Multiplying the Human Potentials of KM - conversational outline of new book on THE MAP of Trust-flow
02-Sep-02
HUMANLY VALUING: ORGANISATION AS 10-WIN RELATIONSHIP INFRASTRUCTURES -THE MAP previewed in Reporting & Measuring reources at Prism
As people we learn to produce value in 5 multiplying ways
( MAP coordinates K1-K5):
-as individuals
-as groups
-within formal organisational identities
-across networks of organisations
-as part of a geographic democracy which whose cultural learning and productive opportunities we invest in through taxes
As people we demand value in 5 multiplying ways
(MAP Coordinates V1-V5):
-as employees
-as customers
-as owners
-as networks of business partners
-as networks of social or democratic partners in connecting the world’s resources (humanly valuable as well as natural ones)
Consequently a mathematician would say: the simplest governance of transparent organisational relationship systems would aim to communicate and deliver 10-way wins across these relationships (5 productivities of Knowledge Working and 5 of Stakeholders’ demand) of dynamic valuation.
The most basic pattern rule of human systems theory is that however perfect a system design (as 10-wins) it will degrade unless it is proactively governed. This means detecting emerging conflicts between the 10-wins all across the system and externally due to changes in the environment and because of systems of systems it interacts with. Trust-flow governance requires everyone to openly participate in detecting emerging conflicts (win-loses) and resolving them (into win-wins) at the start of each audit period which is socially and economically the best time before the system compounds the conflict period after period in a way that will ultimately turn a valuable and sustainable 10-win system into a worthless and destructive 10-lose system.
Mathematically, there are 5 interconnecting sub-processes (MAP T1-T5) to lead which are diametrically opposite to transactional accounting/performance numbers (and their machine matters more than people assumptions). This is quite simple to map but it also starts up a hunt for all sorts of ‘beyond’ services/tools that sustain living systems. These include understanding emotional intelligence, improvisation, open spaces, storytelling that begins with the strategic coordinates not the execution. The reason why all the emerging intangibles leaderships tools can be quite simple to openly catalogue –and benchmark around - is that the 10 coordinates which they should be valued against are the ten human ones introduced as k1-k5 and v1-v5 in the discussion above.
If you need more on the basic constructs, journalist Alan Mitchell’s book (sample chapter on request from me at wcbn007@easynet.co.uk) will provide it. Roughly the plot of the 5 ‘building module’ chapters are:
-1) so you think you know how to control numbers?
Slide:
Tangible Numbers & Higher Human Intelligence of Intangibles
–can you build win-wins between these conflicting value-drivers?
Transaction Relationship
Plans based on Adapting learning
past assumption with the future
Separability (add) Connectivity (multiply)
Machine-age investing People-age productivity
One-sided value extraction All sided value win-win participation
Conflict hiding & Emerging conflict identification &
compounding resolution
Need-to-know politics Open Transparency flows
Negative Emotional Positive emotional intelligences
Intelligences & diseases & rugged health maintenance
Tangible capitals Intangible Capitals
(By now, shared governance should be the only way forward you want to go if you are stewarding any organisation’s future viability. Simplify accounting down to true cashflow; introduce parallel audit (with every bit as much attention of all employees)coordinating the opposite intelligences coming from the system dynamics of intangibles; and let leaders choose how to reconcile the feedback and feedforward wherever needed. Do not average out the mathematics of multiplication and compound relationship health/illness by using some halfway house like a balanced scorecard which buries all sorts of assumptions in its own aggregating)
2) What are intangible capitals and why do they matter?
A community is slowly compiling a dictionary of Intangible Capitals - left hand column at http://www.knowledgeboard.com/community/zones/sig/kmei.html
In service, knowledge and network markets, intangible capitals currently compound 4 times more value (growth/destruction) than tangibles though this index runs from 1 to 25 depending how much your company is human capital connected.
