Society30: Knowmads and new value creation

Society30: Knowmads and new value creation

by Ronald van den Hoff

In recent years, Western capitalism has done nothing more than shift possessions from the poor to the rich, and it is aided by a complex monetary system that is holding us hostage. This form of modern capitalism does not only grind the faces of the poor, but also our natural resources. Nothing is replenished or compensated, and everything is exploited and bled dry. This is no longer a sustainable model. What we have come to understand as democracy is a poor substitute for the essence of the words “demos” (people) and “krateo” (rule). As a people, we have no say anymore. We have an immense economic problem, but do not expect any solutions from our publishers, car manufacturers, housing contractors, or pharmaceutical companies. The established companies are not going to solve this problem and neither will our Western world political- or administrative structures. (van den Hoff, 2011)

The social market economy has ruled in Europe for decades. This system redistributed 65% or more of the national income via the government to all social groups. Traditional capitalism is focused predominantly on enriching the stockholders; and, in doing so, it is not only antisocial, but also far from being sustainable. We will not be able to keep the temperature of the planet stable, restore our supply of fossil fuels, and establish international banking control if we hold on to the redistribution policy of the Anglo Saxon (the capitalist macroeconomic model in which levels of regulation and taxes are low, and the government provides relatively fewer services) and/or the Rhineland Economic Model (the capitalist macroeconomic counterpart which is founded on publicly-organized social security). All things considered, this way of redistributing wealth is an outdated concept. Why is our entire economic theory based on the scarcity of people, means and time, resulting in having to make choices? Why do we have to give up one thing if we choose the other? Thinking in terms of limitations gets us deadlocked in an economic and social sense. We have seen many countries of the European Monetary Union have a larger budget deficit than others. In May 2010, the Euro nearly collapsed because the collaboration and budget discipline was nowhere in sight. This threat still is here. Obviously, this is not desirable in normal times, but in times of crisis, it is deadly. We still reason from the viewpoint of limitations and boundaries, and we are building towering walls around our national interests.

This crisis will persist and will be felt for a long time. Many countries within and outside of Europe will have to put up with a great deal in the next few years. There is nothing but a lot of hot air, which will convert into financial disillusions. Just think of the enormous rise of the aging population in Europe and the fragile situation of the welfare state, the pension system, and the connected level of spending of our municipalities, the rising costs of our health care, and the inevitable depletion of our natural reserves. We are yet to experience the effects of these developments. Hot air, after all, is intangible. And, intangibility translates into financial depreciation.

It seems as if the only system we have is a financial system. It is holding us in The Netherlands hostage as an individual, an organization, and as an EU member state. Actually, our money is simply gone. Already. And, yet, all we can think of is to produce more money, inject it into the existing structures, curtail expenditures with that money (!), and impose the largest part of that burden on the part of society that can’t carry it. Entire industries are still crying out for more money to bear the costs for new business models that are meant to postpone their end of life cycle yet again. These long-established companies are apparently not able to self-innovate and unfortunately terminating the business is not part of their corporate strategy. At the same time, they are blocking opportunities for newcomers with their unwieldiness, their managerial jumble, and their monopolization of the big funds.

Large parts of society are under huge pressure. In their power play, banks and other financial institutes are quietly collecting their outlandish profits and bonuses again. It’s no wonder that there is polarization in our society. It seems as if it is time for a revolution, or innovation. What we really need is an innovution!

Knowmads in the world of Society30

Fortunately, there is moss growing on the rocks, the convolvulus is creeping through the cracks, and the desert plants only need a few raindrops to bloom. A new order is presenting itself. It may still be an undercurrent, but maybe it is the best way to grow. A moorland fire if you will. I see more and more people who have clearly chosen how they want to define themselves, their environments, and their relationships with other people.

They are the people I call global citizens: people of the new world. These Society30 citizens cannot and will not deal with the thinking of the establishment anymore. They want to add meaning to their work and life in a significantly different way, namely by creating value instead of growth. Most of all, the global citizen wants a sustainable society. The Society30.

I think these global citizens – who are increasing in number daily – are the pillars, which support Society30, the society that really operates better!

Global citizens, people of the world:

  • Are open, transparent, and unbiased in taking the “traditional answers” for granted;
  • See differences between people and cultures as a source of creativity;
  • Want to learn with and from each other, grow and work together;
  • Are interested in other cultures and introspective of their own culture;
  • See themselves as part of the world and not specifically as citizens of a nation or city; and,
  • Act from transnational values and standards.

