"Unorganization: The Social Handbook" contains the following sections:
Introduction
A description of the unorganized world
PART 1: TOWARDS ADULTHOOD
Ichi Fiction
Childhood
Raising Children
On pleasing Children
Parenting
Delivering Education
Curricula Unorgana
The Importance of Microeconomics
University Education
University campuses as open offices
Into the real world
Graduate Careering
Arise the liberati
Summary to Part 1
PART 2: trans: shaping interactions in the unorganized world
Summary to Part 2
The importance of transactions
Transaction types
Transaction components
Transaction costs are everywhere
Defining transaction costs
Mechanisms for minimizing transaction costs
Avoiding transaction costs in business relationships
Avoiding transaction costs in personal relationships
The balance between physical and electronic transactions
Email lists
Types of private places
Types of public places
Markets
Characteristics of interactions
Unsolicited Approaches
Spamming is spam
How transactions and transaction settings have changed
Implications
Feedback
Bibliography
This version of Unorganization: The Social Handbook is a shorter version of that which is incorporated in the Complete Personal Unorganization book on unorgan.com. The later includes the famous "When to chat up and when to shut up" theory which explains how and when to approach another person to shape an interaction.
Introduction
This book "Unorganization: The Social Handbook" is all about having a happy and successful childhood and adult life in the unorganized world.
Part 1 follows the journeys made by individuals as they progress towards adulthood, starting with childhood, then considering education, youth and universities. The idea is to survive childhood to reach youth, get through school to university and so on.
Part 2 then uses the transaction cost metaphor to explain how individuals can successfully shape social interactions and thereby contribute positively to society.
Essentially, Part 1 describes the transition from dependence as a child to independence as an adult and Part 2 explores how independent adults successfully interact in social and other contexts.
Firstly, how and why has the world changed?
A description of the unorganized world
The world has changed in the past few years from being an orderly organized world into a global diverse unorganized world. "Unorganization" is my banner term to describe a number of political, economic, social and technological trends that have occurred and are continuing:
Social factors: Certainty about behavioral norms regarding everything from the role of women to jobs for life has disappeared. The unorganized world combines lifestyle changes (mobility, divorce and working mothers), demographic changes (family, security fears) and technological changes (new telecoms services such as position location).
Political factors: Respect for and certainty about the purpose and role of central institutions such as governments, royalty and work organizations has disintegrated.
Economic factors: Freer market economies have developed internationally throughout the world as the central planning by governments in communist systems has been disgraced.
Technological factors: Technology has changed the way we live and work. Everything from telephones to televisions are firmly established in our lives.
Clearly in such a changed environment, traditional norms regarding families and children and education and parenting have all changed. This is the environment in which children grow up and adults live- both need to behave in different ways to make the most of the upside of these changes and minimize the effects of their downside.
PART 1: TOWARDS ADULTHOOD
Ichi Fiction
My name is Ichi and I am a baby. I have just been born and I cannot do anything much except cry when I am hungry or uncomfortable. Otherwise I am not very animated and find it difficult to move.
The big people have to look after me. They go through this big long routine when sorting me out like getting my cot and nappies and bottle and mush and clothes and bibs ready. There is a lot to do and a lot to carry. They do it all because I cannot. I sleep through all this preparation because there isn't much that I can do right now.
And so this goes on and I begin to move more, to focus my eyes on different things and not just stare into space. I am a few months old now and the big people hold me up on my legs or I lie down on the floor. I cannot sit up because my body is too floppy. I can grasp hold of my biscuit now and move it in the general direction of my mouth. Bits come off on my face and clothes and hands and some even gets into my mouth. I drop the biscuit a lot and the big people pick it up, clean it off and give it back to me. Its hard work this eating game and it takes a long time to eat very little. This annoys me. Sometimes I get so hungry and cry and cry for them to feed me, but they look at their wrists and say it's not time. But my tummy says it is!
I get to ride along in my cot, and sometimes I like to lie down and sleep and sometimes I like to sit up and look at the blur as we move along and we weave around things and things weave around us. Sometimes the pavements are really narrow.
I am speaking a bit now. I can handle the short words like "mum" and "urgh" but I can't understand those long words so I don't know what those adults are trying to say to me.
As I get older, I can do more and more things more and more easily. I can toddle around slowly and dangerously in a wobbly walk. It's easier to move along when one of my big people holds my hand. The big people watch me carefully when I try to walk because they seem interested and want to make sure I don't fall and hurt myself on any of the many objects that surround me.
Now I go to nursery school and there are lots of other little people around and new big people looking after me during the day. I’m really interested in the other children: I keep staring at them and they look shyly back and circle me watchfully. I got to speak to them and meet them when we built sandcastles in the sandpit. We even cycle around on tricycles and play games and paint. I am not the center of attention during the day now.
I learn how to go to toilet myself. I'm not so dependent on the big people now. I wish they would not keep asking me if I need to go though- if I go now just in case there are no toilets later, I will end up needing to go even when I don't need to go.
I can walk by myself now- and in a straight line! I hop and skip along and am present physically but not always mentally. I am aware but not quite there. I sing and dream a lot and find it very hard to pay attention to anything for very long.
I am talking and deciding and thinking for myself now. We live in the countryside and it takes a long time to get to school. I like to speak to my grandparents on the phone. They live a long, long way away- it takes nearly half an hour to walk to their house past all the big houses and trees.
I am learning to read- I can do numbers OK but tend to guess words from the first letter and don't always get it right!
I'm getting taller all the time- I used to have to stretch to reach things in my cupboard but nowadays its getting easier. I regularly need new shoes though.
I went out to the cinema with a friend yesterday and on the way we stopped and had a milkshake. I really had to suck hard on my straw to get any of the shake out. It was really thick but after a little while it melted around the sides and I could drink some. We would have been late for the film if we had not taken the milkshakes away from the restaurant.
I've started paying the opposite sex more attention these days.
I wish they'd stop asking me all those questions- I don't want their advice, I just wish they'd leave me alone. I'm not their little kid anymore and I wish they'd recognize that.
I started learning another language today- its really hard work. I cannot understand the people who are speaking on the tape, but can recognize a few words now and again.
I applied to go on a college course and filed out an application form. I am waiting for their reply to see whether they accepted me or not.
I moved out of home today to go to university. The university did not have enough accommodation for all the students so I had to go to the accommodation office on campus and look at the notices of properties available. I rang a few up but they were already taken. I went to see a couple of rooms that were available but they were really dirty and smelly. I eventually found a room that was near to the campus and clean and in a nice area with other people who I like the look of. I have moved in.
The university held a barn dance tonight and invited all the newly arrived students. The great thing is that I got to know lots of people because we kept swinging round and changing dance partners all the time. We had to get close to the people to dance and the participants kept changing as people joined in and dropped out to go and get drinks.
The university held a fair where all the university societies had stands giving out posters and leaflets and signing up new members. One of the older students on one of the stands was using the opportunity to get the names of new members- but was only signing up redheads!!??
I got to know so many people this week because everyone had moved away from home for the first time and did not know anyone. We were all really keen to have friends, sort of like as a mutual support system I guess to help and reassure and support each other. Now everyone seems to have their circle of friends from their hall of residence and their course and their societies and no one is as keen to get to know more new people. I met some of the people once and have not seen them since!
There is not much opportunity to speak to the lecturers but we have a personal tutor who we meet every couple of weeks to talk to and discuss the course and life with.
I had a friend round to dinner today. I searched out a recipe, went and bought the ingredients, peeled the vegetables, waited for the food to cook, threw away the vegetable peel. My guest traveled over and we ended up having a food fight with the exotic fruits I had prepared for dessert. I had to clear up the mess and clean the windows the next day, but it was fun.
I have been preparing for my examinations. I have queued to take out and photocopy and return all of the books and articles I need to research. My lecturers gave me a list, with the most important articles highlighted. I am fairly lucky because I have enough money to buy all the course textbooks and don't have to base my study on the availability of the books I need and the library being open.
I graduated today. I have been using the university careers center and looking through the newspapers when they have appointments sections to see what situations are vacant. I'm targeting companies that seem like good places to work judging from the articles in the business press. I started writing off to companies to get a job. I filled in lots of application forms and read lots of prospectuses and company reports. I was invited to an interview and got all dressed up in my only suit. I received a letter to say that I made it to the next stage and have to go to something called an assessment center where apparently we get to play lot of games and solve lots of problems with the other applicants! They sent me this questionnaire to fill in asking all sorts of hypothetical and personal questions about myself and my behavior. I don't like this process much- it's more difficult than passing my final university exams- but every company seems to do it. I got the job- finally- I am now a "Marketing Officer"! Great title that! I had to buy myself a second suit!
I've been working for six weeks now and I know pretty much what to do and how to answer most of the questions that people ring up and ask. I know who does what and where I should pass queries to. I know what my current role is and what I am allowed to do. I have worked out my boss's moods and know the best time to approach her.
I met a partner who I really like and I want to get together so that we can spend much more time together. Dating is not like it was when I was a student though- this person is already involved and living with someone else. This means that I need to offer a package deal involving not just myself but accommodation and financial security too! I need a partner though because I want to have a family of my own. My parents keep asking when they are going to be grandparents- I liked it better when I was a baby and could just ignore what they were saying!
We got together in the end and we get on well. I've been out with other partners who have nagged me and wanted to do different things to me and who I didn't agree with very often. I think that I'll stay with this partner providing they want to stay with me- we seem quite compatible and things are not too complicated or difficult.
My partner and I moved in with each other today. It was too much hassle keeping two sets of clothes and toiletries and keep traveling back and forth. We wanted to be together.
I've been here doing the same job for a year now and I am beginning to think about doing something else for someone else. I want to use my language skills more. After all, I went to the trouble to learn them for years but I think I might be forgetting the vocabulary.
I have casually mentioned to some of the customers I deal with regularly that I am looking around for another job. They have been making some informal inquiries for me. I am lucky because a company I know quite well approached me at an industry exhibition and mentioned that there was a job available that was similar to what I was doing now but with much more overseas travel. This sounds good to me and I met with a couple of other people from the company. I know them quite well and they know me. I had a look at their web site and read the press releases- they are expanding rapidly around the world and increasing their sales turnover. We are going to talk again about the role and what my responsibilities would be. I am going to try and avoid having to go through the process of formally applying for jobs this time around.
I have now agreed to join the company that approached me. It’s a good deal for me because I can work from home and carry on with my work interests but see them from an international perspective. They have made me a formal offer and I have accepted it. I handed my notice in at work today and because I am not moving to a company that is a competitor, I am working one month's notice, handing my work over to other employees- clearing my head and getting it all down on paper.
I joined my new company and have been traveling around a lot meeting with colleagues and customers in various places. I have written to everyone I knew in my last job telling them about my new job and sending them a new business card. I have bought myself personal telephone and fax numbers and my last company let me take my old email address with me because it did not have their company name in it.
Some of the transactions between my partner and me have led to us having a child of our own. I have been working from home to spend time with the baby.
I changed jobs again, and am now working on a different lifestream. I think I will spend a few years getting to know this industry and building a leading company in it.
I am so old now that I cannot leave the house. I take so much looking after- and cannot look after myself without relying on someone else. It's like being a helpless baby again. The helpers are moving me into an old people's home. It's easier to look after me there: they have all the facilities and staff to look after me readily available.
