Endless Knots

Transparency for accountability as the funds roll out

Transparency was a keyword in Obama's run for the office and it's been a critical tenet of everything that he and his administration have spoken about since. The first presidential directives out of the gate for the new administration were focused on transparency and open government. And, it is central to the bailout-stimulus-rescue plans now underway and soon to come.

There are many potential traps in promoting transparency, of course, and each time something seems a little untransparent, the commentators are quick to wave the hypocrisy flag. Putting aside the media's lack of transparency, we want to focus on another aspect of transparency which is this: its ability to keep a clear focus on accountability. If we know what ends are sought and who's responsible for reaching them, then we have a clear roadmap of accountability.

But how do you have a clear roadmap when the thing itself is far more huge than anything has ever been before?

We talked a bit here about the need for clear maps during reorganization where enterprises are shrinking, but we haven't talked at all about the need for clear maps when organizations are growing, or exploding in size.

Take the Federal Deposit Insurance Corporation, whose head, Sheila Bair, has been one of those voices for greater transparency. Yay, Ms. Bair. We've spent a bit of time putting the top levels of FDIC into our US Government Map (go to Federal Agencies, at about 2 o'clock).

Thanks to the careful reporting of Eric Lipton in a NY Times Valentine Day post ("Failed Banks Pose Test for Regulators"), we learn that the work--and the budget--of FDIC increased astronomically from 2007 to 2008. FDIC, which has the thankless task of toxic clean-up of failed banks (and the businesses that led to their failures), had just three failed banks to scrub-rinse-repeat in '07. Number in '08? Twenty-five, or, arithmetic fans, eight times the number it had to launder, so to speak, just a year earlier. Given that, as of last week, thirteen more banks already have failed in '09 (and we're only halfway through February), a whole lot more are landing in FDIC's dirty laundry basket even as we write.

To provide some perspective, Lipton examines just one part of FDIC, its Division of Resolutions and Receiverships, whose 2008 budget was $75 million. The budget for 2009? $1 billion. Let's keep following this through. How does FDIC manage to negotiate the deals that allow billions of dollars in assets to move to higher ground?

It hires people. As of right now (or maybe a few weeks ago), FDIC employs 4800 people, according to Lipton's article. When it was last responsible for the prior big bank horror show in the '90s, it employed as many as 15,000. Given that the mess we're dealing with now is HUMUNGUSLY BIGGER than what transpired in the '90s, shall we speculate that perhaps FDIC may need to do more than triple its size? Will the FDIC grow to 30,000? 45,000?

To meet this challenge, it is only hiring 1500 new people. Lipton reports that $700 million (!) will be spent hiring contractors to provide the warm bodies to do the work. So like so much of the rest of corporate America, FDIC is outsourcing the work to avoid the painful ballooning up followed by the excruciating shrinking that always follows windfalls.

How will FDIC manage accountability across such a fast and vast ramp-up of its capabilities? Accountability is all the more important because of the "army of contractors."

Like the dozens of other agencies whose budgets are about to swell--at the national, state, and local levels, FDIC desperately needs to upgrade its accountability mechanisms. One fundamental way to do that is by establishing and maintaining org charts of the whole organization, which are literally the structure of accountability. We're putting in some time as a start to that process and we encourage FDIC and the other agencies and departments charged with implementing the stimulus and other spending to do the same.

With transparency you can see accountability which (re)builds trust.

Revolution in networks: applying the new science to organizations

As we posted earlier, the Discovery Network's Science Channel (thank you, Joe Wehr) premieres "Connected: The Real Matrix" tonight, Sunday, February 15, at 9pm EST (and PST). As our friends at Future of Work note in their cross-post, "the program will also be repeated on Monday, February 16, at 12:00 AM, and on Tuesday, February 17 at4 AM (again, EST and PST). Maybe not the greatest times, but you can always set your trusty DVR to pick it up for you."

The TV show emphasizes the general applicability of the new network science to complex systems. We here at NetAge have applied this same science to organizations. As we've written, OrgScope is the tool we developed to visualize and analyze organizations as networks. So the show is the perfect lead-in to the next installment of our NetAge Working Papers series on management science for networked organizations:

"Revolution in Networks: Applying the New Science of Networks to Organizations." (Download Revolution in Networks)

We present the concept of “organization network science” as an application of the new network science, as described in the "Connected" show. As described in this working paper, the new science includes the concept of “scale-free networks” and their signature pattern of hubs developed by Albert-László Barabási and others. A second stream of new network thinking, personified by Duncan Watts, reveals how a few “shortcuts” dramatically reduce path lengths to form “small-world networks.” We reframe generic network principles of growth and “preferential attachment” for use in understanding and managing organizations as networks. At the paper’s end, we retrace in organizational terms a Barabási simulation of how a network grows, and address the development of hierarchical networks.

