Open Innovation: Cracking the black Box

We are opening the Black Box of innovation. In fact, social media is forcing many black boxes to open based on a more free way of making large scale conversations. Open innovation is part of this movement. It is not only a matter of amplifying the search for ideas or the interaction with clients and suppliers. Open Innovation is part of a greater movement, of a Zeitgeist based on open creative fields. But what does this new concept tell us? If there is open innovation would there be a “closed innovation”?

Black Box Instalation by Tom Friedman

Last month we had a Conversation Jam sponsored by Dobra on this theme and our guests were Caspar Bart Van Rijnbach and Caio Vassão at JuntoSP coworkin.

 

“Closed Innovation”?

According to Caspar, this closed concept of innovation comes from Industrial Revolution, and the creation of the intellectual property is its cornerstone. This vision was dominant at least until the 1990s, when the greatest reference on innovation was 3M and its ultra secretive product development process.

A strong opposition to that idea only emerged after free software. Richard Matthew Stallman, or rms, founder of the movement preaches that all information wants to be free. But that started only in 1985, getting stronger during the 1990s and being crowned with the Cluetrain Manifesto (1999), that introduced the “open” philosophy in the business environment via marketing.

So the idea that a highly innovative production system can be based on the absence of intellectual property is very recent. It generates a radical inversion: those who do not open their innovation process are losing time. Sharing multiplies knowledge and thus makes new possibilities emerge.

 

Why Opening?

Caspar also stated the difference between open innovation and open ideation. The open ideation shares, and therefore opens, problem solving or idea generation processes of an organization, but the greatest impacts of open innovation do not come from this type of initiative.

In order to access the greatest benefits of open innovation, it is necessary to think about how the business strategy develops over time, understanding why and in what level it makes sense for the company to be open.

 

Lessons from free software

The development of free software is based on the voluntary engagement of talents to solve problems in the benefit of a community (of users and developers themselves). There is no money involved, but anyone can use it. “Do your best and be recognized”. Self motivation is the key and reputation is the necessary consequence.

But are organizations prepared for this type of self motivated free engagement, at least on innovation matters?

Are organizations able to foster the intelligence of their internal networks?

From a people management point of view this is a radical idea that shakes systems such as career and performance management, to say the least.

 

Innovation and Motivation

For Caio Vassão, the central theme is: what motivates innovation inside a company? How are innovative ideas validated?

But we can go even further: a key challenge to the open innovation process is to listen to innovation perspectives brought by partners from outside the company´s boundaries.  Does the organization let itself be modified by its network? Or is it going only as far as its own questions allow?

According to Paul Pangaro, variety is one of the most important conditions for innovation. Activating this variety in a collective creative process is a big qualitative leap for innovation networks. Caio Vassão argues in the same direction: innovation is a change in the ontology of the organization. It refers to the categories the company uses to organize its processes, its relationships and the routine discourses. The ontology determines choice mechanisms that can limit or amplify the variety the organization accesses to innovate.

Ontologies in a network are emergent. It is very complex for an organization to deal with them when its planning and management systems are based on pre existing taxonomies. Conversation usually goes around “growth pillars” and “strategic vectors” everyone should follow.

At the same time, there is enormous potential to that. There might be many innovation possibilities that are just not perceived by the mental model and the installed conversation patterns.

 

Innovating is dealing with paradoxes

So it seems that innovating in an open way means dealing with a fundamental paradox: being connected to what emerges and, at the same time, being able to make sense of it through strategy.

Since the ability to deal with paradoxes is one of the fundamental properties of complex adaptative systems, it seems we are getting somewhere. That is how it works in nature: clarity of purpose and deep connection to the environment at the same time.

 

A new mindset

An interesting view was presented by designer Ihon Yadoya at our Jam: “I don´t feel limited by the work environment. Innovation opens itself naturally when we solve our problems.” For those who think that way, the company is not a limit. Openness is inherent to innovation, something that is always available when we need it. This is an important mindset change. From the individual´s point of view, there is no closed innovation.

For those who work in connected environments, an idea generates a series of interactions and compositions. There are no boundaries to this. One more challenge for organizations facing the so called Y generation, one that lives in remix, and in eternal beta.

“Ideas belong to those that put them to action”- says Ihon. It´s as simple as that!

 

Who is ready?

The challenge is this collective authorship of ideas. And here some fundamental ideas on open innovation and strategy introduced by Caspar might help. He brought the example of companies that take part on the Battle of Concepts, promoted in Brazil by Terraforum. They are obviously worried about intellectual property.

But how do companies get ready for this new reality? Strategic thinking, says Caspar.

Kip Garland, brings his contribution and makes some important distinctions. For him, there are three levels of open innovation: sharing, building and decision making. Opening the decision process is the most complex level and sharing challenges is the less complex. Sharing refers to creating a collaborative network, building refers to bringing in each member´s strength and decision making… well, that´s where the greatest dilemmas are.

Caio agrees: making distinctions and choosing what to open is key. A reductionist view does not generate a process of collective construction. If the open innovation project is designed exclusively to profit from “Lei do Bem”, a innovation policy in Brazil, the benefits are reduced. The open mindset does not penetrate the culture.

Caspar presented the Phillips Innovation Camp case, which brings together many partners of the company to an environment where architecture contributes to make people meet and exchange ideas. There are no cars. An open culture emerges.

 

Shortening the thought-to-action cycles

Caio considers that open innovation is related to a short thought-to-action cycle. Somebody perceives a new reality arrangement, new ontologies emerge, unseen opportunities arise.

Kip brings the Visa Vale case to the table. The company was conceived by an ABN Amro Real bank executive who understood the consequences of a change in Brazilian regulation laws. In Five years, a 2 billion dollar business was created… outside the Banks boundaries. The institution could not evaluate the executive´s proposal of a new business when he was still an employee. It was a path that could not be analysed by the ontologies the company had at that point.