I cannot do anything for myself now- I cannot move or control myself or think or breath. I am dead.
This book shows how life is a journey from dependence as a child to independence as a young person to possible interdependence in teaming up with others for work and life. Death comes when total dependence descends upon us. This transition is all based on transaction costs economics- it is difficult to do anything for ourselves as a child so the transaction costs are high relative to the benefit from the transaction. We will explore transaction costs further in Part 2.
Lets take a closer look at life's various stages, starting with childhood.
I am not unfortunately a father myself (as yet), but I have spent quite a bit of time recently with children in my family and some neighbors of mine. This has flavored my comments and beliefs, along with my own discoveries in the education system which I graduated from quite recently. I have tried to use these personal observations to assess the various different schools initiatives and social trends that are discussed.
Childhood
I don't think that childhood has been lost completely, but expect that like everything it has been shortened in timescale. Children are the same now as they were when you were a child- they play games and run around and need to learn to read and write and cuddle and dream and ask questions. Its just that they grow up more quickly- they outgrow their Barbie dolls more quickly, they start using computers in their early years, they choose their own clothes and decide what they want to wear. I used to just put on whatever clothes I could find on the floor or whatever I was told to.
Whilst the content of childhood remains largely unchanged, if speeded up, the context in which childhood takes place has changed. This is demonstrated by the social changes that were introduced at the start of this book. Divorce, single parent families, step mothers and fathers and boyfriends and girlfriends are more prevalent now as the typical traditional family unit of two married parents has broken down.
As such, uncertainty begins at birth, with the early childhood years threatened by the possibility of loss of family through divorce if a single parent did not run the family anyway. Children tend to be aware of the significance of having money- they will often make comments like "Mummy and I need millions". They will not necessarily covert it because everything tends to be paid for them anyway.
As they always have, children need to be aware of dangers, for example, how to behave toward the increasing number of strangers in a mobile and diverse world. And generally, parents or teachers do make them aware of "stranger danger" as they always have. "A 12-year-old bombarded with warnings about strangers, priests, friends of the family and fathers may begin to wonder why the burden of avoiding abuse has to fall so heavily on her- or, to put it another way, why can't these damn grown-ups control themselves? These are people whose trust cannot be assumed, the same lack of trust is felt by the young towards institutions. Almost all institutions have lost their moral authority; churches, politicians, families, parents, the royal family". (WROE, 9OCT94).
Children still have allies in their brothers and sisters and other children who live near by. Of course, children cannot assume that other children will not be of danger to them in these days of bullying, but children soon learn who to avoid. Such behavioral factors are likely to be more relevant in categorizing children than age. To navigate these dangers as safely as possible, both parents and children need to behave in a manner which is open-minded but sceptical. Children are vulnerable, hence they need to protect themselves as well as rely on their parents for care. If children are resilient and their parents are vigilant, children should be able to navigate childhood without too many major problems.
Children do tend to make closer friends with other children of the same sex- the first people that young boys want to invite to their birthday parties are other young boys.
Children from poorer families live and play alongside relatively large numbers of children of all different colors living and playing alongside each other. Large numbers of children continuously move around the estate avoiding those areas that they have learned are uncertain. Time is spent mock fighting, playing basketball or soccer, but most of the time simply dancing to music in their heads. In fact, children from less prosperous backgrounds tend to have more freedom than children who are supervised by parents or guardians who have managed to find some steady source of income.
The children of steady income earners tend to have their time and activities regimented by their parents. Their routine is supervised by anxious parents, but these children find their freedom at the high performing schools their parents choose for them, move houses to live near to, and pay for where necessary. Such schools have lunchtime and after school activities to keep the children active, occupied and stimulated. Evenings entail supervised homework, some controlled exposure to television and video games, and then bed. In some ways, this regimented routine reflects the parent's own anxieties about the opportunities that will be available to their children when they are older, sort of plan whilst you can. Such anxiety is of course understandable.
Notice the flow, the movement, the dreaming of the little people, acting out videos, miming songs, playing marbles with style, rocking back and forth. We should refuse to grow up. We all need to be organisms and not machines and think in circles and not lines. Retain some of the dreaminess, optimism, freshness, creativity and inquisitiveness of all children.
Raising Children
I was struck by the death in March 1998 of Dr Spock, the famed childcare guru, who was the first person to argue against a strict disciplinary upbringing of children with regimented feeding times, sleeping times, toilet training and so on. At the time, his philosophy of trusting your instincts and going with the flow and letting the child develop as an individual was controversial and revolutionary. Dr Spock did not advocate unfettered permissiveness either- although he was accused and blamed for it. In fact, it is about time we applied the same ideas to the way people operate in organizational contexts- people will look back in a couple of decades and wonder how it could ever be that people went to offices every day and were micro-managed.
I have come round to thinking that the optimal learning environment for all children and some adults is a middle way between unfettered and over-structured supervision.
It is true to say that you can eliminate ALL structures and barriers that prevent the unhindered exploration of new things. You could, for example, let children wander freely and explore whatever they want. This certainly can stimulate new learning about what actions never to repeat but is a very steep learning curve. For example, it is suboptimal to burn your hand or fall down a flight of stairs because no one held onto you or told you it was hot or to hold onto the rail.
On the other hand, the opposite extreme of completely rigid boundaries in which every move the child (or adult) makes is watched carefully by the parent or guardian (or manager) is also a suboptimal learning environment. It actively discourages thinking for self, exploring new ways of doing and being, punishes curiosity and so on.
Hence, when it comes to raising children (and leading people), I prefer an approach that eliminates the static, inflexible, outmoded policies and procedures and rules. But it is important to retain the useful, positive, flexible, dynamic structures that do help to get the job done in the best way and contribute to the business in hand.
And another thing: there is a difference between the degree of regulation needed when thinking compared with when doing. Obviously, thinking is less dangerous to the thinker at least at the time they are thinking than action-based learning is. Hence, it is much less effective and necessary to regulate knowledge work than manufacturing type physical work.
No matter how careful you are and how much you watch them, a child’s exploration is bound to lead to some accidents occasionally. Like spinning them around on a work chair- and seeing them fall off. Not a bad accident, but you feel so scared and then guilty. The last thing you wanted to do was hurt them. On the contrary, to see a child smile when they see you or because of you is something really special indeed.
For raising children, and work involving physical actions, let us find a middle way between unfettered freedom and overbearing regulation.
On pleasing Children
Children are both the easiest and the hardest people to please.
Getting on with children is the easiest thing in the world to do because you need only give them attention, do what they tell you to, entertain them with improvised games and listen to them for them to love you. Children tend to spend a lot of time in large groups at school and some parents sometimes see children as annoyances who demand attention and answers to their questions and interrupt conversations with other parents and so on. As such, people who give children attention tend to receive attention in return!
Children are people too and their opinions count for a lot. In fact, contrary to received convention, you can learn a lot more from children than you can from adults. This is because adults all tend to merge into following the same lifestyle and convention- they pretty much all end up with work and money and relationship worries. Children are asking you questions which make you ask yourself questions about why things are done the way they are. Children make you explain and describe things in understandable, practical and imaginative ways. Spending time with a child is therefore a bit like being overseas- the environment is constantly in question- it is unfamiliar to you or the child.
All that children care about is content, whilst all that adults care about is context. Children don’t care what your job is and scarcely know about money- they see you, there and then- for what you are and the novelty you can create. All a child cares about is here and now, they don’t tend to know about practical things like where they were a couple of days ago- because they have their own adult navigators. Ask them where they were or what they did at school yesterday, and the answer is likely to be "Can’t remember".
But children are at the same time difficult to please because they are restless. You buy them a game to play, they play it for a couple of minutes and then say "I’ve had enough of this game now". Then, once they have looked around for other games and realized they’re aren’t any, they get the same game out again! Constant activity, constant novelty- these are the things that children demand. And then suddenly, they will find joy and fascination in something so trivial and simple for such a long time that adults feel confused- they could never have foreseen that that would interest them. They will happily spend an hour playing with your venetian blinds.
Children help you to keep your perspective on life- to sort out what is important from what is mere posturing. To show what is positive and help you to realize the need to minimize the negative. The sweet squeaky voice of a child can cut through adult tension in an instant. Children- the little people. Precious.
Parenting
There is a time when you look up to your parents and they are your role models. This typically lasts until the teenage years. Young people then start to disagree with what their parents say and resent their interventions. The offspring consider this "advice" unnecessarily intrusive and constraining such as the requirement to get back home by 10 in the evening. They are moving from dependence to independence.
Problems arise whenever anyone views and judges someone else using their own frame of reference. This is particularly acute when parents judge their children’s progress through life according to their own path: the parents left home at 18, they were married at 19, had a family by 21- so why haven’t you? The answer of course is that the world has changed fundamentally between their life and ours.
The behavior and attitude of youngsters is often misinterpreted by elders and institutions. A wide generation gap often exists between today's young and their parents and grandparents. This is more pronounced because the faster the world changes, the greater the difference between the youth which older people faced and that which their children are coping with.
For example, older generations can actually think that knowledge workers are lazy even if they work in continuous session because they do not do the gardening or clean the car or cook meals. Knowledge workers are not visibly active- they work with their head and not with their hands. Older generations studied woodwork, metalwork and home economics and just don’t value sitting on your bed thinking as highly! The nature and form of work has changed along with the world. Attitudes must change to reflect this truth.
I get most frustrated when my parents keep asking me "Do you know where you are going yet?" before I fly off on a project somewhere. They cannot believe that I do not have any plane tickets and know where I am going until a few hours before I depart. They need concrete information to pass onto my grandparents and their friends, not vague notions of where I might be and what I might be doing. They have not grasped the fact that in the unorganized world the planning horizon has been slashed and it is hard to say anything with certainty.
Children should certainly not let their parent’s expectations become their own. You should not do what they expect of you such as take the steady "secure" job that they want you to. You have to follow your own dreams because it is both a long life compromising your ideals to try and keep other people happy and unnecessary because you can successfully pursue those ideals.
There comes a time when you first live away from home and work or study some place else. I think that it is worth returning to the family home after finishing your studies to see how your parents have changed (usually they have mellowed with middle age) and how your views of them change (your opinions and actions are far more independent). The idea is to always outstay your welcome, that way you never have to look back.
That way, you can respect, admire and love your parents but you have also escaped from them- you can pursue your own dreams independently of them. I know where I came from, and I can see large parts of my parents in me. They have had a strong influence on me but now I am my own person and need their support and encouragement about what I want to do, and not their opinions. And the parents too have had enough of the children- they have exercised their parental duty with a great deal of energy over a great deal of years. So the parting is both due and mutual.
Be a reminder but not a mirror of your parents.
Delivering Education
Although a good education is not a guarantee of lifetime success (there are no such guarantees), in a fast changing world, education is more important than experience. An ability to learn is a prerequisite for succeeding in the unorganized world where careering and frequent job changes are the norm. Your qualifications stay with your forever, unlike most jobs! More fundamentally, "Educational attainment is the surest escape route from poverty." (STEVENS, 20JUN95). Educational attainment tends to build upon itself in that younger brothers and sisters want to emulate their educated elders. It is also the case that if you have had a good education you will realize the value of it and expect your children to have the same access to educational opportunities.
