Patterns

of Shared Value

David Week
06 July 2016

Introduction
As originally formulated, the idea of patterns powerfully crystallised and made explicit
many felt human needs and desires which are unfulfilled by current systems of building
production.

However, the patterns in A Pattern Language [APL] (and those that have attempt to
emulate it) avoid completely questions of money. In avoiding money, they also make it
difficult, if not impossible, to execute them in contemporary development projects.

Pattern languages aim to take large, complex design problems and break them down
into manageable bits, where they can be dealt with. The pattern language process them
provides a way of re-assembling the solutions into a workable project.

The "manageable bits" are the patterns. Patterns deal with conflicting forces. Those
forces are mainly human needs and desires. A pattern is a design strategy that resolves
and mediates between conflicting desires. The conventional pattern DOOR (for instance)
mediates between the desire for movement and the desire for privacy. The pattern
WINDOW mediates the desires for light and view with the desire for thermal comfort
and security. The patterns in APL take a step beyond convention and address needs and
desires that are felt but not dealt with. That's what give APL its appeal.

Money is a social system of signs which also mediates human needs and desires. In
order to do so, it measures them with "costs" and "prices". The desire for a larger
apartment, for instance, has both a money cost and a money price. However, only ome
of our desires are readily monetised: others are not. The desire for a deep conversation
with a friend has not. We are thus left with two sets of human desires and needs: those
that are monetised, and those that are not.

In order to combine monetised and unmonetised needs and desires, we might turn to
the idea of the Creation of Shared Value [CSV]. CSV proposes that businesses today need
to produceat the same time, and through the same processboth economic and
social value. A CSV initiative aims to produce both monetised and unmonetised value at
the same time.

This suggests a new concept of pattern, one in which money is included as an integral
part of the pattern. In particular, we can think of a pattern which specifically aims to
mediate between monetised and unmonetised needs and desires. In order to do this,
we need to redesign the concept of a pattern, so as to take money into account.
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Patterns
The idea of patterns was formulated by the architect Christopher Alexander and his
colleagues in the 1970s. The most popular book on the subject is A Pattern Language
still in print: not bad for a $65 first published in 1977.

Behind the popular idea of patterns lies a series of technical papers, rarely referenced,
but important to understanding patterns in a practical way.

One key idea in the technical papers of a "force", which is a way of thinking about
human valuation. If we often see people always attempting to arrange their seating into
circles, we can imagine this as a set of forces (including a tendency to face each other
when interacting) which creates the pattern SITTING CIRCLE. The value in treating this as
a "force" is that allows us to look at enacted values (values as reveal through action), not
just espoused values (what people say they value.)

Another is the idea of persistent, debilitating human stress: what happens when these
forces are not resolved.

The key idea behind a pattern, then, is this:
there are forces operating in the environment: social, psychological, biological
and physical
these forces can come into into conflict: when they do, they manifest as human
stress
there exist design strategies which can resolve those conflicts and thus make
people's lives better, because they allow life relatively free of persistent,
unresolved, locked in stress.

For instance:
When people meet, they arrange themselves so as to see each others' faces
Daylight from only one side creates glare, and makes it difficult to see others'
faces. In a deep room with daylight from just one side, this becomes impossible.
Hence the pattern: LIGHT ON TWO SIDES OF EVERY ROOM, which gets rid of this
conflict.

Many people have attempted to write pattern languages since. Many are terrible. They
dont understand the process of writing a pattern that really resonates with people:
it has to be actionable
it has to be different from current reality, but no so different that it seems
unrealistic or idealised;
it has to appeal to a sense people have that something is missing or wrong in
current way lifenot abstract ideology.

Feel is the operative word. It's the indicator that the pattern is dealing with tacit
knowledge and lived values, not something already explicitly known and dealt with by
current conscious processes.

In the sense, a good pattern is also a good selling point. One reason that APL as a book
has been so robust is that it really "sells" its design ideas at an emotional levelas good
selling processes do. Of course, emotional selling can be unethical: if you do not deliver
what you promise. But a good pattern is also a verifiable specification for how that
particular felt value will be delivered.
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Money
There is huge flaw in the way that the idea of patterns is executed in A Pattern Language.
They completely ignore money. Money is treated elsewhere, as a low-level matter of
cost.

