This essay explores the workings of the art of public competition, in search of the reasons for its conflict with liberalisation. It details the interurban bus “market” serving Barcelona’s hinterland, with reference to passenger usage, historical policy, administrative structure, and comparative costs. Analysis suggests a dualistic form of counter-balancing competition on key routes, regulated by the need to maintain equality between operators – albeit an equality bounded by the operators’ focus, which often masks an inequitable distribution of public funding within public transport overall. A pattern conflated by the tendency to emphasise only short run operating costs, and sometimes rely, almost blindly, on higher tiers of the state for fixed assets. Continue reading “Interurban Buses in Public Competition”
Alex van Someren is one of those rare people, without whom our modern world would probably be a little bit different. From writing the first book about programming ARM architecture, the computer processor which now sits at the core of almost every mobile phone on the planet. To providing the technology that made Secure Socket Layer (SSL) more commercially viable, and helped enable the ecommerce internet revolution of the late 1990s.
Yet his story is fascinating because it is a definitive study in luck: Not just pure chance. But the type of luck that comes from a combination of unusual personal interests, social circumstance, and the active pursuit of something different.
It’s a reality that few “successful” entrepreneurial people acknowledge, because it’s an uncomfortable reality: It doesn’t fit neatly into a 5-point plan for instant fame and fortune [also see box below]. And it leaves a nagging doubt that the outcome could easily have been unsuccessful. And while I suspect that Alex isn’t comfortable with pure chance, he provides ample examples of how other elements of luck can be biased. How the odds can be improved. The dice loaded more favourably.
Those examples make Alex van Someren worth understanding. This article is based on a talk he gave to the Edinburgh Informatics Forum. Continue reading “Alex van Someren’s Lucky Acorns”
As I write, the United Kingdom is in the midst of a national election campaign. A month during which politicians vie to confuse the electorate with big numbers. Politics is suddenly ravaged by intangibility, because the national economy is unable to sustain the usual tangible proxies for a better life – “more schools and hospitals” – and because the tangible results of fixing that economy tend to be unattractive – “less schools and hospitals”. So the best political strategy is not explaining the consequence of choices in a language ordinary people can understand.
Do you like the sound of £100 million ($150 million)? Can I tempt you with £160 billion? Expressing these figures per person in the population can be useful. The first figure is one bar of luxury chocolate for everyone. Doesn’t sound so big now, does it? The second figure is like everyone having a £2,500 bank overdraft (loan). Strange that, because indirectly, we do.
Unfortunately, applying the economics of household groceries to major items of government expenditure introduces certainty. The idea that one can visit a store where luxury chocolate bars are sold for precisely £1.70. Yet many large elements of government expenditure are akin to ordering a chocolate bar years before it can be eaten, for a price that transpires to be somewhere between £1 and £5.
Larger businesses will be familiar with this concept. It’s called risk. Such businesses are often far more interested in what “it might cost” (£5) than what “it will cost” (£1.70), because what it might cost might lead the business to bankruptcy.
The national economy is chaotic in its complexity, but overall, things should average out. So long as all the assumptions are broadly reasonable: Ultimately some will earn/cost more, some less. Short-term in-balance can be solved by (basically) printing more money, and then down-grading future assumptions until everything is back in balance.
However, this breeds a form of arrogance. A sense that government doesn’t need to consider the possibilities. That we can deliver a radical new policy – that has never been done before – and, in spite of it never having been done before, we know precisely how much it is going to cost. Just like a bar of chocolate.
Unfortunately, assumptions tend towards optimism. On average, projected costs are less than actual costs. This isn’t just a problem for accountants. It means that decisions are taken which do not reflect reality. Potentially leading to a Disneyland scenario, where everything is affordable until after the decision is taken, when suddenly everything has become too expensive. It ultimately challenges the validity of decisions, and in doing so, the moral authority of those that take them.
This article uses the Edinburgh Tram project to demonstrate the inherent uncertainty of large government infrastructure projects. It discusses the role of optimism in planning, and the methods used to reconcile planned optimism with subsequent reality. The article describes how the involvement of the private sector in public projects has evolved over the last 20 years, and the highlights the different time-scales applied to private investment and public choices. It concludes that optimism is not only unavoidable, but necessary. Rather, the true problem lies in tendency of people to demand certainty from the public sector, while accepting uncertainty in the private sector. Continue reading “Optimism”
From a stereotypical “dot com” baby in 1998, to the rapidly maturing teenager of 2010. Ian charted the way in which the business’s strategy, structure and ownership had evolved as it matured from something with the turnover of a small local pub, to a multi-billion enterprise. Covering the problems of merging acquired companies, the need to scale costs, and the change from a public (stock market) ownership to private equity.
This article is based on Ian’s talk. It concludes with some personal analysis of the future, with particular reference to my favorite topic, public transportation information… Continue reading “Ian McCaig’s History of Lastminute.com”
If we could eliminate transportation from our daily lives, would we want to? Or do we still need to travel, even if we have nowhere to go?