In delivering education, the emphasis should be on schooling and not schools. Of course, schooling takes place in schools and the schools will affect the schooling. Unfortunately, in the organized world, schools were heavily institutionalized by interest groups and lobbyists such as trade unions, education authorities and the like. Schools must reconnect with the purpose of their existence, namely, to teach their pupils well. Only by introducing parental power and switching the decision-making emphasis to the level of individual pupils and parents can the necessary improvement in educational attainment occur without crisis. Institutional baggage means that currently change occurs periodically and radically rather than smoothly and incrementally because organizations are dominated by collective rather than individual concerns.
There should be a large range of viable choices of schools that the children could attend to receive a solid and rigorous education. To ensure choice, there should be competition within the education system to ensure that the requisite incentives exist to stimulate excellent performance. We can, for example, imagine distance learning, in-house teaching, nurseries, vocational, sports-centric schools and so on.
Parents need to have sufficient relevant information to make decisions between the choices about where to send their children to school. League tables listing the relative performance of schools in examination results, extra-curricular activities and so on are useful in that they give parents more information with which to make decisions about their children's education. However, a special effort is often made by teachers, for example, to vary teaching methods, when the school inspectors are visiting than otherwise. I will never forget a teacher of mine spending most of my lessons talking about her child and his latest exploits, whereas, the one lesson that was being monitored was spent wholly and solely and fully on the subject matter at hand.
Remember, the very introduction of all measurements such as league tables introduces distortions to the process being measured. Parents still get a better view from speaking to a cross-section of past, present and prospective parents of pupils rather than league tables. When all schools have Internet sites, pupils and parents can post their comments on electronic bulletin boards- building direct league tables. This is like the community models that Internet sites such as eBay have developed- everyone gets a different color star on the basis of the feedback that is posted by other users. The associated comments can be read and replied to. (See "Unorganization: The Customer Service Handbook" at www.unorgan.com/cserve.htm for a detailed case study of eBay).
Vouchers for access to all types of education are a positive step because parents are the decision makers who decide which school to use their vouchers on and hence where to send their children. Vouchers mean that schools must teach efficiently and effectively. Those schools which underperform because of poor teachers or teaching methods won't attract pupils and must either improve their performance or close. Given the viable choices that competition brings, parents and pupils are not locked into poorly performing schools.
Just as vouchers increase parental choices in education, so too do private sector run schools that are run by their teachers and school governors rather than the government. Such initiatives are positive in giving all schools freedom in determining how they manage the provision of education to pupils. It should not however be necessary to pay for a child's education in order to ensure that they receive a solid and rigorous one. In the many geographic areas where there are well run schools and sufficient places, payment isn't necessary. Private schools do offer impressive advantages such as beginning to learn foreign languages earlier and increased contact with pupils from overseas. This is especially important in rural areas, where such contact would otherwise (still unfortunately) be scarce. At the end of the day it is each parent's decision as to how they educate their children. The government's role is to allow the parents this decision and ensure that there is sufficient choice between different rigorous and affordable means of education.
These days, education begins at a younger age, with universal nursery education from the age of four becoming more widespread. I am often surprised by how many children have their won computers in affluent areas even at the age of five- this can be the majority of class members.
Giving teenage, school age people more work experience and so called work-based education is a positive step. Some pupils do lose interest in school-based education and wish to leave at the earliest possible school leaving age. The biggest challenge in today's employment market is actually getting your foot through the door and gaining access to companies. Work experience breaks the vicious cycle between no job because no education and no experience between no job. These work-based education initiatives help overcome these barriers by increasing the links and contacts between pupils and companies before those pupils have left school. There are likely to be increased opportunities within firms for those pupils who show a willingness to work and learn in this type of non-school environment. Such initiatives should not however become an all-encompassing partnership between institutions such as schools, colleges, training providers, employers, government and trade unions. The main contact should be between the pupil (assisted by parents) and the employer (with the assistance of the school).
Having an education is important. Having choices in education is essential.
Curricula Unorgana
There are quite a few subjects that can be studied these days, from mathematics, English, geography, history, economics, art, design, law, physics, chemistry, religion and all manner of other topics.
Many governments around the world have tried to set a national curriculum that decrees that all children at school are to study certain topics for a certain amount of time. I always remember having to study a "humanity" subject at school- which was history or domestic science (cooking!) or religious studies. I didn't take any of these- my humanity was commerce. And commerce is humanity- it cuts to the heart of person to person interactions.
I will try to justify why people should attach a higher priority to learning some of these subjects rather than others. I will however say now and again later that rule number one in what you study and indeed what work you do is to concentrate on what you are good at, because this is usually what you also enjoy. Additionally, do not specialize completely because there are many insights into your favorite subject to be found in lateral links with other subjects and other non-study activities.
That said, it is certainly the case that some subjects are more relevant than others in the unorganized world. The core essential curricula unorgana would consist of economics, computing and English for people who’s first language is not English. Additionally, knowledge of the theory of economics is necessary but not sufficient. It also needs to be applied for understanding other relevant topics such as marketing and international business. The study of geography is also very useful because it is improves our understanding of the world- just looking through the "National Geographic" magazine helps us to understand the diversity and scope of the world. Playing sports is a great thing too.
The curricula unorgana would not include employee relations or personnel because trade unions and working legislation is not important now that individuals create work opportunities for themselves. It would also exclude history which is by definition long since past and irrelevant because of the fundamental change in the unorganized world. Religion would not feature high on my list of priorities either. Not studying politics would not be a showstopper either: especially as much politics is just a question of economics anyway.
The sciences of biology, physics and chemistry could possibly be studied. I tend to think that physics and chemistry are not essentials, after all, it is the not the concern of the general population how gravity works, just as long as it does! Having said that though there is a lot of interest amongst writers in the synergy between biological concepts and metaphors and those in the unorganized economy.
I am not a big fan of mathematics other than to get a good basic grounding in numbers and calculating. Similarly, it is difficult to add any value, honestly at least, when generating a standard set of accounts which meet accounting practices. I studied finance and investment (derivatives, shares, portfolio management etc.) and again could add very little value and have not used the knowledge much since.
The study of art and design stimulates expressions of creativity and visual images. Design is certainly a useful topic to know about: although good design is often instinctively recognized and yet hard to define. I did study some law at university- general principles and also business law. I could do little to add to the existing body of law such as the details of the obligations of company directors. It was nonetheless interesting to gain an insight into the way that the minds of lawyers work. They look at both sides of the argument, and can argue both sides of the case. Lawyers also need when formulating and evaluating contracts to consider all manner of possible future outcomes, occurrences and eventualities to cover their client’s interests. It is fascinatingly logical and somewhat imaginative to try and envision all the possible scenarios.
For someone who studied languages (German and Japanese) at university, since graduating I have started to seriously question the use of learning languages other than English. The reason is that after introducing myself to people in Japanese and having a basic conversation, I can then do little more. One morning I went into my university, saw my Japanese tutor in the lift, said a few words and was so tired that I turned around and went back to bed again! Even during my year in Germany, when I was fluent, I could not create in German, I had to revert back to my mother tongue to conceive of new ideas.
At the end of the (school) day, the most important thing is to get a good introduction to and grounding in every subject- studying 10 or more subjects in your first school and that number again in your freshman year at university. Than as you study further in university, you can specialize in fewer subjects following say a marketing or legal or accounting stream depending on your interests and abilities. This later point is important- pupils should be able to specialize increasingly in the subjects they show aptitude in, and there should be schools with centers of excellence in these activities to nurture those youngster's talents.
The Importance of Microeconomics
The subject of economics is a valuable and important one. Concepts such as cost benefit analysis, economic rent, consumer surplus, transaction cost economics and opportunity cost help to make sense of the unorganized world and make decisions about how we are going to respond to it.
1. Cost benefit analysis allows us to accurately interpret claims made by politicians and recognize the reasons why a particular group is angry or holds a particular point of view. Basically, if someone is against an idea they always raise its disadvantages (costs) and if they are in favor of the idea they raise all of its advantages (benefits). We as individuals need to sit back and think to take both sides of the story into account. Cost benefit analysis is the tool which lets us do that.
In his brilliant book "THE ECONOMICS OF LIFE", GARY S. BECKER puts the case for using cost benefit analysis widely very strongly: "Everyone recognizes that most people respond to costs and benefits in deciding how much to buy of simple goods such as fruit, clothing, or a car. I claim that this common-sense idea applies to all human decisions."
2. Economic rent helps justify why branders earn more than rankers: they may earn more themselves because they also earn their companies more. (See the "Economic Value of Branders" section in "Unorganization: The Individual handbook" on unorgan.com for a detailed explanation of economic rent).
3. Consumer surplus describes how even if the price of something appears high, as long as the customer derives greater satisfaction and value than the price paid, they will be willing to pay that price. If I value a can of Coca-Cola at 99 cents and only pay 50 cents then my consumer surplus is 49 cents- the difference between what I would have paid and what I actually paid. The secret is to never charge a consumer more than their surplus- because they will never rationally pay more.
4. Opportunity cost justifies focusing on activities which you do best and getting and letting others concentrate on what they are good at. Get someone in to do your do-it-yourself work if you are a knowledge worker better with your head than with your hands. (See the "Do It Yourself?" section in "Unorganization: The Lifestyle Handbook" on unorgan.com for more detail).
5. We will feel the power of transaction cost economics throughout Part 2 of this book.
The subject of economics has had a lot of bad press in the recent past. The word is that if you laid all the economists in the world end to end, you might just get an accurate predication: but don’t bet on it as they are all likely to have a different opinion. Diversity in opinion is of course a very positive thing. Much of the criticism of economics is that it has focused on ever more theoretical models and mathematical equations.
In fact, the discipline of economics is typically split into two parts: micro and macro economics. Macro deals with the economy as a whole from the government’s perspective. Micro deals with economic topics from an individual’s point of view. Macro concerns inflation, government spending, taxation levels and such like. Micro is all about the sorts of concepts discussed above.
It is macro economics which is getting economics a bad name. As ever, the complicated unorganized word cannot be understood and controlled by government officials or anyone: diverse and multiple market transactions are too complex when taken as a whole for governments to dictate the course of.
Micro economics on the other hand is of great use every day, in fact, in every decision when individuals are making their choices. It is therefore of great significance, and I would certainly include it in my "Curricula Unorgana" as a core subject which everyone should learn the basics about.
University Education
As with schools, there should be a diversity of choices in university education as well. These days, many more people are going into higher education who wouldn't previously have considered it. University attendance is no longer limited to the elite- a wide range of higher and further education options are available to people. As with many other things in the unorganized world, entry barriers to (educational) opportunities are falling.
Universities should be places of diverse nationality, background, age and activity. For example, the London School of Economics in England has a student population consisting of over 50% of students from overseas. Reports show that easier access to higher education has increased opportunities for young people from working class backgrounds to attend university. (AUTHERS, 2MAY95). Lets hope that this carries on, as class is essentially irrelevant because behavior is the key differentiator between people.
Because adult education is a supplement to basic education as a young person, there is less regulation of this sector of the education market (no set curriculums and so on). Newly established universities accommodate many of the new students and offer a wide range of vocational and practical degree courses and not just bachelor degrees but alternative qualifications. Many colleges accept vocational as well as more traditional qualifications for entry. Often the majority of courses and students are part-time. Specialization and also variety in courses abound, for example, you can combine complementary subjects such as tourism and language learning. Teaching and research-led universities abound.
