Shaping Network Society

—————

I am back from Berlin, where we were discussing at the google collaboratory how to evaluate the impact of open government. While the excitement about enterprise 2.0, government 2.0, and open government has been building, critical voices in organizations have questioned the return on investment (ROI) of such projects. 2.0 projects are often still looked upon as insignificant or superfluous. The now classical response to this has been to allude to the ROI of  successful projects:

Consider Apps for Democracy, which yielded 47 iPhone, Facebook and Web apps in 30 days – a $2.3 million value that only cost the city $50,000. It’s hard to dismiss an estimated 4,000 percent return on investment in one month’s time. The contest’s success, powered by iStrategyLabs, spurred Apps for Democracy “Community Edition” and spinoffs in other cities.

This approach of utilizing the ROI framework to defend 2.0-strategies, however, has several flaws, (a) it might have been a lucky shot, (b) it might not be sustainable, (c) contests might not focus on what citizens need (d) any impact below a certain threshold, let’s say $ 1 billion does not carry weight in big governmental or corporate organizations, but (e) most importantly, ROI is the wrong tool to evaluate success of enterprise/government 2.0 projects, because most of the value is accrued with the consumer not the producer of the value.

If we look at the most successful 2.0 projects of the last years, we see a pattern, where the ROI is not a relevant indicator to evaluate the project. One of the first big 2.0 projects, Wikipedia, destroyed the encyclopedia industry, but is not generating major revenues.  Couchsurfing and sites like http://airbnb.com/ or http://www.crashpadder.com/ are taking big bites out of the Hotel industry without generating equivalent returns. Open Street Map is having a huge impact on the mapping industry, one of the most profitable industries of the last years. Dynamic ridesharing is creating a secondary mobility infrastructure in most countries, basically competing with our complex integrated public transport systems such as the German Railway, with revenues of more than 10 billion euro in passenger transport per year or shorthaul flights. The combined revenues of the 5 major German ride sharing companies is way less than $ 10 million, but the impact on the lifeworld of their users is dramatic.

There are three lessons to be gleamed from this:

• the impact of 2.0 project are not to be evaluated in ROI, but in consumer-focused metrics (shadow prices, counterfactuals, reduction in average cost, rate of demonetarization, etc.). Ideally, not in monetary terms, because 2.0-strategies aim to de-monetarize.
• for corporations, 2.0 strategies go way beyond “normal” cannibalization strategies. They focus on the de-monetarization of industries. Therefore, as strategists, we need to ask, how can we generate a revenue flow that does not inhibit adoption, but sustains the effort.There is no choice, either we do it, or someone else will do it.
• For public value strategists that are not entrenched in existing practices this is a dream-come-true. You can now recreate a multi-billion-dollar infrastructure (the German railway system) with a web-page.

If this does not sound like a fun scenario from the perspective of an existing organization (be that governmental or private), be assured that there is nothing you can do against it. The two mega-trends driving the development are the dematerialization of the economy which has been going on for over one hundred years (the weight of the US economy per dollar of GDP has been decreasing more than 100-fold in the last century) and the implosion of transaction costs of organization through digitization and the rise of n-to-n (peer-to-peer) media are leading to new forms of organization (open value chains) and new products and services that can be digitally provided at basically zero marginal costs.

An analogy of what is happening today can be seen, when we look at the historical institution of medieval knighthood, probably the most expensive and sophisticated approach to individualized fighting and organization of social and cultural life in the history of humanity. In 1386, at the battle of Sempach, a “web-startup” consisting of Swiss peasants defeated the Austrian knights, by pushing them down from their high horses by using long poles. Not very sophisticated, but sufficient to get the job done. Expect more of that today.

When in Berlin, I also had breakfast with Peter Scheufen, the CEO of Skobbler, a smartphone navigation company that was globally the first to utilize Open Street Map in its core navigation product and that is making the navigation industry very nervous.  Peter sees his role as a negotiator between the world of the voluntary mappers, software developers that might want to build applications on top of his server offering, and consumers that expect a working navigation product for as close to free as possible, and believes he can build a business model where he can generate a non-intrusive revenue stream for his company. Navigating these waters is not easy, but it can be very rewarding for all of us, who believe we can have a positive impact on this planet and generate revenues, by figuring out how to generate revenue streams that do not disturb the value chain. So, ignore the ROI-issue and focus on the big picture of (public) value creation!

