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Updated list of performance drivers

21C INDIVIDUAL PERFORMANCE DRIVERS

Thursday, August 25, 2011 draft

CONNECT

TAKE STOCK. Know thyself. Self-assessment. Interpret 360. Articulate your aspirations.

TAKE CHARGE.  Figure out your personal knowledge management. Pull, not push. Choose your leadership style. Shoulder responsibility for getting things done. Create a vision, a concrete image of outcomes you are deeply committed to achieving.

COLLABORATE. Work well with others. Narrate what you know. Construct your network(s). Connect successfully. Share what you know.

CONDUCT KICK-ASS MEETINGS. Think in advance about the purpose, politics, structure, outcomes, and follow-up to group gatherings.

COMMUNICATE EFFECTIVELY.  In writing, visually, through story, virtually, with media.

WORK SMARTER. Integrate work and learning. Increase your capabilities in order to tackle more a greater challenges, to play a higher game, to add more value, to lead a more fulfilling life.

COACH COURAGEOUSLY. Provide specific, constructive feedback. Conduct frequent one-to-ones, co-creating solutions. Inspire others to greatness. Challenge people with stretch assignments. Tell it like it is. Be open to bad news. Be transparent. Courageous conversation.

ORGANIZE

MAKE SOUND DECISIONS.  Balance short and long term perspectives. Think holistically, systemically.  Paraphrasing Deming: the manager co-own’s the system with the workers. Apply the 80/20 rule. Don’t go it alone.

TAKE THE PULSE.  Feedback is the heart of continuous improvement. Monitor activity streams. Identify and act on metrics that matter.

ORGANIZE FOR ACTION. All of us are smarter than any of us, so groups trump individual effort.Create subject matter networks (instead of relying on subject matter experts). Identify and support communities, teams, task groups. Overcome obstacles to flatter organization. Get everyone on the same page.

INSPIRE WORTHY PERFORMANCE. This is enlightened performance review. Recognize meaningful progress, small and large, frequently. In the coming era, doing the exactly right thing is far more fruitful than doing the same thing better.

NOURISH A CULTURE OF BUSINESS IMPROVEMENT. Attach every business processes to a continuous feedback loop to identify and change for improvement.

CHANGE

NURTURE SERENDIPITY. Be open, explore, be alert, try hard — and often an unexpected breakthrough results. Make time for reflection. Google’s 20% innovation time fits here. Take your eye off the ball. Fail faster; make mistakes.

SPRINT. Use self-organizing groups to get things done; that involves daily meetings, rapid prototyping, iterative development, living by customer feedback, extreme flexibility, short deadlines, sprints to accomplishment, and multidisciplinary cooperation.

RE-MODEL Innovate or die. If the system’s broken, change it. 21C organizations propel innovation to create a dynamic and fun workplace and to adapt to rapid market changes. Innovation is now everyone’s job, not just something that’s stuck in R&D.

SERVE CLIENTS BETTER. Be open to possibility. Life is beta. Remain flexible. Probe, sense, respond. Take perspective. Change little things as well as big ones. Embrace feedback…

NET-WORK. Understand and exploit the power of connections. This is where we address social business, making connections, social network analysis, web 2.0 tools, and so forth. This is optimizing the digital workplace. Building and participating in communities of people with shared interests.

FOCUS

FOCUS ON RESULTS. When there is a genuine vision (as opposed to the all-to-familiar ‘vision statement’), people excel and learn, not because they are told to, but because they want to. Co-create shared ‘pictures of the future’ that foster genuine commitment and enrollment rather than compliance.

CONDUCT PERFORMANCE. Demystify organizational goals. Make the task clear.

DELIGHT CUSTOMERS. Exceed their expectations. Form meaningful, reciprocal relationships with customers.

TAKE ACTION NOW. Do it now. Don’t mistake thinking for action. Close the knowing/doing gap. Always know the next step. Be here now. Get things done.

DE-STRESS. Root out fear. Remain calm. Address and deal with conflict. Individually, be healthy: sleep, exercise, meditate, don’t overindulge. Manage crises to help others avoid stress.

BALANCE. The 21C Leader acts upon trade-offs continuously. Clear thinking begins with shucking off out-of-date industrial age thinking. Identify the biggies: info hoarding power, cut throat competition, secrecy as default, email, and so forth. Trade-offs. Now or later? Me or them? Alone or together? Right or wrong? Act or wait? Open or closed? Worthwhile or worth waiting out? Wise or foolish? Do it or don’t?

