Tuesday, February 24, 2009

It is not a recession, it is a restructuring

I've been thinking about this post since last November. Unfortunately, quite a few things have come between my thinking about it and my writing about it. I'm sitting here now, with 25 minutes to go before I know I'll be interrupted, to get some first words out there because I think this frame is critical - this is an opportunity to reframe, rethink, re-set, and re-build some of the things we take most for granted. It is not (just) a recession, it (can be) a restructuring.

This video, which I found on Marty Linsky's blog (with a big shout out to Virginia Clarke) is worth the 4 minutes and 50 seconds to watch - I bet it will get you thinking in a "re-set" kind of way.

So - beyond the alliteration - what does a restructuring mean? Focusing only on issues of the public good and how they get done and who contributes to them (what I might have previously called philanthropy) let's think about this:

We know that nonprofits are under extreme duress financially. Our communities are filling with neighbors out of work, houses under water, questioning of the "American dream," fear that the government won't be able to "get us out of this mess," closed shopfronts, under-performing schools, health care crises...you know the list.

Our collective financial assets have dropped by some un-imaginable amount - 10 trillion USD? 30 trillion USD? These are numbers none of us can visualize, let alone really comprehend.

Most of us have also finally gotten the message that we live on "spaceship earth" - the resources of which are both finite and undergoing rapid changes for which we argue about the pace but can't really begin to comprehend or plan for the impact of higher coastlines, arctic water passage, post-petroleum economics, and so on.

It doesn't make sense to think of this as a dip in an otherwise upward trend. It is more like a turn off onto a different path. People born since 1990, all over the globe, have fundamentally different assumptions than those born before that year about where information lives, who controls it, where and how work gets done, what the "proper" role of government might be, where their friends live, how much personal privacy they have, want or value, what kind of resources will be needed to fuel their futures, what kind of innovation might fuel the economies in which they will live, and what their individual relationships to others - proximal and far away - are, could be, or might be.

So, what might now seem to be on the edge of philanthropy - or any industry - may very well come to its center. And quickly. Here are some ways restructuring might happen:
  • Social enterprise begins to morph the philanthropic giving that exists to its left and the commercial enterprise that exists to its right (on a spectrum from giving to investing)
  • Networks of individuals - deliberately or expectantly time-limited - get more done than organizations
  • Individuals' daily contributions and activities are a deliberate and recognized mix of paid and unpaid - and successful enterprises build themselves to catalyze those inside/outside, professional/volunteer, expert/amateur, user/producer contributions
  • Philanthropic giving is really asked (read: required by regulators or purchased: in a marketplace) to prove its value in the funding food chain of producing social good. So are social investing, social enterprise, and socially responsible investing.
  • Islamic finance and various Asian cultural practices regarding mutual aid, private capital for public good, and giving become as influential in practice as they are in number of people
  • Enterprises and activities that generate economic, social and environmental benefits move from marginal to the middle - and innovation shifts elsewhere
  • Schooling and educational systems evolve to prepare more kids for the skill, job and political markets they will actually face
  • Cooperation on a global scale prevents or limits a global pandemic, and we learn from that
  • We will no longer assume that nonprofit = social good, commercial enterprise = profit, rather we will think about what we need as a society (investigative reporters, an independent media, universal literacy, human rights) and figure out new forms of delivering those things
  • Foundations will act like entities in the knowledge business, not as mere funders
  • We'll be working among a profoundly different set of dynamics between the public sector, commerce, and independent entities - and making the most of those changes
Such a future is already here. The debates about the future of the newspaper, working models in which indigenous knowledge informs medicinal innovation, free and open educational resources and tools to access them, debates on social innovation and business models, and the growth of the science commons, creative commons and (maybe even) a giving commons are early signs of movement in these directions. Linsky's post above asked individuals which way they'll go - hunkering down or resetting. These are choices at the individual level, but the larger forces are already in motion.

That's it - my time is up. More to come, I promise. In the meantime - please chime in.

Friday, February 20, 2009

Design principles for building a field

I'm perhaps obsessed with this question and so apologies to those who are not quite as interested in the whole notion of field building as I am. (Previous two posts here and here)

Based on some great comments on previous posts, more research on behalf of clients, and deeper thought, I'm starting to formulate some preliminary design principles for philanthropic investments in field building. Some of my key assumptions or frame for the following - that the "it" already exists in fragmented ways, the philanthropic intervention is coming along at the point of "organizing and coordinating" and that sustaining structures or systems or business models is a goal (as philanthropic support is always fleeting).

Here they are (raw form) - please let me know what you think:

1) Plan for remixing and re-using of core knowledge - core element of a new field must be able to used by those in other fields to advance their work (e.g. new media to learn to read or write, social enterprise that improves how public problems get solved)

2) Diversity of players and networks, methods and perspectives is key to meaning and survival. And, yes, it makes definitions and standards harder.

3) Be clear on what needs to be standardized (if anything) and what needs to remain open, flexible, and inclusive.

