For example:

• The 6 employees in "dining services".  (Dining services!)

• The 4 employees in the "office of the CEO"  (I'm a CEO.  How come I don't have 4 people in my office?  Oh, wait, I have 12 people in my office.  The whole editorial team!)

• The 17 employees in IT.  (What do these 17 folks do, exactly?  Maintain Microsoft Office?  These aren't the folks who build and maintain the web site, by the way. There are another 10 of those.)

• The 19 employees in accounting.

• The 21 employees in manufacturing and distribution (M&D).

• The $102 million the company spent last year manufacturing, distributing, mailing, and managing circulation of the print magazine.  It's worth noting that this was actually a lot less than the the company made from selling the magazine ($80 million) and advertising in the magazine ($70 million).  If there's good news here, in fact, it's that even factoring in the $29 million cost of editorial, the money taken in from the magazine ($150 million) was more than the cost to produce it ($131 million).  Well, unless you count advertising and marketing ($19 million).  And corporate overhead ($55 million).

• And then, yes, the 92 employees in print editorial and the 18 employees in online editorial, and the rest of the publication's 379 employees worldwide.

Here are the detailed financials.  And here's the relevant employee chart from the book:

Isn't this fascinating! Here is the real root of the Print vs Online debate - the costs of the old system. Bloat Bloat Bloat.

I see 3 big areas here. The key to the kingdom is the online - But IT are in charge and they hate this. They are the people who tell you why not. Note the online folks at Newsweek are subservient to IT.

What is the real role today of IT? Is it not to have the most robust network? It is not to have a unique impenetrable kingdom.

What is the world of "Online" - it is to have the most flexible architecture and to embody the editorial context into this.

Then you can rebuild your editorial staff to work in the new global online context - you can curate masses of citizen content and have millions of stringers.

So in the process you can lose the magazine.

Newsweek have a great brand that could really help make this shift. As a citizen how would you feel if your story was in Newsweek?

So how are you doing? What are you really spending your money on? Spending it on killing your media business or in saving it?

If you need creativity, then the classic rewards = #fail.

Most of our challenges today are complex. The right brain has to be activated to cope. But money forces us to be analytical opening up the left brain that can only find what is known.

Here Paul Solman and Daniel Pink make the case that the traditional reward of carrot and stick has no effectiveness in this new context.

Before you laugh - watch!

We need to stop contributing to this problem and start building a new kind of social space for our work to be alive in.

We do a great deal to get in the way of people bringing their whole selves to work and we do a great deal to get in the way of people having true and organic connections to their work and this is a big part of what must change.  This is why we need freedom fighters.

We hire whole people, but it tends to go down hill from there.  Applicants are told about how people are our greatest asset, how creativity and honesty are vital, and we how we value the unique contribution of each individual.  Employees are bombarded with messages both implicit and explicit about fitting in, not rocking the boat and playing the game. Employees end up with truncated identities and trade their passion and ideals in for the rules to the game.

Continuing forward with organizational cultures that implicitly or explicitly proclaim that management has all the answers and that management owns the truth is not unlike clinging tightly to the idea that the Earth is flat.  This thinking is a fatal flaw in today’s business world and must be evicted. 

Business is simply too complex and too fast moving today for us not to be engaging the individual wholes of our whole workforce.  We can no longer drive around with the emergency brake on.  We have become very efficient at managing activity but we are still very sloppy and wasteful with talent, ability, potential and the intangible assets that each person brings with them.  The hearts and minds of a select few with select titles and select parking spaces are woefully inadequate for the challenge before us now.  We must create space for the hearts and minds of all.  We can afford nothing less than the fully stoked fire of our collective aspirations and abilities and this part of our journey cannot be navigated with spread sheets or flow-charts.

There will always be some conformity involved in joining a community or an organization.  There are some agreements involved in joining a social group, whether it is an organization, congregation, association or community.  We just need to push way, way, way, way back on those things…especially the implicit things that are baked into an organizations culture and its way of leadership.

This seems like a big piece of work and it is, but it is something that each and every one of us can contribute to regardless of our role or title.  There are a lot of things that influence, shape and contribute to a culture including our individual actions and relationships.  Here lies a powerful opportunity for us to take responsibility.    

