This episode is hosted by Boundaryless Conversation Podcast host Simone Cicero with co-host Emanuele Quintarelli.

The following is a semi-automatically generated transcript that has not been thoroughly revised by the podcast host or by the guest. Please check with us before using any quotations from this transcript. Thank you.

Simone Cicero:
Hello, everyone. So, we’re back at the Boundaryless Conversations Podcast, this time with a slightly unusual co-host, not my usual co-host, Stina. But there is Emanuele Quintarelli with me today. Ciao, Emanuele.

Emanuele Quintarelli:
Hello. Hello, nice to be here.

Simone Cicero:
Emanuele, who is our Micro-Enterprise Lead on the Entrepreneurial Ecosystem Enabling Organization Micro-Enterprise. And today with us, we have Jabe Bloom, Senior Director, Global Transformation Office at Red Hat.

Jabe Bloom:
Hi, guys. Thank you for having me. I’m looking forward to the conversation.

Simone Cicero:
Thank you so much, Jabe. We are really, really excited about this conversation first of all, because of the countless exchanges we had on Twitter, and we had the chance to compare notes on our organizational development practice, theories, and ideas. And so I’m really looking forward to help our audience to also familiarize with your work, that I believe it’s really, really interesting and important. So, first of all, I would like you to start from some of your key insights on how do you look into a modern organization, in the context of the hyper-connected technological and changing world that we are living in.

And one angle, I think, that we should start from, is really your way to offer a systematized or general, I would say, an approachable and clear understanding of the frictions, let’s say that in modern organizations, one can encounter at least, between essentially the pressures towards differentiation and the possibility to create niche, value niche experiences, this particular experience is that the economy of today seems to be really made off. And on the other hand, the question of scale, so really, the usual question of efficiencies and how do you manage an organization as it grows, as it creates actually more growth and more opportunities to develop and deploy its value proposition? So, maybe you can start from there.

Jabe Bloom:
Sure. So, the sort of theory that I usually deploy when I talk about this is something I call the three economies theory. And it’s based on the idea that in most modern organizations, there are two economic theories at play. And the two economic theories tend to confront each other in unproductive ways and create a situation where the firm sub-optimizes by choosing one of the economic theories over the other economic theory as opposed to trying to deploy both. So, those two economic theories that we usually see at play are an economic theory of differentiation. And the economic theory there, you could call it an economy of innovation. The reason I chose the term differentiation is simply to say that the economic value of anything that is produced in this economic frame comes from its ability to differentiate the producer in the marketplace. Why would I buy product X over product Y? What are the differences? Have I created a valuable differentiation in the market to help the customer purchase or consume a product that I’m making? A lot of things you’ll hear over here are things like agility, product thinking, differentiation, market fit, things like this.

On the other side of the firm, almost all firms these days, you’ll find a scale play. And scale obviously, is the idea that we can kind of create value by efficiently reproducing common things, things that we use frequently, or things that are kind of required inputs for products. And the idea of scale at least in my mind, is that whenever we can find those things that we repeatedly do, we can perfect the creation of those things. The confusion of these two things, I think is primarily because people fail to look at what the economic logic is managing. And in particular, in the economic logic of scale, which is, I think, subtly different than some of the ways people use the term scale these days.

Economic logic has to do with the resources being reproducible. And also, importantly, I think that economics of scale require that the appropriate application economic scale has to do with the resources being consumable in use. So, it’s really important to understand this idea, I think, because what it means is that if you look inside of an IT organization, for instance, things like CPU pools, networking, storage, these types of things are things if they’re left unmanaged, can be over-consumed by the organization. And the detriment of overconsumption is broadly applicable to the organization.

In other words, one team could cause problems for many teams in the organization. And this is largely because the way that we create scale economies these days inside of organizations, so we centralize the control of these resources into a single department, like central IT or something like that. So, what you’ll see, I think, these days, if you go into many organizations is this, a movement from highly siloed approaches highly functionalized approaches towards value streams cross-cutting those traditional silos, and that’s the product frame, the product family, product line frame. And then at some point, it’s going to, but in those product lines, those value streams are going to butt into a centralized attempt to control the cost of maintaining these consumable resources.

So, the question ends up being I think, and the friction point that ends up happening quite frequently these days lies in the direct interaction of economies of differentiation and economies of scale. One side trying to create what I would call variety, and the other one trying to reduce what I would call variation. So, really quickly, to go there really quickly and not dwell on it too much. There’s a real confusion in the market, I think about what the difference between variety and variation, especially when we look at kind of agile, lean, and these theories about how we control for things. In the traditional kind of Toyota framing the importance of reducing variation, which is the unintentional change of those primitives, those consumable resources.

