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Healthy culture, healthy network

The biggest problem we face with value networks is that they are part of a new paradigm. The term ["paradigm"] is used here with its meaning given by Thomas Kuhn.

The value network model transcends the basic socialism-capitalism dichotomy of standard economic thinking. Even if we provide someone with tools tailored for value networks he will not know what to do with them. It's not just about the tools. This is not just about social networking. This is not just about collaboration. This is not just about sharing. It's a complex combination of all that and more.

As we develop a new economic reality based around value network models, we are also developing a new language to talk about them and a new culture that goes with them! In order for value networks to be adopted, people must first understand what we are talking about, they must "see" the things we are referring to, and they must be able to use them, which requires more than just understanding. In fact, it is the practice of a new culture.

Why is culture important?

Culture is our social glue. Choosing to participate in value network model of production is more than adapting to a new work environment. It is more like emigrating to a different country. Changing cultural settings is VERY different from changing a job. We are talking about very different social settings, with very different internal dynamics and values, which reinforce their own ways of thinking, their own cultures.

Because of the cultural factor value networks must form and grow organically from a seed value and "social DNA", one participant at a time. Seed value embodies the most powerful set of incentives present at this moment and catalyzes network. Social DNA establishes cohesion and mutual regard - the lasting spirit of collaboration over competition. One by one, new contributors will "emigrate" to this new promised land and gradually they will form a new socio-economical system.

The cultural particularities discussed below need to be coupled to the Reputation system, which is in turn connected to the Value system.

From Designing the Void (Matt Black Systems)

Leadership and Culture

Leadership and culture are the current focus of much of management best practice. But while a leader gains influence by setting standards and crafting a persuasive message, just how effective is that kind of influence on the front-line? After all, rules can be laid down to determine behaviour, but they can also be broken … and frequently are, in very ingenious ways. It is fashionable to talk about the primary role of the leader as the shaper of culture. The assumption goes; with the right rules andmessage the culture will capture the hearts and minds of the workforce and they will automatically do the right thing. But culture is a much more personal phenomenon, it is naïve to believe it is subject to such simple and direct influence. Certainly people are reactive and adaptive and will explicitly convey the impression that the message from leadership has been loyally embodied. But the truth is more subtle. The situation is analogous to teaching a parrot to “talk”; when the parrot says “who’s a pretty boy” it is not embodied “language” that is occurring- the parrot is not making a considered expression of its inner conscious landscape; there is no embodiment of meaning. The parrot is simply repeating a noise because it is rewarded to do so.

The Nuances of Culture

Culture must be understood in a more sophisticated way. Culture is like climate- it does not exist in and of itself- it cannot exist in a vacuum, it must exist within a medium. Culture is to be found in the interaction between people and with their environment- it is always within this context. Rules and message are the conventional tools used to shape culture, they rely on the over simplified premise that constantly repeating a mantra and controlling behavior via explicit rules will embody new cultural norms. Unfortunately the result of this naïve approach is to overlay a culture with further complexity in both language and behavior; it simply conditions new responses- parrot fashion. These visible changes can be considered a veneer that obscures the true nature of the underlying culture. It is an illusion that leaves the presenting culture fragile and fickle; subject to sudden U-turns and dislocations. Incompatibility between the presenting culture and the underlying one provide a great source of tension. A single incident or series of trivial incidents makes the presenting culture appear to undergo dramatic sudden change. The truth of course is that when tension builds to a critical level it takes just a small perturbation to burst the bubble and the hidden culture reveals itself powered by the considerable pent-up energy.

