What Technology Wants

“The proper response to a lousy idea is not to stop thinking.”

 Kevin Kelly

Every so often a book appears that unexpectedly changes everything. For me, these books are usually accidental. I frequent Politics and Prose, a local, independent bookstore in Washington, DC. It is one those rare places where authors still present their works, and take questions from the literate and thoughtful audience. Come to think of it, it was here that I first met Dan Pink.

A couple of weeks ago, Politics and Prose held their membership appreciation day, where all books are discounted by 20%. This is always an expensive time of year for me, and also deeply rewarding. As I wandered amongst the plethora of arcane literature, I happened upon an incredible book that turns out to be my most important read of several years.

The book is What Technology Wants by Kevin Kelly. Kelly is a former editor at Wired magazine. He also spent 8 years wandering around Asia with nothing but a bedroll, has lived in Amish communities, and, it seems, has truly questioned every premise of modern life.

Kelly makes several observations about the nature of technology that were completely new, yet absolutely resonant with me.  His view of technology, or the technium, as he calls it, is that it is a near-living system, subject to the laws and inevitability of all living things. The view of a vast system of technology creating the conditions for its own further development is a fascinating, and sometimes unnerving concept.

Yet, here it is. Kelly is an amazing and interesting writer with a compelling message. He tells us that by embracing the technium as our ally, we can maximize our utilization to solve a wealth of challenges of this and future generations. The greatest challenge for us is to steer this technology towards benevolence and equity, and not allow it to be controlled by a few institutions, whether private or governmental.

It is no accident that Kelly makes his case that Information Wants to Be Free. He worked with Stewart Brand at Whole Earth Catalogue, and is an eloquent advocate of technology as a liberator. If you are looking for a stimulating, entertaining, and brilliantly written book, I would suggest picking up What Technology Wants. You won’t be able to put it down until you are finished!

The Four Uncertainties

As I talk with my clients, who represent a highly diverse cross-section of businesses, from virtual consultants to blue-collar, mid-market operations to Fortune 100 telecoms, I sense a consistent reluctance to move confidently into the future. As I explored with each of them the source of their reluctance, we uncovered together a pervasive anxiety about the future.

 The most predominant anxiety we explored was an encompassing uncertainty. For each of my clients, this usually takes one or more of four forms:

1)      Uncertainty of the consequences of political decisions (or lack of same): This is not about party politics. It is simply the confusion generated by an inert Congress and an increasingly polarized society. The unbelievable ineptitude of political leaders of all persuasions has resulted in a gridlock that prevents any future planning on the part of business. This leads, of course, to the second uncertainty;

2)      Uncertainty of the economic future: Even though most of my clients are doing exceptionally well, the fact that the global economic news is contradictory and complex means that orders are not being placed in a timely manner. The lack of clarity and conflicting news about future growth engenders reluctance to commit investment dollars. The results are inefficiency in planning and execution.

3)      Technological advances that can game-change an entire line of business: Phenomena such as iPads, virtualization, Skype,  Mechanical Turk, eLance, the death of Web 2.0, social media, etc., etc., have created massive confusion regarding investment, hiring, relocation, outsourcing, and even the hope of strategic decision-making.

Advances in the popularity of cloud computing have caused many of my clients to hesitate to make any major purchase. They are concerned that an investment in new servers or software licenses today may be wasted. Apple’s introduction of iCloud in the fall is one more game-changer.  iCloud is the first major business-to-consumer use of cloud computing. Because it is Apple, we will see a massive acceptance of cloud computing by consumers, as well as by commercial interests, creating instantaneous ubiquity. The movement skyward will be accelerated exponentially.

Technological advances have also mandated organizational restructuring into totally non-traditional forms. We are already seeing everything from virtual assistants to virtual CEOs. We see more and more employees working remotely, without offices. I was talking last week with an attorney who has created a virtual law practice with other attorneys on a global scale. Technology has made all of this possible, if not inevitable.

