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Thanks, Detroit

I have much to be thankful for -- certainly my family, friends, and the opportunity to do what I love -- but let me single out a city that I'm thankful to see on the rise.  

Forbes recently listed the places where young people are happiest.  By grading cities on economic factors like compensation and benefits as well as non-economic factors like work-life balance, they gave each city a kind of overall "grade point average."  The cities grading out the highest were Redmond, WA (been there), Ft. Lauderdale (done that, a long time ago), and Orlando (been and done more recently -- but with my wife and kids).

But another top-ten city made me smile:  Detroit, at #6.  It's a happier place to live than Chicago, San Francisco, and LA.

Why am I gratified to see Detroit included among the winners?

Teaching at the Ross School of Business, University of Michigan, in Ann Arbor, forty miles away from Detroit, I've seen a parade of talented students come to town, get their education, and take their skills and training elsewhere.  Students are inspired by the "change the world through business" courses I teach, but when it comes to applying what they've learned in the real world, they've preferred jobs in India, Africa, or Latin America.

That appears to be changing.

Entrepreneurial efforts are  harnessing the city's energy.  An organization that I've worked with, Ascension Health, the largest nonprofit healthcare system in the country, has launched Enterprising Health, a business-development organization aimed at identifying, supporting, and launching "bottom-up" enterprises that improve the health and lives of urban dwellers. 

Among the social enterprises being supported: businesses that use games or sports to encourage and educate about health; a fresh food "dollar store"; and an activity that delivers health services to the poor where they naturally congregate, thus encouraging health care among a group that is often excluded from, and suspicious of, traditional health care delivery.

Visionary thinkers like Josh Linkner, Dan Gilbert, Brian Hermelin, and Earvin (Magic) Johnson have a larger scale vision to reclaim, re-define, and re-brand the city. Though not everything they touch turns to gold (Gilbert owns the Cleveland Cavaliers), the new-age venture capital firm they've formed, Detroit Venture Partners, plans to hit a homerun in Detroit (yes, a metaphorical non sequitur -- maybe because I've got half an ear on a soccer game on TV in the other room).

DVP's culture includes its Big 11, with "passion" topping the list:

1. PASSION FIRST
  • Build something larger than yourself
  • Stay close to your purpose and "why"
  • Rebuild Detroit
  • Drive social change


The energy of change and the opportunity to re-create a city (and create a great life)  have not been lost on students.

In a class I'm teaching to undergrad business students, Base of the Pyramid: Business Innovation for Solving Society's Problems, students work on addressing real, vexing societal problems.  In previous years, the kinds of problems students have clamored to work on have mainly been in the developing world, and this year, too, students are working on problems in settings including Haiti, Liberia, and Honduras.  

But fully half of the students this year chose instead to work on problems affecting Detroit:  health care, education, business and economic development, and food deserts.  (Watch this space as the Impact / Call to Action videos they're creating are completed.)

At the graduate school level, the Revitalization and Business Club at the University of Michigan is planning its second annual conference on using business as a force for positive societal change.  The club recognizes the overlapping desires of graduate students of all stripes -- business, policy, urban planning, and other disciplines -- to explore how innovation and entrepreneurship can create a vibrant, inclusive city.

The jury on Detroit's growth and revitalization is still out.  Richard Florida, the urban scholar and commentator, contends growth will come from increased productivity of the population rather than strategic contraction.  

Economic development today is about literally hundreds and thousands of little things that you do slowly and cumulatively at the neighborhood and community level. Building partnerships involving universities, building clusters, many, many small things that accumulate, that create some economic viability. ... That's what Detroit has to do and [it] all the assets ... It has spectacular universities like Wayne State, it has the Cranbrook Academy, the center of modern design, industrial design, and furniture design. It has two of the greatest research universities on the planet, very close by at Ann Arbor and Lansing, the University of Michigan and Michigan State. And it has a fabulous design/architecture community, creative energy in its low income communities, a tremendous, really resilient African-American community, a phenomenal Arabic community that will do anything to save and pitch in... [and] it has this legacy of musical talent that is just incredible and it continues to propulsively create new musical styles. 

All of those things add up to a kind of creativity and innovation being in Detroit's DNA. But [sustainable growth is] not going to come from a federal bail-out from the auto industry, it's not going to come from a big casino and convention and stadium project, it's going to come from really the small-scale efforts when people are empowered, where neighborhoods are empowered.

