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The Complexity Matters blog features the Thursday Complexity Post as well as other complexity inspired news items.


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Architectural Designs for Food of the Future

Posted By Prucia Buscell, Thursday, September 25, 2014

Vertical farms are blossoming in several big cities, including Chicago, Kyoto and Singapore, with plants growing in artificial light in specially reconfigured buildings. The Brooklyn-based design firm Aprilli has expanded the idea with a proposal for a giant tree-shaped skyscraper the architects believe will maximize food production and improve local environment through water and air filtration and renewable energy output.

The Urban Skyfarm, winner of an A'Design Award, is described in a FastCompanyExist story by Adele Peters. Architects Steve Lee and See Yoon Park told Peters they envision the giant agricultural skyscraper in the heart of downtown Seoul, South Korea, a densely populated city with air pollution and other environmental problems. There's little space for on the ground farming there, and fresh fruits and vegetables at local markets are in demand but very expensive.

Urban Skyfarm by Aprilli Design Studio

The design mimics the shape of an enormous tree, with leaf-like open air decks built of strong but light weight materials that provide as much as 24 acres for growing fruit trees and plants like tomatoes. The more enclosed lower and inner portions of the structure have space for plants growing in a more controlled environment. The roots, trunk, branches and leaves have different characteristics to suit different farming conditions. The trunk houses a hydroponic farm for greens, and wind turbines and solar panels at the top provide energy to keep the whole mini ecosystem in operation. The solar panels generate energy for night time lighting and heat where needed for plant growth.

Another idea for agriculture in places where farms won't fit comes from JAPA, a design firm in Barcelona now called Forward Thinking Architecture. Architects there propose a system of looping towers that could float in harbors and provide new space for year round crops. In another FastCompany article by Peters, JAPA architect Javier Ponce explains that a network of towers called floating responsive architecture (FRA) is designed for Singapore-or any other densely populated city near water where food is expensively imported from long distances. Throughout the towers, which would surround the city, networks of sensors would monitor crops and communicate with networks in the city creating a data management system that would keep track of food supplies and purchases. Economists say as much as 30 percent of food is wasted, and Ponce says this system would aim for zero waste.

Kyoto Group - proposed network of towers around Singapore 

While creative architectural vertical design may help supply nutritious food to urban centers in the future, many creative projects are already producing food in urban areas. One example is the work of entrepreneurs in Chicago who bought an abandoned factory building and transformed it into a multi-story indoor farm that produces everything from fish to salad greens to beer. Another example is Urban Farming Guys, a nonprofit based in Kansas City, dedicated to creating sustainable urban communities, starting with local food and water security, alternative energy and economic resilience. 

Tags:  buscell  community  complexity matters  ecology 

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The Best Story

Posted By Susan Doherty, Wednesday, September 24, 2014
Updated: Wednesday, September 24, 2014

In 2013, Plexus Institute received a $2.1 million grant from the Bill & Melinda Gates Foundation for a three year project in California’s Long Beach Unified School District (LBUSD) to discover, develop and promote methods that help K-12 educators continually improve so that their students achieve better outcomes. On September 17, 2014, Plexus Institute President, Jeff Cohn, joined a Healthcare PlexusCall to discuss Leading Change in a Complex World.

In the following audio clips Jeff describes one of the best stories to come out of the project so far and provides some background on the project and the model Plexus Institute is deploying in LBUSD. A transcript follows each clip.

The Best Story

Jeff: The best story that has come out of the work so far involves a music teacher. He is literally a department of one for the entire school so he has no peers from a subject matter standpoint to collaborate with. This team gave him an opportunity to interact that he was lacking so he loved that. The team landed on focusing on a particular aspect of this new common core curriculum that I don’t want to spend our time on but it’s a big focus of trying to help "transform public school education.” And one of the domains pertains to students use of academic vocabulary. Words that help their teachers and parents and peers recognize that they actually know what they’re’ talking about and have come to their conclusions in a thoughtful and meaningful way. This music teacher felt that this wasn’t particularly relevant to him, but the rest of the project and the opportunity to collaborate was so enticing that he would stay a part of the team as his teammates figured out ways to help their students learn how to use these vocabulary words productively.

