Stanford Japan Center and the Kansai Silicon Valley Venture Forum

Abscape™ from trip to Japan 1987
by Matt Taylor

Culture • Innovation • Economy
notes for two talks in Japan - April 2001



These NOTES are presented as CONTEXT for my talks at the Kansai Silicon Valley Venture Forum and the Stanford Japan Center.

Their intent is to establish a framework for the more tactical level “how to” remarks of my actual presentations.

Their “voice” is that of a prepared presentation. These Notes can be taken as the talk not given for reasons of time constraint and the desire, on the program sponsors part, that I describe in some detail the specific processes and techniques developed by MG Taylor and knOwhere for facilitating Group Genius.

These Notes may be useful for those interested in my perspective on the broader issues of innovation and entrepreneuring and how these characteristics can be more widely promoted in the Japanese culture.

These Notes, my formal talk and documentation of the two sessions will be posted on my Web site by May 3, 2001 at:


Hypertext links will be provided connecting to supporting information. These Notes and the other supporting documents and links will be made final by May 5, 2001.

Matt Taylor


There are three concepts I wish to define and bring some historical perspective to: Culture, Innovation and Economy. These are old words full of old meanings. If you will explore them with me from a fresh perspective, together, we may be able to breath some new life into these sometimes tired concepts.

A culture is the tacit operating system of a people. Innovation is the ability to change the rules of a system while using it. An economy is a system of transactions, bound by common rules and means (tooling) enabling the exchange of GOODS. A global economy - something we do not yet have - is characterized by real-time, transparent ubiquity - person-to-person - anywhere/anytime on Earth.

There are many aspects to culture, of course. My definition focuses on the aspect that most concerns us here today: What are the RULES that govern the choices that people can even SEE - let alone make? Innovation - ANY innovation - involves, at the root of it, breaking those rules that are being employed within the system in which the innovation is taking place. A culture cradles innovation. Innovation, in turn, challenges cultural assumptions.

When working with a design team, I always look for the “hidden” design assumptions that block breakthrough. Hidden because their cultural norms do not even let certain ideas and choices to surface. It is not choice if you cannot think of something and decide consciously. Too often, cultures filter out and “decide” by default.

The power of Silicon Valley is not it’s technology, product savvy or capital. Not even it’s social organization per se. The power of Silicon Valley is in it’s ability to rewrite it’s own social operating rules in real time. It IS an economy based on constant recreation. This is not efficient. It is often sloppy and chaotic. It is effective. It is adaptive. People there are very aware of the game rules by which the Valley runs.

We will come back to these definitions and look at some examples that illustrate them later. We will see that these definitions argue strongly that the social organizations that we know and employ today - both business and government - will change a great deal as a true global economy comes into existence.

Armed with these definitions, we can explore the essence of Silicon Valley and some aspects of what this phenomena might mean to Japan. I will end with practical suggestions for building a more innovative culture and adaptive economy in Japan.

I argue that the Silicon Valley experience cannot and should not be transported whole to Japan. That the real value is in how the Japanese culture can continue it’s own legacy and recreate itself IN this emerging global economy. Silicon Valley does offer many useful examples of methods and means that can be employed by Japan. However, it is the GENIUS of Japan you have to tap, not America, in order to succeed in the 21st Century.

My remarks are conceptual but not theoretical. I speak from the perspective of a DESIGNER of work environments, work processes and tools. My expertise is in the making of environments that facilitate people doing innovative, collaborative, creative work in greatly compressed time periods. This involves building enterprise organizations that rapidly evolve and adapt to new circumstances.

I have studied the materials describing the activities of the Stanford Japan Center and the Kansai Silicon Valley Venture Forum. These appear to me to be laudable accomplishments in research, network building, education, stimulation of the entrepreneurial spirit and the creation of the infrastructure for innovation. My view is greatly supportive of these efforts which I see as mutually beneficial to what you are doing Japan as well as the necessary ongoing recreation of Silicon Valley itself.

While conceptual, the thrust of my remarks are aimed at identifying the design strategies and actual processes of creating functioning CENTERS of enterprise creation.

