Strategy. Innovation. Brand.

Innovation

Human 2.0

Human 2.0

Human 2.0

When I worked for business-to-business software vendors, I often met companies that were simply out of date. They hadn’t caught up with the latest trends and buzzwords. They used inefficient processes and outdated business practices.

Why were they so far behind? Because that’s the way their software worked. They had loaded an early version of a software system (perhaps from my company) and never upgraded it. The system became comfortable. It was the ways they had always done it. If it ain’t broke, don’t fix it.

I’ve often wondered if we humans don’t do the same thing. Perhaps we load the software called Human 1.0 during childhood and then just forget about it. It works. It gets us through the day. It’s comfortable. Don’t mess with success.

Fixing the problem for companies was easy: just buy my new software. But how do we solve the problem (if it is a problem) for humans? How do we load Human 2.0? What patches do we need? What new processes do we need to learn? What new practices do we need to adopt?

As a teacher of critical thinking, I’d like to think that critical thinking is one element of such an upgrade. When we learn most skills – ice skating, piano playing, cooking, driving, etc. – we seek out a teacher to help us master the craft. We use a teacher – and perhaps a coach – to help us upgrade our skills to a new level.

But not so with thinking. We think we know how to think; we’ve been doing it all our lives. We don’t realize that thinking is a skill like any other. If we want to get better at basketball, we practice. If we want to get better at thinking, ….well, we don’t really want to get better at thinking, do we? We assume that we’re good enough. If the only thinking we know is the thinking that we do, then we don’t see the need to change our thinking.

So how do we help people realize that they can upgrade their thinking? Focusing on fallacies often works. I often start my classes by asking students to think through the way we make mistakes. For instance, we often use short cuts – more formally known as heuristics – to reach decisions quickly. Most of the time they work – we make good decisions and save time in the process. But when they don’t work, we make very predictable errors. We invade the wrong country, marry the wrong person, or take the wrong job.

When we make big mistakes, we can draw one of two conclusions. On the one hand, we might conclude that we made a mistake and need to rethink our thinking. On the other hand, we might conclude that our thinking was just fine but that our political opponents undermined our noble efforts. If not for them, everything would be peachy. The second conclusion is lazy and popular. We’re not responsible for the mess – someone else is.

But let’s focus for a moment on the first conclusion – we realize that we need to upgrade our thinking. Then what? Well… I suppose that everyone could sign up for my critical thinking class. But what if that’s not enough? As people realize that there are better ways to think, they’ll ask for coaches, and teachers, and gurus.

If you’re an entrepreneur, there’s an opportunity here. I expect that many companies and non-profit organizations will emerge to promote the need and service the demand. The first one I’ve spotted is the Center for Applied Rationality (CFAR). Based in Berkeley (of course), CFAR’s motto is “Turning Cognitive Science Into Cognitive Practice”. I’ve browsed through their web site and read a very interesting article in the New York Times (click here). CFAR seems to touch on many of the same concepts that I use in my critical thinking class – but they do it on a much grander scale.

If I’m right, CFAR is at the leading edge of an interesting new wave. I expect to see many more organizations pop up to promote rationality, cognitive enhancements, behavioral economics, or … to us traditional practitioners, critical thinking. Get ready. Critical thinking is about to be industrialized. Time to put your critical thinking cap on.

Questions or Answers?

Question or answer?

Question or answer?

Which is more important: questions or answers?

Being a good systems thinker, I used to think the answer was obvious: answers are more important than questions. You’re given a problem, you pull it apart into its subsystems, you analyze them, and you develop solutions.

But what if you’re analyzing the wrong problem?

I thought about this yesterday when I read a profile of Alejandro Aravena, the Chilean architect who just won the Pritzker Prize. Aravena and his colleagues – as you might imagine – develop some very creative ideas. They do so by focusing on questions rather than answers. (Aravena’s building at the Universidad Católica de Chile is pictured).

In 2010, for instance, Aravena’s firm, Elemental, was selected to help rebuild the city of Constitución after it was hit by an earthquake and tsunami. I would have thought that they would focus on the built environment – buildings, infrastructure, and so on. They’re architects, after all. Isn’t that what architects do?

But Aravena explains it differently:

“We asked the community to identify not the answer, but what was the question,” Mr. Aravena said. This, it turned out, was how to manage rainfall, so the firm designed a forest that could help prevent flooding.

Architects, then, designed a forest instead of a building. If they were thinking about answers rather than questions, they might have missed this altogether.

On a smaller scale, I had a similar experience early in my career when I worked for Solbourne Computer. We build very fast computers – in 1988, Electronics magazine named our high-end machine the computer of the year. Naturally, we positioned our messages around speed, advanced technology, and throughput.

