Successfully Developing Triple Bottom Line Sustainability: #1

This is the first of six Blogs dealing with TBL Sustainability to be published over the next few weeks. All these Blogs are being co-developed with my colleague and TLA Associate Tia Carr Williams.

“We now know that the source of wealth is something specifically human: knowledge. If we apply knowledge to tasks we already know how to do, we call it productivity; if we apply knowledge to tasks that are new and different, we call it innovation. Only knowledge allows us to achieve those two goals. Organizations that are efficient and effective in applying knowledge will succeed better than their competitors” – Peter Drucker

Business as usual is no longer an option – it is obvious that traditional organizational design has not worked in today’s complex business environments. New ways of thinking and organizing are critically important if organizations are to do more with less, and ensure ongoing business growth and renewal.

Most of today’s organizations are set up like spider webs with thinking and command at the centre, and planning and control exerted through the web threads. The problem is that command and control operation is far too inefficient in terms of speed and efficiency, too clumsy in terms of knowledge management, and too lacking in variety for today’s complex dynamic business contexts. Top-down corporations need to adapt their fundamental structure to change from a command and control model to one that promotes facile communication incorporating social trust and widespread knowledge sharing – in other words to survive surging market competition organizations must decentralize.

A decentralized organization has distinct market advantages over a wholly centralized organization, allowing not only for the natural development of the key capabilities needed for the organization to operate creatively and successfully in face of today’s constantly changing circumstances and environmental demands, but equally to address the needs of a churning workforce that increasingly includes a new breed of worker – the Generation Y Millennials, the cohort born between the mid-70s and the early 2000s. Organizations challenged with three generations of employees need novel organizational strategies to accommodate employees’ varied learning requirements and to foster work satisfaction. Decentralized organizations are more responsive to market forces and employee variety, are agile in implementation, and are consistently adaptive to innovative processes that promote and empower continuous improvement at the rock face of employee daily-deliverables.

Decentralization as it is implemented today typically involves creating a starfish configuration, comprised of small hubs capable of operating, growing and multiplying interdependently of each other. The starfish model is used by innumerable organization designers around the globe today. Although it is an advance over the spider web design, and does facilitate significant strategic advantages to emerge from daily operations in ways that play a significant role in continuous improvements informing sustainable advantage, the starfish model still does not go far enough to provide a truly sustainable systemic approach to organizational design.

Genuine Sustainable Advantage (SA) demands a much more polyarchic approach, providing both independency and interdependency of all major components of organizational processes. In the SA model people become epi-central to the co-evolution and co-maintenance of strategy, structure, processes, and rewards. Human-centric organizations include employees in most of the organization’s responsibilities and decision-making, ensuring incremental investment by each member in the rigors and rewards of a profitable company.

In the second Blog of this series the critical differences between Sustainable Advantage (SA) and Sustainable Competitive Advantage (SCA) will be explored, and the relevance and promotion of innovation reviewed.

Dancing with the Gorilla!

Once upon a time the pace of change was slow enough that we could adapt either by making small adjustments or by passing our insights on to the next generation. Today the pace of technological and social change accelerates almost continuously, and the necessary adjustments are so large as to lead us to talk about the “management of discontinuities” and our insights are often out of date as soon as we formulate them.

Our environment has become so large, interconnected, complex and unpredictable that the only kind of stability we can find is dynamic – like a boat in a storm. Each day brings more surprises and we ponder “What in the world is happening to the world?” Our answer to this question shapes our individual world view that in turn shapes just about everything we do – so let’s explore a couple of world views ….. Enter the Gorilla of change that your organization is partnered to dance with whether you like it or not! Wake Up!! The trampling has commenced ….

The gorilla represents contextual change that can cause anything from minimal organizational discomfort to deathly executive fear – simple transition or absolute chaos. In the past the gorillas you and your organization danced with came from zoos, and were docile old things that gave you a very few surprises if any. They had names like unrest, confusion, transition, competition and the like. Your organization knew all the moves and steps and the dance went quite smoothly.

Suddenly the supply of tame gorillas dried up and all the new gorillas you partner with now have just come from the jungle. These gorillas are wild and unpredictable, and have names like ambiguity, disorder, complexity, and chaos – even dare we say it “global crisis”! Now, there are two ways you and your organization can dance today with these gorillas (1) the old way where you imposed the steps, or (2) a new way in which you learn to let the steps emerge.

