Tag: philosophy

Together for Good: Mutuals and Social Cohesion

Posted on by simongterry in future of work

Mutuals and cooperatives (‘mutuals’) can play a key role in addressing declining social connection and civic engagement in Australia. To do so they must return to their connection to their members, foster belonging in those members  and strengthen the fundamental principles of mutuality that define that connection. Mutuals can also use their economic power to do more to contribute to social challenges beyond their everyday economic activities, further reinforcing community engagement and wellbeing.

The Business Council on Cooperatives and Mutuals produces a report each year that documents the the scale of cooperatives and mutuals in the Australian economy. That report highlights that almost 8 in 10 Australians are members of mutuals. Many of those engagements are through motoring agencies, superannuation, financial services and other commercial service offerings provided by mutuals and cooperatives. The challenge we face in our digital age is that few consumers understand that mutuality. Members may not feel any tangible sense of belonging or loyalty and may not understand that membership that comes with a say in the future of their organisation. Only when we work to engage members in these organisations and ensure that they are connected to, run for and shaped by their membership do we see the wider social benefits of mutuality.

Going it Alone: Declining civic engagement and belonging

I recently read Hyperpolitics by Anton Jäger, a book about the rapid and tumultuous politics of the last few years where issues rise rapidly and dissipate just as rapidly without necessarily driving any real change. One of the theses of the book is that the current era involves a rise in politicisation at the same time that individuals are increasingly atomised in their experiences of politics. The institutions like political parties, unions, and other associations are increasingly less relevant and have lower membership. This individualisation of politics and the shifting issue-led campaigns that result becomes an extension of the themes of Putnam’s Bowling Alone from 2000, which examined social capital in the US and among other trends highlighted the decline of bowling leagues as representative of a wider social disengagement. Both books describe these changes as being driven by social trends in work, life, family and technology and encouraged policy makers to look for new ways to encourage civic engagement. Civic engagement and social cohesion have been themes of this blog, especially as we faced the challenges of the Covid crisis.

The trends of civic engagement in Australia continue to be concerning, particularly in an era when demands on that engagement are likely to be increasing. We have ongoing cost of living pressures, international shocks continuing at pace, and structural challenges such as intergenerational equality, ageing population and climate change to address. Addressing these issues with a focus on individual outcomes only will present impossible political challenges and likely continue the volatility described in Hyperpolitics.

Examples of the declining social engagement are around us. The membership of Australia’s political parties has fallen and trade union membership continues its downward trend. Even volunteering has fallen since the first decade of this century as measured independently by the ABS and the HILDA longitudinal survey. The Scanlon Index of Social Cohesion has been level for the last three surveys at 78 but that is measured against an index of 100 in 2007. Elements of that survey such as the sense of belonging Australians feel experience even greater drops and particularly in younger members of our community. The Scanlon report indicates that community engagement activities, such as community support groups, social and religious and civic groups, are playing a role in engaging people and delivering a sense of belonging.

Growth is Not Enough. Belonging Matters

Mutuals step in where society needs them and the market won’t. In the current environment, it is clear that market forces won’t deliver the uplift in social belonging needed and some trends such as artificial intelligence may actively work against improvement in connection. Mutuals and cooperatives are examples of communities community together to address issues because of the connection and belonging between people in the community. That is something we need to foster. If mutuals work to contribute to these core elements of the principles of mutuality, they will be another force for connection in our communities. That connection to members and community can be the foundation of new social connection, wellbeing, and prosperity, particularly for younger members.

Many mutuals are generous donors using their profits for social good. However, giving away profits to charitable and community causes is not a substitute for living the spirit of the Rochdale principles of democratic control, education and cooperation. Mutuals and Cooperatives can and should be a part of the process of fostering social connection and belonging in the communities that they exist to support.

Discussing community organisations as a solution to the decline in civic engagement, Former British Prime Minister Gordon Brown has said;

The distinctive feature of a successful community organisation is not that we belong to it, but that it belongs to us

Two-way belonging sets a high standard for mutuals. The communities from which mutuals arise should have a deep connection to them. That means should be clear and closely connected to their mutual or cooperative, at least they should understand the organisation is a mutual and the benefits that they accrue from that model of business. In many agricultural and other purchasing cooperatives, these connections are strong and clear. In many commercial and financial cooperatives this focus on connection to members has been lost to the detriment of the organisation and the wider community. If greater member participation gives rise to new risks that the organisation must become responsive to new demands from its members, then it will be fostering that engagement and alignment that members are seeking. The organisations will be better for working with and for their members.

