Highlights from Esko Kilpi’s writings (2014–2019) that resonate
Esko Kilpi - Medium
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The Internet is the first communication environment that decentralizes the financial capital requirements of production. Much of the capital is not only distributed, but also largely owned by the workers, the individuals, who themselves own the smartphones and other smart devices, the new machines of work.
It is about loose couplings and modularity, about networked tasks. In creative work, any node in the network should be able to communicate with any other node on the basis of contextual interdependence and creative, participatory engagement. [top highlight]
Creative, network-based work in the future will not be about jobs, but about tasks, assignments, gigs and interdependence between people. You don’t need to be present in a factory any more, or in an office, but you need to be present for other people.
The architecture of work is not the structure of a corporation, but the structure of the network. The organization is not a given hierarchy or a predictive process, but an ongoing process of organizing.
The law [Metcalfe’s Law] states that the cost of a network expands linearly with increases in the size of the network, but the value of the network increases exponentially.
The new focus is outside, in network economies. The most important goal is to create a network structure where the value of all interactions is raised by all interactions; where every interaction benefits from the total number of interactions.
The Internet and The Sciences of Complexity (Nov 7, 2014)
This paradoxical pattern where simultaneous coherence and novelty are experienced is called the edge of chaos. Attractor theory calls the same thing a strange attractor.
Interaction creates resonance between the particles. Resonance is the result of coupling the frequencies of particles leading to an increase in the amplitude.
If this metaphor is transferred to social sciences, we could perhaps say that we are the result of our interaction. We form our relations and our relations form us.
Our everyday life takes place in a “place” between chance and choice. What is happening happens in interaction, not by chance or by choice, but as a result of the interaction itself. The Internet changes the patterns of connectivity, transforms our understanding what “local” in local interaction is, and makes possible wider participation and new enriching variety in interaction.
Designing Change (Nov 17, 2014)
Designing change starts with the study of networks and the patterns of interaction.
Creative work is a movement of thought that is always based on working with differences.
There can be no change without changes in the patterns of communication.
The distinctive characteristic of a high productivity organization is the capacity to generate expansive, positive and inclusive emotional states.
Advanced Work (Dec 22, 2014)
The world of work still consists of cultural metaphors that have guided the development of industrial firms and societies for the past 100 years.
The architecture of work is metaphorically still a picture of walls defining who is employed and inside and who is unemployed and outside. Who is included and who is excluded.
In creative, knowledge-based work it is increasingly difficult to know the best mix of people, capabilities and tasks in advance. Interdependence between peers involves, almost by default, crossing boundaries.
The new management task is to make possible the very easy and very fast emergent formation of groups and to make it as easy as possible for the best contributions from the whole network to find the applicable tasks.
The focal point in tomorrow’s organizing is not the organizational entity one belongs to, or the manager one reports to, but the reason that brings people together.
The architecture of work is a live social graph of networked interdependence and accountability.
The task is to combine technological intelligence and creative interaction between interdependent human beings.
This thing with people and machines (Jan 26, 2015)
The sciences of uncertainty and complexity have helped us to understand that organizations are patterns of interaction between human beings.
The social revolution, the human-centric revolution, is about deeply rethinking the value of human effort. An increase in value can only occur if people can do something in interaction that they cannot do alone.
This means that the defining characteristic of a social business is the increased, non-algorithmic, variety of behaviors that is available. It is not necessarily about common goals or shared purposes any more. It is a common movement of thought that always surprises us.
Enterprises have always consisted of people who have ideas, intentions and a will of their own. Now it really matters. All people can be creators. All people are creators!
The Future of Firms. Is There an App for That? (Feb 16, 2015)
What really matters now is the reverse side of the Coasean argumentation. If the (transaction) costs of exchanging value in the society at large go down drastically as is happening today, the form and logic of economic entities necessarily need to change! Coase’s insight turned around is the number one driver of change today! The traditional firm is the more expensive alternative almost by default. This is something that he did not see coming.
The Internet is nothing less than an extinction-level event for the traditional firm. [top highlight]
Work in the Machine Age — Humans Need to Apply (Feb 21, 2015)
The problem we face today is not in the capabilities of humans but in the outdated and limiting conceptualization of work. Work as we know it is mainly designed for machines, not for human beings.
Human life is non-deterministic, full of uncertainty, unknowns and surprises. Creative learning is the fundamental process of socialization and being a human. For a human being, the number of choices or moves in the game of life, in any situation, is unlimited. This is the very hard to copy difference between men and machines.
Almost all economic theories have made, and still make, the same assumption: the employer — employee relationship is necessary to create jobs.
The employees of the organization are not seen as being autonomous, with a choice of their own, but are seen as rule-following, dependent, entities. People are not really people, but resources.
We should ask whether the current social construct of jobs is inevitable, or whether it is a social artifact that is over 100 years old, and should be redesigned.
We need a new agenda connecting people and businesses. The aim should not be a set of shared goals, but complementary goals and a co-created narrative for both.
Instead of the industrial era’s generalizations and abstractions about what skills everybody should have, or what steps everybody should take, it is now time to cultivate a deep understanding of the context, the unique, particular situation you are in.
Markets, market networks and the future of firms? (Mar 31, 2015)
The economist Brian Arthur from the Santa Fe Institute argues that the ever-increasing role of knowledge in value creation makes the foundations of economics and our thinking around firms badly outdated. Likewise, Peter Drucker predicted that “knowledge may come to occupy the place in the society which property occupied over the last three centuries.”
The labor services of employees with specialized skills thus cannot be modeled as undifferentiated generic market inputs, for which wages and quantity, the number of people, and the number of hours of work are determined. With context-specific human capital, the creativity and productivity of a particular individual depends on being part of a particular group of people engaged in particular assignments. Knowledge work is relation-specific and contextual.
The future of capitalism depends on whether firms create a much larger number of capitalists than they do today. Everybody will benefit if, in the future, a larger number of workers think like owners and act like long-term investors.
Henri Matisse, Pablo Picasso and the Future of Work (Apr 7, 2015)
In complex environments, the way to proficiency is to recombine successful elements to create new versions, some of which may thrive.
The new approach represents a different logic of organizing based on neither the traditional market nor a process. Whereas processes involve relations based on dependence and markets involve relations based on independence, the new networks involve relations of dynamic interdependence. A bit like Matisse and Picasso.
The democratization of technology that is taking place at the moment does not determine social and organizational change, but does create new opportunity spaces for new social practices.
Network theory suggests that what the system becomes emerges from the complex, responsive relationships of its members, continuously developing in communication.
From the industrial system to an entrepreneurial system (Apr 18, 2015)
Economic growth in the future will still be about value added. The difference is that the generic raw materials of the industrial era are now unique ideas.
The industrial process was a linear, sequential chain of predictable acts. The creative process is one of unpredictable, iterative and complex movement from ideas to value. The most important input is not knowledge but on-demand learning.
The worlds of knowledge-based added value and creativity-based added value require very different thinking, skills, and even science, to explain what is going on.
Thinking develops best through friction and argumentation. The transformation from ideas to value is a movement of thought that always builds on working with differences.
Economic growth is more and more a result of the interactive movement of thought expressed as the entrepreneurial capacity for transforming ideas into customer value. We are now in the midst of this huge economic change.
Contextual leadership or can leadership be innovated? (Apr 21, 2015)
When seen as a symmetric relationship, not as leader or subordinate attributes of individuals, leading and following create a very different dynamic. Leading in this new sense is not position-based, but contextual and recognition-based.
Relations form patterns that are either restricting or enabling.
We need leadership that helps people to link to enriching information and enables people to make new associations and, most of all, to make sense of the world. [top highlight]
When we connect with people we link with topics, with contexts. The challenge is to see all the filters and linkages as communication patterns that are either keeping us stuck or opening up new possibilities. … The next developments need to take place on the sense-making side.
And as Max Planck famously said: “If you change the way you look at things, the things you look at change”
To be competitive is to be cooperative (Apr 24, 2015)
Knowledge work is creative work we do in interaction.
Nobody can be successful without supporting contributions from network partners. The new role is a “complementor”. A complement to an offering is another offering that makes it more attractive.
Complementary contributions may be the most important explanation of business and personal success today. The new strategic imperative and one of the very first entrepreneurial tasks is to identify complementors and to be inviting to them.
Complementarity is not about recombining skills but redefining work. To be competitive in the new landscape is to be cooperative.
Old Work New Work (May 2, 2015)
The task is not the reduction of uncertainty but to develop the capacity to operate creatively within it.
When following a spatial metaphor, there is a territory that can be explored and understood, but here the territory is seen as being under continuous development and formation through the exploration itself. “It is impossible to map an area that changes with every step the explorer takes.”
The new, entrepreneurial experience of work is very different from the industrial experience. It is about acting into the unknown, not necessarily working towards a goal. It is about creating the future together in interaction, not about reductionist job roles and separations. It is more about improvising together than following scripts. It is more about emergence than causality. It is more about sciences of complexity than systems thinking.
