Design Thinking

It did not go unnoticed that there was some irony in having several hundred people assemble in Dubai last week (see my previous post) to discuss how to make global institutions and systems more sustainable, especially given this week’s announcement of delayed debt repayments by Dubai World.

Despite this, or perhaps because of it, there was plenty of robust conversation about how a shift in values within our economies was called for. I was moderating a great discussion on values with several of the Global Agenda Councils and one of the attendees suggested that a shift in focus was called for from “having more to being more”.

This seems a great call to action to me and one that resonates with my own views about design’s role changing from encouraging consumption to enabling participation. My question is whether this sentiment can be globally relevant or whether it applies only to those of us who already have lots?

You can see me talking about participation on the Nokia Ideas Project site. There are a bunch of other folks also talking about ideas around communications technology.

This is the fifth, and last, of a series of pieces originally posted at Fast Company.

Those who have stuck with me all week, know that I believe that participation is key to the next big wave of innovation in business and society. Whether it is in the fundamentals of how we think about wealth or the economy, how we parse the minutiae of individual transactions, or how we evolve our most important social systems such as health care, I believe that the interconnectedness of our information society makes this shift inevitable and highly desirable.

The question that I inevitably ask as a designer is how we design these kinds of participatory systems?

The first and most obvious response to this question is that it really is all about we, not I. In other words, corporations and their designers cannot presume to conceive of, design and engineer complete systems and role them out to the enthusiastic applause of the masses. The best examples of current participatory systems included a significant amount of “user” participation in the design process itself. Whether it is Facebook or Apple, the richness and variety of their offerings are created by untold developers, not employed by the host brand, who have created solutions never imagined by the original architects of the platform.

But there are other design principles that must be considered here. First, and foremost, these systems need to be human-centered. Nobody will participate in a system that does not serve his or her needs, and hence those involved in design, whether inside or outside conventional organizations, must master the skills of human centered design thinking.

Additionally, these systems should be fractal. By this I mean they must work at both the small and large scale. Industrial production and consumerism relied on mass scale to operate. Millions of products were made at a low cost and distributed to millions of consumers; in those systems, individuals and small organizations typically could not compete with large-scale industrial corporations. Participative systems must be as relevant to a market of one as to a market of millions. Digital technology offers the flexibility to operate at very different scales. Any participatory offering must make effective use of the Internet.

As I discussed earlier in my post, :”Why We Need Economic Dashboards“, we have to design interactions that are profitable for all participants. And that profit must be measurable on one or more of the dimensions of the participation economy, even if they have associated costs on other dimensions. This way every interaction becomes a productive investment, not an act of consumption. This means we must design in the information feedback loops that make measurement of the various forms of participatory value easy. Robert Wright proposed a related idea in his book Non-Zero. My interpretation of his thesis is that good participatory systems will not rely on zero-sum trading of finite resources but will instead allow everyone to make a profit.

Earlier, I also mentioned information transparency. Figuring out how to make information transparent, and understandable, will unlock unanticipated forms of value and help create the “multiplier effects” recently explained by President Obama in his defense of the bank bailout.

It’s likely that the best ideas that emerge from our networks will not be those decreed from on high by senior executives or government officials. Hence we also need to design processes that allow us to spot new patterns, encourage the evolution of new ideas, and help new ideas scale to the point where they have impact. This is a different approach to innovation and management than the one we have been reliant upon for the last hundred years. It will take some getting used to. Gary Hamel has lots to say about this in his book The Future of Management.

Rapid prototyping and “learning by making” is already an accepted strategy for effective innovation. For participatory systems, this is even more important because the complexity of the interactions cannot possibly be anticipated by even the smartest of plans. The reality is that these prototypes cannot live in the lab; they have to be let out into the wild. So, we need to start getting comfortable with letting others participate in our innovation activities. Of course this means that many of our accepted notions of IP and trade secrets go out of the window. This is very scary for the lawyers.

Over the coming months I am hoping to build a clearer and more precise set of design principles for participatory systems and I would welcome your ideas for new principles. I’d also appreciate your thoughts on whether this thesis makes any sense at all!

This is the fourth of a series of pieces originally posted at Fast Company.

In the U.K. in the 1940s, Sir William Beveridge designed what became known as the welfare state. In an ambitious program, the post-war Labor government attempted to put in place a series of services designed to ensure that the population of Britain could reliably receive high-quality public education, health care and other public services. Beveridge envisioned a system in which citizens participated directly in their own well-being. Instead, he helped create what he later described as a “culture of consumption” of public services.

