Lessons from Experiments in Decentralized Autonomous Organizations (DAO)

Understanding human dynamics — cultural software — to achieve the vision for decentralized governance and leaderless organizations

For those who managed to follow the travails of the Decentralized Autonomous Organization (DAO) vision and then demise of the Ethereum DAO project that lead to the Ethereum protocol fork, this series of articles explores the opportunity for cryptocurrency professionals and developers to take into consideration research and expertise from domains such as social sciences, for example anthropology, behavioural economics, psychology and neurosciences in the creation of their platforms and coded governance to achieve the full vision of the potential of democratic autonomous organizations.

The importance of establishing credible case studies and trust in decentralized organizations and governance

The rapid speed and volatile properties of the current emerging blockchain eco-system makes for a charged atmosphere. Participants experience disrupter technology pressures, such as continued accusations of not following the law, publicity on hack attacks, while also having to build use case studies and gain trust for winning over the mass market, governments, and investor communities.

Image: Manie Eagar: CEO Digital Futures

This new technology and its community are under rigorous scrutiny — some may say even more than the established incumbents. According to Coindesk, a recent Gartner report cautions and recommends firms understand issues surrounding blockchain governance, an issue it highlighted as a “critical factor” for adoption.

For digital currencies and blockchain technologies to continue to gain ground and trust, it is imperative that we pay more attention to the evolution of the people elements as these impact the technology development, which in turns creates the people dynamics and culture.

Neglecting human dynamics in a hyper connected world can multiply poor decisions like a chain reaction

As everyone interested in the blockchain networks have discovered by now — relying on technology alone cannot dissolve the hard problem of people issues in, for example, governance and decision-making.

In a hyper-connected world where poor decisions can multiply like a chain reaction, understanding human behavior has never been more urgent or important. Exponential technologies demonstrate how experimental technology escalate “people” issues and dynamics towards unexpected random and non-linear events.

In such turbulent environments we have already witnessed black swan events. “The black swan theory or theory of black swan events is a metaphor that describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The term is based on an ancient saying which presumed black swans did not exist, but the saying was rewritten after black swans were discovered in the wild.” (Wikipedia — August 23, 2016)

The vision of distributed and/or decentralized organizations

The promise of decentralization is to move us from a “my way” or “your way” to “our way” where we were able to tap the full potential of the group (or hive). These goals include mitigating the limitations of bias outside conscious awareness, approaching solutions from multiple perspectives and increasing diversity of thought.

Decentralizes aims to also enable the principals of inclusivity and vitality, based on worldview that the whole is greater than the sum of the parts. The theory is that it would result in superior solutions, better decision-making, processes, increased commitment to implement decisions made, or a combination of two or more of these and therefore establish a better future.

“Decentralization is often linked to concepts of participation in decision-making, democracy, equality and liberty from higher authority.[35][36] Decentralization enhances the democratic voice.[28] Theorists believe that local representative authorities with actual discretionary powers are the basis of decentralization that can lead to local efficiency, equity and development.”[37] Columbia University’s Earth Institute identified one of three major trends relating to decentralization as: “increased involvement of local jurisdictions and civil society in the management of their affairs, with new forms of participation, consultation, and partnerships.”[8] https://en.wikipedia.org/wiki/Decentralization

“Decentralized governance, refers to the restructuring or reorganization of authority so that there is a system of co-responsibility.”

Decentralized technologies are not just economic but social sciences experiments that look chaotic and possibly too disruptive to outsiders

Decentralized platforms are conceptualized and developed testing different ideas of not only of autonomous decentralized organizations, but also new decentralized governance for decision making, reward and business models for participation to achieve more fair, transparent and trust-worthy organizations.

Establishing decentralized governance and decision making for autonomous decentralized organizations is, as with the technologies itself, highly experimental.

Many people not in the thick of decentralized experiments are not always aware that these technologies are also social experiments captured and deployed as software code. Usually published as a white paper, such as Satoshi’s paper on Bitcoin which was designed to enable decentralized autonomous organizations — upon securing sufficient funding and resourcing the technologies are then developed, deployed and evolve.