This is not about our bosses.  This is about us and what we will do to take our work and our places of work back.

Be good to each other.

So true - Our world is so complex now that one or two of us - no matter how smart we are cannot know enough to have the answers and a traditional organization cannot move fast enough to cope.

I think the issue is now survival. If your organization relies on only a handful of leaders to know what to do and if your organization has no agility. Your organization will die - die soon.

So the point now is not to be trendy and co-opt social media. "Look Ma I am using Facebook!" It is to look at the issues that are in front of us, the systemic unemployment, the demographic crisis, the peak oil potential, the possibility of war in the middle east, climate change, the ungovernability of America, the culture wars, the generational gap, the effect of the web on all work - and say

"Any one of these could kill my organization. All of them may act upon it. How can I organize to be able to adapt and cope?"

Your new strategy - Organize the survive "interesting/complex" times.

Many of us are starting to see that there is math that underpins human community – The Dunbar Number and related math that defines the hierarchies of trust are gaining credence as being “real“.

I think that they should be: for surely all else in Nature that is about relationships has math? Light, Gravity, Water and Heat etc. So why would there not be Math that supports how Human Relationships work?

I was re-reading my favourite text the other day – Christopher Alexander’s Pattern Language – and I was stunned, but not surprised, to learn that not only do we humans have a gradient of Trust governed by math but that there are limits in the physical space as well beyond which, we fall out of community. Naturally these limits are hardly known, least of all by architects and maybe hardly at all by any of us who wish to design a physical space that promotes a healthy human community.

Alexander brings up this topic in the section on Small Public Squares (Pattern 61). He asks why so many public squares are dead space?

Here is the Space Magic Number #1 – 70.

• We cannot make out another face much over 70 feet away
• We cannot hear another person properly over 70 feet away

Any space that exceeds this – Piazza San Marco and Trafalgar are exceptions because they are a nexus in a large city and get filled to the right density – feels un social.

So here is Space Magic Number #2 – 300

• Any space with more than 300 square feet per person will feel “deserted”
• So a space with a diameter of 100 feet needs 33 people in it to feel ok
• So a space with a diameter of 35 feet needs only 4
• A space with 60 feet needs only 12
• It’s hard to get 33 or more people into a public space at any one time – it is much easier to get 4

I wonder – do these numbers then tie into what we know about group satisfaction – (Chris Allen)

My bet is that there must be a link between these two sets of numbers.

Forming the best groups in the best spaces will surely have an impact on the power of these groups. This then raises another question. Might getting the group size and the group space optimized have an impact on group power?

Do these numbers have any connection with Adoption?

Might knowing more about ideal groups and ideal spaces address the question that we all have – How can I optimize my power in the world?

Our model until now has been to use money as a substitute for social power.

Are we close now to seeing the Social Power Model? I think so.

In my follow up post to this, I will share a Fractal Model of how we have found social adoption to work in a university setting. If this is Fractal, then the social design we see in a University should match all fields of social groupings.

We may be getting close.

5 reasons why your company should be distributed

I’ve noticed a new trend in Silicon Valley. More and more startups are beginning life as distributed companies, and investors and partners are starting to accept it as normal. Our company Automattic is distributed, and I’m ready to sing the praises of running a business in this way. BTW, I think distributed (“evenly spread throughout an area”) is a better description than the more commonly used virtual (“nearly real or simulated to be real”) for a company that has people working from all over the place instead of a centralized office. In Automattic’s case, we currently have over 50 employees spread across 12 US states and 10 countries.

Here are my top 5 reasons why you should consider the distributed model for your company:

I think that this is indeed the future - the full text follows here 

As with all good network designs - most of the direct and indirect costs of the organization go away.

The capital costs are shed and are taken up by the nodes. People work from their place. With their gear. Huge expenses off the table. Huge potential to have the best gear for the staff.

Most of those interruptions go away - who can get any work done at the office these days?

Most of those silly meetings go away.

With NO Commute - so they get hours of time back a day. Let's say 2 hours a day. 10 hours a week. 40 hours a month. (That's a working week). 12 weeks a year! That is a lot of dentist visits, plumber visits, time with kids and spouse, time to nap, time to do whatever. And all this time was pulled out of the air as a result of not commuting.