The challenge therefore is: how do we present business concepts that don´t yet exist? How are we able to listen to the proposals open innovation can bring? How do we distinguish what is relevant?

For the group that was present at our Jam, one of the most important answers is creating prototypes that materialize these possibilities. There is a certain simplicity to that: creating prototypes is storytelling to present ideas.

Caio suggests: then it is not a question of what we have to build, but of what we have to take away for motivated people to be able to present their ideas. It is about building open platforms and short cycles of prototyping inside and outside organizations, labs of new realities in which creation and action are closer and closer.

So much to do!

I Love Idea Jams!

 

All cconomy can be creative

We live in perhaps the most creative and serious moment in human history.

We live in an “era of abundance, but still carry the mentality of scarcity”. We are able to acknowledge the complexity of the world and also have the tools, the power and the desire to handle it.

This complex world is born out of unprecedented connectivity, growing information flow, diversity coupled with the prospect of unity, and a chaos that can lead us to disintegration or to the discovery of patterns that we could not see before.

We hurry.

We must hurry to preserve the planet, hurry to avoid further wars, rush to find conditions for the expression of individual power at work, leaving aside the terrible paradigm of pain as something that elevates the human being. We want to carry a certain smile behind what we do, not denying  pain, but knowing that pain is a state that can pass through us like the water from a river that knows its own destiny.

Love and pain, power and collaboration, we have no more time for plain oppositions,we want mixtures. We hurry.

Through the computer screen we seek good encounters. We desire to touch those who share the same vibe: it’s possible to love life without being too innocent.We can use all the technical, scientific and cognitive conquers in composition with the joyful, urgent and practical dictates of the so said Generation Y. In Y we have choices.

The desire of these new combinations will then inhabiting projects: striking actions, which pervade the world based on open listening and the contemplation of complex maps. Old ways don´t disappear by collapse, but because they become obsolete.

Wherever you are and whom you can talk to, you´ll hear the same story. We want a life that has meaning. Hidden under the tables in business meetings, stretched out on bar counters and on the drawings made by coaches and pupils, lies a project perspective that will enable the emergence of a new world. It is to these projects that we want to devote our energies.

We hurry. There never was so much inspiration and so many “loose” people in search of good agency that helps them to exert their power. There has never been so much pressure to melt together our knowledge, catalyzing authorless innovations that are born in “between”, born in relationships, but with collective authority and resources. Virtual and action collapse.

Innovation can then seem a magic word, a contemporary holy grail that everyone wants, but nobody knows where it is. It is so because innovation is the possibility that inhabits the present, it is the Zeitgeist, is all over the place for those who have eyes to see, ears to listen and desire to perform. To innovate is to make relevant changes to and from the networks we inhabit. It is a way of living in which an expanded and elusive present challenges us to act with consistency and to amplify the generation of value. Where cities, schools and organizations need an accurate acupuncture for small points of light to gain strength and overshadow what consumes us (and what we consume).

We live up to what happens to us, if we’re up to the present events.

All economy can be creative.

(this post was based on the recent events of CICI 2011, international conference of innovative cities, and The Network Society and the Creative Economy Seminar, sponsored by VIVO- in Curitiba and São Paulo respectively; plus infinite readings, links and posts that invade my life every day. It is possibly the most appreciative thing I´ve ever written.)

Holistic Approach to Learning

I´ve recently read the post by Frédéric Domon at the ecollaborative blog site. He describes in a very precise manner the origin and the consequences of the 70-20-10 approach to the design of learning strategies and budget allocation.

The concept is not new to me, but something caught my attention in this particular post. As Frédéric puts it: “Rather than think of these three forms of antagonistic professionalism, rather than leave the informal to other aspects of the company, the model should be thought of as the cornerstone of organizational development. As the Princeton group advises, imagine a holistic approach integrating both formal and informal. An approach that enables strong development of that 70% of experience learning, that takes advantage of the relational 20% and that designs using the yardstick of the 90% informal and 10% formal training.”

The word holistic here is not a metaphor. It means that learning professionals must consider the full experience and the learning environment to design and adjust their strategies. As a consequence, it is necessary to consider not only the 70-20-10 paradigm, but also the culture of the organization, the past experiences with learning resources, the available technologies, established KPIs for learning, the predominant leadership style, and so forth.

I´ll give an example to illustrate my point. Recently, we visited a big construction company who is facing a major problem on workforce education. Their need is not to build knowledge management nor to introduce some sophisticated new tool, their problem is plain and simple: they need to recruit around 4000 new professionals, such as masons and foremen in 6 months and there is simply no availability of those professionals in the region they are building their new operation.

Plus, in Brazil there have been some serious problems in big infrastructure constructions, including riots, because of work conditions and lack of systemic coordination of such constructions. Learning is only one of the challenges being faced by such companies.

Going back to my client, we´ve made a proposal that included utilization of the good professionals they have internally to start a learning program that had a very important informal component (since there is no time to format and deliver formal programs). The reaction was surprising. The HR person seemed not to understand what we were talking about and we had to present the proposal two more times. We had presented a totally unusual approach to learning! The culture and the environment in that company could not fully understand what we were talking about, and so our proposal was refused.

Sometime later, me and my fellow consultant sat down to chat about it. We had read on the paper about the problems the company was facing which were, in part, caused by their poor response to this kind of problem. But hey! We had also lacked a good holistic understanding of their learning environment! Mea culpa. We too had come with a readymade pill! We can´t just go and introduce the 70-20-10 model into the construction business of an old Brazilian company!

