Best Practices in Management – Page 19 – Public Intelligence Blog

2007/01/232009/12/04

Review: The Starfish and the Spider–The Unstoppable Power of Leaderless Organizations

5 Star, Best Practices in Management, Change & Innovation, Civil Society, Consciousness & Social IQ, Democracy, Intelligence (Public), Intelligence (Wealth of Networks)

Amazon Page

Compelling and Sensible, Offers Hope in Face of High-Level Threats,

January 23, 2007

Ori Brafman

I like this book very much and recommend that it be read in conjunction with “Wikinomics” and “Infotopia,” or at least read my reviews there. Each of these three books has its own perspective and the combine well. There are other books, such as Kevin Kelly's and Howard Rheingold's that were ten to fifteen years ahead of what is now “conventional wisdom” and it is important to give credit to the true pioneers.

From a business and governance perspective, the book is valuable in emphasizing that any endeavor based on information will improve with decentralization–more dots will be captured, shared, understood, and acted on in a timely fashion. I have been saying for over a decade that in the age of distributed information, central intelligence is an oxymoron, something the Central Intelligence Agency, my former employer, simply refuses to believe.

I listened to Al Gore last night on Global Warming, in Boise, Idaho–10,000 people who gave him multiple standing ovations, and I plan to listen to George Bush on Iraq tonight. Al gets it, George does not. Centralized systems cannot defeat decentralized systems. Al Gore is leading a massive global campaign to get all of us to change the planet from the bottom up, while George (or Dick Cheney, depending on who you think actually runs the place) is deepening America's loss of global standing and moral stature at the same time that he is bankrupting the treasury and destroying the Armed Forces–and planning a conventional attack on Iran at the same time. One of these guys is sane, the other is a nutcase. The good news is that decentralized morality can triumph over centralized corruption, and that is the back story on Al Gore's emergence as a virtual Earth Leader.

The authors offer us a number of gems and conclude with ten rules I will list below.

The key point is that a distributed brain or organization is more resilient and more likely to pick up weak signals. Distributed consensus is both scalable and sustainable, while centralized coercion is neither.

The authors place great emphasis on the importance of a spiritually-compelling ide[a]ology as the glue that helps decentralized organizations adjust to external and internal challenges much faster and with greater precision (as well as fewer resources) that any centralized system can manage. The “catalyst” model (Al Gore) is compared with the “commander in chief” model (George Bush) and there is no doubt at all which is the superior model for addressing today's complex high-level threats.

Indeed, it may be that between state secessions and popular boycotts of corporations using the federal government to pick people's pockets, that the Internet could create a form of global self-governance that makes the Federal government largely irrelevant, while re-directing funds from waging war to waging peace. That is the next big step. The authors specifically say that the price of software is declining toward zero. It will be content, sense-making, and what IBM calls “services science” that will add value and be marketable.

The authors describe Amazon and E-Bay in very favorable terms, and as hybrids with a centralized infrastructure for delivering services, but a vast decentralized network of customers who are also “prosumers” (Alvin Toffler's term) creating value on the network with their reviews and buying patterns. The authors' phrase “decentralized creativity and centralized consistency” jumped out at me.

The ten “rules” (better described as guidelines) are:

01 Diseconomies of scale
02 Network effect
03 Power of chaos
04 Knowledge at the edge
05 Everyone wants to contribute
06 Beware the hydra response
07 Catalysts rule
08 *Values* are the heart of any organization or network
09 Measure, monitor, and manage
10 Flatten or be flattened

Overall, this is a very fine book. I also recommend the emerging literature on the “true cost” meme and on natural capitalism, demonstrating that a proper understanding of the true and long-term costs of any product or service actually makes businesses more profitable and more sustainable.

I have added an image I created in the 1990's when I first started advocating Open Source Intelligence (OSINT), today I am focused on a non-profit, the Earth Intelligence Network, whose objective is to empower individuals and communities with public intelligence in the public interest. This book gave me hope, gave me a sense that we can indeed come together as a global network, and displace the authoritarian and corrupt governments that have been bribed by corporations to loot our commonwealth.