Here are a few paragraphs from the paper:

Background on the Network Revolution

Over the past few years, a new “science of networks” has rapidly woven across the physical, biological, and social domains, bringing the simplicity of common characteristics to diverse complex systems.

Our field work at the leading edge of global organizational development confirms that this new “linked” science applies directly and immediately to highly-complex organizations. It is our hope that a true theory-based, data-driven, testable science of “organizational networks” will enable an historic step-change increase in human organizational capabilities. Great ambition, but even modest improvements in collaboration could have widespread application and deep impact. We believe this new knowledge can substantially improve our collective ability to work together better, a clear imperative imposed by the era’s economic interdependence, digital information technologies, accelerating globalization, and deepening human power to modify ourselves and the world around us.

So what’s new about networks according to the latest research? In a phrase, they are organic, scale-free, small worlds. The new network science grasps complex networks by their nodes and maps their links, generating useful metrics related to configurations that help identify hubs, shortcuts, and all manner of characteristics that are directly applicable to organizations.

Download Revolution in Networks

-- Jeff Stamps

Transparency and open government - Obama's midnight memos

At the stroke of midnight on January 21, 2009. five "Presidential Actions" went into force (see White House press statement), establishing a clear foundation of organizing values and principles for the new Obama Administration. The "Midnight Five," with their links, are:

Presidential Memorandum on Transparency and Open Government

Presidential Memorandum on Freedom of Information Act

Executive Order on Presidential Records

Executive Order on Ethics Commitments by Executive Branch Personnel

Presidential Memorandum Regarding Pay Freeze

The capstone action is the one we list first, the memo on "Transparency and Open Government," a remarkable document that lays out the fundamental reason we need openness and how to achieve it. This understanding of the central role of transparency is vital at this extraordinarily critical moment in the still-accelerating economic crisis. Transparency is both necessary and beneficial. To paraphrase Judge Brandeis again, things get better with sunlight.

The president doesn't mince words in his preamble to the memo:

"My Administration is committed to creating an unprecedented level of openness in Government. We will work together to ensure the public trust and establish a system of transparency, public participation, and collaboration. Openness will strengthen our democracy and promote efficiency and effectiveness in Government."

How are these open government benefits of efficiency, effectiveness, and a stronger democracy to be achieved? The memo outlines three imperatives ("shoulds"):

• Government should be transparent.
• Government should be participatory.
• Government should be collaborative.

Lest you think transparency and openness apply just to government, listen up all you leaders in organizations of every size in every sector who are feeling and dealing with desperate challenges. We can only get out of this mess by all of us being smarter and contributing to the overall solution.

We are posting the whole transparency memo after the break below, inserting in brackets words that indicate its applicability to all organizations, thus, the revised title and what follows. Please take a read and see if you might be able to endorse the same statement in your organization.

-- Jeff Stamps

Transparency and Open Governments [Organizations]

"The Victorian Internet:" revisiting a classic

Does "the highway of thought," as the telegraph was known, remind you of any often-saids about the current global surround? Betsy Carroll over at Leading Virtually has a nice pointer to Tom Standage's decade-old book, The Victorian Internet, the leading edge technology whose opening chapter is titled "The Mother of All Internets." I could leave it right there but Carroll's reflections after reading Standage's book are so good that I'm posting the intros to her five points here. Her post is click-worthy and I don't want to steal her thunder so I'm just including her first sentences:

1. Planning is crucial when adopting technology.

The development of a telegraph system was plagued by amateur scientists who were put in charge of major events such as designing and laying cable across the Atlantic to connect the US and Europe. 

2. Keep in mind the distance between early adopters of technology and average users.

The telegraph represented a huge improvement in communication, yet the general public was slow to recognize its potential influence on society. [Ed. note: we're in a funny period where the public is in many ways ahead of the organizations in which they work with regard to early adoption of Web 2.0 and beyond.]

3. Make sure your technology continues to support your purpose.

With the telegraph, there came a stage where some lines or offices were so busy that messages weren’t getting from place to place in a timely manner, yet that was the whole purpose of the technology.

4. Remember to consider companion technologies.

The story of the telegraph is incomplete without also discussing the rise of pneumatic tube systems around major cities.

5. Don’t lose sight of the people for the technology.

One eyewitness account of the telegraph said that the telegraph cables crossing the Atlantic were not just cable, but represented bonds between people. 

Obamicon-me: This is fun

So long as I'm having such a me-centered day, how about you? Try it.

The Valentine

Valentine's Day is always bittersweet for me.

A version of why: "The Valentine"

True life in only six words

NPR has been running Six Word Stories on love and heartbreak this week in honor of, yup, today, Valentine's Day, inspired by Ernest Hemingway's nine-syllable zinger:

"For sale: baby shoes, never used"

Six Word Stories (thank you, Pete Berg) publishes one every day and they're funny, sad, thought-provoking, of the moment...you name it. From Thursday:

"Checked Facebook. Apparently we broke up."

