Organizational Design for the New Economy - Rob's Web Course May- June 2003 at UPEI

482W - Organizational Design for the New Economy

Contact Details

Offered by Rob Paterson

Tel: 902 566 9012

Email: rob@renew.com

Web: www.renew.com

Course Introduction

Many organizations are under great stress today. Most organizations that have command and control cultures are struggling to survive by applying the old rules even more vigorously. The key to the future is not to work the old model harder but to transform to a new model.

The new model for organizing for work is no longer the machine but nature itself.

This course will show explicitly the rules for the new culture and new organization of the New Economy and will provide case studies of how some organizations have made the transformation.

The course is built around two new books and will involve a highly interactive discussion group with a number of exercises and assignments.

·        “Surfing the Edge of Chaos”  Pascale, Millemann & Gioja (Three Rivers Press ISBN 0-80883-4) is the best book available today where the rules of the New Science are explicitly described and where many good examples of their application are presented.

·        “Hope is not a Method” by Gordon Sullivan and Michael Harper, (Broadway Books ISBN 076790060X ) is the final book where we will have a complete case study of the most successful transformation from Command and Control to a Natural Model, the US Army!

The course will be offered online and will contain a number of case studies in addition to the books that will include:

• An introduction to the emerging rules of nature which form the foundation of the new human organizational model
• A case study based on Southwest Airlines that will show you how managing for Culture rather than only for process will become the new organizational focus.
• Visa International – The first and most successful global network organization.
• Dell Computer – the most successful applier of natural models to a production system
• The ANX Network – The Emergent network that is creating an ecosystem that connects all the players in the Auto industry around the world

Structure

The content of this course is structured as follows:

• Issues that the course will deal with. This section will provide you with an overview of the questions and issues that we will be exploring. When the course has finished you will be familiar with all these issues.
• Process. This section will define how we will work together
• Timetable. This section will show you what the work will be over the 6 weeks of the course
• Marking and Evaluation. This section will define my expectations for your work and how you will be evaluated
• A bibliography that will extend your reading beyond the set books. This bibliography includes web links to supporting material that refers to and often summarizes the key points made in the books. Please also refer to my own web page which has a broader reading list http://www.renew.com/great_books.htm
• A set of supporting slides. These illustrate some of the changes to our environment that we will have to take into account.

Issues that the course will deal with

• Why have our Organizations have become part of the problem? – We will see how the forces created by the impact of the new technology, by the radical shift in demography, by the shifts in our environment, by the acceleration of the pace of change, by the shifts in the values of society and by the visible changes to our climate are converging to invalidate all our current institutions ( Schools, Healthcare, Government, Business, Nations and even Family).
• The Pattern of Organizational Change – We will discover that these conditions of institutional crisis, or bifurcations, have occurred before and that there is a pattern to them. We will use the perspective of history to see the pattern of change more clearly and then apply this pattern to our own time. In so doing we will find out the roots of our current organizational problems and see the new organizational model that will solve our problems emerging.
• Culture – We will see why there is a shift in Organizational Culture from Process to Outcome, from rigidity to flexibility. We will see why this tracks a shift in how we understand Physics and Living Systems
• Definition of the New Model – We will explore the key elements of the  emerging “Network”  Model, a meme where the rules are based on Nature and Evolution,  which is rapidly replacing the “Machine” model, a meme which is based on Control and Engineering. We will see how the new model deals with adaptation, learning and order and discover why this model solves most of our current problems.
• Examples of the new Model – We will look at some of the early exemplars of the new model. In particular we will look at how Southwest Airlines has used a new type of culture to become a world leader. We will look at how Visa and Interac have dealt with the paradox of operating a common service delivery network between competitors, at how Dell has reversed the polarity of manufacturing from product push to customer pull by using network principles and we will see how ANX is creating an ecosystem out of the auto manufacturing industry. We will discover the new power realities from these examples.
• How to make the change –We will use the US Army as the exemplar of a traditional organization that is trying to make the transition from the command and control model to a natural model. We will see how a major corporation like BP has used the lessons of the US Army to make the same transition in business. We will see how a tool to help reduce illness in the workplace, inadvertently using the same change principles, is also working to change traditional cultures.
• Values and beliefs – We will see how organizational models are driven by a form of DNA, a “Meme” which is a set of collective beliefs about power and relationships. We will see how these “Memes” are expressed in behaviors and actions. By understanding this Darwinian struggle of the fitness of ideas, we will start to understand the process of organizational and cultural change itself.
• Codifying the new Rules -  We will end the course by bringing clarity to what the new rules are.

Process

This course is entirely on the web. Beyond the fact that this allows you to participate at any time of day that is convenient for you, it creates other opportunities that are different from class work that we have all experienced in the classroom.

• This course in a conversation between all of you and with me. I will ask you questions and you will discuss them amongst yourselves. Your answers in turn will raise new questions in which I will participate as a participant. We will use the Discussion Tool of the WebCT system for this part of the work which will take up about 60% of your time on the course. It is essential that you participate. This means that you will be required to be an effective participant at least three times a week. By effective, I mean that you raise interesting topics and that you respond to others in an informed way. This does not mean we cannot have fun as well. So we do often joke around, after all this is a conversation, but it does mean that at the core of your effort must come quality and quantity.