Innovation is one aspect of this process. Preserving and bringing forth those aspects of the past that should live, is another. Culture and innovation must be in harmony if lasting progress is to be accomplished. Every innovation and it’s adaptation is a cultural phenomena that requires economy and effects economy. If there is to be lasting benefit, change has to bring true improvement to both people and their organizations. The purpose of economy is to make life better - the purpose of life is NOT to make economy. Much of our modern temperment seems to be based on the contrary principle. NATURE is not kind to those who reverse means (economy) and ends (life).

As you look for ideas - for memes - to bring into your culture - beware:

Great prospects
Create greater hopes
Early flowers before Spring’s last frost



I will conduct the SCAN by stating a number of design assumptions:

Every culture is complex, emergent and cannot be fully understood. Cultural change should never be attempted in the sense of direct, large scale intervention of an organization. Innovation is tied intimately to the cognitive processes of people as they experience life within a culture.

link to three reasons for innovation

A new concept of economy is required if the great industrial nations are to bridge the gap between the world we know today and a sustainable global knowledge-based, “hunter-gatherer,” network economy.

This new economy is being formed by a new culture - a culture based on continuous fundamental innovation. Fundamental in the sense that the economy itself, as well as it’s components, is undergoing deep change. Continuous, in that this never stops - but is accelerating - defying traditional concepts of growth and stability.

This is not an economy of some disruptive technologies, this IS a disruptive economy.

In this situation, every individual has to make decisions not called for in past generations. Every organization, corporation and government has to do the same. The sum of these decisions - and the actions that flow from them - will make a new global culture.

This culture will intrisically be in conflict with the traditional context we now each live and work in - which we call our culture. Ultimately, both this global culture and the many unique local cultures have to come to terms - one will not be healthy without the others.

We cannot control this new economy. The question to ask is: “How can we CO-evolve with it, profit with it and imbue it with human values?

If we fail to build IN human values we will build a relentless machine and become it’s slaves. The economy will merely be an engine, running faster and faster, building more, demanding more - all for no purpose other than to sustain itself and the fleeting profits of who are on top at any given moment. This is a treadmill economy - one lacking in significance.

We must reinvent our concept of organization and direct our genius to the making of a new economy - organizations will not succeed by just continuing to compete in markets defined by the old economy and it’s structures. The new economy will function as an ecology. It will reach the complexity of natural systems. It will be in harmony with Nature and all players in it will participate in it’s creation else it will not serve human needs and goals.

Silicon Valley - with all it’s obvious good and bad aspects - is, first and foremost a culture of BUSINESS innovation - this innovation of business and social forms, not just products grew organically, it was not made. It sprang from an unique set of circumstances and, today, is facing a revolution of it’s own. It is producing tremendous unintended consequences. It will not survive for long the way it is. It shows, however, every sign that it can replace itself, again, with something new.

Transporting Silicon Valley to Japan is a mistake. A forced fit of a seed form that will cause only pain and few benefits. In fact, it is not possible to do this. Nor is it necessary.

To learn from the Silicon Valley experience is both useful and productive. To stimulate the Japanese culture to apply this learning while discovering it’s unique contribution and role in an emerging global economy is a practical investment.

I said:

“A culture is the tacit operating system of a people. Innovation is the ability to change the rules of a system while using it. An economy is a system of transactions, bound by common rules and means (tooling) enabling the exchange of GOODS. A global economy - something we do not yet have - is transparent ubiquity - person-to-person - anywhere/anytime on earth.”

The real question before us, then, is how will the Japanese culture evolve and make a unique contribution to a future planet, and, what is the economy of this? How will Japan take the lead in BUILDING a transparent global network that facilitates billions one-to-one transactions.

These question formulate a DESIGN challenge: “how do you design and build a system that is too complex to understand and cannot be controled - yet, produces the kind of results you want?” This is the central question to all 21st Century enterprise.

The short answer is you employ GROUP GENIUS to build a VALUEWEB environment that IS a culture, economy and system of work. You expand it. You evolve it through feedback of a complex kind. And, you expand it again. Multiple, FAST iterations of work and recreation are required. Make many small mistakes. Avoid monolithic policies. Employ enabling structures and technologies. Create highly adaptive processes.

