venturing Archives

The new threads of ‘Organization’

Organization is one of our most potent social technologies. In a world where chaos, connectivity, and creativity have risen to new heights, increased attention on the topic is both natural and welcomed. Quite simply, if our civilization is set to pivot, getting better at it will help us realize a better future, sooner.

My three favourite books on the topic are (reading recommendations at the bottom of this post):

1979, The Heart of Enterprise (“Heart”), Stafford Beer (selected quotes)
2007, The Future of Management (“Future”), Gary Hamel (selected quotes)
2010, The Power of Pull (“Pull”), John Hagel III, John Seely Brown, Lang Davison (selected quotes)

I recently revisited them side-by-side to see what they had in common. What stood out for me were the themes conditioning, humanity, networks, and social technology.

Conditioning trumps control

Already back in Heart, Beer recognized the role of management as attending to cohesion, sensing for incipient instability and making the minimum of intervention. In both Future and Pull the authors are more critical of the dehumanizing effect of command and control driven organizations and zero-sum management practices. They all argue that control restrains the creativity, humanity and innovation needed for any organization to thrive and adapt in complex and dynamic environments. Designing and managing organizations is increasingly about creating and conditioning spaces for passionate people to pursue a common purpose.

Organizations are human first

In Heart, Beer talked about the ultimate manager being someone who achieved enlightenment – someone who was fully alive and aware of who they were. Similarly he saw the optimal organization as one ‘exploding into self-consciousness’. Future and Pull more simply recognize that people are at their best when they are free to pursue what matters to them, in short, when they are treated as human beings, not production resources. Where Pull dives into the shift from transactions to relationships and the role of trust, Future summons the moral imperatives of beauty, truth, love, service, wisdom, justice, freedom, and compassion.

System dynamics dominate

Information flow is at the heart of Beer’s Viable System Model and Heart excels at driving the rigor of design around information sensing, amplification and attenuation. Its purpose is primarily for being able to sense for incipient instabilities and opportunities within and around the system in focus. This systems perspective is more fully fleshed out in Future through a case illustrating the power of prediction markets in achieving more accurate forecasts than the best analysts. Pull goes further drawing from examples of how sharing, production and collaboration through social media foster natural innovation and illustrate how these dynamics lead to increasing returns. In fact, they argue, that the real value of an organization lies in its networks of long-term relationships.

Social technology playing a pivotal role

Before Beer wrote Heart, he led a Star Trek-esque roject using telex machines in Chile to manage a centrally planned economy. It’s hard not to have a chuckle at first glance, but the core principles of the design are at the core of the opportunity in the emerging ecosystem of social technologies we have at our disposal today. In Future, written at the start of Web 2.0, Hamel boldly declares “Argue with me if you like, but I’m willing to bet that Management 2.0 is going to look a lot more like Web 2.0”. While the novelty of Web 2.0 had worn off a bit by the time Pull came out, the examples of how social technology is enabling people to pursue their passion, connect, and create value are foundational to how organization actually happens today. It is of course about more than the technology, it is about the technology having reached a point where it nurtures, enables and is compatible with the other three themes above. It seems, these technologies are instrumental in allowing organization to happen more naturally, and of course with over 4 billion people connected, at a scale never before imaginable.

In summary, it seems that the technology of organization is undergoing a transformation, enabled by our social technologies, and powered by passionate people. It seems that we naturally are drawn to collaborate around purpose to create a better future, sooner, however that looks to us individually. It seems, even, like a rennaissance of humanity. Whatever it is though, it is on the upswing.

I’m looking forward to seeing what the great thinkers and writers discover next. I’m also, of course, looking forward to seeing what I can contribute to the game with things like Epic.io.

These are fun times to be alive and engaged.

