"Warm-up" Blogs

Adam Smith (1723-1790) and his concept of “the invisible hand” has been a useful historical reference point in judging how far regulation of affairs should be extended after the banking crisis. For example, see here.

Smith was one of the developers of classical economics, itself probably the first modern school of economic thought. But who influenced Adam Smith, apart from such notables as:-

> Frances Hutcheson (1694- 1746) his professor at Glasgow University
> David Hume (1711-1776)
> Bernard de Mandeville (1670-1733)?

His early career was spent in France with the French Society of Physiocrats. One of their number, Francois Quesnay (1694-1774), outlined in 1759 his "Tableau Economique," the first known economic model. This lay the foundation of the Physiocrats' economic theories and, together with writing and money, they were regarded by Smith as being the three great inventions which had contributed to the stability of political societies.

More recent analyses of the model help in interpreting the "Tableau" and enable the first value exchange system view of an economic model to be constructed as follows (for the value network space).

The diagram shows the three "classes," as role plays as follows:-

> The Proprietary class - as Landowner (also known as Landlord)
> The Productive class - as Farmer and Farmhand
> The Sterile class - as Artisan and Merchant

Two new role plays are introduced to represent "Markets" as a place for the exchange of goods:-

> Manufacturers marketeers and
> Agricultures marketeers

The exchanges of value are shown as transactions with tangible deliverables designated "m" or "g", such that "300 g," for example, means 300 units of goods or services (with further description added as needed) and "300 m" means 300 units of money.

You can also add the sequence of transaction. For example, I have shown the first four (1) to (4), following the assumption made in the model that the Proprietary class spent all they received from renting their land on agricultural and manufactured products, thus keeping the economy working through their "contribution."

Omitted from the value exchanges are the actual stocks of goods and money residing within each group playing the roles. These would be represented, today, in the data tables associated with the work flow implementation of the Value Exchange System (VES).

What the "Tableau" omits is all the informal flow that enables societies to function! What we see here is only the mechanical system at work which could, possibly, have influenced Adam Smith to note that the subdivision of labour induced a certain "stupidity of mind," and spurred him to write the "Theory of Moral Sentiments" before his epic "Wealth of Nations!"

A description of the model can be seen on Wikipedia. I have removed the $ sign!

Having been through this exercise, it is interesting to surmise how both Quesnay and subsequent economists would have benefited from a knowledge of VES in visualising how the economy really worked. Certainly, with its simple handling of system dynamics and centrality of the human element, we may have reached somewhat sooner (by 200 years perhaps) current trends to radically remake economics. The paradigm shift embodied in "Complexity Economics" has paved the way for economists to approach in their own way "Edge-of-Chaos" conditions we now face.

You are at http://tinyurl.com/ybtgudm

The following is a list of blogs made in the years up to 2015.

Announcing "Discovery Leadership and Management (TM")
Announcing "quantum co-creativity (TM)"
Announcing "Rapid Synchronous Process Change (TM)"
A super auditor for extraordinary times
Achieve win-win with value networks
BEIN(2)
Big Society Programme - The MakeItZone
Christmas Greetings - the Trinity / Triune value network
City firm adds value networks to portfolio

Four people gathered at the Institution of Civil Engineers (UK) for three hours on 7th January 2009 to co-create a simple way of visualizing how the current financial system could be tweaked to fund needed action to help combat climate change effects and causes.

The brainchild of Ian Greenwood, with supporting analyses and input from Jamie Walton, Ian assembled information from the UK Treasury, the Bank of England and other authorities to formulate options for restructuring the funding of sustainable energy production and energy conservation/usage in buildings. Concurrently, he conceived how both commercial property and householders could benefit from the proceeds of a range of new taxes that re routed conventional commercial banking money flows along new channels to help offset the tax needed for the restructure.

Following probing questioning from Beverley Daley, a Value Exchange Systems (VES) diagram was developed with facilitation from David Meggitt. A first cut at the current situation was co-created by first identifying two broad groupings of participant as follows:

• The banking ecosystem, consisting of commercial, banks, the money market, the UK Treasury, the Bank of England

• A UK development ecosystem, consisting of a) designers, builders / installers, product manufacturers, raw material suppliers and customers for insulation products b) more general investment by Government in infrastructure and services provided by a network of other contributors

We identified some key transactions that flowed between the participants by asking a simple question, “What are the deliverables that a Participant creates and launches to be received by another Participant?” The following diagram was prepared to show how these flows fit together. The Participants are shown as ovals and the transactions as lines with a description of the deliverable on the line. The activities needed to create, launch and receive the deliverables are contained within the ovals. These activities include the formal procedures and processes required for that purpose. The receipt of rules enforced by regulation and legislation is omitted for clarity.

The following VES diagrams are provided as examples only and subject to continual refinement.

