Demanding Change

The Group of Six

2011-12-31T03:32:00.002Z

According to Buddhist tradition, there was a group of six monks who constantly behaved in ways that exasperated the Buddha, causing him to produce a series of monastic rules to regulate their conduct.

Khuddaka Nikaya. The Dhammapada Stories. Translated by Daw Mya Tin, M.A., Burma Pitaka Association (1986)

The Bhikkhus' Rules. A Guide for Laypeople compiled and explained by Bhikkhu Ariyesako

Thanissaro Bhikkhu, Buddhist Monastic Code I, Chapter 6 Aniyata

See also "Six Monks, Group Of" in The Soka Gakkai Dictionary of Buddhism.

What puzzles me in this tradition is the apparent repetition of the Buddha's behaviour. Why does he keep defining more rules to guide the behaviour of the six errant monks (bhikkhus), when it is surely apparent that a more profound intervention ("enlightenment" perhaps) is required. Or is this tradition intended to demonstrate exactly that - the inadequacy of rules?

There is always another story 3

2011-11-01T15:08:00.001Z

@alantlwilson the Anglican Bishop of Buckingham once went on telly suggesting Apple was "in some sociological respects" a religion. Following Steve Jobs' death, he praises Jobs for having resurrected a corporation and for what he calls "genuine moral leadership". By quoting Hebrews 11 ("He Being Dead Yet Speaketh"), Bishop Alan is clearly inviting us to compare Jobs with the moral leaders of the Old Testament.

Bishop Alan rightly warns against the idolisation of business leadership, but regards Steve Jobs as an honourable exception.

"What passes for business leadership often turns out to be no more than grumpy old men sounding off about their control fantasies, or low grade Pelagian boasting about their deservings, or saying nice things about a religion that is no more than top dressing for their own greed and prejudices. ... Not so Mr Jobs."

Alan Wilson, He Being Dead Yet Speaketh (Oct 2011)

The Reverend Michael Johnson begs to differ, wishes Apple's "moral leadership" had extended to its suppliers and those who build iPhones and iPads in very stressful sweatshops in China, and continues with a wry comment about the Jobs myth: "It says something about the way we perceive our world that many shocking truths are obscured by slick promotion of stylish desirables."

By the way, there is a brilliant and very rude rant about right-wing Christians on the Fake Steve Jobs blog: Hate-spewing “Christians” need to listen up. And even though I know it was written by Dan Lyons, I really really want to believe that it was actually based on Jobs' own words. You know, He Being Dead Yet Speaketh.

There is always another story
There is always another story 2

The Centralization-Decentralization Dialectic

2011-10-25T01:00:00.002+01:00

Why is it that attempts to decentralize often seem to result in an accumulation of power at the centre? There are several possible explanations.

1. In some instances, the decentralization agenda may be completely fraudulent. Popular leaders may spout the rhetoric of decentralization as a means of permanently gathering more power for themselves.

2 Alternatively, the leadership may believe that a temporary centralization is a necessary step towards what Lenin called The Withering Away Of The State. "Although leaders such as Ronald Reagan or Margaret Thatcher may have been inspired by liberal mentors - Thatcher being directly inspired by Hayek - they nonetheless were decision makers who benefited from power." (Marciano and Josselin p xvi)

3. As a third possibility, the leadership may genuinely believe in the desirability of decentralization, both short-term and longer-term, but find themselves frustrated by larger system forces. Emerging system behaviour somehow manages to nullify any planned intervention that challenges the essential purpose and identity of the larger systems: Stafford Beer coined the term POSIWID to refer to this phenomenon.

4. We may note that there is always a paradox in imposing a decentralization agenda from the centre. Mark Bray observes that "the terms centralization and decentralization usually refer to deliberate processes initiated at the apex of hierarchies. However, sometimes patterns change by default rather than by deliberate action. Also power may be removed from the centre either with the acquiescence of or in the face of resistance by the centre."

5. There are various trade-offs involved. For example, Jan Zábojník discusses the trade-off between the distribution of information and the distribution of motivation.

6. Centralization and decentralization often take place alternately, creating a kind of oscillation, or even simultaneously. For example, Paul Corrigan talks about Centralising and decentralising the NHS simultaneously (October 2011), and asks how to work with that?

7. Or perhaps we need to stop thinking about centralization-decentralization as a simple polar choice. Writing on IT centralization and decentralization (HBR July 2008), Susan Cramm says it's time to kill off this centralized versus decentralized IT debate. No longer should we ask, "Should we centralize or decentralize IT?", but rather, "How do we decentralize IT in a centralized manner?"

Bob Avakian, Centralization, Decentralization and the Withering Away of the State (2004)

Mark Bray (2003), Control of Education: Issues and tensions in Centralization and Decentralization, in Arnove, Robert F. and Torres, Carlos A. (eds) Comparative Education: The Dialectic of the Global and the Local, second edition. Lanham: Rowman and Littlefield, pp.204-228.

N McGinn and T Welsh, Decentralization of Education UNESCO 1999

Alain Marciano, Jean-Michel Josselin (eds), Democracy, freedom and coercion: a law and economics approach Edward Elgar Publishing, 2007

Richard Saltman, Vaida Bankauskaite, Karsten Vrangbaek (eds) Decentralization in Health Care: Strategies and Outcomes. Open University Press 2007.

Jan Zábojník Centralized and Decentralized Decision-Making in Organizations (pdf), Journal of Labor Economics, January 2002

There is always another story 2

2011-10-24T19:29:00.002+01:00

@jamesallworth and @claychristensen believe that Steve Jobs solved the innovator's dilemma (HBR October 2011).

Allworth's simplified version of the Innovator's Dilemma (as explained with greater precision in Christensen's book) is that successful innovators are led astray by the pursuit of profit. Jobs supposedly disdained profit, along with any number of other business school best practices, and produced "a company that looks entirely different to almost any other modern Fortune 500 company". In an unrelated article on Steve Jobs and the purpose of the corporation (HBR October 2011), Ben Heineman has asserted that "Apple existed to delight customers first — benefits to other stakeholders, including shareholders, followed".

Jobs' original expulsion from Apple may well have been partly caused by his failure to respect the traditional gods of management. On his return, he characterized the difference between Sculley and himself in terms of profitability versus passion. Jobs later told Walter Isaacson, his official biographer: "My passion has been to build an enduring company where people were motivated to make great products. The products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It's a subtle difference, but it ends up meaning everything." [via Huffington Post October 2011]

But as I indicated in my previous blogpost (There is always another story), Jobs was outstandingly good at constructing simple either-or narratives of this kind, and persuading everyone to believe them. His former colleague Bud Tribble called this a Reality Distortion Field. We sometimes have to work hard to avoid taking such narratives at face value. Like many wealthy rock stars or religious gurus, Jobs may have enjoyed creating the impression that he didn't care about wealth. But we don't have to believe it.

