Neil Tambe 10/10/13 Neil Tambe 10/10/13

Creating From What You Know

Today, the Ross Net Impact club had it's fall kickoff event. At this event, Seth Godman the Tea-EO of Honest Tea gave a talk. It was fairly good, but one thing about the origins of Honest Tea struck me more than anything else. Seth just created it, somewhat randomly. The story goes, Seth had a business school class and his professor asked a provocative question while discussing a case about the beverage industry: "What's missing from the beverage aisle?" Seth said, a drink that was "just a tad" sweet. At the time, he didn't think to start a company. Years later, he was visiting a friend in New York, looking for a beverage in a cooler in Central Park. His friend was perplexed when Seth exclaimed that he couldn't find a suitable drink (there were sodas and presumably other beverages). But, he saw something else...he saw that a tea drink was missing.

So from there, he and his original professor created Honest Tea.

The obvious thing, (that never seemed so obvious to me before today) was that Seth had a unique insight that a tea-based beverage was missing, because he himself was a low-sweetness tea drinker. He knew the market space, it seemed, on an intuitive level. Not so much to confuse himself, but enough to see a missing product and create something. This seems to be the right way to create products, understand a market / customer need and think about simple ways to close the gap.

When I think about Silicon Valley culture (and what I hear about it) I think of people that are simply looking to start companies. They are looking for gaps so they can fill them, for filling's sake - not for any intuitive or intrinsic reason. This seems contrary to how businesses actually start. Rather, it seems like you understand something well and then you just start seeing the gaps. You create from what you know, and looking at what you know in a new way.

This seems to jive with innovation and creativity (in social impact contexts or otherwise): the best solutions come from front-line, tacit knowledge. So long as they can get out of people's heads, of course. The magic of creativity and innovation, it seems, is when someone is fortunate enough to get a deeply held insight out of their heads so that they can build something from it. What is important is making the tacit first explicit, then tangible.

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Some friends and I were talking about this after the event. One friend pointed out that what I seem to know is people. Which is true, I have cultivated an instinct about how to bring people together over the past 20 years, since I was six years old. Now, I wonder, how do I look at people / relationships in a new way so that I can start seeing some gaps that could be filled by entrepreneurship?

Neil Tambe 10/8/13 Neil Tambe 10/8/13

Allying / Coming Out In the (Private Sector) Workplace

Friday is National Coming Out Day and I wanted to soapbox a bit on behalf of allies everywhere as a result. I also picked up a nifty bracelet from the Ross Out For Business Club after signing the "Ally Pledge". Thanks peeps. ---

I had a work experience where I thought I couldn't be myself and it was the most stressful time of my life, to date. I even wrote a business school essay about it. It was TERRIBLE. I was always stressed, becoming less healthy, and I wasn't performing at my best. I felt incredibly lonely and was losing hope that my situation would ever get better. I thought about quitting or taking a transfer, often. My situation wasn't even that extreme.

The more I talk to friends, classmates, and colleagues now, I find that everyone feels this way at some point or another. The chorus of people I talk to agree that it is a terrible feeling that is dehumanizing. Yes, dehumanizing.

If I felt that way for superficial reasons (e.g., I wasn't doing the sort of work I liked, my sense of humor wasn't accepted, people thought I was a goofball), I can't imagine what it would be life to feel compelled to hide your sexual identity or something equally personal. I'm guessing it'd be about a thousand times worse. As a result, I don't think we should ever let someone feel compelled to hide their sexual identity. It's hurtful and it's not fair.

I don't think those who identify as L, G, B, T, Q, or even an Ally should feel unsupported, either, because coming out can be such a hard process anyway. On the contrary, because it's so hard (and might subject the person coming out to emotional, career, or even physical harm) I think any ally needs to be an extremely, visible, and active one. A quiet ally might as well not be an ally.

We owe it to our friends, family, and colleagues to be supportive allies precisely because being out is really hard. And after spending some time in private sector organizations, it's broken my heart to see friends (who I deliberately call friends, they just happened to be colleagues) have to hide parts of who they were. I know the relief of being able to talk about my wonderful girlfriend with my friends from work or school (which you can't do if you're not out). It makes you feel good when a caring supervisor asks you about why you're smiling when they know you went on a first date the evening before (which you can't do if you're not out). All my older colleagues (without exception) loved talking about their kids and to take that away from someone is hurtful and a damn shame (afterall, baby pictures are adorable!).

More than that, if we're not supportive allies, our LGBTQ friends may suffer in their careers - maybe because they aren't chosen for a project, because their life circumstances aren't understood, or any number of other reasons. As allies, we can't let anyone feel like they have a reason to think that a colleague who happens not to be straight is any less talented or employable than anyone else. On the contrary, diverse perspectives (whether from sexual orientation, race, SES, educational background, career history, interests, location, anything) make business better. Speaking from a place of "profit maximization", teams can't afford not to have different flavors of people on them and have those differences be open, visible, and usable.

So today, while eating my peanut butter sandwich in an empty classroom I say to my friends, whatever flavor of human they are: I support you. For those who happen to L,G, B, T, Q or any type of sexual identity, I'm your ally. I'll try my best to be a good one.

PS - Special thanks to my friend Gabriel for reminding our class about the Ally Pledge!

Neil Tambe 10/2/13 Neil Tambe 10/2/13

Why we need legislative responsiveness (and dunk tanks)

After the government shutdown, I was furious and hopeless. Furious because, well, how did this happen? More importantly, I was hopeless because I felt like I (nor any other citizens) had real recourse against legislators after the shutdown occurred. After all, we can't fire legislators, nor can we dock their pay, nor can we easily protest outside of their offices in Washington. In other words, we can't change their behavior by immediately making them feel the pain of their decisions. [For more discussion on response tactics like voting and campaign contributions (and why they don't work in this case), scroll to the bottom of this page.]

So with this in mind, I'd like to propose some radical (read: wacky) alternatives which might actually make legislators "feel the pain" when they make decisions that are bad or "feel the love" when they make decisions that are good.

How to make legislators feel the pain and love One easy translation from the private sector is to have variable compensation or "pay-for-performance". In such a scheme you could have citizens judge legislators on a number of criteria indicating good performance. Then, you could have a bonus pool for legislators who do well and no bonuses for those who don't. This would be difficult because you'd have to design the incentives correctly, but it's possible. This isn't radical, however.

Campaign contributions aren't a great lever to use, but I think campaign spending could be. What if we limited campaign spending by legislators based on how pools of constituents viewed their performance? Say you had three pools of constituents, people in your district, people in your state, and a national group of non-partisan political elites. After every session of congress, each pool of constituents would be able to allocate points to whichever members they wanted. Then, based on those point allocations on a session-by-session basis, legislators would have different spending ceilings for their campaigns down the road. This would give an incentive for legislators to be responsive to constituents, immediately, beyond vocal minorities.

