

Towards the new normal

Whenever I'm with Steve barnett, he's usually drinking and I'm the designated driver. Mostly because he and my wife are members of a wine club and when they go on high-class pub crawls (or winery tours) and I of the cardboard palate drive the people mover. When he talks about business he reminds me a lot of Johnnie Moore and Rob Paterson; and me. Learn fast: things aren’t (ever) returning to “normal”.

National Bank (NZ) Chief Economist Cameron Bagrey... confessed he’s embarrassed that his profession’s consistently got it wrong: failed to predict the current recession and doesn’t have a clue how to fix.

He says only one thing’s for certain: we can’t go back to the way it was. Anyone who thinks that things will return to “normal” is stupid. The policy makers are determined it won’t; determined we figure out new ways to do, manage and teach business and the economy. Previous answers are wrong.

[...] I seriously doubt NZ Business Education can change from its prescriptive right-answer model any time soon, hobbled as it is by administrators and their anti-professional, centralised rules and controls, and know-no-better student and employer market.

I’m sceptical too that NZ business managers can abandon their manager-knows-best, right-answer approach any time soon: go deeper than recite the superficial lists of “secrets” peddled in popular business management literature.

Actually, if Steve thinks its only NZ managers, he's dreaming. The managerial class is global, its largely responsible for the problem and will cling to its paycheque till the collapsing businesses they parasitise crumble in their hands.

[...] Here’s the guts: (really) involve everyone; confess ignorance (starting at the top); spend time together generating a long term goal that everyone’s passionate about but not sure how to achieve; get very clear on the medium term strategy and short term goals that stand to take you towards the long term; openly generate and agree clear individual and collective accountabilities in achieving the change; openly measure progress to keep individuals and groups (at all levels) openly accountable for their contribution; continually review and revise in the light of individual and collective experience; take every opportunity to talk about the long term goal and the actual action and progress towards it.

I think he's optimistic here.

In the new normal, we have so little idea of what will work that the idea of goals and strategies may be a waste of time as well. As our energy and financial resources are decimated we will gain new appreciations of those resources that are left.

I think there might be some new parameters that will have more power in the future.

• We will demand much higher value returns for any of those irrecoverable resources that we expend, especially if we hand them to someone else.
  
• We will increasingly trade time for goods and services. Where we have invested a lot througout my lifetime in "saving time" we will now "spend" or invest, that time ratrher than use a resource like energy.
• Things will slow down in some areas such as travel and material flows
• Information shipping will speed up as we reduce even further the documentary exchanges and rely more on electronics (saving paper, energy etc)
• Discretionary spending will evaporate and the industries based on them will disappear. If we spend more time waiting, travelling or producing things we will have less liesure time and less money to spend in it.
• Energy and material flows at a personal, community and business level will become a critical part if every economic model and activity.
• The idea of waste will disappear, we will be much more conscious that we can't 'afford" it any more. The idea that we should pay for packaging, then pay to have it taken away and pay again in opportunity costs merely to have a wrapper will become laughable, if not criminal
• Product design, durability, ease of use and fitness for purpose will become absolute criteria for everything
• We will all need to try many, small actions that may or may not succeed. We will need to be deadly honest about the outcomes and rethink those that fail while iterating those that seem to succeed.
• We will need to acknowledge that, at a time of paradigm shift, nothing will be reliable for quite a long time; what worked yesterday may not work again tomorrow. That is why small, iterative actions will be the only safe ones, there will be no more going large.
  
• Your turn. What other geenral rules do you think might fit here and does this make any sense at all?

I'm planning some renovations to my house - we have been since we moved in 2 years ago - and the other night I was using Google Sketchup (a brilliant bit of software) to turn the 2D plan into a 3D model so we could try stuff out.

I put in a work bench for building things and a wet area for wine making and a pot still for recovering essential oils from the flowers and herbs and plenty of space for creating stuff and storing it and for tools and consumables like glues and screws and so forth.

And then I stood back and realised that I am making not just a workshop a small artisanal factory that would fit in the 19th century or earlier. I'm doing it because it is the logical outcome of thinking about local production andtrying to close the energy and material flow loops as tightly as possible.

