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Cheers!

Michael

Exploring Open - Investing and Organizations

The OpenEverything retreat is coming up and in prep I've setup a wiki to begin exploring attributes and examples of Open Organizations and practices for/what's different with Investing in Open.

Have some thoughts? Jump in here.

The influence of open in venturing.

So what does 'open' mean for 'venturing' and venturing on 'the frontiers'.

From some prior definitions, venturing is process of creating and evolving a venture, where a venture is an agreement among people to do things in service of a purpose and according to a set of values. More simply it's about the process of organizing resources (social, financial, and human capital) toward realizing a certain intent.

If 'open' really is about a new mode of organization, then it is central to the process of venturing. It will inevitably impact every venture, the leadership and culture required, and the way in which we go about it.

Where strategy has been a dominant management driver in the past 3 decades, design will require greater attention. Conventionally, the control of financial and intellectual capital allowed organizations to directly control action and influence outcomes. In open, social and human capital are more dominant factors. They are also inherently less controllable which means we have to pay more attention to the design of systems versus control of action to influence outcomes and fulfil the organization's purpose.

If this shift to 'open' is truly a product of the evolution of our society, as I believe it is, then this is inescapably important.

Furthermore, ventures that are themselves focused on the evolution of our society toward a just and sustainable state have to pay particular attention to open. These frontiers are necessarily about dealing at the edges of our current systems and structures - the turbulent space where 'open' is most effective.

Pulling this together - venturing on the frontiers requires a focus on:

• social and human capital
• a shift in culture, values, mindset, and leadership
• systems design

That said, this doesn't mean it's time to throw the baby out with the bathwater. Strategy is still a useful tool, and we are still in the midst of a culture dominated by the conventional mode of organization. What it does mean though is that the compatibility of our underlying organizational culture, values, mindset, and leadership will determine the ability to make the most of convention in context of where we are going.

The point of 'open' - a new mode of organization.

In working on Open Everything I've been struggling to come up with why it matters and what it means to the common person. For people in the open source community or other fields where 'open' is a already at play they don't tend to ask this question but if we are to 'open' the open meme, we certainly need to be able to answer it.

So here's how I answer it now. (Ad-lib seesmic video answer below)

Open is about a new mode of organization.

• Enabled by pervasive adoption of communication technologies and an emergent culture of people comfortably communicating with greater numbers of people, independent of geography or in-person relationship. (it's a product of the evolution of our civilization - not just some fad formula for success)
  
• Rooted in and requires values and mindset rooted in interdependence, contribution, collaboration as opposed to the currently dominant culture of independence, competition, and zero-sum competition. (it's not about tools and techniques)
  
• Relies more on social and human capital than financial and intellectual capital. (requires a different type of leadership)
  
• Much more flexible and responsive to immediate context (great for situations where there is systemic turbulence like we are increasingly facing).

The implications of this are:

• It will inevitably become a factor in your organization or industry whether as a result of: strategic intent ("let's do some of this web 2.0 stuff" - "we need to listen to our customers/community"); the shift in our society and culture; or an increase in turblence/instability the systems that impact your organization
  
• Working with it requires some deep shifts in culture and leadership
• May (likely will) result in significant unintended changes to the organization, what it does, and how it does it.

While this is a quick first take - it certainly expresses what's attracted me to this 'open' meme. I'm looking forward to mixing this into the conversations we'll be having at the Open Everything Retreat in September (the agenda is starting to look good) and seeing what we come up with.

Of course, if you have any thoughts, ideas, opinions we need them all in working this through. Comment here, at any of the Open Everything events, your own blog posts (tagged with openeverything), or even in the Mapping Open wiki are all welcome.

What's the point of open for you?

A crack in the dam - opening a new domain.

Rhizoming the plane of emergence 2.0 . .
Originally uploaded by jεƒ saƒı

It's been in the works for awhile and I now think we're really starting to make a connection between web tech (2.0+), venture investing, social innovation. That connection is going to unleash some tremendous innovations and a surge in the activity directly working on the challenges facing our civilization. It feels like the emergence of a new domain that will take some very different approaches to change and influencing the course of civilization. It seems inspired by open source, technology innovation, financial risk taking, a venturing culture, and now a deepening and deeply felt realization that there are more important tasks to tend to.

