Esko Kilpi on Interactive Value Creation

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

Tag: David Weinberger

From productivity to social innovations

The printing press constituted a true revolution in communication. But what really happened as a wider consequence of that revolution? Let’s try to reconstruct the circumstances that preceded printing. We know that there was a strong, although very divergent scribal culture before the printing press. The cultural texture was quite thin outside monasteries, libraries, and cities such as Bologna. That led to a heavy reliance on the vocal transmission of information, on storytelling.

The information culture was half-spoken, half-written.

The influence of the scribe was greatly enhanced because of a complementary character, the copyist. At first, the shift from script to print produced a social culture that was not very different from the culture produced by scribes. The writer – printer process was not very different from the scribe – copyist process, if looked at from the outside. Of course there was a huge increase in the output of books and a drastic reduction in the man-hours required to turn them out.

The first change was a remarkable increase in productivity. But then, the communications revolution of print caused remarkable changes in information-related practices that led to even wider social changes.

The well-informed man had to spend a part of each day in temporary isolation from his fellow men – reading. Another development was the Sunday papers replacing church going.  Sermons used to be coupled with news about local and foreign affairs. The new media players handled news gathering and circulation logistics much more efficiently.

The most noteworthy social change took place on the community level. To hear, you have to come together. To read encourages you to draw apart. The notion that a society can be regarded as a bundle of discrete units supported the principle that detached people can be represented through a system of disconnected political parties. The reading public was very different from the one before. It was not only dispersed, it was very atomistic and individualistic. As a result, the present political system was born.

Learning, which used to take place through vocal interaction in groups, was now the activity of a solitary, independent individual. The picture of the student in the library reading room was transferred to classrooms and the architectures of education.

According to some researchers, print silenced the spoken word. The orators of Rome gave way to the men of letters. Written text was now about facts and talk was cheap.

From this point on, people have tended to see information and communication technologies as two separate domains, not only for technological reasons, but because of the historical developments described above.

We are again going through another revolution in communication. The way the written word is used on Twitter or on Facebook is much closer to the vocal transmission of information than to writing. Through closely combining communication and information technologies, we are creating a much richer cognitive tapestry than the present separate ICT-systems are capable of.  Second, instead of drawing apart, we can now come (digitally) together. The culture is again half-spoken, half-written. The printing press separated information and communication. The Internet and the new social technologies are causing the two to converge.

The first change is again a remarkable increase in productivity, but again, it does not end there. The real promise of the Internet is in the new information-related practices and the social innovations that are still ahead of us.

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The foundations of social business: pull communication

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In mainstream thinking, managers are understood as the prime originators of what happens in their businesses. The central concern is how the active manager/subject gets the passive follower/object to act in ways that reflect the manager’s perspective. Management continues to see communication in terms of influence and manipulation.

The social business view sees relations and communication as conversational processes of meaning making. It is a movement of thought on the basis of multiple perspectives that you invite or you pull. A person, when networking, would be subscribing to contextually relevant topics and people. Push transforms to pull.

Interaction starts with recognition. It is about granting attention to people and information and making room for them in our lives.  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.

When seen through the logic of social business and social tools, leading and following have a very different dynamic. Leading in this new business sense is not position-based, but recognition-based. People, the followers, decide who to follow and what topics to follow.  You pull information from someone you trust to be at the forefront in an area, which is temporarily meaningful for you.

Another huge difference from traditional management thinking is that because of the diversity of contexts people link to, there can never be just one source of information. Thus, an individual always has many topics and people 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.

Pull communication is at best a process of active following, creative learning through observing and simulating desired practices. Leading on the other hand, is doing one’s work in a transparent, inspiring and reflective way.

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Thank you John Hagel, Stowe Boyd and Stephen Downes

More on the subject: Stowe Boyd.

Emergence and self-organization

Many people say that open source software developers have the most efficient ecosystems for learning that have ever existed. What is it, then, that is so special about the way developers do things? Is there something that could act as a model for the future of work, or the future of education?

What takes place in open source projects is typically not the result of choices made by a few (powerful) people that others blindly implement. Instead, what emerges is the consequence of the choices of all involved in the whole interconnected network, “the connective“, as Stowe Boyd puts it. What happens does not follow exactly a plan or a design, what happens emerges. It is about the hard to understand process of self-organization.

