Author: JP

Admit it. I had you with that headline. Have I finally flipped? What could possibly connect Neil Young and David Agus to the Social Enterprise, and related topics?

I could just say “Marc Benioff”, since he personally introduced me to all three.  Soon after joining Salesforce.com, I heard Marc speak about the concept while travelling with him through Munich and Davos last year; he gave me the opportunity to meet Neil Young, a boyhood hero of mine, in Tokyo last December; and he ensured that I had a chat with David Agus, heard him speak and read his book last week in Las Vegas. [Incidentally, if you have any interest in personal health, you should read David’s book, The End of Illness. I’ve just finished it, it’s an excellent read].

Serendipitous introductions, like the ones Marc made above, can be valuable; sometimes they’re valuable enough for me to write a blog post about them. And sometimes they’re a lot more important than that.

Let’s take David Agus and his book, which I will commend you again to read. It’s more than just a book, it’s a manifesto. A call to action built around some core (and radical) principles. A whole new way of looking at the very concept of health, or at the very least a renaissance of older ways, underpinned and substantiated by advances in medical research, technology and understanding.

Early on in the book, Dr Agus quotes JBS Haldane as saying, in Cambridge in 1923:

“The recent history of medicine is as follows. Until about 1870 medicine was largely founded on physiology, or, as the Scotch called it ‘Institutes of Medicine’. Disease was looked at from the point of view of the patient, as injuries still are. Pasteur’s discovery of the nature of infectious disease transformed the whole outlook, and made it possible to abolish one group of disease. But it also diverted scientific medicine from its former path, and it is probable that, were bacteria unknown, though many more people would die of sepsis and typhoid, we should be better able to cope with kidney disease and cancer.”

For patient read customer. That’s easy. And for disease read product/service; it may be a bit harder to strip negative connotations away from the word, but the principle is important so please try.

We used to be patient-centric, then found that we could industrialise processes better if we went disease-centric. Which was fine for some patients and some diseases. But overall it was a backward step as we stopped learning about the patient in a holistic manner.

Park that thought, and let’s move on to Neil Young. When we met in Tokyo, Neil spoke passionately about the parlous state of modern music. He’s been a harsh critic of the poor quality of MP3s, and has felt particularly aggrieved by the continuing deterioration of the technical quality of recorded music. As a result, he’s been working on ways to transform the music listening experience end-to-end, how music is recorded, how it is stored and retrieved, how it is played back, the devices used, the connectivity, the whole nine yards. You can read some of his views on this here and here. I was particularly taken with the way Wired UK reported on this, quoting him as saying:

My goal is to try and rescue the art form that I’ve been practising for the past 50 years. We live in the digital age, and unfortunately it’s degrading our music, not improving [it].

You could say Neil is putting forward a manifesto, a platform for change, transforming the customer experience end-to-end. It may be about his chosen art form, but the principle transcends that.

Which brings me to the Social Enterprise.

It’s a manifesto for radical change.

It begins with a holistic view of the customer; the entire process emanates from a 360-degree customer profile that is at the core of the Social Enterprise vision.

It then continues with a radical transformation of the business, end-to-end, connecting customers with the companies they deal with, their staff, their distribution network, supply chain and even their products.

And it focuses on making sure that technology is used to enhance the customer experience, not to degrade it. [Remember region coding on DVDs? That’s the sort of thinking that comes from being product-centric. No customer’s experience was enhanced even infinitesimally by that “invention”.]

And there you have it. How Neil Young and David Agus help me understand and explain the Social Enterprise.

I know, I know, you’re very tempted to say “To a hammer everything looks like a nail”.

But step back and think about it.

We have moved from being customer-centric to product- and service-centric in many contexts, sometimes to such an extent that we forget altogether about the customer. Think about what’s happening in education, no longer about the student or about learning; about what’s happening in healthcare, no longer about the patient or about being healthy; about what’s happening in government, no longer about the citizen or about her satisfaction.

There’s a renaissance needed, to a time when it was about the student, the patient, the citizen. And about the customer.

A renaissance based on using the tools of technological advance to improve the customer experience rather than to degrade it.