Note: Professor Christensen tweeted James Allworth's HBR article without further comment, so I take that as indicating broad agreement with the article's main premise.

There is always another story

2011-10-15T15:36:00.007+01:00

Steve Jobs talks about death

"About a year ago I was diagnosed with cancer. ... It turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I'm fine now." [Stanford University, June 2005]

But according to some sources, there is a critical omission from the story. The diagnosis was in October 2003. Jobs spent several months trying alternative medicine before agreeing to the surgery, which took place in July 2004. Some cancer experts believe this delay may have shortened his life.

Polarity

Jobs himself judges the world in binary terms. Products, in his view, are "insanely great" or "shit." One is facing death from cancer or "cured." Subordinates are geniuses or "bozos," indispensable or no longer relevant. People in his orbit regularly flip, at a second's notice, from one category to another, in what early Apple colleagues came to call his "hero-shithead roller coaster." (Fortune Magazine 2008)

Some might think that this was at odds with his Buddhist beliefs: Polarity is an Illusion, Oneness is a Reality.

Risk

It is important to understand the ways in which Jobs' attempts to manipulate his world pose risks for Apple - and thus its investors. They are evident in his difficult partnerships with music and television companies, which chafe at his insistence on setting uniform prices for their songs and videos on iTunes; in the real story of his battle with cancer; and in his deployment of stock options at Apple and Pixar, which exposed both companies to backdating scandals. (Fortune Magazine 2008)

The risks here come not only from the attempts to control everything, but from the polarity, delay and denial, which emerges from the way he tackled his cancer as well as in the way he ran Apple.

Storytelling

Writing in the Guardian, in the week Jobs died, Charlie Kaufman reveals something important about story-telling. He wasn't talking explicitly about Jobs, but as Matthew Creamer points out, he might as well have been.

Storytelling is inherently dangerous. Consider a traumatic event in your life. Think about how you experienced it. Now think about how you told it to someone a year later. Now think about how you told it for the hundredth time. It's not the same thing. Most people think perspective is a good thing: you can figure out characters arcs, you can apply a moral, you can tell it with understanding and context. But this perspective is a misrepresentation: it's a reconstruction with meaning, and as such bears little resemblance to the event.

The other thing that happens is adjustment. You find out which part of the story works, which part to embellish, which to jettison. You fashion it. Your goal is to be entertaining. This is true for a story told at a dinner party, and it's true for stories told through movies. Don't let anyone tell you what a story is, what it needs to include. As an experiment, write a non-story. It will have a chance of being different.

Meanwhile, some reviewers of Walter Isaacson's authorised biography of Steve Jobs are questioning whether it is a true representation of the man - see revew roundup by Clare Spencer.

Is a single true representation possible - of anyone, let alone Jobs? Brent Shlender writes

"Most of us who wrote in depth about the brilliant career of Steve Jobs sooner or later came to realize that we were complicit in the making of a modern myth. ... Nevertheless, Steve was merely mortal. And his storied life was one of dissonances and contradictions."

For more, see There is always another story - part 2
Steve Jobs wasn't a visionary

Sources

Matthew Creamer, Walking with Steve Jobs (AdAge 7 October 2011)

Peter Elkind, The Trouble with Steve Jobs (Fortune March 2008)

David Gorski, Steve Jobs’ cancer and pushing the limits of science-based medicine, Steve Jobs’ medical reality distortion field (Science-Based Medicine, October 2011) (via Jason Yip)

Sue Halpern, Who was Steve Jobs? (New York Review, Jan 2012)

Charlie Kaufman, Why I wrote Being John Malkovich (Guardian 3 October 2011)

Moses Ma, The Apple-Theosis of Steve Jobs (Psychology Today 15 November 2011)

Brent Schlender, Steve Jobs and Me: A journalist reminisces (Fortune, October 25, 2011)

Clare Spencer, Is Steve Jobs biography accurate? (BBC News 25 October 2011)

Ryan Tate, Steve Jobs Probably Doomed Himself With Alternative Medicine (Gawker, October 2011)

Steve Jobs wasn't a visionary

2011-10-09T10:58:00.006+01:00

I'm afraid I disagree with my friend @markhillary and countless others who have described Steve Jobs as a visionary. See for example Mark's piece Steve Jobs Succeeded Against all the Odds (Huffington Post, 6 October 2011).

If you want a visionary from the billionaire college-drop-out class of 1955, Bill Gates is your man. A computer in every home? A chip in every household device? Computers in schools? Business @ the Speed of Thought? Wiping out polio? Those are the kinds of goal we regard as visionary.

Jobs himself credited Gates' vision. "Bill was really focused on software before almost anybody else had a clue that it was really the software." (WSJ May 2007)

As Horace Dediu (@asymco) points out, Steve Jobs was not a visionary or a futurist. He just built the future, one piece at a time.

On his own account, he didn't even "put the dots together and saw where they led", as Horace (I think mistakenly) claims. The point of the calligraphy story in his Stanford Commencement address [Stanford University, June 2005] is that "you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future."

Lucy Suchman talks about plans and situated actions. Situated action is "living in the moment", which Buddhism calls mindfulness, and Jobs himself called following your heart. (See PresentationZen). There is no grand plan, simply enormous attention to detail.

What he did connect was people and knowledge. @jonahlehrer says his secret sauce was Consilience. See my post From Convenience to Consilience.

That's not exactly vision. But it has a lot to do with what Gartner calls "ability to execute". After Steve's death, Dan Lyons (responsible for the brilliant and funny FakeSteveJobs blog) asked Woz what he thought was Steve's greatest strength. "Everyone else will say vision, and gosh darn that’s important but that doesn’t go anywhere without operational discipline. ... He organized the company to have good tight controls. Watching everything he could — that is operational excellence." (RealDanLyons, 11 October 2011)

Malcolm Gladwell agrees. "Philanthropy on the scale that Gates practices it represents imagination at its grandest. In contrast, Jobs’s vision, brilliant and perfect as it was, was narrow. He was a tweaker to the last, endlessly refining the same territory he had claimed as a young man." (Steve Jobs Real Genius New Yorker, November 2011) via @ironick

But of course you may disagree. There is always another story.

The politics of "top-down"

2011-09-22T11:22:00.000+01:00

Top-down is very unfashionable these days. David Cameron, the British Prime Minster, talks about "ending the old big-government, top-down way of running public services, releasing the grip of state control and putting power in people's hands" (Cameron promises 'people power' in public services plan BBC News 11 July 2011).

"Top-down" is associated with centralized (Whitehall) control, which is assumed to be driven by dogma and ideology. Whereas "bottom-up" is liberated and local - the new citizen-led democracy. (Mark Easton calls this Upside-Down Accountability - see his piece Introducing Cameronism BBC News 11 July 2011.)

