Thoughts on building a better Society
Our Vision for Building a Better World; unlocking productivity potential, minimizing risk, and creating better outcomes.
We founded Unaty because we want to radically change the world for the better. We are passionate about design, technology, community, systems and economics — we believe that applying principles, practices, and learnings from these different subject areas can lead to new and innovative tools, methods, and applications that will positively transform our Society.
This article is the introduction to a series we’re starting on the role of associations in society, their history and challenges. In the later part of the series we will detail concrete ways to transform associations in their structure, principles and practices. This introduction sets the stage for this series by giving context to the problems our society faces today, and where we’re focusing our attention on fixing the problem.
We’re dedicated to creating better outcomes around the world by empowering individuals with new tools and possibilities, thereby spurring economic, scientific, and technological growth. We seek to accomplish this goal by reinventing the systems these people operate and live in — including communities, businesses, governments, and thereby society itself.
Never doubt that a small group of thoughtful, committed citizens
can change the world; indeed, it’s the only thing that ever has.
- Margaret Mead
Self-driving cars, reusable rocket boosters, AI enabled robots playing chess; but a few of the countless innovations that display the constant pushing of our limitations and boundaries as a Society. Yet as exponential advances are being made in technology, science, mechanics, aerospace — every area of work and society is currently in some form of transformation. Automation, globalization and connectivity have ushered in previously unimaginable new possibilities.
After WWII, our world bore witness to an unprecedented wave of innovation and advancement that shows no signs of stopping. Yet many societal vital signs from countries around the world have remained flat along the same time period in which these innovations came to be. Poverty rates in the US have been hovering around 15% since 1965, the number of Americans in poverty today is the highest it has been in over 50 years. World economies are experiencing long-term drags on demand for goods and services from more frequent disruptive events. We’re experiencing rising income inequality, declining labor shares, changing demographics and declining investment rates on a macro level.
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair…
- A Tale of Two Cities by Charles Dickens
If we as a collective, global society wish to achieve prosperity for all those within it, we must first seek to understand what drives societal growth and creates more prosperous outcomes for those within a system — and why.
Analyzing, interpreting and understanding these complex problems and opportunities is essential — only then can we reach a state of awareness from which we can pursue actionable change.
- Societal Stagnation: Utopia yet to be found
- Dawn of Digitalization: The Productivity Promise
- Anti-fragile Organizations: Growth from Disruption
- Time for an SOS: Social Operating System
- A call for Unaty: The Importance of Communities
Societal Stagnation: Utopia yet to be found
Signs of Stagnation
Since the beginning of filmmaking itself, movies like Metropolis, Gattaca and Logan’s Run have shaped our vision of the future —modernistic, shiny and clean where people are happier, healthier and exponentially smarter and more capable than we are today.
These may only be movies and it’ll take time before the first X-Wing takes off. Yet many innovations once seen as sci-fi have already made their way into the real world — flying taxis, smart machines, and blockchain to name a few. Innovation and some organizations are advancing at an exponential rate.
Societal vital signs such as household income and purchasing power have naturally increased over the last 50 years, but not at all societal milieus and growth is surprisingly flat for a significant portion of society.
Innovation has led to wealth creation and increased income, yet the positive effects are sharply focused on the top quintile of households, with those at the bottom experiencing almost no rise in income over the past 50 years.
Additionally the purchasing power based on hourly wages for production and non-supervisory employees has flatlined meaning wages have risen, but people feel less impact from the money they do earn.
This begs the question what truly drives income growth and upward mobility. A healthy and prosperous economy should reap benefits for all who take part.
Progress through Productivity
Economics is built upon the principal that we as parts of a system must face decisions meaning to get one thing, we must give up another thing. The cost of something we buy is based on what we give up to obtain it. Growth of economic systems is driven by value creation, adding more value through your activities makes you inherently more valuable to the system itself.
