What a real Network looks like – Thanks Valdis Krebs

What does a real network look like? If we know then we can see if the networks we seek to design and grow are real. Here is how Valdis Krebs sees them and he is for me the Gold Standard.

I think when the history books are written that one of  the Galileo’s of our time – a person who used scientific tools to see a new reality that changes our paradigm – will be Valdis Krebs. While commentators such as myself speculate, Valdis proves the theory with evidence.

This is what the new organization looks like:

online_community

Here Valdis uses a real community – (OCL) – on the outside a loose group of “lurkers”. In the Green group – groups of loosely connected sub groups – In the Centre – the Core – a densely connected group that acts like a Sun. It has both mass that acts as a social gravity attracting inwards. It also acts as the sun in that this group also shines energy out that reaches to the far edges of the outer group.

online_community_core

Here is Valdis’ view of the core or as I call it the “Sun”.

Here is another view of what the “Sun” can do – it is an adoption force. Once the Sun is powerful enough, it can shift the paradigm. This may be how people get a disease like flu, adopt a new fashion. Or adopt social media and then a new view of how the world really works – that we are not part of a machine but part of an interconnected universe!

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So the implications are clear for me anyway.

Adopting Social Media has nothing to do with the tools. After all the tools are cheap and easy to use. It is all about rewiring the habits and the mindset of people.

If you wish to have your organization adopt this new mindset and hence also its tool kit of social media. You are going to have to create a “Sun” – a densely connected but small group that are committed to the bigger idea that is the energy behind the Sun.

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The numbers required for the core are modest. A core of 8 will get you an inner ring of 4,000. A core of 34 will get you an inner ring of 1,300,000. 89 will get you 62,000,000.

The leverage that is possible is incredible when compared to the traditional organization. This is where the costs fall away and the impact goes up.

I will talk more about this and offer you a number of real examples.

But here is the key insight. The Big idea cannot be about the internal needs of the organization. It can’t be about your sales, your profits etc. It cannot be about YOU. For the Sun to access the full energy of people and to spread out to the edge, it must be about US. It must be about the larger group that includes everyone who will be in the community.

More later.

The new world will have hierarchies and will not be open – For that is Nature’s design

Many say that they hope that the new world will have no hierarchy. This is just as much a fantasy as the positional hierarchies in traditional organizations are. A hope based on nothing. Many say that new systems will be “Open” meaning that all can access them. This too is a fantasy. In nature all systems have boundaries that are defended vigorously.

Many profess that they hope we will find algorithms to filter the best stuff from the web but miss the fact that unless we trust the source, content is just noise. No filter works like human filters and quite small groups can cover a lot of ground. You won’t miss much with a group of 33 or max at 144. For the real filter is in our own heads and can only be pierced by a trusted source.

Here is a post of mine on FF that explains this. 

What is value? Usually it is something that is scarce. What is scarce today? Certainly not content which is why all the attempts to make content pay are doomed. Content has never been more plentiful. In fact we are approaching the point where content is all but infinite.

The Value point then becomes finding content that means some thing to each of us. So Search is a Holy Grail here. And it is very valuable. But can we rely only on algorithms?  I do not think so.

This week two people that I respect and trust a lot Craig Newmark and Jeremiah Owyang have put their own stakes in the ground saying that ironically it will be a screen of named people in our social orbit that will be the final layer of screening for meaning. That our impersonal transactional world will return to a personal world where reputation is key. There is enough convergence to call it now I think.

What you are about to see is how the world will be organized in the future. It’s official now!

This is the new Org Chart.

fibnumbers

The Inner Circle is your Trusted Space – moving out from this is a gradient of Trust and Intimacy – These rings have numeric boundaries. The Inner Circle is limited to 8. The next ring for you is 34. The outer ring is of course 144. If you look up to the diagram above the “Donut”, you will see the Fibonacci Curve. There you will see that these numbers are the boundaries of the curve – this is how nature organizes all complex systems. The Dunbar number is 144. (Not 150 by the way) We know that 8 is the ideal team size. We know that 34 is the ideal large team.

To the left I have added the “Permaflower” – this is the organizing model for Permaculture. I think that this may be the model that we use to organize the Natural Organization.

Here is how Craig opens his piece:

People use social networking tools to figure out who they can trust and rely on for decision making. By the end of this decade, power and influence will shift largely to those people with the best reputations and trust networks, from people with money and nominal power. That is, peer networks will confer legitimacy on people emerging from the grassroots.

This shift is already happening, gradually creating a new power and influence equilibrium with new checks and balances. It will seem dramatic when its tipping point occurs, even though we’re living through it now.