4)      Customer uncertainty:  Customer expectations have radically changed. I have surveyed all of my 22 current clients. Without exception, they have confirmed that their customers have come to expect new and different services from all of their vendors and suppliers. What I hear most often is that a long-time customer that has been fully satisfied with my client’s services in the past now expects both the current service and an additional service that includes advice on anticipating the future.

The major challenge this generates is the need to provide innovative solutions from a staff that has traditionally only provided task completion. Some of my clients welcome this as a fantastic opportunity to define new service offerings to current customers. Others see it as an incredibly challenging change in the direction of today’s business model.

The result of these four uncertainties is that businesses are hesitant to invest, hire, train or develop staff. They are also resistant to creating new, venturesome lines of business. Furthermore, since everyone is uncertain and hesitant to invest, when a decision is finally made, the expectation is that the product or service will be delivered immediately. Only a few years ago, most businesses had a substantial backlog, which made production of product or provision of service orderly and predictable. No longer! Now, everyone puts off any purchase until the last possible moment, then expects immediate fulfillment. This precipitates surges and lulls, which makes strategic planning and efficient execution all but impossible.

Are you seeing the same trends? I would love to collect your examples, and hear your opinions on other uncertainties that are slowing us down. The inexorable forward movement toward efficiency and automation can overcome the most stubborn human resistance. For that to happen, though, humans must first recapture the courage to invest and embrace risk. How can we help make that happen?

Denying the Paradigm

I recently heard a Vistage (Vistage.com) speaker admonish members for believing that there is anything special or unusual about this historic moment. His benign take on the world is that we are in a simple economic correction that is no different from every other recession. His position was a little surprising, given that he otherwise seemed to be quite intelligent.

What I found to be most naive in the presentation was his thesis that nothing in the technology of today in any way differentiates this age from others. His point was that technology has always existed. One of his examples was that the tomahawk was a technological advance, as was the Trojan horse. People, he said, have always used technology to their advantage, and today is no different. He openly ridiculed any concept of a paradigm shift.

What he, and a considerable number of economists and supposed historians seem to be ignoring is the enormity of the social impact that these technological advances are introducing. We have, of course, experienced similar massive upheavals in the past. I think a look at just one example, utilization of the assembly line in manufacturing, can help us get an idea of technology as social, as well as, economic game-changer.

Henry Ford had a problem. He had designed a reliable car that used mass-produced, inter-changeable parts. The car was better-made and simpler to operate than its predecessors. Ford realized that with all those advantages, he could make his car available and usable to a mass market.

The problem he had yet to solve was purely financial. He needed to produce a car cheaply enough so the people who built the car would be able to afford it. The car was, of course, the Model T.

When the Model T was introduced in 1908, assembly time was 728 minutes, and the price was $950. After implementation of the assembly line production in 1913, the assembly time dropped to 93 minutes, and the sales price decreased to a low of $280.

However, the problem of mass market remained. How could the factory worker afford the car? Ford solved the problem by doubling the going rate from $2.50/day to $5.00/day. This, combined with credit financing by the company, allowed the common worker to be able to afford the fruits of his labor, and the consumer economy was born.

The economic impact of this development was enormous, and relatively speaking, immediate. The mass production and availability of the automobile set in motion a global demand for steel, oil, and rubber. Since many of the raw materials came from outside the United States, the shipping industry experienced an immediate increase in volume.

Prior to 1919, the main use of refined petroleum was kerosene for lamps. After that year, the major use of petroleum was conversion to gasoline for automobiles. This increase resulted in a natural demand to build pipelines. This demand exacerbated the need for mining more iron ore for pipe.

Aside from the increased demand for natural resources, the number of cars on the roads created a predictable demand for more of the same…roads! An interesting historic aside is that also in 1919, Dwight D. Eisenhower crossed the United States from Washington, DC to San Francisco in a military convoy. It took more than two months for the trip. This is supposedly the catalyst to Eisenhower’s advocacy of a National Highway System during his presidency.