Social Design

For Julian Wilson this is unapologetic social design- even if indirect. Consider again the idea that for the health of an endangered species; the conditions in their habitat must be just right. In business, the work environment can be considered analogous to this idea of habitat. This perspective contrasts with the command-and-control environment employed by conventional business to shape the behaviour of their staff. Specifically, it is the design of an effective and nurturing work environmentthat provides the canvas on which the culture is writ large. A healthy environment is one that provides a blank canvas; it should be invisible in that it allows culture to be expressed without taint. The culture is fully revealed on this inert canvas, for good or bad. In common with an artist’s canvas, the work environment must be reduced to its most simple objective form- subjectivity being kept as far as possible outside the system and in the realm of reality. This sort of business redesign peels away the trappings of the dysfunctional corporate environment, letting in the fresh air of reality, applying it in direct ways to the individuals within the organization. The over-arching, high-level obligations are applied to the organization via contractual and legal terms.

But it is these obligations that the traditional corporate model separates out into functions and then parcels off to distinct groups. The effect is that a clear sight of these ‘higher’ obligations by the people at the front-end is obstructed. The overall sense of responsibility is not transmitted but gets lost in the distortions, discontinuities and contradictions inherent in the corporate systems of hierarchy and functionalization. Most business books do little more than attempt to provide tools for the transmission of the various separate aspects of these high level obligations. The task for the individual director is then to ensure he has ALL his obligations translated and that his tools neither overlap, leave gaps, or conflict with each other. But doesn’t it make more sense for every member of staff to be faced directly with such a holistic responsibility?

Bounding not Binding A culture constrained by such a crafted environment has proven itself to be far stronger and more robust in its tolerance of large perturbations. The innumerable direct links back to an external reality -like the fragile ties that bound giant Gulliver, seem much more effective at aligning the presenting culture and the underlying embodied culture, and in doing so work to remove the existing tension. Those aspects of their embodied culture (vision and values) that are at odds with reality must be directly confronted by the individual otherwise they become explicit obstacles to success. Returning to the habitat analogy- a healthy habitat results in healthy animals within; and healthy animals are far more resilient in the face of perturbations.

With a culture that responds directly to reality, the rules in the environment can be “bounding” rather than “binding”- limiting rather than instructive; this way individual behavior need not be directed at all. The goal is to free the individual to express himself fully through his work, bounded only by the limits of the law. With clever feedback (self-referencing feedback loops) integrated into the design, the individuals can themselves grow to collectively take charge of the system boundaries, culture and even the environment itself, always minded of the inherent risks they are balancing, leaving the law of the land as the sole artificial boundary.

If one wants to put it unkindly, this is an unapologetic process of social engineering but arguably no more so than the conventional company, which, instead of rewarding enterprise, trains compliance by suppressing individual initiative under layer upon layer of translation tools.

Associative Behaviour Put more positively: when one realizes that a business is primarily a social institution one can apply new perspectives. One might imagine that the primary focus of attention on the individual at Matt Black Systems is akin to a “divide and conquer” policy. However they are at pains to point out that their system is designed only to apply accountability to the individual not command-and-control. They maintain that without the divisive and overbearing management cabal the natural reaction of humans is to combine their efforts - we are after all a social species. Companies that put effort into promoting teamwork inadvertently reveal just how little natural, healthy human behavior is expressed within their culture. They are also usually companies where IT constrains and controls every activity through pre-determined process.

Aspects of network culture

Documenting work

Members should understand that documenting their contributions is in their interest. The role of the value accounting systems is to capture the contribution of every member. Thus members are required to log their contributions (in time, in materials, etc). All contributions are subject to peer-evaluation in order to attribute them a score of value, which is translated into fluid equity, resulting in a % of total revenue generated by a particular project, whenever deliverables are exchanged on the market. A good description of a contribution, done at the time when this contribution was made, provides more material to help in the evaluation process. It is thus in the best interest of all members to leave well-documented traces about their involvement. This is ONLY the responsibility of contributing members. The incentive to diligently provide documentation is simply related to the fact that well-documented contributions have a higher probability to be well-evaluated by peers, which will result in a higher recognition.

