Shoshana Zuboff in BusinessWeek:

I spent a quarter-century as a professor at the Harvard Business School, including 15 years teaching in the MBA program. I have come to believe that much of what my colleagues and I taught has caused real suffering, suppressed wealth creation, destabilized the world economy, and accelerated the demise of the 20th century capitalism in which the U.S. played the leading role.

…a return to real prosperity and long-term growth [will] require a rebirth of business based on new rules for a new era. The old rules that most B-schools have preached were invented a century ago for supplying mass consumers with affordable goods and services. They are poorly suited to the values of today’s new consumers, who want help to live their lives as they choose, with personal control, voice, and a practical sense of connection.

She proposes three rules:

1. Race to I-Space. Operate from the perspective of the individual consumer – not the product, and certainly not the company. [She notes that business school students are trained in the "administrative point of view." The manager's job was to oversee and control what was inside organization space, or what they were trained to view as "my company" - a world of boundaries and adversarial relationships.

2. Advocate, Don't Alienate. Speak not of your products and selling them to your customers, but ask your customers what they need and how you can help.

3. Collaborate and Federate to Compete. Collaborating and "federating" means learning to manage what you don't control or own, in other words, building economies of trust. You cannot serve individuals on their own because these needs don't conform to existing boundaries. "The emphasis shifts from contracts and legal sanctions to trust and transparency as companies work together, aligned with their customers' interests—sharing core values, business practices, infrastructure, and systems."

Paul Krugman in Friday's NYT re Goldman's record quarterly profits :

Goldman is very good at what it does. Unfortunately, what it does is bad for America. ... Let’s start by talking about how Goldman makes money. ... The business of moving money around, of slicing, dicing and repackaging financial claims, has soared in importance compared with the actual production of useful stuff.

Tracing both ends of the supply chain, from forest to landfill.

Helveta ... is tracking a million trees in southeast Asia, Africa, and South America ... gives every tree in a plantation above a certain size its own barcode. When a tree is chopped down, workers use a handheld computer to scan processing and export data into Helveta's database. Helveta's system can't stop determined criminals from selling illegal timber on the black market, but it does make it more difficult for them to sell or export the wood, as any timber processed without tags is considered illegal.

MIT's Trash Track program ... will use electronic tags to track waste in its trip through the disposal systems of New York and Seattle. The initial goal isn't to track every piece of waste that passes through--it's to raise awareness of urban disposal costs and the impact of trash on the planet.

As the economy becomes more highly networked, it must also become more transparent in order to remain resilient, says an article on networks of trust on NESTA's website:

...connections between financial, health, government, education and other institutions have always existed but there has been little transparency about these relationships. She cites the recent financial meltdown as a clear consequence of the highly networked but non-transparent economy.

... the challenge of creating a new transparent networked economy [is] “a gargantuan problem”… the answer won’t be found by looking to the past. “Organisations are connected and interconnected in ways for which there is no precedent in human history. The solution has to come from people on the ground. It certainly won’t come from academics – the disciplines haven’t even been created for the problems we’re now facing.”

Paul Buchheit, creator and lead developer of Gmail, on the role of prototyping and “20% time” in innovation:

We did a lot of things wrong during the 2.5 years of pre-launch Gmail development, but one thing we did very right was to always have live code. The first version of Gmail was literally written in a day. It wasn’t very impressive … but it was live and people could use it… From that day until launch, every new feature went live immediately…

The great thing about this process was that I didn’t need to sell anyone on my ideas. I would just write the code, release the feature, and watch the response. Usually, everyone (including me) would end up hating whatever it was (especially my ideas), but we always learned something from the experience, and we were able to quickly move on to other ideas.

The most dramatic example of this process was the creation of content targeted ads (now known as “AdSense”, or maybe “AdSense for Content”). The idea of targeting our keyword based ads to arbitrary content on the web had been floating around the company for a long time — it was “obvious”. However, it was also “obviously bad”. Most people believed that it would require some kind of fancy artificial intelligence to understand the content well enough to target ads, and even if we had that, nobody would click on the ads. I thought they were probably right.