But money is not a low level matter. Money is subtle, complex social system which
mediates the needs and desires of millions of common human needs and desires,
interacting through the economy. It's also the system through which manage almost all
forms of production, beyond what can be achieved by self, family, or informal
association.

In a building project, money quantifies needs and desires.
Larger dwellings command higher prices than small because overall, people
value size
Views add value, because most people value them
Properties fronting parks are more expensive because people value views and
access to those parks.

However, the money system does not cover all human needs or desires. Having children,
conversations with friends and sitting in the sun, all human needs and desires which are
not given a money value. There is no standard market price per child, per minute of
conversation, or per hour in the sun.

Money also central to the way that the production economy works. Patterns that do not
deal with money avoid central questions of the values that go into making something. A
worker values his or her time, which translates into a wage, which gets built into a
building cost, which may then in conflict with a buyer's desire to have a larger
apartment, which requires more labour.

Money is thus central to taking into account another key stakeholder in the built
environment: the producer. The seat in which I am now sitting has two principle
stakeholders: me (and others), who sit in itthe users. The other stakeholders are the
people who produced itthe foresters and miners and makers. Typically, the value of
chair to the user comes in the form of unmonetised intangibles like "comfort" and
"sturdiness", but to the makers, who are not there to enjoy those intangibles, it comes
in the form of money, which they can then convert into use value in their own way.

Political economists call these the exchange value and the use value. And this is a big
tension within our culture. When we only focus only exchange value, we only get some
our values delivered: those that can be measured through exchange. And the bias is
towards the makers. When we only we focus on social value, we fail to engage our
economic machinery, so delivery is weak or non-existent, and left to people's spare
time and voluntarism.

So, we should not see money as separate from subtler and unmeasured forms of value
that the patterns aim to deal with. Monetised and unmonetised values all come from
the same pot: human needs and desires.

Building money into patterns also means taking all the stakeholders into account: the
users, and the makers.

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Patterns of Shared Value

The Creation of Shared Value (CSV) is a recent philosophy of business, pioneered by
Michael Porter. CSV suggests that business needs to find ways to create two types of
value simultaneously:
economic value
social value.

In terms of the discussion above:
creating economic value means delivering on those human values which are
measured by money, primarily for the makers
create social value means delivering on those human values that are not
measured by money, primarily for the users.

The challenge presented by CSV is:

How do we organise our enterprises and projects to deliver on both kinds of
value, in an integrated way. How do we resolve the the big conflict between
monetised values and unmonetised values? And between the maker values of
firms and workers, and the users values of society and individuals.

This points to the idea of a different kind of pattern for use in complex development
projects, and thus deal with both use value and exchange value, users and makers,
unmonetised and monetised values at the same time.

The basic problem faced by a property developer came through some discussions I had
with a large developer in South America. The developer has built 10,000 units in the last
five years, and has a further 20,000 planned over the next five years.

The development they have built follow the following formula:
tall buildings
comprised of very small apartments (19-24m2)
near transport nodes
in low cost neighbourhoods
immediately adjacent the CBD

These developments are very attractive to tenants including new migrants (30% of sales)
and manual workers, who would otherwise face two hour commutes from the edge of
the city. They are also attractive to small investors looking to supplement their future
pension retirements, but without much to invest.

This formula works in the short term.

However, the developer was also encountering social problems and government
resistance. These arose because the developments only addressed monetised values,
and did not take seriously the social development of the buildings as communities, or
the social life of the tenants.

We agreed there were two possible futures for these buildings:

Option 1: Decline
A decline in the quality of the communities they house, indicated by early
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evidence of prostitution and drug dealing, leading to them being labelled as

"vertical slums"; increased difficulties in getting government permits; increased
management costs; decline in the company brand value; decline in property
values to investors; overall decline for the company.

