Category: Collaborative Age value production system

Why Don’t You Start What You Want to Do NOW?

The quote on this picture I encountered in internet by chance struck me.

the most dangerous riskIndeed it is a great risk of spending your life not doing what you want on the consideration you can buy yourself the freedom to do it later.

It assumes a bet on life, on the future. Some people indeed work like mad looking for an enjoyable retirement without ever taking advantage of it.

Is it really the most dangerous risk of all? In terms of personal balance it is certainly a great risk. Still sometimes it is great to have the possibility to take advantage of available opportunities to fund or prepare a future venture. I don’t think it is a problem if it corresponds to a clearly defined period that does not exceed a pair of years, and relates to a clear plan.

If you are like me, it is still good to remember sometimes that it is important to take advantage of the present moment and not bet everything on the future in particular further than a few months away.

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Why Large Modern Organizations are Handicapped when it Comes to Adaptation

An interesting short e-book from the Boston Consulting Group, ‘Adaptative Advantage: winning strategies for uncertain times‘ by Martin Reeves, addresses the issue of adaptation (and innovation) in large organizations.

board-meetingLarge organizations need to be especially aware of the challenges they are likely to encounter in developing adaptative capabilities. Classical approaches to managing scale – delegation and specialization – can be highly efficient under stable conditions, but the hierarchical structures they produce are too rigid for the rapid learning and change required in turbulent environments.
A narrow focus on leanness, too, can impede adaptability. Under pressure from competition and capital markets, some large companies have squeezed out not only inefficiency but also the diversity and variation needed to adapt to rapid change. What’s more, once adaptative capabilities in highly structured and specialized organizations have atrophied, they can be challenging to recreate.

In summary, the search for maximum optimization and scalability is bad for adaptation because it squeezes out all the resources and organizational levers that would be needed for adaptation.

This is just why so many large organizations and institutions will not survive the Fourth Revolution. This is why successful organizations will seek to be sub-optimized, to remain reactive, constantly changing and adaptative.

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When Imitated, it Means You’re on the Right Track! Persist!

Following on our blog post about competition, most people tend to get angry, frustrated and fearful when they realize what they are doing is being imitated. Wrong! That’s absolutely fantastic! It just means that what you are doing is so great that people believe it is worth imitating!

When imitated, that's great news.
When imitated, that’s great news. Don’t retaliate, innovate more!

As Pamela Slim says, “When you are great at what you do, people are bound to imitate you. Sometimes they will try to steal your  intellectual property, or students, or employees or business model, or artistic genre. It is natural to get upset when this happens. But instead of fighting with the imitator, move on to innovate the next stage of your work. If you are doing your job well, your work is constantly improving and growing. Imitate that.”

And she continues with this marvelous formula: “When imitated, don’t retaliate, innovate.”

We could argue on the contrary: when nobody cares to imitate you, maybe what you are doing is not at the right level?

More great thoughts from Pam Slim in her post 10 Ways to Develop a Mastery Mindset

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How to Exploit the Fact that Life is Richer at the Interfaces

It is a constant biological observation that life is always richer at the interface. Take intertidal zones (the zones that are covered and uncovered by tides), the interface between the sea and the air, between earth and the atmosphere etc… On the reverse, life is much poorer in the middle of all single environments. And those animals and plants living at the interface are also much more adaptable to all sorts of new circumstances.

Rich life in intertidal zones
Rich life in intertidal zones

It is the same in life and business. However we have been educated to live best in a single environment and we are often unconfortable to sit at the edge of our environment or at the interface between two disciplines.

This is a mistake because opportunities are much richer there. First, there is much less competition because it means that you are able to be comfortable in at least two different environments. Second, it gives great opportunities to connect people and resources of both environments to create something new of high value. Third, it is the source of fantastic creativity when it comes to transferring to an other environment the knowledge gained elsewhere.

Don’t develop your career in a single environment. Make sure you can be comfortable at the Interfaces, at the fringe. This will give you an edge and allow you to create unprecedented value.

Next time you think about where to develop yourself professionally or personally, think about interfaces and how rich they can be in opportunities!

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A glimpse into the developing world of online freelancing

ODesk, one of the online marketplaces for freelancers, released an interesting figure of the ‘long tail’ of freelancers, based on its database of job openings vs skills.

