Conches

Incentives, motivation, outcomes and logic models

Logic Models: The purpose of a Logic Model or Theory of Change is to map activities to the world we want to see. I would like to point out two recent news stories that highlight the need for logic models.

The first is microfinance in Anda Pradesh. Bad incentives and aggressive profit/financial targets pushed loan officers to poor outcomes. Instead of tying the loan officers actions to specific outcomes in the lives of the poor, they were tied to profit numbers of the orgs that served the poor and there was no clear connection to that orgs financial success and the success of the poor clients. That what a logic model is for.

In the you tube video below (thanks Jessica Margolin) you see the same outcome in policing. Quotas aare established for numbers that have no logical connection to the right outcome.

 

This video demonstrates a logic model that goes kinda like this...

The Change We Want To See: NYPD appears to be addressing crime.

The Theory: If we make and record a lot of arrests then we will appear to be working hard to address crime.

The Activities: Compensate/Incentivize employees to arrests.

Anyone have suggestions for how this formula might be imnproved?

Entrepreneurship, Growth and Value

I recently found this short and very compelling video from the Kauffman Foundation on enabling entrepreneurship.  It is worth watching and kinda necessary for the rest of this post as critique.  

 

Here are my comments...

Growth: The approach in the video seems to advocate for a gross measurement of growth as any new enterprise any where which buys in to the all growth is good growth myth.

Failure: There is an assumption that "improving" the failure rate of new enterprises will improve the economy which brings up the question about how many of new companies "should" fail? Is the failure rate a useful filtering mechanism? Our economic structure is such that there is very little penalty for failure.  It may be that failure 1) keeps "bad" businesses out of the market, 2) improves the skills of new entrepreneurs.  Additionally, I would love to see a formal way for entrepreneurs to be able to, as Clay Shirkey says, fail informatively.

Success: This statement is in the video: "People would start more businesses if they were more certain of their success." There are many assumptions embedded here.  What we don't want to do is weaken any market physics in an effort to increase the success rate.  This is where people start yelling about subsidy and market distortion.  How do we answer these concerns?

Maximize: There is a section of the video on finding the levers for increased growth of individual companies. I am an advocate of maximizing existing efforts so this makes sense to me. However, the levers discussed in the video all revolve around growth in a value-free way, just financial growth for the casino economy. It is my belief that this paradigm is dead and we now need to understand growth in terms of progress towards solutions and emergence where cooperation helps 1+1=3.

What Ifs...

Very interesting article from TechCrunch on the wasted opportunity (my words) of technologists. Look at what we just saw is possible with SOPA / PIPA. We went from a backroom deal that they hoped would sneak through to public embarrassment and backpeddling that killed an otherwise sure thing. The reason why SOPA/PIPA were written has very little to do with pirating (not nothing, but very little). They were written to protect the privileged market position of entertainment arbiters in the face of innovation that makes them nearly irrelevant. (Same idea with Big Oil and alternative energy though not so stark in that we still really need oil.)

I find that technology, communications technology in particular, is littered with powerful examples of what if... What if Cable TV and Community Access wasn't crippled by funding and end-of-dial regulation? What if we wre allowed to leverage the foundational P2P architecture of the Internet to create connections between difference and "other" instead of like-interests?

We now know what is possible if the new-tech/communications/information industry comes together to apply pressure against regulation. What if they were to realize that Citizen's United is exactly the same threat as SOPA/PIPA? What if they were to realize that what is passing for political discourse is least-common-denominator and then decided to do something about it? What if the something they decided to do didn't provide a revenue boost to this FQ but provided a win for their customers, their communities, the commons. What-if...

http://techcrunch.com/2012/01/20/do-great-things/

 

 

The Golden Rule

I am reading Karen Armstrong's "Twelve Steps to a More Compassionate Life".  I posted a quote from that book to Facebook:

Compassion is aptly summed up in the Golden Rule, which asks us to look into our own hearts, discover what gives us pain, and then refuse, under any circumstance whatsoever, to inflict that pain on anybody else.

An excellent discussion ensued. The gist of the discussion was about the tactics of compassion.  The do-unto-others bit makes sense but is not a roadmap.  As Karen Armstrong says in her book, the first question is always, "What do I do next?"

Maybe I will gain some insight on this when I make it past the Introduction of the book.  However, this is how I understand the Golden Rule today.

I should fight to keep my enemies from experiencing what I know to be painful. This is very difficult for me. I fight. I am an American. I believe that this tradition of rugged individualism, of might makes right, of social Darwinism, does not build more than it destroys. So, at the very least, it is ineffective. I also believe this competitive tradition keeps of from defining our nirvana and instead frames our aspirations for us around ownership and self as an abstraction. There is no self outside of community. The act of thinking requires communication which, at the very least, requires a dialogue. Humanity can only be at its best as humanity. There are no heros. There is only us. 