This social sciences experiment is in the public domain, which results in further innovation and experimentation as new philosophies, platforms and apps are developed.

For outsiders not so deeply involved, this might look like chaos. Critics describe what they perceive as too disruptive, or assign what they observe happening in the public domain as lack of experience and real insight into how organizations should be managed.

This then becomes a feedback loop that self-reinforces the paradigm that decentralized systems are inherently inefficient, result in poor decision making and outcomes, have no governance and therefore limited trust, too complex and uncontrollable. In other words, maybe not worth the effort.

The most important consequence for the decentralized community is that first adopters become discouraged to further investigate, experiment and experience what decentralization really means and what the underlying untapped potential of it is.

And no amount of praise singing from credible experts will sway them, especially if they feel burnt through some investment, be it a use case development in their organization or as a direct investor. At the end people will naturally flock to experts and technologies developed by traditional and familiar incumbents.

Turning crisis into a positive learning opportunity will change the narrative in the public domain

Cryptocurrrency and blockchain experts have an opportunity to examine cognitive bias and pay more attention to the human dynamics inherent in the conceptualization, design and deployment of decentralized autonomous organizations and governance.

It is proposed that social sciences offer a currently untapped value to improve decentralized technologies. Examples include developing mechanisms for voting on funds disbursements, crisis management and critical decision making, such as the recent Ethereum decision to hard fork which unfortunately has resulted in a very public exposure of deep rifts within the blockchain community.

This includes decentralized networks having “crucial conversations” based on social sciences to “nourish community relationships and develop tools, skills and enhanced capacity to find better and new solutions to our problems”. (Crucial Conversations: Tools for Talking When Stakes Are High — Kerry Patterson, Joseph Grenny, Ron McMillan and Ai Switzler.)

Human resources domains also offer frameworks such as crisis leadership to deal with organizational crisis, such as recently experienced with the Ethereum DAO project’s hack.

Code it not only Law, but Code is also “Culture — the knowledge, beliefs, art, morals, customs, and material expression which, over time, expresses the continuities and discontinuities of social meaning of a life held in common” (Wikipedia)

The next article will explore the impact of leadership styles on decision making, and how it can result in unexpected resistance.

About this article

The purpose of this article is to support the cultivation of meaningful thought processes and encourage action based research to learn from real events during the we development of decentralized systems, technologies and organizations.

Talent management for the digital future

The race for attracting and retaining talented digital experts, is on. One of the elements that stand in the way of change and retaining high demand skills, are that current traditional talent practices that are widely used, were build for a previous age, IT platforms and organizational dynamics.  The modern era demands pragmatic, evidence informed yet light touch and some resourceful co-creation and learning while experimenting with new models, such as distributed leadership.

What this means right now for talent and people development strategies in the digital world

To attract, recruit, onbo041712.Tina.Seelig.Color.Innovation.Engineard, retain and grow digital futures talent you need to differentiate your business from others by providing a work experience aligned to the values and expectations of your community, your talent market, investors and customers. This includes thinking about and planning for people strategies that will enable rapid business scaling and change using contemporary models and practices.

Research from the Centre of Positive Organizations indicates that positive leadership and organizations create extraordinary performance through positive climate, positive relationships, positive meaning and positive communications. This does not mean a business where the negative does not get addressed – in fact positive organizations enables organizations to deal more effectively with challenges. Gallup studies shows that positive leadership creates

  • a more positive mood
  • enhanced job satisfaction
  • greater engagement
  • improved performance

Applying 21st Century Talent and People Strategies are less costly, more flexible and generate better results

Creating a scaleable, human-centered workplace will generate attractive work experiences and create a strong and committed leadership cohort and brand. Examples of new practices include:

  • Letting go of old-school job descriptions and instead targeting individuals through matching their strengths with your organization’s strength profile and values. This will ensure better, socially diverse and targeted candidates are attracted and you achieve a higher retention rate. It also creates a better brand and competitive differentiation.
  • Recruitment using strengths-based interviews while assessing core traits and experiences from a person’s past, capability – the abilities and technical skills that a person can do and capacity – the strengths, appetite and values that determine what a person would love to do (based on the high potential model from the Centre of Applied Positive Psychology).
  • Designing and developing lean, smart and better ways of assessing people by letting go of personality tests that do not predict success. For example, developing a deep understanding on how to assess for motivation and identifying genuine potential for success  through machine learning tools will give you the edge.
  • Applying strengths-based, realistic and high potential interviews, and combining it with an assessment of the past, the present and looking to the future, will help you to truly begin to understand a person and your teams’ potential (and areas for unique and customized growth).
  • Creative on-boarding for you and your new team member to ensure a smooth integration and clear easy first 90 day including a customized guidance plan and action steps for team members as well as critical stakeholders, such as clients or investors. This will make a new person feel welcome and productive while you set them up for success.
  • Designing your culture with neurosciences in mind to ensure your people are motivated and flourish. Using a behavioral science approach also increases individual, team and organizational awareness and improve decision making.
  • Developing team member’s unique strengths to enable them to achieve their full potential, and embedding a strengths-development and solutions focused mindset for competitive advantages in not only talent retention, but your growth and profitability.
  • Designing management practices, compensation and reward approaches aligned with unique talent segments in mind will help you retain the values and purpose your business is found upon. This means fair payment and a commitment to helping them grow their financial wellbeing so that they focus on the task at hand while being empowered to make a positive impact in the world.
  • New team onboarding, alignment and development plans, including team leadership development while working on projects and building your talent pipeline. This means truly valuing teams and cross-functional team work.
  • Creating positive exit experiences when people leave the organization. This will promote your reputation and generate a network of loyal alumni.

“In the beginner’s  mind there are many possibilities, but in the expert’s there are few.” Shunryo Zuzuki

Why EI is difficult for AI

….And what does it mean for you?

Artificial intelligence, machine learning and robots are expected to have a significant impact on our future.  Conversations are taking place about human skills that cannot be replicated by robots or software systems. Emotional intelligence, creativity and critical thinking are often quoted as examples of unique human attributes that will be valued for future work. And these will also evolve and be enhanced as we shape a new future at the intersection of humanity, technology and the natural world.

Can computers possess emotions and can they become emotionally mature?

Understanding emotions is critical for effective human interaction, to learn about people and the world in which we live. It is so important that Interactions between people can either increase their energy, or deplete it.

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Microsoft’s chatbot Tay

Some of the familiar areas of emotions and artificial intelligence is in the field of  “Affective Computing. This is computing that relates to, arises from, or deliberately influences emotion or other affective phenomena (Picard, MIT Press 1997).” A simple example of this can be the use of Facebook’s experiment to deliberately influence emotions to change user’s behavior. This can be used for positive impact (such as motivating to follow positive and healthy experiences) or for marketing and increasing shopping, which could lead to negative impact on individuals, communities and even the environment.

It is anticipated that Emotional Robots will be able to respond effectively to human emotions and provide care to, for example, elderly patients.

However, for Artificial Intelligence programs to merely influence, model and mimic emotions are not enough, as humans can quickly see through it. Here are some concepts about emotional intelligence that illustrate why human emotional capabilities will continue to be important for the unfolding robotic and artificial intelligence future.

Why emotional intelligence is difficult for robots and artificial intelligence

Emotional intelligence relates to your potential capability in the emotional domain.

Emotional competence is knowing how to separate healthy from unhealthy feelings, how to turn negative feelings into positive and the “upside” of your dark side (such as anger or anxiety). Research on emotions indicate that there are various aspects of emotions that can be developed, and that emotional response can become a conscious choice.

Emotional awareness is the ability to perceive, recognize, understand and react to the feelings of yourself and those of others. Unlike what most people believe, facial expressions are not a good universal indicator of reading emotions. Humans use a range of different cues to communicate to others how they feel, including facial, vocal, and gestural signals. Recent research indicates that “a number of primarily negative emotions have vocalizations that can be recognized across cultures, while most positive emotions are communicated with culture-specific signals”.

