The Power of Flows

Picture flow

If you only read one book this year, make it Thomas Friedman’s Thank You For Being Late - especially the chapter about technology. You don’t understand the significance of things you take for granted like cloud-computing and social media - you don’t understand what kind of potential these technologies hold.

I am so inspired by this book, and the people I have met who read it too cannot stop talking about it.  One of the theme I want to dig deeper into is his analogy about flows.

[T]his isn’t complicated: the most educated people who plug into the most flows and enjoy the best governance and infrastructure win. Thomas Friedman

It is a theory that really stuck with me, and I can relate to in a lot of ways. Have you ever thought why most big cities and capitals in Europe are built near water: streams, rivers or the ocean? It brings life. Running water brings fertility to not only the ground but to society. It created activity in form of trade and culture.

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Likewise, the biggest companies today and built close to flows of activity. To give an example, Social Networks like Facebook are built on a flow of relationships and successfully manage to tap into that flow, sometimes and even expand upon it. They are enablers of flow, removing friction from the stream to let activity run more smoothly.

That is in my very simple explanation of flows, but i urge you to read the book to understand it better - and I am up for discussing this with anyone!

But first, I want to expand the term a little bit. I love the flow metaphor and I think it extends to success in general - not just for companies. I will tell you why.

The Expat I met in Panama

When I was living in Panama, I was constantly met with the notion that Panamanians were lazy and unintelligent workers (a stigma I found to be false most of the time). Then I met a successful expat businessman that supplied ships in the Panama Canal with basic provisions (I hope the stream metaphor isn’t lost on you). He had managed to outperform all local suppliers and the dominate the vast majority of the market.

When ask how he did it he answered without hesitation I was lucky … people who work hard tend to be more lucky.

You can find people who work hard without success - many start-up founders fall into this category. You can also find people who doesn’t work too hard but make a lot of money - this is rarely the case though, and is mostly reserved to lottery winners.

To explain this I will use the river metaphor again.

Imagine a river village ...

Once upon a time, there was a village lying next to a river. The men usually ventured out into the river every now and then to catch fish with their hands and spear. Most of the men retired to shore after they made a catch. But one of the men, Eitan, kept standing in the river, only retiring to shore when he had to sleep and eat. Every day Eitan was out in the river from dawn to dusk.

Who do you think caught more fish - of course, it was Eitan who kept going into the river, day in day out. But Eitan didn’t catch more fish just by standing in the river. Two things happened as a result of his strategy.

The first factor of Eitan's succes, was that he increased his chances for a catch the longer he stood there. With improved opportunities with a catch, Eitan got more training, more practice. He failed than the others missing fish after fish, but he also caught more than the other men. And while he tried, he learned, and he got exponential better with every experience building on top of the previous mistakes and successes. This is Eitan’s internal force for success - perseverance and experience.

The second factor for Eitan’s success is the river. Of course, he wouldn’t make a catch if there were no fish in the river, no matter how long he stood there. So this tell us something about the role of your surroundings, and what flow you choose to build your village next to. The river must be fertile enough for fish to live, and big enough to house a population.

But no matter how many fish there was in the river, Eitan wouldn’t be able to catch any of them without practice. So without fish in the river, Eitan’s experience is useless. But without Eitan’s experience, the fish becomes useless. You need opportunities, but you will only get them if you venture in the river. And when opportunity present itself, you need the skills necessary to catch them and not let them slide away.

Even the greatest warrior will be forgotten, if the war never comes.

The expat I talked about earlier went to the river every day. His competitors didn’t. He was lucky that he had chosen a big, fertile stream, or at least big enough to support him and his company.

A comment on windfalls

Sometimes, people get a windfall [meaning they get a lot of money handed - lottery winners, heritage, lucky stock options]. But that would be like if the village was hid by a storm that happened to rain tunas. The possibility is low for that happening, so don’t count on it as a serious option for getting dinner on the table.

Just because people got into a windfall doesn’t mean they know how to catch fish, and once the tunas are eaten they are back to starving.

A comment on managing people

Even though the expat businessman was the CEO of the company, he was in the office two hours before his employees and made a point of leaving as the last one. He worked relentlessly. He managed to motivate his employees to show up on time, work hard, and provide excellent service - things that was unheard of in Panama - because they saw that he worked twice as much, twice as hard and provided twice as much service than they did.

He set the status quo for an organization of excellence. These workers were young, uneducated, lowly-paid storage and inventory workers

When a boss complains about his slow, unproductive labour force that shows up late, miss deadlines and unmotivated, it is not their fault - it is his own. He needs to be x10 everything of what he wants his employees to be.