IT investments and shareholder value
Don’t treat information as money, and don’t treat money as information!
Laszlo Kövari
The anomaly
For the past 50 years there is increased spending on information technology and there is an increased need to justify not only spending on new technology but also to understand the value of all previous spending. This makes it look like either:
IT is the only field where spending happens without real justification or
IT investments are comparable to investments in the public markets in that there is no right scientific formula to figure out what to bet on yet the decision may influence the future of the organization.
I believe that shedding light on the cause of such an anomaly will help us understand the value of information and knowledge to shareholders. Then we maybe able to show how (if) knowledge as a perceived intangible* increases shareholder value.
*This situation assumes that market players have a hard time perceiving intangibles as carrying “real” value. The reason for this is a value system on the base of which the market operates. Value systems are based on worldviews. If this is true, to prove that knowledge oriented investments increase shareholder value is impossible without changing the worldviews of shareholders. Since this is of course next to impossible it seems like we have a contradiction.
This contradiction maybe overcome by providing a view of information and knowledge that reflects a particular logic which could be connected to the tactical and strategic environments, including organizations, the markets and society. Since the broader the view, the better the understanding, if we step back far enough we may better understand IT investments than if we look at them up close.
The problem
The areas where it’s easy to prove shareholder value are the ones that are directly tied to revenue generation.
Information technology is an area that (in most cases) is not directly tied to revenue generation yet it consumes resources.
IT executives must “persuade” corporate leaders about the value of investments in IT. They use various ROI tools to prove their point.
Problems that emerge:
- IT executives and corporate executives have different views and these views are not integrated into a cohesive whole
- They have the same view but it is flawed. This flawed view is the context of the fight for resources against other cost centers.
The first one is a communication problem the other one is an organizational problem. Both problems are the result of the same cause: a fragmented view of information and a fragmented view of reality.
Statement: the cause of such an anomaly is a disconnect between perception and reality.
The only way to align perception with reality is by understanding reality.
Assumption: the Evolution of an organization is in the best interest of shareholders. Everything else is secondary.
Solution: Key shareholders (sr. management, board) must understand the role of information in the evolution of organizations. Without such an understanding their assessment of its value will be flawed which means the anomaly continues to prevail and may become a self-reinforcing negative pattern/trend.
Perception about the value of knowledge and related technology currently fluctuates according to market sentiments. It is important to establish a solid foundation on which the leadership of a company can develop their understanding of the organization. Without such a foundation, perceptions about value will continue to fluctuate and since information is a building block of Evolution, organizations whose leaders don’t understand Evolution will inevitably decline.
To summarize the statement above:
1. The value of information/knowledge related investments only becomes evident from the vantage point of Evolution.
2. Traditional company valuation methods focus on isolated components that reflect the effects of invisible and poorly understood causes. While they may provide information on growth they rarely provide information on Evolution. Therefore the value of information and knowledge related investments can only be proven to shareholders if they have an awareness of the Evolution of the organization. If they don’t, the only way we can prove the value of information is if we attempt to distort reality in an opportune time (e.g. when markets react favorably to IT investments -which is itself the effect of a poorly understood cause).
3. The design of an Evolutionary system is required that embeds leadership, the board and major stakeholders and that enables them to increase awareness to the Evolution and ultimately to the Identity of the organization.
Brief framework for understanding
It’s important to think systemically about the meaning of the basic terms/components of the system:
- information and knowledge
- leadership, awareness
as well as the relationship between these components. In doing so a system must be described, whose components become meaningful only in their relationships with each other and not in isolation, with disregard of other components.
Any one component of a system is in constant interaction with all other components, exerting influence and being influenced. This system serves as the context for understanding the value of knowledge.
Components:
Information and Knowledge, systems view. To understand these terms we must look at them from a context that integrates them into a cohesive system. This system is Evolution and Evolution is a component of an even larger system, Identity (see Identity Map).
Both information and knowledge owe their meaning to Awareness.
For simplicity’s sake we use the term Awareness instead of Consciousness.
Awareness is a driving factor of Evolution.
