The Picture of the Future in a Box - Update

Update: Ross Dawson writes about the importance of 3D printing in his post - How 3D printing will transform the retail industry: the opportunities.

This post is a continuation of the ideas presented in The End and The Beginning. In this one, I want to focus on three culture shifts that impact what leadership means in the 21st century.

A picture of the future in a box

Let me begin with this picture. 3dsystems-RapMan-Students-6

Here is a student using a three-dimensional printer. The blue object in the middle of the picture is being printed. This is a kit that individuals can buy for around $1,300.

All you need is a basic CAD program to begin to create prototypes of your ideas. 

I recently saw this model, RapMan 3.1, and the BFB-300 3D printer demonstrated at Hatchfest in Asheville. Rajeev Kulkarni, Vice President of Global Engineering for 3D Systems spoke on the uses of 3D printing.  His presentation described a extremely wide spectrum of application for this technology. The most impressive use of 3D printing is to create human organs from the cells of the recipient. See Antony Atala's TED2011 presentation to grasp the magnitude of this innovation in medicine.

This picture of innovative technology points to the social change that is occurring because of the advance of technology. Besides lowering the cost of prototyping and manufacturing new products, people can now take their ideas from conception to market in a shorter period of time.  Kulkarni spoke about what used to take months to produce that now can be done in a matter hours or days.

Three Shifts

As I listened to Rajeev Kulkarni's Hatch presentation, I realized that in these printers I saw three significant social shifts. When the cost of manufacturing and production time are reduced, and the technology becomes affordable for individual use, then we are moving through a transition period from one era to the next.   The shifts that I see taking place are:

1. From consumers to creators / producers

2. From mass market to mass customization

3. From a mass culture to a local culture

 Let me describe each.

1. From consumers to creators / producers

With the use of basic design software and the RapMan 3d printer, any individual can become a producer of products for sale. The materials that can be used in the printing process are extensive. So, no longer will people have to depend on the marketplace to provide the products that he or she needs. With some ingenuity and business sense, they can make a shift from being a consumer of products to being the creator and producer of them.

Of course, six billion people will not automatically shift from being consumers to creators / producers. And every producer needs consumers to buy her product. Yet, it does not take many people embracing this shift in culture to dramatically impact it. The picture above is of an school girl in England using the RapMan printer.

Imagine every school in your school district having a 3d printer to complete a learning process of idea creation to product completion. Imagine the change of mind that comes to the students in that school when they can create, and not just consume.  Imagine a generation of men and women who think of themselves as creators and producers, as leaders, rather than just consumers of other peoples' creative output. 

One of the first realizations I had about 21st century leadership was that it was about personal initiative, not about roles. Leadership begins with personal initiative. Tools like these 3D printers place into the hands of people the opportunity to initiate, to create, and to produce products and solutions that can make a difference. 

2. From mass market to mass customization

The nature of product development cycles used to be months, even years, necessary to bring a product to market. As a result, it required that product to have as wide an appeal and as long a shelf life as possible. With the advent of technologies, like 3D printers, this is changing. Now in a matter of a few hours, a specialize part can be designed and produced for a customer.

There are a couple implications for this shift.

First, it changes how a company relates to the marketplace. In a one-size fits all world, the marketplace is the lowest common denominator. In a mass customized world, the individual is the market. Marketing to individuals is different than to a mass culture. This is the insight that Chris Anderson wrote about in his book The Long Tail.

Second, it makes the relationship between manufacturer and consumer more important. I've learned this as a consultant. I cannot approach any project as if there is a formula that applies to every other organization in their industry. I have to build a relationship of interest, inquiry and adaptive response to meet not only their expectations, but their needs. I enter into their organizational setting with a set of tools, not unlike a 3D printer, though I don't have one, and use my tools to address the needs that they have.

In a mass customized world, relationships matter, and that is a key to managing the shifts that I'm identifying here.

3. From mass culture to local culture

Prior to the 20th century, life for most people from the beginning of time was experienced in small towns. I remember my grandfather telling me near the end of his long life that the most significant invention in his life time was the radio. When asked why, he said, "Because it showed us what life was like in other places."

