Consider This... AI is the Killer App of IP
Guardrails
The Synallagi Targeting Framework will be examined comprehensively in a forthcoming paper within our 21st Century Marketplace Vision series. For this paper's purposes, it is sufficient to establish the guardrails within which it must operate.
The Targeting Framework is intended to identify, evaluate, monetize, and distribute a portion of the incremental benefits generated through the knowledge, skills, experience, expertise, ideas, and innovative capabilities of our user community. These benefits may arise from reduced costs, increased revenues, improved productivity, better business processes, or entirely new operating capabilities developed by our user community and enabled through our software developers.
In a directly related matter. Intellectual Property as discussed to this point forms the foundation of what is and what is not undertaken within the producer firm and oil & gas industry through Synallagi. Where in fact Artificial Intelligence is the “Killer App” that makes Intellectual Properties value realized. And as we will see in this paper AI plus IP makes Orchestration both possible and operational.
Guardrails: Protecting Value, Trust and Architectural Integrity
A seemingly insignificant improvement—such as a recurring $0.25 reduction in cost or increase in revenue—may mean little to an individual producer. Applied repeatedly across the 1.1 to 1.3 million producing wells in North America, however, that same improvement could create substantial industry value. The Targeting Framework would determine the portion of that value attributable to an innovation and support the distribution of an agreed derivative share to our user community members and service provider organizations responsible for creating, implementing, and sustaining it.
The framework cannot be permitted to assess its own success subjectively. A permanent base case of industry performance must be established against which subsequent developments are measured. Benefits must be calculated independently, objectively, verifiably, and consistently—both for the most recent reporting period and cumulatively from the time Synallagi becomes operational. What gets measured gets managed.
Oversight must therefore be entrusted to an independent body representing our user community, producers, and other appropriate participants. That body would govern the evaluation, calculation, monetization, allocation, distribution, administration, and arbitration of benefits. Its purpose would be to ensure that value is neither claimed without evidence nor withheld from those responsible for creating it.
This is the first guardrail: no demonstrated value, no distribution.
The second is that every innovation must operate within Synallagi’s established business models and architectural framework. A change producing an apparent benefit in one area cannot be accepted if it creates hidden costs, inconsistencies, or failures elsewhere. Synallagi is an integrated Enterprise Resource Planning architecture. Much as a building has its foundations, electrical systems, plumbing, and structural components must work together. Shortcuts taken during development will eventually be paid for by everyone who depends upon the system.
Innovation must therefore be initiated, refined, developed, tested, documented, validated, and supported before its benefits can be recognized. Errors will occur—often more frequently than solutions during the early stages of development. What matters is whether those errors are identified, understood, corrected, and converted into better methods. The objective is not the appearance of progress. The objective is completion: work that operates accurately, reliably, and consistently throughout the architecture.
The third guardrail concerns authority. Synallagi development will occur within an independent community of qualified, authorized, and licensed collaborators. Our user community will provide the business knowledge and functional direction. Software developers will provide the comprehensive technical capabilities necessary to convert those requirements into operating software. Service provider organizations will combine the explicit knowledge captured in Synallagi with the tacit knowledge accumulated through implementation, specialization, and continuing industry experience.
Each participant will have a defined role. No contributor should receive credit for value that cannot be attributed to their work, and no participant should be able to appropriate another person’s contribution. The applicable Intellectual Property, licensing, documentation, attribution, confidentiality, and derivative-work requirements will govern how innovations are developed and incorporated into Synallagi. These matters will be addressed more fully in the section that follows.
The fourth guardrail is transparency appropriate to responsibility. Synallagi should produce an industry scorecard comparing the established base case with the performance achieved after implementation. That scorecard would show the aggregate value created through the combined innovations of our user community across North American oil & gas. Each user community member would also receive a detailed accounting of the innovations attributed to them, the value those innovations generated, and the compensation earned as a result. As stated earlier what gets measured gets managed.
Transparency does not mean that confidential methods, individual contributions, proprietary information, or commercially sensitive details must be exposed publicly. It means that the calculations, decisions, and distributions must be sufficiently documented to withstand independent review.
