Archive for the ‘Business’ Category

Why Employees are the best Salesman

Thursday, April 3rd, 2008

The parts of most organization are not only internally disconnected by the trap op the Tower of Babel. The internal dialogue has stopped.

Most organizations are also externally disconnected to their primary source of wealth, the customer. If the organization of the customer is in the same state of confusion the problem seems to be unsolvable.

The solution to this problem is really easy. To solve the problem we have to leave behind the concept of the hierarchical organization.

We have to realize that an organization is a network of human beings and this network is connecting many organizations.

It is proven that every human on earth is connected by a chain that has a maximum of seven steps. When we look at a specialized network the amount of steps is much lower (in general three). Most of the managers don’t realize this.

The consequence of this shift in paradigm is that every employee of every organization is a potential customer and a salesman.

A programmer is selling to programmers, a trainer is selling to trainers, a manager is selling to managers and a CEO is selling to CEO’s. They all tell a different story but the story they tell is understood by their partners in the Network. If we are able to connect all the different stories by organizing a dialogue of understanding, a generic story will be created. Creating a joint story (a myth) takes time but it is not necessary to wait for the perfect story. Every story that resonates is a good story.

It is not wise for a programmer to spend all his time in selling. His main task is to program. The solution to this problem is to combine “working and selling”. When a programmer works in the organization of the customers, doing his job, he is selling. A good performing motivated programmer sells without selling.

A software package is easily sold if the employees of the company use their own tools and are enthusiastic about the use of the tools.

The consequence of this insight is that a software company has to use his own product all the time and focus itself on “doing joint projects”. A combination of employees of the customer and employees of the software company will speed up the dialogue.

A very important point is to create short-term and long-term feedback-mechanisms. We have to close the cycle at every level as soon as possible.

The effect of feed-back is that every action of every employee returns on himself when the cycle is closed. The employee is able to take responsibility, learn from his mistakes and improve his behavior. If this is done on every level, the organization will spiral. It will move up without loosing the whole.

Now we have to find out what connection will be the most effective. It is the area where we have to focus the efforts of the specialists in selling. Again we have to look at the cycle of business. We have to find the generator of business in society. If we find this generator it will propagate the package in every network if the myth of the package runs like a fire.

Everybody knows that the generator in business is the Small and Medium Enterprise (SME). Selling to SME’s is simple when you are able to convince the entrepreneurs. Big companies are also networks of SME’s. The priority of sales has to be given to the entrepreneurs in business. Most of the time they are situated in what is called the Business Unit in a Big Company.

To sell you need to talk the language (tell the story) of the Entrepreneur. The consequence of this Insight is that Sales People have to be former entrepreneurs in Business that are still acting in their network. These people are called charismatic leaders or boundary spanners.

About the Business Cycle

Wednesday, April 2nd, 2008

A business starts when an isolated craftsman makes a unique product with his unique tools for his unique customers. To find out what the customer needs the craftsman and the customer start a dialogue. They are inventing new possibilities. Out of the process of invention new tools and new approaches emerge.

In the next stage craftsmen share their trade and move to the next level, a company. They sell and share experience to and with their clients. In a company specialization takes place. People are selling or taking care of infrastructure. To make specialization work a dialogue is needed. Specialists create their own language and don’t understand that their colleagues and their customers are doing the same. If the mapping of all the language does not take place the company will look like the Tower of Babel. It will end its activity in a conflict caused by mis-understanding.

If the dialogue is successful the company standardizes its services and creates a product. It moves to a new level, the factory. In a factory not only the processes are standardized but also the language. Specialists are replaced by software, machines and cheap labor. The employees are not users of tools but are controlled by tools. The replacement does not happen without conflicts. It causes a battlefield between two opposing powers, the employers and the employees.

By carefully analyzing all the processes, getting rid of all the waste, the employees are finally totally replaced by programmed machines. The factory moves to the level of the Utility. It becomes an invisible repeatable process. The process only shows itself to the human when it is out of order. Humans are totally dependent of utilities and a fatal error simply stops society. This generates an extreme level of collective stress.

In the next stage new craftsman emerge. They use of the new invisible, hidden, infrastructure to create new products. The cycle starts again.

Many companies are now transformed into factories and utilities. Cheap labor is provided by the new economic powers China and India. The standardization of the processes is accomplished by the implementation of packages. When the dialogue in the company is disturbed the implementation of the package results in a financial and social disaster.