We use the following definition for evolution (most likely after Csikszentmihalyi, although this is not a 100%…sorry!): increased differentiation (specialization) coupled with increased integration towards higher levels of complexity. Awareness is the integration factor, without which disintegration takes place, the opposite of Evolution. Without Awareness there’s no Evolution.
When applied specifically to information, the definition sounds like this:
Conscious integration of specialized information is knowledge (besides awareness thinking is the other integration tool that connects percepts to concepts, creating realities that correspond or contradict belief systems…this issue only has partial relevance here).
After data and information therefore Knowledge is the next stage of Evolution. If we look at these components as systems, we see that Awareness as a system incorporates –besides other components- information and knowledge.
Another, simpler definition of Evolution: the path to fulfilling the Purpose. The integration of perceived Purpose, intention and behavior is the job of the CEO. He should be evaluated accordingly. This however is not the case due to a number of reasons. The most important ones are:
- there is no perceived purpose and
- there is no reality that incorporates the ceo with other shareholders.
When it comes to Purpose, statements like increasing shareholder value, profit, etc. cannot be accepted, since if shareholders’ values were only monetary, the Purpose would be comparable (an exaggerated example of course) as declaring that the CEO’s purpose is to eat (money and food both being resources in the analogy). Similarly, an organization whose Purpose is to increase the amount of resources is meaningless.
Since information and knowledge is an intrinsic part of evolution and identity, the notion of justifying its existence is comparable to the notion of justifying metabolism in the human body or consciousness of the human mind. It is there for a purpose.
The demarcation mark between the structuring/organizing effects of metabolism to higher levels of complexity and the fulfilling of the purpose of the whole entity is Awareness. Information flows through Awareness both ways (top to bottom, bottom to top) providing clues and information for awareness; awareness has to increase in order for the entity to evolve. If awareness does not increase, the entity, after reaching a certain point in growth will stagnate and decline without reaching its Purpose or realizing any of the available potentials (levels of the Purpose)
Information and technology
Information increase is incessant below the line of awareness since the organization is an open system and the complexity of the environment is increasing. Technology enables the organization to appropriately structure information to create negative entropy. Structuring must be guided by thinking that comes from attention from above the line of awareness.
Understanding is perspective. What makes it hard to understand the value of information is the way it is viewed. Rather than trying to prove the value of information to decision-makers whose view on it is flawed, it is more productive and strategically more important to change these views.
To prove information’s value we must view it not as a resource but as a building block of organizational existence, similarly perhaps to metabolism in the human body that, while it consumes resources and by itself doesn’t produce any, is an important factor “keeping it together” (structuring).
As such, information is beyond the sphere of our judgments: value it or not, without it there is no company to invest in, consequently there are no shareholders to provide value for.
Investments in technology provide direct strategic ROI only, if they enable raising the level of awareness holistically rather than on fragments of the organization. This is why it’s impossible to prove the ROI on disparate enterprise software systems and this is why integration is a hot ticket item now, that the view is so fragmented.
Leadership
The CEO is a catalyst (initiator and integrator). His/her attention must be focused on the Identity Map of the organization, and within that context, on its Evolution. His job is to accelerate Evolution and increase Awareness (individual and organizational). The CEO therefore must a thinker first and a doer second. His *deeds must be based on thinking. The CEO is the facilitator of **proper specialization and the main integrator towards higher levels of complexity.
For the CEO choosing is a means not the end, because before time comes for choosing, the context must have already been made clear.
*Note: there is a difference between a deed and an act. In short: deed is performed as an evolutionary act, therefore it is future oriented at worst and timeless at best, while an act is performed in consistent with the past only.
** proper specialization means simply the right people in the right positions –no displacement, which causes destruction and hinders creativity.
Current leadership performance measurement systems call for actions on the part of the CEO to increase bottom line (financial) performance, operational performance and to choose the appropriate leadership behavior. The first two encourages selection-based leadership, where thinking doesn’t enjoy a main priority, the third one presupposes the very thinking and awareness that is suppressed by the fist two. Ironically without an extended awareness to the Identity Map, even operational and financial decision making is inefficient.
The ideal situation is when there is perfect alignment between the culture of the organization and its shareholders based on well thought out values that are based on principles. In such a situation the organization is looked at as an evolving system and not judged on the base of snap shot images that are (dis)colored by market sentiments.
