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The constant battle to think outside of accepted norms

October 27, 2010 //

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I went to the Yanaka Cemetery this morning to explore the resting place of the last shogun. The cemetery is in the middle of a lovely neighborhood, almost untouched by World War II. While wandering around I discovered this.

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A playground in the middle of a cemetery. I had look twice to believe my eyes: Indeed, a playground smack-dab in the middle of a cemetery. I don’t know the Japanese culture well enough to understand the reason behind this placement but it hit me immediately: What a great idea. What a brilliant way to connect life and death. What an easy way to make your pilgrimage to visit your dead loved ones an enjoyable experience for your kids. What an innovative way to make grieving part of our human experience, not something we want to box up nicely and put away.

I never thought of it because we’re all slaves of accepted norms

My parents died 2 years ago and I’ve visited their graves a few times together with my daughter. I tend to just spend a few minutes at the cemetery since there’s nothing to do for my daughter, and I want her life to be filled with unicorns not memories of dead people. The cemetery my parents found their resting place in is a very solemn place. You barely want to breathe. I often wished cemeteries could be a celebration of lives lived well. But I never thought of reserving a place inside the cemetery for a playground. Somebody else did. Why?

At the minimum, the cultural norms in Japan might be different and death might be more accepted than in the Western culture where we tend to put grieving into a ghetto. At best, the people who came up with this idea thought outside of accepted norms. Outside of the system that tells us what to think. How things should be. These norms turn people into conforming machines. These norms turn companies into lifeless corporations.

As I wrote before, we’re in the middle of a revolution. It’s the opportunity of our lifetime. To make this world a better place, we need to fight the urge to stay within accepted norms.

The egg and the system

Haruki Murakami gave an inspiring speech last year where he spoke about our constant struggle as fragile beings to confront the wall aka the system:

“Each of us is, more or less, an egg. Each of us is a unique, irreplaceable soul enclosed in a fragile shell. This is true of me, and it is true of each of you. And each of us, to a greater or lesser degree, is confronting a high, solid wall. The wall has a name: It is The System. The System is supposed to protect us, but sometimes it takes on a life of its own, and then it begins to kill us and cause us to kill others – coldly, efficiently, systematically.” (…)

“We are all human beings, individuals transcending nationality and race and religion, fragile eggs faced with a solid wall called The System. To all appearances, we have no hope of winning. The wall is too high, too strong – and too cold. If we have any hope of victory at all, it will have to come from our believing in the utter uniqueness and irreplaceability of our own and others’ souls and from the warmth we gain by joining souls together.

Take a moment to think about this. Each of us possesses a tangible, living soul. The System has no such thing. We must not allow The System to exploit us. We must not allow The System to take on a life of its own. The System did not make us: We made The System.”

We created all these accepted norms. We all did. Who says we can’t change them constantly to live a more human, loving and connected life? All these social technologies can help us humanize the marketplace, the interactions between people brands, work and life. Let’s not waste that opportunity by staying within accepted norms.

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Life and Marketing lessons from Burning Man

September 7, 2010 //

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Images: Courtesy of artbyphil

By now, it’s gone. A temporary city that forms during the annual Burning Man event is fading back into the nothingness of a remote desert. Most inhabitants are back in their normal life, and within weeks, the entire city will have disappeared. It’s an interesting way for a city to exist – once a year, just for a few weeks. People will talk about their experiences for months (just follow the hashtag #burningman to get a sense of the enthusiasm) and start making plans for next year’s event.

This was my second time at Burning Man. It remains one of the most bizarre, creative, inspiring, breathtaking and weird events I ever attended. Whatever you heard about Burning Man: It’s true. And, it’s completely false. You have to experience it to really understand it. It’s like having a kid, running a marathon or writing a book: Everything you heard about it is true. And, completely false at the same time.

On my way back from Black Rock City, I reflected on the lessons marketers can learn from Burning Man:

1. The paralyzing fear of change is far more inhibiting than the actual experience of change:

I’ve been a runner for more than 15 years. The first 5 years, I never ran more than 6 miles per day. A marathon was completely out of my reach, even though I was intrigued by the idea. “How do they run 26 miles?”, I asked myself many times, envisioning images of pain and agony. I tried to run 10 miles, never able to do it. Started walking after 6-7 miles, my usual comfort zone. Until one day, I decided to run 15 miles that day. No particular reason, just the feeling that I was sick of not being able to break that 7-mile barrier. And, I didn’t want to just break it. I wanted to shatter it. And so I did. Just to finish a marathon 3 months later.

Many marketers feel the same way: They want to break with the old model of marketing but they feel stuck in their old ways, the outdated processes and the aging model of broadcast marketing. They wait for someone to have the courage to change. The truth is: Nobody gets courage and then changes everything. First you change everything and then get the courage.

2. Don’t give up too early

The first time you try anything new, your senses are under attack. You don’t even know if it’s good or bad. You just know it’s new. You don’t know yet how to put it into perspective and add it to your experiences. The first time is the basic foundation of the overall process. The best advice for the first time in everything: Hang in there. Do whatever you can, the best you can. The second time is different: You have now one experience to compare your second experience to. And your second experience might be good or bad. Better or worse. It helps you to avoid bad experiences and to top good experiences. The third time is where it gets interesting. That’s when you become part of the context, when you can apply some of your experience history to the current experience. The third time gives you enough time to analyze incoming data.

This is true for visiting new cities. New countries. Starting a new job. And it’s true for marketing.

The first two digital campaigns/social media initiatives won’t be featured in any award book. I worked hard, I tried my best, I just didn’t have the proper context to deliver the best work possible. With the third campaign/initiative, I felt more grounded, more experienced. When you experiment with new platforms, new ideas or a new brand that just decided to run their marketing with you, just know you’re not going to ace it with the first idea/initiative. The fear of failure is looming large but you need to beat it by accepting this normal process.