Getting down to basics

Why the 21st Century is a Phase Change from the 20th Century

Major differences are:

  • the dizzying rate of change. We are overwhelming by the pace of progress.
  • denser and denser interconnections. Not just the internet. Everything is getting hooked up to everything else. Nothing stands alone. This gives rise to complexity and, therefore, unpredictability.
  • intangibles are the prime source of value. Social capital and know-how have replaced plant and equipment as the creators of economic value.

This morning I had an enlightening conversation with a former Harvard Business School professor who has been an inspiration to me, Stan Davis. A quarter century ago, Stan wrote that the fundmentals of the universe, and therefore business, are time, space, and matter. Their derivatives are the universal variables that impact all business:

Fundamentals 

Drivers          

Time Speed
Space Connectivity
Matter Intangibles

These are the same variables I’ve been touting as harbingers of the 21st Century’s break with the past for several years. Maybe the concepts from Stan’s book Future Perfect were still rolling around in the recesses of my mind.

When I read about these dimensions of business twenty-five years ago, I found them intellectually fascinating. Re-visiting them today, I see them as seminal aspects of 21C Leadership.

Practical ramifications

Speed, connects, and intangibles each suggest levers for improving business performance. Each suggests new metrics for 21C businesses.

Stan and I talked about Speed. Businesses talk about speed but they hide it. Take revenue. It’s expressed as revenue per quarter. Managers typically work on boosting revenue. Shouldn’t they flip the fraction upside down and talk about decreasing the amount it takes to bring the revenue in? Managers should be concerned with time-to-completion.

How about metrics for connections? The point of value network analysis is creating value through better linkages. Relationships like supply chain are the tip of the iceberg. How about focusing on increasing the value of relationships with customer and partners? Improving networks improves the business.

And as for intangibles, it’s high time to replace 20C accounting with scorecards and surveys that assess the soft stuff, capabilities, competencies, and intangibles. The narrow focus on what’s easy to count is stifling business creativity and leading to short-sighted behavior. What we can’t see have become more important than what we can.

The Progress Principle

Teresa Amabile and Steven Kramer are on Dan Pink’s Office Hours, discussing the findings of their new book. These two psychologists asked people at work to send them an electronic daily diary of projects they were working on. Some projects were nine months long. They asked for daily “inner work life:” emotions, perceptions, and motivations. How was today’s psychological experience? Describe one event that stands out in your mind. 12,000 diary reports. This led to the prime finding of the book.

The Progress Principle. The single-most motivating thing is daily progress reports on one’s contribution. Happiness, pride, intrinsic motivation resulted even if the progress appeared trivial, a small win.

700 managers were asked to rank these five motivators:

  • informed about the progress of their meaningful work
  • tangible incentives
  • recognition
  • clear goals
  • interpersonal support

Progress came in dead last. Only 5% considered it important.

B-Schools don’t teach this.

Dan: We’ve undervalued small wins. Teresa: They are so much more likely.

It helps if management shines a light on worker progress.

From Bob Sutton’s review on the book on  Amazon:

The main point of this book may seem obvious to some readers, but if you listen to most management gurus and fancy consulting firms, the approach that the authors suggest is actually radically different. The broad sweep of strategy and radical change and big hairy goals is where much of modern management advice focuses, yet the finding from this book that it is relentless attention to the little things and the seemingly trivial moments in organizational life that real makes for greatness is not something that most leaders and their advisers get, yet it is the hallmark of our most creative companies like Pixar, Apple, Google, IDEO and the like. The implication of The Progress Principle, for example, that management training should focus on how to deal with the little interactions and smallest decisions — and that is what makes for great leaders and organizations — would, if taken seriously, mean completely revamping the way that management is taught throughout the world.

This book isn’t a bag of breathless hype, it doesn’t make grand and shocking claims, and it doesn’t promise instant results. But it is fun and easy to read, it is as strongly grounded in evidence as any business book ever written, and it is relentlessly useful because it points to little things that managers, team members, and everyone else can do day after day to spark creativity and well-being. And it shows how those little things add-up to big victories in the end. I believe it is one of the most important business books ever written.


This is in essence the hard work of doing work. Another reviewer wrote:

You will be able to compare and contrast the experiences of those who were employed by truly great organizations and managers who encouraged autonomy, set clear goals and furnished the resources necessary to succeed with companies whose managers and team leaders stifled creativity, constantly put obstacles in the way and were generally apathetic towards members of their team. As the title of the book suggests what truly motivates today’s sophisticated and highly trained workers are those “small wins” that indicate that progress is actually being made on a problem or project being worked on. Managers and team leaders need to adjust to this new reality if they expect to achieve the kinds of positive results they are looking for.

