.: on the frontiers of venturing and venture investing :.

Monday, October 29, 2007

Macroshift (Ervin Laszlo) --- Doomsday or Breakthrough?

I'm only through the first two chapters of Ervin Laszlo's book Macroshift, but thought I'd better post these snippets before I get caught-up in the flow of the week.  I came across this through a client who pointed to this as the best description of what their work is responding to.  I couldn't agree more... and know a few others that will feel the same way... and am hoping more people will join those ranks. 

The Four Phases of a Macroshift are the core theory and pretty easy to follow and digest.  They are also applied directly to our current position here.

Interestingly the book has helped me articulate the relevance of social media to my focus on transformative venturing and restoring balance among people and the planet... and it's that social media represents the first time that technology is encouraging a deepening of connections between people - a key reversal in the trend that technology has been playing since the industrialization wave that has shaped our society into the position it is in. 

One key quote in this is:

"The insight emerging from this four-phase dynamic is simple and straightforward. Macroshifts are triggered by technological innovations that destabilize the established structures and institutions of society. More adapted structures and institutions await the surfacing of a more adapted mindset in the bulk of the population. Consequently, a macroshift is a transformation of civilization in which technology is the driver and the values and consciousness of a critical mas of people the decider."

Anyone get a feeling that social media is going to play an important role?

I highly recommend buying the book - it's a much easier read that the last book I posted on.  In the meantime... enjoy... here are some of the other highlight quotes from the first two chapters.


"... a vital point: the future is not to be forecast, but created."

"... where desire, transformed into the masterful administration of the unforeseen, makes for a selection between a scenario of breakdown and scenario of breakthrough."

"Today's transformation is not just economic, it is a civilizational process."

"The message of this book is that ours is an era of total-range evolutionary transformation that could, and ultimately will, go beyond economic globalization to pave the way toward a shift in civilization."

"Just as the present has emerged out of the past, the future is likely to follow from conditions in the present. After all, where we are going has much to do with where we have been."

"Given the unsustainability of many trends and processes in today's world, the dynamic of development that will apply to our future is not the linear dynamic of classical extrapolation but the nonlinear chaos dynamic of complex-system evolution."

"A macroshift is a bifurcation in the evolutionary dynamic of a society - in our interacting and interdependent world it is a bifurcation of human civilization in its quasi totality."

"...'catastrophic bifurcation'. Here the system's relatively stable 'point' and 'periodic' attractors are joined by 'chaotic' or 'strange' attractors. These appear suddenly , as chaos theorists say, 'out of the blue.' They drive the system into a supersensitive state, the state of chaos."

"The slightest distrubance would shift the evolutionary trajectory of the world's weather from one of the wings to the other. The weather, it appears, is a system in a permanently chaotic state - a system permanently governed by chaotic attractors."

"Living systems maintain themselves in the physically improbable state far from thermal and chemical equilibrium. ... Living systems do not move toward equilibrium, as classical physical systems do, but maintain themselves in their improbable state by constantly replenishing the energies and matter they consume with fresh energies and matter obtained from their environment."

"When a human society reaches the limits of its stability, it becomes supersensitive and is highly responsive to the smallest fluctuation. Then the system responds even to subtle changes in values, beliefs, worldviews, and aspirations."

"The evolution of the dominant culture and consciousness - the way people's values, views and ethics respond and change - determine the outcome of the system's chaos leap (the way its developmental trajectory forks off)."

"The macroshift moves toward a successful conclusion if, and only if, a critical mass of people in society evolve their mindset: if they generate and embrace values, worldviews, and ethics that mesh with the conditions that were inadvertently spawned by the technological innovations of their predecessors."

"The present time was associated with local space, and the future was seen as a continuous recurrence of the rythms experienced in the present. The seasons were known to follow each other, but there were no new seasons; all times had already been experienced."

"These communities had a high level of integration. The individual was an essential part of the clan or tribe, which in turn was embedded in nature and governed by cosmic forces. Nature and humans did not exist in separation, much less in opposition. Humans had empathy with all they encountered. ... In the seventeenth century Europe's mechanically colored Logos culminated in the concept of the world as a giant machine, which was elaborated by Giordano Bruno and Galileo Galilei. Newton's mathematical demonstration of the universality of the laws of motion confirmed galileo's pioneering insights and provided a basis for embracing a world concept that became the hallmark of the modern age. ...The universe was a divinely designed clockwork that was set in motion by a prime mover and then ran harmoniously through all eternity. It was believed to operate according to strict laws of nature. A knowledge of these lawss was said to enable the rational mind to know all things past, present and future. ... and as Laplace was reputed to have commented to Napoleon, God was a hypothesis for which there was no longer any need."