3.) Give people a sense of ownership

The creativity and passion people pour into Burning Man has nothing to do with monetary rewards. It has a lot to do with a sense of ownership of the event. Sure, the man will burn, there will be coffee and ice, basic structures. The rest of the event is up to each one of the attendees.

Advanced managers base their ethics on fairness, harmony and gratitude to inspire a sense of achievement to goes beyond profit. Modern employees expect more from companies than just a paycheck. The work place should provide an avenue for employees to build knowledge, skills and experience.

The same is true for marketing: It’s not enough to have an offer or a discount coupon anymore. Customers review and recommend brands with a sense of ownership never seen before. Brands need to identify the best way to engage these passionate stakeholders. The future doesn’t belong to broadcast. The future belongs to companies that share values with their customers, that build platforms where all stakeholders can co-create and collaborate, and give people a sense of ownership.

4. Passion has real value

You can feel real passion. Just watch an artist or a kid immersed in something they are passionate about. Objects are not important at Burning Man. We are in the age of transition: From the economy of objects to the economy of people. Just look around: Everyone is starving for meaning. We’re meaning-making machines. All of us experienced how quickly the focus on profits can turn into an economic disaster. Instead, people want to do meaningful stuff that matters.

The new marketing reality implies that brands need to take a hard look at themselves and decide what they stand for. What is the inner truth of your company? What is your purpose? The foundation of any successful company in the future is purpose, passion and integrity, coupled with empathy and care for all stakeholders. It goes way beyond any CSR initiatives or charitable donations. The new marketing reality requires companies with big hearts.

5. The world needs more kindness

Tim Ferriss (The 4-hour workweek) discovered kindness in a sand storm. And, he shared a poem by Naomi Shinab Nye, entitled “Kindness”:

Before you know what kindness really is
you must lose things,
feel the future dissolve in a moment
like salt in a weakened broth.
What you held in your hand,
what you counted and carefully saved,
all this must go so you know
how desolate the landscape can be
between the regions of kindness.
How you ride and ride
thinking the bus will never stop,
the passengers eating maize and chicken
will stare out the window forever.

Before you learn the tender gravity of kindness,
you must travel where the Indian in a white poncho
lies dead by the side of the road.
You must see how this could be you,
how he too was someone
who journeyed through the night with plans
and the simple breath that kept him alive.

Before you know kindness as the deepest thing inside,
you must know sorrow as the other deepest thing.
You must wake up with sorrow.
You must speak to it till your voice
catches the thread of all sorrows
and you see the size of the cloth.

Then it is only kindness that makes sense anymore,
only kindness that ties your shoes
and sends you out into the day to mail letters and
purchase bread,
only kindness that raises its head
from the crowd of the world to say
it is I you have been looking for,
and then goes with you every where
like a shadow or a friend.

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When your dreams turn to dust, vacuum.

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First impressions from VRM + CRM 2010 Day 1

August 27, 2010 //

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My first impression: It’s still early in the game. Very early. We’re still wrapping our head around the whole concept of VRM. Since the idea was to bring together visionaries/practitioners of VRM and CRM, the discussion often reverted back to CRM and how to monetize the customer/data. Clearly, all of us have problems transitioning from the old marketing/advertising paradigm into a new world where advertising is pure demand creation, driven by the attention economy, and relationships between brands and people fall under the VRM umbrella, purely intention driven.

CRM was designed to control customers even better. VRM is an added layer to provide customers with controls. To create an ecosystem that delivers value to all parties. Value doesn’t necessarily mean monetary value. To build all these systems to get $1 off on a deal doesn’t seem worth all the effort. The value is in creating real relationships between people and brands. By collaborating and co-creating value with customers. The future of business is in creating something more valuable and meaningful than just pure shareholder value.

As Umair Haque says in his “Smart Growth Manifesto”,

“21st century economies will be powered by smart growth. Not all growth is created equal. Some kinds of growth are more valuable than others. Where dumb growth is unsustainable, unfair, and brittle, smart growth is sustainable, equitable, and resilient.

Here are the four pillars of smart growth – for economies, communities, and corporations:

1. Outcomes, not income. Dumb growth is about incomes – are we richer today than we were yesterday? Smart growth is about people, and how much better or worse off they are – not merely how much junk an economy can churn out. Smart growth measures people’s outcomes – not just their incomes. Are people healthier, fitter, smarter, happier? Economics that measure financial numbers, we’ve learned the hard way, often fail to be meaningful, except to the quants among us. It is tangible human outcomes that are the arbiters of authentic value creation.

2. Connections, not transactions. Dumb growth looks at what’s flowing through the pipes of the global economy: the volume of trade. Smart growth looks at how pipes are formed, and why some pipes matter more than others: the quality of connections. It doesn’t just look at transactions at the global, regional, or national level — how much world trade has grown, for example — but looks at how local and global relationships power invention and innovation. Without Silicon Valley’s relationships powering the development of personal computing and the internet, for example, the volume of trade between Taiwan, Japan, and China, would be a fraction of what it is. Smart growth seeks to amplify connection and community — because the goal isn’t just to trade, but to co-create and collaborate.

3. People, not product. The next time you hear an old dude talking about “product”, let him know the 20th century ended a decade ago. Smart growth isn’t driven by pushing product, but by the skill, dedication, and creativity of people. What’s the difference? Everything. Globalization driven by McJobs deskilling the world, versus globalization driven by entrepreneurship, venture economies, and radical innovation. People not product means a renewed focus on labour mobility, human capital investment, labour market standards, and labour market efficiency. Smart growth isn’t powered by capital dully seeking the lowest-cost labour — but by giving labour the power to seek the capital with they can create, invent, and innovate the most.

