Collaborative Age value production system | The Fourth Revolution Blog

How the Legal Reference Industry is Being Rebooted

The Harvard Law library (which contains reference to most of US law cases since the US colonial times) is getting digitized and will be available for search for the public. In what is a development that will redefine the law industry, legal references in the US will finally be more searchable and available and far more in the past than now. This will redefine the legal publication industry, as well as the tasks of thousands of junior legal staff that until now had sometimes to search manually through thousands of pages to support their cases. Also, a lot of the digitized databases were only available at very high cost.

shelves of law books we are getting rid of! — Shelves of law books we are getting rid of!

This paper from the NY Times explains the detail and analyses the consequences of that project. While a lot was already available in digital format, it came at a steep price from specialized companies. As explained in the paper, those companies do support the initiative with a deal that will make the data only progressively available to the general public over the next eight years, time for them to redefine their business model and develop some advanced tools on the basis of the raw data that they can sell for a profit. Still, the trend is here to make the information free and available for all.

Even the information that was standing on shelves for the last two centuries is now getting free. We are decidedly moving towards an era of free and available information, where most of the information ever produced by humans on a support will be available to all, anywhere.

How the Move to Mobile Highlights the Broadcasting Majority

Let’s be honest – I can’t create on a tablet or a phone. I can only consume information, or have simple interactions. I struggle to write an email that is more than 3 lines long. Thus when I read that mobile devices are taking over the traditional PC, I also read that most people probably don’t create, and if they ditch their PC, they remove the means to create the more easily.

I can’t create without my traditional laptop or PC. I need a keyboard to efficiently write my blogs and books. I need a mouse to create my powerpoint slides or work efficiently in Photoshop. In summary, I need some accessories to enhance my creative productivity that are absent from mobile devices.

The move to mobile is once again the demonstration that most people prefer just receiving broadcast and reading and viewing stuff created by others. That’s not an issue by itself, because that can be expected. It is an observation. It is also on what Facebook and many other sites and apps are counting on.

Just make sure you don’t diminish your ability to create. Keep the means around, like a traditional laptop.

Commodity Projects: Why it’s Not About Risk Transfer, but about Sustainable Lower Cost

In the current days of low commodity prices, operators and contractors are suffering – be it in Oil & Gas, mining, and energy in general. I hear a lot about the need to redefine the contractual setup, and the wish for operators to transfer more risk to the contractors.

Let’s be clear. Risk transfer is tactical. It’s not a sustainable solution. You can transfer more risk to the other party, but if that’s systematic and if it’s not priced in, this solution will sooner or later lead to the disappearance of that party.

Transferring risks sustainably to another party only makes sense if the other party is better geared to manage that risk, in terms of competencies or capability.

What operators in the commodity markets need right now:

projects that cost less,
and which outcome is more reliable in terms of cost and schedule.

Lowering excessive specifications and being more clever in terms of standardization to seek gains from series effects are key for the first point. More effective project execution practices and less complexity in execution are the levers for the second point – and there is a lot of knowledge now in the industry to make it successful, because project governance and management practices are still sometimes poor.

The contractual setup between operator and contractor is essential, but on the long term it should be geared towards these two objectives rather on the short term tactical risk transfer. This also means that operators need to have an industrial policy where they develop contractors that can meet their expectations in terms of capabilities and develop long term relationships that allow to fully deploy series effects over several large projects.

Risk transfer is short term and tactical. Lowering the cost by developing a proper contracting landscape is the sustainable solution to commodity projects’ woes.

Why Ever More Large Companies Will Collapse Suddenly

In the next years and decades we will witness more frequent events of collapse of organizations and companies which we thought were almost like institutions in the economic landscape.

Bank-Run — A bank run, the typical extreme event where a quasi-institution falls

That’s at least the view of Jeremy Rifkin in his interesting book ‘The Zero Marginal Cost Society‘. He quotes an economist of the XXth century, Oskar Lange, to have said: “The stability of the capitalist system is shaken by the alternation of attempts to stop economic progress in order to protect old investments and tremendous collapses when those attempts fail“. It was true in all times. Today more and more industries struggle to defend their position and their investments as the Fourth Revolution spreads. The more they are in oligopolistic or monopolistic situation, the longer they will resist – and the harder the fall will be. The larger and global they are, the more widespread the consequences will be.

As we move into the Collaborative Age in the next few years and decades we can expect some dramatic collapses to happen as many dominating organizations will resist until the end while their economic model will crumble.

Why Profit Will Increasingly Be At the Edge of the Existing

“In a market-exchange economy, profit is made at the margins” writes Jeremy Rifkin in his interesting book ‘The Zero Marginal Cost Society‘. His argument is that the natural trend for commodity products’ price is to tend to zero; and this trend has significantly accelerated in the last decades.