Everyone gets a chance to participate in large or small ways, giving a voice to what we once called “the silent majority.”

Here is how Jeremiah describes it:

jorings

Here is how a Permagarden is layed out:

permagarden

Here we see the idea of a gradient in the hierarchy more clearly. Inside the network are of course sub networks. In Permagardening, these are called Guilds. They are reinforcing groups of diverse species. Toby Hemenway is the source of these lovely garden images.

permaguild

Talking about guilds here is how Chris Allen has shown us how Guilds form in WOW.

teambuilding blocks

In this slide you can also see the leverage that the Fibonacci Sequence can give you. Imagine your 8 inside the Trusted Space. Imagine that you have 4 good friends in the next circle who have 4 friends who have 4 friends and then 4 more – that is 4,096 people. A group of 34 with 4 friends gets you 1.3 million. 144 gets you 429 million.

A small group can have huge social leverage. Enough I think to do anything.

Why Corporations will fail before Networks – They canot innovate or adapt

There is an underlying math part of the model that forces a traditional organization to fail – here it is

Are corporations more like animals or more like cities? They want to be like cities, with ever increasing productivity as they grow and potentially unbounded lifespans. Unfortunately, West et al.’s research on 22,000 companies shows that as they increase in size from 100 to 1,000,000 employees, their net income and assets (and 23 other metrics) per person increase only at a 4/5 ratio. Like animals and cities they do grow more efficient with size, but unlike cities, their innovation cannot keep pace as their systems gradually decay, requiring ever more costly repair until a fluctuation sinks them. Like animals, companies are sublinear and doomed to die.

The issue is that using a machine model – is that friction builds as well as cost as the corporation scales. The costs rise with revenue. So in the mature part of the cycle, you cannot innovate – you can only manage the numbers/ratios. For example, 10 years ago, Shell set up Shell Renewables. Shell was going to become a leader in non oil energy. Makes sense right? The top people know about Peak Oil better than most and wanted to find a place in the next energy sector. What ruined this experiment was its success. Being a very large organization, Shell did new projects at scale. With two of the largest new Wind Farms online – the CFO and the CEO saw the trap – saw why they had to retreat back into OIL ONLY. Shell had to make the numbers even if by doing so meant that Shell could not position itself to be a leader in New Energy.

Wind farms that do well have an ROI of about 8% they are a utility – like owning a bond. But the Oil business has embedded costs that are linked to the returns on OIL that are much higher than wind. So if Shell did a lot more of these mega wind projects, the ROI of Shell would be reduced and Shell would have an earnings problem. The more wind farms they installed, the more their earnings would drop but their costs could not. They were trapped!

This dooms Shell and all mature companies. We saw that is Big Steel when smaller local mini mills ate into the lower ROI parts of the business until there was nothing left? We see this now with media.

The costs of a press or a studio – are so great that all the majors can do is to defend their existing platform. The New York Times can only hide behind the paywall for a period of time. The studios can only hold off web distribution of video for so long. But their battle to keep the status quo is not stupid – they are stuck with the costs. It is the model of how we do business that is the problem. For in the mature phase, the CEO has to make the ratios and the costs are embedded. In the final phase all the CEO can do is to milk the system.

For all true innovation HAS to start with a modest revenue line. So if you have a large enterprise with high revenues you have also high costs. So a web based news alternative CANNOT earn the revenue that you need to run the Times. So you cannot go there. But of course a new competitor – Huffington? Can and will and in the end will take enough revenue off your top line to kill you.

So are corporations doomed? Well with a sample of 22,000 West makes a good case that the current model does doom you, if you are traditionally organized. So what then is the way out?

West makes the case that Cities live much much much longer. The core of why is the core idea for corporations to study and apply.

“It’s hard to kill a city,” West began, “but easy to kill a company.” The mean life of companies is 10 years. Cities routinely survive even nuclear bombs. And “cities are the crucible of civilization.” They are the major source of innovation and wealth creation. Currently they are growing exponentially. “Every week from now until 2050, one million new people are being added to our cities.”

Cities are much more open as systems and networks. They are much closer to being alive than corporations that rely too much on command and control.

As I write this I am thinking of how WordPress works. At the core of WordPress is a for profit organization – but also one of the tasks of Automattic is to ensure the health of an ecosystem that is the larger WordPress ecology in which thousands of independent developers who do not work for Automattic make a living. I think of Wikipedia. At the core of Wikipedia is a set of rules about how Wikpedia has to work and how people in Wikipedia have to behave. Surrounding this core is a cadre of “White Blood Cells” AKA editors – that ensure that this DNA is kept healthy. I see no way now that Wikipedia will not be here in 50 years.

