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A group picture...

A lunch together...

Then, a final exercise to learn about complex systems...

Additional tools and concepts

• Pareto and the 80/20 rule
• Recency, Frequency, Monetary: the three dimensions of the value of a customer
• Innovation adoption
• Crossing the chasm 
• A key issue for getting to the acceleration component of the S curve
• Market: Need + Ability to Pay + Market size
• People percieve 3 data points as a trend
• Signal to noise ratio
  
• Leading and trailing indicators (metrics) A key customer metric: Customer recommendations (Learn more about loyalty marketing)
  

New Media

The Internet is our first interactive mass medium. That provides opportunity for conversations with customers.  Its a double edge sword, though. Welcome to the world of transparency.

Chris points to a video: "Comcast technician sleeping on my couch"

He points to Skype, Facebook, blogs, Twitter, wikis, Second Life.

We are now dealing with a case study that puts economic development into a broader context of a community and region facing economic transformation.

When developing a program, you need to determine whom you will serve. The decision on the market focus determines the tools mix.

There are two types of payoffs to consider in decidining which : job payoffs and pollitical payoffs.

Served markets

• Start-ups
• jobs impact: low
• political impact: low
  
• Local (mom and pops): Tools focus: Marketing databases and GIS, temperment introductions
  
• jobs impact: low
• political impact: high (the constant stream of "love letters" can keep an EG program alive.)
  
• Export/Growth Tools focus: Industry trends, competitor analysis, temperment one on one
  
• jobs impact: high
• politics impact: high
  

Perfromance considerations: EG programs need to measure delivery times in hours, not days or weeks. The key point is to get the first stuff out fast. Speed and delivery is critical to image management. By focusing on delivery, you communicate a messsage the "we are a trusted partner". EG Littleton does not focus on developing an image branding. Because the city is small, branding comes from the people in the EG program.

Retention

We have had a good discussion on whether EG can or should be marketed as "rtetention". Chris says no, because retention issues are about moving, not about growth. Others see retention as a a broader strategy of helping existing companies solve problems. The challenge commes indefining "retention", and, so far, there are no clear definition.

S Curve

Chris introduces the S curve to help us understand how the S Curve helps you understand where companies are in their life cycle. The issues is not to focus on companies that are too far gone. "When your firstget lost in the woods, your tendency is to run."

EG Focuses on the Key Growth Drivers of Innovation

• Core strategy
• Management
• Marketing strategy
  

Getting things done in a public arena

Public sector is very different from private secrtor. The public sector: no one can tell anyone what to do. The core issues:

Information

• How you use information in a public arena.
  
• The issue is not control of information (a private sector perspectives), but using information in the framing of ideas and issues. 
• Storylines are critical. Information is more meaningful embedded in a story.
• Every presentation restates the storyline: Each presentation is the next chapter of the storyline
• Media: Be a trusted source of information and context
• Use background briefings and ocnversations to keep them up to speed: Mis-stories happen when reporters do not have enough context
  
• Think about headlines
• Inquire about the storyline
• Structure the interview to get your messages/storylines across around the headlines
• Businesses: Insider information
• Kiplinger style: urgency and authenticity
• Develop reputation as the "trusted source": Need to tell them the bad and good news. Do not deny the facts, but after stating negative facts, come back to your story line. 
• Political leaders: Set up feedback loops
• Drip irrigation: regular drips: not event driven: small drips in all channels
  
• Stats and stories
• Don't tell me; tell my boss
• Keep the elected officials in the spotlight

Politics

Think of the Bell Curve. Small group of passionates. Most people aren't paying attention. And some small segment of opponents.

• Dealing with the Opponents
• Futility of the frontal attack against your oppponents
• Wander into the enemy camp andtry to find common ground: Focus on the common ground
  
• More questions, less opinions
• Conceptual discussions tend to lead to arguments...focus on personal experiences, field visits
• Learn to spot the critical moments...

