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The Swimming Pool Story
Building a ValueWeb
With a ValueWeb


I consider this story to be one of the most important on my web site as it documents a seminal experience in my life which continues to have wide ranging implications to the work of MG Taylor and to human economics in general.

This story is about how human organizational structures and work processes effect the time to build something and its ultimate cost.

One would reasonably think that this is a broadly understood subject and that human attention and markets had long achieved efficiency and quality in the making of things. Sadly, this is not so.

Hidden structures overwhelm the areas where low costs and high quality are achieved in ways the squander the gains made. What is interesting is that few people even want to explore these structures and change them even when the benefits are clearly demonstrated.

This story is about building and architecture yet many of the wider implications will also be pointed out. This story is told in five parts: Background, The Model, MG Taylor’s Work, The Method, and Broader Implications.

Parts One and Two were first written in March 2001. Parts Three, Four and Five in February 2009. At this time, the entire document was rearranged and edited.

As lengthily as this story is, it remains a mere outline. The many links to other articles help fill in the missing pieces. The experience which this story reports was my first attempt to build a ValueWeb which was capable of results not considered possible at the time. This was a remarkable success and in the end it succumbed to the seamier kind of business ethics which now grace our media on a nightly basis. This story offers proof - and a method of organizing and working - that says the present economic news is not an accident, does not have to be what it is, and is far from the last word in human enterprise.

Matt Taylor
February 18, 2009


This doscuments documents the only (in my terms) successful organizational structure I have ever been a part of. And, it was only a partial success. The story goes back to a seven year period, 1964 to 1971, where I was able to work with a single industry and set of companies through the entire process cycle of R&D, product development, design, sales, production, service and maintenance. This scope was more than what today would be called a supply chain and less than what I would call a full, mature ValueWeb architecture. Looking back on over 52 years of work (as of 2009), it shocks me to write “the only successful organizational structure...” I thought a great deal about the word “only.” I decided to use it because it at least establishes a marker - a minimum standard. There were several organizations I worked with that were very well run and fun to be with. Tishman Construction, in New York City, principle among them. I will argue, of course, that this was accomplished despite their structure and for a limited period of time also. The swimming pool era lasted only a short period before it lapsed back into convention - but then, it was not a true ValueWeb and that also is part of what is to be learned.


I sometimes think that I was born with a hypersensitivity to organizational structure. This comes, I suppose, from being an innovator who has never been satisfied with all the explanation why doing things better “is impossible.” As I dug into these explanations, I discovered that virtually all of them had to do with organization and with the claim that “profit” would be sacrificed by the new idea. I found this not to be true. In many cases just the opposite. Innovation can be made to pay for itself and if it is done right nearly always will. No, organizations take on a life of their own. They are not neutral environments. This is good news - and bad depending on the character of what is made. My insight was to realize that organizations are DESIGNED like everything else. They are human artifacts. It seems to me that most think of them as “facts of nature” - immutable. I discovered that virtually ALL organizational concepts are variations on the same theme. There are not competing models of organization out there - there are competing versions of the same model. I was “happy” to “discover” in 1961 and “again” in the mid 70s that the traditional organizational structure was not able to deal with the growing complexities of modern life. The old way was going to die. Since then, I have devoted a great deal of my effort to discovering and designing alternatives. I have also spent the greater amount of my time helping traditional organizations stay alive. It will not do to have them die before there is a tested alternative. This would be bad engineering and very bad business. All this lead to the MG Taylor Corporation and a 25 year effort to get to what I now consider the beginning phase of a genuine alternative to traditional organizational architecture. In the mean time, I discovered many other fellow traveler:. Weiner, Ashby, Beer, Channon, Arbib, Boulding, Brand, Miller, Minski, Bateson, Kauffman, Kelly...Their work in cybernetic, systems theory and chaos theory has established a powerful base. My work has been to put these kinds of ideas to work. Unfortunately, this work is just beginning to be part of the business mainstream and is still approached in a mostly metaphorical (non structural) way. “How is you business like a rain forest?” Insightful, useful - but not enough. I have worked to learn how to engineer organizational structures as one would any other technical system. This act is to INSTALL an OS. We in the MG Taylor (proto) ValueWeb have had some success in doing this. Enough to have many unique stories to tell - like the one that follows. Enough to know that there is definitely something to this and enough to have a health respect for the persistence of the old way and its power to compromise and reabsorb attempts to transform it. Our present step is to build a true ValueWeb at significant scale. This will be assembled, “bottoms up” from a number of project-focused ValueWebs that will find their own natural path to creating a greater system. In period 2002 to mid 2004, there emerged several projects as candidates for doing this. Success with these will constitute a great breakthrough. In the mean time, we have our own (MG Taylor) experiment and our past project experiences from which we can extract the knowledge necessary for building every more powerful and useful models.


In the mid 80’s, I created the “Business of Enterprise” model to codify this experience. I first called this model the “Business of Business” because of the question I asked: what is the business of business?” This may seem like a simple question. At the time, the answer usually would be “to make money.” This is confusing cause with effect. My answer was that the business of a business was to function like the commissioner of Baseball that builds a network of individuals and enterprises focused around a certain set of objectives - a defined “game.” Later, I realized that this pertained to enterprises of all kinds including governments.



(insert photo of Acacia presentation)



This model is also closely related to the NASA story which describes how NASA functioned as a (partial) ValueWeb enterprise when going to the moon.