The board, CEO and his senior management team’s view of the organization is holistic, with Evolution as the appropriate context for strategy and all its other components.
The context for resource allocation is Evolution. This context makes current best practices on both measuring and forecasting ROI more efficient and sensible where positive sum games can be accomplished, creativity unleashed and manipulative behaviour rendered groundless.
Recommendation:
The creation of a system that serves as the Reality the CEO, the board and the senior management team operate in. In this environment everyone’s understanding is deep enough, and everyone’s attention is contained in the right context, focused on the appropriate priorities.
Such Reality fosters creativity and eliminates manipulation that typically results from flawed values first, and competition for resources second.
The Identity Map creates an environment where understanding of Information, Knowledge and Evolution is not superficial and values are formed on the base of logic.
Such Reality fosters inside-out change, that results in greater control over the tactical and strategic environments, exerting a great Attraction factor to bring in the right shareholders, stakeholders, team and customers as opposed to the great Manipulation effort that is constrained to an environment where participants’ awareness never extends to the causal relationships between events, but they are exposed to the inevitable betting/surprise/fear game plan.
i created a diagram but i have no idea how to import it …. will come soon. the diagram is a tilted square divided by a horizontal line and a vertical line in the middle. the top angle is the purpose, the bottom is the Need/purpose potential
Vertical line: indicates the direction of information (bottom up and top to bottom flow), it’s not dividing anything in this particular example. (In a different example, as a divider, it divides the left and the right hemisphere, providing an additional dimension to all the components of the system outlined here.)
The circle indicates the reciprocal connection between Purpose and Need, which is a Purpose Potential.
The role and significance of awareness is easily observable. Instead of providing a complete account I only highlight a few, in relation to information, knowledge and the Purpose of the system.
The top, converging triangle is analogous with knowledge while the one below the line of Awareness is analogous with information.
The bottom triangle shows the divergent nature of information.
The top triangle shows the convergent nature of knowledge.
If we take away Purpose, both the bottom and the top rectangle is symbolical only: it indicates a lack of structure, basically entropy, where awareness literally has no place: it may be anywhere, in a sense by chance.
If we remove Awareness, the divergence continues indefinitely, never reaching the purpose.
The top portion is symmetrical (mirror image of) of the bottom. The pace and structure of divergence is the same as the pace and structure of convergence (if awareness is central). The implications go beyond the range of the points I am making here, although it has relevance to the Leadership factor, in that the leader must continually seek Purpose often from beyond perceived reality. Organization below the line of awareness happens in accordance with the yet unrealized (and perhaps not yet perceived) Purpose.
Awareness must extend to both directions: up and down.
Bottom triangle indicates the nature of growth
Top triangle indicates the nature of evolution.
Note: the line of awareness is not a line, but a field that goes from the line all the way to knowledge and beyond.
Above awareness (in the field of awareness) thinking and attention is focused on identifying potentials (opportunities) to realize.
Information freely flows through awareness from the bottom up and vice versa, influencing circumstances based on how thinking and awareness perceives, captures and uses them.
Mistakes are made mostly when the attention remains on the sphere below awareness with its “back” turned on the Purpose.
If Attention is kept in one direction only, the perceived half-truth leads to disruptive behavior; if it is focused on the “growth triangle” below the ideal line of awareness, the focus of strategy is entirely on growth, where the concept of money and information is replaced in the perception of leadership.
Since money is the measure of value, the role of money becomes the most fundamental of all: the building block of the organization, which in reality is that of information. Information on the other hand becomes a resource, which in reality is money.
communications crisis
Laszlo Kövari
It is clear that the terms “communications skills” and “language skills” are not necessarily mutually inclusive.
Somebody may have a flair for languages while he is unable to appropriately structure his thoughts, make decisions in context about what’s important, and to make the appropriate points in the appropriate time and in the appropriate style.
In addition to the above somebody with good communications skills is also very sensitive to the situation itself, which could be:
- a discussion or debate (which should serve as an emotionless problem solving tool, thus not at all what it is typically today),
- a conversation (mostly easy topics)
- easy talk (here there is no intention to solve anything, it is just about producing something interesting; raising points and leaving them in the air)
- a dialogue (this deserves a study by itself) and of course
- fooling/joking around.
