Discussion 1 Week One
Be sure to make as strong of an argument as you can to support your view, relying on the assigned and other resources you have chosen from the MBA Program Capstone Bibliography or program content, whether or not you agree with the point of view personally. This is like a mini-debate, so be nice and have fun!
Post a well-written response to support one of the following points of view that your Instructor assigned to you:
C: The primary purpose of business is to solve people’s problems. The primary responsibility of senior leaders is to create and maintain an environment of meaning and purpose so that the organization’s people can create value for a broad range of stakeholders.
3-4 Paragraphs in APA format. Resource is attached (Chapter 1 and Chapter 2)
Praise
from
Influential
Executives,
Thought
Leaders
and
Writers
for
The
Living
Organization®
“The Living Organization® is blazing a trail to a new world. You will never
again see your organization, or relate to your employees, customers, and
investors in the same old way. Norman Wolfe’s insightful reframing of how
business operates frees us from the shackles of the “great machine” and opens
us to the possibility of realizing the fullest of our human potential, individually
and collectively.”
Chip Conley, Executive Chairman, Joie de Vivre and author of “Peak: How
Great Companies Get Their Mojo from Maslow”
“I’ve always believed that people are central to the success of any
organization. Norman Wolfe gets that. In his new book The Living
Organization®, he guides readers through the concept of organizations as
living energy. People are energy, and The Living Organization® is created by
people’s activities, relationships, and context regarding what they do and why
they do it. This is an intriguing book.”
Ken Blanchard, coauthor of
The One Minute Manager® and Lead with LUV
“For successful leaders who want to get even better this book is a must read.
The Living Organization® is a powerful and penetrating exploration of what
really creates great companies. It completely reframes how to understand
your organization while also providing a simple and pragmatic approach to
achieve your loftiest dreams.”
Marshall Goldsmith – million-selling author of the
New York Times bestsellers, MOJO and
What Got You Here Won’t Get You There
“This is an inspiring reframing of how we understand business creates bottom-
line result. I couldn’t put it down. The Living Organization® reinforces so
much of what I know to be true about the power of culture and inspiration to
move organizations. Every leader will find dozens of powerful insights in this
book to help engage their teams in new patterns of healthy growth and long-
term success.”
Casey Sheehan, CEO, Patagonia
“Norman Wolfe so brilliantly reveals the magic needed to sustain today’s
businesses – the true essence of the human spirit. The Living Organization® is
a practical guide on what it takes to leverage that human spirit and build a
sustainable, conscious and profitable organization.”
Kip Tindell, Chairman and CEO, The Container Store
“At Trader Joe’s, I worked with a great team to build a remarkable company
with a deep sense of purpose and truly cared for all the stakeholders we
served. I enjoyed success only through the painfully slow process of trial and
error. The Living Organization® would have made my journey a lot easier,
and quicker. Do yourself a favor and read this book now. It will transform
the way you think about your organization, and your role as a leader!
Doug Rauch, Former President, Trader Joe’s
“Imagine a world in which soulful purpose is the guiding force in individual
and organizational life. Norman Wolfe is a prophet of this new world. Filled
with incisive observations and captivating stories from the front lines of
commerce, The Living Organization® is a powerful manifesto for the new
paradigm of conscious business.”
Michael J. Gelb, Author of How to Think Like Leonardo Da Vinci and
BRAIN POWER: Improve Your Mind As You Age
“Norman Wolfe explores indisputable truths from a new perspective beyond
business; we are all connected, it’s all energy, love is just a particular frequency
and positive relationship energy inside and outside the organization is the key
to all successes. Simply contemplating Norman’s process enhances awareness
and one’s ability to pay attention to what really matters, a purposeful bottom
line. I am convinced that there is a relationship between meaning and
purpose, happiness and performance.”
Don Piper, Entrepreneurship Discipline Lead,
Bainbridge Graduate Institute
“The Living Organization® will transform the way business leaders
understand and manage their organizations. With keen insights, Norman
Wolfe takes us on a journey in creating an organization that is alive with
energy and passion, and adaptability and innovations in response to a
dynamically changing environment.”
Sam Yau, Former CEO, National Education Corporation, Director of 2
public companies & Chairman, The Esalen Inst.
“In today’s global business world the traditional business models which rely
largely on left brain quantitative thinking and actions, while still necessary are
no longer sufficient. The Living organization insightfully provides many of the
missing pieces. With clarity borne from years of real life experiences, Norman
Wolfe reframes and broadens our understanding of how organizations can
create better results. Every CEO, board member and senior executive will
benefit from the practical guidance this book provides.”
John Rehfeld, former GM/ CEO of Toshiba America, Seiko
Instruments and Proxima corporation, currently a director of two public
companies, Executive MBA professor at Pepperdine and USD, and author,
Alchemy of a Leader
“Drawing on his deep and extensive experience building successful teams and
organizations as a corporate manager and consultant, Norman Wolfe reveals
the vibrant structure and magical process of The Living Organization® and
provides a map for traversing the terrain to create an extraordinary business.”
Jeff Klein, author, Working for Good: Making a
Difference While Making a Living
“Have you ever wondered why some groups seem so full of energy and vitality
bubbling with enthusiasm, creating results while others barely progress even
with substantial prompting and pushing? In “The Living Organization” we are
granted access to that hidden dynamic that controls the energy–and results–of
any group. In this new insightful book, Norman Wolfe reveals a model that
strengthens our ability to harness the often unconscious energetics that
determine outstanding results and greatness in a company. The practical tool
this book offers will allow you to enlist your group’s deeper energies to drive
uncommon success.”
Rick Ferris, President Sequoia Realty Corp.
“We have lived for too long believing that we have to check our emotional
and spiritual self at the door when we enter the world of work. No More!
Norman Wolfe will expand your current thinking and reveal the very act of
creating financial success requires we bring our entire self into our work. In
this groundbreaking book he provides practical tools to combine the forces of
our Activity, Relationship and Context to create results beyond what we
thought possible.”
Tom Zender, Former CEO, Unity Worldwide, Author of “God Goes to
Work”, Evolutionary Leader, Corporate Executive
“In today’s world it is critical that businesses all across our globe act and
behave from an ethical stance. In this thought provoking and insightful book,
Norman Wolfe teaches that as a living being, organizations are governed by
the same forces that govern all living entities. Morals and ethics no longer are
an afterthought, but are shown to be at the core of creating results. This is a
must read guidebook for every leader doing business in the 21st Century.”
Russell Williams, CEO,
Passkeys Foundation and The Ethical Edge
“To lead today requires leveraging the power of the whole – and that requires
the use of multiple intelligences. Leaders must access and draw from the
living energy of organizational systems. In The Living
Organization®, Norman Wolfe offers the clarity and depth of insight that
comes from experience. He teaches leaders how to develop and use their
cognitive, emotional and spiritual intelligences to tap the organization’s
intelligence. This “intelligence of the collective” is what creates extraordinary
success.”