So far, we have only focused on the automobile. It is important to remember that once Ford proved the efficacy of the production line, it spread to all other industries. Once Ford introduced the extension of credit to employees so that they could afford the product of their labor, that practice, too, became the norm. Wringer washing machines, refrigerators, water heaters, and radios are among the myriad of products suddenly put within the reach of the average wage earner, creating a unique, American phenomenon: a substantial middle-class.

The economic consequences of a change in a method of production are measurable. We could include more and more data points to further elucidate the thesis, but I think you get the point. One major change in the organization of the assembly line had enormous impact on production, price, buying power, expectation, and the global economy.

The secondary aspect of this change is equally important, and probably had even more influence on the lifestyle of most American workers. Prior to Henry Ford, automobiles were mostly toys for the wealthy. They were a hobby, built by craftsmen who enjoyed the artistry of designing and building a few cars a year, usually against a direct order from the new owner. The teams that built the cars were inventors, mechanics, hobbyists, and other skilled workmen.

What was required for the assembly line was a very different type of worker. The beauty of the assembly line was that it mimicked the product it produced. The products were interchangeable and could fit any machine. The workers, too, were interchangeable.

There is a very telling quote from Henry Ford that has been largely misinterpreted. Ford said, “Why is it every time I ask for a pair of hands, they come with a brain attached?” I have seen this variously quoted as praise of the intelligence of the American worker. In fact, it was a complaint that the workers hired to be interchangeable machines on the assembly line actually had ideas about how that work should be done.

The assembly line was a place for pure efficiency. The less energy people spent on any activity not directly devoted to production, the better. It was, therefore, Ford’s policy to fine anyone on the assembly line for the crime of laughing, talking, or whistling…all of which, Ford believed, diverted energy from production.

The conversion of skilled craftsmen to interchangeable cogs has had an immeasurable impact on the history of work in America for the past hundred years. That, coupled with the huge social displacement of a rural, agrarian population to an urban, industrial workforce had the added effect of further denying the majority of people the opportunity to contribute at their highest level of ability in any job.

Until very recently, Ford’s practices had a stranglehold on the workplace. It is only in the past few years that employers have begun to open their offices, factories, and retail outlets to leverage the creative energy of the people generating the income. The good news is that we have a new tool as powerful as the assembly line that is transforming the workplace back into a creative, productive, and fulfilling place to be for those with the courage to embrace it.

Today, by focusing on the blinding flash of the obvious popularized by Jim Collins in Good to Great, getting the right people in the right seats on the right bus, we have taken the first step. The next step is to recognize what Dan Pink calls Conceptual Workers, and Seth Godin refers to as Linchpins in our organizations. The final step is to create an organizational structure that celebrates the competence and beauty of the minds and hearts of everyone. Rather than follow Ford’s practice of punishing people for showing any lack of focus to the singular task at hand, we create workplaces that encourage us all to be productive because it is enjoyable and rewarding.

I have focused on the impact of the automobile to illustrate a paradigm shift, full of both intended and unintended consequences. I could have used electrification, the steam engine, or the printing press to make the same point. Occasionally, a new tool introduces an energy so powerful that it completely transforms the way we live.

The ubiquity of the internet, collaboration tools, cloud computing, crowd-sourcing, mobility (of people and information), shows us that we can return to the best aspects of work: contribution at our highest level. With these tools, and an intelligent attitude toward a dynamic organizational structure, any CEO can create a workplace that leverages the best of all possible worlds without the burden of imposing his or her own personal prejudices on the rest of the organization.

All that is holding us back is the inertia of rest; the resistance of business owners to create a workplace where we encourage creativity. It should be obvious to everyone that the assembly line is not coming back. The workers who are hired to be human machines have been replaced by actual machines. How will your company find and attract people who are willing to be more than a machine? How will you create an organization that supports that kind of worker? How will you find and develop executives who have the courage to not always have to be in control? These are the challenges we face in this new, exciting, and challenging paradigm.