By linking improvisation to a community, like in theatrical improvisation, we get to what is in fact happening in creative work. All of us with our differing intentions, hopes and values, are acting in corporate plays. We are self-organizing in shifting social configurations in the responsive interplay of different players.
The world we live in is context dependent. The best way to be future-proof is to be more responsively present in the present moment.
The reason why we need to talk (May 31, 2015)
The challenge is that people often treat the existence of multiple views as a symptom of weakness that should be solved with power, rather that as an accurate and needed barometer of uncertainty that can only be solved with interaction.
If people want to do things together they need to create something that is shared, they need to talk about their experience in a common language and have a shared context for conversation. Because any information can mean a variety of things, meaning can never be simply discovered. We have to talk!
A crucial property of working together is that situations can be progressively clarified in iterative interaction, in conversation.
Emergence and self-organization (June 10, 2015)
We still don’t quite get what emergence and self-organization mean. This is because we think that the unit of activity is the independent individual.
Cooperating individuals are not, and cannot be independent. People are interdependent. Interdependence means that individuals constrain and enable each other all the time. What happens, happens always in interaction and as a result of that interaction.
The future cannot be understood by looking at the plans or goals. [top highlight]
Emergence is often understood as things which just happen and there is nothing we can do about it. But emergence means the exact opposite. The patterns that emerge do so precisely because of what everybody is doing. It is what many, many local interactions produce. This is what self-organization really means.
An organization is not a whole consisting of parts, but an emergent pattern that is constantly formed in those local interactions. It is a movement in time that cannot be understood just by looking at the parts.
From Firms to Platforms to Commons (June 23, 2015)
In creative, knowledge-based work it is increasingly difficult to know the best mix of capabilities and tasks in advance.
Instead of thinking about the organization let’s think about organizing as an ongoing thing.[top highlight]
Then the managerial task is to make possible very easy and very fast emergent responsive interaction and group formation. It has to be as easy as possible for the best contributions from the whole network to find the applicable contextual needs and people.
Instead of the topology or organizational boxes that are often the visual representation of work, the picture of work is a live social graph.
The sheer size of an enterprise will tend to mean less in the digital network business than in the world of physical goods. The flip side is that companies don’t grow and create jobs in the way they used to. It is the networks that grow creating new earnings opportunities for people who are part of the network!
The central aggregator of enterprise value will no longer be a value chain, but a network space, where these new firms are fully market-facing and the customer experience is defined by apps. Our management thinking is slowly shifting towards understanding the new kernel of work: participative, self-organizing responsiveness.
The physical commons were, and still often are, over-exploited but the new commons follow a different logic. The more they are used, the more valuable they are for each participant.
In the new commons and market networks, people with more potential ties become better informed and have more signalling power, while those outside and with fewer ties may be left behind. This is the new digital divide. Network inequality creates and reinforces inequality of opportunity.
Why do I have to cooperate? (June 30, 2015)
The days when we could just do our own thing without paying attention to the bigger picture are over. We are interdependent and this interdependence is contextual, situational. [top highlight]
When the circle of involvement is larger many changes start to occur. When people see where they fit in the bigger picture they are able to see the real interdependencies and are able to respond much, much faster and more effectively to changing conditions.
The challenge today is engagement. Widening the circle of involvement means expanding who gets to participate. It is about inviting and including relevant, new and different voices. Success is increasingly a result from skillful management of participation: who are included and who should be, who are not, who are excluded.
Temporal communities can be formed to solve a problem or to tackle an opportunity easier, cheaper and faster than ever before — if people are invited and if people want to engage.
When you widen the circle of participation, you widen the solution space.
Is the economy a (fool’s) game? (July 6, 2015)
The expectation is that what has worked is likely to be used again. Game theorists claim that if you want to know the future, you should study the past.
Most games we play have been played under the postulation that you play against others and you win independently, without help from others. That is fair, but, in real life the unit of survival is the actor as an interdependent, not independent, part of the game being played.
The conundrum is that the winners end up having to take care of the losers. In the end, the winners have to pay the price of winning in one way or another. The bigger the divide is, the bigger the price that has to be paid. As losers are excluded one by one, as happens on the TV, they are excluded from the possibility of learning to win.
We need a new relational approach that combines competing and collaborating. In games that were paradoxically competitive and collaborative at the same time, losers would not be eliminated from the game. In competitive/collaborative games the winners would be all those whose participation and contributions were incorporated.
The criteria for success do not lie solely in winning but in the development and continuation of the game. Who wins and who loses is of minor importance compared to the decay of the (game) environment as a result of our outdated zero-sum thinking and winner-take-all philosophy.
How we create dictators (July 8, 2015)
The only way to sustain democracy in a totally interdependent world is to work together and share the burdens and the efforts — whatever happens — not only to us, but also to those “others”, so that also “they” can trust us.
Therefore it is understandable that the expanding dynamic of trust can reach a point where promises are just not believed any more. After that limit is passed, the result is a sudden and deep crisis because there is nothing in between: either you trust or you don’t.
Without trust there is no democracy. This explains why trust is the number one target for attacks today.
Can there be a human-centric approach to technology? (July 19, 2015)
Creative, entrepreneurial work is very different. The context of work is changing from generic, repetitive practices to contextual, creative practices.
This time, the machines, the tools, need to serve the worker. Human beings come first.
In practice it means the capability to use the given tools. But literacy to just use is not what we need.
The perspective of the consumer/user separate from the producer was the perspective of the industrial age.
We are typically always one step behind what technology can offer. One of the most important, largely overlooked, trends happening at the moment is the democratization of technological opportunity.
Creative learning is for us what productivity meant during the industrial age. [top highlight]
Creative learning is the human edge that separates us from machines, also in the future.
The relational future of work (July 30, 2015)
Most managers still subscribe to this and think that the core of creating value is to plan and manage a supply chain. A supply chain is a system of assets and transactions that in the end form the components of the customer offering.
The new interactive economy demands new skills: managing the supply chain is less important than building networks and enabling trust in relations.
“You start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you’re going to try to sell it.” [- Steven Jobs/top highlight]
The interactive enterprise must be able to integrate its entire network around the needs of each individual customer’s context. The on-demand chain means continuous on-demand learning and thus continuous change.
The main benefit for the network partners may not be financial. The most valuable thing is to have access to “community knowledge”, a common movement of thought. It means to be part of a network where learning takes place faster than somewhere else.
To succeed you need high-quality relationships.
The most inspiring and energizing future of work may be in defining and solving problems or spotting opportunities in creative interaction with your customers.
The industrial make-and-sell model required expert skills. The decisive thing was your individual knowledge. Today you work more from your network than your skills. The decisive thing is your relations.
Creative Commons of Innovation (Aug 9, 2015)
The history lessons taught in schools and leadership case studies taught in management education classes see the properties and ideas of particular persons as the drivers of the events that unfold in the world. Even today, this reinforces the common notion that history is made by outstanding individuals. But is it really so that if Newton had never been born, we would still be ignorant about gravitation? Or do we think that without Steve Jobs, there would have been no smartphone revolution or without Elon Musk, no surge of interest in electric vehicles, as Amanda Schaffer asks.
Does the great man theory of innovation, science and business really help us to understand the world we live in?
Before the time of universities, scholars depended largely on correspondence networks for the exchange of ideas. These communities, known as the “Republic of Letters” were the social media of the era, following astonishingly closely the communication patterns of today.
The better-networked scientist is the better scientist. The better-networked knowledge worker is the better knowledge worker. The main difference from the time of Charles Darwin is the efficiency of our tools for networking, our tools for thinking. This is what Darwin used letters for, to think together with his network of contacts. Over 6000 of those letters can be studied at the Darwin Correspondence Project web pages. What is similar to the social media of today is the many casual letters Darwin sent, reflecting his own life and the life around him, sometimes in a very intimate way.[top highlight]
What matters even more than the network, is networking, the way we use the network. In trying to understand what is going on, we should shift our focus from independent events and independent heroic people to networked temporality, the common movement of thought.
Even more than understanding networking, we should acknowledge the inherently creative commons nature of thinking, innovation and all development. It all takes place in interaction.
Can we learn to be intelligent? (Aug 23, 2015)
If we continue to assume that some people are born intelligent, while most are not, and continue to see intelligence as a fixed, personal possession, the options for large-scale systemic changes will be few.
Success in life has been seen governed by two concepts: skills and effort; how bright you are and how hard you work. Recently, researchers have claimed that there is a third and decisive concept. It is the practice of lifelong curiosity: “knowing what to do when you don’t know what to do” as Piaget put it.
We should welcome the fact that people today are smarter in large measure because they have invented and use smarter tools. Making tools is what human-beings have always done. The interactions between tools and human minds are so complex that it is very hard to try to draw a line between humans and technology.
To benefit from technology, we need resourcefulness. It means to be constantly looking for new tools with which to augment our intelligence.
Smarter and smarter tools surround us, but if we don’t want to learn the new practices and take up the new roles that the new technologies make possible, they might as well not be there. It is sometimes not easy, because the challenge with new technologies is what is called “functional fixedness”, our inability to see more than the most obvious use cases.