Here in the U.S., a “culture of consumption” is exactly what we have when it comes to health care. The third-party payer system (whether it is private insurance or government) has created passive consumers of health-care services who have little motivation to engage, and bloated, bureaucratic service providers who have little motivation to become more efficient. It is difficult to envision any effective reform of our seemingly doomed system that does not demand much higher levels of engagement from all the participants in the system.

As individuals, we must become more engaged with our health, including living lives that promote health and wellness rather than encourage the onset of chronic disease. As corporations, we must consider the social contract we have that grants us permission to operate and extract profits. As health-care providers and insurers, we cannot continue to demand an ever-increasing percentage of the nation’s wealth without providing widespread and sustainable benefits. Instead of each remaining entrenched in our own view of the system, we must find ways to achieve what presumably is a shared goal of a healthy and productive society.

Fundamental to this collaboration is the creation of platforms that encourage participation. By this I don’t mean goading people into eating healthier food or taking more exercise. These may be beneficial outcomes of other more systemic innovations, but they are not, on their own, going to create the major shifts that we need.

Two platforms that are already under discussion and, in my opinion, offer huge potential for improved collaboration and participation, are e-medical records and health savings accounts (HSAs). With the risk of sounding like a health-care reform lobbyist, here is why I think they are important, but also why I think current ideas about these platforms run the risk of limiting their impact.

Electronic medical records offer the opportunity for each and every member of society to take control of his or her health. Instead of waiting for some symptom to drive us to the doctor, we can integrate information from a host of sources, including ever more pervasive monitoring technologies, to give us a picture of our health. This system could also provide goals, allow us to rate and recommend service providers, let us explore alternative means of achieving health goals, and enable us to create a personal network of health providers where each individual expert can interact with every other to ensure optimum outcomes.

E-medical records can do for health what Facebook is doing for the creation and maintenance of social groups. However, they can only do this if they are designed to serve the needs of every stakeholder, but particularly us as individual citizens. If, instead, they are designed merely to automate existing bureaucratic processes, or to protect the interests of incumbents–including promoting walled gardens of information–then we will miss a huge opportunity to change the way individuals engage with their health.

Open, connected e-medical records designed to support unknown future products and services should be the goal. Imagine an equivalent to the Apple application store where all kinds of health products and services are available and where it is easy for us to build our own unique and personal toolkit for being and staying healthy.

Just as important as the acquisition and management of health services is the question of who pays for them. There is obviously a need for some kind of risk sharing to make health care equally accessible to all. In our current system there is little to motivate individuals to alter their behavior in the interests of better health.

Corporate America has been far more effective at encouraging us to spend money on fashion and beauty or SUV’s than it has been at seducing us to focus on our health. While the introduction of Health Savings Accounts (HSA’s) was a result of attempts to limit rising corporate health-care costs and to give individuals the opportunity to do some of their own risk management, I think they offer an opportunity for the government to significantly change our attitudes towards health.

Existing insurers are understandably reluctant to offer to pay for new services that might have a long-term preventative benefits but are yet unproven, but governments do this kind of this all the time. If the rules around what is a legitimate expenditure for an HSA were open to experiment, I believe that a host of nutrition, fitness and other health-related products and services would emerge to compete with the existing health-care services we have today.

Ultimately, enlightened insurance companies would provide additional benefits to those who took control of their personal health, thus helping to accelerate the shift to health versus health care. Existing incumbents in the health-care industry would get more serious about offering scientifically proven offerings, such as nutrition monitoring, if they could see that there was a significant market for them. Since we, as individuals, would be paying for them with our own dollars those offerings would much more likely be cost efficient.

E-medical records and HSAs are both examples of platforms that encourage participation and that can support an eco-system of innovation that results in untold benefits. Are there other participation-based platforms that might have an impact on health in America?

This is the third of a series of pieces originally posted at Fast Company.

A significant difference between those of us fortunate to be living above the poverty line and those unfortunate enough to be at the “bottom of the pyramid” is that the ‘wealthy’ can afford to consume. Being a “useful” member of a consumer society requires the consumption of products and services not directly necessary to survival. The very poor do not generally have that choice.

I never really appreciated that distinction until I began to understand what was so powerful about the concept behind organizations like Kickstart.

Founded by Martin Fisher and Nick Moon, Kickstart designs and distributes hand and foot-operated water pumps in West Africa. Unlike many organizations dedicated to alleviating poverty in struggling areas, Kickstart does not give the pumps away: it sells them.