"... countless civilizations failed to survive, victims of changing conditions to which they could not adapt. This failure is not one we can contemplate today."

"If our Logos-dominated civilizations fails to adapt to the conditions it has itself created, the entire economic and political structure of our world will come crashing down."

"... the macroshift from national industrial societies toward a globally interdependent yet locally diverse world."

"It is the flexibility and creativity of the people that creates the subtle but all-important "fluctuation" that decides which of the available evolutionary paths the macroshift will then follow."

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Friday, October 26, 2007

The early days of the Internet - an original CBC news story.

I just caught this in Beth's Blog

Wow... how far we've come, in such short time, and yet how relevant the social observations remain today.

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Thursday, October 25, 2007

Higlights from "Heart of Enterprise" --- the Viable System Model

I've been working my way through this tome for a few weeks and have had a number of conversations around it. It's by far the most valuable piece of work I've ever encountered on organizational design --- and for me a critical model in ventures that are on the venturing frontier (early concept stage and/or systemic co-creation -- see graph below).

Efficacy of venturing and investing models and practices

Written by Stafford Beer, this book is a thorough walk-through of the Viable System Model.

The Heart of Enterprise

The key principles can be found here, but will not likely be that helpful without gaining an understanding of the language being used - which is a big part of why this book is so dense. It's also, I think, necessary though to get at this topic in a way that is freed from the conventions that most of us have learned and understand about management and venturing --- those same conventions that seem to fail us the earlier or more systemically focused the ventures are.

A potentially helpful excerpt in terms of practical application in day-to-day decision making can be found here but again the value will
likely mostly be lost without an immersion in the language, theory, and examples contained in the book.

Rather than trying to summarize those - I have a lot more digesting and experimenting to do with this before I can begin to try - I will simply list a series of quotes that most interested me while reading the book. Perhaps that will help serve as some intriguing context.

(oh and by the way... I found the ones at the end to be the most fun).


"... the viability of any enterprise. This is not meant in purely economic sense; it refers to the ability of the enterprise to maintain a separate existence."

"Every viable system contains, and is contained in, a viable system. This conept of an organizational nest is crucial to this account of how enterprises really work, and is contrasted with the orthodox concept of hierarchy."

"A System consists of a group of elements dynamically related in time according to some coherent pattern. ... this System has a PURPOSE ... (which) is you the observer of the System who recognizes its purpose. ... it means that we have to agree on the CONVENTION about the nature, the boundaries, and the purpose of any System before we can agree on what is to count as a fact."

"We cannot successfully handle any system that we are disposed to manage unless we obtain an insight into its nature. That nature, as we have seen, has to do with purposes, with boundaries, and with other matters which are not customarily investigated within our institutions..."

"Every Good Regulator of a System must be a Model of that System"

"Viable: able to maintain a separate existence."

"The metasystem exists to undertake whatever functions are required to procure coherence."

"At any point on the diagram, then, these orthogonal forces (operation, coherence) interact. It is that interaction with DEFINES FREEDOM within the viable system."

"The metasystem must make some intervention, and should make only that degree of intervention that is required to maintain cohesiveness in a viable system. Cohesiveness is however a function of the purpose of the system. ... Freedom is in principle a computable function of systemic purpose as perceived."

"For, if the systemic purpose is subjective, only agreement of the heart will justify a given level of cohesion in any institution."

"... the synergistic formula must lie in the intersect of all the elemental operations."

"... the cybernetic policy of freedom: minimal intervention, in aid of cohesiveness plus synergy."

"Of STRUCTURE there is almost nothing to say, beyond the 'machine for apportioning blame' that the organization chart comprises."

"When two models of each other converge, learning has occurred."

"Money can be made available, one way or another, sooner or later, so long as the system remains (and is observed to remain) viable. That is why I have previously described the availability of money as a constraint rather than as a condition. ... the really scarce resources need for this investment are those of time, talent, care, attention..."