Thank you David Agus. Thank you Neil Young. Now, as I listen to my vinyl collection on my Linn equipment, and as I continue to approach my personal health and well-being holistically, I will also continue to learn about how the Social Enterprise works.

Have you heard of Sugata Mitra? If you haven’t, then please watch this video. And if you have, please watch this video. And if you’ve already seen it, please watch this video.

He’s an amazing guy; his ideas on “minimally invasive education” and “child-driven education” are fabulous; what’s more important is that he’s put his ideas into practice and shared the results with us. I had the privilege of watching him at TED Global at Oxford in 2010 (thank you Chris, thank you Bruno), and one phrase he used has stayed forever in my memory.

Teachers who can be replaced by computers should be replaced by computers

I may be paraphrasing him, but that’s the gist of what he said. That sentence, along with John Seely Brown’s deceptively simple question (How long does a five-year-old take to become a six-year-old? One year), have influenced quite a lot of my recent thinking on education. But that’s not what this post is about. Or maybe it is. Sometimes I get the feeling the answer to everything is learn, learn, learn. Learning is living. The willingness to learn fuels life.

When I first came across the concept of outsourcing I was mystified. The received wisdom was that we should only outsource operations that had well-defined and mature processes, standardised and repeatable. And a part of me was asking “Why? Surely those are the very processes that are prime candidates for automation? Why would we want to apply the sledgehammer power of human brains to such mundane things?”. I remained mystified as I watched the BPO market mushroom. Paraphrasing Sugata Mitra, I felt that processes that can be replaced by computers should be replaced by computers. And I could not understand why this didn’t happen.

Those were the days, eh? Times when we had regular, standardised, repeatable processes. Times when we knew when, where and how locked-in customers would consume products and services in a predictable, stable manner. Times when listening to the customer was easy because there was nothing they could say and nowhere they could say it. And even if they did say something, it was easy not to listen.

Today it’s a whole different ball game. And for some time now I’ve been stressing the importance of “designing for loss of control” as companies spend more and more time trying to fit square pegs into round holes, as engagement with the customer migrates and mutates away from standardisable processes; companies nowadays seem to spend more time “handling exceptions” than executing the unexceptional.

Which brings me to the point of this post.

Systems can ask for permission. Only humans can ask for forgiveness.

You can come up with rules for how people should do things, and come up with tables of authorities and permissions and what-have-you. Much of the time, all you’ve done is lay out a rulebase that can be automated. And perhaps should be automated. But maybe it’s too late for that. Today, we’re seeing a shift from process to pattern, a shift from rule to principle, a shift from hierarchical to networked, a shift from centralised to edge-based. No more repeatable processes. Values-based activity. With domain experts dotted throughout the organisation, engaging with customers who expect the people they’re dealing with to be empowered to deal.

Customers know all this.

Customers know that exception handling is now the norm. And they expect everyone to know this.

People in customer service will have to learn to improvise. Be creative. We’ve all heard tales about the helpdesk from hell of the type “My computer freezes every time I touch any key” “Well don’t touch any key then!”. That’s not going to work any more.

An aside. I was looking for recipes for jhal muri, street food from Calcutta. Extra-spicy puffed rice with dollops of mustard oil and lashings of fresh green chillies. And I found this site, which I loved. In fact the stimulus for writing this post came from reading the recipe. The author makes the point that there is no such thing as a recipe for the dish; just a set of ingredients that can be varied at will to suit tastes.

And I thought to myself, that’s how customer service will look in time to come. A set of “ingredients”, the things a company can do or make or provide, loosely coupled by the values and principles the company adheres to. A “cook” who puts those ingredients together, on order, to suit what the customer wants.

Creativity in customer service? Perish the thought.

But I’m being serious. It is possible that unless customer service gets creative, it will be the company that perishes, not the thought.

Which brings me to my final point. For this creativity to exist, we should look to the masters of improvisation, in music, drama, art. Before they could improvise, they had to have real in-depth knowledge of the domain, a feel for the space, an intuitive sense of what they do. [Maybe there’s a reason for knowledge workers to be called knowledge workers? Hmmm.] Before they could improvise, they had to understand the technical capabilities and constraints of the instruments they played, the tools they used. Intuition, coupled with technical skill, underpinned by experience.

