The Evolutionary Imperative for Business
The Evolutionary Imperative for Business
That business leaders are struggling with the implications of global, systemic, and structural change cannot be denied. After all, business has always had to deal with the sometimes chaotic processes of evolutionary change. During the Industrial Era, for example, the emphasis was on efficiency and a view that employees were just one more component of the production process. Progressivism, otherwise known as “scientific management,” assumed that employees were incapable of making decisions and needed to be directed or managed. Employees weren’t trusted to do the right thing, nor were they empowered to contribute. Then along came Dave Packard, cofounder of Hewlett Packard, and other foresighted humanistic leaders who saw that the responsibility of a company went beyond designing an effective economic model to recognizing, as Packard put it, that “we had important responsibilities to our employees, to our customers, to our suppliers, and to the welfare of society at large.”
Although many companies weren’t as ready to trust their employees to the degree that Hewlett Packard did, some were prepared to flip the organizational chart and slowly move toward employee empowerment while still holding on to the reins. For most, though, making that leap of faith seemed riskier than sticking to what seemed to be the tried and true. However, that option is no longer viable for companies that want to survive and thrive.
Dave Packard’s intuition served him well. He saw above and beyond the limits of thinking that were prevalent at that time. In his book The Biology of Transcendence, Joseph Chilton Pearce writes, “We actually contain a built-in ability to rise above restriction, incapacity, or limitation, and as a result of this ability, possess a vital adaptive spirit that we have not yet fully accessed.” He further explains that we can intuitively sense this adaptive potential. I wonder if that desire for inspiring, engaging, fulfilling, and creative work arises naturally from deeper levels of knowing that we have unrealized potential waiting to be released.
And release it must, for we are at a pivotal point in our evolution. The accelerating degeneration of our natural systems, including climate change, diminishing biodiversity, and disruptions in our global food supply, confront us with some very complex issues to resolve. As ecological economist Herman Daly has pointed out, “The economy is a wholly owned subsidiary of the environment, not the reverse.” A 1997 article in Nature estimated that “Through its natural resources, the earth provides $33 trillion worth of value per year to the global economy.”1 Linear styles of management are simply too archaic to effectively respond to the uncertainty and complexity we now face. As our collective consciousness rises to meet these challenges, business has yet another opportunity to apply its considerable resources toward solutions.
Paradoxically, it is nature that provides the guidance.The LAMP index, created by investment advisor and author Jay Bragdon (Profit for Life), is rigorously screened to include companies that operate with integrity (where the means align with ends), value their employees, and follow the principles of nature. These principles include interdependence, where the success of the individual depends on the success of the whole and vice versa; nonlinear networks, which feature multiple feedback loops that serve to support self-regulation; and frugality, the efficient use of energy and resources.
“Globally, fewer than 4 percent of stock exchange–listed companies operate from core values of care and compassion,” Bragdon explained to me. “Most people believe this approach to business is ‘soft.’ But when done with deep commitment and professional competence, it produces hard results. In 2009, for example, Global LAMP Index companies returned 44.56 percent, far surpassing returns on the S&P 500 (+26.46 percent) and the MSCI World Index (+28.01 percent). Over the past decade, Global LAMP Index companies returned 98.03 percent, while other benchmark companies collectively lost money.”
If such achievements confront conventional wisdom that the profit-and-loss statement is the only measure of a successful business, then we are on the right track.“Managing a company as if it were a profit-making machine imposes a linear-thinking mentality that blinds it to important relationships . . . Managing a company as if it were a living organism, which it is, creates a radically different and more beneficial set of relationships.”2
Systems thinking maps these relationships, most often as thought patterns, cycles, and feedback loops. By combining systems thinking with insights from such emerging trends as the internalization of social and environmental responsibility, open and crowd sourcing, social enterprise, increases in self-employment, and other indicators of change, a wider and more integrated map emerges that shows these interrelationships on a global scale. And in order to seize the opportunity available to work with rather than against the emerging forces of change, a higher level of consciousness is needed.
A Reckoning of Forces
Force 1: A Shift of Consciousness. Scientific analysis of the Mayan calendar tells us that we are right where we are supposed to be.The connection between the Mayan Calendar and contemporary systems thinking was presented in an award-winning paper by Slovenian professor Tadeja Jere Lazanski at the 2009 Computing Anticipatory Systems Conference. Most modern-day businesses, she explained in her paper “Ancient Maya’s Evolution of Consciousness and Contemporary Systems Thinking,” grew up during what the Mayan Calendar describes as the “seventh step” of consciousness:
“The seventh step of consciousness, from 1755 to 1999, was a consciousness of power, where there was no place for integration but analyzing, separation, creating towers of power, wars, and manipulation. This is a reason that no one would think of connection and integration, of systems thinking in its highest meaning — not one philosopher or politician.”
