From business units to value networks

Numbers make the world go 'round, one might say. Numbers are everywhere and still they proliferate. Often these numbers denote monetary value, or a percentage indicator for performance. Lots of hidden numbers control increasing parts of our life, with advanced algorithms steering our digital interfaces and financial systems. In many ways, organisations are like numbers. Numbers are scalable, as are organisations. Numbers allow you to express and unify complex systems, as do organisations. They reduce the loss of information, and so do organisations.

We love numbers. We like to express things in numbers, even if it might not always make much sense to do so. There are aspects of the world around us that we weren’t able to express in numbers before, but are increasingly able to capture through science and information technologies - take the human genome, or our consumer habits. On the other hand, there are aspects of our inner life or subjectivity that we love to put a number to - from our happiness to the value of an artwork.

You could say that numbers brought us to the point we’re at now - an advanced urban society ready to step into the second machine age. But like the phenomenon of dark matter in physics, all those numbers don’t seem to add up to a whole.

Rather, holes appear throughout our society, leaving the numbers people somewhat baffled. There’s the gap between politics and the electorate. A lack of support for the arts. A lack of understanding between old inhabitants and new arrivals. Difference between interest on savings and the bonus of the banker. The distance from the plate of the consumer to the farm that grew the crop. The contradiction between academic principles and university targets.

These gaps show us how organisations and numbers actually differ. Organisations are composed of people, not numbers. And where numbers express their value outright, people have diverse, multiple and often contradictory values that change over time. During the organisational age (Richard Florida), companies and government organisations grew tremendously in size and power, aided by numbers-based value systems. But in doing so they increasingly removed themselves from the diverse values that drive individuals, rendering them incapable of connecting to larger groups (whose collective sets of values we might define as cultures). When it comes to these gaps, there is therefore an issue of scale at play, and a question of value to be answered.

I'd like to recall Einstein’s old wisdom that 'we cannot solve our problems with the same thinking we used when we created them.' Tackling these already-old, yet persistent gaps requires a new approach. Central to it are collaborative networks and organisations that reconnect societal, cultural ánd economic concerns. In the following, I’ll outline three important trends that make these shifts possible.

1. Top-down turns bottom-up

The end of the manager has been announced with increasing confidence in recent years. Even if most organisations struggle to interiorize this announcement -their multiple layers of management still firmly in place - alternative modes of production are becoming more pronounced and successful. What these new modes have in common is the inversion of traditional, centrally organised production in favour of decentralised, bottom-up organisation.

There’s clearly a strong democratic potential to this trend, akin to that of the early sixties. Only this time around, there is a technological base to the trend that dramatically increases the capacity to decentralise production of knowledge, decision making and goods. Because of this material base, we see more potential for institutional or organisational change in addition to a popular movement. What’s happening is that production is shifting towards so-called collaborative commons; decentralised networks of individuals collaborating around shared goals or values to produce anything from encyclopedia’s to energy networks. They function according to agile processes; continually adapting to changing technological circumstances and the feedback of stakeholders.

By definition, the rate of change in hierarchical organisations is slower than the technological-economic developments that determine their fate. This presents them with the insurmountable challenge of keeping up with a world in constant flux, and an over-abundance of information. Networked organisations have unprecedented speed and flexibility through their collaborative mode of production, relying on the bottom-up processing and prioritising of technological developments, customer demands and decision-making. Many of today’s leading organisations face the challenge of tilting towards this new mode of production, or running the risk of disruption and obsoleteness.

2. The 'Turing-test' for sincerity

The past century saw the rebranding of propaganda into PR, the advent of marketing and the rise of the spindoctor. These strategies developed according to the needs of ever growing organisations: to communicate effectively over increasing distances to individuals. On the receiving end, decades of exposure to ever-refined methods of communication have led connected individuals to develop an uncanny ability to filter information. Increasingly, communications that seem to have ulterior motives are ignored, together with the sources of communication whose intentions are perceived as being insincere. The result is a divide between todays corporate and political 'communications-at-a-distance' and the audiences they seek to reach.

Increasingly, these (rather one-sided) long-distance relationships are being replaced by local and more affective relationships. Based on the values of authenticity and transparency, these relationships are becoming dominant because they enable people to effectively ascertain the intentions of sources and the relevance of information. Traditional organisations often look to social media (with its potential for ersatz dialogue and community) as a way to maintain long-distance communications whilst adopting a more authentic and transparent attitude. The catch here is, with algorithms increasingly passing the Turing-test in the composition of digital communications, people quickly catch up to and filter out these new strategies of faux-sincerity.

Sincerity of intention is the touchstone of contemporary communications, buttressed by the values of authenticity and transparency. With a near-infinite capacity for simulation, media don’t offer an effective arena for individuals to test these intentions. In stead, they operate increasingly on the other side of the media-barrier, closer to home. They do so in the physical sense of local, handmade, and sustainable, as well as the psychological sense of with other individuals and the idealistic sense of based on shared values. These three are combined in the concept of community. It is the community beyond the media barrier that serves as an updated Turing-test for sincerity.

3. From business units to value-networks

So authenticity is reconfiguring many areas of production towards a more human, local scale. Simultaneously, technological advances are creating automated productive systems that exceed the scope of the individual. Although they come with their own set of challenges and risks (mass unemployment and robot apocalypse to name a few) these systems reduce the import of efficiency in human productivity, further opening up the possibility of reconfiguring human production towards the authentic. More specifically, these systems allow labour to be organised in completely new ways along the lines of value-based networks. In stead of the long-distance communications and numbers-based scaling of traditional organisations, these new (micro)organisations form according to collective goals and values, and depend on collaboration for scale.

This means labour is destined to become more organised according to symbolic value-systems and collective aspirations rather than corporate strategies and political agenda’s. The distribution of these follow an internet logic of virality and commons, both in the case of a benign forerunner as Wikipedia as in the far more sinister spread of ISIS. For today’s extant organisations, the challenge at the board-room level is to transition from numbers-based, top-down and media-oriented structures to more flexible networks that are value-based, bottom-up and community-oriented. Communications departments face a particularly interesting challenge, as their essential logic is turned upside-down: becoming community leaders in stead of corporate spokespersons, practicing advocacy in stead of pushing sales and being segmented along the same lines as their audiences.

In short, neither numbers nor media can close the gaps that exist like dark matter throughout our societies. As long as we continue to endorse organisations that put numbers ahead of values, these gaps will continue their enigmatic growth. We should accept that in certain domains, numbers-based answers cause more problems than they solve. Moreover, we should heed Einstein’s advice in adopting new, value-based ways of thinking to move forward. It’s time to leave the calculators behind and bring right & wrong back into the equation. For many, this entails leaping through the media-barrier, into a brave new world of real people and communities… don’t be afraid, you’ll like it here.

Second Sight #44: On Numbers