And I just received this one from an extremely close friend:

"Met at anti-war event, still fighting."

Now today I receive notice that  "Best Tweets" is following me on Twitter. Similar idea. It collects up some gems but ironically when I went to follow Best Tweets back, it says I'm blocked. Not knowing what to make of this, I'm borrowing a few of these to give you, those of you not on Twitter that is, an idea of what you can do with 140 characters, here choosing the humorous ones. Apologies in advance, Best Tweets and Twitterers.

The latest Best Tweets

myr4206: I haven't checked my email in three days and apparently a Nigerian prince needed my help... I hope he's okay

joeschmitt Why I love Twitter: When someone says "Plane crash!" or "Daschle out!", I can sneer & smugly say "That's so 30 minutes ago."

gordonshumway The woman in front of me at Kinko's dated her check as "2/3/1938". She didn't laugh when I told her I'd come from the future to correct her.

tj I taught The Boy to hold his sleeve when he puts on his coat to keep it down. He now thinks I'm a genius. I wish I could keep him this age.

paulapoundstone I just ate about a hundred Wheat Thins, and I'm not any thinner at all. These things don't work.

"I could go on, often do."
(anon-me-ous)

"Connected: the real matrix" - see it Sunday on Discovery

"Nothing is more practical than a good theory."

So says Duncan Watts in a wonderful documentary on the new science of networks. "Connected: The Real Matrix" airs Sunday night at 9pm on the Discovery Channel in the US. The promo (see below) is enough to get us excited as it features Watts and Albert Laszlo Barabasi, who represent the two great streams of advances in network science in the last decade: small worlds (Watts) and scale-free networks (Barabasi). It was Barabasi's work that inspired us to apply the new network science to organizations, a subject we have been studying for almost three decades (see our Library). From that early investigation came our OrgScope tool that maps and analyzes organizations as networks. We've let Barabasi know how influential his work has been on ours and we're excited that this show will be on TV.

What's the "new" in the "new network science?" Two things: an unexpected discovery and a resolution to an old problem. Barabasi led the team that discovered "scale-free networks," non-random configurations with sparse but many-linked "hubs" that turn out to be key nodes in networks. With Steven Strogatz, Watts finally solved the "six-degrees of separation" conundrum by showing how a few "shortcuts" could dramatically decrease average communication distance.

These final two advances enlarged traditional ("old") network science (known as "graph theory") that underlies social network analysis (SNA) and created a remarkable general-purpose network paradigm that is immediately applicable to both people and organizations. Listen closely, and you will hear news in the program about a "general network theory," a mathematically-rooted, experimentally demonstrated, and highly practical theory that applies across physical, biological, and human domains. Our work shows that this same general network theory applies directly to networked organizations (see, for example, our paper, "Principles for Reorganization").

On Monday, February 16, we'll release "Revolution in Networks: Applying the New Science of Networks to Organizations," the next in our NetAge Working Papers series. There, we tell the story and examine the work of both Barabasi and Watts, elegantly platformed by the upcoming documentary.

Check out what's in store on the documentary:

-- Jeff Stamps

Note to self: cancel subscription, April, 2043 - no, sooner; no, don't

I'm not sure when I fell in love with newspapers. Maybe it was when my brother got his first newspaper route and my father (this, the anniversary of his death, by the way), my brother, and I would get up at dawn and load bundles of The Pottstown Mercury into my father's station wagon. With the tailgate down and my brother and I sitting on it, my father would drive slowly through our neighborhood and we would each jump off every couple of houses and drop the paper on the front steps. Frankly, I don't think this bucolic episode lasted very long but it's a great memory.

Or maybe I fell in love when my first story was published in the self-same Mercury, the report on a birthday party in my first-grade class. I got the byline because the editor lived on our street but everyone in the class worked on the "piece," a three-paragraph "story" with one-syllable words. I've felt guilty ever since. Or maybe it was when that editor hired me as a reporter when I was sixteen. Here I am interviewing Miss Pennsylvania and Miss Pottstown Sesquicentennial. (Forgive me if I've published this picture before here - I thought I had but can't find it through search.)

So I don't know precisely when holding the paper became synonymous with the next day being worth living but its roots lie somewhere among these mental shards. Just yesterday, my hubby and I were bemoaning the slimness of the two papers we subscribe to and wondering whether the last day of their arrival in the driveway would precede our last days.

Thanks then to Kathy Hansen's A Storied Career, which alerted me to the work of Univ of North Carolina Journalism School Professor-Emeritus Phil Meyer. Nearly fifteen years ago, Meyer predicted the predicament newspapers find themselves in today. Revenues were certain to fall, he said, and publishers should shift some energy into increasing community influence (see his article, "Learning to Love Lower Profits," in American Journalism Review). Unaccounted for in his prediction was the major disruption introduced by the Internet itself.

