Trading down

Posted in finance by thenextwavefutures on 3 February, 2016


The release of The Big Short, which I saw last week, gives me a moment to connect it with another film that bookends the long financial crisis that started in the 1980s. I watched Trading Places again recently 30 years after it was released, and with the benefit of hindsight it seems like a harbinger for the “gilded age” and its less gilded aftermath.


William Morris and David Gentleman

Posted in design, politics by thenextwavefutures on 20 December, 2015

Charing Cross mural, by David Gentleman. Image:

The distinguished artist and illustrator David Gentleman gave this year’s Kelmscott’s Lecture last month, and he used the occasion to look back at his own career for points of contact with William Morris. I thought I knew his work quite well (when I was a television producer I worked briefly with him on a short film based on his book A Special Relationship) but the range of the work he shared during the lecture was, frankly, stunning. Everything from a huge number of stamps to the Penguin New Shakespeare covers to Charing Cross Station to political posters to his more conventional illustrated books.

Listening to his talk, I think I discerned three themes that Morris would have recognised.


Trapped in the moment of birth

Posted in organisational, politics, security by thenextwavefutures on 30 November, 2015

Source: Wikimedia Commons/Norwegian Military

I have a friend who was an historian before he became a health service manager, and he wrote a paper (which has never been put online, as far as I can see) which argued that the NHS had been trapped in its moment of birth. By that he meant that it never escaped the contradictions that had to be resolved to create it. We can see the same thing in the current Labour Party split over Syria.


Futures and metaphors

Posted in books, future by thenextwavefutures on 31 October, 2015

CLA2I reviewed CLA 2.0, the second causal layered analysis reader, for the APF’s newsletter, Compass, and the full review is attached as a PDF below. To declare an interest: I have a co-written chapter (with Wendy Schultz) in the reader, based on our article [opens pdf] on comparative scenarios methods in the Journal of Futures Studies.

The layers of Causal Layered Analysis are litanies, systems, worldviews and metaphors. One of the things reading CLA 2.0 for the review made me realise was the importance of metaphors in influencing the impact of futures work. So I’m sharing that part of the review here.

The realm of poetry

The metaphor layer of Causal Layered Analysis, in my experience, is at once the most difficult and most distinctive part of CLA. Reassuringly, at least personally, I found reading the case studies that it wasn’t just me: a number of these case studies (without pointing fingers; this is difficult work) didn’t get close when it came to the metaphor layer. The reason metaphors are distinctive is because they tap a part of the mind “belonging historically to the realm of poetry, stories, fables and fictions,” as Lynda Shevellar writes, a part that other futures processes don’t reach. But metaphors connect futures to power and its critiques.

Ian Lowe picks up on this in a reflective essay on the history of Limits to Growth and climate change, which deploys CLA to reconstruct this history as a cultural history:

“Causal layered analysis … suggests there is little point in refining the science or improving the mathematical proofs for these serious problems. Effective responses are only likely to be socially acceptable and politically practicable if society embraces new metaphors.”

The pseudonymous Saliv Ben Larif broadens this in a rich chapter specifically about metaphor:

Metaphors create reality

“As Lakoff and Johnson note, when governments, media and other powerful groups use metaphors it has implications for policy, legislation and public opinion: ‘The people who get to impose their metaphors on the culture get to define what we consider to be true.’ … Thus, metaphors not only describe reality but create it. In turn, historical and social contexts also determine what kind of metaphors gain currency and become ‘entrenched.’”

In our modest pilot research project, Wendy Schultz and I found that scenarios developed from worldviews—where the metaphorical layer remained too difficult to see—seemed not to be poorer than those with added metaphor. But reading several of these essays, including Larif’s, I wonder now if the impact of the work is greater when the metaphor layer is fully developed, in terms of constructing preferred futures that challenge the present. Larif’s essay can be read as a first set of notes towards helping facilitators, and groups, develop a process for doing this more systematically.

