Collaborative Age value production system | The Fourth Revolution Blog

Is national investment in R&D a fallacy for economic growth ?

It is a commonly held belief that to create innovation, and hence economic growth and competitiveness, governments and companies should invest in R&D. R&D expenditure is an important indicator used at political level to evaluate the competitiveness of economies.

The first powered flight by the Wright brothers

However, there is plenty of substantial evidence, at least anecdotal, that the most impacting and most fundamental inventions were rarely created by government or centralized spending. For example, computers created in a garage; or powered flight invented by self-taught bicycle shop owners. Sometimes R&D spending creates something unexpected, not part of the original program.

The competition between the Wright Brothers and Samuel Langley, a well established academic with generous funding from government, is possibly the best example.

It went to the point where the US government denied the Wright brothers recognition for forty years, so upset were they that they had succeeded and not the program the government had funded!

Some details on that story can be found here, here. On this link there are some interesting thoughts about the effect of government and bureaucratic funding, with reflections around this story.

(Centrally planned) government or corporate funding might not be the most effective way to foster innovation. Letting an ecosystem of innovators create, destroy, fail and finally evolve into suitable innovations is certainly a much better solution. But central planning and bureaucratic management is unable to support or control such an arrangement.

The issue is more about creating a social context where failure needs to be accepted as part of the search for innovation, and where innovation needs to remain nested in action. It is not certain that the huge push of China in R&D and academic research will be effective if there is no possibility to experiment and to fail in Chinese society.

How can we release the inventive potential in a society better than spreading centrally controlled funds?

What Makes Great Organizations and Individuals different?

According to Simon Sinek, what makes the difference for great organizations – and great leaders – is that they know their ‘Why”. It is from their purpose that they derive how they do things and what they do in detail.

All individuals and organizations know their “What”. Some organizations know their “How”, but very rarely their “Why”.

Watch Simon Sinek give a great explanation with fantastic examples related to the Wright Brothers versus the establishment, and other great examples in this TED speech (if you’re a hurry, watch from 1:20 to 5:50 – if you can stop then!):

(Here is the link if you can’t see the video)

“People don’t buy What you do, they buy Why you do it” – Simon Sinek

Simon Sinek’s Golden Circle (Why-How-What) is an interesting approach. It triggers important questions for ourselves and for our organizations.

Is your personal “Why” clear and compelling? Is your organization’s “Why” clear and compelling?

If not, what are you going to do about it?

A great sample of applied Fourth Revolution’s organizational culture

Lately, a deck of slides about culture from a company called Hubspot has been quite popular. And it reflects very well what the culture of Fourth Revolution’s organizations will be. There are 150 slides but they are quite worthwhile for you to take a few minutes to scroll through:

Culture Code: Creating A Lovable Company from HubSpot All-in-one Marketing Software

“Culture happens. Whether we plan for it or not, culture will happen in an organization. Why not create a culture we love?”

This reminds me that it is our responsibility to create the culture we love in our organizations. What do you do about it?

8 Lessons from One Year into Entrepreneurship

It’s now a bit more than one year that I am really on my own as an entrepreneur and it’s time to look back and reflect.

Business Plan — Keep your business plan simple!

After starting my consulting company Project Value Delivery on my own as the single… everything (employee, director, accountant, webmaster, technical writer etc etc) we are now 3. Are a real Fourth Revolution company, we still have no office as in our consulting work we are mostly in our client’s premises. The market has been tested, and it is clearly there to sustain the company. The business model has been slightly revised but remains grossly what was anticipated at the beginning.

Here are 8 lessons learnt from this first year:

Entrepreneurship is not risky if you don’t over-develop before checking the market. The key is not to spend too much time developing a great glitzy product to find out nobody wants it. The philosophy is – do some homework to be sure you can do it but get the contract (i.e. a paying client) before you develop it!!
You need to define a niche where you are the best and only in the world – and have the discipline to stick to it! (say ‘no’ to other opportunities and to your other ideas if they are not aligned. Even if you are hungry, better say no to what is not aligned)
Don’t over-plan. Forecasts are wrong anyway. I am working with a 6 months plan that’s quite enough.
Be conservative in your finances. Keep sufficient money in the company. It will give you freedom: freedom to invest, to take time off to create, to say ‘no’ to an annoying client or because you want to stick to your niche.
Everything is in the relationship with the clients. Integrity and commitment are key to long term relationships
What prevents you from starting your activity (or asking for a client to pay the right price) is in your head, nothing else. It’s purely psychological. The lizard brain creates that fear of the unknown. Remember, today employment is possibly more risky than being on your own!
Make sure to have a permanent council of advisors you can rely on (if needed, get them interested in your business)
Once you have found a great idea that resonates with clients, the harder part is to figure out how to scale your idea (I am not yet there but working on it)

I am now looking forward working as a team with exceptional co-workers that have complementary skills, and not any more individually like we started working. Our biggest challenge for the year to come is to figure out how to scale and expand geographically. Stay tuned!