The transactions, shown as solid lines, are associated with contracted and expected agreements, albeit, at a low level of detail at this stage.

We then asked ourselves whether this represented the real way in which the overall “system” worked. Had we acknowledged the informal networks that oil the wheels of the machine? Recognizing this omission, we then added a representative sample of informal flows of information that normally fell outside the auditable standard processes, shown as dotted lines in the diagram following.

The next step was to consider new possibilities, termed scenarios, in which the quantity of interest paid by customers to commercial banks for loans was reduced and a portion diverted via a Credit Money Banking Adjustment (CMBA) which is passed straight to the Treasury. Similarly, an Environmental Tax on Imports (ET) raised from customers is redirected to the Treasury using the existing VAT system but clearly indicated on receipts to fund further activities in the development grouping that will help combat climate change (ET%).

We then added these new flows to the VES diagram, below, and in so doing identified a new group that we wished to add:

• Overseas programmes beneficiaries,

The tentative suggestion flagged up here depends upon whether banks are able to fulfill their new roles in return for leaving the principal payments untouched and flowing to the programmes. A funding stream is definitely needed to accomplish climate mitigation and adaptation for the poorer producer nations.

We now have a first cut / draft of the value exchange system for the existing situation and one for a possible future scenario. Subsequent work, as below, would show the sequence in which the activities and deliverables took place. Additionally, for those who prefer lists and tables to diagrams, spreadsheets are available which also show additional detail needed for analysis of costs, risks, perceived values et al.

The current diagrams can be used as a “Discovery Dialogue” with interested parties prior to establishing a project to move to the next stages. This can be formulated to develop a “Discovery Map” of a desired arrangement, leading to a “Business Model,” “Strategy Blueprint,” “Business Process Prototypes, and Deployment.”

Further questions can now be raised. Where is the energy or passion in this ecosystem and how is it raised or lowered? Is greed a shared passion? Is enabling a sustainable cause a motivation? How does that affect behaviour of the whole or part of the ecosystem? How is synchronous leadership cultivated? Techniques that complement the VES approach can be used. For example, we can begin to visualise the possibilities of energy flow quite easily: see here.

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Additional notes from Ian Greenwood

1. Revenue must be directed as part of the system towards insulating the “hard to treat” buildings - it is no good having:
• difficulties/time lag in applying for adequate funds/subsidy
• long delays or stop-start of funding,
• immense staff or bureaucracy costs

2. The message from STEERglobal is that an equal dollar return must be made to the producer nation for their sustainability & energy efficiency. This can be achieved via an Environmental Tax on Imports (ETI) or ET. Credit money re-directed - the Credit Money Banking Adjustment – (CMBA) at the level of the base rate can then enable offsetting of ETI Tax. Such an adjustment would be about 50% of so-called “free” commercial bank money.

The key point about CMBA is that it diverts a portion of the large amount of so called FREE MONEY that currently accrues to Banking and Finance. This FREE MONEY has significantly contributed to the CREDIT CRUNCH through build up over preceeding years. With a target 5% base rate, CMBA would divert about half and be adjustable.

3. Additionally, now that the other proposal, the Credit Money Banking Adjustment (CMBA) has been devised, the revenue can flow from where it has been inflationary (or held back in the credit crunch) to where it is necessary to achieve energy and resource sustainability, directly to projects investing in a sustainable future. Allowing these investments in a balanced way across the world would also create more stable finances and benefits socially, environmentally and politically. Confidence can then return.

4. Notes on conversation Ian/David 21-04-2009v2: Possibly change red arrow to black from customer to Commercial bank. In due course maybe suggest that in return for retaining the principal on “free” money, C.banks administer the system at no extra charge: i.e. the diversion to the treasury can be an un-necessary task. The banks in receiving the principal merely return some of it direct to the customer – i.e it is healthy to SHOW the interest on the statements, but maybe not necessary to collect part or all of the principal/interest. No doubt there are further “takes” on this. IG

You are at http://tinyurl.com/cs9dtq

This note describes how entrepreneurs benefited from using value networks to underpin their thinking and strategy, having initially practised their pitch within an environment supportive of those aspiring to entrepreneurship. The initial random contact was made at a Regional Meeting of Ecademy in Weybridge with Paul Harvey.

The 3Cs Community (www.3cscommunity.com) in the UK is focussed on encouraging entrepreneurship in a supportive atmosphere and receives sponsorship in the form of meeting facilities from a range of organisations - professional firms, research and academic institutions, libraries.

One of the business pitches in May was by Bio Music, whom I introduced, and subsequently suggested they use the value network approach to further refine their business planning.

This note briefly describes the process we undertook to apply value networks over a period of two months.

Developing the Discovery Map

The first conversation was to allow the business owner / CEO to develop what I call a Discovery Map, underpinned by the value network way of representing the key role plays and both formal and informal flows. This was done in free style with a large piece of paper, pens and sticky notes and took about two hours of time together. A tidied up version is shown below.

