Category: From the field

Changing how a problem is framed can describe who can contribute and what success would look like

The way a problem is described often reveals what kind of expertise is required to solve it. It can also indicate whose issue it is and what resources are presumed to be needed. Experts might describe problems in ways that are hard for most people to understand, creating a sense of alienation or distance from issues that could be crucial for individuals to tackle. Many important problems, like climate change, water insecurity, or human trafficking, are presented in ways that disempower ordinary citizens.

Why is it important to frame or reframe a situation?

As process facilitators, we need to intervene and help interested or affected ecosystems or interest groups frame the problem in a way that enables them to take action, contribute what they can, and exercise their individual or collective agency in the situation. Otherwise, ecosystems and interested citizens are reduced to beneficiaries or mere spectators.

Donald Schön, a prominent thinker in process consulting, characterised framing as “the way practitioners define and interpret a situation, influencing their understanding of the problem, the relevant factors, and the potential solutions.”

Framing a problem is not only about making it more likely that novel solutions are generated because more people understand the problem. The process of reframing a problem also forces people to confront a problem and how it permeates or persists in their context or surroundings. It nurtures a deeper understanding of how an everyday problem affects others in our communities, and thus reframing enables collective action, joint learning and the strengthening of trust.

How we frame a problem significantly influences who can contribute to solving it and what success might entail.

Finally, when we can reframe a problem in a more open way, everyone who engages in understanding the problem or in contributing potential solutions becomes a co-innovator. Contributing to problem-solving builds confidence and gives hope, as it restores agency and builds social ties across social spheres.

What is wrong with how problems are usually framed?

Before discussing how to reframe a problem or a situation, I want to explain why the way we describe problems can sometimes be problematic.

  • A frequent challenge in problem framing is that descriptions are often too general. While individuals can identify symptoms, they frequently miss how the underlying causes or structural factors interact in a particular context. For example, although the effects of unemployment are straightforward to recognise, the underlying causes and potential solutions vary greatly depending on the situation.
  • Problem descriptions often implicitly favour a specific action or blame a particular actor. This is common when the problem is overly simplified or when the underlying causes are assumed to be more direct or straightforward than they are.
  • It can also serve as a method to transfer responsibility to another person.

How can we reframe a problem or a situation?

Now, let’s return to how we can alter the problem’s framing.

If urgent issues stay unresolved by stakeholders or earlier efforts haven’t yielded results, it could mean the problem isn’t effectively framed within the current context. The way the problem is presented might also be unappealing, discouraging individuals from engaging or contributing to a solution. It might also sound like someone else’s issue or a problem that demands specific expertise to fix.

Sometimes, we become so accustomed to problems that we see them as simply part of the environment we move through. We avoid confronting the issue and instead find workarounds that often come at a high cost or cause great inconvenience. The reality is that those with fewer alternatives tend to expend more effort and resources on workarounds, while those with more resources could perhaps switch to substitute solutions.

When people become familiar with long-standing problems, it may seem as if they need approval to challenge the status quo, because the common framings do not invite their input or interest. This is especially likely to happen when problems become the rallying cry of politicians who promise that they will get somebody to solve these problems on behalf of citizens.

What is framing?

Framing extends beyond simply rephrasing the problem. It involves dedicating time to thoroughly understand the problem space and the underlying structures that sustain patterns, even when they cause pain and inconvenience. Furthermore, framing is seldom a solo activity; it typically requires a group with varied experiences of the problem to collaborate, developing a shared understanding of the issue, its impacts, and frameworks.

Steve Jobs quoted in Newsweek, 2006

Marvin Minsky, an early AI pioneer, emphasised that understanding involves viewing the problem from multiple perspectives, allowing different permutations or representations to be detailed as fully as possible. Essentially, this means forming a multidimensional understanding of the problem and its structure. With this deeper insight, identifying potential solutions in a particular context becomes easier. Moreover, involving more people in understanding the problem, its causes, and effects enables better contributions to solving it.

Einstein argued that “The formulation of a problem is often more essential than its solution, which may be merely a matter of mathematical or experimental skill”.

I often cite a quote attributed to Albert Einstein: “If I had an hour to solve a problem, I would spend 55 minutes thinking about the problem and five minutes thinking about solutions.”

How to reframe

Here are suggestions on how a problem, situation or opportunity can be better framed:

  • Gather a small, diverse group of stakeholders representing different perspectives or interests to help describe the problem from multiple viewpoints. Ask “how do different people experience this problem?” or “why do different people see this as an issue?” Revise the framing to include these varied perspectives and the consequences of failing to resolve the problem.
  • Describe the problem in a way that clearly shows it is a shared issue that matters in our context, and that we (as a group, not just the experts or those directly affected) collectively take responsibility for this problem within our sphere of influence.
  • If the group doubts their ability to reframe or resolve the problem, challenge them to describe the issue, why it persists, and who it impacts in at least three different ways. If they struggle to do this, it may suggest that perspectives or experiences from diverse backgrounds should be invited to join the effort. This way, the original group might also learn from the perspectives of the newly invited contributors.
  • Identify whether there are people in the system who have already framed the situation to their own advantage. When individuals benefit from a problem, they might not be eager to see it resolved. When actors benefit from a problem, you must consider their influence in undermining any solutions that could affect their interests. Is there any way we can frame the problem in a way that might also benefit those who are benefiting from the current situation, to ensure they support the solutions?
  • When describing the situation, avoid placing blame or favouring certain solutions. Instead, keep the options for solutions open so that more people feel like they can contribute in their own way.
  • If you sense that the problem is complex or messy, then formulate a description of the problem that allows for multiple safe-to-fail probes to be tried. These attempts should be carefully observed to see whether any had a positive or perhaps negative effect on the situation. These small efforts are not so much about solving the problem as about seeing whether we have any influence on the situation.
  • Treat any explanations of possible causes or solutions as “first cut” understandings or hypotheses. Encourage participants to develop “low-cost tests” to minimise the costs of testing and to reduce the risk of making things worse.
  • Lastly, agree on what success would look like. If success is hard to measure, or if the people affected by the problem cannot see the difference, then the interventions might be successfully implemented, but the problem may remain. Or worse, the original problem might be replaced by several new problems that require new solutions.