Jeff: Then we’re moving into April. His big looming task is helping the band and orchestra prepare for the Spring concert and he’s still trying to figure out a way to integrate this academic vocabulary, push himself outside of his comfort zone, and he lands on an idea helped by some ideas that he had heard his peers on the improvement team come up with. So, one night he gives as an assignment listening to a recording of a recent rehearsal for the band and he also sends the kids home with a copy of his conductor’s score and asks them to write a short critique of what they hear. He also gives them a list of 10 academic vocabulary words and they’re assigned to use at least one of them in their critique. So the next day he got these extremely thoughtful perspectives from the kids on what they heard where they did find ways to integrate these words. And, maybe to his surprise, but also gratification, they incorporated their critique into how they did their remaining practices together and ultimately led to by far the best Spring concert that he’s ever been a part of. I think this, for all, was a great example of the sort of bottom-up emergent kind of learning that this sort of environment can foster.

The Project

Joelle: I know that Plexus has an on-going grant project in the field of education. Who is involved with that, Jeff, and what are you learning?

Jeff: This has been a really exciting project to be a part of. Through a grant from the Bill & Melinda Gates Foundation we’ve been working initially in two middle schools in inner city Long Beach, California. I know I had this vision of Long Beach as this vibrant coastal community, which I guess in some neighborhoods it is, but in the two schools where we’re working it’s a very underserved group of kids. 95% of the kids on subsidized meal plans and over half English second language. The goal of the project is to help teachers learn or re-learn how to continually improve. There’s data that was not collected by the Gates folks but which they’ve held up to the schools and to us that shows that most teachers after the first few years of their career plateau in terms of their effectiveness and plateau at a level that produces student outcomes less than what we would hope.

Jeff: So, how can, instead of the usual approaches in education of external experts coming in and telling schools what they should be doing differently, how might they be able to discover the improvement practices that exist within their own schools but which are hiding in plain sight of which they’re not aware. We’ve been working with teams of volunteer teachers that have been meeting before and after school with regularity. These are a diverse group teachers who initially kind of stayed isolated from each other, did not communicate across subject matter and/or grade barriers, but over the course of the first couple of months as they met and as we used Liberating Structures to design the time in which they were interacting and starting to engage in this challenge we noticed the pattern of interacting changing. Now you hear things like a math teacher asking an english teacher and a phys-ed teacher for help on a certain issue that is a challenge to him.


The Model

Joelle: What model are you using to shape this work?

Jeff: The Gates Foundation had come to us asking us for a proposal based on our previous Positive Deviance work. As we described our approach to Positive Deviance in a complex organizational setting they said, we hear you talking about PD, but we hear your talking about leadership, which we think is important in schools, and Liberating Structures, which we don’t know what they are but you seem to think they’re important, and something about networks and something about complexity, so it sounds to us like Positive Deviance plus plus. And, we wound up thoughtfully hearing what they were describing us saying and saying, yeah, actually our model of doing Positive Deviance work does include all those domains. This image that’s on the screenshare of the complexity lens and adaptive positive deviance at the center, that’s what we’re calling the whole Adaptive Positive Deviance, which is different than and greater than the sum of those individual components of a focus on leadership and Liberating Structures use and the complexity lens.

Tags:  cohn  education  music 

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We're Smarter with People Whose World Views Differ

Posted By Prucia Buscell, Thursday, September 18, 2014

Researchers say we try harder, make better decisions and achieve more when we work in groups that have racial, ethnic and gender diversity.

A Scientific American story by Katherine Phillips describes research showing that scientists, businesses, banks, juries and groups collaborating to solve problems do a better job when people from diverse viewpoints and life experiences come together. People who differ from each other bring differing information, perspectives and opinions to the task at hand. They may also bring tension and discomfort, Phillips writes, and that may be part of the benefit.