Shun the Critics. Create a Tribe and Connect with It

Seth Godin makes a great point in the Icarus Deception.

“Shun the non-believers. First you must pick yourself, then you must pick your audience”

Seth goes on to explain that the key is to grow your own tribe of believers so that you expose yourself often to people who know you and believe in your ideas. That’s also an other way to deal with critics. Make their voice disappear in the background of your tribe.

The thing is, it takes time, patience and consistent production and interaction to slowly create a tribe that is well connected with you to a point of supporting your initiatives. It is something that needs to be started early. Still it can be done. It must be done if you want to benefit from a louder voice in the world and from support for your projects.

It also requires to take a stand on a number of issues that are unconventional or outright contrarian. Because growing a tribe is like marketing: you need to define a narrow niche market where people that are particulary interested will join immediately.

How can you grow your supporting tribe to deal more easily with ever more difficult projects and endeavors? How can you define better your voice niche?

Why our Current Political System is Reaching its Limits

Political systems (autocracy, representative democracy, etc) including the way they are implemented, have a limit: a given political system can only manage up to a certain level of complexity.

Are our current democratic institutions reaching the limits of the complexity they can manage?

When that maximum level is reached, fragility becomes a key property of the system, and the system will one day break apart. Suddenly. Completely. The Soviet political system was unable to bear the complexity driven by the Western world in the 1980’s; and to manage the inherent complexity of the modern world (as shown by the Tchernobyl accident investigation). The French political system in the 1700’s became unable to manage the increasing complexity and globalization of the world. The French Revolution and decades of instability ensued.

Sometimes (rarely), political institutions succeed in reforming themselves before reaching a critical level of fragility.

Our current representative democracies are probably the most elaborate political system, and can manage a far higher level of complexity than any of the previous political institutions. We can see everyday that autocratic regimes are overwhelmed by much lower levels of complexity. Still, the question is now, whether it can manage the level of complexity we are reaching globally?

I fear that it is not the case and that currently, we are reaching uncomfortable levels of institutional fragility. Representative democracy might need to be replaced by (or, evolve in) a new political system that will be better to deal with the current level of complexity – by choice or by default if we reach the limits before we can change. That new system needs to leverage better on networks and direct democracy. It needs to be much more global.

Let’s start now to build this new political system, before the increasing fragility of the previous one creates dramatic consequences.

Why You Should Fail More Often

Let’s come back to the financial markets as a model of complex system that can be easily measured. What are the strategies that can provide gains with limited risks and significant chance of success?

Investment is more about managing the emotions of failure than it is about being clever

Professionals will tell you that the winning strategies (provided there are winning strategies,as we now can doubt from our post on the superiority of randomness) always involve some dose of failure. The trick is to have less failures than wins, and / or smaller failures than wins. As long as you invest more on stocks that have chances of recovering, over time this strategy will provide interesting returns with a relative certainty – the larger returns being generated by the larger or more frequent number of tries.

What is interesting here is that real professionals that deal with the stock market everyday will never speak of ‘sure win’. They know they have to accept a certain amount of failure. They know there will be bad days as there will be good days – only hopefully slightly less frequently. They know they will have to deal with the emotions of failure and not let themselves be driven by them.

In our real life, that complex system, the lesson holds. We can’t succeed without a certain dose of failure. And the more often we try, the higher will be our overall success. We just need to make sure that any failure will not kill us (that we have a cut-loss soon enough) and that our successes have a bigger upside than our failures’ downside.

In complex systems, frequent failure is the key to success. So, when do you start to fail more often?

How Big Data Will not Help our Understanding of Complexity

It is not possible anymore nowadays to open a serious newspaper or a financial investment document without reading about the great prospects of “Big Data”: analyzing the troves of data progressively acquired by organizations when we surf, shop, spend money, etc., to create Value. And companies have been setup which raise money on the markets to exploit data like other exploit mines and oil wells.

Curve errors/ data size — The number of spurious correlations increase with the size of the data. Be careful when you read about discoveries from “Big Data”!

Be careful, says Taleb in his book Antifragile, lots of data also means lots of spurious correlations. The argument is detailed in the book and in this Wired Article “Beware the Big Errors of ‘Big Data’“, from which we reproduce the curve on the right (it is also in the book).

To translate the point in conventional language, the bigger the size of the data and the number of potential variables considered, the higher the probability that bullshit is produced when it comes to the identification of possible trends. From there to consider that all this “Big Data” trend is just a vast hoax, there is a step we won’t take (I don’t invest in this “Big Data” thing unless it is very focused application). However, this potentially shows that a high proportion of the ‘discoveries’ that people do analyzing “Big Data” will be spurious. Be careful next time you read about one of these new ‘discoveries’.

A further challenge: is it really possible to understand complexity through more advanced data analysis? Following Taleb, we can have high doubts about that. In particular because all data analysis tools will never consider anything than conventional statistical approaches, and will never consider those discontinuities and benefits from volatility which makes real life what it is: interesting!