Many mutual and cooperative organisations are very proud of their track record of growth. Growth is very important for organisations seeking to influence better outcomes for Australian consumers through their capabilities and financial resources. However, the scale of commercial activity alone is not enough to justify a mutual’s use of members’ capital. Scale cannot become an end in itself. Without connection to and between members and a commitment to a fuller expression of mutuality, any such organisation risks becoming just another commercial player and losing the wider social benefits that these organisations can deliver. Scale can be an active detriment to member connection and influence over the organisation. In this case, we lose the opportunity for mutuals and cooperatives to play a role restoring civic engagement.

Mutuals were born in a period in the late 19th Century when people came together to address the challenges of a rapidly transforming society and when the political response to that transition was weak. From the Rochdale Pioneers to the friendly societies, mutual insurers, building societies and commercial cooperatives, we experienced a flowering of social innovation to support communities through that change. It’s time for the mutual organisations of today to play their role in supporting communities and society through another era of challenging transition. To achieve this, mutuals will need to focus on the connections with and between their members and generate new strength of two-way bellowing.

More than Enough Problems

Some sceptics might view that the world has changed irreversibly and that connection is impossible in a digital age. However, the second trend highlighted in the book Hyperpolitics suggests that people will engage with a cause that matters enough to them. What they have been missing is a way for that engagement to result in a contribution to the problem or opportunity that they want addresses. Mutuals can and should be that vehicle.

In a wider sense, mutuals must adapt to contribute to the social needs of the communities that they exist to support beyond making money and giving away money made from members’ consumer purchasing decisions. To restore and deepen member engagement, cooperatives and mutuals need to challenge themselves to consider how they can help members with new solutions to other challenges that are widespread in our communities. There Is a long list of issues where Australia needs new solutions and mutuals are ideally placed to work with their communities to deliver them. Examples include: sustainability, affordable housing, affordability generally, food security, social and community care, access to services for regional communities and the ongoing workforce transitions and reselling required. Ignoring these issues or papering over them with charity will not deliver the benefits Australia needs from mutuals and cooperatives.

Mutuals have played a defining role in Australia before. The federation of the Australian colonies in 1901 was the work of civic organisations like the Australian Natives Association friendly society (now Australian Unity). These organisations kept the idea of and the campaign for Federation alive when politicians repeatedly failed to deliver the agreement required at conventions. That pressure ultimately led to successful political change. Mutuals and cooperatives don’t have to become political organisations. but they can lead change, connect their members and shape the society around them for the better.

In a world in which social disconnection is on the rise, especially for younger adults, mutuals need to take up the challenge of fostering new social connections and delivering solutions to wider social issues. In so doing, they will lay the foundations for their next phase of relevance and the well-being of society more generally.

And while governments, local and national, can create conditions for a stronger civic society, the most effective way to build one is the simple act of one person inviting another person to join in

Gordon Brown

The challenge to all mutuals in Australia is simple: How can they invite their members to join together in solving the challenge that we as Australians all share?

Pondering the End of Newtonian Management

Posted on by simongterry in future of work

The current generation of artificial intelligence is probabilistic, not deterministic. After more than 60 years of digital technology and over a hundred years of management, we’re about to grapple with the end of Newtonian management

Probabilities Astray

I have the misfortune to be both short-sighted and long-sighted. As a result, I have a pair of glasses for each. My main glasses are for shortsightedness, which makes texting on the phone something of a random experience at times. Everything works thanks to autocorrect until the phone guesses wrong. I usually don’t discover until a confused correspondent replies seeking to clarify. While autocorrect mostly accelerates our work, the ‘thanks autocorrect’ meme is a reminder probabilities can go astray.

Our new Artificial Intelligence founded on the predictive power of large language models extends this probabilistic approach much deeper into the world of work. Our management philosophies have not yet adapted to the differences to the systems we traditionally manage. We will need new systems and governance for this world of work. In critical arenas we may need regulation to define where and where not we are comfortable with putting our processes in the hands of probabilities.

Newtonian Management

Our modern management philosophy is driven in large part by machine metaphors. Inputs lead directly to outputs. Processes are predictable, inspectable, and repeatable. This is the simplicity of Newtownian physics.