Cindy Wigglesworth, President, Deep Change, Inc., Creator of the SQi
Spiritual Intelligence assessment
“The Living Organization® offers an innovative and exciting new perspective
on managing organizations. This book takes the purpose of the firm from a
dry afterthought to the central management issue. Managers who take its
message seriously will find themselves reframing their understandings of both
their organizations and their roles for the better.”
Dr. Philip Bromiley, Dean’s Professor of Strategic Management, Merage
School of Business, University of California, Irvine
“The world is hungry for a new paradigm of business. We can see all around
us that the old ways don’t work, but so many in leadership positions don’t
know what to do or where to turn. The Living Organization® provides a
model to work with, practical steps to implement, and inspiration to keep you
going. Join the movement of conscious capitalists who are making a difference
in the world. This book provides you the support and guidance you need.”
Judi Neal, Ph.D. Director, Tyson Center for Faith and Spirituality in the
Workplace, Author of Edgewalkers: People and Organizations that Take
Risks, Build Bridges, and Break New Ground, and co-author with Alan
Harpham of Spirituality and Project Management
THE
LIVING
ORGANIZATION
TRANSFORMING BUSINESS TO CREATE EXTRAORDINARY RESULTS
Book 1: Encounter
Norman Wolfe
ii
The Living Organization®
Published by Quantum Leaders Publishing
© 2011 Norman Wolfe
All rights reserved
First edition printed July 2011
All rights reserved. Except as permitted by applicable copyright laws, no
part of this book may be reproduced, duplicated, sold or distributed in
any form or by any means, either mechanical, by photocopy, electronic, or
by computer, or stored in a database or retrieval system, without the
express written permission of the publisher, except for brief quotations by
reviewers.
ISBN: 978-0-9835310-1-2
Printed in the United States of America
This is a work of non-fiction. The ideas presented are those of the author
alone. All references to possible income to be gained from the techniques
discussed in this book relate to specific past examples and are not
necessarily representative of any future results specific individuals may
achieve.
Illustrations by Lauren Card
Cover design by Michael Glock, PhD
The Living Organization, ARC Framework, Strategic Compass, Soulful
Purpose, Real Time Execution, and RTE-S are trademarks or registered
trademarks of Quantum Leader, Inc.
The Living Organization is available at a discount when purchased in
quantity by corporations, associations and other organizations. For
information, contact Quantum Leaders Publishing at 7 Shasta, Irvine, CA
92612
iii
The
Living
Organization®
Trilogy
Book 1 – Encounter
Book 2 – The Journey
Book 3 – A New World
Dedication
To Gregg Gallagher
His friendship and critical thinking helped midwife this work into life.
May he bring these same qualities to his Eternal Life.
iv
Acknowledgments
How does one begin to acknowledge all the people who have
contributed to and supported my journey? There are those who have
directly contributed to the writing effort, there are those who have
contributed to the evolution of the models and methods presented in this
book, and there are those who provided loving support and
encouragement along the way.
This book, however, represents more than just the ideas, models, and
methods. It is a reflection of my personal journey with creating results,
both on an organizational basis and on a personal basis. My journey of
development as a person is deeply entwined with the book’s underlying
philosophy. It is with profound gratitude that I acknowledge all the
people who have contributed, consciously and unconsciously, directly and
indirectly, positively and negatively, to my life, my growth and my
development as a person.
I want to specifically acknowledge my three editors. Peter Gerraro was
my initial writing consultant who helped get the seeds of my ideas onto
paper. Through his guided interviewing he managed to convert my ideas
into written form and provide the initial structure to convert a concept
into a book. Paul Roberts, a master storyteller, challenged me each step of
the way until I understood the story I wanted to tell. He helped me
understand the fullness of the story and how it paralleled other great
trilogies. Lee Pound took what was already a good story and refined it. He
guided me to bring more of my life into the story, making it and the whole
book more fully alive.
v
This book is designed to address the needs of Leadership Teams
(Boards, CEOs and Executive teams) to overcome their challenges in
creating desired results. Many of the theories and methods come from my
work with the many clients I have been honored to serve. I want to serve
them better, to make them more effective, which drives me to deepen my
understanding of the dynamic forces that create or block their dreams.
This would not have been possible without the support of my many
clients who allowed me to test these ideas, concepts and methods. I want
to specifically acknowledge two of them.
I was first introduced to National Technical Systems in 1990 when I
met one of its founders and then CEO and Chairman, Dr. Jack Lin. Jack
understood the power of the unconscious forces that define success and
continuously explored how best to work with these forces. This led to a
culture that was open to exploring new and often non-traditional ways of
creating collective results. Bill McGinnis, who replaced Jack as CEO,
continued the exploration, opening himself and his executive team to
work with the energies of Context and Relationship. The lessons I learned
working with these two great CEOs and their teams greatly influenced
what is presented in the book.
From the time Jim Summers took over as President of SafeNet
Mykotronx division, he had a deep connection to the organization’s
Soulful Purpose™. It was this connection that has guided Jim to establish
the vision of what was possible for this organization. I have had the honor
of working with Jim and his team for over 8 years, taking the organization
through a number of growth transitions as it doubled its size. I am deeply
grateful for the opportunity to work with and learn how viewing an
organization as a living entity enhances its ability to continuously improve
and increases its ability to grow.
Because my life had been an exploration into improving myself to
improve my personal as well as business results, it has become a tapestry of
many roads exploring many disciplines. One particular path I have
traveled for the past 8 years is working with my teacher, guide, and
mentor Brugh Joy. I will be forever in his debt, and those who have
traveled the path of Joys Jubilation with me. This journey provided me an
understanding of and direct experience working with the deeper energies
of what many call a Divine Mystery.
vi
I want to also acknowledge the many consultants who have been part
of Quantum Leaders since its founding in 2002 and those friends who
were gracious enough to mentor and advise me on this journey. Each has
left their mark on The Living Organization® and me. I specifically
acknowledge three of them. Kevin McGourty was the first consultant to
join Quantum Leaders and showed me that others would be willing to
bring my vision to reality. Don Hicks has supported our efforts for over 5
years in defining what it takes to sell our services. This book is dedicated
to Gregg Gallagher who challenged my thinking every step of the way,
leading to a more robust and detailed product. Gregg passed on
unexpectedly and his presence and contributions are sorely missed. Of the
advisors I acknowledge Mike Kucha and David Kinnear, who brought
different perspectives and helped, refine the model.
Finally I want to acknowledge two people that are closest and most
dear to me. My daughter Lindsay taught me what it really means to be a
parent, a custodian of another living being’s spirit. She taught me how to
help prepare that being to give that spirit full expression. It is this
experience of guiding another being towards maturity that is the basis for
how to develop an organization to fully express its spirit.
My wife Jane has taught me most of all. Not only did I learn the
beauty of seeing the world through the eyes of an artist, I have also come
to understand and live life as an unfolding improvisational play. She
showed me the meaning and power of acceptance and gratitude. Her
ability to see me as what I can be, her support through all the challenges
that life can bring, and the love she openly and graciously shares, has
given me the strength and confidence to pursue my dreams.