That’s hard.

Or at least it used to be hard.

Now, with enterprise social networks, it’s become a whole lot easier. If they’re designed well, you’re able to able to propagate the principles and values consistently, develop both the tacit as well as the explicit knowledge needed, share and enhance experience, make it easier for people to build their intuition and their skillbase, grow their confidence via active feedback loops. All done in an environment where you can record and look back in order to learn and improve. [Of course this can be used to apportion blame as well, but that’s not a sustainable strategy]. That’s why I joined Salesforce just over a year ago, I was fascinated by what could be done with Chatter, how enterprises would be able to transform themselves.

Look around you. See if the culture of work you’re in is about permission or forgiveness. It’s a good yardstick for figuring out whether you’ve really grasped this new world we’re all entering.

My grandfather appears to have grown up in a village in southern India, attended university in what was then Madras, worked as “private secretary” to one of India’s richest men and biggest landowners, the Maharaja of Darbhanga, all on his way to founding a weekly magazine, called Indian Finance, in Calcutta in 1928. He died when I was sixteen months old, and he was succeeded by my father. So I grew up in a home full of books, where reading and writing and publishing put food on the table and, occasionally, even paid the bill.

It was an interesting business, with some very unusual approaches to vertical integration. The family owned the printing press. Made sense. If your livelihood depending on somebody printing, publishing and distributing what you write, then you’d want to own a printing press: the internet hadn’t been built as yet. The family also appeared to have significant stakes, perhaps ownership, in a canteen. You employ a lot of people, they need subsidised food, it made sense to own what must have been a precursor to the modern office cafeteria. But it didn’t appear to be that common in small family-owned businesses in the ’60s.

And there was an ad agency stuck in there somewhere. For the life of me I could not figure out whether we owned the agency, had shares in it, had a strategic alliance, or what, but there was a relationship. So when I was growing up, it looked like we “owned” a magazine, a printing press, a canteen and an ad agency. The set-up gave me some firsthand experience of what Ronald Coase was on about, in terms of the theory of the firm, transaction costs and vertical integration. [Amazingly, Ronald Coase is still alive. I would so love to meet him and talk to him!].

Which brings me to the point of this post.

As a child I used to have the run of the place, driving people insane with my constant questions “Why?”. I couldn’t help it, I was curious. One of the things I was curious about was the fact that every now and then, a parcel would arrive from Air India. And it contained tickets. Which was very strange, because I’d never known anyone who worked for Indian Finance travel abroad. And Air India did nothing but travel abroad, domestic travel used to be the sole domain of Indian Airlines in those days. So why were we buying the tickets? For what and for whom?

Nobody there seemed to know. Which meant that I had to ask my dad. It wasn’t the asking that was difficult, it was the remembering to ask. So many questions, so little time. Yet one day I did.

It turned out that the answer was simple. We wanted Air India to advertise in the magazine. They didn’t have the budget to do it…. as long as we wanted to be paid in cash. They were short cash. And they were long airline seats. So if we were prepared to be paid in airline seats, they would advertise. And so they did.

I have no idea whether my father pitched it to them or whether they pitched it to us, but the deal was done. And we kept getting tickets. Which somehow got used up.

Years later I went to university. Studied economics. Started writing stuff about banking and finance. Tripped and fell into computing in 1980. And here I am, 32 years later.

Fast forward to the 1990s. Lots of stuff published about the internet, increasing-returns models, “holonic” organisations, incubators and ecosystems. That’s when I first met Don Tapscott and read Paradigm Shift, a fabulous book. I think the firm he was with was called something like DMR Consulting, an interesting Canadian outfit. That’s when I fell in love with what Ken Ohmae described as the Borderless World. That’s when I really got into the works of W Brian Arthur.

