Lifespan of Social Metrics

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Unlike metrics of simple systems, the metrics of complex adaptive systems have a life span. They grow in value over time. And then they decay in value as well.

Take twitter. At first it was follower count – and that still matters some. But over time, people found ways to gain followers that didn’t coincide to the value that they provided, so it started to lose usefulness as an indicator of value from the tweeter.

Jane McGonigal, @avantgame, just posted a series of tweets about how Amazon rating system is being gamed.

Interesting, my book seems to have been targeted last year by some conservative group, individuals encouraged to post negative reviews

a cluster of extremely negative reviews with a conservative POV posted at the same time with weird (untrue) criticism of my biography…

here’s a recent NYT article on partisan groups attempting to one-star bomb books on Amazonnytimes.com/2013/01/21/bus… …

“Here’s what I do: I go to Amazon.com + search for ‘liberal book’. I give 1 star, 1 star, 1 star”youtube.com/watch?v=tGB8Uu…

“Then I search ‘conservative book’ and give 5-star, 5-star, 5-star.” From a tea-party Internet training meetup youtube.com/watch?v=tGB8Uu…

apparently one trick is to purchase book so your review appears “verified”, then cancel order before books ships

Note: I took out a few tweets in the series which were just about her work, rather than about the gaming the stars method she points to.

Knowing that people are giving a count of stars based on their ideology rather than the quality of the work, I am now less likely to put stock in the star count on a given project, especially when it is politically polemic material. Thus the usefulness of the stars decrease for me (and for others) and then for the whole system.

With twitter, we first looked at “follower” count, and then that was gamed. Then the metrics had to start considering other factors like RT count to demonstrate influence. Now we rely on twittergrader, kred, klout, etc to take a great number of factors into weighted consideration to produce an “influence” or reputation score. This amalgam of factors evolves over time.

You might think this is just the way of social media, since it is a fast feedback loop. But actually, I think that a lot of measures of complex adaptive systems work this way.

What comes to mind is Scott Nelson’s story from Blockage in the Thrivability Sketch.

…It was during the crisis of 1857 that the previously ignored insights of a long-haired mathematician, abolitionist, and utopian socialist named Elizur Wright were finally recognized as critically valuable for economic stability.

In the 1840s and 1850s, Wright had tried to convince the state of Massachusetts that life insurance needed reform. As a mathematician, he had been asked calculate the present value of any given policy based on the premiums paid in, a calculation that British mathematicians had called impossible. He created a rule-of-thumb called “net present value” (NPV) to determine the value of a flow of resources in a single instant (present value) and then to subtract operating costs (net).

But the more Elizur calculated, the more troubled he became. Many companies by his calculations spent so much on advertising that they could never pay off their policies. Others profited by canceling policies for those who missed a single payment. The effect was often to end a policy a year before death, leaving families with nothing. Wright fumed, but in vain. In the go-go 1840s and early 1850s, no one would listen to his criticisms and only a few would accept his principle of valuation. But through the 1850s he returned to the Massachusetts legislature with a blueprint for reform. When the Panic of 1857 hit with the failure of a bank called Ohio Life Insurance and Trust Company, Elizur was prepared. This blockage of trade and transport, Wright declared, was a result of distrust. Insurance companies needed reliable accounting practices that would allow Massachusetts to calculate net present value, and internal rate of return. When trust returns, Wright assured them, the blockage will be over.

Unconvinced but without options, Massachusetts adopted Wright’s blueprint, preventing any company from selling insurance in Massachusetts that did not provide complete financial information. NPV offers transparency of obligations.  The panic was short-lived, and Elizur Wright’s accounting principles became the basis of what we now call Generally Accepted Accounting Principles, adopted by millions of companies, states, and non-governmental organizations throughout the world. MBAs take credit for it, but a long-haired radical gave us cost accrual accounting.

Wright took advantage of blockage to identify its root cause – a distrust of opacity. Increased financial transparency was the solution; trust collapses without it. Blockage can let us make institutions open up and make them thrivable.