And to all of you who have chosen to read this book – Thank You!
vii
Table
of
Contents
Dedication iii
Acknowledgements iv
Foreword 1
Introduction 4
Chapter 1 – A Shock to Our System 11
A New Paradigm for Capitalism 14
The Forces of Creation 16
Evolve or Die 19
Chapter 2 – The Living Organization® –
The Secret of Life 21
More than the Physical 23
The Magic of Living Organizations 24
More than a call for Social Good 25
Wisdom of manifestation 29
Chapter 3 – It’s all about Energy 31
Results are energies transformed 32
Forms of Energy 32
The patterns of our lives 34
People Are Energy Too 35
Choice lets energy flow 36
The Dance of energy 38
Energy patterns that create are alive 39
The Evolutionary Flow of Energy 41
Chapter 4 – The Energy of Business 45
The Flow 46
The Source of All Energy: Our People 50
viii
Chapter 5 – Profit: The Good, Bad and Ugly 54
The Need for Feedback 54
The Nature of Profit 56
Chapter 6 – The Rainbow Within 63
Activity – the Energy of Doing 64
Relationship – the Energy of Interactions 65
Chapter 7 – Synergy – The Multiplier Effect 68
Synergy Explained 71
Chapter 8 – Experience: The Driver of Perceived Value 76
Perception produces margin 79
Chapter 9 – Where the Magic Hides 81
Context – the Energy of Meaning and Purpose 81
The Soul of the Organization 84
Access the Wisdom 87
What gets measured gets improved 91
Explaining the Unexplainable 92
All Results Start In the Context Field 93
The Dance of Energy 94
It’s All a Story 96
Chapter 10 – The True Nature of Business 100
Business in 3-D 100
A Success Story 103
The Model Applied 103
Activity 105
Relationship 106
Context 107
Chapter 11 – Putting it all Together 110
A New field – Strategy Execution 111
Strategy Execution 3.0 112
Strategic Planning is Dead – Long Live Strategy Execution 117
Start with a Compass! 120
Soulful PurposeTM 121
The Mission 122
Future Vision 123
Core Values 124
Alignment is the key 125
The title, the lyrics and the music 128
Chapter 12 – Executing in Real Time 130
Real Time Execution System™ (RTE-S™) 130
It’s about time 131
Alignment 133
ix
Know your Place 135
What to do, what to do? 135
Get ready the future is coming 138
Incrementing or Innovating – It makes a difference 139
Who’s changing what 141
What’s your horizon? 142
Put your money where your mouth is 144
Who dreamed this up anyway? 145
What did you assume? 146
Lights, Cameras, Action 146
Well, how did you do? 147
Who’s leading the show? 150
Speaking of Boards 152
The Journey of Development 153
Chapter 13 – The Journey Continues 155
Appendix 159
Business as the Driving Force of Society 159
How Capitalism’s Reputation Changed 160
The Evolution of Business 162
The Limitations of Worldviews 162
The Organization as Machine 163
The Impact of World War II 165
Our Changing Worldview 166
The Emergence of the Humanistic View 168
Humanism Isn’t Enough 174
The Leadership Challenge 179
Book References 181
Endnotes 187
Index 190
About the Author 195
1
Foreword
By John Mackey, Co-CEO, Whole Foods Market
Do we need a new way to think about business, corporations, and
capitalism for the 21st Century? Do we need to create a new business
paradigm? Corporations are probably the most influential institutions in
the world today and yet many people do not believe that they can be
trusted. Instead corporations are widely perceived as greedy, selfish,
exploitative, uncaring – and interested only in maximizing profits. In the
early years of the 21st century, major ethical lapses on the part of big
business contributed to a growing distrust of business. Increasingly, many
people believe there must be something wrong with both corporations and
capitalism.
The problem does not lie in the system of capitalism but rather in the
theories we use to guide our decisions. Although economic theory has
evolved since Adam Smith wrote The Wealth of Nations in 1776, many
economists continue using industrial and machine metaphors to explain
how the economy works. According to this model, business operates like a
machine—business owners input various amounts of capital, labor, and
land at the start. Profits then spit out on the other side of the metaphorical
machine.
Today’s real challenge for the corporation and the economy overall, is
that most modern economists and business leaders’ thinking is still
grounded in a theoretical model that does not acknowledge the complex
interdependencies of all the various constituencies and all the dynamics
that impact success. The existing model simply fails to provide sufficient
guidance for success in the 21st Century.
2 The Living Organization
For business to reach its fullest potential in the 21st Century, we need
a new business paradigm that moves beyond simplistic machine/industrial
models to one that embraces the complexity and interdependencies, in
which corporations exist today. Complexity and interdependency is our
reality and our economic and business theories need to evolve to reflect
this truth.
The Living Organization® is that evolutionary perspective. It presents
a fresh new way to understand what an organization is and how it
operates. It directs us to understand how organizations draw from
complexity and interdependence to develop, grow and evolve. We begin
to see businesses as living entities in relationship with all its stakeholders,
which is all part of an evolutionary journey for advancing society. This is
the same fascinating discovery I made over the last 30 years as CEO of
Whole Foods Market.
When Whole Foods Market’s co-founders created the company in
1980 we infused it with a few simple ideals and core values and then
created very simple business structures to help fulfill those ideals.
However, as the company grew a process of dynamic self-organization
took place to fulfill the original purpose. The business and even the
purpose evolved over time through the dynamic interaction of the various
interdependent stakeholders with each other and with the business itself.
This interactive relationship of an organization with all its stakeholders
(customers, employees, investors, suppliers, and the community) is what is
so richly expressed in The Living Organization®. It provides a deeper
understanding into why Whole Foods Market consistently created success
for all the stakeholders and why our purpose has become deeper, richer,
and more complex over the years.
Through the lens of The Living Organization®, we can see the
solutions to many of our challenges as a business and within society. A
business as a machine does not, and cannot, have any social consciousness
or social responsibility. A business viewed as a living entity is, like all
people within a society, a citizen with a social and moral responsibility to
both itself and society. A machine does not learn and adapt to its
environment, but adaptation is the very essence of all living entities.
Machines merely produce, they cannot innovate, while living entities can
actually dream of and create a healthier future.
Foreword 3
Every successful CEO and organization leader will find within the
pages of The Living Organization® the same secrets of success they have
learned over the course of their careers, only it will look very different. It
does not read like a traditional business book providing a rehashing of the
same old management theories. It does not reject the traditional theories;
rather it adds to and expands them. It provides a fresh new perspective
that can deepen our understanding of the things that successful CEOs
have stumbled on through trial and error.
Because it is a new paradigm that draws from many disciplines, it will
challenge us. It will challenge the way we think, it will challenge how we
interact with our employees, our suppliers, our customers, our investors
and our communities. It will challenge us to grow up, become more
conscious and like all living entities, evolve.