In some countries, people live at home and attend the local university. In others, people travel away from home and live in university or other local accommodation. This is usually the first time that person has lived away from their family. This is important for building independence.
Given that having an education often brings with it increased economic rewards, any money spent on education is an investment. It is therefore fair that political government grants to university students pursuing higher education are reduced and replaced by student loans that are paid back out of subsequent earnings. After all, "for many graduates, and not just City high-fliers, the personal benefit is far greater than the benefit to society." (ECONOMIST, 22APR95). "Allow universities to charge fees, provide students with a reliable way to borrow money, and the universities will continue to boom." (ECONOMIST, 24SEP94). There are no God-given rights, people must get used to paying a cost nearer to the benefit gained in all things, including education.
At my undergraduate university, Birmingham, there were two professors with totally opposite viewpoints teaching in the same department. One was totally opposed to transnationals and described his counterpart openly in lectures as "not being able to identify a monopoly if it bit him on the nose". That such contrarian views could exist in one department of one organization is superb. It certainly inspires debate and encourages intellectual arguments to justify viewpoints.
"It is in the very design of democratic capitalist countries that the most talented and ambitious natures should tend to go into business, rather than politics, the military, universities or the church. And it would seem not entirely a bad thing for the long-run stability of democratic politics that economic activity can preoccupy such ambitious natures for an entire lifetime. This is not simply because such people create wealth which migrates through the economy as a whole, but because such people are kept out of politics and the military. In those latter occupations, their restlessness would lead them to propose innovations at home or adventures overseas, with potentially disastrous consequences for the polity." (FUKUYAMA, 1992). This is a fascinating statement that does hold true.
University campuses as open offices
The system of study at Birmingham University was a useful model for more dynamic work organizations seeking the ideal balance between proximate and remote working.
Both the students and the lecturers had different obligations. Students had a set timetable of lectures that they visited campus to attend that was not too onerous. We had set essays with deadlines. And we had a tutorial with our personal tutor every three weeks during term time in which a small group of people discussed their progress and discoveries over that period. The tutor had set office hours for advice or meetings at other times and a telephone number for any other queries. Lecturers carried on with their own work and research, administration and course direction setting inbetween sharing their discoveries with students. Everyone knew what they were doing with whom and by when.
Inbetween these get-togethers, the students were very autonomous in our pursuit of research into our course or extra curricular activities such as sports and clubs. We were not restricted to remaining on the campus and often worked from our student accommodation, the library or lecture theaters. The buildings and resources were designed to further the mixture of collaborative and individual learning and the facilities such as libraries and lecture theaters supported this activity. We pursued multiple lifestreams in multiple places. All of these facilities were available to us on campus within walking distance. The buildings served a purpose for their dynamic occupants, and they didn’t dominate anyone. The physical resources were just another tool to help us get the work done.
There were some key features that ensured the efficiency and smooth running of this free-flowing system of mutual obligation. Each student knew by name and face all of our peers who we regularly came into contact with at lectures and around the campus. Of course, the students were in regular informal contact with each other talking about projects and assignments.
At the end of the project or course in Birmingham, the students disbanded and either left the campus altogether and went to work or study somewhere else, or otherwise joined some other campus activity. The holidays inbetween semesters broadened horizons too. Six months of work and six of study was a welcome balance between non-work and work focus, allowing for a pleasant but productive lifestyle.
Now think about the usefulness of this model as applied to work. Instead of students read employees, instead of tutors, lecturers and professors, read mentors. Instead of campus, substitute office. What you then end up with is a much more dynamic, flowing system of the input, process, output cycle of work and learning than the static 9 to 5 office systems that were commonplace in the organized world. You come into the office when you need to or are expected, not arbitrarily all of the time.
Students at university were self-motivated to do the work. They were under an obligation to meet deadlines, if they did not, then it was themselves who personally suffered or benefited in direct correlation with their effort expenditure. With on the organizations in the organized world on the other hand, the central relationship was between the customer and the company and not the customer and the employee. This meant that sub-standard or non-effort by employees damaged the company as much as the employee. The organization's reputation was dependent upon the employee's output and behavior. Hence the conventional belief in the need for closer supervision of employee work output within offices. In the unorganized world, however, employee ownership of part of the company is more commonplace, through share ownership plans, self-employment and so on. As such, lack of effort leads to personal loss of return and there is therefore no need for direct supervision.
Non-effort is most likely in any circumstance where the work does not interest or motivate. But just as students decide the types of course they study, so too can individuals increasingly achieve voluntary independence and then volunteer to work on projects that interest them.
Free flowing but planned associations of certain people in certain places at certain times as in the British university system is now perfectly achievable. Such ways of working are a much better means of mixing the necessary electronic and physical collaboration and balancing work and non-work activities. Let's get out from our offices, and onto our campuses.
Into the real world
The two biggest changes when leaving the education system and entering the world of work are the need for self-motivation and the end of reward for effort.
At school and college there were periodic evaluations of your ability which acted simultaneously as performance assessments. These were assignments and exams. The timetable was set and you knew when it was exam time and could therefore build up your preparations as exam time neared. A framework structured pupil's progress and efforts.
At university, I was a strong believer that hard work was always worthwhile and would always be rewarded. I worked hard and got the marks I deserved. My marks were always correctly proportioned to my efforts: in my first year I just about managed to turn up for lectures and averaged across my courses less than 50% (40% is the failure mark). In the second year I averaged just under 60%, by the third year this was just under 70% and the final year just under 80%. I deliberately planned my expenditure of effort depending on the value of those courses to my end degree classification. I got it right and was rewarded with the highest possible grade, a first-class degree. I was in control of my destiny and my teachers awarded me the marks I deserved according to effort and ability.
In the working world on the other hand, you have to be totally self-motivated. You lose the stage on which you perform- your timetable for success. You have to be self-motivated to keep exploring and learning about the industry you’re in and other industries. You have to make the effort to get home at night and work on your Internet site or develop your lifestreams or sign up for some activity. No one other than yourself is telling you to do it or evaluating your performance anymore. You have to do it of your own free will and accord.
Another significant change from education to organized work world was that instead of teachers looking for good work they could reward, managers were deliberately looking for work output or behavior they could criticize. At work, no wider view was taken: just momentary evaluations of completed tasks. Teachers were looking for potential, managers were seeking out faults and weaknesses.
There was also a transformation in timescales. At college there were short single or two semester long courses culminating quickly in examinations and course completion. At work, there was a whole career ahead of you lasting up to 50 years. The hierarchical organized organization was looking at ways to slow me down and prevent me from meeting its milestones quickly. The organization’s systems of work and evaluation deliberately sought to point out why I could not be promoted yet (too young, too inexperienced). It was as if someone was seeing you completely differently to how you saw yourself and the recognition you think you deserved.
Graduate Careering
Young people have been described as the 2.1 generation, referring to the system of undergraduate degree classifications used in the United Kingdom. A first is the best grade, followed by a 2:1 then a 2:2. "These young people are heads-down pragmatic. They are the 2:1 generation- not quite innovative enough to go hell for leather for a first, too constant to sink to a 2:2 or a third... the latest, 1990s generation of undergraduates was diligent, conformist and fatalist- and, it seems, desperately dull. "They are deeply attentive in tutorials and carefully write down the jokes. On the other hand, I cannot get them to care. They take no intellectual risks, just as they take no personal risks". (ELLIS, 15AUG95). "They [students] become experts at grade-getting, but there’s less hanging around the lamppost now, no more just chewing the fat," or speculating about the wrongs of the world and ideal solutions, something no employer was interested in and might even suspect." (MILLER, 1987).
Those employees who suffer the most from the organized organizational practices are graduate recruits. Organizations put graduates through intrusive and intensive selection programs during which they typically over-promise about the nature and form of the graduate jobs- promising responsibility early on, opportunities to work overseas and so on.
Most graduate careers programs significantly underleverage the talents of graduates- although this fact applies to all other employees as well. Graduates perform routine tasks on behalf of managers, administering rather than adding value- entering figures on a spreadsheet rather than analyzing the results of those figures and making recommendations- even when perfectly able to do so. This assumes that information of any value is made available to lowly employees in the first place. Two months into the job and anyone can do it.
"By working faithfully for eight hours a day, you may eventually get to be a boss and work twelve hours a day." (ROBERT FROST). Yet many people covert careers above all else- including having a family. Work is a trivial activity when it is stood alongside the joys from interacting with your children. Maybe because many women see the choice as being either having children or a career, they lack the perspective conferred by children. In the organized world, having children was a positive boost to many men's careers because it signalled an implied need for stability at work (i.e. controllability for their managers). Conversely, having children was often seen as being bad for a women's career since it meant disruption, conflicting demands for attention and so on. This no longer need be the case in the unorganized world where people take control of their own careers.
Within downstructured networked companies, graduate trainees should be assigned to projects and mentored by a senior manager, with contributions based on merit and not age or experience. Graduates, like other employees and people, want interesting, challenging and varied work. Graduates are more interested in personal development than promotion up the hierarchy. They want the chance to develop transferable skills such as computing. They rightly lack trust, don't expect lifetime careers, are pragmatic, determined to look after themselves and are more assertive with their seniors. (DONKIN, 11JAN95).
It is a shame to hear graduates tell their friends to stay in the education system for as long as they possible can. If organizations really want to retain their young employees, then they need to stop behaving like managers and act more like teachers. But somehow I doubt that they have the self-confidence otherwise they’d be entrepreneurs rather than employees themselves. Young employees are no longer have the patience to wait to be rewarded anyway. They are too busy out there making their mark outside of traditional work organizations- and rightly so.
As higher percentages of young people earn degrees, so graduate career competition will intensify and thankfully, fewer will take up traditional graduate careers involving training and skill development with large, long established organizations. Graduates who are unable to gain long-term employment contracts take up short-term temporary jobs, sometimes two or three, which often turn into a long-term way of earning income. Some young people soon leave the low paid work in the service or public sector and drop out of everything but casual employment. Many people in their early twenties are retreating into their own worlds because the traditional organized world offers them little. (TROND AND FISHER, 26MAR95).
Up to a half of all young people now never get the old steady graduate job with its training. Because of this shortfall of graduate jobs, those young people who are employed are expected to feel lucky and fortunate and be grateful to their employer. This is demonstrably false reasoning since young people in full-time jobs are often artificially held back because they lack experience and the common myth is that experience still matters. Even those who have full-time jobs typically would like to do something else and tend to retain the frugal student mentality of enjoying themselves as much as possible on as low a budget as possible.
This change in the way we earn a living can be viewed in a negative, pessimistic light. But in fact it is great that young people are now going off in different directions and doing different things. There is no one best way. Paradoxically, these people who cannot get graduate positions are probably better off from a non-monetary perspective because of the diversity of people and places they come across in their search for work and non-work activity and support.
There is no one best way, as each person has different wishes and talents. Everyone should have a variety of viable, exercisable choices such as teaching or studying abroad. Indeed, many more graduates are choosing to study further or travel the world, necessitated in part by lack of career opportunities, but also through deliberate choice. (DONKIN, 11JAN95). Many are working abroad as well, often in long-term jobs. A job should not be and is not the only way to earn an income.