Why my confidence?

If you look at WordPress and Wikipedia you will see the key. In a network that really is a network – like WordPress and Wikipedia – the costs go up in a shallow linear curve while the outcomes rise exponentially. The margin grows so that any bump in revenue along the way – which is of course natural for nothing in Nature runs on any form of straight line – does not take down the organization. But in a traditional organization, the costs rise in direct concert with the revenue and outcomes. This means that once the business approaches maturity, the leadership have to force the numbers, meaning that in the mature phase, the only real focus are the numbers themselves. Not the underlying purpose of the business. The focus becomes defence and self referential. The organization is now doomed. Doomed to suffer a bump in the market or to a new competitor. Look at the case of RIM.  Can RIM come back?

This site has been a place where many of us have tried to see the future for business. We could all agree that more Command and Control would not help. We could all agree that more Social Media used to open up the organization would help.  But what we are seeing now is that for an enterprise to thrive over time – it must become alive! Only a true network can enable this to take place. The few true networks that we can see now, give us a working model of the new enterprise.

Stuart Baker and I are working on what this might be and in the fall we will be posting our ideas.

Our proposition is this. In the 1800’s most business was small, local and unique. The great shift in the 20th century was to consolidate into the enterprise as we know it. This was how to create wealth then. All who stayed back in the small, local and unique died. The efficient machine had to be the model you used. Now we enter a new phase. For the limits of the efficient machine have been reached. The new winners will be those that can adopt the model of the real network.

We all know about how to organize the machine. How to organize the network is all new and mainly unknown. That then is the challenge and the opportunity. Good luck to all of us.

Riots – Social Media the problem or a help?

Part of the reaction of politicians to SM and the riots is of course that they don’t get it all! Interesting that the police do

Joe mentioned this week that the use of Social Media still have not taken off in small business.

But we also learned this week that the use of social media and texting is at the core of how the riots in the UK are being organized. The best rioter’s tool – The Blackberry which is encrypted.

Since then, the BBMs regarding Duggan’s death and the ensuring riots have gone viral. The Guardian was shown one message by a recipient which read, “Everyone in Edmonton, Enfield, Wood Green, everyone in north London, link up at Enfield train station at 4pm.” It detailed what items to being–including hammers–for the demonstrations.

The advantage users have with BBM is that the news continues to circulate, but is covert enough that it is difficult to trace. BBMs are encrypted and hacking this network would be incredibly difficult, so protestors are able to stay a step ahead of authorities.

RIM UK has stated that it will help Scotland Yard in any way it can, so the BBM may only have so long to live as a tool for rioters. But most of them are of the young, mobile-minded, tech-savvy generation, and there are a variety of tools at their disposal.

The Police and the community are learning also in real time how to help each other – by also using social media. Citizens are using Twitter and Facebook to help the police have better intelligence and the police are learning this week how best to respond and to monitor.

Here is a Google map that is being run to track incidents

The Police are setting up a Flickr site to help citizens help the police identify rioters

The Guardian has a map that shows incidents all over the UK

The only chance that citizens and the police have to get ahead of this to to get ahead of it – they have to use the same tools better and faster.

I make no ethical comments – this is what it is and there is no going back

This is the reality of our world today – it is rushing to a network state. So if you don’t know how to use this well – you are at extreme risk. You just don’t know what is going on and the pace of your interaction with the world will be too slow. It does not matter how small you are – you will be too slow to know.

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Arab Spring – the networks over throwing the hierarchs who have failed their people – Business next?

Ah the irony of western politicians supporting the Arab spring and social media and THEN not seeing the link to their own problems? Oh the irony of big business still keeping a firm hand on their communist central planning systems! It will change…

Don’t you feel something big in the air? The Wirearchy amplified events in the Arab world this spring and many regimes have fallen. Do you think the rest of the rulers feel safer now or more vulnerable?

In the last 2 weeks, the establishment in the UK has been rocked. Again the amplification and openness of the Wirearchy has prevented the old system from being able to contain the firestorm. It is also early days, but it is not just the Murdochs who have been shaken but the entire establishment. Do you think that this will blow over and all in the UK will go back to normal?

In the US our political system is log-jammed at a time when it has to cope with all sorts of real problems – do you think that we will avoid a crisis here at home?

Are you ready as a individual or a CEO to cope with what is unfolding?

This global meltdown and systemic failure of our system is I think the real context for social media and its tools and your adoption of them. The Wirearchy is the only way to survive. The Hierarchy is the sure way to die.