I've been digging deeply into this for a while (Venturing on the Frontiers, Open Everything <site>, and The Great Remix) and these two posts (Umair Haque and Fred Wilson) have me feeling that something just shifted. What I love is that this isn't just the same old folks getting into this AND that they are coming at it from an understanding of how systems emerge. Umair uses the language of DNA and Fred is living it through his investment approach in web tech companies.

Maybe what it is, is that all the different groups I've been working/having the conversations with (MaRS, SiG, CSI, Renewal Partners, Communicopia, Causeway, Tides Canada, and Good Capital) are using different language to talk about the same things.

I'm not sure. What do you think? Is this just a personal moment are others sensing that some thing has shifted too?

An open quote from Michael Edwards

Cross posted from my tumblog.

Open: "more radical innovations in ownership and production that change the basis on which markets currently work"

In the conclusion of “Just Another Emperor” by Michael Edwards, he poses the above quote which I think is a great description of what ‘open’ is actually playing at. Full context here: “Philanthrocapitalism offers one way of increasing the social value of the market, but there are other routes that could offer equal or better results in changing the way the economic surplus is produced, distributed and used: the traditional route that uses external pressure, taxation and regulation; the philanthrocapitalist route that changes internal incentives and gives a little more back through foundations and corporate social repsonsibility; and the more radical innovations in ownership and production that change the basis in which markets work. We don’t know which of these routes carries the greatest long term potential, though all of them rely on civil society as a vehicle for innovation, accountability, influence and modified consumption, and especially for getting us from reformist to transformational solutions.”

Benevolent dictators in the open movement

One of the interesting things coming out of OPEN everything (Toronto) was the idea that open projects are driven by what we were calling 'benevolent dictators'. That phrase, while abrasive to some, seems to be resonating in a number of different conversations that I and others are having.

What it seems to do is counter the notion that open is a touchy-feely, everyone has to agree, happy place where everyone gets along. At the same time it reinforces the important and evolving role of leadership. What I'm starting to try and tease out is what are the qualities of open leadership that we're really getting at? And which of those are core values - and which are situational reactions?

So far I've been seeing some aspects such as:

• willingness and authority to make quick decisions based on intuition and sense of purpose and values (the DNA of the project)
• a relentless focus on near-term goals vs. controlling tasks
• ability to command/wield social capital vs. financial capital

So what do you think? What are you experiencing? What's different?

Photo credit: invisible consequential

OPEN everything (Toronto) Reflection

The first half-day OPEN everything event happened in Toronto at the Centre for Social Innovation on Wednesday and was a great start to what's going to be a very interesting series. Mark Surman - the mastermind of the series - opened the agenda and launched the group into an exploration of what 'open' is and what are the underlying principles.

I twittered some of my observations on the day and have a running tag which is going to capture the ongoing conversation (#openeverything). Some of the highlights for me were:

• social capital is the key currency - more important than financial capital
• leadership is essential and often looks like a benevolent dictator
  
• control is of priorities rather than tasks
• purpose and values are more powerful than strategy and logic
• it's better to graft on to an existing community than try and create a new one
• open projects need to be big to be able to absorb the capacity of the community
• open isn't new (1 example was from the 17th and 18th centuries)
  

That last point helps also to remind me that this is part of our ongoing nature and evolution - and part of the Great Remix. What we are seeing as expressions of open now are necessarily coloured by the context of our society today. Clearly. So what will be interesting as we go forward with this is what are the essential enduring principles? What's the heart of open? How do we kick-it up to kick-up the pace of our evolution to a just and sustaianble state? Fun.

Thanks to Mark, Tonya and everyone who participated. We're on to something here.

OpenEverything opens today!

Well, it was only a few months ago when Jason Mogus, Mark Surman and I chatted on this concept of the event series that is now underway. It started as an exploration as to a new Web Of Change event at Hollyhock this year and Mark has taken it to what is going to be an amazing series that is going to push our thinking and the thinking of the 'open' community even further.

For more information, check out Mark's opening post here, and the openeverything wiki.

Today, Toronto kicks off Open Everything: a global series of six (or more?) events about the art, science and spirit of open. We've got 60 amazing people registered who come from computer programming, community development and everywhere in between. It's gonna rock.