The jump to the level of the factory generates a conflict and the shock of the conflict lowers the performance of the company. The transition to a factory is hard to sell to the employees and the middle managers. The reduction of the performance is not appreciated by the customers also. The customers want a predictable and gradual improvement of the performance.

Many companies are not suited to move to the level of the factory. They are providing a service. The specialists, knowledge-workers, are constantly innovating their processes.

The specialists are not helped by a standardized process, a method. Methods are not a mechanism to control. They are an educational instrument. When people learn a method they acquire experience. They make mistakes, learn and adapt the method. A dominating not adaptable toolset stops the innovation in a company.

Innovation cannot be stopped at the human level. Users start to look for an alternative to move on and abandon the dominating central infrastructure. They create work-environments of their own and connect them. The effect is a highly unbalanced infrastructue.

This has happened when the PC was introduced and will happen all the time when a new user-friendly toolset appears. At this moment many new collaborative toolsets appear on the Internet. They support the new craftsman, the knowledge-workers, in the service industry.

Many toolsets are available on the market. They are dominating, highly specialized and disconnected. The toolsets support different types of craftsman, different types of companies, different types of factories and different types of utilities.

They don’t support the dialogue to reach mutual understanding, collaboration and innovation. This causes unnecessary conflicts, stress and finally a total blockage of every activity an employee wants to start. The result is de-motivation and finally apathy. The employee just does what he is told to do. He is transformed into a machine.

We need a toolset that supports the gradual movement from the level of the craftsman to the level of the utility. This will create the harmony so many people are looking for.

How to Create Cooperative Networks by Playing Complementary Roles

Wednesday, March 26th, 2008

People have to cooperate to survive. Children need their parents to nurture and teach them. Parents need the help of their children when they are old. The basic principle behind cooperation is long-term reciprocity. People give something voluntary and sometimes for free to others or help the other trusting they get something of the same value back in the future.

To survive people have to have a long-term perspective. They have to sustain their environment and the supporting infrastructures to make sure that there are enough people and tools to help them when they are old.

The need to survive created the basic level concept of cooperation (the tribe). The tribe transformed into higher and more complex levels of cooperation (town, guild, state, corporation) when human society evolved.

To coordinate the complex structures the mental concept of the many leveled hierarchy was formed. This concept fails when the environment of the organizational structure becomes turbulent.

Hierarchies adapt too slowly to their environment. At this moment, hierarchies are falling apart in cooperating self-sustaining specialized network. The networks are gaining control over many activities that are now taking place at the level of the big corporation and the state.

A specialized network produces activities and products that are consumed by other specialized networks. To realize the output people have to play complementary roles.

When we can distinguish six basic roles:

  • Craftsmen (Senses, Patterns)

A craftsman has acquired experience by practicing. Craftsmen do not like too much change. Change requires new practicing and keeps him from producing.  A craftsman loves to make what he sees. He learns by copying. Examples are carpenters, painters, musicians, technicians and programmers. The craftsmen are the producers in the network. In many cases, programmable machines can replace their activities. Craftsmen use specialized tools. If their processes are standardized a process-model can be used to coordinated their activities.

  • Entrepreneur (Senses, Emotions)

An entrepreneur feels what preferences people have. Examples are retailers and brokers. Entrepreneurs sell the products the network is producing and buy products the network needs. They also are the people that negotiate contracts and make connections to other specialized networks. Entrepreneurs use technologies like relationship-management-tools and procurement-systems.

  • Politicians (Emotions, Patterns)

A politician structures collective emotions by creating consensus. He feels the opinions of the collective, has the gift to influence opinions, and gets people into collaborative action.   A politician looks after the social cohesion in the network. He uses opinion polls and media.

  • Creators (Imagination, Patterns)

A creator visualizes the whole of a structure. A creator can balance variety (his imagination) and predictability (the patterns). Examples are composers, architects and designers. A creator designs the machines and the products the network is producing.

  • Motivator (Emotions, Imagination)

A motivator visualizes what makes people move forward. Motivators develop concepts.  Many of them operate in the media (actors, writers, poets and movie-directors). Motivators cannot live without variety. Other examples are coaches and psychiatrist. A motivator looks after the long-term perspective of the network by creating and implementing a shared vision.

  • Inventors (Senses, Imagination)

An inventor makes sense of his imagination. Inventors generate ideas and create prototypes (R&D). They use brainstorming tools and analyze trends.

