In my last post on this topic, I left off with a reference to Yochai
Benkler, a professor at Yale Law School, who has become an influential
writer on new economics. Today's economy has been called the Internet
economy, but I prefer Benkler's term: “networked information economy.”
Here's how he defines it in a
paper originally delivered at Duke Law School on March 26,
2002:

an
economy of information knowledge, and culture that flow through society
over a ubiquitous, decentralized network.“Within this new economy,
Benkler
describes a new mode of production which he calls ”peer production.“
Here's how he defines it:

Peer production describes a process by which many
individuals, whose actions are coordinated neither by managers nor by
price signals in the market, contribute to a joint effort that
effective produces a unit of information and culture.

In
our work with the Otter Group, we have come to believe that learning is
going to be transformed by the peer-production economy and that the
benefits to organizations who adopt new systems and methods that can
harness the energy of the peer-production economy will be enormous. Now
the diverse talents and intelligence of large numbers of people can be
better harnessed. Here's Benkler again:

People have different innate capabilities, personal,
social, and educational histories, emotional frameworks,and ongoing
lived experiences. These characteristics make for immensely diverse
associations with, idiosyncratic insights into, and divergent
utilization of, existing information and cultural inputs at different
times and in different contexts.

In
our work designing and managing e-learning programs we see first-hand
how true this statement really is. We have worked with some of the
great minds of our generation of thinkers. And yet our best programs
are those that manage to tap the “idiosyncratic insights” of the
participants. This palpable experience has led us to expand as much as
possible the time devoted to the participant content. It was the desire
to find new ways to get participant thinking into the mix that led us
to weblogs and RSS as learning technologies. And they have proven to be
very powerful at bringing the intelligence at the edge of network
forward and into view. Now we are working on using our new method
combined with these new tools to make learning emergent and continuous.
This is why we call what we do an ”emergent learning network.“

The mental model for an emergent learning network is not a hierarchical
model. Rather, the intelligence of the network is in the end users. An
emergent learning network looks more like a bee hive than a traditional
organizational chart. It is also like the brain.

In my next post, I'll start to look at how new technologies are making
it easier to capture and share learning as it emerges and what we are
developing at the Otter Group to capture and manage emergent learning.

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For the past five years we have had the honor of working closely with
Andrew Lo, a finance professor at MIT's Sloan School of Management.
This Sunday, Andrew was profiled in the business section of the Sunday New York Times on his new paper on how hedge fund returns can be deceptive in terms of predicting future performance.

We have been working with Andrew on a program for Merrill Lynch where
high performing employees learn Andrew's theories and ideas and then
work in teams to adapt what they learn to new product and service ideas
for Merrill.

One of the exciting aspects of this program is that Andrew has not only
brilliant insight into where things are headed in the financial
markets, but he himself runs a hedge fund. He is able to bring a
hands-on perspective to learning that is unusual coming from someone
with an academic background.

We have used digital publishing and collaboration tools to help a
global set of employees at Merrill Lynch work with Andrew and with one
another. The result has been amazingly powerful new ideas that are
being developed within the firm.

The full paper can be found at http://web.mit.edu/alo/www/Papers/systemic2.pdf.
Here's an excerpt from the New York Times article:

Andrew W. Lo, a finance
professor at the Sloan School of Management at the Massachusetts
Institute of Technology, has been studying hedge fund failures and
risks, and he says that another hedge fund industry shakeout is likely
in the near future. Mr. Lo runs a company, AlphaSimplex, that manages a
$400 million hedge fund - so he is not looking for a reason to say
hedge funds are in trouble. But that is exactly what he's saying,
backing it up with powerful data and a couple of unexpected theories.

Mr. Lo has been working on the economics of hedge funds since the
mid-1990's, but he started thinking seriously about how to measure risk
across the industry in 1999, when he was first approached by backers to
start his own hedge fund; it opened in 2003. He knew that sophisticated
investors would want lots of data about his fund's returns and about
the risk level he would assume, so he started looking carefully at the
return data provided by other funds.