Another argument for good documentation refers to the internal dynamics of the value network. The magic happens in the space between members. A well-documented contribution of one member, shared across the network, can stimulate other members to carry the work further. If I perform some research, this has personal value. If I decide to write a summary and share it, I provide real value to the network. The summary clearly has value, because it allows others to absorb the same knowledge faster and to turn it into tangible value for the network. A contribution must leave behind something that can be shared, someone else can build upon.

In the long run, sharing our work to allow others to build on it also translates into enhanced reputation and a greater influence, because the contribution spreads through the network and can get embedded in many deliverables. Showing that you are doing something of value has an impact on the morale and on the energy of others. Energizing the value network is in the benefit of all members.

Signaling achievements and advancements

A glocal value network like SENSORICA coordinates most of its activities in the virtual space. This means that there is a lack of direct/physical contact between collaborators, and thus a lack of various meaningful cues, which serve to build awareness, to create a sense of teamwork, to create a sense of progress, to stimulate us be be more creative and productive, to tell us that there is something going on in this group... When we share the same physical space, when we are in proximity, these cues emanate from us and come to us naturally, effortlessly. When we aren't, we need to make a small effort, we need to be more conscious about it, we need to actively signal our activities and progress, to fill this virtual space with activity, to build awareness, etc.

Giving a medal to a soldier has a profound impact on the individual. This ritual also affects the entire army, seen as a distinct community. Simply saying “thank you” to someone, or publicly acknowledging good results, is a lower intensity ritual of recognition, which again, affects the individual concerned, as well as the entire community. There is no doubt that recognition plays a BIG role in harmonizing and stabilizing value networks, and in making them more creative and more productive. Publicly acknowledging and recognizing each other's work is a good practice, as long as it doesn’t go too far, to hinder constructive criticism.

It is important to distinguish between a ritual for recognition and a rite of passage. A value network is a self-organizing system. It does NOT rely on relations of power. The organization relies solely of value-based relations. Roles are emergent patterns of activity. They are dynamic. No one has the “right” to decide for others or to make other do something against their will. So there is NO rite of passage in SENSORICA. Giving someone recognition for something should NOT raise this individual on a pedestal forever. The reputation and the role of an individual within a value network is are very dynamic, they must be constantly maintained by the individual, they are volatile characteristics.

Rituals for acceptance and inclusion

Becoming an active member is an automatic process, whenever someone logs a contribution in the appropriate format and location, this contribution may be endorsed by others as adding value to the network. We probably need to think about some form of ritual, to mark the passage. This can be orchestrated by someone who takes on the role of animator. There should be some sort of formal agreement... at least an acknowledgment of responsibilities. What is the degree of openness and transparency? We need to tune that knob. I believe in keeping some things private, but not protected. Whoever needs to look at them needs to present him-/herself.

Constructive criticism

Important! We should all accept constructive criticism. We should encourage others to provide constructive criticism. We should understand that the network as a whole is wiser than us, individuals. We should understand that we are always limited and biased, and invite others to help us broaden our views and understanding. Everyone should understand that everyone else part of the network is on a personal growth journey. No one is perfect. There is nothing bad about not knowing something. Hiding our weaknesses is limiting the ability for others to help us to improve. Reproach

The cohesion of a value network is insured by attraction, NOT by confinement as it is the case in a corporation. No one is obliged to do anything within a value network. We cannot reproach someone for not doing enough! Everyone contributes as much as they can and want. We should understand that any valuable contribution to the network is is a step in the right direction. If the network cannot generate powerful incentives to have members contribute more that’s a problem of the network itself, not of members.

On the other side, any member can reproach another member for a mismatch between expectations they have set and the actual contribution delivered. In other words, if an active member promises to do something within a period of time and this promise is not kept the reputation of this active member must be affected. It is acceptable to publicly reproach this individual for the mismatch between the expectation set and the actual contribution delivered as long as it is done with respect and in a non confrontational manner. This can be seen as a constructive criticism.