Green Beret Leadership

I am sick of hearing about the new normal. I reject the idea thatcompanies need to do more with less. These are both ludicrous clichés that provide easy excuses for doing nothing or clinging to the past…a past that is more myth than reality. The vast majority of the companies I work with are doing well. They are successful because they are doing things differently, and having fun making the changes.

For the past 12 years, I have had the great privilege of working with some of the most adaptable and progressive companies in the country. As a Vistage Chair (www.vistage.com), I facilitate monthly meetings of 16 CEOs/Presidents/Business Owners/Managing Partners in a peer-group think tank setting. I also meet with each of them individually for a dialogue beginning with some variation of the question “What’s the most important thing we should talk about today?”

During that same 12 years, I have worked with five or six companies every year to facilitate the complete restructuring of their organizations. As a Professional Outsider with ExecuVision International (www.iexecuvision.com), I lead a series of retreats for the senior leadership of companies, focusing on working at a very deep level to mold highly functioning teams.

What I have written above is no surprise to anyone in the business community. Skilled practitioners have facilitated retreats and mentored executives since at least the time of Sun Tzu. What I believe is different today, however, is illuminated by three recent books and two very different military models. Each of these events individually are important; taken together, they represent a new model for organizing the chaos of the world around us.

The three books are Daniel Pink’s Drive, Clay Shirky’s Cognitive Surplus, and Seth Godin’s Linchpin. In the first, Daniel Pink describes the transition from Information Worker to Conceptual Worker. The basic premise is that we are finished with just throwing more and more mediocre workers at every challenge that comes along. Successful companies have realized that we need to hire fewer and fewer people at a higher and higher level.

The undeniable truth of this insight is the basis of the jobless recovery. Of course it is jobless! The fact is that production no longer requires significant numbers of no- or low-skilled workers. What Pink demonstrates is that information workers fall into this category right along with factory workers. In good times, when money is flush, we tend to simply throw more and more people into the fray, hoping that somehow they will finally get the job done. No longer, says Pink. What we require are conceptual workers who can envision the larger issues, and devise (and implement) a plan to address them holistically.

Clay Shirky adds insight about the astounding number of hours people are willing to volunteer on projects outside of their boring, pay-the-bills job. He cites Wikipedia as the premier example of global collaboration by a large group of very intelligent people to create a useful tool where no one is paid for the work. This same phenomenon is alive in the non-profit as well as the for-profit world. Shirky’s observation is important to all of us concerned about the state of business organizations today. The tragedy is that we are leaving huge, untapped intellectual and creative manpower to the vagaries of internet contribution, rather than creating organizations that fully utilize this energy.

Finally, Seth Godin weighs in with Linchpin. He makes essentially the same case that Pink does in Drive, but from a different vantage point. Drive is written more from the business owner’s perspective. Pink asks the question, “How do I motivate my employees to use their creative problem-solving skills to help this organization?” Godin asks, “How do I find an employer who values my creative problem-solving skills?” For Pink, the quest is identifying conceptual workers. For Godin, it is becoming a linchpin for change in whatever situation you find yourself. For Shirky it is the challenge of creating an organization that allows people to contribute at their highest level of ability.

All three authors focus on the most important question anyone running an organization must answer today: What kind of organizational model will help me find the best people, and allow them the freedom to use all their talent in creative and productive endeavor?

Counter intuitively, the answer may just come from the military. Until recently, the military has seemed to be the least likely model for adaptive change. Ever since WWI, and particularly since WWII, companies were structured around the traditional military model of chain of command. This made perfect sense in a world where information was not easily accessible.

I remember my first managerial position in a large Danish company. My department consisted of five people. I was, as the supervisor, the only one of us who had all the information from our small unit. I reported that information up to my manager, who reported it to a vice president who reported it to the president. It all made perfect sense. It was orderly, static, reliable…and totally boring for all concerned, because the president was the only one who had access to all the information.

