Steve Barth is an associate of Dave Snowden’s Cynefin Centre for Organizational Complexity, and that by itself qualified him as an interesting guy to talk to at the KMWorld & Intranets conference in San Jose. As soon as I heard him cite the John Gray statistic about the 16 million bits of information our bodies process every second, of which only 18 bits is conscious, I knew I’d found a kindred spirit. His presentation was about Collaborative Learning and Games, and was brilliant. It is the first presentation I’ve seen in a long time where the audience was so engrossed in the subject that they spoke more than the speaker. Some of the ideas that emerged from the presentation:

• Millions of people voluntarily spend 20 hours per week or more playing multiplayer online games that are essentially complex collaborative role-playing activities. In doing this they do many of the same things that are essential to effective business collaboration: set goals, select roles, identify appropriate teammates, accumulate capabilities (i.e. learn) and experience, and engage in strategic social interaction. So why is it so hard to cajole employees, when they are paid to do these things, to do them as enthusiastically and with as much engagement as gamers do them for free?
• Some of these games are excellent models for complex systems in real life: They entail people acting in multiple identities (avatars) responding to attractors and barriers. Because they involve real-time, emotional decisions of real people, they are much richer and more complex than computer simulations that process only a finite number of variables. 
• As players and games grow in sophistication, they start to become prone to some of the same unethical behaviours that occur in real life. For example, some players have started using eBay to buy and sell (a) real estate and other resources in these virtual spaces, outside the constraints of the game, and (b) experience and reputation, by hiring students to create a new game character, develop him or her in the game until the character is well established, and then turn the character over to the buyer. Real money therefore starts to create an unlevel playing field in virtual space, in effect corrupting the game. There have also been some physical acts of violence between players as a real-world extension of conflicts of their avatars.
• Other complex real-world behaviours are starting to emerge in these virtual worlds. For example, in one game a group of characters unhappy with the constraints placed by the game-makers on their character type formed an online ‘character union’ and held a mass demonstration with their characters in the virtual world. How much can we learn about social action by watching different groups, cultures, age-groups, gender differences and personality types act out scenarios in surprisingly sophisticated and ‘realistic’ environments and situations?
• An economist used a game persona to gather sufficient information to compute an exchange rate for the game’s virtual currency in real dollars, and a GDP per capita for the entire game environment. Because this information was gathered anthropologically (by having the economist’s ‘attractive’ character observe and interview other characters) rather than analytically, are such economic determinations perhaps more accurate than ‘real world’ economic measurements, and what learnings could we apply to improve the latter?
• Some audience members volunteered these reasons why people love playing these games: (a) to become a member of an interesting group, (b) to meet new like-minded people, (c) to find an outlet for stifled creativity, (d) to step outside one’s normal personal identity and ‘try on’ a new one, (e) to master a challenge, (f) to do things anonymously they wouldn’t dare do in real life, (g) to establish a personal reputation and hence increase self-esteem. How many of these things do business collaborations allow employees to do, and how could collaborations start offering more of these attractors?
• A training officer in the audience identified three reasons business learning isn’t as engaging as learning in role-playing games: (a) you can’t come and go in the learning environment whenever it suits you, (b) business learning, unlike some games, is non-addictive, and (c) business learning is much less visually interesting than learning in games. I would be tempted to add (d) business learning is often context poor while learning in games is always in context.

I took another look at the chart I put together from my previous post contrasting complicated world and complex world qualities:

and I began to realize that ‘real-world’ business is rooted in complicated world behaviours, precepts and constructs (left side of this chart), while ‘virtual-world’ gaming is rooted in complex world behaviours, precepts and constructs (right side of this chart). Not only is the stuff on the right-hand side of the chart more interesting than that on the left, it is more real.
Some of the people in the audience couldn’t quite ‘grok’ what Steve was getting at. They kept wanting him to do the lateral thinking for them, and answer the question how business could make its collaborative, innovation and learning activities as engaging as those of video games. Some also thought Steve was advocating the use of games in business, to make learning more fun, or that he was simply advocating the use of game theory and software to run business simulations. His real point is he wants business to be the game that everyone wants to play.