Phillips, a professor and senior vice dean at Columbia Business School, Margaret Neale, of Stanford University, and Gregory Northcraft, of the University of Illinois, studied the impact of racial diversity on small decision making groups. Business students at Illinois were divided into groups of three and given a murder mystery to solve. All participants shared a common set of facts, but each person was also given an important clue that only he or she knew. To solve the crime, the groups had to share all the information they collectively knew. Groups with white and non-white members substantially outperformed the all white groups. Being with similar people makes us think we all hold the same data and perspective, which stops us from processing and fully sharing information, Phillips explains.

In a study of jury decision making, Samuel Sommers of Tufts University found that members of racially diverse juries exchanged a wider range of information during deliberations. He has also found racial diversity contributes to greater complexity in thinking.

Other research shows we are more diligent and more thoughtful when we hear views from people who differ from us. Anthony Lising Antonio, a Stanford Graduate School of Education professor, and colleagues conducted a study with 350 students from three universities. Groups of these students were asked to discuss child labor practices or the death penalty for 15 minutes. Researchers wrote dissenting opinions and had both black and white students deliver them to their groups. When a black student presented the dissenting opinion to a white group, it was perceived as more novel and provoked broader thinking than when a white student delivered the same dissent to a white group.

People also try harder if they're in ideologically diverse groups. Phillips, Denise Lewin Loyd, of the University of Illinois and colleagues asked 186 people who identified as Republican or Democrat to read a murder mystery and decide who was guilty. They were told to write a persuasive essay designed to convince a partner who disagreed. Half were told to make the case to a member of their own party, and half were told to make the case to a member of the opposing party. Both Republicans and Democrats were better prepared for their discussions when their partners were from the other party.

Other studies showed that gender diversity benefitted big businesses. At companies that prioritized diversity, research found, those with women in the top ranks saw greater financial gains.

Phillips story did not specifically address economic diversity, which has long been an issue in education, college admissions and housing. Low income students are underrepresented at elite universities, where incentive to enroll them is weak. Available public housing has dwindled over the last 25 years. Typing "resistance to affordable housing" into Google brings 1,030,000 results. An eighth grade teacher in a wealthy district recalled a fear expressed in a class discussion of affordable housing: "One of the kids said 'these people making $50,000, $60,000 a year are going to come in here and rob and mug.'"

Tags:  buscell  complexity matters  diversity 

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Big Data and Workplace Design Surprises

Posted By Prucia Buscell, Thursday, September 11, 2014
Updated: Thursday, September 18, 2014

Business scholars believe work performance is influenced by our workspaces and that design can enhance or inhibit human interaction. Researchers are now confirming that's true, and even further, they're finding that certain kinds of design encourage specific kinds of results. They also suggest that productivity may be more a function of groups than of individuals, and teamwork too can be fostered by design.

According to a new report published in Harvard Business Review, face-to-face encounters and chance encounters with others are vital for improvement of workers in a knowledge economy. Authors Ben Waber, Jennifer Magnolfi, and Greg Lindsay conducted experiments in which employees in hospitals and pharmaceutical, finance and software companies voluntarily wore isometric badges that captured social interactions, conversation, movement, posture and physical location. They write that face-to-face interactions are "by far the most important activity in an office," and that unplanned encounters among people inside and outside an organization improve performance.

Lindsay, who is working on a book he calls Engineering Serendipity, told Fast Company's Lydia Dishman that employees wearing the devices were monitored for six to eight weeks and data was randomized to protect individual identities. Content of conversations was not recorded. Earlier research found that physical distance negatively affected communication even among digitally connected people. Interestingly, the Fast Company story says, studies by Waber found that engineers who shared physical space were 20 percent more likely to communicate digitally. When working on projects, they emailed four times as often and finished 32 percent faster than engineers working on the project in different places.

Waber, Magnolfi and Lindsay cite a 2012 HBR article by Alex "Sandy" Pentland who did similar research tracing movements and interactions of employees wearing badges. Pentland identified three key elements of successful business communication: exploration (interacting with people from diverse groups) engagement (interacting with people in your own group) and energy (interacting with more people overall.)