For management practice, this fits with the notion of Agile.

At the end of the study, some people asked to continue receiving the daily diary request to help them reflect. You could do this through journaling.

Reflection on inner work life parallels company focus on yoga to reduce stress.

A potential driver may be TIME OUT. Create some time to reflect on the day’s progress.

Performance support: There’s a copy of the survey on Amabile’s website. Pink mentions IDoneThis.com; you get a daily email and respond with what you did during the day.

Set-backs have a profound negative impact on inner work life. Negatives outweigh positives many times over.

People perform better when they have positive inner work life. More creative, more productive.

The imperative to change organizational behavior

An organization is the sum of its people.

If the managers and professionals in an organization change their behavior, the organizations changes.

But that never happens piecemeal, with one manager doing her thing and another doing his. Wholesale change requires a shared vision and culture. This is social. It involves lots of people working in concert.

Inertia is HUGE. Maintaining CONTROL is the bedrock of 20C thinking. Avoid surprises. Standardize. Keep things in line. Be efficient, reduce errors, do the same thing over and over. Keep the factory humming. Reduce exceptions. Six sigma! Get rid of the deviants and oddballs. Plan your work and work your plan. Follow instructions. Obey. Hey, you listening to me?

This was a formula for success when the business environment was stable and you could optimize what went on inside your organization without worrying about what was happening inside. That’s no longer the case. A prime directive of 21C is “Give up control. Share it.” Cast your fate to the wind. Trust the force. It’s hard to imagine a scarier thought for a dyed-in-the-wool 20C executive.

In 21C, everything is connected to everything else. Organization’s futures are at the whim of external events. Not only are businesses no longer insulated from the outside world, they are so interconnected to it that they’ve become elements of complex adaptive systems. Business is unpredictable. Executives can issue all the commandments they wish, but there’s no guarantee of results or any change at all.

In fact, giant swaths of 20C thinking are detrimental to making things work in 21C.

Time to worship at a new altar

The switch from 20C thinking to 21C thinking requires top-to-bottom organizational transformation. The 21C drivers are poles apart from 20C industrial practice.

Change is never easy. Wholesale change rips people out of their comfort zones is a a bitch. Recognition of crisis is the only way to kick start it.

Adopting 21C beliefs is urgent because companies who don’t shift out of 20C are headed for the scrapheap. Don’t believe me? Ask somebody in the newspaper business. Or the music business. So this is the first step: accept that the 20C organization faces this choice: Change or Die.

Unmanagement

Then what? You can’t teach someone something they think they already know, so adopting new practices involves unlearning 20C. I found an artifact of 20C on the walkway outside my cottage this morning: a time card. It had a single entry, 8 hours for the first day of the week. Probably some 21C guy recognized it for the 20C relic it was and refused to go along.

Time cards were once a mainstay of industrial life. You clocked in and you clocked out. (You couldn’t be trusted to show up and leave on time.) The predecessor to IBM, the Computing and Tabulating Machine Company, made their mark making time-card clocks.

When work was physical, time was a reliable if crude measure of production. When work was manual, the fastest worker on the line was maybe 20% faster than the average. When work is mental, the most productive worker creates new business models, scores patents, brings in major clients, and cuts the deals that save the bacon.

A manager who monitors who is at her desk early and which cars are last to leave the parking lot might as well be reading tea leaves.

 

Finding and paying attention to feedback loops: a driver?

“What’s the most important aspect of 21C Leadership?”

It might just be responding to feedback. And choosing the right feedback to listen to. And closing open loops.

After-action reviews work for the military. For Israeli defense forces. For clued-in organizations.

This is rigorous transparency. It ain’t over until we’ve assessed what we learned. And decided how to change and evolve.

Let’s assess our current norms against what we just experienced. What’s helpful? What needs to be changed?

Action is the first step. Without it, there’s nothing. After-action is the double loop. How can we do better next time?

Management, leadership, projects, activities: to evolve — to make progress — all need to respond to results, to feedback.

Once upon a time, feedback from the boss was sufficient. “That’s what I’m paid to do.” That doesn’t cut it in 21C. It’s not meaningful.

The 21C Leader casts a wider net. Did it help the customer? Did it further the cause? Did it improve the organization? Did it make a dent in the universe?

