Esko Kilpi on Interactive Value Creation

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

Tag: Patterns

Patterns

Social sciences are concerned with understanding and representation of what is going on and what has happened. Earlier, social scientists took great leaders and their personal characteristics as the topics to be explained. Context and time did not matter. More recent approaches to the study of social phenomena can be summarized as trying to understand temporality; the processes of becoming, live movement in time, which, in the world of business, either gives rise to viability or makes us slowly, or rapidly, obsolete.

The life stream of individuals is the new focus area. Life streams are also called social activity streams. The term “lifestream” was coined by Eric Freeman and David Gelernter in the mid-1990s to describe a time-ordered stream of documents that functions as a diary; every document created and every document received is stored in the lifestream.

In management studies, the questions of becoming, remembering and forgetting are not only new concerns. They are the essence of modern knowledge management, especially in the time of Big Data, when “it is cheaper to keep than to throw away”.

There is a fear of memory loss in business, but there is also the opposite fear, that memory produces practices in the present that should best be forgotten.

Anthropologists claim that reproduction of the past is easier than change. This often leads us into situations where the past is no longer an adequate guide to the present, leading to a situation where an information asset turns into a liability.

Knowledge-intensive work takes place in communication. The process of knowing is the process of communication. The most important knowledge management challenge is to understand what takes place in that interaction: what is being discussed? What is not discussed, what is silenced? Who is included in the conversation, who is excluded? The most important measure, however, is how the common narrative develops, how fast, and where to.

This is why an organization should be seen as a pattern in time, a lifestream, a continuing story without beginnings. Everything we do is built on what has happened before. New people join this narrative and people leave. The patterns that emerge do so because of what everybody is doing. It is what many, many local interactions produce. Work is dynamic participation and influencing how the story develops.

Without understanding and visualizing where we come from and where we are heading, it is impossible to know whether we move at all, whether the flurry of daily activities is actually keeping us trapped in repetitive patterns without any progress. The same people having the same conversation again and again, as often seems to be the case.

Our past, together with our intentions for the future is present in the daily, mundane actions and interactions that often pass without notice. A lifestream is the ongoing reference point and visualization of progress in place (a map) and time (a calender). It is the means for pattern recognition to help create the future we truly desire.

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More on the subject: Euan Semple on Patterns. Doc Searls Weblog. Big Data and pattern recognition.

Complexity, patterns and links

The mainstream ways of thinking about management are based on the sciences of certainty. The whole system of strategic choice, goal setting and choosing actions to reach the given goals in a controlled way depends on predictability. The problem is that this familiar causal foundation cannot explain the reality we face. Almost daily, we experience the inability of people to choose what happens in their organizations – or in their countries. We live in a complex world. Things may appear orderly over time, but are inherently unpredictable.

Complexity refers to a pattern, a movement in time that is at the same time predictable and unpredictable, knowable and unknowable. Healthy, ordinary, everyday life is always complex, no matter what the situation is. There is absolutely no linearity in the world of human beings.

Human patterns that lose this complexity become repetitive and rapidly inappropriate for dealing with life. Unlike mechanical systems, human systems thrive on variety and diversity. An exact replication of behavior in nature would be disastrous and seen as neurotic in social life. For example, a failing heart is typically characterized by increasing loss of complexity.

A pattern is something that emerges through the complex interactions between elements in a system. Although there is apparent order, there is never exact repetition if the system is viable. This is why human interaction cannot be understood as processes in the way they were used in manufacturing, but as patterns.

Patterns that are more repetitive are normally called routines or habits. This conclusion is important for us. Novelty emerges in a radically unpredictable way. Creativity is seldom the end result of a repetitive process.

The Internet changes the patterns of connectivity, transforms our understanding what “local” is, and makes possible wide participation and new enriching variety in interaction. By relying on the interactions of millions of people instead of a few experts/managers to classify content on the net, Google democratized scientific citation indexing. To be able to manage the increasingly complex organizations of today, the same kind of democratization needs to take place in the corporate world. Companies are transforming themselves from industrial mass production to creating value in networks of mass communication.

Transparency of tasks is the corporate equivalent of publishing academic articles. Responsive linking, rather than predictive linking such as in corporate hierarchies and process charts, acts as a measure of relevance, control and value. This has served the academic community well. It made Sergey Brin and Larry Page billionaires. Now is the time to do the same in the corporate world.

The Google lesson for management is, that the more work is based on responsive, democratic processes of relating and the more organizing is an ongoing process of communicative linking, the more value we can create!

It is now time for the sciences of uncertainty.

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On trust

Dire economic outlooks typically lead to emotional reactions and social fragmentation. This always results in bad decisions and conflicts. Then frustrations increase further as the established ways of doing things come under greater attacks. Irritation over the perceived ineffectiveness of governance systems then creates the wish for a saviour, a strong person, to come and clear up the mess. This is how we create dictators, this is how they come into power. This is how Hitler was elected.

The same dynamic is still inbuilt in our political and social systems and should be taken into consideration when we try to figure out what may happen next. Rather than trying to resolve situations through discourse, populist politicians are increasing tensions through an “us versus them” rhetoric in pursuit of support among their own.

We face a repeating social pattern: with growing economic difficulties, the populist stance is to blame “others”, normally “foreigners”, for taking our jobs or for taking our money.

Aristotle had interesting ideas to explain what was going on in the economy. Aristotle made a distinction between two kinds of value added – one that we get from nature’s resources to sustain our lives, and another, which we create to facilitate our relationships and trade. The value added in the latter does not begin from nature, but from the promises we make to one another – from money.

There are limits to what we can get from nature, but, according to Aristotle, since money is promises, there is no end to the amount of money we can aspire to collect. What is special about money, Aristotle says, is that its value is set by mutual agreement. It has no intrinsic use value, only an exchange value, and it keeps that value only as long as people agree to accept it in payment. As long as there is trust.

Therefore it is understandable if the expanding social dynamic reaches a point where promises are not believed any more. After that limit is passed, the result is a sudden and deep crisis. The whole house of cards crashes because it is made of promises that don’t have any value any more. Fear replaces trust. At the moment, it does not take much distrust to cause solvency problems to highly leveraged banks – or highly leveraged countries.

What is a fairly new phenomenon is that buying and selling are no longer confined to resources, to trading goods and services. The world economy mostly consists of buying and selling money, buying and selling promises according to Aristotle. This is why we are so deeply interdependent and why we are even more dependent on building and sustaining trust.

The only way to sustain democracy is to work together and share the burdens and the efforts – whatever happens.

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Thank you Ray Dalio and Mikael Jungner