4) Activities for growth and identity matter more than the structures that provide them - identify what is needed, then be forward thinking in how these things get provided or done. (Form follow function)

5) It will take longer to get there than you think, and it may never be "built" but always "building." If it ever is "built," that is probably the moment at which it will need to be replaced or morphed into something else

Given how long I've been thinking about this, it is somewhat of a "doh" moment" to notice that these are core evolutionary principles. They also remind me of my Seven Building Blocks of Open Philanthropy. Perhaps I should have just read Darwin and short-circuited the whole thought process.


Wednesday, February 18, 2009

Field building part two

[First posted around 5:43 pm. Typos fixed and edited around 9:30 pm]

My post a few weeks back on field building brought on some great comments. Some of these questioned the possibility that lessons learned from building academic fields in the 1960s (Women's studies, ethnic studies) could have any bearing on foundation efforts to influence new areas of work in today's markets (digital media and learning, social enterprise). Others wanted more clarification of terms - what is a field? what is an industry? (Hey - I'd like more clarity on this also!*)

I've been thinking about this for a lot of reasons - including the recent opportunity to participate in planning discussions for a new global federation of social investment exchanges, the ongoing work we** are doing on digital media and learning for the MacArthur Foundation, and an upcoming panel discussion I'll be moderating on the emergence and maturation of social enterprise.

Understanding something often requires an analog - that is actually how and why I went looking for and found Porter's work on industries. If I wanted to understand the history, development and future of philanthropy I needed something to compare it to. Porter's definition of an industry fit philanthropy pretty well (exception noted in the book and always - particularly the voluntary nature of philanthropy and the role of individual passion or interest as a driving force over market rationality).

As I think about this question of field building - or industry evolution - now, I'm struck by two possible analogs. First, ongoing debates about the nature and future of the Internet. A much-debated article by John Markoff in Sunday's New York Times discussed the work of engineers now working on a "new internet." The "old" Internet was created to facilitate sharing among scientists, privacy was paramount and security an afterthought (argues Markoff). Since no one predicted that the Internet would "one day bear the burden of carrying all the world's communications and commerce," security was not a priority, anonymity was. Since then, hackers have shown the perils inherent in the system as we know it. Efforts to add security features to this system have been "immense," yet, many experts think we may be worse off now than we were before these investments. This is because of all the money and time and expertise that have gone into trying to "patch" holes instead of "investing in the redesign of our infrastructure."

Which led me to the second, hotly-debated topic du jour - "shovel ready" versus "green" infrastructure - as another analog for thinking about field building, industry evolution and the role of philanthropy. This analog draws from the daily discussions of the financial stimulus package being put forth by President Obama and Congress. The oversimplified difference between the two points of view is that putting government money to work fast to restart the economy means getting it out into needed infrastructure (i.e. "shovel ready") ASAP. Many of those projects in the USA involve bridge building, road repair, and other investments that, some argue, only extend our collective dependence on automobiles, petroleum and "yesterday's economy." Putting the stimulus money into "green" projects - those that will jump start the economy and position the US for a future of solar and wind power, public transportation, and inner city jobs, housing and schooling improvement is a better prospect in the short and long term, this side argues.

So, when you think about "field building" how do we know which (if any) of these analogs matter? Is it enough to "patch holes" and "add-on" features? Do we need to start all over again, and figure out how to migrate from the current version to a new version of the Internet (or whatever field we're talking about?) Should we invest in rebuilding the infrastructure that got us here (roads) or re-direct money to whole new systems (high speed rail)?

And, as we do this, do the same interventions that most analyses of philanthropic field building efforts recommend, still matter? This is the original question motivating my first post - the interventions I've identified from reading many such analyses are:
  1. Infrastructure,
  2. Intermediaries,
  3. Networks,
  4. Standards
My sense is that the answer to the above question is "yes." What we need, however, are stress tests for each of these four interventions that take into account a couple of well-considered assumptions about each case at hand.

First, what is the time frame for the field/industry to be built? The longer the time frame, I would argue, the more flexible the infrastructure that will need to be built - as it will be subject to a greater number of completely unpredictable technological and organizational changes. Is the biggest challenge at hand getting start ups and new brains into the field? Is it scaling small enterprises into larger ones? Is is encouraging mergers or joint ventures? Is it breaking up monoliths and sparking spin-offs? Knowing what the current state is and a better future state would be is the first part of stress-testing this idea of infrastructure.

Second, what intermediaries exist now? The answer to this question is valuable not for the picture of intermediaries that it produces, but for the secondary image that can be revealed by that picture - what are those intermediaries doing? It may not be that the field needs a trade association and an annual conference, for example. What it actually may need is some organizing node or event that regularly brings together key players, competitors, and knowledgeable outsiders. Once that set of activities can be seen it can be "overlaid" against an informed hypothesis of what activities are actually needed - to scale, to connect, to influence, to stabilize, or to migrate - the existing enterprises toward a vision of a "built field" (maturing industry) This "stress test" needs to be all about key activities and functions - once those are identified then the forms to be built or adapted or migrated should be more visible.