There are going to be a few bloggers and hopefully a few twitters going live today and putting their follow-up thoughts out shortly thereafter... and I'll do my best to link to them as they come available.

Some related links - adding on to another conversation.

I commented on Fred Wilson's Looking Forward post yesterday and he reblogged a part of my comment in his tumblog here. Tt's been generating a few emails to me so for those that are interested, here are a few other links that follow that theme...

- A few of us are convening an event that is digging deeper into that mindset that riffs off open source openeverything.net.
- Ervin Laszlo's Macroshift - a book about the evolution of civilization and the interplay of technology and mindsets (my highlights and links to the book - additional post here)
- A post of mine on this phase we are in that I'm calling "the Great Remix". Additional posts here and here.
- Stafford Beer's work on information design of systems in an organizational context (my highlights and links to his book and work)

Forces at play in the The Great Remix

The final piece from this work on The Great Remix are a couple of presentations that explore the forces at play. I've yet to add annotated detail but here they are nonetheless.

Summary

| View | Upload your own

Detail

| View | Upload your own

Doing differently in the Great Remix

The one other piece that I'll share from my exploration into the Great Remix, is a part about how I see doing happening differently as we move forward.

The following four areas now describe how doing is different in the context of the Great Remix.

Employ Systems Dynamics
(From conductor to mix master)
As the systems of our civilization demonstrate instability and failure more frequently, openings are created for previously unexpected initiatives to emerge. We can’t know when or how but rather must work to condition the emergence of those initiatives.

Turntable
Originally uploaded by mrhayata

Insights from the domains of systems science point to how systems work, providing essential knowledge into how to transform and operate within the systems we have. Leaders now require competencies more like those of a a mix master DJ as opposed to those of a conductor. While composers work with their orchestra to perform predetermined music, a mix master DJ comes to a room with an assortment of songs and sounds which they mix together according to the energy of the audience and the experience they hope to happen.

There are already many bodies of work in this area and the increasing rate of new works being published indicates the growing interest in this topic. Some particularly notable works include:

• Stafford Beer, The Heart of Enterprise, 1995
• Donella H. Meadows, Places to Intervene in a System, 1997
• R. Brian Stanfield, Courage to Lead, 2000
• Margaret Wheatley & Deborah Frieze, Lifecycle of Emergence, 2006
• Frances Westley, Brenda Zimmerman, Michael Patton, Getting to Maybe, 2007

Distill to Essential Elements
(From buildings to bricks.)
Big things have tremendous momentum and aren't easily remixed with other things. This manifests as resistance to change and slows the pace of evolution. It also sets the stage for more spectacular failures. Enabling the capacity to essentially remix our society into a system compatible with the common goal requires that things be re-mixable. This means breaking things back down into their essential elements - deconstructing their existing configurations - to reuse the valuable pieces in ways that fit the new context. Houses can’t be remixed very well, but bricks can.

In this context organizations are bundles of people and assets that organize around a purpose, work towards a set of goals, deliver an offering (product or service), and develop a set of core competencies. Similarly, people are grounded in purpose, driven by passion, accumulate experiences, knowledge and connections, and develop competencies and insights. The capacity to remix elemental components of organizations and individuals directly relates to our potential in the Great Remix.

Dynamic Organization in Individual Context
(From phonebook to crystal ball)
Context is essential for people to make meaningful connections to each other and to other knowledge. Humans are extraordinary at dealing with context and substantially limited without it. Take language for example: phrases or statements out of context can be taken to mean very different things - a reality made abundantly clear by sensationalist media.

Through the context lens, information is best when:

• presented with the context it came from
• received in the configuration most relevant to the context of the recipient
• exchanged through the point where both contexts converge.

In venturing for example, imagine if rather than relying on an individual mentor, limited by their own individual context, the venturer was able to access the essential insights, experiences, and connections of a 1,000 entrepreneurs filtered according to the context of their individual and immediate situation. That would be like moving from phonebook to crystal ball.

Allying the Frontiers
(From discrete domains to friends on the frontiers.)
Given the purpose of quickening the evolution of our civilization toward the common goal, it is imperative that we foster the convergence and interaction of those that are taking initiative on the frontiers across all related domains. In this context we see the commonality between many discrete domains such as technology, science, mathematics and philosophy.