So that is my point: the great challenge of this model is not only to build learning strategies around this idea, with which I totally agree by the way, but having the sensibility to understand the conditions under which a certain system can absorb this idea.

When I read Domon´s post it immediately brought me back to my clients table, and the face he had when we presented our sophisticated thoughts. We are hoping to find open minded organizations and have good conversations to solve the problems we have in this country around education and learning. The model might be something we keep under the table.

What it feels like to be brazilian in 2011- a view from São Paulo

Here I am. The “studio like” heavy rain hits the window of my apartment, in São Paulo, from where I can see one of the golden towers of Paulista Avenue. I love to watch the rain.

São Paulo is the big financial Center of Brazil, and suffers from a double  trouble: it  accumulates the paradoxes of the country, but in many aspects can be closer to New York than to Bahia. São Paulo is like an island.

Surrounded by two extremely important Rivers, Tietê and Pinheiros, the city suffers with terrible floods. A total of 1500 km of rivers, streams and fountains where covered with the worst asphalt you´ll find in the whole world to form this huge traffic jammed city. Of course the rain water flows with some violence around here. Nature was buried in São Paulo.

But what brings so many people here? What makes it possible for apartments to have had an appreciation of more than 300% in 10 years? Why are so many Brazilians and foreigners interested in this mess?

In the city center, Bolivians where found to be working in slavery. The contradictions of the world are right here right now, but are mostly invisible. The periphery of the city is far away, and although there are poor neighborhoods close to luxurious apartment buildings, the situation is radically different from Rio. In Rio, the hills are so close do the shore (and to the more noble areas of the city) that is looks like the shanty houses are going to fall into the sea any minute. In São Paulo the situation is different.

According to IBGE Institute, in 2010 there were 20.309.647 million people living in the extended area of the city. A Photographer friend of mine, Iatan Canabrava, who has for a long time taken the periphery as the theme, told me of his sensation on a helicopter ride. As he got further away from the city center, the buildings were substituted by a brownish colored neighborhood of houses. Most of them are left unfinished and are not painted at all (although they have TV sets and now an amazingly great amount of web connected computers). As the landscape turns brown, police turns away and transportation becomes scarce. Ferraz de Vasconcelos, Capão Redondo and Itaim Paulista are places most of the medium class people like me have never visited.

In São Paulo, it can take a regular worker 1 or 2 hours to arrive at his destination in the morning or in the afternoon. And that applies to the rich as well as to the poor, except for those rich enough to fly helicopters to work, and believe me, there are lots of helicopters in this city, 420 to be precise. Traffic jams are literally in the air.

So, after building enough walls around houses and apartment buildings as to make them look like prisons, finally, under the heavy rain and in the traffic, we all are trapped together. Be rich or poor, we are part of the same fear and immobility.

At the same time, Sâo Paulo is one of the most interesting cities in the world. In his movie Blindness (2008), Fernando Meirelles pictures one of the most chaotic, and therefore spectacular views of the city, a viaduct nicknamed “Minhocão” (that could be translated as big worm). And so it is: nasty, crawling, fetid, but brutally vital for the city traffic. It is almost a metaphor of what São Paulo is for Brazil as a whole: a brutally vital ugly mirror.

But last month I finally went to Brasilia: an amazing experience. Incredibly blue sky, Niemeyer buildings vanishing in real estate speculation, a mixture pot of races, especially of people from the northern country. Brasilia is beautiful in many ways.

It was Thursday. Huge abandoned corridors and empty meeting rooms illustrated what the “loneliness of Power” means in the Congress building.  Power itself was alone in the building, with a couple of public servants and an army of waiters serving coffee from a huge “coffee factory” in the basemen that looked like a sweat shop.

Yes, there was a session going on. In the silence of the corridors, so much happens. But that is how it feels to be Brazilian. Even if all of us were to shout in those corridors, there would be no guarantee that we would be heard, except by deaf waiters who serve the people that are supposed to serve us. We have democracy, but not a democratic system. Everything is designed for the perpetuation of a system that does not help anyone taking a 2 hour ride to work for a salary of U$250 to have a better journey, a better life or pay lower taxes embedded on products.

Being Brazilian is not knowing how to change things and yet, smiling. It´s to have the desire to fight, but being too busy for it, it is to dance the dances of time while the Japanese sleep (or die). It is being Italian, Portuguese, African, Chinese and Dutch. It´s to dance a Gilberto Gill song that used to call everyone to embark the Express 2222, which in the seventies announced the year we would finally be important. Being Brazilian is suddenly being interesting to the world, and yet being so late for that. Our problems as are as ancient as they can be in the New World.

So we are late to get ready for the World Cup, late for the Olympics, late to be ashamed or lazy. Every Carnival tells us we are capable and ready.

Being Brazilian is also to know that, in the division of archetypes among countries, it is our job to be the big mixture pot of ethnics and ethics, the place where people run to when they are desperate for love or in need of a hiding place. It is being hope, and also a huge picture of frustration, it´s being the strange exotic brother of the tall blue eyed guy. It´s being more Dionysos than Apollo.

In a Matisse like dance, we are seen in the picture for the first time.May we know what to do next.



Metadesign and Innovation

On December 1st we had another interesting conversation here at JuntoSP, our coworking space in São Paulo. It was about metadesign but the innovation theme was brought up again, it seems to be what makes hearts and minds uneasy.

Ours guests were architect Caio Vassão and conversation designer Luiz Algarra, in addiction to some communication professionals, designers, executives, and partners from Dobra’s network as well. It was a really interesting mix of people.

Where does the term “meta” come from?

According to Vassão, the first term to use the prefix “meta” was “Metaphysics”. Legend has it, that it was a way to classify some of the books of prime philosophy by Aristotle, which had no name. As they were positioned after (meta) the physics books, the term metaphysics was created. But the word metaphysics has important consequences.

