Categories
Thinking out loud

Looking back at August 2020

This is a short article to reflect on some of my learning over the month of August. I put the timer on 30 minutes to practice writing faster.

In the first week of the month, I made time to read up on socio-technical change and transitions. I was trying to figure out how “big transformations”, “technological disruptions”, socio-technical change and several other permutations fit together. For me, the scholar who brought all of this together in the most succinct way is Professor Frank Geels. You can find his Google Scholar page here. The diagram that he co-developed with Professor Johan Schot has gone through several iterations, and I think it has for now settled in the form shared below. Now that I mention Johan Schot, his work on transformative change and deep transitions and how it relates to innovation systems and systems of innovation are also very important. You can find his papers on his personal website.

In the 2nd week of August, I participated as a panellist in the Knowledge Management South Africa conference (called an e-Imbizo. Imbizo means a gathering in isiZulu, and it is usually called by a leader). As the event spanned several days it made sense for me to dive deep into knowledge management for the week. I had three highlights that stood out for me that week.

The first was the opportunity to again go through Harold Jarche’s Personal Knowledge Management course that I wrote about here. Central to Harolds teaching is the idea of living in perpetual beta.

The second was re-discovering a paper by Matthew Jelavic titled “Socio-technical knowledge management and epistemological paradigms” (Researchgate link). What I liked about this paper is the description of the functionalist versus the integrative socio-technical knowledge management. As I am interested in how knowledge flows and is shaped between organisations in a distributed way, this paper really resonated with me. It was a presentation by Brenda van Wyk from the Independent Institute of Education that led me back to the paper by Jelavic. Brenda showed how their university created a knowledge management strategy based on the work by Jelavic that included functional KM as well as integrative elements.

The third highlight was to follow a lead from Harold Jarche to look into the amazing work by Harold Innis and Marshall McLuhan. We were discussing how new technological disruptions could be detected in a distributed way, and Harold suggested that I look into the Tetrad concept developed by McLuhan (it is also known as the Tetrad of Media Effects). I am still trying to wrap my head around the Tetrad and I will write about it once I have read through all the material. Below is a template for a Tetrad.

To develop the Tetrad, ask the following four questions of the technology you have in mind:

  1. What does the medium/technology enhance?
  2. What does the medium/technology make obsolete?
  3. What does the medium/technology retrieve that had been obsolesced earlier?
  4. What does the medium/technology reverse or flip into when pushed to extremes?

In the original formulation, McLuhan used “media”, but it appears that the substitution of media with technology works. But more about this in a future post. My thoughts are still too messy right now.

In the last two weeks of August, I shifted my attention to the topic of disruption. I wrote a series of five blog posts on disruption here:

Post 1: What does it mean to be disrupted?

Post 2: Defining disruption

Post 3: Who is being disrupted, by whom?

Post 4: Technological disruption over time

Post 5: Social technological disruption: The disruption that hits hardest

I have received an offer from Marcus Jenal and Zenebe Uraguchi to edit and integrate these five posts into one working paper or a coherent article.

During and after the disruption series I received many requests from readers asking me “now what?“, or “how do we become better at tracking potentially disruptive technologies and trends?“. Well, I am delighted so many asked about that, as that is the topic for September.

In September I will also revisit Local Economic Development and how local stakeholders can become better at system innovation and tracking innovations that have the potential to disrupt the location. I will also finish the development of an entrepreneurial ecosystem benchmarking instrument for a client, and I will publish a concept note to establish an observatory to track technological change for another client.

If you are a subscriber to this blog, then you will receive a copy of the integrated working paper on disruption when it is ready. If you are not already subscribed, then fill in the line below to stay connected.

Thank you for the many comments, shares and likes. Your support encourages me to keep on digging, exploring and connecting ideas that make development and innovation more valuable.

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Technological change Technological disruption Thinking out loud

Social technological disruption: The disruption that hits hardest

This is the 5th post in this series on disruption. This post was updated on the 15th of September 2020.

It is a common mistake to think that the contest is only about technology in the form of hardware, software, services or processes. These are the most visible features of new technologies that can more easily be compared, measured and integrated into existing operations. In these visible forms, technologies can be procured off-the-shelf (or from a website or an app store) and can be adapted in an existing operation. The nature of the disruption for the technology adopter then mainly concerns the inconvenience of changing routines, systems and arrangements. Technology and operational managers often spend months planning, preparing and carefully integrating these kinds of change into their operations to try and mitigate the effects of the disruptions.

In many organisations in the public and the private sector, operational managers focus on ensuring that their system designs and processes are able to resist all kinds of interference and disruption, as these introduce potential variations, risk and uncertainty into their finely tuned operations. This is true for a factory, and it is also true for a hospital or a government department or a post office. Any process that is striving to attain a certain level of efficiency must be protected against unnecessary changes. Change means costs. The downside of striving for efficiency is a loss of flexibility. 

In more modern production and organisational systems, the topic of flexible configuration and agile process design has enabled many newer products, services and processes and their supporting systems to allow for more flexibility. However, many older or more conventional products, services, processes and systems are vulnerable to being overly rigid (meaning resistant to change) as they are often more sensitive to minimum scale and efficiency thresholds.

The most difficult disruption to cope with is at the level of business and organisational models. This is where a new technology market requires a complete or significant rethink of the business strategy, organisation, operations and leadership frameworks. Many new business models that have emerged in the last twenty years have overcome previous market and technology limitations, meaning that even an inefficient provider using newer technology may have an advantage over an older organisation using their older technology efficiently. 

New business models that leverage new digital technologies often make for a potent competitive advantage once a leader can break free from the pack. These new entrants are often free from many of the constraints and limitations that older, more established firms face. They are also closer to the edge or just on the other side of the current regulations and controls that restrain many more established competitors.

These innovations in business models often draw on new social technologies. Social technologies could change the internal or external arrangements of the organisation. Internally, social innovations can be about how workplaces are organised, how decisions are made, how people from different business units relate within an organisation, how communication takes place and so on. However, in my experience, when organisations are arranged innovatively on the inside, this is often mirrored in their relationships with external partners, suppliers and clients. 

