Business Meets Social Networks

While their use is still largely limited to less-than-critical purposes, online social networking services are becoming more popular each day. Dating, hobby-related hookups, and party announcements are some of the many trivial pursuits people seek on Web sites like Friendster, MySpace, and Tribe.net.  But there is growing evidence to support claims that some social networking services (SNS for short) can be a powerful professional ally to businesses — in particular, independent entrepreneurs and smaller companies, for whom each new personal connection is a significant business building block. LinkedIn and ZeroDegrees are two of the more popular services that facilitate business-oriented connections, and some argue these and similar sites are now doing a better job at connectivity than ever before. Remember Metcalfe's Law — coined by the inventor of Ethernet — which states that the power of a network grows in proportion to the square of the number of its nodes? That's a geeky way of saying that networking technologies nobody uses are of limited value. As the popularity of SNS sites grows, so does their value, because a larger number of users mean better odds for productive connections. These tools for networking are going to increasingly become a part of mainstream business and will be used as an important tool to identify and interact with prospects and partners, fueling the business revolution. See Forbes new social network site. 

How We Live & How We Eat - The Revolution in Global Food Production

In a recent CNN Report, “Food Crisis, a Silent Tsunami” , Josette Sheeran, executive director of the United Nations' World Food Program, claims bio-fuel promotion is unintentionally adding to skyrocketing world food prices and threatening to “ plunge more than 100 million people on every continent into hunger." Sheeran attended a Food summit hosted by British Prime Minister Gordon Brown, aimed at determining ways to boost food supplies and identify deterrents as commodity inflation of the past year is contributing to increasing consumer food prices and a food crisis in unindustrialized countries. Yet the debate between fuel or food is really misplaced. As my friend Phillip Mills pointed out to me some time ago during the publishing of his and his better half's book "Fighting Globesity" Our method of industrial food production is at its roots inefficient, inextricably tied to fossil fuels as a base for its production and that is the real problem and basis of the challenge. How sad more people do not realize how untenable the unsustainable nature of the human food supply chain is.

The views expressed by an increasing number of well meaning educated people, like Sheehan, are an example of how broken the global and industrial food system is and illustrates the lack of understanding surrounding it.  The method of industrial global crop production is unsustainable; therefore to incorporate the debate of rising cost of food with bio-fuel competition is akin to worrying about how the furniture on the deck of the Titanic is arranged. The global food system is very inefficient and dysfunctional. How we are processing energy for human consumption is vastly problematic and is why we are experiencing both large jumps in fossil fuel costs and food commodities at the same time. The reality is we use vast amounts of fossil fuels to grow soy, corn and wheat - the core components of the global industrial food system. Wether we use those crops to feed people or alternatively to grow "bio-fuel" is irrelevant in the long view simply because the manner in which global grop production is occuring is so damn inefficient.

As Pollan points out in his book The Omnivore’s Dilemma,   “when you add together the natural gas in the fertilizer to the fossil fuels it takes to make the pesticides, drive the tractors, and harvest, dry and transport the corn, you find that every bushel of industrial corn requires the equivalent of between a quarter and a third of a gallon of oil to grow – or around fifty gallons of oil per acre of corn.” Simply put it takes more than a calorie of fossil fuel energy to produce a calorie of food. That is the real problem, which people like Sheeran, among others, fail to grasp. Even the surge in "organic" foods does not help - it costs over 70 calories of fuel to transport 1 calorie of organic lettuce from California to the central U.S. This does not even begin to address other side effects of our food system - the permeation of corn and its contribution to obesity and the adverse consequences of industrial farming to the environment are but a few of many other ill affects. As the world becomes more industrialized and developed the reality of the unsustainable nature of the system is exacerabted.

How can this change?  How can we help avoid the situation where the industrialized world is becoming increasingly obese while one child is dying every five seconds from hunger-related causes? How can we reconcile that one of the most productive base of farms and a key food basket for the world, Iowa, is a food dessert that only produces feed grade corn and soy and must import 80% of what the population there consumes as food? While complex, the solution is truly basic. We must decentralize our food chain and make it sustainable as nature intended. We must go back to our roots. This relates directly to the revolution – our centralized modes of production do not work any longer. It will take more people making more informed and better choices to drive the change. Unfortunately, this requires that things break before they get better and many unfortunate will suffer the consequences of change.