Sohail Inayatuallh observes in an introductory chapter here that as CLA has evolved, so “the post-structural toolbox” that provided the context for it “has seen little use or evolution.” He makes the important point that the elements within that toolbox—deconstruction, genealogy, distancing, alternative pasts and futures and reordering knowledge—are essential in ensuring that CLA remains open, and therefore able to evolve.

I think he is worrying too much here. Effectively what CLA does is code these tools into practice through a Max Boisot-like Social Learning Cycle. To take just one example from many in the book, Robert Burke writes,

“The CLA process guided the participants into the realization that addressing their worldview and its underlying myths and metaphors had the promise of finding solutions to those problems.”

My review is here: Curry_CLA20Review_APFCompass_Oct15_Final

CLA 2.0 can be bought through the metafutures website bookstore.

The human face of High Value Work

Posted in innovation, trends, work by thenextwavefutures on 16 October, 2015

This is a version of a talk I gave in Helsinki at Teknologia ‘15, based on the work on High Value Work that I have have done at The Futures Company with the Association of Finnish Work.

The Futures Company has been collaborating with the Association of Finnish Work for more than eighteen months on the idea of “High Value Work”. We define this as work that is productive (it creates new value); that is durable (it creates value over time); and work that is inclusive (it spreads value beyond the business — or the C-suite. This combination, based on the emerging post-crisis literature, also creates work that is meaningful, for employees and customers.

AFW_high value work agenda

Slide 1: high value work

In the first of our four reports on High Value Work, we identified four routes to it. These are service innovation, based on a full understanding of the customer and their needs; value in authenticity, based on on a full understanding of cultural context; resource innovation, based on a full understanding of material flows; and rich knowledge, based on a full understanding of the technical knowledge held inside the organisation and a method to capture and codify it.

High value businesses combine these; for example, mastery of resource innovation often creates new technical capabilities that lead to new forms of rich knowledge.

Human capabilities

Slide 2: Theory X and Y revisited

What striking about these routes is that they have human capabilities at their heart. Service innovation and value in authenticity are based on relationships, whether human or cultural, while resource innovation and rich knowledge are based on technical processes and technical understanding. People, in short, are at the heart of value.

Of course, this is a familiar, even long-running, argument about humans and work. Douglas McGregor outlined Theory X and Theory Y some fifty years ago: Theory X, that humans were unwilling workers who need to be disciplined for the workplace, Theory Y, that humans wanted to be fulfilled through purposeful work but that management systems often got in the way. More recently, Matthew Stewart added an axis — T and U — which is about conflict. T, for Tragic, sees conflict as inevitable and irresolvable, U, for Utopia, sees conflict as coming from misunderstandings that can be resolved.

These days, there is barely a human resources professional who does not at least pay lip service to Stewart’s Freedom Lovers quadrant, and there are businesses that are trying to live it, none more so that the US online shoe retailer Zappo’s. But there are plenty of businesses that are camped on the left hand side of the axis. Zappo’s parent, Amazon, for example, has anchored itself strongly in the XT “Controllers” quadrant.

High value companies

In our research, we found different examples of companies operating in the world of High Value Work. The Spanish supermarket Mercadona, for example, pays its staff above average and trains them extensively, while also expecting them to be able to perform tasks right across the retail environment as needed. It also asks its customers “why” they bought things as well as capturing what they bought, and has a highly effective system for trialling and rolling out innovation ideas. It outperforms its sector.

The aero engine business Rolls Royce no longer sells aero engines, but sells flying hours. The performance of every Rolls Royce engine in flight is monitored by its data centre in Derby in the English Midlands, and information is sent to maintenance centres as to maintenance tasks to keep the engine running at 100%. The Finnish lift manufacturer Kone monitors its lifts in service in a similar way. Both companies have wrapped a data layer around their engineering products that helps customers get the most out of what they have bought, and removes surprises.

In England’s pottery district, in Stoke on Trent, the sector is using a combination of design, technology and authenticity to improve its profitability and rebuild employment levels. Employment fell from around 50,000 in 1979 to 10,000 in 2008. During that time, much of that production was outsourced to Asia. Now, they are discovering that the brand (Wedgwood, for example) is not enough; customers want a “Made in England” stamp as well. Gross value added has increased by 45% since 2008.