• The Set Books – This course is not confined to simply reading the set books. The purpose of the set books is that they will give us all a common context to talk more about other examples and other issues. They are not long and it is vital that we have them both read by the end of the second week. I urge you to explore the attached bibliography as well which is set out with web links that will accelerate your ability to pick up more supporting ideas..

• There will be 3 assignments during the 6 week course. These will be set up to help you reveal that you have understood the ideas inherent in the course. The first 2 assignments will be posted on the Discussion Tool for all to see. The final assignment will be more traditional in that it will be a paper of 3,000 words or more. You can choose to write this paper alone or you can team up with another student and write a team paper.

Timetable

• Week 1
• Private work – it is essential for us all to share a common context. Please read the first book  Surfing the Edge of Chaos by the end of this week. This will give us a set of tools and ideas that we can use to look at other areas. You will find other material in the bibliography if you want to expand on the ideas in the book.
• Please post an introduction of your self – tell us about you as if you were meeting us at a party or for the first time at lunch so that we can all get a “picture” of who you are, what interests you and so on. Remember this is a conversation: so it works best when you don’t try too hard to make this story about you too perfect
• Discussions – I will be asking you questions about the ideas in this book this week
• Assignment 1 - In Surfing the Edge of Chaos you will be introduced early on in the book to why the old rules are not working well and to a new set of rules based on nature – your first assignment due at the beginning of Week 2 is to describe in 1,000 (4 pages) words:
• Where does PEI, or your province, fit in this context? What are the risks of being such a stable society? What are some of the unseen pressures that are building that may push us into having to find a new way? What are the risks of using the old methods to find the new answers? What are the signs of “strange attractors” that could be harnessed to pull us into the future? Are there signs of emergence of new paths and if so what are they?
• Week 2
• Private work - Please have read book two, Hope is not a Method by the end of week 2. The US Army is often referenced in Surfing as an exemplar of how to transform a traditional organization. This book provides us with many useful lessons of how a traditional organization can transform itself. It therefore gives us hope that any traditional organization has the potential to do the same. which can be used by any organization and by any leader.
• Discussions – I will be asking questions about the key issues and leanings from the US Army this week
• Assignment 2 – Please write a 1,000 words on what are the key lessons that you learned from the US Army on why transformation is essential for post industrial organizations. This is due at the start of week 3. How would these best apply to where you live or work right now? If you are not working, how best would these apply to PEI or to your community?

·        Week 3

o       Private work – Cooperation is part of the natural model for organization. The traditional organization was about function and things. The key organizational objective in the future will be to organize around information. I will post information on Southwest Airlines who have a clearly designed cultural strategy. We will also examine the story of Visa International. Read all you can on Visa International  - see the link in the bibliography and go to my web site for more on Visa and Networks http://www.renew.com/NewModel.htm  Networks have rules for organization that are quite different than traditional rules. They use a few protocols like DNA. Please go to the web and search for the ANX network as well. ANX is the network that supports the Auto industry.  http://www.anx.com/  and  http://webreference.com/content/extranet/examples.html are good introductions to the power of extranets such as ANX. There are also powerful new personal tools such as Groove: see http://www.groove.net/  you may wish to download Groove and try it yourself. It is free for 3 months. Many individuals now refuse to work traditionally in organizations and are redefining self employment. See the link to the key book on this topic http://www.freeagentnation.com/ for an great overview. They will become linked into personal networks. Another great personal tool to try are web logs. A good one, also free for 30 days is Radio UserLand see the link at  http://radio.userland.com/

o       Discussion questions – I will be asking questions this week about networks and about competition versus cooperation

o       No Assignment this week

·        Week 4

o       Private work – This week we will be looking at how manufacturing and distribution has been changed by the network organization. In particular we will look at Amazon and at Dell. Please find out as much as you can about these two organizations.  A good link to Dell is http://www.dell.com/us/en/gen/corporate/vision_directmodel.htm. A good story on Amazon is at http://www.fool.com/community/pod/2002/020424.htm  Ask yourself about their essential differences from the traditional organizations. Ask yourself how a traditional organization could compete. My web page also has a short piece on the difference between a traditional way of organizing and the network alternative  http://www.renew.com/new_strategy.htm  Follow the link to the book called Blown to Bits in the bibliography to see the underlying power of the networked organization to overwhelm the traditional organization.

o       Discussion questions – An early idea in Surfing is that the reality of an imminent crisis or “death” is a great motivator for change. When traditional organizations are confronted by network competitors, they are faced with “death”. This week we will be looking at the “Fitness Landscape”. We will examine the pressures that are converging that will force an abrupt organizational change on traditional organizations. We will also look at the additional forces of demography and the pace of technological change. We will look at how this has happened before and what is the underlying pattern for these changes. The slides section has some useful additional information on these forces. My web age will provide you with additional insight as to the historic patterns.   http://www.renew.com/chaos_&;_change.htm The link to Great Books on my website has an excellent section on Chaos Theory. We will explore how this process works and what might be around the corner for us.

