miércoles, abril 16, 2008

Leadership Answers What to do First

Third update. Contrary to a strong west back, should #GlobalDebout aim to strengthen the whole world? What follows is a response to the artícle How the west was lost – and why we need it back, written by Timothy Garton Ash for theguardian, with the subtitle "The ties between Europe and the US have loosened, but there are still huge global challenges – Russia, China, the Middle East, climate change – we can only face together." It is easy to conclude that such a viewpoint reinforces the negatives identified in the article The Global Crisis Of Leadership, written by Alon Ben-Meir. Instead of why we need a strong west back, the first update of this post concentrated on why we need to strengthen the whole world. Let's see a few views:

Mr. Garton Ash's introduction is as follows: "Whatever happened to the west? Barack Obama just visited Europe to praise and strengthen the west, urging Britain to stay in the EU and Germany to support the proposed Transatlantic Trade and Investment Partnership (TTIP). Reactions in Britain, Germany and the United States suggest that he was praising a ghost. Or at least, a ghost of a former self."

In contrast, Mr. Ben-Meir argues that: "Although President Obama falls in an entirely different category — he restored to the Presidency the dignity and the stature it deserves, and demonstrated unwavering commitment to human rights — he never appreciated the US’ indispensable global role to lead... Instead, he led from behind, creating the perception of weakness and vacillation allowing other powers, especially Russia and Iran, to fill the vacuum he created, raising serious doubts in the minds of America’s allies whether the US is still up to the task."

While Mr. Garton Ash and Mr. Ben-Meir argue by learning from the past of independent countries of the industrial civilization, the first saying that "The real-life alternative is not something more progressive, but rather some ghastly amalgam of Putin, Trump and Le Pen: the Putrumpen," there's a real.life alternative that comes from learning from the emergent future of interdependent countries of the systemic civilization as can be seen in the first update that suggest what to do first.

 Second update. Del 90% #GlobalDebout a representantes en la Cumbre de Energía EE.UU - Caribe y Centroamérica. Como los celulares que saltaron (leapfrog) los teléfonos fijos, los votantes queremos un Servicio eléctrico sobresaliente, que salte las redes inteligentes, lo cual se logra con el pensamiento disponible para redactar una Ley Sistémica de Electricidad, que servirá como patrón para una Ley Sistémica de Energía. Debajo de la nota Hacia un futuro sostenible del sistema eléctrico, escrita por Juanjo Gabiña, colocamos el siguiente comentario:

Hola Juanjo,

Muy interesante y oportuna tu nota que nos sirve como "feedback." La misma llega cuando el vicepresidente Joe Biden será el anfitrión de la Cumbre de Energía de los EE.UU con el Caribe y Centroamérica, los días 3 y 4 de mayo en Washington, D.C.

Concentrando la atención en el último párrafo de tu nota, cuya última oración versa sobre la "gran importancia para analizar la importancia de las plantas de energía en relación con la seguridad del suministro en el futuro," se centra en los países avanzados que tienen centrales instaladas. Saltando hacia arriba en tu nota, la situación es muy distinta a países con capacidad instalada insuficiente, en los que no sucede que "cualquier interrupción de corriente se debe a la red de transporte y se espera que siempre sea en este nivel." En esos casos el ejemplo de las redes celulares telefónicas es muy valioso porque permiten saltar (leapfrog) las centrales con redes distribuidas.

Pero para dar ese salto se necesita hacer una reestructuración profunda del mercado, como la que aparece en la actualización de la nota [esta misma] "Leadership Answers What to do First," que ahora tiene su primera actualización "Mr. Joe Biden: voters need a global framework change to a systemic energy policy act for maximum social welfare." Dicha actualización tiene una traducción de los tres primeros párrafos que empieza así: "El liderazgo responde a qué hacer primero" y "Primera actualización. Sr. Joe Biden: los votantes necesitan un cambio de marco de referencia global a una Ley Sistémica de Energía para el máximo bienestar social."