When i build stuff, I use screws not nails so that everything can be dismantled and used again in something else. More rules.

• Low energy dismantle-ability
• Repurposing all manner of manufactures
  
• Building things that can be applied to new uses
• Shared spaces, shared tools, shared skills
  

What else?

The linearity problem

Yet another great link from Johnnie that triggers something. No straight lines

I enjoyed Alan Moore's slideshare from Reboot Britain, No Straight Lines. It's worth taking a good look.

Al kicks off with a very funny story about a train journey and an iPod that I won't spoil by summarising. And goes into a passionate diatribe against the limits of linear thinking.

Its not just the lack of linearity that we need to accept, its the lack of sequence. Also not wanting to screw up the joke.

But we almost never learn anything in a stepwise, linear fashion. We grab bits of it passing by, and fiddle with our understanding of them, and sometimes for a long time we "just don't get it" because even when we have all the bits they are like a jigsaw puzzle in a bag, the picture is there but we can't 'see" it.

And some people never do. Especially, paradoxically, those who are best at stuff like computer programming where sequence and excruciating detail is critical. Then one day, apparently without any relevant input, we "get" it.

And I suspect that is where, god help me, real innovation occurs. Someone has most of the bits, but can't make them fit so they create a bit, a new bit that didn't exist before but which connects the thing in an entirely different way

And because the world is NOT a jigsaw puzzle, what happens is that the new bit makes all the old bits fit together in different ways as well. Which is why change can be so disorienting.

We recognise that many of the old bits are there but they are somehow distorted in ways we don't understand. So the response of those who were comfortable with the old ways things worked try to pretend that the old bits still work in the old ways, that its just their perception that is wonky; because to accept that the whole world is wonky is just too much of a challenge.

We are, in effect, betrayed by the proximity to familiarity that wouldn't happen if we, say, suddenly moved to Tanzania and had to learn Swahili to survive. When we shift our entire domain we recognise its foreignness, but when that shift happens around us it takes time to adjust to that suspiciously familiar but actually completely different reality.

That seems to me the problem with peak Oil, with Climate change, with the end of western financial capitalism, it all still LOOKS the same, or closely enough to fool us into believing that we don't have to change anything to deal with the problem.

Wrong.

And one more point about non-linearity, it entails outputs that are grossly inconsistent with the inputs and apparently disconnected from them.

Diagrams and frameworks

Johnnie brings up what I think is a riff on the whole powerpoint ranger syndrome and that is Diagrams. He says:

Visual explanations can be extremely useful and effective. The famous London Underground map is a great example, though recent versions do seem to be getting more cluttered.

But a huge number of diagrams make use of shape and colour in ways that seem gratuitous. Visuals are powerful and when used clumsily seem to screw up the signal-to-noise ratio. I have a suspicion that this sometimes intentional: you can take a fairly simple idea and make is seem more important by turning into a diagram.

For example, you often get a simple idea like "there are five aspects to this" that mysteriously becomes a brightly coloured pentagram. The big shape adds nothing relevant to the idea but introduces to my mind all sort of superfluous ideas about space and boundaries.

Here's one I spotted today from Accenture, relating to public service:

I agree, essentially meaningless, for a start, Governance is a dynamic among a number of actors, that they relate to each other in some way (the diagram domain) is a given, what matters is how that relationship functions.

And dynamics are much harder to show visually. I've been trying to design one recently for a programme we call E-engage Your community. Its about enabling NFP's to make better use of ICTs.

My task at the moment is to show how organisations all round the country would be able to use a website to manage their own EYC events, from finding and recruiting workshop presenters to creating a programme of events, accepting bookings and handling payments and have all that feed into a budget spreadsheet.

The idea is that we set up a site and when you create your event we clone the tools on the site for you and you can get on with the event management, promotion etc and the mechanics of the rest of the thing are handled by the website.

In the process it needs to embody the various parts of the organisation at a national level supporting the process

Here's the latest draft. If you can do a better job, don't hesitate.

Ideally it also enables me to tag various parts of it and say to a sponsor, "this is what you are paying for and this is how it fits into the process".

