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Of #Risk – as the stakes keep getting higher

Nassim Taleb, whose book The Black Swan added a term to our vocabulary, has offered a brief discussion of how we might anticipate. As we continue to reflect on the enormous damage done in 2008.

His point is basically to draw a distinction between linear and exponential factors. As well we know, with Moore’s Law driving core aspects of technological change, the impact of exponential factors may be expected to increase, exponentially (my point, not Taleb’s).

Here is his key para:

So here is something to use. And the technique, a simple heuristic, called fragility (and antifragility) detection heuristic works as follows. Let’s say you want to check if a town is overoptimized. Say you measure that when traffic increases by 10,000 cars, travel time to grows by ten minutes. But then if traffic increases by 10,000 more cars, travel time now extends by an extra thirty minutes. Such asymmetry shows that traffic is fragile and you have too many cars, and need to reduce traffic until the acceleration becomes mild (acceleration, I repeat, is acute concavity, or negative convexity effect).

A Method of Detection of Fragility: How to Detect Who Will Go Bust — Nassim Taleb.

The Real Point about Social: Value and the Culture of the Organization

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It’s unfortunate that I wasn’t able to be in Milan last week for the Social Business Forum. Aside from the fact that any reason to be in Italy is a good one, the Forum brought together some of the most illustrious names in the social space together with major corporate players. See the valuable links below.

Reports from the Forum plus my own participation in SOBCon in Chicago a few weeks ago and last week’s Tech Policy Summit in Napa have focused my thinking on the question of “corporate culture.” It’s a term we use lightly though we know its import is huge. Many are the mergers that have failed for lack of matching cultures. Culture is an extraordinarily difficult thing to shift. It is difficult enough even to define. For a terrific book-length exploration, see my friend Naomi Stanford’s Corporate Culture: Getting it Right (published by The Economist). For the moment, a simpler reflection.

Let’s look at the two core aspects of the digital age in which we are working.

1. Change, innovation, Moore’s Law – the marks of products, markets, and the context for both are shifting; in many cases quickly, and in all cases faster than they have ever before. The more digital the effort, the faster the actual or potential change. We know this well. We forget it every day. It is more important, more disruptive, more full of potential value, than almost anyone has realized. Only by looking back will you see.

But the same tech revolution is bringing us answers.

2. The disruption of communications, marketing, sales, all aspects of the company’s interface with the wider world (and B2B as much as B2C, though that is not much grasped) is also the corrective. For the business significance of social is to open the steel barriers that we have erected around the organizational boundary to enable coming and going with that party for whom the entire enterprise exists: the customer. Not the customer as defined by marketing departments and product designers, by focus groups the kind of polling that still leaves most new launches a failure, but the actual customer, the end-user of the fruit of the business effort, that living, breathing, tweeting, Facebooking, always changing, creature in whose hands lies the power of success and disaster.

Social marketing has recognized this, even though it is in its infancy and we keep reading bizarrely unworldly statistics – like only 10% of CIOs are on Twitter, or the average Facebook page is only change twice a month, or 69% of B2B companies have no systematic way of tracking the gold dust which is social feedback (I’ve blogged about each of these; go search if you are interested). Point is, we are ambling along toward a social understanding of marketing and customer relations. We have hardly even noticed that the key to revamping corporate culture – the value holy grail in the context of disruptive change – lies also exactly here. For what social has begun to do is connect corporate culture with the culture of the market. And it is precisely in the alignment of those two that there lies competitive advantage.

http://www.socialbusinessforum.com/

http://www.socialfish.org/2012/06/can-social-business-reshape-the-organization.html

What social business is. And isn’t. | johnstepper.

#Facebook and the #IPO again . . . @Wadhwa ‘s latest salvo

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Vivek Wadhwa has emerged as one of the sharpest critics of conventional wisdom at the meeting-point of innovation, business, and finance. As entrepreneur, biz school prof, and now leader at the NASA-hosted Singularity University, he has plenty of street cred. And he is also a ferocious writer.

His critique of the IPO model is timely, and Facebook offers an example too good not to address. As he points out, they now have $16bn on hand for new tech and acquisitions; on the other hand, they face market pressures to deliver profit and growth that in their innovative space will unquestionably be hard to reconcile with the “social” purpose they have set – and on which, a la Catch-22, hopes of long-term success probably lie.

I’m interested in examples of innovative financing and governance that straddle the IPO/private/acquisition/nonprofit standard options. I think they will emerge at the interface of social, social enterprise, and new technologies. Perhaps in Facebook’s successor.

Don’t get tangled in the IPO yarn – The Washington Post.