Steve spent a fair bit of time hanging around with the team at Coemergence, a Canadian software company headed up by New York ex-pat Michael Chender, and in addition to Michael I had the chance to meet with Richard Marrs, Nadine Tanner and several other members of the team. I’m planning on reviewing their product, but I was profoundly impressed by the team, and wondered aloud why it is that so many very bright, creative, multi-talented and well-read people have found their niche in technology companies. Michael, for example, is a Buddhist, meditation instructor, and the Chair of the Shambala Institute, a leadership training organization that is focused on awareness, complexity, capacity, learning, innovation and community. In my discussion with Michael, I lamented that most business activities were not nearly as interesting as the discussions and idea play that has been occurring in the intersections and gaps of this remarkable conference. His answer was that we should not worry about most business being dull, and recognize that these special discussions and creative play are their own reward, and that is all the reason needed to have them — and that what was important was making room for more people to participate in these activities which, while perhaps not terribly relevant to the participants’ day jobs, nevertheless enrich, motivate, refresh and stretch us.

Another interesting presentation was by Peter Gloor of MIT/Sloan, who talked about the way in which organizations can interleaf (a) innovation networks (people who share an organizational vision or objective), (b) collaboration networks (people who share tasks, learning and capability), and (c) communication networks (people who share interests and news), in such a way that they reinforce and build on each other. He presented this intriguing map of the roles people play in business’ social networks, based on the frequency of their contributions to the network, and whether they send more messages than they receive or vice versa (note that we may play different roles in different networks, and our role in each network can evolve):

I have said before that the more organizations I study, the more I see knowledge management and technology as the ghetto for organizations’ brightest, most creative and collaborative people. This conference has shown that when you let those people out of the ghetto and get them together to party, the result is magic.

The best part of my visit to San Jose has been, perhaps not surprisingly, the social networking between the KMWorld & Intranets presentations on social networking. To any conference attendees visiting How to Save the World for the first time: Welcome! Some highlights of the presentations:

Tom Davenport described some research he’s done with Rob Cross on the social networks of identified high performers in organizations. Relative to other people in their companies, these high performers:

• Have larger, deeper social networks
• Have more people from outside their organization in their networks
• Are more sought out for advice and information
• Are more aware of who to go to and where to go to get critical information
• Have more new (to the organization) people in their networks
• Invest significantly more time in their networks

Nothing remarkable in this, perhaps, but interesting. Think about the people in your organization or network who you think are most effective — do they fit this profile? Will social network mapping ‘out’ the ‘leaders’ who surround themselves with a small (often sycophantic) cadre of advisors as the ineffective, out of touch, isolated organizational weak links they really are?

Ross Mayfield of Socialtext and Many 2 Many fame had lots to say about wikis, of course, but also made some awesome comments about how social networking disrupts many ‘political’ aspects of business and society and ushers in Extreme Democracy:

• Wikis can evolve to be more than just collaborative content aggregation tools; they can be platforms for collective knowledge that could replace entire corporate Intranets (Dresdner Bank is already doing this), and also replace e-mail (other than one-to-one messages) and most ‘managed’ collaboration ‘spaces’.
• Wikis are becoming a lot less intimidating with the addition of WYSIWYG entry screens that eliminate the need to learn those unintuitive formatting codes.
• The biggest cultural barrier to wikis is also their greatest potential value and power — they engender shared trust and shared responsibility by offering participants unrestricted collective ownership of all content; the space and the collective knowledge in it belongs to ‘us’ (the participants, jointly) not to ‘them’ (the company).
• Today, over half of the US GDP consists of transaction (clerical, management and administrative) costs — i.e. ‘non-productive’ costs that are passed along to the ultimate consumer and which, in a ‘perfect’ market economy, would be zero; eliminating hierarchical, ‘managerial’ and paper-shuffling non-value-added work could therefore more than double productivity and halve cost, and in the process would massively shift organizational power and authority to the front lines (and eliminate a ton of expensive, overpaid executive jobs).
• Clay Shirky has said“Process is an embedded reaction to prior stupidity.” In a world where every situation is different and everyone knows their own job better than their boss does, process is simply a dysfunctional imposition to try (fruitlessly) to prevent recurrence of a specific human error. A perfect example of this is 90% of the ever-changing and seemingly arbitrary processes in what is laughably called ‘airport security’ (this week I’ve discovered that they’ve decided allowing cell phones turned on within 100 feet of customs booths is a security risk, but on some domestic flights they’ve stopped asking for picture ID). Clay and Ross assert that wikis and similar ‘democratic’ social software tools promise the end of process in business. And eliminating the need for process also eliminates the need for most management. It is replaced by collective self-management.
• The value of information is in its currency and movement. “Word and .pdf format is where information goes to die”.
• The standard for good social software is: Social, Simple, Open. Not: Powerful, Multi-Featured, Sophisticated, Integrated, or even Secure. 
• As the cost of forming a group using social software nears zero, under-represented groups in society and business will start using such software to find, articulate and aggregate their voice, and agitate to rectify their under-representation until that voice is heard.
• What is holding back simple, open, social software from becoming an extremely powerful, democratic social, political and business tool is the digital divide.