Another lever one could use to punish misbehaving legislators is to control access to the chamber floor or the media. In this scheme, legislators who get more done or better represent the country would have easier access to make remarks publicly. If a legislator was being wholly unproductive, they'd have their time to speak capped. You could perhaps evaluate this based on a constituent voting scheme or by legislators policing themselves.

Finally, here's a funny one that might actually work. Below I discuss why shaming might not be good enough. But, if we're going to shame legislators let's REALLY shame legislators. Let's do a gong show. In this scheme, maybe we put a big dunk tank on the Capitol steps. Let's put a legislator above that aforementioned dunk tank. Then, we have a game show on a regular basis where a legislator gets grilled by a moderator. Then, people on social media vote as to whether that legislator should get dunked or not. If they get off the tank without a dunking, we'd make a big deal about it to really make them feel good about it. If they get dunked, we'd make them wear a "dunked" cap until the next dunking show. They'd look really, really foolish if they were dunked. We'd do say, 10 or 20 legislators during each show so that over the course of a term everyone would have to face the dunk tank.

Anyway, some of these are crazy, some are hard, and others are simple. Overall, though, I think there's many better ways to have immediate responsiveness of government. Surely, all these ideas are not ready for implementation. I merely want to provide a vision of alternatives that we might use. If there's big demand, I'll flesh one of them out. If not, I hope they help the readers of this post realize that responsiveness in government is difficult, but very important.

Extended Discussion on Voting and Campaign Contributions (and why they don't work): The two mechanisms we seem to have are voting and campaign contributions. Unfortunately, though, these happen every two, four, or six years which diffuses the effectiveness of those feedback mechanisms - if you vote for a congressperson every two years, they'll have no idea what the basis of your decision is. It could be because of the government shutdown or because you like their views on pet adoption. A vote isn't a great feedback mechanism if a legislator doesn't know why you vote and you vote very infrequently.

You could also communicate your viewpoint after an event by making campaign contributions for a particular candidate. But that runs into the same problems of diffusion above: no legislator can really know exactly why you contribute to them. They probably shouldn't anyway, because if you contribute for a specific purpose the legislator is running into a gray moral area (potential bribery).

Moreover, both these mechanisms don't actually impose a direct cost on a legislator...by not giving a vote or a contribution, you're simply withholding a future benefit. Legislators don't "feel the pain", so to speak. Also, I don't think shaming - for example through letter writing or social media - does enough because it's also diffused. On average, any legislator will probably get lots of different written feedback from constituents but they plusses will probably cancel out the minuses. Moreover, constituent letters and tweets are very easy to ignore, especially when media channels are already saturated with information.

Neil Tambe 9/18/13 Neil Tambe 9/18/13

Irrational Manager / Market Share Fallacy

Today, my strategy professor made a very wise point: only the irrational manager puts increasing market share ahead of increasing profits. A business intends to make profits, which gaining market share doesn't necessarily do. Increased market share may lead to increased profits, yes, but it's not a guarantee. So any strategy to increase market share should be rooted in an intent to increase profits.I think this also applies to the social sector. Lots of times, in my experience, social sector organizations measure themselves by serving more people or increasing the amount of programs they have. That's fine, but only as long as those increase actually make their communities better in a meaningful. Having more programs isn't intrinsically valuable. It's rare, in my experience, for social sector organization to make this connection (between programs and impact) clearly. This construct mirrors the irrationality of irreverent market share gain in the private sector:

Increased Market Share = More Programs
More Profits = More Impact

More programs doesn't mean more impact, just as more market share doesn't mean more profits. Not-so-good Managers in both sectors don't understand this fully. Increasing market share or programs makes you look like a better manager / executive, but it doesn't mean you are a better manager / executive.

The anecdotal difference, I think, is that founders in the private sector are crazy about profits whereas founders in the social sector seem more likely to be interested in their "market share" than their private sector peers.

Neil Tambe 9/17/13 Neil Tambe 9/17/13

Future of Auto #2 - Imagining Data (not tailpipe) Exhaust

The vehicle's condition: e.g., it's oil level, fuel level, engine wear, or any data that is already produced by the car or could be cheaply captured with an add-on sensor
The vehicle's location: i.e., with GPS
The vehicle's use: e.g., RPMs, acceleration, g-forces of turns
Anyone interacting with the car: e.g., a driver driving the car, a mechanic

The OEM then transmits the data wirelessly to the cloud and runs analysis on individual cars and the health of the fleet. It could then sell this data, via a subscription service, to fleet managers looking for better information to manage their fleet of vehicles. For sophisticated client needs, maybe the OEM has a consulting business to develop customized metrics.

Maybe you could extend the use of the data by predicting when the fleet manager will need new parts for maintenance (e.g., when a vehicle needs an oil change), or by optimizing routes, or recommending ways for drivers to operate their vehicles more safely and efficiently.

Moreover, the OEM could open up the API to the transmitter's hardware allowing aftermarket sensors to transmit via the pre-installed transmitter. That way, the OEM's client could add data to the client's subscription, making the service more valuable for the client, which in turn boosts the OEM's positioning. Maybe you could even design the data in such a way so that it integrates into inventory or logistics systems already used by the client.

So now, we have a decently feasible business which has low capital costs (compared to producing a car) and the potential for ongoing returns. But wait, it gets better.

If you're an OEM, you now have lots of data about vehicles and their operation in the real world. You could mine that data to improve the production of automobiles themselves. Maybe you can detect defects or performance issues. Maybe you could see usage patterns and identify a new, underserved, customer segment. Maybe you could even scrub the data so it could be used by researchers to improve society.

But wait, there's more. If you perfect the technology on fleet vehicles (or even cars that you've leased to individual consumers) maybe you can develop a consumer metrics business which helps people improve the use of their automobiles in their own lives. Maybe you can recommend carpools. Maybe you help consumers have conversations with their kids who are new drivers. Maybe you can help people know when the most efficient time to go to the grocery store is. The possibilities seem limited only by the data that's collected and the imagination of the analyst.

This is fun.

Neil Tambe 9/17/13 Neil Tambe 9/17/13

Future of Auto #1 - The Shareable Car

I want to intern in Detroit this summer and I'm extremely interested in things like Consumer Insights, New Product Development, Future Trends Analysis, and Strategic Planning. Basically, I like building and launching new things. Seeing as how working in Auto is the likeliest of these routes (though not exclusively), I figured I'd see if I could actually come up with visionary ideas about the automotive industry.

This post is the first installment in a series I hope to keep with over the next few months. In it I will try to empathize with different customer segments and think of new products or services that would serve them in fresh ways. If you think my ideas are legit, I'd appreciate your help in finding a sweet gig for the summer. If you think my ideas are far from legit, I'd appreciate your feedback.

