Esko Kilpi on Interactive Value Creation

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

Month: September, 2011

Why do I have to cooperate?

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


More on the subject: Lessons from wikipedia. A HBR blog post by Gartner.

The social business redefining what binds individuals together

Almost all leadership concepts start with the assumption that a key role for the leader is to set a direction. This usually means designing and communicating a vision and a set of goals. Traditionally, the roles of vision and goals have been there to help people to understand the direction of the enterprise and how they can contribute to it. Today we need something more.

We need to redefine what binds individuals together. Separate individuals subscribing to the vision may not be enough if people don’t connect with one another. What we are striving to do is not enough if there is no discussion about who we are, and why we do the things we do. We cannot talk about an organization of people without referring to what makes them a collective.

Leadership in the era of the social business should be about providing a platform for discussing the meaning of work and the collective identity.

Leadership should address the human search for being part of something larger than one’s self. The more gifted people are, the more they want to connect with meaningful people doing meaningful things together.

As almost all organizations are becoming increasingly diverse and network-like, and as all boundaries are increasingly flexible, the notion of what brings people together is becoming even more critical.

When we think of intelligence, we usually think of extraordinary individuals. We imagine the thought processes of independent geniuses innovating in isolation. Nothing could be further away from the reality. Creativity is an interactive and social process for even the most gifted. Significant creative breakthroughs almost always represent years of sustained collaboration with others. Creative individuals need both independence and interdependence to do their best work. A creative organization thrives on the tension that arises from widely different but complementary abilities and views working with one another.

In industrial management, employees were taken for granted and had no choice or voice. The foundations of work relationships are still largely built on asymmetrical relationships between the employer and the employee, the manager and the worker. This antagonism is already affecting labor markets in developed countries: firms are finding it increasingly hard to hire good people. Younger people are more and more attracted to self-employment and entrepreneurial possibilities instead of joining a corporation.

The ideas and technological solutions around the social enterprise can help renew and refresh outdated approaches to work.

The social business is very different from the industrial corporation. In order to be successful, the firm needs to listen and involve people in the same manner that we are today trying to do with one group – customers. Successful corporations, no matter how large and established, are evolving collectives of talented, passionate and diverse individuals in interaction

Knowledge workers want to have a say in what they do in life; where and when they work and most importantly – why and with whom!


More on the subject: New social networks. David Weinberger on impractical knowledge and knowledge is the network. Douglas Rushkoff on the future of jobs.

Coworking spaces in London, and Amsterdam and co-working as a phenomena.

Why Start-ups should think differently

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.

The like button

What would life be like if no one acknowledged your existence. What if you were ignored and excluded.

Our social interactions play a role in shaping our brain. We know now that repeated experiences sculpt the synaptic connections and rewire our brain. Accordingly, our relationships gradually frame the neural circuitry. Being chronically depressed by others or being emotionally nourished and enriched has lifelong impacts. This is of course unwelcome news to someone whose relationships tend towards the negative but it also points out to where the possibilities for repairing the situation might be.

We can no longer see our minds as independent and separate but as thoroughly social. 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.

Communication starts with acknowledgement. It is about granting attention to others and making room for them in our lives. Thus how we connect has tremendous significance. Our (management) attention should be on who is talking and who is being silenced? Who is included and who is being excluded? Who do I acknowledge and who acknowledges me?

Changing the way we communicate is the way we change organizations. Changing the conversation is not a major program or change process. It is about understanding and influencing participation. It is sometimes about new connections, new conversations, and new people taking actively part. It is often about asking different kind of questions and pointing to different kinds of issues. It is always about being more positive than negative.

There can be no change without changes in the patterns of communication. Organizations of any kind, no matter how large or how small they are, are continuously reproduced and transformed in the ongoing communicative interaction. The patterns of interaction in an organization are highly correlated with its performance. Thus we should pay much more attention to the strength and number of relationships and the wideness and depth of networked thinking.

My friend Marcial Losada has proved that the distinctive characteristic of a high productivity organization is the capacity to generate expansive, positive, emotional states. Emotions can thus be seen as the driving force behind cognition and action. There is a lot of truth in the sentence “I don’t remember what you said, but I remember how you made me feel”

Low connectivity, self-orientation and negativity can trap organizations and people into rigid patterns of thinking and limiting behavior. “We have a human habit of getting stuck in a certain way of thinking and finding it extremely difficult to jump out of the rut into another way of thinking” as Murray Gell-Mann put it.

In modern psychology, the word empathy is used in three senses: acknowledging a persons existence, understanding that person’s feelings and being responsive: I notice you, I listen to you, I act with you.

The new management challenge is to identify the patterns of interaction behind high or low productivity and high or low creativity. It is also about analyzing how and when we get stuck. Is it in endless advocacy? Is it in self-absorption? Is it a result of general negativity? The goal is to create expansive emotional spaces that open up possibilities for effective action, creativity and learning. It is not about having common goals and sharing the same values. It all starts with acknowledgment and recognition between different people with different views and different approaches, evolving into a more responsive and complementary sense of consciousness.

What would it be like to live in a world where acknowledgement was the accepted rule that we freely wanted to follow – any time, any place, and with anybody.

The like button, as one way of saying that I have noticed you, I see you, I hear you,  is more important than we know.


Thank you Marcial, Doug and Ralph

On attention and brain science . The Passion Economy . The architecture of cooperation .