More influenced by Dr Arthur’s work than anything else, overlaid on my childhood and education, I began to view economies the same way I viewed companies, a network of smaller organisations trading with each other. That view led me to observing the way companies did business with each other through different lenses, applying personal, often warped, interpretations of transaction cost theory to the whole network of companies.

It was a theme that had already been influenced by my exposure to EDI and SITPRO in the early 1980s; it was a theme that continued throughout my time in capital markets; it was a theme I continued to see elsewhere, in other industry sectors, as when Covisint was formed.

The theme was simple. What causes friction between companies in a market? How can that friction be reduced or removed altogether? What can be done with the resources that are freed up by removal of the friction? It may sound boring to many of you, but I enjoyed thinking about it and talking to friends and colleagues about it. Most of the time, in a post-trade world, frictions are caused by “reference data” mismatches: names, addresses, that sort of thing. Low-volatility data are incredibly important in capital markets; vast sums of money are spent in seeking to keep them accurate and up-to-date; and yet errors related to such data continue to be immense sources of friction within that trading environment.

So when I moved to Salesforce.com, I was fascinated to hear about the existence of what would soon become data.com.

Since joining the company, I’ve had the opportunity to watch the Social Enterprise concept emerge and take form; how important it was to connect customers and distribution and supply chain and staff, how an ecosystem of companies would evolve as a result, how this was really a fractal representation of the market and the global economy.

In the past, much of my thinking about this was in a post-trade context. Since the middle of 2010, I’ve been working on a book on Designing For Loss Of Control, and for the last year or so, I’ve been thinking about all this from a pre-trade perspective. What makes it difficult for companies to agree to trade with each other? What would happen if this barrier, this friction, was removed? How would we go about removing the friction?

Probably influenced by my time in capital markets, and probably underpinned by the environment I grew up in, I started thinking of pre-contract frictions as “mismatches” of some sort of other, sophisticated versions of what Air India faced when dealing with the family business. Long one thing, short another, willing to trade only if a way could be found. Again, influenced by capital markets and trading terminology, I kept seeing all this as flows, and as barriers to flow. This whole mindset was reinforced by repeated exposure to the research of John Hagel, John Seely Brown and Lang Davison, in The Big Shift and, prior to that, The Only Sustainable Edge. [And even before that, I felt the same sense and imagery of flow while reading JSB and Paul Duguid on The Social Life Of Information]. How could labour productivity have doubled since 1965 while return on assets dropped precipitously? And would the stocks-to-flows shift reverse that? If so why?

Influenced by all this, I began to visualise the possibility of radical changes in how companies contracted with each other, how risk was transferred, how gains and losses were crystallised. I began to visualise API-like structures connecting firms together, with each pair of connections choosing the best “currency” to execute the trade in, something that happened to suit both sides, some sort of barter 2.0. [Yes, I know that our systems of accounting and valuing what we do are way incapable of dealing with all this; but then some would say they appear to be way incapable of dealing with “normal” business today….] If you contracted with a haulage firm, the measure of success would be in volume of goods carried over distance; with a telco, it might be new customers gained; and so on. Some way of having a shared risk and reward system, such that both parties got paid out only when successful against some commonly agreed measure or baseline.

A part of me gave up on that thought stream, thinking that it would be too complex to agree the terms….. friction in the contracting process would not be reduced unless it was simple to agree the currency and the baseline, and unless it was difficult to game or subvert.

That remained the case until I came across the work of Geoffrey West on cities. How some things experienced superlinearity in comparison to population, while others had sublinear relationships. I had the chance to talk to him at TED Global last year, and understood he was driving the research into the corporate world as well.

And that made me think. For each company-pair, if we could identify something desirable, something that had a simple superlinear relationship to something else that was easy to measure and hard to game, we could simplify the contracting process and de-risk it for both sides.

All this stems from a sense that the way firms contract with each other today is a static stocks-based view of the world. That the world of the cloud is radically different, flexible, elastic, dynamic. That as companies continue to connect with their customers and supply chain, as trust is created through transparency, as information flows faster and faster, as low-volatility data becomes more reliable, we’re going to see new forms of contracting. And new forms of currency. In a typically William-Gibsonian manner, this is happening already.