Connecting those with purpose primacy related to the common goal across all domains would be a high-leverage opportunity. Doing so could better orient and leverage all activity working toward the common goal regardless of domain.

The Great Remix

Part of my silence over the last few months has been from some deep-digging I was doing in an engagement with the Social Innovation group at MaRS and with the Centre for Social Innovation. One of the great things about the engagement was an opportunity to push deeper into what's underneath social innovation, social entrepreneurship and social enterprise. What's come from that is seeping into most everything I'm doing right now - and so it's about time I get back to posting what I've been discovering.

Perhaps the most profound observation during the course of this exploration is that social innovation and social entrepreneurship are not so much intentional movements as they are phenomena of the evolution of civilization.

As civilization reaches an increasing degree of complexity we are being confronted by the limits of the system that created it. This is being experienced as systemic instability and failure in everything from credit markets to climate change to the remix of the music industry. While we don’t know how things will evolve, we can be sure that whether through intentional actions or systemic collapses, we are entering a period of increasing reconfiguration - “the Great Remix”

At the same time numerous fields of study are converging on the realization that “everything is connected” and that connectedness, connectivity, and emergence are fundamentally important areas of understanding. This realization is key to learning how we might successfully steer our civilization toward a just and sustainable state.

The movements of social finance/innovation/entrepreneurship/tech all bring different perspectives and at the same time share a common ground. From this common ground will come the new initiatives and systems that change the trajectory of our evolution.

Common Ground
The frontiers of the evolution of civilization share the common ground of:

Interdependent in a “common goal”
Acknowledging a greater common goal of a just and sustainable balance among people and the planet.

Driven forward by “purpose primacy”
People and initiatives that hold a primary purpose directly related to the common goal are the catalysts of civilization's evolution toward a just and sustainable state.

Action taken through a “practical approach”
The strategies and actions of these people and initiatives tend towards:

• Sustainable financial viability;
• Practical and productive application of techniques and approaches from non-traditional domains; and
• Distributing increasing control, earnings, and assets into the communities they serve.

The people and initiatives in this domain tend to be increasingly expressive of the following values:

• Exhibiting the qualities of open, fluid, and dynamic
• Providing spaces for people as they are and as they want to become
• Embracing the richness and wisdom in differences
• Acting with a light spirit, sense of fun, creativity and a perspective of opportunity

I'll post some more excerpts from this and my other recent work over the coming weeks as I get back into the groove.

Social Tech Training - June 22-24, 2008

That's right, Social Tech Training is happening this June in Toronto.  Here's the link and a quick blurb.  Check-it out and sign-up if it catches your eye. Coming from Web of Change and MaRS it's bound to be an excellent event!

No one working in social change these days can afford to ignore the opportunities offered by the web. Most organizations get stuck, though, on "How do we do it?" "Where do we start?" and "Who can help us?" Interest in high, but the talent pool of people equipped to understand, prioritize, and implement these tools and ideas remains limited.

We've gathered the best and the brightest leaders in this sector, and we've put together an agenda that will help take your organization to the next level. Each participant will emerge with new technical, creative, and leadership skills, a powerful network, and a customized, comprehensive “Web 2.0 Plan” for their organization.

This training is an excellent opportunity to connect to the big picture, develop practical skills required to execute, and network with both leaders and learners in this emerging space. We are excited to be part of this transformation of the social change sector. Please join us!

"Bets n' chips" - Implications for investors on the frontiers.

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

There seem to be two types of bets that investors make when doing a deal. A bet on the team. A bet on the plan. The closer to the frontiers (early stages and deep change) the greater the emphasis is on the team. And rightly so. We all know that plans don't last on the frontiers.

So how can we get better at investing on the frontiers? Surely betting on the team alone isn't a sound investment strategy.

From my conversations the current practices seem to be either focused on 'rolling up the sleeves' and getting involved directly (few, high-cost investments) or being a hands-off patron (many small investments). Either that or back off from the frontiers and use conditional investment to achieve specific results (e.g. disadvantaged employment or other enviro-social activities). The limitations in each of those should be fairly self-evident.

So what else could we make bets on? Well if venturing is a process, we could bet on the process they are following. If we know plans are not static, what is the venture doing to continue the process of framing, planning, and connecting?

