Signaling Intent

I’m big on signaling. Whether explicit (turn signals) or implicit (body language), signals help me navigate the world — usually granting me either some form of opportunity, safety, or both.

Signals are our most basic communication platform. Be it 0’s and 1’s or smoke signals, we humans often find the ways to communicate simply what we can’t otherwise say.

However, if we want to have a significant chance at re-imagining our education system, transforming the health of our citizens, and making our communities more prosperous, silence is not an option:

Signaling intent and working out loud is a critical component to social system transformation.

Here’s why:

Signaling and Social Systems

First, signals are a critical tool for building and transforming complex social systems. We all know how ants use signals to build complex colonies and organize resources. They use pheromones to signal danger and food sources, the need for troops, and opportunities to attack prey.

In short, signals help the ants work in the dark and without words. Signals enable the ants to, as Len Schlesinger would say:

Act their way into knowing.

This ability is critical when it comes to innovation — a sport that is inherently about not knowing what the future state should be, about working in the dark, about being able to iterate our way into new possibilities. This can be a scary and intimidating prospect.

In our social systems, BIF creates open platforms that signal that transformation is possible. Our mission is to help leaders get better, faster at transformational change in the places that touch people’s lives the most — healthcare, education, and community. Our labs are real-world platforms for the R&D of new business models. These are public platforms — that share learnings to inspire and help leaders across social systems.

To this end, we believe in working out loud; we tweet, blog, and share the design happening in real time. We create real-time visibility into the exploration of new business models. Seeing the “sausage being made” inspires others, provides a “we can do that too” mentality. In short, it builds the understanding that business model innovation is not as scary and hard as we tend to think.

Signals and Value Chains

Second, signaling enables value chains (and infrastructure) to evolve around an emergent business model. At BIF, we use the business model as the unit of system transformation. If a business model is a network of capabilities woven together in a sustainable business model, a system is a network of business models also woven together through a sustainable value chain.

If a company or institution is going to transform its business model, it has to signal to the system that a specific shift is ahead — otherwise, it will be left dead in the water without access to markets, supporting capabilities, and enabling infrastructure (like supply chains).

Consider the deployment of sustainable technologies into electronic vehicles. The technology enables significantly new business models — which entrepreneurs and incumbent car manufacturers are exploring. In this exploration, there are several different directions that companies are experimenting with in order to create, deliver, and capture value in new ways. Some companies are transforming themselves into service companies — which lease batteries. Other companies are transforming themselves into supporting infrastructure, e.g. charging stations.

Market players are watching these models — exploring how they can rearrange their own capabilities to provide new value to these emerging systems, and thereby transform themselves. In short, they are looking for SIGNALS of where the industry is going, and how they will be able to profit from adding value in new and different ways.

This is how system transformation happens.

So if a college is intent on transforming how it educates students or a hospital is intent on transforming how it keeps people healthy, it needs to signal to a number of stakeholders that (a) a shift is afoot, and (b) what new opportunities that shift will create and require.

Signals & Self-Organizing Purposeful Networks

Finally, social system transformation requires cooperation — amongst individuals and institutions, and signals are the foundation for cooperation.

In The Penguin and the Leviathan, Yochai Benkler describes how most of today’s business models and social systems were built on the fallacy that people are most motivated by self-interest, and thereby required a top-down, punitive approach to ensuring compliance with any particular model.

We see this almost every day, in every context. Consider:

• We punish kids who can’t sit still in school, rather than exploring whether human movement might help them learn better.
• We shame patients into hiding unhealthy behaviors (drinking, smoking) rather than partnering with them to understand their triggers and curb these behaviors.
• We fine citizens who litter rather than engaging them in the wellbeing and ownership of their communities.

Benkler makes a strong case for systems designed around, and for human cooperation — and how this phenomena — when designed well — is giving rise to a new generation of business models (ZipCar) and social systems (Conscious Capitalism). At BIF, we would call these self-organizing purposeful networks, and we believe they are key to social system transformation.

Signals are a key component of their design. Self-organization requires that people be able to (1) signal interest in working together, (2) signal something about themselves that indicates they are reputable and credible, and (3) signal the rules of cooperation. This enables the identity and commitment of a purposeful network to emerge, and, more importantly, encourages people to contribute to the network’s goals. According to Benckler’s research — from music downloads to open source technology:

“People care a lot about conforming with others about what is seen as ‘normal’ behavior. People are looking for signals that will tell them what is normal — not just what is normal on average, but also what is normal for a person who wants to be seen as better than average or generous.

So if we want to encourage good social habits, we need to do more than institute norms, we also need to set clear signals of what counts as normal and appropriate behavior.”

This is as much true for enabling cooperation between people and enabling cooperation between institutions. In both cases, signaling catalyzes cooperation and action.