The 20th century was a century lived on a global scale, with World Wars and multi-national corporations, and, with institutions that were designed for a mass culture. It was a perspective where one size fits all, and that all people are to be treated a like. Individuality was rebellious and conventionality was the norm.

Those days are slipping away as innovations, like 3D Systems printers, make it possible to create a business that serves customers globally from an office in a small town with an internet connection.  It is the twin developments of innovation for individual productivity and the failure of large organizations to function in a one-size fits all world.

As a result, the meaning of global and local is changing. It is less about a mass market culture of sameness, and more about a culture of relationship where I can serve you, regardless of where you or I live. We can be connected. We can communicate, collaborate and coordinate our projects from wherever we sit today.

It isn't just that we live in a time of the long tail, or that technological innovation provides a basis for mass customization or a better foundation for individual initiative. Each is true. At a deeper level, it means that any individual with a minimum investment can pursue their own sense of calling as a person, and do it in a social context of others who share their vision and commitment. This is an emerging reality that will seriously impact the nature of leadership and organizational design in the future.

One way of understanding this development is to see this as the ascendency of the local. I've written about it here, here and here.

The key to making a local orientation work is openness. For many people, local is just another word for provincial, or closed. However, if local is less physical place, and more a relational space, then we can begin to see that my local can include colleagues in Japan, Pakistan, England, Canada, and my neighbors nearby in Asheville.

In a local community, you share a concern for people, for families, for education systems, the business community and for those less fortunate. It is a concern for the whole person, not just for the transaction.

For example, I can share a concern that my friends in California have for the economic and social conditions of their small coastal town, and feel that as their community grows, that I contribute to their growth.

A local community orientation can function in any social or organizational structure. It is the heart of team work. It brings personal initiative, shared responsibility, and common goals and values together.

Leading Through These Shifts

The implications of these shifts for organizational leaders is fairly simple. It means that instead of being organizational process managers, we must become culture creators. The culture that forms from our leadership provides an open environment for individual initiative, relationship building, and shared responsibility.

The local in this sense is like the ancient Greek polis as described by Victor Davis Hanson in his fascinating book, The Other Greeks: The Family Farm and the Agrarian Roots of Western Civilization. He writes in the introduction,

The early Greek polis has often been called a nexus for exchange, consumption, or acquisition, but it is better to define it as an "agro-service center." Surplus food was brought in from the countryside to be consumed or traded in a forum that concurrently advanced the material, political, social, and cultural agenda of its agrarian members. The buildings and circult walls of a city-state were a testament to the accumulated bounty of generations, its democratic membership a formal acknowledgment of the unique triad of small landowner, infantry soldier, and voting citizen. The "other" Greeks, therefore, were not the dispossessed but the possessors of power and influence. Nor is their story a popular account of slaves, the poor, foreigners, and the numerous other "outsiders" of the ancient Greek city-state. The real Greeks are the farmers and infantrymen, the men and women outside the city, who were the insiders of Greek life and culture.

The rise of independent farmers who owned and worked without encumbrance their small plots at the end of the Greek Dark Ages was an entirely new phenomenon in history. This rougly homogeneous agrarian class was previously unseen in Greece, or anywhere else in Europe and the surrounding Mediterranean area. Their efforts to create a great community of agrarian equals resulted, I believe, in the system of independent but interconnected Greek city-states (poleis) which characterized Western cutlure.

The shifts indentified in this post, to me, point to a similar opportunity that the early Greek farmers had. Through their collaborative relationship of shared responsibility, together they created the Greek polis that remains as the model for what cities and communities are in the West.

The ascendency of the local will come as a result of these shifts. And with it a new conception of leadership as more personal, more collaborative, more focused on impact, will emerge to provide it descriptive power that inspires innovation.

Is Small Business at a Crossroads

In my browsing this morning, I came across this article from the Federal Reserve Bank of Atlanta - Prospects for a small business-fueled employment recovery.  Here is a quote from a speech given by William Dudley of the Federal Reserve Bank of New York. 