Intelligence is social and arises in communities and communication.
Social intelligence is not a separate type of intelligence. All intelligence emerges from the efforts of the community.
Work starts from problems and learning starts from questions. Work is creating value and learning is creating knowledge. Both work and learning require the same things: interaction and engagement.
But learning itself has changed: it is not first acquiring skills and then utilizing those skills at work. Post-industrial work is learning. It is figuring out how to solve a particular problem and then scaling up the solution in a reflective and iterative way — both with technology and with other people.
Why should I work with you? (Aug 26, 2015)
We need to redefine what binds individuals together. Separate individuals subscribing to the goals set by the leaders, and making their interpretations about what they mean, may not be enough if people don’t connect with one another.
One cannot talk about an organization of people without referring to what makes them a community. Leadership should address the human search for connecting with other people and being part of something larger than yourself. The more passionate people are, the more they want to connect with meaningful people doing meaningful things.
… the notion of what brings people together is becoming even more critical.
Creative individuals need both independence and interdependence to do their best work.
A creative organization thrives on the tension that arises from widely different but complementary abilities and views working with one another in enriching interaction.
Younger people are more and more attracted to self-employment and entrepreneurial possibilities instead of joining a corporation.
Birds, Hogs and Human Beings — Three lessons in sense making (Aug 29, 2015)
Scale without scope may not work in the future. The context matters more than we have so far understood.
Thomas Kuhn has written that instead of switching to a new paradigm, the devotees of the old paradigm would add more and more scaffolding to keep the building of an outdated theory from falling.
More and more people take inspiration from a new source: the sciences of complexity. The new insights are felt to be relevant, because complexity models uncertain environments and sees organizations as networks.
This new thinking sees control as a fantasy in social systems and linear, rational “if-this-then-that” causality as something that cannot be applied directly to humans. Human action is not deterministic.
Learning is the new word for productivity. [top highlight]
Ten million people working together for ten minutes (Sep 2, 2015)
A firm is normally seen as an entity that is separate from its members. The most important role in this model for the agents/managers is to serve the interests of the owners, the people who made the financial investment.
What if it is going to get harder in the future to get knowledge workers’ contributions than to get financial investors’ contributions? Should firms then serve ideas and creativity more than they serve money?
Is the way we think about firms helping us to meet the challenge of the future or is the mainstream theory of the firm an obstacle for us?
Firms are social and legal constructs. Firms don’t tell us what they are. They are what we think they are. Should we renew our old construct of the firm being based on mass production and high capital costs to a newer version, a low-cost, lightweight, knowledge-based view of the firm?
Knowledge work is always contextual, while money is generic. Knowledge work involves specific contributions to specific problems. The context matters.
Networking is not enough. Building the network is as important as building human capital.
When the architecture of work is the network, dramatic changes are possible.
The firm of the future may be ten million people working together for ten minutes. [top highlight]
“In the beginning there were markets” (Sept 10, 2015)
Unfortunately, the study of organizational innovation has never been more than a poor and distant cousin to the study of technological innovation.
The focus has now changed from seeing a firm as a production function managing its own assets to seeing it primarily as a contracting structure managing network assets. The value chain has been transformed into a multi-sided market.
The economic counterpart of friction is transaction costs.
In organizations, friction turns human energy into management pay. [top highlight]
Our technologies of coordination have developed tremendously, potentially allowing us to innovate new organizational forms. The difficult challenges ahead may not be technological or architectural, but habitual and contractual.
The future of work has to be based on willing participation by all parties, and the ability of all parties to protect their interests by contractual means.
The new kernel of on-demand work (Sep 20, 2015)
Why are we transferring the history of work to the future of work?
What if the kernel of on-demand work is not short-term associations and spot market exchanges, but in allowing us to create a new understanding of work: contextual interaction based on collaborative creativity and human capital?
A firm, then, is not a bundle of assets belonging to owners, but a bundle of dynamic commitments between people. The organization becomes a process of ongoing organizing.
In industrial processes your value could easily be less than what you are. In contextual, post-industrial settings your value can be more than what you are.
You work more from your relations than your skills.
The death of the old can be the birth of the new. What is now disappearing is not work, but the notion of a job. It is a social artifact that emerged during the nineteenth century as a way to package tasks. It was a rigid solution to a dynamic problem.
The search is even on for a word to replace work. Perhaps, the future of work is about “value-adding relationships”. Networked intelligence enables quite ordinary people to perform in extraordinary ways. What we still lack, are the institutional arrangements that would support this third way of working.
Contextual work (Sep 26, 2015)
We live in an age of simplistic explanations. We build simple systemic models and crude abstractions. As a result, both our sense making and our decisions are built on an inadequate appreciation of the complex systems we are part of.
Every time we replace natural, complex systems with simplified mono-cultures we gain in short-term productivity, but at the cost of long-term resilience and viability. The less diverse a system is, the more vulnerable it is, and the more unsustainable it becomes. [top highlight]
The principles of simplification still apply to the social systems of work: most of our firms can be described as mono-cultures.
Many organizations are productive in the short-term, but fragile in the long-term. As long as the environment remains the same, simplified systems are very efficient, but they immediately become counterproductive when the environment changes even slightly.
Simplified social systems can cause the same kind of damage to human ecology as the simplified farming systems have caused to natural ecology. People become dependent on artificial motivation systems, the human equivalents of fertilizers. We call them incentives.
It is about generic, mass-solutions becoming contextual and about interchangeable people who are now, perhaps for the first time, seen as unique. The case for networked small units, such as human beings working together in responsive interaction, is stronger than ever.
A minimum viable organization (Oct 18, 2015)
The demands of work are now different: how efficient an organization is reflects the number of links people have and the quality of the links to the contexts of value creation, the things that matter. We are beginning to see the world in terms of relations.
The wiki was one of the best departures from the division of labor and workflows. Wikis let people work digitally together in the very same way they would work face-to-face.
Email and physical meetings are methods which always exclude. They necessarily always leave people out. A wiki, depending on the topic, the context, and the people taking part, can be inviting and including. The goal is to enable groups to form around shared purposes without preset organizational walls, or rules of engagement.
It [a wiki] is a minimum viable organization. A wiki does not force a hierarchy on people; hierarchy is an emergent and dynamic phenomena.
New work is about responsive, free and voluntary participation by people who contribute as little, or as much as they want, and who are motivated by something much more elusive than only money.
Work is interaction between interdependent people. Every organization is in essence a wiki! [top highlight]
Why management has to be algorithmic (Oct 25, 2015)
Cybernetics is the theory of control and management is the practice of control. [top highlight]
People build the environment that is relevant to them. Each individual in a sense constructs her own world.
Interaction itself has the capacity to create structure, coherence and, yes, order.
Management and strategy used to be about rational choice between a small set of known options and variables. Under circumstances of rapid technological change, the challenge is to create openness to possible options.
… seeing human work as contextual interaction between interdependent people. In certain conditions human beings can also produce creative new outcomes that none of us planned or even thought were possible.
Complexity (Nov 1, 2015)
here is an assumption about causality that is taken for granted . If you do A, you get B. If you use tool X, you get result Y. What we have not appreciated is that the universal prescriptions and tools get their meaning in the local situations in which they are enacted, one way or the other. The context matters more than the abstraction.
Interaction creates patterns no person individually intends or can control. This is what complexity means. The sciences of complexity offer a new framework for bringing together new insights about human beings into a theory of organizational development that is very different from the ones we presently subscribe to.
The way complexity works is to escalate small changes, breaking any direct link between input and output.
Applying mainstream management approaches in conditions of uncertainty leads us unintentionally to avoid the search for learning and positive change. [top highlight]
Products as art and the manager as an artist (Nov 19, 2015)
The scientific method set out to overcome fears of the unknown, the domain of creativity.
Organizations are social constructs. They are nothing but constructs to which people are drawn in pursuit of some purpose. Healthy organizations are a concept of relationships to which people are drawn by beauty, values and meaning, along with the freedom to pursue them cooperatively. Healthy organizations enable more than they constrain. Unhealthy organizations are a concept of relationships into which people are forced by birth, necessity or manipulation. Unhealthy organizations constrain more than they enable.
But competition and cooperation are not mutually contradictory. In the new design of work they don’t have opposite meanings. They need to be complementary.
Competition has become absurd in capitalism, leading to mindless self-interest, a winner-take-all society, and has now left us to cope with the results of the irreversible exploitation of natural resources and the irresponsible abuse of people.
It was evident at the event that we don’t yet have a good idea of what can or cannot be done by connected people.
We need a new vocabulary beyond the models of industrial production and the separatist, mechanistic concepts of a corporation.
The emerging organizations cannot be portrayed in two dimensions on a traditional organizational chart.
The next challenge is to design a beautiful business.
Conversations and narratives are the new documents (Nov 25, 2015)
Cultures without writing used human contact as a means for interpreting shared reality. Information within these cultures was community-based and people tended to construct their identities in relation to the community.
Literacy led to people looking for information through the relatively isolated practice of reading rather than through interaction.
Change occurs not so much as a result of new information leading to individual learning but when the patterns of connectedness between individuals change.