This is what Silicone Valley did. This is what it must do again to both survive and remain a leader. This is what Japan is positioned to do as well as - if not better - than any nation, or CULTURE, on Earth. I emphasize culture because I suspect it will be predominately the Japanees culture that contributes and prospers - not the Nation State form as we know it today.

What we are discussing, today, is the engineering - and ART - of process design. It is the PROCESS of Silicone Valley that Japan can recreate and apply, with it’s own unique social and economic perceptions and means, to the making of something totally unique. I am, of course, talking about transformation - not change.

The paradox is that cultures and institutions that transform recreate the best of their tradition. Those that resist change merely cling to the shell of their past while squandering their future.

Every transformational period - and we have gone through many in history - has it’s own set of starting conditions and desired out comes. The GAP between what is and what is imagined generates the PROBLEM to be solved.

What is the problem we want to solve?

Why do we talk about Silicone Valley in reference to Japan? What do we perceive needs changing? What is the desired outcome? What do we believe will obstruct the process? Why are the intended results important? How have we succeeded - and failed - in similar attempts before? What happens to people as a result of this journey? How do we actually accomplish the task? How do we avoid doing harm? When we get to the destination, will we still want it? How do we bound the problem (opportunity) so that the investment makes sense?

25 years ago in thinking about the transformation implied by the transition from an industrial economy to a knowledge economy, I asked myself many of these questions. This led to the formation of MG Taylor and our building an innovation LAB in which complex change, of the scale and kind we are talking about here today, can be facilitated. In over two decades, over a thousand exercises of Group Genius have been conducted enabling organizations of all type, sizes and cultures to re-create both their problem and their solution of it.

It is from this experience that I ask and address these questions. It is from this experience, using Silicone Valley as a metaphor, that I will answer them. In fact, I have already answered these questions:

“The short answer is you employ GROUP GENIUS to build a VALUEWEB environment that IS a culture, economy and system of work. You expand it. You evolve it through feedback of a complex kind. And, you expand it again. Multiple, FAST iterations of work and recreation are required. Make many small mistakes. Avoid monolithic policies. Employ enabling structures and technologies. Create highly adaptive processes.”

I must now define: Group Genius, ValueWeb, network architecture and feedback (and complex feedback).

Group Genius is not individual talent and genius added up. Group Genius is the SYNERGY of the experience that a team, organization or society possesses. Group Genius relies on intensive collaboration in an environment (physical &virtual) where everyone is in a peer-to-peer relationship. Group Genius cannot be controlled - it can be facilitated.

The traditional organization organizes it’s investors, customers, producers and management into a hierarchy. Investors want more return and less risk. Customers want greater values and less hassle. Producers want greater income and lower effort. Management is in the middle trying to mediate these conflicting interests. The BUSINESS is seen as some of the investors, some of the producers and the management. The Customer is seen as the market.

draw diagram

A VALUEWEB rearranges these elements into a network architecture. The investor network, the customer network and the producer network are facilitated by a SYSTEM INTEGRATOR (we used to call management). The purpose of the ValueWeb is to create wealth and distribute the proceeds to each contingent investor, customer, producer) in the form they value by rules that have been agreed upon. The ValueWeb IS the market - it IS the ENTERPRISE.

draw diagram

The legal entity we call the business has two roles in a ValueWeb. First, to be the fair broker, system integrator of it’s ValueWeb The task is to facilitate the web’s identity, rules-of-engagement, activities, growth and continued renewal for long term sustainable success. The second, as an operating entity, is to have FITNESS as a player inside this web. These two roles cannot be confused. The first role is focused on creating and maintaining the commons. The second at achieving individual benefit.