In many spheres of society, these new social technologies are challenging older paradigms. For the companies, regulators, government departments and communities that have become intertwined with existing social arrangements, changing the business or organisational models is very hard if not impossible. It is often simpler to start something new because the old arrangements are so deeply entrenched. Think for instance about the shift from coal mining to renewable energy and its effect not only on the mining companies but the communities, the financial markets, the downstream buyers of coal, the suppliers of equipment and technology and the specialised public and private institutions that have emerged around the coal industry. Do not forget about the labour unions, local charities, churches and other social partners. The new energy market will eventually take over from this older market with its more established social arrangements, but the players and institutions will look different, will be funded differently, will use more modern regulatory frameworks, and will most likely also be located in a different place using different skills and very different social arrangements. This disruption is not going to look pretty, and local stakeholders all have good incentives to dig in their heels to resist the disruption for as long as possible. 

If a society cannot foster the emergence of new institutions and social innovations for new configurations to be developed in the local market, then the local system becomes even more vulnerable to international disruptors in the longer term. The implication is that if the government cannot enable new competition to incumbent arrangements in the shorter to medium term, then in the longer term the intensity of the disruption caused by new social technologies may be more severe. Many governments resist promoting new business and technologies because of the entrenched positions of business, labour and civil lobby groups. Yet even while agreeing that promoting new technologies to disrupt or challenge existing arrangements is a good policy, it may be very hard to implement.

The reason why new technologies are hard to implement is because of the many simultaneous investments and changes that may be required; in other words, the coordination failures that may make a new market and all its dependent institutions and networks harder to establish. This is one reason why so many developing countries are being reduced to being users of new technologies: because it is so hard to create the densely interrelated market systems that enable new technology adaptation and development. New markets often leverage older market institutions and norms, so it is not as easy as simply allowing a new market to be established. A whole web of other supporting arrangements is needed.

Ultimately it is not about the use of new technology. The biggest challenge lies in the business model and network arrangements that are needed to make a new technology market viable. This is where the most serious disruptions occur, namely when one country’s social institutions and social arrangements are displaced by those from another country. An example is where high-tech companies embedded in one country’s market system disrupts another country with weaker or inferior market and organisational arrangements. Local funding markets, tech entrepreneurs, regulators and policy makers will constantly be on the defensive and will be caught between those that want to completely resist the uptake of the technology and those that want to adopt the new technology.

Now we turn to the question of why these new social arrangements often originate in the USA and Canada, and why Europe and Africa are often on the back foot. A closer look reveals that many of the new social arrangements actually originate from only a handful of cities and locations, and to simply paint the whole of the USA as a hotspot for new business model innovations is perhaps a bit optimistic. Somehow, to develop new business models requires a tremendous amount of trust between individuals and the hierarchies that they form part of. Yes, even a flat hierarchy still has rules, and in fact, it depends on a certain singularity of mind of what the organisation is trying to achieve. In societies where much importance is attached to degrees, years of work experience, social hierarchy, and professional pedigree, social innovations are much harder to achieve. Not impossible, just harder. The same applies to societies where people need to be directed, where only a few have the vision while the rest just grind away at what they are told to do. 

Here in South Africa, with our low trust, it is tough to manage or lead a team, even if it is a team of professionals. Almost all our efforts at innovating in South Africa are focused on building systems and procedures that must make up for what we cannot draw on from the broader environment. Managers are constantly checking up on subordinates. The ecosystem around most organisations has a trust deficit, so any team or organisation must make up for what is lacking on the outside through structures and functions on the inside. This shows in our economic data. In almost any market here in South Africa, there are only a handful of companies (public or private) that have managed to achieve a scale or a semblance of stability. They are often like self-contained islands. Their supply chains often don’t look like chains, they look rather like pipes that extend from the bigger buyer. I suppose this is social innovation in its own right, but it does not help us to navigate a future where a small and even unheard of competitor from abroad can come in and very quickly establish a new market because of its combination of social and technical innovations.

I am often asked how ready we are for technological disruption. Mastering a new product, service or gadget may seem easy enough. But I shudder to think of the rigidity and readiness of many of the companies and public organisations that I know of. They have been successful at defending themselves against many external threats, but have often not embraced many social innovations that are now already widespread elsewhere. I think that social innovations and new social technologies are potentially the biggest disruptors. 

Is it different in your context?

How are the organisations that you work with experimenting with or tracking new social technologies? 

What social technologies are you tracking because you think that these have the potential to create completely new business models or market arrangements?

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Thinking out loud

Technological disruption over time

This is the fourth post in this series about disruption. This post was updated on 15 September 2020.

I have previously written about technological change cycles where I explored how the nature of innovation changes over time. This time I would like to explore disruption more from the perspective of the challenge to a business model as well as the broader sociological impact of disruption. 

Time is another dimension that must be considered if we are to understand disruption. In the short term, new technologies often disrupt incumbents (firmly entrenched existing players) who are dominant in a particular technology market segment. New technologies force existing companies in the market to rethink their products, services, operations and networks. They may decide to resist change, or adapt or retreat to market segments where their scale and operations are still competitive. 

In the shorter term, the most significant disruptions are at the level of functions and applications (or products and processes), and the disruptions are often felt by competitors who identify with a particular market or technological paradigm. The new technology may allow a better or different way for a function to be performed, and as a result a new need may be created. All competitors must scramble to get newly-introduced competing solutions integrated into their current offerings.

In the medium term, technological change may disrupt consumers and global technology markets, as new products and services might make existing alternatives incompatible or redundant. As the uptake of a newer technology increases, it may become more visible to other (unrelated) markets and user types. The result is that a technology that was developed for a particular niche market may be taken up or adapted to new markets. Technology providers benefit from more scale, and their attention often shifts from developing the products/services to improving their processes and systems. Users benefit from better-developed products/services and support, increasing compatibility and the establishment of standards, etc.

In the longer term, technological change disrupts investments in fixed infrastructure and social institutions such as universities, economic regions, job markets, regulators and industries. Some jobs, industries, key infrastructure or technologies may become redundant. From a spatial perspective, the way municipal boundaries or functional economic regions are drawn may be challenged, and regional infrastructure may suddenly become redundant or expensive to maintain.

In the longer term, technological change disrupts investments in fixed infrastructure, social institutions like universities, economic regions, job markets, regulators and industries. Some jobs, industries, key infrastructure or technologies may become redundant. From a spatial perspective, the way municipal boundaries or functional economic regions are drawn may be challenged, and regional infrastructure may suddenly become redundant or expensive to maintain.