Knowledge that used to be understood as the internal property of an individual should now be seen as networked communication. This requires us to learn new ways of talking about education, competencies and work itself.
Conversations and narratives are the new documents. Conversations cannot be controlled. The only way to influence conversations is to take part in them.
Art and AI (Dec 3, 2015)
We have great expectations of Artificial Intelligence (AI). Those expectations are based on the ways we have used the scientific method to make sense of the world.
Not all events or relations between observations can be reduced to a mathematical description. Ideas can have very different meanings; the context matters.
We reduce the world to fit the models we have made and tools we have created. The method is called reductionism. This is where the problems begin.
AI research modeling the world or reverse engineering the human brain are both based on approximation, the belief that very small uncertainties don’t matter.
The human brain works through associations, not through algorithms. The processes of life are contextual, continuously varying, unpredictable and complex. The philosopher E. F. Schumacher wrote poetically: “The power of the Eye of the Heart, which produces insights, is vastly superior to the power of thought, which produces opinions”.
We have associated intelligence with reasoning. Perhaps, intelligence should be equally associated with creativity. [top highlight]
Connecting the dots (Dec 13, 2015)
The cognitive opportunity of connecting lies in the fact that as we don’t all select the same things, we don’t all miss the same things. If we can pool our insights in a creative, enriching way, we can thrive in the complex world we live in.
This shift in the way we see organizations changes the way we perceive competitive advantages. The new competitive edge comes from openness and interactive capacity: the ability to participate and connect.
In this view, information is the energy of organizing. Or, as Gregory Bateson wrote, “information is a difference, which makes a difference”.
When information is transparent, people can organize effectively around changes, customers and purposes.
The easier the access that people have to one another and to different information is, the more cognitive and creative possibilities there are. What we have still not understood is that people need to have access to information streams that no one could predict they would want to know about.
Cooperation is necessary because one person no longer has the answer. Answers reside in the interaction, between the different views of reality, between and in all of us.
The management task is not to understand people better, but to understand better what happens, and what can happen between people. Our world is co-created in relations.
Redefining work (Dec 31, 2015)
But what if high performance is incorrectly attributed to competition and is more a result of diversity, self-organizing communication and non-competitive processes of cooperation? [top highlight]
Leaving something out of an ecosystem always means a reduction of diversity. The resulting less diverse system is efficient in the short term and competition seems to work, but always at the expense of long-term viability.
The bigger the divide of inequality, the bigger the price that finally has to be paid. The winners end up having to take care of the losers.
The games we play have been played under the assumption that the unit of survival is the player, meaning the individual or a company.
Who wins and who loses is of minor importance compared to the decay of the (game) environment as a result of the actions of the players.
Cooperative processes are about interdependent individuals and groups defining and solving problems in a shared context. Individuals competing on job markets may be one of the historic mistakes we have inherited from the industrial age.
Interaction creates capability beyond individuals … Higher performance and robustness are emergent properties of cooperative interaction.
To solve them, a person has to think not only about what he believes the right answer is, but also about what other people think the right answers might be.
The really big idea of 2016 is to reconfigure agency in a way that brings relationships into the center.
In competitive/cooperative games the winners would be all those whose participation, comments and contributions are incorporated into the development of the game.
The most underutilized resource still waiting for discovery may be our ability to cooperate much more deeply than the systems of work have so far envisioned.
A new agenda connecting people and business (Feb 7, 2016)
Our vocabulary around work resembles “newspeak” in its lack of diversity and richness. We have been accustomed to talking about a very limited number of things: such as jobs, labor, job markets, managers, employers, freelancers, employees.
Nilofer Merchant is a leading voice in creating the post-industrial narrative. There are very few management thinkers who have done as much as Nilofer to help us to make sense of the new world.
What would work be like if your own life, your own context were the starting point?
Knowledge of your abilities, interests, strengths and weaknesses is essential to becoming response-able in choosing and changing your career. [top highlight]
Too few people actively make a connection between what they are good at, or want to be good at and what they do for a living.
We need a new agenda connecting people and businesses! The aim, however, is not to have a single set of common goals, but complementary goals and a co-created narrative for both!
The notion that a society can be regarded as a bundle of separate units, represented and described by separate units of information, supported the principle that detached people can be represented through a system of disconnected political parties.
Learning, which used to take place through oral interaction in groups, was now the activity of the individual.
The printing press separated information and communication. The Internet and the new social technologies are causing the two to converge. [top highlight]
Complex Intelligence (Feb 28, 2016)
The dominant scientific way of thinking tries to eliminate paradox. An encounter with paradox, such as seeing the same thing differently from different points of view, has been understood as a sign of not thinking properly and thus has led to attempts to resolve or eliminate the paradox.
The real question here is whether modern society is in effect de-skilling people in the conduct of the practices of everyday life because of our tools. We have more machines than our ancestors, but less idea of how to use them well.
When the context is stripped away, we add it back.
The next digital tools dealing with intelligence need to be more “dialogic”. The concept of dialogue has a very precise meaning. It is a discussion which does not resolve itself by finding common ground. Though no shared agreements are reached, people often become more aware of their own views and learn through expanding their understanding of one another and the different contexts of different people. We become more intelligent if the paradoxes are kept alive.
Unless you genuinely value the perspectives of others, and not just the ones that conform to your own, you are not going to understand them. Truly intelligent thinking is not just a means to an end: it has to be rooted in what we see as ends in themselves, the values by which we live.
Work and the games we play (Mar 12, 2016)
The still dominant industrial “value model” is based on controlling and leveraging assets, whether those assets are land, capital or competences .
Four fairly new insights are challenging our traditional beliefs:
1. Value creation happens at the point of use, not the point of production; [top highlight]
2. Mass solutions are not as competitive as contextual solutions;
3. Transactions are replaced by interactions because contextual value creation cannot take place without interaction;
4. Open networks and reach and richness of networking are more valuable than control of proprietary assets.
The game environment may be one of the case examples that are now available for creating a deeper understanding of the future of digital work.
Frequent risk taking and confronting risks routinely help players to learn to keep paradoxes alive calmly and to live efficiently with continuous change.
Management/hierarchy in games is often temporary and context specific. People switch roles. They direct others one minute and take orders the next. Management is a task. It is not a position, a role or part of the identity of an individual.
Treating management as a temporary state and a task can be the new model of the future.
The widespread adoption of game mechanics for coordination and taking responsibility would require a dramatic change in mainstream organizational culture.
Network reach and richness become more important than any and all other assets. Maximizing network interactions becomes the route to maximizing value.
Work is solving problems — The lessons from Google (Mar 30, 2016)
There is a mental framework that is used when dealing with work, and another distinct mental framework regarding learning. But what if we could talk about work the same way we talk about problem-based learning?
Problem-based work is interaction and exploration both when it comes to defining the problem and when seeking a solution.
You design for participation. As many people as possible with applicable and relevant skills should have a chance to connect and contribute.
Work is about cognitive and social presence. You don’t need to be present in a factory or in an office, but you need to be present to other people.
The quality of both work and learning depend on asking the right questions and linking with the most relevant nodes in the network! [top highlight]
Although many people don’t agree with this, I see platforms/platform cooperatives as an important step towards democratization and the new economies of learning and scope.
Network leadership (Apr 10, 2016)
The industrial approach to leadership places a heavy emphasis on the formulation of intentions and plans and then communicating them as action points to be implemented by others.
There is a different approach to this need, which is made possible through the Internet, cooperative platforms and new social technologies. The question asked is: “How can more people participate in ways that bring about development and change over time?”. The strategic logic is temporal rather than spatial.
Following this thinking, there was no true sense of creating the future together. “Networks create the experience of acting into the unknown, creating the future together, improvising together in the responsive interplay of different participants with different views.” But the problem is that a crucially important thing, responsiveness, is often the missing ingredient.
The new rule is that if you are a participant, you are, by default, a moderator, a curator and an editor for others. [top highlight]
Leadership could be seen as an emergent property of responsive interaction in the whole network.
Instead of highlighting posts with high ratings, the third algorithm should highlight posts that have triggered something new.
Extended intelligence requires extended leadership and extended leadership requires participation. We have the technologies, next we need the designs for participation and responsiveness beyond what we have today!
So what could possibly go wrong? (Apr 25, 2016)
It aims to extract value from the opportunities that are offered by very small price differences sometimes lasting for less than a second. Information asymmetries turn into revenue.
John Dewey wrote: “the greatest gift of thought is that it allows us to imagine things not yet experienced, based on what we know in and about the present — it enables us to act on the basis of the absent and the future.” [top highlight]
Technology can replace us. Technology can extract value and serve us. But technology can also augment our human capability to create value and to think.
Instead of just imagining the future, perhaps, we should try to imagine a desirable future.
A New Growth Theory (Apr 30, 2016)
The important innovation of the modern firm was to internalize activities by bringing many discrete entities under one roof and under one system of coordination.
Thus, aiming to become a platform requires a vision that extends beyond one’s firm and aims to build and sustain an ecosystem where each network node benefits from more nodes joining the network.
