Strategy. Innovation. Brand.

Innovation

One-Day Seminars – Fall 2018

Wake up! It’s seminar time.

This fall, in addition to my regular academic courses, I’ll  teach three one-day seminars designed for managers and executives.

These seminars draw on my academic courses and are repackaged for professionals who want to think more clearly and persuade more effectively. They also provide continuing education credits under the auspices of the University of Denver’s Center for Professional Development.

If you’re guiding your organization into an uncertain future, you’ll find them helpful. Here are the dates and titles along with links to the registration pages.

I hope to see you in one or more of these seminars. If you’re not in the Denver area, I can also take these on the road. Just let me know of your interest.

Bitcoin, Blockchain, and Five Years

What’s next?

I first wrote about Bitcoin on this website five years ago today. (Click here). I decided not to buy any at the time because the price had surged to well over one hundred dollars! Clearly it was a bubble. If only I had known that the price would peak at $18,000 a few years later. (Today, the price is about $6,800).

So what’s happened over the past five years? Let’s look at Bitcoin’s benefits and then investigate some of the ways that it has changed our world.

Bitcoin is based on a blockchain stored in multiple locations. This gives it two major advantages: it can’t be erased and can’t be tampered with. Simply put, it’s like writing checks in ink rather than in pencil, using paper that can’t be destroyed. A blockchain can record transactions and ensure that they will always be available as a matter of public record. Bitcoin uses this feature to buy and sell things. Each transaction is recorded forever, meaning that you can’t spend the same Bitcoin more than once.

Bitcoins can also reduce inflation because they can’t be printed at a government’s whim. Instead, they’re “mined” through complex mathematical calculations. The process gradually grows the supply of coins. The money supply grows in predictable ways. This appeals to anyone who worries that governments will artificially inflate their national currencies.

Bitcoin is also anonymous – just like cash. Unlike cash, however, it’s not physical. It can easily be moved around the world as electronic blips. That makes transactions convenient and inexpensive and could conceivably cut out banks as middlemen. This makes Bitcoin attractive to many groups, especially criminals.

So, what’s happened? First, the idea of the blockchain has spread. There’s no reason to limit the blockchain to currency transactions. We can store anything in blockchain and ensure that it never disappears. In other words, we believe that it is more trustworthy than government or financial entities.

As Tim Wu writes, we are undergoing, “… a monumental transfer of social trust: away from human institutions backed by governments and to systems reliant on well-tested computer code.” Wu notes that we already trust computers to fly airplanes, assist in surgery, and guide us to our destination. Why not financial systems as well? A well-organized cryptocurrency could become the de facto standard global currency and eliminate the need for many banking services.

But we don’t need to limit the blockchain to financial transactions. Any record that must be inviolate can potentially benefit from blockchain technology. Some examples:

  • The Peruvian economist, Hernando de Soto, has suggested that we can combat poverty by storing land ownership records in blockchain systems. Land ownership disputes in Latin America can last for centuries. Blockchain could simplify the process and ensure that those who hold title to land can’t be cheated out of it.
  • De Soto’s proposal eliminates the government as the arbiter of land titles. This is part of a broader trend to disintermediate governments. Why should governments be information czars? Better to store our records in blockchain. This could include land titles, personal identification, health records (including our DNA), the provenance of art works, stock ownership, international fund transfers, and self-enforcing contracts.
  • Tim Wu suggests that we’re moving our trust from governments to code. But we’re only part way there. In our first step away from governments, we put our trust in giant Internet companies like Facebook and Google. We’re now discovering that these entities are no more trustworthy than governments. Indeed, they may be less trustworthy. What’s the next step? Many suggest that it’s the blockchain.
  • Meanwhile, afraid of being disintermediated, governments are starting to plan cryptocurrencies of their own. Russia has proposed a digital currency with several former soviet socialist republics. Sweden and China are both interested in their own cryptocurrencies and have established study groups. But the first government out of the gate seems to be Venezuela, driven by a financial crisis. Venezuela’s printed currency, the Bolívar, suffers from inflation rates around 4,000%. So the government has just announced a new cryptocurrency called the Petro, based on the nation’s oil revenues. The government is essentially saying, “We’re incompetent to print paper money but you can trust the Petro because it’s based on code, not a bumbling bureaucracy. We humans can’t interfere with it.” Will it work? Stay tuned.