A NETWORK ARCHITECTURE is made up of channels and nodes. These are the “supply chains” - providers to customer - that never comfortably fit in the old organizational model. These channels and nodes must follow “Patch Theory” as defined by Steward Kaufman. The “Patches” are the various organizations within the web - nodes are individuals. If over wired, they become rigid. If under-wired they become isolated. Optimally, these are a five to seven connections per node. The rules of the patch - which has many nodes - are: “use what you get, ship what you learn - optimize your patch.”

draw diagram

The ValueWeb Model functions on several levels of recursion. The level where EMERGENCE happens cannot be controlled. Context comes from the “higher” level, discipline from a “lower” - multiple iterations of activities are required to find “fitness.”

draw diagram

This works, however, only if there is effective FEEDBACK. Feedback is the message to a controller of a system, from the sensor of a system, of the difference between performance and expectation. Feedback of a complex kind - necessary for governance of dynamic, large scale complex systems - is feedback on feedback. This means feedback from multiple levels of recursion and iterations of work.

draw diagram

The ValueWeb, and it’s network architecture, is like a massive parallel processing computer compared to the old hierarchical machines: it is much faster and cheaper and... far more difficult to program. It cannot be taught - it has to be grown. It must learn from it’s own experience.

You must build this network architecture through many iterations to accomplish the future you envision. Start on a doable level - whatever that is. Then scale it to the next level. Do it again and... again. This is applying rapid prototyping methods to the development of enterprise STRUCTURES. In this case, each iteration - is the ENTERPRISE.

This is how Silicon Valley came to be. Silicon Valley has been called one company whose divisions are SUN, APPLE, INTEL, CISCO (and so on). This is why we can think of it as a PLACE. We think of it as a place, not only in the physical sense, but as an enterprise - as a metaphor. It is a BRAND. It is a social movement. The result of culture and the maker of culture.

These DESIGN ASSUMPTIONS are solid. We, at MG Taylor, have tested them for 25 years. I mean to be taken literally: build a PLACE that runs by new rules. Start in a single building. Test it. Expand to a city. Test it. Expand to a region. Test it. Build many network nodes in many regions throughout the globe. Test again. When satisfied, take it to scale - quickly. Enterprise, economy and culture grow organically as one thing.

Not knowing
The journey starts
A place of stillness



Our FOCUS, then, must be on the design details. Design WINS in the new economy. Not just the design of products and services but the design of processes and organizations. The design of ValueWebs. the creation of BRANDS.

Japan is very good at design. Japan is very good at building enterprise networks. Japan needs to apply these virtues to it’s own concept of business STRUCTURE and organization.

However, as I pointed out, DIRECT intervention in matters of culture do not often work. Direct intervention is arrogant and spawns unintended consequences.

The best strategy is to build new - do not change what is. Let the what IS adapt, naturally, in response to successes of new ventures. This will happen, however, only if the two are intimately linked. Both old and new have to function as Patches, channels and nodes in a ValueWeb architecture. Leave the huge, old, successful organizations alone. Wire them IN to a new more dynamic ENTERPRISE.

Four stories illustrate my points:

The 777 engine development process, the F-15 reconfiguration that put the jet back into production, NASA’s going to the moon and Silicon Valley as an OPERATING SYSTEM. None of these illustrate organizations that are perfect examples of ValueWeb architecture. Far from it. Many players in these stories are considered, old, successful, conservative even hide-bound enterprises. This in itself is important to our understanding. Organizations in all stages of their developmental life cycle can be entrepreneurial and innovative. These stories clearly illustrate the principles and rules that allow us to understand how ValueWebs can operate.

MG Taylor was deeply and intimately involved in the 777 and F-15 work both on the level of strategy development and facilitating of the thousands of individuals that did the work. The Air Force built an MG Taylor NavCenter at Arnold Engineering and Development Center where most of these two stories unfolded.

We have worked with NASA for 7 years now. This work stared long after the Moon program was history. In a strange way, the aftermath of the Moon program nearly destroyed NASA - a clear case of unintended consequences. Now NASA aeronautics is learning how to apply ValueWeb architecture to the recreation of their enterprise.

MG Taylor built it’s second knOwhere Store in Palo Alto in 1997. Until then, most of our work was with “old economy” governments and businesses seeking to re-create themselves. Since 1997, we have worked with many established and startup companies in Silicon Valley and have been intimately involved with the incubation of several start ups. We have watch these companies struggle with both the “upside” and “downside” of the rash.