Its not clear, bold and simple, you need to follow the arrows to make sense of it. Guess what, life is complicated.

Another kvetch with "frameworks". Not impressed.

A colleague sent me one the other day on a Digital Communities Framework set up by local government organisation in NZ. Here's what I sent back.

I'm interested in the document but to be blunt, it will achieve nothing. It is mostly a restatement of the "we'll fill the air with regulation and platitude and someone else will do the real work" model that has been around forever.

It is practically verbatim the same document that almost every governmental organisation has produced for as long as I have been doing this stuff and it never goes anywhere.

Just once I would like to see an action plan that uses the leverage of local government being the biggest purchaser of goods and services in a region and says, as did WalMart in the US and the Insurance companies here, "if you want to sell to us, you do it online". it would almost certainly entail all the regional authorities either agreeing on a "framework" themselves, a common data structure and terminology for their activities and transactions (does that already exist BTW?) or providing middleware to map their local version to the agreed structure.

Then it would require that they all sign up to use the same platform to make it affordable and then probably buying something OS off the shelf from Mexico or India that would do pretty much everything they require and getting on with it.

Instead we get endless anodyne documents full of pious hopes and no action.

Like Frameworks for Governance, hot air, wasted paper and people's time.

Innovation, is it worth it?

For the last few years we've been treated to endless praise of "innovation", whatever that may mean to the speaker, we have "innovation management" (oxymoron) and the Russians even have an "innovation strategy" run by some Government department (dead serious, I sat through one of their presentations at a UNESCO conference once, they even had thoughts on how you force companies to innovate).

At a dinner at the Auckland Uni buisness school on Tuesday night there was a lot of use of the word innovation and how you teach it and so on it goes all the way from "first mover advantage". Well that worked well for Apple, IBM, eXcite and any number of other 'innovators" who don't appear to own the world. Marco Rinesi argues:

"But for all of its undeniable power, the printing press wasn’t the source of large fortunes for the engineers, investors, and businessmen involved in this industry. Profits were made, yes, sometimes significant ones, but nothing quite proportional to the influence of the technology. The bulk of the benefits came to the organizations that leveraged this technology for their own ends like modern states, which would have been logistically impossible without the printing press, or the myriad business that cannot be conceived without a superbly well-educated (for pre-modern standards) source of workers and consumers.

The same pattern can be seen in many other technical advances, specially those that impacted society the most. Contraceptives, telecommunications, refrigeration: they are often overlooked foundations of the contemporary world, each of them enormously disruptive, yet none of them, over the long term, a gold mine of extraordinary returns."

There’s nothing guaranteeing that today and tomorrow’s disruptive technologies like the Internet, genetic engineering, or nanotechnology, won’t follow the same pattern, utterly changing the world but without profits at the same scale. We do not argue against investing in disruptive technologies, though. After all, they still offer a better chance of extraordinary results that non-disruptive technologies. And even if in the long term something like genetic medicine becomes as mundane as TV sets, that doesn’t mean that there aren’t very large sums of money to be made in that industry, specially in its early stages.

But always keep in mind that in most industries, no matter how advanced, you are selling tools to other people. They are the ones that will use the tools, and they are the ones most likely to reap the bulk of the benefits of them. And they should: they are the ones changing the world.

Adam Elkus adds some notes to that.

When reading of this, I think mostly of Mikhail Kalashnikov, whose humble assault rifle was widely pirated and copied. Despite the production of 100 million AKs, Kalashnikov lives on a meager state pension and is buying shares in umbrella companies. This is a reason to look askance at claims of disruptive innovation making instant billionaires. Rather, it's worth reflecting on how niche inventions and tools developed out of existing platforms have been the most successful. Kalashnikov did not invent the first assault rifle--rather he invented the most cheap, reliable, and user-friendly variant. Similarly, the team behind Facebook didn't invent social network sites but created a juggernaut through innovative redesign of an existing template and platform.

The other facet to keep in mind is that innovation and disruption, of themselves are nothing, you still need to pop them up in the right place at the right time, luck matters. Otherwise you are just another target in the game of cosmic Whack-a-Mole

Embedding the payment option

One of the challenges of Micropayments has always been that the transaction costs quickly exceed the transaction value, and that makes great sense for the transaction processor and is totally stupid for everyone else. I've never understood why Telcos, which have solved the micropayment problem years ago didn't put their transaction management services online for everyone and make a bundle.