 First update. Mr. Joe Biden: voters need a global framework change to a systemic energy policy act for maximum social welfare. The update of this post ‘Leadership Answers What to do First’ is intended for Vice President Joe Biden, because of the timely opportunity for voters of the USA, Spain and Dominican Republic that emerged as he will host the U.S.-Caribbean-Central American Energy Summit on May 3 and 4 in Washington, D.C.  As designed as an institutional innovation, the purpose of the systemic energy policy act is maximum social welfare. Such purpose is needed to start to fill today´s empty global leadership vacuum with a sharp strategy in the Dominican Republic with a global framework change that will serve for pattern changes elsewhere.


With ongoing speech acts proposals, like “we will go to the moon,” being developed under an action oriented scientific attitude, a lot has emerged in the past 8 years after the main text of this post, as the architecting scope has been increased all the way to the global social, cultural, political, and economic spheres.  As complemented below, the Dominican Republic has developed the systems architecting thought required to give every poor and rich global stakeholder the opportunity of a great, mature and reliable energy service to be offered by servant leaders. The above strategy is based on the “Second update. Do voters need #Fordism transitions or #Jobsism transformations under #GlobalDebout?,” of the @gmh_upsa paper Minimalists governments with fair global free deregulated markets must arrive soon, in which we suggested:
For starters, we are proposing the first three global leaders: USA transforms itself to set the pattern change for other countries unions, Spain transforms itself to set the pattern change for other countries and the Dominican Republic transforms its electric power sector to set the pattern change for other public sectors. Any other countries ready to execute those kinds of transformations please let us know.
That is in sharp contrast with the Big Shift global leadership vacuum that have voters facing electoral processes that are so naïve, unreliable and dangerous. Such leadership vacuum is reflected, for example, in the USA, Spain, Brazil, Puerto Rico, Dominican Republic, Greece, Argentina, as well as UK’s Brexit with EU, migrations towards Europe and the USA, as a result of a flawed framework change started (according to Thomas Frank’s assessment explained below) by the Democratic Party two decades ago, which we strongly believe favors global crony capitalism.

This is a reinterpretation of what can be considered a key piece of the global leadership puzzle that we believe is our artistic conclusion of the Harvard Business Review Online blog post The Innovative Coworking Spaces of 15th-Century Italy, written by Piero Formica on April 27, 2016. Piero’s post is a welcome contribution to solve said puzzle based on what emerged in the above mentioned “Second update.” This is what we said about how to address the leadership vacuum:
To get a better understanding why we need framework change, which is supported by the great and timely article The Global Crisis Of Leadership, written by Alon Ben-Meir, Senior Fellow, Center for Global Affairs, NYU, we need to consider from the main text of this paper what "Thomas Frank associates... with the emergence of a meritocracy that failed," to which we immediately added that "It failed not by being a meritocracy, but by the money led Groupthink consensus under the primacy of the parts." An additional explanation of the failure comes from the April 21, 2016, article Not All Practice Makes Perfect: "Moving from naive to purposeful practice can dramatically increase performance," by Anders Ericsson & Robert Pool.
Such global leadership vacuum is being filled with candidates lacking the needed leadership capacity at every level of society. The reinterpretation that follows goes back to explain why electoral debate processes besides being naïve, are so unreliable and dangerous. While soaring inequality tell us that we are heading to the Second Middle Ages, Piero seems to help us believe that we have the great opportunity to be heading to a Second Renaissance.

To me the idea of a renaissance is very familiar. One of the owners of a company that I worked at during the 90’s and until 2010, the late José Vicini (of Italian origin of course) saw in me a Renaissance man. The late management guru Peter Drucker would have said that the renaissance was the result of the third information revolution brought by the printing press, being a precedent to the fourth information revolution renaissance brought to us by the microprocessor. The most probable self-explanation comes in a blog post of April 11, 2012 [1], which says:
A very attractive insight on an issue of the IEEE Power Engineering Review, published more than 30 years ago, started to change my life for the better. Showing “A New PES Award” in the issue’s cover, you can also find in it the above engineering concept. Inside that issue is the story “Renaissance Man: Uno Lamm, ASEA’s ‘Retired’ Electrotechnical Director, Leads a Remarkably Active and Inquisitive Life.”
The insight in that story that really altered my life was his example “… there’s the opportunity to work on ideas quite outside one’s owned special field of expertise. I can then enjoy the enthusiasm built on partial ignorance which, as you know, is greater and fuller than any other enthusiasm.”
In my current process, I am using Google’s Blogger for production of quality collaborations [2] and Twitter for distribution with a few valuable citizens so far retweeting (and giving feedback) those collaborations. I learned of the existence of Piero’s article because John Hagel gave a 'like' on Linkedin to Heather McGowan's suggestion "We need a return to the #renaissance to create #neogeneralists and #scaleable #learning John Hagel Chris Shipley."