Getting results

Not a shortage of money. Good ideas are simple, robust and resonate. Always use pilots. You can shut it down easily (no embarrasment and risks). Work out bugs in a smll scale.

Don't cross big thresholds: big money, big politics, big media

Be patient, but persistent. Wait for events to unfold (brew time). Keep low key but persistent. When the door opens, move quickly.

Focus on trends, not events. (In human terms, three points make a trend. Three strikes and your out.) Do not worry about a loss, but focus on the trends.

Results in biological systems happen as aparabolic function.

We're starting out with Chris reviewing what we've covered.

For most of us, the discussions we had yesterday helped all of us start thinking about implementation.

We broke into four groups: urban, rural, universities and regional. Each group focused on the details of how to implement EG within that context.

In addition, the case discussion we had yesterday helped us all focus on the integration of these tools into a "live" context.

We are talking about how do we keep our network together.

We are also trying to focus on "What do I do on Monday morning?"

We had an exercise yesterday, River Tweed, that helped us understand complex systems (the edge of chaos) and the balance required between how tightly or loosely an organization gets managed.

Temperment

There are four dimensions of temperment. Management problems arise with the wrong slotting. ("Getting the right people in th eright seats".)

Complexity

Difference between biological systems and mechanical systems. Each have their own rules. Trouble arises in applying mechanical solutions to biological problems. You need to innovate in biological systems in order to survive. The fitness landscape helps us understand how learn. Exploit the opportunities you have found and explore for new opportunities. Learning requires un-learning.

One of the great features of the Lowe Foundation training has been the oppportunity to connect with folks from across the country.

Each day ends at Lowe around the campfire.

We have the opportunity to connect, reflect, eat s'mores.

The days have been full. A lot of material during the day. Early mornings. Activities until 8:30 or 9:00 each night.

We've learned, thoough, that some of the most important experiences happen informally. When we have time to connect.

Photo: Steve Russell

Chris is describing the Jumpstart team to get immediate results on an EG program. Estimates costs for each of the three companies $125/hour.It's all in beta now. Hopefully, this process will lead to a good linkage between the resource people (JumpStart team) and the client. This is a core relationship that has to be carefully managed.

The Jumpstart team involves three companies involving:

• Market Research: Database Research
• GIS
  
• Search Engine Optimizaation

The initial contact person has key characteristics: s/he must be enthusiastic...filled with pasion for the EG game. Managing this relationship is critical to the success of an EG program. 

Not everything is work at the EG Training. Saturday evening after dinner, we played Pickle Barrel golf. The tournament was "best ball". One trick: if you lose a ball in the high grass, your team adds five strokes to the score.

Photos: Steve Russell

Chris is leading a discussion on the different types of EG programs. We are heding off on a discussion. We have broken the initiatives into three groups:

Photo: Steve Russell

• Urban: current culture; concentration of companies; ease of identifying companies (more ED organizations competing in the space); entry points; access to resources (more);
  
• Rural: current cultrue; silver bullet mindsets; competiong companies; stage of companies; entry points; access to resources (less);
• Regional: current culture; partnerships; ole of the governor, political cycles
  

Chris is going through some of the history of the Santa Fe Institute and complex adaptive systems. Distinguish mechanical (short term, logical) and biological thinking (long term, adaptive). 

Businesses run on both. The problem comes is applying mechanical thinking to biologial systems (customers, employees). Know which system you are dealing with, so that you know whatrules to apply.

Complex adaptive systems

Key properties of complex adaptive systems:

• emergence properties
• adapting to adaptations
• operating at the edge of chaos:
  

• Biological systems are most likely to survive at the edge of chaos

Signatures of Complex Adaptive Systems

• States of criticality
• Sub criticality
• Super criticality
• Criticality
• Power Laws
• Punctuated equilibrium 

Biological systems tend to maintain themselves. They have immune responses. They are interconnected, and, therefore, they will have unintended consequences.