Data was then fed into a proprietary analysis and report generator tool and sample outputs obtained and distributed.

A comment from the owner at this point is included below the map.

Discovery Map of the Bio Music Business

"Dear David, Just wanted to say, once again, a very big thank you for yesterday’s session at the ICE and for your invaluable input in helping us identify the ‘mechanics’ of our business, which, I find, has greatly helped us to pin-point the priorities to make and the strategy to follow up in order to achieve the overall goal of a global success.

Please let me know if I can be of any assistance to you in your future presentations of our business model or in any other way at all.

I look forward to receiving your final map in due course and to see you again in the near future, most likely at a future 3Cs event, if not before…

All the very best,

Jean-Louis
Loriana Music"

Developing the business model and strategy blueprint

The next stage was to involve another key member of the team, Paul Harvey, and allow both to co-develop a business model that incorporated the business strategy. This means using the Discovery map to tease out and use further components that addressed the key questions of "What should we be doing and when?" and " Who will do it and why?"

The technique used in this case was to project the Discovery map (as the underpinning value network) on to the wall which was covered with a large blank sheet of paper. The facilitated conversation was a mix of standard value network analysis subjects, interlaced with strategy considerations, extended over a working day with a break for lunch. The value network was extended by adding new deliverables, highlighting cash flows, and adding the sequence of the flow of deliverables. (Called transactions in the methodology). Some role plays / participants were removed for strategic reasons.

The resulting drawing is shown in the photograph below.

Subsequently, a neat version of the map was created and a nice twist added to the title to create....

A vibrational pull business model.

"Vibrational pull" resonates particularly well in this case for two reasons:

>>> The marketing approach is geared up to the "pull" from potential served markets as opposed to "product push"

>>> The product itself features vibrations of a special nature

This represents the current position. The diagram is now available for use in conveying, through conversation, the dynamics of the emerging and developing business. It can also be used to progress to creating the Business process blueprint and technology blueprints which create prototype and working workflow systems in quick time.

A final word from the entrepreneur..

"Dear David

Many thanks for the Bio Music Vibrational Pull Model.
It seems all fine to me.

Thank you also for the value network map attached to your email.
It does show how valuable the exercise of creating a value network map is in order to enable a clear overview of a business model and to facilitate the process of elaborating the changes required.
I like this a lot!

Best regards,

Jean-Louis
Loriana Music
www.biomusic-6in1.net"

You are at http://tinyurl.com/nqkrzl

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David is one of the co-founders of 3Cs Community and served on the Board of Directors of the servicing company for many years.

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Today is auspicious as it marks the introduction of a new phrase on the Internet - Discovery Leadership and Management (TM). Note the italics, which adds distinction to the mark. The mark will be removed as soon as possible.

Is it coincidence that a search on Google revealed only two similar groupings of words?

>>> drug discovery leadership and management, when my daughter is Senior Manager of Medical Writing with a leading, global clinical research company
>>> Antarctica discovery leadership and management, when my son is contemplating his next move with team colleagues after having been accepted for the 2012-2013 Antarctic Race

Discovery Leadership and Management (TM) will be used to enable people and organisations to thrive in the 21st century despite the increasing unpredictability of events.

The visusal that supports this is now in the hands of a select group of SME's in the UK. Their opportunity is to experience and mould a new way of working that equips them for unpredictable times and discover the joy of co-creative achievement at every level.

A key underpinning discipline is now the Value Exchange System (VES), governed by overarching organising principles, and a reformulation of VNA depicted in the figure below.

Responsibility for this announcement must rest with me, but I have been influenced to take action by many colleagues, in particular:

Dr Charles Savage, author of "5th Generation Management" on leadership and management issues.

David Chassels CA, CEO of Procession, on adaptable work flow design.




Further announcements will be made as events unfold. See comments below.

This is also a special time for all managers in the UK who are members of the Chartered Management Institute (CMI). A CMI Manifesto has been launched, focused on improving management and leadership skills in the UK. Seek it out and sign up if appropriate.

An unprecedented combination of political, economic, social, technological, environmental and legal (PESTEL) factors is creating an “edge of chaos” (see 1) below) condition in the United Kingdom for the next five to 10 years as we realign interests, ambitions and means with changes in mood and conscience.

Usefully for businesses, this challenge to survival can create a “bulldog” mood to win against the odds and pull together in adversity.

But we do need to discover approaches to leadership and management that are compatible with sustained “edge of chaos” business situations. “Discovery Leadership and Management”, orignally announced here, is suggested as an umbrella term for a range of leadership and / or management styles and approaches that will serve stakeholder involvements optimally whatever the situation.