So, variation has to do with not being able to produce those consumable resources in a standardized way. Yeah. So, the quality of those primitives is assured. Versus variety, which again, has more to do with being able to create multiple products off of those consumable resources. So, the ability to target niches and things like this. So, for instance, Toyota cared very much about the reduction of variation. But they did that primarily to make their product lines and their manufacturing lines capable of producing multiple models of cars, to address multiple market niches. So, they were reducing variation, not as a cost-cutting concern, but as a variety, increasing activity. So, those are two kind of conflicts I think we see and organizations tend to lock up on them.

The way that I try to convince people to rethink that is to say that there’s a third economic logic that can come into play and this is the economy of scope. And a scope economy is primarily driven by resources that, when shared, gain value. So, it’s a way of creating a commons is the traditional way of talking about this. And the commons is a set of resources that are shared in common with both your central IT department and your product lines. And the trick here is I think that if we look around in organizations, we do find resources that satisfy these two constraints. One, they’re not consumed in use, and two, they gain value in reuse.

And so common ones are things like data, well-formed functions, and kind of platform components and platform configurations. And I think that the importance of kind of thinking through that ends up being things like there’s a radical differentiation between three ways of managing these technical resources, kind of product thinking being the differentiation, thinking that we see in most organizations, service thinking, traditional IT, ITIL style service, risk reduction, concepts of service, and then finally, in the scope economy, this idea of creating a platform in which the design activities become primarily about reconfiguration and the ability to reconfigure components to create value in a niche enabling the differentiation economies.

Simone Cicero:
Well, amazing. There’s a lot of — so many strings that resonate on our side because while you were talking about an inkling towards this idea of scope as a way to reconcile, let’s say, these two needs, these directions of development, I was thinking to, first of all, this idea of enabling — that seems to be emerging in how we look at organizations from new emerging perspective. So, this idea that there is an aspect of enabling, for example, entrepreneurship, or enabling communities, enabling ecosystems to create value more than actually coming with the pre-packaged product value that we used to have maybe in the industrial organization. So, another topic that resonated is this idea of modularity versus composability. And also, to some extent, doing trade-offs in modularizing our organizations so that we can have fun composing it into something new. And this is something that also resonates with the idea of designing for disobedience. That is one of the pillars of our platform thinking.

The idea that you design something that has standardized the transactions, but then you try to make it in a way that lets the ecosystem to interpret or customize the experience to their flavor, to their needs, to their context. So, can you maybe double click into this idea, and this friction between sacrificing something to the altar of modularity, so that we have broader composability in the organization. And also, I would like to ask you, if you can also look into the very idea of the boundary of the organization from this point of view. Because when I talk to you about this, I’m talking about not just organizational models, but also business models. So, I know it’s a long question, but I would like you to dig into that.

Jabe Bloom:
Sure. So, one of the things I wanted to kind of useful ways of starting to think a little bit about the design aspects of platform and scope economies, is to think about, that there are multiple different definitions of service design, and service design ends up being I think, one way to start beginning to think through what platforming could be. I don’t think that service design currently does it particularly well. But I do think it’s a way of starting to differentiate these things. So, in IT especially, there’s a traditional conception of service design, which is much more like your — when you sign a contract with your cellular provider, they give you an SLA, they manage a certain part of the risk, that is a platform to some extent, right? That tel towers are a platform that they’re selling access to. And the idea there, though, is that it’s a purely service-based approach. So, I don’t get to help my local cell phone company determine where to deploy towers or any of those types of things. So, it’s not a code design activity. So, that’s one way of looking at service. Of course, inside of architecture, inside of software architecture, we have traditional kind of concepts of service-oriented architectures.

And nowadays, microarchitectures and things like this, that are also similarly focused on the containment of complexity via interfacing. The way in which we componentize and create components as a way of kind of managing the cognitive load of a team, or making a system more kind of comprehensible for the organization so that they can kind of isolate and manage the complexity of the interactions they’re trying to deal with. I usually trace all those ideas back to actually Herbert Simon and to the extent that we want to talk about organizational design, one of the things that I think is most interesting is that the concept of componentization actually comes from Simon’s study of organizational theory prior to software engineering. So, kind of componentization, the idea of components, the idea of complexity management, etc. as a way of dealing with componentization is from organizational theory, to begin with. It’s from his study of kind of human organizational systems. And then it becomes applied to software engineering after that, which I think is kind of interesting.

But the third way to think about it is what I usually refer to as designerly service design. And what I mean by designerly service design is the way that like, I’m going to say this to Italians, and you guys are going to just have a meltdown. The way that Starbucks is designed is a service design, right, it’s a way in which someone thought through the co-creation of value with the customer. So, that the customer has to perform part of the activity in order to become part of the value stream themselves. The experience is partially co-created by the customer performing in a certain kind of way. There is a kind of a way in which there’s a deferred — the deferment of the final configuration of the environment until a particular customer kind of presents themselves. And that customer explains how they would like their configuration to work so that it’s maximally satisfying to them.