Fisher believes that farmers who pay for pumps will have a far greater commitment and will devote a far greater effort to making their fields produce than those who might have received one as a donation. Kickstart’s numbers are amazing. The return on investment for a smallholder farmer can be hundreds or even thousands of dollars in one year–enough to put children through school or build a house. Kickstart has created more than 80,000 new businesses and creates $88M a year in profits for African farmers.

What if every transaction was like that for rich and poor alike? What if we could measure profit across several dimensions, and we engaged in transactions or interactions that clearly provided a profit on one or more? For the poor, those profits are likely to remain in the realm of economic value or the satisfaction of basic needs. For the rest of us, those profits might more appropriately be measured along the dimensions I discussed in my last post: Learning to Measure Participation.

In the West we tend to make a strong distinction between consumption and investing. Consumption only creates value for the minority, while theoretically investing can create value for every investor. If we thought of every interaction as an investment with measurable returns, might we think and act very differently? For example I may pay to subscribe to a community that gave me access to a network of like-minded creative business executives if it meant I could have high quality conversations with that community. There are lots of examples of people doing this already such as the World Economic Forum.

I may take what I learn from my new- found network of creative business executives and develop it into a point of view that I can sell as part of a consulting offering to my clients. I am trading on my knowledge-based capital.

Of course if we think about it, these kinds of transactions and exchanges are going on all the time, except that we don’t keep very good track of them. As I argued in my last post, I think that in an information society we can keep track of them and hence measure the returns we get.

This has some interesting implications. First, we need better tools for keeping track of various kinds of value at an individual, organizational and societal level. This seems like an interesting opportunity for new kinds of products and services–a kind of economic dashboard. Second, this all relies on information transparency. If you can’t see the data, then you can’t measure the returns. We might ask our governments to focus less on information privacy, which seems like a lost cause to me, and more on information access. Why should a corporation know things about me that I don’t know about myself? I wonder whether we would have gotten into such deep trouble in the current recession if we had done a better job of information transparency?

Ultimately managing our own social networks, our reputations, and our influence, and leveraging our ideas won’t just be a cool pastime carried out by the technorati. It will be essential to survival in a participation economy.

This is the second of a series of pieces originally posted at Fast Company. It follows from an earlier post called A post consumption economy.

When I consider bidding for something on e-Bay, the first thing I do is check the reliability rating of the seller. When I want to meet a hard-to-reach executive, I try to establish a link through my network. When I consider which conference I will pay to attend, I choose TED because I know it will give me the most new ideas to feed off for the year.

Each of these qualities–reputation, access, and ideas–has real and tangible value to me and to the individual or institution that holds them. I am more likely to shop with an e-Bay vendor with a stellar rating. I am more likely to meet that executive if I have a large and well-maintained network. I am more likely to pay (a very large sum of money) to go to the conference with the most useful ideas. So why don’t we measure some of these things and have them constitute the picture we have of our personal, corporate or national wealth?

Some would argue that these are intangible and therefore hard to exchange, unlike cash or physical assets. I would argue that this is much less true in an information society where essentially everything is intangible. How can anything be less tangible than credit default swaps, and yet somehow we managed to exchange those, with admittedly disastrous consequences? With the information systems at our disposal, we can create measures of many of the things that facilitate modern society. Here is my list of things that I think might make up a networked, participation based economy.

Network value would describe the access that an individual or organization has to new ideas and opportunities. Brand value would describe reputation. Social value would measure influence. Knowledge would be measured through the number and quality of ideas and, finally, meaning measured through engagement. I suspect that we may have a hard time letting go of the measuring of cash, so I assume monetary value remains one of the dimensions of a participation economy. Personally, I think it would be an interesting thought experiment to imagine the first five replacing money rather than augmenting it.

Each type of value has to have some kind of measurable currency and the units of that currency presumably have to be exchangeable in some form. So in this framework monetary value has a measurable currency in the form of cash and has units such as dollars, euros or yuan. The measurable units of currency for networks might be connections, such the number of Linked-in connections I might have. For brand, reputation would be measured through ratings, just like e-Bay ratings, or the ranking of corporations that Interbrand publishes each year. The influence generated through social value might be measured by tracking conversations, much as the number of hits in a Google search is an indication of influence or importance. Identifying a universal measure for meaning might well be the most difficult, but corporations manage to measure employee engagement and media companies measure audience engagement. Somehow the stickiness of our experiences ought to be measurable and be an indication of how important to us any given experience might be. The more meaningful those experiences, the wealthier we should feel, and be.