When we are small children we are egocentric, concerned only about
our own needs and desires. As we mature, we expand our consciousness
and grow beyond this egocentrism; we begin to care about others – our
families, friends, communities, and countries. Our capacity to love can
expand even further, to loving people from different races, religions, and
countries – potentially to unlimited love for all people and even for other
sentient creatures. This is the potential of human beings, expanding
consciousness and taking joy in the flourishing of people and other living
beings everywhere.
Living Organizations® also have the potential to evolve in
consciousness, and the collection of all businesses can evolve towards a
conscious capitalism. Let each organization leader, whether for-profit,
non-profit or government, learn the art of leading a Living Organization®;
of guiding its growth and development towards greater consciousness to
better serve its customers and in turn further the advancement of a
healthy society.
4
Introduction
As a professional magician I am sworn, on the graves of Houdini,
Blackstone, and all the other great magicians, to never reveal the secrets
behind the magic. Today I am about to break that vow. I am going to
reveal the secret behind the magic. Not the magic behind creating the
illusion we see on the stage, but the magic behind creating the results we
get in business and in life.
Every CEO Executive, team leader and even every individual
contributor wants to create the results they set as their goals. This is
certainly true for me. This desire led me on a continual journey of
exploration and discovery to answer the questions, “How are results
created, what is the trick to improving my success rate, and why does the
same effort sometimes produce results and sometimes not?”
This journey has two parallel paths, my business career and my
personal growth and development. These two paths are not separate and
distinct paths but are an interwoven journey of reaching and seeking,
attempts and failures, and the eventual success that follows. Mostly it is a
journey of discovery, a journey that has revealed to me much about the
secrets that lie behind the results we create, of how and why we get the
results we get.
Two days stand out in my mind, two days that marked the beginning
of two distinct journeys. Two journeys that would over time merge into a
single journey.
March 4, 1969 was a beautiful sunny day in New York, the first day of
spring-like weather after a long cold winter. I was a senior at NYU and a
Introduction 5
group of us spent the day in Bear Mountain State Park enjoying the
coming of spring. It was also the beginning of Purim; the Jewish holiday
that celebrates the end of the dark of winter and the coming light of
spring.
I had spent the evening with a group of Jewish students who were
celebrating with music and songs that brought me back to my youth and
family gatherings.
When I returned to my room, I felt the sweetness of the day mixed
with longing for days past, the interplay of joy and sadness. My roommate
was there and as we talked he pulled out a book by Alan Watts. He read a
passage, “To know white you must know black, to know up, down must
exist.” In a flash I was transformed.
I didn’t know what an epiphany meant until years later but in that
moment I experienced what would certainly be an epiphany: a
spontaneous understanding, what some might call a spontaneous
awakening. In that moment my world flashed in front of me. People
formed a circle before my eyes and as each person’s face appeared a sense
of deep understanding and pure love filled me.
This deep loving feeling stayed with me for months and it seemed my
relationship with everything in life was vivid, peaceful and loving. I began
reading Alan Watts, Herman Hesse, Joseph Campbell and others. My
whole world began to re-form and I was filled with a purpose to journey
into a deeper understanding of life, a journey of spiritual discovery that to
this day is a significant part of my life.
I took this newfound awareness with me upon graduation as I
entered the world of work. I started my career as a system analyst for Pratt
& Whitney Aircraft designing applications and writing code for fuel cell
testing. It was a very different world from the open exploration into the
deeper mysteries that dominated my previous six months.
Where the one tapped into the mystical, curious, discovery side of me,
the world of computers engaged the logical, analytical rational parts of my
being. I found that the two worlds, while very distinct, seemed to draw on
each other. My analytical side made sense of the mystical discoveries I
would have and the mystical creative side brought innovative approaches
to the challenges of logic and program design.
6 The Living Organization
I entered on the second path of my journey on July 19, 1976. I
remember this day so vividly because like my day of awakening, the events
of that day marked what might be called a second awakening, but of a
different kind.
My wife and I just returned from two weeks visiting the UK during
the bi-centennial anniversary of the United States. We were visiting the
very place from which our country was born, born not out of intention but
out of conflict. We were visiting the culture that rejected our forefathers
and now embraced us as friends.
I was returning to work this day, renewed, rejuvenated and filled
with a new sense of beginning. I was just completing my first year as
manager of a Service District for Hewlett Packard. It was not an easy year
for me, struggling with the role of management and the challenges it
brought forth. I knew I had a lot to learn, but was eager to jump in and
conquer this like I did everything else in my life.
The first person I saw was my boss, who called me into his office to
give me my performance review. As I sat and read his comments and his
ranking I was devastated. It seems in his opinion I did not do one thing
right. The ratings were unacceptable in every category. I was a complete
and utter failure.
How could this be? I knew I had some struggles, I knew I had a lot to
learn, but completely unacceptable?
I began questioning whether I was really cut out for management. My
whole career I had always received outstanding reviews. It was the
innovative work I did at Pratt & Whitney using HP’s computers that
landed me the job as Systems Engineer for HP in Southern California.
The outstanding work I was doing as System Engineer, with both the sales
people and customers, caused my current boss to offer me the position of
District Service Manager.
I was excited when I was given the opportunity to move into
management for I was convinced I could really help the people who
worked for me to be as successful in their careers as I was. Still filled with
the earlier discoveries of how life worked, of love and caring for others, I
knew I could help others become successful.
But now after this review I wasn’t sure. Perhaps I should return to the
world of computers where I was safe and successful. Computers, after all,
Introduction 7
were logical, results definable and predictable. Not so with people. And
though I was very successful in dealing with customers there seemed to be
something more when it came to leading an organization.
But a number of other managers, my peers and superiors, individuals
who would become mentors and coaches, saw something in me I did not
yet see. They encouraged me to stick with management believing I had all
the attributes to become a great leader. It was good they believed in me
for at that time I had great doubts. But I chose to heed their advice and I
am really glad I did.
For this started my second journey, the one of discovering what it
took to successfully lead an organization. Out of conflict was born a new
determination, a determination to discover the secrets of business and
organization success.
And so I set out to become an expert at managing organizations and
the people who comprised them. And like every manager, I hungered for
one thing – to always achieve the goals I set for my organization. Many of
these goals were mine, a sense of purpose I wanted my organizations to
achieve, which of course were merged with goals given me by my boss, or
later when I was COO or CEO, the ones established by the boards of
directors or investors. Regardless of who established the goals, all that
mattered to me was exceeding them.
I have spent the last 40 years of my life traveling these two paths. The
first is a spiritual path delving ever deeper into the mysteries of why I do
what I do, how do I create what I want and why life unfolds the way it
does. The second path is that of achieving business results, growth, profits,
and improved performance. These two paths continually intersect, cross
over, circle around and intermingle with each other. There always seemed
to be parallels I could draw on from one path that provided insights into
the challenges of the other.