Emotional flexibility: One particular kind of flexibility that is of great interest to affective scientists is emotion regulation flexibility. In a nutshell, this flexibility captures people’s ability to use different emotion regulation strategies as the environment changes. This is important because the adaptiveness of regulation strategies changes as a function of contextual demands. It means 1) adapting to fluctuating situational demands, (2) reconfiguring mental resources, (3) shifting perspective, and (4) balancing competing desires, needs, and life domains.

Emotional literacy : The ability to distinguish between various feelings and to name them. To increase emotional literacy require personal increase in diverse experience of emotions and their unique qualities. Apart from the diverse range of emotions from excitement to boredom, there are also many subtle ones, such as feeling open to new ideas.

Emotional control: 1. The ability to express and control your emotions appropriately. 2. The ability to listen to others, to have empathy with them and to communicate effectively in terms of emotions and thoughts. 3. To use the information in directing your thoughts and actions 4. so that you live effectively, are motivated and have a goal in mind (relation between thoughts, feelings and behaviour.

Self-awareness is about observing yourself and recognizing a feeling as it happens.

Managing emotions: Handling feelings so that they are appropriate, realizing what is behind a feeling, finding ways to handle fears and anxieties, anger and sadness. Although this sounds simple, it requires significant empathy and skill, in particular emotional flexibility to know when to deploy what is considered a negative emotion (such as anxiety) or anger as these are as important for emotional health than positive emotions.

Motivating oneself: Channeling emotions in the service of a goal, emotional self-control, delaying gratification and stifling impulses. This requires self-awareness, self-knowledge and the ability to set goals.

Empathy is sensitivity to other’s feelings and concerns, and taking their perspective; appreciating the differences in how people feel about things. In particular empathy requires imagination.  “Empathy is the art of stepping imaginatively into the shoes of another person, understanding their feelings and perspectives, and using that understanding to guide your actions.” Roman Kriznaric

Handling relationships : Managing emotions in others, social competence and social skills. The ability to be aware of the needs and feelings of others and to use this awareness effectively in interacting with them and arriving at decisions impacting on them.

Emotional resilience The ability to perform well and consistently in a range of situations and when under pressure. Interpersonal sensitivity.

Emotional leadership is the inside-out and out-side in development of the emotional capability and potential of a person to improve influence over self and others. In other words, the continuous development of your emotional potential.  The emotional leader continues to develop his/her emotional intelligence competencies.

Emotions are embodied – Emotions are not purely cognitive. Emotions are also an embodied reaction – emotions can be changed through the body. When you have an emotional reaction to something (e.g. that email that makes you angry) that reaction doesn’t appear as an idea in your head, but as a feeling in your gut. It’s an ‘embodied’ reaction.  “From a scientific perspective we don’t think of emotions as just a feeling state, it is an embodied feeling state that comes with action, urges that comes with responses to change the situation or change our thoughts”. Dr Barbara Frederickson (MOOC Course in Positive Psychology and Positive Emotions) (February 2015) (Coursera)

Emotional intelligence and competence will be as important in the future as it is today…if not more so.

To be able to learn and understand humans, computer systems (as part of their learning) would need to not only learn about emotions and also be able to cultivate and express from genuine emotions, but also experience the qualities of emotions in their bodies and the bodies of others. And they will have to learn that from humans. For example, it will be difficult for a robot to experience what “a gut feeling” is and human would need to find a way to teach that.

Emotions, our mind and bodies are more complex than just cognitive functions or computer programs build on principles of entropy that inevitably are created through the lens of human bias.

The continued use of metaphors to describe our brain as a “computer” still falls short and hints at the old mechanistic view of the world.

People with high levels of emotional awareness, flexibility and literacy will be able to identify when emotions are manipulated by computer programs (such as the Facebook experiment or marketing campaigns) and be able to live more authentically and autonomously.

With the arrival of virtual reality and ARI, our ability to distinguish between computer generated emotional experiences and other “organic” such as animals and humans, will become more cultivated and sophisticated. This means opening new possibilities for paying attention to our emotional world which is full of richness, define what a good or not so good life is about, and deepen our connection to our “energy-in-motion” for achieving happiness, success and prosperity.