This article explores the desire to travel – to make economically irrational transport journeys. It ponders the apparently unnecessary role of travel in virtual worlds. It considers how travel contributes to immersion within the world, and how such travel can be substituted. Finally, the article addresses some of the difficulties in bringing lessons from the virtual back into the physical world. Continue reading “Why We Travel”
This article probes the implications of cloud computing for financing very rapidly distributed internet-based services and products. It contains rough, inadequately researched thoughts, sparked from discussions at the recent CloudCamp Scotland. Continue reading “Financing Hyper-Virality in the Clouds”
Michael S. Malone is perhaps best known for his work defining the “Virtual Corporation” in the early 1990s. At Stanford’s Media X conference he proposed the next iteration of organisational development – the Protean Corporation. The topic forms the basis of Malone’s next book. This article is based on his talk.
The total number of consumers is growing exponentially. Wireless broadband covers an ever-increasing amount of territory. The US may become the first truly “entrepreneurial society”, with skill-based work that never last more than a few years, where people never plan to do the same work forever: A mixture of creativity and volatility. The increasing size of the customer base will lead to larger organisations. Simultaneously, competitive threats can appear from anywhere, particularly in fast-moving technology sectors.
The result is two contradictory forces:
- Centrifugal: Technology enables workers to be spread out.
- Centripetal: Humans still need a sense of legacy and wider purpose; and are inherently social creatures. The “fatal flaw” of the Virtual Corporation was that once everything has been pulled apart, nothing is left.
Throughout history, from pre-corporations (such as early modern trading companies and guilds), through Taylorism to the virtual/adaptive/wired organisations, two trends can be seen:
- Increased autonomy of employees, with greater communication between them.
- Reduced management control.
The Protean Corporation
The paradox is simple: How to build an enterprise that lasts, while still being flexible and adaptive?
Michael used the Quantum atom to demonstrate the shape of things to come: An organic form, in constant flux, which retains its core. The design attempts to recreate the structures within Hewlett Packard, where a group of long-term employees remained at the core, with the traditional enterprise formed around them.
The Protean Corporation has three parts:
- Inner Ring
The Core are the permanent staff – people that have been with the business since as long as anyone can remember – “the immortals”. Their role is to protect the culture of the company, which they do somewhat informally. For example, they might be highly regarded by other employees for their experience or ability to get a result out of the organisation. Largely unseen, they are the people that make the organisation run smoothly. They may not be immediately apparent to the senior management, and as such they need to be protected from a new CEO – they are likely to be accidentally culled along with the rest of the workforce.
The Inner Ring are the traditional full time employees. They manage and operate the business. Their job is to recruit the Cloud.
The Cloud are 90% of the organisation. Their employment might last a matter of hours or days. They might work remotely, never having met their employer. The cloud is so transient that they might make errors before they have time to learn. It is critical that the Core is able to watch over the Cloud, and maintain the company’s culture and standards.
The role of the company’s board is merely to adjudicate and not to manage – to act like the company’s Supreme Court.
The Protean Corporation will be fixed in perpetual motion. The most important role in such a corporation will be “competence aggregators”. These people pull individuals together for specific projects, much like creating start-up companies within the corporation. Competence Aggregators exist within the Cloud, but are still governed by the Core. The Competence Aggregators will be the new superstars of the economy.
Private and Public
The shape-shifting Protean Corporation can exist in both public and private sectors of the economy. To achieve this is the zenith of the concept.
A key problem remains: There is no way to accurately value the Protean Corporation. Its assets are intangible, and not reflected in conventional accountancy-based corporate market valuation. It is a similar issue to that which limits social entrepreneurs – there is no way to measure the performance of non-profit organisations. The ultimate limitation on the whole process is the lack of a market for intellectual capital.
The Protean Corporation in Practice
Wikipedia was cited as an example of a protean-like corporation.
I personally recognise the existence of both the Core, Inner Ring and Cloud from the Open Directory Project. The Core was part-formalised as “Editalls” – floating editors that had no fixed role, but which were always trusted and experienced veterans of the project. The Inner Ring consisted of “Meta” editors (and later Admins), who appointed everyone else, and took the formal leadership role. However, neither group entirely matched these roles. The Cloud, the regular editors, were just as described by Malone: The majority of the organisation, often with very limited ties to the project, many moving on after a short period of work.
The Core is also commonly found within British local government: In most long-established authorities there are a handful of people who both provide a sense of stability, and can simply get things done that nobody else can (usually through some combination of contacts and experience). Without these people I suspect that much of local government would be rendered totally dysfunctional (as close to collapse as a public body can become).
It was noted that Intel had originally shunned the concept of the Virtual Organisation, yet had subsequently developed into one “by walking backwards into it”. For example, only 20% of its “employees” are now traditional permanent staff. Far more contribute “virtually” or as suppliers. Yet all need access to company data and systems, so have to be trusted. A fifth have never met their boss face-to-face, and half of those never expect to: Such an organisation is logically already facing the challenges that the Protean Corporation seeks to answer.
Michael S. Malone’s book is called The Future Arrived Yesterday: The Rise of the Protean Corporation and What It Means for You.