On Effective Change-Making: Collective Intelligence and How It’s Encoded in Organizations

Part 1 in a Series on Currency Design

In collaboration with Arthur Brock

At one point in Monty Python’s The Life of Brian, a crowd of worshippers has gathered outside the home of Brian, who they have mistaken for a prophet, to plead for a transmission of his wisdom.

Brian attempts to send them away. “You’ve got it all wrong! You’ve got to think for yourselves! You’re all individuals!”

The crowd robotically refrains together: “Yes, we are all individuals!”

“You’re all different!” Brian exclaims.

“Yes, we’re all different!” says the crowd in unison.

It’s a satirical take on allegiance to social structures — in this case a blind, religious one, but the point actually applies across many types of collectives, from companies to political ideologies to all manner of offline and online communities. The point is that social and institutional architectures tend to shape our behavior to a greater degree that we commonly appreciate.

In a more stark example from real life, Stanley Milgram famously conducted a psychological experiment in the 1960s in which subjects believed they were administering painful electric shocks to test-takers who gave wrong answers to memorization questions. Even when the subjects could hear the horrific screams and desperate pleas of the test-takers (who were actually actors), and even when instructed to turn the dial up to levels clearly marked with “Danger: Severe Shock”, the majority of subjects proceeded to administer what they believed were potentially fatal doses of electricity.

Milgram’s experiments were designed to investigate people’s obedience to authority figures when doing so conflicts with their personal conscience. His main goal was insight into the the psychology of genocides such as the Holocaust, but once again the lesson applies more broadly. If people are that responsive to the pressure of a stranger in a lab coat, imagine how influential social pressures can be when the ‘instructor’ is, say, an actual boss who can disrupt their ability to feed their family, or a member of their community who can affect their social standing.

The Behavior of Collectives Is a Function of Intelligence Encoded at the Level of the Collective

Having our behavior shaped by social or economic structures isn’t a bad thing in and of itself; these structures often provide healthy guardrails that align our actions with the common good. What can be a problem, however, is when we underestimate their influence, which can cause us to misplace our focus when trying to make change.

Let’s say we want to materially reduce carbon emissions from coal-based power. If we approach the problem as though it results from the aggregate of individual behavior, we’re going to campaign to individuals: we might send out emails encouraging people to shut the lights when they leave a room or turn down their thermostats at night. These campaigns may have noble intent, but they only change the actions of individuals, which has only a small effect compared to shifting the institutional patterns that mainly determine the amount of coal mined and burned: major corporate contracts, government subsidies, environmental regulations, and so on. Individual homeowners cannot easily choose where their energy comes from, nor do individual workers at energy companies have much say in the strategies of those institutions. Their behavior is constrained by the behavior of the collectives they are a part of.

Even if the individual running the coal-mining company — the CEO, let’s say — develops an environmental conscience and wants to steer toward more environmental accountability, he or she is probably powerless to do so: any actions that compromise quarterly profits could have him or her fired by the board. Even if all the individual members of the board have a change of heart, they might fear being replaced by the shareholders. The institution has a set of objectives that is different from the aggregate of the personal desires of the individuals involved, and the institutional objectives dictate much of the human behavior. (Coal miners are mining coal because they’re paid to, not because they enjoy it.)

Not only are the objectives different, but they are actually encoded at two different levels within the architecture of the institution, which arises from a complex interplay among the roles of the executives, the board, the shareholders, and more. It would be hard to say that the CEO is truly in charge, since the CEO answers to the board and the board answers to the shareholders, although it would be hard to say that the shareholders are exactly in charge either. Identifying who is ‘in charge’ isn’t as simple as pointing to this or that person or even group of people; rather, it’s a function of the intelligence encoded at the level of the collective, which is different from the sum of the intelligence of its parts.

It’s the same way that the clerk at the motor vehicle department cannot issue you a driver license without seeing other forms of identification — special kinds of reputation currencies, actually — such as a passport, utility bill, and birth certificate. It doesn’t matter that the clerk can see that you’re a person, or if you can convince the clerk you’re a great driver. It doesn’t even matter if the clerk knows you personally, not even if they’ve known you since birth, not even if they are your mom or dad! In order to get a license you need to be recognized not by the clerk, but by the state. And the state ‘sees’ according to the institutional architectures that have been established through the state’s rulesets and encoded into the state’s sensory system — architectures which constrain the behavior of everyone working at the motor vehicle department, as well as your behavior (e.g. you must go get your birth certificate) if you want a driver license.