The following visual portrays four possible views we can take of an organisation as we move from a conventional 19th century mechanical system view to a more appropriate living, adaptive system view. Overriding both of these is our current mood. And, as we reflect on our current and future state of global health, we examine our conscience and deep down discover our true purpose, if we are lucky, and find the energy to initiate, or, at the very least, participate in changes that conform to enabling our personal vision.

You can download the complete visual here..
Discovery Leadership and Management.pdf
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Further, three visuals are offered below as a reference for continued dialogue as blueprints for opportunity:-

1) The impact of external events viewed as the balance between ordered and emergent situations...
"Edge-of-chaos" tends to arise when we experience complicated or complex arrangements of activities (shown as tasks or processes below) in combination with extreme difficulty in predicting the future within our chosen horizon or "radar" scan.

2) The engagement and energy of staff at different stages of business maturity and the shifts in perception required...

3) The oportunity for converting external threats to new gains by adopting a different (value network) way of conceiving how work is really done.

The complete set of slides which includes the introduction of value networks /VES and acknowledgements is attached below . Please note that the slides are not accompanied by explanatory text ......
Opportunity blueprint.pdf

You are at http://tinyurl.com/yhwavs3

There is an intriguing article on Cloud Computing and the Promise of On-Demand Business Innovation in Intelligent Enterprise here

The central message is that the wow is not just about technology; it is about process flexibility and reuse that will enable enterprises to quickly serve new customers and launch new lines of business. It is envisaged that Internet enabled components can be linked together to provide the flexibility needed by businesses in the 21st century, particularly within the current economic crisis.

The author implies that cloud computing is needed to deliver now the “End to end Situational Business Process (SBPs) Supporting Multiple, Simultaneous Value Chains.“

This may send shivers down the spines of enterprise architects or IT professionals and business leaders who want flexibility but fear a lack of accountability and auditability.

Fortunately, there is a more secure and controllable route. For example, consider:

1) using value networks to discover how best to meet customer needs and the interaction with the whole business

2) connecting those findings to systems that currently exist for creating the appropriate workflow, incorporating agility, compliance and performance management with rapid prototyping - see, for example Procession

It may seem complicated but start off simply. After all, it's the people that count and it needs to be intelligible. Here is a first cut business model covering a slice of your ecosystem.

You can read more about value networks and business models here

You are at http://tinyurl.com/kwofc4

How can CEOs benefit from a knowledge of viruses?

Maybe they can point to the flu strain's apparent capacity for both incremental innovation (genetic drift) and disruptive innovation (genetic shift) as an exemplar of good practice for use in an organisational setting. Its capacity to adapt and survive against threats to its existence is only marred by its propensity to kill off its hosts / customers too early in the relationship before infection can spread!

So, how does the human body adapts to survive without our even thinking about it? The following description shows how.

The immune system’s role is to identify the enemies that are attacking the body and then to destroy them. These enemies include foreign agents such as bacteria and viruses as well as our own cells that become defective.

You can see how in the diagram following. Follow the sequence 1 to 7. Note the potentially supporting role of "nutrients." You never hear that from the UK NHS; just the role of drugs, unfortunately.

Source F:\energy4living\Swine flu material\Immune System

There are four levels to our defences: some of the main components are shown here.

Apart from our skin, the first level contains the digestive tract which lets in food, and the lungs, which let in air.

Within the digestive tract is the “gut-asssociated immune system”, which is programmed to prevent incompletely digested foods from entering the bloodstream and causing immune reactions and eventually allergies.

The nasal passages help to prevent unwanted agents from entering the lungs. Healthy, strong mucous membranes in the respiratory and digestive tract are the first line of defence against invaders.

Once inside the body, the immune system has an army of special cells to deal with invaders. These defenders differ in their function and territory. For example, some cells operate in the blood, keeping an eye out for invaders. The three main types of immune cells found in the blood, collectively called white cells, are B-cells, T-cells and macrophages.

B-cells or B-lymphocytes are produced in an antibody for each specific invader or antigen. When a B-cell comes into contact with an antigen it grows larger and divides into several cells which secrete specific antibodies that latch on to the invader. Antibodies cannot destroy bacteria or viruses, but they do give them a hard time. They stop bacteria producing toxins, and they prevent viruses from entering body cells. Since a virus cannot reproduce unless it enters a body cell and takes over the cell’s control centre, reprogramming it to produce more viruses, antibodies are a major nuisance for viruses. Antibodies also whistle up other, more belligerent members of the immune army, such as T-cells.

T-cells or T- lymphocytes are derived from the thymus gland at the top of the chest. There are three kinds: T-helpers, T-suppressors and NK (natural killers). NK cells produce toxins that can destroy the invader. T-helpers help to activate B-cells to produce antigens, while T-suppressors turn off the reactions once the battle is won. Normally, there are roughly twice as many T-helpers as T-suppressors. In AIDS the HIV virus selectively destroys T-helpers, resulting in too many T-suppressors which depress the immune system, leaving the sufferer susceptible to other infections.