"For small business borrowers, there are three problems. First, the fundamentals of their businesses have often deteriorated because of the length and severity of the recession—making many less creditworthy. Second, some sources of funding for small businesses—credit card borrowing and home equity loans—have dried up as banks have responded to rising credit losses in these areas by tightening credit standards. Third, small businesses have few alternative sources of funds. They are too small to borrow in the capital markets and the Small Business Administration programs are not large enough to accommodate more than a small fraction of the demand from this sector."

Whether you work in a small business or patronize one, it is an important article to reflect upon. Look at this chart that I've posted from the article and especially the results from 2007-2008.

Distribution of net gain-loss in employment

Job losses from late 2007 through 2008 were 43% from businesses with less that 50 employees.

Let me pose a question. What if 43% of the stimulus money went to these small businesses. What do you think would have happened? Do you think those dollars would be sitting in a bank? I don't think so either. They would have been spent, and real stimulus and real economic strength would have been built.

Having spent the last fourteen years working with small businesses as an organizational consultant, my perspective is different than Washington's. I take a micro, localized view of the economy. Global businesses are not really global, but a collection of local economic operations. There maybe a global headquarters, but it nothing but a building with offices. The real economic engine of those companies is local. The global nature of them makes them efficient. But they are still localized operations where people go to work, pick up their pay check, deposit it in the bank and pay their mortgage, bills, insurance and buy food and other necessities for their families.

We live in a networked age. A local jewelry maker in Indonesia can sell her product line to customers in the US or Europe. She can because of the internet and the global reach of package companies like UPS and FedEx. Here a smart business person on one side of the world can have a successful company selling to people in a nation where 43% of the job losses in one 15 month period were from businesses virtually the same size as her's. What does this tell you about the business climate in the US today?

Linked is a New York Times article - Are Medium-Size Businesses the Job Creators? - that suggests that we should change the way we look at business size. Look at this chart from the Bureau of Labor Statistics that was included in the article.

NYT job creation chart.chart

Source: Bureau of Labor Statistics (Numbers do not total 100 percent due to rounding.) Job Creation by Firms of Different Sizes, 1992-2008

What should those of us who are small business owners and serve small businesses take away from these two articles?

1. Scale matters. The most productive small companies in regard to job creation are those between 50 and 500 employees. If you are starting a business today. You should consider as a part of your business planning process what it would take to reach that threshold of 50 employees. In a number of client situations, the idea came to me that many of their problems would be solved by being just a little bit larger. Then the scale of costs would be more favorable for them.

What if you don't want to grow that large? What are you alternatives?

2. Collaboration leverages size for small businesses. Becoming a collaborative partner with other business provides a way to be big while remaining small. The skills and perspective required to be a good collaborator are not the same as being good at running a small business. 

What if you feel like you've reached a crossroads, a transition point, in both your business and professional life?

3. Impact determines what business you are in rather than the activities that you do.  To be successful today requires a change of mind about what business you are in. If you are in the business of providing the same products and doing the same services over and over again for customers, then you may find yourself irrelevant and out of business. However, if you understand the impact you want to create, then you can change your business and/or employment status to put yourself in the best possible position to achieve that impact. If this means that you close your small business and go to work for a medium size one, then that is what you do. In so doing we become a mission-driven workforce, rather than a job activity driven one.

My main concern is the lack of recognition by Washington of the situation of small business. This isn't a Democrat/Republican, or Bush/Obama issue. It is a national issue that is impacting people, families and communities across our nation. 

What if these are not my issues? What can I do to make a difference?

4. Support local small business groups in your local community. In most communities there is an economic development agency. Check with them and offer support to helping attract and support new business. Check and see if there is a local chapter of SCORE where you live. Offer to teach a class on some aspect of being a small business. Check and see if there is a micro-enterprise organization in your community. Each of these organizations provide help and support to small business. Get involved and you'll be strengthening your community.

Is small business at a crossroads? Based on these job numbers, I'd say yes. Support your local small business while we learn to make the changes that are necessary to survive in a very tough climate for business.

Peter Drucker and the New World of Economics, Society and the Individual

A couple days ago, I was compelled to pull off my book shelf a couple of books by Peter Drucker, that I had read in the early 1990's.  I wanted to see what he had to say about economics, globalism and entrepreneurialism that may be relevant to what has been taking place recently.

