Institutions and Revolutions | The Fourth Revolution Blog

How Collaborative Age Moguls are Taking Over Press Media

One of the most astonishing trends in the past few years and months is to see successful Collaborative Age entrepreneurs getting involved in the media business through investment in major newspapers and associated news outlets (while at the same time the newspaper industry revenues and profits are in severe decline with the advent of content marketing).

bezos-buys-washington-post Last August, Amazon’s Jeff Bezos bought the Washington Post. No-one is really sure why. In France, in 2010, Xavier Niel, probably the most visible internet entrepreneur in France, participated in the buying of Le Monde, a major newspaper, and seems to be currently looking forward buying another major media outlet.

Of course, billionaires buying newspapers is nothing new. It has always been a way to seek influence, and sometimes has served as a launch pad for a political career. As usual, the buyer swears that he will not influence the editorial line of the paper, but while that might be true on the short term, it will definitely influence it, broadly speaking, on the longer term.

Previous newspaper buyers and owners had more created their fortunes from mining, commerce or industry and the fact that internet-based company billionaires are in the game reflects their new prominence among the wealthy and powerful. Also, the positive side is that in the middle term this new ownership might change the viewpoint and stance of the press in a more positive view of Collaborative Age economy, and support the societal change that are required.

Indirectly, these investments are good for the business of these entrepreneurs as it will support the mindset change that is needed for society to embrace the Collaborative Age.

How Philanthropic Patronage Returns for Art and Science

This paper in the NY Times describes how ‘Billionaires With Big Ideas Are Privatizing American Science‘. This can also be put in perspective with what happens in the field of health and development, for example with the Gates foundation, which is privately funded. Roles that had been taken by Governments during the Industrial Age seem to be now shifting to private individuals.

Orfeo_libretto_dedication — A dedication by Monteverdi to his patron – Orfeo (17th Century) (source – Wikipedia)

Patronage is actually not new. In the previous Agricultural Age, artists and creators needed the protection and funding of high-ranking individuals to develop their art and develop their initiatives – it was the widespread concept of patronage. This is why most artistic production is dedicated to the patron. It is only during the Industrial Age that this role was taken over by Government, with the creation of massive public research institutions and other direct and indirect public support mechanisms to artistic endeavors.

As we enter the Collaborative Age the trend would seem to reverse again with high wealth individuals entering again the field of art and science fostering while Governments are wrestling with huge deficits and can’t afford to continue this protection and support.

Is this trend temporary or will it be a characteristic of the Collaborative Age? I believe that with the shift in value creation and the disappearance of middle class this trend is possibly here to stay. Of course this poses all sorts of questions about possible conflicts of interests. Still patronage in the Agricultural Age supported the production of many great artwork and scientific advance, there is no reason why that could not continue.

Artists, scientists, you might want to seek funding in patronage rather than in Industrial Age governmental institutions!

How Innovation Will Necessarily Alter the Power Balance

Following up on our previous post on why real disruptive innovation does have to change business models, this inspirational image from Hugh MacLeod is a great complement.

original_ideas_hugh2 Real good ideas do necessarily alter the power relationships (and that is why they are always resisted, but that is another story).

Power relationships include those relationships in an organization’s hierarchy as well as those relationships in a market.

When I am facilitating, it is interesting to see how I can feel that the group stumbled upon a good idea – when someone starts feeling uneasy about this is going to change power relationships (and in general, his or her own power). Resistance starts to kick-in. It is a sure sign that we hit the nail on the head and that a good idea has been produced. It needs to be captured before it dilutes itself, and assessed to check whether it is just good, or whether it is great.

Image and inspiration by Hugh MacLeod at GapingVoid.com

How True Innovation Requires a Business Model Transformation

Tesla Motors (an electrical car-maker) is one of the hottest hardware start-ups in the US at the moment. The CEO Elon Musk is one of the stars of the new economy. Apart from the innovative quality of their product (if you have the opportunity, visit one their showrooms!), and of the underlying technologies (some say that the battery technology is going to be even more important than the cars themselves) the most interesting part of this long term experiment is how Tesla has to upend the well-set business model of car selling to be successful.

It appears that there are strong regulations in the US about the fact that cars would need to be sold through franchised car-dealerships and this creates all sorts of weird market effects. Tesla is currently battling to topple these old-fashioned regulations, and might well eventually win at that game, although that will take long consistent efforts (see Bloomberg’s paper on “Can Tesla Topple the Car Dealer Monopoly” and this post “Tesla versus the rent-seekers“). In the meantime there are strong legal cases based on old-fashioned regulations that prevent the start-up to effectively deploy its business model.

The more general question is: can there be real innovation without disruptive existing business models? Or, is a technical innovation that does not disrupt an existing business model a real transformational innovation?

We can take this question further: can established players really be innovative, because real innovation would challenge their existing business model? For example, in Tesla’s market, could conventional car makers really lead a transformation into electrical cars, because they also need to protect their conventional business and modes of distribution?