All of these are necessary for a healthy, diverse and well balanced lifestyle.
There are nuances and overlaps; some of these maybe more valuable than others, depending on the point of view. An easy talk for example may solve big problems, fooling around may resolve conflicts, while a conversation may end up in a discussion in the conventional (wrong) sense of the word, etc.
And now about language skills.
In Europe, especially in Western Europe it is quite typical that there are many people speaking more languages. It is conspicuous how often the word “perfect” is used (especially in the CEE, where –since they always learn but rarely speak foreign languages- they ideologize the langue skills of westerners) to describe the level of language skills. It is obviously the English language that suffers most of the insults.
Naturally the fact that somebody can chat about everyday topics or EVEN ABOUT BUSINESS does not mean that he or she is speaking a language well. I had to emphasize “even about business”, because people tend to think that business is the real proof. If somebody do well there, he must really be perfect in a particular language.
Nothing is farther from the truth. Most managers and top managers communicate incredibly poorly in the second (and even more so in the third or fourth, etc.) language.
This causes a lot of misunderstandings even in such simple things as setting up a meeting, not to mention price negotiations, discussing terms and conditions, etc. These topics could be very simple but in actuality they are never so. One of the main reasons of this is that people of different nationalities think with completely different temperament about money, commitments, about social hierarchy, about each other, and about a million other things. They can express the most minor nuances about these things IN THEIR OWN LANGUAGE…but not at all or at least in a very distorted way in the second or third, etc. language.
The distortion happens when the speaker literally translates something. This may actually work, if the negotiation partner was aware about the distortions. But this is not so: not only is he not aware, but he is further distorting the communication by perceiving the already distorted information through the lens of his own language, temperament, opinion, etc.
A simple example: a third party wants to organize a meeting between two parties. The number of participants is 5.
Everybody is busy, everybody’s schedule is changing all the time. The proposed meeting should take place in approximately two weeks. The third party, the mediating one, is in a difficult situation, since the time that works today may not work a week from now.
There are specialists (like the production leader in a factory) among the players, who are completely insensitive to such factors, and there are integrators (like the ceo of the other manufacturing company), who are fully aware of these and who exhibit (and expect) a high level of flexibility.
For the production manager it is a real problem to understand that the meeting is scheduled only with “pencil” right now, meaning that it has to be confirmed. He already said that it works, so as far as he is concerned, it’s done, what’s the big discussion about this anyways?!
Then he’s asked about possible alternative times. At this point the production manager thinks that everybody’s crazy.
After all these, he gets an sms requesting confirmation that 4 30 pm on Thursday is still good for sure?…since the other party just confirmed that it’s good for them.
At this point he doesn’t even answer the sms. He said it’s good, so what‘s there to confirm?
So since he didn’t respond, he gets a call from the organizing party: you didn’t respond! Everything’s still good, has something come up??
Messages are being evaluated through four filters: through that of the specialists, of the integrating specialists (managers), of the specialized integrators and the (main) integrator.
The integrator understands all the other levels, the specialized integrator all the levels below him, etc. The specialist only understands his own level…and this has consequences on protocol.
Such problems are multiplied by inefficient language skills. If the language of conversation is English, and it is conducted between people, who never lived in an English speaking environment, and everybody dedicated the same amount of time to the language, and are on the same level (it is of course obvious that there is no such thing as same level), the communication would still not work because of the four different kinds of filters.
The adherence to communications protocols may provide a surprising easy solution to such problems in a business setting. But there is never such a thing in place.
In times past the formal way of addressing people, social interactions governed by protocols (introductions, etc.), the significance (and rarity) of travel obviously eliminated the possibility of (the majority of) misunderstandings.
Today there are plenty of business transactions that went awry because of the lack of language and communications skills and there are business relationships also, which are based on misunderstandings.
These are contributing factors to a general communications crisis in the CEE region and will increasingly become so in the Middle and Far East, where in addition to the language deficiencies, the cultural differences (between European and American people and the Middle and Far Eastern people) are even larger than within the EU… at least for a short while.