However, we needed a way for Gmail to make money, and Sanjeev Singh kept talking about using relevant ads, even though it was obviously a “bad idea”. I remained skeptical, but thought that it might be a fun experiment … The code was rather ugly and hackish, but more importantly, it only took a few hours to write!

I then released the feature on our unsuspecting userbase of about 100 Googlers, and then went home and went to sleep. The response when I returned the next day was not what I would classify as “positive”. Someone may have used the word “blasphemous”. I liked the ads though — they were amusing and often relevant. An email from someone looking for their lost sunglasses got an ad for new sunglasses. The lunch menu had an ad for balsamic vinegar.

More importantly, I wasn’t the only one who found the ads surprisingly relevant. Suddenly, content targeted ads switched from being a lowest-priority project (unstaffed, will not do) to being a top priority project, an extremely talented team was formed to build the project, and within maybe six months a live beta was launched. Google’s content targeted ads are now a big business with billions of dollars in revenue (I think).

Of course none of the code from my prototype ever made it near the real product (thankfully), but that code did something that fancy arguments couldn’t do (at least not my fancy arguments), it showed that the idea and product had real potential.

The point of this story, I think, you should consider spending less time talking, and more time prototyping, especially if you’re not very good at talking or powerpoint. Your code can be a very persuasive argument.

The other point is that it’s important to make prototyping new ideas, especially bad ideas, as fast and easy as possible. … This is also where Google’s “20% time” comes in — if you want innovation, it’s critical that people are able to work on ideas that are unapproved and generally thought to be stupid. The real value of “20%” is not the time, but rather the “license” it gives to work on things that “aren’t important”.

From Time’s “10 Ideas Changing the World Right Now” special’s sixth section on Africa: Business Destination:

Aid even manages to silence those it is meant to help. “African governments become accountable to Western donors,” says [Andrew Rugasira, a Ugandan entrepreneur who founded Good African Coffee, the first African coffee roaster to supply direct to British supermarkets], “and Africa finds itself represented not by Africans but by Bono and Bob Geldof. I mean, how would America react if Amy Winehouse dropped in to advise them on the credit crisis?”

Everyone at SustainAbility has a particular lens through which they see the world that is our work: mine is value chains. I have other colleagues who see everything in terms of brand, or change management, or markets, or converted particles of energy…

Last spring, when we were writing ‘Unchaining Value‘, I became obsessed with an idea I dubbed ‘One Planet Value Chain’ – appropriately named after WWF’s One Planet branded advocacy program (including a report on One Planet Business co-authored with SustainAbility), one of three inspirations for OPVC – the other two being Yasmin Crowther’s framing of the major sustainability challenge for supply chains as one of managing resource ‘pinch-points’ between competing supply chains (e.g. the food-energy struggle for crops and land, the shared need for water and human resources by every industry), and UNEP’s Cornis Lugt’s deep interest in product service systems.

Here’s the idea: that there is just one set of resources and one set of societal needs (food, energy, transport, shelter, etc. but also things like freedom), linked by global human economic activity (i.e. the creation and allocation of value).

So what we are trying to do is redesign our global economic activity so that value is replicably created and equitably allocated. Seeing business through such a lens could lead to:

The notion of “the business case” for sustainability has been bothering me for some time, and it wasn’t till right before Christmas that I was able to put my own finger on why: Traditional attempts at identifying the business case for sustainability are doomed to fail, because they focus by and large on short-term, (relatively) tangible value created for the company. But sustainability initiatives intrinsically create value beyond the walls of the company, for the long-term, and thus outside the measuring capabilities of traditional financial accounting.

What’s needed is a broader notion of business case. So, not the usual sort of business case like the opportunities to make money from environmental efficiencies / manage risks / capture new market demand, but the systemic, big-picture business case, which is that business is a part of society and the environment and therefore the sustainability of business depends critically on the sustainability of both. (For example, SustainAbility’s working vision for the food sector is that it deliver safe, nutritious, accessible and affordable food in such a way that the two resources on which the food sector depends – the environment and the farmers – can sustain themselves.)