It wasn’t until the early part of this century, as I was working on
defining the purpose and mission of Quantum Leaders that I began to get
a sense that what for many years seemed to me to be two very different
paths were in fact the same path. They were both complementary sides of
the same coin, the same journey; a journey to find the secret formula for
success in all endeavors of life – a philosopher’s stone that will guarantee
the success of any organization and the people within it.
8 The Living Organization
This journey led to the development of The Living Organization®
model – the subject of this book.
I have written this book because I sense there is a major change
happening in the ranks of corporate leadership, a generational shift in the
ranks of CEOs and other corporate level executives. It is a shift from those
who were raised during World War II and moved into leadership roles
during the 70s and 80s, to those who were raised in the post Vietnam era
and came into the leadership roles in the 90s and turn of the century.
The previous generation relied on military, hierarchical organization,
command and control leadership. The new generation was schooled in
the power of teams, global collaboration and empowerment of employees.
But the old paradigm still has a hold on the system and prevents these
ideas from taking hold.
This generational shift in leadership coincides with the recognition
that what worked in the past is not working any more. “What got us here
won’t get us there,” the title of Marshal Goldsmith’s latest book declares.
There is a breakdown of our existing business models and the new leaders
sense it. If the recent economic crisis has taught us anything, it is that the
future will not look like the past. The framework, the very paradigm we
have used to guide our efforts in creating results no longer produces the
same level of results. Some even question whether it works at all. The
magic has left us, or so it seems. In reality the magic is still there. It is
simply that we never understood the whole picture of how we did what we
did. We simply lack the insight, the details of how the magic of creating
results actually works.
This book is for those new leaders who are seeking to better
understand how to navigate the multiplicity of dynamics impacting their
organizations. It presents the foundation of a new business model,
keeping what is valid from its predecessor models, adding new concepts to
create a consolidated framework that brings it all together. This book
provides today’s leaders a new, more detailed map to navigate the
complex business world of this century.
We start by explaining the need for a new business model, revealing
the limitations of the existing paradigm, while also recognizing what
elements are still important going forward. We then lay the foundation of
the new paradigm, The Living Organization® model. By shifting the lens
Introduction 9
from the organization as a machine of production to a living creator of
results we can begin to get a glimpse of how this will reveal many
heretofore secrets of success, Chapters 1 & 2.
Key to every living entity, key to life itself is the understanding that
everything is energy. In Chapter 3 we present an overview of the nature
of energy and its role in creating results. With this understanding we will
take you through the process of how energy flows through an
organization on its journey of transformation into creating the desired
results. It describes the role each of the domains of business – people,
process, customers and financial – plays in the transformation process. We
show where the old paradigm fits in the new model, keeping what is valid
from the former approaches while adding new concepts to create a more
robust holistic organic framework for today’s leaders, Chapters 4 – 10.
While having a model that is robust enough to describe the forces
impacting success in today’s fast shifting environment, it is not sufficient.
In Chapters 11 & 12 we delineate a management process that allows the
organization leaders, the CEO and executive team, a department head, a
team leader or even an individual, to manage the execution, the process of
activity needed to achieve the results. This new approach, The Real Time
Execution System™, builds on many of the tools and processes that have
been developed over the last 3 – 4 decades to improve an organization’s
success in achieving its goals. But The Real Time Execution System™ is
not constrained by trying to fit itself into a machine, a paradigm that
inherently limits the release of the creative forces needed for successful
execution. Instead it is rooted in The Living Organization® model
providing access and the ability to work with the very forces that breed
creativity, passion, engagement, commitment, synergy, unparalleled
customer experience and all the other drivers of success.
You are likely to find many of the concepts presented familiar though
not necessarily through the lens of business. I draw on many fields of
study including physics, psychology, perennial wisdoms, philosophy, and
of course business. In some cases I have left untouched the work of others,
merely merging it in where I believe it fits best. In other cases I have
taken previous work and modified it, either adding concepts or simply
reframing them. I have also drawn on work not normally associated with
business, recognizing the business is also part of the totality of life.
10 The Living Organization
Like all new discoveries we have the distinct advantage of having
available to us the many contributions that have come before. I have built
on the work of others and my own “eureka moments,” assembling the
puzzle pieces to form a more complete picture of how modern
corporations function, and how their resources can better be harnessed to
achieve the goals of management and the communities they serve – their
“marketplace of customers.” This model is part of an emerging paradigm
– the next rung on the evolutionary ladder of organizational theory.
Like all journeys, we are served by having an effective map to guide
us. In many regards I felt like an explorer on a journey wandering though
many uncharted regions. It is my hope that this book will serve as an
effective map guiding the next generation of leaders as they navigate the
challenges of our current and ever changing business environment.
11
CChhaapptteerr 11
“The
dogmas
of
the
quiet
past
are
inadequate
to
the
stormy
present.
The
occasion
is
piled
high
with
difficulty,
and
we
must
rise
with
the
occasion.
As
our
case
is
new,
so
we
must
think
anew
and
act
anew.”
Abraham
Lincoln
A
Shock
to
Our
System
It’s April 3, 2010. At Apple Stores all across the United States,
hundreds of people are lined up eager to grab their very own iPad, finally
available after two months of unending promotion. When the doors finally
opened, people piled in to be one of the first to own an iPad. Within the
first month Apple sold over a million iPads and by March 2011 was up to
over 15 million units and climbing.
This was more than just another successful launch of a new Apple
product. It was another record breaking launch in a string that started
with the iPhone in June 2007, the iPhone 3G in 2008, and the iPhone 3GS
in 2009. Each launch drew thousands of buyers waiting in lines at Apple
stores and sold millions of products, including 33.75 million iPhones.
Apple achieved the highest volume of sales for any product launch
and they did it in the middle of the worst recession since the 1930s; in a
market where companies like Bear Stearns and Lehman Brothers were
collapsing, banks needed huge bailouts to stay in business, and the once
great General Motors (“what’s good for GM is good for the United States”)
became the property of the United States government.
Every executive, every leader, no matter the size of their organization
or their position within it, has the same overriding objective – to create
their desired results. And what leader does not set out to go beyond just
12 The Living Organization
creating average results? Every leader has visions of leading their
organizations to stand out from the pack, to manifest results that would be
considered magical, results like those Steve Jobs, and his team at Apple,
consistently repeats with each new product launch.
“Apple sold 15 million iPads in nine months, created a mammoth new
product category and started an industry of copycats. Apparently, it
doesn’t pay to bet against Jobs’ gut instinct1.”
Is Apple’s repeated success a fluke that is unique to them, is it Steve
Jobs’ unique “gut instinct” that creates Apple’s magic, or is there a set of
principles that can truly explain Apple’s success?
This book will explain what truly underlies Apple’s success by looking
at the world of creating results from a completely different vantage point.
It will provide insights and practices that will allow any company to
achieve the magical results of Apple and others. Yes, Apple is not alone in
consistently creating results that go beyond great; there are many other
companies who have demonstrated similar success during these difficult
times that follow a similar pattern.
