Peter Drucker on continuity and change

The more an institution is organized to be a change leader, the more it will need to establish continuity internally and externally, and the more it will need to balance rapid change and continuity.

Balancing change and continuity requires continuous work on information. Nothing disrupts continuity and corrupts relationships more than poor or unreliable information. It has to become routine for any enterprise to ask at any change, even of the most minor one: “Who needs to be informed of this?” And this will become more and more important as more enterprises come to rely on people working together without actually working together – that is, on people using the new technologies of information.

Above all, there is need for continuity in respect to the fundamentals of the enterprise: its mission, its values, its definition of performance and results. … The balance between change and continuity has to be built into compensation, recognition and rewards.

Peter Drucker – Management Challenges for the 21st Century (in The Daily Drucker)

In other words, the faster things change, the more valuable stability becomes. This is true for skills and routines, for cultural reference points, and especially for relationships. The hard part is seeing which things are most valuable: if you’re not careful, you don’t know what you’ve got till it’s gone.

The Onion (2): a model for solving interesting problems

My first post about The Onion looked at interesting problems as systems of networked sub-problems, and suggested that our solutions will mirror this structure.

The Onion is also a good metaphor for the process of finding practical solutions: we work from solving the smallest problems in theory, outwards to technical solutions, before we finally build a (networked system of) practical solution that works consistently and at the scale we need.

1) Theoretical problem – theoretical solution

First we work out how – in theory – the problem might be solved. This might be a simple case of gathering information, because the theoretical problem has already been solved – as in the case for all the three problems above.

If the problem doesn’t yet have a theoretical solution, we’ll need to break the problem into smaller pieces, work out what’s missing, and treat the smallest unsolved piece as a new interesting problem. (see the example above: family health)

2) Technical problem – technical solution

Once we have a theoretical solution, the problem becomes a technical one: how do we apply the theoretical solution in the world, in this context, to make the solution actually work? The old saying about the difference between theory and practice holds true here. When we attempt to put our theory to work in practice we uncover buried assumptions and dependencies that make our theory impractical without major revision or lots of additional work to create the conditions in which it will work. So we have a choice: modify the context enough to make the theory work, or modify the theory to better suit the context. Often we do both.

Example technical problems:
Yikes, how to do I reduce the number of horrifically-bad-for-you things that my family eats on a regular basis?
In our context, what does a healthy diet look like?
Given that I can’t source organic kale in my neighbourhood, what are the alternatives?
How do I make kale-alternatives delicious?
Which components of a healthy diet are easiest to add to what we already do?
What habits can I encourage that will make it easier for my family to eat healthily?

3) Practical or scaleable solution

This is often the most overlooked part in solving an interesting problem: what is the ‘wrapper‘ of infrastructure and activity necessary to make the technical solution workable on an ongoing basis.

This is usually about the collection and coordination of scarce resources (time, money, people, other inputs) that are needed to solve the problem reliably.

The Onion (1): understanding interesting problems

This post is a sketch of a way of thinking about how problems work, and what we need to do to make our solutions (“the change we seek to make”) effective. It’s bit abstract – I’ll share a more concrete illustration in a later post.

We often talk about interesting problems as if they’re discrete units:

  • How can I keep my family healthy?
  • How can we split the atom?
  • How can we help more children learn to read?

But all interesting problems really consist of little clusters or bundles (or networked systems) of problems – we just can’t always see what the problem-network looks like until we’ve spent some time working in it.

We can work our way down the problem hierarchy, reducing complexity as we ask smaller (and usually more easily solvable) problems.

Example theoretical problem:
How can I keep my family healthy?
Example sub-problems:
What is a healthy diet? How can I make sure my family has access to it? How can I make sure that they eat it? What foods do they need to avoid, and how can I make sure they do?
What’s a healthy level of exercise?
What about emotional health?

In lots of cases, the sub-problems have sub-problems… and so-on.

We can also work our way further out too, from micro-problems to macro – for example, “How can I help other families to live healthier lifestyles?”

The onion

So we end up with a multi-layered set of nested-problems – ‘the onion’. And effective solutions will mirror this structure of solutions-within-solutions, with each layer creating the necessary conditions for the layers within it – more on this in an upcoming post.

*see also: the wrapper

Interesting problems: a definition

A problem is interesting when…

1. It’s important to someone

Presumably because solving it will make things better.* The problem won’t be important to everyone, so by definition it won’t be interesting to everyone either.

The problem will be valuable in proportion to the number of people it is important to, and how intensely they feel its importance.

This means that problems exist in a network, and gain their importance and value from their position within the network – this is true of both their actual and perceived importance and value.

2. A solution isn’t immediately obvious or available

Sometimes (rarely) a problem is hard to solve because it’s actually new and unique – a world first. More often it’s because interesting problems are actually systems (or networks) of smaller problems, and are closely bound up with their local context, which means that there won’t be a simple, discrete solution: a ‘system’ of problems will require a ‘system’ of solutions.

It also means that what looks like an old problem in a new context (a new place, time, group of people, culture) is likely to respond differently to previously successful solutions. A new configuration of the problem ‘system’ will require a newly configured set of solutions – and the solutions that work best will change with time.

