Friction, hypereconomics, and social intercourse

Friction is one of the more important concepts in the world. Many things are either made possible or impeded by friction.

Strike a match and the friction creates a flame. Yet that same kind of friction stops other things from flowing smoothly.

Perhaps the best description of the challenges that arise from friction is from the well known military strategist, Clausewitz:

“Everything is very simple in War, but the simplest thing is difficult. These difficulties accumulate and produce a friction which no man can imagine exactly who has not seen War . . . in War, through the influence of an infinity of petty circumstances, which cannot properly be described on paper, things disappoint us, and we fall short of the mark.”

From: Clausewitz, On War, Book I, Ch. VII

Recently Mark Pesce asked “What happens after we’re all connected?“, and he came up with the answer: “hypereconomics”.

Economics, fuelled by hyperconnectivity and enabled by the removal of friction in processes between people, equals hypereconomics.

And it is this removal of friction in processes, enabled by the internet and mobile technology, that creates the next frontier of opportunities for business.

The combination of mobile accessible applications and peer-to-peer social networks offers an astonishing array of new business opportunities.

In the Arab Spring and Occupy movements we have already begun to see the social and political shifts that are enabled when citizens can communicate and organize effectively through use of mobile technology coupled with social media.

The impact of these political and social movements will necessarily flow on to economic structures. This will create a gap for development of new business models based on removing friction and leveraging peer-to-peer capabilities offered by mobile devices.

Also people are getting used to helping themselves and each other, and the technology is enabling them to act collectively without a great deal of effort. This is the big shift.

We can now collaborate and act collectively even though separated geographically. No longer do we need to meet face-to-face to act. Collective action is enabled and made more efficient with mobile technology in so many hands. And it even facilitates better face-to-face meetings and action (viz. Occupy and the Arab Spring).

I am expecting to see a lot of disintermediation – shifts in the supply chain that that remove some existing intermediary players.

One of the first areas I expect to see this in is new mobile and online peer-to-peer payment models. Another area is aggregation of service providers and potential customers. Up until now aggregating those types of services required large capital investment, but now it just needs a peer-to-peer smart phone application.

If you are an existing economic or financial intermediary it’s time to start planning for this new reality. If you don’t then the dispersed peer-to-peer linked mob might just eat your lunch.

Navigating the New World of Hyperconnectivity

This week I spoke at the Recruitment Technology Evaluation Convention in Sydney. The topic was navigating the hyperconnected world from a recruitment and human resources perspective.

The key issues facing businesses now include:

  • Hyperconnectivity and the digital revolution
  • New rules for engagement and recruitment
  • Why community matters more than ever

The proliferation of social computing and huge growth in smart phones means that the communication landscape is changing. No longer are people tied to desk to access applications and the internet. And the high usage of social networks is driving different expectations in our user communities.

Further, there is an increase in social recommendations as an engine of business. The workplace is changing. We are changing both the physical experience of the workplace, with creation of collaborative spaces for people to gather in as well as traditional work stations. Along side the changes in the physical work spaces we are seeing a rapid evolution in social business practices and platforms that mirror the experience of public social networks.

The challenge for businesses today is how to engage and retain staff, and to build a culture that supports the creation of value for all stakeholders. Maintaining relationships with current and former staff members (through alumni communities) and other stakeholders is becoming critical. This is where community management becomes increasingly important.

Also, for many years, employers have taken it as their right to undertake surveillance of various kinds in respect of their current and potential employees. Now we are seeing the rise of sousveillance or ‘inverse surveillance’, where the watchers become the watched.

This phenomenon of sousveillance is merging with the trend towards social recommendations to create reputation networks that not only encompass the personal brands of individuals, but also include corporate brands. This is changing the rules of engagement for all parties. Employees are increasingly likely to bring with them a fully fleshed personal brand and a propensity to use social media as part of their daily lives.

Companies are increasingly demanding that their employees participate in social media on behalf of their brands. This means that the boundaries between personal and corporate brands are likely to blur, and we can expect to see skirmishes along those boundaries. Questions such as who really owns the contacts made via social media that an individual has made during their employment will need to be resolved. We are already seeing legal cases testing this question.

The big challenges that I see (from a company perspective) within the new hyperconnected landscape include:

  • the need to master complexity;
  • finding ways to deal with shifting or blurred boundaries between the public and private or between business and personal;
  • the need to remove friction in processes across silos and boundaries;
  • continued demands to deliver value to all stakeholders; and
  • the increased need to build and maintain relationships and the growing visibility of those relationships via social channels.