The fifth guardrail is that compensation must remain connected to realized value. The Targeting Framework is not intended to reward ideas merely because they are novel, nor effort merely because it was expended. It is intended to reward demonstrated improvements that producers can implement and from which the industry receives measurable benefits.
This changes the basis upon which some work may be valued. Compensation has traditionally been tied to attendance, hours worked, or a defined organizational position. Synallagi creates the opportunity to compensate people for finding better methods, developing them with software developers, proving that they work, and distributing their benefits across the industry.
Artificial Intelligence will accelerate this change. Manual movement of data and repetitive calculations will increasingly disappear, while the value of judgment, domain knowledge, innovation, and effective implementation will increase. The implications for work, productivity, and compensation will be considered more fully in the Artificial Intelligence section of this paper.
These guardrails are not intended to constrain innovation. They establish the conditions under which innovation can be trusted, protected, commercialized, and distributed at scale. They align the interests of producers, our user community, service provider organizations, software developers, producer investors, bankers and the broader industry around a common result: independently verified improvements in reserves preservation, performance, and profitability.
The Targeting Framework must ultimately answer two questions:
- What measurable value has Synallagi created for North American oil & gas?
- And who is responsible for creating it?
If those questions can be answered objectively, accurately, and fairly, our user community will have more than an incentive to innovate. It will have a durable means of building businesses around its knowledge, converting individual expertise into industry-wide capability, and sharing in the value it creates.
The Tragic and Utopian Visions
In A Conflict of Visions: Ideological Origins of Political Struggles, Thomas Sowell distinguishes between two fundamentally different understandings of human nature: the constrained vision and the unconstrained vision, also commonly described as the tragic vision and the utopian vision. The constrained vision regards human beings as permanently limited in knowledge, judgment, and virtue. The unconstrained vision considers human nature sufficiently malleable and perfectible to permit society to be deliberately remade according to an ideal design. Basic Books, Google Books.
The danger arises when a utopian vision attempts to impose a perfect outcome upon imperfect people. By discounting human limitations, competing interests, dispersed knowledge, and unintended consequences, the pursuit of perfection can produce coercion, institutional failure, and precisely the harms it was intended to eliminate.
Synallagi subscribes to the tragic—or constrained—vision. It does not assume perfect knowledge, flawless judgment, or uniformly benevolent behaviour. It therefore relies upon defined authority, distributed knowledge, incentives, accountability, measurable performance, and institutional guardrails. As the discussion below demonstrates, Synallagi is designed to work with human limitations, not to pretend they can be designed away.
Motivation: Aligning Individual Reward with Industry Value
In our January 20, 2025 paper, “Catalysts for Cultural Change: The Leadership Role of People, Ideas & Objects User Community,” we outlined a compensation model for the individuals responsible for developing, completing, and continually improving Synallagi.
The underlying principle is straightforward:
What gets measured gets managed—and what creates measurable value should be rewarded.
People, Ideas & Objects must provide sufficient motivation for our user community to bring Synallagi into operation throughout the North American oil & gas industry. That motivation cannot depend upon promises of future opportunity alone. Members must be able to support themselves while Synallagi is being developed, receive meaningful recognition for completing the work, and participate in the recurring value their innovations create after commercial release.
This requires a layered compensation model.
During development, our user community members would receive basic hourly compensation and performance-based bonuses. After commercial release, the Synallagi Targeting Framework would begin evaluating, calculating, monetizing, and distributing the recurring value created by their innovations, automations, and autonomous developments. Members would also earn revenue through their service provider organizations, including fees for managing Joint Operating Committee processes and compensation for participating in the continuing development of the processes for which they are responsible.
Each form of compensation serves a distinct purpose.
Basic Hourly Compensation
Members of our user community would receive basic compensation of $50.00 per hour for their participation throughout the software-development process. Their work would include collecting information, identifying issues, analyzing existing processes, formulating solutions, defining business requirements, testing results, and designing the organizations through which those processes will eventually be delivered.