In his book Firms of Endearment, Raj Sisodia has identified a number of
companies who march to a different drummer. These Firms of
Endearment (FoE) companies not only embrace the traditional business
paradigm, they add to it a set of principles that transcend merely
improving the effectiveness of the machine of production. Like all
companies, they pay attention to increasing efficiency, cutting costs and
maximizing shareholder value, but go beyond these traditional objectives.
They add a sense of higher purpose, of caring for and being in service to
employees, customers, partners, investors, and the greater society.
Who are these companies and what results do they produce? We all
know them and most people aspire to be like them in one form or
another. The 30 companies Sisodia studied, all highly admired and often
loved by their customers, are Amazon, BMW, CarMax, Caterpillar,
Commerce Bank, The Container Store, Costco, eBay, Google, Harley-
Davidson, Honda, IDEO, IKEA, JetBlue, Johnson & Johnson, Jordan’s
Furniture, L.L.Bean, New Balance, Patagonia, REI, Southwest, Starbucks,
Timberland, Toyota, Trader Joe’s, UPS, Wegmans, and Whole Foods.
As for results, over the ten years ending June 30, 2006 they produced
a return on investment of 1,026% compared to the S&P’s return of 128%.
A Shock to Our System 13
And during the last five years they have produced a return of 240%
compared with the S&P’s return of -13%.
Apple is no fluke, nor is the performance of the FoE companies.
These companies perform well and often have a loyal following usually
reserved for rock stars and sports teams for a reason. These companies
don’t simply produce results, they consistently create magic.
But is it magic? I want to tell you something about magic. At one point
in my life I was a professional magician, performing every week for three
months at a local nightclub. For everyone in the audience, what I did
amazed them, wowed them and stupefied them. They couldn’t figure out
how the coins could possibly disappear and reappear right in front of
their eyes. To them it was simply magic. To me, however, it was not magic.
I knew the secrets that lie below the surface. I knew how to create the
illusion.
Arthur C. Clark said, “Any sufficiently advanced technology is
indistinguishable from magic.”2 I believe the corollary is also true. What
appears to be magic is in reality an advanced technology that is not yet
fully understood.
The magical results of Apple, the FoE companies and others only
appear to be magic. In reality it is the combination of certain forces,
certain energies that logically and rationally produce their results. It
appears to be magic because we do not have a good model that explains
these forces and how to work with them.
What we need is a new model for business that more fully explains the
forces that underlie the creation of magical results, a new model that
explains how to manifest the same magical results created by Apple, the
FoE companies and many other companies that consistently perform at
these levels even if they do not make it to the public limelight.
This book will provide such a model, an evolutionary model that
builds on our current models for business success and expands them to
explain what they miss or ignore. It will provide a deep understanding of
how to work with the forces that mix together to produce the results we
create. It will provide the map that will allow you to lead your
organization to create the desired outcomes, which to others will appear
magical.
14 The Living Organization
But it will not be easy. While the principles may be easy to
understand, they will not be easy to adopt and implement. It will call on
you to rethink how you believe results are created. You may find yourself
standing alone against other advisors, your staff, even your board and
your investors.
Our world is undergoing tectonic changes, major shifts in the rules of
engagement, the way things get done. No matter where we look, politics,
education, the environment, and business are in turmoil. Nothing is stable
any more. The maps we’ve used to navigate our world no longer give us
the proper guidance they once did.
When our world seems turned upside down, when everything seems
uncertain and unpredictable, the natural response is to return to the
comfort of what used to work. There is a natural tendency to call for a
reinvigoration of what we used to do, to fall back on the old rules of
engagement, even in the face of mounting data that the old ways don’t
work. Everywhere you turn people will be suggesting a return to
fundamentals, to the rules of the “good old days.” This is why it will be
challenging to move to a new way of thinking and why it will take courage
to adopt a new model for business success.
But as difficult as it will be, do we have a choice? Can we continue to
rely on what has worked in the past but is now failing? To paraphrase
Einstein’s famous observation, “The significant problems we have cannot
be solved by the same type of thinking that created them.” Or as a dear
friend and client, Bill McGinnis, CEO of National Technical Systems, is
fond of quoting Mark Twain, “If you always do what you have always
done, then you will always get the same results you have always gotten.”
I believe that it is at these very times, when the old rules of
engagement are failing and our world feels in chaos, that we need the
courage to explore and be open to taking steps we have never taken
before. This is the very time when we should consider what we rejected in
the past. That is what creating magic is about: doing what others do not
expect is possible.
A
New
Paradigm
for
Capitalism
The world of commerce has evolved over hundreds of years. Society
has evolved from a purely agrarian society to an industrial society. Our
A Shock to Our System 15
world has been on a journey that has taken us from a society of hunters
and farmers to craftsman to the modern corporation of efficient
production. The rules of commerce have evolved during this journey to
the system we call capitalism and the capitalist system has been the engine
of progress in every society that has adopted it.
Progress, innovation, and improving the standard of living is what
business used to be all about from the early days of mercantilism through
the industrial revolution; that is until business turned from being the
engine of creation, the source of progress, to the machine of destruction3.
Can this system, which created widespread success for over 300 years,
function in today’s society? Can we still depend on the model that
advanced society for so many centuries? Is the very foundation upon
which our society is built, free market capitalism, failing us as a system?
At first glance, it might seem that the evidence is heavily weighted
towards yes. What we hear in the press and the problems I have
mentioned earlier indicate that capitalism has had its day and that we
need a new system.
Let’s remember the incredible progress capitalism and the individual
businesses that follow its principles have collectively created over the last
three centuries and resist the temptation to throw out the baby with the
bath water. Much is right with our system. We must resist the impulse to
discredit and discard our economic model just because it doesn’t seem to
work right now. It could well be the system of economic exchange is
sound but its application has been limited.
Yes, Lehman Brothers and Bear Sterns are gone from the scene and
the Federal Government owns GM. Yes, housing values have plummeted
and many people have lost a significant amount of their net worth. Yes,
unemployment is currently at a painful 9% – 10%. Yet many companies
survive and even thrive.
Think again about Apple’s extremely successful launches of the
iPhone and the iPad. As Sarah Rotman Epps of Forrester Research said,
“The iPad isn’t behaving like other consumer devices. It has a steamroller
of momentum behind it that indicates incredibly strong demand for this
entirely new form factor.”4
16 The Living Organization
If Apple, FoE companies and the companies I work with as a
consultant can create such magic, why not all companies? Why not your
company?
The system has its flaws but all human systems have their flaws. I
contend that the basic principles of Capitalism are sound. Rather than
declare it a failure, let’s see if we can discover how to enhance its positive
attributes while eliminating the negative impacts. Can we create a system
that draws on the productive, society-benefiting aspects of capitalism while
eliminating its negative side effects? Can the decisions made by our
corporate leaders to create their desired results and benefit their
organizations, also benefit society? My journey to discover an answer to
how results are created also revealed the answer to these questions, which
will be revealed in this book and the works that will follow.