Then of course there are the direct costs of commuting - the car, the transport. It costs $9,000 a year to run a car fully costed. How about coffee and lunch? What do you spend today? $5.0 - $20 a day. That is $1,000 - $4,000 a year for coffee and lunch! How about clothes? I used to buy 2 suits a year as a man. Women can't get away with that. How much does going to work cost you in clothes? $2,000 - $5,000.

Daycare - well you might still want to send your kid off to daycare but now you might be able to do this locally and walk there. You will not have that pressure at the end of the day to juggle that project and getting to daycare on time. If your child is sick, you have options. And with all the money you have saved on the other things, you can afford a good one.

They live where they want. Huge choice given back. Not only can you choose what part of town, but what town or even country.

Then firm can also hire from a market of 6 billion versus from the local pool - the full talent pool of the planet is open to you.

The costs of travel to meet and hang out now and then are tiny compared to what is spent on a conventional organization.

The communication tools that connect you all now are all but free as well. The Skype offices have big screens that are ON all the time - so you can look up and call out to a colleague in another city as if she was in the next room - for free!

So why not your office? Well if your organization is all about control, then this will never happen. if your organization is all about process and not results, this will never happen. If your organization hires people who don't have the skills to deliver, this will never happen. If your organization is like this - why are you still there?

So, we need to radically rethink the design of boards. We need to end the practice of boards as committees more interested in rules than resilience, and more obsessed with structure than engagement.

We need to start thinking of boards as thriving aspiration, asset, and action networked boards.

In a networked board architecture, the board would be comprised of a thriving network of aspiration, assets, and actions, organized by a core team. The core team is a network-elected group of 6-8 people, with continuity-friendly terms, that sustains the legal and fiscal responsibilities of a 501.c organization.

The primary work of the core team is to grow the capacity, impact, and agility of the board’s network.

The network would include key organizational stakeholders, community entrepreneurs and experts committed to the organization's success, interested community members, volunteers, and even funders, investors, and other non-profit partners. As with any healthy network, anyone can join the network and leave the network at any time.

The work of the core team is to continuously invite people, groups, and organizations into the board’s network who would be able and willing to contribute value to the thrivability of the organization in the currencies of tangible and intangible assets.

These assets include ideas, talent, resources, funds, and connections. Not only would the core team invite people into the network, everyone in the network is expected to invite other people and assets into the network.

As an aspiration network, the network would continuously inspire the core team, organization, and the network with long and short term vision. As an asset network, the network would engage and grow the kinds of assets that could help realize these aspirations. As an action network, the network would engage people in projects that would add value to the success and thrivancy of the organization.

The core team of the board grows and weaves the network, so that it is an ever-evolving network of compelling vision, rich with diverse assets, and engaged in new ways to grow the organization and the network. This replaces the structure of “board committees” that manage to exclude resources and engagement outside the board and to spend more trying to get to consensus than to incubate rich ecologies of diverse projects.

The purpose of the board's core team and network is to complement the organization's assets. Where the organization needs financial, legal, strategic, marketing, fundraising, or volunteer assets, it now has a core team and the network to engage the network's assets. This eliminates the capacity constraints of the board. How would you like to be a non-profit with a board whose asset constraints are not an issue?

Compared to traditionally designed boards, networked boards are incredibly more inclusive, agile, and innovative. A networked board increase the chances that non-profits will become more collaborative, resource-wise, and strategic than ever before.

Of course this approach will only be embraced by only the most strategic and visionary non-profit boards. Once more of them engage and prove the model, it will hopefully become the norm, and we will see more non-profits thrive as community investment organizations.

Thanks Valdis

Picture from Delta7.com

Did you laugh when you saw this? I did. I laughed because the picture tells the truth that we dare not speak about. That the only thing that keeps the formal organization going are the informal, unseen, human, social networks that both inhabit it and cross its boundaries.

What really lives and works today are social networks. But all the rules that are used in the traditional organization are based on the central metaphor that it is a machine and that people are merely components.

This is the disconnect that Jon and I wish to talk about in this new series on HR and IT.

There are many reasons why the old model is not a good one any more. The disconnect between the machine model and our humanity makes us ill.