And Gore Tex, something of a poster child in these matters, has used the expertise and curiosity of the chemists it employs to develop the potential of its compound PTFE. It is best known for its waterproof and breathable fabrics and outdoor wear, but it is a market leader in the medical sector, in dental flossing, and in the guitar strings market. Like Mercadona, it has a well-developed innovation programme within the company, and this encourages its staff to experiment with new uses for the compound.

People drive value

Slide 3: The increasing value of relationships

Increasingly business research is finding that people drive value. Christof Binder and Dominique Hanssens published research based on analysing M&A data from 6,000 transactions over 10 years, In that time, they found that the value of brand had halved as a share of transacton value, while customer value had doubled. Of course, people have criticised the research (the branding business is large and valuable), and it is hard to disentangle brand and customer research, but Futures Company data also suggests that the value of brands is declining in the minds of customers.

In their study of high growth businesses, The Three Rules, Michael Raynor and Ahmed Mumtaz found through analysis of thousands of businesses over 45 years, including an average growth control group, that only two factors distinguished the performance of high growth businesses. They prioritised revenues over costs, and put “better” before “cheaper.” An algorithm can cut costs and calculate the cheapest way to do something; it takes people to grow revenues and make a better product or service.

Similarly, in research done in Finland, with a sample of 10,000 businesses, Markku Kesti has found that high performing firms generate 2.5 times as much revenue per head as low performing firms. The difference? They also spend three times as much on training and technical support.

Better employee relationships

Businesses which do meaningful work also have better employee relationships: purpose matters. In the latest Deloitte Millennials Survey, respondents were asked about the gap between purpose and impact. In many ways, this is an unrepresentative sample. Deloitte research 7,800 millennials worldwide. Respondents needed to have a college degree, to work in the private sector, and for businesses of more than 100 people.

Slide 4: the Millennials are coming. Data: Deloitte

When asked about the gap between Purpose and Impact, or what their businesses did and what they talked about, the respondents found that they fell short on “improving society”, on “social and environmental benefits”, and on “enhancing employee livelihoods,” while over-delivering on “profit generation” and “wealth creation.” These underlying attitudes are one of the reasons that B-corps businesses and social enterprises, which have their social or public purpose written into their company articles, are becoming an employer of choice for younger workers.

The same Deloitte’s research also found that — in the view of respondents — businesses with strong purpose tended to have good financial performance, high employee satisfaction, and growing employee numbers. Again, this chimes with Futures Company data, from its Global MONITOR research, that shows that consumers also appreciate companies that have a clear purpose and values.

Asset stripping

These are significant changes in attitudes, so it is worth pausing to ask what happened. At one level we seem to be experiencing a long term secular shift (pdf) towards “post-materialist” values, which place a higher priority on intrinsic values than on extrinsic values: who you are and how you act are more important than what you own or what you buy. But this has been sharpened by our experience of the corporate world over the past thirty years, especially in the Anglo-American business cultures. Oliver Stone’s 1987 film Wall Street captured this corporate ethic well, with its story of financier Gordon Gekko, played by Michael Douglas, buying out a airline so he could asset-strip it.

The 1990s saw this process systematised by businesses and consultants, best represented by Business Process Re-engineering [BPR], developed by Michael Hammer and James Champy. BPR claimed that it could improve workflows, improve customer service, and increase competitiveness. One of the outcomes of BPR, whatever the rhetoric, was redundancies. It was designed to streamline processes and get rid of those who were not contributing to them. With hindsight, one of the inventors thinks it succeeded 50% of the time, while the other puts the success rate at 30%. The reason for this abysmal success rate: it seems that while chopping out apparently ineffective workers, those who moved knowledge around the business (whatever their job title) were removed, making the business more dysfunctional as well as leaner.

The song-writer Allen Toussaint has a line that says, “The same dudes you misuse on the way up/ You might meet up on the way down.” For the 21st century business, it seems that on the way back down they are meeting the children of those they made redundant in the 1980s and 1990s.