Peter Drucker, who died at the age of 95 in 2005, was an Austrian born journalist, lawyer, and academic, who came to America in the late 1930's and became known as the father of modern management. His writings on leadership and management helped to frame how we understand business and the changing global social context. The impetus to start my own business came from reading his Innovation and Entrepreneurship in the mid-1980's. To get a good idea of the range and power of Peter Drucker's mind, download his 1994 The Atlantic Montly article, The Age of Social Transformation.  So, I'm indebted to Peter Drucker as one of my intellectual mentors. It was such a breath of fresh air to go back and read much of these books over the past couple days.

The two books I pulled off the shelf were The New Realities (1989) and The Post-Capitalist Society (1993). I want to quote from these books and then comment.  

Keynes, the post-Keynesians, and the neoclassicists alike cast the economy in a model in which a few constants drive the entire machinery. The model we now need would have to see the economy as "ecology," "environment," "configuration, " and as composed of several interacting spheres: a "microeconomy of individuals and firms, especially transnational ones; a "macroeconomy" of national governments; and a world economy.  Every earlier economic theory postulated that one such economy totally controls; all others are dependent and "functions."  In the marginal-utility world of the neoclassicists, the microeconomy of individuals and firms controls the macroeconomy of government.  In the Keynesian and post-Keynesian worlds, the macroeconomy of national money and credit controls the microeconomy of individuals and firms.  But economic reality now is one of three such economies. And soon the economic region (as in the European Economic Community), may become a fourth semi-dependent economy.  Each, to use a  mathematician's term, is a partially dependent variable.   None totally controls the other three; none is totally controlled by the others . Yet none is fully independent from the others, either.  Such complexity can barely be described.  It cannot be analyzed since it allows of no prediction.

To give us a functioning economic theory, we thus need a new synthesis that simplifies - but so far there is no sign of it. And if no such synthesis emerges, we may be at the end of economic theory. There may then be only economic theorems, that is formulae and formulations that describe or explain this or that phenomenon and solve this or that problem rather than presenting economics as a coherent system.  But there also then would be no "economic policy" as the term is now understood, that is, no foundation for governmental action to manage the business cycle and economic conditions altogether.

Economic policy requires that lay people such as politicians understand the key concepts of economic theory, but economic reality is much too complex for that.  It is already difficult, if not impossible, to give answers understandable to a lay person to the simplest economic question.  If there is not again a simple economic theory - or at least one capable of simplification - then there can be only "economic policies" aimed at a specific problem, such as an inadequate savings rate.  There can be only what might be called "economic hygiene" or "preventive economics." These would aim at strengthening the basic health of an economy so that it could resist even severe bouts of economic crisis rather than at curing a crisis or managing it.  (The New Realities, 156-158.)

Those words were written during 1986-87, over twenty years ago, and well describe the economic situation that we now find ourselves in today. A complex global economic environment that does not yield to simple, completely integrated theories. And yet, these different spheres of economic activity - the individual, the firm, the nation-state, the transnational or global corporation and the economic region - are integrated in such a way that a failed bank in the US or a natural disaster in eastern Europe can impact an Indian entrepreneur or a Japanese merchant.

A half decade later, Drucker wrote the following.
 Only a few short decades ago, everybody "knew" that a post-capitalist society would surely be a Marxist one.  Now we all know that a Marxist society is the one thing that the next society is not going to be.  But most us also know - or at least sense - that developed countries are moving out of anything that could be called "capitalism." The market will surely remain the effective integrator of economic activity. But as a society, the developed countries have also already moved into post-capitalism. It is fast becoming a society of new "classes," with a new central resource at its core. ... the real, controlling resource and the absolutely decisive "factor of production" is now neither capital nor land nor labor.  It is knowledge.  Instead of capitalists and proletarians, the classes of the post-capitalist society are knowledge workers and service workers. (Post-Capitalist Society, 5-6.)

Political and social theory, since Plato and Aristotle, has focused on power.  But responsibility must be the principle which informs and organizes the post-capitalist society. The society of organizations, the knowledge society, demands a responsibility-based organization.
Organizations must take responsibility for the limit of their power, that is for the point at which exercising their function ceases to be legitimate.
Organizations have to "social responsibility."  There is no one else around in the society of organizations to take care of society itself.  Yet they must do so responsibly, within the limits of their competence, and without endangering their performance capacity.
Organizations, in order to function, have to have considerable power. What is legitimate power? What are its limits? What should they be?
Finally, organizations themselves must be on responsibility from within, rather than on power or on command and control. (Post-Capitalist Society, 97.)