The human relationship connections we speak of are introduced as the 10 relationship productivities and demands (above). The most basic question anyone multiplying value in a rich intangibles organisations boils down to: what else is this humanly connected to? This is why we need more humanly connecting language: chapter 3 win-win-win and whole human systems dynamic understanding – chapter 4
3) Win-win-win
Win-win-win is the basic SWOT framework of intangible capital systems. It can be used in many dynamic ways especially once you understand transparent trust-flow governance is all about detecting emerging conflicts and turning the system round to win-win again.
Regarding Weaknesses and Threats: We can demonstrate dozens of cases of how companies lost all their value and much more besides by losing just one of the 10-win connections. This is because ultimately relationship dynamics are nearer multiplication than add.
Eg 1 Andersen had billions of dollars of demand value from its 4 business stakeholders but its serial offence with society reduced its valuation in society’s eyes to zero. Dynamic Valuation Maths: Billion times Zero=Zero
Eg2 the culture of NASA should have been designed primarily around 3-win goals : cost, schedule, safety. By making safety a conflict with cost and schedule, NASA blew up Challenger with foam. (Incidentally, Swiss airlines went bankrupt by blowing up an airline with hot video games but that is only a slightly different mapping disaster of not understanding a business partner’s competence misfit)
As another insight of win-wins , we can look at (Strengths and Opportunities) of all the emotional currencies that correlate with trust, ( incidentally a proposal is going out to do this with the UK National Health Service Trusts) … or if you wish to start with a risk professional perspective the terrifying dynamics of those that compound dis-trust. Intriguingly for corporate sustainability experts, we can map back which big organisations network activists of an open democratic kind will increasingly hold responsible for what globally. (Its taken me many (eg 20) years to start to get the people networks within Coca-Cola and Unilever to understand this but things are revving up so wish me luck!)
Win-Win: At the individual productivity level, 15000 interviews show that happiness and focused opportunity to learn to make my personal difference are valued most. At a group level the flows that facilitate trust and the courage to question a doubtful behaviour of co-worker or boss matter most. And so forth. (OK these are emerging areas – please nominate other emotions if you think I’ve bookmarked you erroneously)
As another insight of win-wins, of course we have 2 hugely new productivities to play at connections with: K2 all sorts of teams (virtual and real) and interpersonal networks- each is its own organisational context. Eg many big companies are using teams as their primary innovation mode. Yet the structure for passing learnings between teams is very immature- Sveiby Associates (vested interest: I'm a paid up member) have a game on this. Its parameters (game cards) were designed by Price Waterhouse Coopers. I used to work there. PWC teamworking context is not one I would advise many to benchmark as win-win! But again this illustrates the point of how much intangibles advice needs to be so context specific that you need someone to be the hub of every combinatorial relationship game –teamworking be just one of many examples (Sveiby’s network has about 10 different games that now have mature learning banks of practitioners and latent benchmarking networks if I understand correctly)
K4 all sorts of system of system partnership strategies in collaborative innovation (see eg Debra Amidon’s book) - the future essence of global branding if we have one. As most may know I have been part of network economics future circles since 1984
http://www.normanmacrae.com/netfuture.html
Chapter 4 Systems
Human Systems have 30 plus years of insight that managerial sciences and academic rivalries between human disciplines have studiously avoided connecting into valuable organisational practice. The good news is its all there to be webbed together; the bad news is that it appears complex/chaotic until you’ve trained yourself into simplicity. (Incidentally academics christened Chaos Theory out of some Greek God identified with natural opportunity not the garbage that permits leaders to give up responsibility because of uncontrollable butterfly’s wings) Here’s an extract on human systems mainly based on Allee, one of the world’s top 5 intangibles value practitioners:
This extract is from the recommended systems reading list from KM expert Verna Allee:
• The five disciplines of Peter Senge
• The knowledge conversion of Nonaka and Takeuchi
• The viable systems model of Stafford Beer
• The stratified systems of Elliott Jacques
• The knowledge continuum of Russell Ackoff
• The quality philosophy of W Edwards Deming
• The organisational intelligence of Peter Koestenbaum
• The levels of consciousness of Ken Wilber
• The theory of process of Arthur Young
• The multiple intelligences of Howard Gardner
• The hierarchy of needs of Abraham Maslow
• The moral development of Lawrence Kohlberg
According to Allee, these are the five most vital principles of System Theory that any leadership modeller should know about: Capra’s 3 defining properties of living systems:
1) Pattern: the configuration of relationships among the system’s components which determine its essential characteristics
2) Structure: whereas seeing the pattern involves abstract mapping of relationships, structure describes the actual components, their shapes, their composition and all that is necessary to know the system’s purpose.