The roles are not evenly distributed in the network. The majority of the people play the role of the producer, the craftsman.

In the current situation, the basic roles are concentrated in specialized corporations (e.g. media, retail, production-plants) or   staff-department of big corporations. Many high talented people are already leaving the big corporations and take part of specialized networks. The amount of one-person-companies is increasing.

People can cooperate with persons that share with them one of their basic cognitive components. An entrepreneur can convince a craftsman what products people he has to sell. They are both practical people (the senses). A creator (e.g. an architect) can show a craftsman what to make. They share a focus on structure (patterns).

When complementary roles are working in a cooperative environment, they join their forces in an open dialogue. This dialogue has many stages ranging from brainstorming (inventors take the lead) to realizing material structures (craftsman work together with creators).

Politicians, entrepreneurs and motivators can only perform if they are able to observe and express emotions (visual expressions, gestures). To ensure a successful cooperation they have to meet. New technologies like video-conferencing make it possible to cooperate anytime, any-place and anywhere. 

To collaborate people have to communicate face to face. In a competition patents (legal actions) and secrecy (rules and walls) shield ideas to prevent the competitor to take the lead.  In cooperation, ideas are shared to sustain the network.

The most used model in communication is the sender/receiver-model.  People send and receive content (e.g. email, documents, pictures, plans, designs) Specialized networks need advanced content-management systems to support this model of communication.

The sender/receiver-model supposes that the brain converts ideas directly into words and that another person can easily draw out the meaning of the ideas from the words. It assumes little effort to understand or interpret what is being conveyed.

The sender/receiver-model only works if there is a high level of common conceptual understanding (a shared model) between all the people involved in the communication process.

In reality, this is mostly not the case especially when experts (inventors, craftsman and creators) are communicating with laymen (entrepreneurs, motivators and politicians).

The dialogue between an expert and a layman is often a monologue. The expert confuses the layman with all his knowledge and the layman is not capable of asking the right questions. In the end, the layman stops asking questions and accepts the situation. 

The sender/receiver-model reduces a specialized network to a production-process. The model lowers the social cohesion (politicians), reduces the external cooperation (entrepreneurs) and removes the long-term perspective of the network (motivators).

People have to invest time to understand (ask unsophisticated questions) and explain their ideas (inventions) in many ways. It also takes time to generate trust. Ideas of others have to be tried out (in the imagination or in the real world) to understand them.

People have to have the opportunity to fail and learn from their mistakes. Sometimes they generate personal inventions that can be given back to the others to create reciprocity.

Eventually ideas create new personal patterns that can be shown and praised by others.  Collaboration does not take place instantly but evolves in a cycle where the pleasure of finding things out is the motivator.

When people are pessimistic and afraid the other becomes the enemy. They shield themselves from the outside world by creating fixed boundaries (walls).

To make sure that they get something in return they use a threat (e.g. physical force, the legal system). Before they start, they have to spend time to prevent a possible conflict (making contracts, detailed specifications). When people trust each other, they cannot wait to start.

The fear of losing something (possessions, status, existence) changes a collaborative relationship into a battle.

In a competition, the focus is on winning and selfishness. Fear has a negative impact on the senses (tunnel view), the emotions (stress) and the imagination (creativity block).

In a competition, priority is given to stay in front and to prohibited possible actions of the enemies. To win one has to predict and control by defining strict rules and make sure that people obey the rules. Internal and external competition finally kills a cooperative relationship.

To prevent the move from cooperation to competition people have to sustain a free and open communicate-process.

How to Create the Perfect Need-Machine by Analyzing Personal Activity Patterns

Wednesday, March 26th, 2008

In the approach of Taylor and Ford, the employees and customers are treated as programmable machines.  The focus was on a perfect coordination of the senses, the muscles and the production system (the assembly line).  The emotions and the imagination were neglected.

In mass customization, the emotions are involved. In customer innovation, the imagination is imperative. In a demand oriented system all the parts of the human cognitive system have to play a role in a coherent and balanced way.

The human body acts on its environment with messages and action-patterns. The incoming and outgoing messages are observed by the senses and transformed to an internal format. The internal communication system sends the messages to the appropriate place in the body. The emotions are always looking for danger. They want to control the priority of the actions to make it possible for the body to react immediately. The imagination creates an image of the outside world and helps the body to generate scenario’s to improve its action-patterns. 