In their website edgeperspective.com, John Hagel and John Seely Brown say that "We developed the ‘Shift Index,’ a new economic indicator that suggests the current recession is masking long-term competitive challenges for U.S. businesses,” which they introduce as:
Corporate returns are under pressure from far more than the recession. The patterns we’ve uncovered span decades and deeply affect even the highest performing companies, with the single greatest driver of these challenges, and indeed future opportunities, being our underlying digital infrastructure. Regardless of when the economy shifts back to an upturn, the long-term implications for continued erosion of return-on-assets will continue.
We suggest that such Big Shift can be understood as the result of the transition from Alvin Toffler's Second Wave (an industrial civilization that must include the earlier developments that led to the industrial revolution) to the Third Wave (what we have been calling the systemic civilization). A thought experiment thesis on the need for scalable learning suggested by Hagel and Seely Brown would have the Big Shift as a change in waves: accordingly, the Renaissance as a transition from the First Wave to the Second Wave would be a precedent to the current renaissance transition from the Second Wave to the Third Wave.

The above is one way in which Piero’s contribution fits well into the leadership vacuum puzzle. Regarding his selling point, that mutually reinforce each other, besides “Turning ideas into action,” that we aim here to produce with proposals of “speech acts,” we will deal below with the selling points “Facilitating the convergence of art and science” and “Fostering dialogue.”

After reading Piero’s article, I went back to Linkedin to see what Heather had to say on the issue. To our surprise we should partially love (more below) her most recent post Education Is Not The Answer (Part 1), whose introduction says:
The notion of education implies that there’s a path towards a definitive, finished state wherein an individual has become “educated.” But in a world of accelerated change, with rapid disruption cycles in industry and with rising automation, that end state of being “educated” is just no longer meaningful. An individual must have learning agility - the ability to learn, adapt, and apply in quick cycles. Part One of this piece discusses the learning-over-knowing imperative, and Part Two will examine the specifics of learning agility.
Part One’s introduction aspect fits quite well with a new strong argument: the Democratic Party meritocracy’s failure as a result of a mistaken framework change which relied on educated experts that served as pattern change for left leaning political parties all over the world that generated said global leadership vacuum. As given in the @gmh_upsa paper mentioned above, that argument says that: “about the main difference between representative and direct democracy can be associated with complexity and simplicity respectively. After I heard Thomas Frank talk about complexity, we search his book and found this two paragraphs, the first of which is under the section “Consensus of the willing:”
All the things mentioned so far – the fascination with complexity, the desire to preserve existing players, the genuflection before expertise – all of them arise from one of the deepest wellsprings of liberal thought and action: the longing for a grand consensus of professional class that never seems to come.