And that, it seems to me, is what we are seeing beginning to take hold.

Thanks, Detroit.


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Unbuilding Complexity

Building blocks.  I'm fascinated by building blocks. Without them, complexity is impossible. But recently, I've been toying with the idea of "unbuilding blocks" -- elements or processes that can help disassemble entrenched activities, processes, or institutions that are causing the world difficulty.

An arch depends on its keystone for its strength and stability. Similarly, activities, processes, and institutions  -- with all their function and dysfunction  -- might be altered for societal benefit by removing key building blocks, even if we desire fundamental change. How do we remove the building blocks that are producing climatic disaster?  That have created so many "have nots"?  That leave parts of the world centuries behind others?

Musings:

It's 5 a.m., I've walked our dog, made some coffee, and am easing into the day (too early! can't sleep!) with email.  Something drew me to a message showing my LinkedIn Updates, the kind of thing I usually trash without reading, but today I looked at the Updates and saw a post by someone I've met once and don't actively follow (thanks Lev Gonick) -- a link for a crowd-sourced film.

A 4-minute video, a trailer for the longer (still short) film, Connected, begins with an explanation:

On the 4th of July, 2011,
we posted a request online
to #participate in a short film
about #interdependence

Video makers and artists around the world submitted work to illustrate ideas in the film's script.  Online voting determined which snippets made it.   The trailer is being crowd-translated into 100 languages.  So, who made this film?  A bunch of crowdsourcing strangers.














The film has not hit Ann Arbor, where I live, and I didn't make it to Cannes this year.  (Of course, I've never made it to Cannes.)  So I am guessing based the film's website and various online reviews what it's about.  I'm also guessing I'll like it.  A lot.

Fast Company describes this film by Tiffany Shlain as illustrating

"the power of digital connectivity and access to knowledge ... [and the] connectedness between major issues like the environment, consumption, technology, human rights, and the global economy [and] a personal journey of discovery about connections in [Shlain's] own life. The film shows the beauty and tragedy of human endeavor and champions personal connection and how the "power of one" has become digitally exponential."
"Digitally exponential" sounds to me like The Onion describing how to approach a difficult math problem; but never mind, I think I get the drift:  That somehow the right email found me this morning as I'm thinking about how to teach fifty odd students (fifty odd means "approximately fifty") to create change through video.  In our (my) wildest dreams, we'll go viral.  I've never done anything like this before, and neither have they.

The unexpected email, on a topic precisely relevant to my needs, even directing me to a film when I'm wondering what a film about changing the world might look like suggests that our new "connecting technologies" create serendipitous events like these, and far more often than ever before.  And as they do, our interdependence can create something bigger than any of us is even remotely capable of as an individuals.  People are smart. Groups, especially when diverse, are crowd-smart.

Connecting with others can create communal actions in the Arab world powerful enough to topple regimes, so what else might it do? Might it change what what we buy (and so what is produced), what we tolerate and what we won't (to force legislators' hands), how we live our lives (with the impact that has on others around the globe)? Can connecting dismantle building blocks?   

Our progress as a civilization has come from creating an elaborate technological and social edifice, based on simple building blocks at first such as wheels and chieftans, and now involving highly sophisticated building blocks like computer chips and multinational corporations.  

At heart, we are social animals who want, even need, to communicate.  With our family, our tribe, our community -- even as our community includes crowds that we've never met in person. Through our communications, we might begin to remove building blocks.  

Can we create some new unbuilding blocks to create a world that is not racing towards a cliff?  Maybe Tiffany Shlain's movie will provide some answers when I see it.   It's certainly gotten my day going at an early hour.
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Physics Pop Quiz.

Can something be in two places at the same time?
The answer from advanced physics is a clear (if counter-intuitive) Yes.

Can you create something from nothing?
We all know that you can’t — except scientists explain that you can, by taking a vacuum (nothing) and blasting it into its dense, complementary matter - anti-matter components (lots of something).


Can these esoteric observations help us address societal problems - problems operating on the scale of billions of people, not the sub-atomic level of quantum physics?
As metaphors and guiding questions, yes.