What assets were for the industrial firm, network effects are for the post-industrial firm.
Traditional business economics focuses on supply-side economies of scale derived from the resource base of the company. It scales much more slowly than the demand-side network effects the new firms are built on.
People participate on the basis of transparent information and high-quality communication systems enabling “resonance”.
The more of them that are in active resonance, the more assets there are. The big shift is from market transactions to network interactions.
The main mission of platforms is to make network effects possible.
Platforms are, so far, the best means to flourish and create growth in low transaction cost environments, the same way as the industrial firm was the best means to flourish and grow in high transaction cost environments.
The design patterns of work (May 31, 2016)
Solutions are by default contextual, but they can be starting points for someone else to create value. Creative, connected learning is at the core of the new logic.
… the task is to design value creation on three patterns: (1) a relational focus. (2) creating network effects, and (3) solving meaningful problems.
The new structures and new designs are about communities continuously organizing themselves around shared contexts, meaning shared interests and shared practices.
The focus should now be on cooperation and emergent interaction based on transparency, interdependence and responsiveness.
Success today is increasingly a result of skillful participation: it is about how we are present and how we communicate. [top highlight]
The physical commons were, and often still are, over-exploited but the new digital commons follow a different logic. The more they are used, the more valuable they are for each participant.
The most important model is a network structure where the value of all interactions is raised by all interactions; where every interaction benefits from the total number of interactions.
Recently, researchers have claimed that there is a third and decisive concept. It is the practice of lifelong curiosity and “knowing what to do when you don’t know what to do” as Piaget put it.
The interactions between tools and human minds are so complex that it is very hard to try to draw a line between humans and technology.
Work starts from problems and learning starts from questions. Work is creating value and learning is creating knowledge. Both work and learning require the same things: interaction and engagement.
Productivity revolutions (Sep 18, 2016)
The interactions between tools and human minds are today so complex that it is very hard to try to draw a line between humans and technology. Neither is it a zero-sum game where the human brain is losing to the microchip, but as technology changes, people and what people do, are necessarily changed. This is just one of the reasons why work needs to be understood as learning.
There is naturally more to being intelligent than using the latest technologies; how we connect and interact with others is a crucial element of how smart we are in practice. Intelligence is social and arises in communities and communication.
This means that the defining characteristic of the next revolution in productivity is the increased variety of intelligent behaviors that are available in any situation.
Knowledge changed profoundly the life of the manual worker one hundred years ago. Technological augmentation is going to do the same to the knowledge worker.
The Future Skills We Need (Oct 9, 2016)
The industrial process was a linear, sequential chain of predictable acts. The problem to be solved was known and the solution to the problem was clearly defined. In creative work, the transformation process is a non-linear, complex movement of thought from unclear problems to developing solutions. Work is exploration when defining problems as well as for creating solutions.
Problem-based value added is interaction that is always based on working with differences. The requirement for efficient work is thus not necessarily to have common goals or to reach a consensus.
Knowledge was situated in the individual. In order to help individuals cope with the challenges of everyday life, individual competencies needed to be developed. Our whole education system is still largely based on independent individuals learning and knowing.
Work is communication and the network is the amplifier of knowledge creating value and learning.[top highlight]
The new managerial task is to understand: (1) the speed of the common movement of thought, (2) what is being discussed, (3) the quality and “cool factor” of that conversation, and (4) how problems actually develop towards solutions and scalable learning. Thinking does not take place inside separate people but in rich, continuous interaction. The richer the interaction, the more value and learning are potentially created.
Your facts are not my facts (Nov 7, 2016)
The actions in real life always vary and create emergent, often surprising results. As the people with whom we interact change, the context of knowing changes. In other words, there is always variation in processes, routines and actions.
The relational perspective looks at the problem from a different point of view: knowledge is understood as socially constructed. Knowledge is not stuff accumulated and shared by individuals. When knowledge and truth are viewed as social, and temporary, then constructions of what we call understanding or knowledge are always a part of everything that is going on. Contextual, social interpretation takes the place of the objective fact.
Knowledge is social. Knowledge is neither a stock nor a flow! Knowledge is the act of interacting. New and different knowledge is created when ways of interaction, and therefore patterns of relationship change.
Enabling new habits of communication and improving the quality of the conversation are the most important processes of changing organizations or changing the world. [top highlight]
The task is to build platforms that produce connectedness and interdependence as processes that construct collective capability and responsibility.
In a relational model, identity is constructed from being in relationships, being connected, as contrasted with the mainstream view of identity through separation.
Gregory Bateson argued that humankind’s fall from grace began through separations such as separating the self from the other, separating thought from emotion or separating the sacred from the secular.
Leading and following in the traditional sense have seen the leader making people follow him or her through charisma, motivation and rewards.
Leading and following when seen as a two-sided, symmetric network relationship, not as attributes of individuals, follow a very different dynamic. Leading in this new sense is not position-based, but contextual, temporal and recognition based.
The leader is someone people trust to be at the forefront in the area, which is temporally meaningful for them.
We are now at the very beginning of trying to understand leadership in the new contextual, symmetric framework.
We need new skills of dynamically connecting to new people and enriching information. This is a growing challenge for our tools. Social tools have developed tremendously on the publishing and social sharing side. The next developments need to take place on the social sense-making side.
Leading is then helping people to make sense of the world. [top highlight]
The Essential Skill of Pattern Recognition (Jan 8, 2017)
What emerges is, paradoxically, predictable and unpredictable, knowable and unknowable at the same time. This does not mean dismissing planning, or management, as pointless, but means that the future always contains surprises that no one can control.
Emergence is often understood as things which just happen and there is nothing we can do about it. But emergence means the exact opposite.
Complexity means a different theory of causality. It is about emergence.
In the end it is about the combination and interaction of the elements that are present and how all of them participate in co-creating what is happening. The big new idea is to reconfigure agency in a way that brings these relationships into the center.
Recent developments in psychology/sociology have shown that human agency is not located or stored in an individual, contrary to what mainstream economics would have us believe. The individual mind arises continuously in communication between people. The focus should now be on cooperation and emergent interaction based on interdependence and responsiveness to what is actually happening.
Ilya Prigogine wrote in his book “The End of Certainty” that the future is not given, but under perpetual construction:
The Programmable Enterprise (Jan 22, 2017)
Corporations are the dominant mechanism by which economic activity is organized. Whether there are opportunities for social innovation in the corporate world is hence a key question for the prosperity and well being in the emerging post-industrial society.
A programmable enterprise connects and scales up learning and makes the whole network smarter with every individual interaction, thus creating network effects. The benefits for the network partners are then not only financial. The most valuable thing is to have access to a common movement of thought. It means to be part of a network where learning scales up faster than somewhere else.
Work is not job roles, but context specific contributions. The challenge for the firm is to be inviting to as many applicable contributions/investments as possible, from as many people as possible.
A firm, then, is not a bundle of assets belonging to owners, but a bundle of dynamic, smart contracts between people.
Interactive competence (Feb 5, 2017)
People are simultaneously forming and being formed by each other at the same time — all the time.
The new competitive edge comes from interactive capacity: the ability to connect with information and people, as and when needed. Knowing depends on how you are present and how you communicate. [top highlight]
This new understanding of competence suggests that the capability to act is a social process.
What we have still not understood is that people need to have access to information that no one could predict they would want to know.
It is only a few network connections away (Feb 18, 2017)
We often create things together that nobody wants to create.
This is not possible because what really happens arises in the complex interplay of all the network actors with all their intentions, which is why leaders cannot choose outcomes although they can choose their next action. [top highlight]
Actions are not independent. Meaning is not attached to any single act but is perpetually created in interaction. Cognition is relational.
A better understanding of social networks is essential for facing the new threats in the world.
Post-blockchain Smart Contracts Creating a New Firm (Feb 26, 2017)
Technology does not determine social and organizational change, but it does create new opportunity spaces for new social practices. Some things are becoming much easier than before and some things, such as totally new economic spaces with new contracting rules are becoming possible.
With programmable cryptocurrencies, we don’t need to think that wages and equity are opposite ends of the rewards spectrum. Liquidity and rights for future earnings potential can be coded into compensation principles, into smart contracts.
Smart, programmable money can be both currency and equity at the same time.
Firms are social and legal constructs. They are what we think firms are. It is time to renew our old construct of the firm as a newer version, a creativity- and innovation-based view of the firm, utilizing the new post-blockchain smart contracts and network effects.
Business game design (Apr 9, 2017)
Smart contracts substitute boundaries. The kernel of a firm is a live social graph of networked interdependence and accountability.
Becoming indicates that nothing exists in a final state and all entities are in a continuous movement in time, not through adaptation, but through emergence, through responsive connecting with the new. The focus is on the connecting of people and events in a game-like environment.
Under circumstances of rapid technological change, the (management) challenge is to create openness to possibilities and plausible options.
By drawing a boundary around the organization, we made the assumption that interactions within the boundary are more significant than interactions with actors outside that boundary.