Much love to every one.

Pro-Community Business Models Part 2

In my first post on this topic I proposed a list of community based business models and claimed to be able to fill them out with some more detail.  Here is my first effort.

Traditional, old-school, tried and true, community development.
After asking some friends in the community development field about efforts by community development practitioners, intermediaries and funders to generate, recycle, and retain capital at the ground level, here is what I found out.

The foreclosure crisis has given rise to a number of coordinated efforts to stabilize communities, that is, to identify those levers (resources, human capital, grassroots organizing/advocacy, local policy reform) that would help to stimulate economic activity; create jobs; prevent eviction of residents; preserve the supply of affordable housing – all aimed at reinvigorating the municipal tax base. Some noteable efforts in this category include:

• Neighborhood Stabilization Program (www.hud.gov)
• NeighborWorks America’s Stable Communities program: www.stablecommunities.org
• Boston Community Capital’s model of working with lenders and legal advocates to buy, restore and re-sell homes
• The work of HANDS Inc, in New Jersey (www.handsinc.org) focused on high-impact development of vacant, troubled properties
• Funders such as the F.B. Heron Foundation, that support mission-related investing, are working to promote the growth of small- to medium-sized place-based enterprises that rely on a local workforce.
• Will Allen’s Growing Power operation in Milwaukee: www.growingpower.org, aimed at re-shaping local food systems, working from the community level out.

These are initiatives that are focused on the current situation; however, community development organizations have been supporting local business and community residents for many years.  It may be that the very best, most effective work we can do is to strength, support, highlight, sing the praises of their work.

Cooperatives

I ran across an artcle in the LA Times the other day about how Richmond CA is taking a que from the Mondragon Corporation and building our cooperatives.  So who is Mondragon?

MONDRAGON Corporation is the embodiment of the co-operative movement that began in 1956, the year that witnessed the creation of the first industrial cooperative in Mondragón in the province of Gipuzkoa in Spain; its business philosophy is contained in its Corporate Values:

• Co-operation.
• Participation.
• Social Responsibility.
• Innovation.

The Corporation’s Mission combines the core goals of a business organisation competing on international markets with the use of democratic methods in its business organisation, the creation of jobs, the human and professional development of its workers and a pledge to development with its social environment.

"Mayor Gayle McLaughlin, Green Party Mayor of Richmond CA and a former schoolteacher, visited Mondragon, Spain, and recognized a possible path out of the poverty and unemployment that plague her city." (LA Times).  Mayor McLaughlin hired Terry Baird a vertran of the cooperative movement and the most delicious Arizmendi Bakery.  According to the article in the LA Times, several new worker owned cooperative businesses have been started.

The other classic and more informal version of this are things like child care coops or bulk purchasing coops (when I was a kid I remember our family got together with a bunch of other families to buy a cow and have it slaughtered.)  Maybe there is a way for a community to facilitate this sorts of ad hoc coops?

Franchises that behave like Shared-Services

I'm not sure if this actually exists but the idea is to create business support by business model and charge a sustainable rate for the value add.  So, like a franchise, say Subway, charges it's franchisees to use the brand and to buy the stuff to sell to the people.  In the shared services model, it takes a page from the cooperatives and collects the demand from several similar organizations to purchase larger lots and get a discount for quantity. This could be done for businesses that are needed or valuable to communities but where the overhead is too high to build a small business from scratch and compete. Legal services are a possible model.  Health services are another.  In both these cases these services tend to the higher profit margins of wealthy clients and leave the lower income brackets unserved.  For legal services an interesting model is the Americorp JusticeCorp.

The JusticeCorps program is an innovative approach to solving one of the more pressing issues faced by courts around the country today: providing equal access to justice. JusticeCorps recruits and trains 250 diverse university students annually to serve in overburdened legal self-help centers throughout California.

As for health services, the idea of community health clinics is begining to catch on.  The Octagon Acupuncture Clinc in Oakland provides low cost, sliding-scale care in an open community setting. This idea of customer focused retail health care has worked well for the rich.  How can we tweek the model to provide services across our communities.  Javier Lozano is trying to do just this for Diabetes care in Mexico.

Diabetes in Mexico is called "the disease of the rich." This is because current care alternatives are expensive, inconvenient and out of reach for 90% of the population. By developing innovative evidence-based algorithms for diagnosis and disease management, and by creating a chain of low-cost diabetes clinics, we will revolutionize the way diabetes care is delivered in developing countries and for the 14 million patients with diabetes in Mexico.

