iPlot

Hope for the Quantified Self

The fate of the ‘moral economy’ lies squarely in the hand of software engineers – all the more reason to appreciate intangible value.

This month, the emerging Pirates party in Germany was able to garner 8.2% share of the votes in elections in the rural German state of Schleswig-Holstein. It was the latest manifestation of the broader civic protest sentiment sweeping through the West. Like Spain’s Los Indignados and Occupy Wall Street, the Pirates are a largely leaderless movement that has a shared purpose but no clearly articulated agenda. It is absorbing general dissatisfaction amongst citizens, but also, for the first time, asserting ‘transparency’ as a democratically legitimatized political platform. Four years after the Obama election, Hope has become a bottom-up vector. The Generation Meaning is assuming places of power but still has to figure out what exactly it is looking for.

At any rate, the moral economy is in popular demand: With debt and inequality undermining social contracts and eroding social capital worldwide, citizens and consumers alike expect more inclusive models of decision-making, higher standards of integrity, and fairer mechanisms of creation and redistribution of wealth. The various protest movements are self-organizing themselves and seeking to demonstrate the very values-based behaviors and organizational principles they find lacking in their institutional counterparts. At the corporate level, alternative forms of ‘doing business’ are burgeoning – from the social entrepreneur to the social intrapreneur, the hybrid for/non-profit to the B Corp, from Gary Hamel’s Management Innovation XChange (MIX), Ashoka’s Corporate Change-Makers, to frog’s Reinvent Business hackathon – in a quest to rethink business from within, ‘socialize’ corporate gain, and yield ‘shared value’ (Michael Porter), or ‘thick value’ (Umair Haque), instead of maximizing shareholder value as the ultimate moral obligation of business.

Value

All of these alternatives, at their core, aim to renegotiate the definition of value. Technology publisher and social web godfather Tim O’ Reilly suggests that the quintessential moral challenge for the 21st century enterprise might be to ensure that those who capture value are the ones who create it. It may never be the perfect congruence, he cautions, but the closer the proximity of these two positions on the ‘values continuum,’ the more beneficial the outcome. Ideally, companies (and economies) “create more value than they capture” so that they can nurture the communal ecosystem that is their lifeblood. “If you have too small of a group capturing value, then the whole ecosystem breaks down,” he contends.

Of course the prerequisite for this is that really all value is externalized, captured, and properly recognized – in particular the value that may not be readily qualified within the canon of current business accounting and not yet exploited through the capture of Big Personal Data on the web and on Facebook, the network that shapes the digital uber-narrative of the stories of our lives. Think of the vast amounts of social capital created by other, perhaps smaller, online networks that may be harder to monetize and yet strengthen the fabric of civic society. Think of the social value YouTube generates by virtue of offering a free platform for the dissemination of educational content. Think of investigative journalists, the hard work of parents, teachers, and others whose contributions to society are generally undervalued. Think of books, movies, dance, plays, or other pieces of art and cultural artifacts that make people happy and thereby contribute to the well-being of societies, but typically represent an asymmetrical economic relationship between value-creator and benefactor.

And even within companies, why is it that numbers always favor the ones with the numbers while there are no numbers to measure the social value created by those whose contributions are outside of the common ROI vocabulary? The sales person who has missed his targets but is popular amongst his colleagues, and widely seen as integral to team morale in the workplace. The CEO who inspires and instills hope for thousands of employees but has failed to meet the board’s growth expectations. The manager who shares the credit for a completed project with her team but has gone over budget in delivering it. Why is being a good person, why is character, not considered an economic asset in a time when trust and reputation are widely heralded as crucial assets, as competitive advantages for companies?

Integrity

It is striking that the apparent growing desire for purpose and meaning does not yet correspond with companies’ mental models of their customers and employees. Companies turn people (data) into products, segment individuals into uniform clusters, create services for the ‘Quantified Self,’ and conduct elaborate ‘employee engagement’ studies on why their employees (don’t) like them. On the employee side, in particular, this myopic belief in data may distract businesses from what really matters. Instead of winning the ill-named ‘war for talent,’ Dov Seidman, the author of the book How, suggests companies should focus on trust and integrity, on employing the full and true selves of the people who make up their organizations. If they succeed, they will be rewarded with employees who don’t withhold anything; who put their full selves at work, with all their passions, beliefs, and vulnerabilities. Matching internal and external character, purpose and action, words and deeds, these whole selves will no longer tolerate a chasm between idealism and pragmatism, between principles and practical reasons. As hyper-connectivity and social networks tear down the boundaries between professional and private lives, only those who are complete are able to compete.

Integrity is the only sustainable position in the modern business world, and trust is both its enabler and result. Trust is an act of believing, which means not (really) knowing. Paradoxically, the entire enterprise seems to be convinced that more effective knowledge sharing might unleash a more social, a more human enterprise, when it is in fact the sharing of intimate beliefs – an exchange of trust – that facilitates human interaction and enables the concept of the company as an intricately woven, sympathetic community of purpose-driven individuals and their ideas and passions. We like to be in good company when we pursue our ambitions. What we need then are not knowledge workers but trust workers, and instead of knowledge management, trust management. An organization with high trust levels is made up of people who not only believe in the organization’s values but, more importantly, believe in each other; and only then it is believable – credible – to the outside world.

This is not to be underestimated. Credibility, the scarcest resource in the information age, is the only real differentiator in a marketplace saturated with efficiency and excellence. With credibility you can sell anything, except that you no longer have to. When your credibility is strong, when people believe (in) you, in spite of their (lack of) knowledge, then your character, your ethos becomes your most powerful – your only – product.

Medicine

The importance of ethos is also the main theme of Jonathan Harris’ wonderful essay Modern Medicine, in which he draws an analogy between software and medicine based on their dual capacities to heal and to hurt. Given the power that software designers are presently wielding over the masses, he argues that “software engineers” should be considered “social engineers“:

“Through the software they design and introduce to the world, these engineers transform the daily routines of hundreds of millions of people. Previously, this kind of mass transformation of human behavior was the sole domain of war, famine, disease, and religion, but now it happens more quietly, through the software we use every day, which affects how we spend our time, and what we do, think, and feel.”

Their technology is addictive:

“In its capacity to transform the behavior of people, software is a kind of drug — a new kind of drug. As there are many kinds of drugs (caffeine, echinacea, Tylenol, Viagra, heroin, crack), so are there many kinds of software, feeding different urges and creating different outcomes.”

When Harris proposes engineers be trained to grasp the full social implications of their work, inferring “the ethics of code,” he directs attention to the externalities of our online behaviors. What we consider to be “of value” is a question of social engineering, a question of software design. Our moral compass is (in) the code. The actions of future generations are determined by today’s networked interactions. The moral economy lies squarely in the hands of software engineers. As companies are transforming into software companies, Harris, imagines a new role for them – to serve as “medicine men for the species”:

“A medicine man company would observe a given community, society, or even a whole civilization, and try to sense what's ailing it. Then, it would create technological interventions to counteract those ailments. It would use software as a kind of medicine, traveling into the world and subtly altering the behavior of people. A medicine man company would become a new kind of healthcare provider, helping people heal.”

The medicine man’s biggest value is the ability to offer empathy, intimacy, and compassion, and to inspire behavior change for the better. And this indeed is the very challenge for software engineers, or social engineers, amidst a sea of data and outcome-oriented, financial metrics.

Anticipation

To capture and reward the value of ‘the modern medicine men,’ we need to identify metrics for those intangible assets that have the capacity to ‘heal’ us; metrics that measure the emotional, intellectual, and spiritual benefits of our products and services. In light of research showing that activities rather than possessions enrich our memories and give our lives significance, we need to appreciate experiences over material goods, access over ownership, essence over form, and the journey over the destination.

The travel industry is uniquely positioned to do so. A pioneering effort is American Express’ Nextpedition service, launched earlier this year, which relies on serendipity to create meaningful experiences for consumers. Instead of a fixed itinerary usually provided by conventional travel sites, Nextpedition offers a succession of surprises that highlight the open-ended nature of the trip. The service does not tell the user where he is going until the last minute, and information is given just in time. The set up reminds of the film The Game – nothing is what you think it is. An envelope appears, pushed under the door of the hotel room, or a message alerts the user from his smartphone. The experience is full of deviances from the norm – and hence meaningful.

In his analysis of Nextpediton in a recent Harvard Business Review blog post, Grant McCracken, the author of the book Culturematic, explains why the value proposition of serendipity is so strong:

“Standardizing production was the great objective of the second industrial revolution. It almost always made the product or experience better because in those days, randomness was enemy of consumer satisfaction. But as consumers, it turns out, we are totally ungrateful. No sooner do we get perfection, sometime in the mid-20th century, than we tire of it. Enter Joe Pine's mass customization and eventually Etsy. Now it feels like we are on the verge of another revolution. Call it the Culturematic revolution. Now we want not just customization, but noise in the system, things that emerge (apparently) in real time, and the world to resist expectation.”

He concludes that “This may require a new kind of manager. Managerial capitalism asks everyone to leave randomness at home and come to work as a hard-headed pragmatist, a heat-seeking problem solver. But managing, creating, and delivering randomness means living with variation. It means asking people to get in touch with their differences instead of asking them, as we usually do, to converge on a shared facsimile of selfhood.”

From serendipity it is only a small step to anticipation. When violations are constantly broken, anticipation grows stronger. In other words: The level of anticipation is inversely proportional to the predictability of outcomes.