A forgotten school of left-wing historians used to argue that the regulatory state began not with public-minded statesmen cracking the whip and taming big biz, but just the opposite – with business leaders deliberately inviting federal regulation as a way to build barriers to entry and give their cartels the protection of law. Long-ago giants of steel, tobacco, telephones, and meatpacking all welcome federal regulation because of the effects it would have on smaller competitors. That old style of regulation brought ancillary benefits to the public, of course: better food, a standardized phone system. But its main objects were stability for existing businesses and guarantee profits in perpetuity.”
While we agree with Heather that we are under a Big Shift where “Education in Not the answer,” Education may well again become the answer in the future as a result of the selling point “Facilitating the convergence of art and science,” as suggested, for example, in the “Ninth update. Countries must leap into Hagel's electoral strategy of trajectory on Handy's curve of systemic civilization [3].” The Big Shift could be seen from one civilization curve to another, for example, after the framework change from the Fordism of the industrial civilization to Jobsism of the systemic civilization. This is where ‘Fostering Dialogue’ comes in, where Piero says:
Today, we often recognize the need for these kinds of illuminating conversations without really making space for them in our organizations, either because organizations are too afraid of conflict or because people are simply too busy to try to expand their understanding of each other. But Renaissance workshops offer proof of how important it is for collaborative workplaces to draw on sources of opposing ideas and controversial opinions.
With regard to those kinds of ‘illuminating conversation,’ Verganti responded with "Jose Antonio, thanks for your reference to Otto Scharmer, indeed one of our most precious inspiration," the following paragraph of my comments to another of his blog post that says:
In addition, by using Otto Scharmer’s “Four Fields of Conversation,” next is a reinterpretation that values Verganti’s four step process insights, based on the difference between the approaches of art of ideation and those of the art of criticism. The art of ideation approaches is set in the third field under reflexive dialogue and the primacy of the parts, while the art of criticism is set in the fourth field under generative dialogue and the primacy of the whole.
[1] First Draft: Let’s Emulate Uno Lamm’s Accomplishments Through Imagination and Truth, @gmh_upsa blog post, April 13, 2012.
[2] Roberto Verganti, Harvard Business Review Online, Quantity versus quality in collaborations, June 15, 2011.
[3] Can we agree with the Second Curve, while not with Handy?, @gmh_upsa blog post, October 2, 2015.
[4] Roberto Verganti, Harvard Business Review, "The Innovative Power of Criticism," January-February 2016.

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The answer to the question of what to do first is for the global power industry to get out of the wrong jungle to produce a EWPC based EPAct as soon as possible. That is the kind of leadership needed to face the inevitable fundamental changes required to significantly reduce today’s legislative and regulatory uncertainty.

Leadership Answers What to do First
By José Antonio Vanderhorst-Silverio, Ph.D.
Systemic Consultant: Electricity

First posted in the GMH Blog, on April 16th, 2008.

Copyright © 2008 José Antonio Vanderhorst-Silverio. All rights reserved. No part of this article may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, without written permission from José Antonio Vanderhorst-Silverio. This article is an unedited, an uncorrected, draft material of The EWPC Textbook. Please write to javs@ieee.org to contact the author for any kind of engagement.

I agree with Warren Causey’s article Utilities Full Speed Ahead on IUE/SG: The Question is What to do First that “the consensus is correct: ‘fundamental changes are inevitable… the paradigm is going to have to change.’” M.I.T. professor Fred C. Schweppe, and his research team, knew that in the 1980s. The EWPC effort that extended Schweppes work is about facing those inevitable fundamental changes, as can be seen in the EWPC article The Electricity Revolution, which is summarized as:

“Warren Causey is [also] reporting a technological revolution in the power industry, which is ahead of legislative and regulatory uncertainty and is heading for a very costly dead-end. Utilities in the US and Europe are trying to extend their obsolete business model of winning rate case to the regulators. Customers, [the general market] and society should not have to pay for such large value destruction, by adopting the EWPC market architecture and design paradigm that removes the uncertainty.”

The most important reason why the existing paradigm – the system - is failing is because of architecture and design flaws. Eberhardt Rechtin and Mark W. Maier, in their book “The Art of System Architecting,” have a descriptive heuristics that explains what happens: “In architecting a new [the paradigm in this case] program all the serious mistakes are made in the first day.” Leaving out utilities native loads, Open Transmission Access of EPAct 92 was such a serious mistake, which initiated the incremental path of the California crisis, the 2003 blackout, etc., that have taken us to today’s mess of costly and complex capacity markets, NERC mandatory requirements, etc.