And what other practices could we employ? Well if one of the biggest chips an investor brings to the game is their social capital, well then how can that capital be better employed in the task of connecting? Going back to the image above, we can see that at minimum it requires a venture to have articulated simple and accessible spaces. I wonder - how many entrepreneurs and their investors would truly describe the primary spaces of their venture in the same way? How about in your venture or your portfolio? My bet is that's strongly correlated to the difference between friction and luck.

Summing up, that leaves us with making bets on:

• a team;
• their venturing process; and
• their spaces (accessible and simply articulated).

And it means bringing our social chips into the game to make the connections the venture truly needs (more in a future post).

Now that's an investment space I'd bet on.

"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.

Venturing and venture investing on the frontiers - in simple terms.

I've been asked a few times about what I'm working on in simple terms. Not always easy for me - but here goes top-of-mind while riding the train...

My focus is on venturing and venture investing 'on the frontiers'.

• venturing is about organizing and directing resources toward a purpose
• venture investing is about improving the capacity of ventures to achieve their purpose (or certain milestones along the way)
• 'on the frontiers' means the places where conventional ways of doing things are least effective

My work is focused on being able to systematically improve ventures and venture investors operating on the frontiers. My belief is that by focusing here, practices can be developed and demonstrated that will themselves become conventional in time and thereby move 'the frontiers' greatly increasing our society's ability and capacity to take on our civilization's greatest challenges.

So how will ventures be different after employing these practices?

• more efficient and effective at getting things done
• better responsiveness to the environments it's operating within
• better anticipation and avoidance of 'crises'
• more flexibility in responding to immediate opportunities and challenges
• more focus on and faster progress toward fulfilling the purpose

And how will venture investors be different?

• better investee governance with less effort
• increased capacity of all portfolio companies (whether they've applied the approaches or not)
• better results from existing portfolio (fewer failures, greater success according to purpose)
• better able to go earlier with less risk
• better able to go deeper into realizing non-financial aims (particularly relevant for 'social' venture funds.
• lower transaction costs

And what's at the root of what's different?

• concerned with systems vs. plans

(Said in different ways - couldn't resist...)

• creating spaces for uncertainty to resolve itself vs. trying to solve uncertainty
• organizing under a purpose vs. organizing around an idea/product/service
• unfolding vs. turning inward
• enabling vs. constraining
• fluid vs. rigid
• framed vs. forced
• ...

'Social'-lingo

Many things have been picking up the 'social' modifier lately. Here are some of the ones I'm encountering and what I think they mean.

First, the modifier 'social'

• modifies the following word to the focus of serving a social (and/or environmental) benefit

Social-tech

• technology employed for social benefit (most commonly digital

Social-change

• concerned generally with societal change and how it happens

Social-innovation

• innovations and the process of innovating solutions that deliver or enable social change

Social-venture

• a venture with purpose primarily concerned with delivering social benefit

Social-entrepreneurship

• concerned with developing and supporting entrepreneurs focused on social change (and primarily social ventures)

Clearly, each of these words describe fields with much activity and research into how they work. Adding the modifier, at best prompts the question of how, when modified, is it different. In my perspective it's the realization that things aren't linear - and in fact are 'chaotic' - which then calls on the research of systems science and it's theories on complexity and systems. And it also seems to be best done in an 'open' way - or maybe better put - those that are in the depths of doing this stuff tend to do 'open'... which of course... is another story.

The 'evil' in exchanges.

Exchanges are a hot topic in the social capital markets. They are appealing in the sense of the efficiency they promise. Efficiency is good - and it also has a dark side. This dark-side, which I'm considering the 'inherent evil' in exchanges, is their tendency to disconnect/dissociate the 'buyer' from the 'seller'. It comes out in things like the sub-prime mess and rogue traders.

So how do we get the benefits of this 'masterpiece' of capitalism?

By using exchanges to:

• create and deepen connections;
• increase the richness of information and communication in those relationships; and
  
• craft and uphold agreements.

To me that means looking as much or more to social networks as it does financial exchanges. I know there are some folks working on local exchanges who have acknowledged this 'evil'. I'll be particularly interested to see how they address it - from all the angles I've looked so far it seems to be a tough balance.