4. Creativity, not productivity. Uh-oh: Creativity is an economic four-letter word. Why? Because it’s hard to measure, manage, and model. So economists focus on productivity instead — and the result is dumb growth. Smart growth focuses on economic creativity – because creativity is what let us know that competition is creating new value, instead of just shifting old value around. What is economic creativity? How many new industries, markets, categories, and segments an economy can consistently create. Think China’s gonna save the world? Think again: it’s economically productive, but it’s far from economically creative. Smart growth is creative — not merely productive.”

While many VRM initiatives will be driven by innovative divisions within enterprises, the real change agent will be customers. They will be the enzyme in the evolution of VRM. We have to help them understand that tools will be soon available that give them equal footing with brands, that give them power to engage with brands on their terms. That’s a powerful message. Especially in this new normal economy, people want to extract more value out of brands than just a coupon or a silly loyalty program.

And, that’s just the tip of the iceberg. If done right, VRM tools will revolutionize all aspects of our lives: health care, government, education – you name it.

From what I gathered from the workshop so far:

  • We’re close to achieve data portability
  • While Doc Searls believes VRM code should be open source, I heard some dissenters
  • The value proposition for people is still too vague to excite people outside of our bubble
  • We’re too focused on transactions. Instead, we should focus on value exchanges
  • We still have to identify the change agents within organizations. Marketing? Customer Service? (Gulp) IT?
  • How can fourth parties create stakeholder value?
  • How can VRM complement legacy VRM systems?

I don’t think anybody was expecting comprehensive answers for all these questions in a workshop. On the contrary, I hope for more questions to arise on Day 2. My goal for this workshop was not to get all the answers. My goal was not to stop questioning.

Below a few Twitter highlights from Day 1:

@jyarmis: 1995: the invention of the cookie. the end.

@missrogue When we solve problems for individuals, we actually end up solving problems for businesses in the process.

@mjayliebs Search is really the entire set of activities i perform, including talking to friends, neighbors, trusted sources,oh, and google

@nitinbadjatia User driven search (VRM search) – control over input, control over output and control over who gets to help you

@glfceo enterprises trying to predict customers intents will fail

@joeandrieu John McKean: the real challenge is the behavioral one: will individuals move from a CRM-directed world to a self-directed one?

@joshuakahn yeah, a lot of the stuff I’m hearing here is early, but actually alot farther along than I thought.

@missrogue With VRM, I have the opportunity to say, “You earn my trust and I’ll give you the key to all of my information.”

@kevinmarks Josh Weinberger: who are the best communicators in your org? your support people. Why get them off the phone to customers?

@mkrisgman Business is based on exchange of value, power, expectation, and degrees of valuation.

@mjayliebs VRM and CRM are whole lot closer to each other than people think – the gap is culture and understanding as much as principle

@DeanLand For VRM enterprise level uptake: leverage data, show benefits (aka: enable the information) create a VRM ecosystem.

@nhbaldwin vrm offers the vendor a b2b relationship, tighter personalization, with the consumer

@candres this is the confluence of intention and solicitation.

@joshuakahn cookies; designed to be low level machine ID’s, not useful for human ID’s, no matter how you bake ’em. <- Craig Burton

@jyarmis privacy is only as good as the number of people you can be confused for

Looking forward to Day 2

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Connections (Cheap encounters) vs. Relationships

August 3, 2010 //

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Image: Courtesy of dropular

Cheap encounters

Not everything was better years ago but some things were better defined. Clarity has become a rarity. A good example: relationships. Decades ago it was clearly defined. A relationship was between two people who liked or loved each other. Even without engagement ring or marriage contract, a relationship was nothing vague. A relationship was a well-defined thing with clear rules and a precise goal: improving the relationship over time. Before you started a relationship, there were declarations. We defined our expectations and were ready to hear the same from the counterpart. Besides these defined relationships, we had cheap encounters: We had something but no real ties that held us together, many exit doors in close vicinity. Nobody wanted to define expectations. More booty call, less duty call. That’s what we called a cheap encounter.

We’ve become used to this. Today we call it network.

Everyone does it with everybody. And it starts earlier than we think. Do brands really have a deep connection with their customers? Why do brands address me with my first name as if we just had a beer together? Do we know each other? Why do brands think it’s better to become my buddy than treating me with respect as a paying customer?

Sure, when you ask those questions you sound like an old fart. Nobody talks about basic politeness and a healthy distance. A healthy distance that would help us identify forced and real intimacy much easier. All these networks nobody claims to be able to live without, support the idea of social promiscuity. That leads to many cheap encounters but rarely to real relationships.

Global Relationship Economy

The word “Network” transformed into an empty word in the last few years. Scientists, database modelers and engineers defined network precisely. And enterprises started to understand that inflexible, hierarchical organizations that see themselves as a walled garden have problems adjusting to a new world of complex and collaborative work structures. Old enterprises were successful because they had everything under control. New enterprises are successful because they know who to work with others to solve a problem.

The last few years made clear that new enterprises got it right: Energy, IT, Research and Innovation: You can’t survive without  cooperation, collaboration and co-creation. The walls of the walled garden came tumbling down. The old control economy will be replaced with the new relationship economy. Are we ready for that?

Looking for friends

Let’s pose the question differently: Are we engaging enough? Are we open to a cooperative working environment? Are we ready for relationships?

Actually, the word ‘Network’ is for most people a throw-away word, mostly used to avoid the answers to above questions. The Web made everything so easy. So much interactivity, so many opportunities, often too many opportunities.

