Organization in the Collaborative Age | The Fourth Revolution Blog

The Fourth Revolution and the CEO mindset’s transformation

The latest IBM CEO study gives some interesting insights into how CEO’s role and priorities change over time. In 2012, this study of more than 1,700 CEOs came with 3 strong topics:

For Employees: Empowering Employees through Values
For Customers: Engaging Customers as Individuals
Amplifying Innovation through partnerships

The study highlights that now at last CEOs of large corporations see that investing in internal social networks (for collaboration) and external social networks (for engaging customers) is mandatory.

One conclusion of the study is “As CEOs ratchet up the level of openness within their organizations, they are developing collaborative environments where employees are
encouraged to speak up, exercise personal initiative, connect with fellow
collaborators, and innovate“.

While only 16% of them do it now, in 3 years time it is expected that a majority of them will get on external social networks:

It is interesting to note how the focus of CEO’s changed in the past decade or so

We can see how the focus changed from revenue growth to change, accounting for complexity and leveraging on employees. This looks like the trajectory of the Fourth Revolution revealed! It is clear that CEOs are “abandoning command and control” (link to an excellent paper by Alexandra Levit) to more collaborative ways of working. This Forbes article “If you don’t have a social CEO you are going to be less competitive” is also a great reference on the IBM study.

There is obviously a big limit to this study: it only considers corporations. When will the corporations feel that they might not be the best value-producing form of organization? When will IBM also study what happens in other organizations? Already today the CEOs need to be much more entrepreneurial. This trend will only further develop and grow. I’m already looking forward to the next studies!

Perfecting the Rules for Crowdfunding: Reminding about the Risk!

Crowdfunding is still polishing its model. In September 2012, to make they would remain true to the ideals of crowdfunding, Kickstarter did a significant change to its rules. Conscious of some deviations and criticisms, the new rules aims at making sure that people do not mix up crowdfunding and purchasing new items (follow the link to Kickstarter’s announcement “Kickstarter is not a store”).

This came after some hefty criticism that some of the projects did not deliver to the funders the goodies that were supposed to be delivered (because you don’t crowdfund for free – refer to our post “Crowdfunding is not charity – and it is not free!”).

It is a good reminder that crowdfunding projects do entail a significant amount of risk – the risk of innovation. Some will fail, and even the products that are to be developed by big names might end up being disappointing! This is the game of innovation, and statistically failure will happen; and so-so results will be the majority. The infographics gives some statistics as of June 2012 on the ratio of failure to successes; a more detailed infographics is here.

It will be tough for Kickstarter to maintain the clear message that Kickstarter projects, although filtered out by the crowd, are still risky endeavor and that the thrill is to follow the people try hard and maybe fail. Crowdfunding will remain an isolated island in our world of quick and immediate gratification; and those reminders from crowdfunding organizations will necessarily have to be repeated often, again and again so that we don’t forget that it is some kind of risky venture investment.

Nevertheless, it is good to see how the crowdfunding model is getting refined to stay close to its true calling. It will probably take another couple of years until the model is really settled (enough time so as to have enough feedback from completed projects – as they only start to really trickle in after the enthusiasm of their initial launch). Let’s follow up how that evolves!

The infographics is by Appsblogger.com; follow this link for the full infographics; and this link for the blog post on “Kickstarter failures revealed”.

How the Anonymous are a Precursor of the Collaborative Age Organization

This interesting article in the Guardian “Disorganized but effective: how technology lowers transaction costs” highlights how lower the transaction costs has allowed the development of such amorphous groups such as Anonymous or the Occupy movement.

Interestingly, the article takes a perspective on the dramatic change of our capabilities in terms of ‘transaction cost’ that is very similar to our Fourth Revolution concept based on our communication capabilities. It is the same of course. The previous Fundamental Revolutions always saw the creation of more organized bureaucracy – the Agricultural Age’s bureaucracy paving the way for the Industrial Age’s Corporation. The Fourth Revolution is the era of chaos and complexity. And for the first time we can organize chaotic groups that deliver effectively.

Not just the Anonymous, Occupy, other activists but also many groups that are not so much on the dark side, like all the Open Source movement: these are all amorphous groups without visible structure; their weak structure is constantly evolving and never fixed, completely akin to turbulent flow. They rely heavily on technology to communicate, using automation and a choice of synchronous and asynchronous tools.

These groups are in advance on their time; soon we’ll all participate to such groups because chaos begets creation, the value engine of the Fourth Revolution. They are the real precursors of the Collaborative Age turbulent organization.

Welcome to a chaotic, and effective world – Welcome to the Future of the Organization!

On which Organizational Plateau is your Company?