It refers to matters of ontology, namely, it belongs to the same category of thought we use to reflect about something, adopting the position of an observer of our own lives: a meta-position.

For me, Humberto Maturana´s question: “how do we do what we do?” is the great and powerful meta-question. We can ask ourselves about how we do physics, how we work or how we design the spaces we inhabit. “The metadesign is the project’s own design project,” says Vassão.

He gave the example of the program METAFONT, a publishing system that, as the name says, programs fonts. The person who programmed the system to program fonts, was a metadesigner.

It’s as if life had layers and we were rising and rising to increasingly higher levels to observe what we do. These layers, Vassão says, are levels of abstraction. Being a Metadesigner is to place oneself in a higher level of abstraction to reflect upon the reality being created.

Metadesign and complex systems

When we face complex systems, as an organization or a community, for example, we can’t create a closed project.

The system is constantly changing and adapting. Metadesign then creates an environment of decisions made of few basic guidelines, criteria that make life easier for those working within the system. These criteria are not control parameters, but operators to guide action within the system which are validated (or not) by use.

The principle behind it is that simple elements can generate complexity. Reversing this reasoning, we may say it is possible to find the simple elements that build a complex system. The Metadesign seeks to identify those simple elements a posteriori, creating what Pierce called opportune categorical system.

Shared criteria for operating in a complex system: it is easier to say than to define them, but they can help us give a positive answer to the question “is it possible to project complexity?” If we think about working and learning contexts, this is a key question, since the growing connectivity and availabity of information increases the complexity of the systems we operate in. It is a great temptation to simply categorize and cut the system to pieces to understand it, with great risks of ending up with inadequate analytic answers.

Algarra pointed a critical distinction: what makes us human is that we talk about these criteria or ontology. This is one of the foundations of the collective intelligence concept, which rises in Bateson (Steps to the Ecology of Mind) and is further developed by Pierre Levy.

That might sound harsh, “headstrong”, ultra-reflective, but then another interesting concept was brought to stimulate the conversation: the homo ludens. According to this concept, the basis of culture is a play.

Then what makes us human is our ability to play with concepts and ontologies, to play with the design of how we live what we live. Playing is an essential, yet overlooked skill because it leads us to revise, combine and generate concepts creatively.

We lead the life we are able to perceive and talk about. Playing with concepts that underlie our lives would be metadesign.

From this point on talking about innovation was inevitable.

What is innovation anyway?

Algarra brought up Maturana, and proposed innovation emerges to save something we want to conserve. We want to conserve a way of life, the possibility to have affordable energy, the possibility of dealing with scarce resources and yet have comfort; we want to sustain the business of an organization. Actions, ideas and changes are articulated on the basis of what we want to conserve.

Vassão suggests: innovation is manipulating ontologies. We can do it top down from pre-defined categories or bottom up as we watch the events and create ontologies from this observation. For Vassão, this second path is much more innovative.

So innovation would be “to confront the cognitive boundaries of the reality that we build.” I´ve  twitted this statement of Vassão´s and Paulo Ganns (@ pganns suggested:) “Breaking instead of confronting?”. Well, maybe innovating is “dissolving the cognitive boundaries of the reality we build.”

But why innovate? Where does this desire come from?

Again we returned to the point of the previous meeting: the reason why of innovation.

We discussed two opinions about the origin of our motivation to action: the reaction (negative motivation generated by a  perception of error) or affection (according to Deleuze, affections are our real drivers). People who work with innovation know it very well that there is a big difference between these two motivations!

Innovating in response is not the same as innovating in search of a path built upon affection and desire. It is much more difficult to generate radical innovation from the first path, when the decay of something is imminent, but, yes, there are many who only get moving in this kind of situation. We are inside the box.

Then someone says: we live in alienation, we lack awareness of where we are, and it is difficult to be connected to one´s own emotions when we’re trapped in this kind of place.

Think outside the box? What box?

The box would be this ontology, these categories of thought that inhabit us without our being aware and determine what we can see. A metadesign conversation opens these boxes and these categories to reflect and play with them. As Maturana would say: Do I want to conserve this way of thinking?

Is Innovation always a good thing?

That got us into a conversation about the binomial innovation x ethics, and about how we think of innovation in a complex system (the communities where we live in).

In a complex context, an innovation unleashes a series of systemic reactions. Vassão reported the case of the pocket car project in which he participates.

Thinking about a new type of car means rethinking the entire production chain of the car. If the engine is oversimplified what will happen to the jobs of steelworkers who make engines? If the cars are shared, what will happen with the insurance companies?

As consequence, we can consider that the real challenges of innovation begin, in fact, after a new product or action is launched. Innovation needs will be multiplied by the actions we have to take to deal with the systemic consequences of that launch.

How do innovations emerge in culture?

Innovation irradiates through new concepts that will penetrate and spread in a given culture. It may be a new product, but it may simply be a new concept with which we begin operating.

Someone asks: does it come from a new need? Or we create new needs?

Who needed the cellphone before it existed? The need seems to be more of a consequence. The innovation arises; we become accustomed to what it provides. From then on the need emerges and is nurtured.

But innovation goes far beyond product, services and processes. It may simply be a concept, a new way of living. (The term “to stay” – for example, was created less than 20 years ago to name faster forms of love relationships – in Brazil at least).

These easily replicable concepts that change our lives are memes.

Thus innovating is agencing possibilities. If you do not understand it yet, do not worry, if you are curious about it, read a bit of Deleuze, but let´s make it simple: possibilities are vectors that are available, someone or something finds an intersection or a new combination of these vectors, and voilá here’s the innovation.

Being attentive to the events that emerge around us without categorizing them a priori, allows us to think of new ontologies.