The unfolding of artificial intelligence as an application field
In this brief we’ll highlight negative tendencies in context of which artificial intelligence, as a field of application follows a process of involution –opposite to expectations.
Ironically the involution process is unavoidable, it is a logical impossibility for this field to follow a different path of evolution.
We are going to systematically focus on the context and avoid any kind of content based deviations, since when we are addressing the context, starting from the content always results in deviations. Intelligence is naturally context and by no means can be considered as content; to put it differently: intelligence is essential, and it is by no means substantial.
The expression artificial intelligence contains a contradiction and is itself the (by far not the end) result of an involutive process. The expressions we use today reflect nothing from their original meaning, the reason of which is the proliferation of rationalism. Rationalism is a particular way of thinking that lacks true context and which results of uncontrolled and non-integrated specialization. Rationalism, cut off from the context is forced to consider content-elements as context, unavoidably resulting in smaller and smaller content elements. Specialization is only one aspect of this process. It is clear that when it comes to organization, rationalism is unable to provide any kind of integration: it can only create specialization, and quite often, disintegration.
If the word artificial applies only to what’s human (which our contemporaries tend to identify with that, which is rational, assuming that a human factor may only be rational, and denying –with rationalism of course- that the human domain goes beyond rationalism), then we can interpret the word artificial as human rationalism, which is then is in analogy with such silly expressions as canine-barking.
To better highlight our thinking it is necessary to define the basic terms and their dynamic relationships and to some degree consider general systems theory.
Intelligence and evolution
Intelligence and consciousness are inseparable terms. The fact that common views today define the areas of consciousness only in the sub/un conscious and in the wakeful consciousness, is also the result of a general involution process, which is the result of the lack of context, or awareness thereof. The context itself is of course supra-rational consciousness, from which modern man (especially specialists) is already separated, thus he focuses his “attention” only on the domain below, on the sub-conscious level, while proudly limiting his wakeful consciousness exclusively to primitive problem solving scenarios.
There are hierarchical correspondences between the three domains, whereby the inferior depends on the superior, i.e. the existence of the inferior depends on the existence of the superior. The bottom-up hierarchical order is: subconscious, wakeful consciousness and supra-rational consciousness. It is easy to see that “proving” supra rational consciousness for mechanical “intelligence”, or the brain, whose specialization has often reached sub-rational levels, is senseless (irrational), thus we are not going to digress into this direction at this time.
Since the direction of evolution must be upward (vertical), it is obvious that if we consider artificial intelligence as an application, it must be oriented towards the supra-rational domain; if it isn’t, we can not talk about any kind of evolution.
Most of the current applications are focused on problem solving, which provides context for the unfolding (not evolution) of the application. Problem solving however can only be considered as a content element and not as context, since in the causal relation, even in the best case scenario, it only proves the cause, trying to deduce the cause from the effect, which is a typical example of the gaffe of practical rationalism. To use a simple example, this approach is like trying to figure out the intention of an aggressor from the quality of his punch and its after affects on somebody’s face.
The rational problem solving approach is “breaking down” (analysis) and not integration. All complex problem solving methods follow the these main steps: define the problem, break it down to components, find the key drivers, choose a critical element, define a solution for the critical element, and prove how the “improved” critical element will solve the whole complex problem. In this context analysis enjoys a great role, while synthesis enjoys almost no role at all. When people still talk about synthesis, we typically see syncretism only, which is also just a data-dependent experiment, unable to go beyond the limits created by data.
Since the focus is not on integration, we can not talk about evolution even if we consider the generally accepted definition of evolution as increased specialization (differentiation) accompanied by increased integration towards higher levels of complexity. If we add to this –and almost nobody does-, that this is not a process that happens from the parts towards the whole, but it is the unfolding of the concept, which is considered to be the whole, through recognized and actualized potentialities and virtualities, we have reached the gates of the supra-rational domain.