Verne Harnish (author, consultant and entrepreneur), a specialist of small companies, has a great insight: there are relatively stable plateaus for company size, separated by steep “Valleys of Death”. Here’s what it looks like (numbers based on US statistics):

Company survival patterns by size of company — The companies’ development plateaus

The explanation goes, each plateau corresponds to a more or less stable organizational form; however to be able to transition from one plateau to the other, a significant transformation needs to happen in the way the company is run. And this transition is tough, because it will shake the organization and established areas of power; while at the same time the company still needs to run its operations and make money.

For example, from the 1-3 employees plateau to the 7-12 employee plateau you need to establish systems and cannot any more rely on people doing everything; then to jump to the 40-70 employees plateau you need to establish a management team and cannot manage everything directly any more, etc.

Your organization might be on such a plateau right now. Be aware of the looming “valley of death” that separates you from your growth target. How experienced are you with the new organizational form you want to reach? How ready are you to get through the tough re-organization it will require?

Many thanks to John Warrillow’s blog (Built to Sell) and his always very inspiring insights for the idea and the picture

How the Fourth Revolution is the era of the individual widget – even for drugs!

The Industrial Age was all about mass production and production for the bulk of the population. That was in particular the dominant economic model of big pharma. Rare diseases were not tackled for the lack of economic viability.

Today this changes completely. Some biotech companies are extremely successful at making drugs for rare, orphan diseases. And social security or private insurance is happy to pay for the hefty price tag – because those diseases are so rare. In this great paper in Forbes, “How A $440,000 Drug Is Turning Alexion Into Biotech’s New Innovation Powerhouse”, we get a great insight into a new business model. A business model which addresses the needs of individuals at the fringe of the mass production model, while remaining profitable.

As in many fields, the Collaborative Age is the Age of production for the individual of customized products. Pharma is just one example. The revolution in manufacturing will bring the same result – produce widgets one by one, on demand.

In the medical field, medicine is becoming more and more individualized. Genetic factors are increasingly taken into account before administering medicines or X-rays, as sensitivities vary. Soon we won’t get mass produced drugs but drugs specifically generated in dosage and type for our own case.

The Fourth Revolution is the era of narrow niches – so narrow that it addresses an individual. Are you still stuck in the mindset of mass production? Change now to understand the world as it transforms!

How the Fourth Revolution transforms our view of Earth

Working in the field of large, complex projects, I can’t see a project file nowadays without great pictures coming from Google Maps adorning the file: pictures of the site, of the present facilities…

Industrial Facility seen from Google Satellite — Industrial Facility seen from Google Maps

And indeed it is so easy from any computer to have precise satellite pictures of any place on Earth that we just don’t think any more about the miracle that is… ten years ago only, this privilege was reserved to government authorities and large corporations who could pay to get the picture taken by an aircraft or a satellite.

And today in developed countries most roads in large cities are also visible through Google’s StreetView.

This unprecedented democratization of earth imagery has far reaching consequences. It changes fundamentally the concept of ‘public space’ (which can now be observed from anywhere on Earth) but also the concept of ‘private space’ (you can’t hide what you have in your garden from your neighbor any more!). It changes fundamentally how we perceive the physical space around us. This transformation is as strong as when we saw the blue planet Earth for the first time from space, floating in emptiness, in the 1960’s.

Some people argue that because only a limited number of actors manage this data (Google being the most prominent), we are exposed to possible manipulation of the data for commercial purposes, showing us only what they want to show us (see the paper “The Dark Side of Commercial Mapping”). We are not so pessimistic, because there will always be competitors and the crowd will denounce abusing behavior. But certainly our view of the geography that surrounds us has been transformed and this has already changed our decision making when it comes to property or project management.

Today, our perception of our immediate and distant geography has been transformed. Like our new vision of Earth transformed our mindset in the 1960’s, how will our action taking relative to geography, in particular in the field of ecology, change?

Social Product Creation: Quirky, The Collaborative Invention Unleashed!

Take 6mins and watch this video of the Quirky manifesto – one of the most enlightening videos on the Fourth Revolution’s process and possibilities:

Quirky Manifesto from Quirky on Vimeo.

Quirky is a successful startup that thrives on social invention. Inventions are sorted out by the crowd, and if selected, inventors get royalties… and not just inventors: those that were influential in the later development of the idea, the name, the tagline or the color too!!

The development of this startup is astounding. Launched in 2009 it now launches 2 new products per week.. and they have paid millions to inventors and contributors. More information on this post by Mitch Joel.

Quirky now gets full attention: Quirky just raised $68 million and the attention of highly influential venture capitalists.