Ross agreed with me that the biggest drawback with wikis today is difficulty of navigation. I told Ross that wikis need “a map that shows you where you are”. I have a half-formed idea that there is a great opportunity to allow the sections and pages of wikis to be generated and indexed visually by mindmaps. The mindmap could serve as a cognitive representation of the entire landscape of the wiki, so it could be used not only to spontaneously and collectively create the organizational framework of the wiki, but to visualize and navigate that framework as well.

Ross co-presented with Jim Bair, who I also had the chance to talk with at length. Jim described IBM’s prediction that we will soon see software that will allow people to more powerfully browse and organize blog content, both of single users and of multiple users as a collective repository. Think of the entire blogosphere as a single large collective knowledge repository that you can reorganize, filter and index according to your own way of looking at that content, or as a giant conversation that you can re-thread in a way that is most coherent and meaningful to you.

I had the pleasure of having dinner with Dave Davison, who has been a consistent champion of my AHA! per project. We shared some interesting ideas about the project that you’ll see on these pages soon.

This has been, for me, an outstanding conference. Wish you were here.

The slides for my Tuesday presentation on Social Networking are here, and those for my Wednesday (today’s) presentation on Personal Knowledge Management are here.

I’ve been advising clients and prospective new businesses how to document and evaluate their business model for years, and in my experience there are three types of business models, that organizations look at in sequence:

1. Viability Model: How the idea/project/plan/business will make money, and with which partners. In some cases it is actually about How the idea/project/plan/business will fill an untapped need, and with which partners. Such a model outlines the research that will be done to ensure the value proposition is compelling (i.e. customers want and are prepared to pay for it), that the business has, or can acquire, the competencies and resources needed to deliver it, and that it makes strategic sense for the organization (e.g. it’s consistent with their mission and values and does not cannibalize existing business). This model culminates in a go/no go decision.
2. Formation Model: How the idea/project/plan/business will be set up. This model is focused on capital and infrastructure that must be in place before operations can begin: human capital (what people will be involved in what roles), intellectual capital (what knowledge, technology and know-how must be put in place), physical capital (what premises, equipment and supplies will be needed prior to start-up), financial capital (start-up money, and where it will come from), and social capital (organization, alliances and relationships that will drive it). This model culminates in a launch.
3. Operating Model: How the idea/project/plan/business will operate. This model describes the ongoing activities of the organization or project — what megaprocesses it will entail (e.g. R&D, purchasing, sales & marketing, manufacturing, distribution, service, back office support, and management decision making), what budgets and other resources it will require and use, and what roles will be played by who.

This sequence of models can apply to anything from a simple marketing program to the launch of an entirely new business.

It’s been my experience that most businesses put insufficient work into the viability assessment, the wrong kind of thinking into the business formation decisions, and too much emphasis on the details of the operating model, and hence on ‘micromanaging’ the operations to ensure they conform to the operating plan.

The reason for insufficient work on viability assessment is that it’s tedious, and the people who are championing the idea have already concluded that it’s viable. That’s why in Natural Enterprise I encourage an almost excruciating amount of attention and research on viability up front, tough, shoe-leather-wearing work with potential customers, suppliers and partners until you know that it fits a need, that you have the competencies to fill that need, and that you have some competitive advantage in doing so.