Young people need to find a role in life that satisfies them. This could be studying until their early twenties, getting some organizational experience and traveling and working abroad to broaden horizons. Perhaps they should have flexible contracts for the first ten years of their organizational life which allow them to take learning sabbaticals in between junior project membership. They could perhaps study for an advanced management degree or learn other skills such as languages before joining core management at around the age of thirty. This leaves many others to take diverse paths in order to generate diverse knowledge to solve the complicated problems that are increasingly commonplace. Graduates should not compromise their ideals and accept the requirement to bide their time until they have gathered irrelevant experience in an organization, especially not at a time when they have considerable mobility.
Now out in the real world, I still believe that efforts will be rewarded fairly. But not in organizations. Even if as an employee in someone else’s organization you achieve a high level of external success, you will only be rewarded for it slowly. You can only get the full recognition and the reward you deserve in your own company.
Of course, if you set up your own company you have to finance your passions and overcome the learning curve. You have to break into your target market’s field of vision using low entry barrier media such as the Internet. Still you can try to make the clients you looked after in your last organization the first customers for your new business. After all, they know you so you have a foot in their door.
Arise the liberati
The world's young people (aged 12-22) will account for around 50% of the estimated world population of six billion in the year 2000. There are many challenges in ensuring that all these young people have the opportunities for a prosperous future. Currently, there is much child labor and child prostitution, plus 100 million street children, 100 million more not attending school, of which two-thirds are girls. (TUCKER, 21JAN94). These challenges must be overcome as all children have the right to choices in their future, and not just the need to accept the circumstances that they were born in.
The life of young people has not changed as much as might think it has. The same sorts of preoccupations dominate their thoughts as they did when you were a young person- relationships, popularity, image, passing their exams. But they are living in a world where there are more opportunities to thrive- using things like the Internet. Today's young people have some fundamental advantages over previous generations. "They're more ethnically diverse, and they're more comfortable with diversity than any previous generation. Many of them don't give a hoot for the old-fashioned war between the sexes, either, but instead tend to have lots of friends of the opposite sex". (BUSINESS WEEK, 14DEC92).
Even raves [parties with loud dance music and bright flashing lights] are predictably full of smiling girls in tiny dresses and smartly dressed men trying to be cool and dance and smoke at the same time. There is little diversity within the group at all, but they are different to other generations of young people, and different to older generations. One London club prints on its leaflets : "Caution: No blinkers, blaggers, barriers, borders, bigotry, bitchiness, bullshit, excess baggage, bad attitude, bad eggs, bird brains, pigeon holing, pets, pettiness, cattiness, cliqueness, cloth ears or cold fish." (CLUB UK). A pretty comprehensive way of describing suboptimal behavior in other words.
The liberati are a group that encompasses an entire generation of young people aged somewhere between 15 and 25. The liberati are the first lot to grow up not remembering the first computers, punch cards and all that other ticker tape. They talk about the future, but rightly do not shroud it in the context of the past. Mainly because they have no past.
The liberati share a common attitude that has been shaped by their upbringing and their early explorations of the real, adult, unorganized world. They have grown up in an uncertain world, surrounded by redundancies and divorces. But they have also traveled more, learned more, done more. They didn’t just follow convention and get a job for life and then married. Mainly because there are not enough full-time jobs. These discoveries have taught them not to expect things to automatically go their way. They also expect to have to work hard and know that nothing is forever.
Above all, the liberati are not the digerati: they are not in their late 40s, early 50s and former hippies entering the Internet economy from other media and with money in their pockets. The digerati are the small group of movers and shakers who all know each other and sit on the same company boards and meet at the same closed retreats for industry executives. With the digerati, new media projects just mean new configurations of the same few old people.
Instead of full-time work, a great many of the liberati now work part-time, temporarily and are always on their way somewhere else. They go off and set up their own businesses in music, clothing, writing, software, furniture design, comics, painting. They are coming to the market with more attitude than cash, more dreams than ventures, more diversity than conformity. But they support each other in their ventures.
And because the liberati are as attuned as is possible to the unorganized world and therefore know how to use the tools and survive there, they will do well. The liberated liberati will liberate the world.
Summary to Part 1
The context of childhood may have changed, but its content has only speeded up. Fortunately, children are preoccupied with content anyway and can cope well with changes if not shocks in their context. It is as important as ever for adults to look out for and after their children and provide them with a degree of stability.
Those people who say that it is unfair to bring children into this world are being overly pessimistic. The fact of the matter is that there has never been a better time to be alive, as young people with the right attitude can thrive. Furthermore, the opportunity to pursue the opportunities is rising with each passing day- as long as people don't let the days pass by without progress.
Young people should study as much as they want and can and then find a way of making a living from the things that interest them. They should not and need not accept the conventional norm of careers.
PART 2: trans: shaping interactions in the unorganized world
Summary to Part 2
Once children have left the education system and achieved some degree of physical and intellectual intelligence, they need to then go on and gain financial freedom, continue to develop their own relationships with other people and so on. In the unorganized world, where collective contexts such as employment are changing, it is important that people understand how to shape interactions with other people.
The education system provides a defined context and legitimate environment where pupils can meet each other and collaborate with each other and teachers to learn. Having graduated from this defined environment, such legitimate environments become more hazy, especially in the event that work patterns are remote and distributed. Dealing with these and other changes in social contexts is the subject matter for part 2 of this book.
Part 2 is based on the premise that the traditional collective institutions such as organizations and governments whose interventions dominated and controlled the old orderly organized world are no longer effective or cost-effective. In the unorganized world, such formal institutions are marginal last resorts. As such, new forms of interactions between individuals are in ascendancy. This part sets out to explore the nature and form of these interactions- in both social and business contexts.
The importance of transactions
Transactions are the building blocks of life. As we saw in the "Ichi Fiction" story at the start of this book, transaction costs are central to understanding and managing our entire life- right from birth to death. We are born as a transaction cost- a side effect from a transaction. We grow up to avoid transaction costs. We die when we can transact in no way anymore. Death is thus a transaction cost, as is dependence either as a child or a dying person. Transaction costs arise from everything we do and have to do in life- they encompass all of the unproductive or unavoidable time we spend on waiting, preparing, negotiating and navigating.
Life consists of trillions of transactions, and the secret of success in life is to avoid transaction costs whilst shaping interactions. Success is being in a position to participate positively in interactions. This means interacting in low transaction cost environments.
We should avoid transaction costs in both social and business settings- although it is easier to replace physical transactions in a business setting than it is in a social one where face-to-face interactions are central.
To shape interactions, individuals need to understand "when to chat up and when to shut up". A legitimate approach opportunity for an interaction with a stranger arises when there is a common context in a non-hostile environment and non-intense ongoing interactivity.
We can picture the world and understand our lives as a massive series of continuous, inter-related transactions. A transaction can be defined as an act carried out for some reason. Transactions comprise interactions and interventions:
Transactions = interventions + interactions
The "action" part of the word is very important- neither interventions nor interactions are merely thoughts; they are specifically acted upon.
Interactions are bottom up, voluntary, lateral transactions, interventions are top down, coerced hierarchical transactions. Transactions are the building blocks of life itself. The world is formed from trillions of inter-connected transactions. Everything we do can be understood using the transaction metaphor. Some of these transactions are monetary, some non-monetary, some business, some personal. Transactions earn us income and let us have fun. Some of these transactions are useful, others are not effective in today’s unorganized world. Some can be influenced and initiated, some cannot.
I myself am personally responsible for a whole multitude of transactions at this very moment. My pen is transacting with my paper, my chair with the floor, the paper with my desk and my fingers with the pen. Magnify the quantity and interplay between these billions of transactions on a worldwide scale and you begin to understand the wonder of this world.
In the unorganized world, transactions are more inter-related, dynamic and global. As participants in the financial exchange markets know, transactions initiated in the US can have implications in Malaysia. As scientists know, when a butterfly flaps its wings in Brazil, the subsequent interactions generated can trigger a storm in Norway. Because of bounded rationality, no intervention or series of interventions can control these interactions in the unorganized world- but interventions can cause the interactions that trigger the implications. A heavy-handed government intervention can quickly lead to a large outflow of money- or even human resources. Institutions should refrain from intervening.
Transaction types
Everyone everywhere in everything we do is transacting with someone or something. We transact with living things, and things that are not alive.
I have classified four main types of transactions:
Living, living (ANIMATE, ANIMATED) transactions take place between two or more dynamic living objects such as people and people or people and animals.
Living, living transactions are the lifeblood and the most precious of transactions- they always were and they still are. Transactions between individuals are the basis for all social contact between people: all of the relationships we have- long or short, good or bad are formed at this level.
Person to person transactions can take place electronically and physically. As far as I am concerned, any unedited private communications between two or more people through, for example, email represent living to living transactions- they are simply conferred electronically rather than physically.
Living, dead (ANIMATE, NON-ANIMATED) transactions take place between one or more live objects such as a person and non-living or living but static things such as trees, desks and pavements.
The static items such as desks, chairs and beds can facilitate the creation of ideas. They are tools that should be comfortable and convenient for people to use. They should be designed ergonomically (there should be a good fit between the item and what its user is using it for).
Dead, dead (INANIMATE, NON-ANIMATED) transactions take place between two or more non-living static objects such as a picture and a wall. These are the many relationships between our different possessions and between one building and another.
Dead, dead transactions should be reduced because as possessions build up we get weighed down and cluttered up by them.
Dead, living (INANIMATE, ANIMATED) transactions take place between one or more live objects such as a person and non-living but dynamic moving things such as product packaging, clothes and cars. These are our relationships with non-living things that help us to function as living things by assisting in our nourishment, mobility and warmth.
Dead, living transactions are primarily negative these days and should therefore be avoided. Cars don’t necessarily help us to get around, packaging is often excessive and we often have too many clothes, for example, to transport when we go on holiday.
I do however have a positive relationship with some of my inanimate animated goods such as my laptop and books. Transactions using these items are a good thing when they facilitate voluntary communication between living, living things.
All of these different types of transactions are important in understanding the immediate environment in which we live our lives. This is, if you like the micro-science of relationships between individuals and other things, as opposed to the macro-science of physics and chemistry that gives us the ability to move, gravity and so on.
For me, broadly speaking, life is about minimizing dead, dead plus dead, living plus living, dead transactions and focusing on the living, living transactions. The reason for this is that the by-product of every transaction is transaction costs. These are the costs incurred getting in a position to transact before the transaction is actually carried out. The possessions we accumulate are often associated with high levels of transaction costs. These costs are only worth incurring if the associated benefits are high.
Transaction components
A transaction is made up of four distinct but clearly inter-related components:
Transaction contemplation
This is the initial part of the transaction. If the thought goes no further, then a transaction does not occur. The type and implementation of the transaction is then dependent upon the attitude of the person doing the contemplation. If that person thinks they can successfully intervene or legitimately interact, then they are likely to try.
Transaction initiation
Transaction initiation is the approach to the transaction. It entails the transaction costs to get someone who wants to transact into a position where they are able to carry out that transaction.
Transaction implementation
This is the actual act that comprises the transaction. This is the most important part of the transaction: the transaction itself under way and in progress.
Transaction completion
After the transaction is complete, it has after-effects and side effects. There may well be a significant lag between transaction implementation and completion. The repercussions from even a simple transaction could endure.
