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3rd Order Engagement

Third-order engagement is a framework for thinking holistically about the network of people connected to an organization. 

First-order engagement is engaging employees in the work of the organization.

Second-order engagement is employees engaging the customers and partners of the organization. 

Third-order engagement is customers and partners engage other customers and partners. 

More...
http://www.the-vital-edge.com/third-order-engagement/

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Distributed Autonomous Organizations -- DAOs

Is it possible to run an organization without managers, employees or even a formal head office? Can it be run entirely decentralized and autonomous? Christoph will present blockchain enabled government structures as well as the story of "The DAO, the largest crowdfunding project in history".

Christoph Jentzsch works on exploring the most basic fundamentals in different systems. After studying theoretical physics in Dresden he worked on the protocol and as the lead tester for the non-profit organization Ethereum. Building a blockchain which enables smart contracts as the fundamentals for a new decentralized economy. Using this technology he authored "The DAO", a decentralized autonomous organisation which runs entirely on the blockchain. He also founded the company Slock.it working on the decentralized sharing economy.

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Leadership Transitions

This weekend's board meeting at +YES! Magazine was the first with the organization's new executive director, Christine Hanna. She did an amazing job at this meeting and is already showing organizational tremendous leadership. This weekend further strengthened my confidence that we have picked an excellent new leader.

I have been deeply involved with this leadership transition over the last two years, heading up the search process on the board. Some of you who know me well know the sad, sad story of my old organization, Groundwire, and how strongly motivated I was to avoid a similar fate at YES!

If you're interested in what we did for our transition process, you may want to read this article by the organization's outgoing ED, Fran Korten. Fran and I partnered very closely in this work, and her deep commitment to this transition proved absolutely critical to its success. I am so glad that she has captured this work to share with others:

http://laffsociety.org/News.asp?PostID=963

(I took this photo during a break in our meeting this morning. This artwork sits in the conference room at YES!)
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Big Data Changing Business Decision Making

More and more, we are going to see algorithmically-managed organizations.

...The dirty little productivity secret of big data is that Pareto’s 80/20 insight has decayed into empirical anachronism. Analytically aggressive firms increasingly see Pareto proportions closer to 10/90, 5/50, 2/30, and 1/25. Depending on how rigorously the data is digitally sliced, diced, and defined, 1/50, 5/75, and, yes, 10/150 Paretos emerge. Pareto’s “vital few” becomes a “vital fewer.”

The preliminary success of Pareto ensembles recalls the critical insight from the Netflix Prize competition: The best results came not from improving individual model performance but from creating ensembles where the best attributes were collectively amplified. Ironically but appropriately, Pareto analytics could determine the most valuable ensembles.

Rigorously applying the Pareto analytics to Pareto analytics seems obvious, but few organizations demonstrate that discipline every day. That must change. Strategic plans and technology road maps need to be analytically informed by “Pareto pathways.” The ability to better predict tomorrow’s vital few, the opportunity to combinatorially combine KPIs from across the enterprise, will become sources of not just greater efficiencies but also determinants of disruptive value creation.

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A look at a few of the problems Zappos is having making Holacracy with within their organization. If I were to sum it up on a few words, it would be too much of a focus on organizational process.

My critique of this article is that it unfairly ascribes the motivation for trying Holacracy as a desire to turn people into highly efficient software. That's simply not true. The goal behind the management system is to develop a non-hierarchical approach to managing an organization.

I have been watching some of these experiments over the past few years, hoping that they would work. Years ago, I actually met with the founder/visionary behind Holacracy while he was visiting Seattle. I was running a similar experiment with my own organization at the time, and running into problems. The core of the difficulties? Too much energy was going into process, and it was bogging us down.

Hierarchy, it turns out, is a pretty efficient model for making decisions amongst a group of humans. It bothers me to say that, but it's true. It does have all kinds of drawbacks though. Some of these can be overcome with culture and process innovations, but that requires a management team that fully acknowledges these pitfalls from the get go.

I personally am of the belief that as our software systems get better, we may actually be able to make non-hierarchical management structures work, as software takes up some of the complexity and awkwardness of managing the process. Until then, I'm not going to bash leaders like Tony Hsieh for trying to make stuff like this work. It's a risky move, to be sure, but the intention behind it is laudable.

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Why visionary CEOs are rarely followed by visionary CEOs

This is a good analysis of how companies like Apple and Microsoft have stumbled after losing generative CEOs. It focuses on the organizational dynamics and market pressures that companies face when they lose someone like Gates or Jobs.

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The difference between connections and relationships

I used to use the words connection and relationship interchangeably. Let me explain why I don’t anymore because I think it sheds some light on how building relationships works over time.

This is a post from a few years back, but +Bernard Vatant made me think of it just now as he was musing in a post about the difference between focusing on collections rather than people here on Google+.

I am a big fan of Collections because I think that they take closer to a true "shared interest graph." With that said, I think that G+ may have swung a bit too far in that direction. If circles represent our relationships with people and collections our relationships with topics, the circle has largely been eclipsed by the collection and that's a very narrow view on how people connect via shared interests. Yes, we might first connect around a topic, but over time, as we get to know someone, our interest in them stretches beyond that shared topic. That evolution of relationships around shared interests is something that Google seems to have lost a bit over this past couple years, and it's a shame. Or, to quote from this piece:

The first few times I go in for my haircut, it’s all about my hair. Eventually, the barber and I may form a relationship though, and begin to actually care about the answers we give each other about our lives. Our connection matures; it becomes less transactional and more relational.

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Every once in a while, I run into writing that really excites me with the perspective it offers.

In this case, it's +Jessie Lydia Henshaw​. I've just done a skim and am looking forward to more of a deep dive later, but wanted to share her site now for those interested in systems thinking, living systems, learning and a bunch of other interesting topics. She cautions that her site is a little dated, but I've found to be very interesting and worth sharing.

Here's the link: http://www.synapse9.com

Oh yeah, and to make this post pop a bit, I included a nice painting - which is by her, the way.
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Managing the Commons

One of the big issues we will continue to wrestle with is how we deal with the commons; not just physical spaces and ecosystems but cultural commons and technological commons as well.

Thanks to +John Kellden and +Zara Altair for sharing and flagging this respectively over on FB.

#commons  

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Short and sweet introduction of the blockchain.

HT to +Zara Altair.
Here's my first animated video. I used After Effects. It's for Institute for the Future.
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