Some excerpts from Dana’s post:

The impact of Web 2.0 technologies on the current global economic downturn will hasten the demise of closed and siloed corporate cultures while providing a reality-based balm on those companies that seek transformation and adaptation by tapping the wisdom of its communities.

These were some of the high-level observations from a chat I had this morning with Dr. David Friend, chairman, president and CEO of Palladium Group, a prominent performance management and consulting firm in Lincoln, Mass….

…the swift and severe economic recession predicted by economists and presaged by plunging stock valuations worldwide points to a difficult period of months and possibly years, said Friend. And that means that the decisions that companies and government agencies make during the tumultuous period will carry more impact, perhaps making the difference between organizations becoming adaptive survivors or calcified road kill….Companies in today’s increasingly “hot, flat and crowded world,” said Friend, need to make better decisions. Information alone does not do the job. A systemic and ingrained corporate capacity around decision making is needed…

…New tools, collectively grouped under Web 2.0, however, have emerged in just the past few years that could have a dramatic bearing on how companies newly react to the pressures of the economic contraction. Severe downturns act in a Darwinian fashion, weeding out the ill-adapted and weak, and rewarding the fittest and agile. Web 2.0 will aid the agile and open while placing those who don’t use tools such as blogs, wikis, podcasts, social networks at a disadvantage, said Friend…

…For those companies that, by culture and tradition, act as dictatorships, with decisions that emanate from the top and which punish countervailing information from reaching decision makers, they will not benefit from the wellspring of information available from employees, customers, partners, and even competitors. Those who avoid or undermine the benefits of Web 2.0 tools will lack the information that leads to better decisions, will miss the ongoing refinement of strategies by those witnessing their impacts.

The power is in the “democratization of information,” said Friend, and then of placing that information in the context of proper decision-making. The flow of information and its exploitation for the business’s benefit will hasten the decision cycles, for better or worse, said Friend.

http://blogs.zdnet.com/Gardner/?p=2746

Figure 1 Taleb’s  classical metaphor: A Turkey is fed for a 1000 days—every day confirms to its statistical department that the human race cares about its welfare “with increased statistical significance”. On the 1001^st day, the turkey has a surprise.

Figure 2 The graph above shows the fate of close to 1000 financial institutions (includes busts such as FNMA, Bear Stearns, Northern Rock, Lehman Brothers, etc.). The banking system (betting AGAINST rare events) just lost > 1 Trillion dollars (so far) on a single error, more than was ever earned in the history of banking. Yet bankers kept their previous bonuses and it looks like citizens have to foot the bills. And one Professor Ben Bernanke pronounced right before the blowup that we live in an era of stability and “great moderation” (he is now piloting a plane and we all are passengers on it).

Taleb, looking at the current banking crisis, points out that “the banking system, betting against Black Swans, has lost over 1 Trillion dollars (so far), more than was ever made in the history of banking”.

His essay does however helpfully provide a map outlining where statistics can be valuable and where they should be discarded.

We can identify where the danger zone is located, which I call “the fourth quadrant”, and show it on a map with more or less clear boundaries. A map is a useful thing because you know where you are safe and where your knowledge is questionable. So I drew for the Edge readers a tableau showing the boundaries where statistics works well and where it is questionable or unreliable. Now once you identify where the danger zone is, where your knowledge is no longer valid, you can easily make some policy rules: how to conduct yourself in that fourth quadrant; what to avoid…

…The “wisdom of crowds” might work in the first three quadrant; but it certainly fails (and has failed) in the fourth.

Read: THE FOURTH QUADRANT: A MAP OF THE LIMITS OF STATISTICS

I list the Manifesto’s 95 theses again here for your consideration:

   1. Markets are conversations.

   2. Markets consist of human beings, not demographic sectors.

   3. Conversations among human beings sound human. They are conducted in a human voice.

   4. Whether delivering information, opinions, perspectives, dissenting arguments or humorous asides, the human voice is typically open, natural, uncontrived.