>>> for those who haven’t yet read the above books… here’s my quick take on which is best for whom

Heart of Enterprise: A beast of a read but the most accruate understanding of what an organization actually is. Best for those who really really want to get their geek on… or those who are somewhat sadistic.
Future of Management: A powerfully passionate case for reinventing management. Best for those who are in management and in need of serious rehab from convention… if you don’t what I’m talking about, that’s you.
Power of Pull: A well researched and articulate understanding of how ‘organization’ is fundamentally changing. Best for those who want to understand what is going on right now and why… and those who are working to innovate for good right now.

The Power to Pull Prosperity (blogs.hbr.org)

Lessons in systemic entrepreneurship. The time is now.

Late last fall I had the opportunity to conduct an intensive review of the Vartana initiative on behalf of the J.W. McConnell Family Foundation. Vartana was an initiative to create a chartable bank in Canada dedicated to serving the voluntary sector. It held the promise of changing the availability of capital for the sector and as a Schedule I chartered bank, influencing the Canadian financial services industry. While ultimately felled by the financial services collapse of 2008, it holds some valuable lessons in entrepreneurial pursuit of systemic change.

In brief, the key lessons learned were:

Systemic interventions amplify strategic vulnerabilities
Ideation is the missed opportunity in systemic entrepreneurship
Communication is a critical organizing capacity

To put it simply, systemic entrepreneurship is, well, really stinkin’ hard. The path is more ambiguous, the context more complex, and resistance greater. It tests the entrepreneurial process to its fullest. If I look to my own entrepreneurial experiences, communication was always the ultimate core infrastructure. But the more systemic the aims, the riskier the initiative and the longer and more iterative the ideation process. It’s in those areas that entrepreneurial self-destruction most show their face.

From the Vartana experience, I found:

Vartana demonstrates that initiatives seeking systemic change require both adequate investment in up front ideation and strategy formulation and an infrastructure that has the capacity to respond commensurately to systemic resistance and volatility.

More broadly, I pressed the issue of entrepreneurial infrastructure:

…entrepreneurial infrastructure is not to be confused with conventional governance models that focus on executive limitation. Rather it should be designed to enable proactive and focused attention to governance, strategy, and execution. It must enable founding contributions from many; leveraging instead of hampering what are traditionally seen as conflicted roles like founder and funder. It must enable entrepreneurs to do the impossible in an environment that is flexible, yet that has the capacity and rigour to address the scale of the challenge at hand. It must create a space that nurtures meaningful engagement, rapid iteration and routine reflection, and transparent decisionmaking that remains grounded in achieving the intended impact with optimal levels of investment.

It reminds me a lot of what I’ve since read in The Power of Pull by John Hagel III, John Seely Brown, and Lang Davison of Deloitte’s Centre for Edge. Even the sub-line “How Small Moves, Smartly Made, Can Set Big Things in Motion” echos of systems thinking and social innovation.

Which brings me to my final point. As we pay attention to the systems of our society and find whatever we are working on increasingly influenced by changes in those systems… we elevate ourselves out of traditional sectoral silos. This isn’t an issue isolated to commercial, social, government or civil sectors. It’s an issue about our future and particularly those intent on creating a better future, sooner.

So, whether you buy into the Big Shift, the Great Reset, the Macropocalypse, the Macroshift, the Great Remix, or just think “we’re screwed”, the time is now. It’s about our future. Don’t wait. Try. Reflect. Share. Repeat.

Kauffman Foundation Announces Partnership To Create “Who Owns The Icehouse?” Youth Entrepreneurship Initiative (kauffman.org)
Philanthropy Roundtable – A Stimulus that Works: Philanthropic Strategies for Boosting Entrepreneurship (kauffman.org)
Entrepreneurial Support Programs Must Function Within a Regional Vision, Meet Entrepreneurs’ Core Needs (kauffman.org)
Keen On… with Hagel and Seely Brown: Building a New Normal TCTV) (techcrunch.com)
Podcast: Entrepreneurship in Fly-Over Country (growvc.com)

“Gettin’ lucky” – implications for ventures on the frontiers.