3) Process: the activity involved in the continual embodiment of the system’s pattern of organisation- the process criterion links pattern and structure
To which Allee adds 2 more properties to distinguish the richness of a human system from a merely mechanical one:
4) Autopoietic Network: the cognitive capability to continually produce itself so that being and doing are inseparable (alternative terminology: organisational intelligence)
5) Dissipative structure: using the dynamic of openness to systemise flows of learning, energy and matter. The ability to resolve external conflicts and environmental change without having the core purpose overwhelmed by such turbulence. Ultimately, in a world of system of system interactions, economic and policy recommendations are only as insightful as the completeness and transparency of their assumptions of dissipative structure and boundaries.
To conclude this section we quote an extract of Allee on pp190-191 of her book “The Future of Knowledge”: “Most of the models and tools of the past, (including popular models of value chains) are “engineering” types of tools. They break down a complex system into component parts or processes, so that each can be fine-tuned (separately). However, it doesn’t work to try and paste all these processes back together… The focus is completely the other way round from a living system’s perspective. Processes aren’t the active agents in organisations- people are. When engineering approaches focus on processes, the cognitive and emotional aspects of the organisation never show up in the model. Engineering approaches are blind to the organisational intelligence that is embedded in real, living, breathing people. Small wonder investments in people are regarded as an expense!
Chapter 5
Leadership needs context. The addicts of accounting and advertising have lost the two main communicating contexts of leadership: 1 by priortising a monopoly of generic numbers that provide no help on seeing where the future is leading; the other whose vested interest in its own business case is to disintegrate all contextual communications so it gets paid to image over everything.
Inspirational and trustworthy leadership context comes from such human organisational truths as depth, breadth and unique sustainability of purpose (ie vision/values). Welch, a much maligned leader coined 2 interesting terms for GE's culture- relentless consistency (the gravity of a learning organisation), and boundarylessness (human priorities to interconnect beyond business units). Built to Last Collins had fun with demonstrating how the one leadership paradox of stimulating progress whilst preserving the core enables leaders to make all sorts of other change paradoxes easy for all employees to take on board at the right time to value multiply.
Passion , ie the emotional flows of trust and all the human relationship characteristics valued above
Pattern rules that enable people to benchmark contextualisation of metrics and integration roles.
If a servant leader (and the whole transparent flows and motivations of a human relationship infrastructure) can openly master all this, then the prize –and communal brand learning permission - for this organisation could be leadership value of the whole worldwide networks of its industry not just the markets its shares in.
Finally (in this current overview!), we need to be good neighbours across our borders: compete on serving benefits, collaborate in risks. Stop being so daft as to copyright learning which is an open innovation multiplier not a consumed up value. Realise the bigger you are the more you have responsibility for those your knowledge could most desperately help especially if they have so little that they will lose all hope (and therefore destroy all the world's value) unless you proact total brand corporate responsibility. See how all of these demands actually fit quite naturally into the 10-win framework if you use it to scenarioise forward and understand that trustworthy human investment should always unite stakeholders and repel speculators.
Details
Attachments: 2
-
Produced as a debating sheet for the conference at www.collapsingworld.org Sept 2003, London09-Sep-03 -
How the transparency of human goverance systems depends on win-win-win11-Sep-03
- Author:
- Chris Macrae
- Publisher:
- KnowledgeBoard
- Date:
- 02-Sep-02
- Categories:
- Emotional Intelligence, Knowledge Angels
- Sections:
This article has been read 3945 times.
Tools
Member comments (12)
Share your views with other users: add your own comments to this item.