"Closure is the talisman of identity."

"The very notion of recursiveness embraces the notion of local closure at any given level of recursion."

"... plans should be continuously adaptive to fresh information."

"Often some aspect of a matter is measured because that is the easiest aspect to slap a number on, and by now it is the traditional and the accepted thing to do."

"Figures are useful only to the extent that we use them."

"The measures we use do not have requisite variety to absorb the variety of that which they claim to measure."

"Fact: that which is the case."

"Noise: A meaningless jumble of signals."

"Data: statements of fact."

"Information: that which CHANGES us."

"Data become information - when the fact in them is susceptible to action. How can I possibly know that I am informed? -- Only because I have changed my state."

"a manager is a human being who has refined the brain's ability to recognize patterns, and to compare the key characteristics of such patters, in the context of extremely complicated systems comprising men, materials, machinery, and money;

he has become skilled in recognizing a change in his own state, by recognizing information in the data flowing around him and in the ambient noise;

he has the motive, and has cultivated the style, necessary to transduce his own change of state into a change of stat in the extremely complicated system of which he is the manager."

"The manager's job is three-fold: to set the CRITERIA of stability... ; to detect instability... ; to change the criteria."

"The manager's requirement of measurement is that it should measure stability and instability in the system that he (this being his role) has subjectively defined."

"The manager's information, however, is his own recognition of his own change of state."

"... the criteria to which the system answers, in terms of its degree of stability, derive from the criteria of systemic viability in the context of teh total viable system - and in particular they derive from the understanding of cohesion, in which... freedom and constraint are balanced to provide a workable level of autonomy."

"Improvement in the management of complicated systems will not occur until managers give up the dysfunctional concept of causality, and the search for the unique case."

Summarizing a few paragraphs here on what it means in terms of some measure for the system to say 'I am all right':
- we normally <e.g. produce>... speaks to status quo and is measured as ACTUALITY (actuality)
- our plan... speaks to intention and is measured as CAPABILITY
- we wish we could... expresses a will to advance and is measured as POTENTIALITY.
- Ratios of those then indicate degrees of stability: actuality to capability is PRODUCTIVITY; capability to potentiality is LATENCY; and actuality to potentiality is PERFORMANCE.

"... the (senior) manager... must listen to himself doing the job. Here is closure for the viable system. It also is a form of measurement. But it is self-referential, and there is no objective measure for a measurement so defined. In the viable system called 'the human being', this function is usually called conscience."

is the primary characteristic of organization."

"... the process of organizing itself creates a problem of fragmentation which only its capacity to provide cohesion can offset."

"... planning... is actually the 'glue' of organizational cohesion."

"... planning is a continuous process."

"What needs to be reiterated is that planning happens only when there is an act of deicision. This act commits resources now, so that the future may be different from what would otherwise have simply happened to us. It follows that the only planners are managers, namely those people who are entitled to commit resources."

"The argument is to say that planning is a continuous act of adaptive decision that continually aborts."

"...it is an act of decision carried out by managers empowered to commit resources to a different future. Planning is not an activity resulting in products called plans: it is a continuous process, whereby the process itself - namely that of aborting the plans - is the pay-off."

"Plans are the embodiment of intentions subscribed to at each level of recursion: since these intentions are constantly changing, and not in a homogeneous way with respect either to time or to probability..., they must continually abort. The only characteristic worth detecting, measuring, reporting, or doing anything about, is incipient instability in the system."

"The great physicist (Heisenberg) showed that to examine, to measure, to interrogate, something changes its state."

"The model we now have, contemplated at any one level of recursion, comprises two hierarchical stages - and only two. ... stage of operations inside and now, and there is the... stage that constitutes the metasystem."

"And it (senior management) should be characterized by calm."

"... infinity is a process; thus to understand the process is to understand infinity without going there."

"First: there is a very real barrier to modeling the recursivity of viable systems more than one system beyond that over which we have authority. Second: no finite model is possible, because we do not have requisite variety to make it; and all we can do is to contemplate the process whereby such models are endlessly capable of generation. And that is to define the infinite recursion; and that is to explode into self-consciousness."