Am I receiving feedback on the right level? Are the ripples getting back to me or washing up on the shore silently, unseen? Am I paying attention to the right signals?

Evolution in nature is slow. A mutation that works eventually predominates. Those without the twisted gene die out. Memes operate much faster. Great ideas propagate rapidly.

How far out do my feedback loops extend? Do I need to forge new ones? To listen to edgier sources?

 

 

Surfing the Edge of Chaos

from a review:

Thus four laws of nature from Chaos Theory are applied:

1. Equilibrium is death -When a living system is in a state of equilibrium, it is less responsive to changes occurring around it. This places it at maximum risk. There is also a well proven law of cybernetics – Requisite Variety – which states that when a system fails to cultivate (not just tolerate) variety in its internal operations, it will fail to deal with variety that challenges it externally.

2. Innovation takes place at the edge of chaos -In the face of threat, or when galvanized by a compelling opportunity, living things move toward the edge of chaos. This condition evokes higher levels of mutation and experimentation. The result is that fresh new solutions are more likely to be found.

3. Self organization and emergence occur naturally -When the right kind of excitation takes place, independent agents move toward what has been popularized as the “tipping point.” New forms and repertoires emerge from the turmoil.

4. Organization can only be disturbed, not directed -Living systems cannot be directed along a linear path. Unforeseen consequences are inevitable. The challenge is to disturb them in a manner that moves directionally toward the desired state, then course-correct as the outcome unfolds.

The authors draw reference to Darwin. They go further to propose that the natural selection process come from selection pressure, that species do not evolve of their own accord. Rather, they change because of the forces, indeed threats, imposed on them from the environment. Such selection pressures intensify during periods of radical upheaval. The bottom line is that nature is more dedicated to proliferating life in general than to the perpetuation of any particular species. In a fair competitive environment, no organization has the ability to stay in a equilibrium. Change is the only way to stay alive.

The edge of chaos is a condition, not a location. It is a permeable, intermediate state through which order and disorder flow, not a finite line of demarcation. Moving to the edge of chaos creates upheaval but not dissolution. That’s why the edge of chaos is so important. The edge is not the abyss. It’s the sweet spot for productive change. But moving over the edge is to avoided.

The book extends the concept of fitness landscape from ecologists to the management area. The great plain is chaotic with customer defections, low margins, undifferentiated products, etc., while fit and successful organizations with their niches are represented as hills in the landscape. An organization grows and climbs a small hill to reach its summit. But in order to achieve greater height at another hill, it must first descend to the plain of chaos, get rid of its culture and build afresh. The journey is a sequence of disturbances and adjustments, not a lock-step march along a predetermined path.

One main point that defies traditional management theory is the trouble with optimization. Management likes to take the classic “blank sheet of paper” approach and optimize the inefficient system. This approach cannot anticipate every twist and turn in the execution phase. The law of unintended consequences reminds us that optimization seldom yields radical innovation. At best, it only maximizes the pre-existing model. It founders because efforts to direct living systems, beyond very general goals, are counterproductive. This seldom conforms to the linear path that we have in mind. This is why the misapplication of linear logic, i.e. re-engineering business processes, will inevitably fail.

The book proposes some guidelines in surfing the edge of chaos by disturbing but not directing the system.

1. Design, don’t engineer.

2. Discover, don’t presuppose.

3. Amplify, don’t dictate.

 

Dan Pink’s Drive

Dan Pink‘s Drive, The Surprising Truth About What Motivates Us, provides convincing arguments in favor of intrinsic motivation. We have had too limited a view of what drives performance and we need a whole new operating system for some of the places where science says one thing and business does another. The patches are just barely holding the old beliefs in place.

Most if-then incentive systems do more damage than good. Give somebody a contingent reward and they lose interest after a short while. That which had once been fun is transmuted into work. Pink gives one example after another of paying a contingent bonus and seeing performance decline.

Setting goals can backfire, too. People who put the goals first often cut corners to accomplish them. Also, goals fight against self-determination.

The new values displace the shareholder value maximization mandate, making its workers/partners part of the larger whole. HBS MBAs are signing a pledge to be principled and weigh the balance of profit and what feels right.

Students today do things just for the hell of it. Money is not as big a motivator as doing the right thing. They live and breathe  networks. They aren’t about to stay still because they know how to leverage the powerful of information and timing.

Dan has a following; I expect he’ll raise enough of a ruckus that execs will take action. Higher salary and smaller bonus. Or bonus pays your contributions to charity and churches.