At any time there are a small number of immune cells roaming the body. Many of the have only a short life: T-cells, for example, live for about four days. When an invader is identified, new troops are produced in the bone marrow and thymus and posted to other areas such as lymph nodes, the tonsils, appendix, spleen and Peyer’s patches. Lymphatic vessels drain into these areas, bringing in invaders to be destroyed. That is why lymph nodes, for example in the neck, armpits and groin, become inflamed during an infection. This means they are doing their job. Since the lymphatic system does not have a pump, lymphatic fluid is moved along by muscle movement – so physical exercise is important for lymphatic
drainage.”

Since anti viral drugs inhibit replication of viruses, there is no point in taking them until infected.

On the other hand, a vaccine stimulates antibodies to fight a specific strain - the body is given a memory of something it must fight. Get the strain wrong, or be behind a virus' mutation, it may become less effective, or even useless.

So, maybe a little bit of thought, using value networks, can reveal how an organisation of people can reconfigure for both incremental and disruptive innovation.

Please note the form of diagram shown above is not the same as a value network. Spot the difference.
There will be no prize for the answer. Knowing is enough.

You are at http://tinyurl.com/ylpksjq

"Does Increased regulation reduce corporate responsibility?"

This was the title for the annual open debate held as a regular event by the UK Institute of Business Ethics sponsored this year by Simmons & Simmons.

The event was held under the Chatham House Rule so these observations are the result of a distillation of what was debated there and my own prior knowledge. This means, though, that no attributions or acknowledgments of insights contributed by others can be made.

An understandable reaction by most businesses is that regulation invariably increases the complexity of doing business and could lead to obfuscation if regulations are too detailed. They can detract from seeing the bigger picture and also be a distraction to understanding the business itself.

Invariably, extra management time and costs are incurred and the threat of criminal proceedings is frightening.

There are also issues of accessibility, clarity and coherence, with a veritable succession of tides and unceasing waves of EU Directives, laws, departmental guidelines, regulations, standards et al that have to be navigated with guidance from Court rulings and opinions.

So why is regulation needed at all? Perhaps it all comes down to "performance," both individually and collectively as is manifest in our behaviour. And what constitutes appropriate regulation depends upon the nature of the subject matter, or context, and the form of the regulatory mechanisms and material.

For example, for health and safety issues, particularly in construction where the safety record has improved considerably, simple rules for particular situations become a statement of sensible good practice for remaining safe and healthy. However, in more fuzzy areas such as economic regulation, financial services and data protection, there is a real danger that a list of rules alone will simply be shuffled down to operational levels who simply "tick boxes" without consideration of reasons why, and the underlying principles, if any.

Taking a leaf or two from the writings of Adam Smith we are reminded of the effect of natural human instincts: that the pursuit of self interest by an individual, maximising revenue for himself in a free market, tends to maximise the total revenue of society as a whole. But in his time, the "invisible hand" as it were, was underpinned by a good dose of moral sentiment, cultivated by the strong Christian tradition. So we can see from the left hand side of the figure following that a positive impact on society can be achieved. Additionally, Adam Smith also pointed out that the division of labour, despite achieving productivity gains, induced a certain stupidity of mind, the early equivalent, perhaps of a tick box mentality!

However, we also know that selfish cattle owners overused their rights to free grazing on common land and, with no regard for their co-farmers, ruined the nutritional value of the land leading to the "tragedy of the commons." So greed had to be tempered by regulation to control access. So we can see from the right hand side of the figure that we can still aim for a positive impact on society despite human greed.

However, regulation always seems to be behind the curve of personal aspiration and performance improvement. What holistic perspectives enable us to control bad behaviour and cultivate good behaviour and get to grips with systemic failures and successes?

Two possibilities come to mind for further dialogue.

Winston Churchill once said, "The empires of the future are empires of the mind." Also, leaders and managers are always seeking ways to create more adaptive and responsive organisations and maximise knowledge value. So firstly, consider the ways in which different aspects of knowing have been represented and synthesise them to understand better the evolution of knowledge itself.

Drawing on the work of past colleague Verna Allee in her book "The Knowledge Evolution - Expanding Organizational Intelligence," I depict in the following diagram two dimensions, learning and performance, of her knowledge archetype, arrived at by analysing sixteen theoretical constructs for representing and understanding different aspects of knowing.

The right hand side depicts different aspects of performance. On the left, are corresponding aspects of learning. These are set in the traditional triangle of controls for project performance, (schedule, quality and time) with an additional vertical dimension that enables us to pin point different tasks and operations.

Suffice to observe at this point that a case can be made for applying principles to aspects in the blue zone and leaving rules firmly for the orange zone.