At this point we must ask a fundamental question; a question, to which the points outlined above provide an answer, in order to be able to better perceive the truth, which breaks down to a question and an answer: how come that in the artificial intelligence area nobody deals with the question of supra-rational intuition, i.e. with the domain of consciousness that goes beyond just describing things and beyond seeking the “WHY” behind problems and situations (once more: only in the most exceptional cases, since the majority of applications don’t even get to this point; they are satisfied with the automatization of problem solving mechanisms). As far as we know this question hasn’t even come up, which is rather logical, if we consider the strategic environment. If we google “supra rational intuition” we receive less than 30 results. If we use “suprarational intelligence”, we get only 7 results If we add artificial intelligence, we receive only one hit. Not one of these hits has business connotations in general or software connections in particular.
Thus the situation is that the developers and the developed applications are part of the same system. If the developer wants to be able to exercise real control over any kind of a system, it is necessary that he/she is in a position above the system. In lack of this position any kind of attempt for control is in vain from the start.
Considering the points above, current attempts are following patterns of involution, which have no values whatsoever. If the accepted view still holds that there is value in these attempts, it only becomes obvious, if the application is extremely primitive, yet (or, considering the rapid decline of the environment, because of this) they are considered to be a success within the low complexity applications it deals with, and within which it is pushing for some solution; another case is that the environment is declining to such a degree, that the low complexity pseudo solution transcends the ever smaller area of specialization of specialist users, creating an illusion of achievement.
Organizational Identity: A force of integration
Laszlo Kövari
The challenges of attracting, integrating and retaining the right people for a given organization are well known globally. Tens of thousands of positions remain unfilled in any given geography in North America alone.
The tendencies of globalization, the emergence of a brand new and distinct generation (Y) in, and the gradual disappearance of a previous generation (boom) from the workforce, changing perceptions about leadership, collaboration, integration, strategy, etc. are obviously changing the dynamics of competition. It is no longer enough trying to compete with technology, compensation and benefits, generous training and social allowances, or by trying to make the workplace “fun”. All these measures are fundamentally reactive, putting companies in increasingly more disadvantageous positions, both from the financial and reputation point of view.
As a conventional HR tool, Employer Branding must enjoy much more attention and a much more adequate foundation to address such challenges.
Employer Branding provides context for the high level alignment of corporate strategy, executive leadership and the employees, among other things. Without the definition of the Employer Brand, all initiatives in these areas are happening blindly, without real foundation and direction, including even such specialized functions as recruiting, compensation or training.
The reason why Employer Branding can fill a function of integration is because it is based on the same foundation as other vertical and horizontal areas, including strategy, marketing, communications (vertical), HR, finance, technology (horizontal), etc., but when it comes to manifestation, it is at least as strong as marketing and branding.
This foundation is organizational identity. Without organizational identity HR is nothing more than a set of administrative functions, marketing is only a reaction to the environment (trends, tendencies, competitors, etc.), strategy is focused exclusively on survival, while management and staff show up only for the money. In short: without organizational identity there is no foundation for any kind of integration.
It is obvious that organizational identity is not to be confused with brand identity. Brand identity is only the reflection of organizational identity. Our choice of the term organizational identity (as opposed to corporate identity) is well founded, since the company is not identical with the (organic) organization. One of the factors that makes Employer Branding significant is that it should enable the company to reflect true, i.e. organic organization.
A successful Employer Brand turns the company into an organic whole (although never perfectly!) with a serious creative force of attraction, which enables real innovation, as well as the attraction of appropriate people with the righ talent, ideal customers, partners and investors.
Main steps for defining the Employer Brand and Communications
- Definition of organizational identity as context
- Design in the context of purpose, evolution (unfolding), style and awareness
- Comprehensive communications audit in the context of the defined organizational ID: PR, marketing, internal and/or HR communications, as well as related channels (e.g. intranet, website, job boards, etc.), identifying gaps, deficiencies, inconsistencies
- Introducing change necessary to lift potential or virtual identity to the level of actuality (organic organization enablement, change awareness/readiness/management, training, etc.)