If the metrics we use in our economy are also being created (even at a very slow pace) they may also be declining in usefulness. Elizur’s methods didn’t anticipate the complex financial instruments to come over 100 years later that obscured the “trustworthiness” of the things our measures aim to reveal.

Consider how the measures you use can be gamed, where they may be in their lifespan of adoption and decay, and what other indicators might be emerging to reveal what matters – the territory and not the map.

Organizational Heartbeat

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I am working on a book about agency, and the power and requirements for transformational change. This comes out of about a decade of writing about philanthropy – both for effective donors and the sector as a whole.  Today, Eugene Kim posted to Facebook a link to a groupaya post, How Can We Make Nonprofit Consulting Transformational? And this reminded me of Geoffrey West’s TED talk on The surprising math of cities and corporations.

My sense is that the larger the organization, the slower the heartbeat of the organization – AND the less it is capable of transformational change. This is all about efficiencies of scale. And you know from previous posts that I have an allergic reaction to scale as a lauded idea in and of itself. It always, to me, requires clarification. Mostly because people act as if scale operates as a power law – when I think it is a sigmoidal function. Probably because of that West TED talk, of course, since I am not a mathematician by any stretch of the imagination.

Sigmoid Curve via Wikipedia

West makes clear is that companies grow on a sigmoidal curve – an S curve. You grow on an s curve too. And then you stop growing. These economies of scale are not infinite. At a certain point the energy required to transmit information throughout the organization and engage all the people in it exceeds the effectiveness gained by adding more people to it. [See also what West says about cities not being sigmoidal.]

Let’s be a little more clear about this scaling thing. The Long Now has a lovely essay on West’s work, which I pulled this quote from:

Working with macroecologist James Brown and others, West explored the fact that living systems such as individual organisms show a shocking consistency of scalability. (The theory they elucidated has long been known in biology as Kleiber’s Law.) Animals, for example, range in size over ten orders of magnitude from a shrew to a blue whale. If you plot their metabolic rate against their mass on a log-log graph, you get an absolutely straight line. From mouse to human to elephant, each increase in size requires a proportional increase in energy to maintain it.

But the proportion is not linear. Quadrupling in size does not require a quadrupling in energy use. Only a tripling in energy use is needed. It’s sublinear; the ratio is 3/4 instead of 4/4. Humans enjoy an economy of scale over mice, as elephants do over us.

With each increase in animal size there is a slowing of the pace of life. A shrew’s heart beats 1,000 times a minute, a human’s 70 times, and an elephant heart beats only 28 times a minute. The lifespans are proportional; shrew life is intense but brief, elephant life long and contemplative. Each animal, independent of size, gets about a billion heartbeats per life.

Picture a mouse trying to do a startup pivot. Now try to imagine your favorite large scale organizational gorilla trying to pivot. The larger the company, the more difficult it is to turn the entire company on a single point and do something related but quite different.

Startups often go through multiple transformations of what they do, how they do it, and who they do it for. Their organizational heartbeat is fast and their scale is small. (And some of them get successfully gobbled up by the larger organizational bodies, but we can talk about that another day.)

You can have nonprofits, whose social mission talks about transformational change, hiring consultants to help them do that as much as you want, but they won’t be very good at it. The kind of organizational heartbeat needed for transformational change – that leading edge early adopter game changing innovation in the social sector – well, it isn’t going to happen in the large organization. (We could talk about how big donors impede that, how organizational mission moves from “change” to “keeping the org alive” or how larger orgs attract stable-present-focused people who aren’t keen on transformational disruption, etc… but understanding the why doesn’t change that it happens. And we ought to just be honest about it and stop speaking transformational change in organizations that don’t do it.)

Do you think organizational scale relates to ability to be transformational? Or not? If not, why not?

ps. the antidote or innovation that can disrupt this exists – organizational slime molds… crowdfunding transformational change experiments, etc. I don’t have clear answers on how that all works, but I am deeply curious about how it is connecting.