ODeskFreelanceLongTail smallWhat this figure shows is that although the web-related specialties obviously dominate, a number of other skills are now visible on these marketplaces. What’s even more interesting is the emergence of more specialties including Engineering and Architectural Design.

An other interesting source of information on the freelance market is the ‘state of the freelance‘ study by Elance (an other freelance market place) in Sept 2012. Some of the data needs to be considered with caution as it is somewhat an infomercial, but there are some interesting observations:

  • lots of on-line freelance (38%) are from generation X, and not all are millenials!
  • most online freelance are full-time
  • overall, all these freelance marketplaces see a healthy grow in jobs and freelance revenue transiting.

It will be interesting to see how much this trend will spread in the next few years. While the number of skills will expand, my prediction and experience is that online freelancing is somewhat limited to simple tasks and cannot replace the need to organize a project team, which will remain the key competence, in particular if it comes to organize a project team of online freelancers!

More on the figure data origin and interpretation on the ODesk blog.

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Why Risk Management is Really about Long-Term Survival

Age old wisdom: In investing and in life in general, avoiding fatal situations that kill us generally means that we can’t strive for the best possible returns. In other words, trying to follow the best strategies giving the highest returns can be seductive but generally also entails fatal risks – great on the short term but unsustainable on the long term!

Jared Diamond just published a new book, ‘The World Until Yesterday: What Can We Learn from Traditional Societies’, in which he describes in details those cultural traits of traditional societies that we should maybe consider re-introducing in our modern world.

age-old farmer wisdom
Do you follow the age-old wisdom of having numerous small plots of value-creation?

In the field of risk management, he reminds us of age-old practices of hunter-gatherers and farmers, that evolved through time for their resilience. For example, traditional farmers generally farm a large number of different small plots (7 to 15 depending on the cultures) in different areas. This is clearly sub-optimal in terms of work, effort and yield. Yet it is the strategy that survived generations because it is the only strategy that ensures survival: diversity in location of the land plots means that even the worst years, some plots of land will give some returns and the farmer’s family will not starve. The current strategy of large fields and unique crops can only work in a developed system involving money  where food can be bought in the case of a poor crop.

We are attracted by the stars that produce temporarily incredible returns on investment, that have incredible short-term success. We only forget that it always comes with substantial risks including bankruptcy or starving.

Success on the long term is about survival, and if possible comfortable survival; not great spikes of success followed by abysmal failures. Remember this the next time you’ll feel some hint of envy looking at some other young overnight success. It is defined by luck and in most instances, it is just the premise of a fatal evolution the other way.

Success is just about survival.

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Why would “profits without production” be bad?

In a column in the International Herald Tribune “Profits without Production“, Paul Krugman explains how the world is changing and how corporations like Apple is the highest valued company in America and employs only 0.05% of the workforce, to be compared with GM in the 1960’s – also the most valued company in America but employing 1% of the workforce and thus spreading wealth much more through society. And that it is a problem for economic growth because of less redistribution of value throughout the economy.

stack of cashIndeed as we defend in this blog, with the Fourth Revolution the value is moving from manufacturing into creativity. For Apple, manufacturing is a (low cost) commodity. The value lies in the creativity, the design and the service; in summary, in the experience. Marketing then takes care of selling us that experience at the right price – the price we are deady to pay for it.

Yes, we have a problem now of large corporations not reinvesting in the economy their huge profits; yes, we have a problem of the share of employee compensation shrinking compared to executives’ and shareholders compensation, thus slowing down consumption and growth. Yes, we have a problem of monopolies being created in new economic arenas that will need to be tackled.

However it serves nothing to complain that value is moving from tangible manufacturing into intangible creation. It is the sense of history. What we need to do is to find solutions so that this shift is accompanied by an appropriate balance in the distribution of value throughout society. We have not found the recipe yet but let’s continue to experiment and observe!

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Launching the Innovation Renaissance, About the Law of Diminishing Innovation

Alex Tabarrok is economist and has written a short essay on ‘Launching the Innovation Renaissance‘. In this highly recommended book he analyses the current issues related to innovation – such as patents, education system and corporate rewards.

The Tabarrok curve of decreased innovation when patent protection exceeds a certain level
The Tabarrok curve of decreased innovation when patent protection exceeds a certain level

Alex Tabarrok is also known for the Tabarrok curve of decreasing innovation when patent protection increases beyond a certain level. Not dissimilar to the Laffer curve of diminishing tax returns when the tax burden increases!

