Saturday, May 23, 2009

Recently Noticed News

Like a lot of people, I am a regular reader of The New York Times. In fact, I break out in a rash when I don't get to read it on a daily basis. I love the on-line site which has innumerable features, but I am an abiding fan of the print version as well. I like being able to underline information as I read it and write in the margins of the paper. I clip photos because I find there to be quality of color that occurs when ink meets newsprint to be, occasionally, quite beautiful.

Of course, it is a time consuming occupation, this Times reading, but it is certainly rich in discovery and information. I wanted to share a few items that have captured my attention.

1. Jonathan Ruach's review of Judge Richard Posner's The Failure of Capitalism is deeply sobering. Posner is a federal judge who has written on a range of topics, including the power low-probability, high impact events (e.g., an asteroid hitting the Earth) in Catastrophe: Risk and Response. Unfortunately, these darned low-probability, high impact things keep happening. (Remember Condaleezza Rice' "Who could imagine that someone would crash an airplane into the World Trade Center?!") In the futures business, we call these sorts of possibilities critical uncertainties or wild cards, depending on how incredibly far out, yet still plausible, they seem.

I felt a little sheepish when Rauch, a guest scholar at Brookings, asserted that the reader "knows that story" when reciting the set of interlocking drivers that have created the current Great Recession/Minor League Depression, since I certainly hadn't seen it put together so succinctly. And, just in case you're as shell shocked and uninformed about the systemic picture as me, here it is: "Cheap money and an inrush of foreign capital fueled a lending boom, which poured credit into the housing market. As prices went up, up,up, even risky mortgages seemed safe and everyone piled in, including banks. Financiers relied on securitization and complicated financial instruments to dilute the attendant risk, but the result was to spread that risk through the financial system, making it impossible to locate. When the housing bubble popped, everyone was holding bad debt, but no one was sure how bad or even how much. With banks suddenly looking undercapitalized, lenders stopped lending and started selling assets to raise cash. The faster everyone ran for the exits, the faster asset prices fell, dragging banks' balance sheets down with them. Credit markets seized up, depressing the economy, causing more mortgage defaults and asset-price deflation, further weakening banks, further paralyzing credit, depressing the economy still more...repeat ad nauseam."

Posner's assertion is that this crisis "came about precisely because intelligent businesses and consumers follow market signals." In other words, the capitalist system, which believes in market driven self-regulation doesn't function in that way at all. In fact, the market of "an interrelated system of financial intermediaries is inherently unstable...[it is] a kind of epileptic, subject to unpredictable, strange seizures." Put a bunch of bankers in a low interest rate environment without a lot of regulation and economic depression will be the product. Ouch! It's not about irresponsible people. People made very rational and responsible choices under these conditions resulting in the fact that the overall world and US economies are going to be screwed for at least a couple of years.

Posner presents us with a very troubling dilemma: On the one hand, conditions of easy money and light regulation ought to be just what's needed to promote innovation in a capitalist economy. You should be able to get that without the credit system seizing up, but that's not what happened. And, to make matters worse, there aren't any easy answers: Socialism, too bureaucratic; Communism, death; Fascism, bad history. If liberal capitalism is the "end of history," I sure hope it doesn't have another heart attack anytime soon.

2. Here's a story that didn't come from The Times but is worth knowing about. The Russians Are Coming (to Facebook)! Art of the Future's principals have been using for the last few months with tremendous pleasure and with positive consequences in terms of making new friends and establishing new professional relationships. Facebook is a creative revelation. It is very easy to post material to one's sign, including video, and there are a virtually infinite number of groups of prospective interest.

Facebook is great fun, and it is also a big business. For example, in 2007 Microsoft announced that it had purchased a 1.6% share of Facebook for $240 million, giving Facebook a total implied value of around $15 billion at that time. Today, a Russian firm, Digital Sky Technologies, announced that it is seeking to purchase employee owned shares for between $100-150 million. This development strikes me as noteworthy, not only because it's indicative of the dynamic power of globalization--I mean, seriously, Russia, the supposedly re-emerging autocratic society becoming a stakeholder in Facebook, the sine qua non of open boundaries--but also because Russia has been so dismissed by authorities such as Parang Khanna, whose Second World is one of several books postulating the dismemberment of the Russian Federation. Maybe there's more to Russia than Putin and his natural resources strategy. We hope so.