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Speaking as a Millennial, It's not that I don't like cars. I actually really like cars. I grew up around cars. When I played with Legos as a kid, I used to make them into cars (full disclosure: and spaceships that doubled as cars). I think the technological innovations in cars are astounding and that the invention that's currently happening with in-car tech is fascinating.

The thing is, I wish I had a lifestyle that didn't require a car. See, I want to live in a city and walk places. But I still want to be able to use a car. And, I still want to own a car. I want some of the private benefits of having a car while still sharing the fixed costs of having a car with other people.

So, why not have some of the benefits of both with a shareable car? What if people who aren't necessarily family or members of the same household could own a car together, too? Maybe the beginnings of an idea could work like this:

OEMs would create leasing schemes in which the leasees can be of any association to each other. Maybe they're neighbors. Maybe they're friends. Maybe they're roommates. Maybe they just met and live down the street from each other. Under the agreement they would each pay for insurance and maintenance through the OEM and sign their lease together. They'd both have access to the car. And, it wouldn't be a generic car like Zipcars. It'd be one they picked all together.

A supporting technology for this idea would be a mobile app which helps the co-leasees share the car. The app would track mileage and usage so that the friends could split gas and maintenance (i.e. variable costs) quickly and automatically. This app could also be used by the friends to reserve use of the car at the times they need it, or maybe coordinate how they can carpool. Finally, the app could contain a unique identifying mechanism which allows the car to adjust itself to the driver's preferences, whether it's music, recently navigated destinations, temperature, or seating arrangements.

Of course, there are problems with this idea (e.g., who would want partial ownership of a car with a friend, especially if that person doesn't live within parking distance of your residence). I don't attempt to resolve all the problems here. I merely intend to lay out the beginnings of what could be a good discussion about the future of the auto industry and a potential product or service offering.

Neil Tambe 9/15/13 Neil Tambe 9/15/13

Business Must Do Good

Earlier this week, I penned a post titled, "Can business do good?" which I wrote in response to a bit of disillusionment I was feeling about the profit-maximizing vibes I've felt in business school and a near radio silence about the role of business in society. To be fair, I'm only in core classes now, but it's still disappointing...at least to me. Earlier I took the approach of being a gadfly - being critical without offering an alternative point of view. I'd like to present that alternative, more provocative point of view: business must do good. Not business can do good, not business should do good, but business must do good. Here's why I think so:

The Metaphor To have a healthy body, one must eat a variety of foods, at least in the long run. Let's say you grow your own food and you need fruits, vegetables, grains, and proteins to be healthy. Say you run out of fruits in your refrigerator, and you're hungry and the store is closed. So you eat vegetables, grains, and proteins. Say you don't eat fruits for a week. You'll still probably be okay, though you like fruits. You just go about your activities and you have lots of grains and proteins. You don't worry...you just keep eating.But say it's been several weeks. Now, unfortunately, you're starting to feel weary. You really need the nutritional value of the fruits. You start to catch more colds and generally feel malaise when walking around. But uh oh, now you're out of vegetables too. This only makes things worse and you start to feel worse whenever you get sick. Thankfully, grain is still cheap and easy to grow. Your ability to eat meat, however, is fading because you're less and less able to work hard in your garden to grow the things required to support livestock. In fact, your family tells you to stop raising and eating meat…saying you should focus on growing and eating grain.

The problem is, your body is less and less resilient the more you eat only grain. There's no telling how you'll react when you get sick. You'll probably respond very badly to ailments and will probably have to go to the hospital. Unfortunately, the hospital is expensive and it will take you a long time to pay off the bills…especially if you go back to a diet of grains after you're released.

The Metaphor, Explained This is a metaphor for how I think society works. We consume a lot of different types of value: economic, social, civic, and spiritual (grain, vegetables, meats, and fruits, respectively). And we can subsist on one type of value, perhaps, for a long time. The consequence is that it makes our society - the living organism that it is - weak and more unable to respond to shocks.

Economic value, much like grain, is easy to grow in a variety of climates and is reasonably consistent across the globe. It provides energy. It's satisfying and makes you feel temporarily at ease. It's easy to measure and store. It doesn't spoil quickly. It fills you up.

Civic, social, and spiritual value are much like vegetables, fruits, and meats. Everyone has different preferences with those kinds of value. They are harder to classify and they decompose much more quickly. It takes getting used to them to like them. They don't always fill you up as quickly as grain, so they seem less important to eat.

But these types of value are needed, much like in the example of the farmer, to have a healthy society. We need a mix of value being created to be able to prosper, I think. To put it into the nomenclature of a 4 year old and his parents…we need to eat our vegetables, which is to say that we need to create value beyond that which is economic to have a healthy society.

Note that there's a difference between the vehicle creating value (e.g., business, government, non-profits, hybrid organizations, informal organizations, etc.) and the value that those vehicles create. For example all these types of organizations creative a mix of value (e.g., non-profits create economic, social, and civic value…as do the rest of the value creating vehicles I've mentioned). I'm concerned with the value that's created and consumed, regardless of the vehicle that creates it.

The Argument For Why Business Must Do Good I'd contend that business is the vehicle that creates the largest amount of value in society (not necessarily the most important value…just the most). Think about how the largest companies have more assets and people associated with them than some nation states. They also make the resources of non-profits look like pennies on the dollar. This is especially true because government has become weaker in the past several decades, in no small part because of the influence of business interests.

I'd also contend that the majority of the value that businesses create - especially in this unfortunate era of shareholder capitalism - is economic value. When it comes to civic, social, and spiritual value, businesses might even consume more than they replenish.Because they are the greatest force in creating value of all kinds, and they are severely skewed in the type of value that they create, I'd contend that businesses must do good. Let me even reframe this notion…I contend that businesses must create economic value, but at very least also leave behind more civic, social, and spiritual value than they consume. If their net value creation leaves our stocks of value (e.g., the total amount of social, economic, civic, and spiritual value) lopsided, our society will be unhealthy.

They way I see it, in the long run if business does NOT do good, our society will collapse. Which is to say that if their net value creation doesn't preserve the balance and growth of civic, social, spiritual, and economic value, our society will collapse. As a result, I'd contend that business must do good.

The Corollary I don't think the other value creating vehicles that exist (government, non-profits, churches, etc.) are off they hook. They ought to help in striking the balance of value that's needed. I don't implicate them here because they're proportion of value creation is smaller and they're more conscious of the balance they need to strike (in my humble opinion) than is business.

I strongly believe, also, that we are all much better off when these stocks of value are in balance because they create synergies when they interact together. In other words, when these stocks of value are in appropriate proportion, our total amount of value grows bigger and faster than it would if our stocks of value were lopsided.

Neil Tambe 9/12/13 Neil Tambe 9/12/13

Can business do good?