The senses are the connection to the physical outside world. They shield the human being from the enormous amount of signals that are trying to enter the body. They filter incoming data and transform the data in a standard internal format. When the senses detect an event, it is evaluated by the emotions. If the event is not important, nothing happens. It the event is unusual it becomes aware in the conscious. Events that are highly repeating are not noticed after some time. An internal program (an action-pattern) automates the handling of the event.

The muscles act in physical space. They acquire an enormous amount of reaction-patterns by repeated practicing. Humans learn from their failures. When the senses detect an event, many appropriate patterns are located and enabled. 

When the patterns enter mental space, they change into models. Complicated patterns are compressed into models. Humans use all kinds of compression techniques to make the world compact and therefore more understandable. Static models (e.g. an organization contains employees) compress the world in wholes (nouns) and parts (attributes). They create identities. Dynamic models (the employee sells a product) compress causal chains (event, actor, result). They make it possible to reason.

Models behave the same way as sensors do in physical space. They shield the mental space of the human being from the enormous amount of ideas that the imagination is producing.

The emotions act on hostile and friendly forces. They shield the body from physical injuries (avoiding pain) and take care of the self re-production process of the body (looking for food and a sexual partner).

The emotional system determines the amount of resources that is allocated to the evaluation and the search for adequate action patterns. If an event is dangerous, all resources in the body are used. The body reacts without thinking and uses a biological inherited and fast pattern (fight, flight, freeze, the primary emotions). If there is enough time to react, the emotional system evaluates its preferences and enables the preferred actions-patterns.

If the preferences are related to a long-term perspective, they enter mental space and the human has a choice to make. In the evaluation of long-term preferences, the other plays an important role. People want to take care of the other (family, friends, children), are afraid to get in to a conflict (dominance, status) and want to be praised by the other for what they are accomplishing.

Humans imagine (by creating pictures connected with feelings) what events they like to happen (a wish). When they are pessimistic, they imagine what events they do not want to happen (a fear).  The imagination is the innovative part of the human mental space that generates all kinds of new connections (ideas). The imagination is also the most free to play with new ideas. People can simulate and practice in their imagination without getting into trouble. The imagination produces the idea of the identity.

The imagination uses visual metaphors to create an understandable world. On the lowest level the metaphors are connect to the action patterns. The image of a cup is connected to picking up the cup, holding the cup and moving the cup. New structures are blended with old familiar structures.

Many metaphors make use of the human understanding of technology.  Freud based his theory of the unconsciousness on his understanding of the steam-machine (“I am steamed up with emotions”). Many theories of the mind are based on the metaphor of the computer. People always relate new phenomena to something they already understand. They sometimes do this (in the eyes of others) in very strange ways.  A skilful teacher knows this and tries to find the bridge (the right metaphor, a story) between his world and the world of the student.

In the human body, all the sub-systems (e.g. the services, the organs) are connected by shared communication-channels. There are fast (the nervous system) and slow reacting shared channels (the endocrine system). All the sub-systems use specific messenger-molecules to communicate their actions and act on incoming messengers.  Messengers materialize with every thought we create and with every emotion we feel. When a messenger enters the boundary of a sub-system, (e.g. a cell) it triggers messengers that are specific for that sub-system.

The action patterns make the muscles move according to a movements-plan that is stored in memory. The movement-plans of the muscles enable people to walk, to work (using tools) and to talk. In this last case, people communicate their intentions. The human communication contains a complicated mix of signals that are related to the emotions (e.g. visual expressions, gestures), the patterns (assertions) and the imagination (visual images, ideas).

People resist change. The patterns they have acquired control their behavior and determine their potential. People do not want to change their patterns dramatically. They want to acquire new patterns (by doing) without noticing the change. Only a major event (a critical moment), mostly with negative impact, can have a radical effect. If this event happens it takes a very long time to recover and get into harmony again. When people have to adjust their patterns too often, they experience stress and on the long run get sick.

If people cannot adjust their patterns, they have to involve the other parts of the cognitive system. When they involve the emotions, they have to set priorities and make a choice. People do not like making choices. They are incapable of evaluating all the possibilities. They can also make use of the senses and look at the real opportunities in the outside world. People are almost incapable of doing this because their imagination produces the images it wants to see. If the imagination really faces the facts, the identity is attacked. It feels powerless and unable to control his path of destiny. The last possibility a human has is to adjust the imagination. He has to realize that the possibilities he imagined were just illusions.

