Post industrial scarcity and Natural Capitalism

I've been reading a Harvard Business Review article on Natural Capitalism (Lovins et al 1999), and just discovered this is also a book. The article highlights numerous ideas for a greener business environment - re-glazing that pays back cost and energy output inside two years, penny-pinching on wiring that drives up lifetime costs and energy output and innovative services/leases that can change the economic question from initial investment appraisal to total cost of ownership savings.

But the really interesting comment that struck me towards the end was "most businesses are behaving as if people were scarce and nature abundant - the conditions that fueled the first Industrial Revolution". But today's conditions are reversed - people are abundant and natural resources are becoming scarce. That's quite a philosophical challenge to the accepted business strategy norms. How does off-shoring continue to make sense with this philosophy - given the abundance of people here and the increased energy requirements of moving manufacturing overseas (and transporting finished goods back).

The (current) normal business response to a financial challenge/crisis is to cut costs - normally headcount costs and particularly in the "support functions". But if this reduces the amount of maintenance (see BP's record or New York city's bridge maintenance deferral problem), the ultimate cost (in both natural resources and financial capital) can exceed the initial savings. Lovins et al called for a broader measure of business performance - measuring and effectively using human and natural capital as well as financial capital. At least one company has taken this forward seriously - Novo Nordisk in reporting on their triple bottom line.

However, even this triple bottom line reporting is missing the intangible nature of novel ideas. It is said that "creativity, knowledge, innovation and learning now add value far more than land, labour or capital" (OU, p15). Perhaps a quadruple bottom line is needed for the learning organisation.

Change Management: toolkits for change or Viral Change

The standard model for change management seems to be (1) decide on the change, engaging a few people if you have to, (2) create the project/programme plan, (3) set out the vision and communicate it, (4) tell people what you want them to do differently and (5) run the project ... reinforcing the message in the hope that people will change.  There are numerous change toolkits available on the web to support this methodology.  But, with continuing reports of 70% failure rate of change initiatives, isn't it time for a change in managing change?

Viral Change: the alternative to slow, painful and unsuccessful change

I've recently been reading Viral Change (by Leandro Herrero). This puts the case for easing change into an organisation by:

• Framing the change in an appropriate language
• Identifying (and rewarding) a non-negotiable set of new behaviours
• A Change Champion network, who are given the principles of the change and the new behaviours, and then set free to influence ... supported by management rather than reporting to management, and supporting each other through a simple communications channel
• When changes in behaviour are apparent in some areas, broadcast (and reward) this change

This approach focuses on changing people's regular behaviours rather than some nebulous "culture". Rather than a huge top-down programme of change, the initiative becomes one of modelling the change (through managers and change agents), focussing on the positive behavioural changes that start to happen and allowing the organisation to adapt the programme to local circumstances. This feels like a radical new platform for addressing the challenges of organisational change.

2012 update We recently persuaded Leandro Herrero to come and present to the Henley Management group Leadership of Organisational Change. Focussing more on his new book Homo Imitans, he highlighted the problems of traditional change programmes (formal leadership, communication channels and push ... leading to limited success) and compared with his proposed "world II"  change which focusses on behaviours, social copying, informal networks stories and leaders staying backstage.  A challenge to the normal organisational hierarchy, but with the continuing massive failure rate of change programmes, something different is needed ...

The "strategic pause" in creativity

I mentioned the "strategic pause" in my last blog, and seem to have taken one ... with no entries for a year. I recalled term again today in reading about processes for creativity. There are numerous descriptions of characteristics, personality profiles and tests of creativity, which identify skills such as originality, flexibility, problem identification and reframing.
However, a rather different perspective considers the skills needed for the process of creativity, rather than the content. These seem to be:

• an intrinsic motivation - interest in the challenge for its own sake
• objectivity - to quickly identify and reject ideas that are not going to work
• problem-finding skills
• a tolerance for ambiguity - to avoid premature closure, settling on a less effective solution too soon

It was this last comment that brought me back to the "strategic pause". As I commented last time, delaying acting, delaying coming to a decision, and taking to time to think and allow events to unfold ... are skills that are rarely rewarded in fast-paced business where action is rewarded over thinking.

A Strategic Pause

Yesterday I was asked to "escalate" an issue. Someone out in the business hadn't completed some forms that had been requested a few weeks ago, and this was going to delay implementing some project changes. I was supposed to contact this person's line manager, highlight the lack of activity and generally bang the table ("escalate") until the recalcitrant miscreant did what was requested.

I thought I'd do a little checking before I started the escalation, and checked the forms. I found a mess - people listed in the wrong buildings, incorrect data, mostly people not associated with our contact ... etc. Hardly surprising that the forms hadn't been completed. Instead of escalating, I searched around for someone I vaguely knew in the relevant department and gave him a call to ask for assistance. He'd already gone home, so I took a risk and delayed doing anything until today.