It may seem obvious, but I do feel that with so much of the wider sustainability advocacy discourse still placing business in opposition to society and to the environment, it is critical to:

• spell out the argument that environmental and social sustainability are a necessary condition for the long-term sustainability of business, and
• be really clear about why the old ways of doing business no longer work for businesses.

Luckily, if there ever were a time when business was ready to hear that, that time could be now. Alan Greenspan: I was wrong.

There is certainly opposition and tension, but not between business and society/environment so much as between different mindsets:

• the short-term at the expense of the longer-term,
• the pure self-interest at the expense of relationships,
• the narrow competitiveness and secrecy at the expense of ultimately more value-creating collaboration and transparency, the “more for just me” versus “enough for everyone”,
• the stubborn fetishization of deregulation versus an approach that understands that individual decision-makers (and hence the market) cannot always know best – an approach that understands that human rationality has its limits.

Thinking of it in this way, it becomes clear that these are all tensions that are not unique to business activities, although that is where they are most powerfully expressed. Rather they are very human and appear in all areas of human activity and are rooted in the way we think and relate to the world and this is why they’re so hard to address… this is why we have had to have some form of the Golden Rule embedded in all religions going as far back as we’ve existed.

And our task becomes sharply and simply a task of shifting mindsets, both at a strategic level through all the various arguments and persuasions we have at our disposal, and at an implementation level through helping businesses to develop new vocabularies and tools to operationalize this way of thinking.

Of course there was a reason why the old way of thinking has thrived, and part of our work needs to be to understand this at a deeper level – it worked well in our old world where (a) natural resources appeared unlimited and (b) people and regions and individual businesses weren’t so connected as they are now.

When natural resources are abundant it’s easier to dismiss the tragedy of the commons because there are always new commons to exploit. But we’re now bumping up against the limit. (I can’t help but think of the last scene in The Truman Show where Truman is in a boat trying to escape and hits the tarp sky enclosing the aquarium that his seaside hometown is set in.)

Similarly, in a world of interconnections so deeply woven that we can’t know the full extent of global interdependency, it becomes clear that offloading risk to another party (as seems to have been the single aim of financial innovation over the last decade) doesn’t make the risk go away, it just hides it… as recent events have made rampantly clear. This interconnectedness has also made it clear that the prevailing “portfolio approach” to managing transactions – an approach that assumes that markets and events are independent – is ultimately flawed.

In an independent world you can reduce investment risk simply by diversifying your portfolio because if one stock goes down another will go up, and you can squeeze your suppliers because there will always be another one waiting for your business. But this is a world where a slowdown in the US retail sector causes Chinese toy factories to lay off workers, and where the collapse of the Icelandic banking system puts the supply of ready meals in the UK at risk, and where foreign gov’ts hold 25% of Fannie and Freddie’s agency debt….

A week ago my colleague Gary and I went to Forum for the Future’s and IDEO’s i-team debrief at the Design Council on some of the work they’ve been doing with UK councils on using design thinking to address climate change. Intriguing and energizing – very much enjoyed the presentations by the council representatives, who were shifting Post-Its and throwing out “how might we”’s like seasoned IDEOers.

My favorite take-away: “Pitch, don’t preach.”

The session was chaired by sustainable design and innovation expert John Thackara. I was so impressed by his chairing that I wanted to find out more, and realized he writes Doors of Perception (among other things). Delighted to find that he does not have formal design training – he studied philosophy (me too!).

John Thackara’s Power Laws of Innovation

Power Law 1: Don’t think “new product” – think social value.
Power Law 2: Think social value before “tech”.
Power Law 3: Enable human agency. Design people into situations, not out of them.
Power Law 4: Use, not own. Possession is old paradigm.
Power Law 5: Think P2P, not point-to-mass.
Power Law 6: Don’t think faster, think closer.
Power Law 7: Don’t start from zero. Re-mix what’s already out there.
Power Law 8: Connect the big and the small.
Power Law 9: Think whole systems (and new business models, too).
Power Law 10: Think open systems, not closed ones.