Think about it: a startup which is collecting ideas from anybody, put them to proof and vote, builds them, compensates all the crowd that was influential in producing the product… and unleashes the inventiveness of the world.

The Fourth Revolution has not finished to astonish us!

Old Industrial Age Cliches Die Hard. Kill them Faster to Transform the Economy!

As I was travelling in France a few weeks ago I was repeatedly struck by how Old Industrial Age cliches die hard – and in particular in ‘developed’ countries.

Lets' Reindustrialize France (2012 Union poster) — Lets’ Reindustrialize France (2012 French trade union poster)

Trade unions claim that the country should be re-industrialized (poster on the right I saw on a building). That would be fine if they did not mean rebuilt large manufacturing complexes.

Authorities and traffic forecasters still believe that people take their leave all together when the factories close (which is of course, less and less true – no wonder traffic predictions are less and less accurate!).

In the midst of the crisis, the government plays with the idea of creating large manufacturing giants, the key to wealth and prosperity. Is it really?

I have two main objections to this:

First, in the Fourth Revolution, as argued repeatedly in this blog, a nation wealth and prosperity will not come from its manufacturing proficiency, but from its creativity, networking and knowledge enhancement capabilities. There will always be cheaper places to manufacture. There won’t be so many places to create value.
Second, frankly after I spent as a student a one-month experience in a car manufacturing plant, I don’t see working in a manufacturing environment as the dream of my life where I would encounter the development opportunities I dream of! So I don’t necessarily wish this to be the future of the entire next generation.

Diving into the Fourth Revolution is not easy. It is not easy at a personal level because instead of waiting for someone to give instructions we need to find out how to create value for others. It requires to change one’s mindset.

Durations of bankruptcy by country (the Economist)

But it is not by dreaming of rebuilding smoking stacks of large manufacturing plants that the economy of developed countries will be saved. It is by releasing the creativity potential of the people!

One of the best papers I read on that lately was from the Economist, “les Miserables“, or how Europe consistently discourages entrepreneurs (published July 2012).

Do you really release the potential of your people when they get a life sentence when they fail (see the graphic on the average duration of bankruptcy)? Do you think they will take the risk to fail – a risk inherent to any creation?

Stop dreaming about going back in time to the Industrial Age. Step forward into the Fourth Revolution or you’re doomed.

Allow people to fail. Allow people to be flexible with their life. Create the infrastructures and institutions that will free people while giving them a guaranteed minimum safety net at a reasonable price.

The opportunity is now. Crisis are time where things can change, where things will shift. The current crisis might be the one opportunity for developed country to do the transition. Don’t miss it.

Why the Collaborative Age is about Lean – Accelerating our Learning

Have you read the ‘The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses‘ by Eric Ries? I must say I was a bit reluctant at first because it seemed to be a very trendy flashy concept – of the kind that are trendy for a season and then disappear in the forgotten-great-concepts-that-were-supposed-to-change-the-world.

Pushed by my curiosity I still read it and I must say that I dived into it. Because what Eric Ries is describing there in the realm of startups can probably be applicable to all types of endeavors in the Collaborative Age. An Age where failure does not cost a lot, and where on can try multiple ideas without committing too much funds or time. An Age where learning from actual feedback can be dramatically accelerated.

The Lean Startup proposes a structured framework to accelerate Learning. It proposes to propose to the world a ‘Minimum Viable Product’ as soon as possible, listen to the feedback, and accelerate the learning curve. Most people and companies do the mistake of taking long time to develop the ‘perfect product’ – that nobody really wants, because we never asked the potential user!

You might also have heard about ‘pivoting’ in the context of startups: it is about deciding to change completely the plans and the business model to respond to the actual feedback. And most successful startups need to pivot once or twice. Hopefully they can do it before they reach the end of the cash runway! Lean enables companies to learn quicker what works and what does not work.

Read the book or watch this video. It’s worth it!

Get Lean, and accelerate your learning. Stop perfecting your product, throw your ‘Minimum Viable Product’ to the world!

Crowdfunding is not charity – and it is not free!

Crowdfunding is very trendy. It is about financing startups with many people contributing a little bit of money each (it also works very well in other endeavors like political campaign financing and art financing).

We’ve already touched on crowdfunding in the posts “What’s hiding behind crowdfunding sites” which mentioned Kickstarter, the most famous crowdfunding site, and how these sites are effectively crowd-voting machines; and how crowdfunding applies to small local business as well “Crowdfunding… a local bakery“.

Recently there have been efforts made by the US government to give a legal framework to crowdfunding, although that is still work in progress as the issue is quite complicated (the JOBS act was signed by President Obama and gives 9 months for the SEC to come up with regulations). More information in this Forbes article.