We want to do something as we join a game — with other people and with technological intelligence. The defining characteristic of post-industrial economic spaces is the increased, non-algorithmic, variety of behaviors that is available. It is not necessarily about common goals or even shared purposes any more.
Neural networks as the architecture of human work (Apr 16, 2017)
No neuron links with all the other neurons at the same time. No server links with all the servers at the same time, and no one person interacts with all the other people at the same time. So all interaction is always “local” creating “events”, whether in the brain, in an organization, or on the Internet.
The digital world we live in today is totally different when it comes to the quality and costs associated with coordination, communication and contracting and allows us to experiment with totally new value creation architectures.
When knowledge and creativity are the decisive factors of value creation and when work takes place in digital, global, decentralized environments, this top-down process is increasingly inefficient. A manager cannot know who knows or where the most valuable contributions could come from. This is a problem because time to value is an increasingly important metric.
We often think of individuals as independent and self-contained. The view suggested here sees individuals as nodes of the complex networks they form when interacting with others, co-creating themselves and the reality in which they participate.
One of the biggest promises of Internet-based work is the way it potentially redefines local interaction.
A working class manifesto (Apr 30, 2017)
Today, more and more scholars see organizations as being more analogous to complex networks. There, it is not about predictions and controlled outcomes, but about uncertainty, perpetual co-creation and fundamental interdependence. Their claim is that we should study links and interactions.
… the inputs and outputs of knowledge work are problem definitions and exploration for solutions. Knowledge work is characterized by variety and exception rather than predictability and routine.
Knowledge work is about human beings being more intensely present for each other. Thus, a post-industrial business today needs to be human-centric by definition. But people still tend to see their work and personal lives as two separate spheres.
Here we are talking about connecting work and life in a new way, with a new agenda. Human beings in interaction not the processes of production, are the main thing.
As we know, passion and commitment are best mobilized in response to personal aspirations, not financial rewards. The aim, however, is not to have a single set of common goals, but complementary goals and a co-created narrative for both!
The lack of a connecting agenda may be one of the big, so far undiscussed, challenges facing the emerging post-industrial society.
We need to study the intersection of business strategy and personal narrative and use the new agenda to challenge our industrial-age practices and flawed ways of thinking.
The new structures of work and new designs for value creation are about communities continuously organizing themselves around shared information, shared interests and shared practices. Post-industrial business is about doing meaningful things with meaningful people in a meaningful way.
Hedging the future of work (May 17, 2017)
In the future we typically work in three kinds of economic spaces: in long-term collectives, short-term communities, and in fast response flash networks. [top highlight]
Hacking uncertainty and hedging risks is an increasingly important part of the future of work.
Social capital is not something an individual can own. It is the commonly “owned” stock of active connections and trust between people in your network.
The future of work will be based on hacking uncertainty and hedging risks through post-blockchain smart contracts, learning and social capital.
The main question is perhaps not what skills we should have in the future, but how we hedge the risks that are inbuilt in our world, our unique knowledge assets, the know-what, the know-who and know-how of our life.
Rethinking skills and responsibility (May 27, 2017)
The industrial make-and-sell model required explicit skills as we still know them. The decisive thing was your individual knowledge and individual education. Today, in the new economic spaces you work more from your relations than your skills. The decisive thing is your network. Work is interaction.
We have so far followed a very crude pyramid-like classification in work: skilled work was what highly educated individuals would do. Semi-skilled work was possible for trained people. Unspecified labor was what almost everybody could do after onboarding.
Managers, who are responsible people, are given responsibilities — and higher wages. Workers are given less demanding tasks, less responsibility — and lower wages. The argument behind this is a circular, self-fulfilling prophecy. People who are not made responsible tend to avoid responsibilities and therefore never become responsible.
What defines most problems today is that they are not isolated and independent. To solve them, a person has to think not only about what he believes the right answer is, but also about what other people think the right answers might be.
To succeed in the new economic spaces we need symmetric relationships, open assets and very open organizations.
Through new technologies and ubiquitous connectivity, we have totally new opportunities for participation and communication in the new economic spaces.
Interaction creates capability beyond individuals.
It is not about individual skills any more. Skills, performance and resilience are emergent properties of cooperative interaction.
New Economic Spaces (Aug 11, 2017)
In complex environments, the way to vitality and resilience is a continuous recombination of successful elements to create new versions, some of which may thrive. As a result, the operating system of work is starting to change in a radical way.
The concept of economic space represents a new logic of organizing based on neither the traditional market nor a process.
Interaction creates capability beyond individuals. Cooperative performance can be more than what could ever be predicted just by looking at the performance of the parties involved.
Under circumstances of rapid technological change, the management challenge is not better planning and control, but creation of protocols that make possible openness to possibilities. By creating and integrating more relationships, the networked business broadens its opportunity space dramatically. The only common goal the nodes of the network have is the growth of the network.
Firms are social and legal constructs. They are what we think firms are. It is time to renew our old construct of the firm as a newer version, a creativity- and network effects-based view of the firm, utilizing tokens and smart contracts.
The future architecture of work is not the structure of a corporation, but the structure of the network.
The most important model for work is a learning protocol where the value of all interactions is raised by all interactions; where every interaction and every worker benefits from the total number of interactions and workers.
Purpose-driven proximity complements local proximity in the world of work.
The network is then the market and commons for exploration, coordination and value creation without any central (platform) authority. Businesses used to be built on assets. Tomorrow they are built on network effects. The Internet is no longer about linked pages but connected purposes.
The Future of Management (Sep 9, 2017)
What an organization becomes emerges from the sense-making relationships of its members, rather than being determined by the choices of a few powerful individuals.
The idealistic view of a manager as someone who is in control is not consistent with our practical experience, or with modern science. From the point of view of the sciences of complexity, an organization is not even a system, but should be understood as a pattern, or as interconnected patterns in time.
The key management capability is not being in control, but participating and influencing the formation of sense making and meaning. It is about creating a context that enables connectedness, interaction and trust between people.
Most people believe that the role of leaders is to choose strategic directions and then persuade others to follow them. A modern view of strategy is about exploration and experiments, a search process of trial and error.
This is why the goal is not to reach consensus. What an organization becomes emerges from the relationships of its members rather than being chosen by some individuals. The fundamental dynamic of evolution is not competitive selection, but interactive cooperation. Management in the new economic spaces is then about self-influencing cooperation.
Biology, Blockchains and Quantum Physics (Dec 16, 2017)
The greatest opportunities for advantage lie in the combination of fast-changing markets and emerging technologies. Because of this complex landscape, instead of preparing ourselves for a knowable future, we need to explore and probe for openings.
The strategic logic is temporal rather than spatial. When following a spatial, foresight metaphor, there is a territory that can be mapped and understood, but here the territory is seen as being under continuous development and in formation by the exploration itself.
The success of the colony is a result of the collective activity of the individuals following very basic protocols: (1) make successful behavior visible to others, and (2) follow successful behavior. The principle is basically the same, even if instead of ants and pheromone, we were to talk about human beings and blockchains.
The biggest constraint, however, is that we are not used to thinking that we may have thousands of opportunities available every day. Thousands of potential trails to study and possibly follow.
The dominant business organization of the future may not be a permanent corporation but rather a dynamic network. Network knowledge can merge into temporary bundles whenever and wherever necessary to solve problems.
A work role for many individuals in the future will be to take part in networks that neither they nor anyone else controls. The key metric is how long it takes for people to cooperate efficiently.
Quantum theory says that each quantum entity has both a wavelike and a particle like aspect. The particle-like characteristic is fixed but the wavelike one is a set of potentialities that cannot be reduced to the existing (parts of the) entity. If two or more of these entities are brought together, their potentialities become entangled.[my comment: importance of “field” where this entanglement is possible]
A new shared reality emerges that could not have been predicted by studying the properties or the actions of the two entities. The interconnected patterns in human interaction are the results of self-organizing processes across the particular network forming the temporal organization.
Work of Art (Feb 24, 2018)
Computer-based digital manufacturing does not work this way. It does not use moulds or casts. Without these, there is no need to repeat the same form. Every piece can be unique, a work of art.
People may choose to serve as passive bystanders and consumers of artificial intelligence and its expanding capability. This is why learning needs to change: it is not first going through education and then finding corresponding work, but working first and then finding supporting, corresponding learning. Modern technology is abused if it deprives its users of hands-on training.
Work is becoming more situational and context-specific. Motivation and a sense of meaningfulness are going to be much more important than talent.
Pride in one’s work lies at the heart of art and craftsmanship as the biggest reward. The enlightenment believed that everyone possesses the ability to do good work. We now have the tools to support a renaissance of human-centric work — for all.
The common movement of thought (Apr 8, 2018)
Memories do matter. Memories are representations of the past that are manifested in the present, often unconsciously, and carried forward into the future. Accordingly, what is happening as we live on, is forgetting.
Our past, together with our intentions for the future is always present in the daily, mundane actions that often pass without notice. The narrative, the movement of thought, is the ongoing pattern of life.
The ten principles of digital work (May 31, 2018)
The human protocols of creating value in the post-industrial world.
Work is creative interaction based on curiosity and exploration.