File on Sustainability of the Globalisation System
http://www.knowledgeboard.com/download/2865/sustainone.ppt
This is one-page handout produced as a conversation stimulus in preparation for http://www.collapsingworld.org
To use or understand it fully, I would expect you would need to chat about it with me at wcbn007@easynet.co.uk
As a rough overview of the information flow:
1 is what we know from tracking the evolution of globalisation and networking technology's pervasive connectivity - we need a different system of analysis of what is transparent performance by every large organisation for humankind to thrive. KM might call this different system the links to govern the flows between all the intangible capitals - see dictionary , right hand column of http://www.knowledgeboard.com/community/zones/sig/kmei.html
2) Communally KM luminaries such as Sveiby , Allee (see her NGO Brussels appearance http://www.knowledgeboard.com/cgi-bin/item.cgi?id=113991&d=1&h=417&f=418&dateformat=%o%20%B%20%Y), Edvinsson have helped develop the maths -and metrics - for systemically changing the governance of global value dynamics in a networked world
3) How could this mother of all measurement and governance changes take place? It would ultimately need the cooperation of two opposite sides of the world
On the left: the humanitarian networks, each concerned with a specific global divide, and already best practice users of the internet. (remember how global pharma companies have had to respond to humanitarian calls to change pricing policies of aids and other drugs in poorest countries)
The right hand side - the big global organisations that need to benchmark transparency, trust-flow and intangibles networking governance fast because they are faced with system immaturities of governance that make the sudden rush to improve physical quality systems in the 80s look like child's play in terms of change leadership.
McMaster Congress 2004
I am just submiiting a paper for the corporate governance track of this primary stage for latest research on Intellecual Capital.
Draft paper available from me chris macrae, email wcbn007@easynet.co.uk
Title & Abstract & Keywords follow:
THE MAP: Corporate Governance of Trust-Flow as an Open Source Standard
Abstract
Intangibles are now the major value dynamic of firms. We map their systematic correspondence to an organisation’s relationship integrity in connecting valuable productivities and demands. Mathematically, this leads to a simple standard that must be audited in opposite ways to tangible accounting. The transparency crisis of the world’s biggest organisations will not disappear until shared governance between tangible and intangible auditing is instituted into corporate governance.
Policy-making ought to view organisations as living systems where Intellectual, Social and Human Capitals flow together. Social and economic perspectives are not separate leadership responsibilities but necessary win-wins both globally and locally. It is time to see the compound impacts on valuations and global responsibilities in a networking age. The measurement capability to map the dynamics of system of systems is as vital for evolving human prosperity, as the ability to reveal what will happen next to each organisation’s value as a separate identity.
Keywords: Intangibles, Trust-Flow, Living System, Win-Win relationships, Dynamic Valuation, Transparency, Mapping, Shared Governance, Policy Capitals.
Afterthought: I notice with dismay that win-win is becoming a fashionable phrase to band around. This puts it at risk of being mouthed as the precise opposite of what its systemic purpose is in trustworthy leadership contexts. I hope, if nothing else, this paper will enable you to discriminate between people who are sincerely seeking to communalise win-wins, and those who rule by separating image-making from reality-making. This transparency issue is also one of the perennial conversations at the blog http://www.beyond-branding.com/blog/blogger.html
Reply
There is nothing impossible if it depends on the correctly thinking people.
Thank you for this dialogue, Chris.
yes
if I could turn one idea round about the integrity of national states and their impacts on neighbours, it would be to let local places split off from bigger countries to declare themselves as new beacons of offshore transparency rather than places that come rich through syphoning taxes out of the large democracies they neighboured
of course this idea may be the opposite of that which created the 20th century sucess of L-place that pulls the strings on kboard2 funding so "yes please" but will I ever see it happen in my lifetime?
Right thought!
You are right, Chris, certainly your thought that “we should have new offshores that are super-transparent instead of the very opposite” is quite within knowledge oasis suggestion.
So I think you understand.