Our user community members are not software developers and will not be expected to write code. They will have access to a dedicated software-development team capable of converting their knowledge, ideas, and functional requirements into operating software.
Their role is creative and analytical. They must determine what Synallagi needs to do, why it needs to do it, how the resulting process should operate, and whether the completed software fulfills its intended purpose.
Basic hourly compensation provides members with the means to support themselves while performing this work. It also prevents the future opportunity offered by the Targeting Framework from being used against them. People cannot reasonably be expected to accept substantial professional and financial risk while receiving nothing more than a promise of compensation after commercial release.
At the same time, hourly compensation alone cannot provide the motivation necessary to complete a project of Synallagi’s scope. It recognizes time and participation; it does not fully recognize performance, completion, innovation, or the value ultimately created.
That is the purpose of the bonus system.
Performance Bonuses
Performance bonuses would provide immediate recognition for achieving prescribed outcomes during development. They are distinct from distributions made through the Targeting Framework.
Bonuses reward the successful completion of defined work. The Targeting Framework measures and distributes a derivative share of the recurring value subsequently created by that work in the marketplace. One provides near-term compensation for performance; the other creates the potential for long-term income from realized industry value.
The bonus system must recognize that performance occurs at several levels.
Project Completion Bonuses
Individual projects would be budgeted, approved, and administered by a project owner responsible for a Synallagi module, major process, or defined area of functionality, such as the Material Balance Report or Work Order.
Each project would have established requirements for functionality, quality, accuracy, timing, documentation, testing, and integration. A Project Completion Bonus would be earned when those requirements were satisfied.
This bonus provides the additional compensation necessary for members to receive the full value of the time, judgment, and effort invested in completing a project. It supplements the basic hourly compensation received while the work is underway.
Projects may be short or long and may require both synchronous and asynchronous participation. Several projects may operate concurrently. Work that cannot be completed within its requirements may need to be reassigned, and members who repeatedly cannot meet their responsibilities may need to reconsider their continued participation.
The objective is not activity. It is completed work that functions properly within Synallagi.
Module and Major-Process Bonuses
Every Synallagi module is responsible for a defined category of functionality and process management. Each module contains numerous specialized processes, functions, information requirements, integrations, and dependencies.
Project Completion Bonuses recognize incremental accomplishments. Module and Major-Process Bonuses ensure that members also remain focused on the larger deliverable.
An individual project may satisfy its immediate requirements yet leave the overall module incomplete. Members must therefore remain attentive to how their projects combine with the work of others and whether the complete module or major process operates as intended.
Team-Based Bonuses
Synallagi cannot be developed through isolated individual contributions. Its complexity, scope, scale, and required development speed would produce incoherent results if every participant concentrated exclusively on their own work.
Team-Based Bonuses would reward coordination, shared problem-solving, cross-functional support, and successful completion of the broader Synallagi platform. These bonuses may complement—and in some circumstances exceed—individual performance bonuses because the value of an integrated Enterprise Resource Planning system depends upon the success of the whole.
Some members will focus almost exclusively on their licensed domain. Others will contribute wherever additional effort is required to move a process, module, or the complete platform through its final stages. Both forms of participation are necessary and should be recognized appropriately.
When Synallagi achieves commercial release, a final Team-Based Bonus would be distributed among those whose contributions earned participation in that result.
Commercial release would also establish the point from which the Targeting Framework begins measuring the incremental value created by subsequent innovations, automations, and autonomous developments throughout the Synallagi ecosystem.
Profitability, Innovation, and Accountability Bonuses
The objective of People, Ideas & Objects and our user community is to provide dynamic, innovative, accountable, and profitable oil & gas producers with the most profitable means of oil & gas operations—everywhere and always.
Our user community is also expected to establish a culture of reserves preservation, performance, and profitability throughout the industry.
That responsibility requires members to search continually for better methods within producer firms, Joint Operating Committees, and the broader industry. Profitability, Innovation, and Accountability Bonuses would recognize work that materially advances those objectives during development and implementation.
The purpose is to reward people for changing how work is performed, resolving persistent problems, and creating capabilities that would not otherwise exist.