Innovation is experimental, says Vassão.

Yes, we live in Beta.

Mariana Gogswell, another colleague places: “How can we develop the emotional resources to live like this?”

Good question! We´ll stick with this one and reflect upon its consequences to education, learning, smart work and innovation.

Social currencies increase employment and income in Brazilian communities

Inspired by The Future of Money Project, we have translated the present article from Mercado Ético, originally written by Naná Prado, from Instituto Akatu. Special thanks to Christina Carvalho Pinto and Henrique Carvalho.

We all know the dollar, the real, the euro. But have you ever heard of the Apuan? And what about ‘freires’, ‘sampaios’, ‘vistas lindas’ or ‘moradias em ação’, do you know? They are the five social currencies accepted by the trade in some communities in São Paulo since last year. This means that in some neighborhoods the Real ( the official brazilian currency) is not the main currency.
In Jardim Filhos da Terra neighborhood, in the north, traders have accepted the Apuan. In Jardim Maria Sampaio, in the south of the town, the currency that circulates is the Sampaio. The Freires are accepted in the Jardim Inacio Monteiro, in the east, the vistas lindas in Jardim Donária in the west, and the Moradias em Ação in Jardim São Luiz, in the south.
“The social currency is very important to the community because it makes wealth circle around the neighborhood. This happens because it is accepted only by businesses enrolled in the district Community Bank, enabling those enterprises to make the exchange of social currency to Real “, said Diogo Jamra Tsukumo, coordinator of the Solidarity Economy (NESOL) at University of São Paulo (USP).
The Community Banks are projects that support the popular economy of  communities with low Human Development Index and provide solidarity financial services in a network of associations and communities. In addition, community banks operate to generate employment and income by promoting the social economy. The community banks belong to the community, which is also responsible for its management.
Tsukumo says that the social currency allowsa greater circulation of wealth in the community, increasing numbers of economic transactions and enabling local economic development. In this respect, both residents of the community, who get access to credit, and local businesses, which gets more clients, win.
“For many people in the community, this project was a dream. Now everyday we see an improvement in the self-esteem of everyone, “says Hilda Pires, manager of the Apuan Bank, created in June 2009 as part of the Housing Development. Hilda is part of the Landless Movement for Housing in the north of Sao Paulo, which has the support of the Technological Incubator of Popular Cooperatives of the University of São Paulo (ITCP / USP).
Just over a year after the establishment of the Bank Apuan, Hilda is confident that the community is reaping good results, “today we have a sewing cooperative in full development, a cooperative of cleaning products and once a month we conducted a fair to sell all products made by the community. ” But none of this would be possible without the bank Apuan. “In addition to local development we have increased the demand for jobs and, consequently, the income of residents as well,” concluded the manager of the bank.
Throughout Brazil, there are currently 51 social currencies. They do not replace the Real – the idea is that they work in a complementary way to the national currency, developing local economies. For this purpose, they must have real backing , which means that for every amounty of the social currency there must be a real currency saving. Recognized by the Central Bank, the social currency needs to be created in communities with a well structured neighborhood association.
According to the coordinator of the Solidarity Economy of USP, the currency is an instrument of exchange and it is important to boost its circulation and reduce the idea of accumulation. “The social currency creates and recovers the identity of the community, enhancing local production and generating development in all senses of the word in a given community,” he says Tsukumo.
The social currency shall not prevent a bank customer who was benefited from a consumer credit (in social currency) to spend this resource on any product that is available the neighborhood. This means that the consumer does not necessarily need to buy any object produced by the community. He can buy any product offered on the market or nearby pharmacy.
For the coordinator of USP, what really guarantees the responsible consumption of products is the educational process and cultural transformation that occurs with the implementation of a Community Bank and a social currency.

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Tsukumo believes that a process involving campaigns for local consumption and support of solidarity economic enterprises is an interesting way for future sustainability and conscious consuming in communities. Combining these points to productive and to actions by the credit agent, enterprises can offer alternatives to the consumption of neighborhood residents.
“The system also has an identity function, it allows  people to consume in the neighborhood where they live, using a currency that has the name of the neighborhood,” says Tsukumo. To encourage the public to use the social currency, traders call for discounts. This way money is getting in the community. “The more money staying in the community, the more it will circulate internally and will generate more wealth. The more times it passes from hand to hand, the more you will be creating value and wealth. “
Besides discounts, maps of consumption and production to evaluate consumers needs versus local production is made to foster the growth of the use of these currencies. The community also organizes forums to discuss issues such as interest and guidance of community banks in granting credit.
Tsumuko believes that the potential growth of these experiments is as large as the number of communities in Brazil and worldwide. “Even more now that the Central Bank at the end of last year, has created a working group by an agreement with the National Solidarity Economy Ministry of Labor and Employment to study these innovations, publicly acknowledging the importance and value of these initiatives for the development of communities and the country, “he argues.

Did you know?
The first Brazilian community bank was Palmas Bank, which appeared in 1998 in the Conjunto Palmeira, a neighborhood on the outskirts of Fortaleza. In 2003, the community organized itself and established the Palms, which is now responsible for the opening of most community banks in the country, among them those in São Paulo. The expectation for the next two years is that 100 community banks to be created over throughout Brazil.
- Ceará is the state that focuses more on social currency. In small municipalities, they can be used in the whole city. This is the case of Acaraú, Tamboril and Paramoti.
- The social currency also exist in other countries. In Argentina, they came to reach nearly 1 million people, after the 2001 economic crisis.

5 Reflections on Open Innovation

What is the big buzz about open innovation? What’s the big change? The subject was discussed at the Connecta 2010 Congress in São Paulo and at Stefan Lindegaard´s workshop (during The Hub SP Winter School). It´s been approached in books and web communities and accounts for more than 12 million links at google search. Here are some thoughts about the theme from the last few weeks.