As new technology becomes more prevalent and as it reaches a more mature phase, its influence may spread to other more indirect markets in a slow, ever-expanding series of mini-disruptions. This is where convergence and spill-overs become a risk to those who are ignorant or complacent, as technological developments in unrelated economic activities may spill over into a deeply rooted and rigid technology marketplace. It may take a long time for this kind of disruption to slowly build up, but once it arrives, the changes are sudden and often catastrophic to the economic actors who are affected. 

The challenge is then not the new technology per se, but the organisational and social innovations that have been refined in the new technology market place. Many improvements at the product or business process levels can be copied (or perhaps licensed). However, new business models with different forms of financing, novel arrangements with suppliers, new partnership structures or with creative business logic are very hard to copy. It is especially hard to respond to business model innovations when an organisation is already set in its ways (or is successful). This is the real disruption, and it is not only the private sector that is vulnerable to this – The public sector and even the NGO sector can be disrupted by business model innovations.

In the course of my career I have worked with many leaders of companies and public organisations or technologists who have been caught off guard by technological change. They all describe the same pattern.

They were once globally competitive and could benchmark their operations, technologies and efficiencies against global peers. Then some competitors started choosing alternative technologies that were emerging at the time. Some competitors fell behind, while others appeared to have a small advantage. However, they were increasingly losing competitive bids for contracts. Some competitors were able to clinch contracts at prices and volumes that were just out of reach. By working hard, and staying close to their customers, they could make up for some of the disadvantages. They could justify their current path and decisions based on sunk costs and their reputation. They improved some processes and changed some arrangements, but were aware that other important priorities were not receiving attention. The status quo could be maintained for many years. Then suddenly, almost overnight, the performance gap was too big. The new technology was taken up by some local competitors, or one or two customers started insisting on the use of the new technology or higher performance standards. No amount of blood, sweat and tears could secure a deal. At this moment, they were disrupted. They had been left behind. They could not meet the criteria, the volumes or the market prices. It was not just a question of ordering a new production line, as the new technology required different systems, different suppliers, different volumes and different skills throughout their organisations. Key staff left. Funders no longer extended credit so easily. 

They were suddenly behind on all fronts. It started happening slowly, and then it happened suddenly. Their financiers, government officials and industry bodies all claimed they had been overtaken overnight. But this sudden disruption took many years. 

In hindsight, they could see where they had made the wrong decisions. Often it was not a big decision that caused them to fall behind, but rather the cumulative effect of many decisions building up over time.

In hindsight, they could see where they had made the wrong decisions. Often it was not a big decision that caused them to fall behind, but rather the cumulative effect of many decisions building up over time.

Some of these (disrupted) companies are still operating today, but they are now just a shadow of the successful companies that they once were. They still have some loyal customers who use their services, but they are no longer the leading suppliers or the default choice in their industries. One of these companies that I know well used to manufacture precision metal parts for the automotive sector to very high tolerances, and now they manufacture coarse grinding balls used to crush rock in the mining industry. Another company used to make trains, another used to make buses, and another used to design and build aircraft. They have all been disrupted over a period of more than ten years. It started happening slowly, and then it happened fast.

I also know of regions that have been disrupted. The town where I grew up also went through this (see my angry rant in a post about this town from some years ago).

Change in my home town also happened slowly. First, the biggest company in town moved some headquarters functions to a nearby city. They had problems attracting certain kinds of staff and supporting service providers to the small town where I lived. More functions followed a year or two later. Local government was not focused much on reversing this outflow of talent, investment and expertise. Next, certain equipment maintenance functions were moved elsewhere to consolidate operations in another city. Spouses and families moved in pursuit of jobs, and the local brain drain was gathering momentum. At some point, the existence of the local railway station and the small airfield could no longer be justified. Non-related industries such as agriculture suffered. As more and more functions moved from the town, more and more shops, restaurants and smaller companies closed down. It felt like the whole town had changed in just a few years. What started as a technological disruption in one sector quickly affected many others. 

In many of the examples that I have shared in this post, technological disruption started elsewhere through the technology choices of other organisations and companies. Without anybody noticing, the seeds of disruption had been sown. The effects would only be felt some years down the line, and then it was simply too late to start scrambling around to try and reverse what had happened.

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Technological change Technological disruption Thinking out loud

Who is being disrupted, and by whom?

This is the third post in this short series on disruption. This post was updated on 15 September 2020.

In simple terms, technological disruption implies at least two actor groups: those that are being disrupted, and those that are doing the disruption. However, to assist societies, institutions, governments and businesses to be better able to adjust to, mitigate or even lead technological disruption this simple description is not useful.

Everything should be made as simple as possible, but no simpler

Albert Einstein

Closer scrutiny of any technological disruption reveals many more actor groups that are both directly and indirectly involved in technological disruption. The more you dig, the messier the picture becomes. There are four groups that quickly spring to mind: you will probably be able to think of more if you focus on a technological disruption about which you have more detail.

  1. On the technology supply side, there are many concurrent contests where promoters and early adopters of new technologies are trying to gain a foothold in technology markets by achieving a viable scale. If an existing technology market is too firmly established (or protected), then an alternative technology market may emerge. Over time, this new technology market may disrupt the incumbent technology market, leading to further disruptions in many other related markets downstream. However, Clayton Christensen made us aware that in many cases incumbents are able to quickly learn from new disrupters, and they are often able to use their scale and operations to adapt quickly to their operations, and so beating the new challengers. It is only in rare instances that a new technology disrupter manages to unseat an incumbent, but there are many celebrated examples where this has happened.
  2. On the demand side, there are those who are disrupted when their suppliers, clients, employers or regulators select one technology over another. Markets and actors are disrupted by other markets and actors that they are dependent on. Users of technologies may have to master new skills to continue performing certain functions. To replace an older technology with newer technology may also involve investing in and mastering a whole range of other technologies. Occasionally an incumbent could even be disrupted by its own technology development. Remember the story of Kodak and the development of digital camera technology? Another more recent example is Apple’s iPad technology that disrupted its own computer technologies, but at least Apple has since adapted and even thrived. There are many examples out there with happy and sad endings.
  3. Occasionally, an incumbent could even be disrupted by its own technology development. Remember the story of Kodak and the development of digital camera technology? Another more recent example is Apple and the iPad technology that disrupted its own computer technologies, but at least they have since adapted and even thrived. There are many examples out there with happy and sad endings…
  4. Wherever markets are forming, changing and disappearing, a range of market-enabling and market-supporting institutions are affected. These institutions could be in either the public or the private sector, or in some hybrid form. An institution could be in the form of a combination of formal rules and informal norms as well as regulations, or it could be in the form of organisations. Whenever a new technology market emerges, it challenges the incumbent market and supporting institutional arrangements. Think of how the formal hospitality market is challenged by the emergence of homestay holidays and the ease with which a property owner can now rent out a property online. This has consequences for existing providers of hospitality, for regulators, for local authorities, other property owners affected by these transactions, and also for buyers of the new hospitality services. The implication is that the speed with which a country can create, adjust and adapt its market-supporting institutions will have a direct bearing on the pace and the effect of how disruptive the new technology may be, and how equal and fair the uptake of the new technology will be. It is very hard to add new market regulations and rules after technology has already become widely adopted.