Let’s start with money. As a physical medium, if I’ve got a $5 bill in my wallet, it can’t be in yours at the same time. But, as a representation of financial value, my five dollars can be many places at once. If I deposit it in a bank, it’s mine, even if the bank considers it theirs and then uses it to make five $1 loans (meaning “my” five dollars is now in seven places at once).

A loan is the most basic financial derivative, a building block that, in effect, creates money and puts it into the hands of those who need it and can use it to create value. (This is not to overlook derivative’s frightening power and potential destructiveness. Derivatives too numerous and too complicated to describe account for more than twenty times the amount of money in the world’s annual economy, and those tied to housing values brought financial chaos to the world when they imploded.)

But let’s not forget the fundamental lesson: loans let us store the same medium of value in several places at the same time. And these loans need not be money. For instance, Impact Everyday is creating a credit card that lets you loan it the “points” your card earns, whose cash value is then used to fund renewable energy projects. Where do your points “live?” With you, with the card company, or with the solar farm you’re supporting?   It’s not a stretch to say they live each of those places at once.

Or consider your time.  We know that we can’t get it back, but we can come awfully close when we bank it. Time banks create non-monetary markets, often in income-strapped communities, where a unit of effort I perform (say, an hour’s worth of computer programming) is banked until I redeem it (maybe for an hour’s worth of repairs on my car). In obvious ways, this non-cash economy creates a powerful means for putting idle time to productive use and bootstrapping economic activity.

Lent time, as with lent money (credit card points, or other items of tangible value), unlocks value.  In different ways, each transforms potential into value that can help people and communities right now. Dare we say, being in two places at once creates something from nothing?

I consider these examples of Big Picture Design. A principle of Big Picture Design is never to let a good idea go to waste. Good ideas are everywhere, often requiring nothing more than imagination to be applied in a new context. If you can lend money, why not credit card points, time, airline miles, equipment, … ?

Big Picture Design also teaches us to consider everything in developing a solution to a societal problem. By considering everything, not just features that first come to mind, solutions are more comprehensive—and better.

Wal-Mart, poster child for much that needs changing (especially in the area of labor rights), has also jumped to the forefront of the environmental movement by (finally) considering everything involved in its products’ manufacture and delivery. A company that values low costs over everything else discovered it had ignored waste. Once it recognized this oversight, it eliminated the water in its gallon-sized laundry detergent, producing a much smaller container that eliminated three-fourths of the packaging, weight, shipping costs, and shelf space associated with the product. Customers got a less expensive, more convenient product that cleaned clothes equally well. Wal-Mart made more money.

From 2005 to 2008, Wal-Mart shifted its entire detergent inventory to small-size containers, pulling the industry’s production (one billion units) along with it. During this period, Wal-Mart’s actions alone caused 95 million fewer pounds of resin from petroleum to be used, 400 million fewer gallons of water, and more than 60,000 fewer tons of cardboard. The reduction in weight resulted in less fuel being consumed by its fleet of trucks, saving the company money and keeping 11 million pounds of CO2 out of the atmosphere

Wal-Mart also learned that, while it had believed it had nothing in common with soft-headed environmentalists, they both wanted the same outcome. Whether driven by lower costs (Wal-Mart) or a sustainable planet (environmentalists), finding common cause was the best way forward.

To both, waste was the enemy. While it may have appeared that nothing could be gained from Wal-Mart and environmentalists joining forces, this nothing became something. A big, profitable, sustainable something.

Evolution and Invention


How can we make sense of all the changes taking place around us?  More importantly, how can we create the change necessary to attack our most pressing societal problems?

 

Short answer:  building blocks.  I will return to this theme again and again in other posts.  But for now: a preview.

 

Eric Beinhocker's Origin of Wealth leans on the theory of complex systems to show how, little by little, a small thing like a wheel gets incorporated into increasingly complex components and systems.  First we see carts, then bikes, then the Audobon.  More building blocks mean more complex combinations built from them.  And these combinations give rise to greater variety, greater sophistication, and greater wealth.

 

Brian Arthur's The Nature of Technology provides a related account, up to a point, but emphasizes how change is not always gradual and continuous.  For instance, piston-powered propeller airplanes began as rather simple machines and performed well for short flights.  But when these planes began to fly at higher speeds at higher altitudes, their limitations became evident.  To address them, engineers began making a series of increasingly complicated modifications until, finally, an entirely new means of powering a plane appeared:  the first jet-engine.  This invention was not further evolution of the piston-propeller arrangement but, instead, was based on entirely different principles.  It was much simpler too, the original prototype of the jet engine having just one moving part!