o       Assignment 3 – In “Surfing” we have been introduced to the idea of the Fitness Landscape. In “Hope” we have seen the need for transformation to respond to the challenges of climbing out of the valley to the next height. In both books we have seen the need for a vision to pull us forward. In both books we have seen the need to find an emergent set of values. Both books suggest that you need to find a vision for the future and then work backwards to find out how to get there. This assignment will be a traditional one in that it will be a formal paper. You can choose to work with a partner or partners. It will be due at the end of the course. Your task will be to develop a vision for the future that will draw on the principles of the course. Your vision can be for PEI, your community or for your workplace. In building your vision consider what is the true reality of our situation? Consider the emergent principles and the foundation values that will support your vision. How different will the future have to be and what kind of leadership will we need? What might it mean to organize around information?  What will be the likely breakthrough that will arise if we organize differently. What does this mean in terms of the power of your organization? What are the barriers that will need to be overcome and how would you deal with them?

·        Week 5

o       Private Work – Our topic this week will be to see how to move through the natural resistance to change. We will see how big ideas are like diseases which generate a response from the immune system of the system that they invade. Look at the links in the bibliography to the Global Brian and the Tipping Point for more on this concept of how both the resistance develops and how best to overcome it. The link to the book on Diffusion will give those of you with more of  science bent some additional research on how ideas spread and or/get killed. Look back at the set books and other material and see what they tell you about resistance, about motivation and about the role of the leader.

o       Discussion work – this week I will explore with you with how unpredictable the world is and how our mental models of how we see the world and ourselves can either hurt or help us. We will explore how ideas are spread and how they are resisted. One of the big ideas that we need to overcome is the hope for a stable world. The world is not stable. Its natural state is change. What we are experiencing in fact is an immense acceleration of change. Please go to the link for Ray Kurzweil to read an astonishing view of how change will accelerate even more. Please look at the link to Blown to Bits to see how the new organizations such as Amazon or Dell are deconstructing the traditional competitors. This rate of change means that it is impossible to plan in the traditional way. Traditional plans assume that we can know and control the future. The reality of today is that we cannot do this. Only organizations that can draw on the distributed intelligence of their entire workforce and their customers and suppliers can cope. We will see how the US Army have dealt with this planning problem by using the concept of the Commander’s Intent to plan for the unexpected and to harness the power of the distributed intelligence in any organization. We will see how the US Army has used the AAR as the key process to unlock the command and control culture and to unleash the learning of the organization.

·        Week 6

o       Private Work – Go beyond the reading this week and really push into the bibliography. Look at how the new science underpins the new organization. Look at how the new science explains resistance and how new ideas propagate. Look at the new rules and see them as a system. At the heart of the new is a new set of values. We are moving from a world where we needed to belong to groups to find comfort to a world where we take our deepest satisfaction from within ourselves. We are moving from a world where we were disconnected from nature to a world where we are once again part of it. Hence we will redesign our organizations to be natural. Hence we will group not in a machine but in networks. The best business expression of the values that I have found is in the Cluetrain Manifesto. Go to the site at http://www.cluetrain.com/  for an understanding of how these new values work in business. In particular please read the first chapter of the book which is easily accessible on the site. The best book on the shift in values that I have found so far that explains the personal aspects of the shift is “The Cultural Creatives – Or how 50 million people are changing the world” by Paul Ray and Sherry Anderson. You will find the link at http://www.culturalcreatives.org/  Their research reveals that there are 50 million people in North America who are in the new values space who are ready to find the structures that will connect them and hence give them a voice to be heard. Once these structures click, they will become the new. Where do you fit in the values range? We end then with the big idea – the world will change when there is a critical mass of those with the new values who are empowered by new structures to have power.

o       Discussion work – We will have our own AAR this week. We will explore what did happen on the course, what we thought should have happened, what we have learned and what could be improved. We will discuss what we can take out into our lives and use as a result of the course and what more we can do to understand the new rules for the new organization

o       Assignment 3 will be due this week.

Marking and Evaluation

60% of the marks will be given for the Discussion and for the first two assignments. I will be looking for both quantity and quality. Quantity is defined as posting thoroughly at least three times a week. Quality is defined as clearly offering up considered insights either as an initial idea or in how you respond to others. I will post weekly updates showing the relative quantity of your posts so that you can see how well you fit.

40% of the marks will be given for the final assignment. If you choose to work with a partner, you will share the same mark. A simple review of the material in the books will put you in the range of 55-70%. An example that you have thoroughly understood the material and have developed insights of your own will take you into the 75-85% range. An article worthy of publication that shows that you have mastery of the material will put you in the range of 90% plus.

A Bibliography

Introduction

This annotated bibliography will provide you with a list of source documents and books that represent the leading thinking in a new field – Organizations designed around a natural model or Networks. The linked web addresses will take you to a synopsis of the works in question.