If that time and effort is invested, the whole approach to business formation changes. The people and partners who will play the key roles will already be onside and will have essentially self-selected to play those roles. Much of the start-up capital may come in the form of advances from customers who have already indicated an interest in the product or service, and who have been active partners in its design. The total amount of capital will be less, capital needs will be rather obvious, and may be already forthcoming, if the viability assessment has been done well first.

At this point, I think, trust takes over. You have the right people in the right places. They know what they have to do and how to do it. They’re motivated, and focused on the customer. Why do you need an elaborate operating model at this stage? Not only will it be telling people what they already know, it will be getting in the way of them doing their job effectively, by imposing the inevitable standards, paperwork, and approvals procedures. And worst of all, it will discourage improvisational thinking and continuous sustaining and disruptive innovation, and will be contributing to what David Ehrenfeld calls “a society managed to death”.
So the business models I have helped develop have been heavy on the Viability phase, creative in the Formation phase, and light on the Operating phase. The hardest part is telling entrepreneurs, before they’ve laid out a penny but after they’ve invested a lot of sweat equity, that the Viability assessment indicates they don’t have a sound business model. More often than not, that’s the right message, and failure to heed it is the main reason for the staggering failure rate of entrepreneurial enterprises.

But giving them that message at the outset is a lot easier than telling them, after spending years of effort trying to make a flawed business model work, and investing their life savings in it, that they should pull the plug.

[I'm in San Jose at the KMWorld & Intranets conference, and for the next two days I'll be blogging about what I think are the highlights of the conference, and also including my own (two) presentations, on Social Networking and Personal Knowledge Management.]

Creativity Inc outlines creativity practices that entail learning new competencies, establishing a facilitating environment, and offering creativity programs. The keys to creativity, its authors say, are intrinsic motivation, curiosity, making and breaking connections, and honest idea evaluation.

Bengt explains his cycle, diagrammed above, as follows:

• Draw Inspiration: You are challenged and/or inspired by something.
• Exercise Personal Courage: The healthy tension between curiosity (opportunity) and fear (risk), when appropriately encouraged and reinforced by healthy sense of self-esteem, drives you to explore the opportunities.
• Break Connections: You break the existing connections in your synapses to free your mind (using TRIZ, lateral thinking, meditation and other techniques) from established, limiting patterns.
• Open Yourself: You stay in limbo, i.e. with a completely open mind, and draw on input from outside sources, especially those that intersect and synthesize multiple disciplines, and add your own internal sensory, integrative and inductive inputs.
• Create New Connections: You draw on a balance of intuition, emotional intelligence and rational intellect to choose and make new and better connections to convert ideas into opportunities. These opportunities then drive the innovation process.
• Feel the Reward: The creative process is its own intrinsic reward, a much stronger motivator for more creative effort than externally-offered rewards. The joy you receive from the creative process strengthens your self-value and self-esteem and provokes even more creativity.

Not coincidentally, there is a lot of the ‘suspending’ and ‘letting go’ elements of the Presence model in Bengt’s model. This is a personal creative process. Now let’s put it together with the organizational  creative and innovation process we developed for AHA!:

So, to reiterate Bengt’s personal creativity cycle, we, as individuals, (1) draw inspiration, (2) exercise personal courage, (3) break connections, (4) open ourselves to input from without and within, (5) draw on intuition, emotional intelligence and rational intellect to create new connections, and (6) feel the reward — the joy that this creative process gives us (outer circles of this chart). 

Creative organizations invite us to apply this creative process to organizational creative and innovative tasks. In organizational creative work, we collectively (a) learn, (b) listen/observe, (c) explore, (d) understand, (e) organize, (f) imagine, (g) reach out, and (h) brainstorm (leftmost 8 boxes of the inner circle of this chart). In organizational innovation work, we collectively (i) canvass the ‘crowd’ for confirmation that our ideas meet a genuine need, (j) design, (k) experiment, (l) question/challenge, and (m) realize the idea into a successful offering (rightmost 5 boxes of inner circle of this chart). All six elements of individual creativity in Bengt’s model are applied in all 13 aspects of the organizational creative and innovation process.

