The Newtonian paradox of groups.

Successful groups have great power, power to identify, understand the causes and implications of problems and opportunities, and come up with creative responses, and once moving can gather great momentum. Most workplaces are now actively seeking to harness the intellect and creative power of their employees and other stakeholders, and those that do it well create great opportunity.

The flip side is that groups also have inertia, they are much harder to get rolling than just an individual, and once rolling, have a tendency to take unpredictable excursions.

It is easy to underestimate the effort, leadership, and capacity to connect that is required to overcome this inertia, and to manage the momentum constructively, leading a group in a consistent direction, focusing on the important issues, and consistently delivering outcomes.

I bet Isaac never thought of this application of his laws.   

Successful chains are communities

When people are tied together, when they are in “communities” they tend to develop shared values, aspirations, and courses of action. The incidence of double dealing, dishonesty, personal gain at the expense of the community gain, are reduced.

An efficient demand chain is just another type of community, it benefits from the collaboration, is able to identify and filter out self interest and hubris, and can deliver value to all participants.

The oxygen of such a community is information, both the quantitative data that can be collected and shared, but perhaps more importantly, the qualitative stuff that accrues with use, personal relationships,  shared obligations, the mutual understanding of peoples idiosyncrasies,  and simply the need to be recognised. 

“Democtratising knowledge” in demand chains

Democratising  knowledge, isn’t this a lovely term! I have heard it used on a number of occasions recently, and it came up again in an extraordinary TED presentation by Stephen Wolfram .

In just two words it nails the complex changes happening in numerous ways in our lives. Knowledge used to be power, now it is freely available, it is simply a tool, and the ones who use it best will win, rather than in the past, where the holder of the knowledge had a huge advantage.

Amongst all the other things that have changed, is the potential to turn simple supply chains that pump product into a channel driven only by capacity, into demand chains that respond backwards to demand signals from the customer.

This opportunity for change driven by a combination of the communication tools on the net, and the ability to assemble and analyse the drivers of demand in your particular market  offers huge potential for innovation, efficiency, and differentiation based on the capabilities of those in the chain. 

Transactions and obligations in a demand chain

Isn’t it interesting, when we pay for something, we have an expectation of what that transaction will deliver to us, but there is little sense of lingering obligation.

However, if we just do something for someone, any small piece of kindness or consideration, it creates a bond, and often a feeling of obligation that the kindness requires some reciprocal consideration on the part of the receiver.

This reciprocal obligation dynamic exists in the best demand chains, smoothing the path through the chain of whatever product or service the chain is set up to provide.

Any chain is a set of transactions, but the dynamics of a transaction are nowhere near as important to the individuals performing the transactions as the overall performance of the chain, and so they use initiative, alter the status quo, innovate, and generally go that bit extra, recognizing implicitly the value of the action to the performance of the chain, and it is their contribution to the performance of the chain that is the motivation, just completing the not the immediate transaction.

Customers drive chains

Integrated value chains are nothing new. IBM had one before it started “outsourcing” what turned out to be the future to Microsoft and Intel, Ford had one at  centered around the Dearborn factory, from where the company controlled by owning everything from growing the cattle to supply the leather for the T model seats, to the end of the production line, and beyond, and even the Venetian shipyards way back in the 1400’s was an integrated chain.

What has changed are the tools by which we can manage integrated value chains, and the recognition that they do not necessarily need to be controlled by equity, the power of the customer is far more potent.

Transparency effect

Can you imagine the changes that would have occurred in the behavior of the tobacco industry in the 70’s and 80’s had there been the “net-enabled” communication tools available then, when the big tobacco companies were conducting a rear guard action against those who sought to have the lethal effects of tobacco on health made public.

Simply, they would not have got away with 20 years of denial, the ridicule circulating via blogs, twitter, Digg and all the rest would have been overwhelming.

When you think about it, the negative reaction that would have occurred may have been better than all the public advertising that has gone on since the 80’s, sanctimonious adults telling youngsters what to do (again) whilst still taking the taxes.