Well, actually, that's not true, I know why they didn't, it meant losing control of the thing that mattered most to them, the services on the network. As soon as they encourage others to use their payments systems they implicitly encourage others to create services that the Telcos don't own and THAT was anathema.

So, once again, they get trumped. PayPal’s New ‘Open’ Payment Platform Gets Microsoft’s Endorsement

PayPal has ... it’s got its eyes on the newly booming apps and cloud computing market.

The eBay-owned company is opening up its platform to third-party developers this fall, so that everyone from individual app-makers, to social gaming companies and software startups will be able to plug global payment options into their applications from the start.

That means users in different countries, with different currencies, and even on different devices (including mobile phones and set-top boxes) will be able to start paying for apps and services as quickly and securely as they’re used to doing on the desktop.

And during the kickoff of a developer training session for the new “PayPal X” platform, it got an endorsement from arguably one of the most powerful companies in software development today: Microsoft (NSDQ: MSFT), which announced that it will be supporting PayPal X in its own cloud-computing platform, Windows Azure.

If they can enable us all to embed a payment option such as 'flick earl 20c for an interesting post" or "that YouTube video was worth 10c" and if they can make it simple enough for bunnies like me to USE, they will be on to something really interesting.
Video version

Is Social Media Diluting the Message?

Paul Chin is another beautiful example of competely misunderstanding the internet. Get this Is Social Media Diluting the Message?

Is the prevalence and abundance of social media -- especially micro-blogs such as the ubiquitous Twitter -- devaluing the message? Are important business-oriented messages being diluted by all the vacuous ramblings around it? Has the focus shifted away from a desire to transmit an important message through an effective medium to conjuring up any message as an excuse for using the medium?

Paul, Paul, wake up, smell the coffee.

The internet does NOT exist to promote and support business activity, it really really doesn't. eCommerce, business development, sales pitches, all that stuff is just a nuisance except for those few, VERY few occasions when we want those interactions. It was ever thus. In the words of Doc searls, "there is no demand for messages", none. And those who think the net should exist for the benefit of business are totally out of touch.

Although social media tools hold a lot of potential and have many useful professional applications when used properly, I’m seeing more and more business users jump on board for the novelty of it. They have no clear, professional goal for tweeting; they just know they want to do it.

"when used properly" ack, give me a break. Read my piece yesterday, you have said the truth, "they just know they want to do it", you just aren't listening to what you are saying.

As a result, many so-called professional tweets end up having as much relevance to the owner’s business and industry as a thirteen-year-old girl’s “C U @ recess” SMS during history class. I’ve seen business owners post their lunch and dinner plans on Twitter, brag about their weekend itinerary, or raise a question as to how the television show Lost is going to end.

Yes, exactly. Its what makes these people human, it is part of showing that they shqare the same psychological and emotional space as their hoped-for customers. THAT's marketing on the net.

The best search engine is meatware

Euan puts a better suit on something I've been saying since I found out what end-to-end meant. That the ends in question are not devices but their users and that connecting people is what this stuff is all about. Social networks are all about finding stuff

A question from Dave Snowden on Twitter about what I thought the best semantic search tool was and my rather facetious response "the meatware" reminded me of something I am more and more convinced of. Social networks are about finding stuff. Finding documents, finding people, even finding human contact.

[...]  Twitter is making this ubiquitous access to an outboard brain more obvious to more people and there has even been talk of it replacing Google for some. The point is you can only do this if you have a high quality network of people doing the filtering and collective noticing for you. Building up these networks, and building "credit" by helping others, will become key skills and the people who invest the effort will find the better stuff faster.

Exactly. And as Geoff Brown suggests in the comments, there is no best practise or other CYA you can call upon, there is no technological solution to it, you have to get out there and make contacts, some of which turn into connections and associates and colleagues and eventually friends. And you have to filter them into a network of trusted people whose judgement you accept and whose values you share.