People need free reign in making their work what they want to do; that’s what works with intrinsicly motivated workers. The big payoff arrives when companies are doing the sort of greater good that makes a team proud.

Education in spite of school

Can You Get an Education in Spite of School?

Summary of a talk by John Taylor Gatto, including this bit: “Mr. Gatto ended his presentation by talking about traits that a truly educated person possesses; they bear little resemblance to traditional school curriculums:

* An educated person writes his/her own script in life; destiny is self-determined
* An educated person is never at a loss for what to do with his/her time
* An educated person has a blueprint for personal values, a philosophy
* An educated person understands his/her own mortality and learns throughout life, right until the end
* An educated person has the capacity to create new things, new experiences, and new ideas”

Forbes survey on innovation

From Forbes:

In Comparison, Here’s What Our Research Found Drives Corporate Value In Durable Manufacturing (In Rank Order):

1. Innovation
2. Ability To Attract Talented Employees
3. Alliances
4. Quality Of Major Processes, Products, Or Services
5. Environmental Performance
6. Brand Investment
7. Technology
8. Customer Satisfaction

Stunning, isn’t it? Although our readers rated the importance of alliances relatively low, our statistical analysis shows that companies with more joint ventures, marketing and manufacturing alliances, and other forms of partnerships have substantially higher market values. It suggests that in the connected economy, connections matter. Alliances are incredibly, even decisively, important. Similarly, our results indicate that quality is not dead. Our survey respondents ranked it seventh in importance, yet in the durable sector, product quality, including the quality of the manufacturing process, remains statistically a strong predictor of corporate value. Just as surprising is the importance of environmental performance. Although most companies pay only lip service to this issue, and readers ranked it the least important of the value drivers, companies that perform better in this dimension have significantly higher market values.

Steven Berlin Johnson’s Where Good Ideas Come From

Where Good Ideas Come From is a book about the space of innovation. Some environments squelch new ideas; others seem to breed them effortlessly. The city and the Web have been such engines of innovation because, for complicated historical reasons, they are both environments that are powerfully suited to the creation, diffusion, and adoption of good ideas.

If we want to understand where good ideas come from, we have to put them in context. Our thought shapes the spaces we inhabit, and our spaces return the favor. Johnson’s book argues that a series of shared properties and patterns recut again and again in unusually fertile environments. The more we embrace these patterns–in our private work habits and hobbies, in our office environments, in the design of new software tools–the better we will be at tapping our extraordinary capacity for innovative thinking. The amplification and adoption of useful innovation exist throughout natural history as well as human.

What we’ve lacked is a unified theory that describes the common attributes shared by all those innovation systems. Johnson calls that vantage point the long zoom. It can be imagined as a kind of hourglass, with nature on top and culture below:

global evolution
ecosystems
species
brains
cells

ideas
workspaces
organizations
settlements
information networks

The long zoom approach lets us see that openness and connectivity may, in the end, be more valuable to innovation than purely competitive mechanisms. Those patterns of innovation deserve recognition–in part because it’s intrinsically important to understand why good ideas emerge historically, and in part because by embracing these patterns we can build environments that do a better job of nurturing good ideas, whether those environments are schools, governments, software platforms, poetry seminars, or social movements. We can think more creatively is we open our minds to the many connected environments that make creativity possible.

We are often better served by connecting ideas than we are by protecting them. Like the free market itself, the case for restricting the flow of innovation has long been buttressed by appeals to the naturalorder of things. But the truth is, when one looks at innovation in nature and in culture, environments that build walls around good ideas tend to be less innovative in the long run that more open-ended environments. Good ideas may not want to be free, but they do want to connect, fuse, recombine. They want to reinvent themselves by crossing conceptual orders. They  want to complete each other as much as they want to compete.

The Adjacent Possible

Stuart Kauffman calls the potential first-order combinations of things that currently exist “the adjacent possible.” This explains why most discoveries occur in several places at once. The adjacent possible might include, say, the internal combustion engine and the carriage. When both are available, lots of people stick them together to invent cars. It’s rare to find an invention that wasn’t discovered in several places simultaneously.

Liquid Networks

A good idea is a network. In a famous experiment in 1953, scientists at the University of Chicago assembled a closed system of glass tubes and flasks that simulated the early conditions of the prebiotic earth: methane, ammonia, hydrogen, and water. They shot an electric charge through this soup to simulate lightening. At the end of a week, the soup contains the organic compounds essential of life: sugars, lipids, and twenty-two amino acids.