But our early customers were actually buying something else. When we interviewed our first dozen customers, we found that they were all men, in their early thirties, and that they had recently been promoted to replace an executive who had been in place for many years. They bought our computers to mark the changeover from the old regime to the new regime. They were meeting a sociological need as much as a technical need.

When you go to a gas station to fill your car’s tank, you may imagine that you’re buying gasoline. But, as the marketing guru Ted Levitt pointed out long ago, you’re really buying the right to continue driving your car. It’s a different question and a broader perspective and may well lead you to more creative ways to continue driving.

More recently, another marketing guru, Daniel Pink, wrote that products and services “… are far more valuable when your prospect is mistaken, confused or completely clueless about their true problem.” So often our market research focuses on simple questions about obvious problems. The classic question is, “What keeps you up at night?” We identify an obvious problem and then propose a solution. Meanwhile, our competitors are identifying the same problem and proposing their solutions. We’re locked into the same problem space.

But if we step back, look around, dig a little deeper, observe more creatively, and ask non-obvious questions, we may find that the customer actually needs something completely different. Different than what they imagined – or we imagined or our competitors imagined. They may, in fact, need a forest not a building.

Disrupting the Lawyers

Filling out unemployment forms.

Filling out unemployment forms.

Last week, I wrote about the process of disintermediation and how it will disrupt banks and bankers. By encrypting transactions and distributing them across a peer-to-peer network, we will no longer need banks to serve as trusted intermediaries in financial transactions. We can eliminate the middleman.

Can we eliminate lawyers as well? You bethca.

We have lawyers for the same reasons that we have bankers: we don’t trust each other. I don’t trust that you’ll pay me; I want your bank to guarantee it. Similarly, I don’t trust that you’ll honor our contract; I want a lawyer to enforce it.

But what if we could create a contract that didn’t need a lawyer to interpret and execute it? We could eliminate the lawyer as an intermediary. That’s exactly the idea behind smart contracts (also known as self-enforcing or self-executing contracts).

First proposed by Nick Szabo back in 1993, smart contracts use software to ensure that agreements are properly executed. Not surprisingly, smart contracts use blockchain technologies spread across peer-to-peer networks. If you think that sounds like Bitcoin, you’re right. Indeed many people think that Szabo created Bitcoin using the pseudonym Satoshi Nakamoto.

So how do smart contracts work? Here’s how Josh Blatchford explains it:

“… imagine a red-widget factory receives an order from a new customer to produce 100 of a new type of blue widget. This requires the factory to invest in a new machine and they will only recoup this investment if the customer follows through on their order.

Instead of trusting the customer or hiring an expensive lawyer, the company could create a smart property with a self-executing contract. Such a contract might look like this: For every blue widget delivered, transfer price per item from the customer’s bank account to the factory’s bank account. Not only does this eliminate the need for a deposit or escrow — which places trust in a third party — the customer is protected from the factory under-delivering.”

Smart contracts, in other words, precisely define the conditions of an agreement — not unlike dumb contracts. They also execute the terms of the contract by automatically (and irrevocably) transferring assets as the contract is fulfilled.

Blatchford wrote his description in VentureBeat – an online magazine that helps venture capitalists identify and invest in leading edge technologies. This suggests that the money to fund smart contract platforms is already flowing.

Indeed, the first smart contract platform – Ethereum – launched in July 2015. Ethereum’s website describes the endeavor as “… a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.”

Ethereum seems to be essentially a developer’s platform today. Developers can use the platform to develop applications that eliminate the need for trusted (human) intermediaries. Should lawyers be worried? Not yet. But soon.

Blockchain Beyond Bitcoin

Blockchain - It's not just for Bitcoin anymore.

Blockchain – It’s not just for Bitcoin anymore.

In 1979, Paper Mate introduced the world’s first ballpoint pen with erasable ink. Technology analysts considered it an important breakthrough and the news made headlines around the country. Many of us thought, “Wow! Finally I can write in ink and then erase it. How cool is that?” After a few moments of reflection, we had a second thought, “Why would I ever want to do that?”

Before erasable ink, we thought of ink’s permanence as a drawback and a disadvantage. After erasable ink appeared, we realized that ink’s permanence was actually its primary benefit. Write it once and you know it will never go away. If you might want to erase something, use a pencil.

In an odd way, permanence may also be the primary benefit of the blockchain technology that underlies Bitcoin. We think of databases as interactive, up-to-date records of the world as it is. The closer to real-time, the better. If you want to know what’s happening right this millisecond, high-speed databases will tell you.

But what if you want to know what happened some time ago? And what if you want assurances that the information you retrieve is tamper-proof and immutable? In other words, what if you want the electronic equivalent of permanent ink?