3. It doesn’t have a perfect solution

If you understand a problem as a system, you understand that predictability and perfection are impossible once you move beyond the most basic or theoretical level. Instead we need to understand the best solutions as those which most improve the disposition of the problem system, giving the best chance of a ‘good enough’ outcome.

4. We may not even be able to find a satisfactory solution

If you can’t fail, it’s not interesting.

5. The solutions to the problem are dynamic

If interesting problems are dynamic systems within changing contexts, ‘happily ever after’ isn’t possible from a single (fixed) solution: old solutions will become less effective (or less acceptable) as the context changes. Both the solution ‘system’ and the system that generates the solution need to be dynamic too.

What do you think? What problems does this perspective help with? Where does it fall down?

*Stopping things from getting worse is a way of making them better

Econtalk: Mauricio Miller on Poverty, Social Work, and the Alternative

This is a really interesting episode of Econtalk, and worth a listen.

Highlight 1: Accurate description of poor communities

A couple of things here really resonated with my experience of living and working in low-income communities in Jakarta:

  • Miller’s descriptions of the resourcefulness of people in poor communities – that many people in poor communities are hard working and resourceful and demonstrating impressive amounts of willpower and – in his word – ‘talent’ just to get by on low incomes.
  • The dynamism of poor communities, particularly in terms of people moving in and out of poverty – apparently backed up by statistics. According to Miller, although 15% of the U.S. population are ‘poor’ at any given time, the majority of those will move above the poverty line, to be replaced by other (temporarily) poor people – i.e. people who lost their job a month before the census and have no income, but will soon return to work. Miller says that only about 3% of the population are ‘long-term, generationally poor.’

Highlight 2: What happens when users pay for services

This section also really reflected my experience at the charity I work for, where a switch to a ‘user pays’ model of service (rather than a purely donation-based, ‘charitable’ model) made us more responsive to the needs of our users, and drove up the quality of what we do. Here’s Miller:

Mauricio Miller: …I wouldn’t bring my own family through [my own social services]; now I had money–

Russ Roberts: Why not?

Mauricio Miller: Because they were paternalistic. My mother hated that. She said, ‘The social workers are really nice, but they take away my pride.’ And certainly the racists would take away her pride, too. You know. And sexual harassers would take away her pride. But even the people who were trying to be really nice would take her pride away. And so, that was one of the issues. The other issue is that the programs that I had were sold–and the structures were to sell to get funding. Funders don’t really understand circumstances on the ground. But, they get certain interests. And so you have to shape your program based on what they kind of want in order to get the money. And that, then you are held accountable to those kind of standards. Where, I actually had started two businesses within my own non-profit, that, when you are running a business, you have to meet the customer demand. Not the investor demand. You have to really meet the customer demand. And so, somehow or other, when I wanted to adjust my programs, they were not responsive to my customers. And so, for me, my social service programs were too structured, too paternalistic. They did not recognize or meet that market demand. And now that I was middle income and had money, I would instead, when I had to help my nephew and nieces who struggled with drugs and all kinds of things, I would go to private sector services, because they would say, ‘Do you want us to send the advisor on the weekend, or the evenings?’ Or, ‘What’s convenient for you?’ and ‘Would you like this program?’ I was given choices. Because I had money. But people who were poor didn’t have those kind of choices. And so, why would I want to take my own family, that had struggled with everything that everybody else was struggling with what was out there in some of these neighborhoods: Why would I take them into a system that was so structured and was not responsive when I had money? So, money made a difference. And I realized that: No, I wouldn’t bring my own family.

Russ Roberts and Mauricio Miller – Econtalk

In the end, I wasn’t completely convinced with Miller’s model – or didn’t feel completely clear about what he was offering – but these bits were excellent – and true.

Resources: Software is eating the world

WTF?! In San Francisco, Uber has 3x the revenue of the entire prior taxi and limousine industry.

WTF?! Without owning a single room, Airbnb has more rooms on offer than some of the largest hotel groups in the world. Airbnb has 800 employees, while Hilton has 152,000.

WTF?! Top Kickstarters raise tens of millions of dollars from tens of thousands of individual backers, amounts of capital that once required top-tier investment firms.

WTF?! What happens to all those Uber drivers when the cars start driving themselves? AIs are flying planes, driving cars, advising doctors on the best treatments, writing sports and financial news, and telling us all, in real time, the fastest way to get to work. They are also telling human workers when to show up and when to go home, based on real-time measurement of demand. The algorithm is the new shift boss.

Tim O’Reilly –The WTF Economy

This phrase comes from a 2011 Marc Andreessen article in the New York Times, which you can read here. In it he describes how software was – and is, and will continue to – take over the economy. Here are a few more WTF illustrations:

  • The world’s largest bookstore is a software company
  • Two of the world’s three biggest retailers are software companies
  • Five of the U.S.’s eight biggest companies are software companies (Alphabet/Google, Apple, Microsoft, Amazon, Facebook)… some of them even make and sell software.
  • The world’s biggest Encyclopedia is mainly software… and not even a company

Conclusion / Questions:

  • How are you using software in your non-software organisation?
  • What would it enable if you thought of your organisation as a software company?