I am sitting in my apartment at Peapody Terrace, overlooking the Charles River wrapping up my time at Harvard. Teaching in the collaborative governance program with Jack Donahue, Akash Deep, Tony Gomez-Ibanez, Chris Letts, Edgar Aragon and Mary Hilderbrand was amazingly fun. Conversations with Gerald Knaus, Jorrit de Jong and Linda Kaboolian have been invigorating and I am ever more convinced that we need to carefully work out the logic of collaboration in high trust societies where transaction costs have collapsed because of new n-to-n communication technologies.

It is a historical moment analogous to the new logic shaping societies when we moved from transcendental to immanent explanations of collective action in the 15th century. And just as Machiavelli tried to uncover the systematic aspects of these logics, we need to focus on new statecraft and new strategy. Below is a  screenshot and link to an interview I did along these lines with an Austrian Monthly, you might enjoy it (if you read German).

I am just coming back from a wonderful day of debate with Germany’s and Austria’s top policy makers in the information technology field. The conference headlined by the new German CIO was titled Information and Communication Technologies as Strategic Instruments for Government. I had been asked to give the final talk after a wonderful tour of the Austrian national library that confronted us with the knowledge politics of the printing age.

I took up that thread and connected it to the idea of statecraft, a concept you can only talk about with a straight face, when speaking in the halls where Metternich, von Stein, Kelsen, and co. voiced their ideas and created the modern state. In this situation, we were able to start an important conversation on how the idea of collaboration in open value chains and social media technologies are transforming public value production.

It was amazing to learn from the top German government officials concerning the topic. There is clearly a very sophisticated, but distributed community out there in government that is starting to make change happen. Expect great changes in the next year.

Anyway, if you want to read the talk, I posted it here. I would love to get your feedback on the text and continue the conversation.
(in German)

By: Philipp Mueller and Violetta Pleshakova

In 2010, it has become a truism that culture, lifeworlds, and our political economies are transforming. It is obvious that the Web is impacting society, bringing in new lifestyles, attitudes, values, work patterns and relationships – it is now even officially (unofficially) nominated for the Nobel Peace Prize. As the Internet for Peace Manifesto states,

We have finally realized that the internet is much more than a network of computers. It is an endless web of people. Men and women from every corner of the globe are connecting to one another, thanks to the biggest social interface ever known to humanity.Digital culture has laid the foundations for a new kind of society. And this society is advancing dialogue, debate and consensus through communication. Because democracy has always flourished where there is openness, acceptance, discussion and participation. And contact with others has always been the most effective antidote against hatred and conflict.That’s why the internet is a tool for peace. That’s why anyone who uses it can sow the seeds of nonviolence. And that’s why the next Nobel Peace Prize should go to the net. A Nobel for each and every one of us.

Wide-ranging opportunities for peer production, low transaction costs of participation and prominence of non-instrumental and non-material motivations can potentially transform the social world into more creative, collaborative and active (see Lessig 2008, Shirky 2009, Benkler 2006). Due to this interplay of factors the social reality is transformed from a Read-Only world to Read-Write world. In the latter, people shift from being passive consumers to acting as enthusiastic creators. As argued by Shirky, “revolution doesn’t happen when society adopts new technologies – it happens when society adopts new behaviors” (2009, p. 160). Technology, however powerful it might be, cannot master the change alone. Technology has to be adopted and used by people, only then it can become ubiquitous and embedded in the everyday reality of society.

Although we witness a plethora of new digital phenomena on a daily basis, we are still lacking an overarching framework to think how these new technologies will transform our cultures, politics, our lives, and even personalities. This understanding and reflection occurs “on the go”, as we are forced to react to change and as we try to craft it. We face numerous questions along the way as technologies shape our lifeworlds and our lifeworlds shape our cultures and politics.

Culture, Lifeworlds, and Politics

Culture is a set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group. Georg Simmel defined the concept as “the cultivation of individuals through the agency of external forms which have been objectified in the course of history.” Lifeworld is the social scientific term that reminds us of the incommensurability between academic description and the human experience social life. It is a term that asks us to think culture not only through the systemic perspective of the outside observer, but to hermeneutically engage with the subjects of our objects of analysis. As Habermas (1984: 117) conceptualizes it,

society is conceived from the perspective of acting subjects as the lifeworld of a social group. In contrast, from the observer’s perspective of someone not involved, society can be conceived only as a system of actions such that each action has a functional significance according to its contribution to the maintenance of the system.

Politics is the concept that deals with questions that are described as questions of choice for collectivities (Bartelson 2001; Anderson 1983). It can be circumscribed by the terms community and authority that can be ostensibly related to the questions “Who is member?” (the question of community or identity) and “who gets to decide?” (the question of authority).