This slide is taken for Marmot’s historic study of the UK Civil Service. (The Whitehall Study) What it shows is that our hierarchies kill us. The issue is control. Those in the lowest levels are 5 times more likely to die of Heart Disease than those on the far left, the Senior Leadership. High demands and low control cause our immune system to be compromised. The traditional organization is all about control. CHD is not the only outcome. At my old employer, a major bank, more than 60% of the women staff used anti depressants. We were typical.

We are miserable inside these kinds of organizations – if a better alternative arrives we will go there. Many of my kids age group, about 30, will not work in such places. They just can’t cope with the control.

These organizations cannot cope with change. And Change is all there is right now. We also know how unresponsive these organizations are to change. I was stunned to know this week that most governments in North America still use Word Perfect! This of course is tiny when compared to facing the challenges that confront us all.

There are new organizations based on natural models that are now at scale and making a difference in the world. They are now ready as a model, to be applied everywhere. You think I exaggerate? Let’s look at these numbers.

Skype has 500 million customers/users and only 600 staff. How many people work for your Telco?

Mozilla has about 350 million and so does Wikipedia. Mozilla has 375 staff and Wikipedia 30.

Back in 2007, Craigslist had the 7th highest number of page views of any web company. It had 23 on the payroll. Yahoo, the # 1 had 10,000. Time Warner #2 had 90,000. No wonder the newspapers lost the personals and the locals and could never get them back.

Here is one I bet you never thought of. It is the grandfather of the natural model – the first Chaord or as Jon might the first Wirearchic Organization.

Back in the 1990’s Visa International had 355 million users, 23,000 partners and operated in more than 200 countries but had only 3,000 employees. The NatWest at that time had 81,000 and B of A 91,000 and a fraction of the scale. Here is more current information

All these organizations are designed as natural networks. They use Group Forming as their value proposition.

In the next few weeks, we will talk about what is it about these natural network models that make them so effective? What are the new rules? Why does social media make so much sense in the network model? Why is it so hard to install any of this in the traditional model?

How can a traditional organization stand up to this? After all an artisan weaver could not stand up to the big mill. So once again, a better model will trump the lesser. The industrialization of the world took less than 50 years to be dominant. How long will it take for the natural model to supplant the mechanical?

Is this something that you should know about?

There will be a lot of pain along the way. Especially for those that get caught by the transition. But there is good news. I think that we are about to return to a world where mankind is no longer separated by his tools and processes from nature but is in fact ironically taken home by his new tool set. The plow took us to a cold inhuman and unnatural machine world – the internet and the metaphor that it embodies will return us home. Home to a world where we live again inside the metaphor and rules  of nature herself.

In this context, I found the DLD talk on Disruptors fascinating. Yossi Vardi, a veritable colossus at DLD and at Davos, elegantly walked Niklas Zennstrom (skype), Mitchell Baker (Mozilla) and Jimmy Wales (Wikipedia) towards sharing a remarkable perspective. Skype has over 500m users, Mozilla and Wikipedia around 350m each. Serious numbers, when you think that only India and China are bigger than them, and that the only other entity with similar numbers is Facebook.

But that's not the startling fact. What was startling was their staff sizes. Skype 600, Mozilla 375 and Wikipedia 30. Yes, thirty. Which suggested one thing. We have a lot to learn about scale from some of the 21st century companies.

Time to look at the scale issues for networks - here is the data for Visa International back in the early 1990's: Visa International has only been in existence for a quarter of a century. It has grown at a compound growth rate of between 20-50% and clears more electronic transactions in a week than the Federal Reserve wire system does in a year. It has 355 million users, 23,000 partners and operates in more than 200 countries but has only 3,000 employees. The NatWest at that time had 81,000 and B of A 91,000 and a fraction of the scale.

So when people talk of cutting costs today, the usually miss this point. All the discussion is in the context of the conventional model where all is inside the enterprise.

If we use a real network design where the centre is the System Facilitator - this is the new norm.

Here is the Craigslist version of the same issue back in 2007

Rank Employees Company
(page views)
1 10,000 Yahoo!
2 90,000 TimeWarner
3 10,000 Google
4 70,000 Microsoft
5 50,000 News Corp
6 12,000 eBay
7 23 craigslist
8 25,000 BBC
9 130,000 Disney
10 12,000 Amazon

These numbers are at the heart of the real revolution of work and value. The traditional design cannot compete.

More soon