This is a powerful design principle, and the travel industry is not the only one taking advantage of it. Other consumer-facing sectors, such as online retail, are beginning to design products around anticipation. The UK-based start-up Fantasy Shopper, for example, has introduced the idea of a virtual social wardrobe: Consumes who sift through online stores can select clothing items and other goods they find attractive, and add them to a virtual wardrobe they can share with their Facebook friends. In effect, users indicate what they intend to buy, start a conversation on the virtual purchases with their friends, and then decide whether they want to buy the items at all. The Fantasy Shopper service effectively moves the purchase decision to the stage of anticipation, and it allows consumers to socially validate their purchase decision before they actually make the purchase (in fact, even if they never will).

Hope

The social status derived from the virtual acquisition of a product turns into a powerful intangible asset. The Self becomes a self-fulfilling prophecy. Buying without buying is the epitome of the ‘anticipation economy’ where the mere declaration of intent replaces action, and what could happen becomes infinitely more important than whatever eventually happens.

There is a name for it: Hope.

[image credit: Judith Horstman]

A Hackathon to “Reinvent Business”

Can social technology enable companies and the people within them to make better decisions? Can it improve corporate behavior? Can it perhaps even help restore the social contract between business and society? These are just some of the questions to be tackled by the “Reinvent Business” hackathon – a collaborative, rapid ideation and programming workshop – to be held in San Francisco on June 9-10, Hosted by frog and LRN, in partnership with BSR, Carnegie Mellon University, Dachis Group, Net Impact, Silicon Valley Bank, Fast Company, and the World Economic Forum, the two-day event will bring together software developers, designers, gamers, film makers, writers, business leaders, and other creative minds to imagine, design, and build a more human and truly social enterprise. The goal is both simple and bold: to develop concepts and prototypes for innovative products and services that have the capacity to transform business from within.

The World Economic Forum formed a Global Agenda Council on Values in Decision-Making (of which I am a member) in response to the current economic crisis to realign our collective mindset and develop practical approaches for a more moral economy. It has developed an ambitious agenda to help organizations translate human values into practices and behaviors that strengthen our institutions and positively impact the state of the world. New challenges call for new approaches, and we hope that with this hackathon as the starting point, we can engage the tech and creative communities in an ongoing constructive dialogue on how technology, and especially social technology, can change corporate behavior.

This need for behavior change, for “reinventing business,” is an urgent one, considering the growing number of voices that observe a crisis of capitalism and demand its fundamental transformation. In an op-ed piece for the Huffington Post, “The End of Capitalism – What Comes Next?,” World Economic Forum Founder and Executive Chairman Klaus Schwab draws a clear line between the original, defensible idea of the free market economy and the worrisome decoupling of the financial system and value-creation that makes an overhaul of its technical aspects mandatory. But he also argues that simply correcting excesses is not enough – we need a more radical reset. Schwab reminds us of the Stakeholder Principle he introduced in 1971, which is now more relevant than ever, propelled by the rise of social technologies: “In an age when social networks are enabling greater participation and transparency, companies will only be able to achieve economic success if they can generate long-term benefits not just for their shareholders, but also for the common good.”

While most companies will subscribe to that point of view rhetorically, the disconnection between business and society (and, as studies show, between management and employees) is indisputable. From Occupy Wall Street to public resignation letters in the New York Times, the widening ‘trust gap’ between business and society can’t be ignored. In a recent column, The Economist contends that companies should worry less about their reputations and more about how they do business. And indeed, increasingly, consumers and citizens demand that companies match their words to their actions, far beyond just Mission Statements, Codes of Conduct, and Corporate Social Responsibility (CSR) programs. For today’s consumers and citizens, integrity means that a firm’s decisions and behaviors are fundamentally and consistently aligned with its values and principles as well as those of its stakeholders (which include society at large).

Yet the crisis of capitalism is not only a crisis of integrity, it is also one of meaning. “It is the job of companies to produce meaning,” writes management philosopher John Hagel, and with a growing number of consumers and employees expressing a strong desire for purpose beyond profits, and even the Harvard Business Review espousing happiness as a new economic paradigm, this appears to be a ripe time for reinvention. As the world becomes more interconnected and interdependent, the lines between the corporate and the social, the professional and the personal blur, and the younger generation of netizens in particular expects heightened levels of transparency, responsibility, and inspiration – both as consumers and employees. Being “In Search of Excellence” therefore no longer suffices; companies and their leaders now need to pursue significance.

Achieving this vision requires changes in two key dimensions of our economy: what we consider to be “value” and the values that guide how we create it. We need a more inclusive value definition that is respectful of all stakeholders’ needs, fully aligned with human values, and transcending the merely transactional; and we need inclusive models of value-creation that are inherently social.

At the national level, Bhutan’s Gross Happiness Index, as an alternative to the Gross Domestic Product (GDP), has gained many admirers, and both the French and the UK governments have begun to emulate it. Moreover, there are supra-national organizations and NGOs such as the New Economics Foundation in the UK that have long proposed new indicators of economic progress grounded in the belief that we need a more holistic, integrated understanding of the economy instead of one that is purely based on financial terms.

At the corporate level, social media and networks have disrupted traditional paradigms of productivity and organizational behavior, and enabled participatory models of value creation that fully harness human potential by leveraging social technologies to maximize social capital (e.g. enterprise social networks, crowdsourcing). Consequently, the social enterprise of the 21st century recognizes social capital – in other words: talent, inside and outside of the organization – as its key asset. In his article, Klaus Schwab describes this as a significant paradigm shift:

“Capital is being superseded by creativity and the ability to innovate – and therefore by human talents – as the most important factors of production. If talent is becoming the decisive competitive factor, we can be confident in stating that capitalism is being replaced by ‘talentism.’ Just as capital replaced manual trades during the process of industrialization, capital is now giving way to human talent. I am convinced that this process of transformation will also lead to new approaches within the field of economics. It is indisputable that an ideology founded on personal freedom and social responsibility gives both individuals and the economy the greatest possible scope to develop.”

With the rise of “talentism,” the need for a real understanding of the common human values that connect organizations and individuals is becoming ever more important. Transparency, inclusivity, individual empowerment, and organizational responsiveness are crucial in nurturing businesses’ social fabric and facilitating empathy and collaboration. Yet, the challenge remains: How do we translate these values into day-to-day corporate behavior and into tangible, personal experiences? How can companies become open organizations that harness and build social capital both inside and outside of their institutional boundaries?

This is where our “Reinvent Business” hackathon comes in. Whether it is a mobile app that uses real-time peer feedback from social networks to help address ethical dilemmas, or a tracker that captures and measures alternative types of value, or a data visualization tool that illustrates the unintended consequences and the externalities of decisions, or an ‘empathy app’ that lets you see the world through someone else’s eyes, we hope for concepts that radically rethink the current business frameworks while at the same time offering practical solutions to business leaders and employees.

To be clear: We don’t expect this hackathon to produce any silver bullets, nor do we aim to “productize away” the deep and complex challenges of a moral economy and a more human enterprise. But we are poised to spawn a conversation by tackling concrete problem spaces that might inspire further-reaching, broader solutions.

Learn more about the "Reinvent Business" hackathon: http://www.reinventbusinesshackathon.com/overview.html

To participate in the "Reinvent Business" hackathon, apply here: http://www.reinventbusinesshackathon.com/apply.html

India: Urgent Emergence

This was India’s year. Obama visited, as did Sarkozy, and many other statesmen of lesser political weight or star appeal. With an annual growth rate of close to 8.9% and foreign direct investments projected to exceed $100 billion, the booming Indian economy defied the global recession. For the first time ever, eight Indian companies made it onto the Fortune 500 global list. And even PR crises like the ill-organized Commonwealth Games and political corporate scandals that were an easy target for India’s cynical media did not eclipse the nation's staggering rise – in fact, these events just seemed to magnify the spotlight. Without a doubt, the sub-continent became ready for primetime in 2010, and to many outside observers a new confidence appeared to take hold of India’s economic and intellectual elite.

This year also marked my first visit to India. I had the privilege of assuming leadership for a team in Gurgaon (New Delhi), Bangalore, and Chennai, and to immerse myself in a country I had never been to before. I vividly remember the first five minutes after my arrival at Indira Gandhi International Airport in Delhi in September, the dusty air, the thick fog, the vanilla scented perfume tree in the car, and the calm driver whom I, for lack of any alternative, decided to wholeheartedly trust as he was racing me to my hotel amidst the polyphony of honks. Other countries are in your face or slowly creep into your soul with their mores, oddities, and sensations. India is around you, all the time. It is simple as the tourist cliché of itself (especially when you live in the airport-lounge-and-luxury-hotel bubble of the global business traveler) and yet complex as a vertical staggering of infinite parallel worlds which make sense each by themselves but fail to strike a consonant chord – like in the movie Inception.

When I attended the India Economic Summit in Delhi in November a few weeks after my first trip, jointly hosted (for the 26th time) by the World Economic Forum and the Confederation of Indian Industry (CII), President Obama had just passed through India, leaving an indelible mark on the Indian collective psyche with his now famous line that “India is not emerging, it has emerged.” The mood was bullish, if not exuberant, and many considered the visit a breakthrough moment for India. The economic reality had not changed but the awareness of the sheer scale of the opportunity ahead and the self-assurance that it might indeed be feasible to accomplish it, had moved to a whole new level, seemingly overnight. No wonder the optimism was palpable at the Summit.