Hundreds of millions of people in the world move around without restraints, literally unbounded, across borders all over the planet. Sometimes they do this physically, but more often they do so digitally through the Internet: the World Wide Web. These people of the world are no longer bound to old organizations. They have organized themselves in virtual social networks. They have started to create value in a different way. They do not work according to a formal organizational structure. They guide themselves. They are themselves. Their social connections show great creative vitality and unleash an enormous amount of energy. From within their self-awareness they respect the individuality of anybody. People of the world are not after personal enrichment at the expense of others. They share, and they are prepared to do a lot for someone else, without expecting a monetary reward. I think it is both exciting and fun to be such a person, a knowmad of the world of Society30.

In his book, The Cubrix, van Marrewijk (2011) argues that we are ready for a new economic model – and, with, that a new social and political model for the new Society30. This economic model is called the Interdependent Economy, a social economic value system based on solidarity, sustainability, and reciprocity. Actually, it is a logical next step in the development of our society. History shows us a certain evolutionary order of ranking in different economic systems that had a limited shelf life. Every system was suitable for the specific circumstances of that period. Economic systems are transient, which is caused by changing environmental factors. So, at a certain point in time, these economic systems no longer connect to reality.

The real power within the Interdependent Economy of the Society30 will shift to the consumer or the citizen. As it happens, these people organize themselves. They want to participate. They want to engage with suppliers. These engaged consumers or “prosumers” (see esp. Toffler, 1980; Tapscott, 1995) want to co-create in order to develop customized products and services of impeccable quality. Transparency, accountability, and authenticity are the core values. The Internet makes these affairs transparent, making the prosumer more educated than ever about what’s for sale at which price or about how your organization interprets its social role and responsibility. The prosumer has a whole range of alternative suppliers, provided by his or her social network, at its disposal. The prosumer wants to choose, can choose, and will choose. Hence, the Organization30 will have to seek an alliance with prosumers to ensure that consumers are participating at an early stage, and, in doing so, determine what is being produced and how. Call this social business, if you like. In this case, it is not about the product itself. More and more products are being packaged as a service. Many people want to have access to something, but do not necessarily have to own it. In their book, What’s mine is yours, the authors Botsman and Rodgers (2010) call this development collaborative consumption. I prefer to call it collaborative prosumption.

Network value creation

Collaborative prosumption means when we create economic value in the Interdependent Economy, we are moving automatically away from the traditional value chain toward value networks (Allee, 2008; Benkler, 2006).

There is no particular fixed connection between network members in a value network; the network is not always visible as a group. Generally, a value network has a few core members – including a potential client – complemented with “occasional-collaborators” and some other people who contribute incidentally and/or if required (resonance). The core workers often do not know the marginal participants, while the source of knowledge is not always visible either; it is more of a cloud. Or as John Moravec is known to call it figuratively in his lectures, “a plate of spaghetti and meatballs.”

Value networks like this – I like to call these Social Economic Entities– almost exhibit Al Qaida-like structures and movements (van den Hoff, 2011). Teamwork is a great concept, but working in a value network goes beyond the old team philosophy. It already starts with a different understanding of objectives. In traditional team-based organizations, the targeted goals are usually clearly defined, as is the road that reaches it, such as the allocation of tasks and responsibility. A value network is mainly characterized by shared points of view and a path of creation that is mutually discovered in a context of collective responsibility. In the collaboration with or within organizations, the community leader facilitates the process as much as possible, but you cannot call this managing. There is an open structure: for new knowledge and contacts, one can make an appeal to the entire outside world. The same goes for the capturing and making of the acquired knowledge by the value network available. The old “team thinking” is disposed to keeping this within their walls, but value creation is, of course, best served by open connections.