Venturing on the Frontiers – A simple guide.
Originally uploaded by Michael Lewkowitz

I wrote about the gist of this image here. Now I’m turning to the implications for venturers.

Quite simply the essence of venturing is a process. A process of creating spaces for things to happen (some call it ‘luck’). The simpler and more accessible the space, the easier it is to get people engaged and get things done (some would say ‘the luckier you get’).

Sound simple? It should be, but can you simply articulate the 3 primary spaces for your venture? Do you have a time and place to think about and evolve those spaces? Why are people connecting to you? Do they know what they need to meaningfully contribute in ways you may not have asked or may not be expecting? How often have you been ‘lucky’?

So how can ventures get better at “gettin’ lucky” on the frontiers?

Step 1: Define your spaces (framing)
Get out you favourite notebook or stash of napkins and start framing each of your primary spaces separately: founding agreement, magic box; and realms of relevance. Keep them separate. Keep them simple. (more on this in a later post)

Step 2: Get your team together and get to it (planning)
Revisit planning as a team – those who control the resources and those who do the work. In the context of your spaces, figure out what your going to do for the next meaningful chunk of time, making the most of what you have, and getting what you need to move you most towards fullfilling your purpose.

Step 3: Connect with purpose (connecting)
Make connections throughout your spaces to better understand and define your spaces, and to get done what you need to get done. Do it with purpose and give it space to let something happen.

Step 4: Repeat (venturing)
Take a look at what you did for steps 1-3 and do it again – but better. This becomes the process of venturing. Find what works for you and your venture. There is no right way. There is no right answer. In fact, there really are no answers… just keep asking questions, keep moving forward, and keep at the process.

You can’t know where exactly you’ll end up but you’ve got a much better chance of “gettin’ lucky”!

Venturing on the Frontiers – A simple guide.

Venturing on the Frontiers – A simple guide.
Originally uploaded by Michael Lewkowitz

Venturing on the frontiers is about the early stages of taking on big challenges. It’s a space where conventional models to planning and management prove ineffective. It’s the place where entrepeneurs trust their ‘gut’ and face the challenges with an unrelenting push forward. And it’s the place from which the greatest change can come about.

I’ve been tapping my own experience, researching into systems science and talking with some of North America’s leading venture investors who are themselves pushing the frontiers. Through all of that I’ve emerged with an understanding that I’ve tried to capture to the right. Essentially it describes a venture as a set of spaces (‘founding agreement‘ which gives rise to a ‘magic box‘ which operates within certain ‘realms of relevance‘). Venturing then is the process of ‘framing‘ those spaces, ‘planning’ immediate action, and ‘connecting‘ to get things done and evolve the spaces. Collectively that led me to the following set of principles for venturing on the frontiers:

Create spaces for things to happen
Make it simple and accessible
Tend to connections and connecting
Keep venturing

I’ve published the image under a creative commons license so please feel free to use and build from it accordingly. And as always, this is but a snapshot of understanding and bound to evolve… so please do get in touch with your reflections, experiences, and suggestions.

I’ll publish future posts on the implications for ventures and venture investors who are pushing the frontiers. Don’t expect magic bullets, but rather a prompting of some productive questions. If anything this has reminded me is that there are no answers, only questions… and asking the right ones can make all the difference.

The definitive definitions of venturing!

One of the surprising things that I came out of my latest exploration into the frontiers of venturing and venture investing is a set of definitions. I’m actually not one that likes to debate definitions ad infinitum but I found I needed to clarify things to be able to have meaningful conversations going forward. So here, is what I’ve come up with… for now (I’ll keep updating this definitions as the evolve so feel free to check-back or link here for reference).