When considering disruption, it is useful to think a bit further than the disrupted and the disruptor. We have to consider the networks that these two groups form part of, but we must also think of the social institutions and market-supporting organisations that enable these technology markets to exist in the first place.

Society bears the costs of late disruption

Attempting to mitigate the risks of any possible disruption may be a nuisance for many businesses that are just trying to cope. However, when many companies or whole industries do not adequately consider potential disruptions, the costs of disruption spread from the shareholders to the broader society. It is therefore important that policy makers, government departments, local governments, industry-representative organisations and labour representatives should also take into consideration technological change and the interdependence between different systems. 

In markets where competition is too low, or where the markets are dominated by just a few thought leaders, incumbents may be able to avoid being disrupted in the shorter to the medium-term through their defensive innovation strategies. However, in the longer term, these champions may become more vulnerable to technological disruption. This means that all the other systems are at risk whose success is highly dependent on the success of the leading firms.

It is a bit difficult for policy makers and industry bodies to imagine how disruption can be managed. It may even be necessary for countries and regions to intentionally disrupt their own industries and local social arrangements, as I heard they do in Singapore. I was told that the logic of purposefully introducing disruptions is that having more frequent small disruptions is better than losing big battles against global competitors already operating at scale.

The old Zollverein Coking Plant World Heritage Site in Germany is one of my favourite places to visit to witness how technological change can challenge a region. Click here to see more photos of industrial heritage in Germany

Over my 25 years of working experience, I have worked with disruptions in many different forms and contexts. To me, disruption is not an abstract term. Sometimes it is about being optimistic, trying to introduce a change. Other times it was about pain, trying to find a way out of a mess. I have worked with governments and industry bodies that were trying to find ways to resist disruption, or that were desperate to figure out how to catch up after being left behind. I supported innovative teams to use the logic of disruption to explore how they could break into or gain a foothold in an established market. I have experienced the desperation of stakeholders in regions where key industries have been disrupted, where those that have remained behind are struggling to reignite a depressed economy. I have also worked with technology extension programmes that were trying to introduce (disrupt) new technologies into existing markets. These experiences all exposed me to different practical challenges of disruption, being disrupted, disrupting others and trying to resist disruption. I am sharing these experiences because disruption is a very different experience based on who you are and what you are trying to achieve. 

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Technological change Technological disruption Thinking out loud

Defining disruption

This is the second post in this short series on disruption. It was updated on the 15th of September 2020.

Disruption can be defined as the act or process of disrupting somethinga break or interruption in the normal course or continuation of some activity, process, etc.

The Merriam-Webster Dictionary

Disruption means that somebody or something is interrupted by somebody or something else; plans may no longer be valid as priorities have changed. It means more than just being surprised that something is now possible, as being disrupted implies inconvenience.

When we think of global disruptions, periods of economic turmoil or political change typically come to mind. For instance, the effects of the global financial crisis are still echoing around the world. The effects of the technological disruption enabled by the increasing reach of the internet are still reverberating around the world. Think of how smartphones have challenged fixed-line communication technologies, and how internet connectivity is reaching into factories, schools, churches and households. 

There are other forms of disruptions, such as natural disruptions that are often felt more intensely at local or regional levels. Disruptions caused by politics is a reality in many regions and countries in the world, with the biggest disrupters being regional or global conflicts.

Supply chains can also be disrupted by regional and international events. For instance, during the Covid-19 pandemic, many supply chains were disrupted as ports closed, and as suppliers, routes, logistics centres and shops were closed.

Our local retailer ran out of stock during the Covid-19 lockdown due to a combination of panic buying and the disruption caused to supply chains. This disrupted our dinner plans and required us to completely re-think our frequency and way of shopping.

What makes any form of widespread disruption hard to plan for is how interconnected different systems are. A disruption caused by political turmoil may quickly lead to economic and technological disruptions, or a disruption caused by nature may lead to political, economic and technological disruption. We often do not know how the systems we rely on in turn depend on other systems.

From a resilience perspective, this interconnectedness is called “coupling”. In highly coupled systems a small disruption in one area could lead to a domino effect elsewhere. In loosely coupled systems, failure or disruption in one area could be contained or isolated in that area. With the increasing convergence of technologies, the interdependencies between systems are increasing. Just think of how many systems would be disrupted if a country’s internet connectivity were to fail. 

Every leadership team should be aware of the potential disruptions that may affect their operations, their networks and their plans. These disruptions may originate externally to the organisation, or they may originate within the organisation. Being more aware of potentially vulnerable points in the organisation and the broader context can help to rapidly reallocate resources and reconfigure arrangements when something unexpected happens. I find it interesting that some domains use “surprise” disruptions to build something akin to muscle memory for their organisations. Think of emergency response teams such as medics or firefighters using scenarios to challenge their assumptions and to reveal dependencies. 

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Thinking out loud

A big shout out to Harold Jarche

A few years ago, I completed the Personal Knowledge Mastery (PKM) programme by Harold Jarche. I was then struck by how well thought through his training programme was. I could immediately use many of these ideas to improve how I develop, nurture and organise my knowledge on a daily basis.