The material is divided into two sections. A - Deep Context focuses on the scientific underpinnings for the Networked Economy. B- The Business Context shows you how these principles have been applied.

A. Deep Context – How the New Science underpins the Network Model

1. The Web of Life by Fritjof Capra (http://www.geocities.com/combusem/CAPRA2.HTM) This is the best overall introduction that I know of that provides the complete overview of the underpinning ideas of the new science that themselves will underpin our new approach to organization.

“During the past 25 years, a new language for understanding the complexity of living systems - that is, of organisms, social systems, and ecosystems - has been developed at the forefront of science. You may have heard about some of the key concepts of this new way of understanding complex systems - chaos, attractors, fractals, dissipative structures, self-organization, autopoietic networks.

What is now emerging at the forefront of science is a coherent scientific theory that offers, for the first time, a unified view of mind, matter, and life.

Since industrial society has been dominated by the Cartesian split between mind and matter and by the ensuing mechanistic paradigm for the past three hundred years, this new vision that finally overcomes the Cartesian split will have not only important scientific and philosophical consequences, but will also have tremendous practical implications. It will change the way we relate to each other and to our living natural environment, the way we deal with our health, the way we perceive our business organizations, our educational systems, and many other social and political institutions.

In particular, the new vision of life will help us build and nurture sustainable communities - the great challenge of our time - because it will help us understand how nature's communities of plants, animals, and microorganisms - the ecosystems - have organized themselves so as so maximize their ecological sustainability. We have much to learn from this wisdom of nature, and to do so we need to become ecologically literate. We need to understand the basic principles of ecology, the language of nature. The new framework I present in my book shows that these principles of ecology are also the basic principles of organization of all living systems. I believe therefore that The Web of Life provides a solid basis for ecological thought and practice”

2. The Global Brain –The Evolution of the Mass Mind from the Big Bang to the 21st Century by Howard K Bloom

(http://www.amazon.com/exec/obidos/tg/stores/detail/-/books/0471295841/customer-reviews/ref=ase_howardbloomnet/104-0496759-3197502) The leading book available today on how to understand living or “complex adaptive systems”. Bloom describes the rules for learning organisms and shows how humans, with the added issue of culture, adapt as groups to shifts in the environment. Don’t be put off this is compelling reading.

“Very very few books actually need to be read word for word, beginning with the bibliography and ending with the footnotes. This is one of those books..

I like this book and recommend it to everyone concerned with day to day thinking and information operations. I like it because it off-sets the current fascination with the world-wide web and electronic connectivity, and provides a historical and biologically based foundation for thinking about what Kevin Kelly and Stuart Brand set forth in the 1970's through the 1990's: the rise of neo-biological civilization and the concepts of co-evolution.”

3. Out of Control : The New Biology of Machines, Social Systems and the Economic World by Kevin Kelly

( http://www.amazon.com/exec/obidos/tg/stores/detail/-/books/0201483408/customer-reviews/ref=ase_thechurchofvirusA/104-0496759-3197502 ) This was the first book to explore from an organizational sense how the new science will be applied. It is not a book to read with a loved one. You will be constantly regaling them with nuggets of information and ideas that will take your breath away.

“It is in the realm of technology that Kelly, executive editor of Wired magazine, has something to add. In dozens of interviews with academics and corporate researchers, tinkerer- artists in industrial lofts and even beekeepers, Kelly has uncovered a growing subculture that is systematically exploiting the complex forces of the hive mind, evolution and other self-organizing systems”

4. Leadership and the New Science: Learning About Organization from an Orderly Universe by Margaret Wheatley.

(http://www.kaneandassociates.com/summary2.htm ) This was the breakthrough book that linked the New Science directly to the managerial world. A crossover book that is both a science book and a management tool. Written with passion and insight.

“Wheatley does a fine job of explaining the implications for organizations and management philosophy of the shift away from the mechanistic worldview that grew out of Newtonian physics. She does a good job of explaining how quantum physics and chaos theory together demolished all the assumptions of the mechanistic worldview. This mechanistic view fostered the idea that organizations are impersonal machines. It also gave credence to the nonsensical idea of the commodity theory of labor applied to the people hired to fill the "job-parts" of those machines. The mechanistic view excludes concepts such as esprit de corps or team spirit. It ignores the communal loyalty that goes with team spirit that helps foster cooperative self-motivated teamwork so vital in achieving top performance.

The new (postmodern) worldview is organic rather than mechanistic, is holistic rather than parts centered, is participatory rather than impersonal and manages much more via networks than through top down hierarchies. As Capra points out in his book, The Web of Life, all living systems are mainly coordinated by networks, not hierarchies. All this fits well with the new postmodern management philosophy that stress empowerment of employees on the local level, self managed teams, and organic systems. And as Wheatley points out the reality of such new thinking lies in the relationships that arise from them”

5. The Tipping Point: How Little Things Can Make a Big Difference by Malcolm Gladwell

(http://www.amazon.com/exec/obidos/tg/stores/detail/-/books/0316316962/customer-reviews/newsfortraders/104-0496759-3197502 ) This is an important book to read if you are interested in how to make large scale, timely changes in a short time with limited resources. Gladwell writes with enormous zest. If we are to change the mindset of a nation and of how to deliver service, then this book will become our primer.