And so in this way, the service design is partially of the performance of service, the performance of the platform, in the way that you might think of performance being capable of improvisation, of reacting and interacting with a particular audience, right. And so I think if we kind of move our idea of platforming, the terminology that I tend to use for this is, we want to move from the concept of platforming as a technical activity like a technical set of components, things like you could traditionally see themes, like Honda’s idea of using the same frame of the car for everything from a Sedan to an SUV, right. So, the platform becomes that particular frame.

But it’s a very technical view of the world, which leads us into things like set-based design and things like that. If you instead move more towards this idea of designerly service design is the thing that platforming is trying to start to achieve in the world, we get to sociotechnical platforms, where what we’re trying to do is optimize or co-evolve the social and the technical aspects of a system into a platform that allows kind of the direct interaction, again, the customers or the users of the platform in the instantiation or creation of the actual value. That the platform actually can only provide the components and that the performance of the platform is for a particular audience or market segment or things like that. So, I think that’s one way to start thinking about how platforming could start being thought of as being an intersection of organizational design and software architecture or software theory. And I think that’s interesting.

The other thing I would generally start talking about, I think, from my frame, because partially, my frame has to do with the platform being, at least initially, inside the organization, it’s a way of like thinking about the platform tending to evolve, as the way to balance these resources inside of our organization or these constraints or complex, is to say that the marketplace is that differentiation and scale address are different marketplaces with different cycle times. So, the marketplace of scale tends to be longer cycle time, that’s how we get the economic efficiencies involved. But also, if you can’t keep up with the cycle, so again the kind of things like Moore’s law, and you can apply things like Moore’s law to storage and networking, etc. It’s a balancing act in the scale economy of investing the right amount, purchasing the right amount of the current technology, knowing that that technology, that resource is going to be available in a year and a half for half the cost.

So, there’s an arbitrage going on there of trying to figure out how to time the purchase. And to understand, frankly, that if we over-invest right now, we will own suboptimal technology in the future because we won’t be able to purchase the future technology. But the other version of it being if we don’t have the ability to swap out these technologies with relative fluidity inside the organization, we get locked in, we get locked into older technologies, where we are basically paying a tax then for owning sub-optimal old technology. So, you got this cycle time that you’re trying to manage on that side, which has to do with replacement, graceful replacement. And that focus tends to lead us towards the concept of componentization that we see in software-oriented architecture and things like this: isolation and replacement as being a critical aspect of platforming you.

If we look on the other side, though, and we start kind of poking around and try to figure out how to think about the market differentiation, the cycle times in differentiation actually tend to be, I usually refer to them as punctuated, right? They’re not actual, like, if scale has a regular kind of clock tick to it, right, like it’s a cycle, differentiation is actually chaotic. It has to do with being able to react to market opportunities that do not present themselves on cycles, but instead may emerge from dynamics in the marketplace. So, actually, teams inside of differentiation, primarily just don’t want their hands tied behind their back. Because what they want to be able to do is swing and hit at the right moment where the right moment isn’t predefined.

So, part of the activity then of interacting with marketplaces and what the platform can start to provide for them, is an isolation of the cycle times from each other. So, that the cycle times don’t become entangled on each other where one is highly cyclical, and then another one is highly opportunistic. When these two cycle times entangle on each other, which happens quite frequently inside of modern organizations, the organization can lock up and the platform ends up being a way, I refer to as, platform as an interface. It’s a way of isolating these two cycle times from each other, in order to enable both sides to achieve the economic optimal point of their economic logic without having to kind of fight with each other over it.

Simone Cicero:
I was reflecting or listen to you and came to mind, a piece from 1968 about managing differentiation and integration, Lawrence and Lorsch. It’s a classic organizational design. And it really resonated with this idea of differentiation and scale. And if we look at Conway’s Law, of course, we know that what we see outside should be at least what we design for insight. Why is this becoming so crucial right now? And what is the difference of implementing the same concepts inside an organization by looking at the market?

Jabe Bloom:
Sure. The first thing to say is that when most people look at Conway or when they look at Ashby, Ashby’s law, they apply those laws as generalities, as they look at the whole organization equally. And so part of my argument is that, in fact, you shouldn’t look at the organization as being equal. You should look at the organization as being differentiated in its economic logics. And you need to understand the different parts of the organization will attempt to achieve different things. And if you take that viewpoint, particularly you take kind of an Ashby’s viewpoint. What ends up happening is that as the marketplace — as the organizations grow to address more and more local concerns, those local concerns are growth and management of local concerns is Ashby’s complexity. It’s the idea that variety is increasing — the environmental variety that we want to address is increasing.