The official theme was “Implementing India” but the actual theme that emerged during the three conference days was “Inclusive Growth” – how can India sustain its tremendous growth and at the same time narrow the social divide? While India’s growth numbers are impressive, many of the speakers acknowledged that its so-called “demographic dividend” (a term coined by Harvard demograph David Bloom) is a double-edged sword. By 2020 half of India’s population will be below 25, and it will account for 25% of the global workforce. But this demographic trend is unevenly distributed. India’s northern states, with their high fertility rates, are the main contributors to population growth (by 2025, the median age will be 26) whereas the south faces rapid aging (a median age of 34 by 2025). This means that “India’s demographic dividend is actually a double hump, one of which is already nearly exhausted,” Infosys co-founder Nandan Nilekan writes in his seminal book Imagining India.

This “double hump” makes capitalizing on the remaining, “unexpensed” demographic dividend rather urgent. Experts foresee a demographic disaster unless India’s young workforce is properly skilled and employable by global standards. Unfortunately this is far from being the case today: For starters, 300 million people live in extreme poverty, that is, they live on less than one dollar per day, and 90% work in the informal economy. 70% of India’s 509 million-strong working population has not received a primary education, and only 11% of those aged 17-23 receive a higher education. India has the lowest education indicators among the G20 economies and the world’s highest number of illiterate people. One of the main challenges for India will be to create jobs for the 270 million people expected to enter the working-age population over the next 20 years. Will these people become the world’s workforce, as some predict, or the world’s worry?

Sustainable growth, many argue, will come from frugal (or reverse) social innovation, through public-private partnerships that scale at the base of the pyramid. It is well known that IBM has more employees in India than in any other country, and many of India’s big IT outsourcing companies (e.g. Wipro, Infosys, Tata Consultancy Services etc.) have long been competing with multinationals. But no longer is India just the development center of excellence of the world or an emerging consumer market of massive scale; it is increasingly home to bottom-up innovations in areas such as energy, healthcare, and automotive, spurred by the urgency of structural change. Crisis has always proven to be a hotbed of innovation, and the need to improve the livelihood of a society is a powerful driver for entrepreneurship.

India is already the front of some radical product and service innovations such as the $3,000 car or the two cents per minute nationwide cell phone service. Moreover, with the deep penetration of low-cost telephony, the country’s emerging middle class could be a testing ground for the burgeoning mobile health (mHealth) technology market, in particular telemedicine and rapid diagnostic services. Globally, mHealth revenues are projected to grow by 25% annually, from $1.5 billion in 2010 to $4.6 billion by 2014. India is seeing many of its pioneering efforts, for example start-ups such as mDhil and eHealthpoints. The Indian healthcare industry, in general, is one of the fastest growing sectors of the economy, growing at 23% per annum.

A basic enabler of “inclusive growth” is to provide the rural population with access to information- and communication technologies and financial services. Although India is the second largest telecom market in the world and tele-density has increased to 56.6% in 2010, 44% of rural Indian households are still unwired, and of India’s 6,000,000 rural villages less than ten percent have a local bank branch. Microfinance, long heralded as an able solution to this shortcoming, has recently suffered a serious setback. The rapidly growing private microcredit industry faced imminent collapse when almost all borrowers in Andhra Pradesh, one of India’s largest states, stopped repaying their loans. Critics accused microfinance institutions of making “hyperprofits off the poor” by extending loans to poor villagers at exorbitant interest rates and without enough regard for their ability to repay. It will take some time for the industry to restore trust (and some more regulatory oversight from the state will help, too). But again, this crisis may spur much needed innovation in the Mobile Money space.

India’s villages are increasingly becoming a breeding ground for innovation, as its rural poor develop inventions out of necessity. Mansukhbhai Jagani, Mansukhbhai Patel, Mansukhbhai Prajapati, and Madanlal Kumawat, and three others are on a recent Forbes list of rural Indian entrepreneurs (compiled by IIM-Ahmedabad professor Anil K. Gupta) “whose inventions are changing lives” of the people across the country. Jagani developed a motorcycle-based tractor for India's poor farmers, which is both cost effective – costing roughly $318 – and fuel efficient. A farmer, Patel invented a cotton stripping machine that significantly cut the cost of cotton farming and revolutionized India’s cotton industry. Prajapati, a potter, invented a clay non-stick pan that costs Rs 100 and a clay refrigerator that runs without electricity for those who cannot afford a fridge or their electricity and maintenance costs. Madanlal Kumawat, a grassroots innovator with no more than a fourth-grade education, developed a fuel-efficient, multi-crop thresher that yields cleaner grains, which can be bagged directly and eliminates the cost of cleaning.

Design and design-driven innovation are quickly entering the business vocabulary here, too, and when I met with editors of business publications in Delhi a few weeks ago, their interest in design was as keen as their conviction that India will soon become a powerful innovation engine with global impact, propelled by a distinct national design style and a throng of young, ambitious, and fearless entrepreneurs. It will require a mix of national policy and education providing the economic framework, global design and innovation firms bringing quality standards and best practices to India, and – perhaps most importantly – Indian companies embracing design as a key differentiator and value-driver, with some quick and visible market successes.

Whether you’re strolling through Old Delhi or driving along the campuses of Bangalore’s IT firms, you can’t help but marvel at the tremendous pace with which the country and its people are happening. The whole country is on the move, which offers plenty of opportunities for upward social mobility but also disrupts traditional lifestyles and cultures. New high-rise developments for the burgeoning middle class (91 million urban households are projected to be part of it by 2030, up from 22 million today) stand in stark contrast to the poor villages right next to them, which are in the progress of upending their local identities and cultural roots. According to the United Nations Development program, it is expected that 41% of India’s population will live in cities by 2020, compared to less than 30% in 2010. That is 590 million people, nearly twice the population of the US today. A recent McKinsey report (“India’s Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth”) estimates that 70% of net new employment will be generated in cities by 2030 and that 85% of total tax revenue will come from the urban economy.

Needless to say, that this migration will further contribute to stresses on the already insufficient infrastructure. McKinsey expects 68 Indian cities to have a population of more than one million by 2030 (up from 42 today vs. 35 in Europe). It warns that the current urban policy framework will lead to urban decay and gridlock. Today, India is investing eight percent of its GDP in infrastructure, which is a high number by international standards. And as much as $300 billion are forecast to be devoted to urban infrastructure over the next 20 years, a twofold increase in per capita spending of $17 today. But McKinsey believes that $1.2 trillion capital investments are necessary to meet the projected demand in Indian cities. The firm proposes fundamental city governance reforms to ensure these funds are not only raised but put to work efficiently. Unlike China, India cannot issue sharp policy shifts to appease a young population that may not be satisfied with the living standards of their parents. If urban policies fail, social upheaval, fuelled by underlying religious and ethnic divides, will likely be the result. Or as Nandan Nilekan puts it: “This is our biggest, but also our last chance.”

India is aware of its “moment” and understands that the window of opportunity for inclusive growth is limited. The government is seeking to balance the hustle, the frenzy, and the urgency with calm and confidence. It is the only possible attitude when you have to govern what seems to be genuinely ungovernable. I thought of a line from a song by Thom Yorke: “You have all the time in the world. Don’t squander it.”

[picture: painting by Vangobot. Vangobot is "a robot who paints with the soul of the human artists who taught him how to see."]

The Economist and the Human Potential

If TED is about “Ideas Worth Spreading,” then the Economist’s Ideas Economy conference series is – as the title would suggest – about ideas worth monetizing. It’s the Economist, stupid! The venerable publication, a notorious late adopter, has realized that despite solid market standing it must reinvent itself to survive, both through a suite of new digital products and by branching out into the conference business. The focus on Innovation (as in “a commercialized original idea,” as the excellent moderator Vijay Vaitheeswaran defined it in his opening remarks) is a natural fit: The Economist has always stood for liberal economic policies and liberal social values – which is typically the kind of fabric that innovation thrives in.

The most recent event of the series took place last week in New York: With the theme “Human Potential,” 250 business leaders, entrepreneurs, politicians, and academics discussed for two days how to foster and tap into the creativity and intellect of their employees, stakeholders, peers, and students. The cynic could object and ask “Do we indeed have potential?,” inferring that the term “potential” implies progress and betterment – but are we, humans, even good? And if so, can we get better?

According to Harvard psychologist Steven Pinker, the answer is a clear yes. He presented a “history of violence,” arguing that violence is on the decline, which, as he readily admitted, appears to be somewhat counter-intuitive, knowing that there has not been a single day without war in the history of mankind. Attribute this to a recording bias: The magnifying effect of mass media makes violence more visible than ever before. Yet, Pinker cited empirical studies showing that the amount of actions which cause physical harm has steadily decreased over the past centuries. Despite the many atrocities it saw, the 20th century was not the most violent century in terms of absolute numbers (compared to the total world population), and acts of terrorism, Pinker pointed out, can only be described as (statistically) “insignificant.” Clearly, Pinker commented, the US overreacted in response to the 9/11 attacks. Before you cheer about the rise of human enlightenment and moral reasoning, however, consider that the way violence is committed may have become more subliminal, and that, more pressingly, weapons of mass destruction in the hands of a few rogue individuals (or states) can arguably do more harm nowadays - that is, cause ‘ultimate violence' - than ever before. Additionally, it remains difficult to project future trends based on historical data so that an overly optimistic, non-violent concept of human potential might be flawed because of a bias of retrospective. In fact, the Rational Optimist's great blind spot is that it cannot look into the “heart of darkness,” that it has no means to explain or forecast truly irrational behavior.