Automation and Autonomous Development Bonuses
Automation and autonomous development are not one-time undertakings. They represent a continuing effort to provide better-quality services faster, more accurately, and with substantially greater efficiency.
Automation and Autonomous Development Bonuses would motivate our user community to continue identifying activities that can be simplified, automated, or performed autonomously through Synallagi. The industry benefits from those improvements through lower overhead, improved execution, greater consistency, and better use of professional knowledge.
The cost of rewarding an individual innovation becomes comparatively small when distributed across the production profile of the North American oil & gas industry. Through Synnefa.ai—Synallagi’s cloud-distribution environment—producers would share the cost of maintaining a single industry-focused Enterprise Resource Planning system in a manner comparable to the cost-sharing economics of cloud computing.
Synnefa takes its name from the Greek word for “clouds.”
From Immediate Recognition to Recurring Value
Development-stage bonuses and the Targeting Framework must not be confused.
Bonuses compensate defined performance and completion. They provide relatively immediate recognition while Synallagi is being built and brought into operation.
The Targeting Framework begins with demonstrated marketplace performance. It determines whether an innovation has created measurable value, how much value has been created, who was responsible for creating it, and what derivative share should be distributed to those contributors.
This creates a direct relationship between individual initiative and industry value.
A user community member who identifies an opportunity, works with software developers to implement it, proves that it operates successfully, and distributes it throughout the North American producer population should participate in the value created by that work. The greater the recurring benefit and the broader its application, the greater the potential long-term value to the member responsible.
Completion is therefore not merely an organizational demand. It is the point at which future value can begin to be realized.
Incomplete work cannot be implemented. Unverified work cannot be valued. Poorly integrated work cannot be distributed safely. Shortcuts that damage the architecture delay or diminish the benefits available to everyone—including those responsible for taking them.
Motivation consequently becomes one of Synallagi’s operating disciplines. Members are rewarded for completing their work accurately, supporting the work of others, protecting the integrity of the architecture, and continually seeking new value after commercial release.
Building Independent Businesses
Our user community must ultimately be independent of both Synallagi and People, Ideas & Objects as operating businesses. Members cannot build their futures upon promise and hope. They require defined areas of responsibility, durable commercial rights, and several sources of income.
Based upon each member’s knowledge, experience, contribution, and area of specialization, an appropriate Synallagi domain would be identified and licensed to them. That Intellectual Property license would provide the authority necessary to operate within the domain and prepare authorized derivative works.
The license would also grant the member the exclusive right to establish a service provider organization for that domain. Through that organization, the member could combine the explicit knowledge embodied in Synallagi with the tacit knowledge accumulated through implementation, operation, support, and continuing improvement.
Their potential compensation would therefore extend beyond hourly payments and bonuses to include:
Fees earned while participating in incremental software development.
Process-management fees charged through their service provider organization.
Performance bonuses earned during Synallagi development and implementation.
Targeting Framework distributions arising from measurable, recurring industry value.
The long-term commercial value of operating within an exclusively licensed area of Synallagi.
Profitable Production Rights represent another component of Synallagi’s funding model. These rights will be made available to members of our user community at a 15 percent discounted price when available. Their limited adoption does not establish a failure of Synallagi or of Profitable Production Rights; it reflects the continuing failure of producers to act upon the opportunities available to them.
Motivation as an Operating Principle
The compensation model is designed to balance survival, performance, completion, innovation, and long-term value.
Basic hourly compensation enables people to undertake the work. Performance bonuses reward defined achievements. Project, module, and team bonuses align individual effort with the completion of the integrated platform. The Targeting Framework allows contributors to participate in the recurring value their innovations create. Intellectual Property licensing and service provider rights enable them to convert personal expertise into enduring independent businesses.
Together, these mechanisms answer the fundamental question confronting every prospective member of our user community:
Why should I accept the risk, make the commitment, and undertake what may be the most difficult professional challenge of my career?
Because Synallagi offers more than employment. It provides an opportunity to build, own, operate, and continually improve a specialized business around the knowledge and experience that an individual has spent a career developing—and to share in the industry-wide value that knowledge creates.