"There are two features about instability that need a lot of careful consideration. The first is that instability may set in anywhere in the behaviour of the organization, and at any time. the second is that there are always pre-symptoms of the fact. Unfortunately, the typical management information system... is repetitiously reporting on stability - it is in fact challenging the manager to find evidence of this crucial instability in the welter of routine data. If, nonetheless, he finds it, he does so because instability has already set in - it is in fact too late to avert it."

"But suppose that we can acquire data about stability that can be transformed into infomration (which changes us) about the possibility, the likelihood, of incipient instability: then, and only then, do we have a chance to avert it."

"The causal model in a complex probabilistic system does not have requisite variety to predict the future. This can be said with confidence from many theoretical standpoints: epistemological, logical, even theological, as well as cybernetic - wherein the causal model cannot possibly exhibit requisite variety."

"It seems, may we not then say, that calm is a function of alertness. It comes from being poised to read the signs of incipient instability, in the quiet confidence that instability can be averted."

"The senior manager stands as he humanly is: a very finite person. But he holds many privileges, that can extend his human faculties: in expertise, through his staff and advisors; in space through telecommunications; in time through a monitored alertness to incipient instability - whenever it may come. He operates within a metasystem which, though its currency is conflict, generates a special and indeed unique comradeship."

"It is only in the infinite recursion that self-consciousness occurs. It occurs for the man himself, of course... .The senior manager has to embody the self-consciousness of the institution; even if, unhappily, he does not yet know himself... "

"But one feature of the management centre that is quite general has to e provision for the intercommunication of the senior managers that reflects the comradeship."

"It seems likely to me that people are very accommodating to a wide range of styles; what they reject in leaders is especially insensitivity and insincerity."

"The problem is that managers are themselves, and tend to use the response they see fit and the style they see fit as if these two things were unconnected. The variety analysis leads to the conclusion that this is not so."

"The two immediate consequences of these arguments are, first that it is better to teach a manager to know himself than to know what someone supposes (without knowing the circumstances) that he ought to be; and, second, that he should understand the systemic nature of the viable system in which he operates."

"The final diagram shows us how everything is modifying everything else. Its contemplation is rewarding, because it finally demonstrates the foolhardiness of reductionism in senior management."

"If we want to classify the situations in which the manager finds himself, they are dependent on two major parameters. ... The fist of course is variety, and the second is relaxation time."

"Thus in designing a regulatory system for any given situation, the first rule is to follow every significant loop through the systemic diagram, applying the variety rules that have been elucidated. The second rule is to attend to the relaxation time of the system. ... The key point to note is that if the system has not returned to stability before another shock drives it once more towards instability, then the regulation is impossible. So is learning impossible, so adaptation, so evolution."

"The real concern is with the proliferating variety that must needs be absorbed; and with the time that must needs elapse before the iterative loops of the managerial system can assimilate that variety and return the representative point of the system to stability and the psychological state of the manager to its point of calm."

"The parameters of effectiveness... judgment, style, and relaxation time..."

"... we observe him (the senior manager) as personifying the self-consciousness of the enterprise. The clue was that he operates in the awareness of the infinite recursion."

"If the senior manager success in understanding, and legislating for, his own ambiance of calm and alarm; and if he also succeeds in classifying managerial situations and his own decisions according to the tripartite model here set out (judgment, style, and relaxation time), then he may operate closure in the sense defined. And if he does that, in full awareness of what he is doing, then he may embody the infinite recursion as a living process."

"Perception fo the infinite recursion is always the goal. Perhaps the problem is that once a man or woman has reached that perception, nothing matters any longer."

"The contention seems to be that if the informational system is properly deisnged to recognize incipient instabilities, and if there is a management cnetre in which requisite metasystemic variety is shared between comradeship, then the senior management can become aware of what it is really doing."

"... viable organizations produce themselves."

"It is extremely important, when contemplating what it is to count as the management centre, to consider the inter-recursive algedonic signaling equipmnent. Otherwise: either the management centre will go to sleep in trance-like contemplation of the self-consciousness of the infinite recursion, or it will be overtaken by anarchists from the lower recursive levels intent on alleviating their personal pain."

"The suspicion dawns that the enterprise may not only be a system that produces itself, but that this is both its definition and its purpose."

"The heart of the enterprise is embodied in its own people. Consultants cannot catalyse interactions that do not exist, or are persistently and perversely held at bay."

"Life is a process, not a justification."