One key idea that Harold promotes is the idea of sharing emerging thoughts and ideas, even if they are half-baked. He calls this “living in perpetual beta”. He predicts that our future will require much more of this mode of knowledge creation. For several years, I followed his advice to live in perpetual beta here on this blog site and elsewhere. However, somewhere along the line, I stopped sharing my half-baked ideas and concepts. It felt to me as if I should rather write about ideas that I am fully convinced about and concepts that I have thought through.

As many of my readers noticed and commented, I blogged less. When I blogged, the ideas were already further developed, language edited and almost final. Some complained that my posts were too long. I forgot about living out loud. I became afraid of making a mistake in public, of sharing a half-baked idea that was dumb! Of making silly grammar mistakes in my excitement to capture and share an idea. I was afraid of writing in my own voice!

It was not as if I have been short of ideas during the last 6 months. I have been living in perpetual beta behind the scenes. I have been pondering how societies and communities can make more decisions in decentralised ways. This was emphasized to me in the way the South Africa government handled the response to the COVID-19 pandemic. The whole lockdown in South Africa was managed in a very directed top-down manner. Dialogue, feedback or critique was (and is) simply avoided or suppressed. There is almost no focus on building credibility, trust or information flows. Even though I believe decisive action was needed to avert an even bigger crisis, I am disappointed that building trust and resilience never became a priority. Along these lines, I have been brooding on ideas about how to get institutions (like local governments, or small enterprise support organisations) to be more sensitive to the challenges their constituencies are facing today and in the near future. It feels as if distributed knowledge, decentralised decision making, and being more sensitive to weak signals and emerging trends were all connected in a very messy way, and those local institutions that are close to communities must play a central role. Thinking about how we can get institutions and organisations to adapt, make transparent decisions and think about the future filled my days and my restless dreams. Yet, I have little to show except lots of loose ideas. I started to worry that I would lose some snippets of knowledge along the way.

I wrote to Harold to ask for some advice, and he replied by promptly enrolling me to take his course again. For free! (The option to re-enrol is a standing offer to his alumni that I had completely forgotten about). I was sort of hoping he could give me a one-sentence solution, or a link to an app….

The idea of another on-line course during lockdown was daunting. Even though I am used to working from my home office, I have been feeling frustrated by my output and productivity during this lockdown. To my relief, others could better describe how I felt, as novelist Amy Sackville so brilliantly put it here in the Guardian. It felt like I had holes in my thinking, and also in my calendar.

As a result, I approached the course with some apprehension. At first, I rushed through the course. I skipped some of the exercises. Every now and then I would pause at an idea or an insight that I realised had already become part of how I develop new ideas and concepts. I was searching for a simple solution and hoping it would be described in the next lesson.

After rushing through the course, I realised that there were also some key ideas that I had not adopted that could enhance how I work. Some topics required more thought and changes in my habits. For instance, the course contains great concepts on curating information flows and sensing weak signals. I could immediately use these frameworks in my current research.

After a few days of simmering in the back of my mind, I decided that I had to give the course more attention. I went back through the material a second time, this time paying more attention to the ideas that I could adopt to improve my practices. I followed the many links to other sources and authors and managed to only get a little distracted along the way. I immediately made changes to some of my folder structures, how I recorded notes, and how I organised my snippets of ideas.

In addition, I decided to take Harold up on the invitation to his learners for a 30-minute coaching call. Our scheduled 30-minute call turned into almost 2,5 hours of reflection and coaching. Not only did Harold provide me with some useful pointers on personal knowledge management, but he also shared his experience on time management. He listened to the research I am busy with, and connected me to the work of Marshall McLuhan and some others. Thankfully our call was on a Friday afternoon, so I did not have to rush into something else afterwards.

After pondering our conversation for a few days, I decided that my first blog post in five months should be to publicly thank Harold Jarche for sharing his thinking so persistently. I really hope that some of my friends and clients would also take his course. I do not get a commission if anybody signs up. I think that Harold’s ideas are fundamental to what we are trying to get right in economic development and in building more knowledge-intensive economies, and therefore I want more people to know about Harold’s resources.

The answer to my concern that I feel incoherent and overwhelmed with these many loose ideas is to simply share them with my friends and my readers and to allow others to contribute to the refinement of these ideas. Instead of hoarding ideas and snippets and then writing it up when I confident about their coherence, I must be courageous and put my ideas out there. I will better curate the ideas I find interesting.

My intent with this blog is to help the people I care about to make better decisions or to make better sense of their options and potential strategies. I feel better equipped now to share frameworks and material that can achieve this aim.

Harold, you have set a high standard with how you develop, write and share your thoughts. You are a master curator. I will follow your blog more diligently going forward. There is still much for me to learn, and many new habits for me to cultivate to improve my perpetual beta and personal knowledge management.

I guess there are many people that using your ideas without giving you due credit. Despite this selfish behaviour by some, you still continue to develop, refine and share your material. I thank you and I want you to know that your ideas and concepts are valued and are helpful to many.

Thank you for being a role model worth following!

PS. My mid-August resolution is to live in perpetual beta mode. I will share my half-baked ideas more frequently. Watch this space.

Categories
Thinking out loud

New podcast episode published on System Insight: Episode 6 On Competitiveness

I hope you are all following our Systemic Insight podcast series. Instructions below!

We have just launched a new episode on the Systemic Insight Podcast. In this episode, I discuss with Marcus the concept of competitiveness. The chat was inspired by some reading Marcus had been doing that condemned competition to be part of the driving force that makes our society so extractive and unequal.

The topic of competitiveness comes up often in our work, and I hope that this episode will add value to the discussions that our followers also must be having about the concept.

In particular, Marcus quoted two quotes from Daniel Wahl’s book ‘Designing Regenerative Cultures’ to exemplify the argument. To contrast this viewpoint, we explore the positive aspects of competition and why competitiveness and in particular systemic competitiveness in the way it is used by Mesopartner and others still are and will remain important concepts in economic development – and why they can indeed also be forces that drive a positive transformation of society towards a more sustainable future. We also asked Christian Schoen to share his opinion on competitiveness in development.

Find the episode on Libsyn or Apple Podcast.

Categories
Addressing persistent market failure Meso organisational development Promoting Innovation Systems Thinking out loud

Improving the value proposition of the meso layer to enterprises

Updated and refined, 12 April 2020

When working to improve the performance of any sector or value chain, we are often confronted with a range of meso organisations or programmes designed to support upgrading, skills development and better decision making in small businesses in the targeted sector.