Resilience Ain’t Enough

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It isn’t enough to repair the damage our progress has brought. The unintended consequences of our efforts to improve quality of life for humans has repercussions and requires action.  Yes, and. It is also not enough to manage our risks and be more shock-resistant. Now is not only the time to course correct and be more resilient. It is a time to imagine what we can generate for the world. Not only can we work to minimize our footprint but we can also create positive handprints. It is time to strive for a world that thrives.

As I am wont to do, I had a gathering while in SF. This time it was a brunch filled with amazing people I wouldn’t have a chance to see one on one during my time there. I always enjoy seeing friends meet friends and discovering connection. A couple guests brought someone with them. And one guest took up my twitter invite and joined even though she didn’t know me yet. Everyone brought something to share. Yum. It felt warm and delightful.

Then we got in a debate about resilience and thrivability. Of course I appreciate the friends who not only stand by me but also stand behind thrivability. And, it was really exciting to have someone who wasn’t converted to the thrivability team challenge what it is we mean and to say she didn’t like the term. Juicy.

Where there is a bit of friction, you can get traction.

As a facilitator, you can always be sure I have paper and pens around, so I started sketching it out. Since then, I put together a chart, showed it to a few collaborators, and here it is narrowed down to key points for you. It isn’t enough to strive for resilience, and it won’t motivate enough of us. When we strive to thrive, we create a story of greatness that invites everyone to contribute their very best to making a world that not only works, it also produces joy, delight, and awe.

Comparison chart for Thrivable

Thrivability transcends survival modes, sustainability, and resilience. Thrivability embraces flow as the sources of life and joy and meaning, adds to the flow and rides the waves, instead of trying to nullify the effects. Each layer includes and also transcends the previous layer, expanding both interconnections as well as expanding system awareness as each layer hits limits and discovers that more forces are at work than can be explained within their purview. Also, this is not a progression, where you need to move through one before beginning another. You can have aspects of yourself or your organization in multiple places in the chart and movement within the chart can be from any one area to any other. It is not a spectrum of progression. It is a spectrum of viewpoint. And most of us are like electrons, leaping about from point to point and sometimes seemingly nowhere at all… until you look and ask.

Please allow me to amend with gratitudes:

Thank you to attendees of the brunch that triggered action on the chart, especially: Sarah Brooks, Evonne Heyning, Scott Albritton (photos of chart from brunch), Thomas Kriese, David Evan Harris, Jeanie Kirk, Kimberly Olson, Mair Dundon, and Nicole Lazzaro.
Thank you to thrivability champions for assistance in development and refining: Michele Holliday, Irma Wilson, Joshua Foss, Herman Wagter, and Kathryn Bottrell.

Scale Makes Me Scream

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In both for profit and social enterprise, people talk about creating a business that scales. And it is said as if there were no other way worth doing it. It is said as if you don’t have a successful business if it doesn’t expand in size. And you don’t have a successful social business if your impact isn’t scaling.

It makes me want to scream. Or inside I am already screaming.

There are organizations that are best at scale. And laudable well scaled social enterprises exist too. I am not denying that. I am saying the glorification of any of those without pointing to small business or local enterprises diminishes the power and results of an organization that is not scaling ever upward in our collective awareness. Where are the HBR or SSIR articles on local social business and impact?

When uniqueness is part of the experience you pay for…

Think about your favorite local family owned restaurant. Should it scale? Doesn’t a little part of you die if you hear they are scaling? As if the personality of the place has been turned into a factory like process with measured perfection and efficiencies that stop being unique and by hand. What about your local farmer? The local farmer’s market? Should those scale?