1. All innovation is open. This conception was clear both in the speech of Matthew Heim, CEO of NineSigma, at Conecta 2010 as in Stefan Lindegaard´s.

Today open innovation has become a “buzz word” because new online tools have opened up possibilities that where not devised before, but in a few years all innovation will be open, or connected, as Jeff Bellairs, director of General Mills worldwide Innovation Netwwork, puts it in Lindegaard´s book. In addition, all innovation has always been somewhat “open”, since it requires a huge range expertise to be implemented. The mith of the Genious is far behind, we all know innovation is in most cases a collective achievement.

The difference nowadays is the availability of new mechanisms for building conversation networks around innovation. There are far more sophisticated ways of searching, connecting and managing such networks. Any company that has a well defined innovation question, a good “Elevator Speech” (making its innovation vision clear) and the right tools can have access to virtually any connected professional in the world. (That is not enough to keep an innovation network alive, but it might be a good start).If each person is a portal as Augusto de Franco put it during Conecta, the possibilities are endless.

So although basic characteristics of innovation, such as the need to coordinate a diversity of players and the inevitable stumbles inherent to the creative process, are the same, there is a significant increase in the complexity and connectivity of innovation networks and of organizations themselves. New questions emerge in this context, such as how to stimulate agents to connect and generate value in an innovation network and how to deal with and profit from these new possibilities. Open innovation potentiates the creative capacity of individuals and organizations, but it is a new way of discovering, relating and doing business.

Perhaps the big issue is creating a management paradigm to fit such a connected business environment. The verb manage has to be reinvented to deal with elements such as control and instability, creativity and organization. Innovation lies at the edge of chaos but it takes very wise management to deal with the paradoxes inherent to this state. Who is ready? How will partners in a network collaborate and deal with power relationships, for example? Which network patterns will emerge from open innovation?

2. It must start at home. One point that is placed as a success factor by several experts and case studies is to start articulating the organization’s internal network. It may seem trivial, but creating a network culture in which the relevant innovation questions can be shared with staff members and direct partners is a big issue.

The lives and conversations inside companies are still largely organized into “clusters” (work areas, processes) and it is difficult to visualize the larger map of innovation when time is short and accountability for results relentless. One must deliver the planned. How will organizations deal with emerging issues that change nonstop?

In this sense there are great challenges in terms of culture and organizational environment, such as to enable engagement in innovation projects (not only those projects that are already the responsibility of each one), to open space and to recognize that engagement. Most organizations are still far away from a “project” culture, where one can engage by his or her own desire to put to use the top of one´s knowledge. How will that be proposed to the external network if it is not the proposal internally?
3. Networking is bonding. There is a good discussion about how to promote the engagement of different actors in open innovation. There are two clear paths, and in Matthew Heim´s vision they are complementary. In the first case, actors enter the network to help answer a specific innovation question. In the second case, a permanent network is formed, and individual actors have a lasting bond.

There’s a difference between these two paths. In the first case, thinking of network management can make sense: you need to manage the innovation questions and the actors that can help solve them.

But in the second case, who manages the permanent network if each organization is (at principle) just another actor? And in the case the network is managed by a big company, how will creativity and self organization emerge? How will power affect the development of fair share relationships, as Umair Haque suggests in his behavior innovation approach?
Sustaining a permanent network implies network ethics. Today it is very common for large corporations, for example, not to respond to work proposals developed by their partners. Imagine how this behavior would be seen in a network, where spontaneous contributions among agents is what brings value to reputations.

Relate this to the theme of “being the preferred partner,” posted by Lindegaard in his book, and imagine how network relations represent a change for organizations. It must be a new way of living if you really want to have it in its full potential.
4. The network builds on diversity. Venessa Miemmis, who defines herself as a digital ethnographer, provides some inspiration to think of win-win relationships not as equality, but as something to be built from the different roles that actors play in networks in which they participate.

Venessa has posted a very interesting chart about the different roles that actors have in networks (which was deeply discussed, if you have the patience to read the comments).

When I looked at the chart I thought about the level of complexity of any sort of “management” or even setup of a network. Each actor takes on different roles in the networks it participates, and those roles change as time passes. To maintain a network with an ecology that allows both the diversity of actors and the diversity of roles played by them is pretty challenging. It is worth reflecting on how this affects  open innovation.
5. Creating conditions to be affected by a network is one of the biggest open innovation challenges. I’ve been reading It’s Alive by Christopher Meyer and Stan Davis where I found a wise statement I play freely: networks make us more sensitive but also more vulnerable to chance.

It is not just a question of demanding solutions from a network, though that can lead to good problem solving. The point is also to improve organization sensitivity and improve the quality of its problem finding capacity. Being connected increases the capacity to perceive transformations in business environment, but that depends on the network pattern you are living. This is about asking and being asked, to demand contributions and contribute as well. That is why understanding network patters will be so important to open innovation.

Finally, a question that maybe just time will respond: will open innovation undermine the organizational models as we know them? How?



How does organizational culture change?

I was recently reading an old synthesis of the work of Edgar Schein, an author who always helps us to think about organizational culture. He says that the culture of a group is formed around a few basic assumptions:

• The nature of reality and truth.
• The nature of time.
• The nature of space.
• The nature of human nature.
• The nature of human activity.
• The nature of human relationships.

Culture is “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems” (Schein, 1992).  That is why organizational culture is so difficult to change.

Recently I had a funny conversation with a senior executive about a network that was being created within the organization where he works.

For him it was difficult to understand that network moderation (or netweaving, as many might call) is a process, and it’s impossible to make a “schedule of posts” or try to define what the community may or may not do. The network form is emergent.

