Framework for Localization-an Overview

The simple dictum is: successful localization of a business ecosystem demands widespread participation by community members. Easy to say. It’s another thing for community members to know what that means and what to do about it. This is where another kind of map — a “framework for localization” — comes in handy to help community members define their business ecosystem, understand its dynamics, and assess to what degree it is already localized.

During the course of my work on the USDA-SCRI and FFEF grants, I had the opportunity to develop such a framework. I documented it in two presentations available for view and download on Slideshare. The first, Framework4Localization – Overview, provides a graphic representation of a typical business ecosystem. It is the subject of this posting. The second, Framework4Localization – in Action, offers steps community members can consider as they develop a strategy for localizing their business ecosystem. It will be the topic of the second posting in this series. Together, these set the stage for community members to build a “portfolio” of business cases that attracts widespread participation and drives the localization process. The nature of this portfolio and how community members invest in it will be the theme of a third posting.

Let’s begin this overview with a general description of a business ecosystem. Like a natural ecosystem, the business version functions due to material and data flows from source points to use points. Again, as with its natural counterpart, sustainability depends on a continuous flow from sources to points of use.

As sources become scarce, costs go up and the search is on for a suitable alternative. For instance, businesses that require inputs that are unavailable locally at competitive prices, import needed materials from source points further away. And if suitable sources cannot be found, those businesses in the ecosystem that depend on them cease to operate because they cannot secure what they need.

The challenge for sustainability of business operations in their ecosystem is to draw upon their sources at rates that allow them to recharge, or slow their use so as to not exhaust them, or provide a window of time large enough to find suitable substitutes.

In the context of a community whose members have basic needs that must be fulfilled daily, the availability of water, food, housing, etc. becomes significant in terms of THEIR sustainability. The sustainability challenge is similar to what businesses must confront only with the caveat that the distance between life-giving sources and community members who depend on their delivery imposes another level of dependence and urgency. Localization, then, closes this distance gap and reduces dependence and anxiety levels.

With the general explanation of terms in mind, the purpose of this overview is to help community members “see” the various elements of their business ecosystem in relationship to one another as a first step in taking action to localize.

Slide 1 lays out the basics for a localization framework that, in effect, ties source points on the left to downstream use points and markets on the right.

Slide 1

Slide 2 outlines value-added (see USDA definition in italics below) functions that are central to the business ecosystem. This includes stages of production, processing, and preparation, installation, construction as well as the flows of energy necessary to make the conversions in each stage, and the waste management flows that seek to recharge sources with what is not used, repurposed, and recovered during conversions and consumption.

Agricultural product that has undergone a change in physical state or was produced, marketed, or segregated (e.g., identity-preserved, eco-labeling, etc.) in a manner that enhances its value or expands the customer base of the product is considered a value-added product.1

Slide 2

Slide 3 highlights a distribution and logistics system that manages the shipping and storage of material as inputs and outputs on their way to various markets. These functions are non-value-added given the USDA definition of “value-added” (see definition in previous slide).

Slide 3

Slide 4 targets those data-driven services that provide a virtual representation of the material side of the business ecosystem. Asset maps utilize a graphical user interface to capture all relevant data about participants in a business ecosystem so they are easy to see; ecosystem models readily demonstrate the dynamics among business ecosystem participants and generate likely scenarios about how to improve the efficiency, performance, and sustainability of the business ecosystem; information flows deliver real-time, continuous, detailed overlays and insights into the behaviors of preferred ecosystem models upon their adoption; and decision support provides an information-enriched knowledge commons for business ecosystem participants to access and apply in their decisions.

Slide 4

Slide five identifies the three main service areas that influence the larger context in which the business ecosystem functions. These three hold significant implications on the cost to adopt a different business ecosystem model, such as one dedicated to localization of the food system. The current globalized food system is held in place by entrenched legal, capital, and education institutions. To localize requires changes in all three. This means confronting major inertia.

Slide 5

Slide six posits governance as the backdrop for change in the system. Governance is the process by which laws, codes, rules, regulations, and curricula change. And that changes the legal, capital, and education institutions. And that expedites the localization of a business ecosystem. Governance provides fair and impartial incentives for community members to participate in localization by playing a diverse array of roles and exercising certain responsibilities, delivering value, and building on their reputations.

Slide 6

Slide seven illustrates the complete localization framework as a “map” that can be tailored to the specific circumstances of a community and its business ecosystem.