I am more and more convinced that true innovation is not technical. It is innovating at the business model level. Look for innovations in that space, because that is really what is changing the world.

How Innovative Organization Forms Must Address our Psychological Need for Visible Status

In this blog we have made the case on how the Fourth Revolution (and its widespread availability of communication capability) will lead to a much flatter organization – and that it does scare many people (see the post “What is so Awful About the Disappearance of Hierarchy?“). There is currently considerable debate about the need for hierarchy, like for example in this recent Stanford Business School article, ‘The Case for Workplace Hierarchy‘.

hierarchy One of the points of the paper is that “power structures haven’t changed much over time, […] the way organizations operate today actually reflects hundreds of years of hierarchical power structures, and remains unchanged because these structures ‘can be linked to survival advantages’ in the workplace“. Also, “hierarchies deliver practical and psychological value, in part by fulfilling deep-seated needs for order and security“.

Hierarchy would then be justified by deep psychological needs to recognize effectively and visibly a power structure that would help people orient themselves.

There is no doubt that societies or groups or people do tend to organize themselves around a spoken or unspoken power balance and that hierarchy has the benefit of making power and status immediately visible. It is very possible that most of us do need some kind of social hierarchy to fit in, as a deep-seated psychological need. Still there are other ways to show visibly power or importance, and these ways are being used or developed by social networks today (recognition of top contributors, peer ratings, Klout score etc.). They are not mature yet and this is an area of interesting and controversial development.

What I take from this debate is clearly that flatter or no hierarchy is only possible if there is a clear way to visibility show some kind of status in the organization, and that successful companies that implement new ways of organizing themselves need to address this psychological need. What do you think?

Why Organization’s Stability Should Be Used To Enhance External Disruption

Following on our latest post on the increase of the world’s unpredictability, Robert Branche makes also an excellent point that as nature designed living organisms that would dramatically increase the unpredictability of the world, it had to design organisms that were more stable inside. And actually, from plants to animals, to mammals, internal stability has increased dramatically with evolution.

storm and stability — A storm on stability

This is a very interesting contradiction: to enhance the world’s changes, internal stability is required. And this observation actually applies to many situations.

Robert Branche extends this observation to organizations: for him, companies or organizations are a way to build an internal stability to become able to transform the world. “Internal order and rules should not reduce uncertainty, but make its development and acceptance easier” states Robert Branche in the case of large corporations.

Organizations that would implement internal rules for the sake of increasing internal and external certainty are ultimately doomed. Organizations need to develop and nurture internal stability as a way to enhance their disruptive impact on the world.

What a challenge to all established organizations!

How does your organization fare? Is it really defending its stability to make a bigger, more disruptive impact on the world?

Reference is made to Robert Branche‘s latest book “les Radeaux de Feu” (in French). Visit Robert Branche’s blog (in French) for more about the author and his latest book.

How Emotional Experience is Key for Overcoming Fear and Creating Change

Change creates fear. Titus said “We fear things in proportion of our ignorance of them“. Hence one of the easiest ways to help people and organization change would be to educate them. While it does work now and again, however, it has been constantly proven that this is a very ineffective strategy. Education does play a role, but it is personal experience at the emotional level that is important to effectively create change.

Fear is deeply emotional. The rational mind can tame some of it, but it is a long and difficult process. Educating people as a way to support change had long been quite a dismal strategy to elicit change (anti-alcohol and tobacco campaigns being good examples), although it is still supported by many rational minds.

Creating deep emotional experience is much more effective. Change management programs should probably aim at creating these emotional experiences as a way to support change rather than over-rationalizing what factors are at play to prevent change.

Creating emotional experiences can be tough to design in corporate environments, but are not impossible. They include leveraging on the connections between people and pushing people outside their comfort zone. They including pushing people to discomfort. Change management programs would need to include these elements but often do not for fear of rejection by the sponsors.

If you want real change, tackle it at an emotional level and make sure to create enough discomfort to elicit real transformation.

Why We Reject Inconvenient Truths – an Impediment to Change

We reject inconvenient truths – as long as they stay remote enough not to disturb too much our lifestyles. And so we stay in our comfort zone while disaster is looming further away, and although the consequences might be much more dire in the future.

inconvenient truths vs reassuring lies Change is about looking at reality in the face. Not to over-dramatize, but to be aware of what really happens outside there.

It is not easy and it is not natural. And it is why those that describe the reality of things are often rejected. And why those that create and transmit reassuring messages are popular.

The only way to overcome this hurdle is to create visible change in the life of the people that strike them at the emotional level. There is unfortunately no other way.

Want change without some dose of suffering? That won’t be possible. Just make sure that it is bearable and that measures are in place to overcome the challenge when it will have been noted by the group.

The Intrinsic Long Tail of Online Education Graduation Statistics

With the Fourth Revolution comes this new challenge to traditional universities: online courses and degrees. We have mentioned this transformation in the posts ‘online universities are becoming mainstream!‘ and ‘Another institution under siege from the Fourth Revolution: Universities‘.