2006/12/082010/02/14

Review: The Ecology of Commerce–A Declaration of Sustainability

6 Star Top 10%, Best Practices in Management, Complexity & Resilience, Economics, Environment (Solutions), Intelligence (Commercial), Nature, Diet, Memetics, Design, Values, Ethics, Sustainable Evolution

Foundation Reference for Future of Business Without Waste,

December 8, 2006

Paul Hawken

This is easily one of the top ten books on the pragmatic reality of what Herman Daly calls “ecological economics” (see my list of Environmental Security).

The author excels at painting a holistic view of the realities that are not being addressed by the media or by scholars in anything other than piecemeal fashion.

The bottom line: what we are doing now in the face of accelerating decay (changes and losses that used to take 10,000 years now take three years) is the equivalent of “trying to bail out the Titanic with teaspoons.” On page 21-22 the author states that we are using 10,000 days of energy creation every day, or 27 years of energy each day.

This is a practical book. In brief, we can monetize the costs of the decay, we can show people the *real* cost of each product and in this way inspire both boycotts (of wasteful products) and boycotts (Jim Turner's term) of solar energy and long-lasting repairable products.

The author appears to be both pro-business and very wise in seeing that the cannot save the environment by destroying business, but rather must save business so it can save the environment–we must help business understand that doing more with less is what they must do to survive.

The author includes a recurring theme from the literature, that diversity is an option generator, and hence one of the most precious aspects of life on Earth. Diversity is the ultimate source of wealth, and anything that reduces diversity is impoverishing the planet and mankind. In a magnificent turn of phrase, the author states that the loss of a species is the loss of a biological library.

At its root this book is about missing information, needed information, about the urgency of making all inputs, processes, and outputs from corporate production transparent. He quotes Vaclav Havel on page 54 as saying that this is an information challenge, a challenge of too much (or too little) information and not enough actionable intelligence supporting sustainable sensible outcomes.

This is also a financial problem that has not been monetized properly. Although E. O. Wilson takes a crack at the strategic or gross costs of saving the Earth in his book “The Future of Life,” this author looks at the retail level and describes the waste inherent in our military system. He reminds me of Derek Leebaert's “The 50 Year Wound” when he notes that the US and the USSR spent over 10 trillion dollars on the Cold War, enough to completely re-make the entire infrastructure of Earth, including all schools. As I myself like to note, for the half trillion we have spent on the war against Iraq, we could instead have given a free $50 cell phone to each of the 5 billion poor people, and changed the planet forever.

The author is compelling in pointing out that conservation alone would save more energy than drilling in Alaska, and that President Reagan not rolled back gasoline mileage expectations, we would today be free of any dependency of Middle Eastern energy.

A good part of the book focuses on the need to eliminate waste, what some call “cradle to cradle” (waste must be fully absorbed of other pieces of the system), and where waste cannot be eliminated, to include the cost of its storage in the price of the product, requiring producers of products to take them back (e.g. refrigerators).

I am inspired by the author's view that not only is technology NOT a complete solution, but that full employment is possible if we REDUCE our excessive acquisition of technology that not only replaces humans, but also consumes energy and produces pollution.

This is an extraordinarily clever and useful book that fully integrates discussions of feedback loops and especially of financial and legal feedback loops that are now misrepresentative. One example the author uses is the GATT demand that there be no discrimination of “like” products based on methods of production. This is code for blocking labor laws by imposing high tariffs on products made by slaves or under sweatshop conditions.

I completely agree with one of the author's most important opinions, that we must end corporate claims of “personality” and the rights of a person. This has had two pernicious effects, the first allowing corporations to dominate the public debate; and the second of exempting managers from legal liability and transparency.

The book emphasized the restoration of human and natural capital as vital foundations for evaluating investments–this would dramatically reduce the financial criteria's dominance and emphasis on short-term returns that do not reflect the cost of natural resources and lost jobs to the future and the community.