Of course, we can also use blockchains for less noble pursuits. The blockchain can store any information, including pornography. That’s a problem but it’s the same problem that was faced by myriad new technologies, including VCRs and the Internet itself. Criminals can also use cryptocurrencies for ransomware attacks, and to traffic in contraband or avoid taxes. We can ameliorate these problems but we probably can’t eliminate them. Still, the advantages of the technology seem much greater than the disadvantages.

So … what happens over the next five years? The New York Times reports that venture capitalists poured more than half a billion dollars into blockchain projects in the first three months of this year. So, I expect we’ll see a shakeout at the platform level over the next five years. Today, there are many ways to implement blockchain. It reminds me of the personal computing market in, say, 1985 – too many vendors selling too many technologies through too many channels. I expect the market will consolidate around two or perhaps three major platforms. Who will win? Perhaps IBM. Perhaps R3. Perhaps Ethereum. Perhaps Multichain. Rather than buying Bitcoin, I’d suggest that you study the platforms and place your bets accordingly.

In the meantime, we need to ask ourselves a simple question: Are we really willing to forego our trust in traditional institutions and put it all into computer code?

Designing A Life — Fate and Gravity

Design constraint.

I was one of the taller kids in my high school class. I thought – and hoped – that I might use this size advantage to become a star basketball player.

Alas, it was not to be. I had a bad case of what’s often called “white guy’s disease”. Simply put, I couldn’t jump. Though I was over six feet tall, I could barely touch the rim even with my mightiest leap.

Van Jones would call this my fate. In a memorable commencement speech at Loyola New Orleans, Jones distinguished between fate and destiny. He defines fate as “those things that we have no control over” and suggests that the “people who are most miserable in life are the ones who spend their time cursing their fate.” (Click here for the video).

As it happens, the field of design thinking has a similar concept. Dave Evans, a design engineer, calls it the gravity problem. No matter how hard we try, we can’t change gravity. Indeed, we can’t even suspend it temporarily. Wouldn’t it be great to suspend gravity while we’re building a new house and then reinstate it when we move in? Unfortunately, we can’t. Time to move on. (For a podcast featuring Evans, click here).

Gravity is a fact of life. My inability to jump is a fact of my life. Instead of asking, “How can I change my fate?” it’s better to accept it and ask more useful questions. A useful question is one that we can actually do something about. A designer would say that we need to design around the constraints.

As Evans describes it, we’re looking for room to maneuver around the facts that define our products or our lives. I couldn’t jump very high. That’s a design constraint. So I might ask a different question: “How can I make basketball an important part of my life, even though I can’t play very well?” Once I ask the how can I question, I can dream up alternatives. I might become a coach. Or a sportscaster. Or I might decide to take up a sport that doesn’t require jumping.

Van Jones calls this destiny as opposed to fate. We have no control over fate. But we can respond to destiny. As Jones points out, “The world is not going to tell you every day about …” your destiny. We have to live our lives, and respond to our challenges, to discover our destiny.

Whether we call it destiny or design thinking, when we bump up against gravity, we need to change the question. By doing so, we can find an array of alternatives. Once armed with a list of alternatives, we can design a life or a product. Which alternatives fit the constraints? Which ones don’t?

We don’t design a product and then launch it. Rather we design it, then re-design it, then re-design it as we discover new constraints. Similarly, it’s difficult to design a life before we launch it. To overcome fate and discover our destiny, we need to design our lives as we live them.

Happiness and Creativity

Do you want to be happy or creative today?

The 2017 World Happiness Report was released yesterday. The headlines today are all about Norway, which supplanted Denmark as the happiest country in the world. That’s nice and I’m sure that Norwegians are celebrating today. But what intrigues me is the relationship between happiness and creativity. (See also here, here and here).

In 2015, the Martin Prosperity Institute published the Global Creativity Index. Reviewing the two lists together suggests that the relationship between happiness and creativity is very tight indeed. Here are the top ten countries on each list.

Rank Happiness (2017) Most Creative (2015)
1 Norway Australia
2 Denmark United States
3 Iceland New Zealand
4 Switzerland Canada
5 Finland Denmark
6 Netherlands Sweden
7 Canada Finland
8 New Zealand Iceland
9 Australia Singapore
10 Sweden Netherlands

Of the ten happiest countries in the world, eight also make the top ten list for most creative countries in the world. The two that miss — Norway and Switzerland — don’t miss by much. Norway is 11th on the most creative list; Switzerland is 16th.