Productivity is understood as creative learning and scaling up learning instead of more output with less input.
Work is interaction between interdependent people. Competence and learning capability are less about the attributes of individuals, and more about the attributes of social interaction.
Saving democracy (Jun 10, 2018)
The earlier high cost of coordination, communication and contracting is the reason behind many of the organizational forms [i.e., corporations] that are still taken for granted and which we experience daily.
The digital world we live in is totally different when it comes to the quality and costs associated with these three drivers behind organizing, and allows us to imagine and experiment with totally new value creation architectures.
Because of the higher quality and lower costs of communication and coordination the content of work is changing from generic, repetitive practices to contextual, creative practices. The value is not embedded in a product or a service any more, but in interaction.
When knowledge, interaction and creativity are the decisive factors of value creation and when work takes place in digital, decentralized environments, this top-down process is increasingly inefficient. Network knowledge can merge into temporary bundles whenever and wherever necessary to solve problems.
The new economic spaces are based on a reversed sequence, an “on-demand-chain”. It is the exact opposite of the industrial value chain, the make-and-sell model. Here work is a movement in time where some contributions are followed up by others, and some are not, creating a developing blockchain.
An economic space, then, is not a bundle of assets belonging to a group of owners, but a bundle of contracts between people.
It is time to renew our old construct of the firm as a newer version, a creativity- and interaction-based view of the firm.
I am not I (Aug 13, 2018)
We should look at communication, not competences, as the most predictive group activity there is in forecasting viability and agility.
A key management challenge today is to understand that the only way to guarantee agility and resilience is to participate actively and widely in the conversations that matter in an enriching way.
Mainstream thinking sees the social as a community, on a different level from the individuals who form it. A totally different approach sees individuals themselves as thoroughly social.
Both the individual and the social are then about interaction, where the individual is interaction “inside” and the social is interaction “outside”. The individual is the singular of interdependence while the social is the plural. An individual recognizes herself, as a self, in the recognition of those she recognizes…
In this way of thinking, we leave behind the western notion of the self-governing, independent individual for a different notion, of interdependent people whose identities are established in interaction with each other.
Identity is a pattern in time. [top highlight]
Richer connections and more challenging, more exploratory conversations leave people feeling more alive, more inspired and capable of far more.
A relational view of leadership (Aug 18, 2018)
Our attention is a result of the filters we use and our actions are results of our sense making.
Our most valuable guides to useful bits of insight are trusted people, people whose activities we can follow to help us advance and make sense.
Leading and following when seen as a two-sided and more symmetric relationship, not as attributes of individuals, follow a very different dynamic.
Following is at best a process of creative learning through observing and replicating desired practices. Leading is doing one’s work in a transparent, reflective way. Learning is the fundamental process of socialization.
As we engage in relationships we are creating new potentials for action and sense making. [top highlight]
We need to shift our focus from competencies to agency (Nov 4, 2018)
Knowledge work is characterized by variety and exception rather than predictability and routine.
The focus is changing from generic skills to contextual presence, empathy and interaction. Instead of competences and skills, we should talk about agency.
The most modern definition of work is an exchange in which the participants benefit from the interaction. Interestingly, cooperation is also described as “an exchange in which the participants benefit from the interaction”.
Generic labor was what almost everybody could do on the bottom. This classification of work led to the consequence that the most economical design of mass-era organizations reduces the amount of skilled work and increases the amount of less skilled work, thus reducing costs. It has been a self-fulfilling prophecy that has created the problems we face today.
Unlike the repetitive business processes we know so well, where inputs are acted on in some predictable, structured way and converted into outputs, the inputs and outputs of knowledge work are definitions of problems and exploration for solutions. Even more, there are no predetermined task sequences that, if executed, would guarantee success.
Enterprises are not organized to facilitate interactions, only the actions of parts taken separately.
Agency becomes more important than education.
Success today [which is according to Kilpi relative and temporal] is increasingly a result of skillful presence: it is about empathy and interaction.
Agency, which here means performance and resilience, is an emergent property of cooperative interaction supported by intelligent technologies. [top highlight]
Creative individuals need both independence and interdependence to do their best work. A creative organization thrives on the tension that arises from widely different but complementary views working with one another.
Instead of talking about generic competences, we need to focus on continuously developing agency — for everybody.
The era of mass-production was about non-regenerative systems that ignored all contextual particularities.
The principles of extraction and simplification still apply to the social systems of work: most of our firms can still be described as monocultures.
The post-industrial, post-fossil era is too complicated to boil down into a single slogan describing work. It is a more profound change in work patterns than what the present visions offer.
The technological case for networked small units, such as connected human beings working together in responsive interaction, is stronger than ever. Local, contextual knowledge is needed not only for sustainability in the post-fossil society but also in digitally augmented work.
The New Commons of Work (Jan 15, 2019)
Hierarchies and repetitive processes were based on tight couplings. The post-industrial platforms are based on loose couplings following the original logic of the Internet.
What, then, is the use of the corporate theater as we know it now, when it is literally impossible to define the organization before we actually do something? What if the organization really should be a process of emergent self-organizing, and always changing when the context changes?
Instead of thinking about the organization let’s think about organizing as an ongoing thing. Then the managerial task, but not necessarily a managers task, is to make possible very easy and very fast responsive interaction and formation of interdependent individuals into value creating groups. [top highlight]
Instead of the topology or organizational boxes that are often the visual representation of work, the picture of work is a live social graph.
What if a post-industrial “company” could be, first and foremost, a set of interaction protocols, a shared and open resource, making interactive value creation possible through organizing and simplifying participation?
The physical commons were, and still often are, over-exploited but the new digital commons of work follow a different logic. The more they are used, the more valuable they are for each participant.
In the new commons, people with more potential ties become better informed and have more signalling power, while those outside and with fewer ties may be left behind. This is the new digital divide.
Living with paradoxes (Jan 21, 2019)
In Hegel’s thinking, the word paradox means the natural, and necessary, presence of conflicting ideas at the same time. A paradox is then the essential requirement for creativity and transformation.
Crossing boundaries is always about working with differences. This is why differences are potentially conflictual in nature, and this is something we should now welcome. Conflicts give rise to the possibility of innovation and the potential for finding totally new solutions.
The contradiction and dilemma between stable and unstable cannot be resolved, but gives rise to the potential for creativity and innovation. It is time to refresh our thinking about strategic choice in management. It is time to embrace complexity and the enormous creative potential of live paradoxes, if we keep them alive!
To be competitive is to be cooperative (Feb 4, 2019)
Knowledge work is creative work we do in interaction.
Because of specialized, narrow skill sets, a new role with a new role definition is needed in knowledge work. Nobody can be successful without supporting contributions from network partners. The new role is a “complementor”. A complementor is not the same as a supplier. The connection is based on a non-hierarchic network relation, not the value chain.
Barry Nalebuff explains that a complement to an offering is another offering that makes it more attractive.
Complementarity is not about recombining skills but redefining work and learning. To be competitive in the new post-industrial, post-fossil landscape is to be cooperative.
Collaborative and Competitive Creativity (Feb 10, 2019)
The new technological environment of business has something in common with the world of Picasso and Matisse. It is marked by conflicting constraints, variables that shift very rapidly and value-creating relationships that change constantly. It is a complex environment.
In complex environments, the way to proficiency is to recombine successful elements to create new versions, some of which may thrive.
… the operating system of work is starting to change in a radical wa.
Because of greater complexity, coordination cannot be planned in advance. Authority needs to be distributed; it is no longer delegated vertically but emerges horizontally. Under distributed authority work teams and knowledge workers need to be accountable to other work teams and other knowledge workers. Achievement depends on learning by mutual accountability and responsiveness. [top highlight]
The variables of creative work and complex environments have increased beyond systems thinking and process design.
Success is based on continuous redefinition of the organization itself. It is about recombining options and contributions in a competitive and cooperative environment.
The democratization of technology that is taking place at the moment does not determine social and organizational change, but does create new opportunity spaces for new social practices. he opportunity we have is in new relational forms that don’t mimic the governance models of industrial firms. Network theory suggests that what the system becomes emerges from the complex, responsive relationships of its members, continuously developing in communication.
How to scale up learning (Feb 18, 2019)
If we continue to assume that some people are intelligent or creative, while most are not, and continue to see intelligence and creativity as fixed, personal possessions, the options for the needed large-scale systemic changes will be few.
Perhaps a bigger problem than low-skilled people would be the low-skilled occupations we have created.
Success in life has been seen governed by two concepts: skills and effort; how bright you are and how hard you work. Recently, researchers have claimed that there is a third and decisive concept. It is the practice of lifelong curiosity and learning: “knowing what to do when you don’t know what to do” as Piaget put it.
To benefit from technology, we need imagination. It means to be constantly looking for new human-centric use cases for the new intelligent technologies and tools.
This is often not easy, because the challenge with new technologies is, what is called “functional fixedness”, our inability to see more than the most obvious use cases.
Human behavior is learned in relations. Our brains are wired to notice and imitate others.