Many have thought that they could adjust slowly to the Wirearchy.

It was great to see how they are slowly being adopted in the enterprise. It is now common knowledge that we have to be more human in our work and how our work must do something that offers real value to all not just to a few owners.

Many know that we should go here. But maybe not just yet – so much risk in changing right?

Bu now all the risk is in not being there. The system has tipped and total turbulence is here.

Chaos is our new normal. Will the Euro continue and what will happen if there is a default? How will America get though its own financial and fiscal crisis? What will this mean to the election. What new weather event will affect us and the global system? Will the millions of underemployed, unemployed sit quiet?

And in this context a new kind of competitor that has been forced into being by the evolutionary pressures of this time.

An entirely new economy, based on the small tribal networks, will emerge very quickly out of the desperation of the people who have no alternative. They need no capital. They don’t need what you needed. They can get the best people. They can go from an idea on napkin to your doom in 5 years.

All organizations who rely on concentration will be too slow to keep up as the pace of change accelerates.

If you as a person cannot find your way through this and if you the CEO of a large organization cannot be agile enough, these waves will take you down.

So it is now “Change or Die”.

As bad as “Not getting” Social Media – getting it WRONG! – All those SM Gurus!

I want to throw up when I hear all these Gurus talking about using SM to be all about ME! I think that most still see it in terms of the old system which is all about who can shout the loudest! Here is a picture of what we have to see to “see” it for real – the new reality that is.

Of course everybody gets 2.0 now don’t they. After all even the Oscars were designed for Social Media. Large organizations are piling in.

But is this true? Certainly everyone is on board with the tools now. God I recall Jevon and I talking to CIBC 6 years ago and they thought we were Martians. Now everyone is on Facebook!

But how many people “get” what is underpinning these tools? Not many and I have little hope for many too.

Why?

Because underneath all the hype, most of us see the world the same way as before. We see what we see with our eyes. Just like most people saw the world 500 years ago. Then, if you used your eyes, the world seemed flat. This perception allowed to you to do a lot of useful things. You also saw that the sun came up every morning and circled the Earth. This did not ruin your day and was also a useful observation. That is of course unless you wanted to sail a long distance. Or calculate a trajectory or build a complex building or in fact do almost anything that we take for granted in the modern world. Imagine Watt explaining the steam engine to the Vatican? Imagine trying to build a suspension bridge? Imagine anyone doing chemistry – see where I am going.

But we are not so stupid today are we? We don’t rely only on our eyes to tell us about reality?

kurakinnew view

Well here is your test. Can you see that all these things are in fact a fractal scaling of the same thing?

Can you see that what appears on the surface to your eyes as being unique, different and discrete are in reality the same and that all co-evolve and affect each other? Do you see them therefore as all obeying the same rules, the rules of networks? Can you see how with this perspective everything becomes actually quite simple to understand? All we need to know is how nature governs networks.

Or do you see them all as Objects that are are different – that interact only directly as objects do? That are therefore so complex that we can only know tiny bits of them. So medicine and science are all about the bits and the direct interactions. That we inhabit a Newtonian world where the geometry of nature’s interactions do not apply?

For is this not the prevailing paradigm?

This is why people seek to have masses of followers – this is a Newtonian idea about mass and gravity. It has nothing to do with co-evolution and true influence.

This is why it’s still ALL ABOUT ME! So long as I am OK it’s OK!

This is why medicine makes no sense and each week a new contradictory idea is floated. This is why science is lost in minutiae. This is why our organizations are so toxic. We have designed them to be Newtonian but we are fractal co-evolving networks. This why our mass education system is such a mess. This is why even how we fight our wars means that we have to lose them. This is why we think that there is a conflict between the planet and our economy.

We have been captured by a simple and wrong idea of us all being objects that bounce off each other like tennis balls whereas we are really magnetized iron filings.

No amount of Facebook Strategies will help you if you don’t get this.

The world is not flat and you and I are not an object.

If you want  to know more about this new paradigm of reality – I have the great honor to introduce you to the work of Alexei Kurakin – a genius – a Galileo of our time.

Sometimes I lose it with people who will not see – Adoption

Many people just cannot let go of their old perception – and sometimes I lose it. 

Most organizations know that the web is important today – even the most dinosauric. But for most, the web is an up and coming “channel” and most still don’t have a clue about social media – they do it because they have to and they do it without much understanding about how it works and how different it is from their old “Normal”.