The advent of relational databases in the 1970s changed the need for the hierarchical structure forever. It has taken us over 30 years to even begin to come to grips with this reality. Access to information is no longer a problem. Instead, the overwhelming volume of available information now threatens our ability to make decisions. Progressive and successful companies work comfortably with this new paradigm.

The military faced the same challenges in a very different way. During the Korean War, military leaders realized that the military structure that had served them well for a couple of hundred years was no longer working. A new approach was needed. The creative use of Special Forces was born.  In Vietnam, and now in the global war on terrorism, the use of Special Forces has increased to fight a new type of enemy.

The amazing success of the Green Beret model is based on the characteristics of the team. First of all, only the very best candidates are even allowed to participate in an assessment of their abilities. Second, once the few who make it through the assessment have completed it, they peer review each other. They must answer one question about the other survivors of the assessment: Would this man keep me alive? As my son, an active duty Green Beret (15 years in the Army, 11 in Special Forces) explained to me, “Dad, this is not about ability. We know that anyone who made it this far has the stamina and the skill. It’s not about skillset. It’s about mindset. It’s about trust!”

What further makes the Green Beret model so extraordinarily successful is this summary of features:

1)     Trust

2)     Clarity of Purpose

3)     Mission First

4)     No emphasis on rank

5)     Flexible function  (all members cross-trained – my son is both
combat medic and sniper)

6)     Utilizing existing infrastructure for support

7)     Self-directed teams

These teams fully embody Pink’s and Godin’s ideas of conceptual workers and linchpins in otherwise staid institutions. The Army has seen the necessity of maintaining a static organization for their normal functions, and enabling a small group of exceptional people to achieve phenomenal results. They also embrace Shirky’s emphasis on allowing employees to participate at their highest level of ability to resolve immediate challenges.

The second military model that has evolved to meet modern challenges is the Marine Corps. The Marines are not Special Forces. They are, rather, an assault force. Their structure was altered over ten years ago to focus on “the strategic corporal”. The idea, of course, is to push decision-making down to the level where the action is actually taking place. This is a new twist for the static organization – dynamic capabilities to respond to the actual situation.

These two models together offer us a solution for business. We create and maintain an infrastructure for existing business that pushes customer response down to the lowest level of the organization. We create a second group of strategic thinkers who are also tactical implementers. The two work in tandem to embrace the most innovative solutions to constant and unexpected developments caused by a rapidly changing world.

In 2010, I have received more and more requests to help companies redesign their organizational structures to address new realities. The most frequent push-back I experience is executives telling me that they don’t have any Green Berets, and that their corporals are not capable of being strategic.

Two thoughts on that belief: 1) How do you know that it is true? 2) If it is true, who was responsible for hiring mediocrity? To answer the first question, we have to take a risk. Let’s find out how innovative people can be. To answer the second question requires accountability at the highest level of the organization.

Of the companies I have worked with this year, three have gone virtual, reducing staff numbers from a high of around 50 to now from 1, 5 and 15 respectively, while increasing revenue…and, of course, profitability. With the added benefit of reducing stress! Another company is managing $40million in revenue with 31 employees, six of whom do not live in the employer’s state. Another company has embraced a bifurcated organization: the “regular Army” manages $40 million of commodity revenue, while the “Green Berets” generate and manage $20 million in new business.

To me, these are the most exciting and dynamic times imaginable. We are in an exhilarating time of growth, connectivity, virtualization, and interdependent globalization. We have moved rapidly from the Information Age (1960) to the Knowledge Age (2000) and have just entered the Conceptual Age (2010). Pink, Shirky, and Godin offer some unique perspectives that, taken together, can help us enter this age with confidence and enthusiasm.

Indulge yourself with the fantasy that you have a Green Beret team of conceptual workers. Imagine that you have linchpins constantly and consistently providing insights and plans for implementation of great new strategies to embrace an ever-changing world. What would it take for you to create that team? Do you have the courage to begin? Welcome to the conceptual age!