On top of that, it is, of course, particularly hard to assess the human potential when you are human. Is human potential limited to humans? Can humans really fully unleash their own potential or will it take artificial intelligence to do so? Were the attendees in New York able to realize human potential or rather its impediment? The conference, for the most part, stayed away from such provocations. Notwithstanding the occasional excursion into macro-economic or philosophical debate, most of the program was devoted to more pragmatic topics such as employee motivation, knowledge management, institutional and non-institutional learning, and creative thinking.

Like Pinker, Richard Florida struck an optimistic tone in his opening keynote, in which he heralded creativity as the essential resource of our societies. According to Florida, one third of the US workforce is employed in the creative sector, generating 50% of the overall wages. The unemployment rate has only gone up by 5% during the economic downturn, much less so than in other market sectors. Creativity, says Florida, is the key to economic recovery and the main catalyst of the “Great Reset” that he proposes. Asked about what he would tell the citizens of Detroit, he said “harness the creativity there,” claiming that “if we could turn 60% of services jobs into creative job we would boost the economy.” While that stood uncontested, his insisting on the metropolitan region as the hub of the “creative class” provoked more audience dissent in the subsequent Q&A. In the connected age of virtual worlds and social networks, the physical density of “idea people” seems to have lost some of its relevance. This is not to argue the importance of geographical talent clusters, but increasingly, innovation overcomes boundaries of space and happens whenever, wherever people meet (online). Geography is no longer destiny, and no longer does human potential start in cities, as Florida claims.

My colleague Robert Fabricant, VP of creative at frog design, who spearheaded a “social experiment” at the conference (more about that in another post soon), offered a less class-centric view on creativity. For him, creativity does not exist so much exclusively within an individual as it does between two entities: “Because that which is created needs a response to bring it to life.” He used the analogy of the old Roadrunner and Coyote cartoons to illustrate this collaborative creative interaction that is at the center of innovation.

The relationship between creativity and well-being, values and value, social purpose and money, self-actualization and economic success was the main theme of the conference. Jim Clifton, the CEO of Gallup, shared some remarkable insights, based on his institute’s annual survey on “what does the whole world want?” This time, the majority of respondents said: “A job” – in stark contrast to previous years when the answers had ranged from “a happy life,”and “family,” to “health.” The responses this year shifted the focus to the bottom of Maslow’s pyramid. Why is that? First of all, the inequality between the rich and the poor is growing, and it is no surprise that many living in developing countries consider “finding a job” an existential need. Secondly, the growing middle class (in India and China, and other emerging markets) has become much more aware of its possibilities and views employment as the main enabler of a brighter future for themselves and their families, one that often includes better education and increased consumerism. And then, well, there was the recession in the developed world - and its lasting implications.

So are we seeing a renaissance of materialism? Does money beat meaning? The final debate of the conference, conducted in classic Oxford-style, looked at this conflict through the veneer of employee motivation. Yaron Brook of the Ayn Rand Institute and entrepreneur Lynn Tilton, CEO and principal of Patriarch Partners, contended that “money motivates more than social purpose.” The two were facing formidable opponents in Clay Shirky (author of Cognitive Surplus) and Dan Ariely (author of The Upside of Irrationality), who argued that social purpose was the more powerful motivator. The pro faction – albeit perhaps exhibiting more passion – ran out of arguments soon and could eventually only help itself by evoking the Nazis (Godwin’s Law posits that “as an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1. In other words: all discussions - regardless of topic or scope - inevitably end up being about Hitler and the Nazis.") Brook and Tilton’s mechanistic concept of human behavior was easily rebutted by Shirky and Ariely, who insisted that money is always only a substitute of meaning,refering to Wikipedia, Lego, and other examples of meaning-driven engagements. “Money can motivate your employees to show up,” Ariely said, but if you want them to not just show up but commit with their full creative and intellectual potential, you need to motivate them with non-monetary incentives.”

This view was echoed by Cristóbal Conde, president and CEO of IT services company Sungard, who endorsed transparency and called “creating a platform for collaboration” the most important task of today’s business leader. It didn’t matter that he almost literally borrowed his own words from an interview with the New York Times earlier this year – they still rang true. “Collaboration is one of the most difficult challenges in management. I think top-down organizations got started because the bosses either knew more or they had access to more information. None of that applies now. Everybody has access to identical amounts of information.” Conde said further: “The answer is to allow employees to develop a name for themselves that is irrespective of their organizational ranking or where they sit in the org chart. And it actually is not a question about monetary incentives. They do it because recognition from their peers is, I think, an extremely strong motivating factor, and something that is broadly unused in modern management.” Conde: “Micromanagement doesn’t scale because it spirals down, and you end up with below-average employees in terms of motivation and ability.” Sungard uses enterprise micro-blogging service Yammer to enhance internal knowledge sharing: “It has given our employees a voice.”

With CEOs like him, the company is not a 20th century idea: “The more I teach, the more I learn," Conde said. Humility, openness, and collaboration are the hallmarks of a new kind of humanistic organization, led by humane leaders. That’s an idea worth spreading – and monetizing.

Openness or How Do You Design for the Loss of Control?

 

Openness is the mega-trend for innovation in the 21st century, and it remains the topic du jour for businesses of all kinds. Granted, it has been on the agenda of every executive ever since Henry Chesbrough’s seminal Open Innovation came out in 2003. However, as several new books elaborate upon the concept from different perspectives, and a growing number of organizations have recently launched ambitious initiatives to expand the paradigm to other areas of business, I thought it might be a good time to reframe “Open” from a design point of view.

What sparked my interest in particular was the Dachis Group’s list of Six Social Business Trends to Watch which referenced the phrase JP Rangaswami coined at this year’s Enterprise 2.0 conference: “Design for the loss of control.” His point was more IT-specific, arguing that the combination of pervasive digital infrastructure, software-as-a-service, cloud computing, social software, and smart phones have enabled employee- and customer-driven solutions to a degree that renders top-down IT systems obsolete. As Dion Hinchcliffe of the Dachis Group writes: “Enterprises currently expend considerable resources trying to impose control on a situation that increasingly appears like it not only can’t be controlled, but almost certainly doesn’t need to be.”

No longer in control

The new paradigm Hinchcliffe describes has implications far beyond just IT. For one thing, employees, who are facing an increasingly hybridized work/life proposition, are eager to do what they are passionate about, and they will increasingly find the digital spaces and tools that allow them to do this most effectively without having to ask anyone for permission. Companies have to come to terms with the fact that the traditional model of managerial resource allocation and coordination (mainly coerced through extrinsic motivation in the form of rewards and punishments, such as payments, promotions, demotions, etc.) has become outdated and no longer reflects the social fabric of today’s workforce.

Moreover, customers, too, seek out relationships with brands that go beyond the merely transactional. Empowered through ubiquitous access to information and therefore radical transparency, through an abundance of choices on the web, as well as the ability to contribute and tap into social networks (and thus social capital) in real-time and on-the-go, they expect brands to offer engagement and collaboration models that match the more distributed and multi-layered mechanisms of value creation through social media.

Commitment is fickle, reputation volatile, and loyalty scarce. In short: Companies have lost control – over their workforce, their customers, and as a result, their brands. Or, more precisely, as Charlene Li points out in her book Open Leadership, they have never really been in control – what they are actually forced to give up now is their need for control.

The power of pull

So what can they do besides just bemoaning this loss and passively observing how the new centrifugal forces of the Social, Real-Time Web are disrupting their traditional business and engagement models? Li lays out how business leaders can and (must!) embrace the new rules of openness. John Hagel, John Seely Brown, and Lang Davison, in the The Power of Pull, provide an actionable framework for how these new forces can be leveraged through “shaping strategies” on the individual, institutional, and societal level.

These “shaping strategies,” as the term suggests, present an exciting challenge for design. If designers embrace the insight that influence is replacing authority as the new currency in the “pull economy” and that the best way to gain influence is to give up control, they will have significant impact on how this new economy is shaping up. In fact, they are uniquely positioned to develop what Hagel, Seely Brown, and Davison call levers of “access, attraction, and achievement” that provide the “creation spaces” and tools for employees and customers alike to design their own destiny, create their own meaning, and thus convert their very own skills and passions into productivity and loyalty.

In essence, businesses can use “shaping strategies” to amplify and accelerate the inevitable loss of control in order to avoid employees and customers abandon them. This may sound counter-intuitive but the upside is considerable. A deliberately designed loss of control grants companies the only remaining and arguably most critical competitive advantage – access. As long as they enable and facilitate knowledge flows, ideas, passions, skills, and experiences, they have access to them. In fact, if they fully leverage the “powers of pull,” these assets will gravitate towards them.

X-problems and social networks

Openness is no longer just a nice stunt but a fundamental requirement for any business that wants to thrive in the new “pull economy.” Because we’re increasingly dealing with "X-Problems," as my colleague Adam Richardson reckons in his book Innovation X, we need approaches that allow us to come up with creative solutions to problems we may not even know yet. In other words: Solutions that help define the problem. Or as Hagel, Seely Brown, and Davison put it: “If you want to find out what it is you don’t know that you don’t know, you need to hang out with other people who might already know it.”