Are we looking for friends on Social Networks?

I know the phone numbers of my friends, know where they live and have a beer with them once in a while. I don’t need a friend confirmation before contacting them. Those relationships are transparent, in almost every way.

I know the strengths and weaknesses of my friends, their likes and dislikes, their destination. I invest trust in and have respect for them. Sure, it’s a pretty big risk. I’m more interested in them as a holistic person, less in one of their characteristics. Human beings are more than the sum of ‘likes’ and favorites. And I know I can have in-depth discussions with them, advancing our relationship. These relationships don’t need to be dissected by my preferences and categories. There’s one rule in life: If it’s not for real, there will be a form you need to fill out. 500 million people have done so on Facebook to present themselves to the world. The results (just like government forms): Nothing. Or almost nothing. Instead of a blooming relationship economy, we now have a new form of social bureaucracy. Voluntary. And very 2.0.

Quid pro quo

To be very clear: Not all relationships on Social Networks are equal. And, let’s please stay away from relationship therapy, talking about relationships until there’s nothing to talk about. Social engineers work on their relationships until they deal with a complete wreck. That’s based on the crazy idea one can plan human relationships, direct them, construct them – until they conform with their view of the world. Leaving relationships to the arsenal of manipulation.

Cooperation and collaboration despises manipulation because they always ask: What can you offer me? What can I offer you? How can we create something together we wouldn’t be able to do alone? Cooperation is an evolutionary principle. We band together and 1+1 turns into 3. Nothing new or revolutionary here. Romans used the phrase “quid pro quo” to express this sentiment. A relationship is not a self-service kiosk.

A relationship is not a present. A relationship is a business. A deal. Quid pro quo.

Oh, I’m sure many readers will shake their head in disgust. At least, I hope so. Maybe they start to question the value of 14,453 global friends while there’s no time to meet a real person for lunch. Do we create peace, improve justice and new technologies with our network friends? Or are we just trying to avoid the real work? We could act, do and work together. Instead, we’re developing a fetish. That’s easier. And meaningless.

Quickies and Wikis

That doesn’t mean networks and wikis are useless because that world is is maturing. We see two separate network trends: the Facebook world and the Wiki world. On one hand you have cheap encounters (quickies), on the other hand constructive cooperation. Here self-indulgence, there collaboration.

The Wiki world works together because they extract value. Many enterprises use these tools because they experience the benefit of working together, not against each other. This is not the old team where everybody hid behind the other person. The Wiki world goes beyond that thinking: Innovative projects happen because the old control model ended in the trash. The other department/division/company is not an enemy, they are partners.

Quid pro quo. The network matures.

It might be also a sign of our recessionary times. When people prosper, they focus on themselves and don’t see any benefit in working with others. It’s easier to complain, criticize and bitch about others. Cooperation in this world feels like capitulation. A defeat. We can beat them by merging or owning them. But working WITH them? Please.

Cooperation/Co-Creation and Collaboration has increased in the last few years. It might be the tough times or just the plain insight that enterprises don’t have to do everything themselves. They can become better companies and more competitive when working with others. In the old days, enterprises were forced to collaborate. Now they want to.

Explanations

Collaboration as a basic element of economic activity has been researched by academia for a long time – game theory as an example. Home Cooperativus is far superior to Homo Oeconomicus. Cooperation and collaboration grows up and becomes just a normal part of the business routine. A good sign. But as long as we talk about networks with this quasi religious undertone, we still have a lot to figure out. Homo Cooperativus is not a new form of humankind, a new us. We’re still driven by our own motivations and desires. We just know that we have to cooperate and collaborate to achieve those. The old term ‘relationship’ is filled with moral implications, always implying there are no selfish motivations. That’s why we read so much crap about the new way of working together, Office 2.0, Enterprise 2.0, co-creation. Nobody wants to be honest and admit the one reason for the advent of collaboration: It benefits us.

Until a few years ago, cooperation meant attacking each other (Call it Mergers & Acquisitions.) Those translated in conquering market shares, not developing new markets. A successful merger was one where the winner eliminated the last traces of the losers corporate culture. Often not motivated by a sense of business. Motivated by legacy emotions.

That doesn’t work anymore. Structures are too complex. Employees too confident. Markets too saturated. Forced marriages were replaced with marriages of reason. We should be happy about that.

That forces all parties to adjust to various corporate cultures. They have to negotiate, find a consensus and then decide: What is the value for each of the stakeholders? How much of my identity do I have to give up to succeed? Answering questions like that lead to clearer rules, clearer rights and duties. If you want to have a relationship, you have to declare your self. Clear and explicit.

Results

Enterprises are trying to break through the walls and silos, expanding the definition of relationships. Collaborative efforts become the norm of corporate culture. The groundswell has just begun, forcing enterprises to rethink everything. I’ve worked in the agency world for almost 20 years, often more involved in a client culture than my employers culture. More often than not, feeling more loyalty towards my work than my boss. Good relationships center around content. Not form factors.

Still, many people have problems sharing their knowledge. One of the skills we learned in the corporate world was to hide our expertise and knowledge from competitors and internal divisions. That’s was a key to survival. We all know those little organizational piranhas. Ready to digest any little piece of knowledge and spreading it around the organization, poisoning the culture. Didn’t we get punished for collaboration, being too open for cooperation? And how often do terms like “Team” and “Group” equal “Buddy System” and “Organized Nothingness”?

That’s the trick: Eliminate organizational piranhas, the buddy system, the “relationships” that kill an enterprise. These little games have to stopped before they start. Fact: If your organization lacks cooperation because of internal parasites, your business will suffer. That’s a leadership problem. Maybe the most important leadership challenge for years to come.