I leave the final word to Donald Schön, who argues that “Framing is not a static process but rather a dynamic one, involving continuous reframing as the situation unfolds and new information emerges.”

If you use this blog to reframe a problem in your ecosystem or network and get stuck, reach out to the weaver community or to us. Sometimes, some distance from the problem situation may make it easier to ask the naïve questions that may be needed.

This article was written with inputs from Bronwyn James from PNC and Nikolaos Archontis. It was published originally on www.mesopartner.com as a contribution to the GIZ IYBA-SEED project implementation.

Weaving entrepreneurial innovation ecosystems in South Africa

In the second half of 2024, Annelien and I were awarded a contract to mobilise, equip and support facilitators who weave together entrepreneurial innovation ecosystems in South Africa. We were subcontracted by the EU-funded IYBA SEED programme through GIZ in SA. This project allowed us to consolidate many of the methods we developed over the last twenty years. In addition, we could improve the designs of many of our templates and supporting materials. We could also work with our long-standing colleague Nigel Gwynne-Evans, who is known for his work on entrepreneurial ecosystems, clusters, and sector development.

Our approach to promoting entrepreneurial innovation ecosystems is based on the Mesopartner Annual Reflection 2021-2022 article Fostering Dynamic Entrepreneurial Innovation Ecosystems.

Some background

The political discourse in South Africa is shifting in the right direction. There is more debate and a contest for alternative development ideas. This may sometimes feel unsettling, but the monopoly over debate has been broken. The timing is perfect for mobilising change agents, community-based organisations, local development organisations, businesses and the public sector to foster the bottom-up improvement of different entrepreneurial innovation ecosystems. 

Here are some of the important shifts in the South African economic landscape:

  • During the 2024 national elections, the most dominant political party lost its majority. It had to form a coalition with its opposition. With its majority, it also lost its dominance over the political discourse of ways to improve the economy.
  • Many of our institutions, key infrastructure, and local economies have declined and lack investment and a complete rethink.
  • There is mounting pressure on the public sector to curb wasteful expenditures and to improve public services and infrastructure. 
  • Finally, the increased oversight by opposition parties, the courts, and civil society has increased the pressure on public sector decision-makers to be more careful about implementing their programmes. 

What we have done in the last few months

Our first task in our project was to identify and engage with individuals and organisations already facilitating and promoting entrepreneurial ecosystems, even if they did not call it that. With the IYBA SEED country team, we organised three training events in Gauteng, Western Cape, and KwaZulu-Natal. Over three days, we guided the participants through various thinking frameworks that helped them assess their ecosystems and identify starting points for their homegrown (or ecosystem-grown) improvement processes. 

We challenged the weavers not to pursue an ideal ecosystem based on a normative framework that assumes everyone has the exact same needs. Instead, we argued that weavers should identify strengths and then mobilise their networks to innovate unconventionally to strengthen their ecosystems’ gaps. Our emphasis was on learning what is possible and building networks of individuals and organisations that, in pursuing their interests, also build the dynamism of the larger ecosystem. On the final day of the training, we showed the weavers how to identify potential starting points to establish coalitions for change around identified issues. 

It was not only our trainees who learned during this process. We also learned. Firstly, repeating the same event thrice in different parts of the country was extremely valuable. We could learn much quicker how to explain essential concepts and exercises. Secondly, we also learned how the three regions were different. We learned from the wisdom of several champions who have been organically weaving networks over extended periods. It was rewarding to see how our frameworks resonated with them and helped them reflect on what they were doing. We heard the most amazing stories from all over our country about how networks of entrepreneurs, public officials, local or community organisations and international funders had innovated together. 

Lastly, we spoke to and even met up with old friends, who have taken slightly different paths. And now we ended up back where we started, in local spaces where our biggest asset is the resourcefulness and interdependence of local stakeholders.

Over the next year, we will continue to support the implementation of IYBA SEED in SA and the weavers in this process. In addition, we will identify and document inspirational practices and examples of how ecosystem actors have improved not only the dynamism of their networks but also where thriving ecosystems have resulted in improved public services and infrastructure and inward investment by the private sector into areas that have been starved of innovation and funding.

Form follows function

Published, 2024/09/23, minor edits on 2025/05/08

One of the oldest explicit principles that has shaped my thinking is “form follows function”. When I joined the GTZ (predecessor to GIZ) in 2003, this was one of the first principles that my manager (Mrs Gabriele Trah) often repeated when we received proposals from our counterparts or were designing interventions in a particular context. The principle has proved very valuable ever since, especially when working in bottom-up development, as it constantly challenges us to seek an appropriate level of organisation that matches the capacities of the stakeholders with the context. At the time, it became one of the key principles of the Local Economic Development toolkit that we were developing with Mesopartner, the company I am now a partner of.

At the time, I just took this principle as a universal truth, and only recently did I discover where this principle came from. While following an interesting idea down a rabbit hole, I stumbled upon a letter Peter Drucker wrote to Bill Emmot, the editor of the Economist, in 1994. In it, Drucker corrected the editor that he did not favour smallness or bigness based on an earlier article published in the Economist. (The whole letter is worth reading, because Drucker was a really great author.)

Drucker argued that size follows function. Look at how eloquently he described the appropriate form.

“The right size is one that is appropriate to an organisations function – elephants better be big, butterflies better be small”.

Peter F Drucker, 1994

As far as I can tell, this is where the principle “form follows function” comes from. Drucker credited D’Arcy Wentworth Thompson for this idea, but Drucker seemed to get the credit for this precise formulation.

Drucker, P.F. 1994. Correspondence from Peter Drucker. In Emmot, B.Personal Communication. The Drucker Institute. From https://ccdl.claremont.edu/digital/collection/dac/id/1177/

I found this sentence valuable because promoters of innovation, entrepreneurship, or economic development more broadly are often strongly biased towards smallness and against bigness. Yet, some kinds of innovation are better suited to bigger organisations than smaller ones, or vice versa. Also, as technologies and industries change, what is more suitable for a larger or smaller organisation also changes. For instance, a large retailer can better overcome the logistics, infrastructure, and supply chain challenges in a country like South Africa. But this might change as technologies, markets and infrastructure change.