If everything stays the same, people get bored. They hope that an event will occur that relates to their wishes. People are the most satisfied if their environment produces just enough change (a challenge) they can cope with. They want a balance between the will (what they want, the imagination, variation) and their capabilities (what they are able to do, predictability, the patterns, their skills).

In a perfect demand oriented economy, a supplier has to provide a challenge to the customer. To provide this challenge the supplier has to understand the wishes and the fears (the imagination) of the customer, his behavior (the patterns) and the balance between the two parts. If the customer is out of balance the supplier has to help the customer to acquire new patterns (learning), help him to make a choice (advice) or show him the real opportunities (scenario’s) taking care of the customers identity.  

It is very difficult for a supplier to get accurate information. Most people are unable to make their behavioral patterns conscious. When people are asked about their opinion (an aspect of the emotions), they often do not want to offend the other and give proper answers. People only want to share their most secret wishes with people they trust (partner, family, friends). Correct information about the customer can only be acquired by carefully observing and analyzing the activities of the customer (what he is doing).  It is completely impossible for a company to observe the activities of all their customers. The only one who can do this is the customer himself.

Customers can observe their activities if they were able to gather personal activity-patterns, get the opportunity to analyze their behavior, and share their activity-patterns with others to get an advice. Most of the needed data is somewhere already available (patient records, buying behavior, payments etc) or can be made available by making connections to the tools the consumer is using in his personal- and work-environment (Emails, Content). The only thing that has to happen is that companies and government agencies make these patterns, which are most of the time privately owned by the customer, available.

It can be envisioned that all personal data is kept in a private space. Only the customer (the owner) can make the data available to others. This approach would prevent many problems in the current situation (e.g. spam).

The last step in a perfect rational demand oriented system is reached when the personal activity-patterns are automatically transformed in standardized need-messages that are sent out to appropriate providers.

About Smart Customer Networks or How Free Love will finally Kill the Big Companies

Wednesday, March 26th, 2008

For many years I read the briefings of trendwatching.com. This month their trend is named Free Love. It is all about giving away products for free. They show that when you are smart you can get almost everything for free if you are able to cope with the advertisments.

The products are given away for free because somebody else is paying the costs or the consumer is paying for something else. The major trend is to give products for free because they are payed by advertisers.

You have to understand that this is a very dangerous trend. It is a dangerous trend because when you are an intelligent customer you are able to navigate through “free space” and get almost everything you want for free. The “free love”-trend is killing business in the end.

The funny thing is that companies are paying for their own destructing. They don’t see or don’t want to see that somewhere there is a global competitor who is selling their products for a price they are unable to offer without using the same model.

The most interesting part is that the advertisement that they are paying for is not speeding up their sales at all. It is speeding up the desire to get something that looks like what they are selling.

The desire also generates the need to produce new products. To stay in the rat race they have to innovate at an increasing speed to keep up with the market.

The only companies that are able to do this are global companies that are a global brand. A good example is Nike. They produce trendy products and their customers are paying a huge price for a product that is produced for a very low cost (in China). They even give their customers an opportinity to speed up the innovation process of Nike by designing new products.

Nike and other trendy producers aim at customers who are trend-followers. By creating a customer-lab they make use of customers that are trend-generaters. If they are able to connect the trend-generaters to the trend-followers they will stay in business.

If the trend-makers are able to connect to the trend-followers without the Nike-infrastructure Nike is out-of-business. You can see this trend already in software-development. It is called The Open Source movement.

The Open Source Movement give away software for free but let the customer pay for innovation. You only pay when you want something new and you want something new when you are accustomed to something old.

At this moment many customers don’t know how to mis-use the Free Love-trend. They are “stupid” or “lazy” but like every trend in the end the amount of “smart customers” will increase. In the end they will create Smart Customer Networks.

Smart customers become smart citizens when they want to use political pressure to accomplish something. They join or create pressure groups. When a smart customer gets sick he becomes a smart patient.

He searches the Internet to find the cause of his problems, joins a community of people with the same illness, asks an expert for advice and gives all the information he has gathered to his general practitioner or his medical specialist. There he negotiates his treatment. If he does not get the medicine he wants he is able to buy it somewhere on the Internet.

Most of the companies and government agencies cannot capture the smart consumer. He is navigating from vendor to vendor, from one pressure group to another, always looking for the best fit.