Let’s review these two world views ….

1.    You impose the steps and you:

• see the future as an extension of the past and the steps are laid out
• strive for routine and predictability emphasizing efficiency (“doing it right”) over effectiveness (“doing the right thing”)
• fall victim to the “It has always worked” syndrome
• develop an organization that learns the steps from its own old manuals
• suffer under the curse of the paradigm so that the dance ends catastrophically. A paradigm is mental model of the world. It is useful for aligning the thinking and effort of all organizational members but over time it becomes a restrictive communal mindset where challenge to the status quo is unthinkable – be prepared to be trampled!!

2.    You let the steps emerge and you:

• “Go with the flow” … the dance is a complex system and you leverage the “exploitation/exploration” tension to your advantage
• embrace entrepreneurship and innovation, striving for continuous renewal
• strive for both effectiveness and efficiency
• are agile and leverage the knowledge in your human capital
• avoid the curse of the paradigm by ensuring freedom at all organizational levels to make decisions based on a culture of high autonomy – high alignment
• promote social networks and social networking
• are sensitive to what your organization’s “opinion leaders” are counseling

It turns out that dancing with your gorilla using style #2 fits very well with newly emerging theories that involve social networks, chaordics, and complex adaptive systems, to name just a few tempos. Indeed many current authoritative judges of gorilla dancing think you will have a sound future in competitive gorilla dancing if you adopt this style … ah, but how to begin without being trampled? Why not give me a call? I’d be delighted to introduce you to some great gorilla-dancing coaches ….

The Power of Social Networks & Opinion Leaders

Some time ago my PC crashed and being old it was not worth replacing. The first thing I did was to talk to friends who had gone through similar experiences, and I prepared myself for the new purchase by talking to vendors about their products and by checking books and reviews by acknowledged experts. Then I shared with my network details of the models that I had investigated. By that time I had already decided on the PC I felt would best fit my requirements, but in talking to my friends I was persuaded to change my mind and pick a different model.

I purchased that machine and it is giving me excellent service. I don’t believe that this experience is at all unusual; indeed, I think it’s quite commonplace in dealing with everyday problems of all kinds. Most of us welcome support in addressing our challenges, and seek the help and advice of our social networks in resolving them. The example shows that I did not exclude expert commentary, but it also shows that intervention by familiar trusted social elements is often what provides the final, but most influential, recommendation in the decision-making process. This is because these members of a trusted network ensure the ‘safety’ and ‘cultural fit’ of the decision. Other arms-length elements provide guidance, but in the final analysis they often seem too distant from the complexities of the local situation to be persuasive or perhaps trustworthy.

For me this episode says a lot about the power of networks and defines many of the principles of “opinion leaders”. It got me wondering why, if we follow this process so frequently in our everyday lives, we do not follow it in our organizational lives? Well, guess what – as individuals in informal organizational communities we do! Unfortunately, we don’t formally recognize it, or attempt to address its ramifications or leverage it as a matter of organizational policy and practice. Maybe it’s so commonplace that we all fail to see its utility, just like goldfish are said to fail to comprehend the need for the water in which they swim. Or maybe it’s just not technologically sexy enough.

This acceptance of the power of networks and opinion leaders is at the heart of much of what I and TLA’s Associates ( www.tlainc.com ) bring to our various assignments and I’m delighted to dialogue on  this if you feel like contacting me …

Rationality-Emotion Balance

One may provide all the rational understanding and wherewithal for individuals or communities to accomplish a given objective, but if they don’t want to do it then it won’t happen, or the effort will be half-hearted with predictable results. Surely this simple truth is common knowledge, but much of the organizational managerial establishment still doesn’t get it – having ‘power over’ may make you feel good, but it’s a strategy that starts off suboptimal and goes down hill from there.