When robots rule the world – the future of jobs in a hyperconnected world

Steve Hopkins was telling me recently about an interesting law firm he’d come across in San Francisco – it’s called Robot. Where lawyer and junior partner Tim Hwang and his senior partners, Apollo Cluster and “Daria” XR-1029, work to merge legal and technical systems.

It was this law firm, and an interesting conversation Steve had with Tim Hwang, that sparked the idea for Steve’s session at last Saturday’s Social Innovation Unconference at Barangaroo.

We discussed the time in the future when robots run everything. And it got me thinking just how much robots already do for us. For most people the robots that run things are unknown and operating below their level of consciousness.

But let’s consider some of the work that robots already do for our society:

  • manufacturing – e.g. assembly lines for things like cars and packaging, quality control, building electronics components such as circuit boards
  • call centres – e.g. automated voice response systems
  • financial services – e.g. business decision support systems, straight-through-processing trading systems
  • the internet – e.g. search engine bots or those annoying Twitter bots
  • military – e.g. unmanned combat air vehicles (aka drones)
  • home and industrial cleaning – e.g. vacuum cleaners

I’ve been personally involved in developing and implementing intelligent business systems for a long time. Starting in the early days of voice automation and straight-through processing of financial transactions in the 1990s, through to the present day.

A large part of my work during the late 1990s and early 2000s was automating business processes and removing human beings from business processes. It was a huge shift in labour from human beings to robots. Those were mainly clerical jobs where a computer with a decision engine could easily replicate the work done by people.

Consider the productivity savings achieved by many of those projects; for example one project halved the number of call centre operators through the use of automation. That saving was achieved by addressing throughput constraints in both the inbound and outbound queues.

Firstly savings were achieved through the use of automated outbound calling technology – not waiting for the humans to dial a number but rather having the system start making the new outbound call while the earlier call was finishing. It also improved throughput by automatically bringing up the data entry screens for the call centre staff.

Secondly savings were achieved by adding customer self help options at the start of the inbound call process and by providing support to move customers to online self service. Instead of a human being tied up on the phone for 2-5 minutes with a customer trying to ascertain their needs the IVR and the customer did that work thus freeing up the operators to take more calls.

Arguably these improvements through increased automation were not as good for customers as they were for the bottom line of the companies, nor were they very good for the call centre staff that became redundant. And many would argue (as do I) that shifting the business processing efforts to consumers does not always make for excellent customer experiences. But cost and process optimization is a fundamental business practice.

It’s interesting to consider what other jobs will be removed from people via the next rounds of automation. The jobs that will go next are most likely to be middle class and white collar jobs.

The jobs that could go include: journalists, lawyers, managers and supervisors, warehouse personnel, sales staff (if the sales are all online how many do you need in a store?). Fundamentally, if your job or substantial parts of your job,  can be defined by means of a decision tree then your job is at risk of a robot taking over.

Welcome to the brave new world of work. What’s your plan to survive when robots rule the world?

Note: I’ve left out the entire area of robots for health since I don’t know much about it – but I reckon that will be huge too.

Interesting new initiative: #Solved by TACSI via @stokely

Just saw announcement by TACSI that they’ve launched a new campaign. It seems like a really interesting idea, and one that definitely supports social innovation:

Why Solved? Sometimes when tackling social challenges, we focus too much on searching for new ideas or solutions, and overlook things that are already working. Maybe you set up a scheme to help local kids eat a healthy breakfast in Broome, and someone in Newcastle is searching for a way to do just that. By sharing what works on the Solved map, we hope these solutions can help more people across Australia.

Big or small, it doesn’t matter. It can be something done by an organisation, or one person. My dad did a lot of work to help build a Men’s Shed in Sheffield, Tasmania to create a place for men to get together, and overcome loneliness, social isolation and depression. The work my dad did, and the impact it’s having on people in his town, is what inspired me to create Solved.

Solutions to social problems are worth celebrating and worth sharing. It’s a great opportunity for people or organisations doing good stuff to let people know about it – or to give a shoutout to their favourite local solution.

How you can help: The number one thing you can do is to notify your network of social changemakers about Solved, and encourage them to add their solutions to the map. If you’re sending out a newsletter, we would appreciate it if you’d include a brief plug for Solved! The campaign is running until December 16, but the sooner you can let people know, the better.

We would also love it if you would follow Solved on Twitter and Facebook, and help your followers there discover Solved.

You can do this by:

  • Following @SolvedAustralia on Twitter.
  • Retweet the following: RT @SolvedAustralia: #solved is an Australia-wide search for social solutions that work.
  • Seen or done something that’s helping? Tell us about it: solved.org.au
  • Like the Solved in Australia page on Facebook.