In the same letter, Drucker argues that even within a large organisation, it is necessary to figure out how to create smaller organisational units that are better able to respond to the challenges they were created for. He argued that the appropriate form is determined by the function to perform. Perhaps this is where the subsidiarity principle comes from (pushing the decision to the most appropriate and proximate level of decision making). Still, I would have to do a little more digging about this first.

I would add that Drucker’s form follows function, which seems like a universal heuristic but becomes powerful when we recognise the context. What are the functions and forms that are most appropriate in this particular context. In general, Drucker also questioned the whole form of the public versus private sector as much as he questioned assumptions about size. The business school he helped to establish and many of his publications on management kicked against the conventions of small versus big, public versus private, and state versus market.

In my work, where I support groups of people to make sense and innovate, I have to remind myself often that “form” and “function” are both equally important, and that there is a tension. Wherever you start, form, or function, you have to go to the other and then back, and then consider the context. It is not only about determining the best arrangements (form) for decision making, sensemaking or innovation, but that function, the job-to-be-done, is also important.

This is often where my clients struggle the most. They prefer the form, and the exact functions and what it would take to perform these in a particular context are unclear.

For example, in a conversation with a senior manager supporting innovation in the mineral processing sector, I was told that their organisation’s funder had specified the exact number of small businesses they had to either create or support in their activities promoting innovation in the mining sector. The form was specified before the appropriateness of the form in relation to the functions was clear. In another meeting last week, a senior public official said that we must prevent larger retailers from using e-commerce and their ability to negotiate with suppliers from destroying small retailers.

To use Drucker’s example, we often want bees to perform like elephants or vice versa.

The kinds of problems that must be solved (the functions to be performed) should frame the thinking about what forms would be appropriate, within a specific context. This is what Drucker wanted us to ponder. Furthermore, we must remember that as technologies, markets and contexts change, the appropriateness of different forms will shift. In mining innovation, the regulation and compliance costs are essential factors that shift the balance towards bigness. As technologies and red tape change, the balance might shift in favour of smaller organisational units.

Have you recently used the “form follows function” principle in your work?
Did you start with form or function, or did you manage to think of both?
Can you share any experiences where assumptions about the preferred form did not consider the functions required within a particular context?

Credits:

The image of Peter Drucker is from Wikimedia. It is attribued to Jeff McNeill, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons

The correspondence from Peter Drucker to Bill Emmot is from the Drucker Institute. https://ccdl.claremont.edu/digital/collection/dac/id/1177/

Untangling digitisation, digitalisation and digital transformation

I was recently invited by the Reconomy Programme and the Helvetas working group on Market Systems Development to address practitioners working on economic development in the Balkan region. I was specifically asked to untangle the concepts of digitisation, digitalisation and digital transformation in the context of international development cooperation.

The remainder of this post are the notes that I prepared for this call.

We are increasingly using the words digitisation and digitalisation to refer to certain kinds of economic development and changes to how work is done. These words are often used incorrectly as synonyms to refer to the increased use of software and other electronic gadgetry in everyday life. Every now and then the term digital transformation is also used.

Even though these words sound and look very similar, they are different concepts that are all somehow related. Let me try to explain what these three concepts are about.

Digitisation is the process of converting analogue information into digital information. An example of digitisation is when you convert your old vinyl records to MP3 format, or when you scan your old, printed photos so that you can store them in digital format on your computer. 

Digitisation has slowly crept into our lives over the past several decades. It started with measuring changes in natural phenomena, for instance measuring speed, distance, temperature, vibration, time or altitude. Analog information was simply converted into data points represented by blinking warning lights, alarm bells and bright red digits. Slowly the focus shifted to using digital instructions to control mechanical objects. Consider how vehicle dashboards and instrument panels of aircraft have changed over the past thirty years. 

The digitising process often combines mechanical and electrical/electronic systems, in other words, it combines different knowledge and technology domains into an integrated solution.  As more diverse knowledge domains were integrated, so the reliance on processors and logical operations increased. Initially coding was limited to logic programming of chips, but over time the complexity of coding has increased as the cost and size of chips came down, while the processing power increased. 

Digitalisation is different from digitisation. It describes the use of digital technologies and digitised data to change how we get things done. For instance, emails have replaced (most) physical post, and social media is increasingly replacing phone calls. We buy and rent music from an audio library service instead of buying music CDs.

Our attention shifts from using a digital device, or manipulating digital data. Often different people can use the same digital content for different purposes. For instance, various engineering teams can simultaneously design separate components of an integrated system, such as a car or an aircraft. A the same time another team could be using software to test the performance of digital designs to ensure that they meet performance specifications before they are approved for manufacturing, while another team is working on new materials.

Digitalisation is not only about using physical technologies, data files, software and expertise. It describes the creation of new social arrangements where different people, experts or organisations can cooperate in new ways by sharing digital information. The interoperability of data between different physical technologies and social technologies is what connects digital systems and blurs the lines between traditional industries. Digitalisation makes new arrangements possible that are very difficult or expensive to accomplish in conventional ways. An everyday example of digitalisation is how a photo captured on your smartphone can be synchronised to your computer, posted to your friends via social media and combined with the photos of other people in a digital album stored on a server in another country. 

Digital transformation goes further than simply gadgets, software, geeks and data. It describes an evolutionary process where the social relations between individuals, groups, organisations and social institutions are transformed over time because of the exploitation of new capabilities afforded by digital technologies. The emphasis shifts from the application of digital technology or the exchange of data to creating new ways for people to interact and cooperate towards shared goals. Over time new norms and social institutions evolve that supersede conventional paradigms.

In digital transformation, the traditional boundaries between different knowledge or technology domains shift or disappear. Existing scientific knowledge is creatively combined with new technological capabilities that are reinforced by the emergence of new social institutions like norms or new organisations. 

***

Transformations are essential because conventional paradigms, politics and socioeconomic arrangements are interlocked and re-inforcing a robust construct that only permits incremental changes. This conventional interlocking system makes it hard for radically new ideas and arrangements to get any traction; it often takes an almost fanatic effort to get something new to start in domains where tradition, institutions and older norms have become fossilised.