Following this exercise, HR (and of course other business units) will become a better integrated, more organic part of the corporation and such performance indicators as retention ratio, total cost per hire, training ROI, employee productivity, etc. become much more efficient.
a case for angel networks
laszlo kovari
being a full time VC is a bad compromise; the very reason why the hit rate is so low.
the number of initiatives that are really driven by a certain degree of perception of the truth are very low.
in such cases the drive is strong, there is nobody around to argue, the path is clear and success is established.
the VCs are rarely (not never though) present at the birth of such initiatives, they get involved later.
elite investors should not be full time investors; the people with access to money should focus on what they do and stay close to the periphery, instead of trying to get closer to the mainstream.
innovation happens on the periphery.
invest only in hits. truth is: a hit is a hit. once you start analysing the components of a hit, you should join a big bank and focus on analysis. a hit is a hit as a whole. and you see it as a hit holistically. together with the concept, the potentials, the “virtuals”, the team, the path of unfolding: as an organic whole.
The fragmentation of the environment
Where does the content end and the context begin?
Laszlo Kovari
Let’s consider engineering, or physics, chemistry, mathematics, even biology, anthropology, etc. components of the Content.
One of the mistakes we frequently make today is confusing some of the contents with context.
Paradigm shifts between components, or fragments of the “Content” is just a difference of flavor; e.g. shifting views of organizations from mechanical to organical, etc. It is a pattern of flawed thinking: mistaking the symbol with what it symbolizes.
It seems like we continue picking one (content) or the other, assuming they are contexts, all the while we further fragment the content, focusing our attention on smaller and smaller and more and more pieces, creating seemingly more content to consider. Actually specialization increases, but integration is not keeping up. With the increasing fragmentation we are broadening the context in a direction of increased negative complexity (increasing decay), cutting up bricks to smaller and smaller pieces, confusing involution with evolution, essentially attempting to build sandcastles.
Today’s best practices within a flawed and deteriorating context is the mirror image of the context itself. Fragmentation of the context is what essentially caused the fragmentation of the content. Patterns of deterioration of the context can be observed in scientific revolutions.
In such a flawed and deteriorating context, analyzing the content in order to discover the truth (the hierarchical integration between context and content, some would say essence and substance), will instead lead to further fragmentation, quantification and weakening integration, awareness, thinking, etc, taking us farther away from it.
Attempts to bring integration back into the equation (e.g. with General Systems Theory) will not lead us back to the true context (the purpose of science), since you can’t stop involution as involution as a system contains patterns that create a self-reinforcing cycle.
In plain words sand castled can’t be strengthened. Building real ones have become impossible since the current “builders” have long lost the blue prints and they are mesmerized by the decay, which is reflected in their way of thinking and shrinking attention span.
At this time we feel the need for a major shift, perhaps a new scientific revolution, yet -when speculating about which piece of content it will come from- we are thinking along the very patterns that sustain involution.
We need to go back directly to the state before involution kicked in to find the “new”, or true context. Anything else is just “patchwork” producing temporary results and ill defined “benefits”.
This is an enormous task, but so is the crisis…
Could CEE be the answer to the innovation crisis of the USA?
Laszlo Kovari
Brief Context:
Knowledge is content and today the context for knowledge is also: knowledge.
Cut off from context, which could generate true knowledge, content is proliferating and specialization is getting out of control.
If no integration happens hand in hand with specialization, disintegration takes place.
Since the “knowledge worker” finds himself in ever narrower fields and he identifies with what he knows, his perspective is getting narrower.
Leadership is fundamentally an integrating reality that horizontally enables the integration of specialists (management), vertically aligns management along the context which, ultimately generates valuable, true, as opposed to second, 3rd, grade proliferated knowledge: i.e. commodity.
If the education system only adapts to this disintegrating market reality it only contributes the proliferation of knowledge, which results in people (specialists) focusing on the accumulation of knowledge (quantitative process), as opposed to enabling the emergence of leaders, who focus on context/thinking/integration/innovation: qualitative process.
Situation
Historically the US has focused on specialization as opposed to integration and when this escalated into offshoring, outsourcing, etc. it financed other countries that will compete against her in the game of specialization.
If the US wants to get back into the game and compete against India and China on their own turf, it has to find a way to own the CONTEXT, or to work with countries who do.
The solution will not come from known sources: C level (specialists), (specialized) academia, and (specialized) consultants/advisors.
It will come from an effort of integration.
The US at this moment can’t innovate.
