I’m delighted by the velocity of money as it whistles through the windows of Lower East Side… – Allen Ginsberg
What do an old moneylending maxim in India, the bathtub metaphor, gift giving among tribal people and how you run your business have in common?
If you guessed Flow from the title of this post then you’d be right – but it’s probably not the flow you’re thinking of.
Flow has come to mean, in positive psychology, a way of being immersed in what you’re doing.
This has nothing to do with that at all. Instead, this is a more ancient concept but one that we may have forgotten to see although it exists all around us – in fact at this very moment as you’re reading these words.
Let’s start with the bathtub metaphor, using the picture above.
A bathtub is like a tank that holds water. You fill it up and let the water out again.
If you think about what’s involved you have stock – the stuff in the tank and flows – the stuff going through the pipes.
It’s all water, but when it’s in the tank it’s stock and when it’s in the pipes it’s flow.
Why does this matter?
Think of what happens if you leave water in your bathtub for a month.
It stagnates, doesn’t it? It’s not very nice after a couple of days, reeks after a week and you’ve got mould and scum in a month.
Now to those tribals.
I picked up a book called The Gift by Lewis Hyde which, perhaps unsurprisingly, has a chapter called A theory of gifts.
He describes how Europeans were bewildered by the Native American practice of giving visitors to a tribe a gift. For example, a ceremonial pipe.
Later, when another tribe visited there was an expectation that the gift would be passed on.
This annoyed the Europeans no end, as what they really wanted to do was send the pipe to the British Museum, to put it behind glass and have people queue up to peer at it – not give it away to someone else.
In fact, they coined the term ‘Indian Giver’ to describe this practice.
What the Europeans missed was the difference between stocks and flows.
In tribal cultures a gift is something that circulates, not something that stands still.
As Hyde quotes, “One man’s gift must not be another man’s capital”
Let’s say you wander around the world collecting artifacts and bring them home, displaying them in a room.
What happens to them?
They stagnate. They sit there, mounted on the wall or perched behind glass, stripped of productive or ceremonial use.
When they were passed from tribe to tribe they helped build relationships, cement understanding and common purpose.
Now they just are, doing nothing.
They have been turned into capital, a stock, just the same as water sitting in your tank, going nowhere.
What people need to do is open the taps, keep water and relationships fresh and flowing.
To moneylending, then. The term velocity of money, while perhaps not familiar to the moneylenders of India, is something they would understand.
Money is only useful when it circulates. When it is sent out, invested in businesses or productive activity, generates a return and is then reinvested.
The moneylenders invest in businesses, in people they know in the expectation that they will get a return which they will then reinvest in another business.
Money that sits still in a bank account earns little interest. Money under the mattress earns none. The stewards of unused wealth piled high in warehouses are called misers.
Money that stands still stagnates – just like water and just like a gift that has been stopped from circulating.
Hopefully what you’re noticing from these examples is that flow matters – it’s movement that keeps things fresh and dynamic.
So there we come to your business.
Another book I was reading talked about a large business that tried to improve its knowledge management processes.
After every engagement the participants carefully wrote up what they had learned and filed it in a digital library.
You’d think that such a bank of knowledge would be invaluable – but in reality it was hardly used.
The same issue comes up when you try and manage something like sales or account management.
If you’re the controlling sort of person you might want everyone to use a customer relationship management (CRM) system and make notes of everything they do.
But this is only going to work if there is flow – if there are other people who need that information and use the same system and find it helps them do what needs to be done.
If people are asked to use it but then the information doesn’t naturally flow through, then the knowledge system will stagnate, get clogged up and eventually stop working.
If the boss doesn’t need the system to get their job done that’s a good sign that it’s not going to work.
Finally, that note about how you’re experiencing flow right now.
When I write this blog I draw on a number of resources – articles online, books and research. I use open source tools to write and draw what I do.
If I were to use all those resources only for my own benefit – if I were to hoard what I write and try to turn it into stock – then I’m trying to turn gifts from others into stock.
When I read and write and share, instead, what I’m doing is contributing to the flow of ideas and information – like a gift.
And the point about a gift is that it is given with no expectation of a timeline when equivalent value will be returned.
It turns out that often happens – but it doesn’t have to happen.
The entire open source movement is actually founded on a theory of gifts – even if we don’t know it – and that includes the Internet and its role as the ultimate repository of knowledge.
And that means, hopefully, that the future is underpinned by the right principles and optimised for flow.
p.s. Every week I’m trying to write a longer piece – something a little more structured and perhaps academic that tries to pull together theory into a useful package.
The latest piece is on reflective practice – essentially thinking a bit about what has happened so far.
Might be of interest, especially if you think of yourself as a knowledge professional.
You’ll find more of these in the articles section and hopefully the list will grow over the years.