Transformations often originate in niches that are off to one side where the established leaders and ideas don’t mind (too much). In these niches, an idea or a movement slowly gains momentum as it creates new routines, norms, where new arrangements or combinations can be tried and where confidence can be built.

Social media has made it possible for different niche champions to be connected internationally, even if they feel oddly disconnected from their local realities. In these (global) communities, ideas are exchanged, courage is strengthened and collaborations developed.

As I mentioned before, digital transformation is about far more than making changes to the system by adding digital front-ends, digital services or a search box. A collegue working in public sector reform told me that once communities understand that they can hold public officials and political representatives accountable, the whole initiative got a life of its own. What started off as a way to improve transparency and accountability through digitalisation, ended up being about democracy, governance, public service quality and managing public resources better. Of course, it is also much easier to design and improve public services and impact when communities are keen to be involved.

This explains why a digital transformation in a system is not only about the “digital” or the “system”, but how these interact within a broader socioeconomic context. We have to figure out which higher-order questions to ask.

Can you imagine what it would take to digitally transform a system in your economy? For instance, what would it take to digitally transform an education system in a country? Which combinations of norms, knowledge domains, governance, institutions and technologies would have to be tried to enable such a transformation? It is not possible to design this kind of system upfront. And it is not merely an IT problem. It requires many innovations in different areas such as regulations, processes, systems, organisations, subjects, management and delivery. For digital transformation some solutions would be digital, several would be political, and most would certainly be contested by those already in power.

***

The phenomena of digitisation, digitalisation and digital transformation are fuelled by faster processing, smaller components enabled by new materials, improved energy consumption and reliable and fast connectivity. 

However, digitalisation requires more than advances in hardware and coding; it also requires the integration of different systems and a re-imagination of what is possible with data. It asks of us to combine scientific knowledge with an understanding of how people can work together in new ways. Digitalisation pulls our vision to create new ways of doing things, it asks of us to let go of trying to optimise what we already have in place.

Digital transformation goes even further that digitalisation, as it requires that conventional arrangements, institutions and norms be challenged by entrepreneurs, scientists, engineers and change makers who want to use digital technologies to challenge existing dominant paradigms that are no longer effective.

***

It would be a mistake to think of digitalisation and digital transformation too narrowly from the perspective of ICT, software development or known digital solutions. Of course, it goes without saying that computer programmers, coders and ICT start-ups are still important. Yet digitalisation more often draws on a fundamental understanding of the underlying natural sciences used in a society and how these existing systems could be re-imagined in combination with digital technologies. It requires the ability to integrate systems that are now separate to achieve a specific goal. It asks us to set aside the ambition to incrementally improve different systems and re-think solutions and challenges in a more integrated and holistic way. 

Development projects can support digitalisation by helping developing countries to figure out where conventional processes and social arrangements are too cumbersome or completely lacking to encourage economic growth and investment. Development organisations should remember that the focus of digitalisation is not only on digital skills, technologies and imported solutions, but on how these are combined with other knowledge and scientific domains. Lastly, for digital transformation to occur, diverse stakeholders must work together to re-imagine new ways of doing things in areas where conventional solutions are no longer effective. This requires facilitation and a technology-neutral facilitator that can encourage local stakeholders to experiment with new solutions that combine existing knowledge in new combinations with digital technologies. 

Both digitalisation and digital transformation take much longer to accomplish than a typical development project, and both often need to be nurtured despite resistance from the established interest groups affected by the emergence of a different paradigm. It may be necessary to assist the stakeholders to develop action plans that show results both in the short as well as the long term, otherwise some stakeholders might run out of energy before sufficient gains have been made. 

Lastly, transformations are evolutionary processes. It is not possible to design the ideal end-state and then develop a plan of how to get there. The path from the present to the future is not straight or easy to plan. At best we may be able to figure out a few steps or concurrent processes.

Transformations often start with dissatisfaction with the status quo and a desire to cause a variation of the current trajectory. Or it can sometimes be sparked by a crazy idea starting with “what if we tried this instead?” Often the initiators of transformations are quite naïve about what it would take to see the transformations through. We must therefore step up beside them and help them to build their case for change, to encourage them when they face resistance or when experiments don’t work, and to help them balance the short-term and the longer-term priorities. 

Further reading.

I have benefitted immensely from the publications by Frank Geels and Johan Schot, to name two authors. Searching for deep transitions, socio-technical change or multi-level change will also yield great results.

If there is sufficient interest I can also write a follow-up article about some of the literature that I have found most relevant.

Image by Gerd Altmann from Pixabay

How my praxis is changing

For many years, my practice was mainly about process consulting, with some research on the side. Because I love reading and theorising, my work always combined operational with conceptual development. I think my most significant value add to my clients was in the informal coaching and decision support I gave them on the side.

Over the years, the commissions I received to mainly do research, conceptual development or decision support work steadily increased. Still, I wanted more, as my programme was still mainly organised around consulting assignments. Then last year it happened. For the first time, research, conceptual development and decision support was my primary source of income. These are longer commissions to figure something out, develop a framework, or synthesise a lot of literature and research.

I get these commissions because my clients are finding value in the topics I am researching, and they are interested in leveraging these insights in their work. So my consulting assignments now become the place of integration, while my self-funded and commissioned research becomes the source of inspiration, ideas and curated content.

At last, I am consulting on the side. Almost all my short term process consulting assignments are now about applying or leveraging my research. My consulting contracts are now about weaving together my research in a way that helps my clients make better decisions and lead healthier and more innovative organisations. What I find rewarding, is that research topics that I struggle to keep apart in my mind, all seem to flow together at my clients. The consulting work is still important, but now my world is increasingly organised around my research interests.

For instance, some of my current research themes are:

  • Strengthening meso organisations, and figuring out how societies create, modify and measure these organisations
  • Establishing technological intelligence in industries, regions and organisations to sense discontinuous technological change Enabling innovation cultures that leverage tacit knowledge Enabling teams to draw on complexity thinking to search and discover for opportunities for systemic change.
  • Developing our systemic insight methodology and tools that enable teams to search and discover for opportunities of systemic change in complex or ambiguous environments.
  • How do societies learn, adapt and develop appropriate physical and social technologies? How does this dissemination happen? Is there really a paradigm shift to a “fourth industrial revolution?” or is this just hype?