   5. People recognize each other as such from the sound of this voice.

   6. The Internet is enabling conversations among human beings that were simply not possible in the era of mass media.

   7. Hyperlinks subvert hierarchy.

   8. In both internetworked markets and among intranetworked employees, people are speaking to each other in a powerful new way.

   9. These networked conversations are enabling powerful new forms of social organization and knowledge exchange to emerge.

  10. As a result, markets are getting smarter, more informed, more organized. Participation in a networked market changes people fundamentally.

  11. People in networked markets have figured out that they get far better information and support from one another than from vendors. So much for corporate rhetoric about adding value to commoditized products.

  12. There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.

  13. What’s happening to markets is also happening among employees. A metaphysical construct called “The Company” is the only thing standing between the two.

  14. Corporations do not speak in the same voice as these new networked conversations. To their intended online audiences, companies sound hollow, flat, literally inhuman.

  15. In just a few more years, the current homogenized “voice” of business—the sound of mission statements and brochures—will seem as contrived and artificial as the language of the 18th century French court.

  16. Already, companies that speak in the language of the pitch, the dog-and-pony show, are no longer speaking to anyone.

  17. Companies that assume online markets are the same markets that used to watch their ads on television are kidding themselves.

  18. Companies that don’t realize their markets are now networked person-to-person, getting smarter as a result and deeply joined in conversation are missing their best opportunity.

  19. Companies can now communicate with their markets directly. If they blow it, it could be their last chance.

  20. Companies need to realize their markets are often laughing. At them.

  21. Companies need to lighten up and take themselves less seriously. They need to get a sense of humor.

  22. Getting a sense of humor does not mean putting some jokes on the corporate web site. Rather, it requires big values, a little humility, straight talk, and a genuine point of view.

  23. Companies attempting to “position” themselves need to take a position. Optimally, it should relate to something their market actually cares about.

  24. Bombastic boasts—”We are positioned to become the preeminent provider of XYZ”—do not constitute a position.

  25. Companies need to come down from their Ivory Towers and talk to the people with whom they hope to create relationships.

  26. Public Relations does not relate to the public. Companies are deeply afraid of their markets.

  27. By speaking in language that is distant, uninviting, arrogant, they build walls to keep markets at bay.

  28. Most marketing programs are based on the fear that the market might see what’s really going on inside the company.

  29. Elvis said it best: “We can’t go on together with suspicious minds.”

  30. Brand loyalty is the corporate version of going steady, but the breakup is inevitable—and coming fast. Because they are networked, smart markets are able to renegotiate relationships with blinding speed.

  31. Networked markets can change suppliers overnight. Networked knowledge workers can change employers over lunch. Your own “downsizing initiatives” taught us to ask the question: “Loyalty? What’s that?”

  32. Smart markets will find suppliers who speak their own language.

  33. Learning to speak with a human voice is not a parlor trick. It can’t be “picked up” at some tony conference.

  34. To speak with a human voice, companies must share the concerns of their communities.

  35. But first, they must belong to a community.

  36. Companies must ask themselves where their corporate cultures end.

  37. If their cultures end before the community begins, they will have no market.

  38. Human communities are based on discourse—on human speech about human concerns.

  39. The community of discourse is the market.

  40. Companies that do not belong to a community of discourse will die.

  41. Companies make a religion of security, but this is largely a red herring. Most are protecting less against competitors than against their own market and workforce.

  42. As with networked markets, people are also talking to each other directly inside the company—and not just about rules and regulations, boardroom directives, bottom lines.

  43. Such conversations are taking place today on corporate intranets. But only when the conditions are right.

  44. Companies typically install intranets top-down to distribute HR policies and other corporate information that workers are doing their best to ignore.

  45. Intranets naturally tend to route around boredom. The best are built bottom-up by engaged individuals cooperating to construct something far more valuable: an intranetworked corporate conversation.