Of course organizations do routinely operate under a façade of rationality, but they still over-emphasize the goal-orientation that drives them, and under-value the expressive affective arenas of life; this in spite of a large influx of women into the workforce. In 1973 Gerard Egan wrote “Emotional repression in undoubtedly still a far greater problem than emotional overindulgence” [1]. Some thirty-odd years later this statement is as true as ever in my opinion; society still equates management capability with emotional maturity. This translates as the control or repression of feelings, and organizations continue to use the word ‘emotional’ in a derogatory sense. Indeed, since managers are often guarded in their feelings, they prefer others to behave in the same way: “It is thought uncivil, rude, unconventional, unwarranted, and even obscene to express feelings toward others. Emotional insulation parades under such euphemisms as ‘respect for others’ and ‘the dignity of privacy’” [2]; I would go further and include that it parades as ‘respect for our leaders and managers’.

Putnum and Mumby quote Lutz who sums it up well: “In addition to treating emotion as a physiological state, people regard emotion as a value-laden concept which is often treated as ‘inappropriate’ for organizational life. In particular, emotional reactions are often seen as ‘disruptive’, ‘illogical’, ‘biased’ and ‘weak’. Emotion, then, becomes a deviation from what is seen as intelligent” [3]. Perhaps there is a fear in leaders and managers that focusing on emotional energy leads to loss of control; this is not the case: “Organizations do not need to abandon instrumental goals, productivity, or rationality to develop alternative modes of discourse. Emphasizing work feelings calls for including what is currently ignored or marginalized in organizational life. Rationality is not an objective, immutable state. Rather it is socially constructed and cast as the dominant mode of organizing. Rationality and technical efficiency, however, should be embedded in a larger system of community and interrelatedness. Perhaps organizations of the future could offer society a new alternative, one shaped by emotionally-connected creativity and mutual understanding as necessary elements for human growth.” [4].

A growing issue is that so much interpersonal communication is no longer face-to-face but ‘second-hand’ – mediated through technology, and “Technology makes it easy to fake authenticity, to manipulate it, to have encounters that seem authentic but are not” [5]; however, although technology such as email seems tailor-made for the powerful elite to hand out ‘the tablets’, social networking tools such as twitter and facebook offer huge opportunities for honest social interaction, and indeed demand a level of emotional honesty for social network trust and acceptance. I am encouraged by the way social networking tools leverage the community-influence of individuals to combat ‘power-over’ e.g. the political struggle in Iran. I also see why there will be resistance to inclusion of such tools in an organization’s inernal-use technology portfolio – but we can hope!

Social systems are highly complex and there is no guarantee that a particular seemingly desirable starting condition, such as the widespread introduction of social networking technology into organizations, will result in a desirable end-state. I do believe though that it would be a step in the right direction, helping to redirect the emotional labor that employees currently expend in subverting authoritarianism and emotional control, and channel it such that they display leadership in, and take personal responsibility for, shaping their own self-organizing system. “Here, ideally, people would give up some of their uniqueness to help build the edifice or common system, rather than clamoring for more power for their system, which then gets experienced as power over other people” [6].

Human nature being what it is, I do not believe that it is possible to build a paradise where an organization will fully succeed in dealing appropriately with all the complexities of the interactions within its social systems. I do believe however that an organization can strike an adequate balance between power-over/rationality/technical efficiency and non-rational factors, such that each field contributes to, and supports the other, in optimizing performance.

I contend that by adopting this approach the quality of work, and work life of the organization, would be vastly enhanced over time, and that the ground would be well prepared for general adoption of much needed traits of leadership and personal responsibility at all employee levels. I would like to hear your views – please contact me to further explore these topics..

Notes

[1] Egan, G., Face To Face, Brooks/Cole Publishing, Monterey, 1973; pp. 61

[2] Egan, G., Face To Face, Brooks/Cole Publishing, Monterey, 1973; pp. 64

[3] Putnam, L.L., Mumby, D.K., Organizations, Emotion and the Myth of Rationality, in S. Fineman (Ed), Emotion in Organizations, Sage Publications, London, 1993; pp. 36

[4] Putnam, L.L., Mumby, D.K., Organizations, Emotion and the Myth of Rationality, in S. Fineman (Ed), Emotion in Organizations, Sage Publications, London, 1993; pp. 55

[5] Lukensmeyer, C.J., Parlett, M., Power, Change, And Authenticity: A Political And Gestalt Perspective, British Gestalt Journal, Vol. 6, No. 1, 1997; pp. 7

[6] Lukensmeyer, C.J., Parlett, M., Power, Change, And Authenticity: A Political And Gestalt Perspective, British Gestalt Journal, Vol. 6, No. 1, 1997; pp. 13