Big scale, no fail, organizational obesity in a fragile market…

scale guy

Aren’t businesses that have scaled part of the problem in our current economy? Much like people have a dunbar number – the number of people you can know (and know who they know) which tends to be about 150, organiz

ations have a scale limit. When they exceed that limit, the costs of the necessary organizational bureaucracy to operate outstrip the efficiencies of being bigger. Think of an organization as a organism. You need food (income) to survive. And what is surviving without a purpose? Social organisms make sense. And we as a society want to see them fed, at least. But lots of organizations grow and grow until they bloat and become obese. And unhealthy. Additionally, at such massive scale, society becomes invested in the ongoing success of the obese organization, ruining the market mechanisms capitalism professes to use to make an organization healthy in the market. Too much concentrated power. Why are we glorifying movement in that direction without adequate critique and qualification? From the articles I read, it seems we do so without any question. And that makes me scream,”Wait, stop, think about this!”

whatabout manLayers of impact, axis of scale…

Is it more important for the social business to scale or for there to be impact that goes to scale? Which is more important to you: 1 business (with 5 staff and a group of investors) that gives 1 million people access to water or 1 business model is replicated a thousand times locally, producing a living income for 1000 local entrepreneurs? If they both produce the same impact: 1 million people with access to water, but the first benefits a handful of people in a single organization and lines the pockets of investors OR the second gives living income to 1000 local people. In our current market and media, the first model is celebrated.

When social entrepreneurship looks at scale, we want it to mean scale of impact. What it really means is that investors think that enough transactions at a low margin of profit to the bottom of the pyramid, a profit can still be made. Or they mean, enough wealthy people in search of meaning will pay premiums for the latest moral crisis to be off their conscious. I am not saying that either of these are bad in and of themselves. I think it is good that we explore how to give people at the bottom of the pyramid a greater experience of agency – if that means buying products and services or creating their own small businesses. (You don’t see Kiva donors asking to see if their entrepreneur is taking a business to scale.) And I think it is good that socially conscious people can make more informed decisions and advocate those decisions through social cause purchases. What those two paths miss are the other axis by which social change can happen. What if 10,000 of us all start a MakerSpace in our town? None of our businesses will probably scale (some may merge over time). But if Make Media puts out a blueprint, and thousands of us run with it, enabling lots of innovation and tinkering in our towns, is that a social entrepreneurial effort worth celebration? Should you look at the impact of a single town or could you say the overall movement has touched how many lives, led to how many inventions or customizations, or created how many small businesses…. Sometimes scale comes through tight models that can be replicated. Barcamps. Jellys.

What about the revolving loan or cascading good efforts? Let’s say I start a project where 10 of my friends get together and help 10 people improve their lives, and each person donates $10 to that effort. Each “receiver” is then required to give 10 hours to helping someone else’s life. $2 are used as an administration fee for tracking the cascade forward. The receiver then gives forward their ten hours and $10 to 10 more people and on down the line. Does that count as a social entrepreneurship? Even if the main organization never has to grow beyond 1 or 2 staff? What if loans are passed forward instead of back – so as you prepare to pay your loan, instead of giving the money back to the bank, you have to find someone to give it to who will follow the same condition and mentor them so they can pay it forward to. That might have a lot of social impact over time, but it won’t look sexy at SOCAP. Not glorious or big enough for investor interest, which is what drives media interest and behavior at SOCAP.

Speaking of time…

What “they” also mean when “they” unquestionably glorify scale is that the timeline for scale needs to be rather short term – say 3-7 years. We are talking about cashing out investor money here, and they need to know they can get it. And yet, deep transformative social change happens over decades. So we end up with lots of hot, sexy, quick fixes that scale fast instead of deep and thorough long term social transformation efforts. And with all the glamorization of for profit investment into the social change space, the growing trend for philanthropic dollars to be tied to business like outcomes increases. Why fund long term social transformation when you can get quick neat little measures of incremental improvements as a social impact investor? Slow Money is a small counter effort to this, of course.

Please

Can we please be sure to qualify statements about scale – as a subset of all ideal business development options. Please.  Can we stop glamorizing investment capital and start to celebrate slow evolution, iterative crowd-funded efforts that make a difference locally or have long term deep and transformative impact?