Because markets are an attractive way to organize economic activity, and trading throughout economic systems benefits both parties — due to the allowance for specialization and innovation — currency was introduced to facilitate trade and institutionalize trust in such systems. People who work and create value within these systems are compensated based on the value they add to that system. This in turn makes a country’s standard of living dependent on its ability to produce goods and services.
The value individuals add to an economic system is complex, typically on a macro scale through the per capita GDP of a system. GDP measures the total value of goods produced and services provided in a country during one year. GDP per person (capita) rises when people in that economic system become more productive which results in higher output. Higher individual output leads to higher real and nominal compensation without requiring more work to be done — resources such as time and money are simply being used more efficiently.
Productivity is therefore a key driver for economic and social well-being.
Despite incredible technological innovation, labor productivity growth is near historic lows in the United States and much of Western Europe.
The hours we work are rising as productivity growth continues to fall.
The drastic fall of productivity growth occurring simultaneously with unprecedented innovation is surprising and concerning.
Before exploring the trends and effects of digitalization so far upon productivity, we must understand which factors are responsible for shaping environments in which productivity flourishes.
Pillars of Productivity
- Skill level of personnel
- Organization of functions and tasks
- Capital & Technology
- Scale and capacity utilization
Productivity by individuals in systems is influenced by the 4 main factors listed above. One should observe, that individuals operating within these systems often have little influence themselves on much of that which influences their productivity. The systems in which these people operate therefore carry immense importance in promoting worker productivity.
Dawn of Digitalization: The Productivity Promise
Phases of Productivity
Productivity grew in leaps and bounds in the post-war world, with GIs coming home, capital investment at its highest rates in recorded history, and living standards growing in leaps and bounds. The Greatest Generation and Baby Boomers pushed America and the world to new heights. Advances in physics, chemistry and mechanics drove productivity across the globe — and increased greatly the value of skilled laborers.
This trend can be witnessed strongly in the automobile sector, where companies like Toyota, Nissan and Hyundai were able to create up to 7x more cars per worked in 2000 than in 1976.
The introduction of the internet and new widespread broadband technologies kept productivity growth stable until the 1990s.
In the mid-2000s, the boom caused by upgrading Information and Communication Infrastructures and the PCs, software, and database systems — which in turn enabled global supply chains to be introduced on a massive scale and the restructuring and optimization of processes was ending.
Measurements taken since are impacted greatly of course by the Great Recession of 2008, which caused some sectors such as Financial Services to go from boom to bust virtually overnight. In the aftermath, companies held back new investments after observing weak consumer demand — this drove capital intensity growth down to the lowest rates since World War II.
Untapped Productivity Potential
Since the 2008 recession, a job-rich but productivity-weak recovery is to be observed. Workers are putting in more hours but adding less value.
In an era of exponential organizations, quantum computing and artificial intelligence — tools meant to increase human productivity and power — is productivity growth dropping, as well as real output and compensation.
Barriers to Benefits
Digitalization, connectivity and globalization have led to advanced, complex economies around the world. Digital possibilities routinely promise significant productivity-boosting opportunities, yet the benefits are nowhere to be found. Increasing uncertainty, transition costs, and complexity are widely seen as barriers to more widespread digital diffusion.
Anti-fragile Organizations: Growth from Disruption
New World Chaos and Complexity
In an increasingly fast-paced and connected world, we’ve vast amounts of information at our fingertips as well as the tools to unlock our creative potential — more music, books, art is being created than ever before, and growth is only accelerating.
Consumer interests shift on a dime, new fashion lines are constantly coming out, and we have more purchasing options as consumers than ever before. Traditional business models are being overturn, technologies like Facebook popular with most kids 5 years ago is being kicked to the curb — we’ve found talking to hundreds of associations that members under 35 can be typically reached on Facebook, 18–24 typically on Twitter/Instagram, under 18 Snapchat, and those over 35 per email. Organizations are increasingly consumer-facing and are forced to adapt and accommodate to consumers.