"Top-down is also associated with a mismatch between supply and demand. In Scotland, a Commission on the Future Delivery of Public Services, chaired by Campbell Christie, sets out a mid-term vision of an entirely different culture in public provision: prevention rather than cure, community-based rather than top-down, acknowledging that the objective is to reduce demand, lest the twin pressures of budgetary restraint and demographic changes would "overwhelm" the entire system. (Brian Taylor, Sympathetic ear for 'flawed' social report BBC News 29 June 2011.)

In Britain, most of the topical examples come from the health service, but it is not difficult to find examples in other domains. Here is a small selection.

NHS Reorganization

In opposition David Cameron had promised to protect Chase Farm hospital from what he said was an "unjustified" top-down reorganisation. But there is a growing consensus within the health service and among independent experts that the NHS has too many hospitals (Ministers agree to controversial hospital shake-up, BBC News, 12 September 2011). And is it ever possible for a prime minister to intervene in such a dispute without acting top-down?

Andrew Lansley has said he wanted to put an end to "top-down reconfigurations of NHS services, imposed from Whitehall rather than led by the local NHS". Now he will have to decide whether to back the local NHS even when it wants to make controversial changes. Chase Farm is the first high-profile case. (Why Chase Farm matters BBC News 12 September 2011)

Whenever possible, Andrew Lansley blames the Labour government. "Labour's IT programme ... wasted taxpayers' money by imposing a top-down IT system … " (NHS to overhaul £11bn IT project, BBC News 22 September 2011). Not surprisingly Labour disagrees: for Andy Burnham, it is the present government that is "subjecting the NHS to a reckless top-down reorganisation". (Archbishop of Canterbury criticises coalition policies BBC News 9 June 2011)

Dr Hamish Meldrum, Head of the BMA, also associates "top-down" with ideology. "There is a huge difference between adapt and change and slash and burn, between carefully planned reorganisations and knee-jerk closures and redundancies, between partnership working among health professionals, managers and patients and imposed top-down, politically-motivated diktat." (NHS told to avoid 'slash and burn cuts' BBC News 27 June 2011)

Education Reforms

Scottish Liberal Democrat education spokesman Liam McArthur said: "It is hard to see how this top-down restructuring will improve the experience and opportunities for students, or morale amongst college staff." Scots universities could merge in education reform (BBC News, 14 September 2011).

Law and Order

Profesor Lorraine Gamman, director of the Design Against Crime research centre, argues that "top-down" initiatives generally fail when it comes to encouraging people to preserve and treasure works of art. Instead, she says, community-led initiatives are usually far more effective at ensuring that public art is protected by self-policing. (How do you graffiti-proof public art? BBC News 4 July 2011)

Arab Spring

In Yemen, the momentum behind the revolution quickly grew beyond the top-down control of the established opposition. (Ginny Hill, Yemen unrest: Saleh's rivals enter elite power struggle BBC News 27 May 2011)

Big Picture Again

2011-06-05T12:53:00.002+01:00

In my post Getting the Big Picture, I included a pair of pictures from the Daily Mail showing a house from two perspectives - one bigger than the other. The Daily Mail labelled them as Advert and Reality, but as I pointed out at the time, but of course it is only one reality, and there are many other big pictures.

The Daily Mail has now published another example.

"Impressive: Tindale Towers as it is featured in the estate agent's brochure. It's the home with everything... except a room with a view."

"Reality: What the brochure fails to show is that the mansion (the white building in the middle of this industrial landscape) is nestled between a scrapyard and a gas works"

Read more: http://www.dailymail.co.uk/news/article-1393109/Art-Deco-mansion-Bishop-Auckland-County-Durham-views-scrap-yard.html (2 June 2011).

By juxtaposing these two pictures, the Daily Mail implicitly contrasts the devious wiles of estate agents with the campaigning integrity of journalists. But don't just read the Daily Mail's version, read the comments below the article. Some of these comments suggest that the Daily Mail's version of "reality" is also misleading, and the picture has been taken with a very long lens to create a false impression of proximity. (One comment recommends using Google Earth to check the distances between the buildings.) In other words, the Daily Mail's picture has been chosen for the sake of a good story. (Google Earth provides a different "big picture".)

Furthermore, the gasworks is possibly scheduled for demolition, so a long view might see the ugly buildings replaced by "leisure and retail facilities" and Tindale Towers becoming "a highlight of a new residential area". Which may be okay for those who don't regard "leisure and retail facilities" as a new kind of wasteland. Beauty in the eye of the beholder.

The backstory seems to be that Tindale Towers only got planning permission in the first place because of its inauspicious location. It was relatively cheap to build, and its value increases as the area is dragged upmarket. An internet search for Tindale Towers reveals lots of previous newspaper and TV coverage (e.g. Northern Echo Jan 2008, Independent March 2008), as well as a book by Chris Foote Wood.

Lots of different big pictures.

Constitutional Change

2011-04-29T12:40:00.001+01:00

This post is about the proposed change to the British electoral system, from "First Past The Post" (FPTP) to "Alternative Vote". British electors will have the opportunity to make a choice between these two (and no other) options in next week's referendum. Most of the public arguments both for and against AV have been pretty fatous and feeble, with plenty of ad hominem.

John Kay is a welcome exception. In his latest article A voting system fit to bar Le Pen from power (FT April 27 2011), Kay offers a lucid argument in favor of AV, and makes the following observation.

Britain has an informal system of alternative voting already, whose operation depends on voters making good guesses as to the likely result. This strengthens the case for the formal adoption of AV, but also explains why it would not make very much difference in practice. ... Even if the alternative vote is not the official system, voters will tend to behave as if it were.

John Kay's analysis therefore distinguishes the formal system of voting in the UK (currently first past the post) from the defacto system in use. He suggests that UK voting behaviour already partially reflects an informal conceptual model based on AV, and the proposed change would merely help the formal system to capture the emergent voting behaviour more accurately.

This is one of the reasons why it is difficult to predict the likely consequences of the change, because nobody knows exactly how British electors will adapt their (emergent) voting behaviour to the new formal voting system. Kay is probably correct in predicting that the first order effects of the change will be much less significant than either the pro-AV or anti-AV campaigners have claimed.

One of the arguments put by the anti-AV campaign is that AV is more complicated than FPTP. But FPTP already provokes some people to adopt complicated voting behaviours, and it is not evident that the behaviours associated with AV would be any more complicated than the behaviours associated with FPTP. The point here is that we should look at the total sociopolitical complexity of a given voting scheme, not merely the counting procedure.

There is also a second-order question - whether any given outcome from this referendum makes further constitutional change (e.g. full proportional representation) more or less likely. I have seen some divided opinion about this, but it seems pretty speculative. Some of the campaigners acknowledge that the first-order effects will be pretty small, and they see the current campaign as merely a preliminary battle in a longer-term and more fundamental reform.