When we began to build software systems at scale in the middle of the twentieth fentury those systems follow the same predictable Newtonian principles. Code was lean and ran to achieve the same outcomes from the same inputs every time. We could let it run on its own because we simply had to put assurance over the processes. We know how to do this very well. Newtonian physics fits easily in our head because we can imagine it easily. 

Now, although he knew no more than before, his intensity and verbal glitter bore the likeness of knowledge, seeming to prove that his earlier doubts had been mistaken, and so for him and others his ignorance passed for wisdom,...

Stephen Dobyns, [It was the lack of certainty]

The Mysteries of Quantum Systems

Quantum physics is built around probabilistic wave functions. Suddenly the straightforward outcomes we expect aren’t always those we get. Inspection of the process can even change outcomes (as per the Schrödinger’s cat thought experiment). Mostly, we need not worry about the probabilistic nature of quantum mechanics because much of our lives and systems operate at a Newtonian scale. You don’t need to guess which of several wave functions is your car driving on the road. You have a pretty good idea of where it is.

Which brings us back to our new probabilistic Artificial Intelligence functions. They give us answers faster and better than ever. These models are very powerful at distilling the next most likely token in each scenario, but they do so probabilistically in ways that defy inspection to most. Like my autocorrect, it may not provide the desired outcome if in its view a new option is more likely. 

I, at any rate, am not convinced God is playing at dice - Albert Einstein to Max Born (he was wrong on quantum physics)

The very strength of these models in prediction means that they can be challenging to govern. They fill gaps that they shouldn’t fill. They work around constraints put on them in seeking to achieve goals. They downright critical information in their multi-layered calculations. Outcomes may not be repeatable or may not be predictable because seemingly insignificant variations in starting states can produce different outcomes.

Every system perfectly designed to get the results that it gets - W Edwards Deming
…I have
no feather to weigh. I have no
bubble to burst. I am less
to myself, a character in a drama,
a drumbeat, a benevolence, a
blight...

Jennifer Militello, Mansplaining

New Management Skills

New Probabilistic systems will require new management skills to leverage them. This is even more important now AI is being built into everything and in some cases may be deeply embedded and the probabilistic volatility will be less transparent to users. The Australian Government’s Robodebt fiasco is a stark warning of the problem when prediction systems make mistakes while being urged on by enthusiastic champions with inadequate governance.

A few basic things will need to change:

  • Management and governance can no longer rely on a single test or a single run. We need to understand the whole distribution of outcomes across a wide range of trials. We need to know the expected outcomes and the variability that we need to guard against. Critically we need to understand the risks that the model varies so far from our expectations to get outside our desired outcomes. This understanding needs to apply to every step in an AI-enabled process as the variation can be cumulative.
  • Separating what variation can be managed from what must be accepted. Some of the variation is the model exercising its powerful tools. Much of it is buried in processes that are not capable of being inspected or varied by users. We will need to better sift out what variation in the outcomes can be managed and what must just be accepted and reassure ourselves we are happy with the latter. That uncertainty might be very uncomfortable for Newtonian managers and in legal systems with expectations of greater certainty than systems allow.
  • Be very careful where and how we use these capabilities given their probabilistic nature. Obsess about starting states and inputs to ensure the system is not sent awry from the beginning? What harnesses do we need for AI processes? What are the activities that will add additional noise to the system and can they be excluded? What are the domains in which we need great predictability of results and may have to rely on something less powerful, less efficient and more Newtonian. If uncertainty is at unacceptable limits then you may need to manage another way or around this capability. These may become areas for stricter governance or even regulation.

We will learn even more things as we continue to experiment and evolve these systems. That will be particularly the case as we start to deal with complex webs of AI-enabled and AI-embeded systems interacting on behalf of organisations, their employees and their consumers. Without close scrutiny and new levels of understanding, unintended but highly probable outcomes will abound.

...i saw lands going back to sleep and doors opening both ways. i saw escape buttons pressed into bodies stacked behind your dinner party. i saw sunlit sidewalks. i saw no sign of decaying bags anywhere. i saw signs of decaying bags everywhere...

Paul Martinez-Pompa, lit

Living with Uncertainty.

Newtonian approaches to management have meant we have developed an intolerance for uncertainty. We have engineered it out of our systems as much as humanly possible. That simplifies management down to a few standard sets of concerns around inputs because outputs are predictable from their inputs. We have limited assurance on processes once they are confirmed as repeatable.