Distressingly but importantly, the author notes that a major component of the cost of goods is in advertising, where corporations spend more on advertising than the government spends on all secondary schools, and on packaging, much of which is designed to last vastly longer than the contents.

I especially liked the author's suggestion that insurance costs be included in the price of homes and of gasoline, essentially making universal insurance affordable for all. I also liked his idea for indexing Nations by their sustainability, i.e. Most Sustainable Nation (MSN).

The author ends with a restatement of his three fundamentals:

1) End waste
2) Shift to renewable power (solar and hydro)
3) Create accountability and feedback

Although this book was published in 1993 and the author has now published “Natural Capital” (next on my reading list), I did not discover it until recently and am now very enthused about the author's newest project, the World Index of Social and Environmental Responsibility (WISER). I am certain in my heart that a bottom up Earth Intelligence Network is forming, and that end-user voluntary labor–social networks–are going to place enough information in the hands of individuals to restore participatory democracy and moral communal capitalism. This author is extraordinary in his understanding and his ability to teach adults about reality and the future.

2006/08/092009/12/04

Review: The Wealth of Networks–How Social Production Transforms Markets and Freedom (Hardcover)

6 Star Top 10%, Best Practices in Management, Capitalism (Good & Bad), Change & Innovation, Culture, Research, Intelligence (Collective & Quantum), Intelligence (Public), Intelligence (Wealth of Networks), Values, Ethics, Sustainable Evolution

Amazon Page

Manifesto for the 21st Century of Informed Prosperous Democracy,

August 9, 2006

Yochai Benkler

Edit of 14 Apr 08 to add links (feature not available at the time).

Lawrence Lessig could not say enough good things about this book when he spoke at Wikimania 2006 in Boston last week, so I ordered it while listening to him. It arrived today and I dropped everything to go through it.

This book could well be the manifesto for 21st Century of Informed Prosperous Democracy. It is a meticulous erudite discussion of why information should not be treated as property, and why the “last mile” should be built by the neighborhood as a commons, “I'll carry your bits if you carry mine.”

The bottom line of this book, and I will cite some other books briefly, is that democracy and prosperity are both enhanced by shared rather than restricted information. The open commons model is the only one that allows us to harness the distributed intelligence of the Whole Earth, where each individual can made incremental improvements that cascade without restraint to the benefit of all others.

As I write this, both the publishing and software industries are in the midst of a “last ditch” defense of copyright and proprietary software. I believe they are destined to fail, and IBM stands out as an innovative company that sees the writing on the wall–see especially IBM's leadership in developing “Services Science.”

The author has written the authoritative analytic account of the new social and political and financial realities of a networked world with information embedded goods. There have been earlier accounts–for example, the cover story of Business Week on “The Power of Us” with its many accounts of how Lego, for example, received 1,600 free engineering development hours from its engaged customers of all ages. Thomas Stewart's “The Wealth of Knowledge,” Barry Carter's “Infinite Wealth,” Alvin and Heidi Toffler's most recent “Revolutionary Wealth,” all come to the same conclusion: you cannot manage 21st Century information-rich networks with 20th Century industrial control models.

Lawrence Lessig says it best when he speaks of the old world as “Read Only” and the new world as “Read-Write” or interactive. His fulsome praise for this author and this book suggest that the era of sharing and voluntary work has come of age.

On that note, I wish to observe that those who label the volunteers who craft Wikis including the Wikipedia as “suckers” are completely off-base. The volunteers are the smartest of the smart, the vanguard for a new economy in which bartering and sharing displace centralized financial and industrial control. Indeed, with the localization of energy, water, and agriculture, this book by this author could not be more important or timelier.

One final supportive anecdote, this one from the brilliant Michael Eisen, champion of open publishing. He captured the new paradigm perfectly at Wikimania when he likened the current publishing environment as one in which scientists give birth to babies, the publishers play a mid-wifery role, and then claim that as midwives, they have a perpetual right to the babies and will only lease them back to the parents. What a gloriously illuminating analogy this is.