Esoko add — A great product creating high value and profits, at the edge of the existing

“As more and more of the goods and services that make up the economic life of society edge toward near zero marginal cost and become almost free, the capitalist market will continue to shrink into more narrow niches where profit-making enterprises survive only at the edges of the economy, relying on a diminishing consumer base for very specialized products and services“.

The model where you copy the existing is less and less sustainable. If you want to create value, and hence profit, place yourself at the edge. How does your current strategy fare?

Why Systemic Understanding is Required for Deciding on Changes

It is amazing how most people think and act to optimize their little corner without taking into account the entire system they are in.

In my consulting practice I am involved in a number of process changes in organization. The more these organizations have integrated systems and processes, the more delicate any changes are because of the consequences across many disciplines. Still, a lot of people are just trying to optimize their small segment of work, generally trying to remove some stuff they are doing not for their own sake, but for the sake of the organization. It is not the solution!

This is particularly visible in large projects, which generally involve Engineering, Procurement and Construction. These different areas are deeply inter-related, and most people don’t understand that. Changes in one area can have significant consequences in other areas. It takes experienced people that have a systemic understanding to accept or refuse those changes. We can’t let people try to optimize locally. Optimization needs to be global, systemic.

The complexity of our lives increases. We don’t always understand the indirect consequences of our actions. Let’s try to systematically take a systemic view before changing things.

How Improving Risk Management in Infrastructure Projects is Not Enough

Delivering infrastructure projects in a way that delivers the expected benefits is essential for the good utilization of public and private resources. Still, many infrastructure projects do fail, sometimes miserably and publicly, like for example the new Berlin Brandenburg airport. Causes are almost always the same – poor governance, poor management of changes during the project, and poor coordination of contractors and their interfaces.

The new Berlin Brandenburg airport, still empty 4 years after construction finished

An interesting paper by McKinsey proposes as a solution to these failures that the risk management framework around large infrastructure projects should be deeply reviewed. In typical McKinsey style they state “In our view, most overruns are foreseeable and avoidable. Many of the problems we observe are due to a lack of professional, forward-looking risk management“. The paper goes on with good recommendations on how to implement a comprehensive and consistent risk management process throughout the entire project lifecycle.

But is that sufficient? In my view, process-based solutions are only effective if there is no basic governance breakdown. And more often than not, this is the issue, with situations such as:

over-inflated usage expectations, to justify the investment, based on other motivations (political, status within the company, etc.),
under-estimated costs and duration to make the investment more palatable to investors,
under-estimated effort to coordinate the project and poor contractual approaches with contractors
etc.

It happens too often that we are called as consultants to sort out an issue in the mechanistic project execution only to find out that it is the entire project governance that is rotten to the core.

No amount of process will deal with this issue if the system is not ready for candor and self-examination. It is often necessary to take a broader view and address the complexity of decision-making to deal with problems. It’s often tough and we feel like pulling teeth, but that is what needs to be done when things go awry in infrastructure projects.

Why We Need to Restore Productivity Through Collaboration

Productivity is the basis of wealth. Yet after decades of sustained growth in the Industrial Age, its growth has been progressively slowing down since the 1970s, and is almost plateauing today. This causes economic stagnation.

In a very interesting TED talk, Yves Morieux explains how this crisis is due to a change in the concept of efficiency – because value has shifted, due to the Fourth Revolution.

Yves Morieux explains that the traditional tenets of the corporation (clarity, measurement, accountability) are obsolete and have to be replaced by collaboration. “To cooperate is not a super effort, it is how you allocate your effort. It is to take a risk, because you sacrifice the ultimate protection granted by objectively measurable individual performance. It is to make a super difference in the performance of others, with whom we are compared”.

“Clarity, accountability, measurement were OK when the world was simpler. But business has become much more complex”. And thus the processes and effort around clarity, measurement and accountability and the innumerable processes around these issues have become a liability instead of an advantage.

Collaboration is the key to effectiveness in a complex world. Remove the rules around individual measurement and focus on getting the maximum out of collaboration!

Why Learning Comes from Giving

For a long time I have found that the best way of learning is teaching. It is a bit of a double-edge sword of course (you need to know a minimum to be able to teach) but the preparation and the performance of the course really nail the knowledge down. And the questions and challenges from the students do help light up some obscure corners as well.

Roland Barth, a specialist of school learning, is quoted to say: “The most powerful form of learning, the most sophisticated form of staff development, comes not from listening to the good words of others but from sharing what we know with others. Learning comes more from giving than from receiving. By reflecting on what we do, by giving it coherence, and by sharing and articulating our craft, knowledge, we make meaning, we learn.”

