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In the midst of an economic downturn, it's easy to fixate on cyclical events and lose sight of deeper trends and long-term changes. The Shift Index, a macroeconomic report created by Deloitte LLP's Center for the Edge, suggests that the current economic turmoil is masking long-term competitive challenges for U.S. businesses.  The 2010 Shift Index Report updates the metrics we provided last year and goes deeper into some of the underlying dynamics.

The more connected networks become, the more likely it is that leaders have redundant value. This is one dimension of the leadership crisis today, exacerbated by the fact that the more asset redundant leaders become, the more irrelevant they feel and the more control they exert to restore ego equilibrium. Reality is, in networks leaders can gain unique value in at least two ways. They create unique value when they create a niche of unique value for themselves. And they gain unique value when those in their network intentionally leave them a space of value uniqueness that no one else takes on. This is a huge culture shift to see the value of leaders as equivalent to the uniqueness of their real time knowledge and skills relative to their networks. It is a shift that requires us to question the value of positional power that leaders assume in their leadership roles.

Mihaly Csikszentmihalyi talks about flow as being in the moment. What does this really mean? How might it be relevant for the day to day challenges of organizational life?

How do we move in organizations? Do we give into tides of constraints dotting the shores with recognizable successes and failures? How do we discern the faint melodies of possibilities offered by shifts of how and who we are… and what place should we assume in the ecological menagerie of conditions, gifts, talents and opportunities enlightening our constellations?

Story-based tactics, processes and tools help us probe the complexity of organizational life.

Listen up, budding Masters of the Universe about to start boot-camp week at business school (and sign away $100,000 over two years). For all the wonderful instruction at places like Harvard, Wharton and my alma mater, the Stern School of Business at NYU, remember that making money involves so much more than columns in a spreadsheet and the ever shifting assumptions behind them. Keep in mind:

1. If it ain't broke, still fix it. One of the hardest decisions business owners have to make is turning their backs on cash when it's flowing. But that's exactly what you must have the courage to do at times to protect your franchise.

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2. Unless you end up at Goldman Sachs, forget what you learned about finance. "In a 12-year finance career with large respected companies," says one of my former classmates, who is finance chief for the unit of a large manufacturing firm, "I can count on two hands the number of IRR [internal rate of return], DCF [discounted cash flow] and NPV [net present value] analyses I have completed." He adds: "A career in corporate finance is nothing like what is taught in school. The job is largely to be the conscience of the business--expecting and demanding explanation for decisions and [being] well versed in most topics."

3. Take your financial models with a boulder of salt. "Too often people in business rely upon a model demonstrating projections out 15 to 30 years," says another biz-school mate, now a health care consultant. Really? In school we worked in more modest 3- to 5-year increments, with an understanding that anything beyond that was magical thinking. "Believe it or not," he went on, "I have seen some done out that far for deals [acquisitions] and often for public-private partnerships."

4. Overpromise and try to deliver. Underpromising and overdelivering may work on conference calls with Wall Stree

Framing the Trust Paradox A couple of weeks ago at a gathering in Paris sponsored by the Orange Institute, I explored a paradox that is central to the challenges and opportunities we face as individuals and institutions in the Big Shift.  I call it the Trust Paradox.

We are on the cusp of another major shift in the focus of experience design, one that moves far beyond the impact of individual products and services. What if, instead of pulling out the full potential of our products and services, we focused instead on pulling out the full potential of ourselves?

Over the last couple of weeks there have been a number of rather interesting and insightful blog posts that have been covering IBM's journey to become a social business. A journey that started back in 2001, but that it had its main roots well substantiated within the company for much longer. Interestingly enough, when everyone was starting to think about going social within the enterprise, IBM had already well established, and recognised, since May 2005, the well known Social Computing Guidelines that soon became an industry standard in setting up a reliable and trustworthy governance model and guidelines for knowledge workers to engage with both internal and external social networking tools. However, fast forward to 2011 and I still get asked, every so often, how is IBM doing in the social business space, not just from a vendor perspective, but also from its own internal social transformation. Are we there yet? Have we already made that transition successfully? What has been the experience like so far?

Well, I could probably summarise it all with a single sentence at this point in time: It's been a long journey, indeed! We have learned a lot, we have become much more efficient and effective at what we do, but we still have got lots more to be done! Like for almost everyone out there, becoming a social business is a tough job, for sure, we are not discovering anything new in there, there needs to be a significant cultural shift, a change of mindset, a change on how we do and conduct business, but the good thing is that the trip to provoke such social transformation has been worth while all the way coming from a Globally Integrated Enterprise into a Socially Integrated Enterprise (a.k.a. SIE)

The rise in consumer-oriented social networking applications and platforms over recent years has drawn curiosity from enterprises both large and small. IDC believes that curiosity has turned into business opportunity as the lines between consumer and enterprise continue to blur. Unfortunately, adoption of social software in the enterprise has encountered some skepticism due to the hype surrounding the technology and the perception that it is the younger generations' means for socializing with friends. It has also been criticized as being a waste of time. Yet there is evidence to suggest that this doubt is shifting and that enterprise social software is becoming the next generation of collaboration tools to enhance organizational productivity.

The point is, it is the most interesting, attractive, high-margin work that spans boundaries and requires a network approach. Firms large and small can comfortably do process work internally, but to get the ground-breaking work they must learn to use open innovation and build external networks into the core of how they work.

The table in the report clearly shows how we are moving to an economy that values emotional intelligence, imagination and creativity. These data are almost a decade old, so just imagine how much further we are into the new economy.

Social business design

Executives at the more highly networked companies in our survey reported that they captured a broad set of benefits from their Web investments. A key question remained, however: do these benefits translate into fundamental performance improvements, measured by self-reported market share gains and higher profits?

While there isn't one right culture, just as culture is tough to compare across organizations, there are certain common elements of organizations that do well with these types of initiatives. Charlene Li sums it up best: "be open, be transparent, be authentic".

It's time to think about what companies really are, and to design with that in mind. Companies are not so much machines as complex, dynamic, growing systems. As they get larger, acquiring smaller companies, entering into joint ventures and partnerships, and expanding overseas, they become "systems of systems" that rival nation-states in scale and reach. So what happens if we rethink the modern company, if we stop thinking of it as a machine and start thinking of it as a complex, growing system? What happens if we think of it less like a machine and more like an organism? Or even better, what if we compared the company with other large, complex human systems, like, for example, the city?

In my last blog post on connected companies, complex systems, and social intranets, I wrote a little bit about the appropriateness of mechanical metaphors and models in complex times. While I never used the term explicitly the competing metaphor to the mechanical, which Ephraim picked up on in his comments, is the organic.

Dave Snowden

Rachel Happe has written a compelling vision of what the future of work may look like, in a recent post, and it seems that her thoughts about the increasing autonomy of workers in an increasingly free agent world [my comments embedded in brackets]: So what might this organizational nirvana look like? Employment becomes a cross between a long-term commitment and free-agency: The organization provides employee overhead (benefits) in exchange for a commitment to work a minimum number of hours on organizational projects.

Tiffany Schlain's film, Connected. Trailer, video, 2.31