++++++++++++++++++

Is this interesting?  Please let me know.  I also want to loook at the following items...

Distributed manufacturing

Alternative currencies

Shared/Reciprocol Education

Municipal Resources and Maintenance

Governance / participatory budgetting

 

Really Basic Shit

Really Basic Shit about Hiring:

1. Demand drives hiring
2. Consumers demand.
3. Consumers demand when they have money and demand more when they have good, reliable, productive jobs.
4. When businesses have more money, they might invest in their business. 
5. When businesses have more customers, they hire.

Really Basic Shit about the Rich:

1. Rich people are not businesses.  Rich people own businesses.  Their money is not their buisnesses money and vice versa.
2. When The Rich have more money, they put it in the bank.
3. Giving money to the rich DOES NOT create jobs.  They are rich, they have money and they are not creating jobs.

Really Basic Shit about the Poor:

1. When the poor have more money, they spend it.
2. When the poor spend money, they spend it in very predictable geographies.
3. Giving money to the poor stimulates local economies.
4. When the poor have good, reliable, productive jobs, they are not poor.
5. When the poor are not poor, they contribute to the economy making it more robust.
6. When they poor are not poor they demand.

Capitalism has Replaced Democracy

I had started to write a post last week on the tenshion between Capitalism and Democracy.  Since then I have run in to the articles below...

Harold Meyerson of Washington Post: The Growing Tension between Capitalism and Democracy

What Stubb is proposing, and what the markets are doing, is, in essence, extending to the realm of once-equally-sovereign nations the one-dollar-one-vote principle that our Supreme Court enshrined in itsCitizens United decision last year. The requirement that one must own property to vote — abolished in this nation in the early 1800s by the Jacksonian Democrats — has been resurrected by powerful financial institutions and their political allies. To the nations of the European currency union, the “property” they need to secure their right to vote is a proper credit rating.

And by Stephen Fowley from The Independent in the UK: What Price the New Democracy

The ascension of Mario Monti to the Italian prime ministership is remarkable for more reasons than it is possible to count. By replacing the scandal-surfing Silvio Berlusconi, Italy has dislodged the undislodgeable. By imposing rule by unelected technocrats, it has suspended the normal rules of democracy, and maybe democracy itself. And by putting a senior adviser at Goldman Sachs in charge of a Western nation, it has taken to new heights the political power of an investment bank that you might have thought was prohibitively politically toxic.

This is the most remarkable thing of all: a giant leap forward for, or perhaps even the successful culmination of, the Goldman Sachs Project.

It is not just Mr Monti. The European Central Bank, another crucial player in the sovereign debt drama, is under ex-Goldman management, and the investment bank's alumni hold sway in the corridors of power in almost every European nation, as they have done in the US throughout the financial crisis. Until Wednesday, the International Monetary Fund's European division was also run by a Goldman man, Antonio Borges, who just resigned for personal reasons.

And finally, this excellent article by Naomi Wolf in The Gaurdian: The  Shocking Truth About the Crackdown on Occupy

But just when Americans thought we had the picture – was this crazy police and mayoral overkill, on a municipal level, in many different cities? – the picture darkened. The National Union of Journalists and the Committee to Protect Journalists issued a Freedom of Information Act request to investigate possible federal involvement with law enforcement practices that appeared to target journalists. The New York Times reported that "New York cops have arrested, punched, whacked, shoved to the ground and tossed a barrier at reporters and photographers" covering protests. Reporters were asked by NYPD to raise their hands to prove they had credentials: when many dutifully did so, they were taken, upon threat of arrest, away from the story they were covering, andpenned far from the site in which the news was unfolding. Other reporters wearing press passes were arrested and roughed up by cops, after being – falsely – informed by police that "It is illegal to take pictures on the sidewalk."

...

 noticed that rightwing pundits and politicians on the TV shows on which I was appearing were all on-message against OWS. Journalist Chris Hayes reported on a leaked memo that revealed lobbyists vying for an $850,000 contract to smear Occupy. Message coordination of this kind is impossible without a full-court press at the top. This was clearly not simply a case of a freaked-out mayors', city-by-city municipal overreaction against mess in the parks and cranky campers. As the puzzle pieces fit together, they began to show coordination against OWS at the highest national levels.

...

For the terrible insight to take away from news that the Department of Homeland Security coordinated a violent crackdown is that the DHS does not freelance. The DHS cannot say, on its own initiative, "we are going after these scruffy hippies". Rather, DHS is answerable up a chain of command: first, to New York Representative Peter King, head of the House homeland security subcommittee, who naturally is influenced by his fellow congressmen and women's wishes and interests. And the DHS answers directly, above King, to the president (who was conveniently in Australia at the time).