I have discovered that the flaw is not the inherent nature of the
system but our limited understanding of its inner workings. The
framework by which we make decisions within the system is what is
causing the system to fail. Put another way, there is nothing wrong with
the territory that we are traveling over; our maps simply do not show the
full range of terrain. Is it any wonder that every now and then we fall into
a pit of quicksand or get caught in a raging river? What is missing from
our understanding? What does our current map, our current business
model, not reveal?
The
Forces
of
Creation
Given my background as an engineer, I first looked at business from a
scientific perspective, seeing it as a system of dynamic forces. I used Force
Field analysis to help me explain, identify, and organize the forces that
create society’s situation. Force Field analysis (FFA) is a simple tool
developed by Kurt Lewin, the founder of social psychology and one of the
first to study group dynamics and organizational development. FFA
changed social science and is regularly used for strategic planning.5
In Figure 1 I show how this technique provides a framework for
looking at the factors (forces) that influence any situation. It asks what
forces drive movement towards a goal (driving forces) or block movement
from reaching a goal (restraining forces). A similar pairing of forces drives
our Capitalist system as a whole, as well as each company within it.
A Shock to Our System 17
Figure 1
The challenge in analyzing any system is to identify all of the critical
forces operating in it. Yet, it is difficult to identify all the forces because of
the limiting nature of our worldview. Our individual and collective
worldview serves to frame how we understand our world and it also has
the characteristic of limiting the information available to us.
When we thought the world was flat, we could not imagine sailing to
an undiscovered continent. We couldn’t even imagine such land masses
existed. When we believed the earth was the center of the universe, we
had no way to truly understand the motion of the planets. Our current
worldview about how we create results will be our challenge. It will
challenge our ability to look beyond our worldview so we can understand
all the forces operating within an economic system of exchange.
Every new discovery challenges some aspect of the old paradigm. The
first response from orthodoxy is to reject the new discovery or try to
explain it within the existing framework. When the evidence becomes so
strong that it exposes the inability of the existing paradigm to fully explain
how the world works, a new paradigm evolves. Until then, the forces not
18 The Living Organization
fully explained by the current paradigm are relegated to the mystical or
the magical.
For example, James Clerk Maxwell developed an accurate theory of
electromagnetism by showing that light was electromagnetic radiation
operating in the same field that enabled electrical and magnetic
phenomena, a field he called the ether. While this advanced the field of
classical physics and explained phenomena that could not otherwise be
explained, it never explained the forces that lie in this field or how they
impacted the world. The ether remained a mystery until the advent of
Quantum Physics began to peer under the veil of the subatomic world.
Likewise, forces operating on our economic system today are still
relegated to the ether for the same reason. For example, in his attempt to
explain the self-regulating nature of the marketplace, Adam Smith wrote,
“…and by directing his effort in such a manner as to produce the greatest
value for his own gain, he is in this, as in many other cases, led by an
invisible hand (emphasis added) to promote an end which was no part of
his intention.”6
Like the ether of Maxwell’s classical physics, Smith could only
recognize that there were impactful forces at play but couldn’t fully
explain them. To this day, most economists still accept there are forces
which we don’t fully understand or see that regulate the market.
A New York Times headline on September 2, 2010 reads, “Bernanke
Says He Failed To See Financial Flaws.” In the article Mr. Bernanke, the
Chairman of the Federal Reserve Bank, says, “What I did not recognize was
the extent to which the system had flaws and weaknesses in it that were going to
amplify the initial shock from sub-prime and make it into a much bigger crisis.”
The forces acting on a system are present whether we recognize them
or not. As described by FFA some of the forces drive success while others
restrain success. And as Bernanke and others learned, some of the forces
are visible and known while others that are not visible can have a
tremendous impact.
Take the performance of two teams for example both performing the
same activities. One team is highly aligned while the other is fairly
dysfunctional. The aligned team will enhance its chances of success while
the dysfunctional team may still perform but the path to success will be
more difficult. The invisible force of alignment plays a critical role in
A Shock to Our System 19
determining which team will outperform the other. Yet, because it is in
the “ether,” alignment is not usually a force most managers actively take
into account or even know how to work with. Similarly the unconsciously
formed culture of an organization can be a force that energizes the group
or it could be a force that prevents the group from changing.
Some forces carry with them shadow forces. Microsoft’s success led it
to take on an air of arrogance, a force that is often lying in the shadow of
success. This arrogance led to many of its troubles with regulatory
agencies around the globe. Because our maps are so limited, the forces
that lurk in the shadows will often have unpredictable side effects.
Shadowy forces aren’t inherently bad. They are merely another set of
forces that affect our success. The problem arises when our maps do not
help us understand their existence. Once understood they can be the
source of our greatest development. Psychologist Carl Jung pointed out
that when a person learns to integrate their shadow side, the result is
greater maturity and wisdom. The same is true for business and our
capitalist system. Fire can warm us or burn us. Business can advance
society or destroy it. Only through a deeper understanding of the
elemental forces can we, as Jung said, reach wisdom.
The only proper response to today’s crises is to understand all the
forces impacting the results we create, the visible and the invisible, the
light and the shadow. Effective managers will find a new way to
understand and use all these forces to create magic. When we understand
how to work them, we will make the next quantum leap in improving
ourselves, our companies, and our society.
The successes of Apple, Whole Foods, Container Store and the many
other companies thriving during these troubled times provide powerful
lessons for us. In true scientific fashion, we will reveal and explore the
forces, both driving and restraining, that explain the results we observe.
We will make visible the forces that remain hidden because of the
limitations of our existing paradigm. Only then can we understand and
unleash the hidden magic that lies within all of our organizations.
Evolve
or
Die
When a system goes into chaos as capitalism is doing today, when all
the old rules no longer apply, we can experience it as a failure of the
20 The Living Organization
system. Viewed another way, however, it becomes the natural pattern of
evolution.
Evolution, a force of nature that is at times dormant, asserts itself
when a species or a system no longer fits its current environment. It
asserts itself by creating a crisis that forces the system to adapt to the new
environment or die. A similar call to adapt and change has brought us to a
critical point in our evolutionary development. The choices we make now
will determine the future of business and society.
21
CChhaapptteerr 22
“Life
has
its
own
hidden
forces,
which
you
can
only
discover
by
living.”
Soren
Kierkegaard
The
Living
Organization®
-‐
The
Secret
of
Life
To understand what underlies the performance of all magical
organizations, we need to remove the mental filters that prevent us from
having a more robust understanding of the world around us. Just as we
needed to build new devices to view the hidden elements that Einstein’s
theories predicted, we need to create a new mental lens to view the unseen
forces in today’s new world of business and how they manifest their
magical results.
My journey to understanding how results are actually created started
with my first management position at Hewlett Packard back in 1975
(where I spent the next 13 years rapidly moving up the ladder dealing
with ever increasing levels of complexity). I left HP in 1988 and have
spent the last 23 years working with a vast array of companies in a variety
of industries. Through these years, I continued to focus on one question
above all others: How do we manifest the results we desire? I dove deeper
and deeper to understand why some companies possess that “magic
touch” while others don’t.