While mapping these organisations is not so difficult, it is much harder to figure out what each organisation is doing, offering or whom they are targeting with their services. If it is hard for me to do, I can only imagine how hard it must be for an overstretched entrepreneur working on a dozen burning issues.

Recently Annelien and I worked together to map the meso landscape in the bio sector in South Africa. We used an expectations matrix format to get more than 40 meso programmes to express what they expected of each other.

The first step was to get each organisation or programme to express their expectations in every other organisation in the sector. Then, in a public workshop, each organisation had a chance to respond to the expectations expressed in them by all the other organisations in the sector.

In general, it was evident that most organisations did not have a clearly specified service offering that made it explicit who they were trying to help, what had to be in place in the enterprise, what the benefits or value of their service offerings were and what they cost. While many programmes had objectives and indicators for their work in support of the specific sector, it is hard to find clear information, contact persons and engagement processes in marketing or online material.

What can be done to improve the visibility and value addition of the bio trade meso system?

Here are some of the recommendations that we presented to our clients.

  1. Make descriptions of services more explicit. For instance, clearly describe how each service offering addresses user needs. How can each offering be accessed by entrepreneurs? 
  2. What resources or capabilities does each organisation have in place? Is the support aimed at particular links in the value, a specific range of species, or does it provide general support to all business activities?
  3. Clearly state which kind of enterprise and at what level of competence the enterprise must be to benefit from the service. For instance, state explicitly what the preconditions are to use a particular service. Must the enterprise already have a two-year track record? Must they have a particular kind of technology in their operation? Is this service only useful for certain kinds of companies in specific sectors or stages of development?
  4. Which kind of enterprise can not be assisted? For example, can the organisation help all sizes of companies? Can only community projects be helped?

It is helpful to think of the meso landscape in its present state as being very diverse with many organisations, programmes and resources. The challenge is that from the perspective of enterprises and other support programmes, the meso landscape is like a labyrinth. It is hard to navigate and only those with huge tenacity or resources can afford to go door-to-door to find specific support for their challenges. Often the quality or effectiveness of the support available is also hard for entrepreneurs to assess. 

While it will be easy for some meso organisations to improve their visibility and access to their services, others may struggle.

Some organisations may only have to improve their marketing and information material. If they are already clear about who, what and how they support the sector, then all they have to do is to make this more explicit. For other organisations, improving their offering may require designing specific services or making certain resources available. Or perhaps a more specialised programme would have to work closely with other complementary programmes to improve their impact. There could also be organisations that provide specific services to a more general target market, so perhaps they should make their offerings a bit more explicit without making it specific to the bio trade sector.

To summarise my argument, in many developing countries there are many development programmes or targeted support programmes aimed at addressing market failures or performance issues at the level of enterprises. Some are more generic, promoting, for instance, start-up support. Others may be more technical, such as providing export promotion support. The main point is that these organisations often offer products and services that are very vaguely described. This means any enterprise (or other meso programmes) may have to spend a huge amount of time to figure out where to get support. This increases search and discovery costs, it raises coordination costs and it reduces the quality and effectiveness of public goods available to society.

Categories
About the future Addressing persistent market failure Complexity and Evolutionary Thinking Meso organisational development Organizational Design and Development Promoting Innovation Systems Technological change Technological disruption Technology and innovation management Thinking out loud

Some of the challenge prospective clients that reach out to me are grappling with

Due to my research, public speaking and writing my favourite topics I regularly receive requests to help somebody that is grappling with an issue either around meso-organisational change or about technological capability, innovation or disruption.

Usually, after a few emails, we schedule a phone call to discuss their context, their intent and my service offering. Thanks to my journal and reflection processes I can track the original requests and the ensuing correspondence or projects. Over the last six months, I have noticed some patterns that are now repeating. Here are some of the most frequently discussed points. While I can help with some of these, with some I cannot help for various reasons.

Because I have always focused on training other consultants and my own clients, I thought it would be a good idea to share these early observations with you.  (Larry, Goran, Bojan, Nik, Albina, Garth, these are for you). To save you all from many emails, I have written 8 blog posts in one!

So here are the emerging patterns of 2019:

  1. I am frequently contacted by organisations or projects that believe that technological change, or preparing for the 4th industrial revolution (4IR) is a project. That there is something that we can do quickly (one of the most popular search terms on this blog site is “formula for 4IR” and “4IR method”. Preparing for technological change, responding to disruptions, or even preparing to disrupt others is a capability that is distributed over companies, public and civil organisations, regions and individuals and over time. It is not a project that ends, it is a capability that must be continuously nurtured. After addressing one threat or challenge and the next two will be on the horizon. While I love training, what these organisations really need are new technology, innovation, change and knowledge management capabilities.
  2. I am asked by development organisations to prepare their target groups or beneficiaries for the 4th industrial revolution by focusing on one threat. For instance by mastering computer-aided design, design thinking, or helping entrepreneur to cope with advances in digitalisation, 3D printing, or master some automation or sensor technologies. However, the reason why so many people lump so many technological advances together under the banner of the 4th industrial revolution is that these technologies are converging, and if they are not yet converging, they are rapidly learning from each other. That means the capabilities are converging or starting to follow similar evolutionary patterns.  That also means that very few economic activities are left untouched by changes in other sectors, technologies and markets. Again, this is not about training. It is about competence, leadership, sense-making and innovation. Perhaps it is mostly about learning, relearning and knowing what you have to master next. People also commonly confuse “digitalisation” with writing software, whilst telecommunication costs, insufficient regulatory frameworks for e-commerce, closed government (as opposed to open government) or very fast connectivity and data security are ignored.
    People that can quickly master a new domain, like machine learning, big data or concurrent design, will have a distinct advantage in the future. People that are specialised in one skill, especially a vocational skill, may be more vulnerable. But my main point here is that splitting up the technologies is not helpful. Again, the broad technical capability must be fostered. However, in addition to point 1, I want to add that the ability to track, master, integrate and leverage multiple specialised domains continuously over time is very important, even if they do not yet appear to have a relation to your industry, business or organisation.
  3. I am asked to help only the private sector in a country, region or sector. Many organisations believe that the private sector is most vulnerable to disruptions. I believe that many competent firms would be OK, but not all. Uncompetitive companies, un-innovative companies and undermanaged companies are going to be more vulnerable unless the state can afford to protect them and in so doing possibly raising the costs to the society. But what we must not lose focus of is that when one public sector organisation, programme or function fails, the effects could be far-reaching. Take for instance what happens when a local municipality in a developing country is undermanaged. It will affect the whole community. The challenge is that in developing countries the “revolution” or the “disruption” will be about social institutions (local government, universities, technical vocation colleges, schools, or whole governments etc.) that will be caught in a weak position – and unable to catch up or get ahead. So supporting the private sector in a place where many public institutions are failing is just naive. You do not address a market failure by focusing mainly on the private sector, just as you do not address government failure by only working with the government. 
  4. This point is an extension of the previous point. Many organisations that approach me want me to help them get the private sector more innovative. But here is the problem. It is not possible to develop a prosperous and successful private sector without the same happening in the public sector and in civil society. Actually, any form of innovation starts with a good basic and often some good higher qualifications. The changes that people can work together in a sophisticated way, without these arrangements being replicated in other sectors are naive. Complex forms of cooperation within an organisation, company, NGO, school or church depends on the ability to work together to solve problems that span over the ability of individuals. This needs trust, and it comes from the broader society and its formal and informal institutions. You cannot develop the private sector in a vacuum. Management teams of companies are not suddenly going to behave in novel arrangements that don’t exist in schools, sports teams, civil organisations, universities or political parties. Maybe it is possible to develop only the private sector in the short term, but for long term economic development, healthy public sector organisations are a pre-condition. The social technologies that enable the private sector to innovate, to combine old and new ideas, to figure out new ways of arranging teams around objectives, problems and opportunities are in most countries developed with the direct or indirect help of the public sector. Often these ideas are first developed around social, political or local problems. The quickest way to instigate innovation is to focus on creativity, better decision-making and increased performance in publicly funded programmes and civil organisations. Do you want to quickly get new forms of dialogue or new technology to spread in a location? Start with the schools, the local theatre, church or community organisation – and watch how fast the private (and hopefully public) sectors will catch on. Often the most adaptive private sector leaders are serving on the boards of the schools, local NGOs, and they take up new ideas very quickly.
  5. I am often asked to assist struggling industries in developing countries to become innovative, competitive or successful. Maybe the companies were successful once, hopefully not too long ago. The challenge with sectoral upgrading is that the prominent companies must either be very competent in market development, or they must have mastery in a technological domain that has a long cycle time still ahead. With one of these two domains mastered product and process innovation is possible, but perhaps not easy. The real challenge is often that in developing countries the business model innovations are the hardest and the cost of failure are also very high. Thus the incentives to try new business arrangements are low. If the companies are not able or willing to rethink or change their business models, then there is very little one can do. The entrepreneurs that will be successful in five years from now have already made decisions to master emerging markets and technologies today, and they have found a way to foster their competence in these domains within their current companies. They have innovated in the business arrangements, enabling them to innovate in products and processes. If there are no companies that are able to do this it is most likely the best idea to rather invest public funds into investment promotion, education, tech transfer and incubation to try and offset the job-losses when the current companies fail.
  6. I am often approached by internationally funded development projects to do something to create employment in a sector or a region in a developing country. The challenge is the sectors, supporting institutions and even the approach (the ideology) is already decided and cannot be changed. Often even a quick analysis and a few phone calls reveal that the development project has read the situation wrong, or they ignored strong messages of resistance because they believe in their ideology. Yet they persist, and now they are not getting the response from the stakeholders. I notice many of TVET and green economy projects that fall in this category. Even if there is great value in what these organisations have to offer, if they are not responding the binding constraints or challenges (the decision points) faced by the entrepreneurs and government officials, their offer will not be taken up. Or it may be taken up but it won’t stick. My approach for the last few years has been to wait for the projects to realise that they will never reach their targets and then to propose that we try some alternatives to see if we can get some impact. Or I simply turn down the request. Development programmes in the education sector are often so stubbornly focused on their own ideas that work in their own context that they are not willing to consider developing country needs.
  7. I am often asked to help manufacturers or development organisations in developing countries to prepare for technological disruption at the technological frontier. That means technologies that are newly emerging. The problem is, most companies in developing countries will not be disrupted by cutting edge technology. They will be disrupted when older technologies reach new levels of efficiency and scale, perhaps in combination with newer technology. That means that an older technology evolves to become available as a utility service or on a pay-per-use basis. That is how the fundamental disruptions occur that completely displaces existing markets and sociotechnical arrangements. An example if PV electricity to homes. In many developing countries a homeowner can now buy panels, inverters, brackets and batteries from hardware retailers (or online). It may be illegal in many countries, but homeowners can take their homes off the grid. If enough homeowners do that, national power utilities may collapse. Perhaps another example is that as developing countries switch to fibre internet connectivity, all the IT companies that used to provide small servers, desktop maintenance, server maintenance, cabling installations, etc are disappearing. They are disappearing because they have not long ago mastered an older technology (shared server-based computing, remote network maintenance) that has recently become a utility-based service.
  8. I am asked by an international development organisation to help with a project aiming to support 25, or 50 women, girls, lecturers, youth or a handful of companies. 25 out of a population of thousands or millions is really depressing. This is not systemic, nor is it sustainable. I cannot get involved in these projects, my conscience will not allow me. If any beneficiary group is so marginalised or excluded that 10, 20, or 50 seems like a good indicator of impact, then we should really be going back to the drawing board about the complexity of the system and our sensitivity to the decision points, the attractors and the boundaries in the system. Most likely we should be targeting changes in mandates, roles and functions of institutions and not be focused on individual beneficiaries. The system must be very dysfunctional (meaning somebody must be benefitting enough to keep it in this state), and focusing on getting a handful of people through the system despite all the resistance or challenges is not systemic. In fact, everybody that is inspired by this handful might suffer severe challenges to follow in their footsteps. In a complex system, fixing a little part and then scaling it up does not change the fundamental working of the system. But let me stop venting now, I am asked frequently enough to talk about the potential of complexity thinking applied to developed. Maybe this deserves a blog post of its own.

These are just some thoughts about the challenges that some organisations are grappling with when they reach out to me. These are some of the common objections that many clients are challenged by based on my writing, teaching or speaking. Perhaps these are also the reasons why some clients decide to appoint somebody else or to never reach out to me in the first place. But these are also the points that keep me awake at night, the recurring themes that come up even when I am trying to walk the dog.