From Read-Write to Read-Only and to Read-Write Reloaded

The concept of Read-Only (RO) and Read-Write (RW) was proposed by Larry Lessig in his book “Remix” (2008). As he suggested, human culture has for many centuries existed in Read-Write format, where one would not only perceive, but also create and change the culture. Culture was read-write ever since homo sapiens discovered her ability to paint, play music, and sculpt figurines such as the Venus of Schelklingen in the Swabian Alb 40.000 years ago. As stated in Wikipedia, the ultimate collaborative project:

The Swabian Alb region has a number of caves that have yielded mammoth ivory artifacts of the Upper Paleolithic period, totalling about twenty-five items to date. These include the lion-headed figure of Hohlenstein-Stadel and an ivory flute found at Geißenklösterle, dated to 36,000 years ago.^[1] This concentration of evidence of full behavioral modernity in the period of 40 to 30 thousand years ago, including figurative art and instrumental music, is unique worldwide and Conard speculates that the bearers of the Aurignacian culture in the Swabian Alb may be credited with the invention, not just of figurative art and music, but possibly, early religion as well.^[2][3] In a distance of 70cm to the Venus figurine Conard’s team found a flute made from a vulture bone.^[4]

It was only the 20^th century that has shifted the paradigm of cultural development to Read Only – a culture, where individuals are only consumers.

There are some technological reasons for the shift to RO that took place in the 20^th century. Such inventions as phonograph, TV, radio, CD, VHS, DVD enabled wide distribution of culture products and established the principle of delivering culture to people packed in copies. A TV provides a copy of a talk-show. A CD provides a copy of a song. A DVD provides a copy of a film. If in the previous centuries culture was distributed freely and cultural products were easily built upon (like fairytales, told by people to each other without being written down and with possibility to add or change details; like folklore music, sang by people in private circles and on holidays, composed by nobody in particular and by everyone in general), the 20^th century technologies have emphasized and boosted up the growth of copyrighted culture, provided in fixed and unchangeable form.

Now, in the 21^st century, the world has the chance to go back to RW culture and creativity (Lessig 2008, p. 252), but on steroids. Read-Write combined with the power of a global broadcasting platform. The logic of active participation renders obsolete the image of an individual, nurtured by the pop culture of the 20^th century: the image of a consumer. The tools for this shift are provided by the new Web, which favors free creation, voluntary project commitment and collaborative effort; where simple users can become active netizens (Zittrain 2008, p. 161). Through its participatory effects, the new Web fosters the reality of active creation, not passive consuming. Today people “are gratified in significant ways by the ability to play an active role in generating content, rather than only passively consuming that which is created for them by others (Harrison and Barthel 2009, p. 157). There is “substantially less dependence on the commercial mass media of the twentieth century” (Benkler 2006, p. 9). As the costs for participation in the new Web fall and as the complexity of  handling technologies decreases, more and more individuals are empowered to become co-creators of our cultures and can have their voice heard. This, however, necessitates also a new way of critical listening.

An Attack on Professionalism

This results in the rise of an amateur culture. In the new Web it is not necessary to pay professors and experts to start an encyclopedia – instead, it is easier to harness the potential of individual knowledge, as Wikipedia did. It is not necessary to pay professional photographers to obtain pictures of a certain event – pictures of nearly everything are available for free and are easily searchable in folksonomies on free photosharing websites like Flickr. It is not necessary to buy expensive machines and spend money on marketing campaigns and personnel to create a newspaper – everyone can be a press outlet of his own with the use of blogging platforms since today “the mass amateurization of publishing undoes the limitations inherent in having a small number of traditional press outlets” (Shirky 2009, p. 65). It is not even necessary to turn on TV to get updates on burning news – livestream of first-hand information is available on Twitter and blogging websites. Similar limitations are destroyed in other spheres.

As a result, professional culture is challenged. A professional is a member of a vocation founded upon specialized educational training, who does not need supervision. Think of doctors or lawyers as classical examples. As a patient, you need to trust your lawyer or doctor, because there can be no absolute proof of her quality, therefore, she needs to convince through secondary attributes (being well-dressed, a fancy office) and/or professional codes of honor. Being member of a profession of course is always exclusive and normally connected to better-than-average incomes. With the democratization of tools of the trade professionalism is under attack.

Firstly, it is not needed in the amount it was needed earlier. As statistics shows, traditional media are suffering losses, laying down the personnel and generally loosing the competition to online media, including the ones run by amateurs (see Keen 2008). Secondly, professionals are not considered as reliable as before. If information, cultural products and meaningful content can be provided in the same (if not bigger) amount, faster and easier than before, there remains little ground for professional culture to preserve its monopoly.The result is the formation of more diverse, more vibrant, more active social universe. Remix culture of improving, changing, sampling, mixing derivative works aspires to replace the culture of permission, that existed before.