I've been in business school for just about two weeks, and I already sense a major cultural difference from my undergraduate studies. The focus on profits is palpable. People defend the maladies caused by business, sometimes rightfully and sometimes wrongfully. Business is all about the results and getting things done. Today in a class we started talking about the financial crisis. Let me repeat that, the financial crisis. I asked a question along the lines of, "where was the SEC?" After about two comments, my professor quickly ended the conversation because we were starting to talk about politics.

It perhaps was a foul to talk about that in statistics. But, shouldn't politics and morality be exactly what we should be talking about in a business school classroom? Aren't the effects of business on society and morality strong enough to prevent an outright aversion to political discourse?

I'm not asking for business school to be a public policy classroom. But I am appalled with the seemingly unending focus on profit maximization and the creation of economic value. Without being willing to teach that there are reasons to tame shareholders' interests, I don't know how we can expect that business will do good for society unless it happens to be convenient. The way business schools seem to be now make me think socially responsible business might actually be a gimmick.

Maybe I was expecting too much to have my moral positions challenged and refined in the classroom. Maybe it will still happen. But until then, a question lingers on my heart and mind:

Is business that truly does good even possible?

Neil Tambe 9/8/13 Neil Tambe 9/8/13

Cola meets the maker movement?

I just finished a first read of a very interesting case for my Strategy class, it was about the history of the Carbonated Soft Drink (CSD) industry, focusing on Coca-Cola and Pepsi-Cola. Let me provide a little background, and then I'll infuse an interesting consumer-trend to describe a potential, new, business model.

Background
Basically (and I'm being really basic) the CSD industry operates on a franchised bottling model. What we consider to be the company, let's just go with Coke, makes syrup which it then sells to bottlers. This "mothership" company also puts in a lot of marketing effort and deals with big national contracts. The bottlers add in carbonated water to the syrup sold by the mothership to make a finished product. The bottlers then sell and distribute the bottles within the territory they have exclusive rights for.

There's a lot of nuance, but this is basically it. There are a few other interesting facts about the CSD companies:

Recently (in the past few years / decades) Coke and Pepsi have been buying up bottlers, but operating them as separate companies
The companies have been expanding into emerging markets
US beverage consumption per person (all beverages) has been flat for the past forty years...it's about 185 gallons per person, per year
Bottlers have high operating costs and relatively low margins
Retail consolidation has given larger retailers a lot of leverage when negotiating prices with bottlers / mothership companies
CSDs have been trying to expand into non-CSD beverage (e.g., bottled water, juices, sports drinks

So overall, it seems like the companies really have two options to increase profitability (duh): increase revenue (e.g., find new customers, sell more products) or cut costs. There are lots of ways to increase revenue and it seems like the companies are pursuing these strategies aggressively. By buying bottlers, the companies are looking to cut costs. All this is fairly straight forward.

An opportunity to do both

Buying up bottlers also presents an interesting opportunity: if you buy bottlers, they can't get mad at you if you eliminate them from the picture. What if the cola companies bypassed bottlers (and retailers) completely? They could then presumably dramatically lower the costs of production, pass the savings onto consumers, and increase consumption simultaneously with customer value. Here's how:

What if cola companies sold concentrate and at-home fountains directly to consumers? Kind of like the SodaStream machine, except you get Coke out of it instead of just soda water. Some of the benefits might be:

Cut costs by eliminating a few steps in the value chain and punting those costs to consumers themselves
Providing a value-add to consumers (coke whenever you want it!)
Provide consumers the opportunity to customize their product experience (maybe you have a cartridge for three types of soda and two types of sweetener)
Provide a direct-to-customer product, which probably has a better way of linking marketing and promotion to consumers, so you can probably develop a better relationship with those customers for upsell opportunities for product bundling (which becomes really useful as you diversity product mix beyond beverages or even just beyond CSDs)
Maybe you could even create retail locations and turn the product into a lifestyle brand with accessories and add-on opportunities for enterprising soda enthusiasts

Musings

What I think is interesting about this category (CSDs, I mean) is that it has not leveraged the really disruptive trend of DIY manufacturing and "making", given that the kitchen is the original maker space. Why couldn't you take advantage of the fact that consumers in developed markets have lots of power and desire to customize product experiences to their own tastes (pun intended) by creating an interesting new product?

This isn't terribly far-fetched. The tech to do this probably exists. It would take some chutzpah, though. And, if someone doesn't "change the game", so to speak, the cola wars will probably continue in this expand, consolidate, optimize pattern they have been going in. That'd be really boring and pretty "meh" for us customers.

Neil Tambe 8/29/13 Neil Tambe 8/29/13

Organizations' Dirty Trick

During our lifetimes, we have been bamboozled in our professional work environments. We have been made to believe that cash is king, leaders are indeed sanctimonious, and that hierarchical forms of organization are the only way. We, my friends, are the victims of a dirty trick.

The organizational world doesn't have to be this way. We could be more purpose-driven, or have more freedom at work. We could easily have more equality in pay. We could be doing things that matter, instead of wasting away in bureaucracies which are wholly meaningless. Why is that we don't accept oppression in public life, but accept it from our bosses?

Reframing the question is essential, meaning, allowing ourselves to view organizations fundamentally differently is essential. I will figure out how. Or more likely though, we will figure out how.

Neil Tambe 8/26/13 Neil Tambe 8/26/13

Let's map the social sector's genetic code

In their 1999 paper, "Unbundling the Corporation", John Hagel and Marc Singer described the notion (and I’m generalizing) that all corporations fall into three types: client-facing liaisons, product/service providers, and providers of infrastructure to produce products and services (note that these are my labels, not theirs. Read the article for yourself). I also took a riff on this concept in my July 30 post "Definitions: What archetype of business are you?".

In the business world, there are further specifications of organization models, organization functions, and business models. More than that, there are common routines (read: business processes) which people and machines form to bring life to organization models and business models. For fear of sounding contrived, these are four common components of what I'd call an organization's "DNA". Let me cut through the jargon for a minute before continuing:

These are four examples of the "chromosomes" that organizations have:

Organization Model: There are different ways to organize and structure the relationship between different people in an organization. There are traditional hierarchies (read: bureaucracy) or decentralized ecosystems - think of an auto manufacturer versus Wikipedia.

Organization Function: There are different ways to break down the major types of routines that happen in the company. For example, some organizations have a supply chain function and most all corporations have a finance function. These are the different parts of a traditional organization chart (I don't necessarily agree with this approach to conceiving of organizations, but that's a post for another day).

Business Model: These are different ways organizations generate "returns" on their efforts. In a business, this is the different ways the company generates profits. Newspapers sell advertising and subscriptions. Consumer Packaged Goods companies offer a product. Consultancies provide a service with different types of contracts ranging from hourly billing schemes, to fixed fees, to value-based contracts.