Secondly, utilise simple but effective approaches for visualising the effect of behaviour in organisations systemically. For example, the diagram following uses a powerful approach for combining the formal work flow with the informal conversations that impact board performance. The recent USB shareholder report (a comment on that to an ACCA related meeting is here) highlighted that conversations about the meaning of comprehensive risk management reports did not take place. Could this be the result of NED effectiveness being blunted by collegiality or group think? Would a more diverse representation on the board be appropriate or is it simply a lack of any one individual not being prepared to be "the difficult one?"

Ultimately, it seems that there is no such thing as a corporate ethic, but simply personal matters of conscience, recognising that human nature is fallible.

So, a holistic view of the place of ethics in making choices is particularly appropriate. Usefully, the knowledge archetype introduced above provides an excellent starting point for such a conversation. A more comprehensive snapshot of its contents can be seen on the attachment. Referring to this, maybe we should pin point our conscious attention on ethics when there is an over-riding concern for integrity in assessing performance, when our focus is on caring why (purpose) actions are taken, when our learning is value driven and generative; when our perspective is possessing the will, motivation and adaptability for success, plus the capacity to deduce new effects by integrating different disciplines; when our horizon is "very long" - up to 20 years. Maybe it is at this mode , one up from the top of our pyramid illustrated above, that we should develop principles and then cascade them down to the nitty gritty of specific rules and standards.

By combining what we have so far, maybe we have started the journey to replace the pursuit of self interest by the pursuit of negotiated self interest from a holistic (or systemic) perspective.

A final point. A past Chairman of the SIB, Sir Andrew Large, once agreed with me in the presence of the late Lord Weatherhill, at an ICF meeting that it would be a good idea to have some engineers on his team! At least we do add the odd diagram to punctuate the text that is the natural domain of legal minds who appear comfortable with visualising meaning from words alone!

Maybe the lack of an engineering input is one reason for the occasional corporate governance failure.

Mind map of related aspects of the Knowledge Archetype
Knowledge archetype.jpg

Table of 16 alternative author's views of knowledge aspects
Knowledge Archetype.pdf

This page has URL http://tinyurl.com/lfjlgl

Copy of a version of this note....
IBE Open Debate 9th July 2009 .pdf

In the workplace, it is increasingly useful to link "beliefs" to actions. According to Joseph O'Connor in his NLP handbook, beliefs are the principles that guide actions - not what we say we believe, but what we act on. Beliefs give meaning to what we do.

Values are why we do what we do, what is important to us - health, wealth, happiness, love.

On an organizational level, businesses have principles they act on and values they hold. They are part of the culture of the business. Beliefs and values direct our lives, acting both as permissions and prohibitors on how we act.

Incorporating other factors that affect our capacity for learning and coping with change is the "model" below developed by Robert Dilts from the work of Gregory Bateson. The factors should be viewed as interconnected levels, not a hierarchy.

It is useful, although considered by some not to be entirely consistent, exhaustive or even logical, but has been widely adopted in NLP thinking.

We will be looking at other models in future blogs.

I am grateful to Jennifer J Stenhouse, a Master Practitioner in NLP and also a participant in the only course with Robert and John Dilts to date on modelling effective entrepreneurship, for introducing me to this approach.

Thinking and acting with a "value network" perspective presents participants with a unique opportunity for getting into the flow. It helps you to achieve win-win outcomes in most situations, particularly in business, and guides you in the adoption of new mind sets to become fit for purpose in challenging environments.

There are three steps.

1) Seek out the formal processes that cross functional silos and other hierarchical boundaries. Identify what each participating group is designed to contribute as tangible deliverables.

2) Ask, "How do we really do the work around here?" Identify the informal social networks that provided the basis for relationship building and sharing of information, co-creating knowledge and the transmission of other favours without expecting immediate payback.

3) Be still, reflect, meditate/pray and be open to the energy that transforms disorder into order. Judge whether it is energy that destroys or builds for the future. ( See, for example, how to relate this to credit crunch issues here)

With this trinity of flows, be ready to transform your relationships and effectiveness with others whether in community, enterprises, regions, globally.

Optionally, inject some spirit into affairs, using whatever source inspires you or you are open to.

Note how your capabilities are enhanced and how behaviour changes.

Notes: Acknowledgement is given to the Verna Allee and Oliver Schwabe for the ideas behind the NetMat TM approach to visualising value networks, and Joan Bird for many conversations about energy in networks.

Identifying and formulating projects that fit coherently with the national "will" is a complex affair. Even if a formal process be established, implementing it is complicated.

To illustrate, in the 1980's, a major kingdom in the Middle East used over 5,500 information elements in the preparation of its five year plan, where a single information element could consist of many tables of subject data or accompanying reports.  