You do that through conversation, but you also do it through FOAF, both explicitly ("I think you'd get on well with XX") and implicitly because someone you trust relies on someone you don't know.

They problem for many "networkers" is that you can't do it by going to a conference and splashing your business card about and having 3-minute dates. You get there by persistence, shared resources, gifts of knowledge or help. There are no shortcuts, it requires consistency, contact and communication and very often the benefits are paid forward from people you don't know which just keeps opening out the net of the meatware search engine. Those with good engines will work quickly and effectively, those without will struggle, those who think in terms of silver bullets and best practise wont even be in the game.

Innovation summit - a paradox

A while back we had a jobs summit that produced one good, original idea, a national cycleway from the top of the North to the bottom of the South. Incidentally a great way to lay a national fibre backbone. Since watered down to regional cycle bits of ways that would eventually be connected. Mhmm. Thhpbpbpppttt!

So yesterday they gave it another go, calling together 100 'entrepreneurs' to brainstorm new ideas for lifting the country out of the economic mire. Blue sky thinkers focus minds, spirits in quest for brainwaves.

Boooorrrriiinnnggg.

But in any case, this ain't how it happens. A summit, by definition takes the top people, innovation, by definition, breaks top people. Paradox. What we got was a bunch of oppertunists (that IS what an entrepreneur is yes?) wanting to stay on the bandwagon, and more power to them; but we need to be looking somewhere else.

On top of that the world has changed, the successful people from before 2007 are the very ones who are failing now, some of them spectacularly. To assume they are the people we should be asking for ideas doesn't hold water. And if an angry shouting, sorry, marketing campaign, free air travel for rich people and possum shooting are top of the list, we are sunk.

So what should we be doing? The first thing is to try to tap into the permanent floating innovation pool that is the internet and find ways to attract ideas to our economy.

Here's an idea. A publicly owned, Open, venture capital Kiva, using community funds from the Government. It goes like this

1. The tax department sends out a letter to everyone with a tax file number. It includes a password and a URL. Use all three to login to a website for Open Business plans These people are the investors (their taxes will be the seed funds so they get a say) My mate in the UK Ross Gardler has the model and has built the software, we could tweak it a bit. - the link is not direct to his site for reason that will be obvious)
2. Anyone from anywhere who thinks they have a good idea can propose it. It can be as complete or as vague as you like. (Johnnie would be in favour of that)
3. The posting serves as proof of ownership unless someone can show prior art. Simplified IP as far as we can get.
4. Anyone can critique the idea and offer suggestions.
5. Anyone can offer resources, additional funding, services, bid for roles in the business etc, attach their CV's
6. Any proposer can take the business private at any stage by putting up the money.
7. Any tax file holder can vote on whether its a good idea and at the end of the month the government hands over $50k to the top 10.
8. The money goes into an account (any bank) and must be managed through an online accounting engine such as Xero to which anyone has read access until either the company goes broke or repays the $50k (which part of OPEN didn't you get?)
9. No GST (VAT) on any of the transactions through that account while the balance is below $50k or for the first year, whichever is first.
10. Nobody gets more than one chunk of change in any one year unless they repay their original investment - if they flip the company for a profit, good on them, if they make a fortune and want to try again, good on them. Success should not be a barrier.
11. All proposers are rated according to the success of their previous ideas on the site. Failure doesn't preclude more funding next year, but it is recorded.

It would cost us $6 million a year to float 120 companies whose ideas, pretty much by definition, would not get funded by anyone else. It woudl also act as an audition service for peopel without to engage with other business people and generate their own businesses.

It really saddens me to see people with 20 and 30 years' experience in business, so-called middle management and higher, complaining because they can't get a job. With all that experience, how come they aren't creating new businesses for themselves? God knows there are plenty of them around. Maybe if we had a marketplace for business ideas, with potential funding attached, in which anyone could play, not just those already successful, some new stuff might happen.

Hell, if these people can do it, why the hell can't we?

Update, here's another reason why senior people are the wrong ones to have leading the process. I comes from the Matthew may document linked from Johnnie's post. One of the thinkign omitations he identifies is Stifling

... years ago I played a dirty trick on a group of managers at a fairly large organization. Through my consulting work, I had discovered that a particular set of individuals of the command-and-control type were causing some fairly serious issues: some extremely lucrative opportunities were being dismissed, each at a high “lost opportunity” cost.