This was possible because the elements were immersed in water, a liquid network. The combination of water’s fluidity and solubility makes it marvelously adept at creating new networks of elements, as they churn through the ever-shifting medium, colliding with each other in unpredictable ways. The essentials here are a capacity to make new connections with as many other elements as possible and a “randomizing” environment that encourages collisions between all the elements in the system.

Innovative systems have a tendency to gravitate toward the “edge of chaos”: the fertile zone between too much order and too much anarchy. It’s like the phases of matter–the solid state is ordered and fixed, the gas is chaotic, the liquid is a more promising environment for a system to explore the adjacent possible, i.e. to try things on for size.

In prehistoric times, our hunter-gatherer ancestors led a chaotic existence. With agriculture, people locked into rigid patterns. And when the population mushroomed, new configurations became possible. More people, more possible connections. The result: information spillover. Cities beget connections. Before cities came along about seven thousand years ago, innovation was rare. Boats first appeared 50,000 years ago; sewing emerged 30,000 years later. Once people began living in cities, all manner of innovations started popping up: alphabets, candles, aqueducts, currency, rulers, papyrus, sewers, ploughs, soap, cement, writing, silk, paving, canals, sailing, bread, wheels….

Double-entry accounting illustrates a key principle in the emergence of markets: when economic systems shift from feudal structures to the nascent forms of modern capitalism, they become less hierarchical and more networked. (The quickest way to freeze a liquid network is to stuff people into private offices behind closed doors, which is one reason so many Web-era companies have designed their work environments around common spaces where casual mingling and interdepartmental chatter happens without any formal planning.) In a sense, the designers of Microsoft’s Building 99 built the water-coolers first, and then designed an office building around them. The building sees information spillover as a feature, not a flaw. Think flow: the feeling of drifting along a stream, being carried in a clear direction, but still tossed in surprising ways by the eddies and whirls of moving water.

The Slow Hunch

Most great ideas come into the world half-baked, more hunch than revelation, but hunches that don’t connect are doomed to stay hunches. Sustaining the slow hunch is less a matter of perspiration than of cultivation. (The Vaseline-daubed lens of hindsight tends to blur slow hunches into eureka moments.) Write it down! The humble notebook saves hunches from oblivion.

Serendipity

Dreams are the mind’s primordial soup: the medium that facilitates the serendipitous collisions of creative insight. And hunches are like those early carbon atoms, seeking out new kinds of connections to help them build new chains and rings of innovation. (A German chemist dreams of the structure of the benzine molecule….) Sometimes, the more disorganized your brain, the smarter you are. If google can give its engineers one day a week to work on anything they want, surely other organizations can figure out a way to give their employees dedicated time to immerse themselves in a network of new ideas.

Error

“Fertility of imagination and abundance of guesses at truth are among the first requisites of discover;y but the erroneous guesses must be many times as numerous as those that prove well founded.” Good ideas are more likely to emerge in environments that contain a certain amount of noise and error. Innovative environments thrive on useful mistakes, and suffer when the demands of quality control overwhelm them. Fail faster.

Exaptation

All decisive events in the history of scientific thought can be described in terms of mental cross-fertilization between different disciplines. The coffeehouse model of social networking: broad social networks that extend outside the organization and involve people from diverse fields of expertise. The “third place.” Chance favors the connected mind.

Platforms

The real benefit of stacked platforms lies in the knowledge you no longer need to have. You don’t need to know how to send signals to satellites or parse geo-date to send that tween circulating through the Web’s ecosystem.

The Fourth Quadrant

Innovations can be market-driven or not. They can be created by individuals or networked. During the Renaissance, individual innovation was the rule. Now the breakthroughs come from collaborative environments. Most innovation hubs exist outside the marketplace.

History books like to condense slow, evolutionary processes into eureka moments dominated by a single inventor but most of the key technologies that powered the Industrial Revolution were instances of “collective invention.” James Watt did not single-handedly invent the steam engine; dozens of innovators refined the device and made it workable. For every Alfred Nobel, inventing dynamite in secret in the suburbs of Stockholm, there are a half dozen collective inventions like the vacuum tube or the television, whose existence depended upon multiple firms driven by the profit motive who managed to create a significant new product via decentralized networking.

Market-driven innovation is hamstrung with deliberately built inefficient markets: copyrights, patents, and trade secrets stifle innovation. Bet on non-market networking for innovation in the future.