These are both cycles, and ideas and actions pass through their intersections and give them momentum dynamically, much as electrons are exchanged in chemical reactions. For example, you might be reading about a new type of plastic that dissolves inertly in water, and later about the problems with sorting and recycling of packaging materials (individual creativity cycle step 4). You connect the two learnings together (step 5), and get excited about the possibilities (step 6). You are inspired (step 1) to invent a packaging material that can safely be washed down the sink. You overcome the fear of being thought foolish for such a radical idea, the fear that someone has probably already patented it, the fear that nothing plastic can really ever be harmless to the environment (step 2), and are propelled by your courage to start thinking boldly about the possible applications of such a technology in all kinds of packaging (step 3).

At any point in this personal cycle, you may be drawn into, or create, an organizational group that can explore this idea and do what needs to be done to bring it to fruition. It might start with learning from a business colleague more about plastics, and sharing what you know so far (step a), or a casual brainstorming with trusted colleagues over lunch (step h). Someone in the organization may hear about your exploration and authorize a group to explore it (step b), or to design a prototype (step j & k). The personal creative cycle can thus intersect with and be propelled by the organizational creative and innovation cycle at almost any point, and vice versa.

Some of the articles I have been reading lately (notably this one by innovation guru Michael Schrage suggest that there may be three more steps in the innovation cycle between (i) canvass and (j) design:

• champion — do whatever needs to be done to inform and persuade people in the organization that the idea makes sense, and overcome resistance to it
• obtain sponsorship — find the person or people in the organization needed to get the project approved, and persuade them of its value
• obtain resources — identify and get approval for the time of various people in the organization, the money and other resources needed to implement the idea

That would increase to 16 the number of steps in the group/organizational cycle. I welcome comments from readers on this revision to our model, and how to integrate it with Bengt’s in a graphic way that is not overwhelming to understand.

Why is there so little innovation in most organizations today, when there is so much creative talent and so many ideas and so much information floating around? My hypothesis:

Organizations are not stupid. They have achieved success by effectively meeting customers’ needs. They are not motivated to change what they’re doing until something averse happens — dropping revenues due to a competitor’s disruptive innovation or a dramatic change in the economy, buying criteria or demographics. Too often, by the time this happens it is too late.

Successful organizations should be anticipating such averse events and bringing either sustaining innovations or disruptive innovations of their own to preempt such events. They should be putting in place an environment that encourages their employees and others (including customers) to apply their personal creative skills to help in that effort. And they should trust their employees and customers to be a vital force in the organization’s innovation efforts, and put in place programs to demonstrate that trust and tap that creative talent.

Failure to do so represents not only a squandered opportunity and a waste of talent, but also guarantees that most of your employees will be bored, disengaged and disinterested in the organization’s success beyond their own personal interest, and likewise guarantees a largely indifferent and unloyal customer base.

Business & Innovation

The Key to Innovation is Overcoming Resistance: Michael Schrage in CIO Magazine says innovators need the political smarts and persuasive skill to get their good ideas sponsored, funded and implemented. Thanks to Mitch Ditkoff at IdeaChampions for the link.

Bioteaming: Collaborating Like Nature: Ken Thompson’s blog and his new Manifesto with Robin Good explain how much we can learn about collaboration from watching dolphins and other species.

When Business Knows Too Much About You: A hilarious but slightly spooky  video spoof of how information-sharing gone haywire could imperil your privacy and dignity.

Canadian Businesses That Do Good: Both DownBound in Toronto and Ethiquette in Montreal allow Canadians (and others) to find and buy from socially and environmentally responsible companies. And Dale Asberry points out Etsy — a broker that proposes to connect such business around the world.

Design a New Wine Bottle and Win a Prize: Hugh Macleod has a contest to design a new bottle and label for his favourite wines from Stormhoek. Contest rules here, ideas to date (including mine) here.

Yahoo Online Think Tank: Yahoo Australia is sponsoring a think tank that will allow those looking for ideas, and those that have them, to brainstorm together — 5 minutes per session. You can see the results on a live webcam.

Environment

Carnival of the Green: City Hippy hosts a new eco-blog post carnival this week, with a wide range of posts on environmental matters including my Boycott List (BTW, City Hippy made me a copy of the Boycott List in .pdf format; e-mail me if you’d like a copy).

