Cultural Engineering Group

Troisième et dernière partie de l’excellent article de Riel Miller*, dans le cadre du rapport annuel de l’Observatoire pour les Marchés Extérieurs et du Département Innovation, Universités et Entreprises (Gouvernement de Catalogne).

The jackpot

Taking this imaginary future as a way to look at the present reveals a third feature of the present (after the disconnect between the financial and real economy, the emergence of a learning intensive society), that there is a jackpot of riches waiting to be created by reconnecting the “real economy” with the financial system. We face a historically rare opportunity. Economic and social change partially depends, at least in the systems we have today, on a financial system that plays its traditional of specializing in both the (re)allocation of capital and the management of liquidity – in ways that correspond to the present nature of what is being produced and accumulated in the form of assets (capital).  Without this essential system the new types of output and the new ways of producing this output, including the emergence of new business models on a viable basis, cannot happen.

Time to experiment

In this time of crisis the reflex of retrenchment, consolidation and refuge in familiar routines is understandable. But it should also be self-evident that financial system innovation is essential for developing the potential of the present. History is replete with examples.

The invention during the Renaissance, over four centuries ago, of such primordial ingredients of the financial system as double entry bookkeeping and the then exotic financial instrument called a “bill-of-exchange” were critical to enabling new business models and new markets to emerge. It is easy to forget that instruments and institutions that we take for granted today like bonds, stock markets and even central banks did not always exist but had to be invented and refined through experimentation.

What to experiment on

Past experience shows that finding the right fit between the emergent system of wealth creation and an appropriate financial system requires experimentation in at least four underlying socio-economic sub-systems – identity, property rights, transaction systems, and shared meaning.  One take[1] on today’s context suggests that in business and government we need to pursue experimentation along the following lines:

• Identity. The emergent “learning intensive society” is characterized by “unique creation” in highly fluid and diverse networks. If there is no easy way to prove and own your identity in a practically useable form then there are very high costs and low incentives to opening an account, making an investment, accumulating assets or taking responsibility (recognizing liability).  Citizenship, birth certificates, social security cards and a panoply of rights that we take for granted now need to be extended into cyberspace – it is time to establish the infrastructure of cyber-citizenship.[2]
• Property rights. The new relationship between property rights and finance needs to be based on accounting systems that rest on clear and operational property rights systems that validate and valorize two key asset classes: i) creativity in all its cumulative and composite richness (copyleft), and ii) human capital as the verified acquisition of competences – things you know how to do – that can be deposited in a “knowbank”.[3] A willingness to undertake creative experiments equivalent to those of 19^th century, like the daring decision to introduce universal compulsory schooling, could easily establish the accounting and assessment methods needed to bring property rights and accounting systems back into realignment with the emergent systems of wealth creation.
• Transaction systems. Composite creative works that are formed from a collage of accumulated inputs and spontaneous teams that coalesce for joint activities/joint production of utility (social, business, personal) can only work if there is an easy way to measure value and make payments. For a variety of reasons, including inadequate identity and property rights systems as noted just above, the development of a state backed token that can be used for peer-to-peer payments has not emerged. The problems are not technological but institutional.[4] Central banks did not take initiatives in this direction at the time of the dot.com boom for fear of destabilizing financial sector business models. Now that the sector has to be rebuilt anyhow what better moment to experiment with new forms of payment that can help create new valuation markets and facilitate the viability of new business models in a broad, global-local transaction economy.
• Shared meaning. Language is an obvious enabler of networking but it is the kind of standard that takes centuries and innovations like nation states and compulsory public schooling to become ubiquitous. The equivalent challenge today is to establish a more rapid, task and context specific ability to arrive at shared meanings. This is a key enabler of a learning intensive networked society. Already much grass roots experimentation is happening with what some are calling the “semantic web”, a glimmer of what might be imagined as Web 3.0. Now is the time to be more explicit in encouraging experiments in achieving transparency (finding what you need not just what you already know).

Resistance to experimentation

Collective action, within a company, a region or globally, to introduce experimentation along these lines provokes resolute and often nasty defensive reactions. This is a normal since the emergence of new systems that function on the basis of different landmarks and logics reshuffles the stocks and flows of capital and power.