Routine: These are the types of behaviors or practices organizations need to do so that the organization can use its organization model to generate returns using its business model. In businesses, common routines are things like acquiring customers, purchasing raw materials, selling, manufacturing, and the many sub-routines of each category I've already listed.

So I don't lose you, the reader, here's the implication I'd like to explore. We have some idea of what "DNA" looks like for private sector companies (probably because they are simpler to understand and have less variability in “genetic makeup” because they all have to generate profit). We don't have a good enough idea of what DNA looks like in the social sector. This is problematic because it makes it really difficult to talk about, compare, and measure social sector organizations using a common language. As a result, we can't easily compare what organizations are working well and which ones are not. All social sector organizations aren't perfectly unique, the do have commonalities.

At the same time, social sector orgs aren't completely the same, and shouldn't necessarily be standardized writ large. By having a framework for understanding social sector organization's DNA, we'd have a way of embracing organization's differences as well as their similarities.

Basically, what I think would be useful and interesting would be to define the dimensions which are the important defining features of how a social sector organization operates – the “chromosomes”, if you will – starting with the ones I’ve listed before: Org Models, Org Functions, Business Models, and Routines. There would probably be more, like type of client, issue area, sub issue area, etc.

Then, you’d profile as many organizations as possible and map out the “DNAs.” Then, you could start to see common processes, approaches, and compare the results of organizations, based on relevant features of their DNA. Then, I’d refine the DNA model to make it better.

What I’d hope to accomplish, eventually, is use the framework as a basis of better understanding how social sector organizations operate and the advantages, strengths, weaknesses, and skills of organizations with different DNAs. If the dataset was big enough, you could start to find ways to standardize common processes. More importantly, you could determine when different types of social sector organizations were needed in a given market or issue area.

More than anything, by collecting relevant data, you could open it up (with the appropriate cleansing, of course) and let people do cool stuff with it. In my opinion, it’s really fundamental data which could give us a better structure and language for improving management and performance in the social sector.

Neil Tambe 8/26/13 Neil Tambe 8/26/13

The Loneliest Detroiter

After a few days in the woods and reflecting with different folks (shoutout Nora) I've come to more clearly understand an important pre-requisite for making our city, Detroit, a more creative and prosperous place: long-term commitment from its people and institutions.

What I mean by this, roughly, is a commitment of people and institutions to stick around and work on difficult issues facing the city and individuals within it. This might mean committing to living in the region even if it means narrowing the choices one has for a career. For an institution, like a foundation, it may mean investing and setting up programs that won't start to see returns (social, financial, or otherwise) for two decades instead of two years. Perhaps it's doing something that is irrational, like backing an untested idea or entrepreneur who has a lot of unrealized potential, even though there are many naysayers.

In a way, long-term commitment is like unconditional love. You give it, without expecting anything in return and at the same time make a promise to work through issues even when things get hard. There are two major reasons why long-term commitment - of institutions and people - are important in Detroit: it helps you swing for the fences, and helps when building teams.

Long-term commitment opens up the possibility of tackling big, gnarly, systemic issues vexing Detroit like economic opportunity, government reform, public education, affordable housing or transportation. These sorts of systems are hugely important because they're connected to just about everything else that happens in Detroit. Without long-term commitment, it's very difficult to make headway on these issues because making progress takes a long time.

Moreover, these domains are really complex and have many moving, interconnected parts, making it very difficult to implement ad-hoc solutions. These are the sorts of issues you have to "throw the kitchen sink at", which is very hard to do unless people working the issues are willing to stick it out and see their efforts to success over a long time horizon. Long-term commitment allows problem solvers to make decisions that are unpopular or seemingly ineffective in the short-term but that will give huge benefits years later. Without long-term commitment, problem solvers run into a perverse incentive - trading short-term gain for long-term pain.

Think about President Kennedy commiting the country to go to the moon. Players in the space race were free to experiment and try things out with the Mercury and Gemini programs because they knew the country was committed to a moon landing down the road. Having the long-term commitment of the country behind them allowed NASA and the space industry to focus on "winning the war" instead of simply "winning battles."

Long-term commitment is also important because teams (with the mandate of solving gnarly, complex issues) don't build unless someone puts a stake in the ground and commits to the team. In a city, once people and institutions make long-term commitments, it helps other people and institutions have less fear to make a big commitment and therefore helps them to make big commitments themselves. It's a virtuous cycle. Once one person commits to doing something hard, and which will take a long time, other people start to do the same. This makes long-term commitment very important because none of the big, difficult problems in Detroit can be solved without an awesome, committed "team" of citizens and institutions.

What eats me is that I don't see many people or institutions making long-term commitments, save for a few of the corporations that are committed to keeping their headquarters in the city. Most people and institutions want to invest in sure things with a high potential of return. I don't think that's what we need. I think we need people and institutions who are in it for the long haul and are committed to figuring it out, so to speak, no matter how hard it is.

For the record, I'm not necessarily part of the solution. I'm only partially long-term committed to the city. My operating assumption is that I'm staying in Southeast Michigan for the long haul unless a wife takes me elsewhere. What's unfortunate is that my two-thirds-of-a-commitment is better than most. That's a problem.

So you see, the loneliest Detroiter is the one who has made a long-term commitment and has done it boldly. Because when he or she looks around at others, that bold, honorable Detroiter may find himself dancing alone.

Neil Tambe 8/12/13 Neil Tambe 8/12/13

Why I want to provide seed money for parties

In the past two weeks I released a post on this blog outlining an idea I had to help make our city a more friendly, innovative place: providing people seed money to host parties that get people talking about something. I made it previously, but I'm making one last push to raise some money to try this idea out:

I'm asking for you to give me $25 so I can give it to someone (probably someone else, that you hopefully don't know) to throw a party. In this post I'll provide you two looks into why. The first is my rationale for why I think this idea will work. The second is a story from my day which might provide some anecdotal or emotional appeal.

Appeal #1 - Why I think this will work

In my last post, I outlined a few constraints I had on these parties I want to help people throw. Here's why I put in these constraints:

I'd give the host $50 in cash to use however they wanted, the host would be expected to spend $25 of their own (or more if they want) to get to the $75 threshold - By keeping the party small it brings more attention to the people rather than the party. And, hosts have to be invested...thus not giving them enough money to cover the whole cost of the party.