These stories are drawn from a combination of our own involvement and from the telling of those who were there. These stories are not the conventional view of these events. They are the events retelling from the vantage point of an emerging network economy.

The 777 Story.

The 777 story is one of solving one problem in a way that solves many. It is also a demonstration that going against the conventional wisdom is necessary for break through success.

link to 777 story

The F-15 Story.

The F-15 story illustrates how huge complexity can only be dealt with by a ValueWeb capable of matching complexity (the requisite variety problem).

link to F-15 story

The NASA Story.

The NASA story is one of enlisting the power of an entire economy to leap beyond existing limits. It is also a story of losing the goal in the rush to implement.

link to NASA story

Silicon Valley Story.

The Silicon Valley story is one of intention, serendipity and practical invention in rare mixture. I think it is safe to say that without the existence of one institution, Stanford University, the story would be a very different one. Before Silicon Valley was known as such, many years of careful building took place. Too often the focus is on the result not what lead to the result. Silicon Valley did not come about by doing what it is doing today.

link to Silicon Valley story

Extracting the RULES:

There are a number of simple rules that can be derived from these stories. It is what is consistent across all of them that interests us. It is impossible to predict let alone control the future. Building something as complex as Silicon valley defies simple cause and effect analysis. The results of analysis are do not make useful ready made answers. Original design is required. The common elements from these diverse stories provide design criteria - the PERFORMANCE SPECIFICATIONS of success.

link to table of rules

Nature knows
People work
Flowers grow



ACTING involves moving ideas through design and engineering to concrete implementation steps.

These are my performance specifications and 12 Action steps to a more innovative and entrepreneurial culture in Japan.

First, however, I want to remind you to do something that Japan is very good at. This is to take the long view. 5 years ago, in America, people were wondering just what the Internet was and if people would use it for commerce. Two years ago this so called “NEW ECONOMY” was going wild. Everything was going to be virtual. Bricks and mortar were dead. Nothing but high tech was interesting. IPO after IPO made instant heroes and billionaires. A “growth” stock took on new heroic attributes. Now today, it is a different story. A story that is as much of an over reaction and distortion as the hype that came before.

This is no way to employ an economy as a tool of life. Speculation gets confused with investment. Cause with effect. The Dutch had their Tulips, the US it’s dot coms and you had an over enthusiastic real estate market. All these periods, with too many positive feedback loops, did great damage to the economic machine.

There are some great opportunities now, with the Internet, for those who can understand this and act with dispatch, aggressiveness and modesty.

I do not believe that what makes the new economy NEW is defined by superficial characteristics and certainly not either/or dichotomies such as physical stores versus electronic malls arguments. What makes the new economy a new economy is based on a deeper and SLOWER process. We are in the middle of a great global transformation that started up the steep change curve a quarter of a century ago and will go on for some time yet.

Not to respond in real time in the new economy is death. Not also responding appropriately to the longer and slower cycles is to die before you start. Japan has long been excellent in understand the long cycles. Do not trade this off as you become more adaptive in real time. Excellence in both is the requirement.

While it is true the twists and turns of fashion will get swifter and swifter, if anything, the underlying structures now have to be cared for with an even greater steady diligence and view to the far future. The new economy needs it’s gardeners. There are as many long cycles as there are short ones.


First, kill the meme that Japan is not an innovative culture.

Look at your last 125 years. Japan has been through, at least three major transformations. There are too many clichés applied to the Japanese (as there is to any culture), and while there is merit in paying attention to these perceptions they are, at best, partial truths. The whole story is always more subtle and complex than the easy answer. It is said that the Japanese excel at copying and adapting from other cultures but cannot create as well in the primary sense. I look at your nation and people, I see a culture as unique as any on Earth. Where was this copied from?

The USA’s contribution to technology up to the 1960 - 2000 period was primarily the practices of mass production and distribution. The quality and inventiveness of it’s technology was not considered equal to many European nations. It has only been in the last 40 years or so that the US has lead in the innovation of several technologies. These facts are consistent with it’s history and temper.

As we face the 21st Century and the changes that will take place, from nano-technology to the creation of new ways of organizing, ALL nations and cultures are at the starting gate together. There will be many leaders who will, in turn, find themselves following. All will borrow and adapt from one another. All will contribute something unique from their culture. There will be no single path to success.