A recent rather low key but costly example of this resistance to change happened during the dot.com boom. This explosion of creative and risky ideas both inflated too fast and collapsed because powerful interests not only protected existing systems of property rights, payment, valuation, and accounting – but also, maybe more importantly, stymied experimentation with alternatives. During the dot.com boom experimentation was fenced-in to a narrow range of “wild entrepreneurialism” that left institutions, accounting practices and power untouched.

Some might say that the current context is different. Given the breadth and depth of the failure of the existing systems the choice of experimentalism may seem like a “no brainer”.  Turning to experimentalism could even appear like a good way to show some regret over how things turned out and a willingness to try something new. “Hey, let’s run a few pilot projects to see if they work. What have we got to lose?”

Fear of experimentalism

Plenty. Embracing experimentalism, as defined here, means abandoning administration and “all-knowing” power of the CEO and head of state. This is a huge and frightening loss. Administrative systems use simplification in conjunction with command and control to achieve planned outcomes and manage risk. Administration has been brilliantly, wildly successful, but at a price.

But using administrative methods to address the reality of complex evolving systems entails a loss of information and freedom.[5] By resting on the “Newtonian” world-view (see Doug Griffin’s piece) that the universe can be explained, predicted and planned, the administrative approach – even in its most reflective mode – contains two insurmountable limitations: first the premise of predictability means that failure is due to inadequate planning and hence logically failure is avoidable, failure is someone’s fault, and fear of failure inhibits learning through experimentation[6]; and second the presumption that the future of complex systems can be explained undercuts the modesty and imagination needed to question the assumptions that limit our perceptions of the potential of the present.[7]

To embrace experimentalism is to let go of the organizational forms and practices of planning and administration that are logically at odds with failure and hence, fundamentally at odds with learning. It is to take another, more spontaneous, diversified, fluid and open path to achieving our goals and managing risk.

The courage to do it

Today we look back at the crash of 1929, the immense costs of the Great Depression, and denounce what now seem like pointless political conflicts, obvious policy blunders and the excruciatingly slow pace of institutional innovation.

Will history repeat itself? What will our epitaph be? Will hindsight’s verdict in fifty years be that we systematically and purposefully sought out experimentalism and the new capacities like Futures Literacy as a new way to take advantage of the opportunities created by the complex evolutionary processes within which we live? Or will they once again lament our inability to imagine changes in the conditions of change and do something about it?

At least our choice is simple – will we give up on trying to predict the future and embrace experimentalism or not?

Riel Miller.

Cliquez ici pour lire la première partie et ici pour la seconde partie.

Published in: OME (2009), Annual Report 2009 – Reglobalisation: Underlying transformations and new opportunities in a post-crisis world. Foresight Observatory for International Markets (OME), ACC1O, Department of Innovation, Universitites and Enterprise (Government of Catalonia),  2009.

*Riel Miller est un spécialiste de la réflexion stratégique à long terme. Depuis plus de 20 ans, son travail se concentre sur l’évaluation et la conduite de la transformation socio-économique des secteurs privé et public. Il figure parmi les meilleurs praticiens des méthodes de scénarios et a développé des « scénarios stratégiques hybrides » un peu partout dans le monde. Son travail traite de nombreux sujets comme le futur des services publics, de l’éducation, de l’Internet, de l’identité, de l’information et des technologies, de la société de la connaissance ou de la finance.

Il conçoit et implémente la scénarisation de processus qui révèlent des hypothèses sous-jacentes dans les politiques actuelles mais également le potentiel qu’elles contiennent souvent de manière insoupçonnée. Utilisant une approche qu’il nomme « rigueur imaginative», il aide à la construction de nouvelles décisions qui permettent rendre possible et d’augmenter progressivement le rôle de l’innovation dans le développement des organisations.

Des défis spécifiques du secteur public comme le futur des finances des institutions jusqu’à des défis plus sociétaux comme le futur de la globalisation dans la société de la connaissance, Riel fournit une expérience riche et un réseau international étendu qui ont bâti la solidité et la créativité de sa réputation.