“There are few books that introduce a new idea that can be applied to multiple disciplines. This book contains more than an idea: it introduces a new way of understanding what often seems like major changes that appear to come from little or often unknown effort. Why do teenagers increase their rate of smoking in spite of the huge expense to convince them otherwise? Why did crime suddenly fall so drastically so fast in New York? What caused the sudden increase in sexually transmitted diseases in Baltimore? How did the sales of Hush Puppies more than quadruple with little or no conscious advertising effort?

Understanding these changes allows a minimal effort to effect huge results. It is difficult to see this in advance using our normal viewpoints. In fact the impact of these changes seems difficult to comprehend even in retrospect but it does open your mind for some creative analysis. For instance at Yale what was needed to get better student participation in a tetanus shot program was not more and more information on the medical need for the shots, but a better map showing locations and times available. What may be needed to reduce the long term addiction from teen smoking is not more ads on the dangers of smoking, but cigarettes with lower nicotine, below the tipping point of 5 milligrams of nicotine a day. A nurse named Georgia Sadler, trying to increase the awareness of diabetes and breast cancer in the black community found that the best avenue was not the churches or community centers but..... beauty salons.

Within this new tool is hope. Big problems seem less overwhelming. Big Changes become possible”

B. Business Context – How Networks evolved and why they are so different from the Traditional Organization

1. The Story of Visa International The Chaordic Organization by Dee Hock

(http://www.chaordic.org/res_wba.html ) This essay by the founder of Visa International, Dee Hock, is the “Genesis” story of how all the new science was embodied for the first time into the new form of organization. This compelling article was written for the World Business Academy and has the only introduction of any article in their illustrious canon by the late Willis Harman hinting at the true greatness of the ideas and the achievement which now 20 plus years later are just becoming obvious. It describes not only Hock’s thinking, but the genesis of the new organization and the now established principles for organizations made up of competitors. If you read only one thing, this is it.

If you want more, Mr. Hock has recently published a book called the “Birth of the Chaordic Age.

http://www.amazon.com/exec/obidos/ASIN/1576750744/qid=1012270070/sr=1-1/ref=sr_1_10_1/102-0108310-3940916

“Birth of the Chaordic Age is a compelling manifesto for the future, embedded within the intriguing story of a personal odyssey. An engaging narrator, Dee Hock is the man who first conceived of a global system for the electronic exchange of value, becoming the founder and CEO of VISA International. He looks critically at today's environment of command-and-control institutions and sees organizations that are falling apart, failing to achieve their own purposes let alone addressing the diversity and complexity of society as a whole. The solution, Hock claims, lies in transforming our notion of organization; in embracing the belief that the chaos of competition and the order of cooperation can and do coexist, succeed, even thrive; and in welcoming in the chaordic age.

The underlying tenets of Hock's ideas are well illustrated by the incredible story of the birth of VISA International, an organization formed on chaordic principles that now links in excess of 20,000 financial institutions, 14 million merchants, and 600 million consumers in 220 countries. Hock deplores an age where ingenuity and effort are wasted on circumventing the rules and regulations of insular, hierarchical bureaucracies. In a bold-type subtext interspersed throughout the book, he examines how this situation is stunting our potential as individuals and communities and contemplates what can be changed. This rumination is propelled onward by "Old Monkey Mind" (Hock's own thoughts). Though the technique allows the reader to engage in stimulating mental discovery along with the author, its New Age spiritual tone is sometimes a bit saccharine. His insights, however, are clear and provocative. In the Chaordic Age, he contends, "success will depend less on rote and more on reason; less on the authority of the few and more on the judgment of many; less on compulsion and more on motivation; less on external control of people and more on internal discipline."

What is a Chaord? By Chaord, I mean any self–organizing, adaptive, nonlinear, complex system, whether physical, biological, or social, the behavior of which exhibits characteristics of both order and chaos or, loosely translated to business terminology, cooperation and competition.”

2. The Age of Access: The new culture of Hypercapitalism where all of life is a paid for experience by Jeremy Rifkin

(  http://www.amazon.com/exec/obidos/tg/stores/detail/-/books/1585420182/customer-reviews/104-0496759-3197502 ) The best introduction that I know of to the implications of networks.

“This is a book for those who feel a deep urge to achieve a better understanding of the epoch-making transformations affecting our planet at the start of the 21st century. On reading many of the pages of Rifkin's work I have found myself enlightened, as if my vision and perception of our present world had gained a new touch of insight. But it is quite typical that when you are submerged by an experience you are not in the best condition to judge it objectively, to inventory, classify and minutely describe its processes: you look rather being 'lived' by than actually living the thing yourself! Just this happens today when everybody is speaking about globalization, often following a sort of faddish inclination to appear up-to-date at least as far as words are concerned: but if you are really to develop an informed awareness of what you are talking about books like Rifkin's set a milestone in understanding.”