In recent decades both central planning and the mechanical worldview that justified it have lost their practical and philosophical appeal because they increasingly do not work and our food supply is but one example. The emerging worldview, now becoming more widespread in business as well as in countless other fields, has replaced the mechanical, reductionist model with the organic and the relational. This is the basis of sustainability. Whether the subject of study is a living thing, a society of living things, or a corporate re-organization, the new focus is on the sum of inter-relationships of its members rather than the isolated members themselves. When the centralized industrial era segregated animals from crop production by replacing naturally occurring manure that nourished crops with petroleum based fertilizer and substituted grains grown on the farm to feed the livestock with subsidized corn in feedlots, we created short term gains while eroding rational systems, creating the unsustainable.

The new systems worldview accepts and respects the voluntary, natural order as well as the inborn character of its constituent components, whose natural interactions create that order, an order that is more durable and flexible than one imposed from the outside, no matter how many PhDs helped conceive it. The systems view teaches that all working systems succeed because they comprise smaller, self-organizing sub-systems that retain some degree of autonomy, which enables the overall system to remain adaptable and robust. This view not only restores respectability for the naturally occurring, traditional order, but philosophic legitimacy for local autonomy and decision-making. It is the foundation of the revolution both in how we live, and how we eat.

The Age of Transcendence and the Revolution

The dawn of a new era in human history is upon us all. Perhaps more so than any previous era that inspired historians to give it a name signifying its import, looking back hundreds of years, thousands of years, say some, this new era may be unmatched in the scale of its effect on humankind. Numerous credible authors have testified in their writings that something this big is happening. Francis Fukuyama declared the end of a major cultural era in his famous and controversial essay “The End of History” (1989). A little later, Science magazine editor David Lindley foretold the demise of the Holy Grail of physics—the general unified theory— in The End of Physics (1993). The next year, British economist David Simpson claimed that macroeconomics had outlived its usefulness\ in The End of Macroeconomics (1994). Then, science writer John Horgan ticked off legions of scientists with his provocative book The End of Science (1997). That same year, Nobel laureate chemist Ilya Prigogine told us in The End of Uncertainty (1997) of an imminent broad-reaching shift in scientific worldview that will make much of what stands as scientific truth today scientific myth tomorrow.

So many endings must mean so many new beginnings. Since the start of the last decade, virtually no major field of human endeavor has been spared from predictions of its ending, perhaps not literally, but certainly in terms of past conceptualizations of its nature. The world of business is no exception. It is experiencing far reaching changes in conceptualizations of its fundamental purposes and how companies should operate. Indeed, looking at the magnitude of change in the business world, it is not overreaching to suggest that an historic transformation of capitalism is underway.

Barely a dozen years ago as the Internet was going mainstream few could have credibly predicted the scale of this transformation. This era of epochal change is referred to in the book Firms of Endearment as the Age of Transcendence . The dictionary defines transcendence as a “state of excelling or surpassing or going beyond usual limits.” Associated with this Revolution is shift in the zeitgeist of contemporary society; for example, Columbia University humanities professor Andrew Delbanco says, “The most striking feature of contemporary culture is the unslaked craving for transcendence.” This craving for transcendence could be playing a strong role in the erosion of the dominance of scientifically grounded certainty, which has marked the character of worldviews in Western societies since the dawn of modern science. In recent times, subjective perspectives based on how people feel have gained greater acceptance. More and more, it is acceptable to see life through a worldview shaped more by how individuals feel than by how or what the external world thinks.

We stand at what physicists call a bifurcation point; an interregnum between the poles of death and birth or rebirth, when an old order faces its end and a new order struggles to emerge from its fetal state. At such times, the future becomes more uncertain than usual because events within the time and space boundaries of a bifurcation point have infinite possible outcomes. This is why Valentine declares, “The future is disorder,” but challenges us to join efforts to bring forth a new order with the yeasty lure, “It’s the best possible time to be alive when almost everything you thought you knew is wrong.”

Humankind is entering a realm where no one has gone before. Its landscape is as unfamiliar to us as the world that we have known until now would be to a time traveler from the eighteenth century.

Organizational Design: Hierarchy, Hyperarchy and Facing Business Reality

A business cannot be competitive selling a product for $2 that cost $200 to make. Amazingly many organizations today are operating with this type of knowledge yet continue to avoid making tough choices to address unprofitable financial dynamics in order to survive and possibly even prosper. Many of these organizations delay making tough choices until the consequences of their denials are so dire that their options evaporate and opportunities to rebound vanish; a self fulfilling demise. Why does this situation exist? It is the nature of traditional organizations and the very manner of their operation that greatly contribute to the circumstance. The power centric hierarchy of the old business model is at the center of many of these failings. This form of organization is typically unable to cope with fundamental change because of how it is designed and how it functions. If you fail to design your organization to be effective at grasping and navigating change, you will likely succumb to the same influences as others have.