3. Get ready for either a really, really long weekend or complete servitude and irrelevance as The Singularity approaches. The Singularity is a concept coined by science fiction writer, Vernon Vinge, that asserts that supersmart computers will outstrip human intelligence sometime soon. The Big Bang was the original singularity, as far as I know. There was absolutely nothing and then--poof--there was suddenly something from which everything else has unfolded! So, this singularity business is a very big deal. The acceleration of technical innovation has placed us at "the edge of change comparable to the rise of human life on Earth." Some futurists, such as James John Bell, lay out the possibility that, beginning somewhere around 2025, everything that humanity has ever imagined may, in fact, be achievable virtually instantaneously via the advances that occurring in technology. The unique and beautiful film, Waking Life (which lays out something like thirty alternative philosophies reviewed and comprehended in the last minutes of a young man's life) includes a presentation of what this sort of hyper-telescopic evolution might look like, i.e., where something is envisioned and can, therefore, be subject to experimentation and experience immediately.

The Singularity is the epitome of what people mean when they say, "This is the stuff of science fiction." However, there is considerable reason to believe that what never seemed possible previously, e.g., the prospect that we could transcend mortality and never have to "work," in the way that we presently conceive of that process, or that we are inventing technologies that will come to rule us (and not necessarily in a nice way; reference: The Matrix), has to be taken increasingly seriously. Even if the human prospect isn't about to be reset in its entirety, it's completely clear that phenomenal change is afoot in technologically assisted expansion of life expectancy, for example.

The point for Art of the Future is that these sorts of considerations are virtually off the radar screen when it comes to typical strategic planning processes. Very real and indescribably huge forces shaping the future are often met with such a sense of powerlessness that they are not included in an organization's strategic conversations. The more that is true, the more the overall direction and meaning of all of the technological innovation that is occurring will be left to the very few people who do actually think about "Big Issues." Therefore, the perspectives enunciated by elites, the Best and the Brightest of whatever generation, will demarcate the terms of the conversation.Often , that is not a good thing. It means millions of intelligent and concerned people and organizations around the world won't be thinking together about where our technologies are taking us. So, if the Singularity (or any of its near relatives) breaks into reality, the highest probability is that most people will be completely paralyzed in shock, fear and awe by its effects. They'll have never thought about it, let alone have discussed its organizational consequences. This is a recipe for a lot of distressed people and broken, useless organizations.

Art of the Future's mission is to support the evolution of life sustaining work environments that support creativity and the ability of organizations to survive and thrive in many different social-economic contexts. We are not necessarily adherents to the Singularity hypothesis, but we definitely believe that organizations that want to build powerfully compelling work environments need to incorporate logically presented, unconventional views into their strategic analyses to do justice to the full scope of possibilities that are shaping what work will be, how it will be done and where it will occur.

Saturday, May 16, 2009

Geopolitics and Structuralism

The US Navy is the key driving force that will determine the destiny of the world over the course of the 21st century. That is the assertion of George Friedman in his current best seller, The Next 100 Years.

A talented structural thinker, Friedman explores the way in which the elements of a situation affect, shape and sometimes even determine the choices we make. His firm, Stratfor, operates within the world of geopolitics, which he describes as: "a method for thinking about the world and forecasting what will happen down the road.

Friedman's point of view ought to be very refreshing to those of us who spend a lot of time thinking about organization and leadership theory. Organizational studies concentrate extensively on the actions of individuals, teams, particular organizations, and, occasionally, industries. Economists talk about an invisible hand, in which the self-interested, short-term activities of people lead to ‘the wealth of nations’ (ala Adam Smith). Here are a few quotes from Friedman explicating his views on Geopolitics:
  • "Geopolitics applies the concept of the invisible hand to the behavior of nations and other international actors. The pursuit of short-term self-interest by nations and by their leaders work result, if not to the wealth of nations, then at least to predictable behavior and, therefore, to the ability to forecast the shape of the future international system."
  • "Geopolitics and economics both assume that the players are rational, at least in the sense of knowing their own short-term self-interest. As rational actors, reality provides them with limited choices. It is assumed that, on the whole, people and nations will pursue their self-interest, if not flawlessly, then at least not randomly…in chess you do not have limitless moves. The better you are at chess, the more clearly you see your options, and the fewer moves there actually are.
  • "For the most part, the act of governance in foreign policy is simply executing the necessary and logical next step. Political leaders know how to be leaders or they wouldn’t have emerged as such. Geopolitics does not take the individual leader very seriously, and more than economics takes the individual businessman too seriously.
  • "The core of the method I have used in this book has been to look at the constraints placed on individuals and nations, to see how they are generally forced to behave because of these constraints, and then to try to understand the unintended consequences those actions will have
  • "Geopolitics assumes two things...
  1. First, it assumes that humans organize themselves into units larger than families, and that by doing this, they must engage in politics. It also assumes that humans have natural loyalty to the things they were born into, the people and the places. Loyalty to a tribe, a city, or a nation is natural to people. In our time, national identity matters a great deal. Geopolitics teaches that the relationship between these nations is a vital dimension of human life, and that means that war is ubiquitous.
  2. Second, geopolitics assumes that the character of a nation is determined to a great extent by geography, as is the relationship between nations. That includes the physical characteristics of a location and the effect of a place on individuals and communities. Sparta was a landlocked city and Athens was a maritime empire. Athens was wealthy and cosmopolitan, while Sparta was poor, provincial and very tough. A Spartan was very different from an Athenian in both culture and politics."