And so we have to ingest complexity inside the organization. In essence, the more complex the environment we want to address, the more complex the organizational structure needs to be in order to address it, right. There’s a difference between my nest thermometer and the normal thermostat. So, I think that what’s happening inside of organizations and why platforming is becoming more and more important, frankly, is that the marketplaces themselves are becoming more complex, and they’re forcing problems that organizations normally wouldn’t have to address. So, I think if you look at product thinking or product management thinking or however you want to describe that, it tends to grow — the seeds that it sends out tends to find fertile ground in startup land, where people are trying to create new value in small teams, etc. And I think that’s great.

I think the problem is that as those things become successful and they grow into larger organizations, people try to maintain that same economic theory across the whole organization. So, they want to organize everything according to product thinking or they get to a point where the product thinking becomes obviously not going to be effective at certain scales. And so they bring in scale thinking people, professional management, etc, who then implement efficiency and harvesting theories of value harvesting, etc. So, what do we look for instead, I think what we look for instead is the way in which platforms create a fixed or constrained set of kind of commonly reusable components. And the way in which that fixed constraint creates evolvability. It actually creates the ability for the organization to keep on evolving and keep producing these product things that they want. And so I don’t think that this is — I don’t think it’s generally recognized as a good strategy in most organizations. I think most organizations miss this.

But I do think if you look at the FANG, so Facebook, Amazon, Netflix, etc, Google, I think the primary difference that those technology companies have from their competitors is that they’re effective at platforming. They have figured out how to use platforms well. I also think that platforming isn’t like a kind of homogenous activity, I think there’s different strategies involved in it. I think there’s a radical difference between Amazon’s platforming, which tends to be heavily componentized, kind of very driven by theories like Conway’s Law. You can look at that kind of version of it. You can look at Google’s version of it, which is, let’s basically maintain a standard platform, and then split off the companies and make Alphabet. But all those companies and alphabet are basically running on the same platform, right. So, that the platform becomes a way of kind of enabling a kind of portfolio of companies to interact with each other. It’s primarily again, I think, a scale or efficiency-based theory of platforming, in my mind. But I think they’re very effective at it.

And then you can finally look at Toyota and Toyota’s ecosystemic conception of platforming, where they actually developed ecosystems around them, where they determined that their goals around single piece flow and efficiency and the scale issues that they were having were primarily constrained no longer by Toyota’s internal practices, but by the practices of their partners in the ecosystems, and so that they go out and then start developing their partners in it to create an ecosystem. And in that case, the ecosystemic platforming has more to do with, again, kind of a social interaction, a certain knowledge set, a way of working, that enables you to kind of start thinking of Toyota as being a platform for other kind of smaller companies to grow on top of, as long as they can meet the constraints that the platform request. So, I hope that’s close enough to what you were looking for.

Simone Cicero:
That’s amazing, actually. Because I was also discussing this with Emanuele in the background on our chat, and it sounds like, to some extent, your approach or in general, the approach that you praise, or you want to bring forth, and I must say, not only you. I mean, it’s like a new cultural wave, let’s say, around how we organize. Can it be connected in parallel with, for example, what is the metamodern political theory, let’s say? So, to look at the organization as a technology that we must use, serving a certain epistemic, I don’t want to say a theory of change, because that sounds too much post-modern, but I must say something like a way to embrace the challenges that are emerging in the world and will emerge in the coming decades, because that’s what we’re talking about. So, my question is, how do you relate this with also the politics of organizing in the 21st century?

Jabe Bloom:
Sure. So, I think the primary thing to think through around kind of the political economy that we’re pointing out, the political economy that we’re trying to understand is, through the 90s, through the early 2000s, the dichotomy that a lot of organizations were struggling with were kind of could be defined as locality versus global, right, local versus global issues in relationship to globalization. So, one of the, I think, key concepts to understand here is that if you had invested in the conception of globalization, you were also kind of in a way investing in the theory that a universal system was going to arise and that you would be participating in that universal system. And that that universal system was an actual possibility that we would arrive somewhere where globalization would be a real activity.

I think Latour does the best version of what happens. Latour kind of describes the last kind of the Paris accord for understanding the environment. It describes all these politicians getting on a plane together, and getting up into the air, and they’re all comparing notes about what their future was going to be, how much resource they needed, and how they expected to get the resources in order to maintain their economies, the way that they — their lifestyles, their standards of living, etc. And at some point during the flight, they all kind of realize, wait, if you add up all the resources, all of us think are available on the planet, that’s not a thing, there’s not that much resource. And they look out of the plane and realize that kind of the globe is gone. There’s nowhere to land. There’s nowhere to land this theory of globalization.

And so what we can see I think, politically, in a lot of places is the retraction from this conception of universality, that there’s going to be a simple system that organizes the global economic system, and that that’s something that we can achieve. I tend to think of it as managerialism. Sometimes when I point this out to people, I say, like, have you ever been in a server room with like, let’s say, 500 servers before and seeing how people manage 500 servers? If we can’t manage 500 servers, why do we think we can manage the total output of the global economy with a single system? It just seems like an arrogance that is starting to be realized, right?