Measuring and tracking all six of these may make for a complex economy, but unlike much of what we measure today, these are all relevant at an individual, organizational, or national scale. It seems to me we are more likely to want to participate in their nurturing and growth rather than leaving it to a few smart mathematicians on Wall Street.

Are these the right things to measure in an economy based on participation–and could their measurement result in some kind of sustainable system of growth and wealth creation?

Apologies in advance to anyone who actually understands economics who might be reading this. I don’t, and so much of what follows is probably incredibly naive.

I have been thinking quite a bit recently about the failure of the economy and whether we want it to recover to its pre-bust state. As I listen to the arguments for the various stimulus packages the main justification for distributing hundreds of billions of dollars is to get us to spend more and hence consume more. As a short term fix this may be okay but wasn’t it an unsustainable approach to growth and consumption that got us in to trouble in the first place? Can we really expect to spend our way out of this and somehow magically create a post-crisis economy that is sustainable?

If the financial crisis was caused by the over-consumption of things we couldn’t afford, cheap mortgages for instance, and the environmental crisis is being caused by the over-consumption of things we can’t afford, the earth’s resources, and the health crisis is being caused by the  over-consumption of things we can’t afford, calories, then it points towards there being a bit of a problem with endless consumption.

So what’s the alternative?

I think one problem is that our economy is too simple in what it measures. Industrialization created an economy that converts raw materials into goods that are sold for cash. The economy measures the amount of resource that is converted into cash and growth is dependent on doing more of that and doing it more efficiently. This may be appropriate when manufacturing physical products is the majority of humanity’s value-adding activity, which was the case for the first 150 years of the industrial revolution. It is not the case anymore.

Whether it is reputations created through brands, relationships created through services, knowledge created through information, or networks created through communication, there are many more forms of value that get created in our modern information society. And yet, our economy does not measure those in any meaningful way. If it did might we find that growth through consumption of resources was in fact being replaced by growth through participation in networks, relationships and experiences?

Take the music industry as an example. Measured the conventional way, the music economy has seen a massive destruction of value in the last ten years through the emergence of digital downloads and the internet. Put simply, the record companies are selling far fewer CD’s. If however we were to look at the industry differently might we find a different answer? If we could value the increase in the amount of music being listened to, or the social connections that sharing music creates, or the increase in the number of music creators, or the meaning that an individual gets from creating their own music would we find that instead of the destruction of value we had instead experienced a significant creation of value?

We get more of what we measure. If we measure consumption we will get more of it. If we measure participation we will get more of that and we might just find we are already far wealthier than we realize, or perhaps far poorer. More importantly if our economy measured different types of value we could focus on designing things that created growth without automatically requiring that we consume more stuff.

Sir William Beveridge initiated the creation of Great Britain’s welfare state with his first report in 1942. He defined an approach to public services that was intended to create an active collaboration between citizen and state. By the time of his third report in 1948 he expressed the concern that the new education, health and social services were encouraging citizens to become passive consumers instead of active participants. Sixty years later Hilary Cottam, Hugo Manassei and Charlie Leadbeater of Participle are looking to change that.

Their mission statement is titled Beveridge 4.0 and you can download it from their site. Participle is now working on a series of projects including ones around ageing and youth. A project called Southwark Circle focused on increasing the quality of life of older people and has resulted in the launch of a social enterprise to deliver new services in a sustainable way.

Hilary showed another project on dealing with the loneliness of older people at Davos done for Westminster Council in London and, as with the Southwark Circle project, it was exciting to see robust business model ideas emerging along with new ideas for services.

This approach to redesigning public services is a great example of design thinking in the social arena and it seems to me it could be applied well beyond the UK even in countries that do not have the heritage of Sir William Beveridge.

I am listening to Paul Saffo talk on the KQED program Forum. He is talking about what we might see coming up in the next few years. He discusses what he calls the ‘Creator Economy’ based around the simultaneous creation and consumption of value. He thinks of this as the evolution of what was once the producer economy, where scarcity was the controlling factor, and then became the consumer economy, where sales and marketing was the dominant idea. I have been wondering about this idea recently and see it as a natural extension of Robert Wright’s Non-Zero thesis. As our communication networks grow so does our ability to create new kinds of value.

The early examples are Google, Facebook, Twitter, Wikipedia, Threadless. These all rely on their ability to generate participation and through that create individual and group value. I wonder what it takes for more of our physical products and services to follow this same path?

Saffo talks about everything from new religions, the various dialects of capitalism, the future of robots and the winners and losers from global warming. It is worth checking out. Here is the link.