3. Blown to Bits: How the New Economics of Information Transforms Strategy by Philip Evans and Thomas Wurster.

(http://www.amazon.com/exec/obidos/ASIN/087584877X/qid=1002745556/sr=2-1/ref=sr_2_3_1/104-0496759-3197502 ) This is the best book so far that explains how the internet ends the paradox of richness and reach. In the traditional world if you wanted to reach a large market you had to end up with an information poor and impersonal offering. The challenge for the public service is that to offer richness and reach you have to “deconstruct” the traditional organization. With web you can have both intimacy, tons of information and a reach everyone at a price that you can afford. Fast paced and full of great examples.

“Well, the explosion of connectivity and the subsequent adoption of common standards have created an information medium that can better accommodate the interests of consumers (and of firms as well for that matter, since it connects them to a global potential market). The Internet allows the separation of the economics of information from the economics of things, and also significantly reduces the trade-off between the reach and richness of information (whether this trade-off is blown up altogether is debatable). The authors make a thorough study of both richness and reach as potential sources of competitive advantage for firms. And, since consumers (as human beings) still act with bounded rationality, a new business function emerges in order to help them manage through the newly created choice-reach+richness-cacophony: navigation. This too can be a source of competitive advantage, and it is characterized by how closely it represents the interests of consumers, or on the contrary, firms. Messrs. Evans and Wurster call this affiliation.

The Internet impacts both value chains within firms and supply chains within industries. It leads to deconstruction and disinter mediation, and exposes firms' weaknesses; by leaving them aggressively competing only on their core competencies, it might eventually lead to the establishment of (gulp!) monopolies - the winner-take-all economy. Once a firm reaches what the authors call critical mass, challenging firms in effect do not stand a chance of overtaking the leader. This is a very thought-provoking possibility, as the Internet was also supposed to empower consumers.”

4. Natural Capitalism: Creating the Next Industrial Revolution by Paul Hawken & Amory and Hunter Lovins

(http://www.amazon.com/exec/obidos/ASIN/0316353000/qid=1002746108/sr=2-1/ref=sr_2_7_1/104-0496759-3197502 ) The best book available that describes how the new economy will operate. It describes a decentralized world that is itself increasingly networked and a new bias for technology which will borrow ideas directly from nature. Full of enthralling ideas which are here today. A business context for those who have to plan for the future.

“I first encountered Paul Hawken's writing in 'Growing a Business'. The clear-sighted practicality of that book is evident in this work. Combining thorough research, excellent analysis and insights, Hawken and the Lovinses put forward a vision, and mark out the path to that vision. A host of examples illustrate their arguments brilliantly, and leave one restless, wanting to put their recommendations for a environmentally sustainable world into immediate effect. Moreover, the chapters and arguments are set out so as to appeal to people in many industries and professions - MBAs, engineers, architects, town planners, farmers, scientists

This book cuts through the usual gloss and fluff of other "earth friendly eco-supporting books" by providing solid compelling data ( backed up with extensive detailed references)on our current (mis)use of natural resources and the eventual conclusion that soon we will see that capitalism and proper use of our natural resources can be combined and achieve financial success. This book will be seen as the precursor for refreshing change and a new understanding of what we need to do in the future. Buy it ! Read it ! Live it ! “

5. The Age of Spiritual Machines by Ray Kurzweil

(http://www.amazon.com/exec/obidos/ASIN/0140282025/qid=1002746569/sr=1-1/ref=sr_1_18_1/104-0496759-3197502 ) A Frightening book that describes the implication of the exponential growth that we are experiencing in technology. Who would have thought that the internet which was only a hobby only 6 years ago would be the force that it is today? Kurzweil, the inventor of OCR, speech to text and many other devices, is the leading practical investigator and applier of the power of patterns and neural nets ( network intelligence) See his article on the web that extends these ideas digs deeply into the topic of accelerating returns. The point is that there will be no technological barrier to what we want to do. (http://www.kurzweilai.net/articles/art0134.html?printable=1 )

“Kurzweil's forecasts for super-exponential growth in computing technology and his investigation of the results will seem outlandish to many readers. But Kurzweil's vision is backed by a history of successful predictions and businesses and a roster of substantial inventions (from a reading machine for the blind, to voice recognition technology, to the first digital music synthesizer). He also backs his forecasts with plenty of data. Agree or not, this highly stimulating book helps stretch your imagination to see the possible full extent of the IT revolution. If Kurzweil is anywhere near correct, we've only just begun the revolution”

6. Diffusion of Innovations by Everett Rogers

(http://www.amazon.com/exec/obidos/ASIN/0029266718/qid=1002744068/sr=2-1/ref=sr_2_3_1/104-0496759-3197502 ) This is the bible for understanding change and many of the theories so brilliantly described by Gladwell are supported by the research and the science in this book – Hard slogging though.