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Monday, October 22, 2007

Awaiting the accounting revolution.

I've been twittering my frustrations today.  I have a fairly simple financial situation and have 2 companies that I process both Shawna's and my work through.  There's nothing complex with either of them so I've been filing the taxes and handling the bookkeeping myself since the beginning except for a short stint where I outsourced the annual filings. 

My frustration is that doing it myself is harder than it should be. Bookkeeping/accounting software is far more cumbersome and antequated than it should be, and it costs too much for things that should be free (tax table updates and payroll functionality).

Really, all that I need is a basic ability to track expenses to certain accounts, track taxes collected and paid, and as a bonus handle my payroll tax calculations.  The formulas, preferred account structures etc. are all available from the responsible jurisdictions.  I wouldn't even use it anymore for invoicing or time-tracking (I'm already using FreshBooks and Toggl) and it wouldn't even have to worry about importing bank info (I'm using Wesabe for that).  And as far as tax filings, governments are increasingly encouraging electronic filings so that shouldn't even be a big hurdle.

I'm sure I'm not alone. The small business community is growing as we move into a more creative and entrepreneurial economy and established online tools and protocols make interfacing to things like Freshbooks and Wesabe easy.  And when it costs $200-$500 for basic software to cover the range of functions, plus at least $100 per year to keep tax tables updated it sounds like a very attractive online subscription opportunity and generally about $100 per annual return.  I'd easily pay $10-20 per month for something that integrated FreshBooks, Wesabe, and allowed for online tax filings.

With all that I wonder if a big Intuit (Quickbooks) upset is in the works.  With the speed that these services have been made available and they key building blocks in Wesabe and Freshbooks... I'm hoping it's only a matter of months.  In fact, I'm hoping it's before the start of the next fiscal year - even in beta - I'd love to be testing!

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A good point - enough with the debate on climate change.

This is a nice argument for stopping the debate on climate change and getting on with it.  I don't believe in the only answer to be policy change but it is an important one.  The basic argument is this:

- we can't know for certain whether or not we are impacting climate change or what will happen
- we can only choose whether or not we are going to do something about it
- that choice really comes down to an assessment of the risk in acting or not
- if we act, worst case is economic downturn
- if we don't act, worst case is economic downturn PLUS other global catashrophies

Pretty 'simple' choice in the end isn't it.

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Sunday, October 21, 2007

Dress code? Ugghhh...

As time goes on I increasingly consider clothing first and foremost about function and comfort. For me this means jeans as my primary leg wear and then anything that doesn't need ironing for my tops. And for footwear it's either my Crocs or Blundstones for sheer practicality. For some client work though, I still feel the need to at least put on a 'dress-shirt' and some other pants.  On rare occasion - like the social finance forum - I'll break-out a suit. 

Every time I do this though it really makes me wonder.  What's the point?  As long as clothing is clean and not carrying offensive statements, then what's the big deal.  That said, I still feel the need to conform to what I think is expected of me by those that I am representing or dealing with. 

Going forward I'm going to start asking clients about dress codes before I engage.  It's a conversation worth having I think as it will either 1) gain me 'permission' to wear whatever I want, and/or 2) challenge the client into thinking what is important about what someone wears.  I have a feeling that may open up other conversations as to what we think is the value we see people bringing to the task at hand.  I wonder if the task really requires me to look a certain way, if it's really a task I want to take on?

I'm curious to hear what others think about this now-a-days... particularly in scenarios where the task is working on systems level change.  Leave a comment or email me at michael at igniter dot com.

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Friday, October 19, 2007

Black Cotton

I've long know a lot about the coffee industry and had heard snippets of what's going on in cotton too... but this sure is a wakeup call.

Tuesday, October 2, 2007

Venturing forward.

So now with intellectual models for aligning a venture around a purposeful response to a deep calling, and for designing a viable organizational system it begs the question - now what?

Investment. Investment of capital... intellectual, social, and financial.

In ideal clean slate this might look something like this:

  1. identify a calling
  2. gather a group of diverse though leaders and community members to explore/deepen the calling
  3. conduct an 'externalities analysis'
  4. reconvene a modified group to:
  5. conduct an 'internalities analysis'
  6. design the viable system
  7. reconvene a modified group to:
    • craft strategic directions
    • establish near-term action plans
Of course this cannot be a rigidly linear/sequential process but rather is an iterative co-creative one. It is also a continual process of capital investment: intellectual, social, and financial... done in an integrated co-creative style. And that's what I'm working on now.