So easy and so hard. Cheap encounters sold as relationships are still running the network. As relationships, these encounters are nothing better than a fling between teenagers. We’re still far off from transforming these connections into 1+1=3 relationships. That’s the only result that counts.

A relationship between adults.


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Transform your business – Human Business Design (Part 13)

July 6, 2010 //

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Image: Courtesy of Coralie Bickford-Smith

I took this journey of 13 blog posts to better define the model of Human Business Design. It was necessary to walk through the ideas of systemic thinking, introduce various systems, introduce the idea of interactive management, planning for the apocalypse, pie in the sky models, gap and assets, how to develop a community enterprise based on market principles, design a multidimensional organization, stay away from quick fixes and develop leadership for organizational evolution.

The model of Human Business Design is based on above foundation and rooted in the belief that all human interactions inside and outside of your organization matter now. They way human beings are motivated to connect and realize value has fundamentally changed. We’re seeing a fundamental reset in the nature of work due to drastic changes all of us are experiencing in how people communicate, coordinate and collaborate. And the Enterprise 2.0 “movement” tries to capture this changed behavior by applying Web 2.0 principles to the “command-and-control” needs of the enterprise. In addition, we see a mere obsession with tools for tools sake without much understanding of the socio-business context. The old problem of throwing software solutions at organizational problems is just being re-invented in the social networking arena.

Instead, we need to focus our attention on the shifting nature of work itself and how enterprises need to evolve in a rapidly changing world, Organizations need to dig deeper, define new principles around which work itself can be reworked. Forward thinking companies will develop their own constitution, a bill of rights and a social contract for all stakeholders to have a common purpose everybody involved can rally around. In short: enterprises need to socialize their business.

Technology is the critical enable to implement Human Business Design within your organization but technology is not a sufficient agent for change. We have to focus our work on humans, the limitations of extrinsic motivators (external reward or punishment) and the need for intrinsic motivators (finding meaning in work):

– Developing a foundation of trust
– Motivating and educating the stakeholders to become more active participants
– Providing access to stakeholder knowledge and skills
– Facilitating individual freedom and control
– Encouraging emotional/aspirational co-creativity and participation.

    Successful evolution of the organization to a Human Business Design Enterprise requires them to find the appropriate locus of learning, between both market and non-market sources of ideas and knowledge. Most established firms are still trying to access these autonomous idea pools using industrial age logic and rational economic arguments, and, in most cases, tired and outdated marketing efforts where the emphasis is on surface-level tinkering of the customer engagement model, not a complete realignment and reorientation.

    Enterprises have to understand that each business, with money and investment in structures, is no more than its people within and its people outside (all stakeholders). Enterprises need to rely more on people and bridge their left-brain thinking demands with the desires of people to focus more on their right-brain capabilities.

    More than 10 years ago, the Cluetrain Manifesto exclaimed “Business is fundamentally human”. We need to stop treating stakeholders as “resources” and regard each stakeholders as clients with their own interests, desires and drivers.

    If you want to learn more about Human Business Design and how we can help you implementing these principles into your organization, feel free to contact me at uwe@bateshook.com

    And, all previous installments for this series, can be found here:

    Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, Part 9, Part 10, Part 11, Part 12

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    Transform your business – The community enterprise (Part 8)

    June 23, 2010 //

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    Image: Courtesy of farm4.static

    Transforming an enterprise into a community is consistent with an increasing amount of dissatisfaction with the dominant concept of what a corporation is and who owns it. Community enterprises are created by common purpose rather than a common place. Nobody owns the community. Communities consider members as citizen and not as human resources. Citizen with varied responsibilities as well as rights.

    Transforming an enterprise into a community is imperative to allow the system to focus on interaction of all parts and not on separate actions. A community enterprise allows everyone to participate in making decisions that affect them directly. In addition, control is circular, not linear. We don’t recommend eliminating hierarchies because labor must be coordinated in a complex working environment. But hierarchies don’t equal autocracies.

    Community Design

    Each manager will have a board, consisting of the manager’s supervisor, his subordinates and pertinent stakeholders. Most managers will be part of three levels of boards, interacting with five levels of management. This amount of interactions and access significantly reduces internally generated problems.

    The boards are tasked to plan, police themselves, coordinate and integrate with other boards, improve quality of work life and overall performance and, last but not least, approve the board chair.

    Boards meet at least once a month. The difference to normal meetings, that often accomplish nothing, is that managers don’t consider them as work interruptions. Instead, board meetings help managers to manage interactions with all stakeholders and facilitate their work. Boards don’t operate under the tyranny of majority, their goal is to operate by consensus. If consensus can’t be achieved, board members are tasked to work under the premise of consensus through experimentation. However, board members have to consent on the success metrics of the test and  a follow-up plan.

    The agenda can be set by any member of the board. In the early stages of the enterprise transformation, a facilitator might be used to help the board with the first baby steps. This should be supported with an initial introduction to group processes.

    Each board acts independently, can implement any decision if it doesn’t affect any other or the organization as a whole. Managers should ask their boards for advice on decisions they have to make but the responsibility for the decisions is solely with the managers, not the boards.

    Empowering all stakeholders compered to empowering a few managers will improve the performance of the enterprise dramatically.

    Let’s discuss this further in Part 9.

    Previous installations can be found here: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6 and Part 7.