In other words, for the DHS to be on a call with mayors, the logic of its chain of command and accountability implies that congressional overseers, with the blessing of the White House, told the DHS to authorise mayors to order their police forces – pumped up with millions of dollars of hardware and training from the DHS – to make war on peaceful citizens.

Barrowing from Naomi Wolf, I now have 4 very clear demands:

1. Explicitly, through legislation, end corporate personhood.
2. Explicitly, through legislation, end the idea that spending money is equivalent to free speech protected by the 1st Ammendment
3. The letter and the intent of all insider trading laws and any others laws limiting access or influence to investments apply fully to all elected officials.
4. 100% transparency for ALL political spending by the governement or by any other group (PACs, individuals, corps).

Pro-Community Business Models

The Occupy movement has everybody asking, "What do they want?" I have stated previously that I think it is a much more productive question to ask, "What do we want?"  While we have the media's attention, we need to establish a vision, we need to infect our collective mind with new meme.  My unecessarily convoluted mind has glomed on to the idea of 

The Generative Capacity of our Communities

By this I specifically mean, how can we generate real value that can be realized in the economies of our communites.  More on this in my previous blog, from the center to the edges.

Kurt Vonegut, in Breakfast of Champions, drew an iconic graph of our global economy as it exists today. (That is not how he described it.)

I believe we need an economy that looks a lot more like a graph of the Internet, far less centralized, far more scale-free.

Where our communities are provided the opportunity to be attractive, to create value.

In subsequent posts, I will try to present several possible models for generating value from our communities.

1. Traditional, old-school, tried and true, community development.
2. Cooperatives
3. Franchises that behave more like shared-services.
4. Distributed manufacturing
5. Alternative currencies
6. Shared/Reciprocol Education
7. Municipal Resources and Maintenance
8. Governance

Anyone out there want to help me build these out?  Would love to collaborate!

From the Center to the Edges

What creates change? In the US we are looking to Egypt and the Arab Spring right now to ask, how can we get some of that? Not the violent uprising. I truly believe we are beyond that, outside of the inevitable clashes with the police, a nonviolent popular uprising is possible. However, it is critical to understand the entrenched forces that are against us, against we the 99%, a super-majority.

The most powerful engine available to mankind today is the market. And, it is critical that we recogonize there is no necessary connection between the physics of economic markets and the ideology of capitalism. When we, the 99%, catalyze a better world, that new world must be sustainable; economically, environmentally, emotionally sustainable. This better world is one where the rich, the 1%, are less rich and less important. If the philanthrocapitalists are willing to accept this, to accept that the world that created their massive wealth is an unjust and unsustainable world, then they will play a role in the shift.Revolutionary acts are not performed solely by the oppressed. Charity is not revolutionary.

Those that are currently in control must recognize that the system they own is broken. The center is rotten. However, the edges are filled with potential. Unfortunately we have ignored that potential. We have ignored the generative capacity of our communities. Technology has squeezed massive amounts of productivity out of fewer and fewer people in order to make more and more money for each concentric ring towards the center. However, "we are not some kind of a robot triggered by our greed." (Professor Mohammud Yunus) We must find business models that leverage the generative capacity of the edges of our economy, where our communities are. This is a disruptive innovation.This will spread wealth across the value chain, redistributing the wealth that is curently concentrated in the center. Not via regulation, fiat or decree, but via a just economy designed to serve all of hummanity, designed to make a reasonable quality of life possible for everyone.

It is more expensive to be poor than it is to be rich because we understand the distance from the center of power/wealth to be directly proportionate to the distance from produce to consumer. We understand the purpose of employment to exclusively be earning money to buy stuff to feed the center. This is what GDP is. Our economy exclusively respects the gravity of financial wealth, the weight of the center, around which we, the consumers, revolve. The next system must respect the intrinsic value of products and services and it must equitably compensate those that contribute to the creation of that value. Again, this is a disruptive innovation and those that currently benefit financially from their proximity to the center will fight this change, unless of course, they are willing to be revolutionaries.

Generative Capacity of communities

We need new models that achieve scale by linking the generative capacity of communities. I remember the original CK Prahalad Bottom of the Pyramid paper that suggested a company like Levis could make jeans that were affordable by moving production closer to the consumers. This would also provide jobs and add the money to the community needed to by the jeans. In this era of 3d printing this is possible however it won't aggregate wealth in the center. It will spread wealth across the value chain. That is a good thing for everyone but the 1%. PG&E here in CA is another example. Distributed electricity production is now possible with solar or wind by currently, the money is in the middle so, producing the product closer to the consumer is absolutely financially possible and, it lowers the profit margins for the CEO.