This month’s WIRED is this perfect constellation of things I find really interesting:

• Finance + quants: “The Secret Formula That Destroyed Wall Street”
• Finance + accounting + collaboration + systems: “Road Map for Financial Recovery: Radical Transparency Now!”
• Design: “Design Under Constraint: How Limits Boost Creativity”
• Design + airline flight patterns: “Key to Eliminating US Flight Delays? Redesign the Sky Over New York City”

Saw the Francis Bacon retrospective at Tate Britain this afternoon with Matt. We were trying to imagine having all that raw… rawness inside. Is it inside all of us, and are we just not artistic enough to express it as Bacon does? Now doing the decidedly un-bleak thing of drinking champagne with fresh pomegranate juice and thinking about designing (i.e. borrow a CC-licensed Flickr image and bung a few primary-colored pixel stars on it via Splashup) a New Year Day’s e-card. Heading down to Brixton in a bit to meet up with Mat and some of his friends. Was mighty tempted to stay home in the warm as am a quiet New Year’s Eve kind of girl, but it’ll be lovely to see Mat and be out, especially as I realized this is my first New Year’s Eve in London.

One of the things I am resolving for 2009 is to think slightly less and act slightly more, so I’ll start by writing a few more blog entries without feeling they need to be magnum opuses (so recommends Arianna Huffington, via Slate). E.g., I’m not going to check whether that’s the proper Latin spelling or plural of “magnum opus.” Warning: this one is a rambler.

It has been a wonderful holiday so far. Having very recently seen my folks in Bangkok and brother and sis-in-law in NY and keen to have a bit of quiet time in London, I decided to stick around over the holiday period, and took the opportunity to join Crisis Christmas.

Crisis is an NGO for the homeless that sets up several centers around London from 23-30 December every year. The aim is to provide those in London sleeping rough or in difficult accommodation with shelter, food, services (from massage to haircuts to medical care to advice to training), and companionship at a time of year where things can be especially difficult and lonely. It’s something of a London institution, having run since at least the 1970s, and people travel from all over the UK to volunteer.

Worked up until Christmas Eve enjoying the quiet with the few of us left in the office, playing streaming Internet carols on my laptop (developing an unhealthy love for Channel O, which plays only carols beginning with the interjection “O”, but of course! including my favorite, “…Holy Night”) and getting some thinking done. Then to Sainsbury’s (along with lots of other fellow last-minute-ers) to buy groceries, a quick phone chat with my brother (who was getting ready to cook a seafood supper for himself and N as per southern French Christmas Eve tradition), an hour’s nap, and then to the center at 10pm.

I’d been assigned the Christmas Eve and Christmas Day overnight shifts at the Quiet Center, a residential center that caters to those guests who prefer to be in a smaller, quieter environment (no drugs or alcohol). This year it happened to be located in a unused magistrate’s building just by the Angel tube station, handy as I was able to walk the two and a half miles home on Christmas morning and back again that night. Showed up a little apprehensive as had no idea what to expect (having missed the volunteer induction earlier in the month) and worried about not being able to stay up all night. It turned out to be (as expected) moving, satisfying, educational, and (to my surprise) also just… a whole lot of fun. It’s meeting new people and doing new things wot makes life sparkle.

On my second night at the Quiet Center I had a chance to talk to more of the guests, a hugely varied group of nationalities, ages, histories, situations.

