The weekly download: No 37
A holiday collection covering AI and organisation structures, a framework for everything and the history of the number 60. With a socially acceptable AI question to finish...
Trying to be in the holiday spirit. So no connecting thread this week, just a few different posts that I found fun and interesting.
AI and the nature of the firm
First a thoughtful post from Howard Yu. Coase vs. Claude and The Future of the Firm is an economist’s view of how AI might transform business structures.
His starting point is Coase’s insight that firms exist when the transaction costs of coordination are too high. AI will change those transaction costs dramatically. As that filters through, new organisational forms will inevitably emerge.
No-one knows what these might be. Howard shares the example of Haier which is broken down into more than 4,000 micro enterprises. I didn’t know this story but it is certainly one possible vision of a different future.
It reminded me of a concept from The Living Company (still my all time favourite business book). Aerie De Geus talks about flocking. Encouraging people to gather around the most successful new ideas. I love this as a key element in developing a culture of learning and evolution.
The bigger point is thinking about the change ahead. Over and over again, I have seen businesses focus on new technology as just that, a new piece of tech. The change that matters in business has nothing to do with the tech. It’s about the new products and services people want, the new ways of working and the new businesses and business models that emerge.
This is why the whole debate about AI and jobs bores me. Yes many jobs that exist today will not exist in a few years. People working with AI or in datacentres will not replace all those jobs. We can’t see what the new will look like but history tells us it will emerge. That’s why learning and evolution is the only way forward.
This post is a great framework for thinking about that future:
Frameworks and fundamentals
Which leads me to my second post, The Tetrad by Samir Varma. This is the ultimate framework. He argues that the whole universe can be explained by four things:
Physics - the science of substance
Mathematics - the explanation of structures, patterns and relationships
Computer science - the world of information and computation
Economics - the science of scarce resources
He goes on to test this against the idea of God - not really for me tbh. Nonetheless, I love this way of looking at these things. Even if my knowledge of all four is a little sketchy at best.
The underlying concept is also really important:
“That’s what frameworks do when they work. They don’t answer questions for you — they clarify which answers are compatible with which other answers. They show you the trade-offs you’re actually making, whether you realize it or not.”
My translation of this into business change. Frameworks are a useful tool for understanding the context and figuring out what matters. They help you formulate the right question and evaluate ideas. They are not a formula or a solution.
Division and multiplication
“Why does every human on Earth structure their day around multiples of 60? 60 seconds, 60 minutes, 360 degrees.”
Bhavya Tyagi sets out to explain both the elegant maths and the history in The Number that Refused to Die. A fascinating and fun diversion. Reveals that even something apparently simple can be explained by looking at the question a different way.
In this case, we are so used to base 10 it’s easy to wonder why any other numerical system is ever used. The simple answer is that 10 is perfect for multiplying but not so good for division. Dividing is the superpower of 60.
Incidentally, that is why much of the old British Imperial system makes sense. My wife sews and embroiders beautifully and she is also better at maths than I am. She assures me that 12 is a great base for division. All good - until you start throwing 14s and 22s into the system.
Socially acceptable AI
Finally a question. Dave Kellog writes about the Socially Acceptable Use of AI in Business. Much of what is trumpeted under the heading of ethical use is actually just about social norms.
The author sets out a clear and reasonable view of what is acceptable today. Inevitably, it is driven in part by his own experience in mainly US companies.
Do the same social norms apply wherever you are in the world? How might this change in the next couple of years?
Thanks for reading