Waber an colleagues in their HBR story cite examples of spaces designed for specifically desired results. For example, engagement tends to produce more productivity. So if a business wants more productivity, walled off work stations and spaces for small-group collaboration, could be a successful design and the group's break area could be a crucial space for chance collisions among group members.

The Norwegian telecommunications company Telenor designed open, public spaces with "hot seating"-no assigned desks-and spaces that could be easily reconfigured for different uses. Its executives wanted change and innovation, so they designed the kinds of open spaces that foster exploration and unplanned encounters. A design that fostered engagement might have been detrimental for a goal of innovation.

Pharmaceutical company executives wanted to increase sales, but weren't sure what behaviors would help. Deployed with badges, they found sales increased when salespersons interacted with people on other teams-that is, when they increased exploration. To encourage inter departmental mingling, the company got rid of several small coffee stations that served half a dozen people. They created bigger coffee stations, that served 120 people each, and replaced small cafeterias with a large one. Sales rose 20 percent.

The authors caution that what works for one company might not work for another and some results will be unintended. A furniture company, for example, needed both exploration among some sales people and more engagement among specific groups who needed improved communication. Fewer desks and unassigned seats increased overall interactions, but energy levels and communications declined. The authors say changes didn't really create movement, they just reshuffled stationery workers who didn't leave their unassigned seats once they sat in them.

The authors also suggest focus on individual productivity in performance reviews tends to divert attention from the interactions that help group performance. For instance, they write, if an employee improves group performance by sharing some successful strategy, the group gain can more than compensate for productivity the individual may have lost by taking time to share.

Tags:  buscell  complexity matters  design 

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Disruptive Innovation: A Complexity View - Part 1

Posted By Tom Bigda-Peyton, Friday, September 05, 2014
A recent PlexusCall featured the recent controversy between Dr. Jill LePore and Clay Christensen on the topic of disruptive innovation. Three panelists shared their experience with, and perspective on, Christensen's theory: Peter Jones, David Hurst, and Dr. John Kenagy.

Dr. Kenagy said that successful organizations are designed to keep doing what they are good at doing. This prevents them from seeing, or fostering, innovations that may be disruptive (game-changing). In healthcare this is important because existing organizations, especially those that are well-known and established, may miss or suppress a "game changing" innovation that could provide a breakthrough on Kenagy's area of focus, generating "more care at lower cost."* In order to support disruptive innovations in healthcare, we need to create "safe places" in which to experiment toward better and even disruptive solutions to healthcare's problems. Kenagy went on to elaborate on his methods for creating this kind of "learning line," or "safe to fail" lab in healthcare organizations.

However, healthcare also seems to be a special case of disruptive innovation. As Kenagy and other speakers noted, the notion of "disruptive" innovation suggests the advent of a new product or service that disrupts the status quo. But what is the "product" of healthcare? Kenagy posits that we have one product in healthcare: the health of the patient in front of us. This is a complex challenge, one that suggests a different set of variables than those confronted by Apple or Google.

David Hurst and Peter Jones noted additional dimensions of the healthcare challenge which differentiate it from other industries. Jones suggested that the popularity of the "disruptive" idea may lead us down the wrong path, especially when it comes to healthcare. Do we want medical device startups competing for funding on the idea that they have a disruptive innovation, when a better solution may be that a consolation of companies all have parts of an overall solution that would be better than any of them can produce on their own? The current funding model may suboptimize in terms of overall problem-solving and advancing the health and well-being of individuals and the wider society. For these and other reasons, Kenagy asserted that "adaptive" innovation may be a more appropriate term than "disruptive" innovation for healthcare.

How does a complexity view help us develop an optimal US healthcare system? Let’s assume that healthcare is a complex adaptive system. How do we represent our theory of the system itself? What are the metaphors of change that can help us navigate the journey of disruptive innovation in healthcare? The panelists agreed that organic metaphors, such as the butterfly effect or the self-organizing capacity of flocks of birds, work better than mechanistic metaphors or system dynamics diagrams. If we want to mimic nature, the panelists agreed, we need to promote conditions for trial-and-error experimentation, such that the actors in the system can use a trial-and-error pathway toward innovations that may become "disruptive."