The needs of this kind of customer are constantly changing and expanding. Smart customers are not only buying services in the network, they are inventing, developing and selling their own products combining components from different vendors.

Smart customers can save a company and governments a lot of money. They take over the activities of high paid specialists. Vendors that understand this issue, cooperate with the customer in every stage of their processes.

They let them sell the product (through their personal network), make it possible to assemble their own combinations, give them information about the state of the process, help them to enhance their network and skills and let them even participate in the development of new products.

Not everybody has the time, the money, the facilities, the network or the capabilities to make optimal use of all the opportunities of the Internet. The number of smart consumers and the amount of smart customer networks is growing very rapidly. They are leading a new revolution that will change the marketplace and eventually every aspect of our culture.

The Industrial age is the age of mass production. The Taylor school of management dominated the organization of business. Taylor believed one should manage people (and customers) in the same way one manages inanimate assets and the machines on which people work. Mechanization and standardization of components and interfaces, careful supervision of quality standards, and minute division of labor characterize the mass production process itself.

The division of labor was accomplished by breaking down work into simple, repetitive tasks eliminating unnecessary motion and limiting the handling of different tools and parts. The consequent reduction in production time and the ability to replace craftsmen with lower-paid, unskilled workers or even robots resulted in lower production costs and a less expensive final product.

After the phase of mass production, the industry is now in the phase of mass customization. By carefully standardizing it is possible to make a distinction between components that customers like to vary (mostly visible) and parts that are part of the essential (invisible) infrastructure. A good example is the production line of Dell computers where customers can choose their own configuration.

A next step is to involve the customer in the design-process of the product (Customer Innovation). Companies like BMW or Audi give customers already access to innovation platforms where average drivers are invited to create the next generation of cars.

The move from Mass Production to Smart Customer Networks is the move from one united production and sales model aimed at the customer, to a network-model involving the customer in all stages. The challenge is to combine large-scale mass-production with small-scale user-involvement. It will be impossible to coordinate all the processes from one single point of control. Many coordinators have to synchronize their activities.

Manufacturers, retailers and customers have to act together in a collaboration network. Retailers and suppliers have to maintain customer relationships by sharing customers, margins, and intangibles like brand, as well as jointly planning marketing, merchandising, and sales activities and becoming more like companions (in a good marriage) than master and servant.

Mass Customization and Customer Innovation puts a high strain on the customer. The amount of choices a customer has to make is constantly increasing. The number of possible combinations of components that relate to a product and to a combination of components of different products will soon surpass the complexity a human being can handle. People simply do not have the time and the cognitive capacity to make all the choices that are needed. This problem can only be resolved when product-developers take the capabilities of the complete human cognition system into account.

Mass Customization and Customer Innovation give the customer a small stake in the business cycle. The customer is treated as a consumer and not as a co-producer. All the major design-decisions are still made by the executives in the corporation. In the future customers want to be treated on an even footing.

If customers really get frustrated, they can generate an enormous collective power. With this power, they can change the policies of a corporation (e.g. the Brent Spar affair of Shell) or even take over the complete business cycle.

A war between consumers united in Smart Customer Networks and the Big Corporations is not in the benefit of both the competitors. They have to cooperate and combine their expertise. The big problem is that organizations, supply chains and their supporting systems were never designed to be demand driven. The challenge is to find an evolutionary path where a new fully collaborative infrastructure cooperates with the existing legacy-systems and business-processes.

About Subsidies

Thursday, March 6th, 2008
Around 1993 I became responsible for Subsidy Management at ABN AMRO. The whole thing started when the bank contracted a specialized company called PNO. I was asked to coordinate their activities in the Bank.
  • First you have to write a proposal (estimate time (including advisor).
  • When you get a subsidy you have to spend time reporting (estimate time).
  • The sum of both multiplied by the price per hour result in the costs.
  • Multiply the sum of subsidy by the chance you get the subsidy. A simple way to do that is to estimate the amount of contenders. This gives you a simple statistical expectation.
  • If the Estimated sum is lower than the costs don’t spend your time and try to get money in a different way. In general when you are a small company stay out of subsidies.

If you really want to become rich start a company like PNO (Pecunia Non Olet, Money Does Not Stink).

When I met them I soon found out that I was there when the company was created. They started their activities at the same place (Hengelo) and the same building as the company of a friend of mine. This company (Utopics) developed the expert-system they use to track subsidy opportunities.