The loss of control enables the creation of more weak ties in a company’s network (inside and outside of the organization), and, as social network research has shown, weak ties are more conducive to transporting foreign ideas, knowledge, and skills – because they move faster from one node to the other as the network becomes more accessible and nimble on its fringes. The further you get away from the core of your network, the less control you (may want to) have.

You could argue that designers have been designing creation spaces, feedback mechanisms, and other participatory experiences for some time now. They certainly have, but perhaps without fully recognizing or deliberately orchestrating the amount of loss of control that their designs represented. It seems like the time is ripe to understand these efforts as part of a broader shift and consolidate them into a series of formats that, going forward, shall serve as blueprints for “design for the loss of control,” across different corporate functions and disciplines.

Frequently, these solutions will involve de-institutionalizing decision-making by removing the intermediary. In many cases, this may imply an act of democratization, but it is also important not to see this as a zero-sum game. Control is not just shifting from one hand to many; rather, it is dissolving and defragmenting and along the way diminishing – or turning into something else, far more valuable: social capital that resides in the public domain and is no longer controlled by anyone. The formats that propel this new mode of collaboration and value creation are emergent and informal, and they typically carry a significant amount of tacit knowledge.

Here are some recent examples:

Open ideation/crowdsourcing: Open ideation (or crowdsourcing) is based on the assumption that the best ideas for new products, services, and business models may come from outside of your organization or from those people inside your organization who are typically (by function or hierarchy) excluded from the ideation process. Like all open innovation efforts, crowdsourcing redistributes control from an elite group of thinkers and doers to a broader group of self-selected participants. By broadening the funnel, companies can harness the accumulated or aggregated knowledge of these voices. Crowdsourcing is usually focused on ideas and insights but can also cover a wider array of collaborations with external parties throughout all stages of the innovation cycle. Dell, Starbucks, P&G, and many other organizations use crowdsourcing. Nike partners with Creative Commons and Best Buy for GreenXchange, a platform that promotes “the creation and adoption of technologies that have the potential to solve important global or industry-wide sustainability challenges.” TED is expanding its reach through TEDx, “independently organized TED events," without compromising the exclusivity of its brand. Furthermore, Victors & Spoils brought crowdsourcing to the world of advertising; and IDEO recently launched its crowdsourcing platform, OpenIDEO, inviting the public to join “creative challenges” that tackle social issues through design. And there are firms such as InnoCentive that specialize in crowdsourcing services for other companies. All these companies not only make ideas accessible to more or less open publics (to some extent, giving up control over IP) but also commit to making the follow-up on these ideas (at least partially) transparent (giving up some control over agenda-setting and strategic planning).

Open design research: frogMob, developed by frog design, is a tool for crowdsourced design research, based on the idea that everyone can be a researcher for a day, just by paying a little more attention to the world around them. frogMob uses guerilla photography and stories to take a quick pulse on global trends, behaviors, and artifacts. Launched internally first – tapping into frog’s eight global studios – we are now expanding frogMob to a broader public. Through frogMob, we are able to “mobilize” not only our internal network around a specific assignment but also external contributors on an ad hoc basis, in a short amount of time (like a Flash Mob). frogMob allows us to provide lightweight, rapid design research for clients who ask for a “trend scrape” that identifies patterns and offers unexpected inspiration. The key here is to tap into existing knowledge flows - in a nimble way that does not require too much commitment from the participants and eliminates bureaucratic hurdles.

Open strategy: Crowdsourcing can also take place as a combination of online and offline collaboration, as demonstrated by NPR and its Think-In on the future of digital media. Supported and facilitated by frog, NPR hosted an open strategy session, bringing together 60 thought leaders at the intersection of media and technology to explore new approaches to content creation, distribution, and funding for NPR and NPR member stations. The Think-In harnessed the collective expertise and creativity of an exceptional group of entrepreneurs, executives, and innovators, and it developed concepts that NPR incorporated into its organizational roadmap. The event was augmented through live-commentary and streaming via various social media channels. This social augmentation made the workshop accessible for a broader audience, which – like the on-site participants – felt so genuinely passionate about NPR that they committed some serious time to this collective brainstorming. Such passion for brands could also be put to work through a more radical version of a Think-In: a “brand hijack” that convenes customers and other interested parties to explore new directions for a brand – yet with the twist that the brand itself would not participate (but may have the option to co-opt the results of the session afterwards).

Open-source humanitarian software: In the software space, open-source projects have long been an established form of open innovation, see IBM’s Eclipse platform. Random Hacks of Kindness (RHoK), founded by teams from Google, Microsoft, Yahoo!, NASA and the World Bank, uses open-source methods to “hack for humanity.” It describes itself as a community of “developers, geeks and tech-savvy do-gooders around the world, working to develop software solutions that respond to the challenges facing humanity today.” The group runs “Hackathons,” inviting the best and the brightest hackers from around the world, who volunteer their time to tackle disaster relief issues with through software applications. The Hackathons are designed as so-called “codejams,” fast-paced competitions that give the participants a set amount of time to solve the challenges they are given. At the end of a two-day marathon of hacking, a panel will review each hack, and the winners will walk away with prizes, as well as the right to call themselves “RHoKstars” ever after. Another example of open-source humanitarian software is Ushahidi’s CrowdMap which displays crowdsourced crisis data on maps as a free cloud-based service.

Open-(source) social networks: Lockheed Martin, the giant defense contractor, built its own networking site called Eureka Streams and released it open-source for the public to use. As Fast Company writes in a recent blog post, “The company's management had recognized that an internal social networking tool could have all sorts of procedural benefits for a large, and geographically disjointed organization. Essentially it lets ‘knowledge workers’ inside the company find and talk with other experts who may have valid input to particular projects, but who would otherwise have zero oversight or input.” Dow Chemical is another example of a company setting up its own social network, in this case to help managers identify the talent they need to execute projects across different business units and functions. Dow has even extended the network to include former employees – a smart move. Closed networks are of diminishing value. A recent McKinsey Quarterly report argues, “In the longer term, networked organizations will focus on the orchestration of tasks rather than the ‘ownership’ of workers’ and advises executives to ‘make the network the organization.’”

Open branding: In the spirit of transparency, design firm Continuum is partly revealing to the public its creative process. The specific challenge is to create a brand identity for the Design Museum Boston, a nomadic institution that exhibits mainly in the virtual space. For six weeks, Continuum is partnering with Core77 on a blog series that will reveal the firm’s process and progress as it takes on the challenge. Readers are invited to comment but it is not quite clear to what degree they can influence the creative work. It’s a non-commercial client and a low-risk project but in any case, making a creative project transparent – even somewhat haphazardly – is an interesting experiment that is worth following. The more radical experiment would of course be to put the creative control over a project fully in the hands of the “smart crowd” and have the creative team steered by a disperse group of “remote creative directors”- beyond just input comprising of insights and ideas. Other, more radical formats are imaginable: For example, sharing a company’s entire communications (some, more or less tightly managed corporate Twitter accounts are in a way a precursor to this) with the public. This would be radical transparency indeed, and an experiment with unpredictable outcome – will the benefit of enabling reciprocal, collaborative relationships outweigh the risk of reputational landmines and IP violations? Is it IP, in the end, as proprietary “knowledge stocks” (The Power of Pull), that serves as a company’s greatest asset or isn’t it rather the ability to attract talent and grant access to knowledge and skills? There’s another, softer benefit to it: Brand personality comes from being personal. The more transparent and the more vulnerable brands are, the more personal, they more authentic they will appear. Transparency is a prerequisite for authenticity – an unmasked and immediate act of communication.

Open social-capital enablers: Small, ad-hoc, start-ups are popping up that leverage the principles of self-organization, which Clay Shirky so aptly described in Here Comes Everybody, to rethink “capital” and reinvent human resources allocation in order to tackle global issues. Originated from the Sandbox network, an exclusive network of young innovators and entrepreneurs under 30, this movement calls itself “Emergent Transformation,” and Max Marmer, one of its masterminds, writes on its group blog: “Lately we have been observing an accelerated movement of ventures that are revolutionizing how we take initiative on a global scale. They can be mostly found in the areas of education, innovation, collaboration, networks, entrepreneurship, and human development: spaces that most likely will dominate the future of value creation in our society. These ventures are leveling the global resource play, unleashing unused & undeveloped human capital and leading to a socioeconomic transformation.” For example, there is Supercool School, an online school platform that strives to give people worldwide access to education by building a new global infrastructure of live online schools. Or Assetmap, an online platform that helps individuals discover and leverage resources directly from the community around them, using the methodology of Asset Based Community Development (ABCD). Max Marmer believes “One huge differentiator that sets these projects apart from almost all other organizations is their emphasis on ‘human potential’ or ‘social capital,’ rather than economic capital. The hope is that by creating a clearly defined space for these organizations to work in, there will be more opportunity to share this social capital, allowing them to achieve complimentary aspects of mutually shared visions. Their aspirations are tied to value creation, based on co-operative contribution, and will allow them to fulfill personal passions. Giving new meaning to their work, it’s helping people lead happier lives.”

Open conferences: Un-conferences are facilitated, face-to-face, participant-driven conferences centered on a specific theme or purpose. They are the antidote to the conventional conference format, radically disrupting the delineation between curator and attendees, speaker and audience. The attendees are the experts. Many organizations and groups have begun to use un-conferences to capture and externalize the full breadth of expertise assembled at conferences. Some conferences prefer to incorporate only some un-conference formats into their program – participant-driven sessions that are developed on site in real time.