His view on patents and how the increase in patent protection in the 1990’s in the US, in particular in the field of software patentability, is actually diminishing innovation instead of fostering it, is very interesting, and quite aligned with what we exposed in some early blog posts such as ‘How patent litigation cost half a trillion dollar inefficiency in the last 20 years!‘

It is quite a short book, very easy to read, and to the point. One small issue though is that it is very US-focused and would gain to be broadened more globally looking at the innovation issues world-wide. Issues are not the same everywhere, but at the end of the day innovation does benefit everybody.

Add it to your summer reading list!

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How a Paradigm Shift is Happening in Management

Forbes maintains an interesting column by Steve Denning about the paradigm shift in management.

paradigm-shiftSteve Denning believes that there is a deep change happening right now, from a shareholder-driven organization towards a customer-centered organization (read: ‘Don’t Diss The Paradigm Shift In Management: It’s Happening!’). According to him, this will require change from a bureaucratic organization towards new management models that are more flexible, agile, and customer-focused. As readers of this blog you’ll know I even believe the change is much more fundamental as it is related to customer collaboration, nevertheless Steve Denning’s view is quite useful for organizations nowadays.

As with all paradigm shifts it will be tough and take time – read his excellent column comparing that change to the Copernican revolution – ‘Why The Paradigm Shift In Management Is So Difficult‘. This is entirely applicable to the Fourth Revolution changes.

A paradigm shift is certainly happening, that will take time to be realized by all those that are still in the Industrial Age mindset. Be a Fourth Revolution precursor and see how the new approach of business has the power to change the world!

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How anonymous mobile data redraws bus routes in Africa

A research project has demonstrated that bus routes could be mapped in Abidjan by just following anonymously the signal from the users’ handphones. Bus routes in third world countries are notoriously not centrally managed and operated by a large number of autonomous parties.

Abidjan bus route map inferred from mobile phone position data
Abidjan bus route map inferred from mobile phone position data

This mapping allows city planners to get an up-to-date picture of the situation and take action to improve the current situation or take other actions related to improving the traffic condition.

According to this research done by IBM, actions could be taken to slash commute time by more than 10%! (more on this in this BBC post).

Using available data that way, through the unaware collaboration of millions of commuters, is an effective way to create value for the community. How much of this would have been possible even 5 years ago?

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How Flexibility is Essential in Confronting Uncertainty

It is amazing how the military problem of winning battle is close to the problems we face in our daily activities. Contrary to what most people think, successful armies are war are not organizations that are strictly centralized and hierarchical and wait for detailed orders to act.

Napoleon at war
Napoleon, a leader of the Collaborative Age? His behavior in battle was deeply delegative and collaborative!

History has shown repeatedly that battle is a case of unpredictability, where battle is conducted in a deep ‘fog’. Even our modern technologies do not manage to lift it, because it is all about predicting what happens in the head of the adversary. Periodically some approaches to battle or brazen Generals tend to believe uncertainty and chance can be reduced and believe that technology or intelligence should drive action; these approaches have led to the worst disasters of military history.

In military tradition, the most successful generals seem to have been those that have understood that they had to account for a large uncertainty. To do that, they only give the general direction and vision and let their subordinates take all the necessary initiatives based on what is happening in the field. Control by the general in command is thus not on the detail but only on the overall situation. This allows the necessary flexibility – exploiting opportunities where they appear and managing the unexpected where it occurs. This principle of delegation was typical of Napoleon, and inspired many successful armies in the next two centuries.

Flexibility of the organization and leadership at all levels have thus been for a long time the approach of successful armies.

How can we apply these teachings to our everyday life? We can’t expect to control everything that happens, because it depends on events and decisions by others, beyond our control. We need to give responsibility to those in the action, support them in terms of resources, and align them with a simple-to-understand vision leveraging on the organizational culture. We need to expect the unexpected and keep an eye on the general direction.

Reference made to General Vincent Desportes’s book “Decider dans l’Incertitude” (in French), an excellent book about decision-making in uncertain conditions.

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Choose – be a critic or a hero?

Too often we praise critics instead of praising those that go down in the arena to do things – real stuff that is, that can change the world.

Facing fear in the arenaAs Theodore Roosevelt so well said: “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better”.

Theodore Roosevelt continues: “The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

Are you exposing yourself in the arena or do you just watch from you cozy critic’s seat?

Hat tip to Robin Sharma.

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