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[1] Miller, Riel, (2006), “Equity in a 21^st Century Learning Intensive Society: Is Schooling Part of the Solution?”, Foresight, Emerald, Volume 8, Issue 4. And, Miller, Riel and Tom Bentley, (2003), Unique Creation, National College for School Leadership, UK.

 

[2] Miller, Riel (1997-99), Rules for Radicals, monthly column for ezine, intellectualcapital.com

[3] Miller, Riel (1996), Measuring What People Know: Human Capital Accounting for the Knowledge Economy, OECD, Paris.

[4] Miller, Riel, Wolfgang Michalski and Barrie Stevens, (2002), “The Future of Money”, OECD, Paris.

[5] Miller, Riel, (2006), “From Trends to Futures Literacy: Reclaiming the Future”, Centre for Strategic Education, Seminar Series Papers, No. 160, Melbourne, Australia.

[6] In an administrative system the verdict of success or failure, hence the dynamics of experimentation occurs most tellingly through the birth and death of organizations. This is too “lumpy”, too limited by the administrative form, for unique, networked, co-creation activities.

[7] Miller, Riel (2007), “Futures Literacy: A Hybrid Strategic Scenario Method”, Futures: the journal of policy, planning and future studies, 39, Elsevier, Pp. 341-362.

Filed under: Analyses, Gouvernances, Ingénierie de la connaissance, Politiques de l'innovation

Riel Miller*, un de nos membres les plus actifs, nous fait l’amitié de nous autoriser à diffuser une de ses récentes contributions, dans le cadre du rapport annuel de l’Observatoire pour les Marchés Extérieurs et du Département Innovation, Universités et Entreprises (Gouvernement de Catalogne).

Sa contribution est selon nous essentielle pour établir les axes de réflexion qui suggèrent quelles attitudes et quels processus adopter pour tenter de surmonter les problématiques auxquelles nous sommes confrontés dans la gouvernance de nos systèmes, systèmes pour le moins secoués par la crise financière, économique et sociale.

Ce texte extrêmement concret n’interdit aucun parallèle avec la gouvernance culturelle bien au contraire et c’est pourquoi nous le publions. Les acteurs de la culture sont en effet, tout particulièrement en France, dans une situation contrainte et paradoxale.

Contrainte, c’est une évidence, par la difficulté d’articuler les moyens, les ambitions et les équilibres entre l’offre et la demande ; par la fin de l’ère de la subvention annoncée depuis un moment déjà mais qui prend une toute autre ampleur ces derniers mois ; par les vieilles habitudes de gestion au détriment de l’action ; par la faiblesse des repères donnés par les institutions pour développer un avenir, etc.

Paradoxale, parce que la culture est (pour reprendre la théorie de Jean-Muchel Lucas), cette coquille de noix qui flotte toujours à la surface de l’eau, qu’elle soit en haut de la vague ou dans le creux de la vague, quelle que soit la force des courants ou des tempêtes. La majorité des acteurs culturels français flottent au gré des courants sans qu’aucun cap ne soit jamais fixé ni tenu suffisamment longtemps pour que le voyage en vaille la peine. Aujourd’hui plus que jamais, cette théorie prend une tournure cruelle et les acteurs et les institutions semblent se trouver prisonniers d’une seule alternative : s’adapter ou résister ? On en connaît déjà l’issue.

Dans ces conditions, nous avons toujours tendance à trop faire de prospective pour l’exercice de la prospective en soi. Ce n’est certes pas stérile sur le plan structurel mais nous nous fourvoyons dans l’idée qu’il faut anticiper et que, d’une certaine manière, nous pouvons prédire le futur.

Nous nous en remettons donc aux cabinets de consultants, dont certains ont la fâcheuse tendance à faire avaler beaucoup de couleuvres ambitieuses à leurs clients, pour ne parler que de l’exemple désastreux et pharaonique du Pont du Gard, obligé de fermer de novembre à mai. Nous nous en remettons aussi et heureusement aux élus pour développer de vraies visions mais cela n’exclut pas les défauts de vision pour autant, comme l’exemple du 104 rue d’Aubervilliers à Paris nous le rappelle depuis 4 ans et dont la démission des deux directeurs intervenue il y a quelques jours à peine (mais qui était courue d’avance depuis plusieurs mois) vient clore un bilan bien mitigé.