Option 2: Social development

Over time, the lives of the communities in the buildings becomes richer, more
robust, and internally regulated. Tenants become better educated, have more
resilient livelihoods, climb the economic ladder, and become happier. The
company's brand reflects this; management problems are fewer and easier to
resolve; the value of the buildings rise. Everybody wins.

The developer was clear that it had to invest in social development. But the
question before the developer becomes: in what kinds of social patterns do we
invest? Of all the possible ways in which we might start investing in the social life of
our projects, which ones are worthwhile?

Our solution was two-fold:
Formulate each social investment proposal as a pattern
Include in the pattern an account of not just the use values it delivers for the
tenants, but also the exchange values for bother tenant and developer.

This provides a way of evaluating which interventions make best sense for both
users and makers. The pattern language process then allows for the patterns to be
combined into new designs.

Pattern Structure Reconceived

In order to do this, we borrowed from the start-up tool known as Business Model
Canvas. The business model canvas does two things at the same time:
maps the flow of value for both maker (the entrepreneur) and user (the
customer)
provides a basic P&L for the maker of value invested and received, both
monetised and unmonetised.

Doing so allows us to all kinds of values, to both kinds of stakeholder, in the same
pattern. It also allows us to see a pattern in a new way: rather than as some "resolution"
of conflicting forces, we can instead see it instead as a better value proposition.

For example, take again the traditional DOOR pattern.

Without the door pattern, we can have either easy access to rooms in our
building, or sound and visual privacy, but not both.
The DOOR pattern allows us to have both: so we get greater value. It comes at a
cost, and that cost (in money) represents other possibilities forgone.
Collectively, intuitively, historically, people have made that evaluation, of the
value of the DOOR pattern compared to the possibilities forgone, and the
evaluation.

A more contemporary pattern: CARSHARE.

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Many developers have started to include CARSHARE spaces in their buildings. There is a
cost to these to the developer, as they cannot be sold with individual apartments. On
the other hand, CARSHARE makes sense to residents in terms of reduced car costs,
coupled with some inconvenience.

However, developers do not know the exact role that new pattern might make in a
buyer decision, or the value of that CARSHARE spaces to the buyers. Similarly, buyers
might buy into such a building vaguely liking or disliking the CARSHARE spaces, but
without a clear understanding of their real value or disutility.

A CSV pattern for CARSHARE can make more explicit, these values and their costs:

What is the cost (or saving) to the developer of including CARSHARE spaces
instead of private parking spaces? What are is the monetary value of CARSHARE,
in terms of appeal to buyers?

What the value to the spaces is to the future residents: in terms of money saved
which can be used on other needs and desires, and the probable cost in terms of
inconveniencegenerally a time cost. That time cost can again be quantified
(how real is the fear?) and even monetised (what is the value of your time, to
you?)

Such a pattern details the overall value proposition for both maker and user, across both
monetised and unmonetised values. There will always be values that resist monetization.
However, by breaking down a project first into patterns, and then applying a shared
value approach to each pattern, both developer and buyer/residents can unpack
otherwise vague or global estimates of the value delivered by the project to each.

With this kind of integrated view, developer and prospective buyers can have more
productive discussions prior to development, and track valueboth monetised and
unmonetisedduring the design process. Shared value patterns may also provide very
explicit selling tools for the final developmenttools which address user needs and
desires in detail, rather than through the traditional glad-handing, photographs, or lists
of features.

The upshot
The found in the book A Pattern Language have evoked robust and long-term public
interest in transparent design principles that engage both mind and heart. The idea of a
pattern language is also useful in breaking large, complex design problems into more
manageable pieces, and then recombining them.

However, patterns as originally formulated lack key components: they don't include
money, and thus ignore production economics; they address only user needs for usevalue, not maker needs for money.

By combining patterns with concepts of Share Value, and drawing on the format of
simple evaluation tools such as the Business Model Canvas, we can create patterns
which includes both monetised and unmonetised value, and both user and maker
perspectives and interests. The result retains the benefits of the original patterns, but in
a more practical form that can guide user consultation, development decisions, design
control, and a uniquely informed and transparent selling process.

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