When contemplating a transaction, the transactor (transaction inititator) should consider the actual real effects of that transaction implementation. In the organized world, intervenors saw the results of their intervening transactions as they would like to see them, not as they were. They did not acknowledge their bounded rationality and limited control and failed to respond to it by refraining from initiating transactions in the first place.
Let's now see the all important role of transaction costs in determining success in the unorganized world.
Transaction costs are everywhere
Whenever a transaction of any type- interaction or intervention- takes place, transaction costs are generated. Transaction costs are busyness. Part 1 of this book was all about gaining the freedom to make the right choices to navigate from dependence to independence in the happiest and safest manner. Part 2 is also all about making the right decisions to achieve personal success by making the right decisions about how to behave in business and personal contexts.
A transaction cost is a cost generated when a transaction is carried out. All social, economic and political transactions entail transaction costs. Transaction costs are incurred before, during and after the transaction. If I am going to a restaurant, then I have to get there before eating, generate waste from eating and have to get home again after eating.
I assess everything I do and see in terms of transaction costs. I explicitly take transaction costs into account when making decisions. It is the level of transaction costs compared with the transaction value that shapes my decision making on all of the small and large decisions that life comprises.
Let me give you some examples of transaction costs:
Bad teachers are a transaction cost (they make it more difficult to learn)
Hospital waiting lists are a transaction cost (because it takes longer to get back to a healthy state and a position to transact)
Children are a transaction cost because their dependence necessitates help and attention. This is why the transition to independence described in Part 1 is so important.
Long distances to the nearest school or hospital are a transaction cost (time is spent getting to the place rather than actually being there)
Ignorance is a transaction cost (because it lengthens the distance to truth or the right decision)
Arbitrary policies, for example, promotion according to experience, are a transaction cost (because they extend the time taken to get where you are going)
Make up is a transaction cost because you feel the need to put it on before you go out (a preparation transaction cost)
Taxation is a transaction cost: part of your reward from work activity is forcibly taken away by government (a post-transaction cost)
The need to find out a telephone number before you call someone is a transaction cost because you cannot call someone unless you know the number to call (a preparation transaction cost)
Brushing your teeth is a transaction cost: a by-product of eating and drinking transactions (a post-transaction cost)
Dialing in to pick up your email is a transaction cost: you have to incur the same fixed cost of time and money to dial up irrespective of how many emails you are collecting (a waiting transaction cost)
Needing a haircut is a transaction cost
Luggage in the physical sense of bags and suitcases is a transaction cost: it is a pre-requisite to carrying out transactions such as going on a trip and unavoidable because of other transaction costs such as the need to wash and wear make up! (a preparation transaction cost)
Litter is a transaction cost (a wastage transaction cost)
Noise is a transaction cost (a wastage transaction cost)
Cars are a transaction cost (a navigation, ownership transaction cost)
Driving is a transaction cost (a navigating transaction cost)
Thirst is a transaction cost (a negotiating transaction cost!). Why do you think cold drinks are increasing their share of liquid beverage consumption compared with hot drinks? You guessed it, because of (waiting) transaction costs! Ready made meals prepared in the microwave and ready to eat bacon are other examples of the trend towards convenience. Convenience means that you don't have to fit your transaction into someone else's behavior patterns.
Sleep is a transaction cost
Illness is a transaction cost, a by-product of the transaction we call life.
Allergies such as asthma and hay fever are transaction costs.
The weather is a transaction cost
Gardening is a transaction cost
Decorating is a transaction cost
Going to the bank on a Thursday to withdraw some cash for the weekend is a transaction cost. Forgetting to withdraw some cash on a Thursday and thus queuing on a Friday night is a transaction cost! Even the need to carry around notes and coins is a transaction cost.
Clothes are a transaction cost
Customer service is a transaction cost (a by-product of using a product or service)
Unreliable equipment is a transaction cost: this equipment is a tool to assist in transaction implementation- if it does not work then this hinders the transaction
Difficult to use equipment is a transaction cost
All housework is a transaction cost: washing up, ironing, dusting, vacuuming
Experience is a transaction cost- an irrelevant by-product of life's previous transactions of little specific use in future transactions in the fast changing unorganized world
Addiction is a transaction cost, a side-effect from consumption of an addictive product
Entry and exit barriers are transaction costs: costs incurred in pursuit of a transaction not related to the transaction implementation itself
Sunk costs are a transaction cost that make it expensive and difficult to transact
The cost of buildings such as buildings and fixed infrastructure are all transaction costs: independent of the transaction itself but wrongly deemed necessary to transact successfully
The three types of transaction costs that annoy and stress me the most personally are queues, customer service and unreliable tools such as my laptop and mobile phone network.
We can already see from these examples that transaction costs are both central to understanding the life of every individual and furthermore, not a positive thing.
Lets now give a closer definition of transaction costs.
Defining transaction costs
Many, but by no means all, examples of transaction costs have been described. Lets now try to devise a more systematic definition of transaction costs.
A transaction cost is a cost generated when a transaction is carried out. Transaction costs equate to all the time and energy spent that is not essential to the implementation of the transaction itself. As such, transaction costs are a bad thing that should be avoided.
Any UNAVOIDABLE time is a transaction cost, such as that necessary for brushing teeth, getting hair cut, quenching thirst and the weather. Any UNPRODUCTIVE time is a transaction cost. As we have seen, all waiting, all preparation, all dependence and reliance, all negotiating, all navigating and all wastage are transaction costs. Work is the ultimate transaction cost when it is just a means to end and not an end in itself. It is only when we are voluntarily independent and living our dream, and directly pursuing the things that matter to us, that we are engaged in a purposeful transaction.
Usage of time in pursuit of a transaction is not necessarily a transaction cost. For example, I may be on my way to a business meeting or reunion with friends, and the time spent getting to the place where that interaction is taking place could be seen as a transaction cost. It would be a transaction cost if it was unproductive, i.e. if I drove to the meeting place and could not therefore multitask. If on the other hand, I took the train, I could read a book or my papers and continue productively transacting. This time spent would not therefore be a transaction cost, even if it took longer to make the journey by train than it would to make the same journey by car.
In the organized world, firms were used to organize economic activity in preference to markets because of the high transaction costs incurred using the price mechanism. But firms were also used when the price mechanism failed because of so called externalities (external social costs not incorporated into market prices). The price mechanism generated the price for the transaction but ignored the transaction costs. However, if we, as I indicate in this text, think about our production and consumption decisions in terms of transaction cost avoidance, then we can improve ourselves and our world by protecting the environment. As such, transaction cost avoidance is not only economically attractive because it increases productivity by concentrating efforts on business and not busyness, but simultaneously socially attractive by minimizing the societal harm caused by carrying out those transactions.
Having discovered, described and defined transaction costs, and seen that they should be avoided, we will now move on to discuss the general mechanisms for minimizing transaction costs.
Mechanisms for minimizing transaction costs
The aim of successful transacting is maximizing the value from implementing transactions whilst minimizing the costs incurred to realize that value. It is maximizing business whilst minimizing busyness. To transform your transactions, and is so doing transform yourself, you should minimize transaction costs using the following mechanisms:
Supplant physical transactions with electronic ones
Transaction costs are caused by the need to navigate ourselves around to different geographically located places. These days, we should work from wherever we are, work from home. Shop and bank using the Internet. Electronic transactions mean that we can work and shop when and where it is convenient, have goods delivered to us. We do not need to queue to park, pay for our goods and get home again.
For example, when I walk from my home down to the local shop to buy my daily newspaper, I am incurring a transaction cost. The cost is at least equal to the time it takes to get ready to be in a position to leave my home, plus the time and energy taken to get to the shop, be served and get home again. There is a benefit- but there is also a lot of cost. Alternatively, I could choose to transfer the transaction cost onto someone else and have the shop deliver my paper to my door. The problem with that option is the loss of control it entails. I am entrusting the service I get to the reliability of the shop staff- and the consistency of their reliability. Dependence on others and loss of control are neither positive nor necessary. The best option is simply for me to supplant the physical with the electronic and dial in and pick up the news from the Internet without leaving my home.
Replace forced with voluntary
We have seen the transaction coats caused by forced dependence and forced interdependence. Individuals should cultivate voluntary independence, by, for example, the systematic development of multiple lifestreams. Voluntary independence allows people to determine for themselves who they interact with, for example, what work they do, where they work and who they work with.
Implement empowered delegation
Transaction costs are caused by barriers to direct communication such as operating procedures. Getting everything approved before it can be implemented is a time and energy consuming process. Instead, problems should be solved and issues dealt with by the person most familiar with the problem and with the expertise necessary to solve it. This decreases the transaction costs by decreasing the information set that needs to be communicated by intermediaries.
The same transaction carried out by different people can generate different levels of transaction costs and benefits. To minimize transaction costs, delegate the task to that person who can best do the job with the least costs.
You could, for example, outsource a non-core or essential task by getting someone in to do your cleaning or ironing for you. One person's transaction costs are another person's transaction. The requirement to eat is busyness for someone necessary because of hunger, whilst for someone else, preparing food and feeding people by running a restaurant is business. Transfer the burden of transaction costs to experts who are knowledgeable about and enjoy that task.
Practice simultasking
Being disorganized causes transaction costs. Disorganization means that when I go shopping I forget to buy something important and have to go back to the shops again or go without. Simultasking means incurring the same level of transaction costs whilst carrying out several transactions at once. For example, rather than going all the way into town just to do one task, instead postpone non-time or mission critical tasks until you have several things to do in town. This maximizes the benefit from the transactions for the same level of transaction costs.
Seek multi-functionality
Multi-functional devices and people are valuable to reduce the transaction costs caused by, for example, possessions. For instance, a laptop computer that also plays music compact discs reduces the number of tools needed to carry out different transactions: type and listen to music. People who are technically proficient but also able to communicate the commercial benefits of those technologies effectively mean that it is not always necessary to take or have technical backup at sales meetings just in case the customer asks a technical question.
Choose quality products and use professional services
Avoid unreliable equipment and inconsistent quality by selecting goods and services that perform reliably and consistently over time. "False economy" can cause transaction costs by needing customer service and repairs, replacing sooner, non-productive time and so on.
Use indexing services
We have seen the transaction costs caused by barriers to accessing information. Not knowing something is less of a problem than not being able to find that something out. Directory inquiries and Internet search engines help people to locate the data sources they need quickly and conveniently.
Deploy ergonomics
Environments that are not conducive to human interaction cause transaction costs. For example, when tables are so big that people can't hear each other across the table or so cluttered that people cannot see each other for the ornaments. Ergonomics is the study of the relation between humans and things: it is how comfortable a seat is and how easy to use a tool is. By designing things in an ergonomically friendly form, we can facilitate interaction, rather than make it difficult and put barriers in the way of human communication. Easy to use lets the effort be expended on the transaction itself.
Exercise choice
Be aware of alternative choices and act on them if need be. For example, if the service from one supplier does not meet your expectations, know the alternatives and act to change if necessary.
Par down and focus on essentials
Transaction costs are caused by possessions. When we travel or move, we have to take them with us or leave them behind. To avoid transaction costs, we should avoid the accumulation of non-essential possessions for the sake of conspicuous consumption and status signaling. Minimize possessions to minimize transaction costs.
