Month: September 2013

Institutions will try to preserve the problem to which they are the solution.

One of my favourite Clay Shirky sayings. As Kevin Kelly remarked a few years ago, we should all be referring to it as the Shirky Principle.

I’d spent decades involved in financial technology, but it was only in early 1997 that I crossed the divide and actually started working for a bank. I was still there a decade later, but that’s another story. That decade at Dresdner Kleinwort Wasserstein was an incredible learning curve, I was privileged to work with many really talented people, and I’m delighted that so many of them have remained in touch. Wonderful times.

As with any other place I worked at, the first thing I did was to spend time quietly picking up the “carpet tiles” and observing what was happening below the surface. What were the creepy-crawlies that were peculiar to that institution, needing radically different approaches and attitude? I remember picking my jaw gently off the carpet when I was told that until a few weeks earlier, IT costs were allocated on the basis of floor area used. It’s important to do this, to check out the creepy-crawlies, because you then get the chance to figure out some parts of the form and shape of the organisational immune system. Immune to what? Immune to change. Any change.

Sometimes the creepy-crawly is somewhat larger than the metaphorical carpet tile. At least that’s how I felt when I began to understand the size and shape of the teams working on reference data. It just didn’t make sense to me. [My brain was going: let me understand this: low-volatility data, data that does not undergo much change; data that relates to things outside the firm, data that is used by all participants in the market; data that does not have any competitive value except by being timely and accurate and thereby reducing process breaks; and this required veritable armies?].

I’d just about got my head around the veritable army piece when I realised that there were many veritable armies, that every market participant had replicated what I’d just seen. Years later, I could put a label on such things. Shirky Principle.

It made my life a lot easier. When my plane is coming in to land and the pilot says the usual “There’s a lot of congestion around Heathrow so we’ve been asked to hold our pattern for another 20 minutes” I think to myself : air traffic controllers, Shirky Principle, and my head stops hurting.

In fact my head stopped hurting so often that I began to start looking actively for Shirky Principle in action, underneath the carpet tiles.

And after a while I saw a pattern emerge. The naysayers begin by pretending you don’t exist, that the change you are seeking to wreak is a figment of your personal imagination. Once that ploy fails, the enterprise immune system kicks into gear, and reports, presentations, spreadsheets and white papers begin to wend their weary way around the place. Take open source as an example. The immune system response starts with Open source is unAmerican, Steve Ballmer said so. The hidden costs of open source far outweigh the benefits. Open source was the reason Apollo 1 killed the three astronauts. And so on and so forth. Soon it switches to full-frontal attack. The CIO has a big short position on Microsoft. His sister owns the world’s biggest open source company.

I then saw the same process with Skype. It’s a joke. It doesn’t work. It’s a toy. Kill it. Years later, I see that sequence being repeated with discussions about the cloud. Same sequence. Cloud? What cloud? It’s just a marketing buzzword, just hype. Oh yeah, it exists, but all you can do is make illegal downloads, you couldn’t do real work using it. Where’s the performance? It’s insecure, it’s unAmerican, it’s downright communist.

Mobility. Open source. VoIP. Cloud. Same story.

Same beginning. Same ending.

It made me realise something else, something I’ve written about before. That the problem-preserving Shirky-Principle institutions are following a sequence that has been noticed in society many times before, whenever radical change is sought.

First they ignore you. Then they ridicule you. Then they fight you.

And then you win.

So (apparently) said Mahatma Gandhi. I never bothered to go to Snopes.com and dig into every line of debate on this. Suffice it to say that there are many reasons to believe he said it. Whoever said it, what really matters is what was said.

Ignore. Ridicule. Fight. Lose. That’s what happens to the institutions that seek to preserve the problems for which they were created.

So it is with collaboration. We’ve heard the word many times. And we’ve seen it paid lip service many times. But so long as it was not centre-stage, the immune system didn’t care.

Now things are changing. Studies are coming out indicating that networked organisations don’t work, that command and control is needed. That open-plan doesn’t work, we need cubicles with high walls. That too much collaboration can cause problems.

All that says to me is that the immune system is switching from ignore and ridicule to fight.

Which means that not collaborating will soon come to an end.

 

 

 

I seem to move house every ten years or so. I keep telling myself “This is the last time”; my appetite for the wholesale upheaval that a house move represents has waned somewhat. There was a time when people didn’t move much, they tended to live and die close to where they were born. I have a brother-in-law, about the same age as me, and he continues to live in the house he was born in. Rare today, but commonplace not that long ago.

I left India in 1980. At that time I knew one divorced person, and knew of just one other within my parents’ circle of friends. Now I hear of people getting divorced after 10, 20, 25 years. When I was at the cricket last week, there was a couple behind me celebrating their 49th, and a couple next to me whose parents had  just celebrated their 50th. Very rare today, but commonplace not that long ago.

Names and professions have been closely linked ever since men had professions; if you weren’t named after your lineage or your environment, then your line of work sufficed. So we had people with surnames like Carpenter and Fletcher and Butcher and Baker here in England; the Parsees in India had comparable equivalents, calling themselves Contractor and Doctor and Palkhivala and the legendary SodaBottleOpenerWallah (I confess I’ve never met one). It made sense, at a time when people didn’t change jobs often, when your occupation came with security of tenure. In fact this created an enjoyable variant during my formative years: people were differentiated by corporate label. If you had two Subramaniams in your social network, one would be “named” Reserve Bank and the other Steel Balls (since he worked for a ball bearing company). And yes, I have known a Steel Balls Subramaniam.

