How blockchain will eliminate the difference between inside and outside the business

Click to read article in Sloan Management Review

Chapter 3 of The Escher Cycle describes how

it no longer makes sense to think of “inside” or “outside” the business — they do not exist. The business is not choosing whether to carry out each process inside or outside itself. It is choosing between different forms of contractual agreement as the best way to achieve the levels of value and cost that are needed: with employees or with suppliers.”

Customers are just as much a part of the business model as employees and shareholders.

Companies like Airbnb and Uber have shown how to put this thinking into practice. These businesses provide a platform that people can use to sometimes play the role of customer, sometimes employee.

Now this article in the Sloan Management Review describes how blockchain technology will again transform the way businesses are organised and managed, blurring the distincion between ‘inside’ and ‘outside’ still further.

Not only does the blockchain enable parties to transfer information — something that has already been made much easier by the Internet — but because the blockchain is distributed, public, and encrypted, parties will find it easier to establish trust, thereby making it possible to do transactions that would otherwise have been too risky.

It allows companies to eliminate transaction costs and use resources on the outside as easily as resources on the inside.”

Under this vision, the ‘inside’ of the business could shrink to become only the ability to formulate a series of contracts with different ‘external’ parties to carry out different roles. “If you carry out this action or create this result by this date I will pay you this amount on this date, and the outcome will be recorded on the blockchain for all to see in future.” The more standardised or commodified the activity, the easier it is to contract with someone ‘outside’ the business to do it.

And as this second article shows, IBM is positioning itself as “the go-to business blockchain.”

Research shows bodily RNA can transfer into sexual reproduction


The publishers of this article lie outside the mainstream, but the article is well-referenced.

New research has found that changes to bodily RNA can be transferred to spermatazoa and hence to offspring. This “[collapses] the timescale necessary for the transfer of genetic information through the germline of a species (e.g. sperm) from hundreds of thousands of years to what amounts to ‘real time’ changes in biological systems.”

For me it would explain, for example, how human beings have managed to evolve such varied racial features in different parts of the planet, although under classical models of evolution there has not been enough time for this to happen since homo sapiens left Africa only about 200 thousand years ago and spread across Asia only 75 thousand years ago.

The findings also reinforce the view simply that we are all part of one large interconnected organism. This organism has become increasingly differentiated over the past 3.5bn years (when the first differences appeared in the Last Universal Common Ancestor or LUCA that once covered the planet), but it still co-evolves as a single interlinked organism, via an interconnected Escher Cycle of different mechanisms, of which these new findings are merely part, and the sexual reproduction we are more familiar with is another part.


You can read the full article here:

Experience Changes Biology

The research increasingly shows that even at a genetic level our experience (ie the actions we take) shape the design contained within our genes, in an Escher Cycle that started before we were born and continues throughout our lives:

“A cell is a machine for turning experience into biology.”

Implementing Finland’s Basic Income

Chapter 3 of The Escher Cycle includes a description of how to improve any process.

The steps are:

  1. Define what you want the change to achieve (and what you want it to avoid)
  2. Identify alternative approaches of achieving that
  3. Get input from stakeholders and choose what looks best
  4. Test it out
  5. Decide whether to go ahead, cancel the idea, or run an adjusted trial
  6. Communicate what you have decided works best
  7. Roll-out and continuously improve

This is essentially the approach that Finland have just followed in getting to their rollout of a national basic income:


As a result they are the first country in the world to experiment basic income on a large scale.

You can read more about this here.

Wanted: flexible corporate strategies for fast times

Screen Shot 2015-03-28 at 13.35.36Writing in the Financial Times this week, Andrew Hill says that “People often think business is about strategy but it’s actually one part strategy and nine parts execution.”

Leaders managing in uncertain times, he says, are looking for tools and frameworks to help them plot a path.

The Escher Cycle is a book that integrates strategy and execution. It is both “A unified theory of business” and “A blueprint for winning any game your business chooses to play.

The book starts by asking what are the fewest activities any business needs to do to be successful. It then builds step by step to identify these activities, and provide a simple focused framework describing how to carry out each one.

How well these activities are carried out in comparison with rivals is what defines business advantage.

Together, as one reviewer put it, they describe how to run a business “as a living organism.

This, surely, is exactly what leaders seeking to plot a path through uncertainty need.

Tenth anniversary ebook edition, now available

cover-hi-resWe are pleased and proud to announce that the celebratory tenth anniversary edition of The Escher Cycle is now available as an ebook on Amazon, so you can easily carry it with you at all times.

This second edition of the 2004 hardcover original has a few minor edits, all of the original 80+ figures and tables, and a new preface.

Copies are available through all Amazon sites, but here are links to the relevant UK and US pages (which will display a link to your local site if you need one):

Amazon uk, opens in new window, opens in new window

The book is in kindle format. If you do not have a kindle you can download a free reader app for your device (PC, apple, android, iphone) from the Amazon web page.

Preface to the Tenth Anniversary Edition

cover-hi-resAs publication of the second edition of The Escher Cycle approaches, I thought it would be good to share the new preface to this edition.

It explores some of the changes that have happened during the ten years since initial publication, and asks whether any of the predictions made by the book’s thinking came true.

No one ever steps in the same river twice,
for it is not the same river
and they are not the same person.
— Heraclitus, c. 535-475BC

In the ten years since I wrote The Escher Cycle the world has changed. A billion more people now live on the planet. And what were once the “emerging economies” of the BRICs nations have now grown to account for nearly a quarter of global GDP. They have emerged.

At the same time, some business models that were strong a decade ago have all but disappeared. DVD rental stores and makers of CD players hang on here and there, but the Internet has replaced most of them. Businesses such as Instagram and Whatsapp, meanwhile, have grown from zero to multi-billion dollar valuations in just a few short months.

This ever-changing economy is the ever-changing river that Heraclitus talked about over two and a half thousand years ago. And the rate of change is getting faster.

But some things do not change. Continue Reading >