The Wisdom of the Iron Age

2011-03-24T13:07:00.001Z

Interesting BBC programme In Our Time this morning about The Dawn of the Iron Age. Why and how did people start making ornaments and tools and weapons from copper and tin and lead? Because the ores were shiny, and it was easy to see how they could be melted and purified and worked. Gradually, people discovered that certain combinations of these materials (what we now call alloys) were stronger, or more malleable - hence the development of bronze.

Although iron ore was much more abundant than any of the others, it was much less attractive, and primitive people were unaware of its potential value. Even when melted, it didn't look much. Producing useful iron from this stuff was a more complicated procedure, and those tribes that first discovered the secret wisely kept it to themselves. Egyptian tombs had a few iron items, but these were probably obtained by trade or capture - the evidence suggests that Egyptians themselves did not know how to produce iron.

Could people ever have worked out how to produce iron if they didn't already have the experience of working with other metals. Would people ever have thought it worth the extra hassle of producing iron if they weren't aware of the limitations of using other metals? Is it conceivable that we could ever have had an Iron Age without having a Bronze Age first?

There is an important lesson here for innovation. Nobody should ever be satisfied with the "low hanging fruit". The only purpose of the low-hanging fruit is to get us started, to feed us and motivate us as we build ladders, so we can reach the high-hanging fruit.

See also

Venkatesh Rao, The Disruption of Bronze

Paula Hay, Cognitive Archeology of the West

The Wisdom of the Tomato

2011-03-24T12:43:00.000Z

@davidnasser @mingk @leebryant @kaldajani and many others have tweeted the following aphorism.

'Knowledge is knowing a tomato is a fruit. Wisdom is knowing not to put it in a fruit salad."

Please permit me to quibble with this aphorism. Classifying tomatoes as fruit is merely information. This classification is supported by data, such as the observation that the tomato contains its own seeds. Knowing not to put it into a fruit salad is a culinary "best practice", based on a series of social conventions about the proper constitution of fruit salad and its place within a meal. So this is knowledge, or what is sometimes called "received wisdom". However, innovation often involves disobeying social conventions and surprising those who rely excessively upon received wisdom. For example, how did chefs discover that it was okay to put flower petals into salads ("next practice")? So courage is knowing that you are not "supposed" to put tomatoes into fruit salad, but doing it anyway. And real wisdom is not inflicting such gross culinary experiments on the wrong people at the wrong time in the wrong way.

To lead people on a journey ...

2011-03-16T09:10:00.000Z

#PROMSG @PG_Rule tweeted

1. We have to start from where they are (not from where we are).

and I added three corollaries

2. We have to start from where they really are (not from where they think they are).

3. We have to make our way to where they are (not expect to lead them from a distance).

4. We have to head towards where they want to be (not where we want them to be).

The Authorship of Method

2011-02-02T17:52:00.004Z

Working with organizations is a rich and complex domain, and a large number of methods and frameworks have been developed to help people negotiate this domain. Over the past twenty years or so, I have myself developed or co-developed a number of methods and method fragments.

People may have many different reasons and motivations for developing methods. For my part, I cheerfully acknowledge that my own work has partly been motivated by the desire to earn an honest crust, to find a way of using my talents to feed my family and pay the bills. But I have also been motivated by the belief that this work is worth doing, that by promoting my own ideas and those of other people, I am contributing to making organizations healthier and more viable.

One of the indicators of successful methods is that they are widely adopted and used, and method authors typically aspire to this kind of success. But this kind of success causes new difficulties for its authors, as a broad community of users start to extend and reinterpret these methods for a much wider range of situations than the original authors may have anticipated.

At this point, the authors may wish to impose some authorial control over the evolution of the method: they try to assert a canonical version, to enfranchise carefully selected followers as the only ones approved to make improvements, and to repudiate any other developments as heretical.

I came across this phenomenon many years ago when I wrote an article about Soft Systems Method (SSM), interpreting a certain practice as consistent with SSM. Following my article, Checkland clarified his definition of SSM so that my example would no longer count as valid SSM. (Lakatos would call this "monster-barring").

Obviously there are commercial motives for doing imposing this kind of control - the authors wish to maintain a monopoly or franchise over consulting and training revenues, and to protect the brand from dilution or fragmentation. But for some of these authors, there also seems to be a lot of ego involved in this process.

However, there are also many reasons for relinquishing this kind of control. A key milestone for a notable method is that it gets its own article in Wikipedia, but Wikipedia policy requires some degree of independent coverage and commentary, rather than being based purely on the writings of the method author and his immediate associates. (Although there are many articles in Wikipedia that fail to satisfy this policy.)

Where methods are created by two or more co-authors, we often find that their followers form into rival camps. For example, the key early documents on Information Engineering were written jointly by Clive Finkelstein and James Martin, but many subsequent documents credited either Finkelstein or Martin as the sole author of the method. SSM has also undergone this kind of split - I recently heard someone talking about their experience with SSM and affirming that this was the Wilson version rather than the Checkland version.

One method author who is particularly vigilant in enforcing his brand is Dave Snowden, popularly known as the author of the Cynefin method. In his document on The Origins of Cynefin (pdf), Snowden traces some of the changes that the Cynefin method has undergone since he first invented it, and acknowledges the contributions of several collaborators, including Max Boisot and Cynthia Kurtz. Kurtz and Snowden wrote a paper in the IBM Systems Journal (2003), which must be the paper most commonly cited by other authors as the source of Cynefin. But Snowden doesn't like it when anyone names Kurtz as one of the co-originators.

By objecting to what he regards as an incorrect description of Kurtz's contribution, Snowden is not only claiming to be the prime author of Cynefin, he is also claiming to be the prime authority on the history of Cynefin. But given the complex identity of Cynefin as an evolving cluster of ideas and techniques, it is surely legitimate for a historian of ideas to offer an alternative interpretation of this history. (Just as if we were writing a history of the Beatles, we should of course treat Paul McCartney's account of the creative forces as an important source, but we should not assume that McCartney's account is the last word on the subject.)

Authorship itself is not Simple, as Barthes and Derrida and Foucault have shown. If a method is to be any good, it will pull together ideas and fragments from previous methods, so there will be many voices speaking through a given text. The most successful method authors (James Martin, John Seddon, John Zachman) have always reused and relabelled and reframed old ideas, even when they haven't always appreciated their provenance. (See my post Does Metaphysics Matter? about Zachman's curious misunderstanding of reification.) Tracing the true authorship of a method is Complex, and the relationship between cause and effect can only be perceived in retrospect, if then.

Afterword: At the same time as I was writing this, and perhaps prompted by the same events, Cynthia Kurtz was writing her personal account of the history of Cynefin: Whose Truths Are These? Her account confirms just how complex (and perhaps ultimately unanswerable) are these tricky questions of method authorship.

Bureaucracy and Risk

2011-01-31T18:27:00.000Z

@jasongorman Bureaucracy doesn't reduce the risk of making mistakes, it reduces the risk of making decisions.

retweeted by @ashalynd @barendgarvelink @carloslemes @claussni @fabiogasparro @fabio_nb @fpaiano @jerrygulla @jonmholt @keesvandieren @KevlinHenney @mfeathers @MrAlanCooper @Richardgab @rmHeise @rpepato and others.