Are there current efforts in healthcare to mimic nature’s process of self-organization and evolution? What can we say about the conditions which foster this kind of process in human organizations? Viewing the situation through a complexity lens may help.

When we think about nature as a metaphor for self-organizing and evolution, we need to think about the conditions in human organizations that promote self-organization. We would like to highlight three:

• Optimal uncertainty;

• Optimal agreement among stakeholders; and

• Common language and common framework for complex problem-solving.

Following the Stacey Matrix (below), "optimal uncertainty” refers to a middle zone between chaos and simple problem solving. There is uncertainty but not so much as to paralyze the organization; there is familiarity but not so much as to make the problem seem routine. Optimal agreement is a similar concept, in which we find a diversity of views but also enough commonality to bind, or hold, the group together. Finally, we believe the capacity for self-organization is fostered by a common language and framework for complex problem-solving, such as the ability to differentiate between simple, complicated, and complex problems and the capacity to match appropriate methods to each.

How does all of this apply to healthcare? We will take up this question in our next post.


Tom Bidga-Peyton is a Senior Consultant with Plexus Institute. Tom's work focuses on widening and accelerating the pace of improvement in individual, organizational, and large-system change initiatives.

Tags:  disruptive  innovation 

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Hundred Dollar Bills: A Boon to Bad Behavior?

Posted By Prucia Buscell, Thursday, September 04, 2014

Richard Stratton, executive, author and former drug smuggler, enjoyed counting piles of hundred dollar bills. He says it was a "pleasant, relaxing experience." Harvard Economist Kenneth Rogoff thinks hundred dollar bills are nothing but trouble.

Both expressed their individual expertise in an NPR interview with Melissa Block and Chris Arnold. Stratton, a novelist, friend of the writer Normal Mailer, and later TV executive and magazine editor, once served eight years in prison for drug smuggling. He told NPR the drug business involved generating and smuggling huge sums of money as well as narcotics. Rogoff thinks $100 bills are all too often used to finance illegal activities, and that's a good reason to get rid of them. Rogoff notes these big bills allow a person to carry $1 million in a briefcase. And why would anyone not engaged in nefarious enterprises want to do that?

Rogoff goes even further. Writing in the Financial Times, he proposes getting rid of paper money entirely and replacing it with electronic money. Among other things, he argues, as electronic payments, even for small amounts, become increasingly prevalent, the need for paper currency declines. There would be complications, of course, and international cooperation among governments would be needed. But Rogoff suggests getting rid of large denomination bills would be a good start.

Rogoff and others have said 75 percent to 80 percent of all U.S. currency world-wide is in $100 bills. And many experts think easy flow of huge amounts of anonymous cash facilitates tax evasion as well as illegal trafficking in drugs, weapons and human beings.

The Financial Times notes that when someone with Rogoff's heavyweight credentials questions the future of physical money in a conservative, influential publication like the Financial Times, "The world should sit up and listen."

The change from physical to virtual money would be momentous. Would underground and unofficial currencies flourish? Would crooks find ways to exploit the transition? Stratton, who no longer holds $100 bills, told NPR he thinks criminals would adapt.

Ruth Judson, an economist at the Fed, told NPR she's not convinced there's a need to get rid of the Benjamin Franklin bill because there's really no way to know how much cash in circulation is being used for good or evil. Some historically huge $100 bill transactions have been conducted by government. After the invasion of Iraq in 2003, the U.S. government sent $12 billion in shrink wrapped hundred dollar bills to Iraq to pay Iraqi ministries and U.S. contractors. Planes delivered literally tons of cash from New York to Bagdad for disbursement by the U.S. led Coalition Provisional Authority. Congressional investigators later found control of the cash was lacking, and accounts vary on how much remains unaccounted for.