In other words, there was no receptivity for the kinds of connected consciousness we see appearing today. Everything was neatly sorted into black and white, with no tolerance for ambiguity or shades of gray. Duality prevailed: right-wrong, good-evil, environment-economy, green-profit. Differences of opinion were pitted against each other as opposing ideas rather than a piece of the larger picture. Power meant the ability to control or influence others rather than mastery of the self. Left brain–right brain was synonymous for practical and impractical. You took your left, linear, analytical brain to work and used your right, creative brain for family matters and hobbies. A focus on the short term was being practical; a focus on the long term was considered pointless given the expectation of volatility and uncertainty.
Those operating from this mind-set will, by force of habit, have a great deal of difficulty shifting to a more holistic, big-picture view unless they agree to boldly commit to doing so. And the pressure to do so is intensifying.
From now until the end of 2011, we are (from the Mayan perspective) in the eighth level: “a consciousness of ethics,” writes Lazanski, “where all the towers of manipulation and of negative power are collapsing. Ethics in the higher sense refers to spontaneous solutions through the application of law and power to the benefit of everyone. It shines from within and is personal, knowing the right thing to do and doing it. It is a refined consciousness. Now, the powerful people who make the laws and lead the nations and societies cannot get away with anything without being exposed; all abuses of power are becoming uncovered.” Look no further than the recent Wall Street meltdown for proof.
The ninth and next step leads “the planet to one harmonious system” of conscious cocreation. Affirming that evolutionary step is a finding published by IBM in its 2010 survey of global CEOs titled “Capitalizing on Complexity“: social networking has exponentially increased the degree of interaction customers and citizens expect of organizations. It isn’t enough just to collaborate anymore. Today, the watchword is ‘cocreate.’
Force 2: From organizations structured on Newtonian principles to those structured on quantum principles. Newtonian principles operate quite well in a simple, linear world. They rely on materialism, reductionism, and determinism — the idea that the only thing that matters is matter and that outcomes are predictable and controllable. Quantum principles, by comparison, recognize that everything is energy; everything is connected, interrelated, entangled, and uncertain. In today’s reality, where the context for day-to-day living is characterized as volatile, uncertain, complex, and ambiguous (VUCA), such an understanding is imperative to survival. Companies that remain attached to the hope that these underlying conditions will follow old rules face certain decline.
Force 3: From controlling behavior to focusing on performance and results. We are used to thinking up and down when it comes to hierarchical organizations, but that is not how phenomenal results are produced. Nick Zeniuk, now retired from Ford, described the shift to me in this way: “The traditional managerial system is based on the concept of control, which was a reasonable concept fifty to one hundred years ago, when managers and senior managers knew enough about the business to effectively control the business. Many of the managerial systems in our organizations are based on controlling behavior: the performance systems, the reporting systems, the reward systems, and quality control mechanisms like Six Sigma. That is no longer a valid system. The realization that we were operating under the illusion that we, as executives, could control the outcome was quite a startling discovery. What I discovered personally and what we are discovering now is that our focus needs to be redirected from control and behavior to results or performance — because when we focus on performance, we are focusing on those attributes that enable us to achieve the results we want.” In this process, trust is essential — trust in one’s own sense of inner power and trust that people will do the right thing when given a shared and worthwhile goal. Effective managers no longer control performance but support it. Higher levels of personal mastery then become a prerequisite.
Force 4: From hierarchical leadership to leadership at all levels — top-down, bottom–up, and sideways. Collective intelligence emerges from the collaboration and competition of many individuals, with the group having a higher level of knowledge than the individuals in it. Collective intelligence happens through networks of performance that cut horizontally across a company’s hierarchical structure. Social scientist Dennis Sandow and his client, Anne Murray-Allen, formerly of Hewlett Packard, mapped out networks of performance at HP to understand how, as complexity increased along with the growth of the inkjet cartridge division, that division performed at a consistently high level of achievement over time.
“What I have learned from working in organizations where we had truly phenomenal results day after day after day is that leadership does not come from position; it comes from a place of contribution. It can come from anywhere in the organization. It is based on who is in a position to see what no one else can see, to make the contribution that everyone can get behind and support. My experience from working in organizations for over thirty years is that it is in our nature to be motivated by two things. First, we all want to make a big contribution, not just a contribution but one that is significant. It drives us in terms of purpose. Second, we all want to belong. We are social and emotional beings. We know now from what have learned through neural and cognitive science that we are hardwired to be together and collaborate.”3
Sandow and Murray-Allen also discovered that the people involved in achieving a goal rarely showed up on the organizational chart. In fact, they discovered that most of the people working on a particular objective were from outside of HP and included customers, competitors, suppliers, and anyone else who needed to be a part of it.
Jay Bragdon calls this phenomenon “relationship equity.” “Relational equity is the foundation of financial equity,” he writes. “How companies relate to employees, customers, suppliers, and other stakeholders matters more than most people think. Corporate leaders who understand this build cultures that inspire systems thinking and organizational learning. Those who do it well catalyze a powerful, reinforcing cycle of profit, which turns their firms into innovation hothouses.”4 Employees might describe this as taking your whole self to work, doing work that truly matters, and contributing to a hopeful future.