  46. A healthy intranet organizes workers in many meanings of the word. Its effect is more radical than the agenda of any union.

  47. While this scares companies witless, they also depend heavily on open intranets to generate and share critical knowledge. They need to resist the urge to “improve” or control these networked conversations.

  48. When corporate intranets are not constrained by fear and legalistic rules, the type of conversation they encourage sounds remarkably like the conversation of the networked marketplace.

  49. Org charts worked in an older economy where plans could be fully understood from atop steep management pyramids and detailed work orders could be handed down from on high.

  50. Today, the org chart is hyperlinked, not hierarchical. Respect for hands-on knowledge wins over respect for abstract authority.

  51. Command-and-control management styles both derive from and reinforce bureaucracy, power tripping and an overall culture of paranoia.

  52. Paranoia kills conversation. That’s its point. But lack of open conversation kills companies.

  53. There are two conversations going on. One inside the company. One with the market.

  54. In most cases, neither conversation is going very well. Almost invariably, the cause of failure can be traced to obsolete notions of command and control.

  55. As policy, these notions are poisonous. As tools, they are broken. Command and control are met with hostility by intranetworked knowledge workers and generate distrust in internetworked markets.

  56. These two conversations want to talk to each other. They are speaking the same language. They recognize each other’s voices.

  57. Smart companies will get out of the way and help the inevitable to happen sooner.

  58. If willingness to get out of the way is taken as a measure of IQ, then very few companies have yet wised up.

  59. However subliminally at the moment, millions of people now online perceive companies as little more than quaint legal fictions that are actively preventing these conversations from intersecting.

  60. This is suicidal. Markets want to talk to companies.

  61. Sadly, the part of the company a networked market wants to talk to is usually hidden behind a smokescreen of hucksterism, of language that rings false—and often is.

  62. Markets do not want to talk to flacks and hucksters. They want to participate in the conversations going on behind the corporate firewall.

  63. De-cloaking, getting personal: We are those markets. We want to talk to you.

  64. We want access to your corporate information, to your plans and strategies, your best thinking, your genuine knowledge. We will not settle for the 4-color brochure, for web sites chock-a-block with eye candy but lacking any substance.

  65. We’re also the workers who make your companies go. We want to talk to customers directly in our own voices, not in platitudes written into a script.

  66. As markets, as workers, both of us are sick to death of getting our information by remote control. Why do we need faceless annual reports and third-hand market research studies to introduce us to each other?

  67. As markets, as workers, we wonder why you’re not listening. You seem to be speaking a different language.

  68. The inflated self-important jargon you sling around—in the press, at your conferences—what’s that got to do with us?

  69. Maybe you’re impressing your investors. Maybe you’re impressing Wall Street. You’re not impressing us.

  70. If you don’t impress us, your investors are going to take a bath. Don’t they understand this? If they did, they wouldn’t let you talk that way.

  71. Your tired notions of “the market” make our eyes glaze over. We don’t recognize ourselves in your projections—perhaps because we know we’re already elsewhere.

  72. We like this new marketplace much better. In fact, we are creating it.

  73. You’re invited, but it’s our world. Take your shoes off at the door. If you want to barter with us, get down off that camel!

  74. We are immune to advertising. Just forget it.

  75. If you want us to talk to you, tell us something. Make it something interesting for a change.

  76. We’ve got some ideas for you too: some new tools we need, some better service. Stuff we’d be willing to pay for. Got a minute?

  77. You’re too busy “doing business” to answer our email? Oh gosh, sorry, gee, we’ll come back later. Maybe.

  78. You want us to pay? We want you to pay attention.

  79. We want you to drop your trip, come out of your neurotic self-involvement, join the party.

  80. Don’t worry, you can still make money. That is, as long as it’s not the only thing on your mind.

  81. Have you noticed that, in itself, money is kind of one-dimensional and boring? What else can we talk about?

  82. Your product broke. Why? We’d like to ask the guy who made it. Your corporate strategy makes no sense. We’d like to have a chat with your CEO. What do you mean she’s not in?