A good example is Britannica, the former producer of encyclopedias. The organization realized it could not sell its product for more than it cost to make. Britannica was aware that its sales force, unnecessary as the result of technological change, was the company's major cost. The company also knew people bought Britannica to provide their children a quality reference resource that is now achieved by purchasing a PC which offers access to a huge sea of data via search engines. Despite Britannica having these facts, it refused to accept the need to restructure its business, and disaster resulted. The organization failed to deal with the brutal facts despite the obviousness of their circumstance.

The revolution in information technology is similar to the management revolution itself. What works for other organizations is apparent. The challenge is sluggish response, a consequence of hierarchy. Information moves up and down in gaps in hierarchical pyramids and each gap requires delay and effort. The World Wide Web is an example of “hyperarchy” a more appropriate and responsive system. It is based on the notion of network centric methodology and results in more rapid and digestible change. Decentralized design enables more rapid adoption. Old organizational designs that rely on a top down centralized hierarchy cannot cope with the new business age and dynamic. Speed and adoption are at the core of this new era and that is where the old design fails.

Within a completely flat structure, all information on the Web is available to everybody who has access. Hyperarchical is 'the pattern of amorphous and permeable corporate boundaries characteristic of the companies in Silicon Valley ' - the pattern described above. More conservative models offer no real alternative to the Brave New Web World, even in the medium term. Not only can $200 not compete with $1.50: old 'legacy systems' in management are as disadvantaged as they are in IT. The options are expiring fast. Quite soon, the choice will lie between the new model or nothing.

Power Centric vs. Network Centric Institutions : Schools, the Workplace & the Revolution

Organizations are evolving from a power centric linear relationship wherein those with means and access direct the production of those without, to a network centric exchange that encompasses shared risks and rewards among participants. The access to technology and communication at very low costs is a primary driver of this shift. Many of our institutions fail to adopt the new methodology because they were founded in the power centric mode. Shifting to the new paradigm would essentially remove power from those who in the past benefited from the power centric base. This is the central reason behind our major institutions present failings and ultimate demise. Two institutions that are common to most people’s experiences in “Western” society are schools and the workplace. Few better examples exists of institutions that are failing because their mode of operation has not departed from past and ineffective practices. However, successful groups and associations who adopt the network centric approach have emerged.

Our learning institutions, among others, are for the most part steeped in past tensed power centric and linear designs. These broken systems do not allow our children to learn using the new tools of the revolution. Ironically chalk boards, text books and bells signaling the industrial revolutions methods of work process, are very much the norm. Ivan Illych, whose ideas have gained widespread acceptance beyond fierce libertarians, opines on “schooling,” “deschooling” and democracy, eloquently addresses the point about what old method schools truly represent :

“The pupil is thereby “schooled” to confuse teaching with learning, grade advancement with education, a diploma with competence, and fluency with the ability to say something new. His imagination is “schooled” to accept service in place of value. Medical treatment is mistaken for health care, social work for the improvement of community life, police protection for safety, military poise for national security, the rat race for productive work. Health, learning, dignity, independence, and creative endeavor are defined as little more than the performance of the institutions which claim to serve these ends, and their improvement is made to depend on allocating more resources to the management of hospitals, schools, and other agencies in question.”

In new age learning institutions, democratic school s , students choose what they want to study, when they want to study it and how (see http://www.sudval.org). The structure of the school exists to facilitate the child’s choices and support them; using the tools of the knowledge age. Self-directed learning, based on utilization of the latest technologies, and equal say in governance, regardless of age, or position of authority is at the core of the philosophy. The institution is establishing a true network reflective of the manner in which the revolution will evolve both in our society and in our lives.

Similarly, the traditional workplace remains wrought with challenges. Some companies are beginning to understand the implications of the revolution on its people. Semco is a Brazilian company that was floundering 25 years ago with annual sales of $4 million U.S. Through his revolutionary approach; using methods where employees choose their own days of work, and set their own salaries. Semco now enjoys annual sales of $212 million and is growing at a rate of 20 to 30 percent a year.

Semler, who taught at MIT and Harvard Business School said: “If you wake up in a bad mood on Monday morning, you don’t have to come to work. We don’t even want you to come because you simply don’t feel like it and will therefore not make a contribution. We want employees who are ready and willing to work. If that means they only come twice a week, that’s okay. It’s about results.”

Shared risks and shared rewards; the basis of the new productive paradigm of network relationships. Failing to adopt networked approaches will result in failed organizational efforts.