Tags:  buscell  complexity matters  culture 

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Community Health Vital for Healthy People

Posted By Prucia Buscell, Thursday, August 28, 2014

Leana Wen, MD, an emergency physician who has worked in inner city hospitals in St. Louis, Boston and Washington, D.C., writes in her blog about the painful experience of administering short term fixes to patients whose long term afflictions lie beyond her realm.

She describes a 19-year-old who has come to the emergency room three times with cuts and broken bones and gunshot wounds. An 8-year-old without an inhaler living among relatives in an overcrowded house with lots of smokers comes to the emergency room struggling to breathe. A 38-year-old single mother diagnosed with cervical cancer four years ago never got to see a doctor as she struggled with three part time jobs, the care of four children and inadequate insurance. By the time Dr. Wen saw her in the emergency room, her cancer had spread to her lungs and intestines.

"We in the ER provide a necessary service, but it's far from being sufficient," she writes in her blog The Doctor is Listening. "We need to recognize that health does not exist in a vacuum, that it is intimately tied to issues such as literacy, employment, transportation, crime and poverty. An MRI here, a prescription there, these are Band-Aids not lasting solutions. Our communities need innovative approaches to issues like homelessness, drug addiction, obesity and lack of mental health services." The route to good health, Dr. Wen says, is in the community. Dr. Wen is coauthor of the book When Doctors Don't Listen.

When he was still writing the Wonkblog for the Washington Post, Ezra Klein described an experiment in Oregon to rebuild the state's Medicaid program around community health rather than individual fee for service treatments. Klein tells a story Oregon Gov. John Kitzhaber loves to tell. Kitzhaber, a former emergency room physician himself, calls it an illustration of what's wrong with our healthcare system. A 90-year-old woman with well-managed congestive heart failure lives in an apartment without air conditioning. When her apartment gets too hot, the strain on her cardiovascular system causes heart failure. Medicare will pay for an ambulance and $50,000 to stabilize her, but not $200 for a window air conditioner.

The 90-year-old may be hypothetical, but the story illuminates a common paradox, and Oregon's experimental approach starts with creation of 16 Coordinated Care Organizations (CCOs) that are responsible for assessing the health of their communities. Kitzhaber has given the CCOs flexibility on how they can spend Medicaid money. They can buy that air conditioner. An NPR story describes a Medicaid purchase of a minivan for community health workers who can be available around the clock to pregnant women trying to stop substance abuse, and to help mothers get to doctors' appointments, school and jobs. What makes CCOs different from accountable care organizations, or managed care, is the community component. Once they assess needs, they have to come up with ways to address them. So money can be spent on care coordination and community health workers with the aim of preventing some expensive emergency care. Gov. Kitzhaber told Klein, "We're investing in health. It's just a paradigm shift."

With thanks to Annette Garner, who teaches in the nursing program at the Health & Science University, Portland, Oregon.

Tags:  buscell  complexity matters  health  healthcare  medicine 

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Surprising Return on Enrichment for Babies

Posted By Prucia Buscell, Thursday, August 21, 2014

Policy makers concerned with income inequality need to focus more attention on improving the early environment of disadvantaged babies and toddlers, recent economic analysis suggests. Being born into poverty doesn't have to mean a lifetime of deprivation, researchers say, and the earlier the helpful intervention, the higher society's return on the investment.

High quality early childhood programs have been shown in numerous studies to have substantial benefits in reducing crime, raising earnings, and improving educational outcomes, Frances Campbell, Gabriella Conti, James Heckman and colleagues wrote recently in Science magazine, and now research shows that life's earliest experiences strongly effect adult health.

Heckman and Conti are among the top economists who have done extensive studies on human development. They have found that wealthy children and those from deprived environments have disparities in cognitive performance even before they start kindergarten, and the gap doesn't close with time. Research by Heckman and Flavio Cunha at the University of Pennsylvania shows that the divergence between rich and poor kids in math ability is about the same at age 12 as it was at age six.