Hosts would invite guests of their choosing:

Each guest would be allowed to bring 0-2 friends - This keeps the party manageably sized, and by bringing friends it commits people to come...other people are depending on you to be there. Also, third degree connections (the friend of your friend's friend) is where networks really open up because you're not likely to know that person, but there's probably enough trust between you and that person because you have some ties but not a strong enough tie to make you scared to break things off if it's awkward. Third-degree connections also are where the number of contacts you have exponentially increase.
At least one of the friends each guest brings can't already know the host - This is to promote new people meeting each other - This helps ensure diversity, but also ensures that the group isn't a bunch of strangers. This is ideal...there's enough trust for people to feel comfortable, but enough diversity to meet new people.
Guests would be encouraged (but not expected) to bring something to contribute to the party - a dish to pass, decorations, beverages, etc. - Guests have to be invested. But, people also feel good when they exceed expectations...hence the soft request for contributions. Also by contributing, it's implicitly implied that you can participate in what's happening.

Hosts would pick some small activity to help get a conversation going. - Something like helps convey a purpose for being there. The guests get a signal from the host that their presence matters and that their contribution / thoughts are wanted. A little structure gives people permission to participate and think about what they want to say / share beforehand. It's also not stifling when you have something simple to get conversation going.

We'd share the experiences online - Open accessibility is good. tumblr's / blogs are easily shareable. Lots of people being able to learn from a few people is cheap and valuable. And, it makes it feel like something was produced.

So, if logic is your thing, this is why I created all these constraints for this concept.

Appeal #2 - Why I think this matters

RP and l went to a poetry reading at a friend's place today. It was a blast. It was pretty informal and there were less than 10 people there. A few people shared poems, a few didn't. Regardless, I heard ideas and learned things that I never have. I'm a better person for going. And, it was fun.

I also met some pretty cool people. I'll probably grab a drink with one of them because we have a common interest.

There's so much learning and so many positive outcomes when people meet each other and share something intimate, whether it's a conversation or a poem, a meal or an idea. Good things happen when people talk to each other and listen to each other. That's what I hope these parties that I'm trying to jumpstart do. My thing is...if we had more diverse groups of friends getting together, I feel like our city would be happier, more innovative, smarter, and more prosperous.

So, give me your money ($25) so I can throw parties...please! If you want to kick in some money, leave me a comment / facebook message / e-mail so I can get a hold of you. I'd like to collect disburse funds over Labor Day weekend.

Neil Tambe 8/10/13 Neil Tambe 8/10/13

The danger of "all in one place"

I generally view cliches with a heavy dollop of skepticism. The way I see it, if something is so easy to explain that you can use a canned line to do so, the person sharing the cliche probably hasn't thought deeply about the situation at hand. Because of its organizational roots, I'm especially critical of the cliche which presumptively values having things "all in one place" as good.

As it normally goes, at least when talking about organizations and management or creative spaces, people imply that having things - whether it be people, business process experts, information or materials - co-located...all in one place is what is needed, that having these things all in one place is obviously good and useful. Having things all in one place reduces transaction costs because the task of combining goods or services before consuming them becomes cheaper. This makes sense.

Except when it doesn't. For much of the 20th Century, perhaps it was desirable to have things all in one place. But now whether it's goods or ideas, it's a lot easier to instantly bring things together from disparate places in the moment you need them. Take Amazon for example, they can get you goods from around the world at a few days notice, maybe less than that. This makes it less necessary to have a superstore within 5-10 miles of where you live. Shipping things is cheap and fast, world-wide so it's not necessary to have things all in one place.

This is even more true for digital consumables, like information. It costs virtually nothing (pun intended) to scour for and synthesize information from across the net, as long as the information is connected. We don't need to have massive libraries or other repositories of concentrated information as long as that information is digitized, consistently formatted, and searchable. To spend effort putting information "all in one place" to just sit around is almost laughable because of how easy it is to bring information together within seconds.

The same thing goes for organizations. Organizations don't need to have all materials and expertise in-house, anymore. They can combine things and form teams around problems within hours if necessary, bringing disparate skill-sets and passionate people to a problem from around the globe. Fewer and fewer organizations need to be "one stop shops" or "all under one roof" to be successful. The same forces that have made it easy and cheap to bring goods and information together instantaneously apply to people, too.

More than merely pointing out that having things "all in one place" is inconsequential, I'd say an "all in one place" mentality is actually dangerous. Having things all in one place requires a lot of effort and a lot of internal structure. To make having something "all in one place" worth the effort you have to spread out the fixed costs of doing and make processes efficient when in operation. This often requires rigorous, inflexible processes which stifle creativity and promote the territorialization of people and resources. In other words, having things "all in one place" requires standardization, and standardization stifles creativity. That's a bad thing if you're trying to do something creative.

Now, throw my point of view out the window if the example in your mind doesn't require creativity. The rub is, there are fewer and fewer circumstance where that's actually the case, at least in the organizational world. Being efficient isn't always a useful objective anymore; the need to be creative often trumps efficiency.

So, I'd ask, before you make a statement implying that having things all in one place is unquestionably good, make sure that's actually what you mean, and that it is truly beneficial to have things all in one place.

Neil Tambe 8/5/13 Neil Tambe 8/5/13

Fighting Gen Y Short-termism

There's a lot of pop-sci about Gen Y, some of which is probably true and some of which is probably hyperbole. Who really knows whether we Gen Yers are narcissists or not and whether we'll stay that way? Maybe we're exceptionally minded, maybe we're not, and maybe that'll change. Who knows.

Let's assume for a moment that Gen Y, generally speaking, tends to want efforts from their work to make an impact quickly. Let's assume that it's also true that Gen Y will change jobs more quickly, on average, than other generations have.

If that's the case, we Gen Yers are probably more likely to have a short-term frame of mind. After all, anyone who is going to change jobs rapidly probably doesn't want his/her effort to only result inincremental wins that are a small part of a much larger impact (that takes a long time to come to fruition). That person probably wants complete something, from start to finish, with results, in a short amount of time.

The danger is, there are lots of really important projects (like the popular Gen Y ambition to "fix" education) that take longer than a few years to start coming together, let alone complete. So, having a bias toward making an immediate, end-to-end, impact probably makes Gen Yers avoid doing things that generate returns only after a long time. Such Gen Yers would probably opt for doing something that they could see immediate results for and/or complete in short period of time.

So, I think we need to temper our Gen Y short-termism, even if it means focusing less on generating impact of our efforts very quickly. If we don't, we may never choose to work on the projects that are crucially important but require digging into for many years or across the lifetime of more than one generation.

Neil Tambe 7/31/13 Neil Tambe 7/31/13

A (fun) Detroit Experiment / Why 10 people should give me $25

What helps cities and organizations innovate and really thrive is when diverse groups of people get together and share ideas. I want to try something to help that happen cheaply and rapidly: jumpstart parties. Please help me.

I need 10 people at least (well 9, because I will kick in some money) to give me $25. If you're intrigued so far, please keep reading and let me try to convince you. Here's the idea:

The Context

Really cool things happen when diverse - not necessarily just in terms of race, class, and other social identities...diversity includes groups of people with different experiences, creeds, values, etc. - groups of people get together and exchange ideas. They way I figure it, if we had lots of diverse groups of people getting together and sharing ideas across the city it would lead to some great outcomes: people would probably find dates/mates, businesses might start, people might find jobs, people would make friends...lots of things.