This may sound shocking in the land of the Valley, but there is a lot of truth to it. It is of course leading on the consumer/social-communications front (like social networks), but that is more of a natural unfolding of social patterns, where the States is just a passive “leader”, rather than break-through innovation.
Most innovators from the States have already gone back to home (India, China) and continue with break-through innovation there.
The States is a sales/marketing/project management/financing machine that is increasingly running empty now. It is looking for new markets in India and China: it needs to sell stuff that surprises the hell out of the people on these emerging markets.
Could it be that innovation that will produce such break-through stuff will come from Central and Eastern Europe?
Example for a possible scenario:
American VCs or Sovereign Funds investing money in CEE countries that are typically under funded (there is hardly any VC activity there), but historically are great innovators/thinkers and instead of exiting here, bringing the innovation back to the States, commercialize it, and exit there. The synergies would be good: there is no sales/marketing/project management/financing experience in the CEE region, but there is everything else.
There would be of course some integration problems to be solved, (eg. cultural integration), but these could be overcome and to some degree even solved.
illusion of conventional conflict resolution
Laszlo Kövari
- conventional conflict resolution initiatives are driven to solve a situation (of conflict) thus even when they try to perform root cause analysis, they will inevitably miss the point.
- conventional root cause analysis is not deep enough: it disregards individual patterns
- on the lower level of the organization conflict resolution initiatives may provide results; but always only temporarily.
- conventional methods often follow irrational and flat out infantile patterns
- high level integrators are potentially conflict free. once they are actually conflict free, the whole organization maybe in conflict with them in which case conflict resolution initiatives are not appropriate.
- very often what is being considered a conflict resolution case, should actually be a case for organizational development/enablement
busy-busy
too busy is not good.
if a specialist is too busy, it means he is not managed well.
if an integrating specialist is too busy, it means he’s given too much to do and he is not managing well.
if a specialized integrator is too busy, it means he is in an impossible position.
if a main integrator is too busy, it means he is not in a ceo or chairman role.
there is a difference between a busy organization and an energetic organization. an organization that is too busy, is constantly loosing energy.
an energetic organization is active and dynamic and there is time for the important things in it.
an organization that is too busy is lethargic and yet it’s racing against time. it knows it can’t win, yet: it sacrifices the important things for the seemingly important ones, to maintain the illusion of winning and the dream of energy and dynamism.
to put it differently: an organization that is too busy is trying to pretend it’s an energetic organization.
and this pretention is what creates cynism and sabotage.
10 + 1 general communications advice
10 General communications advice
Laszlo Kovari
This is a list of general best practices, applicable to all 4 players of an organization.
There is no priority order, so they are not numbered.
- Create context. at the very least make sure everybody is clear about why you are communicating.
- Be aware of who you are talking to: a specialist, an integrating specialist, a specialized integrator or a main integrator. Also: be aware of who you are and talk accordingly.
- If possible don’t take part in situations where people are rewarded in any way based on how much they talk
- No matter how strong the urge, don’t repeat the same thing in the course of one conversation; if you feel you must, make a point of it and state why you feel you must repeat a particular point
- No matter what business you are in, if you tend to talk fast, be aware of it, and talk slow. This works of course only if you understand why this is important.
- Never interrupt; even if somebody doesn’t make sense, repeats what was just said, makes statements about things everybody knows or makes other mistakes: never interrupt. These mistakes make sense in that they communicate a message if you listen in context. Also, it’s not worthy of a gentleman to interrupt.
- Even if (and especially when) everybody is fast-firing different points, and you also have a lot to add to each and every point, remain calm, and think in structure, i.e. listen in context: what question are these points answering? OR: how are these points answering the question we are dealing with?
- A conversation, even a discussion, but especially a dialogue: is not a competition. Think and listen in context
- Not everything that comes to mind by way of association to something you have just heard must be said out loud. In fact when it comes to associative thought, it is always uncontrolled, thus better left unsaid.
- Don’t worry about missing an opportunity to make a point. If you think in context, you’ll never forget the point; …you’ll always have a chance to make a point when it’s obvious that it’s important. If you control your impulses, people will in fact ask you to make THE point: as the only one who is entitled to do so.
plus one
- never make statements about things that are well known to your audience!