Eduardo Porter writes in The New York Times that the achievement gap between rich and poor American students is one of the widest among the 65 countries that take part in the Program for International Student Assessment run by the Organization for Economic Cooperation and Development. Porter suggests the acrimonious debate over how to improve American education misses the most important time-the years from infancy though pre-school. Heckman, Conti and others report that interventions from infancy through age five pay extremely high returns. Good early programs improve cognitive skills and foster softer skills such as sociability, motivation, perseverance and self-regulation. Heckman and colleagues say those are the traits that enable kids to use their cognitive skills for future learning and adult success.

Two well documented programs are illustrative. The Perry Preschool Project offered intensive social and cognitive skills building for disadvantaged three and four year olds from 1962 to 1967 in Ypslanti, Michigan. A study found Perry graduates at age 40 were more likely than those in a control group to have finished high school, to hold jobs, and have higher earnings.

The Abecedarian Project in North Carolina started in 1972 with 111 infants who were followed from birth through their mid 30s. The children were randomly assigned with half in an intervention group and half in a control group. Children in the treatment group received regular pediatric care, good nutrition, and stimulation in language, cognition, and emotional self-regulation from infancy through age five. Parents also were trained. In the second phase, through age eight, the focus was on math and reading. The group that received the special early care did better educationally, and by age 30, members of this group were four times more likely than those in the control group to have graduated from college, be employed and have health insurance.

The health findings were a surprise. Men in the treatment group had less hypertension and none had metabolic syndrome, the cluster of conditions that raise the risk of heart disease, diabetes and stroke. One in four of the control group had metabolic syndrome. Women in the treatment group were less likely to be obese, less likely to drink before age 17, and they had healthier habits.

What about the small size of these samples? Heckman says the dramatic disparities between these treatment and control groups actually strengthen results because such differences are unusual in small sample experiments.

In a New York Times article, Heckman wrote that "the economic rate of return from Perry is in the range of 6 percent to 10 percent per year per dollar invested, based on greater productivity, and savings in expenditures on remediation, criminal justice and social dependency. This compares favorably to the estimated 6.9 percent annual rate of return of the U.S. stock market from the end of World War II to the 2008 meltdown." The Abecedarian Project lasted five years and cost $67,000 in 2002 dollars, he said, and produced substantial adult health benefits and cost savings. In Heckman's view: "Early childhood interventions are an unexplored and promising new avenue of health policy."

Tags:  buscell  complexity matters  culture  health 

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Disruption, 'Dematurity' and Cooperative Commercialization

Posted By Prucia Buscell, Thursday, August 14, 2014
Updated: Sunday, August 17, 2014

Disruption in an industry often comes from the gradually accumulated effects of many interacting forces rather than a sudden change, business analyst John Sviokla writes, and what happens to industries impacted by this multifaceted dynamic is a phenomenon he calls "dematurity."

"You can think of dematurity as a crescendo of mini disruptions that add up to great effect," Sviokla writes in Strategy+Business. "It will hit most industries sooner or later; it has struck sectors as varied as soft ware development, entertainment and defense contracting. It's happening right now in the U.S. in healthcare and electric power generation." And results can be surprising.

The term, coined in the early 1990s by former Harvard Business School professors William Abernathy and Kim Clark, describes what happens when many small companies rapidly adopt multiple innovations that can rejuvenate practices in an old industry. Sviokla explains the professors were thinking of the U.S. auto industry, which was profoundly challenged by Japanese competition, the quality movement and lean management. But instead of collapsing, the big three Detroit automakers adopted the tools and techniques of their competition and aimed for better quality and customer satisfaction.

Sometimes disruption actually helps market leaders. Wharton Management Professor David Hsu, MIT Professor Matthew Marx, and University of Toronto Professor Joshua Gans studied the speech recognition industry and found start-ups that introduce disruptive technologies with long term potential are more likely to end up licensing their innovations to established businesses, or agreeing to be acquired, than they are to become rivals. They say that's because start-ups are eager to prove the value of their innovation, and once they do, they often form alliances with the established businesses or merge with them. These authors call that a cooperative commercialization strategy that sometimes has the effect of preserving the status quo. Read their paper here.