Organizations are increasingly breaking under this increased disruption, unable to adapt to environmental changes, and finding little value in previously optimized supply chains and company structures. The life expectancy is dropping of even the most established companies — the life expectancy of members of the Fortune 500 has dropped from in the last 15 years, and over 50% of the member companies in the group no longer exist.
Unfit Organizational Systems
We believe this is a clear sign of how unfit organizational models are in dealing with changes faced by organizations in our new world.
Many ‘Modern Management’ techniques fail to prepare companies for an increasingly uncertain world where organizations are vulnerable and more sensitive to shifts in the world around them. They also tend to be disproportionately affected by negative disruptions and unable to gain from positive disruptions. Some unexpected, negative disruptions — like the financial crisis or Fukushima disaster — are big enough to cause large systemic damage to a large majority of organizations in society. Nassim Nicholas Taleb refers to these as Black Swans.
The question becomes, what system is ideal for an increasingly complex and chaotic world that can benefit from such disruptions?
The Antifragile Organization
Society needs a new operating system for organizations that benefits from chaos, grows from disruption and minimizes the risk of decision making within systems for its stakeholders — thereby creating better outcomes.
Mr. Taleb, who first identified the disproportionate impact of Black Swans, described this organization in his book Antifragile. He states that organizations are fragile and therefore susceptible to outside disruptions. When discussing an ideal organization, he refutes the ideality of resilience (the practically used antonym of fragility) for organizations, instead advocating for a new Antifragile organization, he offers this comparison to explain his concept:
Where a fragile package would be stamped with ‘do not mishandle,’ an antifragile package would be stamped ‘please mishandle.’ Antifragile things get better with each (non-fatal) failure.
- Antifragile by Nassim Nicholas Taleb
The benefits of such a system are immediately clear and incredible at scale. Imagine a world of interconnected antifragile organizations acting as a sort of organism, constantly growing stronger, minimizing risk and creating better outcomes at all levels of the system and for all those within the system.
Our mission has therefore become to create this world of interconnected antifragile organizations — this being no small undertaking we next considered how one would start creating this antifragile world.
Time for an SOS: Social Operating System
Embrace Disruption and Empower Individuals
Though the majority of organizations are disproportional affected by negative disruptions, a number of companies has been able to even leverage these as opportunities for improvement and have since grown stronger.
Toyota, seen before as the car company able to achieve the highest productive efficiency over 40 years ago, has proved a ready example for one such antifragile organization. For demonstration purposes, we shall explore a real life example where Toyota was subjugated to negative external forces and managed to not only survive but emerged a stronger, better company for it.
Less than two years after the beginning of the Great Recession, Toyota was subject to a series of most unfortunate events. 2009 saw it hit by the largest car recall in history. Later that year a massive tsunami wreaked havoc on its supply lines. Thereafter the bad news continued with an airbag recall and a strong Yen.
Competitors such as GM and Ford also experienced setbacks and recalls within this time period, albeit on a much smaller scale. Toyota lost its place as Global Market leader in 2010 due to these setbacks.
Yet something remarkable happened: Toyota bounced back and reclaimed their place as world leader only two years later.
Toyota clearly possessed some qualities that allowed it to not only recover faster, but also benefit and make systematic changes and improvements. The company dealt with disastrous events gracefully and applied learnings to their organization resulting in a growing competitive advantage.
Toyota has become famous for their highly disciplined, kaizen-inspired Kata management style. This style is focused on maximizing and orchestrating human-capabilities to create more desirable outcomes. In a book about this management style, Mike Rother explains “that it is not solutions themselves that provide sustained competitive advantage and long-term survival, but the degree to which an organization has mastered an effective routine for developing fitting solutions again and again, along unpredictable paths” — find the book here.
Sound familiar?
Organizations finding success in the world today are those that put more power, authority, knowledge, information and tools in the hands of the people within their organization.
After all, organizations are simply systems and the success of a system is dependent to the level of awareness of those who operate it.