• Had a nice chat with Marion, a young English woman who was very much into politics and poetry. She had just had her hair, makeup and nails done that day and was going on a date on Boxing Day.
• Also spent a while talking with Andreas, a 24-year-old Lithuanian man who showed all of us the same card trick and spoke eloquently of his dislike for the United States and the war, having just seen Battle for Hadifa. He’d come to the UK to study business, but was accused of a crime and had to drop out while he was doing his court case. He was found innocent and is now sleeping rough while he works and saves up money to go back to school. He won’t go back to Lithuania because it’s just as expensive to live there as it is in London, but the wages aren’t as high.
• Also had a lovely chat with Eli, a quadrilingual Lebanese man who left Beirut eight months ago to go to France and pick grapes, and then somehow ended up in London over the holidays, and plans to go back to France because he said it’s easier to be homeless there.
• Others included a young Romanian man, a very old and blind English man, a Nigerian man, a Chinese researcher who had come to the UK to do a postdoc and ended up homeless after losing both his accommodation and his research funding.
• Sam, who did a shift yesterday, said that many of the (male) guests she spoke with had become homeless after getting divorced.

On the night shift in particular there seems to be a lot of time to talk to your fellow volunteers, as the guests are by and large asleep and you’re paired up to keep each other company. Like the guests, they were a real mix of people with different reasons for being there. I chatted with Toni, who sold cars in Surrey and had a daughter doing 5 A-levels including maths, further maths, physics, and economics!; C, a 20-something financial journalist specializing in hedge funds and trading technologies; Rachel, who had just gotten married in October but was doing this instead of spending Christmas with her and her new husband’s families because she has been doing this for years and missed it last year and didn’t want to miss it again; H, a Japanese-Korean girl in her final year of European studies at UCL whose flatmates were all somewhere else for the holidays (“I’m looking for company, quite honestly”); Paul, a 50-something writer and storyteller; Patrick, an insurance clerk and born-and-bred Londoner with Irish parents; Tammy, a young Anglo-Indian and recent graduate in biomedical sciences about to start a job at UCH; Jamie and Mark, two handsome young men (bless) from South Africa and Britain; George from Scotland who goes to Thailand every year; D, a young insurance underwriter who had spent a few years living in the States and had himself spent some time on the streets in London when he was 16; Sarah and Petra; Bryan and Ross, both former Crisis guests themselves.

As they sent out a last-minute call for extra volunteers, I did a third shift at the Rough Sleepers Centre yesterday, in a disused BBC television studio in Acton, west London. Sam came along as well. It felt very different from last week, not because it was daytime-evening or because there were so many more people, but because the setup of the building was very different: lots of corridors and stairwells and consequently lots of “gap duty” — sitting guarding entranceways and such (and, weirdly, the local Tesco). So ended up having very little interaction with the guests despite the daytime — though did meet a young man from North London, Stavros, who had done a lot of work in local musical and regular theater and was hoping to be a volunteer next year. Did meet some more interesting fellow volunteers though: Mark, who had just returned to the UK after a decade in Southeast Asia and who had me pretty convinced that living on a narrowboat is a great way to house oneself; Helena, a lawyer for a publishing house who was volunteering with her UCL medical student daughter; Rosalind, an accountant at a telecommunications multinational who was going through a bit of a crisis of loving her company but disliking her actual job; and Emma, an stunningly self-possessed 17-year-old English girl with American parents who was a dancer and artist and planned to study physics and philosophy at university.

Sam enjoyed herself hugely as well, despite being tired from running around all weekend visiting family. We were quiet and happy on the tube ride home. A real privilege to be able to do this.

And it was lovely walking home on Christmas morning. Early delight because the S&M Café on Essex Road was open when I walked by just before 9am. Sat in there and had a sausage sandwich, a cappuccino, and a friendly chat with the chef / waiter, a young man from Algeria. Read a bit (Adam’s Fallacy by Duncan Foley) and then the rest of the 2.7 miles home, smiling and exchanging merry Christmas wishes with the few people also out and about, with a final brisk last stretch through a misty Clissold Park and then to home and hot shower and bed… all things even more appreciated.

It’s morning in Bangkok and the AP reported a few minutes ago that McCain has called Obama to concede. The NYT homepage says simply in 72pt Georgia “OBAMA”… Watching live coverage of crowds going crazy in Central Park and Chicago via the NYT homepage. It’s like everyone’s hearts are bursting.