A New Capitalism (P3) - Humans

Business is People

Producers, consumers, investors, stakeholders, shareholders, customers, partners, management, c-suite, line staff, consultants, independent contributors -business is people and the activity that these people are engaged in seems to take place along the sides of a triangle with staff, customers and products at the vertices.

Lean Methodology

Side A is the relationship between the customer and the staff of the business. In 1999, the Cluetrain Manifesto declared that:

 Corporate firewalls have kept smart employees in and smart markets out. It's going to cause real pain to tear those walls down. But the result will be a new kind of conversation. And it will be the most exciting conversation business has ever engaged in.”

Since that time we have seen Lean Methodology take hold in many companies. Lean is characterized by a relationship or conversation between a company's employees and their customers.

The goal of Build-Measure-Learn is not to build a final product to ship or even to build a prototype of a product, but to maximize learning through incremental and iterative engineering . (Learning could be about product features, customer needs, the right pricing and distribution channel, etc.) The “build” step refers to building a minimal viable product (an MVP.) It’s critical to understand that an MVP is not the product with fewer features . Rather it is the simplest thing that you can show to customers to get the most learning at that point in time. Early on in a startup, an MVP could simply be a PowerPoint slide, wireframe, clay model, sample data set, etc. Each time you build an MVP you also define what you are trying to test/measure. Later, as more is learned, the MVP’s go from low-fidelity to higher fidelity, but the goal continues to be to maximize learning not to build a beta/fully featured prototype of the product.
Steve Blank on Lean Methodology   

Human Centered Design

Side B is the relationship between the product and the customer. Human Centered Design is for product design what Lean is for organization design - both are rabidly focused on the experience of the customer.

Human Centered Design is a process that starts with the people you’re designing for and ends with new solutions that are tailor made to suit their needs. Human-centered design is all about building a deep empathy with the people you’re designing for; generating tons of ideas; building a bunch of prototypes; sharing what you’ve made with the people you’re designing for; and eventually putting your innovative new solution out in the world.
IDEO

Humans Doing Work to Create Impact

Side C is the relationship between staff and the product. We have all heard the adage “measure what matters” which is an argument for data informed decision making.  The basic idea is that if you measure what matters the most to the success of your business you will use the resulting data to improve your business in those areas that matter. However, this places the act of measurement outside of the work of the business. This is why I prefer a new adage, manage what matters. If a business builds effective management systems to deliver the intended impact to the customer then the data that can inform the business about how to increase impact will fall out of the management systems as reporting or business intelligence. This is because the thing that creates impact is work and work is managed with process.  Changing how a process is managed will change the impact of that process. The management lens is powerful because it reminds us that: 1) we are humans, 2) doing work, 3) to create impact. 

Fortunately, two of the best practices for managing what matters are Lean Methodology and Human Centered Design because both of them focus on managing an iterative process to deliver value (impact) to the customer. So, reporting on the efficacy of these processes is a reporting on how a company can improve its ability to deliver value over time. No Magic. This is only work.

Product efficacy is one aspect of Side C; however, there is a second and equally important aspect: employee motivation. Here is Daniel Pink from his book Drivetalking about intrinsic motivation.

When it comes to motivation, there’s a gap between what science knows and what business does. Our current business operating system–which is built around external, carrot-and-stick motivators–doesn’t work and often does harm. We need an upgrade. And the science shows the way. This new approach has three essential elements: 

  • Autonomy – the desire to direct our own lives. 
  • Mastery — the urge to get better and better at something that matters. 
  • Purpose — the yearning to do what we do in the service of something larger than ourselves.

In the context of impact as product, #3 becomes particularly interesting… and motivating.

NOTE: If I had this post to write again.  I would have made this two posts with the second one starting here.

Agency Makes Us Free

I have recently decided to focus my work on two essential values: equity and agency.  Equity I have described earlier in this three post series but the short and simple definition is a level playing field. The second essential value is agency.  I have adopted Amartya Sen’s definition for agency.

I am using the term "agent" ... in it’s older - and “grander" - sense as someone who acts and brings about change, and whose achievements can be judged in terms of her own values and objectives, whether or not we assess them in terms of some external criteria as well. This work is particularly concemed with the agency role of the individual as a member of the public and as a participant in economic, social and political actions. - Amartya Sen Development as Freedom

Regardless of our place on my silly business triangle, we are human and as humans it is our right to have agency in our lives. Agency is the freedom of opportunity is not just economic opportunity but also the opportunity to create change.  I have agency when three conditions are met:

  1. Opportunity exists
  2. I have the standing to recognize opportunity
  3. I have the capacity exploit opportunity

Agency is not genetic. No one is predisposed to have more agency than another. Agency requires equity and only with agency can we be free. Bill Gates and the Koch brothers have agency. I have agency though I occasionally choose not to act to protect my privilege. That choice is a privilege. There are many people who have little to no agency. Poverty destroys agency.

The following is an excerpt from Lisa Sharon Harper’s article, The Lie. Ms. Harper is Sojourners’ senior director of mobilizing and she wrote The Lie after working in Ferguson last year.