A Digital Backbone for Systems
As old hierarchical systems crumble under distress, new horizontal structures are emerging as effective replacements, these systems governed by the principles of decentralization, autonomy, self-allocation and transparency.
The applications of these principles onto organizations are radical and often add to the level of complexity before anything else. This is truly a ‘new way of working’ and takes adjustment from all parties. Empowered employees or members with less administrative overhead and restriction, makes management of such an organization a noble, paradoxical new approach. Managers must be open to failure and creativity, strongly align people through a shared purpose, and promote a more open, democratic culture while also meeting business goals and avoiding internal anarchy.
Everything is at its Acme; especially the art of making one’s way in the world. There is more required nowadays to make a single wise man than formerly to make Seven Sages, and more is needed nowadays to deal with a single person than was required with a whole people in former times
- The Art of Worldly Wisdom, by Balthasar Gracian
We believe that the success of such antifragile systems will be largely dependent on new ICT infrastructures that supports all stakeholders within an organization and functions both passively and actively to raise awareness in that organization, thereby empowering the people that run it and leading to better decision making, minimized risk and better outcomes.
Antifragile organizations must implement a digital framework to support working in the ‘new world’. Organizations need a Social Operating System.
Eco-system Awareness
Interconnectivity is already a huge trend, our watches are connected to our phones which sync with a server that sends data to our computers.
Interconnectivity will also play a huge role in the creation of an antifragile world. Organizations securely linked together, sharing relevant information with each other will drastically improve productivity, intensify knowledge sharing and allow more people to take part in our digital economy.
For example: Imagine entire supply chains being securely connected to all players — manufacturers, distributors, retailers, factories, marketing agencies, call centers, etc. — which would have access to selected data from each of its’ partners. Entire supply chains would be incredibly nimble in responding to consumers wishes, and can be more closely aligned. Each person at each company within the system would have a greater understanding of where problems and opportunities lie. The possibility of integrating external data about employees, customer interests and market trends could help uncover subtle trends that lead to revolutionary innovations.
Most importantly, these organizations and the people who operate them at every level do so from a higher level of awareness — these empowered problem-solvers can work together better to craft ‘more fitting solutions’ constantly, meaning that these organizations only get stronger over time.
A call for Unaty: The Importance of Communities
The Third (forgotten) Sector
In our societal construct, we first find the public sector (government), then encounter the private sector (companies), equally important is the often overseen non-profit or third sector.
Organizations in the Non-profit sector include political parties, social clubs (rotary, lions), sports teams, fraternal associations and many more. Over 800k people are employed in the US alone by the non-profit sector and they make up around 6% of the total US GDP .
There are 2m civil organizations in the US, 600k in Germany, 380k in France, and 160k in the UK. Extrapolating these numbers by the weakest organization / population ratio of the four (1 per 400 in UK) would mean there are about 20m organizations globally.
Organizations in this sector have been affected as well by disruption over the past 30 years and have been slower to adapt to management innovations found in the private sector. Although membership is generally on the rise, engagement has drastically fallen, and members are unwilling to commit to participating.
Problems had by these kind of organizations are systemic and that’s why they aren’t currently being helped by the software products on the market today — these are only bandages for problems that stem back to a much deeper issue. The world has become hyper connected in the last 30 years, which has led to a change in the way people participate in organizations — we now live in a personalized participation culture. Organizations have not evolved to meet changing individual needs and must apply fundamental organizational change to find success and grow in this new world.
Their role in the Decay of Democracy
As we search for answers as to why our world is increasingly polarized, we need not look further than the falling engagement in associations.
In his now famous book Democracy in America, Alexander de Tocqueville writes that he is astounded how associations take the place of government in providing social services and attributes the success found in the US in part to their high membership in associations — which act as “Schools of Democracy”.