We still don’t quite understand what emergence and self-organization mean. The problem is that we believe that the unit of work is the independent individual. Self-organization is then thought to mean that individuals organize themselves without the direction of others. People think that it is a form of empowerment, or a do-whatever-you-like environment, in which anybody can choose freely what to do. But connected people can never simply do what they like. Cooperating individuals are not, and cannot be, independent. People are interdependent.  Interdependence means that individuals constrain and enable each other all the time. What happens, happens always in interaction and as a result of interaction.

According to the present approach to management, planning and enactment of the plans are two separate domains that follow a linear causality from plans to actions. From the perspective of open source development, organizational outcomes explicitly emerge in a way that is never just determined by a few people, but arises in the ongoing local interaction of all the people taking part. For example GitHub “encourages individuals to fix things and own those fixes just as much as they own the projects they start”.

What emerges is, paradoxically, predictable and unpredictable, knowable and unknowable at the same time. This does not mean dismissing planning, or management, as pointless, but means that the future always contains surprises that the managers cannot control. The future cannot be predicted just by looking at the plans.

Emergence is often understood as things which just happen and there is nothing we can do about it. But emergence means the exact opposite. The patterns that emerge do so precisely because of what everybody is doing, and not doing. It is what many, many local interactions produce. This is what self-organization means. Each of us is forming plans and making decisions about our next steps all the time. “What each of us does affects others and what they do affects each of us.”

No one can step outside this interaction to design interaction for others.

An organization is not a whole consisting of parts, but an emergent pattern in time that is formed in those local interactions. It is a movement that cannot be understood just by looking at the parts. The time of reductionism as a sense-making mechanism is over.

What we can learn from the open source ecosystems is that organizational sustainability requires the same kind of learning that these software developers already practice: “All work and learning is open and public, leaving tracks that others can follow. Doing and learning mean the same thing.”

The biggest change in thinking that is now needed is that the unit of work and learning is not the independent individual, but interdependent people in interaction.

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Thank you David Weinberger, Ken Gergen, Ralph Stacey and Doug Griffin

More on the subject: the GitHub generation, Sugata Mitra. Video: “Knowledge in a MOOC” Steve Denning on complexity. The mundanity of excellence.

A relational view to management

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.

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Thank you Gregory Bateson, Doug Griffin, Ralph Stacey, Kenneth Gergen, David Weinberger and Katri Saarikivi

New structures – new designs

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.

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More: “Lead like the great conductors

Designing a beautiful business

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!

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Thank you Dee Hock and Thomas Kuhn.

Christmas Letter

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.

Higher performance occurs through the combination of different perspectives and supportive, enriching communication.

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.

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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

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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!

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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.

The death of the sales funnel

The perspective behind the mainstream approach to marketing and accordingly to digital marketing is to create attention, to create eyeballs to feed the sales funnel. That perspective is heavily biased towards the selling side. Its point of view starts with sellers, not buyers. Everybody knows the old saying in advertising: half of the money spent on advertising is wasted. We just don’t know which half. Google has radically reduced the amount of money wasted. But it too produces a lot of wasted expenses because of the inherent, systemic inefficiency of the sales funnel process transforming attention only marginally to leads, and leads only marginally to buyers. The high cost of this process is not normally questioned because the low-returns nature of sales and the sales funnel are taken for granted.

Digital marketing is really about reversing the sales funnel

Digital marketing could reverse the sales funnel and develop business, starting in a people-/context-centric way from the intentions of the buyers, and not from the intentions of the sellers. If you are present on Facebook and if you listen to what people say via Twitter, you hear buyers notifying the market of their intention to buy all the time. It is called demand-side advertising. Unfortunately, and unbelievably, there are still very few sellers who think that it is worthwhile to have a social media presence and to be attentive to this reverse advertising: the digital demand funnel. They are stuck with the sales paradigm of yesterday, the physical world.

But the digital demand funnel does matter. Markets are essentially digital networks of communication. The nodes of the network are people and the links between the nodes are conversations. This is where reputations are earned and reputations are lost. Brands are more about reputations earned in those live, everyday conversations than about the messages bought from advertising agencies to transmit brand promises.

Digital marketing succeeds best if the old ideas of attention are complemented with new ideas of participation. Every company today should know where the conversations that matter take place, and how to take part in a value-creating way. Digital marketing should not only be about creating company sites and marketing messages. It should be about participation in social media.

The challenge is to be where your customers are and to join the conversation.