Characteristics of an Age of Transitions
from: newt.org
Thirty-six years after Boulding's first explanation
of the coming change, and thirty-one years after
Drucker explained how to think about a
discontinuity, some key characteristics have
emerged. This section outlines 18 characteristics
and gives examples of how political and
governmental leaders can help develop the
appropriate policies for the age of transitions.
However, it should first be noted that there is an
overarching general rule: assume there are more
changes coming.
It is clear that more scientists, engineers, and
entrepreneurs are active today than in all of
previous human history. Venture capitalists are
developing powerful models for investing-in and
growing startup companies, and in the process
they are acquiring more and more capital as the
markets shift away from the smokestack industries
and toward new models. It is also clear that there is
a growing world market in which more
entrepreneurs of more nationalities are competing
for more customers than ever in human history.
All this growing momentum of change simply
means that no understanding, no reform, no
principle will be guaranteed to last for very long.
Just as we get good at one thing, or come to
understand one principle, it will be challenged by
an emerging new idea or achievement from a
direction we haven't even considered.
Within that humbling sense that the change is so
large we will never really know in our lifetime the
full analysis of this process, here are 18 powerful
characteristics for developing government policy
and politics in the Age of Transitions:
1. COSTS WILL CRASH A major pattern will be a
continuing, and in many cases steep, declines in
cost. An ATM is dramatically cheaper than a bank
teller. A direct-dial phone call is much less
expensive than an operator-assisted call. My
brother used Priceline.com and received four
airlines tickets for his family for the price of one
regular ticket. We have not even begun to realize
how much costs will decline (including health and
healthcare, education and learning, defense
procurement and government administration). We
also have not yet learned to think in terms of
purchasing power instead of salary. Yet the pattern
is likely to be a huge change in both purchasing
power and behavior for both citizens and
government. Those who are aggressive and alert
will find remarkable savings by moving to the
optimum cost crashes faster than anyone else. As a
result they will dramatically expand their
purchasing power.
2. A CUSTOMER CENTERED PERSONALIZED SYSTEM
With Amazon.com and other systems you can look
up precisely the books or movies you want and,
after a while, they sense your interests and they
begin to bring items to you that you may like. We
can consider a personal Social Security Plus
account because we already have personal Roth
IRA's and 401k's. We can consider a personal
learning and personal health system just as we
have e-tickets for our Internet purchased airline
tickets. Anything that is not personalized and
responsive to changes in the individual will rapidly
be replaced by something that is.
3. 24-7 IS THE WORLD OF THE FUTURE Customer
access 24 hours a day and 7 days a week will
become the standard of the future. ATM's
symbolize this emerging customer convenience
standard. You can get cash 24 hours a day, 7 days a
week, yet today's schools combine an agricultural
era 9 or 10 month school year (including the
summer off for harvesting) with an industrial era
50 minute class, with the foreman at the front of
the room facing a class of workers facing him or
her, in a factory style school day, in a Monday to
Friday work week. Learning in the future will be
embedded in the computer and on the Internet and
will be available with a great deal of customization
for each learner at his or her convenience and on
demand. Similarly, government will have to shift
to its customers' needs rather than demanding that
the customers make themselves available at the
bureaucrat's convenience. These are big changes
and they are unavoidable given the emerging
technologies and the e-customer culture that is
evolving.
4. CONVENIENCE WILL BE A HIGH VALUE As
customers get used to one-click shopping (note the
shopping cart approach on Amazon) they will
demand similar convenience from government.
People will increasingly order products and
services to be delivered to their homes at their
convenience. They will initially pay a premium for
this convenience but over time they will conclude
that it is a basic requirement of any business they
deal with. After a while e-customers will begin to
carry these attitudes into their relationship with
bureaucracy, and as e-voters they will favor
politicians who work to make their lives easier (and
therefore more convenient).
5. CONVERGENCE OF TECHNOLOGIES WILL
INCREASE CONVENIENCE, EXPAND CAPABILITIES,
AND LOWER COSTS The various computation and
communication technologies will rapidly converge
with cell phones, computers, land-lines, mobile
systems, satellite capabilities and cable all
converging into a unified system of capabilities,
which will dramatically expand both capabilities
and convenience.
6. EXPERT SYSTEM EMPOWERED PROCESSES When
you look up an airline reservation on the Internet
you are dealing with an expert system. In virtually
all Internet shopping you are actually asking
questions of such a system. The great increase in
capability for dealing with individual sales and
individual tastes is a function of the growing
capacity of expert systems. These capabilities will
revolutionize health, learning and government
once they are used as frequently as they currently
are in the commercial world. If it can be codified
and standardized it should be done by an expert
system rather than a person. That is a simple rule
to apply to every government activity.