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    Transform your business – Interactive Management (Pt. 3)

    June 16, 2010 //

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    Image: Courtesy of 24.media.tumblr

    “The conventional definition of management is getting work done through people, but real management is developing people through work.” – Agha Hasan Abedi

    Humans are a very diverse species. Each one of us is unique, we all have our strengths and flaws. Surprisingly there are not many variations of basic management categories: Reactive, inactive, proactive and interactive. Let’s briefly evaluate all four of them:

    Reactive Management

    Run, run, run. And then run more. The reactive approach to a problem is first to identify its cause or source, then try to remove or suppress it. Being reactive implies your action begins after the fact; acting in response to a stimulus or situation, as if simply poised waiting for something to happen. We know, this is never the case. Managers usually feel reactive when they are hit by something they didn’t anticipate.

    Organizations in which reactive management is dominant tend to use as their model the oldest and most stable form of organization known, the big family. Like most families, most reactive organizations function as autocratic hierarchies. Ironically, although reactive planning is authorized from the top down, the actual planning is carried out from the bottom up.

    Reactive planning is always focused on getting rid of what is not wanted. The problem with that paradigm is that when one gets rid of what one does not want, often one does not get what one wants but gets what one wants even less. However, effective management focuses on getting what one wants, not getting rid of what one does not want. Reactive organizations walk into the future, facing the past, backward.

    Inactive Management

    We all experienced it: A crisis is unfolding before us and we don’t do anything. We might have good intentions to solve the problem but another, more important crisis is taking all of our attention. A few days later, the initial crisis resolved itself. That’s Garden Eden of inactive management. Unlike the reactivist, who tries to eliminate the cause of a problem, the inactivist settles for suppressing the symptoms. The inactive manager is always in crisis management mode. Our increasingly complex world increases the numbers and severity of crisis. That keeps the inactive manager very busy trying to prevent change. His attention is occupied keeping people busy doing nothing.

    You’ll find inactive managers in organizations whose survival is independent of its performance. Many government agencies come to mind, subsidized and regulated organizations. They tend to change when somebody imposes their will on them.

    Proactive Management

    Proactive management implies that your response is preceding the action. Creating a solution before being requested to have one. Anticipating what is needed and having it ready. This seems like a great position to be in; however you need to know what to be ready for. You cannot anticipate everything. Proactive managers predict and prepare, that is, they attempt to predict the future, then establish the objectives they want to attain, and finally create a plan to get from where they are to where they want to be. Forecasting is a major preoccupation of proactive managers.

    The proactive manager believes there are a few problems that technology can’t solve, the reactive manager tends to think they can only be solved by a softer, human approach. Unfortunately for proactive managers, as the rate of change in the environment accelerates and the environment becomes more complex, their ability to forecast accurately deteriorates. Many proactive plans are never completely implemented because errors in the forecasts on which they are based become apparent, nullifying the plan. In addition, it is very apparent that the objective of planning should not be to prepare for a future that is largely out of our control, but to control that future as much as possible by developing mechanisms/products that have the most effect on our futures.

    Interactive Management

    The objective of management should be to create as much of the future as is possible. Implementing an interactive management style means managers get involved with people without there being a problem or a situation. They understand what’s happening around them. The more a manager knows about the whole organizational system, the goals of each person, the more successful the organization and the manager will be. Interactive management asks executives to very involved with the system environment, thereby giving them access to a myriad of insights and knowledge. It allows an organization to maximize their resource – they don’t have to wait for events, overplan for possibilities or jump the gun.

    Implementing an interactive management system doesn’t mean the organization will never be blindsided. However, when the unexpected happens, management will have a better sense of how urgent the matter is because they live and experience the priorities of the business. They will know who to deal with so the situation can be resolved with a minimum of resources and effort.

    There are three major characteristics of Interactive Planning and Management: a) Interactive Management plan backward from where they want to be to where they are. b) Interactive planning, management and execution is a continuous process. The process is the goal, not the final plan. Because there is no more final plan. c) Every stakeholder  is part of the collaborative planning process. This increases the chances of successful implementations dramatically since every stakeholder has a vested interest in success.

    Because the principal product of interactive management is engagement throughout the organization (Planning, Implementation and Optimization), and because it requires as many stakeholders as possible to participate, it requires a significant change in the role of management. They are no longer required to spend the majority of their time preparing plans. Instead, their role is to encourage and facilitate, educate and advise.

    In Part 4, we’ll be talking about the interactive planning process in detail.

    For reference, Part 1 (Systems Thinking) can be found here and Part 2 (Systems) here.

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    The end of Strategic Planning

    June 3, 2010 //

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    Images: Courtesy of Music Philosophy (Mico, you rock!)

    Strategic Planning was born around 100 years ago when the first cars went into mass production: The lack of product was vast and the economic landscape easy to oversee, making it easy for companies to adjust to changes immediately. Markets were slow and people believed humans can achieve anything, supported by Strategic Planning. This mechanical view of the economy and an enterprise left the role of Strategic Planning almost untouched and its importance has even grown over time.

    Problem is: The world enterprises operate in has dramatically changed. In a world of saturated markets, educated people playing their consumer role rather unwillingly, globalization, terror attacks, ash clouds, etc. Strategic Planning becomes a farcical endeavor. Maneuvering an enterprise has become an illusion. But we continue to plan.

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    Strategic Planning is a waste of time

    Successful companies are highly flexible and adaptable in an ever-changing world and market. That’s the opposite of a plan: focusing on getting something done in a certain amount of time.

    Let’s just have a look at the US government: Every year they plan on paying down the debt – and every year they face  new surprises: high unemployment rate, a Supreme Court decision, an oil spill. Immediately, all the Strategic Planning is out the door and projections have to be adjusted. Planning is not forward-looking, Planning is static and reactive.

    Same is true for enterprises: The performance of a company is more often than  not influenced by factors out of their influence sphere: price of commodities change, currencies fluctuate or a banal law changes somewhere in the world and affects the performance of the enterprise – once again, projections have nothing to do with reality. This results in permanent frustration. And, companies develop the tendency to find someone to blame: Purchasing, Sales, Product.

