Jeffrey Saltzman's Blog

Enhancing Organizational Performance

If War is Hell and Business is War, What about those Red Balloons?

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During the warring states period in China 2300 years ago, Sun Tzu wrote The Art of Strategy, a military guide to be used to help insure victory on the battle field. There was much fodder for Sun Tzu to pull from, for in this time period in China’s history there were more than 300 wars between the independent states of China and the ruling dynasty at the time, the Chou. His premise was that proper preparation and planning is the essence of victory and that a true victory is achieved by correct tactical positioning. This enables easier victories and to avert much destructive conflict. He stated in his treatise, “Those who win one hundred triumphs in one hundred conflicts do not have supreme skill. Those who have supreme skill use strategy to bend others without coming to conflict.”

With 300 wars being fought in this time period it would seem that those thoughts were more aspiration than reality or perhaps it signaled an acute shortage of “supreme skill”. But regardless, his work has been widely read and reinterpreted by those in business as a guideline to building successful and competitive organizations. A theme in Sun Tzu’s work that strikes me as central to his philosophy and approach is the strong notion of centralized command and control.

During the time of Sun Tzu, if you wanted to send a message (something more complex than the lighting of a fire or smoke from a signal tower) from one commander to another, the best you could do was a fast rider on horseback, hoping that the currier made it to the intended location. It would be unheard of for soldiers to plan out any strategy among themselves. You took care of your soldiers, you organized them, you trained them, you fed them, and you tried to keep them alive in combat because that way they were a reusable resource and the other soldiers did not desert, but you did not have them discuss strategy, you did not listen to the common foot soldier, they were considered pawns to be moved around, deployed or spent to the greatest advantage of the strategist.

Many organizations today conduct themselves in a similar fashion. Not seeing employees as the path by which success is achieved, but seeing employees merely as pieces that are employed or deployed for the achievement of the organization’s goals, goals that may or may not be widely accepted by all within the organization. I have to wonder, did social networks exist within the military during Sun Tzu’s time? Of course they did.

Social networks are nothing new. Organizations themselves arose as social networks allowing for groups to accomplish what individuals alone could not. Extended families are social networks, a community is a social network, a church, mosque, or synagogue is a social network as is a military organization, a business, a school or other group coming together for particular purposes. Customers of a product or service are simply another form of social network when they communicate together or share experiences surrounding the purchase of the product or service.

Power (position power or influence) within traditional networks often accumulates to those that controlled the flow of information. Think of those within a religion who would communicate as a go-between between you and your god(s) or a military commander who knew the battle plan and let others know on a “need-to-know” basis. Similarly, find those within business organizations who have their fingers on the “pulse” of the organization, what is going on across the organization and you will have found people with real power within the organization.

There are those within business organizations who are concerned that the social networks that are evolving today represent a threat to the organization. Organizations traditionally liked to control the flow of information as a one-way conduit, from those in control to those who needed to know or execute (centralized command and control). Tightly controlling what information your employees see about the organization, what your customers know about your products, services or cost structure, what your investors know about issues facing the organization etc. is a traditional path of centralizing organizational power.

Those who practice these methods feel threatened by the emerging social networks for they see them as using mechanisms that traditionalists believe will erode their power over the various constituency groups that interact with the organization. Rather than embracing social networks and determining how to leverage this new found technology they seek to control it, to limit its potential impact on the organization, or to specifically shape it to their own purposes. It seems that every time a new technology comes along there are those who don’t see its usefulness or seek to inappropriately control it.  I think over the long run organizational power will not be eroded by social networks, just as organizational power was not eroded by the telephone when it came upon the scene, it will just be different and those who get to the point of understanding those differences first and how to effectively use those networks will come out ahead.

More traditional social networks grow somewhat ephemeral as distance between the members grows. Different parts of an extended network often become something other than what the original was about, as new practices and beliefs arise or local challenges are faced. Like distant cousins in your familial social network, you may know of their existence, but it becomes more and more difficult to accomplish a goal (such as the annual family reunion) as distance between the members of the social network increase.

Additional challenges with traditional large scale social networks come about because of communications limitations (clarity, timeliness, saliency of etc.) and with that our inability to organize appropriately those with needed skills and talents to deal with specific issues that arise. It is one thing to feel part of an organization, or a social network, it is another for that social network to consistently self-organize to deal successfully and quickly with specific challenges that the network is facing.