Bill McKibben Waxes Optimistic About the End of Oil: Environmentalist McKibben (The End of Nature, Maybe One) says expensive oil will benefit local businesses over global ones, and contribute to community self-sufficiency — but only if we start working on improving community-based infrastructure to improve autonomy and introduce local currencies to enable the shift.

Science & Health

New Power Source That’s Too Good to Be True: The Guardian reports on a scientist’s claim to have invented a cheap, limitless, clean source of energy., that defies the rules of quantum mechanics. Pardon my skepticism. Thanks to Jeff Gold of the Green Party for the link.

Meditation is Good for Your Brain: Science Daily reports on a multi-university study that indicates that meditation improves your brain’s ability to process sensory inputs, ideas and emotions. Thanks to Kalanga Joffres for the link.

Social Justice

Tracking Business’ Charitable Giving: WhyCharity is an Open Source project to create a mechanism to monitor and report corporate charitable giving, giving consumers one more indication of corporate social responsibility.

Helping the Rich Loan Interest-Free to the Poor: Kiva provides a list of community business projects in struggling nations that need low-cost loans, and provides an ongoing log of how these businesses are doing, so you can see how your investment is doing. Thanks to Lavonne at BornFamous for the link.

Cartoon by Leo Cullum from The New Yorker — his framed cartoons can be bought here.

And she quotes Gay Talese as saying that his interviews with people are initially quite meaningless, until he has observed them for awhile. So to some extent, he says, interviewing people who speak a different language is no harder than interviewing those who speak your own. Most of the meaning is picked up in the observation, and most of the journalist’s value is in reporting what was observed, not what was said.

This, of course, is Cultural Anthropology 101. From the point of view of a business, the key to disruptive innovation is social insight. The minute you discover something important about your customers that no one else has picked up on, and that perhaps the customers themselves have not articulated, your competitors should be very, very afraid.

I see this in my observations in nature as well. The squirrels learned how to defeat my baffles through one part trial-and-error, one part creative thinking, and one part observing, paying attention to every aspect of the challenge at hand. The ritual circular sniffing of dogs when they meet is merely an introduction to a profound process of mutually paying attention. I sometimes think our language is to some extent a distraction from paying attention, or even an excuse for not paying attention to people we are in the company of. Contrast that with the behaviours of new lovers, who are observing and paying attention to each other to an almost excruciating degree. They pick up, and even neutral observers nearby pick up, non-verbal signals and nuances of communication as subtle as the dilation of the pupils and the rhythm of breathing, the more complex rise and fall of voice and the non-verbal gurgles and trills between words — expressions rarely apparent in ‘normal’ human spoken conversation because there’s no point in them if no one is paying attention.

I believe instinctively that all animal communications are that rich and that subtle, because they are so much better at paying attention than we are. They must perceive us as unbelievably insensitive, almost unconscious by comparison. Yet we call them ‘dumb’ animals.

I recently wrote something that I think (immodestly) is quite profound in Jane Crow Journal where there was some light-hearted discussion of what women (and men) really want. I said:

It’s really all about attention, and paying attention. The attention we pay to others, and that others pay to us, defines us, far more than our appearance or our name. And how can we appreciate what someone (a life partner, a business partner, a customer, an employee, a friend, a foe) is about and has to offer unless and until we pay attention to her, really listen and observe with (as much as is humanly possible) no judgement, no personal filters or frames impeding. And once weve paid enough attention that we really understand that person (or for that matter, that creature of any species), how can we not appreciate her?

That’s the simplest explanation I can provide for how we have lost touch with nature, and why we see the environment as ‘other’ and fail to appreciate its immense importance. We have lost the ability to pay attention to it, as language and other blunter tools of learning and appreciation have replaced observation and paying attention in human behaviour. And when we no longer appreciate it, we are content to allow it to be destroyed, until one day we can’t observe and appreciate it anymore. “Oh it always seems to be, we don’t what we’ve got ’til its gone”, as Joni Mitchell put it.

Things are the way they are for a reason. Watch, listen, observe, pay attention, and you will know that reason. Most genius, most innovation, most emotion, I am convinced, stems from this ‘first-hand’ knowledge.

This is the skill, more than any other, that I need to learn.

Photo from the Ontario SPCA.