All of these things build independence and thereby reduce transaction costs.
Having explored how to avoid transaction costs in general, lets look at business and social settings specifically.
Avoiding transaction costs in business relationships
The transaction costs of doing business are those from organizing such as negotiation, contracting and finding out prices.
I wrote in "Unorganization: The Company Handbook" on unorgan.com about the need to downstructure our business organizations: that is to remove policies, procedures and processes. The aim of downstructuring is to concentrate the activities of the firm on outward-facing business rather than internal administrative busyness. This busyness is my term for transaction costs. Downstructuring reduces the requirement for people to negotiate and navigate themselves into a position to do business. It is implemented by, for example, removing the requirement to be present in offices and instead allowing teleworking. This is a reduction in transaction costs. All managerial supervision and controls are transaction costs- they monitor and indeed prevent people from carrying out business in the way they want to. The imperative for business is removal of transaction costs through downstructuring. Instead of having detailed budgetary targets, operating units simply have to meet a sales target and keep costs below a certain percentage of the value of those sales. Instead of spending time predicting unknown future sales, people spend their time bringing in those sales. We need to introduce more independence into our work environments.
To avoid transaction costs in business contexts, we can trade with customers over the phone and only see them occasionally. The vast majority of interactions that take place in a business relationship can be carried out electronically: over the telephone, by email and so on. It is not even necessary for someone to have ever met a business associate, but having met them at least once helps you to remember who they are and their specific interests, abilities and requirements. I like to make initial contact by email or phone and then if the interest warrants it, and it is geographically feasible, meet with that person and explore mutually beneficial opportunities.
The extent to which you can do business with someone electronically without ever meeting them or knowing them is surprising. And such electronic collaboration is a low entry barrier environment to collaborate in too, because it is the ideas that are judged, not appearance or background or experience.
Avoiding transaction costs in personal relationships
Transaction costs, the costs of getting in a position to something done, are incurred in both personal and business relationships. They are however often much higher for personal as opposed to business relations. As we have seen, we can reduce business transaction costs by using technologies such as electronic agents to trade. However, it is not as easy to overcome the higher transaction costs that are incurred from the greater necessity for face-to-face meetings to sustain personal relationships.
We can transform some of our social transactions- we can trade over the Internet rather than going to the bank or the supermarket. And when we do go out and shop, it will be first and foremost a social activity. We can work from home, spending more time with our families and mixing business with pleasure.
Transaction costs from personal relationships include those from waiting for other people to get ready and turn up, walking at their pace, going where they want to go and so on. Such thoughtfulness for others is of course simple courtesy. It is however also costly in terms of time and opportunity cost - how that same time could have been otherwise productively spent. Indeed, the worst thing about incurring personal transaction costs is the patience such relationships require! We have to mellow out and compromise in order to fit comfortably into personal relationships despite the high transaction costs. However, unlike the transaction costs caused by forced interdependence in organized business contexts such as teams and companies, at least such social interdependence is determined voluntarily.
These days, people tend to be more mobile and friendships often span considerable geographical distances. As such, we are less likely to spend all our time with one or more other persons. Communications technologies help to bridge this gap and keep in touch, but are insufficient for sustaining a good personal relationship throughout extended periods of absence.
Personal visits and get-togethers are necessary to develop shared occasions and just understand better how and where other people spend their time. In fact, a display of willingness to make the effort required to get together is a good indicator and demonstrator of commitment to a relationship.
The frequency of these visits depends of course upon the nature and intensity of the relationship. For instance, personal transaction costs are an unavoidable cost for the benefit of having children. Indeed, the best way to avoid unwanted intense relationships is not to remain physically present in one place with another mildly attractive person for extended periods!
At the end of the day, the best business and personal relationships are all about sustainable i.e. low levels of transaction costs achieved through a mix of physical and electronic encounters. On one hand, business relationships are more about electronic than physical contact. On the other, at play, social transactions are more physical than electronic.
The balance between physical and electronic interactions
Balance is important: there is a requirement to have the right scale. For example, working from home is a great way of reducing the transaction costs of getting in a position to do business, but there is also a requirement to meet with colleagues face to face occasionally. Otherwise people can feel isolated and get "out of the loop": lose the informal, spontaneous conversations that often confer insight and perspective.
The perspective that balance brings is important- I can often get detailed information from a written report, but its good to couple that with an opinion and insight from others familiar with that topic. To rely on either could be hazardous in gaining a balanced considered perspective- but with both, a knowledge worker can form an opinion that they believe in and can justify.
Getting the balance right between physical and electronic interactions is a key pre-requisite for personal and professional success in the unorganized world. Lets look at example of an idea that does balance the local and the distant well.
We have already seen how university campuses are a useful model for finding the ideal balance between proximate and remote working. Lets now look at an example of a highly successful, yet completely electronic, community.
Email lists
I am and have been a member of several email lists on matters such as "Learning Organizations" (www.learning-org.com). The way these lists work is that someone hosts the list about a certain matter. Registered members of that list can then post a message on a specific discussion topic or initiate a discussion about a related topic. This email is sent to the list host who approves its publication and then posts it to the list. Everyone on the list then gets that email and other list members can then reply to the message.
Email lists are like discussions but they are not real time communications. There is a delay between the time a message is generated and the time when list members receive them. There is then another time lag before any responses to that message are posted. This does have the advantage of allowing reflection on the subject being discussed.
For example, Learning-Org is an ongoing dialogue on organizational learning with over 2,000 participants. Twenty or more new messages are posted everyday. Not every list member actively participates by posting messages, some just receive and read the information. Some list members are consultants, some students and others are employees. List members are dispersed around the globe on every continent. There is no physical way for such a diverse and distributed group of people to collaborate and exchange information in the way they do.
The host pays a valuable role in cutting out unrelated advertisements, error messages and other wastage from the messages that get distributed to the list. This minimizes the transaction costs of being on the list and keeps the potential information intensity high. List membership is necessary so that the email addresses of people to receive the messages are known by the email program that distributes the messages. Membership is minimally formal though: any member can simply delete messages on topics that they are uninterested in or from people whose opinion they do not agree with or respect. Any member can unsubscribe at any time, and anyone can rightly join the list: there is no formal check on whether that person is qualified in matters relating to learning organizations: the only necessity for membership is the expression of an interest. Such lists therefore represent a good way for a small consultancy or beginner in the subject to pick up information and communicate their opinions and knowledge to a large and influential group of people.
There is no reason why the necessity of using electronic media to reach such a large and dispersed audience cannot be supplemented with occasional face-to-face gatherings such as conferences which list members and other interested people can attend in person to actively discuss the various topics in real-time.
We will now explore private places and then shared spaces in public places. These are the types and characteristics of buildings and environments in which people meet and interact.
Types of private places
In the organized world, we could hide from the general public, if not from colleagues, in our company's offices. These static closed offices are disappearing in the unorganized world because their costs do not justify their benefits.
As such, the place where you live remains the most important private place in the unorganized world. This is as ever the place where you retreat to in order to relax and for peace and quiet. Because work is location-independent and because of the imperative to avoid transaction costs, working from home, known as teleworking, is increasing too.
Teleworking is in tune with the unorganized world because of the balance it introduces: the opportunity to mix business with pleasure and fuse private with public. It does not matter where you produce, instead what matters is what you produce. You can work from wherever you are. Think of all the transaction costs you can save not having to navigate yourself through the traffic to get where you want to be. Think too of the time saved not having to put your make-up on in the morning and get dressed up in your power clothes. You can work in a tracksuit if you want to.
This is a very good reason why videoconferencing based from the home is unlikely to catch on widely. Maybe if I have to follow the outmoded model of getting dressed up to go to work, I may want to use videoconferencing to talk to colleagues or customers overseas. But I certainly do not want them to see me or my home when I am teleworking. This is an invasion of my privacy and introduces a transaction cost of getting prepared to overcome a transaction cost of not being face to face physically. Remember, we are trying to avoid all transaction costs!
Types of public places
People interact in public places, most of which were used by people even in the old organized world. The difference these days is there are more public places and individuals use them more frequently. They are also being combined in novel ways, such that our uses of them are more varied than what they once were. For example, offices are fusing into club-like environments.
Public places include restaurants, bars, pubs, hotels, cafes, open offices, shops, shopping centers, malls, libraries, streets, markets, schools, churches, parks, airports, job centers, nightclubs, sports centers, gyms, trains, email lists, user groups, bulletin boards and cinemas.
Different public places facilitate and are designed to facilitate different levels of interactivity with strangers and with people you are already associated with.
In general however, people operating or looking to operate businesses in the unorganized world would be advised to facilitate high interactivity with both strangers and associates in a non-hostile i.e. safe environment for all people interacting in that place. The exterior and interior design of buildings should reduce the transaction costs associated with interacting in different places and thereby maximize their usability for interacting.
The building then serves its purpose. Buildings are just tools, a means to an interactive end and not an interaction in itself. Buildings should serve the people, they should be configured to meet the needs of the people transacting there in both work and social contexts. Too often, buildings in the organized world imposed requirements and constraints on the people using them. In the olden but not golden organized days, buildings were for symbolic and protective purposes.
Modern buildings should be convenient. Public places should ideally be well situated and conveniently located and open for extended periods, available whenever people need to use them. Such convenience allows individuals to use these facilities any time they choose. Customers do not then have to fit their usage patterns into the rules dictated by shop owners and building providers.
A good example of public places that are conducive to interactivity between acquaintances and strangers is markets.
Markets
The market is a great mechanism for wealth creation, be it a physical market for trading goods or an electronic market for communicating ideas. A market is an open dynamic external mechanism for carrying out economic activity. Unlike internal-facing, procedure driven hierarchies, external-facing customer focused market traders present themselves and their product, setting out their stores for public viewing.
The essence of the market is a positive one: the contact, dialogue, negotiating, bargaining, and the front-line accountable nature of a trader standing behind just a fold-away table. And of course physical market stalls are temporary constructs: you pack up and go home at the end of the day, collapsing your table as you go. Both opportunities to buy and opportunities to sell are open to all.
The entry barriers to trade are low because the fixed costs are low. In the case of market trading, the fixed costs are what you have to have to trade e.g. web space or a table. The variable costs are also low. These are the charges you pay to be present on that particular day such as market fees. This means that the markets are contestable and profitable trade is perfectly possible.
Moreover, markets present an accessible opportunity to do business: a common context in which buyers and sellers can transact in a certain place at a certain time on a certain day, or in the case of the Internet, anytime and anywhere.
Compare this market scenario with how difficult it was to do effective business when you visited offices with all of their walls and doors and staff, signing in and signing out, secretaries, electronic card keys, the requirement to offer refreshments to visitors and so on. Both the fixed and variable costs were high.
In the unorganized world, markets are both viable and preferable. In whatever form they take, be it exhibitions, street markets, user groups or anything else, markets are the marketplace for the future.
Characteristics of interactions
Wherever they take place, the interactions that shape our lives in the unorganized world should ideally have the following characteristics:
Voluntary
The fundamental importance of the transactions being voluntary and not forced was described in "The importance of voluntary transactions" section above.
Spontaneous and emergent
Interactions should be spontaneous and emergent: they should arise in unplanned and unexpected ways between open-minded but sceptical people. They arise from events that the interactors are either involved in or observing. People are on the look out for the existence of common contexts as a means to pass casual comment and thereby possibly establish a dialogue.