For “customers” it is therefore not always clear who bears the final responsibility for value creation, while it is not always clear to the network members how revenues will be shared or how copyright issues are dealt with. We actually need a new legal form for these kinds of occasional networks or constellations. I propose occasional formations that are each legally organized as a Social Economic Entity. Within these entities, arrangements can provide insight for all stakeholders, including the final client. Whereas regular organizational teams or departments tend to mark their territories and build ivory towers, value networks have the ability to connect to each other. Individual members of value networks can organize themselves from one spot. In part, this increases the data portability between networks on a daily basis. This is how boundaries continue to dissolve: Value networks are extraordinarily dynamic and flow into each other. That is why it is so difficult for outsiders to understand: It is not always an obviously recognizable team or project group that is on the job. The work is also no longer done between four walls under a single roof, with the name of the organization on the façade of the building. The places where new value creation takes place are hard to identify… they can be found in what I like to call The Mesh, THE network of networks. Mesh networks can be described as a network system of nodes where each node must not only capture and disseminate its own data, but also serve as a relay for other nodes. That is, it must collaborate to propagate the data in the network (“Mesh networking,” n.d.).

Society30 organizations are innovative network organizations within their own Mesh. They will grow towards so-called real time companies: network organizations with permanently connected stakeholders, where informal and formal relationships flourish. The Internet and other (mobile) technologies are optimally used to create value and are continuously working on facilitating the collaboration process. The network stakeholders are convinced of the fact that thinking in terms of relevancy and reliability can maximize interconnectivity. Organizations that are able to put this into practice can look forward to a successful right to exist, whereby working innovatively and creatively with, and in the interests of stakeholders, a meaningful product or service of actual value is created. This is what I like to call Organization30: a sustainable organizational ecosystem where people can be proud of the stakeholder value that is being created. Obviously, this Organization30 has a “somewhat different design” than we have been used to. And, in building it, there is a big role for our knowmads.

Stakeholders of the Organization30 want to be increasingly involved with the realization of services or products. This contributes to that “special” user experience. Every experience from incidental co-creation to a full collaboration enhances the feeling that it is all about you, and, as an additional advantage, delivering a much more superior product or service. So much better, in fact, that the eventual sticker price, whether that be monetary or social capital, has become secondary as a selection criteria for doing business, procurement, and collaboration. In order to give the stakeholders that feeling of authenticity, and in order to co-create with them, the organization has to connect with them and start a dialogue. To gain access to a whole network of stakeholders, the modern decisive organization can do itself a favor by developing a solid social media strategy. The starting point is that all communication moments (so called touch points) are linked directly between a stakeholder and the person within the Organization30 who is directly responsible for that part of the service or product. This requires dynamic and flexible internal processes and a large extent of operational freedom for the people involved. Some innovative companies let stakeholders interact among themselves even without any “employee” involvement in the official form of a webcare team, a helpdesk (like the UK-based Telco Giffgaff), service department, or sales desk (like the Dutch based co-working locations operator Seats2meet.com).

Through the network of inter-human contact, a permanent connectivity comes into being between the organization, its people, and its other stakeholders. This social exchange of information and knowledge leads to collaboration and eventually results in “doing business” with each other in value networks.

So, the most important value creation players in the Interdependent Economy, who are no longer large organizations, but increasingly small to medium sized networked enterprises, are complemented by an army of independent professionals – knowmads (Moravec, 2008). We’re talking about a new generation of people who consider virtual social communication to be normal and find sharing generative for the common good; and, they find the use of the Internet common practice. The collapse or even the disappearance of large traditional organizational entities will accelerate this process.

The number of knowmads is growing fast. In 2002, in the United States alone, there were already over 33 million free agents, another term for knowmads, about one in four American workers (Pink, 2002).

In The Netherlands, we see the same picture: over one million traditional employees will retire in the coming 5 years, a process that started in 2010. They will be replaced by a staggering number of knowmads. In 2020, we estimate this Dutch group to be larger than 2.5 million people, representing 40% (!) of the total workforce.

The Organization30 is forced to collaborate with knowmads in the process of survival by new value creation since there are not enough regular employees left.

Co-workers, knowmads, free agents, self-enterprising professionals…

During a recent meeting with the Seats2meet.com team, I asked one of our “employees” Lukie, “can you fetch the flip-chart, I want to draw something.” Lukie is very smart. This is how she describes herself on her social media profile: “I got my bachelor in Liberal Arts & Sciences and majored in New Media. During my studies at the University of Utrecht, I researched new media, games and digital culture. I also invented and implemented an open-source, cross-media concept.” Yet, after my request she looked at me quizzically and with a bit uncertainly. I asked her, “do you know what a flip-chart is?” “No,” she replied timidly.