As a general rule of thumb, I hold that when one makes statements about risk one should specify whose risk you are talking about.

Bureaucracies typically evolve procedures for making decisions, which may help to eliminate certain types of error, but may make other types of error more likely. Bureaucracies also evolve responsibility structures that reinforce certain modes of decision-making and action, and inhibit others. At least in the short term, employees take less personal risk when they conform to these procedures and structures, even when the decisions have bad consequences for other stakeholders, and may create longer term problems for the organization itself.

@richardveryard When a person makes a decision within the rules of a bureaucratic system, the system protects the person from risk.

@ashalynd True, but then the success of the whole organization depends on how good are its rules.

There are various ways of viewing the short-term or long-term success of an organization. Again, we need to ask - success for whom, from which perspective. Inflexible organizations may appear to be successful in the short term, but if they lack requisite variety, they will fail to respond adequately to changes in their environment, and may ultimately become non-viable.

For a rule-driven organization, the flexibility (requisite variety) depends on the degree of agility and intelligence that is embedded in the rules and their interpretation. I guess this is what @ashalynd means by the quality of the rules. It is not impossible for a bureaucracy to have some degree of agility, but rules usually leave a lot to be desired.

@richardveryard The success of the whole organization depends on the fit between the structure of rules and the structure of demand.

@jasongorman What does that mean - "the structure of rules" and "the structure of demand"?

The ability of the organization to behave in an agile and intelligent way depends on whether the flexibility (degrees of freedom) built into the rules and other working practices is aligned with the kinds of direct and indirect value (demand) which the organization needs to deliver. The question of alignment is ultimately a structural question.

The Power of Principles (Not)

2011-01-31T12:38:00.000Z

Discussing The Enclosure of the Commons with @umairh.

@umairh Here's some more stuff we can pimp--oh, sorry, I mean "privatize"--while we're at it. The atmosphere, the oceans, our grandkids. Oh, wait...

In response, I pointed to @owenbarder 's blog Enclosure of the Commons – 21st Century Edition.

@umairh Exactly. That's why fighting back with "open-source"/commons principles is so disruptive--and important.

But the history of enclosure doesn't suggest that it can be defeated by "principles". Wikipedia: Enclosure. Fighting back may be important and disruptive, but surely disruption needs more than principles? After all, people have often defended enclosure with another set of equally plausible principles - protecting the environment, increasing agricultural productivity, or whatever.

Here's a more general question - to what extent have "principles" ever contributed significantly to social or political change. Many key historical changes - examples might include the abolition of slavery in the USA, the enfranchisement of women, and the independence of India - were heralded by strong and principled campaigns. But why were these campaigns more successful than those against enclosure?

We might note that in each case of successful progressive change, there is an alternative explanation for the event, based on socioeconomic and geopolitical forces. For example, with the availability of cheap quinine (reducing the economic dependence on labour of West African origin), slavery ceased to be the cheapest form of labour in malaria-ridden plantations. Such socioeconomic explanations should caution us against regarding the forceful articulation of principles as the sole driver of social change.

In business and engineering, as well as politics, it is customary to appeal to "principles" to justify some business model, some technical solution, or some policy. But these principles are usually so vague that they provide very little concrete guidance. Profitability, productivity, efficiency, which can mean almost anything you want them to mean. And when principles interfere with what we really want to do, we simply come up with a new interpretation of the principle, or another overriding principle, which allows us to do exactly what we want while dressing up the justification in terms of "principles".

The BBC Moral Maze programme this week discussed a recent case of a Christian couple in the UK who refused bed-and-breakfast to a gay couple, thereby offending against recent anti-discrimination legislation. This case appears to involve two conflicting applications of the same principle - tolerance and human rights. Listening to the programme, I thought how easy it might have been for the Christian couple to turn away guests they regarded as undesirable by appealing instead to the principle of security, and how often "security" and "risk" is used as a reason for being unpleasant or unhelpful to other people. I also remembered FakeSteveJobs' recent rant against Christian intolerance, in which he offered the following interpretation of the Good Samaritan story. "Jesus, your big hero, was saying that if you have some rule or conventional wisdom that causes you to do harm to people, violate the goddamn rule." [FSJ December 2010]

So much for principles then.

I have previously written about the over-emphasis on principles within the discourse of enterprise architecture: What's Wrong With Principles

Intervention as System

2010-12-29T11:24:00.000Z

In this post, I want to talk about a couple of consultancy projects I worked on several years ago.

My strongest memory of these projects is not the actual content of what we were trying to do in the client organization, but the almost unbearable conflicts that arose between the members of the consultancy team, and especially between the two principals. We were each talking to different stakeholders within the enterprise, and as a consequence of this we took aggressively different positions on what was important, leading to some extremely uncomfortable meetings. Reflecting on this afterwards, I realized that the two principals were (probably unconsciously) acting out some of the conflicts in the client organization - in other words, the team had become as it were a microcosm of the organization. In such a situation, if the team can manage to resolve its own internal conflicts, this may be a valid step towards dealing with the conflicts in the enterprise as a whole.

This means that I now pay a lot of attention to the intervention process, and to the people engaged in these interventions, and ask how these affect the course of the intervention itself.

I greatly admire Jerry Weinberg and have enjoyed his writings on consultancy, but I would rank Peter Block's book on Flawless Consulting even higher. For Block, one of the most important things for the consultant is to be authentic. An authentic consultant is one who doesn't just think "I'm finding this narrative really boring, why is the client putting so much effort into not saying anything?" but actually says something rather than suffer in silence.

By the way, I think this is also what good therapists do.

Originally posted in the Enterprises *as* Systems - Enterprise Systems Theory group on Linked-In. Following a discussion on Methodological Syncretism, Tom Graves had challenged me to put up some of my own experiences rather than merely question those of other people.

In the subsequent comments, Sally Bean interpreted this example in terms of Checkland's distinction between Hard Systems Thinking and Soft Systems Thinking, prompting Geoff Elliot to challenge Checkland's account of this distinction. Tom Graves quoted Dave Snowden's maxim "every diagnostic is an intervention, every intervention is a diagnostic", mentioned the use of the unconscious in Jerry Weinberg's work, and invoked spiritual and magical thinking.

Edge of Chaos?

2010-12-15T11:55:00.001Z

@Rondon (via @DavidGurteen @tetradian ) points to some ‘weak signals’ that "complex adaptive systems thinking may well be about to assert itself as the new paradigm" [Edge of Chaos - The Ecology of Knowledge].

Ron cites a number of recent examples of fragmentary political action that have evaded the control of the traditional forces of law-and-order. However, different stakeholders will have different ways of making sense of these example.