The corresponding information flows (developed by this author and approved by the Client)  were as shown in the following diagrams.

a) Overview:-

b) More detailed view of Five year "Development Plan Preparation" in above diagram

Having developed the above diagrams with the planning Ministry then, it would be interesting to learn, now, what process the UK government uses to formulate the National Infrastructure Plan and the types of models and simulations used, if any.

It may also be instructive to appreciate the frequency and nature of the internal communication between relevant departments and agencies and other stakeholders. The following chart shows how that could be represented - an early version, perhaps, of Social Network Analysis (SNA). Interesting that it was criticized as being more of a sociogram rather than an exchange of information / ideas about National Planning issues!

Fast forward 25 years and new systems approaches could illuminate the process further and reveal the otherwise hidden connections that support and empower participants to achieve, together, growth and success. Recommended as a primary candidate systems approach is our co-evolved Value Exchange System (VES), a diagnostic and leadership tool for use at every level within the value network space.

You are at http://tinyurl.com/c974xef

The turbulent economic environment in the UK calls for “out-of-the-box” thinking linked to action that “engages.” The uncertainty and unpredictability of future events suggests that such action is now urgent.

The good news is that flexibility is now the mantra and organisation leaders have tended to hoard staff on renegotiated terms rather than seek immediate cost cutting lay-offs.

However, with reductions in overall demand for products and services predicted in many sectors (see comment below), a “reorientation” to identify and meet customer needs and wants in the value chain is this week’s priority.

But how is this achieved? Traditional management thinks “Reorganise!” with the inevitable disruption and delays that associated with identifying and filling new job positions: all accompanied by a lowering of morale over a critical, often prolonged period.

An alternative approach is offered by pedigree marketing and technology specialists Hunter Hastings and Jeff Saperstein in their new book “Bust the Silos – opening your organization for growth.” They are a new breed of specialists who are embracing the value network approach to tackle complex business and organisational challenges.

To tackle the demand deficit, their approach is simple. Wear a “value network” hat and conceive a “Demand Creation Network,” with new roles that are open to all who feel they can contribute. No reorganisation; just a reorientation.

Figure 1-1 in the book illustrates how they replace structure with a network in order to build growth capability. The diagram following captures the essence of the role plays and deliverables shown in the Figure whilst embodying the authentic value network approach that Hunter and Jeff depart from slightly in their representation, which devotees will be quick to spot.

As one rather gauche American put it to me, "I am up to my a**e in alligators!"

That was 10 years ago, but I guess that sentiment could apply to us all now, with a nominal $600 trillion of debt still bubbling below the surface like a molten magma.

For those who feel like holding hands and riding events out together , maybe now is the time to adopt new mindsets, skill sets and tool sets to succeed at win-win in competitive environments using the value network perspective - the intuitive move from supply chain and value chain thinking.

A unique opportunity to start with the basics is open to all on Thursday, 11th June at Regent's Business School, London when, aided by a few rope manoeuvres, I'll be introducing attendees to value networks. It is organised by the Central and Westminster Branch of the Chartered Management Institute.

It's a short, participative session of 60 minutes with Q and A and you will have an overview of value networks and analysis (VNA).

What is it?
What can it do for me?
How can I get more of it?

The flyer is attached here...
CMI talk on Value networks D M Flyer 110609.pdf
[The slides accompanying the presentation are now added as a comment below (14th June)]

You are at http://tinyurl.com/qk45f6

Blackstone Franks is a progressive firm of chartered accountants based in the City of London.

Recognising that company agility and adaptability is key to survival and growth, it has now added value network analysis (VNA) to its portfolio of diagnostic and supporting services. One development is to add VNA to the Activity Review Chart, shown below, which can be used in conversation with SME owners when reviewing their current and future needs.

The firm is no stranger to value networks. It played a leading role in helping visualise the roles played by participants in grooming businesses for sale- demonstrating that it is not a linear process, but one of many interactions in a complex web of inter-relationships. An article on that is here.

The is a partial list of past events in the UK. It provides a background to the heralding in to the UK of value networks and analysis, and its validation in the contexts explored.

May, 2006
Workshops at the University of Greenwich introduced the technique of Value Network Analysis to member organisations within the London Knowledge Network coordinated by Martyn Laycock.
Workshops Greenwich May 2006.pdf

August to December, 2006
Where is value in the "Blank" economy? Will the real business or service model please stand up.
(For "Blank" insert your own words - service; knowledge; networked; ecosystem...)

As a follow up to a briefing by Verna Allee on Value Networks on June 15th 2006, hosted by Tony Tzcarnecki, Managing Partner of Euro Business Management Ltd, in the offices of Sun Microsystems, London, the following workshops were held on the 1st Friday afternoon of each month, August to December 2006, facilitated by David Meggitt. The location was at the Institution of Civil Engineers,Westminster, London SW1P 3AA:-

>>4th August
Relationship management
Relationship management typically just focuses on managing information about customers, suppliers, and business partners. A value network approach considers relationships as two- way value-creating interactions, which focus on realizing value as well as providing value. Sub focus on "Politics", "Diversity", "Handling conflict".