Times, it seems, might be changing, driven by something that the world has never seen before – self-organizing social networks that appear capable of working across distances, coming together to solve a problem and then just as quickly melting away. We are just at the forefront of understanding the potential power here and how best to utilize these capabilities, but the science, techniques and capabilities of these social networks are moving so fast that suffice it to say that any organization that is not making use of them today is lagging and within a few short years will unlikely be able to catch up to competitor organizations that are. The technology is also changing so rapidly that it is very difficult to surmise what kinds of social networks will be in use and most beneficial to organizations within a few short years, but waiting to see what happens at this point rather than jumping in and experimenting is extremely short-sighted.

Case in point, DARPA, the Defense Advanced Research Projects Agency, which funds some really neat cutting edge research, held a contest to celebrate the 40th anniversary of the internet. The moment of birth of the internet is considered to be the point in time when the first email was sent over Arpanet, a forerunner to the Internet. With just a few days advanced notice for groups to get organized, for six hours, on December 5th, 2009, ten large red floating balloons were tethered at various points around the nation. The first person or group to correctly report the latitude and longitude of all ten balloons won $40,000. No rules, no guidelines. The idea was to study how self-forming teams might emerge to solve problems using social networks.

Many groups formed. Some used Twitter, some Facebook, others created their own websites. Some of these groups appealed to altruistic motives, urging people to report their sightings so that the prize money could be donated to AIDS research, the Firefighters Scholarship Fund, or other worthy causes. Other groups stated that they would give a portion of the prize money to those who reported sightings correctly, appealing to people’s desire to put money in their own pockets. In the space of nine hours a group from MIT submitted the winning information. Was their winning strategy to appeal to people’s nobility, their desire to support worthy causes, or to people’s desire to put some cash in their own pockets?

Well, as might be predicted, cash in one’s own pocket triumphed over altruistic motives. (And there are still those who insist that salary, what people get paid to work in organizations is not a motivator, that other factors are important. Other factors are important, but only after you get paid what you consider to be a fair amount). But the victors from MIT had an interesting twist to how they created their social network. Some of the networks that arose to compete for the prize money simply stated that should you provide a correct positioning for one of the balloons you would receive “x” amount of dollars, but the folks from MIT added a higher order social networking strategy to that approach.

Their website said, “We’re giving $2,000 per balloon to the first person to send us the correct coordinates, but that’s not all — we’re also giving $1,000 to the person who invited them. Then we’re giving $500 whoever invited the inviter, and $250 to whoever invited them, and so on…”. A first order solution here is to provide the correct coordinates yourself resulting in the largest amount of money in your pocket, but a second order solution which will also provide money in your pocket is to refer the person to the contest who provided the correct coordinates and so on. This rewards the behavior you really want to have people report on, the correct coordinates, but also to refer people to the social network, so that it is expanding, creating a greater likelihood that this social network becomes the victor. Remember, you get the behaviors that you reward. As you set up social networks of your own, or desire to motivate certain behaviors ask yourself what you are rewarding. Not what you say you are rewarding or what you aspire to reward but what behaviors are you actually rewarding.

Times are changing, specifically, how we interact with each other, not just locally but globally. These are exciting times and those who are prepared and willing to take advantage of these social changes will likely benefit from them.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

Written by Jeffrey M. Saltzman

December 7, 2009 at 3:18 pm

3 Responses

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  1. Great article – thanks Jeffrey

    Tommy Houran

    December 8, 2009 at 10:45 am

  2. Well done, Jeffrey: Thank you. You made several very strong points; one of my favorites, of course, is

    More impressively, the Red Balloons is a fine example of stakeholder recruiting and involvement. Companies that embrace this social network approach will, I think, maintain a healthier profitability in the decades ahead.

    Richard Laurence Baron

    December 9, 2009 at 11:19 am

  3. Good article Jeff, and of course I am disappointed that cash won out over nobility, but I wonder if the crucial step was rewarding recruitment.

    Exciting times indeed, and one area of rapid learning is the whole topic of intrinsic vs extrinsic motivation and what leads to social capital sometimes beating monetary reward and vice versa – right down to which brain circuits control them and how only one can work at a time – “Money” fires up the nucleus accumbens, and social benevolence uses the posterior superior temporal sulcus, and apparently they are mutually exclusive to some degree.

    Sometimes giving money reduces performance, and sometimes it increases it and sometimes social rewards lead to increased effort and performance, and sometimes they do nothing.
    Predicting outcomes seems to be beyond our ability right now, but at least we seem to have all the pieces on the table for developing that.

    MATTHEW H LOXTON

    June 23, 2011 at 1:41 pm


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