From a law-and-order perspective, there is a great deal of activity that remains under the control of the traditional forces of law-and-order, and these examples might be regarded merely as isolated failures. The forces of law-and-order will undoubtedly wish to improve their ability to anticipate and manage future incidents more effectively, and will therefore be looking closely at these examples. From this perspective, it would not be surprising to discover some useful patterns in these examples.

Meanwhile, the forces of radical change in society may be looking at these as hopeful signs of future transformation in our sociopolitical systems. From this perspective, the objective would be to identify tactics that were robust, not only against current police procedure but against any future police procedure.

Ron's new paradigm might be based on a belief that there is a fundamental asymmetry that is shifting power away from the traditional forces of law and order, which no amount of police innovation could ever catch up with. But while there are undoubtedly some asymmetries in the modern world that create new demands and challenges for the forces of law and order, history suggests that traditional order is a lot more robust than student activists might wish.

Adapt or Die

2010-12-03T14:38:00.000Z

Notice anything strange about the following stories?

Universities in Wales told to 'adapt or die' (BBC News 3rd December 2010)

Education Minister Leighton Andrews has told universities and further education colleges in Wales there will be fewer of them by 2013. Those that survive will be those that respond best to the government's agenda, which makes future funding dependent on a willingness to "progress swiftly to merger and reconfiguration".

(By the way, that doesn't sound like adaptation so much as shotgun wedding.)

UK: Scotland 'Adapt or die' warning to companies (BBC News 4 October 1999)

Independent research, commissioned by a leading internet company, suggests small and medium sized (SMEs) firms are failing to invest in new technologies and could be losing their competitive advantage.

Net industry told to adapt or die (BBC News 23 October, 2002)

Britain's broadband industry must start co-operating or face going bust.

Computers upset the workplace (BBC News 17 September, 2002)

In the long run technology does not cost jobs, it moves them around. Humans simply have to adapt or die, to retrain in a way that the pre-computer generations never had to.

In these cases, the "adapt or die" meme comes from an outside agent that is trying to impose or sell some kind of change, rather than emerging from the organization's own sense of its future identity and viability.

Leadership in an empty room

2010-11-15T11:04:00.000Z

@ruskin147 asks "Can brain scans tell us what makes a leader? And can a psychometric test really prove that I have zero leadership skills?"

Rory Cellan-Jones, who is the BBC technology correspondent, reports on an ongoing study of the management brain at Reading University (incorporating Henley Business School) [BBC News 14 November 2010]. The researchers are doing a brain scan of a successful local businessman, Sir John Madejski, known for buying Reading Football Club as well as endowing a Centre for Reputation at Henley Business School. (Among other things, the researchers may discover what might motivate Sir John to give more money to the University. Has the ethics committee been consulted?)

Presumably a brain scan in a laboratory may tell us something about the decision-making style of the subject, but the relationship between decision-making and leadership is an indirect one. If brain scans were going to tell us anything directly useful about Sir John's leadership abilities, we'd need to scan his brain while he was chairing a meeting. Or even better, scan the brains of the other people in the meeting, to measure how much of their attention and respect he commanded.

In his piece, Rory also talks about psychometric testing, which of course suffers from the same limitation - that it provides an assessment of an individual away from a specific organizational context. Of course such exercises may yield indirect clues about how an individual might perform in a given context, but such clues would have to be very carefully interpreted.

A bureaucratic approach to people management might define a fixed profile of leadership skills, including personality traits as well as cognitive abilities, and then attempt to recruit or promote people who fit this profile, as well as facilitating the development of these skills in junior staff. Furthermore, a cookbook approach to team-building and organizational development might have a standard team template, defining the combination of complementary profiles required for a successful team (cf Belbin).

In contrast, a systemic approach to people management would look at how people of diverse abilities and styles can contribute to the emergent leadership and collective intelligence in a complex organization. A lot of attention in the management literature is devoted to charismatic leadership, but the real leaders are those who bring out leadership in other people, whose organizations are full of leaders, in other words people at all levels trying to make a difference.

We get some clues about the paradoxes of leadership by looking at the extraordinary range of personality types who have occupied the White House, Downing Street, Elisee Palace and the Kremlin. Some weighed down by too much understanding of the complexities of the real world, some apparently untroubled by knowledge. Some devious manipulators, some obsessive visionaries, and some who gave the impression of having landed in the job by historical accident. No fixed profile there.

If we want to appreciate Sir John Madejski's leadership skills, we'd need to look at several things in addition to his decision-making style. What does he pay attention to in his organization and environment, how does he make sense of new and emerging stuff, how well does he learn from his mistakes, and above all how does he communicate his insights and vision and energy and enthusiasm to the rest of the organization. In my last Organizational Intelligence Report, I asked some of these questions in relation to Bill Gates and his famous Internet memo; I wonder what a brain scan or psychometric test would tell us about Bill Gates and his leadership style?

Places still available for my Organizational Intelligence Workshop on December 8th.

OrgIntelligence in the Control Room

2010-10-15T13:45:00.002+01:00

A control room provides a thin but panoramic view of everything that is going on. The French sociologist Bruno Latour calls this an oligopticon: he describes how Paris is controlled by a collection of separate control rooms, each focused on a different slice of reality; these control rooms may only talk to each other at the margins, or in major emergencies; there is no supreme control room commanding all the others.

"Water, electricity, telephony, traffic, meteorology, geography, town planning: all have their oligopticon, a huge control panel in a closed control room. From there very little can be seen at any one time, but everything appears with great precision owing to a dual network of signs, coming and going, rising and descending, watching over Parisian life night and day. No single control panel or synoptic board brings all these flows together in a single place at any one time." [Invisible Paris, pdf]

Each control room monitors and directs a particular set of systems, and has some responsibility for the smooth, efficient and safe operation of these systems. Except in a fully automated plant, such as a nuclear power plant, the responsibility may be shared with skilled operators and supervisors in the field, such as inspectors and engineers, bus and train drivers, policemen, etc., who not only pass situation reports to the control room (thus acting as the eyes and ears of the control room), but also may have a fair amount of autonomy and initiative to solve local problems, perhaps supported by up-to-date information from the control room or elsewhere. So we may regard the control room as the hub of a larger distributed control system, involving operational people as well as the control room staff.

My interest here is in the collective intelligence of these control systems. As the operational environment becomes more complex and demanding, collective intelligence becomes more and more critical in ensuring smooth, efficient and safe operation. Collective intelligence depends not just on the individual capabilities of the people, but on how the work is organized and how well the various technologies (information systems, screens, dashboards, communication devices) are designed and integrated to support the work. (In other words, we're talking about sociotechnical intelligence - intelligent collaborations of people and technology.)

Organizational intelligence has six constituents, so there are six areas we need to consider.

Information gathering - what signals and messages are fed into the control room, and are these sufficient to enable critical situations to be quickly recognized or even anticipated?

Sense-making - how well are complex incidents interpreted, and the possible knock-on effects predicted?