Open conversations: Modernista did it. Skittles did it. And ad shop Crispin Porter + Bogusky did it. All of them use their corporate web sites as social hubs that curate what is being said about their brand rather than staging what their brand has to say. These efforts are attempts to at least co-opt the conversation on the Social Web before brand-specific aggregators could benefit from being parasites of the brand's social universe. In other words, what if a brand faced unexpected competition from a third-party site that provided a much more comprehensive and easier-to-access curation of Skittles conversations than the brand itself? Or if McDonalds suddenly saw itself confronted with a site aggregating blogs, videos, news, and tweets, all about but not by McDonalds? Think of this as the logical extension of the company profiles that already exist on LinkedIn and Glassdoor.com, which aggregate individual member data into a fairly transparent view of companies, including employee information, salary information, and recent news. Indeed, third-party brand curators might realize that brands live in the ‘social commons,’ and that whoever builds the right aggregation mechanism and establishes the most popular channels to reach a mass audience will “own” the branded conversation on the web. Take a look at how Get Satisfaction’s “community-empowered customer support” plays this – it is not an uncontroversial model, but it is “designed for the loss of control (of brands),” enabling customer-to-customer service. You could also spin the idea of a “social homepage” a bit further and not only curate the social web conversation about your brand but actually give away your whole homepage to third parties and to public service announcements, stories, or art. Give up control – gain social currency.

Open HR: Of all critical business functions, HR might be the one with the greatest potential for innovation. With dynamic, quickly accessible expertise replacing static piles of proprietary knowledge, and companies moving from organization-centric to network-centric modi operandi, HR becomes a key enabler of assets through the nurturing of relationships, developing talent, and fostering a culture of openness and participation. This is not just pep talk but includes new tools and methodologies that radically alter the relationship between employee and firm. A recent study by Birkman International that surveyed nearly 20,000 HR professionals found that 83 percent of respondents see great potential in social media-based HR solutions, particularly when it comes to improving communication, learning, and knowledge sharing. Here at frog design, we have launched frogForward, an open-ended, conversational, and social performance management app that allows our employees to provide 360-degree feedback any time throughout the year (not just during review cycles). Goal-setting is entered as a stream, and the feedback – peer, managerial, and employee feedback – can be shared openly or privately. This new approach reflects the changing realities of work performance, from a task-driven control and coordination approach with quantifiable goals to a holistic view that is more situation-and context-aware, gives the employee significantly more control of the process, and considers intangibles such as tacit knowledge, social intelligence, and relationship-building. frogForward shares this approach with Rypple, an ad-hoc social network that provides simple, direct, anonymous, and ongoing customer and employee feedback.

All of these initiatives, whether they apply to brand, CRM, product development, R&D, customer service, or HR, exhibit some similar characteristics:

- easy access;

- open platforms that harness the creativity and expertise from people outside of the organization or untapped sources inside;

- open-ended formats that can evolve as the problem statement changes;

- ample room for participation and emergent self-organization;

- easy mechanisms for tinkering and hacking (e.g. through open-source formats);

- small formats that can be easily shared

- strong incentives (ideally intrinsic motivation or social currency);

- real-time visibility (through sharable content);

- tie-ins to dormant or active social networks;

- and distributed decision-making.

Openness as permanent crisis

There is another aspect to this: The most imminent and urgent manifestation of “loss of control” is of course a crisis. And in times where terrorism, financial downturns, natural disasters, as well as catastrophic events on the individual level are a steady companion to our societies and personal lives, designing for crisis has become a default skill, forcing designers to make contingency planning an integral part of the experiences they create. Often, this means developing exit scenarios that are flexible enough to provide a structure for emergent solutions in response to emergencies. (The notion that architects design spaces so they can be escaped from has been thoroughly examined by Stephan Trueby in his book Exit-Architecture - Design Between War and Peace). In other words: an easy way out. And in. Because exits are entry points as well. If you design ways out of the system, they might as well serve as ways into the system.

If you think about it, this insight may provoke a different notion of openness – understanding it as a system where exit and entry are identical. In this line of thinking, an ecosystem on the Social Web could be seen as a system in permanent crisis – it is always in flux, and its composition and value are constantly threatened by a multitude of forces, from the inside and the outside. What if we understood “designing for the loss of control” as designing for structures that are in a permanent crisis? Crises are essentially disruptions that shock the system. They are deviations from routines, and the very variance that the advocates of planning and programs (the “Push” model) so despise. At their own peril, because they fail to realize that variance is the mother of all meaning; it is variance that challenges the status quo, pulls people and their passions towards you, and propels innovation. “Designing for the loss of control” means designing for variance.

One system in permanent crisis that contains a high level of variance is WikiLeaks. The most remarkable thing about the site appears to be the dichotomy between the uncompromised transparency it aims at and the radical secrecy it requires to do so. The same organization that depends on the loss of control for its content very much depends on a highly controlled environment to protect itself and keep operating effectively. But not just that: Ironically, secrecy is also a fundamental prerequisite for the appeal of WikiLeaks’ “there are no secrets” claim. Simply put: there is no light without darkness. And there is no WikiLeaks without secrets.

Applied to systems and solutions design, this means that total openness is the antidote to openness. When everything is open, nothing is open. In order to design openness, one of the first decisions designers have to make is therefore to determine what needs to remain closed. This is a strategic task: making negative choices for positive effects. You need to build enough variance into a system to make it “flow” and yet retain some control over the underlying parameters (access, boundaries, authorship, participants, agenda, process, conversation, collaboration, documentation, etc.). Only if you maintain the fundamental ability to at least manage (and modify) the conditions for openness, will you be able to create it. To design for the loss of control, control the parameters that enable it.

These are just some initial thoughts. What other formats and business models can you think of that “design for the loss of control” to everyone’s benefit and increased social value? What other variances can be created and effectively shaped? What design principles must be applied?

Over to you.

Meaning-Driven Brands

 

A List of Visionaries/Sensemakers/Disruptors/Game Changers/Contrarians

As the world slowly emerges from the economic gloom, and the “hyper-social real-time web” requires new organizational designs, it’s clear that business as usual will not be so usual anymore. Yet fundamental concerns remain, both for business leaders, who face the challenge of innovating in a hyper-transparent and always-on environment, and for consumers, who are increasingly searching for non-economic values amidst the shattered trust in business and the information overload. Smart companies recognize the historic opportunity to transform the way they do business and provide customers with more value-rich, sustainable, and meaningful products, services, and business models. From “un-entitlement” to “disruptive realism” to “for-profit activism” – here are some of the new paradigms that shape meaning-driven brands.

EMPATHY: GE

GE, which is widely known for its rigorous, metrics-based performance management, is changing course and shifting attention to social intelligence, empathy, and listening skills. The company is putting 1,000 managers through their paces to learn how to react to sometimes imperceptible signs of change. While this is not entirely new at GE or any other company, GE is striking a refreshing tone, admitting that: “We don’t have all the answers.” In A Whole New Mind – Moving from the Information Age to the Conceptual Age, Dan Pink wrote several years ago that “Creators and empathizers, pattern recognizers and meaning makers are holding the keys to the new empire,” and GE, humbled by the recession, is catching up with that insight. It emphasizes context over text, the Big Picture over details, listening over brand control and messaging discipline.

UN-ENTITLEMENT: Alibaba

Ma Yun, the president of Alibaba, the world's largest online B2B marketplace, requested that the 18 co-founders resign from current positions in the company and re-apply for jobs – a radical measure to reshape the company’s culture and administration in order to face new challenges in e-commerce after one decade of fast growth.

UN-MARKETING: Costco

The employees of large US retailer Costco are known to be incredibly loyal, which can be attributed to a host of exceptional programs and benefits to motivate them. It doesn’t hurt that Costco pays, on average, $17 an hour, which is 42 percent higher than the average hourly pay of its fiercest rival, Sam’s Club. And Costco's health plan makes those at many other retailers look Scroogeish. Costco’s CEO, James Sinegal, firmly believes that keeping employees satisfied and committed will result in profitability for the organization in the long run. With such a loyal employee base, Costco can maintain the luxury of relying only on word-of-mouth, not having a PR department, and striving to connect with its customers solely through the in-store experience.

RADICAL TRANSPARENCY: Dachis Group

On the Social Web, companies may soon need to share everything about their business, including complaints, profit margins on particular products, and even corporate strategies. In the spirit of Radical Transparency, companies could even make their live email correspondence public. An open and interactive email feed may propel knowledge sharing and collaboration, but also an ongoing conversation that customers, partners, and global media can join. A first step in this direction is the list of outbound emails (“ABC just sent an email to XYZ”) that the Dachis Group, a global social business consultancy, publishes on its web site. It draws the visitor into a stream of real-time events and provides a snapshot of the company’s social graph. This openness, not to mention the implied social references (in a sense, the email recipients vouch with their name), builds trust.