What you mean saying “YES”?
offshore and transparency oases of change
Nikolai
Your last mail had some wonderful points in it but I am not sure if I understood the whole. Let me try and annotate the bits so you can help me learn
As we know off-shore zones/small countries provide very simple and low cost accounting, lowest or no taxes that attract most not transparent business deals. Incorporating in the off-shore territories adds problems with trust outside them. It seems to me (may be I'm wrong) at least European off-shores will be closed with time.
yes, especially off-shore America like Bermuda has come a place for large companies to register so as not to pay takes back in the US. This is outrageous in that it steals from democracy. Conversely, one day I believe nations will need to do 2 things: have taxes that are much more similar to each other; simplify taxes so that transaprency and usability is easy
We are talking about how to make business outside off-shores more transparent and to get understanding as some basis for trust (or understanding will substitute trust with some time) when "connectivity" between shareholders, stakeholders, customers, public, etc. take place.
What would be if to benchmark knowledge accounting (with syndicates of companies you, Chris, have mentioned) that makes intangibles/goodwill transparent and embed it into the law of those off-shore zones/small countries which leaders would like to transform status of their territory from current off-shore/not transparent oasis into knowledge oasis (as some experiment for the first time)? If things will go well this knowledge oasis will be the first practical implementation of knowledge society & economy that attracts innovative people who not only talking about sustainability but doing it. I think money/investments will come too because of understanding/knowledge sharing how business structure really works.
I believe absolutely we need syndicates of companies to benchmark transparency and they will find it a winning advantage. I am not sure I understand why the non-transparent offshore country will be the first to change this. Or perhaps you are suggesting we should have new offshores that are super-transparent instead of the very opposite. Probably Singapore was one such early example of that, although not everything is a parallel.
So off-shore as synonym of not transparency may/will be considered as business practice outside knowledge oasis for its further transformation accordingly results of experiment with knowledge accounting. But it may/will be the challenge for democracy of the country which declares its future as knowledge-based - we'll live and see.
If I understand then YES
Knowledge oasis
Oasis - a place or situation offering relief in the midst of difficulty.
As far as I know quality system hasn’t the same connection with national taxes like accounting/audit has.
What about this additional thought to consider?
As we know off-shore zones/small countries provide very simple and low cost accounting, lowest or no taxes that attract most not transparent business deals. Incorporating in the off-shore territories adds problems with trust outside them. It seems to me (may be I’m wrong) at least European off-shores will be closed with time.
We are talking about how to make business outside off-shores more transparent and to get understanding as some basis for trust (or understanding will substitute trust with some time) when “connectivity” between shareholders, stakeholders, customers, public, etc. take place.
What would be if to benchmark knowledge accounting (with syndicates of companies you, Chris, have mentioned) that makes intangibles/goodwill transparent and embed it into the law of those off-shore zones/small countries which leaders would like to transform status of their territory from current off-shore/not transparent oasis into knowledge oasis (as some experiment for the first time)? If things will go well this knowledge oasis will be the first practical implementation of knowledge society & economy that attracts innovative people who not only talking about sustainability but doing it. I think money/investments will come too because of understanding/knowledge sharing how business structure really works.
So off-shore as synonym of not transparency may/will be considered as business practice outside knowledge oasis for its further transformation accordingly results of experiment with knowledge accounting. But it may/will be the challenge for democracy of the country which declares its future as knowledge-based – we’ll live and see.
Perhaps all I have written above looks too futuristic but I think could be considered and corrected. Add your criticism please.
the greatest competitive advantage a nation could gain
...would be to require intangibles governance alongside traditional tangible auditing in every big company; to some extent Denmark and Nordica countries are starting this
equally, its a catch 22. This is the biggest democratic issue for the future of business organisations(anywhere that society has a choice in which businesses it tries to attract or encourage). At the same time its too technical to be a public votewinner
Two years ago I chatted with the EU's head of the high level intangibles study group- what would make it a public issue I asked. About 3 more collapses the scale of Enron but in businesses peole undesrtand or directly use - eg insurance companies was his answer
The other way is to get syndicates of companies in particular industries to benchmark how to use this 2nd governance system ; like with quality 20 years ago those who implement this system first will overturn companies which are late to do this
What next?