Organizational interventionists put great stock in micro theories: change individuals or small units and you’ll alter the dynamics of the situation in some overarching fashion. Concentrate on the workings of the organization as an entity. Sometimes this is true. Apple runs a hell of a lot better under Steve Jobs than it does under anyone else. He mobilizes the company's design masters and the customer analysts in a way that no one else has. However, is it not also the case that someone like Jobs do a much better job of bringing the forces shaping the future more generally, including Friedman’s geopolitics, inside the firm than most others do? Most executives and managers treat the big picture as exogenous, something that “greater minds” should pay attention to, at least in their official personae. But great organizational leaders--we call them Anticipatory Leaders--are not afraid of the big picture; in fact, they recognize how important it is to embrace the full range of forces confronting their organizations.

Friedman's analysis begins with “the permanent: the persistence of the human condition, suspended between heaven and hell….[Therefore,] the 21st century will be like all other centuries. There will be wars, there will be poverty, there will be triumphs and defeats. There will be tragedy and good luck. People will go to work, make money, have children, fall in love, and come to hate. The permanent human condition is not cyclical."

In fact, Friedman's analysis assumes that war will be ubiquitous and inevitable. This is where we part company. We believe that humanity not only has the possibility of resolving powerful conflict through some other method besides war, but we feel that it must. We are of the view that human evolution is seeking to transcend warfare. Optimists and people who hold that there is some sort of progress in humanity away from violence have long held this view. In fact, the people who invented the Tarot have a card that is meant to convey this forward motion, The Wheel of Fortune which shows the ears of the red Hermanubis protruding into a new realm of human consciousness. (Unfortunately, the data indicate that the decline in conflicts around the world, which had characterized the 80's and 90's seems to have plateaued at about 30; so, hold the champagne.)

What Friedman's thoughtful, rational analysis does demonstrate is that those of us who long for a world without war must realize that such a condition is not going to inevitably occur. There is no New Age that will bring this about. In fact, the geopolitical deck is stacked against peace and for war. Can we strategically position our organizations, our societies, ourselves in a way that make peace more rather than less possible? The answer is "Yes!" and achieving it entails a lot of clear analysis and good decision making at every level of human life. The nature of the weapons that humanity has developed makes it unacceptable for the anwer to this question to be "No."

Thursday, May 14, 2009

Life Sustaining Work Environments: A Book in Progress

Anika and Michael are hard at work on their newest publication, a manual devoted to the challenge of creating of work environments that will attract, house, support and retain key talent that organizations can rely upon to lead them forward into whatever future the next twenty years may bring. A life sustaining work environments welcomes the full range of human potential that people can bring to their work knowing that positive human energy promotes economic viability.

We're writing this book because we've both had really excellent working experiences and we've both had and observed many work environments that were deeply unsatisfying. A wide range of factors that contribute to the quality of an organization's life sustaining qualities, including, for example: Are people encouraged to be creative? Do they get to see the effect of the efforts? Does the workplace acknowledge our needs as social animals? Is there a conscious and continuous consideration of the relationship between the organization and the natural environment. Architectural considerations are important, as captured in the compendium of illustrations you can link to on the left.

As we've considered in several previous articles, the quality of the work environment all too frequently falls between the cracks. It's everybody's concern, but usually it's nobody's job. Yet, as we've tried to capture in graphic below, the work environment has powerful strategic implications for all sorts of organizational outcome measures, such as productivity and employee engagement. A lot of people complain about the work environment, but, unlike the weather, it is something that one can actually do a lot about!

Of course, this is an extraordinarily exciting endeavor that is putting us in contact with a great deal of stimulating information, such as this set of videos on IDEO's very innovative workplace or via the brilliant thinking of the scientist and architect, Christopher Alexander, who has written on The Timeless Way of Building in such exquisite terms. (The picture to your right links to an in-depth presentation of Alexander's thinking.)

A particular way of considering alternative futures and articulating strategy is at the heart of this book. We have found that, in general, organizations don't do a very good job of thinking broadly about the environment that they are in and that they, therefore, miss potent driving forces that shape the general political and economic destiny of societies and industries. Not seeing factors that seem completely obvious in hindsight represents a powerful strategic error. The leaders of many organizations and communities spend truckloads of time considering their values and the vision and/or piling through veritable encyclopedias full of spread sheets and charts without having the ability or willingness to look outward at the critical uncertainties that will determine what the profile of the workforce will be and what incentives will appeal to it.