Venture: An agreement among people to do things in service of a purpose and according to a set of values.
Venturing: The process of creating and evolving a venture.
Venturer: A person primarily involved in or responsible for venturing.
Operator: A person primarily involved in or responsible for operating a venture.
Entrepreneur: A venturer that also carries primary responsibility for operating a venture.
Frontiers of venturing: The effective limit of conventional approaches to venturing.
Frontiers of venture investing: Investing in ventures that are on the frontiers.

Giddy-up: getting better on the frontier.

Coming out of this first inquiry I’m left with new definitions for venture, venturing, and venturer and also a simplistic grouping that the process of venturing essentially requires agreement, action, and governance. It is important to note that these are a set of observations and interpretations that will continue to be evolved in practice. As such they represent a starting point for a concerted effort to ‘get better at venturing and investing on the frontiers’.

DEFINITIONS

Venture: An agreement among people to do things in service of a purpose and according to a set of values.
Venturing: The process of creating and evolving a venture.
Venturer: A person primarily involved in venturing.

AGREEMENT: The venture profile
In getting better at venturing on the frontiers, it becomes apparent that the first things required in a venture are an articulation of:

purpose;
values; and
agreement, followed by action.

This is particularly so in an effort to address complex ambiguity and so also must include the foundational foci that are effective amidst complex ambiguity, namely distinct, discreet attention on:

core viability (CV); and
the process of productive, iterative exploration (PIE).

These items become the core components of a ‘venture profile’ which is an articulation of the collective agreement on what the venture is.

Another interesting realization through these conversations and above definitions is that a venture, at it’s core, is an agreement. It starts with the first agreement between 2 or more people and grows with the deepening and addition of new relationships. Essentially a venture is ‘simply’ a bundle of relationships. Accordingly the individual relationships should also receive special attention through consideration and articulation of the essential process for evolution or termination of the agreement, and of each party’s:

acknowledgment of the other party’s venture profile;
their contribution;
the manner of contribution;
their compensation for their contribution; and
any other explicit responsibilities and expectations.

Collectively, the bundle of individual relationships along with each associated agreement form the essence of the collective agreement articulated in the venture profile and could be visualized through multidimensional maps which naturally will evolve as does the collection of individual relationships. Here there is a significant opportunity for new and improved practices in venturing. The collection of individual agreements also forms the basis for financial model. This is not the same as financial projections which are often an exercise in justifying an anticipated outcome but rather they are the basis for being meaningfully able to anticipate the results of the existing and anticipated agreements under certain conditions.

ACTION: A planning process
With the core profile in place we move into the activity of the venture itself which is best determined by those that have the authority to complete the action being determined. This follows from observations in systems science that planning only happens when action is the result and so can only be carried out by those with the authority to act. The most effective planning approaches will be recognized as intentional, co-creative, and iterative action planning. Established approaches from community and software development could be well applied here. For example, the methodology from the Institute for Cultural Affairs Technology of Participation are particularly effective when conducted with short time horizons (e.g. monthly and/or quarterly) within the context of the venture profile which itself is reviewed periodically (e.g. annually with the inclusion of strategic direction planning). Similarly the agile development process is particularly relevant for venturing on the frontiers.

GOVERNANCE: Cohesion and instability preemption
Governance of a venture (collective agreement and the action that unfolds from it) is best fulfilled through attention on the cohesion of the venture and on signals of incipient instability. Going back to the definition of a venture, this is about monitoring the changing trends in relationship status and agreements. This is perhaps the most unique discovery in these conversations. Changes in the tone of relationships is often one of the biggest and most consistent indicators of incipient instability. This by no means implies that relationships should remain static or that relationships should not be allowed to decline, that’s simply a part of evolution. What it does imply is that changes in the trends of relationships status are particularly powerful indicators of change including growth and incipient instability. For example what’s often described as ‘momentum’ is an upward trend in the strengthening and addition of relationships. Or a founder of an organization challenging the direction the venture is taking may be an indicator of a change in the collective agreement, particularly if it was well articulated at the outset (which is rarely the case). Of course, monitoring financial metrics and changes in budget/plans can also signal incipient instability and by no means should be excluded. Rather disciplined attention should be focused on the metrics that indicate potential instability. If the management system is attentive to incipient instability it will be able to minimize its effects or avoid it all together. The other dynamic of effective governance is attention to the cohesion of the venture itself. This means that ensuring that both PIE and CV are being attended to and that the dynamic between them is constructive.