Looking at the mistake from another perspective, legislators and regulators were trying to get efficiency from wholesale, when the breakthrough paradigm is all about business model innovations at retail to integrate demand to power system planning, operation and control. Such breakthrough is enabled by the Third Industrial (communications) Revolution. Most investments to develop the resources of the demand side will be customers’ investments, that need to be well coordinated to produce large savings. Such coordination should be the result of competition of innovations among open market Retailers’ Enterprise Solutions and the development of the smart grid transportation utilities, instead of monopoly Intelligent Utility Enterprise/Smart Grid solutions.

In the EWPC article Slicing the Last of the Regulated Monopolies (an update of an article with the same title by Lester P. Silverman, a director of McKinsey & Company, on The New York Times of July 21st, 1996.) it is very clear that at the outset “‘The wires business - the transmission and distribution of electricity - will remain regulated but will be operated by [transportation only] utilities … with access to the wires open to all [generators, retailers and customers] ... Many of today’s electric utilities will be little more than regulated wires companies, but some will have grown by acquiring neighboring wires and other [gas and/or water] operations... The energy service business [under Second Generation Retailers], which involves the packaging of energy and other services [to integrate the resources of the demand side to power system is the key to the breakthrough.]"’

Why Silverman’s vision didn’t happen? We have a strong case of lack of leadership to enable a robust system that protect consumers from supply disruptions and unfair pricing. Even though, as Warren says “there still are a lot of questions about what to do first … according to most experts – Congress failed to so in an Energy Policy Act (EPAct) adopted in December,” the real make or break answer is all about legislative and regulatory leadership, which I now discuss.

In the chapter on Habit 2, of “The 7 Habits of Highly Effective People,” Steven R. Covey tells a story about the difference between Leadership and Management to explain that leadership – “What are the things I want to accomplish?” – is the first question to ask, while management is the second question “How can I best accomplish certain things.”

Covey wrote “You can quickly grasp the important difference between the two if you envision a group of producers [the utilities] cutting their way through the jungle with machetes. They’re the producers, the problem solvers. They’re cutting through the undergrowth, clearing it out.”

“The managers [the legislators and regulators] are behind them, sharpening their machetes, writing policies and procedure manuals, holding muscle development programs, bringing in improved technologies and setting up working schedules and compensation programs [rate cases to be won by utilities] for machetes wielders.”

“The leader is the one who climbs the tallest tree, surveys the entire situation [see more than 110 articles in the EWPC Blog], and yells, “Wrong jungle.”

“But how do the busy [Utilities Full Speed Ahead on IUE/SG], efficient producers and managers often respond? ‘Shut up! [José Antonio] We’re making progress.’”

So, the simple answer to “What to do First” is that the power industry should get out of the wrong jungle and adopt the EWPC market architecture and design paradigm. The controlled market transportation utility with their regulated responsibility to transport will be aiming for ultraquality transportation and thus providing “the benefit of localizing disturbances and fragmenting responsibility and expense” with those of the non-real-time open market.

The modernization of the nationwide grid will then be done under a least cost transportation (tightly integrated T&D) expansion plan, considering the investments, operation, maintenance and outage costs forecasts of the whole power system including the value chain (generation, retail, customer) of the open market. The regulatory compact will shift from the utility obligation to serve to the utility obligation to transport in the closed market. The difference between the two will be demand response as a condition of service in the open market.

So, what to do first? Forgetting today’s mess, and starting from a clean slate from the ‘previous, historic paradigm,” as Warren calls it, the legislative and regulatory bodies need the vision and the courage to separate the regulated wire business, from the competitive retail and wholesale businesses of the open market. To go forward, they should take into account all the great insights that have emerged on EWPC market architecture and design paradigm, during the discussions on EnergyPulse and EnergyBlogs.com of the past 28 and 7 month, respectively. EWPC provides the required leadership to reduce the legislative and regulatory uncertainty to acceptable levels.

As Warren says “the next 10 to 15 years will see mayor changes – perhaps classified as upheavals by future historians…,” if the FERC, the administration and Congress of the US don’t take the leadership challenge head on, and produce a EWPC based EPAct to control the destiny of the global power industry, then as Jack Welch and Noel Tichy wrote, in their lessons in mastering change, “someone else will.”



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