Decision-making - how well are resources allocated, problems prioritized and solved, operational policies suspended or adjusted?

Memory - how well are past situations and problems referenced in solving today's problems and anticipating tomorrow's problems?

Learning - how do we continually improve the performance of the operating environment, as well as improving the effectiveness of the control system?

Communication - how well do we communicate internally (within the control room), outwards (to people in the field), sideways (to other control rooms) and upwards (to management or other governance bodies)?

A control room or control system may have opportunities to improve in some or all of these areas, and the leverage yielded by such improvements can be very considerable. For example, with a fixed level of intelligence in a traffic control system, it may be impossible to increase traffic volumes without compromising safety. But if we can increase the effective intelligence of the control system, it may be possible to increase traffic volumes: for example, instead of having a standard minimum distance between vehicles, or time between signals, it may be possible to implement a variable rule that is more complicated, more difficult to enforce, but yielding more efficient utilization of resources. The point is that variable rules only work if you have enough sociotechnical intelligence in the control system to manage them properly; the more intelligence you can build into the system, the more variation (and therefore fine-grained and dynamic optimization) the system will be able to cope with.

A control room typically operates on at least three different tempi (speeds).

1. There is a real-time or near-real-time tempo, in which an event triggers an automatic or pre-programmed response, almost like a reflex. These responses are designed according to some pre-established operational model that allows the designer to reason about causes and effects, and should be monitored to make sure that these reflex mechanisms are working.

2. There will be a continuous stream of incidents requiring human intervention. The people in the control room will have to verify what exactly has happened, and then take appropriate action, based on their training and expertise, past experience, as well as practical common sense. The elapsed decision time may be measured in minutes or hours, and the situation as a whole may take days to clear.

3. Then there is a much longer-term learning cycle, where people are constantly looking for more effective ways of controlling the system and improving its performance. This might include analysing patterns of activity and identifying weak signals that would give early warning of possible future incidents, analysing system behaviour to check if the desired outcomes are being consistently met, exploring alternative ways of exercising control, experimenting with design improvements to the technical systems, and so on. The learning cycle may also include occasional crisis management exercises based around a simulated incident, to test the responses to a major emergency. In a rapidly evolving world, this kind of continuous improvement is a vital aspect of collective intelligence, to make sure that the control system maintains its ability to fulfil its responsibilities.

The relationship between 2. and 3. is an interesting one. Sometimes the people responsible for 3. don't actually sit in the control room, and may even report into a different part of the management hierarchy. But although we certainly cannot ignore the formal management structure, the real question here is about the effectiveness of feedback and learning, and in providing as many people as possible with the opportunity to contribute to the learning process, and therefore to the intelligence of the whole system.

Lots of interesting issues here then, both in terms of organizational change and technological change, with the possibility of producing large improvements at relatively small cost.

For more on organizational intelligence, please visit the Organizational Intelligence website.

Organizational Intelligence and Gender

2010-10-01T11:15:00.005+01:00

A new study by a team of researchers (three male, two female) indicates a statistical correlation between the collective intelligence of a team and the proportion of women. They attribute this correlation to a factor they call "social sensitivity", which they describe in terms of the ability of group members to perceive each other's emotions. They acknowledge that this is not an exclusively female ability, but suggest that females tend to possess this ability to a greater extent than males.

Social sensitivity is one element of emotional intelligence. It would be interesting to know how other elements of emotional intelligence (e.g. confidence, determination, self-awareness, self-control) affected the performance of these groups on these tasks. See my earlier post on Emotional Intelligence.

By the way, we probably shouldn't think of "social sensitivity" as something that belongs to an individual woman in isolation - obviously it would be pretty meaningless and impossible to observe outside some social context - we could instead think of it as a group phenomenon that happens to emerges more readily in the presence of many women.

Another relevant factor appears to be the conversational dynamic of the group - taking equal turns rather than allowing one person to dominate.

I suspect that the relationship between conversational dynamic and gender balance is a complex one - men may respond in various ways to the presence of women and vice versa - and of course this relationship depends on cultural context. And by culture I don't just mean macroculture (Americans versus Japanese, Generation X versus Generation Y) but also microculture (the style and identity of this particular organization). This relationship is not elaborated in the extracts I have seen.

What doesn't appear to be a relevant factor, at least for the set of group tasks included in the experiment, is the average or maximum intelligence of the group members.

This confirms something I have long asserted, that collective intelligence is not determined by individual intelligence, but emerges from the interactions of the group or organization.

While these findings are undoubtedly interesting, it is important to qualify them with the observation that these were fairly short-term tasks from groups that were apparently put together for the purposes of the experiment. So it would be useful to have some research that looked at the performance of mixed gender groups over longer periods. If women are better at reading emotions quickly, is this advantage eroded over time as team members become more familiar with one another, or does this represent a persistent source of advantage?

If we accept the idea that the presence of females in the boardroom would make the board of directors more intelligent, this raises some further interesting questions. Instead of talking abstractly about glass ceilings, we need to understand specifically what power structures allow male-dominated organizations to survive against the potentially superior intelligence of female-dominated organizations. Alternatively, we might have to explore the idea that the intelligence at board level is a lot less relevant to corporate success than the pay and self-importance of senior management might suggest.

Another way of interpreting the results is to say that gender represents an important mode of diversity. In this particular experiment, gender may have been the most significant mode of diversity, especially if all the participants were drawn from a relatively homogeneous population, and were of similar age and educational background. In an experiment with a more heterogeneous population, other kinds of diversity might turn out to be more significant, which would lead to the explanation that it is diversity in general rather than gender in particular that produces these outcomes. However, this research happens to provide data about gender, and I have not seen any data about the comparative value of different kinds of diversity.

For example, Hillary Clinton and David Miliband have much in common, and would be grouped together in many classification schemes.

Anita Williams Woolley, Christopher F. Chabris, Alexander Pentland, Nada Hashmi, Thomas W. Malone Evidence for a Collective Intelligence Factor in the Performance of Human Groups Science DOI: 10.1126/science.1193147

Collective Intelligence: Number of Women in Group Linked to Effectiveness in Solving Difficult Problems ScienceDaily (Sep. 30, 2010)

Study finds small groups demonstrate distinctive 'collective intelligence' when facing difficult tasks PhysOrg (Sep. 30, 2010)

Places are still available for my Organizational Intelligence Workshop on December 8th.

Hybrid Thinking

2010-09-23T07:39:00.002+01:00

Let me start with a few brief quotes from Dev Patnaik, Forget Design Thinking and Try Hybrid Thinking Fast Company, Tue Aug 25, 2009

Something bigger is going on, more powerful than the adoption of a single school of thought. The secret isn't design thinking, it's "hybrid thinking": the conscious blending of different fields of thought to discover and develop opportunities that were previously unseen by the status quo.

Hybridity matters now because the problems companies need to solve are simply too complex for any one skillset to tackle.