Until 1993 I did not realize that it was possible to acquire a huge amount of money when you play the game the right way.

The Subsidy Game is played the right way when you combine two things. You have to align your strategy and related projects with the vision of government and you have to create the right level of contacts.

When the local or international government defines a policy they look for instruments to support this policy. One of the instruments they use is subsidies. They pay you to do what they want you to do.

When you want to get a lot of money you have to align your policy with the policy of the government.

It is very important to understand that aligning your policy is a virtual act. You have to show that the policy is written down on paper. If you are clever you don’t have to adjust your plans. In reality you play the same game government is playing. They also act very differently at the inside.

They play the Game of Politics. The game of politics is a combination between the Unity (Plan, Model) and the Social (Emotions, Network) World-View. The game is about persuading people to accept a model or plan or asking an opinion about a plan.

The simple trick is to relate all the projects you are doing to the policies of the Government and translate the project-plan into a proposal for subsidy.

The next step is much more important. You have to influence the network of decision makers. I hope you are not a naive person who believes in an objective government.

Everybody in government can be influenced to do what you want. The only thing that counts is the price you have to pay. Please understand that bribing is possible but this is a very stupid way to get influence because it only influences one person.

To get an optimal result you have become an “important person” in the network of decision makers itself.

To do this you have practice the art of Public Relations (PR). When you are practicing PR you have to know WHO is WHO, visit meetings and parties and give something to receive something.

When the Subsidy-project grew I became involved in PR at a large scale. PR is really fun. You talk a lot, travel a lot, you eat (and drink) a lot and sometimes you make a beautiful deal.

Soon I found out that the power of the Dutch Government was gone. The power was moved to Brussels. I made a proposal the create a special lobby-office in Brussels and to my surprise top-management agreed.

This started a new level of sophisticated manipulation. Getting things done in Brussels is much more difficult that getting things done in the Hague.

Brussels can be compared with Washington and the European Union acts the same as the USA. Many things are decided behind close doors and the most important influencers are the rich companies.

To get some instant experience I visited a few lobby offices and talked with the managers to find out how they were doing “it”.

My most spectacular experience was with IBM. IBM seemed to me the perfect lobby machine. The manager of the Lobby Office was the Minister of Foreign Affairs of IBM and he also had the power to act.

Influencing EG Policy was a very important issue at IBM. You have to understand that the EG is deciding about many standards and the standards have to be built in the products of IBM.

When I got acquainted with the practices of Brussels I discovered many “bribing patterns”. Later they were also detected and many scandals appeared. Yes, High Level Officials of the EG asked for money and they were also payed.

When you are not a high level player in the Subsidy Business I advice you to make use of an advisor. Even if you use an advisor the changes are low. Because of the low changes you are able to make a simple calculation to find out if subsidies are something you have pursue.

About Sociocracy

Monday, December 17th, 2007

Kees Boeke was the teacher of the children of Queen Juliana. In 1945 just after the end of the Second World he wrote a document in Dutch with the title “What have we learned and where to go“?

At the end of his analysis he comes to the conclusion that the main problem was Democracy. Before the Second World War the Democratic System was unable to solve the problems in Society. Members of Parliament were constantly discussing and blocking each others proposals snnothing really happened.

In this document he evaluates the period 1930-1945. It is impossible to translate the whole document in English. His analysis is impressive and sad to say very applicable to our current situation.

Kees Boeke proposed a new system called Sociocracy. Sociocracy is based on the practices of the Quakers. Just like the Quakers Kees Boeke believed that when people are inspired by the Holy Ghost or The Inner Light they will be guided to a state of “consent”.

His idea is to create “circles” of about 150 people and to close these circles in higher order circles when a decision has a big impact. Every circle has to take into account the higher good of the whole of all circles.

Kees Boeke formulated the basic Rules of Sociocracy.

1. The interests of all members must be considered, the individual bowing to the interests of the whole.

2. No action can be taken if there are no solutions found that everyone can accept.

3. All members must be ready to act according to these unanimous decisions.

Later the ideas of Kees Boeke were taken over by one of his pupils Gerard Endenburg. He applied sociocracy in his factories. Endenburg combined cybernetics and sociocracy.

He formulated new rules:

1. Consent governs policy decision-making. Consent means there are no argued and paramount objections to a proposed decision.

2. Circles are the primary governance unit. Circles are semi-autonomous and self-organizing. Within their domain, they make policy decisions; set aims; delegate the functions of leading, doing, and measuring to their own members; and maintain their own memory system and program of ongoing development.