The social enterprise will accelerate all this. It’s about flow. Not just in the Hagel-Seely Brown-Davison sense. But also in the Mihaly Czikszentmihalyi sense.

Thoughts? Views? Or is this all too much for a Saturday night?

As an adolescent I loved number theory, particularly prime numbers; but that did not stop me looking into some other, apparently mundane aspects of numbers. And finding them fascinating.

Take decimal fractions as an example. I must have been around 14 when I first came across the concept of “circulating” decimals. I understood that some common (or “vulgar”) fractions were easy to express in decimal form: 1/2 was 0.5, and 3/4 was 0.75, and so on. I understood that some common fractions were a little harder to express in decimal form: 2/3 was 0.66666…  and 5/6 was 0.833333…. and so on. But it took me a while to appreciate why. That all this was related to the base we worked on, 10, which led to our using the term “decimal”. That common fractions “terminated” only when the denominator consisted of factors of the base, factors of the number 10. That whenever the denominator contained factors other than 2 or 5, the fraction could not “terminate”. It “recurred”. That “recurring” decimals came in two forms, classic recurring (as in 1/3) and “circulating” (as in 1/11 or 1/13, where a sequence of numbers repeats rather than just a number).

And as I got deeper into circulating decimals, there was a growing sense of magic. As I learnt that circulating decimals had a “period of recurrence”, the length of the sequence of numbers that repeat. So 7 and 13 had periods of recurrence of 6: for example 1/7 was 0.142857142857142857…. where the numbers 142857 repeated in sequence. [Note: there’s a lot more to 1/7 represented in decimal form, but that’s for a different post some other time…. 1/7 is .142857 recurring, 2/7 is .285714, 3/7 is 428571, and so on, the same six digits but with different start points; as triples e.g. 285 and 714 they always add to 999, as doubles e.g. 28 and 57 and 14 they always add to 99…]

The magic began when my teacher let slip that 1/97 had a period of recurrence of 96. That every 96 digits, the same sequence started off again. It continued when the teacher followed it up by saying “Think about it. The period of recurrence of a circulating decimal can never equal the denominator, the maximum is one less than the denominator”. And then he asked me to go and prove it.

As a class we were just beginning to learn about modular arithmetic at the time, so the teacher knew precisely what he was doing by asking me for the proof. The aha moment was not long in coming, in realising that, regardless of the value of the numerator in the fraction, there were a finite number of unique residues possible. That the maximum number of unique residues is one less than the denominator itself. That 1/97 could not have more than 96 different residues.

The joy was not in being told that 1/97 had a period of recurrence of 96; it was in realising that I could work out why. For myself.

Maybe that’s what Richard Feynman was trying to tell all of us when he said “What I cannot create I do not understand“.  Or what Albert Einstein meant when he said “If I can’t picture it I can’t understand it“.

We all have our aha moments, and that’s when real learning takes place. And good teachers make that possible. I’m grateful that I spent time at a school where they understood this. Thank you St Xavier’s!

Recently I had reason to revisit some of the work of W. Brian Arthur, one of my favourite economists; while doing that, I couldn’t help but re-read his excellent The Nature of Technology. In that book, he makes the point that invention happens for two reasons: someone identifies a need to be filled, as in building jet engines rather than propellor-driven ones;  or someone observes an effect that can be used for something else, as in the discovery of penicillin.

While reading the book, I began to realise that learning itself is a form of invention: as I learn something, I create something inside me. I began to realise that the learning that takes place follows the same path as Brian Arthur’s classification of inventions: sometimes I learn by identifying a need and then trying to meet that need, and sometimes I learn by observing an effect and figuring out how to put that effect to good use.

That then took me down a different route, reminding me of something I’d heard George Gilder say: Every economic era is characterised by new abundances and new scarcities. Successful companies will recognise the abundances as well as the scarcities.

I couldn’t resist conflating these ideas, mashing them up. Could I start considering Brian Arthur’s “needs” as Gilder’s “scarcities”, and his “observed effects” as Gilder’s “abundances”? Could I go further and consider “learning” to be a specific instance of “invention”? Then I reminded myself, I live in the age of the web. I could blog about it, share my ideas, and get feedback. Refine and enrich my understanding. Learn. Hence this post.