Corporate power

It is also possible that the conditions that allowed corporations so much power over labour were a particular set of circumstances, caused by a sudden influx of workers into the global labour pool.

Slide 5: The declining global labour market

Recent Morgan Stanley research suggests that the proportion of the world population who were of working age increased from 55% to 65% between the mid-1960s and the turn of the century. But now that the rate of increase in the global population is slowing, fewer people are coming into the workforce than are leaving it.

At the same time, despite widespread fears about technological unemployment, there is credible economic research that argues that the worst of this is already over. According to research done by David Autor, the impact of IT during the last twenty years was to eliminate “routine jobs” in the economy. At the same time, demand for both “knowledge jobs” and “manual jobs” was increasing. However, in the case of manual jobs, demand for those jobs was not increasing fast enough to absorb the displaced routine workers. But, as with population growth, the worst of that IT displacement is now over, according to Autor. And increasingly arguments about technology and work are about “augmented work,” in which technology complements humans. We are also becoming clearer about the limits of technology. As the tech VC Peter Thiel says in his book, Zero to One,

Doctors need to marry clinical understanding with an ability to communicate it to non-expert patients. And good teachers aren’t just experts in their disciplines: they must also understand how to tailor their instruction different individuals’ interests and learning styles. Computers might be able to do some of these tasks, but they can’t combine them effectively.

It’s important to note that technology does not vanish in the world of the high value businesses. Instead it is deployed in such a way that workers can add more value where it matters. Mercadona, for example, invests heavily in stock management systems; Rolls Royce in data systems. In one of our High Value Work reports, we called this “Lean in the right places.”

Investing in people has meant that Mercadona has had to stay lean elsewhere in the business to maintain its low prices. As a result, its warehouses and stocking systems were automated before any of their competitors.

Increasing value competitiveness

So high value work is about increasing value competitiveness, and the secret to success in this is in the heart and heads (and hands) of the workforce. There is a telling contrast in the United States between Costco and Walmart. While they are not identical businesses — they have slightly different business models — they nonetheless fish in the same labour pools. Costco pays substantially more than Walmart, and trains its staff far more extensively. Costco is doing well, while Walmart is struggling, Costco’s workers stay with the business for longer, and difference in performance seems to come down to the knowledge capital that Costco creates in its workers through its High Value Work strategy.

The cost of paying decent wages is also over-estimated. The UK division of Lidl recently announced that it will pay all of its UK staff as a minimum the Full Living Wage. The cost to the business is a rounding error: an increase of £9 million in wages on UK turnover of £4 billion.

There’s a famous saying in the knowledge world, by Dave Snowden, that “Knowledge can only be volunteered, it cannot be conscripted”. One of the distinctive features of the “Freedom Lover” businesses in the top-left UY quadrant is that their workers are volunteers, not conscripts. High Value Work, in turn, creates a virtuous circle in which productivity increases, investment increases, and the social impact of the businesses increases. Everyone gains when businesses compete on value instead of cost.

The High Value Work reports can be found at The Futures Company and the Association of Finnish Work. They comprise the Agenda, the Business Briefing (for companies), the Manifesto (for governments and public agencies) and a report on High Value Employment (for employees). This post has also been posted on Medium.

Futures methods

Posted in future, methods by thenextwavefutures on 15 October, 2015

3650558_origIn my role as editor of Compass, the newsletter of the Association of Professional Futurists, I’ve just put together an anthology on methods, based on the contributions to Compass from APF members and collaborators over the past few years. The result is now available to download on the APF’s website. Compass is normally a membership-only newsletter, but we’ve decided to make this edition available more widely. I think it’s a pretty good collection of some of the newer and emerging methods in the field. Each article (or interview) is by (or with) someone involved in the development of each method.

This is the introduction I wrote for the Anthology:

Where practice and theory meet, innovation often follows. Practitioners resolve difficulties in practice by re-imagining what they do, and developing new approaches. But invention on its own is not enough. To stick, it needs to be reconnected to theory. The why is as important as the what.

This is the story of many of the new and emerging methods collected in this special anthology of articles published first in the APF’s members’ newsletter, Compass. It brings together in one place material on methods published in Compass by APF members and their colleagues and collaborators.