In the last 30 years, I have re-tested and applied pieces of this organizational schema, the F-15 and AEDC projects being the most notable examples in terms of economic results. However, I have not yet been able to get the whole system in place, other than for these isolated projects for a period of time, as an OS for the day-to-day operations of an entire enterprise or culture of significant scale. The swimming pool experience was itself incomplete, in this regard, and functioned in isolation and only for a period of several year. Withinn its own model of enterprise as defined at the time, however, its scope was across an entire system and it functioned at sufficient depth and integrity to show that a remarkable organizational transformation is possible that that this results in both human and economic brilliance. It is possible, now, to implement the The method and ValueWeb concept at a sufficient scale to make a critical mass that it will not be locally reclaimed by the existing organizational mode that makes up our social default. This is possible because the tools of practical networking (Internet, blog, wiki, KM method, financial sophistication) are now sufficiently developed so that isolated renegade (in the eyes of the establishment) nodes can be connected in such a way - and across the boundaries of any discrete single organization - so as to form this critical mass. The projects now underway (as of April of 2004) and the over 30 Taylor-like Centers that exist globally make up the bare minimum nucleolus of this nascent ValueWeb.

For the first time (post 9/11, actually), I feel these evolutionary forces pushing the MG Taylor Enterprise in the direction we have always wanted to go. This is “an idea whose time has come” to quote Mr. Nixon in a somewhat different context. The same can be said for several of our clients. The default model of organization, so long the ruling paradigm, is finally coming under direct fire. It is, in fact, rapidly crumbling under the pressure of today’s markets. I long said (from 1975 and onward) that “no one gets out of the 20th Century alive doing what they are doing now” - This includes MG Taylor. The destruction of the old organizational model - and economic model - is a factor of the environment (Rate of Change and Complexity Model [link]) not our wishes. The paradox is that MG Taylor has had to live in the old organizational world while building a bridge to the new one. An uncomfortable and often dangerous place to be. We have fallen victim to these circumstances more than once.

Why didn’t MG Taylor become a full ValueWeb organization functioning by the “swimming pool” rules much sooner?

The answer is simple. It can be answered by asking another question: “why don’t our environments function with the technology as illustrated on the cover of our 1982 Business Plan?” It is the difference between THERE and HERE. You can never get too far ahead of your own culture while remaining a fully integrated member of it. MG Taylor is not some kind of Utopian dream. It is not organized to function in semi-protection as can be provided in a research organization or university. MGTaylor is a business. This was a deliberate choice. A “where the tire hits the road” decision. The mission of MGTaylor is ubiquity of a new way of working. The measure of success is to do this as a for-profit company (in a ValueWeb) that delivers the GOODS, makes money and creates shareholder VALUE. This completes the entire “Stages of an Enterprise Model.” As such, MGTaylor and the core Business Units have been limited by market as they have pushed the market. Of Course, as a true ValueWeb process emerges, market and ENTERPRISE become the same thing. This is a true answer but only a partial one. There is another. The other answer is that we did not know how to build MG Taylor as a ValueWeb from the beginning. We have tried several times to make it have more value-web-ness and each attemp has been met with limited success. We were fairly successful with the “Producer Network” part of our Web, have had now and then success with our “Client/Customer Network” members and almost total failure with the (would be) “Investor Network” members. 2002, saw the beginning resolution of the conflicting models of what makes a traditional investment and a ValueWeb investment. This has proven to be one of our most difficult tasks - philosophically, legally, operationally.


It should be understood that a ValueWeb has several levels of recursion in it’s structure. Conventional organizations (on one level of recursion) can be successful members of a ValueWeb structure. VISA is an example of this. The company VISA was structured and managed in a conventional way. The network of alliances VISA was a ValueWeb-like Enterprise and thus an example of a chortic organization (on THAT level of recursion).


It is also true that a conventional organization can (and will often) have ValueWeb structure-processes at levels of recursion within it. Startup and joint ventures within a large mature enterprise can be done this way. A (protected) NavCenter is another example. This is a way to start the “conversion” process.


These “partial” ValueWeb structures can be effective (but perhapts not permenant). The Model suggests that a full ValueWeb architecture operating (at minimum) on three levels of recursion - made up of a critical mass of nodes that run the ValueWeb OS - will out perform conventional structures by orders of magnitude. They will require PatchWorks-like processes to stay in tune and to optimise their output.


This piece is organized into four sections: (1) the STORY itself which captures the experience. (2) Comments on the Model, itself, which has never before been put down in sufficient detail. (3) Application to the MG Taylor enterprise Business Units which are going through what I believe to be the first real step to a true ValueWeb architecture. (4) Application to other environments and projects.


Just as DesignShop events have been our LAB for developing the process and understanding the algorithms for the Patent, our own business (and becoming ValueWeb network) is a LAB for understanding and demonstrating a new organizational theory. Our own organizational experience is what we know the most about - through direct experience. We also have the knowledge gained by working with hundreds of organizations and thousands of people over the last quarter of a Century. Not all these partner and client organizations were explicitly building ValueWebs. They all DID, however, employ some facet of our philosophy, methods and tools. This work, plus our own developing theory and the theory developed by others (usually, in unrelated fields) has been integrated and forms the basis for our system and method.


Matt Taylor
Palo Alto
March 8, 2001


SolutionBox voice of this document:

click on graphic for explanation of SolutionBox

posted March 8, 2001

revised February 18, 2002
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Copyright© Matt Taylor 2001, 2002, 2009

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