I will end by tying this book and this author to C.K. Prahalad's “The Fortune at the Bottom of the Pyramid.” That other book focuses on the fact that the five billion poor are actually worth four trillion in disposable income, versus the one billion rich worth one trillion. C.K. Prahalad posits a world in which capitalism stops focusing on making disposable high-end high cost goods, and turns instead to making sustainable low-cost goods. I see the day coming when–the avowed goal of the Wiki Foundation–there is universal free access to all information in all languages all the time.

If Marx and his Communist Manifesto were the tipping point for communism, this book is the tipping point for communal moral capitalism. Yochai Benkler is–along with Stewart Brand, Howard Rheingold, Bruce Sterling, Kevin Kelly, Lawrence Lessig, Jimbo Wales, Ward Cunningham, Brewster Kahle, and Cass Sunstein, one of the bright shining lights in our constellation of change makers.

He ends his book on an optimistic note. Despite the craven collaboration of the U.S. Congress in extending copyright forever into the distant future, he posits a reversal of all these bad laws (it used to be legal to discriminate against women and people of color) by the combination of cultural, social, economic, and technical forces that have their own imperative. Would that it were so, sooner.

I beg indulgence for listing five books I have published. I know you all know about Smart Mobs, Wisdom of the Crowds, Army of Davids, etc. See also the literature resilience, panarchy, and social entrepreneurship.

Peace (and prosperity) for all, in our time.

2005/06/252009/12/04

Review: The Wealth of Knowledge–Intellectual Capital and the Twenty-first Century Organisation (Hardcover)

5 Star, Best Practices in Management, Capitalism (Good & Bad), Change & Innovation, Information Society, Intelligence (Collective & Quantum), Intelligence (Commercial), Intelligence (Public), Intelligence (Wealth of Networks)

One of three best books on creating value in the InfoAge,

June 25, 2005

Thomas A. Stewart

EDIT of 20 Dec 07 to add links.

Too many people will miss the core message of this book, which is about paying attention to truth and seeking out truth in the context of networks of trust, rather than about managing the process of internal knowledge.

When the author says “It's time to gather the grain and torch the chaff,” his book over-all tells me he is talking about brain-power and a culture of thinking (the grain) and counterproductive information technology and irrelevant financial audits (the chaff).

This is one of those rare books that is not easily summarized and really needs to be read in its entirely. A few items that jumped out at me:

1) Training is a priority and has both return on investment and retention of employee benefits that have been under-estimated.

2) All major organizations (he focused on business, I would certainly add government bureaucracies) have “legal underpinnings, ..systems of governance, ..management disciplines, ..accounting (that) are based on a model of the corporation that has become irrelevant.”

3) Although one reviewer objected to his comments on taxation, the author has a deeper point–the government is failing to steer the knowledge economy because it is still taxing as if we had an industrial economy–this has very severe negative effects.

4) As I read the author's discussion of four trends he credits to John Hagel of I2, it was clear that “intelligence” needs to be applied not only to single organizations, but to entire industries. In my view, this author is quite brilliant and needs to be carefully cultivated by the U.S. Chamber of Commerce, all of the industry associations, and by governments. There are some extremely powerful “macro” opportunities here that his ideas could make very profitable for a group acting in the aggregate.

5) This is one book that should have had footnotes instead of end-notes, for while the author is careful to credit all ideas borrowed from others, it is difficult in the text to follow his thinking in isolation. One idea that is very pertinent to national intelligence and counterintelligence as well as corporate knowledge management is that of the reversal of the value chain–“first sell, then make,” i.e. stop pushing pre-conceived products out the door and get into the business of just enough, just in time knowledge or product creation that is precisely tailored to the real time needs of the client.

6) The author excells at blasting those corporations (and implicitly, major government bureaucracies such as the spy agencies that spend over $30 billion a year of taxpayer funds) that assume that if they only apply more dollars to the problem, they can solve any challenge. “Too often ‘dumb power' produces a higher-level stalemate.” One could add: and at greater cost!