Let me know if any you’ve also had these conversations, or whether your organisation, funder or clients are stuck on the same issues. If there is sufficient interest in any of these points then we can perhaps think of how to explore these deeper, or perhaps we can even get together to brainstorm these.

Categories
Meso organisational development Promoting Innovation Systems Technological change Technological disruption Technology and innovation management Thinking out loud

Identifying the meso organisations that strengthen technological capability

This article is from the Mesopartner Annual Reflection 2019 (Cunningham, 2019). In this article, I explore how one could go about to discover the network of meso organisations in a country that helps the private and the public sector to strengthen technological capability.

During the past year, Mesopartner has been working with the Trade and Industrial Policy Strategies (TIPS) and the Department of Trade and Industry (the dti) in South Africa to develop a strategy to identify and respond to discontinuous technological change (see Article 11 in this Annual Reflection). As part of this research, we developed an approach to map the technological landscape of meso organisations that can assist South African enterprises and government programmes to adapt to technological change.

First, we developed a framework to identify meso organisations and functions. Various typologies were evaluated that could be used to classify, measure and manage the performance of those organisations involved in technology dissemination or building technological capability. We started with four typologies of public technology diffusion proposed by the OECD (1997) that are based on operational focus:

  • Supply-driven: programmes to transfer and commercialise technology from government research programmes to private enterprise, both high-tech and low-tech. It also involves education, skills development and standards.
  • Demand-driven: these initiatives start with a diagnosis or the perspective of enterprises and aim to respond to the challenges or opportunities faced by private enterprises. These could be aimed at plugging specific performance, technology and capability gaps in the enterprises and are often focused on smaller businesses.
  • Network-based: these are often sub-national or regional, and are aimed at creating or strengthening bridging effects, inter-firm partnerships in promoting information flows, and the diffusion of technology. Examples are cluster promotion, strengthening of industry or business associations, and fostering collaboration around skills development, research and development, or the development of shared infrastructure.
  • Technological capability dialogue, adaptation and socio-technical infrastructure building: these intentional initiatives are aimed at working on a system-wide level to upgrade the technology diffusion capability of the national system of innovation within the context of global and regional economic and technological change and opportunities. This is often in the form of dialogue and reflection about why certain initiatives are not yielding the expected results, or why certain industries are not striving to increase their innovation, use of technology or competitiveness. An example is the effort by several government departments to collaborate in a national digitalisation strategy, or the effort around the mining and ocean economy in South Africa in the past few years.

Some of these organisations are created to enable international trade. An example is the South African National Accreditation System (SANAS) and other organisations involved in South Africa’s technical infrastructure. Other domestic organisations could be created to support a shift in the economy through a supply-side focus, such as the National Cleaner Production Centre, which provides technical support and training to the manufacturing sector. Programmes and functions established through industrial, innovation, education or technology policies should also be assessed as part of the framework.

As we started identifying and mapping the meso organisations, we realised that two critical types of actors were not captured by the typology we created:

  • Private actors that provide public goods or mixed goods, such as technology demonstration, training and the provision of technology modules in open-source formats. For instance, Siemens in South Africa provides demonstration facilities and accredited technical training courses to the public.
  • Intermediaries or facilitators in the system that broker relationships between different meso organisations and other actors. They may do this as part of another mandate, or they may be set up for this purpose. For instance, in South Africa, there is a huge education crises. A range of non-governmental organisations has emerged that provide important services to the marketplace and the public sector. Many of these organisations conduct research, provide lecturer training, develop training content in open-source format, mobilise public and private stakeholders into collaborative projects and provide public information on shortcomings in the education system. These organisations are critical to overcome coordination failures and to strengthen information flows between different actors in different spheres of society. However, in a typical meso mapping exercise these, organisations could be overlooked or ignored because the public sector or development cooperation partners may see them as interfering in functions that should be provided by the public sector.

International organisations, consultancies and programmes should also be considered in this framework. For instance, as part of executing its commission with various clients, Mesopartner often plays an intermediary role connecting various meso organisations, policymakers, researchers and leading firms to strengthen dialogue or joint decision making, or supporting collaboration. Other organisations that advise industries and governments and create publicly accessible advisory content should also be included.

A challenge that many developing countries face is that meso organisations have to work hard at creating capabilities that should have already existed five years ago, while trying to keep abreast of new international and domestic shifts that require new management capabilities, human resources, technologies and strategies. Not only the private sector can be overwhelmed or paralysed by competing technological choices, but public sector management can suffer the same symptoms. This means that in the framework provision should be made to differentiate between basic (or fundamental) offerings and future-oriented or more advanced offerings. This is not an additional kind of organisation, but it could be different functions provided by the same organisations

While some organisations may be more important for improving the productivity and competitiveness of incumbent firms, others may be more relevant for lowering entry barriers to new start-ups and investors. Even if new start-ups lack market access or technological experience, in a dynamic environment their different knowledge and unique technological capability may put them at less of a disadvantage than the incumbents.

Some meso organisations may be hard to classify because they offer diverse services to different beneficiaries. For instance, universities often play an essential role in lowering the costs of gaining access to new knowledge, codified knowledge and research. At the same time, a university may offer industry access to scarce equipment on a pay-per-use basis, while a university laboratory may offer certification or analytical services to another research group. Or a research programme based at a university may be a sophisticated client to a private enterprise that specialises in advanced equipment, while the same enterprise may be dependent on post-graduate students from the university. Some of these relationships and interdependencies are impossible to map without deep insight into how knowledge, technological ideas and people flow between organisations in the public and the private sectors. Yet it is possible for the same organisation to show up in different typologies, in different markets served, or in multiple roles.

Next year we will have to try and figure out how to map these organisations without making it overly complicated and difficult to use, maintain and adapt.

Notes:

This article is an output of our Mesopartner research theme on technological change and the changing role of the meso landscape. For more information on this theme or to become involved head over to the Mesopartner Research Theme page.

To stay abreast of my research, please sign up for my personal newsletter here.


Dr Shawn Cunningham

Sources

CUNNINGHAM, S. 2019. Identifying the Meso organisations that strengthen technological capability. Mesopartner Annual Reflection 2019

OECD. 1997. Diffusing technology to industry: government policies and programmes.