The challenges ahead do not need to be made more so by self-defeating part truths. Nor, can reality be ignored. The deliberate incubation of new work processes and organizations with clear rules of engagement will lead the way to greater innovation.


Shift your superordinate goals.

If JAPAN is to prosper in the new global economy it has to focus on those global challenges that Japan can address. Success will not come from “fixing” what is perceived to be “wrong” with Japan’s economy. Success is found in creating enterprises that concretely serve human requirements. The “big” problems are just as easy to solve as the “small” ones. A succesful economy (or any enterprise) is the result of having done this.

Since the CUSTOMER is a part of each ValueWeb you build, their participation in the success of an enterprise is a key factor.


Employ what you already know that fits.

The new economy does not come out of nothing. It is a new architecture made of of a combination of new and old components. It always involves a new way of working at it’s core.

How the existing, successful ways of working are re-created and become part of the new way is critical. This takes careful DESIGN. The entire ValueWeb has to be involved in this design process.


Create a PLACE where the rules are different and can be continually rewritten without attribution.

Make an innovation LAB that does real work on many scales of Enterprise. Make sure some “old economy” categories are involved. The future is not all high tech.

Protect this environment from immune attack.

Derive the rules-of-engagement from the MODEL that best matches the kind of end result you want to achieve. LIVE this future state. Experiment with these rules - find out what works.


Gather a ValueWeb.

This means bringing in the web those that make you uncomfortable and those who see the world in different ways. I look at the histories of those involved at Stanford Japan Center and KSVF. Very impressive. All individuals of great accomplishments including the students and young entrepreneurs. What cultural filters selected this group? Does you quest for excellence obscure the talents and ways of working not yet recognized?

Great revolutions have always been lead by misfits. Great diversity of background is necessary for the emergence of new ideas. Innovation is rambunctious and sloppy - it is not efficient. It starts as a revolution, finds something useful, then is reabsorbed into the originating culture - changing both it and the culture.

A new idea does not have credibly - by definition. A system based on credibility can self filter too much leading to adverse selection. The great advantage the US had in the beginning was that it attracted the misfits and adventurous from many nations and started with a nearly blank slate. There were few common standards to trap the growing society in a self-referential loop.

Make sure that everybody “pays to play” in this ValueWeb. By nature a ValueWeb is built on the exchange of value. It grows because everyone contributes and invests. It stays together because the rules work are appropriate and individual efforts are amplified by the web itself.


Create the “impossible dream.”

Formulate beginning projects with great ambition. This does not necessarily mean large or “important” by traditional standards. They must demand breakthrough and constitute a certain amount of risk to those that take them on. Success and failure has to matter. This is not a job.

Follow the passion. If there is no passion there will be little breakthrough and innovation. Hard work and diligence alone with not get the necessary results. Both intellect and intuition are necessary to great creativity. I rather have a less than perfect plan that a team has passionate commitment to than a “perfect” plan that does not compel extraordinary effort.

As we enter the the 21st Century all the easy and basic work has been done. People want extraordinary experiences. Boredom is the enemy of both producer and consumer. New kinds of products and services are required not just better ways of doing what we already have. What excites and delights? What stirs the imagination?

What challenges will stir the Japanese people as they have been in the past?


Establish new measures of success.

By definition, old measures (while still useful) alone will produce the same results. Not matter what you put into a sausage machine it will make sausage. This is what it is designed to do. It is just doing it’s job.

Know that, as a SYSTEM, the results you are getting are the output of the system you designed - if you are aware of it or not. If you want different results, change the system. Not people. Not even organizations as a primary focus.

Diligent failures have to be accepted. Apparent successes should not be over rated. Long term results have to be measured and rewarded in balance with the immediate.


“Govern” in a new way.

The essence of a market is the choice that the customer can exercise within it. Markets sort things out very quickly. This is a major reason why they are effective. Our business organizations rarely use this principle INTERNALLY. Make sure you ValueWeb is composed of organizations that exist in a market relationship to one another. Craft your organizations to be made of of components that function the same way. This requires distributed control, decision making and assets.