It´s not an easy thought for those worried about ROI or indicators…

Inspired by those thoughts, I would consider a reflection of two parts:

How do changes in working patterns or structure affect an organization?

Where would process management and network management, for example, lead us?

I think it is interesting to return to the theme of culture at this point because we often hear that the company “X” will implement process management or will implement a social network.

But any change of this sort takes place around an established culture, around given assumptions and currently accepted success criteria. A culture is modified according to the changes in corporate conversation networks, as professor Maturana would put it.

The word ‘implementation’ might be of little value in this context. For example, nobody implements a new concept of time. It is impossible to replace one way of living for another when we are dealing with human systems.

What happens to human groups then? How can they absorb (and modify) a certain change that is proposed as an implementation?

Some examples illustrate it.

Case 1: The other day I was at a chat in a social network that I help moderate. The guest was a senior executive of the company and the room was full. The guest, however, was not yet accustomed to this type of online interaction and it took him some time to answer each question posed in the chat, so an awkward virtual silence filled the room between his responses.

Now think about the basic assumption behind this behavior: people entered the chat to speak to the senior executive and await his responses. It took a while for people to realize that meanwhile they could talk to each other, but when it happened, the quality of the chat changed considerably and time felt short for so many discussions.

It was simply so different from what that group was used to, that, at first, the standard behavior of having an authority figure mediate the conversation prevailed. The installed culture persisted in the virtual environment.

How does this type of experience affect the organization? How does this affect daily routine? It is not yet possible to say. It might open a new “drift” (or deriva in portuguese), a new flow of conversation and that exercise might maybe lead to less centralized interaction experiences.

Case 2: I was talking about the implementation of process management with a group of executives when a question popped up: how do organizational processes relate to one another? Someone pointed to the slide with the “official process design” of the organization, but no one seemed satisfied.

They clearly perceived the processes entangled in a much more complex manner than that portrayed by the old box-arrows model. Life subverts charts and escapes pre-defined structures.

No diagram will simplify the life of an organization. Simplicity occurs only when we are able to talk about “how we do what we do”, and act recursively in search of what is simple.

No network is implemented. Everything is built based on what already exists. People in an organization do get entangled, so the same happen to processes. That is just how our conversation networks are dynamically built. It is possible to stimulate open spaces for conversation and legitimate networks that already exist, but the idea of “implementing”, seems somewhat misplaced. We must be humble to suggest, feed and observe, but no one knows in advance what will happen in an organization.

How can we propose a new work model if we live our lives with the eyes of control? How can we change the nature of time and space, as proposed by Schein, if not by experiencing?



What is PKM?

PKM means Personal Knowledge Management. It consists of practical methods to make sense of the increasing flows of information around us. As explains Harold Jarche on his blog.

How do you build your personal learning environment?

In other words we are speaking about the personal capacity to be crossed by numerous information flows without being torn apart by them, and at the same time keeping in mind a singular personal guidance, a life project and the desire to absorb and produce knowledge.

Here we have a very interesting point because PKM is not just about how a person absorbs knowledge but also about his or her ability to produce and share it.  In PKM we don’t think only about ourselves but about our network and how we can feed it. What is the knowledge that only I could produce and share with my network?

Thus, personal knowledge management would be the basis for social knowledge management, facilitated and structurally catalyzed by technological tools that enable our networks today.

This view of knowledge management is quite innovative in the context of organizations, because much of what has been produced to guide knowledge management in this context is based on the organization’s centralized view: knowledge must be standardized, circulate and reach the right place.

The discussion of PKM changes the subject. It places the individual, his choices and his multiple networks at the heart of the game and starts to connect KM with such topics as career management, which had not featured in KM discussions so far.

Harold Jarche uses a model named “Seek, Sense and Share” to explain how he manages his personal knowledge but he admits “PKM is a personal process”.

Pierre Levy points out the importance of storytelling, since we are story producers as we interact and talk in our networks. He’s dedicated his time to a very interesting and profound discussion on the semantics of the web.

Stephen Downes and Internet Time Alliance group talk about Personal Learning Environments and bring to the discussion the many ways individuals organize their formal learning (performed in the school context driven, classroom or online courses) and informal learning (based on conversation skills and in the networks each one is involved).

With the individual at the center, the issue of diversity comes back. There are many ways of learning (Howard Gardner has defined 8 of them).Each person has a distinct way to absorb, to process and manage the learning process. How do we stimulate personal knowledge management taking this diversity into account?

I kept this question with me for few days. One of the possible answers that I heard in my network was the importance of defining interests and filtering information into categories. That’s interesting, but maybe quite a structured process for my personal learning style, so I went on with the question.

As we are exposed to numerous flows, perhaps our personal learning environment and PKM are emergent features of our lives, defined as our surrounding chaos takes form. Maybe these environments and the different ways to manage knowledge change as dynamically as the knowledge networks we develop around us.

It was then that I came across an article posted by Thierry de Baillon on his blog about complex organizations and the learning process. The author introduces the concept of micro-foundations of dynamic capabilities that give rise to emerging practices in organizations. This inspired me to think about the importance of PKM.

Maybe the individual and therefore his personal network could be the genesis of these micro-foundations. This view brings us a much more dynamic perspective on how practices in organizations could evolve. Concepts such as ‘best practices’ would be made obsolete if organizations could visualize and trust these micro-foundations. Why do we need one best practice if we can have a diversity of options as rich as the extended network that surrounds an organization?

Maybe this approach is fearful. It is barely impossible to control a complex system and it takes courage and trust to let practices emerge, but a lot of relevant knowledge, totally applied to work, could arise from the professional management’s capacity to be exposed and filter a diversity of flows. Why do we rather trust people to execute that to make choices?