7. MIDDLEMEN DISAPPEAR This is one of the most
powerful rules of the Age of Transitions. In the
commercial world, where competition and profit
margins force change, it is clear that customers are
served more and more from very flat hierarchies,
with very few people in the middle. In the
protected guilds (medicine, teaching, law and any
group which can use its political power to slow
change) and in government structures there are
still very large numbers of middlemen. This will be
one of the most profitable areas for
political-governmental leaders to explore. In the
Age of Transitions the customer should be
foremost and every unnecessary layer should be
eliminated to create a more agile, more rapidly
changing, more customer centered and less
expensive system.
8. CHANGES CAN COME FROM ANYWHERE The
record of the last thirty years has been a growing
shift toward new ideas coming from new places.
Anyone can have a good idea, and the key is to
focus on the power of the idea rather than the
pedigree of the inventor. This directly challenges
some of the peer review assumptions of the
scientific community, much of the screening for
consultants used by government, much of the
credentialing done by education and medicine, and
much of the contractor-certification done by
government. This principle requires us to look very
widely for the newest idea, the newest product and
the newest service, and it requires testing by trial
and error more than by credentialing or traditional
assumptions.
9. SHIFT RESOURCES FROM OPPORTUNITY TO
OPPORTUNITY One of the most powerful engines
driving the American economy has been the rise of
an entrepreneurial venture capitalism that moves
investments to new opportunities and grows those
opportunities better than any other economy in the
world. There is as yet no comparable government
capacity to shift resources to new start-ups and to
empower governmental entrepreneurs. There are
countless efforts to reform and modernize
bureaucracies, but that is exactly the wrong
strategy. Venture capitalists very seldom put new
money into old corporate bureaucracies. Even
many of the established corporations are learning
to create their own startups because they have to
house new ideas and new people in new structures
if they are really to get the big breakthroughs. We
need a doctrine for a venture
capitalist-entrepreneurial model of government
including learning, health, and defense.
10. THE RAPIDITY OF BETTER, LESS EXPENSIVE
PRODUCTS WILL LEAD TO A CONTINUED PROCESS
OF REPLACEMENT Goods and services will take on a
temporary nature as their replacements literally
push them out the door. The process of new, more
capable and less expensive goods and services, and
in some cases revolutionary replacements which
change everything (as Xerox did to the
mimeograph, and as the fax machine, e-mail and
pc have done), will lead to a sense of conditional
existence and temporary leasing that will change
our sense of ownership.
11. FOCUS ON SUCCESS Entrepreneurs and venture
capitalists have a surprisingly high tolerance for
intelligent failure. They praise those who take risks,
even if they fail, over those who avoid risks, even if
they avoid failure. To innovate and change at the
rate the Age of Transitions requires, government
and politicians have to shift their attitudes
dramatically (and it would help if the political
news media joined them in this). Today it is far
more dangerous for a bureaucrat to take a risk
than it is to do nothing. Today the system rewards
(with retirement and non-controversy) serving
your time in government. There are virtually no
rewards for taking the risks and sometimes failing,
sometimes succeeding. Yet in all the other areas of
science, technology, and entrepreneurship the
great breakthroughs often involve a series of
failures (consider Edison's thousands of failed
experiments in inventing the electric light and how
they would have appeared in a congressional
hearing or a news media expose). Setting a tone of
trying, and rewarding success while tolerating
intelligent failure, would do a great deal to set the
stage for a modernized government.
12. VENTURE CAPITALISTS AND ENTREPRENEURS
FOCUS ON OPPORTUNITIES This is similar to
focusing on success but refers to the zone in which
energy and resources are invested. It is the nature
of politics and government to focus on problems
(schools that fail, hospitals that are too expensive,
people living in poverty) when the real
breakthroughs come from focusing on
opportunities (new models of learning that work,
new approaches to health and healthcare that
lower the cost of hospitals, ways to get people to
work so they are no longer in poverty). Venture
capitalists are very good at shifting their attention
away from problem zones toward opportunity
zones. Politicians and the political news media tend
to do the opposite. Yet the great opportunities for
change and progress are in the opportunities
rather than the problems.
13. REAL BREAKTHROUGHS CREATE NEW PRODUCTS
AND NEW EXPECTATIONS Before Disney World
existed it would have been hard to imagine how
many millions would travel to Orlando. Before the
Super Bowl became a cultural event it was hard to
imagine how much of the country would stop for
an entire evening.