Today I found that the person who had escalated this to me had got his information wrong, and the form is not due for completion until next week - it's been a long project, and mistakes are bound to happen sometimes. But I felt greatly relieved that I hadn't taken the escalation action that had been requested. That would have been counter-productive, made me look stupid (or at least uninformed) and high-handed. It was lucky I had taken a "strategic pause".

This seemed very relevant today when I was reading about the strategic benefits of doing nothing in business. While this might seem to encourage the idle, it does highlight the pragmatic approach to management that accepts over-reaction to data or events is just as counter-productive as ignoring information. Studying systems thinking (as I currently am), this links to the management of feedback to control systems. Make the control too reactive and the system rapidly oscillates between different states, while an unresponsive control introduces long lags between event and response. The secret is finding the appropriate balance.

So I'm not moving into the do nothing domain, but taking a "strategic pause" seems an appropriate response to many requests for action. One suggested response is in the art of being brave: listen, wait, do something different and keep it simple, to which I would add: ask lots of questions.

Appreciative Inquiry

I have come acoss Appreciative Inquiry (AI) in readings connected with Systems Thinking recently. Although a relatively new field, there is a wealth of literature and case studies available, particularly at the Appreciative Commons site. Rather than looking to develop individuals (or organisations) by focussing on the weaknesses that must be tackled, AI looks to the strengths and successes, and seeks to build on these. Using the old analogy, this doesn't simpky assume that the glass is always full, but seeks to understandhow the glass has become half full - what strengths and competences have created this success.

There are numerous resources at the Appreciative Commons site, and this toolset is regarded as a great way to enact change through positive drivers. There is a short manual available, which describes some of the background processes that can be used, such as the 4D model:

• Discovery: talk to people to discover the times when their organization is at its best.
• Dream: As a large group conference, people
  are encouraged to envision the organization as though the peak moments were the norm rather than the exception.
• Design: create the design for the organization dreamed in the large group conference.
• Delivery: deliver the dream through the new design. This is a process of experimentation and improvisation, and may require many iterative AI processes to attain the desired results at all levels.

Russell Ackoff (RIP)

The great management thinker and philosopher Russell ackoff died in October, a great loss to alternatives in management thinking. As a systems thinker, he regarded the detail of current management planning as a crisis, and wrote extensively about the flaws in this. Highlighting the risk aversion that is trained into most managers, he regularly proposed a new direction of management measurement - checking up on what people failed tro do as well as what people failed in doing. As he put it: "Managers cannot learn from doing things right, only from doing them wrong".

See more Ackoff at the Ackoff collaboratory (blog), on Mission statements, on systems thinking and an obituary.

Servant Leadership

The term "servant leadership" was coined by Robert Greenleaf in 1970 (see The Power of Servant Leadership), but is based on ancient philosophies of leadership. After the economic collapse following the greed for growth era, perhaps servant leadership is the new style required to re-build businesses and re-build confidence in leaders.

Fons Trompenaars supported this idea in a recent article in people People Management (May 2009). Greenleaf believed that great leaders are motivated by the desire to serve others and see the served grow as people. Trompenaars suggests that this is a strength that is even more in demand in the current challenging times - a commitment to deliver a vision with the knowledge that their actions are always guided by the desire to serve others. He has extended the concept to handling cross-cultural challenges in his book Servant Leadership Across Cultures, contrasting styles of servant leadership in the east and west.

Servant leadership proposes a philosophy of management which is in sharp contrast to the mainstream leadership model based on the exercise and retention of power. But Trompenaars points out that many of the companies in Fortune’s “Best Companies to Work For” follow servant-leadership principles and have links to the Greenleaf Centre for Servant Leadership. Larry Spears, former president of the Center for Servant-Leadership, outlined the 10 characteristics of a servant leader as:

1 Listening - seeks to identify the will of a group in what is being said and what is not being said.
2 Empathy - seeks to understand others, accepting everyone's unique spirit and good intentions. Accepts the person while seeking to correct behaviour or performance.
3 Healing - applies the power to heal self and others, creating wholeness, transformation and integration.
4 Awareness - takes a holistic view of self and situations to increase awareness. Is comfortable with the disturbances that increased awareness brings.
5 Persuasion - seeks to form consensus and convince others rather than using a position of authority to coerce compliance.
6 Conceptualisation - demonstrates the ability to look beyond the operational realities to a concept of the organisation that defines a vision.
7 Foresight - uses a broad range of past experience and intuition to plot the likely outcome of a situation.
8 Stewardship - acts as if authority is only given to hold the current position on trust on behalf of someone else.
9 Commitment to the growth of people - take personal responsibility for the growth of each individual within the organisation.
10 Building community - seeks to build a community among those who work within the organisation.

While Greenleaf is credited with starting this work in the 20th century, the earliest word on the subject may belong to Lao Tzu in Tao Te Ching:

A leader is best
When people are hardly aware of his existence,
Not so good when people praise his government,
Less good when people stand in fear,
Worst, when people are contemptuous.
Fail to honour people, and they will fail to honour you.
But of a good leader, who speaks little,
When his task is accomplished, his work is done!
The people say, “We did it ourselves”