 

 

 

Design Thinking: An opportunity to reinvent learning and development

In the face of a fast changing and increasingly more complex world, many argue that creativity and innovation are crucial 21st century skills. Design thinking is capability that is gaining rapid adoption not only in Canada, but globally. This highly structured yet agile process not only enables creativity and innovation, but also a competitive differentiator that cannot be easily outsourced. It can be applied to develop new training programs, or to change the way training is delivered, or introduced as a simple process to embed a culture of experimentation, creativity and learning in an organization.  Training departments can offer it as a highly effective experience-based learning module for leaders at all levels in the organization.

For the HRMA Roundtable presentation, Human Resources professionals were given resources to

  • Explain design thinking and the benefits of design thinking to others
  • Reflect on the role of the training professional and how design thinking can be used to reinvent training and development and also create new programs in innovation in organizations
  • Use a simple design thinking tool – empathy mapping
  • Learn about a recent case study in BC where design thinking was applied to create a next generation Whole Person Leadership Development Program
  • Some lessons learnt on how to introduce design thinking into your own organization and clients

Watch the interview below with BC Human Resources Management Assocation about Design Thinking and Adult Learning.

 

 

Blockchain Adoption: Use your ‘noggin’ to get their heads ‘noddin’

Neurosciences of technology adoption and growth

Globally one of the key challenges to blockchain and new technology adoption and growth is to create awareness and passion outside of those in the “know” to engage with this new revolution.

Perceived as a risky and unknown technology, start-ups, innovation teams and investors often face significant effort to educate the market, overcome negative perceptions, address technology failures while also using scarce resources in developing new solutions and improving competitiveness and growth.

Research on the functioning of the brain shows that resistance to risky change is not only a psychological, but actually a physiological reaction. When the brain’s fear response is activated, rational and logical explanations about the benefits and opportunities will not always convince people to change their minds, even if it is the “right solution”.

Many a new project failed when impacted decision makers or influencers simply didn’t show up for demo-meetings (“sorry….we had to play golf with an important client.”), send juniors in to negotiate (“they will need to use the solution”, created onerous administrative hurdles to overcome (“our procurement policy…”) or demanded assurance that the solution has been tried and tested by others (“we need evidence that it works”).

Blockchain advocates and companies need to focus in particular on learning how to overcome resistance points to adoption. Understanding behavioural science and best practice change models and tools will help close the blockchain adoption gap and improve the rate of utilization to demonstrate the return on investment.

Blockchain and AI adoption challenges can be managed more effectively by innovators when they apply brain-based behavioural change models and principles to blockchain initiatives.

For a simple start, innovators  can apply global research from the world’s leading technology adoption and change experts to navigate a sequence of milestones, each requiring a different approach and tools for:

  • Increasing Awareness of the blockchain; leading to
  • Desire (willingness) to engage with blockchain technologies (answering: what is in if for me?);
  • Motivating them to Gain more Knowledge about the blockchain to understand it;
  • To be able to better Apply the blockchain technologies successfully to achieve the anticipated performance and outputs; and finally
  • Reinforcement activities to make the blockchain initiatives stick.

(Model from Prosci’s “ADKAR®  is a goal-oriented change management model that allows change management teams to focus their activities on specific business results.”)

What is in it? How will it help improve business growth?

By understanding how to brain responds and knowing how positive change can be achieved by improving the way people think about how to overcome resistance to change, blockchain startups and investors will gain advantages for their own blockchain services and products through

  • Improved and more effective business development and growth strategies based on brain-based models of human behaviour;
  • Strategic communication plans based on behavioural change tactics that will motivate target audiences to engage in a positive way with blockchain technologies;
  • Shortened time lines and decision making with key decision holders around blockchain technology Initiatives; and
  • Setting up blockchain initiatives for success by pro-actively managing risks of resistance by impacted groups to the technology.

MaRi Eagar is a Director and Founder of Digital Futures an independent strategic business and investment advisory and incubator that brings to bear many decades of deal shaping and making to the world of digital currencies, blockchain and financial technologies fuelling the growth of the digital economy.