As I have tried to understand the political and economic developments of the past two months, I've talked with many people about what they think and are experiencing.  The one constant is a sense of having no power or control over their circumstances. They feel at the mercy of forces beyond their reach. This certainly means that we have fully arrived at the world Peter Drucker saw forming twenty plus years ago.

What are we to do?  I believe we need a shift in perspective about who we are individually, about the nature and responsibility of the leadership of organizations, and what is within our power to achieve in a realistic sense.

First, we need to think of ourselves as personally responsible for our lives, even if we feel that we've lost control of the environment of our lives. Only by accepting responsibility for our lives will we make the necessary changes to create the climate in which we can succeed. A decade ago, Daniel Pink wrote a provocative article in FastCompany magazine, followed by a book, called Free Agent Nation. His singular idea is that regardless of what we do, who we work for or with, that we must think of ourselves as "free agents" responsible for our vocational lives.  We must take charge of our life situation, and not transfer authority and responsibility for it over to some other person or organization. Only by taking personal responsibility will we find solutions to our immediate problems. This requires that we must become more open to new possibilities, new relationships, new directions and new challenges to meet.

More than ever this means that each of us must become learners. If you are bored by reading, try one of the books that offers short selections by Drucker. Stimulate your mind to think about ideas and their application. Begin to write down your thoughts in response to what you read. Think of reading as a conversation with an author. Find someone to share you thoughts, or better, share them on a weblog. It is not enough to read widely, but to think widely by learning to express what we feel in our hearts about what we read and see.

To prepare ourselves to lead in this new world that Drucker describes, we must discipline ourselves to begin to ask questions that lead us to people who can help us learn. If you need help, go to your local community college, sign up for continuing education courses, work on a new degree, learn a whole new field of knowledge, before you need it.  No one is going to come invite you to read and expand your education,even though I am doing that very thing at this moment. We must take responsibility to do it for ourselves. As President Eisenhower said, "Not all readers are leaders, but all leaders are readers." Learn to be an effective reader. If you need advice, just ask.

Ultimately this leads to the conclusion that I've been writing about for many years, that leadership begins with personal initiative. It is the initiative of taking personal responsibility for the environment you are in. Whether you are a CEO, a manager, a sales person,or a line worker, leadership emerges from the initiative of the individual to do what is needed to make a difference right now for the right reasons and in the right way. You can use the conversational tools on the sidebar to the right to begin to talk about this with people in your office or at home with your spouse, children or friends.

Second, I suggest that each of us begin to think of ourselves as knowledge workers. Again, here's Peter Drucker.

Post-Capitalist Society deals with the environment in which human beings live and work and learn.  It does not deal with the person.  But in the knowledge society into which we are moving, individuals are central.  Knowledge is not impersonal, like money.  Knowledge does not reside in a book, a database, a software program; they contain only information. Knowledge is always embodied in a person; applied by a person; taught and passed on by a person; used or misused by a person. The shift to the knowledge society there puts the person in the center.  In so doing it raises new challenges, new issues, new and quite unprecedented questions about the knowledge society representative, the educated person. (Post-Capitalist Society, 210.)

This means that we have to understand what we know and its value in the context of where we live and work.  These are the assets that each of us can develop and use to great effect in organizations and our communities.

Lastly, we need to think of economics as not only the complex set of interconnected spheres, but also as a bottom-up phenomenon driven by entrepreneurs who create new enterprises that form the economic foundation of communities.
Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced. Entrepreneurs need to search purposefully for the sources of innovation, the changes and their symptoms that indicated opportunities for successful innovation. And they need to know and to apply the principles of successful innovation.

But everyone who can face up to decision making can learn to be an entrepreneur and to behave entrepreneurially. Entrepreneurship, then, is  behavior rather than personality trait. And its foundation lies in concept and theory rather than in intuition.