It is a strong collection. Some of these articles are the first published accounts of methods that have real value to futures practice, such as the reframing of wildcards, VERGE, or the Mānoa scenarios method.

Some are accounts of methods that have been documented elsewhere, but in a more academic context.

But all—including the interviews—are intended to be used. These accounts are designed to inspire people to try these approaches for themselves.

Here’s the list of contents:

  • Oliver Markley’s new taxonomy of wild card, revised and updated for this edition
  • Richard Lum on VERGE
  • Bill Sharpe on Three Horizons
  • Tony Hodgson on the World Game
  • Terry Grim interviewed on the Foresight Maturity Model
  • Stuart Candy on The Thing From The Future – article expanded for this edition
  • Wendy Schultz on the Manoa Scenarios method
  • Dylan Hendricks interviewed on the Systems Methodology Toolkit.

It can be downloaded here.

The image at the top of the post is courtesy of Triarchy Press, and is used with thanks.

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Britain’s forty year political crises

Posted in long waves, politics by thenextwavefutures on 13 September, 2015
Photo by DonkeyHotey on Flickr, CC BY-SA 2.0

Photo by DonkeyHotey on Flickr, CC BY-SA 2.0

One of the striking things about much of the commentary on Jeremy Corbyn’s Labour leadership election campaign and victory was the short-term nature of the historical thinking. Mostly, it seems, political memories stop in the early 1980s, when current 60-somethings started work. And some of the political prognosis has bordered on hysteria.

There’s a longer view that might help people understand what is happening.

The political scientist David Runciman has observed that Britain has had political crises every 40 years, for more than a century now. There was one in the 1890s, one in the 1930s, one in the 1970s, and we’re certainly living through one now.


Migrants and refugees and Paddington Bear

Posted in migration, politics by thenextwavefutures on 5 September, 2015

Source: Wikipedia

What the film ‘Paddington’ tells us about the language of migration

I’m certainly not the first person to observe that the film Paddington is a story about migrants and refugees. I watched the film recently and it spoons it on with thick dollops of marmalade: Paddington Bear, who stowed away on a boat, Gruber, the antiquarian, who arrived in London on the kindertransport, and the calypso band, which functions as a kind of Greek chorus, who would have arrived on the SS Windrush and its successors.

But my interest in this story this week is the way in which we have developed a complex set of taxonomies about people who leave their original countries. One of the elements of the Twitter conversation this week, after the body of the three year old Syrian boy Aylan Kurdi was found on a Greek beach, was an attempt to shift the language about the Syrian tragedy and those fleeing it, from “migrants” to “refugees.”


Gods of Metal

Posted in politics, security by thenextwavefutures on 2 September, 2015

The reporter Eric Schlosser is perhaps best known for his book Fast Food Nation, but for the past few years he has specialised in researching the nuclear industry, and how we look after our Cold War nuclear legacy, which has left piles of enriched uranium and plutonium in hundreds of locations across the globe. The answer: not well.

Much of this was covered in his 2013 book Command and Control. Now, in a smart piece of publishing, Penguin has published Gods of Metal, an updated novella length (and novella priced) version of his long New Yorker article on the anti-nuclear movement Plowshares, and its break-in at nuclear facility Y-12, at Oak Ridge, Tenneseee. Penguin has also republished in the same format and price John Hersey’s original 1946 account of the atomic bombing of Hiroshima.


Designing for sociability

Posted in cities, design by thenextwavefutures on 26 August, 2015

British public space increasingly seems to be governed by the poetics of the Poor Law, with designers trying to find ways of preventing people stopping and socialising, at least unless they’re willing to pay Starbucks for the price of a coffee. The main – and unspoken – purpose, of course, is to prevent the poor (and perhaps the young) from stopping and socialising, lest they lower the tone of the place, and its asset value.

It can only be a matter of time in England’s unkind political culture before one of Theresa May’s Special Advisers proposes whipping vagrants and ne’er-do-wells to the parish boundary before then fulminating that the Human Rights Act prevents them from introducing this essential reform.


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