Peut-être faut-il rappeler quelques principes sages, des principes qui génèrent beaucoup moins d’impacts négatifs en cas de défaut de pertinence vis-à-vis de l’avenir. Peut-être faut-il éviter toute idée de prévision du futur et véritablement s’emparer de la complexité pour trouver de véritables stratégies gagnantes à long terme. Ce sont ces principes que Riel Miller nous explique, en anglais dans le texte et en trois parties. En voici la première.

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“It is increasingly clear that the current downturn is fundamentally different from recessions of recent decades. We are experiencing not merely another turn of the business cycle, but a restructuring of the economic order. For some organizations, near-term survival is the only agenda item. Others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal. The question is, “What will normal look like?” While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. The new normal will be shaped by a confluence of powerful forces—some arising directly from the financial crisis and some that were at work long before it began.”

Ian Davis, McKinsey, Worldwide Managing Director, March 2009

According to the weather service the sun will rise tomorrow at 6:46. There is a fair degree of confidence in this prediction. A meteor might hit the earth between now and then or space aliens might tow the earth to a new location. But these are low probability events when compared to tomorrow’s sunrise. What about the future of the global economy? What can be predicted about economic performance over the next five years?

It is probably safe to say that in one form or another economic activity and the global flows of goods, services, capital, labor, and ideas will continue over the next five years. Productive economic activity and some degree of cross boundary, over the horizon interaction, has characterized human societies for millennia, so it is a safe bet that economic growth and globalization will continue into the future. But the expectation that economic growth might be plus or minus a couple of percentage points and that global flows will continue does not tell us much about what to actually do.

Which sectors will be winners? Where will margins be squeezed by competitors or declining demand? Which technologies will diffuse fastest or change the rules of a specific market (like MP3’s for music or the iphone for smartphones)?  How will supply chains change? Where will innovation come from? Without a more precise prediction of what will happen specifically, to your sector, to your products, to your market, to your sources of capital, to your margins – what good is a general forecast that things will muddle on more or perhaps, as Ian Davis of McKinsey prognosticates in the opening quote, much less than is usual? Isn’t there a model that offers safe and accurate predictions of how global flows and prospects will enter into the value-chain that generates revenues and profits for your firm, your region?

The short answer, not a surprise, is no.

Economic change is too open ended. As pragmatists point out and recent cyclical events underscore, things can change quickly and yesterday’s anticipatory assumptions – the basis for the predictions used to make decisions – can look fairly foolish only days or months later. The potential for variance is too large and the number of causal factors that might account for such variance greater still. Worse, even if we had perfect information, knew everything about everything, phenomenon like economic change and globalization are fundamentally indeterminate. This compounds the fact that we do not in fact know everything about everything.

Thus when it comes to the future ignorance combines with the creativity of our universe to render prediction either a game of imposing our will on what ever happens or a way to deceive ourselves. The former may be justifiable in circumstances where the ends are so important that the means can be imposed – even if the outcome is often not at all what was intended originally. The latter can be important for our confidence and maybe, at least up until now, psychologically necessary for making the choices and taking the risks that generate change. But fundamentally, the impossibility of prediction is good news for our ability to imagine and exercise freedom.

Either way – because of our ignorance or fundamental indeterminacy – there is no future, in the sense of predictability, for complex phenomena.

If there is no future, then what?

Lacking an effective way to predict the future of economic change what options are available if we still want to take the future into account when we make decisions in the present? What is the alternative? Do we give up and let fatalism reign? I don’t think so. Like the thinkers obliged to revise their view of the cosmos when Copernicus overthrew Ptolemy, there are new ways of looking at the world based on an acceptance of both ignorance and fundamental indeterminacy or openness. This is what embracing complexity is about.

One way to still exercise our volition, indeed it is a moral obligation to address the flaws in the world around us and pursue our aspirations, is to improve our anticipatory systems in ways that take fundamental openness into account.  The alternative to the predictive approach is to construct stories about the future that are inspired by the present and past but do not pretend to offer a probabilistic assessment of how likely any one future may be.  This Futures Literacy approach has the virtue of achieving two goals that are critical for decision-making.