Root cause? these individuals to a person would not allow their subordinates to have ideas. they had various ways of shooting ideas down. (read a great manifesto here called “100 ways to kill a concept: why Most ideas get shot down”) this group of managers took issue with my report. luckily, an upcoming off-site presented me with the opportunity to prove it to them.

At the off-site, there were about 75 people of varying degrees of seniority, ranging from field 
supervisors to senior execs. I gave the assignment, one of those group priority exercises 
whereby you rank a list of items individually and then as a group and compare (sort of a “wisdom 
of crowds” exercise to show that “we” is smarter than “me”).

This specifc exercise required you to rank 25 items with which you’ve crashed on the moon in relation to how important they were to your survival. NASA had compiled the correct ranking, so there was a clear answer. I did the exercise with a twist. at each table I put a ringer. I gave the lowest-ranking person the answer. it was their job to convince the command-control types they knew the right answer.

During the group exercise, not a single correct answer got heard.

After debriefng the exercise in the regular way, I had each person to whom I had given the correct
answer stand up. I announced that these individuals had offered the right answer, but their ideas 
had been stifled, mostly due to their source and stature and seniority, or lack thereof.

That's why. Getting people who have a vested interest in the status quo the right to decide about how much that status quo is disrupted is stupid on its face.

Facebook Chooses Suicide

Facebook got itself into a stew a while ago by enabling online stalking among its users and now its trotting out another, equally dangerous idea: Facebook Unveils Ad Targeting Program.

Facebook has unveiled plans to target advertisements by injecting them into its members' conversations,

See, right there, the word TARGET is not a good look.

the popular online hangout must persuade its users to embrace the initiative.

Facebook is giving users some control over whether to share information on their buying habits and other online activities with friends.

Some control. Ruh Roh.

For the program announced Tuesday to work, enough users must actually say "yes" so advertisers can show users their pitches in the guise of friends' endorsements.

There they go again "IN THE GUISE OF". can anyone say "identity theft"? Here's the news, if I want to endorse a business, I'll do it myself, thanks very much. Its called word of mouth, viral marketing, whatever. But it puts ALL the CONTROL in MY hands. Geddit guys? Apparently not.

David Hallerman, a senior analyst at the research group eMarketer, warned that users might not be as receptive to ads when they are communicating with friends on Facebook as they might when they are reading articles elsewhere in a more relaxed, consuming state.

Ya don't say. Wow, how about that. Who ever would have thought it.

Doc Searls had the final word on this stuff a long time ago, there is NO demand for messages and there is certainly no demand for an ad break while I'm having a meetup with friends.

Yes, Facebook is free and yes it has to be paid for but using my purchase as an endorsement for you to market to my friends?

Here, take the knife, apply to throat, slide sideways.

Assymetric Warfare

One of the horrors of the current quagmire in iraq is that assymetric warfare works exceptionally well, $25 worth of materials and the skills and machinery available in any motorcycle repair shop can build a weapon that will take out a $60 million tank.

It seems that the same applies digitally as Cracking Hollywood's code seems to be getting easier, faster and cheaper.

The system designed to protect next-generation DVDs from pirates has been cracked. Even the hackers are surprised at how easy it was.

The distribnution curve of intelligence in any population always, ALWAYS, puts the smartest people outside your organisation. The net also aggregates that external intelligence and enables it to collaborate and share the knowledge.

Can we just get it down as a maxim and file it away somewhere that we can't lose it? When it comes to outsmarting the internet, you cannot, ever, win.

No amount of money, no amount of computing power, no pile of PhD's will be enough to defeat the intelligence of the network.

The other problem is that, at some point, the technology you use has to allow the information to get out, and it has to contain its own keys and, as it happens with DVD's (and incidentally with RFID "protected" passports ) it has to identify itself in that stream.

Which is exactly where the new crack has come. millions wasted, customers frustrated, business lost and getting a bad reputation for not delivering, DRM must be working for someone, surely, isn't it?