7) The bottom line of this truly inspired and original book comes in the concluding chapters when the author very ably discusses how it is not knowledge per se that creates the value, but rather the leadership, the culture, and infrastructure (one infers a networked infrastructure, not a hard-wired bunker). These are the essential ingredients for fostering both knowledge creation and knowledge sharing, something neither the CIA nor the FBI understood at the management level in the years prior to 9-11.

Final note: I missed the pre-cursor to this book, Intellectual Capital: The New Wealth of Organizations (1997) and just read it. I recommend both books, and in some ways, it is better to read this book first. I also recommend Robert Buckman's Building a Knowledge-Driven Organization, and the book, The Innovator's Solution: Creating and Sustaining Successful Growth as ideal companions to this path-finding work.

Recently published (2006 and on), see also, with reviews:
The Wealth of Networks: How Social Production Transforms Markets and Freedom
The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks)

2005/06/252009/12/04

Review: Intellectual Capital–The New Wealth of Organizations (Paperback)

5 Star, Best Practices in Management, Capitalism (Good & Bad), Change & Innovation, Information Society, Intelligence (Commercial)

Ref A for Buidling Value in the Information Age,

June 25, 2005

Thomas A. Stewart

I read the same author's The Wealth of Knowledge: Intellectual Capital and the Twenty-first Century Organization first, and then went back to get this earlier book (1998), and I actually feel that reading them in that order is better. This book has a lot of detail that is well served by the context that can be found in the later book.

For those who really wish to get a deep look at the future of building value in the age of distribution information in all languages, I recommend that both of Stewart's books be read in conjunction with the following three Nobel-level books: Margaret Wheatley, Leadership and the New Science: Discovering Order in a Chaotic World Robert Buckman, Building a Knowledge-Driven Organization and Christensen & Raynor, The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials) My reviews of these books are both evaluative and summative, and could be helpful as short-cut, but they are no substitute for actually buying and reading the books.

The most important point in this book is that the value is no longer found in collecting just in case knowledge, but rather in connecting dots to dots, dots to people, and (the highest value) people to people. It's about connecting, not collecting. Based on this book I drew my own value triangle, VALUE appearing in the middle of the triangle, with Context being the lower left corer, Content being the lower right corner, and CONNECTION being the apex of the triangle–further refined as connecting customers, connecting contributing talents, and connecting sub-contracted sources, softwares, and services. No one is doing this today in the manner that meets the emerging needs of the marketplace.

Most interesting to me is the author's early emphasis on the Chief Financial Officer being the point of sale, not the CEO, the CTO, or the production divisions. Intellectual capital is a value-creation and profit-building exercise, and it needs to be presented as a financial campaign plan, not a technology plan, not a human resources plan, and not a sales and marketing plan.

Although the author focuses on intellectual property, and provides compelling anecdotes and links that suggest that any company in the knowledge business can increase its bottom line earnings by 20-40% if it does a better job of managing its intellectual property, I see two other emerging marketplaces in this book that the author may not have intended but certainly contributes insights to: managing shared access to external sources, to reduce the cost and increase the knowledge that companies can use to increase their competence in a global environment; and managing customer understanding and relationships in the aggregate–it is possible to take cross-selling to new heights if companies in different industries that are not competing with one another, will share customer information in new ways, thus leading to the invention of new3 offerings and new value.

A major point in this book that I believe everyone misses is that the management of intellectual property, or knowledge management, or external open source information acquisition and exploitation, is totally and utterly without value in the absence of a strategy. Collection or connecting is of the greatest value when it is done with strategic purpose, operational efficiency, and tactical effect.

There is a lot more in this book that will impact on my strategic business planning, and that I choose to not summarize here, but will instead end with three points the author makes that I consider to be important:

1) In the information age, only investments in knowledge building are really investments–traditional investments in capital goods are costs, not to be confused with investments intended to generate new value.

2) Knowledge value grows on a logarithmic scale, while goods value grows arithmetically.

3) In today's environment, careers are defined by personal skills and networking, not traditional jobs and corporate positions. The corollary of this is that individuals must self-manage their continuing education and skill acquisition, and any job that fails to provide for continuing upgrading of skills is not worth keeping.

I consider this a seminal reference.