 

In my book, Design Your Life, Change the World: Your Path as a Social Entrepreneur, I have examined how similar ideas apply to social enterprises.  Often, social enterprises evolve gradually, becoming increasingly effective as they become ever more complex.   As an illustration:  Once, local banks were as much fixtures of communities as mom and pop grocery stores (been to one of those recently?).  Over time, they began to add remote branches and, as regulation allowed, expanded their reach to increasingly distant locales.  These changes were intended to create more efficiency, more competition, and more choice.

 

Overseas, a similar evolution began to include poorer and poorer customers as first, nonprofit organizations and later, for-profit banks began to offer microcredit and other microfinance offerings.  Still, microfinance excludes ten times as many customers as it serves.  Poor clients are expensive to serve, even more so when they are at a distance.  Branches are too expensive in many parts of the world.

 

Yet in Kenya, an invention has dramatically changed the situation.  Much like the jet-engine, which overcame the deficiencies of propeller planes by incorporating a completely new principle, M-Pesa overcame financial exclusion, especially created by distance, by creating an alternative form of money.  Kenyans buy this currency, which is installed on their cell phones.   This e-currency can then be safely, conveniently, and affordably transferred to someone else by sending a financially secure text message.  Urban workers can remit money to relatives in the countryside.  Micro-entrepreneurs can buy trinkets or agricultural products to resell without the insecurity of relying on bus drivers to transport their payments or the inconvenience of taking the bus to make payments themselves.


 

 

 

How successful is M-Pesa?  Over half of all Kenyans use it, nearly three times as many as have bank accounts.  M-Pesa has created similar services in Tanzania, Afghanistan, and South Africa.  It recently created a partnership with Western Union that allows funds transfers to Kenyan M-Pesa customers from 45 countries. 

 

Is this a "one-off," relevant only to citizens without ready access to banking services?  Not at all.  Mobile wallets (as they are known) are moving "up market" to the United States and the rest of the developed world.  Tech stalwarts (Apple, Google, and others), mobile carriers (including Deutsche Telecom, China Unicom, Verizon), and financial institutions and credit card companies (among them Chase and Visa) are all exploring how they can capture this huge, potential market.

 

What was created by the invention of alternative currency has begun to evolve.

 

Let's consider this illustration from an evolutionary perspective.

 

The banking system changed in ways that resemble biological evolution.  New variations (say, bank branches) are tested for their performance (would people use them?) and, when successful, they proliferate. 

 

Producing societal-level change isn't under the control of any single organization.  Consider the environment.  No company or government, of course, "controls" efforts to address climate change.  Yet there are many ways organizations play roles in striving to stem our environmental problems. 

 

How can we stack the odds so that they are successful?

 

By encouraging variation, creating fair and effective tests, and ensuring that winning ideas truly proliferate.  These are not abstract ideas without application.  For instance, the tests performed in the marketplace (profit, sales) give distorted results that fail to account for environmental (mis-)behavior.  As the adage goes, you get what you measure, and we are measuring the wrong things.  Similarly, proliferation can come from replication, but exposing winning ideas to others provides another means to increase their scale.

 

But we must be cognizant, too, that invention is sometimes necessary to spark progress when we are at an impasse.  Methods like recycling, just like propeller-powered planes, can't evolve far enough to achieve our environmental ambitions.  Recycling is better than tossing, but as a practice it still fails to promote better, inherently green methods of creating products in the first place.  That is where invention becomes critical, to create "jumps" in evolution rather smooth, gradual refinements.  Markets in carbon avoidance, for instance, are built on the premise that you can buy the benefits of others' good behavior.  From this new premise various ways to create and operate these markets emerge, themselves subject to variation, testing, and proliferation.  Invention begets evolution.

 

These two forms of change - gradual, continuous; and radical; discontinuous - operate by creating and re-organizing building blocks.  We can think of building blocks as fundamental elements that underlie the process of creating change.  To be architects of change, we must learn to recognize and harness them.  I intend this blog entry itself to be a conceptual building block which we return to, and build on, as we understand how to improve society.

 

 

 

 

 

 

 




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