First rigorously imagined exploratory scenarios help to reveal the anticipatory assumptions, the images or idea of what the future will be like that people use to make choices. Second these non-predictive stories about how things work in the future can be quite imaginative, painting a radically different picture of the future. This, in turn, allows a re-evaluation of the way we see the present, what choices are on offer by altering the anticipatory assumptions used to make decisions in the present.

Rigorously imagined exploratory scenarios that are at the core of a Futures Literacy approach are not the same as the typical scenario used by businesses and governments. The more common types of scenario are used to plan, like in a chess game. The purpose of these scenarios is to think through different ways of getting to the same goal using given resources and given rules of the game. Here the different ways, within given constraints, of getting to the predicted objective offer an opportunity to select the best path.  These “optimization scenarios” help us to take the optimal route to our planned goal.

Another common type of scenario is the what-if simulation, meant to test and improve the capacity to respond in the face of an external event like a catastrophic flood or an unexpected run of good luck.  In playgrounds children rehearse different situations, learning to respond to the actions, good and bad, of their community.  Pilots use flight simulators to practice for all sorts of wildcards like freak storms, mechanical failures and even perfect landing conditions in a variety of airports. Getting ready for things that happen using “contingency scenarios” is common for emergency crews, soldiers and good strategic and competitive intelligence teams.

However both optimization and contingency scenarios are limited. Optimization assumes its goal, and to be effective also needs to make assumptions about the means and methods.  Planning to build a bridge without funds, engineers or the know-how necessary to organize construction, doesn’t make much sense. When you know you want to build a bridge you set out the parameters and then ask about different ways of configuring the rules and resources to get to your goal.  This is optimization thinking.

Contingency is similar.  Although it is hard to predict exactly what kind of external event will impinge on your daily life, manna from heaven or a bolt of lightening, you can prepare for both and be ready.  Such readiness as a mental state and materially in terms of storing or constructing precautionary resources is the basis for survival. We build houses to shelter us from the elements and we simulate disasters to understand how to keep calm and communicate in ways that allow for the coordination of a response that is appropriate to the surprise.

When it comes to complex evolving systems like the future of economic change and globalization, there is little point in developing either planning or contingency scenarios. What you predict and then carefully optimize by looking at a number of scenarios, like a good chess player, ends up being beside the point when the rules of the game, and even the goal, change. Dealing with the indeterminacy of open systems requires a radically different point-of-view – one that does not seek to know or predict what might happen in the future.

Instead the aim is to better understand how our ideas, images, expectations and assumptions about the future enter into our decision making in the present. This involves two key steps: one is becoming more aware of our typically implicit assumptions about the future; and two is challenging and developing alternatives to how the future shapes our picture of the present.  We need to discover the many dimensions of the now that are influenced by the way we imagine the future.

Exploratory scenario exercises still use frames, a few fixed parameters (givens), but they are generally only pre-conditions for action (like the sun will rise) and what is the point (to eat, make a profit, etc.).  To some this may seem just like a question of degree or specificity, but there is a decisive difference between seeing a telephone exclusively as a tool for inter-personal communication and seeing it as a computing device that can serve a myriad of functions like music player, geo-locator, payment instrument, etc.. Similarly a company that supplies gasoline is not the same as one that aims to provide energy – in whatever form and organization. Lastly a nation, may embrace the general goal of “life, liberty and the pursuit of happiness” but the meaning of life, liberty and happiness do not stay the same, nor do the ways in which the nation achieves such objectives.

An obvious example of an open ended, exploratory way of thinking about the future is the way we look at ageing. It is commonplace to expect that as a person gets older their tastes, values, and capabilities all change. When recounting the story of a person’s future we naturally take into account the fact that what a child wants to become at 10 is not likely to be what they want at 25. We also know that what our parents or grandparents wanted us to become, or could even imagine us becoming, is too limiting. Not only do vocabularies (what can be articulated as an aspiration) change, but so too do enabling and constraining conditions (like authoritarianism, mass-production, etc.). It is obvious that a European child born to the war torn middle of the 20th century could not tell the same story about their future as one born today (without in any way making a judgment about the superiority or inferiority of their speculations).