Learning to Trust

The new Web stimulates active engagement of people, impacts their lifeworlds and leads to “the rise of effective, large-scale cooperative efforts – peer production of information, knowledge, and culture” (Benkler 2006, p. 5). This active engagement expands the limits of our experience of culture and politics – it changes individuals that participate. Most of us remember the night when we moved from Read-Only to Read-Write, for some it is an experience similar to a first date or to first driving a car -  it might be writing for Wikipedia, posting photos on Flickr or rating links on Digg, with each and every click a person does in the modern Web, he or she is adding value to the community. Voluntary entries in Wikipedia have helped to build the world’s most consulted encyclopedia within a very short time span. Ratings of goods on Amazon.com help other consumers to select products and learn about items in categories they are interested in. Tagging photos on Flickr or music on Last.fm helps other people to find what they are looking for.

Distributed Leadership

It has to be acknowledged that this type of production is not dramatically new, since people were getting together to produce collectively since primordial times. However, only Internet technologies have made the work flow of this type of collective action easily manageable and allow cooperation across both space and time. It means we need different leadership skills,  leaders that have the ability of “convincing people who care a little to care more” (Shirky 2009, p. 181), leaders who can design open processes and engage distributed collaborators to contribute little pieces to bigger projects. Web technologies enable the  decrease of transaction costs of production and participation. Humans make them happen.

Just in time for the EU minsterial conference in Malmö, John Gotze brought together some of the most prominent thought leaders, including Don Tapscott, Tim O’Reilly and Lawrence Lessig, in the emerging field of Government 2.0 (“thinking government as a platform”) in the book State of the eUnion: Government 2.0 and Onwards, which is available for free download.

In my chapter (p. 275-282), Open Value Creation as a Strategic Management Approach, I argue that

[...] The 
idea 
of 
government
 (or 
business)
 as 
a 
platform
 necessitates 
an
 open
 value
 creation
 process. 
Open 
Value 
Creation 
consists 
of 
Open
 Policy Making 
(participation) 

and 
an 
Open
 Value 
Chain (collaboration). 
The
 distinction
 is 
slightly 
arbitrary
 but 
useful. 
It 
allows
 us 
to differentiate
 between
 coming
 up
 with
 a
 value
 generating
 process
 (policy) 
and
 repeatedly
 creating 
the value 
(value
chain).

Open
 policy
 making aims
 to
 open
 all
 aspects
 of
 the
 policy process
 (initiation,
 formulation,
 implementation,
 evaluation)
to
outside
inputs
and
scrutiny.
It
assumes
 that
 this 
allows
 better
 informed
 policy
making
 that 
is 
more 
legitimate and 
less 
costly.

The
 open
 value
 chain opens
 the
 implementation
 process
 (inputs, 
process,
 outputs, 
impact, 
outcome) 
to 
outside 
contributions
 under
 the
 assumption
 that
 a
 co‐produced
 public
 value
 is 
less
 costly
and 
more
 effective. [...]

Enjoy the book and let us start the discussion!

There are not many instances when a governmental memo shaped the political philosophy of a generation. Clearly Kennan’s Long Telegram comes to mind:

The ‘Long Telegram’ was sent by George Kennan from the United States Embassy in Moscow to Washington, where it was received on February 22nd 1946. The telegram was prompted by US enquiries about Soviet behaviour, especially with regards to their refusal to join the newly created World Bank and International Monetary Fund. In his text, Kennan outlined Soviet belief and practice and proposed the policy of ‘containment‘, making the Telegram a key document in the history of the Cold War. The name ‘long’ derives from the telegram’s 8000 word length. (quote from About.com)

The social media community believes Obama’s Transparency/Participation/Collaboration memo will have a similar impact on our century. The framework implied in the memo has been taken up governments worldwide, real world policies have been implemented, and the “access-to-information-legislation” topic has moved from arcane to center field. It is surprising, however, that not much is known about the background/history of the memo. Who drafted it? Who developed the TPC framework? Who brought the topic onto the agenda? Who knows more? Who can point me to the relevant people?

as we are learning to use social media in organizations, we overestimate some aspects of this new approach and are confused about others: What is new, what is not? What is hype, what is real? Therefore, it is a time for careful definitional work. Yesterday, Andy Blumenthal, the CIO of the FBI did this in an article in Government Technology where he outlined the difference between communication and collaboration:

Information technology has traditionally been about “communication” of information — capturing it, processing it, moving it, storing it, finding it and using it. But now, with Web 2.0, we have evolved from communication to “collaboration.” Well, what’s the difference?

