Context hierarchy

Dr. Adam Tacy PhD, MBA avatar
What we’re thinking

We can explore and understand the progress economy through its hierarchy of four contexts.

Let’s get contextual

One way we can view the progress economy is as a hierarchy of contexts, each building upon the previous. There are four contexts we recognise:

  • Progress
  • Attempts
  • Propositions
  • Service exchange

These contexts are useful to explain how various concepts of the progress economy link together in a consistent model.

Let’s take a look at each in turn as we build up the progress economy. Starting with the progress context.

Progress is the beating heart of the progress economy.

a move over time to a more desirable state

In context, we see progress as a verb, state, noun (named states), and a series of state transitions.

We have waypoints of progress origin, sought and offered. As well as judgements of progress potential and progress reached.

And we should note that a seeker’s progress sought and progress origin are constantly evolve due to a their exposure to, and observation of, other progress attempts.

Importantly, in the progress economy, we see value emerging from making progress. It is a trailing metric of progress; therefore a secondary concern. We primarily look to improving, and removing hurdles to, progress.

Furthermore, we’ll later see value that emerges (progress made) needs to be recognised by the progress seeker – a process akin to revenue recognition in accounting – for it to be meaningful to them.

How do we make progress? It is made in progress attempts; our next context to explore.

Building upon the context of progress we have progress attempts. These are how Progress Seekers try to reach their more desirable state (progress sought) from their progress origin.

These attempts consist of executing a series of progress-making activities, each one integrating resources the seeker currently has available to them or that they can readily find lying around.

Lacking the necessary resources is a fundamental progress hurdle for the progress seeker.

What are these resources? Let’s explore.

Introducing Resources

Resources are carriers of capability – capabilities being skills, knowledge, tools, physical aspects such as strength etc. You and I are resources, for example, with our skills and knowledge. And there are two types – operant and operand resources.

Operant Resource

acts on other resources resulting in progress being made

Operand Resource

need to be acted upon for progress to be made

Broadly speaking, a seeker’s operant resources are their own skills and knowledge. This includes the knowledge of the progress-making activities for the prgress they are attempting (or the skills to work them out).

Whereas their operand resources are physical items/goods they find in nature or have previously acquired (perhaps as goods from previous interactions with progress helpers in this or other progress attempts).

Here’s an important point about operand resources, such as tools (and goods, from a later proposition perspective). We see them as freezing capabilities/service so they can be distributed to another time and place. Those frozen capabilities are unfrozen during acts of resource integration.

Making attempts

We say seekers make “attempts” to progress since they may fail to do so. They may even choose to abandon an attempt.

As such, progress seekers follow a progress decision process. This repeatedly takes into account phenomenological judgements of progress potential, progress reached, and the resource required. There are three reasons a seeker may abandon an attempt:

  • replacement – they’ve found, what they judge, a better way to progress
  • disenchantment – they’re not happy with progress reached and/or remaining progress potential
  • phenomenological – they’ve just decided not to continue for reasons best known to them

Failure to progress comes either through lacking resource necessary or unsuccessfully integrating resources available.

Getting innovative

A seeker may sometimes deliberately, or accidentally, “incorrectly” use a resource or combination of resources yet make progress. This is an example of self innovation.

Another example of self innovation is when they apply their skills to vary, or create, the series of progress-making activities.

Interpreting value

A successful resource integration moves the seeker closer to their progress sought. This is when value emerges – judged as progress reached. But as we saw in the progress context, this value needs to be recognised by a seeker for it to be meaningful to them.

Now we can explore why. Let’s imagine our progress sought is very simply to get to a location 100km away. Each kilometer on the journey brings us closer to our progress sought. Therefore, each kilometer spits out some value (you could measure with more granularity if you want…).

What value have we obtained if we reach 80km and then have to rest?

Well, it depends on how you recognise that emerged value. If you have the ability to rest overnight and can move the final 20km tomorrow, then reaching 80km has recognisable value. Whereas if you had to get the 100km today, reaching 80km likely has no recognisable value to you.

Finding a hurdle to progress

Before setting off on, and continuously during, an attempt, a seeker judges if they have sufficient resources to make progress. For example if they have the skills, knowledge, tools, strength etc.

If they don’t, then they have a lack of resource – the fundamental progress hurdle in the progress economy. And we use “hurdle” rather than “barrier”, since a seeker may make an attempt anyway if they feel the lack of resource is not sufficient to stop them trying (or they may wish to develop the resource as they make an attempt).

To address this lack of resource, Progress Helpers arise, offering progress propositions.

Now we find progress helpers offering progress propositions – offers to help make some specific progress. These propositions are not two bundles of supplementary resources, a:

You might more readily recognise these proposed progress-making activities as instructions, manuals, processes, recipes etc.