Conversely, of the ten most creative countries in the world, eight also make the list of the happiest countries in the world. Again, the two that don’t make the list — the United States and Singapore — don’t miss by much. The United States is 14th; Singapore is 26th.

What’s it all mean? I can think of at least four ways to interpret the data:

  • Happiness causes creativity — there’s a meme that says that only tortured geniuses are truly creative. Perhaps it’s wrong. Perhaps you have to be happy to be creative.
  • Creativity causes happiness — this explanation appeals more to me. I know that when I create something (like an article for this website), it makes me happy. I get a little glow of accomplishment. On the other hand, I know happy people who aren’t very creative and vice-versa.
  • A hidden third variable causes happiness and creativity to correlate — perhaps there’s something else going on. It could be income — all of the countries are fairly rich. It could be government policy — they all invest public funds in research. It could be geography — they are all fairly far from the equator. It could be language — all of the countries on the list have very good English language skills.
  • The two surveys are measuring essentially the same thing — though the two surveys seem quite different, perhaps they really measure the same thing. Perhaps happiness and creativity are so throughly intertwined that we can’t tease them apart.

It’s also interesting to delve into which countries have the best combination of happiness and creativity. We can make some crude judgments by adding up the national position in each survey. Like golf, the low score wins. For instance, Denmark is second in happiness and fifth in creativity, for a combined score of seven. As it happens, that’ s the lowest score — so Denmark takes first place in the combined league table. Here are the top five combined scores. I don’t know about you but I think I’ll soon pay a visit to Denmark.

Rank Country Combined Score
1 Denmark 7
2 Australia 10
3 Iceland 11
3 (tie) Canada 11
3 (tie) New Zealand 11

Greetings from quit.snacks.humid

My house -- quit.snacks.humid

My house — quit.snacks.humid

How do you tell someone where you are? Most of us would use some form of a postal address to identify our location. But what if you’re in a place that doesn’t have a postal address? In other words … most of the world.

If there’s no postal address, I might use latitude and longitude. For instance, our home is located at 39.714549 latitude and -104.971346 longitude. If you understand the system, you’ll realize that my house is 39 degrees north of the equator and 104 degrees west of the prime meridian that passes through Greenwich, England.

(I have an 18th century French map that gives longitude as the number of degrees east or west of Paris. It was part of a long-running dispute about where, precisely, the center of the world is.)

Longitude and latitude give us precise locations, but they’re not human friendly. It’s like noting that the current temperature is 287.039 degrees Kelvin. That’s accurate but not terribly meaningful to most humans.

So, is there a way to map the world that would be easier for humans to manage? Well, how about we divide up the entire surface of the earth into squares that are approximately three meters per side? Each square is nine square meters or roughly 90 square feet. As you’ve no doubt calculated by now, we would need about 54 trillion such squares.

That may sound complicated but, really, how hard is it to manage 54 trillion squares? The researchers at What3Words – a start-up company in London – figured out that you only need 40,000 words in three-word combinations. That yields about 64 trillion combinations – enough to address the world and have a few trillion combinations left over.

In the world of What3Words, our home address is quit.snacks.humid. It’s easy to remember and precise enough to guide you to our front door. If I wanted to guide you to our driveway, I would instead use the words refuse.fake.limbs. If I wanted to send you to the highest summit in Colorado – a place that doesn’t have a postal address – I would send you to penned.metro.inspections.

According to What3Worlds, the system is already in use to deliver mail in unaddressed areas like Mongolia or the favelas of Brazil. Similarly, Steven Spielberg is using What3Words addresses to get his actors and crew to the right place at the right time as he films his latest movie. I can imagine Colorado’s Alpine Rescue Team guiding rescuers to acutely.jumbo.popcorn rather than saying, ”The injured party is about 3.3 miles northeast of the Mt. Elbert summit on the east flank of a small ravine.”

What3Words already has some interesting use cases and, if it develops fully, it should help us with logistics, emergency services, scheduling, and materials management. But its real potential comes from the fact that it’s released not as a solution but as a platform. As we know, (click here, here, and here) platforms are innovations that generate innovations. As other application developers adopt and adapt the platform, we could see a rich ecosystem of solutions that even the What3Words folks can’t imagine today.

By the way, I’m taking a few days off. If you need me, I’ll be at tent.quarrel.charm.

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