Americans of all ages, all conditions, all minds constantly unite. Not only do they have commercial and industrial associations in which all take part, but they also have a thousand other kinds: religious, moral, grave, futile, very general and very particular, immense and very small; Americans use associations to give fêtes, to found seminaries, to build inns, to raise churches, to distribute books, to send missionaries to the antipodes; in this manner they create hospitals, prisons, schools. Finally, if it is a question of bringing to light a truth or developing a sentiment with the support of a great example, they associate. Everywhere that, at the head of a new undertaking, you see the government in France and a great lord in England, count on it that you will perceive an association in the United States.
In America I encountered sorts of associations of which, I confess, I had no idea, and I often admired the infinite art with which the inhabitants of the United States managed to fix a common goal to the efforts of many men and to get them to advance to it freely.
- Democracy in America, Alexander de Tocqueville
We’ve experienced firsthand how important associations are for individuals, organizations, and society itself — and also discovered a surprising and negative trend that offers insights into the state of associations today:
We’ve discovered something surprising about the state of democracy in Germany and systemic issues around democracy itself and participation within the political system.
The landscape of participation — especially political participation — is shifting in a very significant way. In Germany, we traditionally have two large parties, the CDU as a center-right party and the SPD as a center-left party. Both have lost around 50% of their membership since 1990 even though Germany as a country gained 16 million new people due to the reunification in 1990. This isn’t surprising in and of itself — it is reported regularly.
What is surprising is that of the people still left in the parties (which one would assume are the core base), most aren’t being integrated into the process at all. According to interviews we held with many local SPD party leaders, the percentage of members who have never been to a single event or meeting is around 85%. The CDU has email addresses for barely a quarter of their members according to an interview of the secretary-general.
This shows how incredibly unfit parties are for civic engagement in the 21st century. Due to the growing power of personal influence through blogs or social media outweighing the negatives of party affiliation (time-consuming meetings, extra work, etc.), political parties need to realign their processes to account more for the direct and productive feedback people can experience today.
Main takeaway: Associations have traditionally been schools of democracy and civil participation makes democracies strong — De Tocqueville wrote of this all the way back in 1835 in Democracy in America. Associations are broken in their current form and don’t meet members’ expectation which has led to dropping participation which is in turn leading to a democratic decay.
Transform associations and make them engaging and attractive for participation to transform the democratic system from the bottom up.
Associations are inherently subsets of society and therefore also mirror it to a great extent. Associations in their current organizational form are similarly unfit for finding success in our world, which inspired us to apply our research to create a new Operating Model to transform these associations.
A new Model: the Community Canvas
Similar to how Alexander Osterwalder’s provided a framework to visualize and improve companies with his Business Model Canvas, we’ve sought to do the same through the creation of the Community Canvas.
This Community Canvas is a framework for organizations to orient themselves upon when seeking to transform their organizational design to better adapt to their changing environment.
This canvas proposes seven domains in four layers which relate back to important aspects of any organization that deserve a deeper look when considering how organizations are designed to fit into any environment. Each domain consists of a set of principles and practices; principles (derived from trends of organizational innovation in the private sector) being the important aspects of said domain that are to be followed when considering its design or structures, and practices (derived from measures) which describes the concrete actions to be taken and implications that this domain has upon the operations of a given organization.
Later posts in this series will deep dive into each domain and the practices, principles and real world examples that make it useful to organizations.
A Platform for Progress and Prosperity
In this article we explored societal trends, delved into systemic problems responsible for the societal stagnation we’re experiencing, discussed the ideal organization in our chaotic world, touched on the need for a digital platform to support transformation in organizations and delved into the importance and problems facing associations in the third sector today and briefly introduced the Community Canvas.
We will continue this series with more background information about society, organizations and community.
Thus our journey begins. Unaty connects people around shared goals, ideas and interests and gives members the tools to reach, engage and inspire their Communities.
A pillar of sustainable Democracy is an educated citizenry. Building a Better World starts by raising the awareness of all who are part of it — only then can we truly work together to build a better future for everyone.