I have seven or eight of these themes, with some being more coherent while others are still more disordered.

Now at my clients, these themes weave together in amazing ways:

  • I am helping a ministry of trade and industry to establish a technological change observatory to better anticipate and respond to technological disruption. This assignment combines my exploration in meso organisations, but it also harnesses my work on technological change and measuring change.
  • In another country, I am assisting a newly established think tank in developing a strategy, and in promoting knowledge intensification in the broader economy. This project draws on my work on meso change, but it also draws on my earlier experience in helping teams to conduct and make sense of industrial analysis.
  • In yet another context, I am helping an industry body to make sense of an industry diagnosis that we conducted on their trade members to understand their reality and the dynamics in their industry. This was part of a larger assignment to help a skills development project figure out how it can better support dual vocational education and job creation.

I am enjoying this new balance. It is gratifying to synthesise many loose strands into simple organising frameworks. It draws on my strengths of reading broadly, tinkering with ideas, finding literature from wise scholars on these ideas, and finding ways to make these concepts useful to my clients.

Revised: Industry 4.0, IoT, 3D printing and more. Why some technologies diffuse so quickly and others don’t

I wrote this article yesterday on my thinking-out-loud site and was pleasantly surprised at the interest it sparked. My language guru Linton helped me to fix many grammar errors, so here is the revised version.

I receive questions daily about the Internet of Things, Industry 4.0, 3D printing and many other technologies and whether and how I think these technologies will disrupt manufacturing and education in particular and the world in general. These questions are not only from government officials, but also from businesspeople, friends and fellow geeks.

Let me briefly state that I don’t believe it is possible to spot a paradigm shift in the future or in the present. So I would be hesitant to predict whether or when all these big changes will happen. However, when we look back we can spot shifts. Technological change typically takes places slowly but surely, and then at a certain point there is a massive shift. The point I would like to make is that even the futurists have great problems predicting the direction of that sudden shift. We must also consider that technological paradigm shifts almost invariably do not work out the way they are predicted to do before they occur.

For the last few decades many major technological advancements have been heralded as game changers. The advances are often generalised as sweeping statements about large-scale change. However, in most cases, new advances take a long time penetrating our daily lives, if they ever get that far.

So let me rephrase the original question a little. Perhaps the question is more about figuring out which technologies are diffused quicker than others, and why. This is something that we can calculate to some degree using a short history and the current status quo of assessments of technologies that are being touted as near-term game changers.

Dissemination of technology or knowledge always consists of at least three elements. I will for now ignore the process of diffusion for the sake of brevity. There is a supply side, a demand side and some kind of institutional or social construct that enables and even multiplies the diffusion.

The supply side is often most optimistic about how their ideas are going to change the game. The demand side is often naive about how useful a new technology is in real terms. Many potential users simply wait and see. Then there are the institutional mechanisms that operate at local, national, regional and international levels. There are lots of tensions at this institutional level, because this is where a whole range of social technologies, formal and informal, have to emerge or change. Just think of how US-based software companies are constantly coming up against data privacy groups in Europe. I am sometimes grateful that the institutional level takes time to change. Changing institutions to enable knowledge dissemination often requires multiple knowledge domains, different management levels and social play-offs. Often changing institutional support to improve diffusion must also cater for integrating and synchronising many other simultaneous change processes that are not only technological. They could be about regulations, rights and creating new forms of organisation. Furthermore, physical technology does not always change things the way we expect. After all, innovation is a process of combination and recombination, both at the level of physical technologies and also at the level of social technologies.

There are typically a few constraints that frustrate the diffusion of new technologies broadly speaking. The first is the fixed costs of the technology itself. Fixed costs slow down supply (otherwise we would already have electric vehicle charging points throughout the country), and also slow down demand (I cannot afford a Tesla yet).

Suppliers like to think that their solutions will fix social mechanisms, but this is often the area where change is the slowest. Social technologies often take the longest time to evolve (for instance in developing standards and regulations for electric vehicles, charging points and recycling of batteries). By evolving, the technology itself often changes with respect to its use, meaning and value  – often beyond what the originators had in mind. Thus while individual users can quickly adopt a new technology or idea, formal institutions, regulations and supporting infrastructure often take longer to adapt to new ideas. This means that the supporting ecosystem that enables new ideas to be quickly diffused perhaps adds additional costs (perhaps massive infrastructure investment or learning is needed), or fails to reduce costs in the diffusion of ideas. This is where the second constraint comes in. It depends on how complex are the required social changes. I mentioned earlier that institutional diffusion must also integrate different complementary technologies. For instance, using a smartphone to make phone calls is easy (single technological paradigm). Using a smartphone to manage or monitor a part of a production line requires many complementary and concurrent capabilities and technologies. It may even require completely rethinking organisational structures, production lines and supplier networks. Simply put, if the new idea is very complicated to use (due to the many concurrent investments and capabilities that are needed), then the costs goes up in terms of education, regulation, infrastructure, coordination, specialisation, management and so on. Just think of what it would take for South Africa to adopt driverless electric vehicles …

Perhaps this also explains why individual companies (think hierarchies) tend to absorb technologies easier than societies or economic sectors. Inside a company management can overcome coordination failures much easier than within a sector or broader society. Meso institutions such as universities and technology transfer organisations are very important for overcoming these coordination costs, but they tend to change slower.

The complexity of technology and its demands on the meso organisation is important in my work. I help these organisations figure out how to navigate the complexity of new technology adaptation and diffusion. It requires an understanding of users, some understanding of technologies, but a lot of understanding of the process of change and organisation. I don’t think I would be able to do my work without my understanding of market failures, especially with regard to failures in the capturing, dissemination, absorption or valuing of knowledge.