“Dr. Rogers is a brilliant sage whose lifelong quest for understanding how and why people adopt or deny innovation began, he tells me, on his family's farm in Iowa as a boy. At a young age he observed that some farmers were quick to adopt the latest innovations while many others were slower or even resistant to change. He also noticed that adoption didn't always equal success, nor did the refusal to change. So whether your gig is plowshares or computers or languages or healthcare or just about anything, you will find this book fascinating and illuminating. The book takes an "innovation" tour around the globe and through history with poignant examples of how new ways are diffused into societies. INC. magazine recently named this book as one of the 25 most important books written for understanding commerce”

7. The Cluetrain Manifesto by many folks

(http://cluetrain.com )) This important site has spawned a book by the same name. Its thesis is that in the new economy, the market is now a “conversation” and that we had better get the new language right. Out with bureau speak and in with real speak. Don’t understand me? Read the article.

“Markets are conversations. Trade routes pave the storylines. Across the millennia in between, the human voice is the music we have always listened for, and still best understand.

So what went wrong? From the perspective of corporations, many of which by the twentieth century had become bigger and far more powerful than ancient city-states, nothing went wrong. But things did change.

Commerce is a natural part of human life, but it has become increasingly unnatural over the intervening centuries, incrementally divorcing itself from the people on whom it most depends, whether workers or customers. While this change is in many ways understandable — huge factories took the place of village shops; the marketplace moved from the center of the town and came to depend on far-flung mercantile trade — the result has been to interpose a vast chasm between buyers and sellers.

By our own lifetimes, mass production and mass media had totally transformed this relationship, which came to be characterized by alienation and mystery. Exactly what relationship did producers and markets have to each other anymore? In attempting to answer this blind-man's-bluff question, market research became a billion-dollar industry.

Once an intrinsic part of the local community, commerce has evolved to become the primary force shaping the community of nations on a global scale. But because of its increasing divorce from the day-to-day concerns of real people, commerce has come to ignore the natural conversation that defines communities as human.

The slow pace of this historic change has made it seem unsurprising to many that people are now valued primarily for their capacity to consume, as targets for product pitches, as demographic abstractions. Few living in the so-called civilized world today can envision commerce as ever having been anything different. But much of the change happened in the century just passed.”

8. Surfing the Edge of Chaos by Pascale and others

http://www.surfingchaos.com/chaos/index.shtml Is the main page for this book.

Quite the best book I have read so far on the rules of the natural economy plus a host of excellent examples of how others have succeeded or failed to put these rules into practice. My favorite quote – “To repeat , living systems is not a metaphor. It is the way it is.”

The web site gives you an entire set of tools to use to support the book and a set of summaries that will enable the most time pressed to get the guts of the book ion minutes. BUT please invest in the book itself: it’s worth it! One of the key examples is the US Army – not a frivolous organization. For more on how the US Army has become the exemplar of how to make the shift to a “Natural Model” see the next book on the list.

The Amazon link to this book is:

http://www.amazon.com/exec/obidos/ASIN/0609808834/qid=1012269007/sr=2-2/ref=sr_2_91_2/102-0108310-3940916

 “Surfing the Edge of Chaos does a marvellous job of taking many of the ideas being developed in complexity theory and applying them to the business world. In contrast say to Garrett Ralls who tried to do much the same thing, this book succeeds. I found myself continually thinking about not only the examples they provide, but also on my own work experiences and other companies that I have analyzed.

The authors do an excellent job of contrasting their approach (adaptive leadership) with more traditional reorganization (operational leadership). But refreshingly, they also acknowledge that in some cases, the more traditional approach might be more appropriate. There are many interesting concepts being developed by complexity theorists and this book manages to capture many, if not most, of them.

They show repeatedly the need to increase the stress on an organization in order to break past patterns of behaviour. Their use of fitness landscapes (the idea that a successful company rests on a peak, and that in order to reach a new higher peak, often you must go down into the valley) is very powerful and at least partially explains why so many successful companies subsequently struggle, or fail, to adapt. Importantly though, the authors also spend a great deal of time talking about the unintended (or second and third order) effects of change. The point is not that you will be able to predict all of them (which is what chaos theory explicitly says you cannot do), but rather that you must be flexible enough to roll with those unanticipated consequences.

Does that mean that every idea in this book is new? Of course not, but to be successful, a new theory often must combine the old with the new. And this book does a masterful of applying the ideas of Chaos/Complexity theory to business, of providing a new framework to think about both old and new problems. You may not agree with everything that appears in this book, but you will certainly come away with much food for thought.”

“Wonderful case studies. Normally I tend to gloss over case studies, but those in this book are important, in part because assumed successes later deteriorated and returned to poor results of the past. This awareness alone makes the book worth reading; no organization can assume whatever it is doing right is sustainable. Gains can be reversed much faster than the time it took to get the initial gains.

In my view, this book reflects a whole new paradigm gaining momentum of how to best create organizations capable of adapting to the fast changing new economy. It make take a number of years before the wisdom becomes commonplace in practice, and then we move on to the next level of sophistication. One day we will likely be looking back and marvelling how, as we do today with Fredrick Taylor, we could have for generations tapped human talent by deploying the command-and-control techniques that still dominate the corporate landscape. I cannot imagine the concepts in these books being one day written as another fad that died.”