Avoid jumping from the frying pan into the fire. Make many small organizational experiments. Document the results. It is not an experiment if you do not.


Find the ART.

Find your art. Here your traditions are very strong and very great. The Japanese esthetic is widely admired. It is the essence of your culture embodied in FORM. From the design of a product to the touch and feel of a service make the distinctly JAPANESE character stand out. Design wins in a knowledge economy. Look at the Apple iMac and the Volkswagen Beetle. Look at the Sony Vaio.

Myself, I focus on the TOTAL result of a product - the complete quality of it - and how it improves and brings pleasure to my life. I buy from companies who bring great design to their products and services. I trust more those who take the care to do this.

Art, by definition, is innovative - however, it is innovative in a specific way. It cannot be “new” just to be new. It is new because this was the requirement of solving the problem.


Imbue the rule of Rapid Prototyping.

“Real artists ship.” This a well known saying of Steve Jobs. Rapid prototyping means many fast DESIGN-BUILD-USE cycles. It means making many small mistakes. It means acting before knowing. It takes sophisticated risk management. It produces superior results.

It can appear to contradict a culture of diligence and excellence. The conservative element may attack it for that reason. Remember, I am not talking about work in a shop that only a few know of and see. I am talking about a ValueWeb activity in the full sunlight for all to see. This is radical. It is also effective.

This rapid prototyping process is not just for the development of products and services - it also is to be applied to the design and evelopment of organizations and ValueWebs.


Lever successes.

Increasing returns IS an aspect of the new economy. That part we experienced in the last cycle was true and a mere hint of what is to come. Build success upon success as the small beginnings get larger and larger.


Have fun.

We have a Axiom at MG Taylor that says “If you cannot have fun with a problem you will never solve it.”

Creativity and innovation is the highest form of adult play. The consequences may be serious but the path to success has to be joyful. This requires the container of a VISION, the disciple of an ART and free space to play in. You cannot control the spontaneity of a brilliant brush stroke.

The WAY is mystery
Tools sing
Students laugh

I close these notes with some observations about Japan as I have experienced your country. Japan, because of circumstance, already has many of the attributes of a 21st Century global enterprise. There are significant aspects of your tradition that are barriers to your continuing progress. You already know what these are. There are many more that position you for greater successes.

You will have to choose which parts of your tradition and possible futures you want. This is best done ORGANICALLY as a co-evolutionary process. The strategy I have presented follows the principle of cultural diffusion - not the direct “competition” of forcing ideas on people but the free competition of results with people and existing institutions free to choose and adapt these results.

However, this is not a random process without any direction or leadership. The results can be FACILITATED. Total agreement is not required nor is it desirable - INVOLVEMENT by members of healthy ValueWebs is critical.

If you want an innovative entrepreneurial culture that prospers in a global economy you merely have to BUILD IT incrementally starting with one room. Establish the best effort rules-of-engagement for the enterprise and do a cycle of work. Learn, change, do it again. Expand your domain. Be swift in action and deliberate and slow in thought and understanding. Don’t let fashion rule who you are - or become.

Don’t try to change your existing culture and institutions. Connect them. Require that they play - in this new game - by the new rules. Leave the choice to engage - or not - to them. Let them continue their valuable work while the new is learning how to walk. Not everyone has to change at the same time. Just the fact that these traditional organizations are “wired in” to the new Web will greatly accelerate their change process.

Don’t let ego and blind ambition - and unfettered growth for growths sake - be the reason that drives your new venture. Sometimes it seems that common sense is as rare in Silicon Valley as electricity is today and water will be tomorrow. Let the traditional Japanese values of beauty, design, integrity and social sensitivity lead your effort.

As one you has long admired your country, I wish you a prosperous journey.


Matt Taylor
Palo Alto
April 8, 2001

Kansai Silicon Valley Venture Forum and the Stanford Japan Center

SolutionBox voice of this document:

posted April 8, 2001

revised April 19, 2001
• • • •
• • 200104 • •
• •

(note: this document is about 80% finished)

Matt Taylor 650 814 1192

Copyright© Matt Taylor 2001


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