…the real difference between communication and collaboration seems to be related to an organizational and cultural transformation taking place…

We’ve always communicated. But much of the communication was within our own stovepipes — particularly within our own chain of command — to our bosses, staffs or peers primarily within the same organizational function. That was where most of our communication took place — in our organizational verticals.

Now, however, we are transforming from mainly vertical communication to the horizontal collaboration. We are breaking down the stovepipes, which one of my colleagues euphemistically calls “silos of excellence,” and we are instead working across organizational and functional boundaries — hence, we are doing some genuine collaboration!

This is a useful conversation starter and it reminds us of that we are still only learning to “collaborate.” I want to distinguish between three modes of technology-enabled collaboration: Ideation, deliberation, and collaboration, what I refer to at the ESPP as the IDC framework.

All three are useful to governments (and business) when confronted with specific policy issues. Often but not always, you might start out with an ideation phase, move to a deliberation phase, and then to collaboration, the classical example is the Open Government Initiative. Of course, collaboration and deliberation is part of ideation and vice versa, but on the project level, they can be clearly distinguished.

Ideation

ideation is the process of collectively coming up with ideas and developing them. What is need is a platform that allows participants to post ideas, to comment, and to weed out the bad apples.

Deliberation

we understand deliberation best, because it has its analog in the offline world and there is sufficient text about it (Aristotle, Habermas, Sunstein come to mind). The idea is to create a space in which the better argument and not the structurally advantaged position wins. What is needed is a platform to present ideas, discuss them both syn- and diachronically, and to weigh them in concordance with the underlying governance principle (think Digg-style, Reddit-style, or IMDB-style).

Collaboration

we have most difficulties with collaboration, because it is new. Collaboration allows access to the work-flow by self-selected outsiders. The idea is to make the work flow modular, granular, and redundant, so that very different contributions can be integrated without endangering the quality of the output. A collaboration platform must be governed by a combination of self-enforcing code, simple but strong core principles, and an inclusive culture (think Canonical’s Launchpad or Wikipedia).

What do you think? What would a full-fledged framework look like? Is it mutually exclusive and collectively exhaustive (MECE)?

In this “breathless” time where new conceptual frameworks emerge by the minute, it makes sense to step back and reflect on our thinking of… last week. In the “revisiting” series, I want to point to some of the older postings of this blog. Some might still be relevant, others off the mark, others again will have the quaint nostalgic sound of 1950s science fiction. The following is from August 6th, 2006.

Patrick Dunleavy (LSE), Helen Margetts (Oxford Internet Institute), and Simon Bastow/Jane Tinker (LSE) have written a seminal piece in J-PART: New Public Management is Dead — Long Live Digital-Era Governance describing the developments in “leading-edge” countries (UK, US, Australia, Canada, the Netherlands, Japan).

They argue that the main drivers of New Public Management (NPM), disaggregation, competition, and incentivization have not achieved what they promised and that Digital-era Governance (DEG) is described by three trends (p. 480):

a. Reintegration – the key opportunities for exploiting digital-era technology opportunities lie in putting back together many of the elements that NPM separated out into discrete corporate hierarchies, offloading onto citizens and other civil society actors the burden of integrating public services into usable packages.

b. Needs-based holism — In contrast to the narrow, joined-up-governance changes included in the reintegration them, holistic reforms seek to simplify and change the entire relationship between agencies and their clients. The task of creating larger and more encompassing administrative blocs is linked with “end to end” re-engineering of processes, stripping out unnecessary steps, compliance costs, checks, and forms.

c. Digitization changes, broadly construed — To realize contemporary productivity gains from IT and related organizational changes requires a far more fundamental take-up of the opportunities opened up by a transition to fully digital operations.

I agree fully with their critique of NPM, however, believe that they underestimate the radical transformative potential of technology on public administration, which they dismiss by referring to such arguments as Sysadmin-utopia or IT-industry driven scenarios. Let me argue three trends that will transform governance more dramatically than anything that NPM or DEG have even conceptualized:

1. Open source and peer production are the first serious challenge to our monetarized market-based system since socialism.
2. The public sector equivalents of Platforms for interaction (think myspace, secondlife, openbc, etc.) will change citizen’s and governmental interactions as radically than the introduction of general voting.
3. Ubiquitous free access (municipal wireless) also has the chance to create new worlds, services, businesses.

When these three trends will have worked their way through public administration, not much will be left of governance as we know of it now. Speaking with Peterlicht…

How has digital era governance stood up to #gov20? Is the article relevant to what we are discussing now, when we speak about radical transparency? What do you think about my third “utopian” point on municipal wireless?