In this excellent article in Fast Company, an interesting statistic become apparent. “As Thrun [the founder of Udacity] was being praised by Friedman, and pretty much everyone else, for having attracted a stunning number of students–1.6 million to date–he was obsessing over a data point that was rarely mentioned in the breathless accounts about the power of new forms of free online education: the shockingly low number of students who actually finish the classes, which is fewer than 10%. Not all of those people received a passing grade, either, meaning that for every 100 pupils who enrolled in a free course, something like five actually learned the topic. If this was an education revolution, it was a disturbingly uneven one.” Further, “a recent study found that only 7% of students in this type of class actually make it to the end. (This is even worse than for-profit colleges such as the University of Phoenix, which graduates 17% of its full-time online students, according to the Department of Education.)“.

Online education does mean effort, and there is probably some kind of long tail effect at work here: not all of those that say they intend to go for the course will go for it at the end, as it entails a significant commitment. This number should not be a surprise; and as the number of online registered students will increase dramatically, even if the percentage of those that graduate remains small, the number of people who will have benefited will still remain large – and above all, anybody, anywhere in the world, can now take the opportunity. People will simply drop out by themselves if they don’t show the necessary commitment.

The low number of graduates is not a limit of the system, it is but an intrinsic long tail effect. It does not mean failure; the sheer number of graduates does mean success of online education.

Want to Change the Culture? Change the Conversation!

“If you seek to change the culture (or a tiny tribal element of the culture), your timeframe and what you measure have to be focused on the conversation” – says Seth Godin.

This is quite a powerful statement that can apply to a variety of organizational situations – in particular when it comes to organizational transformations.

Changing the conversation means in particular:

changing the words (and what they convey)
changing the conversation’s topics and dynamics
changing the conversation’s participants

Looking at it this way, organizational transformations take another shape and seem less daunting.

Change the conversation. And you’ll change the world!

Inspiration for this post from Seth Godin’s blog post The tribe or the Person?

How Mobile Ubiquity Changes Radically Business Models, Right Now

Calling a taxi has always been a nightmare in Kuala Lumpur, Malaysia: operators that did not understand my english, drivers that couldn’t find the address or got lost on the way, negotiation with those that do not want to use their taxi meter… Last time I went friends made me discover a mobile app, “MyTeksi”.

MyTeksi home screen — The home screen of the app. Remark the “+RM 0” field which allows you to raise the stakes if you can’t get a taxi through an additional tip

It is actually a pair of apps: one for clients, one for drivers. Both figure out the location of the devices, and you can book a taxi instantly, as well as see whether available taxis are around on the map. The economic model is that the drivers pay a small sum of money (less than 50 cents USD) for each successful booking, while the client pay the normal additional booking fee to the driver, who commits to use the taximeter. The app gives you the name of the driver, tracks the actual journey, and send you a summary email, which is a great selling point for lone women’s safety.

The feature I like particularly is the possibility to add a “tip” if you can’t get a taxi in the midst of peak hour (or raining). You can actually raise the stakes live until you get a taxi happy to pick you up! Real time bargaining in action!

This app business model is completely disruptive, by-passing the traditional centralized taxi booking systems and companies. It is based on the widespread availability of smart-phones even for taxi-drivers. Actually, it was brainstormed as part of a Harvard MBA homework business case by two Malaysian students (here is a good link to the story). In addition, the interface is simple and very well thought.

The app is now spreading to neighbouring countries, Thailand, Indonesia and Singapore. It will be interesting to see how successful it will be in developing countries, and not just in emerging countries.

What I find particularly interesting is that it pushes back the decision to the drivers instead of the centralized taxi booking system, leaving them with the choice to adhere to the system or not, or even to have several booking systems working for them.

Once again, the Fourth Revolution gets rid of centralized institutions. It also shows how widespread smartphones are (would all taxi drivers have one in developed countries? really?). Expect to see many more ground-breaking mobile applications coming up that will shake established business models!

How to Better Understand the Hardware Movement Through a Novel: Read ‘Makers’ by Cory Doctorow

I had an excellent read with ‘Makers’ by Cory Doctorow. Cory Doctorow hovers generally somewhere between science-fiction author and defender of free collaborative work over internet. His fiction books are never too far from what could happen in our societies.

In this semi-fiction book, Cory Doctorow imagines what will happen in the world when the capability of 3D-printing and of toying around with all the available electronics will allow decentralized goods production. This leads to severe battles between large companies that can be regarded as real institutions and a loose network of creators.

Of course as always Cory Doctorow tends to support the idea of networks of disinterested creators in the vein of open-source. Still this book explains very well what could happen in a few years’ time if the hardware movement continues its development up to the point of upending significant existing organizations.

Apart from its entertaining aspect I recommend this book to better understand the current transformations of the world. And amazingly this book was originally published in 2009!

I also strongly recommend “Little Brother” by Cory Doctorow, his best seller so far, about how the state could implement a deep surveillance bordering to a police state. Quite premonitory in view of the NSA scandals.

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