I love that sentence: Learning comes more from giving than from receiving.

This statement is actually potentially much more far-reaching than just the issue of teaching. It applies throughout our life: we can’t learn without some exchange. We can’t learn without giving. And it is those lessons that matter.

Quote extracted from the book ‘Optimizing the Power of Action Learning‘ by Michael Marquardt

Why is there a Golden Arches Theory of World Peace?

What is the Golden Arches peace theory? “No two countries with a McDonald’s have ever fought in a war. The only unambiguous Big Mac Attack took place in 1999, when NATO briefly bombed Yugoslavia” writes Steven Pinker in ‘The Better Angels of Our Nature: The Decline of Violence In History And Its Causes‘.

This is an observation, but not a causal fact. What could explain this effect? “Broad historical changes have tilted financial incentives away from war and toward trade. Russett and Oneal found that it was not just the level of bilateral trade between the two nations in a pair that contributed to peace, but the dependence of each country on trade across the board: a country that is open to the global economy is less likely to find itself in a militarized dispute”

It thus seems that bringing countries or communities into the flow of world trade and increasing the dependency on exchange would be a great way to foster world peace. The dramatic increase in worldwide trade could be an explanation of the much more peaceful times we are enjoying since the end of WW2.

In the Collaborative Age, bringing people and communities into the worldwide exchange of ideas should also improve peace and understanding. We then need to be particularly wary of those communities that close themselves to the outside world.

How Sensor Devices Add Another Dimension to the Personal Data Sharing Conundrum

Since the start of the Collaborative Age most of us have been giving out personal data in exchange for free services (like Gmail or Facebook where it serves to generate “targeted” advertisement). It’s already a lot of personal data, but it might become much more soon: we are increasingly wearing personal sensors that generate a lot more intimate data (location, movement, biological data etc.) and the Internet of Things will generate still more data about our personal environment. Should we continue to share it in exchange for more and more (annoying) targeted advertisement with the risk to really see our intimacy compromised or should we put a stop to this trend? Or are we happy to continue to fund free services with our personal data?

It is a real debate that is unfolding under our eyes at the moment. Cory Doctorow who is clearly on the side of the defense of personal data, proposes in a recent column ‘What If People Were Sensors, Not Things to be Sensed?‘ to change the logic: let the world produce offers and let us choose and filter without giving out our data. Large internet conglomerates on the other hand, defend their interest to have our data (while pledging for confidentiality and anonymity). And when Microsoft when installing Windows 10 asks a lot of questions of what we accept about data sharing, it seems scary but well, at least they are asking for authorization… while others don’t!

It is a narrow edge that the internet giants are treading at the moment. Their business model is at stake. Give the consumer the impression that they know too much about their intimacy and they risk a backslash; allow too strict personal data laws to pass and their revenues will disappear. And at the end of this conundrum, the choice is ours, as it will shape the Collaborative Age to come.

Why are we working the more the higher in the organization? The work-time paradox

Today, the higher people are in organizations, and the higher paid they are, the more they are expected to work. That is very much the opposite of the situation one century ago: it was rather the lower classes that had to work long hours to gain a meager living while the upper classes took advantage of a life of leisure. And in the meantime, productivity gains should have rather diminished the average work time, while automation should have reduced human effort.

overworked — Overworked in the bureaucracy?

Why this paradox? Is it representative of a societal shift? Where will it stop (when one hears for example about young interns in banks dying from overwork !?)?

The New-Yorker published an interesting column on this topic ‘You Really Don’t Need To Work So Much‘ following some recent controversies about work conditions in Collaborative Age companies such as Amazon.

The column I find does not give convincing explanations of the paradox. Some arguments are probably valid (such as ‘If you’re busy you seem important’ and the fact that the modern large organization does create a lot of occupation that diminishes dramatically the efficiency, not to mention the effectiveness). One can think also about the fact that the current organizational structures are not designed to tackle the increasing complexity of the world, and this creates huge work to try to catch up the increasing gap. And yes, it is probably possible to be as effective and putting less hours at work, removing some bureaucracy.

It seems to me that the fact that the higher one is in an organization, the more he/she has to work is a remnant of the pyramidal organization of the industrial age. This should disappear progressively with the Collaborative Age. However the increase of inequality counteracts this movement as many people have to work more to earn what they expect. And freelance people end up working more than employees in general, because they also need to do marketing and administration tasks they can’t easily delegate.

Please comment if you have a good explanation for this paradox and your views on its evolution!

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