There are lots of amazing technological ideas out there that have been tried, tested and measured and found to be effective. Many companies here in South Africa are already using these technologies. So supply and demand exists, and in many cases there are transactions. Yet many of our industries, enterprises, universities and policy makers don’t know how these technologies can save costs, improve efficiency or strengthen resilience. Nor do they know which ideas will stick or have the most impact. So there is a missing institutional capability that reduces the complexity of the technology. What is often missing are institutions that make the dissemination of new ideas easier and cheaper. It is often more the case that the users (and possibly suppliers) don’t know how much the full implementation or use of these ideas would cost, or what skills, complementarities or networks are needed to master new ideas. Many market-supporting social technologies (in the form of institutions and networks) are lacking. Somebody must reduce the search, evaluation and coordination costs. This is where the complexity lies. And neither do we want our institutions to try and implement every new technology – this is where social balance and a longer-term vision are required.

So now I can get back to trends such as the Internet of Things or digitisation of the manufacturing environment. Many manufacturers know about Computer Aided Design (CAD) simulation or even rapid prototyping. But how can we reduce their risk of trying 3D printing, or how can they add more sensors to their production facilities so that they can improve measurement and control? It is not just about the cost of using the technology once or twice. There are issues that are holding entrepreneurs back from simply rushing to an online store and hitting “buy now”. Where would they get the trained staff from? How would they train existing staff? How would they manage a new competency? What would it cost to certify or maintain? Where would they find new customers or suppliers, and what would it cost them to develop the complementary capability and optimally use the new technology? And most importantly, how do we reduce their risks of trying something in different combinations? These are the issues that a network of institutions must consider as they craft their technology extension and demonstration strategies.

For me there is a strong role for technology intermediaries to play in demonstrating, perhaps on a small scale, how new technologies can be integrated into existing workplaces. This means that technology intermediaries must be funded to host (and master) a wide range of complementary technologies, so that entrepreneurs can combine what they have in place with the capabilities of these technology intermediaries. Or that new entrepreneurs not burdened by sunk investments can use their agility to gain access to complementary technologies in order to create new markets. These institutions should not be measured by how many companies fully absorb new technologies (this could lead to perverse incentives), but perhaps by how many companies have tried, engaged with and been exposed to new ideas.

At the same time, policy makers should look at ways to introduce new technologies into developing countries beyond demonstration or technology extension. Some countries such as Germany or Singapore have also been purposefully supporting disruptive incumbent enterprises by supporting the uptake of new technologies. Sometimes you can demonstrate until you are blue in the face, but incumbents won’t change if they don’t have to, and small enterprises sometimes simply cannot build up the momentum to challenge the status quo.

I would like to end this blog by briefly summarising what I’ve been discussing. For me the question of how new technologies may affect our lives is too focused on the hardware  and the geeks who love it. Even though I admire the suppliers and developers of new technologies, and I really admire the sophisticated users who are constantly inducing the emergence of newer and greater technologies, I believe that the real change we need is in getting better at creating responsive institutions that lower the costs for suppliers and buyers to try new things. This is where we can overcome many of the costs that slow down the absorption or dissemination of new technologies.

 

Leaders lead by asking better questions

Many of my friends are leaders. All my clients are. They are leaders because they naturally develop people around them. Not only because of a title. You can recognise a good leader by how many of their followers are also leaders. Leaders and their follower leaders co-develop their skills. So leaders help each other, up-and-down the hierarchy and side-by-side in a network. Leaders are not threatened by people in their structure becoming better and better at leading, they usually take pride in how others are rising up. This makes the whole organisation like a network, like a collective brain. Managers don’t always like this, they don’t like it when people lower in “rank” challenge them, asking more of them. They prefer the hierarchy, which is more like a spine and less like a brain. But this is not the place to go into the difference between leaders and managers, or brains and spines.

So this is my main point for today: Leaders ask better questions, so that their teams can search for better questions. They are on a perpetual search process for better formulations and for “higher” questions that stretches everybody to think wider, deeper and more creatively. The goal is not better answers, that belongs to the linear world where questions have specific answers that are either right or wrong. Leaders know that by formulating better questions they enable everybody around them to explore better in this complex world where there are many formulations of a question, each with many answers. Good questions lead to better questions. Leaders somehow understand this complexity, where there are multiple hypotheses that explains what we see or can measure. This means many questions, and many possible answers, and many more reformulations.

These better questions are not random, and they do not emerge out of an isolated mind. They emerge from the very networks and contexts that the leaders are immersed in. Leaders can sense the better articulation of questions, or the unsatisfactory answers from their teams. They can feel that people are not satisfied, and instead of ignoring the issue, they enable a process of reflection with others to lift out the issues that matter. Leaders can also sense when people have fallen back on routines to get things done, so often the questions leaders ask require people to stop, reflect and question. This is not always appreciated as it takes energy to step out of the groove and to engage with new questions.

Right now in South Africa we need more leaders to ask better questions. Better questions about the role of business in the society. Different questions about how to allocate resources between many competing ends. Tough questions about balancing the rights of particular groups and individuals with the well being of the society as a whole. When I look at they way questions are framed by political leaders they often pose ideologies as questions. The very nature of an ideology is that it provides answers, often irrespective of the context. While some of these questions are important, they are closed. They do not allow for much debate, exploring these questions are not really permitted. These kinds of questions do not help as they don’t only exclude beneficiaries, they also exclude the connections of minds. While leaders in the non-government sectors often scoff at political leaders, many business leaders themselves have an ideology about how a workplace should be organised, how they game should be played. They often forget their own bias. Much of my work is about helping these leaders reflect on their own theories.

Focus. Back to my main point. If you are a leader (which I believe you are) then step forward in your environment, and offer to pose the questions that are on people’s minds. Are people feeling hopeless? Then ask questions about what it would take to have hope again. Ask questions about creating alternatives, or for taking stock of what exists and what can be done with what you have.

You have to set down a framework where people know that even if it is uncomfortable, certain questions that are sensitive or uncomfortable should still be explored. If you are afraid that people will burn you on a pile of office furniture then express your question as a theory, and ask your people to help you verify or invalidate you theory. Articulating the difficult questions, those ones where we just don’t seem to have all the right words, this is what we do as leaders. And then we join our people and help search for answers and listen for signals that there are better ways to formulate our questions.

Oh, and this process does not have an end. This is what we do. We ask better questions. All the time.