Before faxes we did not need them, and before
e-mail no one knew how helpful it would be. One
of the key differences between the public and
private sector is this speed of accepting new
products and creating new expectations. The
public sector tends to insist on using the new to
prop up the old. For two generations we have tried
to get the computer into the classroom with
minimal results. That's because it is backward: The
key is to get the classroom into the computer and
the computer in the child's home, so learning
becomes personal and 24/7. Doctors still resist the
information technologies that will revolutionize
health and healthcare, and which will lower
administrative costs and decrease unnecessary
deaths and illnesses dramatically. In the private
sector competition and the customer force change.
In government and government protected guilds
the innovations are distorted to prop up the old and
the public (that is the customer) suffers from
higher expense and less effective goods and
services.
14. SPEED MATTERS: NEW THINGS NEED TO GET
DONE QUICKLY There is a phrase in the Internet
industry, "Launch and Learn," which captures the
entrepreneurial sense of getting things done
quickly. It suggests that you launch your business
or your new product and learn while you are
building it. As one Silicon Valley entrepreneur
suggested, he had moved back from the East
because he could get things done in the same
number of days in California as the months it
would have taken where he had been. Moving
quickly produces more mistakes but it also
produces a real learning that only occurs by trying
things out. The sheer volume of activity, and the
speed of correcting mistakes as fast as they are
discovered, allows a "launch and learn" system to
grow dramatically faster than a "study and
launch" system. This explains one of the major
differences between the venture
capitalist-entrepreneurial world and the
traditional corporate bureaucracies. Since
governments tend to study and study without ever
launching anything truly new it is clear how even
further the gap gets between the public and private
sectors in an Age of Transitions. Today it takes
longer for a Presidential appointee to be cleared by
the White House and approved by the Senate than
it takes to launch a startup company in Silicon
Valley.
15. START SMALL BUT DREAM BIG Venture capital
and entrepreneurship are about baby businesses
rather than small businesses. Venture capitalists
know that in a period of dramatic change it is the
occasional home run rather than a large number of
singles that really make the difference. The result is
that venture capitalists examine every investment
with a focus on its upside. If it does not have a big
enough growth potential it is not worth the time
and energy to make the investment. Government
tends to make large risk-averse investments in
relatively small controllable changes. This is almost
the exact opposite of the venture
capital-entrepreneurial model. The question to ask
is: "If this succeeds, how big will the difference be,
and if the difference isn't very substantial, we need
to keep looking for a more powerful proposal."
16. BUSINESS-TO-BUSINESS IS THE FIRST BIG
PROFIT OPPORTUNITY While most of the attention
in the Internet market is paid to sales to the final
customer, the fact is that that market is still
relatively small and relatively unprofitable.
However, there is no question that Internet based
systems such as Siebel and Intelisys are creating
business-to-business opportunities that will
dramatically lower the cost of doing business.
Every government, at every level, should be
rationalizing its purchasing system and moving on
to the net to eliminate all paper purchasing. The
savings in this area alone could be in the 20 to 30 %
range for most governments. The opportunities for
a paperless system in health and healthcare could
lead to a crash in costs rather than a worry about
rising costs.
17. APPLYING QUALITY AND LEAN THINKING CAN
SAVE ENORMOUS AMOUNTS Whether it is the
earlier model of quality espoused by Edwards
Deming or the more recent concept of lean
thinking advocated by James Womack and Daniel
Jones, it is clear that there is an existing model of
thinking-through production and value, on a
systematic basis, and creating more profitable, less
expensive approaches. The companies that have
really followed this approach have had remarkable
success in producing better products at lower
expense, yet it is almost never used by people who
want to rethink government.
18. PARTNERING IS ESSENTIAL No company or
government can possibly understand all the
changes in an Age of Transitions. Furthermore,
new ideas will emerge with great speed. It is more
profitable to partner than to try to build in-house
expertise. It allows everyone to focus on what they
do best while working as a team on a common
goal. This system is prohibited throughout most of
government, and yet it is the dominant organizing
system of the current era of startups. As
government bureaucracies fall further and further
behind the most dynamic of the startups (in part
because civil service salaries cannot compete with
stock options for the best talent), it will become
more and more important to develop new
mechanisms for government-private partnering.
These initial principles give a flavor of how big the
change will be and of the kind of questions a
political-governmental leader should ask in
designing a program for the Age of Transitions.
They can be refined, expanded and improved, but
they at least start the process of identifying how
different the emerging system will be from the
bureaucratic-industrial system that is the heart of
contemporary government.
.............................
tom watson tosiwmee |