Clerks come and go from the motor vehicle department and the encoded priorities stay the same, just as CEOs and all other role-fillers come and go from corporations and the encoded priorities stay largely the same. The collective intelligence outlives the tenure of individuals, which is more proof that it is a different phenomenon than the aggregate intelligence of individuals.

To Change the Behavior of a Collective, Change the Patterns Encoded at That Level

So, how do patterns of collective intelligence change? What can cause their priorities to shift materially — say, to more sustainable stewardship of resources, or to more long-term versus short-term thinking? Well, to change the patterns, we need to focus on the level at which the encoding of those patterns actually takes place.

In the case of the clerk at the motor vehicle department, one place we can find the encoding is actually in the software they use to input your data. They literally can’t print a driver license for you without entering the required fields — the required currencies — into the system. The individual cannot override the patterns set at the collective level.

What about the coal company? What exactly keeps the CEO acting in their company’s short-term financial interests over common-good interests and, so often, even its own long-term financial interests? Conventional wisdom often cites ‘fiduciary responsibility’, but that’s mostly just an excuse: there’s nothing about fiduciary responsibility that prevents a coal CEO from shifting resources toward renewables in order to be profitable one or two decades down the road. What really keeps them doing what they’re doing is that they don’t want to upset the board or the shareholders who don’t have the risk tolerance or patience for major changes in direction. So at least one of the key encoding patterns is simply that the shareholders own the company, the shareholders elect the board, and the board selects the CEO… along with the fact that the market price of shares, which is driven by shareholder demand, is a key source of operating capital for the company. Those attributes, which are common today but by no means the only way to structure a business, create a feedback loop in which all parties are driven by fear of loss: the shareholders, the board members, and the CEO.

Even getting the CEO to say that there is now a greater priority on sustainability, or on anything else that might be a good idea — like maybe more diversity in the C-suite, or better health benefits for miners, or taking bigger risks on innovating new technologies — isn’t likely to result in actual change if the underlying patterns don’t change. Companies announce new priorities all the time according to what’s in their interest to say. Sometimes the person speaking it really means it and sometimes they don’t, but either way, it’s often much easier said than done.

Making change at the collective level involves first getting visibility into the architectures at that level, then shifting those architectures so that good ideas can actually be implemented.

Currencies (‘Current-Sees’) Make Collective Architectures Visible

We like to think of currencies as current-sees: symbol systems that make visible the currents, or flows, of human behavior. In the example of the coal company’s flows of decision-making and behavior, key currencies include:

• The units of stock that represent ownership in the company
• The market price of the company stock
• The units of various kinds of voting rights (shareholder voting, board voting, intradepartmental decision-making systems, etc.)
• The titles of the executives and board members (and the decision-making authority those titles imply and don’t imply)
• The credentials that made it possible for the executives to be hired for their positions — such as degrees in specific areas of study or previous job titles at specific companies — especially as compared to other credentials that were not valued
• All the key performance metrics that the company is accountable to on a quarterly or annual basis (especially as compared to the ones that are deemed unimportant or simply not considered at all)

Can you begin to imagine the impact it might have to really examine whether all of the above currency systems are the right currency systems to bring about the greatest company success and/or the greatest common good? What credentials are actually the best ones upon which to base C-level hiring decisions? What metrics actually correlate best with sustained profits over the long term? What’s actually the best way for company ownership and governance rights to be accounted for and traded?

At the motor vehicle bureau, what are the most appropriate requirements for someone to get a driver license? How certain of someone’s identity should the state have to be? What about citizenship and/or permanent-resident status? What about good-driving credentials?

In the Milgram experiments, what are the symbols that led to the subjects inflicting ‘pain’ on the actors? The lab coat? The markings on the dial?

In the story of Brian, what prophet-qualifying metrics could have prevented the crowd from mistaking Brian for one?

In this article series, we’ll be exploring how to leverage currency design to bring about real change at the level of communities and institutions. We’ll also soon be launching a multi-media master class to take you all the way to becoming a true practitioner in currency design, as well as a currency design guild where you can share your ideas, get expert feedback, and collaborate with others to launch actual projects. To stay tuned about all of it, follow the MetaCurrency Project on Facebook, Twitter, Medium, and Github.

Next up: how collectives function as social organisms that are more similar to biological organisms than you might think, and how we can build smarter social organisms.