Ten years after that, he published The Vanishing Newspaper: Saving Journalism in the Information Age, a book that included numerous charts and graphs, the kinds of things the press loves to jump all over and extrapolate from. In "The Elite Newspaper of the Future," an American Journalism Review article from Oct-Nov '08, Meyer reports on how The Economist interpreted his data: "In his book 'The Vanishing Newspaper,' Philip Meyer calculates that the first quarter of 2043 will be the moment when newsprint dies in America as the last exhausted reader tosses aside the last crumpled edition."

Meyer goes on to lay out the fallacy in this argument. No newspaper will publish until it only has one subscriber. And there are likely more disruptive technologies coming down the pike in the years to come, ones that will jettison craigslist, blogs, and online publishing in just the ways that those technologies have sounded the death-knell for newspapers.

What Meyer recommends for newspapers is to shift their energies to what they do best - engendering community influence and holding the public trust. How they do that without ad revenue is the puzzle and he suggests narrowing the "buffet" of material. I kind of agree. Kind of because I haven't completely thought this through (ah, blogging, wild speculation is thy name). Here's what he's suggesting (and I'm pushing the copyright limits so please go to the "Elite Newspaper" article link to get the whole thing):

One of the rules of thumb for coping with substitute technology is to narrow your focus to the area that is the least vulnerable to substitution. Michael Porter included it in his list of six strategies in his book "Competitive Advantage: Creating and Sustaining Superior Performance." The railroads survived the threat from trucks on Interstate highways and airlines by focusing on the one thing they could still do better: moving bulk cargo across long distances.

What service supplied by newspapers is the least vulnerable?

I still believe that a newspaper's most important product, the product least vulnerable to substitution, is community influence. It gains this influence by being the trusted source for locally produced news, analysis and investigative reporting about public affairs. This influence makes it more attractive to advertisers.

By news, I don't mean stenographic coverage of public meetings, channeling press releases or listing unanalyzed collections of facts. The old hunter-gatherer model of journalism is no longer sufficient. Now that information is so plentiful, we don't need new information so much as help in processing what's already available. Just as the development of modern agriculture led to a demand for varieties of processed food, the information age has created a demand for processed information. We need someone to put it into context, give it theoretical framing and suggest ways to act on it.

The raw material for this processing is evidence-based journalism, something that bloggers are not good at originating.

Not all readers demand such quality, but the educated, opinion-leading, news-junkie core of the audience always will. They will insist on it as a defense against "persuasive communication," the euphemism for advertising, public relations and spin that exploits the confusion of information overload. Readers need and want to be equipped with truth-based defenses.

Newspapers might have a chance if they can meet that need by holding on to the kind of content that gives them their natural community influence. To keep the resources for doing that, they will have to jettison the frivolous items in the content buffet.

Transparency at Treasury - The case of the missing org chart

Following yesterday's post on how the Geithner bailout plan did not provide the transparency required to fill the enormous trust gap, I checked out the Treasury page on the "Emergency Economic Stabilization Act" (EESA) which is where "details" about the TARP program hang out. First thing to notice is that it looks broken, i.e., the entire left hand column is blank. Strange. It's been this way since this section of the Treasury site was launched in October, 2008. Otherwise, since the new administration has come in, nothing has changed. A few press releases have been added. This stands in stark contrast to the White House site, which is, shall we say, nothing like what was there before January 20.

Then I looked for the Treasury org chart. Not to be found. A review of the site map confirmed that none was listed.

Curious, I checked out the other departments. Most have the Bush-administration org charts still posted. Notably, Steven Chu, the Nobelist Secretary of Energy, has already posted an updated DOE chart. And, Arne Duncan's Dept of Education site has the most interesting interactive chart, which, because of its design, is naturallly up to date. The Treasury Department is the only agency that has no org chart at all. Curious.

When I was assembling our OrgScope map of the US Gov, Treasury's org chart was the first one I keyed in, necessary because I was mapping the network of consultants, contracts, and bailout recipients associated with EESA (which you can see in our Rescue Map). I eventually collected and keyed in all the departmental org charts, posting them together here. As a good archivist, I had the url to the (old) Treasury map here. You can click to see for yourself where that takes you now: "We're sorry...file cannot be found..."

Surely an oversight, so as a public service we offer a link from our site to what is in all likelihood exactly the same Treasury org chart today. Moreover, we have added the organizational structure of EESA to the Treasury chart in our US Gov map. (Treasury is at 11 o'clock, then go to the Deputy, then Office of Domestic Finance, from which hangs the Office of Financial Stability.)

Treasury needs to set an example of transparency itself. Remarkably, they have become less transparent than their Bush administration predecessors. Unintentionally, I'm sure. I hope.

-- Jeff Stamps