Migrations have been happening since the dawn of mankind. We’re learning more about human migration every day, as we begin to piece together what our neanderthal and Denisovan antecedents were up to, and as we try and make sense of where to fit Flores Man in. When I was growing up, there was little such evidence in my social circle. Some of my Anglo-Indian friends went to Australia or Canada; one of my uncles did a stint in the UK, another settled in Chicago (he’s still there). Such migrations were few and far between. And yet today my wife and I have siblings in all five continents, and I’ve met classmates who have settled in eight countries (I think the real count is 19, but I can’t be sure. We move around).

There was a time when we didn’t change where we lived, who we lived with, what we did, where we did it. Changing such things wasn’t easy, the “cost of change” was high. Sometimes the cost was an economic one, sometimes it was a social one, sometimes it just couldn’t be done.

Some things used to be really hard to change. I was born black-haired. Pretty early on, using my childhood powers of observation, I worked out that in years to come, my hair could take one or more of three colours, in a series of combinations: black, the original; black-and-white, the transition style; white, with the expectation of a distinguished look; or scalp-coloured, where you don’t see the hair because it’s no longer there. Nowadays I see even black-haired people change their hair to a plethora of shades, mostly from the purple family. I’ve never been tempted to change my hair colour, and my teenage plans to grow my hair long stayed, like most other things, in the Vegas of life where teenagers hang out.

As a teenager I read Gore Vidal’s Myra Breckinridge, and it opened my eyes to all the transgender possibilities the world was then conceiving of. It was no longer a certainty that the gender you were born with was the gender you would die with. I’ve never been tempted to change, but I was old enough to recognise that the cost of change of something so basic and “permanent” also appeared to be dropping.

I understood that people could and did change nationality. As a cricket fan, I was aware of a number of Indians who had played for England before modern India existed, and it made me think. Did my grandfather have a British passport? An Indian one? Both? Yet, while I knew that nationality could be changed, it wasn’t something I saw often. And now I regularly meet people who’ve changed nationality; some have taken this further, and started collecting multiple nationalities rather than just changing them one for another.

In the 23 years I lived in India, I can only remember going to two barbershops. There were probably more, but for sure between 1966 and 1980 I frequented just two. I went to a nursery (Hindusthan Park School); a primary school (Miss P Hartley) and then, from 1966 to 1979, I was with the Jesuits at St Xavier’s. To all intents and purposes I went to one school. Nowadays parents move their children to what they consider the best school in the area, sometimes even moving areas to achieve their goals.

Names. Addresses. Gender. Marital status. Nationality. Occupation. Place of work. Country of residence. Things that are easy to change now, things that were hard to change in times past. It is not just the ability to change that has itself changed, the ability to afford that change has also changed.

An affordable freedom of choice, touching on areas where there was no such choice historically.

We all need to understand what this freedom of choice represents, what this affordable right to change represents, in all these forms and shapes. Each of us will have formed views as to whether this freedom to change is good or bad; that is not what I write about here; I’m concentrating on the fact of change, of the freedom of choice in that change, and not making any value judgments.

Some changes are less affordable, but the choice remains. Companies can now decide to incorporate themselves somewhere else in order to take advantage of the tax structures. And it’s not just companies, individual citizens also exercise their freedom of choice and move their tax domicile. These changes tend to be expensive and complex to carry out; as a result, it’s only the large company and the high-net-worth individual that are able to exercise choices such as these. In other words, these choices are only available to the high end of the taxpayer spectrum, and therefore can really affect the countries they leave.

And so we come to the customer. A customer who has more choice than he or she has ever had before, and who can exercise that choice more easily than has ever been the case. We get to choose what we buy, where we buy it from, how we pay for it, how we get the goods/services.

When customers have that freedom of choice, many things influence that choice. What they know and like/dislike about the company making the product or service, the “brand” and reputation and values. What they know about the product or service from past experience, either directly or vicariously, sometimes through their friend network, sometimes beyond even that. The softer “sustainable” elements related to the product or service: origin, transport costs, carbon footprint, ease of replenishment, additives and subtractives. If you make it through all that, then you may just get to traditional discriminators like price or availability.

When it comes to the customer, everything’s changed. Everything.

Which is why it’s really important for companies to have relationships with their customers. If their customers will let them. Not everyone wants to have a relationship with the companies they deal with, often because they’ve been let down time after time. So it’s hard going.

There was a time when a commodity was defined as something that is standardised, fungible, provided without differentiation. And companies moved heaven and earth to try and find a way to differentiate.

There’s a new definition of commodity emerging: a product or service where there is no relationship between customer and company. Companies in that position will go the way of all flesh.

Many years ago, I wrote:

We need to be in the business of providing the customer what she wants when she wants it, where she wants it, how she wants it. We need to focus on making things that the customer wants to buy, rather than trying to get customers to pay for things they neither want nor need.

There was a time when we could decide for the customer. There was a time when we could constrain the customer’s voice and choice. There was a time when dinosaurs ruled the earth.

Now is not that time. Now is the time for faster horses.

 

I was reminded of that post when I watched Kevin Spacey’s excellent talk on what’s happening with Netflix, House of Cards and customer choice. If you haven’t seen it, you must.