Tools for Transformation
To accelerate the evolution of leadership and innovation from the old model to a new one, we need to let go of a few habits.
1. Overreliance (or addiction) to linear and analytical thinking. Life does not operate on a runway; it operates as a network, a web of complex and interconnected systems.Linear-logical thinkers link one thought to another in an orderly sequence until a story or thread is constructed that makes logical sense. Analytical thinking takes a concept apart to its more manageable pieces. Both were effective in a simpler world when interrelationships could be ignored at minimal risk. In the workplace, linear thinking is heard whenever older generations depict the exceptionally creative Gen Y as “the entitlement generation” who need to “suck it up” and “pay their dues” on the same career runway they experienced. As creativity becomes the talent du jour, linear thinking can still offer support for implementing creative ideas. But seeing the value in different ways of thinking and processing information must come first. It starts by listening with the intention to understand rather than to be right.
2. The temptation to file and sort new ideas and incoming data so it feels like they have been handled.This is one of the greatest temptations and pitfalls of reacting to complexity. Clarity is achieved by seeing the system, not getting lost in the details. Everything is connected to everything else. The moment you file it, you’ve lost the link to an interrelated dynamic. Fish might be managed by one government department, forestry by another, and the environment by a third. Though administratively convenient, nature ignores such political boundaries. Further, there is a temptation to place anything outside the norm in the “woo-woo” or “New Age” file, where you'll find alternative health, quantum physics, and holistic thinking. This habitual dismissal of new concepts unnecessarily narrows options and diminishes the capacity to see the whole picture. Developing sufficient self-awareness to know when your coping strategy is “file and sort” versus “listen and absorb“ is critical.
3. Negative thinking and limiting beliefs. Uncertainty can provoke fear. Deepening the skill set and ability to regulate emotions reduces stress and opens possibilities. Limiting beliefs operate both consciously and unconsciously. The former are readily identifiable, the latter are not, so it takes a deepening of our inner skills to spot the telltale patterns and know what to keep and what to release. Upgrading personal mastery and expanding self-knowledge are inherent and imperative in such a process.
Systems thinking recognizes that we are a part of the system, not above it. Identifying attachments to old patterns of thought, belief, and habit about how the world works allows new innovations and our greater human potential to emerge.
Organizations as Living Systems
“Companies that model themselves on living systems typically practice what I call living-asset stewardship (LAS),” writes Bragdon in “Capitalism as a Human System.” “To them, profit is not so much a goal in itself as the means to a higher end of service. When such ends are condensed into a compelling vision — one that calls forth the life-affirming instincts and future hopes of employees — the firm becomes a profoundly inspirational workplace. The operating leverage in this is easy to understand. Employees who work with their hearts as well as their minds are more productive than those who simple ’do a job.”5
Project Shakti (meaning “strength” in Sanskrit) was started by Hindustan Lever, Unilever’s Indian division, in 2000. They turned to local women entrepreneurs to distribute products to their rural communities. By 2008, there were 45,000 women distributing $3 million worth of products to 100,000 villages. For Unilever, the rural Indian communities, and the women entrepreneurs, this is an “everyone wins” solution, creating a vast rural marketing network through the resources of the community. By trusting that the local community networks would do what would best serve the entire system, Unilever tapped into a deep well of motivation, creativity, and commitment. Unilever is also behind the establishment of the Marine Stewardship Council, now recognized as the good housekeeping seal of approval for sustainable fishing.
Such initiatives represent good examples of next-stage corporate evolution as well-intentioned businesses move toward a higher level of planetary stewardship. Perfection is not the goal; “self-actualization” is a process so mistakes will happen. To stay on track and overcome the temptation to lose focus, organizations must commit to continual learning and maintain allegiance to a higher purpose.
When control is replaced by trust and the joy of being in service to something larger than oneself, tacit knowledge emerges — the innate know-how unique to each person. The power of our human potential is unleashed and the community as a whole becomes healthier. The simplicity of complexity is that by making a leap of faith, trusting people to do the right thing, supporting development of an employee’s wholeness (self-actualization), and actively stewarding our relationship with nature, organizations will nurture the most powerful source of innovation — the human spirit.
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Fluent with the science behind self-actualization, Dawna Jones develops leaders who can function in any environment, helping them to clear hidden barriers to achievement while restoring entrepreneurial intuition. She knows it is the power of the human spirit that drives creativity and radical innovation and contributes big-picture thinking and deep personal insights to that process. (www.FromInsightToAction.com)
1. Robert Costanza and others, “The Value of the World’s Ecosystem Services and Natural Capital,” Nature 387, no. 6630 (1997). http://www.nature.com/nature/journal/v387/n6630/abs/387253a0.html.
2. Joseph H. Bragdon, “Capitalism as a Human System: The Value of Relational Equity,” Reflections: The SoL Journal 10:1 (2009).
3. Anne Murray-Allen in interview with the author, January 2010.
4. Joseph H. Bragdon, “Capitalism as a Human System: The Value of Relational Equity.”