We've developed a three step process for investigating life sustaining work environments through the integration of systems thinking and scenario planning in the service of strategic leadership. We call it Structural Dynamics. The approach is sort of like participatory theater, where the structure of the drama--the movement from pre-production to staging to rehearsal to performance to post-production--is mapped out in some detail, but the actual content of the play itself will be generated by the members of the specific organization working within a particular industry (or set of industries) that is seeking to design a life sustaining work environment. The process is designed to yield discoveries at each step along the way, creating a sort of flow state of new thinking, which as Charlie Keifer and Robin Charbit have discussed, is a constant companion of insight.

We'll be writing more about developments related to our book periodically. So, stay tuned!

Wednesday, May 13, 2009

Exploring Environmental Futures

Using Scenarios to Improve
Environmental Decision Making

A 90-Minute Experiential Workshop

We have described this workshop previously, and we continue to be very pleased with its reception and utility. We are pleased to announce that the Society for Organizational Learning will be offering this program to members as part of its Conversations with Global Citizens program on December 10th from 3:15 to 5:30PM. Participation may be available to non-members. Chris Doyon (617-300-9515) at the SoL office if you wish to attend.

Overview: There are multiple, conflicting perspectives on the threat posed by the aggregation of greenhouse gases in the atmosphere, and the strategic implications of climate dynamics remains a hotly debated topic. Instead of imposing any one point of view, this experiential learning approach uses the thoughts, feelings and impressions of a group of participants to explore the implications of four archetypal scenarios for organizational choices and strategy development. It encourages robust conversations regarding the facts associated with greenhouse gases while legitimating a range of differing opinions. Better strategic decisions emerge when a group engages a controversial subject using a process based on mutual respect. This program has been piloted to positive reviews in 2009 at the University of Hawaii’s Research Center for Futures Studies and the Association for Strategic Planning’s national conference.

Elaboration: Despite an enormous body of scientific evidence emphasizes its dire consequences, global warming remains a virtually invisible, low priority issue to the vast majority of people and organizations in the world. Discussions of global warming and climate change often take place among people who already agree with each other. And, as captured in Jared Diamond's of the environmental debates that are raging in Montana and elsewhere, when people don’t agree about ecological matters, their conversations and their actions quickly polarize. What is needed is a method that gets people to listen to each other, consider possibilities and arrive at decisions together.

We believe that it is not necessary for participants to fully embrace the reality of global warming in order to support cleaner, healthier environments and sustainable practices. No one wants to live in a waste dump. And, there is no disagreement that CO2 is accumulating in the atmosphere and that temperatures are rising. What these facts mean and how much they should concern us is, however, a source of intense contention.

This workshop uses the impact of the rising level of atmospheric CO2 as a “critical uncertainty” upon which to focus. It is critical because greenhouse gases have tremendous actual and potential impact. While most people accept as fact the rising level of CO2, the impact is uncertain; there is wide spread divergence over what can be done and when to take action.

Using Art of the Future’s Scenario Game Board, participants position themselves according to their beliefs regarding two dimensions of change:

• The speed with which greenhouse gases will exert an impact on human life -- one person may feel that New York City will be under water in the foreseeable future while another might contend that climate change is a complete hoax.

• The nature of the response to these impacts -- paralyzing fear or engaged action?

Divergent perspectives spark the process; they are woven into alternative scenarios for the group’s consideration.

Our own research indicates that these dimensions (gradual vs. abrupt impact and reactive vs. creative response) are fundamental to understanding the images of the future held by people across a wide-range of cultures. The future will always be different than what we expect, and our expectations are frequently way off the mark. However, learning to see and accept a range of possible future conditions is a powerful step forward in the expansion of thought and resulting action.

The dimensions create a two-by-two matrix that provides the basis for four archetypal scenarios crafted by Jim Dator and his colleagues that can be applied to many critical uncertainties. Briefly stated, these scenarios are:

1. Discipline: Making forward movement through mature, disciplined choices.
2. Status Quo: Preserving current or idealized values and life-styles
3. Transformation: Finding a breakthrough pathway to a dramatically improved set of conditions
4. Collapse: A breakdown of social, economic and/or political systems

The participants in this workshop, based on their position along these dimensions, discover that they are aligned with one of these archetypal scenarios. They are then asked to elaborate the conditions of life in that scenario, exchanging information and insights that everyone finds useful, surprising and provocative.

The workshop concludes with the search for robust and contingent strategies. The group arrives at its own conclusions regarding strategies that would be effective in all scenarios (robust) and those that work in one or several (contingent).

Art of the Future offers versions of this stimulating workshop to any organization, institution or community that would like to explore the range of perspectives held on environmental issues. Please contact us via email by writing or by phone at 617-335-9776.