OPEN INNOVATION: Nike + Creative Commons, Best Buy

Nike is committed to developing products that use sustainable materials and are designed for easy disassembly. In its commitment to protecting the environment, the company is sharing its knowledge so other businesses can do the same. Nike has partnered with Creative Commons and Best Buy to support a shared vision of “creating a platform that promotes the creation and adoption of technologies that have the potential to solve important global or industry-wide sustainability challenges.” Together they have formed the GreenXchange. The project aims to develop strategies for using patents and know-how to facilitate and promote open innovation. In late October, 2009, Nike also entered a partnership with social innovation network PopTech as the first participant in the PopTech Labs to “foster open collaboration on key innovation challenges.” Each of the PopTech Labs will bring together a select group of leading scientific researchers, engineers, designers, corporate leaders, policymakers and other key stakeholders around a single topic of research in areas of vital importance to business, society, and the planet.

Best Buy‘s mantra is “the company as wiki.” The company is tapping into its 130,000 employees to market its brand rather than just relying on the marketing staff to do so. It is a great example of how a major company has redefined its attitude towards control and information.

NOWISM: Zara, TCHO, Zappos

Customers always want it faster, that’s not news. But the implications of the real-time web are more profound and affect the way organizations operate and adapt their business models to the new and ever-changing demands of immediacy. Zara, the Spanish clothing chain, uses customer feedback to develop new clothes, in near real-time. TCHO, the San Francisco-based chocolatier, relies on continuous flavor development and customer feedback to drive constantly evolving versions of its dark chocolate, with variations emerging as often as every 36 hours. Zappos, the online shoe retailer, successfully combines real-time customer service on Twitter with near-real-time product delivery.

GLOCALISM: FC Barcelona

FC Barcelona (“Barca”) was one of the first soccer clubs to be founded in Spain, and it became a haven for Catalan sentiment when Catalan self-government and culture were proscribed during Franco’s dictatorship. The club emerged as the playful manifesto of Catalonia’s spiritual independence, and since then, nowhere has soccer been more fundamental to the sense of identity than in Barcelona. It is ironic that a club rooted deeply in Catalan nationalism has such an international following. But Barca’s appeal is so global precisely because its roots are so local. Barca represents the Catalan people while at the same time creating a sense of belonging to “beauty and excellence.” The meaning of Barca transcends the boundaries of sports and nations, and embodies the universal values of sportsmanship and integrity. Barca is fully owned by its members, unlike most other big soccer clubs – which are either in the hands of large corporations or American (Manchester United) and Russian (FC Chelsea) billionaires – and the members possess significant voting power. Based on its spirit of independence, the club has always taken on broader social issues and played a pivotal role in promoting diversity, tolerance, and peace worldwide. Barca’s partnership with UNICEF is a statement of the club's continuing efforts to be at the forefront of solidarity projects with a global reach. Under the agreement, which bears the slogan “Barcelona, more than a club, a new global hope for vulnerable children,” Barca contributes to the financing of UNICEF humanitarian projects and endorses UNICEF on its shirts – it is the only major European team not to wear an advertisement.

COMMUNITY MARKETPLACE: Etsy

Etsy is an online marketplace for buying and selling all things handmade: clothing, music, furniture, software, jewelry, robots. Since launching in June, 2005, the company has experienced incredible growth with hundreds of thousands of sellers globally. A grassroots community has developed amongst its buyers and sellers, and Etsy facilitates these interactions. For example, Alchemy is a space on Etsy where members can post requests for custom handmade items, and sellers submit bids to create them. Etsy also helps bring its online community to real-world teams (organized by location or type of craft) for its sellers to connect and share ideas. Etsy’s mission is “to enable people to make a living making things, and to reconnect makers with buyers. Our vision is to build a new economy and present a better choice. Buy, Sell, and Live Handmade.”

CAN-DOISM: Coca-Cola

With its Expedition 206 campaign, Coca-Cola is tapping regular people to be their “Happiness Ambassadors” and travel the world throughout 2010, documenting their quests via blog posts, tweets, YouTube videos, TwitPics, and other social media tools. The goal of the campaign is to “find happiness” in 206 different countries that sell Coca-Cola products around the globe. The winning three-person team, selected out of numerous applications, began its journey on January 1, 2010 and is attempting to travel more than 150,000 miles in 365 days. On the way, the team will experience the Winter Olympics in Vancouver, the FIFA World Cup in South Africa, and the World Expo in Shanghai. The team’s duty is to engage with locals and uncover what makes them happy, openly document and share their experiences online, and complete tasks in each country as determined by online voters. The campaign connects the ambassadors, and by proxy, the global Coca-Cola customer base, with locals. Through immersion, it will generate empathy and understanding for local cultures. On the web, the campaign will “activate” a dormant network of Coke fans that will follow the ambassadors’ travels and connect with each other. By connecting people from different cultures, Coca-Cola offers a way of looking at the world and creates social wealth: better mutual understanding through enhanced intercultural knowledge.

ONLINE ACTIVISM: Pepsi Co.

For the first time in 23 years, Pepsi Co. decided not to run any advertisements during the Super Bowl in 2010. Instead, the nation’s second-biggest soft drink maker plowed marketing dollars into its Pepsi Refresh Project, an online community that allows Pepsi fans to list their public service projects, which could range from helping to feed people to teaching children to read. Visitors to the site can vote to determine which projects receive money. The program will pay at least $20 million for projects people create to "refresh" communities. Last year, Pepsi Co. spent $33 million advertising products such as Pepsi, Gatorade, and Cheetos during the Super Bowl, according to TNS Media Intelligence, $15 million of it on Pepsi alone. Ad time last year for the NFL championship game cost about $3 million for 30 seconds, on average. Pepsi Co. spokeswoman Nicole Bradley said Super Bowl ads don’t work with the company's future goals: "In 2010, each of our beverage brands has a strategy and marketing platform that will be less about a singular event and more about a movement."

RADICAL CROWDSOURCING: Victors & Spoils (V&S)

Two Crispin Porter + Bogusky alums have launched Victors & Spoils (V&S), “the world's first creative agency built on crowd-sourcing principle.” V&S says it will “provide businesses with a better way to solve their marketing, advertising and product-design problems by engaging the world’s most talented creatives.” V & S is eating its own dog food. The first line you notice on its web site (after the humble “Welcome to Victors & Spoils. Let’s Change an Industry”) is “Why does this site look so plain, Jane?” and the answer is: because the site design, the look and feel, and even the logo are being crowd-sourced. V&S received thousands of applications for crowdsourced projects in the first week after launch.

CREATIVE CONVERGENCE: British Airports Authority and Alain De Botton’s Heathrow Diary

The Swiss writer Alain De Botton was commissioned by the British Airports Authority (BAA) to spend a week in the middle of Heathrow’s bustling Terminal 5 and write about life at the airport. Dan Glover, creative director at Mischief, BAA’s PR agency, said that “If we funded a brochure that said how wonderful the airport was, people would switch off because they’d think they’re being marketed to.” Instead, he added, the Heathrow Diary campaign sought to stimulate “branded conversations” among travelers “through the experience of seeing a top literary figure at the airport — and potentially being a character in the book — and by receiving an exclusive copy to read on your travels. The overarching objective is to make a passenger’s time at Heathrow the best memory of the trip.”

PRESENCE THROUGH ABSENCE: Maison Martin Margiela, +/-0

Instead of crafting a story around its clothing line, Cult fashion brand Maison Martin Margiela (MMM) has remained swathed in anonymity throughout its 20-year history. Namesake designer Martin Margiela chose to remain out of the spotlight, and it was this invisibility that helped to develop the brand. MMM became a household name and its admirers, devout acolytes of the brand. This cult of impersonality spread through the aesthetic of the brand: Stores are never listed in phone books or identified with signage; staff at stores and at Margiela HQ wear standard white lab coats; white is also the ubiquitous color of all stores, MMM’s HQ, and the sheets that cover all in-store furniture and displays; packaging is monochrome and logo-free; models at MMM often appear on the runway with covered faces; seating is mostly first-come, first-served, avoiding the industry standard of seating hierarchy; and the company uses a first person plural response to all inquiries, emphasizing the collaborative, disciple-like consensus of their thoughts.

Japanese brand +/-0 strives to offer “only the things we need.” In response to a belief that many of the products found in the global marketplace are superfluous, +/-0 seeks to design necessities that last a lifetime. The firm has dedicated its business to creating things that “people feel they have truly wanted. Things that seemed like they already existed but didn’t.” These things enter the market without fanfare. The products are carefully designed so the fact that they are unseen makes them appear to have always been there: “Because these things ‘seem to have already existed,’ people feel comfortable with those things, even though they have never seen them before. It is the feeling of having seen the actual shapes of things that people have obscurely, or even unconsciously, felt they have wanted. That is why these things naturally ‘dissolve’ into people’s behavior and into the space around them.” +/-0 began in September, 2003 in Tokyo. The website launched in December of the same year with the quiet unveiling of the first collection by design director Naoto Fukasawa. Since then, the company has garnered widespread attention in the design world for its understated composition. Fukasawa’s personal philosophy is that he’s designing for the gaps, bringing to life a “shared sense” of what should be there.

DISRUPTIVE REALISM: UNICEF

Disruptive Realism is an expression presented in an everyday context that disrupts people’s perceptions about different things. The most prominent example to date has been Orson Welles’s War of the Worlds radio broadcast, which was meant as entertainment and commentary on how evolution had been twisted into Social Darwinism. Regardless of its intention, the broadcast caused mass hysteria. More recent examples include Banksy’s graffiti, Bruno Taylor’s work, which involves physical designs such as the swing set in the bus stop, or Reverse Graffiti artist’s Paul Curtis’ “Pictures by Cleaning.” Disruptive Realism was also used in a campaign conducted by UNICEF in Finland. Wanting to raise awareness of children’s rights, the “Be a Mom for a Moment” campaign placed unattended blue strollers with a crying baby audio track in crowded places in 14 cities. When passers-by looked in the strollers, they found a note with the message: “Thank you for caring, we hope there are more people like you. UNICEF – Be a mom for a moment.” The media and public reaction was overwhelming, with coverage in all major TV, radio, and web news.

