Hello there, friend!

In our current ever-more-VUCA world, our traditional ways of organizing ourselves into bigger groups to handle complexity are breaking down. The two "archetypes" of such traditional ways are Hierarchy and Market (or Babylon and Mammon, in Jordan Hall's words).

The insufficiency of hierarchical forms is quite simple to describe – when information and questions flow from the bottom up and decisions flow from the top down, a lot gets filtered out with every level of the hierarchy (partly because of compression, partly because tacit information cannot be passed up at all). In addition, there is a delay between when a question about what to do arises and when an answer is received. This wasn't such a problem in more stable environments when the higher-ups could simply create rules for their subordinates to follow, but today's complexity creates far too many exceptions for such an approach, revealing clearly the problems of filtering and delay.

The problems of the alternative – markets – are a bit more complicated. Markets are in theory great at coordinating many independent actors, all of whom can be pursuing their self-interest, in a way that optimizes the production of goods and allocation of resources. However, there are several problems poking holes in this theory.

First, markets are not ideal for producing and distributing knowledge. This is because they rely on private property, on people being able to get value from what they produce. They also assume that the best way to allocate scarce goods is by giving them to those who are willing to pay the most. But because knowledge is a public good, i.e. it isn't consumed with use, markets in a knowledge economy face a dilemma: they can either optimize the production of knowledge by setting up strong property rights and thus limiting how many people can access it (suboptimal allocation), or they can let knowledge be shared freely and thus undermine the incentive for the creation of new knowledge (suboptimal production).

Second, there are known market failures even without the production-allocation dilemma of public goods. While governments can theoretically prevent the problems created by monopolies, they haven't yet found a solution to the power of companies to fabricate bullshit needs via marketing and addictive products. What's more, markets are so far absolutely terrible at pricing-in externalities, so even without being driven by bullshit needs, we are unable to accurately express what we value via our purchases.

In response to these failures of both hierarchies and markets, a third "archetype" emerged – collaborative community. Where hierarchies rely on authority and markets on price, collaborative communities rely on trust. Trust that people who are in the closest contact with a problem are also best able to solve it. Trust that when granted the autonomy to make their own decision about what to work on and how, people will step up to the responsibility asked of them. Trust that contributing to the community is the right thing to do, regardless of whether you'll be able to reap any personal benefit from it, and trust that everyone else would do the same. Trust that people are able to self-organize even in the absence of managers.

This allows collaborative communities to benefit from both the distributed cognition of markets and the incentive alignment of hierarchies while avoiding their problems. Because people make decisions for themselves, they don't have to wait for someone else to decide, nor try in vain to convey the nuance of the problem they are facing. And because they don't have to worry about extracting maximum value out of what they create, they don't have to worry about the production-allocation dilemma and just create what's useful. And obviously, trust is not limited just to pure collaborative communities (if those even exist) – it can be infused into both hierarchies and markets, to afford semi-autonomous units and trusted partnerships, unlocking the benefits of lower control and transaction costs.

However, the level of trust required to enable all that would be a big ask for any group. What would be required are both people and systems that can mutually afford such trust-based functioning. So next time, I will try to provide a very rough sketch of what that might look like (btw, the next time will likely be in 2 weeks).

Last week’s dig-ups

Personal metawork

• According to this essay, AI is primarily a reasoning engine, not a knowledge database, so feeding it the right knowledge is essential for the best results. A cool conclusion the author makes is that having your own database of saved resources that you either want to read or read and annotate will let you get the best possible results from AI. So you should definitely be using some read-later app – I use and strongly recommend Reader

• And since we’re on the topic of personal knowledge management tools, you might have noticed that the podcast app I use is Snipd. What’s great about it is that it lets you easily make highlights of the most interesting moments in an episode, share them with others, and even export the AI-generated transcript to your notes app. They recently released some social features to help users explore the highlights made by others, so if you want, you can follow me here.

Collective metawork

• Bonnitta Roy says that groups trying to facilitate the growth of their members work better if the growth is subordinate to some higher purpose of the group. This seems to imply that workplaces can indeed be the perfect space for the cultivation of wisdom.

• Here, also Bonnitta Roy says that the 3 main principles for adaptive organizations are:

  • Organize in a way that maximizes sensing your environment

  • Lower the threshold for action

  • Align sense-making up the hierarchyEntrepreneurship

• This episode of the Digital Writing podcast is full of gems about using educational email courses in your sales funnel, the main being their 6-step sales email sequence. Roughly it goes like this:

  • Email 1: Transformation – explain where the person can be in a year if they take action

  • Email 2: ROI – the more you want to charge, the more you have to provide proof of high ROI (make an offer they would feel stupid refusing)

  • Email 3: Price anchoring – explain all the value you're providing, anchor it to offers of similar value that are much more expensive

  • Email 4: show empathy, that you understand all the challenges of your customer. Then show how you solve them

  • Email 5: FOMO – show all the success stories of your past clients, show what they're missing out on.

  • Email 6: Recap – summarize the previous 5 emails and make a final call to action

Philosophy & Sense-making

• Guy Sengstock is a creator of Circling, a method of fostering deep, transformative conversations – they talk about the importance of true listening and explain how Circling works

• This whole conversation between Daniel Schmachtenberger, Jamie Wheel, and Jordan Hall about collective intelligence and sense-making is just brilliant. If you like it, I definitely recommend looking up any lectures and podcasts with any one of them.

Reflection

• This is hardly a new discovery, but it's still worth repeating – there's a massive difference between how much I absorb and remember when I just listen to a podcast while doing something else, and when I watch the video version while taking notes

• My sister gave me a great idea of getting the first draft out by just letting my thoughts flow with absolutely zero regard for editing. If I feel like jumping to a completely different topic mid-paragraph, then that's exactly what I'll do, no matter how random it is. If I can't quite articulate some argument or connection, I will write that I can't quite articulate it and keep going, not giving the gap a second thought. This is a great way of unblocking myself and for starting to order my thoughts, so I'm definitely going to be using this more and more, probably even just for my own learning.

• Also, I really need to start writing these earlier than on Tuesdays, so that I don't have to publish when it's actually already Wednesday for an hour 😏 Somehow I keep underestimating how long the write-up will take me

And that's it! Let me know what you liked and what was unclear, and I'll see you here next week! (I'm planning to send the curation at least, even if I don't manage to write the essay).

Have a great week

Chris