So, now we end up with this like retraction to just localism, which also seems again, we’re going to move from kind of like a universal collective conception to lots of individuals kind of participating in something like an Adam Smith-ish version of the world. And my hope is that what we can do is we can think of the politics s evolving towards a cosmopolitan localism. And what I mean by that is that cosmopolitanism is the kind of self-governance of a set of localities, that they’re not an attempt to differentiate those two ideas from each other, that the local systems are interdependent with these broader systems. But the broader system isn’t a set of logic to be imposed upon the localities. It’s a way of supporting localities in their self-determination. So, I think that as we kind of move forward, and we try to work through these politics, in public, inside of enterprise, inside of organizations.

What we see more and more is the need for the avoidance of centralized governance, except in cases of consumable resources; that we need to minimize centralized governance as much as possible while recognizing that it is appropriate for certain aspects. We need to continue to think about the importance of innovation and the way that innovation allows us to retrofit according to emergent qualities of the world that we live in, that are not predictable. And therefore, it’s important that we have innovation, to deal with the problems that arise from the conditions of the world. But finally, that there are and should be investments by both the centralized system and the distributed systems into common resources that enable kind of efficient evolvability. And that we really think through kind of strategy, not just as kind of the way that we think of strategy right now as innovation is using the firm’s capabilities to create or capture all these kind of active terms that we use with strategy, that it’s a projection into the world.

Platform strategy is much more about understanding the conditions and the consequences of the conditions. What are our current capabilities? How can we think about those capabilities as a set of potential options that can be deployed to solve problems? To my mind, the challenge for most executives nowadays is that systemic view and not the strategic. The strategic view, to me, that kind of projection of the capabilities into a particular market that is solidly product management, architectural concerns that are important, but they’re not what I think the executive should be focused on. I think the executive should be focused on increasing the options for their product management and architecture groups. So, that they create more evolvability, more options, more opportunities, to deploy the capabilities into the world. That is a different form of strategy, different way of thinking about what the firm should be organized around.

Simone Cicero:
One thing that I’m really getting front of conversation is that we are accepting to some extent that more complexity is raising, and we have to transcend fully specialized society, overly globalized. And I think at least I don’t know, maybe not everyone, but a vast majority of scholars or people that are doing organizational development are embracing that. But having said that maybe this is also another topic that we’re going to touch upon, the idea of social practice theory, and how actually things change. So, given this epistemic point of view and starting point, what then? So, when we talk about brands, for example, in organizations, how they are going to implement this local cosmopolitical point that you wanted to raise in the conversation before, so how it is actually happening, how they reconnect with the cultural context, with the landscape, how are they going to beat the resilience? Is it going to be just a matter of utility players or public bodies? Is the consumer market going to completely detach from this? And then purpose or add whatever you want, but essentially, the purpose is — the question for purpose is also how do we fit into this new landscape that is very hard to upsell?

Emanuele Quintarelli:
I think we understand that we are trying to nurture a variety and to acknowledge and increase in complexity and so to distribute the power decision making coordination strategy. What is left, then, if we want to believe that business should be a force for good, and not just making money or maximizing shareholder value, but trying to create something for the world, for society, for different stakeholders? How can you do that? And you didn’t say that, but what I heard in your words, talking about a systemic view is this idea of enabling constraints, not telling each pievce, or each people, what to do. But the basic principles, the basic boundaries to inspire some kind of action. How is all of this coming together?

Jabe Bloom:
There’s a couple things. One is: when we get to these larger scales, I tend to switch my theory up a little bit. I think there’s two sets of theory that I tend to deploy right now. One is just kind of Ostrom’s polycentrism. And so that’s just to say that people have a hard time understanding hierarchy primarily because hierarchy tends to be captured by a kind of bureaucratic top-down enforcement of that scale-based theory, right, like the governance aspect. It becomes a one-way transaction from the top-down and that is kind of problematic. They tend to have, I think, a confusion about hierarchy. Whereas what Ostrom point towards is what she calls polycentrism, her and her husband, where polycentrism is the idea that there are organizations that hold power, hold efficacy over certain parts of the world, and that there are distributed hierarchically. So, one of the ways to think about it again, is like your local town probably has a council of some form that is a center of power. They live within some sort of — it was the United States, they live within some other state that is another center of power, and then kind of nationalities and things like that become other sets of power.