Biological systems have a capacity to absorb external shocks.

Biological systems require less planning and more adaptation.Fast growth companies operate at the edge of chaos. The most vibrant economies operate at the edge. There are lots of churn in these vibrant economies. In contrast, stable economies are dying. ("Stability is death.")

Linear change v. parabolic change (biological)

The process of innovation

Innovation is the only way to build competitive advantage. Nature innovates in this way: A fitness landscape. A design that can survive in an envirnonment.

The challenge: We cannot see the fitness landscape. We are operating on an moonless night.

We idenitify the landscape through a process of explotation and exploration.

• Exploration strategy
• Exploitation strategy

Mostly local random walks. Occaisional random jumps.

In stable, commodity markets, experience and execution counts. Experience curve operates. Coordinate sequencial tasks and parallel processes.

In volative markets, exploration counts. Lots of little joms, a fe wbig jumps. Lots ossmall bets and double up on winners. Flexible leadership counts. Objective is to create knowledge an innovate.

There's a useful exercise we are doing on bringing the EG tools together within the context of a case study. The case study involves a micro-brewery trying to move from Stage 1 to Stage 2.

The threshold issue is "What class of business problem are we handling?" EG only handles a certain category of business problems. (Exclude: legal issues, finance issues -- in Littleton's case, sucession's issues).

On the legal issue: Don't get into the liability chain. Also, include the disclaimer clause in a EG Service Agreement.

The threshold core strategy issue: Is company's core strategy based on a specialty niche? If so, what are the dimensions of speciality? Will people pay more for these characteristics? 

EG Issues:

• Management
• Core Strategy
• Market

The big challenge is to translate your EG insights into the language that the client can learn.

The plan for this morning has been slightly revised, based on a discussion we had at dinner lst night. Chris is going to start with a presentation on temperment.

These tools are particularly helpful in guing companies to building effective teams. This set of tools helps companies understand their human resource function and build their management team. You can also apply these insights to the marketing function to understand customers and how you structure the customer experience and communicate with your customers through marketing. 

• Most internal problems to businesses can be traced to temperment issues or systems issues.
  

• Everyone has a temperment filter. Comunication passes through two filters: Your speaker's filter and your recipient's filter.
  

Chris recommends:

• David Keirsey web site
  
• Keirsey's book: Please Understand Me
• Another participant recommends: Do What You Are

The key points:

• Play to your strengths and manage your weaknesses: We can see in one direction really well; we can be aware or blind to other viewpoints
  
• Respect others weaknesses
• Conflicting perspectives are inherent in any team: You manage conflicts by surfacing disagreements and agreeing not to play the game of blame
  

Myers Briggs preferences:

• Introversion<--->Extroversion (Key Question: Source of Energy Where do you get your energy?)
  
• Sensing <--->Intuition (Key Question: Here/now 75% versus possibilities 25%
  
• Thinking <--->Feeling (Impersonal, Analytic mostly male versusPersonal, Connection mostly female. Are we focused on the individual or the connections)
• Judging<--->Perceiving (50%/50% split) (Control, time sensitive v Freedom time blind)
  

We look at two larger categories:

• SJ Guardians (think George Bush SR):
• Sense of obligation
• Clear right and wrong
• Loyalty
• Safety and security are core concerns
• See how things can go wrong
• Cautious
  
• Resistent to change
• Hierarchy with clear signals in Guardian organizations
  
• IP Artisans (think Mick Jagger)
  
• Freedom
• Low tolerance for stress
• Avoid confrontation
• Just Do It: Action Oriented: X Games
  
• Work is play
• NT Ratonals
• Understand, predict, explain
• Info junkies
• NF Idealists
• Helping others
• Great sense for people

Categories:

• SP: Tactical
• SJ: Logistical
• NT: Strategic
• NF: Diplomatic

We tend to characterize other temperments in negative terms, but every communication we make or receive is viewed from a distinct point of view.