  83. We want you to take 50 million of us as seriously as you take one reporter from The Wall Street Journal.

  84. We know some people from your company. They’re pretty cool online. Do you have any more like that you’re hiding? Can they come out and play?

  85. When we have questions we turn to each other for answers. If you didn’t have such a tight rein on “your people” maybe they’d be among the people we’d turn to.

  86. When we’re not busy being your “target market,” many of us are your people. We’d rather be talking to friends online than watching the clock. That would get your name around better than your entire million dollar web site. But you tell us speaking to the market is Marketing’s job.

  87. We’d like it if you got what’s going on here. That’d be real nice. But it would be a big mistake to think we’re holding our breath.

  88. We have better things to do than worry about whether you’ll change in time to get our business. Business is only a part of our lives. It seems to be all of yours. Think about it: who needs whom?

  89. We have real power and we know it. If you don’t quite see the light, some other outfit will come along that’s more attentive, more interesting, more fun to play with.

  90. Even at its worst, our newfound conversation is more interesting than most trade shows, more entertaining than any TV sitcom, and certainly more true-to-life than the corporate web sites we’ve been seeing.

  91. Our allegiance is to ourselves—our friends, our new allies and acquaintances, even our sparring partners. Companies that have no part in this world, also have no future.

  92. Companies are spending billions of dollars on Y2K. Why can’t they hear this market timebomb ticking? The stakes are even higher.

  93. We’re both inside companies and outside them. The boundaries that separate our conversations look like the Berlin Wall today, but they’re really just an annoyance. We know they’re coming down. We’re going to work from both sides to take them down.

  94. To traditional corporations, networked conversations may appear confused, may sound confusing. But we are organizing faster than they are. We have better tools, more new ideas, no rules to slow us down.

  95. We are waking up and linking to each other. We are watching. But we are not waiting.

Visit the Cluetrain Manifesto Website

The event  consists  of a series of policy dialogues and panel sessions on the first day (yesterday),which showcased a variety of perspectives on key issues, including the use of technology to drive development; understanding what is in the mind of ICT entrepreneurs; and how the new media and content are shaping the landscapes of business and economics in developing countries. Today’s session  will include an Investors Forum, showcasing emerging business and investment opportunities in information and communication technologies in developing nations, including ICT initiatives from countries across Africa, Asia, the Americas, the Middle East, the Pacific, the Caribbean, and Eastern Europe.

The UN hope Participants will learn how new media and content are shaping the landscapes of business, economics and policy in developing countries; learn about global ICT opportunities; and understand what is in the mind of ICT entrepreneurs and investors.

The event will be attended by representatives of governments, business and industry, academia and professional institutions, non-governmental organizations and media.
http://www.un-gaid.org/en/node/1347

View the event programme

Ranking for foreign direct investment is on slide

Ireland’s foreign direct investment (FDI) ranking fell four places to 14th out of 30 countries in 2007, according to a survey from National Irish Bank and OCO Consulting.

But the index, which is adjusted to take the size of a country into account, also showed that Ireland was one of the leading developed economies, falling below only Australia. The US ranked 21st and the UK 25th.

According to Ronnie O’Toole, chief economist, National Irish Bank, Ireland continues to outperform virtually all major developed economies when adjusted for size.

Ireland attracted a particularly high share of projects involving research and development (R&D) in 2007, with around 12pc of jobs won involving a significant element of R&D.

According to Mark O’Connell, chief executive of OCO Consulting: “R&D projects are the cream of inward investment projects globally, and investment projects involving a significant R&D content are highly prized amongst governments and development agencies.

“The strong performance of Ireland in this regard in 2007 is particularly notable given the fact that this is an area where historically Ireland has not performed so well.

Link