Legitimate
The interactions should meet the three approachability criteria explained in "When to chat up and when to shut up" below.
Impermanent
Interactions should be dynamic: meetings on the street with an exchange of information. Clearly, the length of the interaction will depend wholly and solely on the joint agreement of the people interacting voluntarily. This length will be decided on the basis of open and honest communication between the participating individuals so as to avoid misunderstandings.
Person to person
Interactions should not be based on rank or membership of companies. They should be between people, just people. Experience, company membership and so on may have helped to formulate and generate the ideas being discussed, but they are secondary and not emphasized. Instead, the ideas themselves should be at the forefront of the conversation and its most important component.
Informal
In the organized world, formal coordination mechanisms were used to govern transactions. Contracts, hierarchies, constitutions and legal systems all enforced legally binding transactions.
In the unorganized world, all interactions should be carried out on an informal basis. The voluntary exchange principle determines whether people interact. Mutual gain is the glue that cements the willingness to interact. Look, for example, at "busking": the informal act of someone in a public place trying to entertain the passing public: talent is rewarded with money and rubbish with cold stares.
Unsolicited Approaches
Since I have been freed from the shackles of organizational membership, I have made a couple of unsolicited approaches to companies with ideas. Unsolicited approaches occur when people who are not officially or on the face of it entitled to act or comment do so anyway.
Without invitation, I sent ideas to two organizations, the government-owned British Post Office [the UK equivalent of the United Parcel Service], and the American headquarters of The Coca-Cola Company, a global manufacturer of non-alcoholic beverages.
The UK Post Office had a practice by which its workers stuck a real 30 pence stamp (with a monetary value of 30 pence) onto the back of receipts given for letters and parcels sent by registered post. This is post with some value and with a priority handling and guaranteed delivery time. I wrote in saying that this practice was a waste of money because some other unique identifier could be used, thereby saving the Post Office 30 pence every time a registered letter was sent (this totaled a lot of money). Nine days later, I received the following reply.
23 July
Dear Mr. Buckingham
Thank you for your letter dated 14 July addressed to the Chief Executive of the Post Office, regarding your suggestion for changing the payment method used for Registered items. He has requested that I reply to you on his behalf.
The 30p stamp affixed to the reverse of Registered labels represented the charge for compensation cover provided with the Registered service. The primary reason for placing the fee on the reverse of labels was for our own operational procedures. As these have now been updated I am pleased to inform you that, from 1st July this year, we introduced a new label and procedure for paying for Registered items. From that date the old procedure for a 30p payment to be stuck to the customers receipt or posting book ceased. The new procedure means that customers posting Registered items must now affix all the postage to the front of the item.
I would like to thank you for taking the time to contact Royal Mail with your recommended improvement opportunity and please feel reassured that we are continuously developing our services to meet our customers needs more efficiently.
Yours sincerely
Product Manager
I also wrote to The Coca-Cola Company after dreaming up an idea whilst on an airplane for a "Coca-Cola Inside" or "Coca-Cola Served Here" logo placed on windows, tickets, and menus at the outlets of the Company's stockists such as supermarkets, restaurants, airlines, sports stadiums, colleges etc. This would provide consumers with clear information about suppliers and help to make supplier choices a factor in deciding where to dine or who to fly with.
I got the following reply from the Legal Division of the Patent and Technology Department of The Coca-Cola Company in Atlanta, Georgia, America.
Dear Mr. Buckingham
Thank you very much for your letter of June 14, to our Chief Marketing officer concerning your idea for introducing a "Coca-Cola Inside" or "Coca-Cola Served" logo which you would like to submit to our Company for consideration. We are always grateful when consumers of our products contact us directly with any ideas or concerns they may have. You often provide us our best feedback, and we are happy to hear from you.
The Coca-Cola Company has a strict policy concerning outside submissions, Mr. Buckingham. For legal reasons, our policy states that we are unable to consider any proposals relating to advertising, sales promotion, concepts we have previously reviewed, or formula modifications for any our existing soft drinks, fruit juices, or other fruit based or flavored products. In addition, we also are not accepting any unsolicited ideas for the Olympics. Unfortunately, we are unable to consider your idea since it falls into the prohibited categories of advertising and concepts we have previously considered.
Mr. Buckingham, we realize the possibility exists that we will miss out on a good suggestion by adopting this strict policy. However, experience has shown us that this policy, which is shared by most major corporations, is the approach we consider to be in the best long term interest of everyone, legally protecting the interests of all parties involved.
From a legal standpoint, I hope you understand our position. Let me emphasize that although policy dictates we not consider your idea, this in no way reflects on its merits, and we greatly appreciate your interest in The Coca-Cola Company.
Our best wishes to you for every success in your creative endeavors.
Sincerely,
Patent Administrator
The number of unsolicited approaches which companies (and people) will receive is going to increase substantially in the unorganized world compared with the organized world when everyone had a place and there was a place for everyone.
Given this fact, it seems suboptimal to continue to take the Coca-Cola approach and reject ideas irrespective of their merit just because of the source they were generated from. Companies are going to need to treat unsolicited approaches in a similar way as that adopted by the Post Office (which probably had to be nice to me as it is government owned and I am a tax payer).
In both of my letters, I made it clear that these ideas were with my compliments and could be used free of charge. Clearly, the policy adopted by Coca-Cola is designed to guard against dishonest people who make suggestions, see them adopted and then sue for damages. Because of this, there needs to be a standard formal contract that transfers ownership of and rights to the unsolicited ideas if they are taken up.
Ideas are the lifeblood of individuals and organizations and will often come from outside of the formal boundaries of the organization in the unorganized world. This is increasingly the case because fewer and fewer people are employed within those boundaries and because good ideas often come from a fresh perspective i.e. from outside the company. As such, good ideas are too precious to be rejected or ignored just because of the "rank", "authority" and "status" of the source of the idea. Good ideas should speak for themselves and must be welcomed and more importantly implemented irrespective of their origin.
Spamming is spam
Spamming is the act of sending unsolicited emails to unknown people. This was an "important announcement" I received via email from Amazon.com, the Internet bookseller.
"sending email to people who have no prior business relationship with the sender is commonly referred to as "spamming". Amazon.com wants to re-iterate its policy against using such business practices... By abiding by these "rules of the road", Amazon.com and all of our Associates can continue to be regarded as leaders in responsible online commerce. Thanks for understanding our policies, and for respecting them as Amazon.com Associates."
In the unorganized world, people increasingly do NOT have clear formal existing business relations with people they approach for business purposes. As such, "unsolicited approaches" should be allowed and appreciated: these people are using the Internet to build a business and make a living. Business is increasingly carried out with new customers or existing contacts in new companies and not with the same people in the same companies.
Preventing unsolicited approaches such as email spamming is an attempt to impose an organized approach and policy on an unorganized media. It is a futile attempt to retain the status quo of organized relationships and power configurations. By limiting legitimate approaches to people who are already known to us or close associates of ours, we are limiting the growth of electronic commerce.
Like most people with Internet sites, I get a lot of unsolicited e-mail from people, much of which is of no use to me and which I scan and quickly delete. But many of the suppliers I use for Internet utilities such as search engine submissions informed me about their products by unsolicited e-mails and as such I welcome and understand why people send them.
My policy regarding sending and receiving spam e-mails is as follows: I have adopted the approach that if someone e-mails me about the site, then this expresses an interest. As such that person is added to my e-mail distribution list until they subsequently request to be removed. I also e-mail carefully selected people who I anticipate being interested in the material, getting their e-mail addresses from publications whose content is similar to my own.
Spamming activity can be a legitimate or illegitimate approach. Receiving an email into your inbox is non-hostile, and a common context exists as long as the email recipient has a direct interest in the content of that email. If the sender of the email has some indication from a publication or position they have seen that that person has a direct interest in the email topic, then that is a legitimate approach. If someone approaches me with information about products and services that I have no interest in, then that is spamming.
I certainly do oppose non-targeted spanning, by which I mean receiving unsolicited commercial messages about companies and services which have no relevance or interest to me and which I have never expressed an interest in. In such cases, I simply ask to be removed from that mailing list with a quick reply saying "remove". There is no need to get emotional and angry, as some people do upon receiving unsolicited e-mails- it is a response out of all proportion with the act.
Targeted unsolicited emailing can introduce potential buyers to useful opportunities and communicate valuable information of use to them. On the seller side of the transaction, people sending messages know that causing negative emotion in the recipient is not a good way to get their product or service a good reputation. On the contrary, it is a way of destroying goodwill before the relationship/ business partnership has even begun. As such, thought and care is needed on both sides and there is no need for an Internet service provider or heaven forbid government policy on individual, personal behavior such as spamming which can and is self-regulated.
We have seen some examples of successful configurations of geographic and electronic communities in the unorganized world. Lets now take a general look at how transactions and transaction settings have changed.
How transactions and transaction settings have changed
In sum, the differences between the organized and unorganized worlds for transactions are:
Interventions of any type- whether they come from business or political institutions- are much less effective and cost-effective in the unorganized world.
Interactions are in ascendancy in both a social and economic context in the unorganized world.
All interactions- be they of a social or a business nature- are undertaken voluntarily.
Business interactions have radically changed in the unorganized world. The way we do business is totally different now than what it was because of technologies.
Business people meet each other for the first time in different ways. They meet at conferences and exhibitions and through electronic media such as Internet mailing lists (See the discussion on Email Lists).
Social interactions have not been transformed to the same degree as business interactions. We still meet people- friends and partners- in many of the same social spaces such as pubs and clubs as we used to in the organized world.
Social places have become more important as a means for meeting friends and partners because some of the collective common contexts such as offices where we used to meet people have disappeared. Rather than meet people in a business setting and take them to a social place, people meet in a social place and get to know each other in a social place.
When face to face business interactions are necessary, shared spaces in public places will be used as the neutral place to meet. Such locations for doing business include hotels, open offices and airports.
As such, knowing how and when to approach people- when to chat up and when to shut up is very important.
Implications
Understanding transactions and the power of the transaction cost metaphor allows people to thrive in enjoy the interactions between individuals that are the center of business and personal life in the unorganized world.
Feedback
Feel free to email Simon Buckingham, the author of this book at simon@unorgan.com with comments and queries. "Unorganization: The Social Handbook" should optimally be read in conjunction with "Unorganization: The Individual Handbook" and "Unorganization: The Lifestyle Handbook", published on www.unorgan.com.
Bibliography
Sources quoted in "Unorganization: The Social Handbook" are:
Authers, 2MAY95
Becker Gary S, The Economics of Life, McGraw-Hill, 1997
Business Week, 14DEC92
Donkin R, Milk round still good for creaming talent, Financial Times, 11JAN95
Economist, Britain's Universities Challenged, 22APR95
Economist, Universities Challenged, 24SEP94
Ellis, University: To go or not to go?, Sunday Times, 15AUG95
Fukuyama F, The End of History and the Last Man, 1992
Miller Arthur, Timebends, Minerva, 1987
Stevens P, Politics of the Playground, Financial Times, 20JUN95
Trond and Fisher, 26MAR95
Tucker, Survey of Young People, Financial Times, 21JAN94
Wroe, 9OCT94