Slide 7

And that sets up the second posting in this series which shows how community members can use this framework to guide their localization strategies. Stay tuned…

Originally posted to Sustainable Local Economic Development by Steve Bosserman on Saturday, August 18, 2012

  1. Community Food Systems-Other USDA Grant Opportunities

Mapping as a Matter of the Mind

A mind map is a graphic representation of ideas and concepts in relationship to one another. The resulting visual organization of information provides a communication and decision framework for people to do the following:

  • Express their individual points of view about complex issues and more fully understand them
  • Identify opportunities to come together for a common cause that creatively addresses the issues at hand in ways that benefit all involved
  • Mobilize, coordinate, and sustain their collective efforts so they achieve what they envision and honor themselves and those they serve along the way

While mind mapping differs from the more tangible asset, process, and cluster mapping within business ecosystems as noted in my posting, Mapping: Deciding Which Is the Road Not Taken, it complements them, nonetheless, by assisting in problem resolution, strategic planning, and organizational adaptation—very necessary functions for any business to start, scale, and sustain itself.

A current project I’m working on calls for the application of mind mapping with a group of senior-level managers to help them puzzle out a growth strategy for their equipment manufacturing division over the next 5+ years. As with most change initiatives, the goal is to help them determine what will be the road (or roads) not taken.

The challenge is getting management to see and seriously consider roads other than the one they are on. One of the reasons why this can be more difficult than it seems is that the road they are on is the one with which they are the most familiar. The risk is that management will stick to the current path even if their performance is in the tank. It’s ‘better the devil you know than the devil you don’t’ when it comes to change. And if the organization happens to be enjoying a long run of success, the mere thought of abandoning the main road in favor of another less traveled one is even more harrowing.

It becomes a question of how to disrupt their prevailing world view so they look for, discover, and explore other roads. In other words, what concept seeds the mind map to become an attractor? What’s the entry point?

Earlier this week, a colleague and I got into a discussion about the destiny of 3-D printing in the manufacturing landscape over the next 5+ years. It has considerable potential to be a disruptor because it taps into the convergence of major trends toward a design anywhere, manufacture anywhere (DAMA) approach to the integration of product lifecycle management (PLM) and manufacturing execution systems (MES); customized, close-to-point-of-sale manufacturing, delivery, and support; and third, automation and robotics or more bluntly stated, the replacement of people by machines. Those three literally touch everything that goes on in the enterprise.

Extrapolate from the current state of 3-D printing on its evolutionary path to a future reality where, as a customer, I can spec what I want and it materializes in front of me. As a manufacturer, the strategic question is how do I close the gap between immediate satisfaction and how long it takes now between customer order and customer delivery? 3-D printing is on the technology road map that closes this gap, but where is it? What else is on that road? Where are the forks in the road up ahead? Which ones don’t I take?

Originally posted to Sustainable Local Economic Development by Steve Bosserman on Friday, August 10, 2012

Mapping: Deciding Which Is the Road Not Taken

The refrain from George Harrison’s song, “Any Road” — “If you don’t know where you’re going, any road’ll take you there” — certainly speaks to the importance of having a destination in mind. Place one finger where you want to go on a road atlas and another on the place where you’ll start and the various routes to get from one to the other become obvious. Then, it’s a straightforward process to apply criteria such as distance, time, traffic patterns, etc. to determine which particular route to take.

The concluding lines in Robert Frost’s poem, “The Road Not Taken” state:

Two roads diverged in a wood, and I, | I took the one less traveled by, | And that has made all the difference.

In a classic style, Frost explains how he resolved a dilemma that confronts all of us at some point — a choice between two paths that, once made, offers no chance to go back and choose the other. Unlike the previous instance where destination featured heavily in which road to choose, in this one, the journey becomes more important than the destination. The choice depends on a willingness to explore a foreign landscape and take advantage of the opportunities discovered there.

Here, too, the traveler applies an equally valid process based on powerful criteria such as sensitivity to initial conditions, availability of resources, and degree of advocacy and participation to guide decisions of which way to go. These criteria are often represented in “maps” that don’t look like the more familiar road atlas, but serve a similar purpose in that they show the physical associations among people, places, things as well as define their characteristics in large data sets and frame their interrelationships to powerful concepts and innovative ideas.

During the course of the grants mentioned in my initial post, we introduced several types of maps and mapping processes that blended “destination” and “journey” perspectives, but focused on localizing business ecosystems and developing business cases. Among these are the following:

I encourage you to join LocalFoodSystems.org (it’s free!) so you can explore these mapping features more thoroughly and see how they apply in the context of YOUR business ecosystems as you decide which is the road not taken!

Originally posted to Sustainable Local Economic Development by Steve Bosserman on Thursday, August 9, 2012