The criticism then becomes about the relationship between these power centers, and when a power center of a higher-order starts perverting, or over enforcing constraints on localities that don’t enable them in this kind of enabling constraint way but instead, are constraining them in these governing constraints kinds of ways. So, understanding kind of the hierarchical distribution of power, and that there are then I think, different ontological concerns that each of these different centers would tend to focus on, where localities, their ontology would be much more physical, interactive, everyday life concerns. And as we kind of move up hierarchies, these concerns tend to become longer time spans, longer timeframe concerns, but also, I hate the word abstract for this term, but it’s as close as I usually can get. So, then we can kind of apply those same ideas inside of the organization, inside of most large organizations these days and start kind of thinking through the idea that the time spans for things like product teams, product management architecture, and then leadership.

Those are different time spans that I think tend to align to different ways of working inside the organization, kind of operational and production concerns. Versus strategic concerns about the commitment of an organization to a certain activity, and state that they want to achieve in relationship to a local concern. And then systemics, the management of the firm as a whole, the understanding of the capabilities and the optionality of the firm. And then finally, to kind of pop out into the second set of theory that I think, is important for thinking through this stuff, multi-level perspective, where we then start looking at the firm in an ecosystemic theory, where we start seeing that the firm produces goods that are more or less differentiated, and in fact, often are replaceable by other firms. If we look at this, again, from a multi-level perspective theory, which is a socio-technical systems theory, that is kind of deployed in Northern Europe, often, what we end up seeing is regimes.

So, we reimagine kind of these innovators as being organizations or teams inside of organizations that are looking for an opportunity to become part of a stable regime. The stable regimes being these long-running cultural, socio-technical, social practice, political organizations that are stable, via convention, or otherwise, above that being landscape, which are parts of the market that are defined outside of the control of the regime itself. So, often having to do with politics, international politics, or environmental concerns. If we start looking there, and we start understanding that firms don’t actually currently have completely open futures, they actually have constrained futures. And those constrained futures are primarily constrained by the regimes themselves, then we start seeing significant amounts of inertia and the way that those significant amount of inertia create kind of market lock-in and things like this.

So, I usually try to differentiate those regimes into two different kinds of regimes. Regimes of production and regimes of consumption, where regimes of production are things like regimes that produce energy, and consume carbon in order to produce that energy. Part of the reason those regimes are so incredibly stable is because what they’re primary valued for is their stability. So, if the price of oil was incredibly volatile, it would be a less valuable way of providing something like energy to the consumption regimes. So, consumer regimes tend then to be less about the creation and production of consumable resources of basic resources that are — so oil, for instance, or even electricity is not a directly valuable good for most consumers. I don’t usually buy electricity to use it directly. I have to have some devices to consume electricity with, and then we get regimes of consumption.

And there seems to consumption are, an obvious one would be like the Apple ecosystem or something like this. They rely on these regimes of production to be stable in order to enable the value creation that they use. And so you can imagine the importance of stable electricity prices, stable shipping, stable supply chains, stable factories to Apple. Those four things that I kind of listed end up being, I think, in the production regimes. And Apple requires them to be stable. And then on top of that, there’s all sorts of other people like Apple, who are also building multiple different regimes, that all focus on those lower production regimes. And that means that they become very, very stable and very hard to kind of knock out a place. So, that’s my theory on how we need to kind of rethink how to get out of this stuff.

But we have to look at those bigger problems and understand those things. And I think very few organizations that I’m aware of can really think through these ecosystemic theories. And I think it’s very hard to think about, primarily because I think people think about ecosystems and ecosystem theory from an autopoetic, or they view they still center the individual firm, instead of trying to think of it as a sympoetic system where the firm is in relationship to other firms and the evolvability of the firm has to do with the relationship with other firms. And really starting to understand that then tends to give us a new source of stability, a new source of the understanding of where stability comes from, that isn’t a universalizing globalized theory, but is instead a present relational theory, an anti-foundational theory of stability of the market.

Simone Cicero:
So, my question will be now around the idea that, based on this premise, we may have to look into building new types of institutions, in terms of creating more institutional innovation. Because things like from what you say that the existing ones are pretty much constrained into their own affordances and how they’re made of, why they exist. So, in this perspective, what is the role of methods in terms of methods of organizing, for example, the work we do, and the more generally, the idea also for incumbents to use those methods and creating more interfaces between them and society, and also to participate in this institutional innovation. That will be another reflection I would like you to explore.

Jabe Bloom:
The first thing I say, I think is that like, again, to frame it in the kind of dichotomy that I started the conversation with, scale versus differentiation. I think because people think about differentiation the way they do, there’s a significant push inside of organizational theory right now to say, we need to decentralize decision making, that we need to decentralize the decision making. My problem with that is not that it is in itself a bad idea. I think it’s probably a fine idea to decentralize some decision-making. But I think if you do it dogmatically, it’s problematic. The second part about that is just to say that organizations when they hear decentralized decision making, in my experience, have a tendency to simply abdicate decision making through the organization. They decentralize the authority without decentralizing the information, or the ability to make those. So, they don’t think through things like how do we make better decisions in a decentralized way? What information needs to be available to make these decentralized decisions? Who has that information, etc.? So, I think there’s some problems with that particular frame.