Sviokla says while dematurity can make industries young again, it can also threaten individual industries if leaders haven't seen it coming in time to prepare. He cites five "often overlooked but genuinely prescient" signals of change:

New customer habits: Mobile phones used only for voice communication in the 1990s didn't dramatically change people's habits. When people began to use phones for text messages, reading magazines and books, listening to music, and playing games, habits changed. They began taking pictures, shopping online and using multiple apps so business and pricing models changed in a large group of industries that once operated independently. The same thing happened in IT when access to services by high speed cloud connections began to replace web based software.

New Production Technologies: A recent survey showed more than two thirds of 100 manufacturers report some use of 3D printing, a burgeoning technology that will have major impact in many industries in the manufacture of goods, supply chains, product development, and transportation.

New Lateral Competition: The emergence of healthcare outlets in bog box stores and retail clinics is creating competition for primary care providers and hospital emergency rooms, which will have to adapt. Old and new businesses in healthcare are trying to keep people out of doctors' offices with services to promote exercise, control weight, manage disease and offer advice.

New Regulations: When regulations appear to pave the way for self-driving cars, major dematurity can be expected in public mass transit and private transportation-related industries.

New Means of Distribution: Digital infrastructure has already dematured media and entertainment. Regulations allowing expanded commercial use of unarmed aerial vehicles-drones-would have major impact in fields such as law enforcement, insurance, and delivery of emergency supplies to remote areas. Amazon plans to use drones to deliver merchandize, and some analysts predict drones are the transportation of the future.

Sviokla is co-author of The Billionaire Effect: What Extreme Producers Can Teach Us about Breakthrough Value. He is a principal and advisory innovation leader with PwC. Read his Strategy +Business article here and the David Hsu article here.

Tags:  buscell  business  complexity matters 

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For Children Born Poor, Poverty’s Shadow Lingers

Posted By Prucia Buscell, Thursday, August 07, 2014

After following nearly 800 Baltimore school children for almost three decades, researchers at Johns Hopkins University found most of the children grew up to have about the same socio-economic status as their parents. Those born poor stayed poor. Those born to more economically successful families fared better.

Johns Hopkins sociologist Karl Alexander PhD, and fellow researchers, the late Doris Entwisle, PhD, and Linda Olson MA, tracked 790 Baltimore children from the time they entered first grade through their late 20s. They repeatedly interviewed the students, their parents and their teachers through their school careers, and continued conversations with the maturing students as they entered the work force and started families. Their research is presented in their book, The Long Shadow: Family Background, Disadvantaged Urban Youth, and Transition to Adulthood.

The findings are described on the Johns Hopkins website. Only 33 children born to impoverished families earned high incomes as young adults, whereas 70 would have been expected to have high incomes if the family of origin did not impact the children's prospect for upward mobility, the researchers reported. Only 19 of those born to well off families dropped into the low income bracket as adults.

Only four percent of those from low income backgrounds had a college degree by age 28, a figure Alexander found shocking. By contrast, 45 percent of children born to higher income families had college degrees. And race played a significant role in adult outcomes. While 45 percent of white men from low income families had landed one of the shrinking number of industrial jobs in the area, only 15 percent of black man from low income families had such jobs. White men self-reported having the highest rates of drinking, smoking and drug use, though black men had slightly higher arrest rates and white men were more likely to be employed despite their records and substance use. Alexander said white men were more likely to have social networks that helped them find jobs.

In an interview with NPR, Alexander said we expect that if we "Play by the rules, work hard, apply yourself and do well in school ...that will open doors for you." But the Baltimore study suggests that what makes the difference between success and failure is money and family. Still, a few defy the odds against them. NPR interviewed one young woman in the study whose harrowing childhood included drug addicted parents and neighborhood chaos. "I remember being so immune to death, so immune to shootings and killings. I just remember wanting them to rush, like get the body out of the way so we can get back to playing hopscotch or dodgeball," she said. But she managed to get a well-paying job and give her two children more stability and motherly support. She says she has a strong relationship and plans to be married.

Tags:  buscell  complexity matters  culture  education  research 

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