That’s exactly what blockchains on distributed ledgers give you. You can’t change the blockchain unless you can decrypt it – and that’s very difficult. Even if you can decrypt it on one network node, many original copies exist on other nodes. It’s fairly easy to restore the status quo ante. You can be very confident that the information you retrieve is unchanged from the original. It’s an immutable, permanent record.

The blockchain/ledger technology allows Bitcoin to keep a permanent record of all transactions. That’s important if you want to create a trusted financial system. But why stop at financial transactions? Are there other transactions that might benefit from permanent, tamper-proof records?

Indeed, there are. Here are a few that are in production or beta today:

  • Ascribe – allows artists to “…lock in attribution [and] securely share and trace where your digital work spreads.”
  • Storj – a potential weak point of cloud storage is that, ultimately, your data is assigned to one server. What if that server fails or is corrupted or hacked? To improve security and privacy, Storj breaks your data into blockchains and stores it on multiple servers.
  • BitHealth – while Storj can store most any kind of data, BitHealth focuses on healthcare data. It claims to provide highly secure, uninterruptible, tamper-proof health data around the world.
  • Everledger – where did your fancy diamond come from? How did it get here? Where is it insured? For how much? Everledger keeps a permanent, immutable “ledger for diamond certification and related transaction history.”
  • Proof Of Existence or Bitproof — you want to prove that you had an idea at a certain date (preferably before anyone else). You could file a patent application. But that’s expensive, time-consuming, and public. Or you could register your document in the Proof of Existence or Bitproof blockchain databases.
  • Warranteer – you buy a product that comes with a warranty, which is described in a document. The product goes bad at approximately the same time that the document goes missing. Why not save the warranty in Warranteer’s blockchain, cloud-based database?

I could go on and on. (If you want to dig deeper, click here, here, and here). While Bitcoin popularized the technology, blockchain extends far beyond the financial world. Indeed blockchain may disintermediate and disrupt supply chains around the world. If so, the world will get much more efficient. Is that what we want?

New York, The NORC

Share my NORC with me.

Share my NORC with me.

A lot of our friends are downsizing. The kids have moved out, they don’t need the big house anymore, and they’d rather live in a smaller place and free up some of their funds for travel … or maybe for the grandkids.

Some of our friends are moving into naturally occurring retirement communities or NORCs. These communities were not designed for older people but, over time, have evolved into place where seniors like to congregate.

One of the communities is not far from us. It’s one of the first gated communities in Denver (and still one of the very few). Designed in the 70s, it consists mainly of semi-detached, single story homes. It’s close to a main street but not on it. There’s very little traffic. It’s also a level area, so it’s easy to walk around. There’s a small community center, with a pool. Maintenance workers will help you maintain your place.

The development wasn’t designed as a retirement community. But all the features and amenities make it congenial to older people. There’s also a network effect. As older people move in, they attract other older people (and, perhaps, make it less attractive to younger people).

Some cities have become NORCs in their own right. Tucson and Phoenix come to mind in the west. Miami probably serves a similar function in the east. A number of our friends have homes in Tucson. Some live there year round; others just escape cold northern winters for six months or so. When we visit our friends, we mainly see an older demographic.

Michael Hunt, a professor at the University of Wisconsin, coined the term NORC back in the 80s. According to Wikipedia, there are now three types of NORCS:

  1. Classic NORC – mainly this is a building, or cluster of buildings, filled mainly with older residents. By and large, they’ve aged in place. Also known as a vertical NORC.
  2. Neighborhood NORC – known as a horizontal NORC, this is a small community of single and multi-family homes.
  3. Rural NORC – a rural community, perhaps where the kids have left and older people tend to congregate.

Most of our friends who live in NORCs live in the second type – neighborhoods and gated communities whose amenities — and/or weather — appeal to older people. The gated community near us is definitely a Type 2 NORC.

However, I would argue New York City — which is more of a Type 1 NORC —  is the best NORCtown in America. For one thing, you don’t need to drive. For older people who can no longer driver (or no longer want to), New York is a natural. Then there’s the food. Don’t want to cook anymore? No need to go to the retirement home’s dining hall (where the food is typically awful). You can get almost any food you want delivered to your door.

We might think of New York as a vertical NORC but there’s also a horizontal dimension. Most apartments are on one level – there are no stairs to negotiate. Plus, you have the doormen and supervisors to help you with everything from simple chores to complex maintenance work.

If you want to get a dog to keep you company, you can hire a dog walker to keep it properly exercised. Medical care is widely available and easy to get to. Some docs will even come to your home. And, of course, there’s plenty to do. Everything from Broadway plays to great people watching. Don’t worry – you won’t get bored.

Why isn’t the Big Apple known as the world’s largest NORC? Probably a lack of marketing. But just wait. It won’t belong before Frank Sinatra’s classic voice is remixed to sing New York, The NORC.

My Social Media

YouTube Twitter Facebook LinkedIn

Newsletter Signup
Archives