Resistance is the Symptom That You Are on the Right Track

The point is made by Seth Godin in his new book, the Icarus Deception:

“The resistance is the symptom that you are on the right track“.

When your inner emergency exit sign lights up, it's possibly the message that you should stay! — When your inner emergency exit sign lights up, it’s possibly the message that you should stay!

This is so true. When I try something outside my comfort zone, or which entails a part of uncertainty and risk (in particular when it involves others), resistance has a way of wrenching my stomach, and create all sort of procrastinating activities to avoid getting me to focus on what’s really important. Now, with some experience, I know that when that happens I am probably onto something that will make a difference.

In other words, when my inner emergency sign lights up, in most cases, it means that I should stay because I have touched something important!

Thus, “ The resistance is not something to be avoided: it is something to be sought out. The artist seeks out the feeling of resistance and then tries to maximize it.”

You too should seek out the feeling of resistance. Remember, Life begins at the end of your comfort zone. Resistance will let you know when you’ll exit your usual comfort zone. Take advantage of it!

How essential it is to check information sources on internet

Mid-February, the web went viral with a study that showed that there were not more than 19 links between any page of the internet (examples here, here and here (in French)). This epidemics followed a paper published on 18 February 2013 by the Royal Society.

world wide web graphics — The worldwide web galaxy is smaller than you think – only 19 links to get anywhere!

The thing is, when you read the paper (link to the original paper of the Royal Society here), you realize that this discovery was made in… 1999. Is it still valid? Nobody knows, actually. It is quite possible actually that today there are even less links needed thanks to the Googles and other search engines, plus all the social tools.

Some publications did correct their initial post (like the Smithsonian here), but most did not, in particular the news outlets from where most of the public gets its information.

There are two interesting lessons to take from this event:

On the negative side, what you read on the internet, in particular what is viral, might have been severely distorted by transmittal, editing, search for sensationalism, etc
On the positive side, thanks to the internet, one can access the original source easily – I was able to find it in a very few minutes thanks to the links embedded in the published pages and Google! (and actually it took only 2 or 3 clicks, not 19) (think what would have happened if you had read such a news in a newspaper 50 years ago: would you have ever been able to go back to the original sources within less than a few weeks?).

It is easier now than ever to post and disseminate trash or inaccuracies, but it is also easier than ever to check – or at least get various opinions on a subject. Do we teach ourselves and our children enough to enhance their critical skills and how to search by themselves for diverse opinions?

Note – for those who are interested, reading the original short article (by Barabási in the Royal Society publication) is quite instructive on the topology of the internet.

Thrive Through Complexity by Leveraging Collaboration of an Effective Team

Not only is Collaboration the key to deal with Uncertainty; the extreme collaborative setup, the Effective, Performing Team, is the key to tackle Complexity. That’s in effect the meaning of the conclusion of Jim Collins we quoted in the blog post “How to Take Decisions in a Complex Environment“.

team table — Are you presently mobilizing an effective, performing team?

It is tough to reach the point of achieving a high performing, effective team. In effect, this is the ultimate model of collaboration, where connection between individuals reaches such an emotional depth that it allows to mobilize all of the participant’s resources for the sake of the team’s purpose.

Depending on the level of performance of the team, different levels of complexity can be tackled; but the most uncertain, most complex situations can only be dealt with a totally committed, effective team.

In my consulting work I often observe how getting the leadership team of organizations to work as a performing team is the first condition for any effective transformation. It should be the first focus, instead of launching initiatives all over the place (as most organizations stuck in a rut tend to do).

Do you have an effective, performing team to help you through complexity? If not, what are you going to do to get it working as it should? That should be your first priority, now!

Use Collaboration More to Deal with Uncertainty!

Now that we recognize that we should live with a large amount of uncertainty in our lives, and not believe like in the Industrial Age that the world can be made to be certain, how can we find a way to increase the uncertainty we can bear and turn this uncertainty into opportunity?

Collaboration is the key here. Because through collaboration and creating tribes that can vet our creation, we have a group that can give us feedback before we expose ourselves too much to the world, with which we can discuss any weird idea that come to our mind. We have a group that can funnel to us the information we need to understand the present situation. We can then increase the level of uncertainty we expose ourselves while minimizing risk.

Actually, collaboration is really a fundamental key to success in the real, complex world. It allows to draw ideas from multiple brains that have been expose to multiple situations and dramatically increase our own capabilities.

Maintaining our social network as a ‘secure base’ with which we can test our latest weird idea is a fundamental capability to explore new possibilities.

Certainty in our world and our lives was an illusion. We now know it can’t work. We now have the tools and the capability to routinely collaborate across continents with hundreds, thousands of people (yes, you also: how many people are you linked with on all your social network tools like Facebook, LinkedIn, etc?). We still don’t take enough advantage of this new capability because we don’t really understand it.

Take advantage of your social network more. Harness this collaborative energy to increase the amount of uncertainty you can cope with – and enjoy a better life while increasing your contribution.

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