Traditionally, economists have thought that big up-and-down
fluctuations in returns indicated risky investments, so many hedge fund
investors have hoped to see a pattern of smooth and even returns. But
Mr. Lo quickly saw that lots of hedge funds were posting returns that
were just too smooth to be realistic. Digging deeper, he found that
funds with hard-to-appraise, illiquid investments - like real estate or
esoteric interest rate swaps - showed returns that were particularly
even. In those cases, he concluded, managers had no way to measure
their fluctuations, and simply assumed that their value was going up
steadily. The problem, unfortunately, is that those are exactly the
kinds of investments that can be subject to big losses in a crisis. In
1998, investors retreated en masse from such investments.

……

ALREADY, his work has prompted hedge fund managers and investors to pay
more attention to the hidden risks of funds that seem to be performing
quite well. Clifford S. Asness, managing principal at AQR Capital
Management, a large and successful hedge fund based in Greenwich,
Conn., says Mr. Lo's work forces fund managers in general to confront
the risks: “He demonstrates simple models that generally show a winning
payoff but occasionally really die.”

So what should be done? Mr. Lo sees no way to eliminate the cyclical
nature of hedge fund investing, but he says we can learn from the
mistakes of funds that fail. He advocates the creation of a financial
equivalent of the teams at the National Transportation Safety Board
that swoop in to investigate airplane crashes.

The nightmare script for Mr. Lo would be a series of collapses of
highly leveraged hedge funds that bring down the major banks or
brokerage firms that lend to them. That's a possibility that the entire
hedge fund industry - secretive and fractious though it is - has a huge
interest in avoiding.

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We have been supporting artists with free weblogs. It is a small way
for us to give back to the community. But we gain so much in being able
to read these wonderful weblogs. Here is a blog
just started by filmmaker Arleigh Prelow. She will be using the blog to
document her work on Howard Thurman, the subject of her documentary
film.

And So We Begin…….
by Arleigh Prelow at 10:52PM (EDT) on September 4, 2005  |  Permanent Link  |  Cosmos
Sunday, September 4, 2005, 6 PM
 
This is my first blog. Some inspiring comrades from Martha’s Vineyard
have insisted that I record my remembrances, insights and experiences.
But as I have discovered, and many have voiced all along, I NEED to
write. This blog is a venue to make outer, many of my inner ponderings
and discoveries. It also an opportunity to give flow to the internal
streams of thought that have long harbored inside of me.
 
This will certainly be an experience for me.  Within, there has
been so much that has been stored, for so long. For a while I believed
that these thoughts and revelations were unremarkable. But a Spirit
within, urges me to gift the world with the insight that I’ve culled
from birth to present. And my comrades have confirmed that what I’ve
experienced, needs to be shared. Thank you Abby, Carole, Eric, Mary,
and Russell.
 
So with this blog, a wonderful gift from Kathleen Gilroy and her
Otter Group, I am embarking on this trek of sharing the journey of
completing a documentary on the spiritual giant, Howard Thurman. Among
many things, I will write about being an artist, a single mother of two
daughters, and an African American woman who quests to fulfill a dream
and a calling.  I will also explore how both my life and spirit
have transformed in the process. I will even reflect on the current
occurrences which tug at our hearts, and challenge our spirits, like
Hurricane Katrina.
 
I hope that the postings will inspire you; that they will gift you with
a new courage; that they will touch and affirm the beauty of your
being; and that, most importantly, they will hearten and strengthen the
Spirit that is within you.
 
Thank you for taking this journey with me.….Let’s enjoy the ride!

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In this week's Negotiation Tip podcast, Dr. Weiss invites you, the
listener, to email or post your responses to another negotiation
scenario. If you would like to participate, please email Dr. Weiss at Josh@negotiationtip.com or visit our new weblog at http://www.negotiationtip.com.

MP3 File (00:06:10)

This work is licensed under a Creative Commons License.