Between a rock and a hard place. Sectoral vs. local approaches to private sector development

I am preparing for a presentation at a conference in May about development programmes shifting from a sectoral to a regional or local perspective. This got me thinking about these shifts in focus and why they appear.

In economic development, it is often necessary to choose whether to intervene at a sectoral level, or whether it would be better to take a locational or geographic approach. In my experience I have learned that when you start with the one, i.e. with a specific sector or value chain, you often end up with the other, i.e. supporting specialization or addressing specific issues in a certain location. But this is of little consolation to managers of development programmes and Local Economic Development units who are then typically measured by the wrong indicators or that have different incentives due to the design of their programme or institutional mandate.

During my MBA, the Professor in Organisational Development introduced us to a really elegant tool to assess whether a tension or conflict between different approaches could really be addressed. He introduced us to Polarity Management, a simple instrument developed by Johnson (1992). According to Johnson, many problems that we face today are not really problems to be solved, but polarities to be managed. Johnson argues that we can continually try to solve these problems by shifting our strategies to another mode where we perceive lots of benefits. The trouble is that after a while of some negative aspects emerge, and suddenly the benefits of the other strategy seems to be more attractive.

Polarity management is an instrument that can be used by change management practitioners to understand these polarities and to manage them. It implies that perhaps these different strategies even depend on each other, like breathing in versus breathing out. We need both, even if they have very different objectives, benefits and downsides. This means that the strengths and the weaknesses of alternatives must be understood, and then managed.

In development we have many polarities, for example wealth creation versus poverty reduction, or designed interventions versus enabling evolution, project versus process, top down versus bottom up, and many others. It is very expensive and even risky to shift between these, and an organisations current expertise, instruments and orientation may find it very hard to make these shifts effectively. But some try and some even manage to do this.

This post is for those organisations that are undecided about their strategy and their focus.. A key question then is how do we manage these alternatives, especially if we want the best of both worlds?

There are 3 steps to better understand a polarity:

  1. Fill in the headings of the two polarities in the matrix
  2. Capture the strengths and the weaknesses of both in the columns
  3. Determine if there is a movement of preference between the polaries, meaning that when the negative consequences of a particular strategy becomes too much, strategy is shifted to the other approach for its apparent strengths. Then over time, the negatives start to weight in on the positives, resulting in a shift to the other approach.

Below I have quickly written down some of the positives and negatives of both approaches. This is an incomplete list but I think it is sufficient to illustrate the point. The PDF of the graphic below can be found here. For those that cannot read so small, the bottom line is this: there are pluses and minuses to both paradigms. Under each strategy, the benefits of the one approach may outweigh the negatives of that approach, but be aware, these weights are changing and after a while the other strategy may become more desirable!

Polary table

 

 

 

 

 

 

 

 

 

 

 

 

The third step in understanding the polarity is to look at whether there is a shift between these polarities. From my experience working in a dozen or so developing countries, development programmes are either designed to be sectoral or geographic, with very few programmes designed to do both. From a local perspective, institutions and programmes are designed and resourced to either be targeted at specific industries and sectors, or they have a locational focus. It is very hard for programmes and institutions to build a case that a strategic shift to the other paradigm may be needed, even if for only a part of the resources to be dedicated to the other approach. This typically happens when the negatives of a current path starts to outweigh the positives, and the benefits of the other approach increasingly looks appealing. The danger is that a compromise is reached, instead of a synergy being developed.

From a Local Economic Development perspective, growing the technical capability to pursue both strategies simultaneously is important. This does not imply that both are equally important at any given time, as both these approaches have different timescales, resource requirements, and objectives. For example, it would be unwise to leave a dominant sector to its own devices in order to focus on emerging enterprises. At the same time, focusing on the issues of a dominant sector might distract attention from purposefully promoting emergence, diversification and economic resilience. Yet, many programmes and organisations are forced to choose, often too early when not enough is understood about the dynamics of the place or the industries. For me the worst reason to choose an particular approach is because some or other decision maker has attended a training course or conference, or because a particular approach is deemed “best practice”. In fact, most of my time is spent trying to help leaders and decision makers get out of a mess because their programme or institutions was designed based on some ideology or “solution” without enough attention being given to the requirements, trajectories and complexity of the specific context.

For national governments and international development programmes there seems to be a continuous shift between these two. Almost like a flip-flopping from one to the other. I think that the shifts are counter productive, as the learning from the previous shifts are often lost. If I just think back over my 16 year career how often the value chain or sub sector approaches or alternatively cluster and Local Economic Development have become fashionable again and then losing its appeal after a short time.

My conclusion is that while there is a tension between these approaches, the shifting between the strategies are not taking place at an institutional or programmatic level. Decisions about these strategies are made at higher levels of government and development cooperation with little regard for the challenges faced at sub national level in developing countries to build and grow “the right” institutions that can ensure long term economic evolution and development.

At the implementation level, regional development programmes should do both:

  • Sectoral programmes that ignores the impact of their sector on the geographic areas they are working in are most likely creating negative externalities, even with the best intentions in mind and even when they achieve their objectives of inclusiveness, job creation or export promotion. The negative externalities could be about the environment (mono economy, mono culture), or about increasing the coordination cost of every economic activity not related to the priority sectors (institutional or locational lock-in to particular paths and trajectories). Sectoral programmes that ignore opportunities for regional nuances to develop in their targeted sectors miss important opportunities to enable diversification and emergence of unique regional capabilities.
  • Location development programmes that do not collaborate with other locations to build sufficient scale in particular sectors to justify investing in particular regionally significant institutions will forever remain trapped in low value add, or perpetual dependence on the priorities and mood shifts of national governments. While trying to help every kind of economic activity in a region, you have to at some point also start promoting specific industries and sectors in order to try and reach some leverage or scale.

But most importantly, the economic activity, available institutional capabilities and the regional context prescribes where to start. And when you have started down a chosen path, be sensitive to when it may be necessary to foster additional organisational or collaborate with other institutions with different more adequate capabilities to enable the benefits of the other strategy to be leveraged. A key challenge in developing countries is that we do not have a rich layer of supporting institutions pursuing different strategies. Everyone seem to be trying more or less the same approaches, or chasing the same politically set targets.