After thinking about it, my favorite (and easiest) way of helping this happen is to throw parties. Not just any parties, parties that have a good mix of people and where there's something to jumpstart a conversation. All the formal events happening in the city are great, don't get me wrong, but I think there's something special and intimate about a smaller, informal gathering where the only expectation is to come, and share something. It's not particularly difficult or expensive either.

So I thought, why not help more parties of diverse people sharing ideas happen?

The Idea

The way I figure it, you can throw a good party for about $75, for about 8-15 people. I want to give people money to help get some parties going. There'd be a few simple conditions, though:

I'd give the host $50 in cash to use however they wanted, the host would be expected to spend $25 of their own (or more if they want) to get to the $75 threshold
Hosts would invite guests of their choosing:

Each guest would be allowed to bring 0-2 friends
At least one of the friends each guest brings can't already know the host - this is to promote new people meeting each other
Guests would be encouraged (but not expected) to bring something to contribute to the party - a dish to pass, decorations, beverages, etc.

Hosts would pick some small activity to help get a conversation going. It can be very structured or not so structured, here are a few examples that I've experienced:

In addition to bringing a dish - bring a poem, and everyone takes turns sharing, a poetry potluck!
Everyone reads an article of the host's choosing, and the host helps get a conversation started and then lets it go where it may
The host gets several bottles of wine and everyone does a blind taste test where they rate the wines and guess the price. The host aggregates the data to see if people's preferences match the price of the wine
All members of the party are posed a question / design challenge, they do some brainstorming exercises and conversation ensues

We'd share the experiences online

I'd setup a tumblr or some blog
Each host would be expected to write a post talking about what happened and any interesting conversations or activities which ensued
The host would be expected to get at least one guest to write about their experience, as well
Any guest would have the opportunity to write a post if they wanted to (not just the one the host gets...and many posts would be great)
Pictures / videos would be encouraged!

Party Logistics

I'd grant out money for at least five parties, but no less than five. If I don't get enough money I'm not going to move forward
All parties would happen on one weekend (say, Sept. 20 - Sept. 22). That way the same people probably wouldn't be able to make the rounds at all the parties and more people would be involved
To pick the hosts, I'd just try to pick a group of diverse people who probably didn't run in all the same circles. I'd take suggestions of people who are good at throwing parties, too (you could list those below)!
The hosts would do all the work planning parties, but I'd help out with solving problems and all the hosts could help each other out if they need ideas (I'd setup an e-mail group)

I need help

This is what I need help with:

Please give me your feedback! You can e-mail me (use the contact me box if you don't know my e-mail address / facebook etc.) or leave a comment on this post
Give me money (any denomination)! If you'd be willing to kick in some dough, let me know! If we have a critical mass of people, I'll collect the money and make this happen. If you have other ideas, please let me know that too
Spread the word! The more feedback the better!

Thanks to all the people who have already chimed in (I e-mailed some close friends about two weeks ago).

Neil Tambe 7/30/13 Neil Tambe 7/30/13

My commute, slash, transportation as an end-to-end experience

First a bit about my commute... Every day this summer, I've had a choice on how to commute. I could walk/cycle, drive, or take the bus from New Center (where I live) to Capitol Park (where I spend my working hours). Here's the decision framework and I'll follow with some (hopefully) interesting observations about how we can think about transportation differently. The punchline - we're thinking about it immaturely.

Walking / Cycling: Walking is free, but it takes a long time. I have a decent amount to carry and sometimes the weather is bad. Cycling is good, but I don't have a nice bike and I don't really know how to take care of it. The bike shop is not open everyday and there's only one nearby. As a result, my bike has been sitting at Department of Alternatives for the past week, with a leaky rear tube. If it wasn't for my friend Mike Evans (check out his company, pishposh.tv, here), I would know nothing about bicycle care and would be really sunk.

Driving: Despite the fact my car isn't a desirable one, it's pretty easy to use it. Parking is $4, and I can go and come as I please. Traffic in Detroit isn't terrible, either. The 3.5 miles isn't a huge amount to spend on gasoline, either, and having a car comes in handy if I need to make any stops on the way home from work (e.g., if I need to buy groceries). It's annoying to need cash, though. Cars, in general, are expensive, however, and bad things happen when lots of people commute by car by themselves, like I do.

The Bus: It costs $3 and takes a lot more time, especially if you account for waiting times. That is made a little bit easier by using TextMyBus (which incidentally is also one of Mike's projects*). It's also crowded, but I think that's kind of exciting. Like when I drive, I need cash. And, I also need exact change ($1.50 per trip).

*Addition after publishing - Matt Hampel is another member of the TextMyBus Crew!

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What this means for how we think about transportation and the "mobility industry"...

Taking all this into account, I usually drive. Here's the point, though. People are thinking about all of these transportation options solely as destination products/services (see this blog post for more about this concept), I think, but they shouldn't be anymore. We should be thinking about mobility as an end-to-end customer experience for unique customer segments.

The whole dialogue about transportation really doesn't think about connecting infrastructure and destination products/services into a cohesive product or service. And we wonder why people (who in Detroit have a lot of leeway in picking their transit...all three of my options are relatively easy to pursue) don't adopt transit solutions? We ought to treat them like customers who need options for a unique experience and the curation of a unique experience that fits them.

If we (meaning, institutions, governments, companies, and consumers) thought more about transportation as a customer experience, we'd probably talk more about raising the price of parking, or having an easier time buying a bus pass with a credit card. The only "customer experience" for transportation I think I've ever had in Detroit is Uber (a personal black car from the cloud you can call upon with a mobile app...it's great).

For a long time people thought about transportation as a destination product or service. People wanted cars, because they couldn't even conceive of transporting themselves any other way. People who weren't wealthy in New York probably treated the subway as a destination product/service because they had no other option. The point was to buy a vehicle or take public transit, making a customer experience was your own responsibility.

Now, vehicles themselves are more like a piece of infrastructure, because they're really replicable and the basic platform for building a car, subway, or train is well known (and falling in price). Automobiles and bicycles are commodities, which is why we're starting to see really niche vehicles (e.g., high performance cars, luxury cars) or differentiating products or services being put into cars (e.g., in-car electronics or personal assistant services).

What's next for transportation, briefly, is thinking about consumers (with unique personas) as wanting to have useful, end-to-end transportation experiences rather than thinking of them as automobile owners or bus riders looking simply to consume a destination product or service. Any person or organization that can start to play a "curator of a customer experience" role in the mobility space - whether it's a startup, an existing mobility/transportation company (like an automaker), or a public servant - will provide a lot of value (and probably make a lot of money, too).