Work starts from problems and learning starts from questions. Work is creating value and learning is creating knowledge. Both work and learning require the same things: interaction and engagement.
Changing the conversation (Mar 8, 2019)
Our social interactions play a role in shaping our brain. Being chronically depressed by others or being emotionally nourished and enriched has lifelong impacts on us.
Our mental life is co-created in an interconnected network. The human mind is perhaps amazingly not located and stored in an individual. Rather, what we have called the individual mind is something that arises continuously in relationships between people.
Communication starts with acknowledgement. It is about granting attention to others and making room for them in our lives.
There can be no change without changes in the patterns of communication.
The goal is to create emotional spaces that open possibilities for effective action, creativity and learning. [top highlight] It is not about having common goals and sharing the same values. It all starts with acknowledgment and recognition evolving into a more responsive and attuned sense of consciousness between different people having different backgrounds and thus different approaches.
What kind of leaders do we need? (Apr 2, 2019)
The leader who isolates himself from dissenting opinions is bound to make disastrous decisions.
All organizations are power and communication structures.
The role of the effective leader during the time of digitalization is to widen and deepen communication. [top highlight]
An aesthetic view of life (Apr 10, 2019)
… but as friends of Marcel Duchamp know, a work of art need not look any different from something that is not seen as art. It is a work of art because of its association with an art institution.
What if we removed human institutions from the organizing centre of art and aesthetics?
For us humans, Mozart composed music that transformed his listeners’ capacity to imagine what music could be. These new preferences then opened up new opportunities for future composers and listeners.
An aesthetic view of life also means elevating beauty to the methodological mainstream, filling some of the blind spots of the present cult of innovation and productivity. It is about seeing the small amongst the big, hearing the quiet in the midst of the loud and appreciating tacit, aesthetic, knowledge in addition to the explicit, rational knowledge that our industrial world is built on.
Confusion and ambiguity (May 13, 2019)
The same event means different things to different people and just getting more information will not help them. What will help is a setting where they could negotiate and construct fresh ideas that would include their multiple interpretations of what they experience.
The challenge is that managers often treat the existence of multiple views as a symptom of a weakness rather than as an accurate and needed barometer of uncertainty.
People are selective in what they attend to in any situation and what is attended to become the environment. The reality is not an objective set of arrangements outside us, but is continually constructed in daily interaction.
A crucial property of work is that situations are progressively clarified in iterative interaction. Our reality is an ongoing accomplishment that takes form when people together make sense of the situations in which they find themselves.
The new business cycle embracing uncertainty (May 27, 2019)
Companies need to meet new demands for constant change, and need to embrace uncertainty in ways that we have not been used to.
In conditions of rapid technological change and ecological uncertainty, there has to be a systematic process indicating new opportunities as they emerge.
It is about asking questions, testing the assumptions continuously, and signaling which are still helpful and which are not. The new business cycle is a learning process designed to prove assumptions wrong, not right!
The plan-execute cycle turns into a question-answer cycle:
The new, entrepreneurial experience of work is very different from the mass-industrial experience. It is about acting into the unknown, not necessarily working towards a known goal. It is more about improvising together than creating and following a script. It is more about emergence than rational causality. It is more about sciences of complexity than systems thinking.
The idea of improvisation is often associated with notions of unrehearsed, unintentional action. However, the more skilled the players are, the better they can embrace uncertainty.
The most important outcome is that we can focus attention on what is really happening, what we are learning in the present, rather than on what we intend to do in the future. The best way to be future-proof is to be more responsively present today.
Complexity revisited (Jul 11, 2019)
There is no linearity in the world of human beings. This is why our thinking needs to develop to something more applicable to sense making, to the sciences of uncertainty, the sciences of complexity.
Complexity refers to a pattern, a movement in time that is, at the same time, predictable and unpredictable, knowable and unknowable.
This level where coherence and novelty are experienced simultaneously is called the edge of chaos.
Henri Poincaré was the first scientist to find that there are two distinct kinds of energy. The first is the kinetic energy in the movement of the particle itself. The second is the energy arising from the interaction between particles close enough to affect each other.
When this second energy is not there, the system is in a state of non-dynamism. When there is interactive energy, the system is dynamic and capable of novelty and renewal. Interaction creates resonance between the particles. Resonance is theoretically the result of coupling the frequencies of particles leading to an increase in the amplitude.
The sciences of complexity have helped us to understand that firms should be understood as patterns of interaction between human beings.
Business success in the post-industrial, post-fossil, world is first and foremost based on the value of interaction, context awareness and responsiveness. [top highlight]
It is not about product-market fit any more, but about the fit between your purpose and what the future brings, being at the edge of chaos.
We build simple systemic models and crude abstractions. As a result, both our sense making and our decisions are built on an inadequate appreciation of the complex, interdependent systems we are part of.
Every time we replace natural, complex systems with simplified us-versus-them, win-lose -cultures we gain in short-term productivity, but at the cost of long-term resilience and viability. Accordingly, many organizations are productive in the short term, but fragile in the long term.
As our technologies are going through exponential development and exponential increases in power, their capacity to affect the world and their capacity to cause widespread damage has lead to a time when win-lose becomes lose-lose, as Daniel Schmachtenberger puts it.
Following Darwinian rhetoric, the unit of survival is the species in its interdependent environment. Who wins and who loses is of minor importance compared to the decay of the game itself as a result of the competition.
The divide between winners and losers is growing constantly. This is why, in the end, the winners have to pay the price of winning in one way or another.
This is one of the biggest reasons why we need a new focus in education, our modes of thinking.
The key dynamic is to move forward towards a more profound experience of ethics, and also aesthetics, in a way that increases our collective capacity to connect and solve the common problems on the existential level that we face. The educational task is to learn, to train our mind, to have a more thoughtful worldview based on the fundamental interdependence of all species.
Work as forming the future, work as art (Sep 28, 2019)
The belief is that our view of the world can be revised and improved through more data, and more knowledgeable observations of data. According to this view, data enables us to make progress towards an objective view of what the truth is, also regarding the existential level problems we face.
The process of sense-making is then effectively one of mirroring the world, about reflecting a given state of affairs.
What if we left behind the mirror metaphor in trying to make sense of the world? What if we closed our eyes for a moment and began to imagine what does not yet exist? What kind of a world would we really want to create?
We would look at life from a different point of view. We would take a future forming perspective, the perspective of a creator, not a god, but the perspective of an artist.
It would mean an approach to sense making in which the major attempt is not to examine the world as it is, but to actively shape it through personal engagement and action.
The concept of future forming opens a new solution space, a space defined by art, ethics and aesthetics. It would be optimism beyond techno-optimism.
What is needed is to see the broken mirrors, the failed sense-making systems we have, and to create an alternative approach, building on the significance of creative small moves in everyday life.
The artistic way of being is a dual approach of creativity and responsibility, applying freedom of choice and ethics to imagining alternative ways of being and becoming.
Aesthetic experience is then a core value of everyday actions and interaction; changing the focus from what the world is to what the world I am now creating is, and even more to what kind of a world I could create, focusing on what I am living for.
Mindful and mindless work (Nov 11, 2019)
By fixating primarily on an externalized good, meaning the wages [or the prestige of a position title], the activity of work itself may be overlooked as a source of meaning.
The belief today is that if one creates an interest in the work activity through the employment of a conscious guiding purpose, then one can see it as valuable and even absorbing. These researchers claim that meaning and happiness are attributed more to the orientation and interest toward work activities than to the objective features of those jobs.
And as John Dewey wrote: “the real meaning of life is found in the enrichment of present living”. The future of work has to be based on willing, and mindful, participation by all parties.
Art, entrepreneurship and the future of work (Dec 8, 2019)
The post-industrial, creative and entrepreneurial society is emerging. Entrepreneurs are like artists and artists are like entrepreneurs. They both “turn nothings into somethings”.
Art is the most efficient way of creating novel associations, enriching connections and new, sometimes radical, openings. Art creates suggestions for fresh ways of defining the world we live in.
For an artist, everything you do feeds into everything you do. In this kind of iterative learning the task is to know what you should keep and develop and what you should let go?
The tokenized financial systems of the future are going to recognize and reward the creative majority and not mainly the executive minority.
Creativity is a social and political tool. As it is about expressing ourselves, it gives a voice and a form to democracy. As it is a platform of ideas, it is an agent of change. As it raises new questions, it is about the very thing that makes us human — imagination.
But there is another form of courage, courage to think for yourself. This is what artists and entrepreneurs do, without being sure whether the response you get is positive, and not knowing where having a voice of your own will lead you. We have an inclination towards self-doubt, particularly when it comes to creativity.
Fostering creativity is a genuine goal for absolutely all in the post-industrial society. We need people who can conceive ideas and who can realize them.
We must redefine the role of art. In the future, art may not mean only something we contemplate from a distance, but an approach to life and an experience we possess.
We should treat art and aesthetic experience as topics of deep philosophical concern when we seek ways to the post-industrial society or when we talk about the future of human work. Art is more than something extra in life to be enjoyed and appreciated. Maybe more schools in the future are going to be art schools and more offices creative studios.