In our capacity building sessions in Mesopartner we always elaborate on the importance of value chains and sectors to Local Economic Development practitioners, and the importance of regional competence development for value chain and sector development specialists. Actually, the process of diagnosing industries and regions are very similiar, even if you would give slightly more attention to different issues and perspectives.

In the end, from a bottom up perspective, supporting specific industries allows for scale and focused public investment, but caution must be taken to not create path dependence or institutional lock in. At the same time, a regional approach is critical as it allows for emergence of new kinds of economic activity and for diversity to emerge. I think we need to development of synergies for both, but it depends on the context what your priority should be. Simply being aware that there are pluses and negatives to either strategy is already a good start! This makes it much easier to collaborate with other organisations and programmes that have different objectives and priorities.

Now I have some questions to my readers:

  1. What is your current approach in your programme or organisation? Sectoral or locational?
  2. Have you even been through a shift from the one to the other in your programme, or do you cater for both?
  3. How did making the shift work out? Did you have the networks, resources and expertise to make this shift?
  4. What would you do differently next time?
  5. Please share your thoughts by commenting below, or send me an email if I can paste your comments unanimously if you are afraid to upset somebody higher up the chain.

References:

JOHNSON, B. 1992.  Polarity management : identifying and managing unsolvable problems. Amherst, Mass: HRD Press.

 

Education to enable industry development

Our industry in South Africa is constantly complaining that their workers have the wrong (or low) skills. Yet based on my own experience, many manufacturers prefer to appoint people from the street and then train them in-house on the job. This saves the business money and bargains the wage down, but at the same time makes it very difficult for the enterprise to respond to technological change. And when all your workers are at a low skills level, the technological advancement of the firm is almost completely dependent on the genius (!!) of the entrepreneur and the middle management. This is a risk for our industry as we do not embrace learn-by-doing enough as our competitors are doing because we do not trust the ability of our workforce.

The South African government itself acknowledge the importance of jobs intensive growth, especially aimed at lower skilled workers. I sometimes wonder if our government has given up on its education system, but then the large and continued investments in the overall education system seems to suggest otherwise. The education policy has a strong focus on vocational training, but learners still prefer to queue at our Universities despite the best attempts of the minister to highlight the value of Further Education Colleges and the recent investments into the vocational system in the country.

While the importance of making sure that our large numbers of low skilled workers do get some form of employment and further education, I wonder if we do not need a stronger dual focus on other forms of education and more skills intensive job creation.

Also, I wonder if we do not need to strengthen our ongoing education aimed at people currently employed. I know the Skills Education and Training Authorities (SETAs) are supposed to do this, but from the businesses that I work with it seems that this is a frustrating option – the skills levy is basically treated as a tax. The SETAs are also focused very much on basic skills and not on deep technological skills.

As long ago as 1987, Lawrence and Schultze criticized the European education system with its focus on apprenticeships that provides rather specific skills to rather standard and mature technologies. These technologies become obsolete very fast in times of rapid technological change. Furthermore, these skills do not help our enterprises to get ahead, they simply help the lower productivity part of the economy to catch up. Many other scholars have come to the some conclusions about Europe’s education system, advising them to follow the US model of equipping graduates with a more generic education that helps people to adapt to a more dynamic work and technological environment.

For in case you wondered, South Africa is undergoing huge technological change. With the energy problems this technology intensification is accelerating as enterprises try to upgrade to lower energy manufacturing technology.

To get ahead we need to invest more in creating middle and higher skills capacity, more or less what the learners are sensing. From an economic policy perspective, we need to support the enterprises that are in the more knowledge intensive industries. They still absorb lower skills workers, but at least in these enterprises their development paths are more varied and more secure. While at the job-intensive low skill industries these lower-skilled workers are vulnerable due to South Africa’s poor cost competitiveness on many basic manufactured goods. At the same time, we have to continue and even expand upgrading our workforce with vocational training, if not for any other reason than to give people a deeper sense of pride and dignity.

References

Lawrence, R., Schultze, C., 1987. Overview. In: Lawrence, R., Schultze, C.(Eds.), Barriers to European Growth: A Transatlantic View. The Brookings Institution, Washington, DC.

Moving from generic to specific and then onto systemic

When working with development organizations in the mesolevel we often find that their programmes are very generic. The same can be said of the findings of many diagnosis. The result is that firms do not really use the services of these organizations, because the value add and the impact of the services are not really clear.

For me there should always be a movement from the generic (e.g. the foundry sector is not competitive) towards the specific (e.g. the foundry industry is not competitive because it lacks capacity to do good front end engineering and design). After we have developed a sense of some specific issues that are affecting the performance of firms, there are two things we have to do.

Firstly, we want to try and figure out if there is something that we can do at a more systemic level to try and influence the specific issues. With systemic I mean that instead of addressing a particular issue repeatedly at various firms, see if there are other ways to achieve the same outcome. An example would be instead of only offering a design service to firms, make sure that the university curricula includes sufficient content dealing with design. Of course, we should always strive to have multiple interventions to address a particular issue.

Secondly, we should verify whether our specific findings are unique to the firms we have diagnosed or engaged with. For instance, and food initiative run by a university might find that the private sector is affected by a lack of a particular kind of testing lab. Then instead of designing a solution just for a limited number of producers, the university should check whether similar firms in other industries (related and not even related) are facing the same constraints. It may just be possible to design a solution that is useful to a much broader target group, making the solution more sustainable and more relevant to the private sector.

From my experience of working within many different value chains is that there are many issues that are treated as being unique (or specific) to a particular value chain that are in fact affecting many different kinds of enterprises. The South African Industrial Policy framework for instance is designed around many different sub-sectors, with many different interventions implemented by different organizations and programmes that are actually not unique to a particular sub-sector. This is expensive and also not really systemic, these interventions are not permanently changing the meso level in South Africa or the service offerings of meso organizations such as universities and other development programmes. The South African manufacturing sector is struggling with low volume, outdated designs and rapidly increasing costs across the board. I imagine that it should be possible to based on the insights from the different sub sectors to design much better programmes that are cross cutting over many different sub sectors, and that from the start are designed to improve the service offerings from meso organizations to firms.