Third - what kinds of networks are needed, and for what? The answer to this question will draw from an analysis of the current life stage of the field (industry). Is it nascent and fragmented? Stabilizing and organized? Mature? Depending on this life stage, networks will be needed to do different things (see list above under intermediaries) and will require different constellations of players (like to like, like to unlike). The good news here - network analysis is getting smarter and smarter on these things. A second considerations about networks comes from understanding the real mix of players within which you are working. Do you have/need commercial players, public agencies, and nonprofit players? Some of the above but not all? Knowing who is part of the mix will help make visible the core networks as well as ranges of forces and incentives working on them.

Fourth - standards. Ah, standards. What you need them for may also depend on the life cycle question. Are you trying to set a platform for innovation or keep out impostors? Standards cut both ways. How, when, and for what you need standards will come from your assessment of the earlier three elements infrastructure, intermediaries and networks - as well as an assessment of of where the issues is in its cycle of industry evolution.

All of which leads me to questions of design, iteration, and failure. How much of a "better" field - or Internet or national transportation infrastructure - can we actually design and implement? How much do we build these things in pieces, watch those pieces accrete, identify the gaps, and then wish there were a better whole? Design theory and methods are all the rage these days, and companies such as Google and IDEO regularly demonstrate that some of the best design principles can be deployed by large institutions, quickly, cost-effectively (or benefit-effectively, as the case may be), and without leading the whole entity off of a cliff. This is where design really does help - it is iterative, small step progress, that is inherently contextualized AND focused on creating something to fill a need. Often, what is known is the need, not the solution. Too often, we start with what we have and try to force it into being something better. Learning to think about field building/industry evolving from a design perspective shifts the focus to identifying the vision of better, not just seeing the pieces that are currently at hand.

Being able to identify the benefit you're after, the vision of better, the vision of a "built field" or an "evolved industry" is the hard part. Adapting the principles of intervention identified above, stress-tested for the case you have at hand, and crafted in light of a collective vision of better or built...perhaps that is the process to be deployed.

So...That is as much of a conclusion as I have at this point and they are calling my flight. I'll come back with some more thoughts but I'm interested in your opinions on these issues - please chime in.

*I started referring to philanthropy as an industry in the 1990s when I wrote my dissertation, and refined my thinking and presentation on this in my 2004 book. My reasoning and definition draw from Michael Porter's work on strategy and competition.
** We = Blueprint Research & Design, my employer.

Tuesday, February 03, 2009

Field building - does the field matter?

I've written a lot about field building and read even more. Nowadays, the word "industry" is often substituted for field. I suppose I could take some credit for this - since a chunk of my 2004 book addressed the issue of philanthropy as an industry - and, as an idea that was ahead of its time, I have some battle scars to show for that contribution. First problem is, I'm not so sure some of the fields now being called industries actually fit the definition* or that I want credit, and two, what we call them is not my point for this post, rather my point is how they get built.

Here's what I've noticed from reading some really good reports on fields/industries/sectors/ecosystems as diverse as women's studies, microfinance, impact investing, conflict resolution, digital media and learning, philanthropy, community philanthropy, and social entreprenuership - the recommendations for building the field, or taking it from a phase of entreprenuerial fragmentation - what Katherine Fulton aptly calls uncoordinated innovation - to organized markets - are almost always the same:
  1. Infrastructure,
  2. Intermediaries,
  3. Networks,
  4. Standards.
Sometimes, the recommendations make a mention of the potential role that regulations can play in transformation (though its usually couched in the philanthropically more polite term - policy change). Sometimes they include a focus on evidence, though usually by the time the "field building" discussion starts there is already a body of evidence.

Now, like I've said, I've contributed to this body of thinking. And I rely on it. I'm asking the following questions because I'm steeping myself in this question of transformation from disconnected experiments to organized market/system/ecosystem/industry/sector yet again. So here are the questions:
  • Do all transitions really require the same actions?
  • Are these actions so separate from the content of the market/system/industry that they are consistent across any area?
  • Are these actions so separate from the content of the market/system/industry that they are consistent across any timeframe? (women's studies in the 1960s, social entrepreneurs in the 2000s, for example)
  • If the same set of actions for transformation are known to be necessary, why do we keep studying them? Why don't we just "do" them?
  • How do we adjust our thinking to account for changes in external conditions? - technology, policy, resources, etc?
  • Why do we continue to shy away from the role that rules and regulation can play in each of these transitions?
Am I correct that we know more about building fields than we think we know? And is it really possible that the same basic interventions that worked in the 1960s will work now - is it simply a a matter of where, how, with whom and with what technology?

These are real questions for me - they will shape or be part of at least two chapters/articles I write in 2009. Please help me out here if you can. Thanks.

*I cribbed (with attribution) the definition that I used in the book, as well as the examples of an industry's components and the stages of development and the possible interventions from Michael Porter's, Competitive Strategy.