There are of course more detailed design aspects to organizing and operating a venture, several key ones of which are described in Heart of Enterprise, but from my experience, research, and through the recent conversations I believe venturing effectively on the frontiers requires the essence of:

agreement and articulation of the venture (venture profile, relationship map, financial model);
action through intentional co-creative, iterative action planning (process, budgets, time lines); and
governance attentive to cohesion and able to anticipate and preempt incipient instability (future indicating metrics, report card, ability to respond constructively).

Practically, there is significant opportunity in improving upon each of these areas and particularly in the area of relationships with the emergence of new ways and styles of connecting brought forth by virtual communications developments such as social networking technologies. And with that now begins the process of putting this into practice and an open invitation to those who want to embark on this with me.

Blogged with Flock

Venturing on the frontiers – Inquiry #1wrap-up

A little over a year-ago I began considering what’s next in my journey and exactly 3 months ago I initiated my first inquiry into what’s needed on the frontiers of venturing and venture investing. It hasn’t been a linear journey of course, with a good deal of my attention going towards getting Causeway going over the last year.

While that was ongoing, I had about a dozen conversations over November and December with some extraordinary social venture investors and funds in North America (including Renewal Partners, Social Capital Partners, Kellogg Foundation, RSF Social Finance, Good Capital and others). To all of you I am tremendously grateful for the generosity of your time, the candor with which you shared your experiences and the enthusiasm with which you’ve approached this exploration. Each conversation integrated into my own experiences and readings, and into every other conversation. What has emerged for me is a point of summary from which I feel ready to attempt some active experiments into how do we get better on the frontiers as venturers and venture investors.

What follows now is a series of posts on:

Onward…

Blogged with Flock

Seed venturing toward systemic interventions – deal funnel: screening, conditions, and structuring.

Seeding ventures focussed on systemic interventions needs to be come at with an approach that is grounded in systems thinking. Conventional wisdom in venture investment has come from theory and experiences often based in working with business systems that are working within and dependent on the current system itself. What I’ve found is that the earlier the stage of investment and the more oriented the venture is toward a systemic intervention the more ‘gut instinct’ is used a guide to making investment decisions and supporting the growth and success of those ventures.

My thoughts have been going toward what would something that focuses on seed venturing toward systemic intervention look like and how would it work. What I’ll be posting on for a few posts is going to be my emerging ideas in this.

First off… what would be the filter for projects that it would take on? What would the ‘deal funnel’ be?

I would approach it as follows:

Is systemic intervention the goal of the venture?
Are the readiness indicators favorable?
Are the conditions for accelerated growth present or practically possible?

From that stage the deal funnel would move into deal structuring which focuses on what is necessary to create the conditions for growth:

Basic

Basic financial stability
Core competency coverage

Catalytic

Venture alignment
Active and appropriate network

A key intersection point is that a financial investment is a powerful catalytic moment in the emergence of a venture. That catalytic power can be most productively harnessed if it is focused on encouraging the conditions as opposed to ensuring rigorous controls are in place. It also hopefully leads to much simpler deal documentation that focuses on establishing and orienting the relationship that is being created and how this investment can be used to create the conditions that will most accelerate the growth of the venture… the intensification of the vortex.

That felt good. Let’s see if makes any sense.

Onward…

My latest presentations.

Here are the latest presentations on the directions that are really interesting me right now. Take a look and send me any thoughts, comments, connections. It grows and gains momentum with the attention of others.

Accelerating the collective potential of individual change:

Systematically applying the entrepreneurial approach:
(UPDATED: April 19, 2007)

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