This possibility can inspire us to rethink the meaning of promoting learning practices in the organizations. It is not a matter of mass customization only, but a fundamental change of the vision organizations have about the individual as a “resource” to be “used” in the most economical way as possible.

For the individual to be the genesis of emerging practices, he must have freedom to relate, to connect and to produce. Conversations must flow, as Humberto Maturana is teaching us, because they are at the heart of a dynamic culture. As it happens to a jellyfish taken from the sea to be observed, the individual dries when removed from his networks (for example through corporative firewalls). His PLE gets restricted and it loses much of the wealth he would have to offer.

The individual is also an emergent. The richness that he had when he was hired is not kept if his personal knowledge management environment is restricted or, in other words, if his network territory is encrypted by the organization. Perhaps it’s not necessary to control anything if each professional is really engaged in what he or she does.

Maybe we are the generation of difficult questions. We face a complex world but we don’t yet have the tools or the capacity to visualize solutions. There is a lot of conversation and exchanging ideas to be done.

10+N things I learned at CIRS

The CIRS Conference was held from on march 10th to 13th. It was a Social networks conference held during #CICI 2010, the International Innovative Cities Conference at Curitiba (State of Parana) Brazil and I decided to post about it in English. But what should I post? There were so many interesting conversations within and outside the lectures!

Here I compiled some of my personal learning.  Not everything is indexed by authors. In my mind everything has mingled and transformed, just like it happens on networks.

Here it goes!

desperate nodes dispute energy plugs

1. A network is not its nodes but its patterns. A network is pure movement so it is not possible to know what could modify or influence it. Even mapping a network is only an attempt to photograph a territory that is constantly modified. Mapping networks is archeology, as said by Clara Pelaez.

2. Being in social networks is to inhabit the unknown. Due to the abundance and irregularity of connections it is not possible to know how an information or idea will flow, where it will end up, and how it will be transformed, reinterpreted or buried.  Understanding this, Twitter is changing its configuration and enabling users to engage their applications into it. The network resists imprisonment and businesses need to gain plasticity to profit from it.

3. Living in networks and cooperating are human attributes that have been fundamentally modified by the available tools. The easiness of connection radically diminished transaction costs of cooperating in networks and enabled many initiatives that would not exist if companies were required to manage them, so tells us Clay Shirky. The firm is simply not a viable model for most human desires and projects due to its increasing transaction costs.  Coordinating network action is much cheaper.

Moreover organizations distort the network pattern and make it difficult for self-organization to happen, just as buildings make it difficult to see the landscape. (I live in São Paulo and could never draw the real landscape!) This idea was already in the CIRS opening ceremony performed by Augusto deFranco.

4. What gives life to networks are the emotions behind the speech of each member. There is much discussion on information running on the network but not on emotion. The network is a place of storytelling, says Pierre Levy.  It is a place inhabited by real people and real desires. Maybe that’s why brands have a certain difficulty to appear legitimately in networks. Brands are not people.

5. The entry into a network has to be voluntary. Those who don’t enter voluntarily don’t really connect, share knowledge much less motivation. Involuntary entrants usually won’t be live nodes. Network is expression.

Cacau Garnieri talks about the real experience of Peabirus and its network organizational model at the Open Space Dialogue.

6. “Small is powerful” when you are connected, says Clay Shirky. Forget big networks. Even within a larger network there is a small one that inspires, energizes and makes it happen. The anxiety of a large organization to have such a large network does not make sense in this context. The network is not born from a central desire but from the capillary desires and the connections established between them.

7. Leadership in a network is volatile, it evaporates as the task it helps coordinate is finished. The choice is either to engage in other desires or projects present on the network or be replaced. The big difference is that this not a bad at all. Living in a network is letting go of the status, the movement is constant and if you are not the leader of the moment you may want to read a book, go to the beach or simply continue living in the network.

8. The great network frontier is not given by tools but by the cultural environment. A network creates a common system of meaning that changes and renewals as information flows. There are beliefs, values and customs in each network. Clay Shirky tells us that there is a singular bargain for each network: an implicit set of rules of operation and, most important, a purpose or “why” the network was created. Culture creates agreements and obstructions that show what is off bounds. These boundaries, however, are liquid. The network is a moving territory.

9. “Tagging knowledge gives a kind of access to the subjectivity of others who know, who post, who tag.” “There is an emotional energy connecting the discursive process”. These and other phrases and interpretations are tagged under #2010CICI (mostly in portuguese). This tag came to be among the top 10 of Twitter during the Conference and shows that the discussion of semantics as crucial web crawler continues. Pierre Levy gave us a taste of it, although he made it clear that he is not talking about the same as Tim Berners-Lee. “The image of a coordinated semantic system mathematically processed, where we can find all the concepts and the transformations they might go through…” Well, those who have the curiosity to explore his website will see where he´s going with collective intelligence at this point. It´s worth it!

Pierre Levy inspired by I-Ching

10. Without personal knowledge management there’s no collective knowledge management. Nowadays a huge challenge, as also pointed out by Pierre Levy, is keeping personal focus when learning and producing knowledge on the web.  Personal knowledge management is the basis of collective intelligence because it initiates the cycle of expliciting knowledge and feeding our conversations. When we talk we use words and concepts, we make deals and progressively create common metadata that becomes the collective knowledge management.

11. …N. We learn about networks in networks. I heard it from a friend named Luis Bouabci who is deeply involved in the study of social networks. We were leaving the event when we started a conversation. We sat on the steps and watched the workers dismantle an immense panel with the title of the conference to open up the overall view of Curitiba in front of us.

More interesting than the theory is the practice of networks where everything is being built online. There are so many possible variations that the theory would not and does not account to explain. Explanations don´t replace life. One must live networks.