Combining the assumption that changing contexts change not only what is possible but what is imaginable with the value statement that it would be wrong to insist that future generations must hold the same values as we do today, eliminates one of the key expectations typically attached to a foresight or scenario exercise. Which is to plan how to get from A to B. The implicit (sometimes explicit) expectation is that scenario exercises can help people to change what they do today by contrasting current choices with either a more desirable future or a more probable future.[1] The so called normative future offers an “ideal” benchmark, while the probable future (typically based on a predictive model) offers lessons on what to do or not to do if one wants to either accelerate or avoid the scenario that, from today’s perspective is deemed more or less probable. Both are rooted in a planning paradigm that uses scenarios as a way to improve blueprints for the future.

An alternative, what I call a Futures Literacy approach, uses scenarios as a tool for calling into question current decisions without any expectation that the scenario used today will correspond to the scenario developed tomorrow. Jettisoning the planning premise may seem like a subtle distinction. For instance critics of foresight in general might point out that in any case, both in practice and in principle, scenarios are usually assigned a low probability and hence are not a dependable planning tool. But by altering the premise that underpins the way decision makers typically use scenarios, particularly by explicitly not accepting the dual planning oriented imperatives of fixing a target [2] for the future and seeking the highest probability prediction (despite formal proclamations to the contrary), the scenario method advanced here is at once more modest and less constrained.

It is modest in terms of the imposition of today’s values on a long-run future. It is modest in terms of the predictive value of the scenarios. And it is modest in terms of the realization that even if the scenarios are highly imaginative and get “outside-the-box” that so often constrains thinking about the future, there is no way to know if we are inventing the vocabulary of tomorrow or not. Yet, this approach is also less constrained, less modest, when it comes to throwing off the limits imposed by both the search for predictive accuracy and projecting today’s values into the future. And it is much more ambitious when it comes to both detecting and acting on the potential of the present – taking off the assumptions about the future that stop us from seeing what is around us right now.

The practical question then is how to apply a non-deterministic, imaginative and exploratory approach to the future for making choices today.  Everyone still needs to be able to answer the question – what do I do now?

Fin de la première partie.

Pour lire la seconde partie, cliquez ici.

Published in: OME (2009), Annual Report 2009 – Reglobalisation: Underlying transformations and new opportunities in a post-crisis world. Foresight Observatory for International Markets (OME), ACC1O, Department of Innovation, Universitites and Enterprise (Government of Catalonia),  2009.

*Riel Miller est un spécialiste de la réflexion stratégique à long terme. Depuis plus de 20 ans, son travail se concentre sur l’évaluation et la conduite de la transformation socio-économique des secteurs privé et public. Il figure parmi les meilleurs praticiens des méthodes de scénarios et a développé des « scénarios stratégiques hybrides » un peu partout dans le monde. Son travail traite de nombreux sujets comme le futur des services publics, de l’éducation, de l’Internet, de l’identité, de l’information et des technologies, de la société de la connaissance ou de la finance.

Il conçoit et implémente la scénarisation de processus qui révèlent des hypothèses sous-jacentes dans les politiques actuelles mais également le potentiel qu’elles contiennent souvent de manière insoupçonnée. Utilisant une approche qu’il nomme « rigueur imaginative», il aide à la construction de nouvelles décisions qui permettent rendre possible et d’augmenter progressivement le rôle de l’innovation dans le développement des organisations.

Des défis spécifiques du secteur public comme le futur des finances des institutions jusqu’à des défis plus sociétaux comme le futur de la globalisation dans la société de la connaissance, Riel fournit une expérience riche et un réseau international étendu qui ont bâti la solidité et la créativité de sa réputation.

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[1] It is also common to use scenario exercises to build up better communication and a shared understanding of values and expectations. But this type of scenario exercise does not usually target specific policy issues.

[2] A single target because even if the scenario process generates multiple scenarios the policy choice is made in terms of avoiding the bad scenario or achieving the good one. Sometimes policies are elaborated or judged in terms of being able to accommodate multiple scenarios and this polyvalence is deemed a useful criterion. However this is still a planning perspective only using a set rather than a single target.

Filed under: Analyses, Gouvernances, Ingénierie de la connaissance, Politiques de l'innovation