Voilá: the “knowmad-employees.” They know everything about cross-media, social media, apps, co-creation, prosumption, crowd sourcing, and user generated content. And, they know about augmented reality, embedding, MOOCs, and MMORPGs as well. They have a significant Internet presence. They do not automatically think of money when they talk about value. Transparency and sharing knowledge are second nature to them. Knowmads are looking for a learning and work environment that connects to the way of communicating they have been cultivating privately for years. And, one that stimulates them to learn and develop themselves during their whole lifetime.

But they do not know what a flip chart is.

New value creation: The 3rd Space

If you want to claim your position in the clusters of new value networks as an organization en route to tomorrow in The Mesh, you will have to work with minimal standardization and a new informal corporate culture based on trust and open communication. Only then can you seriously make an appeal to autonomy and entrepreneurship in order to excel internally as well as externally around a dynamic organization. It is not a matter of “being social on the side.” It requires a complete new vision on organizing. A vision to rethink the order of things. A vision that answers the question of how to challenge someone within the new value networks to feel, think, and operate with his entire capacity for the value of co-creation; and, how to supply the stakeholders of relevant information at the right time, so that they can operate independently and thus perform. And, a vision for a style of leadership to keep all of this on the right track.

The value creation of tomorrow is born out of the mobility of people, knowledge, and energy. People operate from within their social networks with the same objective, sharing goals. Knowledge is also being shared, resulting in new knowledge and thus creating new value. In Society30, we are going to collaborate in a different way. And, we do that within open and flat organizations: Social network organizations that are in harmony with their environment, and are therefore sustainable. Individuals profile and organize themselves on the web and connect with peers on platforms like Facebook and LinkedIn. Their communication tools are called blogs, wikis, Tweets, Skype, or Google+. For their physical meet-ups, they use event software. Obviously, they communicate in various languages, but the Web translates for them. Groups of people can collaborate, grow organically, and fuse. Computers and software become a service. Many services are free, and content and data are abundant. Thus, access becomes more important than possession, and that becomes a leading driver for Society30. The virtual social networks are the glue for this new value creation.

Sustainable value creation needs the connection between the old financial business models and the new social business models. When the Organization30 collaborates with knowmads, the value creation process is organized through the Social Economic Entities. That means that the known social network groups like Facebook and LinkedIn are a mere starting point for this value creation. Only when traditional organizations start to realize this, they can start thinking in terms of value networks instead of traditional value chains.

These new value networks need virtual and physical locations to meet and to collaborate. The office as we know it is gone. The traditional school, library, and meeting center will follow.

We need new physical locations in new geographical locations where people can meet, work, exchange information, and more. It is a revival of the 3rd Place (Oldenburg, 1999). Regus, the largest provider of flexible workspaces in the world, labels 3rd Places in their 2011 annual statement as, “exciting opportunities to grow the business” (Regus, 2012).

We have taken this development even a step further. Our co-working formula, Seats2meet.com (S2M), offers venues for co-working, meetings, and collaboration between knowmads and traditional organizations on their way to the Society30. It is a super hub and spoke network of physical co-work, office, and meeting locations, where besides dedicated locations, even individual co-working places in 3rd party office buildings (belonging to companies who believe it is an asset to welcome outsiders within their walls) participate.

Our meeting rooms and office spaces are booked by regular clients and knowmads who pay a fee per seat used (and not per room). Pricing is based on a sophisticated yield management system.

For knowmads who just want a place to work, meet, and connect with others, we offer co-working spaces, WiFi, beverages, and even an occasional lunch free of charge in old monetary terms. “Free” means however “no free lunch”: upon reservation, the bookers/co-workers tell the system, and all members of the S2M network, what topics he/she is working on, where his/her interests are, and more. This way, the booker commits him/herself to the network: he/she is available for unexpected meetings and maybe called upon by traditional clients in the meeting rooms to share their expertise and knowledge. Payment by knowmads is therefore done by means of social capital. As traditional organizations in transition are renting regular meeting rooms in traditional Euros, we have created a parallel monetary system linking traditional and social capital.

On top of every physical Seats2meet.com location, there is a real-time virtual blanket of information and knowledge of people present that can be cleverly used. In this way, co-working and meeting other people at Seats2meet.com locations become unexpectedly relevant, useful, and become a new way to connect and form new ways for cooperation – serendipitously.