Chris,
let’s imagine you have mathematics you seek and it is possible to develop it for knowledge accounting/audit. What next? Current accounting/audit based on law and knowledge accounting/audit may require changes in law. Who need changes and has power to do them?
MAPs
The MAPs you see form a pair of standards for transparently valuing an organisation or a network as a human relationship infrastructure.
By standard, we seek the simplest complete mathematics to do the job it is designed to represent. In this sense, both maps are far more mathematical inquiries than balance sheet audits and other accounting artefacts that are no longer simple in any way that trained mathematicians would value. Another issue that some non-mathematicians may find controversial is that well designed mathematics does not necessarily involve people in spreading too many numbers but enables as many true ideas as possible to be shared so at to communally contextualise practical behavioural understanding even when confronting the most turbulent of knowledge or responsibility environments. As a non-numerical example, a well designed geographical map represents wonderfully elegant mathematics for progress and visionary evolution.
In today’s global service, knowledge and networked markets, most value is systematically being built or destroyed through the connectivity of human relationships. This ‘connectivity’ explains why we need new maps to value the so-called intangibles or trust-flows (and other emotional intelligences) which organisations as human systems dynamise.
Connectivity is primarily represented in mathematics by the ‘multiplication’ operand, not ‘addition’ the separable operand which tangible accounting has for 100 years been defined around. The so-called transparency crisis that caused one of the 5 biggest tangible accountants (Andersen) to destroy all its value is only marginally to do with a few corrupt leaders, and wholly to do with leaders no longer sharing the complete intelligence systems needed to govern human relationship connectivity in a true or fair way. In fact, mapping a model of Andersen’s destruction shows that its own valuation experts did not even know when to use multiply instead of add. Not only does leadership by accounting numbers separate what should first be connected, but its traditions rooted in the industrial age assume that all machines can be booked as investments whilst all people have to be charged as costs. This biases every leadership decision over time in ways that are very counter-productive, most notably where any company wishes to leverage knowledge management and the human behavioural realities of communications networks. It can also make a company increasingly dis-trusted amongst its home-people, where its headquarters was founded. (Reference World Economic Forum, Theme of 2003)
learning patterns
A report on children's education reveals the basic human infrastructure schools need to organise promotes these emotional currencies: Confidence, Curiosity, Intentionality, Self-control,Relatedness, Capacity to communicate, Ability to cooperate
(US National Center for Clinical Infant Programs)
Which would you change if you were to hazard a guess as to what makes organisations great places for adults to action learn?
collaborate-collaborate-collaborate
Collaborative innovation is in its infancy in spite of the fathers of the internet (Vint Cerf) and the worldwide web (Berners-Lee) insisting that they were openly designing technology so that worldwide innovation opportunities would bring whole new value multipliers to organsiations and people's productivity.
Tell me your favourite bookmarks on collaborative innovation to register here:
1 2 3
Transparent branding's 4-multiplying ways to value collaboration imply that organisational systems must be changed inside-out to collaborate with:
A) Governments
B) Businesses
C) People as individual (knowledge) workers
D) Coworker groups such as teams, personal netorks and practice communities
Inside-out collaboration with government means no more furtive lobbying for protectionsism or rights to ruin local environments. Instead only get together with government where you can openly do something so wonderful locally that its a win-win-win for the company, government and humans in the local democracy.
Similarly, each of A-D has an inside out change leadership issue to systemise; for example C)companies will never learn to collaborate with their best knowledge workers whilst booking them as costs (unlike machines which tangible accounting compounds -as its meanest cuts of all - by arbitrarily framing as an investment) D) Tangible measurements have taught people groups to play all sorts of closed knowledge politics- why not design new intangibles-smart games enabling teams of people to "Tango" - let's see how vital business knowledge needs open sourcing, and how valuable group time can be systemised around great proactive challenges leading our strategic purpose?
PS I also have a personal colaboration project- outlining a future affairs 12 year olds curriculum to prepare for a transparent networked world - please tell me your bookmarks 1 2