Friday, 2 May 2008

Friedman's 3rd Globalization: Complexity is Opportunity!

Posted by: Ash Khanna

For a successful knowledge worker ‘complexity’ is an opportunity!

In the knowledge economy, business is a ‘servant’ (i.e. to provide a ‘service’) of complexity. Success implies fuelling the complexity of the competitive environment, - which is on an exponential growth curve because of rampant ‘innovations’ in physical technologies, social technologies and successful businesses, not despite them.

Innovation is nothing new. We are simply more aware of it. Similar to the affects of shipping routes, and the road networks; the emerging, pervasively networked (i.e. ‘conversation’-dense) environment is bringing people together. In effect we are irrigating ideas and creatively farming triggers at rates unprecedented in human history.

Innovation, the ‘hunt’ for value, is the engine for ‘growth’ (as in creating NOT as in grabbing 1% more of)! Let me elucidate.

What is called ‘financial innovation’ today has its roots in the 1970s – 1980s [i.e. the 1st mortgage security department on Wall Street at Salomon Brothers; and the high-yield (junk) bonds of Derxel Burnham (aka Michael Milken)]. The current ‘avatars’ are (the infamous) structured finance products like CDOs, CMOs, etc. – “the credit crisis”. The products may be in trouble but the ‘phenomena’ is sound. They were ‘democratising capital’!

‘Peer-production’, mediated by the ‘Internet’ and other ‘Interactive Digital Media (um)’ are being more audacious. The phenomena being invoked: “democratising innovation” (von Hipple) or unleashing the “wealth of networks” (Benkler)! And it’s here to stay.

The ‘opportunity’ is that potentially good ideas come the way of and are experimented on by motivated individuals or small groups (within or external to the firm) at a far greater pace than the typical (industrial mode of production informed) institutions and organizations can infer the opportunities let alone act on appropriating from them. Further, the socio-business environment is extra-ordinarily (and for some uncomfortably) optimistic. Because of the emergence at this level of granularity, competition is ferocious!

This necessitates a radically enhanced capacity to include complexity in the ‘art of organising’. The source of this complexity is the quest to achieve effectiveness in intellectual activity based transactions - a difficult (i.e. “complexity catastrophe”) and expensive [i.e. dead weight losses like lawyer costs and other market distortions, caused due to the non-rival nature of the primary input and output (i.e. information)] task for older, scaled ‘structures’ to appropriate value from.

This is not a result of the failures of business leaders but a result of their successes, which has facilitated the inclusion of over a billion more people into the global economic system - that they have till now so well ‘commandeered’.

But guess what? ‘War’ is dead! - (Another “success disaster!”)

The shift from martial, command and control, towards the opportunistic, self-organizing of collaborate and coordinate, is not an instance but an inevitable evolutionary trajectory. The sobering message is that innovation is and has always been about the creativity, talent and the resourcefulness of people!


Ian Angell and Ash Khanna said...

Hi Ash

You say "The sobering message is that innovation is and has always been about the creativity, talent and the resourcefulness of people!"

But by 'people' don't you mean inspired individuals and small groupings.


Ashutosh said...

Hi Ian,

That's what the write up suggests.

But this does not imply that all 'people' should be "inspired" across the 'spectrum of potential'.

For example: Prashant's intrigue is technology-in-operation and Govind, business potential. If they can 'communicate' and 'self-organize', then their "unique inspirations" (with convergent objectives, NOT necessairly same) may lead to "an experiment".

Actually I prefer the word 'motivation' not 'inspiration'!

take care,

Govind said...

Hi Ash,

Now that you are 2 blog posts old, perhaps its time to complete your profile information :)

That aside, I guess motivation requires inspiration - this could come from solely within but mostly I believe, inspiration is a response to some external stimulus - like the way Prashant and myslef inspire from Ian and your 'Gyan' (knowledge) , teaching and ur enthusiasm to say the least- and get motivated to pursue "innovation".

Referring to something I wrote last year ....
Religion in its true sense is about discovering ourselves. The Vedanta insists that man is essentially perfect and therefore infinite are the possibilities that lie lurking in him. It should be our dharma to stop questioning how much talent each one of us has, but how much of our talents can be explored , developed and exploited.

This exploration starts with inspiration - the first kick in the rear side - to look beyond our weaknesses towards understanding our strengths. Once we realise our potentials ( inspiration and motivation being catalysts) we recognise our resourcefullness ...

Govind said...

Talking about opportunity, now that you are in India and you were keen on getting reaquainted with the Desi business flavour ...this might be a quick refresher guide

"Key success factors for doing business in India"

Ashutosh said...

Hi Govind,

I guess u might be right. But the point I was trying to make in this blog was in reference to 'activity' and that is 'motive' driven!

"What motivated?" is beyond the scope of this blog - and like you have, plunges into philosophies.

You may be 'inspired' by the Vedic philosophy of 'dharma', someone else equally by opulence and wealth. (I'm sure there is some philosophy that justifies the pursuit of that!) - in that case (s)he is 'motivated' by money! (and that is as good a motive as any)

The point is are the two of you 'motivated' enough to do something about it and further can you 'communicate' and hence work as a team!?! (Can you compliment each other as Guy Kawasaki highlights)

Hence I wrote
"motivated individuals or small groups"

Further, your comment: "and get motivated to pursue "innovation"".

Does not make sense to me!

You are motivated to pursue an evolving (refining) objective. (e.g. medical-peer-network)
What you do end up with (the output(s)) as a result of your activities, if successful, might be 'termed' an 'innovation' in some research or report!

take care,

Govind said...

I guess i should have said 'idea' rather than innovation ...