And then the final one is just this around kind of the organizational theory, at least, if you follow my previous premises, then we get to this idea that I think that platforming and co-creation of value or co-creation of commons or something that I referred to as recommoning means that it’s not decision making primarily that needs to be decentralized. It’s actually a negotiation that needs to be decentralized. We need to help people to better understand how to negotiate common goods. We need to help them identify what a common good could be. And we need to create practices and methods for working together to create a common good that has that not — that quality that I referred to of deferred value creation. Like the minute that you try to create a platform component that specifically delivers value to only one cohort, then it is no longer — doesn’t have the intrinsic quality of that deferred value creation, that way in which it can be reconfigured, and recreated, and the value can be instantiated in another locality.

So, I think creating a set of organizational methods and ways of working around those things becomes really important. There’s a huge set of value in most organizations currently, that could be recommoned. So, if people understood the value of platforming and the creation of common goods, then they could spend some time thinking about this problem. And the problem is that if their organization currently only has two theories of economy, they only have two ways of thinking about economic value creation and management, then it’s likely that they have resources that would be better managed in a common way. But they don’t currently have a way of managing them that way. And so that means that there’s huge amounts of value in the organization that’s being mismanaged. In other words, it’s a resource that should be commonly held or commonly managed. And instead, it’s being either managed inside of a central IT department via some sort of rigorous control system, that is minimizing its ability to be adopted quickly, and therefore, reducing its value because, again, kind of commons gain value by reuse, they gain value by having more people use them. So, if you hide them behind the governing body, they slow the value creation that they’re possible to be created by.

The other one is that we see inside of lots of organizations is that these common resources end up being privately managed by a team that should be focused on a particular marketplace, but instead end up creating something that would probably be better valued as a platform component. But instead, they’re managing that platform component within the product team. And therefore, either they’re doing shadow IT or in some way, hiding that value from other teams. And/or worse, they suddenly start trying to create a platform thinking team within the product team, so that they actually end up having teams that are servicing other product teams directly. And therefore, the teams themselves are then being asked to manage against two different economic theories: differentiation and scope. And often what will, of course, happen is that in a pinch, the team will serve as their primary economic theory, differentiation, and shirk on the scope, versions of it.

So, if I were going to build or if I’m going to work on kind of organizational design, organizational theory, and institutions, the ones that I think are most important are to, again, help people understand that platforming is not about centralized governance, it’s not about central governance. It’s about creation of components and shared value, that accelerate the ability to interact and create value in the world. And to the extent that you see things where the platforms don’t listen to local concerns use, you start to see those platforms kind of have difficulties. I think Facebook’s interaction with multiple organizations throughout the world, and their attempt to kind of force themselves into different societies is a perfect example of the way in which the platform has, in that cases, become aggressive, and tried to do centralized governance or top-down hierarchical forcing plays instead of value creation, by again, creating the potential for the creation of shared goods. Those are the primary concerns that I currently have.

And again, I will point out, I think that there’s a radical difference between the problems that teams and counter when they are trying to service a customer. And the types of problems that they encounter when multiple product teams interact with the platform team that’s interacting with a central IT team. That problem, that secondary problem statement is of an order of magnitude of complexity larger. And it involves multiple interactions, multiple negotiations of shared value throughout the system in several different dimensions. And therefore, what organizations who want to do platforming need to do is they need to understand that that’s a different way of thinking, there’s different methods and different ways of working for that.

And primarily, I’m a big believer in Praxis, they need to create the conditions under which the organization can practice working in those ways. Because in most organizations that I work with, the interventions will tend to be more focused. They’ll tend to be either an agile interaction, or an agile intervention at the product level, or an operational interaction with kind of a lean thinking approach inside of operations. And less common is, is really the creation of true platform engagement and the way that works, and kind of the way that negotiation at that level has to happen. I have seen it in several organizations. Now, it is becoming more common, but it is not something that I see in most organizations.

Simone Cicero:
It has tremendous implications from the perspective of creative entropy and purpose of organizations, isn’t it? So, if you embrace this idea that it’s really about the doing, the experimenting, and then letting people organize around the commons, then for the organizational strategy, let’s say, the focus the purpose, it’s really a challenge in terms of how do you reconcile the idea that value needs to emerge from the self-organizing of sovereign systems versus the idea of a company that wants to enact the strategy?