While the regulatory landscape might change deeply, the crowdfunding model also becomes clearer. It is not ideal for everybody as a funding mechanism. And it is more and more obvious that being successful at crowdfunding requires a well thought strategy and plan.

There is one commonality to this plan: you need to give back value to the investor. No, crowdfunding is not free! It is not charity! Investors want something back from their initial investment; and generally they do want good value perks. This excellent paper on a jeans manufacturing startup that has used crowdfunding successfully gives very good advice on what it takes. Basically, investors are paying money in advance for getting your product later as a perk, or to get a special treatment of some sort. There is a fine line between pre-sales and crowdfunding, although crowdfunding perks can also be more flexible.

Crowdfunding is not just generous benefactors giving for free: for them, it is an investment that needs to get a good return in terms of value. If you seek crowdfunding, what future value can you promise to the investors that will more than enough compensate for their money?

A great example of community leverage by a company: Kreg Tools

As an assiduous reader of this blog you know that in the Fourth Revolution, successful companies will leverage on their community of followers. There is a great example (and not just for wookwork lovers!): Kreg Jig community site.

The Kreg company does woodworking equipment and has an otherwise quite classical website. It is a relatively small company of a few dozen employees in a niche market.

A Kreg community member at work (owner of CherrywoodCustom.com)

Now look at the enthusiasm of the participants to its community site, how they share videos and tips and proudly show to the world their latest woodworking project! This hugely successful community site – more than 35,000 participants apparently – must be a significant driver of sales for the company, and build a fiercely faithful tribe of followers that will spread the word. They exchange and learn together. The forums are an incredible source of information (and all comments are not necessarily positive on the company’s products).

More than that the community site is really a place to speak about woodwork, not just the products of the company! There are fancy projects, great looking results, astonishing builds..

I am not a fanatic of woodworking but now that I have looked at this community site I’m almost ready to start building one of these beautiful pieces of furniture! The power of building a community around one’s product should not be underestimated. This BBC article provides a good background information on what’s happening there and what to be careful about.

It is the power of the Fourth Revolution and it is the future of marketing. So, when do you create the community website of your product or brand?

Thanks to Heinrich Scheffer for the links – following a conversation on LinkedIn on the Fourth Revolution!

The dark little success secret of all social networks: heavy moderation

Did you know that the most successful social networks – public or private – are those that are the most moderated (or censored, depending on the point of view)? Yes, the self-organizing network is a myth.

Rare are the times where the heavy cloak that surrounds this process is lifted long enough to grab a glimpse. Meanwhile we can only listen to the recriminations of those who could not share what they wanted: a photography museum pictures here (credits for the picture below), a profile picture reproducing a famous painting there.

Facebook censorship Let’s face it – unfortunately, without moderation our social networks would soon be full of inappropriate pictures and would be invaded by those dark economies of vice and violence. It is not by chance that all social networks propose to flag inappropriate content; that all employ armies of moderators that censor content according to strict rules. In “The Dark Side of Facebook“, Emma Barnett exposes the global community of low paid Facebook moderators, and how they have to deal on a daily basis with crass content.

And it is not just Facebook: for example Wikipedia also employs many moderators who react almost instantly on inappropriate content. Even if the content “does not follow editorial quality rules”. Ever had the experience of having your contribution rejected from Wikipedia because ‘they’ decided it was not important enough, or maybe even not accurate? I did, many times.

Think about it: Paypal has been very successful not because of its operation mode – which is OK – but because from the beginning it has integrated defenses against fraud, maintaining the fraud level low enough to remain economical. Early competitors did fail under the burden of excessive fraud. From time to time that’s a hassle when you want to pay a friend in a less safe country; but overall it is what has allowed Paypal to remain afloat.

This is a lesson for all those that believe that setting up a social network is just setting it up technically and letting people self-organize, driven by the good in them: always make sure that an adequate supervision and moderation is maintained and even censor a bit too much just to make sure that the system remains acceptable for the majority of people. Moderation can be lighter if the community is regulated otherwise (like inside an organization for example) or heavier if the community is totally open.

Too bad for those that naively believe that social networks is paving the way for free speech, free expression. You can express yourself – if that follows the rules and the will of the social network managers. And it is not possible to avoid it – moderation is mandatory to maintain the health of the social network and its acceptability, on the long term.

Ownerwhip of the network is indeed important and strategic when it comes to political and social expression. Will we see society rebel against those social network moderators like it did against too strong press magnates? How can we make sure that this moderation remains ethical and not politically biaised? Regulation here is more important than protecting Hollywood rights – it is the future of democracy at world level that is at stake.

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