The final arrival of the Beatles on the web – mainly as we see boosted by social media – shows the new reality. That the web amplified by good use of social media is now the primary way of connecting what you have to the public.

Billboard magazine reports that The Beatles sold more than two million individual songs worldwide and in excess of 450,000 albums in its first week on Apple’s iTunes Music Store. (The Beatles’ catalog was added to iTunes on November 16th.)

According to Experian Hitwise, it was social media — not search — that drove a lot of the online interest and, more importantly, the online traffic surrounding The Beatles addition to iTunes. Consider this stat: On November 16, the first day Beatles songs were available on iTunes, 26% of UK traffic to Apple.com came from social media, about double the amount that came from search.

This nail in the coffin of old marketing is what NPR discovered. When I worked for NPR back in 2005 – attracting a younger audience was thought to be vital. But at the time this meant that somehow the content should be changed. But what they found was that if you changed the medium for connection to Social Media – the young came – they loved the content – they just will not access it in the old way.

In a survey of more than 10,000 respondents, NPR found that its Twitter followers are younger, more connected to the social web, and more likely to access content through digital platforms such as NPR’s website, podcasts, mobile apps and more.

NPR has more than one Twitter account; its survey found that most respondents followed between two and five NPR accounts, including topical account, show-specific accounts and on-air staff accounts.

The data on age is hardly surprising. The median age of an NPR Twitter follower is 35 — around 15 years younger than the average NPR radio listener. This lines up with data we recently found about other traditional news media; the average Facebook user reading and “liking” content on a news website is two decades younger than the average print newspaper subscriber.

Isn’t this what has happened to the Beatles? Good content is good. If you have a product or a service or cintent that is good and is not available on the web via social media – you are punishing your business.

So what does this mean? The jury is no longer out. If you are not using the web and social media well – you are no longer cautious but stupid. You are refusing to see the world as it is. Now I know why you won’t move. Because this is all new and you are not any good at it. It’s like me taking up skiing in my forties. What had held me back was how awkward and stupid I would look and feel. But you know – no one cared about how awkward I was and learning to ski then allowed me to spend 10 winters with my kids having a hell of a time. I am 60. I started blogging back in 2002. I was utterly pathetic at it. But over time, I got ok. You can be too.

The real question is do you want your TV station, store, business to survive? It’s still not too late but it is getting close.

Who can help you? Well there are a lot of shysters out there. “Self proclaimed” Social Media Experts who have been involved for a year or so. So here are a few questions to ask to ensure that you are getting someone who can help for real:

  • Tell us about who you have worked for in the past that you have helped make the shift in mindset? They must have been able to help another make this shift in POV
  • Tell us who your friends and network are? The shysters know shysters, the real folks know others who know their stuff and their network is as valuable as anything that they know.
  • Show us what you have written that moves the cheese! Shysters pound on about Facebook etc, the real deal is part of a larger deeper conversation about what all of this means.
  • Show us how knowing what you do has helped you in your own life? Most Shysters still live in the 1.0 world themselves. The real deal don’t – living this life has changed them radically – they have been made different by this and you will know this when you compare the 2 types. PS relentless self promotion is a give away!

Some advice about process:

  • There is no formula/cookie cutter – it is not about using Facebook next week – it is about changing your own mindset. So start with lots of conversation about what is going on and where you can start – you cannot know where you will end up right now – don’t try and go there.
  • Our mindset is changed not by will but by new habits – try a few smallish experiments and label them as such – look at at others who have done well and see how this may give you a start – Have a look here at how Boingo have used listening or look here about how Kotex have used a deep question. These are powerful places to start to help you be different for in the 1.0 world we don’t listen, we shout. In the 1.0 world we don’t ask tough questions, we live instead in a clean, fun, smooth fantasy world where periods are the best part of the month.
  • Hire one or two great young folks. Andy Carvin - just one person has done more for NPR than an army of consultants. Same with Baochi at Boingo who enjoys the confidence of the CEO.
  • Persevere!!! This is really really hard to execute – the tools are simple – it is the shift in mindset that is so painful. I have found that as much as I and others know the direction the day to day part of the journey is stressful. Think of Christopher Columbus on his first voyage. He “knew” that there would be land if he sailed long enough west. But his crew did not. They also had to deal with storms etc, When they arrived, it was land but not the Indies – the destination was different. People got upset. When you do this – all of the trials of Columbus will come your way – Doubt, fear mutiny, disappointment – the lot. But there is no going back – you just have to push through.
  • Last point – anyone who tells you that this is easy and they can show you a step by step formula is a Shyster

So stand up for our species. Be a Sapiens and not a Sap and good luck to you.