Jabe Bloom:
Yeah. I mean, I do think that part of this has to do with — in my dissertation, what I talked a lot about is the difference between different time spans and the way that people think through different time spans. And so many organizations that I engage with nowadays have given up on longer time span thinking like five-year thinking, or even two-year thinking, and they’ve collapsed down. So, the entire organization is trying to operate in very tight time cycles. And I think of this as like a way of saying that the thing that we need to do is sample reality more quickly, and then we’ll be able to follow the market quicker. I think that’s fine, to some extent. I think right now, if you look at it from an executive organizational theory problem, space, you end up in a slightly different place, though. Because a lot of that kind of agility that was deployed in the 90s and early 2000s, allowed certain teams to move fast and things like that. It’s all maneuver warfare theory, to some extent. And maneuver warfare works really well if you can move faster than your competitors. But when everybody can move equally fast, all it does is create chaos on the battlefield. There’s no stability of the battlespace itself.

So, I think that’s why I think there’s going to be and there needs to be a rethinking of commitments, again, I tend to think of platform plays as being we’re going to commit to creating certain components that will endure, not — they don’t need to become permanent, but they will endure for longer than an experiment or a feature. And they will have a stability that’s created by the interaction of multiple product teams. So, that stability, and what we put in that space becomes important. And then we need to keep these somehow plastic so that they can evolve themselves while accelerating the evolution of those separate teams. That’s a kind of a mid-term thinking. And then finally, again, from the executive view from the highest level view, where we start thinking about systemics, and ecosystemics. These are about how do we create organizations that are sustainable, that can sustain themselves over a long period of time, from the systemic and autopoetic of view.

But finally, I think with the types of political and environmental crisis is that we can foresee right now that I think you could easily argue that we are in an ecosystemic crisis right now that will accelerate, being sustainable won’t simply be a question of being profitable or being marketable. It will be whether or not the organization is capable of understanding their impact on those environmental concerns so that the transition in our organizations will move from not just being purely understood as being one of profit-making, but in fact will have to eventually become, if they truly want to be sustainable, will have to become — have to recognize that those longer-term commitments will end up having to do with ecosystemic crises that need to be managed as well.

Simone Cicero:
Certainly. I mean, seems like we should be witnessing the emergence of those communities of practice around how we organize in the 21st century. And it seems, to me, that, to some extent, we are starting to see this conversation around organizing. Still, I probably, the space of investing into infrastructure and doing it at scale, it’s fairly challenging. But there are some experiments emerging, at least in terms of enabling technologies, and let me talk about Commons Stack or Aragon, those players that are trying to build the programmable organizing, let’s say, pretty much around the commons, as you said. It will be interesting to see how existing incumbents evolve to integrate some of these into their missions. It will be interesting to see how new institutions emerge, new forms of institutions emerge, like creative commons or cooperatives or whatever, blockchain-enabled something. It’s going to be interesting to see how it unfolds.

And surely, as you said, how do we practice it socially together? How do we learn from each other? This is our responsibility, to some extent, now to develop as a conversation. So, it’s not going to come from existing institutions, that new development model that everybody is looking for, I think. So, that’s really a key point that we’re raising in this conversation. So, thanks for that. And then I mean, just as a final reflection, if you have something that you feel like, it’s important to add on these important questions that we have been debating. And then if you want to give our listeners a couple of pointers, for where to look into your latest work.

Jabe Bloom:
The point that I would try to leave people on is that this idea of sustainment, this idea of creating ecosystemic — maintain the ecosystemic possibility of human flourishing on the planet is entangled in these problems that we’re trying to talk about right now. And the transition towards those things will probably require a significant new way of rationalizing action on the planet, the way that we act on the planet. And that the dominant forms of rationality that we inherit from the enlightenment have led us very rationally to the place that we are currently at, on the planet in a relationship to our environment. I think design and the way that design works, and the way that design thinking and platform thinking and these other ideas go about thinking about the world are significantly different than traditional rationalities. And we need to develop those ways of being rational in the world with the recognition that we’re no longer primarily interacting as kind of humans in nature.

And in fact, the primary interaction that all of us have today with the world is highly mediated through artifice. Almost everything that we talk about, everything we touch, everything we interact with is deeply, deeply entangled in human intention about what people wanted the world to be like, not, in fact, some sort of natural evolutionary theory of how it is. So, with that being said, I think the thing that everybody should take a peek at, at some point is transition design. My program at CMU is interested in trying to understand the transition between those two ways of thinking, and I think that’s important. If you guys want to see who I am or you want to talk to me more, you can find me on Twitter, I’m @cyetain C-Y-E-T-A-I-N. And I have a website that I occasionally update which is Jabe.co Jabe, J-A-B-E.co. But thank you for having me to talk. I had a great time. Thank you so much.

Simone Cicero:
Good chat. Lots of important things that we debated, I think. Emanuele, do you have anything to add?

Emanuele Quintarelli:
No, I really find it exciting and I hope many more organizations who have listened to your words and follow your lead, be able to think we need that both for employees but more broadly for our world, to become a more welcoming place.

Simone Cicero:
Thank you, Jabe. And to our listeners, catch up soon