Every practice rests on theory, even if the practitioners themselves are unaware of it. Entrepreneurship rests on a theory of economy and society. The theory sees change as normal and indeed as healthy. And it sees the major task in society – and especially in the economy – as doing something different rather than doing better what is already being done.

Entrepreneurs see change as the norm and as healthy. Usually, they do not bring about the change themselves. But – and this defines entrepreneur and entrepreneurship – the entrepreneur always searches for change, responds to it, and exploits it as an opportunity.

Entrepreneurs innovate. Innovation is the specific instrument of entrepreneurship. It is the act that endows resources with a new capacity to create wealth. Innovation, indeed, creates a resource. There is not such thing as a “resource” until man finds a use for something in nature and thus endows it with economic value.

Entrepreneurs will have to learn to practice systematic innovation. Successful entrepreneurs do not wait until “the Muse kisses them” and gives them a “bright idea”; they go to work. Altogether, they do not look for the “biggie,” the innovation that will “revolutionize the industry, “ create a “billion–dollar business,” or “make one rich overnight.” Those entrepreneurs who start out with the idea that they’ll make it big – and in a hurry – can be guaranteed failure. They are almost bound to do the wrong things. An innovation that looks very big may turn out to be nothing but technical virtuosity; and innovations with a modest intellectual pretensions ... may turn into gigantic, highly
profitable businesses. The same applies to nonbusiness, public–service innovations.

Systematic innovation therefore consists in the purposeful and organized search for changes, and in the systematic analysis of the opportunities such changes might offer for economic or social innovation. (Innovation and Entrepreneurship, 19, 26, 27,30, 34-35.)

At the heart of my own perspective of leadership is this notion of the entrepreneur. Most of us are "leading from the middle" and are caught in the vise of expectations that are all around us. The only way to "escape" and thrive in an environment like this is to take responsibility for our own development, know our value in the marketplace of organizations, and develop the disciplines of innovation and entrepreneurship that enable us to be effective, impactful people in any and every situation.

If you have thoughts to share, please do so. Others will benefit from your expression of insight.

Real Life Leadership: Small-business owners need to recognize a time of transition

Welcome to Small Business Week.

Here's my latest Real Life Leadership column - Small-business owners need to recognize a time of transition. Transition_points

It's about how small businesses address the issue of change. It is an important issue for most of us. There are lots of books written about change and change management.  They speak to the context of external change that is coming at us.  This column is really about what I've learned through my clients.  Here's the lesson.

Yes, the world around us is changing. It is changing in an ever-more random way, and at an every accelerating pace.  At least it seems that way. That is our experience. We perceive it this way partly because to a certain extent it is true, but also because of a unacknowledged guiding assumption that we all have. That assumption is that change is bad and stability means no change. 

The reality is that we are changing all the time. It may be slow or rapid, but change happens. The more important question to answer is the direction of change. Is there a pattern I can identify?  I'm I growing, moving forward, or am I languishing, slowing down, or worse losing ground?

This is the transition point represented in the little diagram.  Here is where we must decide what we do next.

Just so you understand where I am coming from. In my work with clients, in the past, I really didn't address this transition point. All we'd do is develop a strategic plan. It had value, but it was built on the assumption that they and their organization would stay the same and we'd just find a way to improve.

What began to happen was project after project had a common thread. Leadership transition. Either the  client was in a leadership transition and wanted to set a new course in anticipation of new leadership, or, the leader left during the project.  What this did was wake me up to the reality of transition in the midst of change.

What all this means that whomever you are today, you are in transition. I am in transition. I know it, feel it and am dealing with it. I don't know everything I need to know, but I know it is happening. The more I know the more I know how to take advantage of the opportunities that are coming with this change.

The change we experience is often times because we are doing well. We are progressing forward and all of a sudden we realize that we need to make some changes in our products and services, in our organizational structure and even in how we understand what our mission, values and vision for impact are.  It is a dynamic time that requires the best of us. That is why as I suggested in the column that we start by getting our physical and financial lives together, so that we are prepared for the new, good things that will come on the other side of this transition point.

This is small business week. I hope you'll patronize small businesses and thank them for being their for you.  I wish you well in your transitions. Take good care.