Learning as a form of invention. Abundances and scarcities as stimuli for learning. Now I was getting somewhere, even if I didn’t know precisely where this was heading. I then began to think about all this in the context of enterprise software, particularly social software. And came to the following conclusions:

• There are an increasing number of knowledge workers in the workplace.
• With the passage of time, more and more of those knowledge workers will be drawn from the Maker Generation.
• Worker productivity will be influenced heavily by the propensity of the work environment to enable and encourage learning.
• Learning will be stimulated by the discovery of scarcities as well as abundances.
• The environment will therefore have to be designed to help surface those scarcities and abundances.
• The likelihood of this happening will follow Linus’s Law.

Most of you know by now that I work for Salesforce.com. Most of you know that I’m fascinated by that strange space where enterprise software meets collaboration and learning. Most of you will understand why I chose to work there.

Companies that learn to connect their staff, their customers, their distribution networks, their supply webs, their products, to each other…… companies that learn to do this on an infrastructure that helps them identify the new scarcities, discover the new abundances…… companies that realise that there’s a very powerful community effect in place here…. companies that understand how to harness all this for invention and innovation….. those are the companies that will succeed in the economic era we’re entering.

An era where connectivity and compute power and mobility are abundant. An era where customers use this power to create other, newer abundances: the ability to act in groups, the ability to share activity and intention.

An era where privacy and trust are scarce, where there are many demands on a customer’s attention. Where openness and transparency form the foundations of a new, sustainable, trust.

The era of the Social Enterprise.

 

 

 

Some years ago, incensed by the jiggery-pokery of the “copyright industries”, I wrote a post seeking to expose the way they went about making the most outrageous claims when it came to the volume of illegal downloads prevalent. I described them as Numbers of Mass Distraction.

It is clear that recent events surrounding SOPA do not represent the end of the war waged by the copyright industries; at most it’s a skirmish they will concede, albeit very grudgingly, as lost. Judging from the experiences we faced in the UK with The Digital Economy Bill (I covered some of those shenanigans here in Musing About Downloads In The UK) dealing with SOPA (and PIPA) is going to be a long hard war of attrition. A war where every one of us needs to understand the weapons being used against us, as well as the absolute flimsiness of the ammunition.

I intended to write another long post on this flimsiness, then found that someone else had done a far better job than I could’ve. So what I shall do instead is to link to the wonderful post on the subject by research fellow Julian Sanchez at the Cato Institute. Headlined How Copyright Industries Con Congress, it’s a must-read. While you’re at it, it’s also worth reading Julian’s earlier piece on the subject in Ars Technica. The elevator version is as follows: numbers related to the value of illegal downloads as well as numbers related to the number of jobs affected are at best wild unsubstantiated estimates, and at worst devious attempts to flim-flam a legislature crying out to be flim-flammed. The $200-$250 billion number, while it came from a sidebar in a reputable magazine, was actually an unsourced estimate of the value of all counterfeit and pirated goods worldwide, and was clearly stated in the magazine as such. And the 750,000 jobs lost number was taken from a 1986 speech by the then Secretary of Commerce, a number that has never been endorsed by the Department of Commerce.

Julian also reminds us that to make matters worse for the pedlars and purveyors of such phony pap, in April 2010, the United States Government Accountability Office released a report titled Intellectual Property: Observations on Efforts to Quantify The Economic Effects Of Counterfeit and Pirated Goods. Here’s what it says on the first page:

Incidentally, if you still don’t know what SOPA threatens to do, then this Khan Academy video is a good place to start.

Tim O’Reilly has repeatedly cited the lack of sound, independently verifiable, evidence on actual loss in the context of illegal downloads. It is not in the interest of the copyright-industries-lobby to participate in or support any activity aimed at filling this important gap. So more Numbers of Mass Distraction will continue to fly around, seeking to encourage lawmakers to enact first and ask questions much, much later.

We need to keep doing as much as we can to educate all and sundry about all this.