    Anyone who still hopes to control the future with numbers has no clue how markets work nowadays, doesn’t know how you can get optimal performance out of all stakeholders or just lives in a perfect world, fueled by selfish wishes and hopes.

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    Executives don’t like change

    The idea that executives don’t maneuver the enterprise through the stormy seas (Actually, it’s the other way around.) doesn’t fit in their MBA-fueled pipedreams of being the sole savior of this struggling ship. A myth born in the Industrial Age. In addition, executives believe they need Strategic Planning to control their employees. At its core, most managers believe their employees are lazy bums that can’t be trusted. (Honestly, without me they just wouldn’t do anything all day.) For that reason, employees need to get clear goals and constant observation.

    Peter Drucker’s Management by Objectives (MBO) gave executives more fodder for their bizarre prejudice that people without objectives have no clue what to do. People wouldn’t work efficiently without planning goals. This resulted in an enterprise world gone crazy: Increase revenue by 13%, reduce costs by 12%, service has to increase their number by 10% for the next 5 years. Totally absurd. We call it: Management.

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    Shift power from executives to all stakeholders

    This absurdity we call management has to be replaced with a new paradigm:

    • Focus on relative goals
    • Empower your employees by trusting them 100% and allow them to react individually to demands of stakeholders
    • Focus on culture

    Don’t stick to numeric goals: Would you want a NASCAR driver to win a race or plan for him to drive the race in 2 hours and 32 minutes? Foster a culture where it’s about winning not making numbers.

    If a department/division/branch has problems, don’t let the executives take over. Stakeholders have to find their own way out of the mess and don’t need the savior from headquarter. This might leave the executives with less opportunities to congratulate themselves but will increase team morale dramatically. The role of leadership has to be be redefined: It’s not about controlling people. That breeds resentments. And crushes spirits.

    It’s about inspiring people. Engaging them. Executives need to lead, not control.

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    Redefine enterprise success

    Executives have to throw away their outdated Org charts, their hierarchy thinking and the focus on their selfish goals. The new enterprise places stakeholders on the pedestal, makes humans not plans their focus. Once you place your trust in all your stakeholders and empower them, goals like shareholder value, executive salaries and bonuses will fall into place.

    Enterprises need less goals, not more. Goals are overrated. Real success metrics are an organic byproduct of a real corporate identity. It shouldn’t be about corporate goals determined by a few, it should be about corporate identity lived each and every day by all stakeholders. Focusing on corporate culture will help enterprises to develop a congruent group of like-minded people. Forget the performance review. Lean on peer pressure as the guiding force.

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    Strategic Planning vs Being Prepared

    Strategic Planning means: Derived out of an executive vision of the future and assessment of the present, the company develops a plan that everybody has to follow blindly. Enterprises based on this belief try to manage the future.

    Being Prepared means: We’re trying to be ready for any eventualities, we prepare, we’re staying intellectually fit, always question everything – never separate acting from thinking. Being prepared is an attitude. This attitude will allow companies to be successful in the future. Strategic Planning dooms them.

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    Strategy has its roots in the military. Even the military doesn’t need mindless warriors anymore

    The idea of Strategic Planning was based on the thought construct that there are two kinds of people: The thinkers, the directors, the controllers. And the mindless workers that do their task and don’t ask questions. Strategy is a tool to keep the doers from thinking and under tight control.

    Since the markets control enterprises more efficiently than managers, what’s the value of managers hiding behind strategy decks anymore? Instead, every stakeholder has to think, adjust and do. What company still can afford to employ non-thinking people, happily entrenched in operations? That’s what automization is for.

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    Perpetual Test Mode

    Enterprises need to ask themselves constantly “How could I do this better?” even when everything works out fine right now. Once enterprises believe they’ve found the perfect model, they will switch into the mode “Why change anything?” And die.

    Enterprises need to follow two paths:

    • Implement perpetual, incremental improvements. Why not improving a dozen of little things? Can you improve your website daily outside of the yearly refresh? Can you change the way customer service interacts with people? Are your key employees fully invested on Social Media Channels, always ready to reply? How can you move your company from good service to utter delight?
    • Think big: Some problems can’t be solved with incremental changes. They need significant innovations. How can you leap ahead of your competitors by rethinking how a problem can be solved?

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    How to begin the transformation process

    This is an unusual paradigm for enterprises. Everything they learned in business schools and on wooden conference tables is useless. Even more: counter-productive.

    It behooves every employee to internalize this new world view. And start to develop multiple pilot projects or beta programs. A good first step would be to eliminate the yearly performance reviews and axe yearly planning.

    Let’s face it: the world was not meant to be perfect and nobody can control it. We’re supposed to muddle along and work our way through challenges and problems. Once enterprises accept this fact, they have a chance to succeed in the future. Most importantly: As long as managers don’t trust all stakeholder, as long as they don’t believe people will work without control and incentives, just because they want to, as long as managers don’t change their thinking, enterprises will remain the places of outdated hierarchy, intellectual imprisonment and planned economy.

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    Personal datastore: The future of the relationship economy

    May 3, 2010 //

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    We’re not consumers anymore. The majority of us are producing ideas, sharing photos, thoughts, comments. Because we have become producers, we have much more power than we ever had. The industrial-age power structure of companies(Coke) buying white spaces/time on properties of producers (Time Warner) is rapidly disintegrating and being replaced by a new economic ecosystem of collaboration and co-creation. The challenge for most companies: How do we value this new ecosystem appropriately?