Viable System Model - the second fulcrum.

The second fulcrum in transformative venturing is the way in which the venture is organized/organizes itself. I've recently been introduced into something that has come closest to describing what it means to build a successful organization. And it's not about outcomes or results - those are simply that, outcomes - it's about the way in which it's done.

(Stafford Beer's) Viable Systems Model, or VSM is a model of the organisational structure of any viable or autonomous system. A viable system is any system organised in such a way as to meet the demands of surviving in the changing environment. One of the prime features of systems that survive is that they are adaptable. The VSM expresses a model for a viable system, which is an abstracted cybernetic description that is applicable to any organisation that is a viable system and capable of autonomy.
I also have the good fortune of being able to apply this model on a deeply transformative initiative with someone who has intimately been involved with application of the viable systems model for a couple of decades. The deeper I get into it the more it rings true --- which shouldn't be surprising considering it is 'simply' based on looking at how all life organizes itself in viable systems. Next time you're faced with some organizational challenges or considering building a venture to tackle something deeply important, do everyone a favour and spend some time with this model and/or people who understand it.

Next post - venturing forward.

Monday, October 1, 2007

Venture Vortex

Over the years I've been collecting management theories and practices that I found useful in venturing and found myself starting to organize them into a map. That map started painting a picture that has now become the Venture Vortex model.

It's primary strength is in providing a platform to organize thinking around the process of building a venture and I am using it both as a design and a diagnostic tool.

Broken into 4 primary regions: internalities; externalities, core ideology and the vortex itself, the arrows and chevrons show of sequencing of rational thought in the design process. Of course, no venture is static but rather an ever evolving mix of people and activity amidst a shifting environment. The model seeks to acknowledge the foundational element of any venture as the core ideology itself which is connected to the key people through values and the calling through purpose.

The core ideology in fact is the fulcrum around which everything pivots. It is the ulitmate basis against which any planning or activity can be checked for congruence. In fact, the organization can only do what it's true purpose and values will allow --- which also means we can't 'make-it-up'... as the actual purpose and values will always express themselves.

Uncovering the true core ideology then is a critically important task if we are to most effeciently build an organization to serve it. Doing so is about deep questioning of the personal intentions of the key stakeholders and the calling that is bringing them together. Finding the answers is often thought of as having statements that look a certain way. My experience though has been more about it being a felt experience. There is no right answer or right structure but the feeling is undeniable when it arises.

From that point moving up the venture vortex is a process of increasing rationalization within shortening time horizons up until the highest level which is the realm of near-term planning activities. The challenge in this, particularly for ventures working on systems-depth shifts or consciousness change is conducting the planning process in a manner consistent with the ideology itself. Conventional approaches often reflect the systems that the ventures seek to change. Now that's not to say conventional approaches are not at all applicable but rather must be managed and applied from a grounded values perspective.

The most effective model I've encountered in business system design is Stafford Beer's Viable System model which is essentially the application of systems science to organizations. For strategic and action planning I've found nothing that comes close the power of a truly co-creative approach with a broad mix of participants --- another thing that fits well with systems science --- but more on that in another post.

Twittering consiousness 2 (tracking)

Twitter just announced the ability to track words in the entire 'twittersphere'. I for example am now tracking:
- systemic
- intervention
- co-create
- venture
- Canada
- Byron

So when anyone does a post with any of those words in it I'll see it. It's interesting to me because I can in a way tap into a broad consciousness flow (comprised of small top-of-mind comments) to see what's happening with these words. Will be interesting to see how this goes - I imagine at lease I'll find some interesting new people to follow - and that so far has proven to be a good thing.

The two (or 3) fulcrums of transformative venturing.

A thought occured to me that there are in essence two fulcrums in the intentional creation of a transformative venture (a venture working on a systems-depth shift/consciousness change) - and those are the purpose and the business system. And perhaps these two fulcrums interplay through another fulcrum - the BHAG.

This is coming to me as I'm exploring the connection between the Venture Vortex model and Stafford Beer's Viable System Model. More posts on these later but this seems like it is starting to come together.