Increasing the pool of resources

The purpose of a progress proposition is to attempt to solve a seeker’s lack of resource progress hurdle and increase initial judgment of progress potential.

Providing a proposed series of progress-making activities is one such set of resource. Usually the helper also provides a proposition resource mix, comprising proposition specific amounts of:

It is these resources, integrated with the seekers resources that make progress (and from which value emerges, which still needs to be recognised by the seeker for it to be meaningful to them)

Jointly making progress

Progress is now a joint effort and an attempt to move towards progress offered (which may differ from progress sought).

A seeker therefore needs to judge progressed offered is sufficient in order to engage with a proposition.

This requires us to update the progress decision process to the engagement decision process which includes this judgement. The reasons for abandoning an attempt remain – replacement, disenchantment, and phenomenological,

Who drives the majority progress-making activities positions the proposition on a continuum between relieving and enabling propositions.

This continuum also informs us about the expected composition of the resource mix, and various non-functional progress supported by a proposition.

Discovering more progress hurdles

However, propositions introduce five new progress hurdles.

One follows directly from the above continuum discussion. Seekers also take a position on the continuum for progress they are seeking, and the gap between that and proposition is a hurdle (the misalignment on continuum hurdle). Simplistically, the hurdle is highest if they are looking for a relieving proposition and you are offering an enabling one (or vice versa).

The others relate to:

Finally, the very hurdle propositions aim to solve may still be there, or be higher – lack of resource. We could solve intra-city travel congestion with mini helicopter drones people can hire and fly. But if they require new skill and knowledge, then we’ve added a lack of resource hurdle.

Getting innovative

Innovation is about improving progress. Now we can see for propositions it becomes much more actionable than the usual definition of adding/improving value. In the progress economy it’s all about some combination of:

Innovation can also attempt to encourage a seeker to recognise value quicker/earlier.

Now we reach the more challenging context of the progress economy. It’s here we tie up some loose ends caused by a switch from value-in-exchange model of value to a value-through-progress one (via value-in-use). We’ve done that way back in the progress context, but you may not have noticed.

The implication is we lose the link between pricing and value; instead price signals effort expected in return service exchange. This may lead to an equitable exchange progress hurdle (you are asking for too much effort in return to perform your service). And opens the door to exploring business model innovation.

Shifting our model of value

In essence we see service – the application of skills and knowledge for someone’s benefit – as the basis of exchange.

This is different to our trusted value-in-exchange model we’ve all come to depend on. Where we exchange cash to own items holding value. Whilst hugely successful in the past, value-in-exchange has several blindspots for growth.

One implication of this shift is that price can no longer signal value – since value is created in-use when using a proposition. But fear not, we’re not falling into a fictitious world of barter. Let’s quickly look at exchanging service.

Exchanging service

The exchange of service might be direct between two parties. Or it might be indirect – which is the more common situation.

For example you do a service for your employer, but you’re not interested in a service from them, you want service from elsewhere (the supermarket, the farmer, the tool manufacturer…). This is an example of transitive indirect exchange.

In both direct and indirect cases, the service exchanges may be separated in time.

To mange such an exchange we use service credits. Simplistically, one service given could require one service credit. That credit can then be used to obtain a service either directly in return now, at a later date, or with another helper.

Exchanging equitably

However, it is likely that different service have different effort to perform. It would be inequitable to see all service as a single credit.

We need a way of signalling that effort and expectation in the exchange; and this is where price comes in. Price indicates how much effort a provider wants, in service, in return for providing their service.

Service credits mediate both temporal differences as we saw above and these magnitude differences. With money being a very successful concrete implementation of service credits.

Equitable exchange hurdle

The main result of this gymnastics is the equitable exchange progress hurdle. Both parties in an exchange of service (or service for service credits) need to feel that the exchange is equitable. It doesn’t need to be equal, but does need to feel that.

If I want a service that asks for, say 10 service credits, to make the progress I want, then I need to be comfortable providing my service (remember this is application of capabilities for someone’s benefit) to someone to get those 10 credits.

If I feel the service I want is only worth 5 credits of my effort, then the hurdle is higher than if I thought it worth 8. That’s to say I have to exert more effort in providing service than I feel I would get back. It is an inequitable exchange.

But don’t forget, everything is based on feeling. So I may feel 10 credits is too much, but I might still be prepared to exchange for that, to get the progress I will be able to make.

Getting innovative – business models

This opens the door for business model innovation.

For example, Instead of 10 service credits, maybe the helper asks for 1 service credit per month. That is much less effort for me monthly. Here we see either servitisation of business model (hiring instead of acquiring, for example) or subscription models.

Alternatively, the progress helper might be able to get 5 credits from another party (an advertiser, for example) and so only requires 5 credits/effort from me. Now the model is subsidised.

Wrapping up
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