    It’s easy to put a price tag on a transaction – You make something of value, I buy it and give you something (most likely money) in return. That’s the idea behind exchanges and the industrial age. It’s measurable. It’s efficient. But, there’s something else taking place: The relationship economy, aka The Karma economy). If I help a friend finding a new job, I don’t expect anything in return. When I love my kid and try to create the best life possible, I don’t expect anything in return. When I smile at a stranger on the street, I don’t hope for an exchange of emotions. I just want to be generous for the sake of being generous.

    At its core, the Web is generous.  That’s why it’s so disturbing (or better: infuriating) that a company like Facebook, relying on the generosity of its users, develops monetization solution based on exchanges. A relationship economy brand tries to get rich based on monetary exchanges: In exchange for the user data, produced through the generosity of its users, brands pay Facebook to target users with more relevant messages. A total disconnect if I’ve ever seen one.

    All this talk about Facebook being the Internet is just silly and there are warning signs that Facebook might be facing a groundswell of deletions very soon. The Internet landscape is littered with ruins and pitiful remains of companies that believed to be the Internet and Facebook will suffer the same fate. As they should.

    Given the generous nature of the Web, people were willing to share data points with the world and didn’t expect anything in return. Sure, a badge from Foursquare is nice. That only works as long as all stakeholders are generous and understand this as a relationship, not an exchange. Users are beginning to understand that most brands just use their data to deliver commercial messages and pay a lot of money to get access to that data. Leaving the user with a shiny badge on his iPhone and data mining companies with impressive balance sheets.

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    Some look at Congress to legislate behavioral targeting and ease privacy concerns. Others hope the industry will self-regulate itself. I wouldn’t bet a dime on these initiatives. But I bet the house on the creativity and originality of people engaging on the Web. Privacy was always about control: We don’t mind sharing our personal lives and thoughts, but we want to control how, where and with whom. A privacy failure is always a control failure.

    So far, our privacy options are limited to the options platforms give us (and how easy they can be located). The exploitation of by corporations leveraging asymmetric power to relinquish control of our data will lead to the obvious question: How can I control my own data, monetize it myself? Why should companies control my relationship with them? Shouldn’t I control the relationship?

    People want to share their data and information on their terms. Yes, we want to engage with brands and give away our data to create innovative things. On our terms. When I’m in the market for a car, I would love to hear from brands that can customize offers based on my preferences. And when I made the purchase, I don’t want to hear from the again. Until I’m in the market again. I don’t mind hearing from a local restaurant about their lunch specials between 11.30 and 12.30 when I showed intention that I’m ready to head out to lunch. But don’t bug me before/after or in case I packed leftovers from yesterday.

    Project VRM (VRM = Vendor Relationship Management) is still in its early stages and we haven’t see any real-life implementations at scale of this thought model. But, that’s where the future lies: Let me control my relationship with brands. Develop meaningful control systems that are easy to use and give way to a new ecosystem of collaboration and co-creation. The future is about a personal datastore, an aggregation of all relationships with people, platforms and brands. Completely controlled by the individual. Limiting the noise emitted by irrelevant advertising, spam and other commercial messages. Shaping the information flow and stream to receive communications when we want it, about things we desire. Ultimately, leading to a restoration of balance in the relationship between people and brands.

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    What B2C needs to learn from B2B

    February 22, 2010 //

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    The B2B playbook is well known: B2B don’t focus on selling specific products, they are mostly focused on listening to customers and meeting their needs. Let’s say you are selling Cloud Computing. You have to identify first why a customer would like to switch: Lower computer and/or software costs, improved performance, improved document format compatibility, unlimited capacity, increased data reliability. In addition, sales people need to identify why customers might be hesitant to make the switch: Reliability, specific location of data is unknown, personal identifiable information can be distorted and a switch might disrupt the organization for a specific time. These insights allow you to organize your enterprise and sales organization based on customer needs, fostering long-term relationships by promoting whichever of the company’s products the customers values most at this moment in time.

    Compare this customer focus to the current B2C landscape: Most companies still use the top-down method to develop products: Develop a new product based on (often) flawed customer research, such as focus groups or surveys. Hand the new product over to the marketing department which identifies segments to target, sets the price and promotions and develops the communication plan. The whole organization is set up to push products out, transact as much as possible. A short-term strategy that is showing decline in performance due to the need of consumers to develop relationships with brands.

    Instead, brand have to focus on building lifetime value by humanizing the brand-people relationship and create a culture (followed by structure) to execute this new strategy.

    One of the major changes in human relationship organizations is the elimination of the CMO position and transferring all responsibilities to the Chief Customer Officer. Forrester’s briefing titled “Customer Experience thrives with executive leadership” found that “firms with these leaders view customer experience as more important, have more enterprisewide customer experience efforts, report having fewer obstacles, do more primary customer research, and score better in all three areas of Experience-Based Differentiation.” Executive stewardship is imperative to implement the next steps:

    • Move CRM out of IT and into the customer department.
    • Use market research throughout the organization to improve customer lifetime value. As an example, R&D needs to work directly with people to develop products that answer emerging needs.
    • Sales and Marketing should be merged into one division, reporting to the new Customer Division. Sales needs to step up and help marketing develop communications because they are closer to the ground and understand what consumers desire.
    • Let your best sales people (your greatest fans) in and collaborate with them throughout the product development process.
    • Suppliers and other stakeholders should not deal primarily with procurement, they are customers as well and should be treated as that.
    • Develop new metrics that focus less on short-term goals and more on customer profitability and lifetime value. Extend these new metrics to financial reporting, helping the markets to understand that stock prices should reflect this new model. Focus on market share should be replaced by focus on customer equity value.

    Transforming an organization to focus more on customers is a challenging task. However, continuing on the current path is not an option. Unless brands consider extinction an option.

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