This spiritual lie is profound and ugly. It has shaped beliefs about the black residents of Ferguson, laid the foundations for missteps by authorities, and affected the black Ferguson community’s capacity to prevent the death of Michael Brown.
This lie was caught on video when a Ferguson police officer said, during an early protest march, “Bring it! All you f***ing animals! Bring it!”
There it is—the belief that usually resides deep beneath the surface of conscious thought, safe from examination and extrication, but was born in biblical times, solidified in the days of the Enlightenment, and codified into colonial law in 1660 through the racialization of Virginia slave codes. Then 14 years after the Declaration of Independence, which proclaimed “all men are created equal and endowed by their creator with certain unalienable rights,” the lie was embedded in the U.S. legal structure through the Naturalization Act of 1790, which barred the rights of citizenship from both free and enslaved black people.
These are the roots of the lie. Here it is—plain and simple: Black people are not fully human. In most crass terms—they are animals.

An animal has no human agency. The African American population of Ferguson is mired in poverty. But this is not a post about poverty. This is a story about agency - equity and agency.   

Michael Brown, the young man who was killed by a Ferguson police officer and was left lying on the street for 4 hours was a graduate of Normandy High School. Just as business is a great opportunity to provide real value - to solve real problems - but is also  the source of the problems we need to solve; education is the opportunity to create equity and build agency but is also the source of inequity and a destroyer of agency. Nicole Hannah-Jones is an award winning investigative reporter for ProPublica and the NY Times Magazine. She has done several exceptional pieces on housing discrimination and more recently a brilliant piece for ProPublica on the REsegregation of american Schools called Segregation Now. Speaking specifically about Michael Brown and other Ferguson youth she wrote:

Out of 520 districts in the state, Normandy, where 98 percent of students are black and 9 of 10 were poor in 2013, is marooned at the very bottom.
Decades of research show that segregated, high-poverty schools are simply toxic for students of all races and backgrounds. Just last month, the University of North Carolina at Chapel Hill released a study showing that black first-graders in segregated schools performed worse than black students with the same backgrounds (meaning poverty, parental education and other factors) who attend integrated schools. - School Segregation, the Continuing Tragedy of Ferguson by Nikole Hannah-Jones.

In an excellent episode of This American Life titled after the Norman Rockwell painting - The Problem We All Live With - Nikole Hannah-Jones talked in depth about the issue of racial integration in schools. Here is a small piece of her insight.

I think it's important to point out that it is not that something magical happens when black kids sit in a classroom next to white kids. It's not that suddenly a switch turns on and they get intelligence, or wanting the desire to learn when they're with white kids. What integration does is it gets black kids in the same facilities as white kids. And therefore, it gets them access to the same things that those kids get-- quality teachers and quality instruction.

Once upon a time - after Brown v. Board of Education - America embarked on an effort to desegregate our schools. In 1971, when America began in earnest to integrate schools, the achievement gap on standardized reading tests between white and black students was 39 points. By 1988, when racial segregation of schools was at an all time low, the gap was reduced to 18 points.

However,

According to an analysis by ProPublica, the number of apartheid schools nationwide has mushroomed from 2,762 in 1988—the peak of school integration—to 6,727 in 2011. -Segregation Now by Nikole Hannah-Jones

And this…

In St. Louis, 29.5 percent of poor African Americans live in concentrated poverty. Among poor whites, just 1.6 percent do. Poor whites, in most major metropolitan areas, are spread out. Poor African Americans are not.
This data point — the share of poor people living in deeply poor places — gets at an important element of poverty that's obscured by citywide poverty rates. "The concentration of poverty is really about the spatial organization of poverty," Jargowsky writes. It captures how we've designed communities to pen poverty in, restricting many poor African Americans in particular to a limited number of neighborhoods. - Black Poverty Differs from White Poverty

Poverty and segregation are bad for everyone but, here’s the crazy thing, integration is good for everyone. The Equality of Opportunity Project at Harvard recently uncovered 5 common factors in communities with high social mobility.

  • Segregation - “We begin by showing that upward income mobility is significantly lower in areas with larger African-American populations. However, white individuals in areas with large African American populations also have lower rates of upward mobility, implying that racial shares matter at the community (rather than individual) level.”
  • Inequality -  “Although one cannot draw definitive conclusions from such correlations, they suggest that the factors that erode the middle class hamper intergenerational mobility more than the factors that lead to income growth in the upper tail.”
  • Schools - “Areas with higher test scores (controlling for income levels), lower dropout rates, and smaller class sizes have higher rates of upward mobility. In addition, areas with higher local tax rates, which are predominantly used to finance public schools, have higher rates of mobility.”
  • Social Capital - “high upward mobility areas tend to have higher fractions of religious individuals and greater participation in local civic organizations.”
  • Family Structure - “As with race, parents' marital status does not matter purely through its effects at the individual level. Children of married parents also have higher rates of upward mobility if they live in communities with fewer single parents.”

In each of these factors we can see vibrancy and social mobility encouraged by diversity.  As we cast about, trying to fix what is broken, this reality should sit in the center of our consciousness. The changes that will end our suffering are simple. In a general sense we must build an equitable world that encourages agency in everyone. In a very specific sense, we must integrate our schools, our communities, our churches, our companies, all of it.

I have written and erased a dozen or so diatribes against the ugliness that opposes integration but what it comes down to is, in a very real sense, “None of us are free, one of us are chained.”  This is a struggle for our soul and our soul - our humanity, our capacity to love - is what makes vibrancy in the human ecosystem possible.