We go even further: we provide, free of charge for every stakeholder, a dynamic (mobile) software platform where professionals can interact, virtually work, and meet. Also, when a physical meeting room is booked through the S2M online booking system, a virtual meeting space is generated automatically and linked to the group of people attending that meeting, training session, or conference. This service is offered in close cooperation with the Helsinki-based company, Meetin.gs. These virtual meeting rooms or classrooms are used to interconnect participants upfront, to communicate with participants before and after the physical session, and to communicate organizational details around that meeting.

With these software systems, we enable our stakeholders to collaborate real-time within the Social Economic Entities of the world of Society30. In blurring these virtual and the physical products, services, and logistic components around our physical locations, we have created an organization in what Pine & Korn (2011) name in their latest book, Infinite possibility, The 3rd Space: “The digital frontier, lying at the intersection of digital technology and offering innovation, beckons companies seeking to create new customer value by mining its rich veins of possibility… But by far the greatest value will come from those innovations that create third spaces that fuse the real and the virtual.”

Thus, the 3rd Place has become the 3rd Space. This 3rd Space enables us at Seats2meet.com to offer an unique, tailor-made experience, with a serendipitous educational element, to all our stakeholders. “Experiences” at Seats2meet.com locations become “transformations,” in line with Pine & Gilmore’s (2011) theory of the “Progression of Economic Value,” where “Transformations” are the subsequent drivers of value creation after traditional “experiences.”

We, as an organization, get back a lot. The return is immense. Our stakeholders appreciate our products and services tremendously, and they help us to position Seats2meet.com on the “free agents” mesh. They create an enormous flow of buzz on the Web (we used to call that PR in the old days); they feed us with tips, reviews, knowledge, and their time (that used to be called “marketing”); and, they actively promote us to other knowmads and to corporate and governmental organizations (that used to be called “sales”). Whenever they have “real business,” they book their training and meeting rooms at Seats2meet.com locations without asking for a discount because the system provides them with tremendous value. Therefore, at Seats2meet.com we no longer have a PR, sales, or marketing, or reservation department. How do you think that works out for our operational costs? The still growing army of “fans” who do our commercial activities is staggering.

With (potential) co-working operators worldwide, we now share our co-working reservation and yield management system, the property management software, and our operational knowledge (partly free) through a special program called Myownseats2meet.com. In The Netherlands alone, we have grown our business within two years from one location to over 50 locations, while, internationally, we are on the brink of making the same waves.

So, being a pioneer in the World of Society30, I certainly can attest to the fact that as an Organization30 working with knowmads is not only a necessity, but also rewarding, inspiring, and pure fun!

References

Allee, V. (2008). Value network analysis and value conversion of tangible assets. Journal of Intellectual Capital, 9 (1), 5-24.

Benkler, Y. (2006). The wealth of networks: How social production transforms markets and freedom. Yale: Yale University Press.

Botsman, R., & Rogers, R. (2010). What’s mine is yours: The rise of collaborative consumption. New York: HarperCollins.

van den Hoff, R. (2011). Society 3.0. Utrecht: Stichting Society 3.0.

van Marrewijk, M. (2011). De Cubrix – Zicht op organisatieontwikkeling en performanceverbetering. Ronde Tafel, SU De.

Mesh networking. (n.d.). In Wikipedia. Retrieved August 3, 2012, from http://en.wikipedia.org/wiki/Mesh_networking

Moravec, J. (2008). Towards Society 3.0: A new paradigm for 21st century education. Keynote lecture presented at ASOMEX Technology Conference: Education for children of the 21st Century. Monterrey, Mexico.

Oldenburg, R. (1999). The great good place: Cafes, coffee shops, bookstores, bars, hair salons, and other hangouts at the heart of the community (Vol. 3). Washington DC: Marlowe & Company.

Pine, J. B., & Gilmore, J. H. (2011). The experience economy, updated edition. Boston: Harvard Business Review Press.

Pine, J. B., & Korn, K. C. (2011). Infinite possibility. San Francisco: Berret-Koehler Publishers.

Pink, H. D. (2002). Free agent nation: The future of working for yourself (Vol. 1). New York: Business Plus.

Regus. (2012, March 20). Regus 2011 full year presentation. Retrieved August 3, 2012, from http://www.regus.com/images/2011-Full-year-presentation_tcm8-49854.pdf

Tapscott, D. (1995). Promise and peril in the age of the networked intelligence. New York: McGraw-Hill.

Toffler, A. (1980). The third wave. New York: Bantam Books.

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