3. Circles are connected by a double-link consisting of the functional leader elected by the next higher circle, and two or more representatives elected by the circle, all of whom participate fully in both circles.

4. People are elected to functions and tasks by consent after open discussion.

Sociocracy became a big success and has spread all over the world. It is, in my opinion, the best approach to solve the immense problems of our current time.

LINKS

About Autarky

About Cooperation

About the Cooperative

About Cybernetics

About Resonance

About Fools, Pyramids and Bubbles

Saturday, December 1st, 2007

foolsDuring the so called E-Commerce Bubble allmost everybody believed that when you sell something on the Internet you will become an instant multi-biljonair.

I did not believe this at all. The funny thing was that almost nobody believed me. I waited for the Bubble to burst.

To my surprise the E-Commerce Bubble became the biggest bubble I ever experienced. At a certain moment I even started to believe I was wrong and something really special was happening, The New Economy.

Later I discovered the reason why the Bubble was able to grow to an extreme proportion. The Long Term Economic Cycle called the Kondratieff-Cycle was at that time in an UP-mode. The Economy was expanding and many people were looking for a nice investment opportunity.

When the Bubble exploded the Kondratieff was moving Down and the Exploding Bubble excellarated the downfall.The Kondratieff will start to rise again around 2020. Until that time we will be in a state of Recession.

The people that promoted E-Commerce believed that Commerce was all about Communication. Just Tell Everybody You are There and Business will Come. But When Everybody is telling Everybody that they are selling Something Nobody will Find you. To find you they have to know what they are looking for. People used a search-engine to find what they were looking for.

E-Commerce created a new problem. The problem was “how to Manipulate a Search-Engine”. The problem was solved by the Search-Engine itself. Just Pay us and we Put You on top of the List. At that time I did not realize that the biggest money-maker in E-Commerce would be the creation of a “fraudulent” search-engine.

At that time we believed the only type of company that would benifit from E-Commerce was a Mail-Order Company. Amazon.COM was our favorite example.

I knew that the Old Companies were unable to create a Website with a connection to the Back Office. Their Legacy Systems would block them.

I reseached Logistics, Languages, Legal and Fiscal Issues and the big Cultural differerences between the many Countries in the World you could reach with one simple Website.I found out that there are a lot of questions you could ask about Commerce that many people never asked because Normal Commerce was “Just Happening”. We are immersed in Commerce and take many things for granted.

I got in contact with people in the US that where doing the same research. We decided to create a European CommerceNet. The EG asked me to participate in a big effort to solve the problems of SME’s in E-Commerce. We identified many issues that had be resolved.

Finally the Bubble exploded.

the-foolEconomic Bubbles are happening all the time. The simplest explanation for the appearance of a Bubble is The Bigger Fool Theory. When you buy something and your investment becomes questionable you believe you will always find a “a bigger fool” who pays the price of your life. Humans are positive thinkers. They believe they will always make a profit.

The bigger fool theory is an example of a positive feedback mechanism. Everybody feels things will go up. If this happens they want to become part of the tremendous success. What many people don’t realize is that positive feedback has to be compensated by a negative feedback.

Everything in the Universe is expanding and contracting. People who are entering in the beginning of the rise make a lot of money. People that join when the decline starts lose everything. A Bubble is a very complicated, unbalanced, unfair and sometimes even fraudulent exchange-mechanism. A fraudulent exchange mechanism is called a Pyramid-scheme or a Ponzi-Scheme. A Bubble is a Ponzi-Scheme where nobody is playing Mr.Ponzi.

In the E-Commerce Bubble many people used the Ponzi-Scheme to make a lot of money. I don’t want to offend my collegueas but I am convinced many financial advisors knew the Bubble would burst some day and did not tell this to the people they were advising. They did not tell the truth for many reasons.

They were completely ignorent about the technology and the effect of the technology on companies but the most important reason was sadly enough the fact that they were making a lot of money themselves. They became greedy. Greed is the Fatal Attractor behind all the Ponzi-schemes.

Economic Theorists proved that the Ponzi-Scheme can also be applied to other areas of our society like The Housing Market and the Government Pension System. All of them will finally end in a Bursting Bubble. The people that will win are always first users. The Housing Market Bubble is already exploding, The Pension Bubble is on its way.

LINKS

About Entrainment and Bubbles