>>1st September
Business ecosystem development.
Resource deployment, delivery, market innovation, knowledge sharing, and time-to-market advantage are dependent on the quality, coherence, and vitality of the relevant value networks within business ecosystems.

>>6th October
Market space strategies and investments
Identifying lucrative and powerful investment opportunities requires the ability to quickly assess a complex environment and accurately map the current and emerging market space. A value network analysis helps identify, analyze, evaluate, prioritize, and manage investments in market spaces — ranging from providing seed capital through joint venture financing and support of management buy-ins or buy-outs.

>>3rd November
Reconfiguring the organization
Change is all there is. Mergers, acquisitions, downsizing, expansion to new markets, new product groups, new partners, new roles and functions — anytime relationships change, value interactions and flows change too.

>>1st December
Fast-track complex process redesign
Product and service offerings are constantly changing — and so are the processes to innovate, design, manufacture, and deliver them. Multiple, inter-dependent, and concurrent processes are too complex for traditional process mapping, but can be analyzed very quickly with the value network method.

For each of the five meetings, the following format was adopted.
Focus on one candidate application of value networks
>> apply VNA thinking
>> expose opportunities for:
>>>>>>incorporating as users,
>>>>>>applying as advisors.
Open up meeting to "Anything on the table" as an application
Identify difficulties encountered with methodology generally. Post up for resolution
Adopt, adapt and improve "messages" for CEO's to open up new and authentic forms of assistance that can be delivered profitably.

20-21 November, 2007
Programme and Project Management conference organised by Unicom
Contribution on role of value networks in projects and programmes. "Will the Real Project Please Stand Up?" Organising for value in situations ranging from simple to chaotic.
Project Management Conference 2007 (2).pdf

20th February, 2009
Meeting of Control and Risk Self-Assessment Forum at Grant Thornton, London, UK
This meeting was held to address the challenges of the current credit crunch to pinpoint needed action in organisations. David Meggitt's presentation used the UBS shareholder report to provide an hour's presentation with Q and A on focussing the value network perspective on "appraising business models before and after they come off the rails." The report of this contribution is here.
CRSA Forum Agenda 2009.pdf

11th June, 2009
Achieve win-win with value networks
Held at Regent's Business School, London, by City and Westminster Branch of Chartered Management Institute.
CMI Flyer for value networks.pdf

21st October, 2009
Business Psychology:The Russian-British Experience
Scheduled for The Graduate Centre, Holloway Road, London, organized By: London Metropolitan University and Moscow Higher School of Economics.
Anglo-Russian Conference AT _2_.pdf

Ideas for moving from top-down Government control to encouragement of more participative government at a local level are in the air. For example, the UK Conservative Party Manifesto published yesterday makes this a core theme; getting stuck in as a volunteer and building a nation of people who look out for others and not assuming that politicians have all the answers.

Pilot to transform supply chains from efficient supply

to innovation pipeline

You are at http://tinyurl.com/yeu29xj

Life in organisations can be complicated and complex! Here's one viewpoint.

The diagram below is my most complicated one yet to capture some of life's challenges in organisations. This is for consumption by engineers and blatently breaks all the rules of good presentation by ignoring the benefits of "chunking." You can obtain a larger image by clicking on the jpg at the foot of the blog.

The blue blocks show how intangible assets are conceived and grouped, using the descriptions found in the value network approach. The intangibles are:

>>> Foreground intangible assets (Human competence, business relationships, internal structure)
>>> Background intangible assets (Corporate identity, social citizenship, environmental health)

Tangible Assets are show in red as facilities and trading, for want of better headings.

The horizontal brown bands represent interventions or concepts that interweave at four levels:

>>> Personal
>>> Interpersonal
>>> Organisational
>>> Societal

A recent book " Long-Range Futures Research - An application of complexity science" by a former colleague at Planning Research Corporation (PRC), Robert H. Samet, provides rich new insights on alternative ways in which to reconfigure these levels, as well as extending the horizon to 2150 with a tracing of an evolutionary trajectory to 2250.

The "Focus of Conversation" blocks are based upon a theoretical construct of aspects of knowledge devised by former colleague Verna Allee in her book"The Knowledge Evolution - Expanding organizational intelligence," itself based on the prior work of Karl-Eric Sveiby and Leif Edvinsson.

Usefully, these aspects can be directly linked to the time horizons of CEO's as they wrestle with the sometimes conflicting demands of short term action and longer term issues and worldviews. Although the brown topics above are not linked to the planning horizons, their significance seems eternal.

A question for Remuneration Committees: - How should a CEO's remuneration be linked to the Planning Horizons?

Dimensions of Organisational Existence.jpg