Hybrid thinking is much more than gathering together a multidisciplinary team. Hybrid thinking is about multidisciplinary people. ... Hybrid thinkers [are] folks who can connect the dots between what's culturally desirable, technically feasible, and viable from a business point of view.

I think the key here is to recognize that hybrid thinking doesn't have to be any particular combination of thinkings, but represents an open-minded quest to bring many thinkings together.

Any new or new-to-us thinking (for example, design thinking is attracting a lot of interest in some circles) should generate some new sources of innovation and value. This is because new thinking is always implicitly combined with old thinking, and so we have hybrid thinking by default. The problem arises when the new thinking is given the full credit for any successful outcomes, because it then starts to become dominant and the hybridity (which was perhaps the true cause of the success) is weakened or altogether lost.

Bearing Limit and Financial Regulation

2010-09-22T02:04:00.001+01:00

An excellent keynote address by Avinash Persaud at the Long Finance conference yesterday, in which he deployed a few apparently simple ideas about risk management to mount an eloquent and powerful critique of the Basel 3 regulatory regime.

Here is a crude summary of some of the key points of Persaud's argument

1. Regulation should be counter-cyclical. Credit mistakes are made during the boom and exposed during the downturn. Regulation therefore needs to be stricter during the boom and relaxed during the downturn.

2. Basel 3 attempts to regulate risk in terms of risk sensitivity. This concept has several flaws.

It focuses on the private risks to banks and their shareholders, rather than the public risks to system and society.
It is based on the market price of risk, which is cyclical and therefore cannot support counter-cyclical regulation.
It assumes that all risk is homogeneous.

3. Financial risk is not homogeneous. There are different types of risk, which call for different kinds of hedging over different timescales. Persaud identified three types.

Credit risk denotes the risk that a given creditor will be unable to pay. This risk is mitigated by having a portfolio of uncorrelated creditors, and assuming that the failure of each creditor is a statistically independent event.
Liquidity risk denotes the risk that a given asset cannot be sold at short notice for the desired amount. This risk is mitigated by a preparedness to hold assets for long periods.
Market risk is a combination of credit risk and liquidity risk.

3. Banks are good at dealing with credit risk and bad at dealing with liquidity risk. Insurance companies and pension funds should be good at dealing with liquidity risk, provided they are not forced into inappropriate measures by stupid regulation.

4. Sustainable long-term investment entails liquidity risk. A regulatory regime that supports credit risk and fails to support liquidity risk tends to militate against sustainable long-term investment. But this is exactly the outcome of the Basel 3 regulations, according to Persaud. Instead, he argues, we need a regulatory regime that encourages firms to take appropriate long-term risk, according to their risk absorptive capacity.

5. The Basel 3 regulations force risk to be misallocated, because of a failure to appreciate time and its effect on risk. The goal of regulation should not be on reducing risk sensitivity but on increasing risk absorptive capacity.

6. The Basel 3 regulations therefore represent a missed opportunity for financing sustainable activities and longterm finance.

Note: In our risk management work, we use the term Bearing Limit, which roughly corresponds to what Persaud calls Risk Absorptive Capacity.

Papers by Avinash Persaud:

Liquidity Black Holes (pdf) April 2003
Regulation, valuation and systemic liquidity (pdf) October 2008
How risk sensitivity led to the greatest financial crisis of modern times. VOX, 7 October 2008.
The Empire strikes back. VOX, 14 September 2010

Emotional Intelligence

2010-09-09T20:14:00.000+01:00

Some of my thoughts here were originally posted in a discussion in the Linked-In Rightshifting group.

In my work on organizational intelligence, I have always tried to make it clear that intelligence of the whole is not equal to the aggregate intelligence of its parts. An organization such as a university can be packed with brainy people, but if they don't talk to each other, the collective intelligence of the whole can be pretty poor.

Something similar applies to emotional intelligence. A large religious organization can be packed with sincere and caring people, mostly with very high personal levels of emotional intelligence, but if they don't trust each other (or conversely trust each other too much), then the collective EQ of the organization could leave much to be desired.

It is also worth noting that intelligence is not always correlated with ethics. Thus some individuals with high personal levels of cognitive and/or emotional intelligence may use their powers for selfish, deceptive or manipulative ends, and this may well have a negative impact on the collective intelligence of the organization.

My primary goal in working with organizations is to increase the collective intelligence of the organization, but I'm very happy if individuals get some personal benefits from this as well. This would apply to emotional intelligence as well as other kinds of intelligence.

In complex systems, the whole is never equal to the sum of its parts. If the whole is greater than the parts, then we have a kind of surplus intelligence. If the whole is less than the parts, then we have a deficit. (I suspect the latter is pretty common.) We may be able to tackle the communication mechanisms and "information systems" (in the broadest possible sense of this phrase) to increase the surplus or reduce the deficit, but because the whole organization is a complex adaptive system then this will change the parts as well, hopefully in positive and productive ways, so the net surplus or deficit might not change, but that's okay as long as both the whole and the parts are better off.

As I see it, organizational intelligence depends on a number of capabilities: information gathering (awareness of relevant events and trends), sense-making, and decision-making, as well as collective memory and communication. I guess emotional intelligence has some of the same elements: emotional awareness (situation awareness, people awareness, self-awareness), a degree of self-discipline, and a high degree of personal and group authenticity. Along with the ability to detect and interpret emotional signals from other people, emotional intelligence brings an awareness of the emotional state of the group, which is not simply an aggregation of the emotional state of individuals. We all know that a group or organization can have an emotional state or mood, which affects all those in and around it. It is a common error to identify the person who expresses this mood most strongly, and to blame this person for causing or amplifying the mood ("scapegoat"), but removing the scapegoat merely shifts the task of expressing the collective mood onto someone else.

Here's where I think emotional intelligence is particularly important. If you want to work with a group or organization in a low emotional state, or with poor morale (and let's face it, that's where a lot of organizations are when we start working with them) you have to be able to engage authentically with the negative emotions of the group without being overwhelmed by the same emotions yourself.

Old thinking

2010-08-21T21:38:00.001+01:00

@dhinchcliffe and @oscarberg have been reading The End of Management by @alansmurray (WSJ, 21 Aug 2010). Dion points to the rise of "mass collaboration" as the new economic model. Oscar points to Alan's comment that "old methods won't last much longer".

@oscarberg "I see how old mgmt methods fail every day, but mgmt does not see their failures because they're stuck in old thinking."

As it happens, I'm in the middle of rereading The Tree of Knowledge, by Humberto Maturana and Francisco Varela. (If you think it's an easy read, then you probably haven't understood it.) What management is capable of seeing is a function of what Maturana and Varela call structural coupling.

@jhagel "Trying to change yr life/the world w/o changing yr own mind inherently doomed to failure." @ethannichtern, Radical Buddhism and the Paradox of Acceptance (Huffington Post, Aug 2010)