See Also: WTF? Technology and you

That little bit extra

… is often what makes the difference, for good or ill.

  • Still going for a run even though you’re taking the kids to the park, so will get exercise later
  • That extra ten percent of time to improve the finish on a piece of DIY – so that it gives you pleasure every time you look at it, instead of bugging you
  • The extra ten percent of money it costs to buy a product because it’s good, not because it’s the cheapest one
  • The not-strictly-necessary time that you spend catching up or doing fun stuff with your colleagues that makes you more than just people who work together
  • The extra job that you tick off so that you not only don’t have to spend time on it tomorrow, and – as importantly – don’t have to spend time and energy remembering tomorrow.

And in the opposite direction…

  • The extra helping / desert / few squares of chocolate that you eat each day, putting your calorie intake 2% above your use, instead of 2% under…

Peter Drucker on social responsibility

A business that does not show a profit at least equal to its cost of capital is irresponsible; it wastes society’s resources. Economic profit performance is the base without which business cannot discharge any other responsibilities, cannot be a good employer, a good citizen, a good neighbor.

But economic performance is not the only responsibility of a business any more than education is the only responsibility of a school or health care the only responsibility of a hospital.

Every organisation must assume responsibility for its impact on employees, the environment, customers, and whoever and whatever it touches.

That is social responsibility. But we also know that society will increasingly look to major organizations, for-profit and non-profit alike, to tackle major social ills. And there we had better be watchful, because good intentions are not always socially responsible. It is irresponsible for an organisation to accept – let alone to pursue – responsibilities that would impede its capacity to perform its main task and mission, or to act where it has no competence.

Peter Drucker – Managing in a time of Great Change

Cutting edge – learning and change

The edge on a knife is important – it’s the sharp end (okay, side) where the cutting actually takes place. It needs to stay sharp, and keeping it sharp takes care and regular maintenance because it dulls quickly from use and corrosion.

The other parts of the knife – spine and heel, bolster, tang, handle – receive less attention. They change more slowly and require less maintenance but are more important in the long run: a sharp edge on a bad knife doesn’t last for long.

The person using the knife is more important again. They decide the important things: what and where and when to cut, and who or what we cut for. They keep the knife sharp or let it rust.

These things are true of most of the tools we use, and of our skills.

Cutting-edge skills – using the latest technology or media, understanding the thing that’s on everybody’s mind – will help you cut, but they’ll change relatively quickly, meaning that you’ll need to work on them regularly to keep them sharp.

Deeper skills last longer. Critical among these are structural literacy of the world in general and your field in particular, an understanding of systems and people, and communication and leadership skills. These skills – alloyed with curiosity and a commitment to learning – allow you to keep the cutting edge sharp and to help others to do the same. Without them you’ll have – at best – a sharp edge on a cheap knife.

Deeper still, ask questions of the person holding these tools: what will you use them to achieve, where, when, and who or what for? A good knife is worse than a bad one in the wrong hands, or in the wrong place at the wrong time.

It might help to work backwards from the cutting edge:

  1. Which skills do I feel pressured to acquire? Which activities do I feel the world is pushing me to do?
  2. How do these fit into the bigger picture and broader trends? If I don’t have it already, where can I acquire the structural literacy to be able to answer that question?
  3. Is this even a game I want to be in in the first place? How does it square with my values? What’s the hard and important part of the work that I do, and will this technology make a difference to that – is it signal or noise?

Kevin Kelly – what is technology?

Not just shiny new stuff

It was clear (at least to me) that technology was an extension of natural life, but in what ways was it different from nature? (Computers and DNA share something essential, but a Mac-Book is not the same as a sunflower.) It was also clear that technology springs from human minds, but it what way are the products of our minds (even cognitive products like artificial intelligences) different from our minds themselves? Is technology human or nonhuman?

We tend to think of technology as shiny tools and gadgets. Even if we acknowledge that technology can exist in disembodied form, such as software, we tend not to include in this category paintings, literature, music, dance, poetry and the arts in general. But we should. If a thousand lines of letters in UNIX qualifies as technology (the computer code for a web page), then a thousand lines of letters in English (Hamlet) must qualify as well. They both can change our behavior, alter the course of events, or enable future inventions.

A Shakespeare sonnet and a Bach fugue, then, are in the same category as Google’s search engine and the iPod: They are something useful produced by a mind.

A Shakespeare sonnet and a Bach fugue, then, are in the same category as Google’s search engine and the iPod: They are something useful produced by a mind.

We can’t separate out the multiple overlapping technologies responsible for a Lord of the Rings movie. The literary rendering of the original novel is as much an invention as the digital rendering of its fantastical creatures. Both are useful works of the human imagination. Both influence audiences powerfully. Both are technological.

Kevin Kelly – What Technology Wants (amazon)

If you haven’t read any of Kevin Kelly’s writing, check out New Rules for the New Economy (where in 1998 – the year Google was founded and seven years before Facebook) he set out most of the trends of the new ‘connection’ economy. Or read the opening chapter of What Technology Wants on Kindle and see if it tempts you.