9. “Hope is not a Method”  by General Gordon Sullivan & Michael Harper

This is the dramatic story of how the US Army revitalised itself from the ashes of the Vietnam war. I found it quite humbling to discover that an organization that I had always sneered at, had within its ranks, a nucleus of fine men who, in spite of every possible roadblock, worked to create what is arguably the finest organization in the world today. All of us who know that we have work to do to renew our organizations can draw on this book

http://www.amazon.com/exec/obidos/ASIN/076790060X/qid=1012268584/sr=1-1/ref=sr_1_14_1/102-0108310-3940916

 “In recent years, the U.S. Army has been modified and modernized more extensively than almost any private business. Leading the charge on this front were General Gordon R. Sullivan, chief of staff from 1991-95, and one of his key strategic planners, Colonel Michael V. Harper. In Hope Is Not a Method, these two explain just how an organization with 1.5 million employees and a $63-billion annual budget was successfully reengineered--and how those in the corporate world can learn from the experience

About the Author
Gordon R. Sullivan was chief of staff of the U.S. Army from 1991 to 1995, culminating a distinguished military career. Professor of strategic leadership and chair of the CEO Forum of the School of Management at Boston University, he lives in Washington, D.C. Michael V. Harper was director of the Army's Strategic Planning Group from 1991 to 1995. He now runs The Harper Group, a business consulting firm. He lives in Springfield, Virginia.

 Sullivan (who recently retired as the army's chief of staff) offers a detailed briefing on how the army has remained an effective, flexible, well-trained force to be reckoned with despite the budget cuts, downsizing, and restructuring that occurred on his watch (199195).

… the author and his collaborator (a retired colonel who headed the army's strategic planning group) provide a comparatively conventional governance manual; as a practical matter, moreover, the text's down-to-earth advisories are broadly applicable to great or small organizations of virtually any kind. In their can-do canvas of guiding principles for capitalizing on convulsive change, they stress the importance of shared values, identifying objectives, challenging the status quo, empowering subordinates, and visionary leadership.

Covered as well are the putatively handsome returns obtainable from investing in people, benchmarking the future, reinforcing an outfit's collective commitment, encouraging constructive dissent, and keeping all hands abreast (if not ahead) of the learning curve. Sound counsel for aspiring and incumbent executives from old soldiers who appreciate the difference between leadership and management.

Slides

1. The Shift in Values – Values Technology

This slide developed by Dr Brian Hall shows the shift in values. We today stand on the edge of Phase II, the belonging phase, and Phase III the self initiating phase. Look at the style of leadership at the bottom of the chart. We need to move to collaboration.

Remember when things go wrong, we tend to move back. So Germany after losing WWI and after suffering hyper inflation went back from a Paternalist system to an Authoritarian system where meeting basic needs were paramount and where the “other” was the enemy. The Cultural Creatives are a product of affluence and are the group that is emerging in Phase III. They will become truly powerful when they can employ networks. They naturally do not like to join organizations. Fundamentalists are in Phase 1. They reject the Modernist world of Phase II. The Phase II Modernist world is our current prevailing culture.

Most organizations therefore are at the Manager level with a few at the facilitator level now. I am not sure whether it will be possible for traditional corporate structures to evolve to Phase III. Most young people are close to the self initiating level and find managerial cultures very stifling and unrewarding. The drive towards self employment is from those who are self initiating who cannot work conventionally any more. This is where the ideas of Free Agency come into play.

Slide 2 The Pace of Change

Moore’s Law appears to work over time. We can see the acceleration in this slide of the storage and processing capacity of information.

Moore’s law has been going on since the advent of Homo Sapiens in about 40,000 BC. Think back over time and consider the development of language (40,000 BC); of writing (3,000 BC; of printing (1400 AD); of the telegraph (C1845 AD); of mechanical printing (C1845 AD); of the telephone and wireless (C1910);  of the mainframe computer (c1965) of the fax (c 1970); of the PC (c1975); of the internet (c1995) and you see how things are accelerating. We can expect the pace to accelerate even further. Ask yourself how this will change the world that we live in?

Slide 3 – Demography

This Slide shows the revolution in demography that we will live through.

Throughout all time before us there have been more young than old.

Soon this will be reversed.

Those of you who are in your young twenties will be scarce in numbers and there will not be many of you who can cope with the pace of change. Those of you who can will be in demand as never before.

But who will raise our children and who will help look after the old? What will the seniors have to do? Can they remain retired? Who will pay the taxes etc.

My sense is that this shift in demography may herald more change than any other dynamic.

Slide 4 The Transition

This then is what we are living through. As you can see the two world are in opposition to each other. There is no half way nor is there a compromise. What we are seeing is that organizations that are fully transformed onto the right will  overwhelm their competitors on the left.

The US Army is invincible in conventional war. Dell will crush all other conventional PC manufacturers. Amazon will triumph in the end.

Only transformation will enable a traditional organization to move from left to right.