Continuing down our current path on large language model Artificial intelligence will test us to live with more uncertainty to get the benefits of the model. It will also test our management skills to consider a wider range of interventions and understand in ongoing processes to ensure we can be comfortable with that uncertainty. When may even choose arenas where we prefer the friction of more predictable but less capable systems. As we race to quantum computing, we may yet need a more quantum form of management.

I suggest moving forward we use two sets of glasses in management – our comfortable set looking for predictability and a new set that looks to understand the uncertainties and volatility of our new AI tools. Life will be much better with both views.

Embracing Abundance

Posted on by simongterry in future of work

The art of management is mostly a story of efficiency and alignment. We have optimised the exercise of managing within tight time, labour and capital constraints so fully it is what we routinely consider as management itself. Any other thinking is routinely dismissed or at least huffed at in the corridors of power where the question returns often to “growth is uncertain, efficiency is much more manageable”. Aside from rare entrepreneurial moments, we aren’t used to thinking in terms of abundance. The new wave of AI gives us an opportunity to reconsider where the bounds of our business opportunities lie. That will demand new skills of all managers. Our path to those skills is new questions to ask.

But thou, contracted to thine own bright eyes,
Feed’st thy light’s flame with self-substantial fuel,
Making a famine where abundance lies,
Thyself thy foe, to thy sweet self too cruel.

William Shakespeare, Sonnet 1

Exploring AI Practice

When I highlighted four clusters of use cases of AI, I finished noting that AI offers a generative opportunity to rewire business models by breaking constraints and transforming value chains. As I have expanded conversations with entrepreneurs and AI practitioners, these are the stories that are most intriguing and captivating because they push hard against our management expectations.

Here are some examples (anonymised to focus on the general implications):

  • the start-up that is struggling to hold a product backlog as their engineers productivity lifts and the non-engineers vibe code
  • the CEO who deployed a new interactive website in an afternoon of experimentation
  • an enterprise transformation where data mapping that normally takes months happened in minutes and suddenly the ability to explore that data map became a generative opportunity rather than a drudge
  • organisations considering whether traditional enterprise software models get in the way of AI value creation because these systems are built to lock in both the data and the process
  • using AI to turn a depth of unused historical data into a competitive moat for the proposition
  • bringing hours of analysis, insight and preparation to bear on interactions, conversations and decisions in minutes
  • organisations breaking historical constraints of budgets, resources, capital or time using AI powered approaches and suddenly seeing new possibilities

When the AI conversation starts to become about the cost of tokens and the returns on the massive investment in data centre infrastructure, we may be starting to see new constraints. Yet each of the examples above highlights, ways organisations are creating new value from AI by removing constraints of time, labour, or capital from their historical value chain.

To you the earth yields her fruit, and you
shall not want if you but know how to fill
your hands.
     It is in exchanging the gifts of the earth
that you shall find abundance and be satisfied.

Khalil Gibran, On Buying and Selling

Embracing Abundance

A number of books, blogposts, and articles have argued that the implications of these changes offer us the opportunity for a new wave or even an age of abundance. Yet to pursue these opportunities we need to move beyond the constraints of managements traditional efficiency mindset. We need Forward deployed entrepreneurs pursuing abundance with new questions.

To pursue these clusters of AI Use case, we need to embrace new management questions and learn new skills. Questions that arise include:

  • What more can we do today with what we have?
  • What would be do if traditional labour or time or capital constraints didn’t exist?
  • What would happen if we didn’t have to queue for coding capabilities, or data access, or analysis, or processing steps to happen?
  • How can we deliver more faster?
  • What’s the most we can do?
  • What will our customers or competitors do with AI around our propositions?

The need to embrace an abundance mindset is driven in most part by the competitive dynamic. Consumers are already working out what they can do for themselves. Your competitors will soon follow on the path to abundance.

Thinking this way is not something you do in an AI strategy team, a skunkworks, a silo or any one technical function. AI efficiency projects might work that way but abundance demands more. Realising transformative opportunities in your value chain takes cross functional collaboration to bring the best of all your resources to bear and to see the whole of the opportunity.

Are you ready to discover where the new constraints really are?

but now—and now—one old,
abundant flower just screws up the room.

Graham Foust, Time I'm Not Here

After experiencing a number waves of technology innovation, Simon Terry is seeking to understand a new wave of AI capabilities and put its opportunities and challenges into context. This blog is where he works out loud on what he learns from reading, conversations with practitioners and experiments.