FOR-PROFIT ACTIVISM: Virgance

The San Francisco-based venture fund Virgance aims to support social causes through multi-pronged campaign platforms that resemble the way Obama for America mobilized its supporters, and it typically consists of four core elements: A web-empowered network of volunteers, a presence on Facebook, a team of paid bloggers to promote the campaigns, and YouTube viral videos. Virgance is not the first for-profit-do-gooder of course; there have been plenty of others whose business models combine bottom line thinking with social value. But Virgance is more like Facebook Causes. It adopts the forces of amateur self-organization described in Clay Shirky’s Here Comes Everybody and builds its entire business on a social web platform, embracing the principles of open-sourcing, mass collaboration, and transparency: “If a for-profit company did the type of work that non-profits often do, but did it more efficiently, would people trust it the same way they trust non-profits?”

Lift10: Connected People

Describing itself as "a series of events built around a community of doers and thinkers who get together in Europe and Asia to explore the social consequences of new technologies," Lift is definitely one of the best conference networks out there. Laurent Haug, Lift founder and curator, is a wonderful host and has managed to maintain a strong sense of community despite continued growth. In addition to numerous satellite events with partners, Lift organizes conferences in France and Korea, as well as the annual Lift conference in Switzerland as its main hub.

Lift10 will take place from May 5-7, 2010 in Geneva and welcome 1,000 participants from 40 countries to "explore the most overlooked aspect of innovation: people. Known in the techno-parlance as users, consumers, clients, participants, prosumers, citizens or activists, people ultimately define the success of all technological and entrepreneurial projects. They adopt or refute, promote or demote; embrace, reject, or re-purpose. Their approaches are unique, influenced by cultural and generational diversity. A decade after the rebirth of user-centered design and innovation, it's time to explore the myths and uncover the reality behind the 'connected people.'"

Check out some of the Lift10 speakers that have already been confirmed.

The early-bird deadline just got extended to January 31 – you can register here.

Goodness on Twitter: From Attention-Sharing to Tweet Fund Drives to Good Mobs

Twitter’s “suggested users” list is a Who’s Who of Twitter celebrities, featuring the likes of Al Gore, Lance Armstrong, Ashton Kutcher, John McCain, Martha Stewart, and others with millions of followers. The New York Times claimed that a spot on the list would guarantee 500,000 additional followers and reported that social media guru Jason Calacanis had offered $250,000 to be listed.

Last Friday, Twitter did something remarkable. It added a number of well-known social entrepreneurs and innovators to this list, among them Social Edge, Skoll Foundation, Kiva, Matt Flannery (Kiva co-founder), Acumen Fund, Jacqueline Novogratz (Acumen Fund founder), charity: water, GOOD Magazine, Kjerstin Erickson (FORGE founder), and Room to Read. Not knowing what was going on, Kiva’s Flannery thought there was a spam attack and complained about the 500 new users a minute he was getting. But not for long.

Twitter’s move is huge, not only because it propels social entrepreneurs to enter mainstream but also because the micro-blogging service – THE trading floor for attention on the web – has decided to give away some of the attention it attracts to promote good causes. Consider it the New Socialism: a redistribution of attention, not of material wealth. What’s even more remarkable is the reaction of one of the benefitting organizations, Social Edge, which immediately sent out a message to all its new users pointing them to a list of 100 other social entrepreneurs and innovators on Twitter. Give more than you take: that’s the power of meaningful marketing and exactly the kind of giving that makes companies thrive in the ‘share economy.' Good creates more good.

There are other, even more immediate ways in which Twitter can be used for doing good. My colleague Jacob Zukerman proposed it the other day, and I found the concept instantly compelling: instant social action, enabled by Twitter. Tweet Mobs for collective action. The idea is simple: Convert all the attention on Twitter into real-world action – in real-time. With some twitter users attracting more than a million followers, their social influence is significant – why not use it for social good, especially when you can “eventize” it by creating artificially scarce moments of real-time public collaboration?

The link between tweet and deed is not new on Twitter and exists in various formats (Mashable has provided a great overview): Cause-related fundraising (Tweet fund drives) via Twitter has been made popular by Twestival, Tweetsgiving,12for12k, Tweetathon, and others. An alternate concept is Twollars, a Twitter-based currency with no hard money value that allows users to pledge money to charity using Twitter. Describing itself as “a currency of appreciation for Twitter,” it effectively connects micro-payments with micro-blogging. (Speaking of currencies, PollyTrade links Twitter accounts to E*Trade account and allows brokers to trade stock via Twitter.) And there are Tweet-Ups – offline events initiated and organized via Twitter – but in this case, too, the tweet and the deed are asynchronous. Carrotmob, a congenial social media platform for social activism, uses Twitter, but it still requires a moment of translation as well: good will and a commitment to a cause can be immediately “socialized,” however, the output – the action – still occurs via intermediary.

All these formats do not convert instantly into offline action in the way Flash Mobs do. What if followers not only follow but do (in the best “Here Comes Everybody” style)? What if Blog Action Day became Twitter Action Minute? These Twitter Mobs or Smart Tweets would capitalize on the unique combination of peer pressure, presence, location-based eventization, and of course, sheer reach. The train wreck Sarah Lacy-Mark Zuckerberg interview at SXSW 2008 was a negative example of live-mobbing on Twitter, a disaster unfolding in real-time, amplified through the synchronous meta-conversation on Twitter. The #CNNfail campaign in response to CNN’s deficient coverage of the Iranian election, was another one. The enormous power of these real-time conversations is frightening, but it is also promising. The more optimistic equation goes like this: Attention = social capital = social action. What if a group of Twitter followers all picked up one piece of garbage from the street? What if they all gave food to a homeless person? What if they exchanged money, products, hugged a stranger, etc.? And so on. It’d be a real-time, real-world transaction that would be as swift as the transactions taking place at breathtaking pace every second in the highly virtual realm of international finance. A smart attention-to-action cascade. A Good Mob.

Maybe a fantasy – but a good one.

[image credit: Maple and Leek]

SOCAP09 (Social Capital Markets) Conference Brings Together Social Innovators from Government and Business

The Social Capital Markets (SOCAP) Conference, a landmark gathering of top business and government leaders creating market-based solutions for social impact, is taking place September 1-3, at San Francisco’s Fort Mason Center.

SOCAP brings together a unique mix of the world’s leading social innovators – traditional investors, impact investors, social entrepreneurs, philanthropists, new media, NGO’s and non-profits, wealth managers, development agencies, venture capitalists, MBA students and other groups interested in the growing opportunities of social capital — who are catalysts of change across the globe.

Last year’s conference gathered more than 650 leading global investors and entrepreneurs from 26 countries. This year’s conference from September 1-3 in San Francisco is sold out again and features speakers from the Skoll Foundation, Participant Productions, Food Inc, GRITtv, LINKtv, Invisible Children, Global Giving, the World Economic Forum, Virgance, Kiva, Change.org, Ushahidi, McKinsey, The Economist, and many others. The opening keynote will be given by Sonal Shah, Director of the White House Office for Social Innovation.

“SOCAP09 is the premier event that puts the flow of capital to social good into a context,” says Founder Kevin Jones. “In these turbulent times, social innovators in the public and private sectors, from foundations to social venture funds to development agencies to grassroots Web 2.0 activists, are working together to build a new economic foundation for the world. With our expert speakers, high-impact sessions and exciting networking events, SOCAP09 is an essential gathering for anyone interested in the burgeoning field of social capital.”

I will be there, too, and report. You can also follow the conference online via:

SOCAP09 Blog

Twitter: @socap09,#socap09

Vote for the INDEX: 2009 People's Choice Award

To help expand the global conversation about design to improve life, INDEX:, a global non-profit network organization based in Copenhagen, is partnering with Facebook to promote the online voting for the INDEX: 2009 People's Choice Award and enable an online discussion during the live stream of the awards show on 28 August.

Worldwide voting began online on 20 August through www.designtoimprovelife.dk, and on-site in the Danish capital on 21 August. During the People's Choice competition, everyone can vote for their own personal INDEX: favorite to win the People’s Choice Award. On 28 August at 18:00 GMT, INDEX: will be using Facebook technologies to let visitors watch the awards show on a live stream from the Danish National Broadcasting Center. Remote viewers will also be able to chat with their friends on Facebook while watching the award ceremony.

The winner of the People's Choice Award will be announced at the INDEX: Award Ceremony on 28 August, along with the juried winners of the INDEX:Award 2009. The winner of the People's Choice Award 2009 will receive "The Egg," a chair designed by famous Danish designer Arne Jacobsen in 1958 for the Radisson SAS hotel in Copenhagen. All 69 design finalists will be on public view at the INDEX: Award Exhibition, as well as on the INDEX: website.

Among the INDEX: finalists and candidates for the People’s Choice Award is frog design’s Project Masiluleke – a HIV Self-Test Kit that combines existing, low-cost diagnostic technologies with mobile support services.

To make your vote, visit: www.designtoimprovelife.dk