Neil Tambe 7/30/13 Neil Tambe 7/30/13

Definitions: What archetype of business are you?

First and foremost, I'm borrowing most (maybe more than "most") of this idea from a conversation I had with a good friend, Christopher Gong. [Update: Chris said a lot of the content of our conversation came from John Hagel's HBR article on "Unbundling the Corporation" so both deserve the credit here!].

Anyway, I see any business initiative (whether it's a company wholly or an initiative within a company) as one of three fundamental archetypes: infrastructure provision, destination products/services, or curators of a customer experience. These are all rough delineations as some products/services may bleed into different categories, depending on their context (e.g., in some cases infrastructure might be a destination product/service and vice versa)

Here are the different categories:

Infrastructure Provision
These are products and services which allow other products and services - across industries and sectors - to be consumed more easily. These are the sorts of products and services that don't really have niche customer segments because they serve all sorts of other businesses serving customers, or, serve customers directly. For example, Amazon Web Services, Roads, Sheet Metal, and The App Store are all infrastructure because people can use these products/services like commodities and build other products, services, and experiences on top of them or using them. Infrastructure is used to consume or produce another product in a easier, better, or more efficient way.

Destination Products/Services
These are products and services which provide a distinct, specific value to a specific customer. It's probably a higher-margin offering which is not as readily transferrable across customer segments. These products/services use infrastructure, probably, to be created or used and are are a small part of a customer's overall experience doing some end-to-end activity. Markets for destination products/services are fragmented because offerings need to be highly customized to specific customer segments. These are something that a consumer actually consumes not something used to produce or consume another product, unlike infrastructure. The vast majority of products and services are this category, I think: heirloom tomatoes, tote bags, advanced pharmaceuticals, a restaurant, and Angry Birds.

Curators of Customer Experience
This group of products and services has recently emerged more prominently, I think. These are the services, people, and products which string together infrastructure and destination products/services to provide a seamless, delightful experience to a customer. They are the interfaces which combine products and services and think about how different things fit together. These could be everything from your tailor, or a retailer, to the designers who designed the MacBook Air I'm writing this post on. In a lot of cases, it's not a trivial exercise to package and weave stuff together...especially when there's an overwhelming amount of choice and it's unclear how different bundles of products and services provide the most value to a very unique customer. Examples here could be: a personal shopper, Amazon's recommendation service, a city planner, or match.com. There are a lot of digital examples here, but the curator need not be expressly digital. Also, people who are good at this could probably recommend other destination products, destination services, or infrastructure which is missing from a seamless customer experience (and that's powerful / interesting / cool).

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Anyway, these are just some basic definitions to be used in the next post (and in the future). Here's something important, though. If you're a business you better know which of these you are, which of these you can be, and which of these is the most valuable to a customer. If you don't, you'll probably not sell your product or service very well.

For what it's worth, these archetypes probably apply to other sectors (not the private sector), I just thought about this in the context of profit-making businesses for simplicity's sake.

Neil Tambe 7/23/13 Neil Tambe 7/23/13

How and when does (de)regulation foster innovation?

Government regulation is a topic that's oft used as a political tool. Those in favor of regulation talk about how it protects consumers and those opposed talk about how regulation unnecessarily hinder business. Fair points.

Right now, innovation, growth, and job growth matter a lot. So I wonder, does regulation encourage or discourage innovation? Why?

As it turns out, a quick survey of research about the effects of regulation and deregulation suggests that the jury is still out. Rather, sometimes regulation and deregulation both encourage and discourage innovation depending on how it's conceived and how it's implemented.

http://www.innovation-policy.net/compendium/section/Default.aspx?topicid=3

http://scheller.gatech.edu/directory/faculty/oettl/pubs/COSS-JFE-2013.pdf

So, this leaves an interesting research gap that inquiring minds (e.g., like those from regulators, policy makers, business leaders, workers, etc.) probably want to know about. It seems like anyone who investigated these questions in a rigorous way would probably do a lot of good. Here are some of the questions which seem to be relevant:

1. What principles should regulation / deregulation be written with to encourage, rather than discourage innovation?

2. How does said regulation / deregulation need to be implemented to encourage, rather than discourage innovation?

3. How can innovation be comprehensively measured (indicators and metrics)?

Some hypotheses of when innovation flourishes:

When standards are applied evenly
When standards are raised for an entire industry
When barriers to entry are lowered
When access to information for producers is not squelched
When infrastructure is already adequate in the industry for all market players
When consumers have transparency to behaviors once an industry is deregulated
When regulators have necessary independence from industry lobbyists and consumer groups
When regulatory agencies process claims quickly

Neil Tambe 7/23/13 Neil Tambe 7/23/13

Skills vs. Capabilities

As the world becomes more dynamic, capabilities matter more and more.

"We need people with more skills!" cried the HR Manager and her cadre of business representatives. Without the right skills, they said, "we can't deliver our products and services!"

Yes, of course. But maybe those that are looking for "skills" are pursuing the wrong goal.

I think there's a monumental difference between skills and capabilities. Skills are something that you get better at practicing over and over. It's a finite ability that can be used under a fixed set of constraints in a narrow set of environments. A skill is something you learn to do and go do it. You repeat it over and over and get better at it and do it the same way every time.

A capability is different, I'd say. A capability isn't a specific skill that fits in a given situation. It's an deep-rooted ability which can be applied in many contexts. It's something you train and have to learn to do in context. It's not an isolated skill, it's an ability that flows in and out as the environment demands it.

Take tennis for example. An open-stanced forehand groundstroke is a skill. It is only usable when the ball is on a specific side of your body and works better on certain court types and when a certain type of ball is hit to you. You practice it and you get better at it. As a result, you try to control the environment so that you can use that shot...so your skill is in a relevant context. Either that or you learn more skills so that you have more options to choose from as you control your environment.

Moving your feet to position correctly to the ball applies to any shot you take in a tennis match: a serve, a volley, a groundstroke, an approach shot, and overhead smash...anything. Moreover, it's an ability that applies to many different sports like basketball, football, soccer, or volleyball to name a few. It's something you train and focus on as part of other actions and motions. You learn the fundamentals and you get better at applying a capability in various circumstances. It's something you use differently as the environment changes. In fact, you use capabilities to adapt to a changing environment.

I'd venture to say that the organizational world is one we have less control over than previous generations and we'll probably continue to lose control of the environment around us. As this happens, capabilities will become more relevant than skills, because skills will become obselete. Some days your business will require an open-stanced forehand ground strokes and other days you won't even be competing on a tennis court, figuratively.

So that raises a question. Is your organization's HR department (or schools, or business leaders, more importantly) cultivating skills or cultivating capabilities? Do they even understand the difference?

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