22 The Living Organization
As the head of numerous enterprises and organizations, I soon
developed the skills needed to build a smooth running and highly
effective machine. I could plan, organize and control with the best of
them. But with the development of each new organizational skill,
something seemed to be missing. While the science of management was
easy to learn, the art of leadership was much more difficult and elusive.
Yet I knew I would find most of the secrets I sought in this often-discussed
but not well-understood field.
In addition to developing my business skills, the desire to delve
deeper into the art of creating magical results led me to explore anything
that would illuminate manifestation. This journey took me into diverse
religions and deep spiritual practices along with the more practical fields
of physics, psychology and microbiology. I even explored mythology and
mystic practices to see if I couldn’t unlock the great mystery of magical
transformation.
Along the way, I discovered a common thread of wisdom that flowed
through this eclectic group of disciplines that better explained how we, as
living beings, survive, thrive and create results in our lives. I also
recognized the uncanny connection between living organizations and
living organisms and how that metaphor could open up new dimensions
in leadership and organizational thinking.
The Living Organization® model synthesizes what I have learned. It
reveals the secrets I discovered that show how your organization can
respond to the changing dynamics of today’s environment and create
magic in the process.
When a corporation organizes, it is “incorporated.” That word derives
from Latin roots and literally means, “to create a body.” I believe that
organizations are bodies in more than metaphorical terms and they are
more than just physical bodies; they are bodies that house living beings in
every sense of the word. Even American and British court systems treat
them as “persons” with the same rights as any individual.
Like all forms of life, organizations create by taking in energy and
transforming it into something else. In plants, it’s called photosynthesis.
With corporations, it’s called production. Both allow the organism to serve
something greater than itself.
The Secret of Life 23
Like people, plants and other living organisms, corporations are born,
grow old, and die. They are governed by the same laws of life as other
living beings and follow the same hierarchy of need fulfillment as people
do. They are an intrinsic part of life, particularly in our post-modern
society. They marry through mergers and give rise to offspring (or spin-
offs). When they mature, they have the choice of rebirthing, of branching
off in new directions (new markets, new products or totally new business
models), or withering away and dying (when they are sold off or go out of
business).
Each life cycle event leads The Living Organization® to the possibility
of a new, more expanded way of life. This more developed stage hopefully
contributes to the society around it and the living cells, the people, which
give life to it. Like all living beings, corporations will either adapt to a
changing environment or be driven to extinction. Yet even in dying, they
can open the way for new companies to prosper and grow as they provide
the seeds for new organizations to sprout to life.
The Living Organization® model views the organization as a complex,
adaptable, living being. It is modeled after the greatest organization alive,
an organization that manages trillions of workers as they perform their
individual and collective functions in one of the most complex yet highly
efficient and effective collaborative efforts ever imagined: the magnificent
and magical human body.
More
than
the
Physical
Every living body is affected by physical laws, by the laws of pressure,
volume and temperature. Our blood flows according to the laws of fluid
mechanics and our mental activity is measured by electro-magnetic
currents. But just because our bodily functions can be explained by the
laws of physics, does that make us a well-oiled machine?
Like human beings, organizations are governed by the same laws of
physics that define how mechanical machines operate. Therefore elements
of the traditional machine paradigm are still necessary and valuable, and
we must continue to embrace them. While necessary, the model of the
organization as a machine to be optimized is not sufficient. Like the
human body, our organizations are more than well-oiled machines.
24 The Living Organization
Forces that transcend the explanations offered by the laws of physics
alone govern our human lives. Even our venerated western medical
profession is slowly accepting the idea that some forces that affect human
health and life are beyond present scientific understanding. For example,
we don’t fully appreciate the mind-body connection but accept it as fact.
We would love to capture and bottle the unexplainable intuitive insight
that turns out to be right, and the amazing power of “synergy.” We’d love
to emulate and master the “sixth sense” or “magic touch” that we often see
as keys to success.
There are powerful forces in our universe (and the world of business).
Many people will not try to explain or even understand these phenomena.
Some will simply accept that results happen and believe we are not meant
to know why they occur. Some will view them as miracles or blessings if
they are good or punishment for sin if they are bad. Others will view them
simply as magic (white magic for the good stuff and black magic for the
bad stuff). And who doesn’t love to believe in magic?
The
Magic
of
Living
Organizations
Most businesses that create magical results can’t explain how they do
it. Steve Jobs and his team at Apple regularly seem to pull rabbits out of
their hats, but can they teach others how the trick is done? Academics and
consultants study these companies and attempt to explain how they
achieve “greatness.” Popular books like Good to Great by Jim Collins help
us study and define what made them great. Yet not all have remained
great, as we witness one giant after another, from GM to IBM, fall from
grace. Even my alma mater, the once venerated Hewlett Packard, the icon
of Silicon Valley, has been plagued with scandal and a loss of its soul.
Clearly, there is something not yet explained at work that impacts the
results we experience, an intricate dance between the physical world and
the unseen universe. Like physics revealing the workings of Maxwell’s
“ether,” we can begin to reveal the invisible workings of the “invisible
hand” that Adam Smith first identified in the 1700’s7. It is no longer
necessary to simply think of it as unknowable invisible forces, or define it
as the power of the “hand of God” or even simply magic at play.
To do so we must recognize that what limits our ability to see these
forces and clouds our vision is the very thing that helps us succeed in life,
The Secret of Life 25
our current worldview. As discussed earlier, our worldviews organize our
world and at the same time limit our world. We need a new paradigm that
helps us understand and see these hidden forces so we can use them in
our daily decisions. We need a new, stronger, sharper lens to bring them
into focus, a lens that will allow us to zoom out and see more of the world
around us. Just as physics needs to transcend the mechanistic view of
classical Newtonian physics, we need to replace the rational, mechanistic
paradigm that currently blinds us to the all the forces impacting our
results and limiting our range of choices.
The real reason we can’t copy the success of the Good to Great
companies or understand their eventual decline is because we continue to
view the workings of the modern corporation through the lens of the old
machine paradigm. This lens is simply not wide enough or powerful
enough to reveal the forces that create success and failure in today’s
world.
More
than
a
call
for
Social
Good
This book is not the first to call for fundamental change in our
foundational paradigm. The Corporate Social Responsibility (CSR)
movement calls upon corporations to act as good corporate citizens and
put the welfare of society as a whole over their need to make individual
profit. There are calls for a shift from the “Shareholder Model” to the
“Stakeholder Model,” a shift away from focusing solely on the return only
for shareholders to a wider picture that focuses on the needs of all
stakeholders: employees, customers, suppliers, and society at large. There
is even a call towards Conscious Leadership, which asks the leaders of our
corporations to move to a higher level of consciousness, taking into
account the “bigger, even moral picture” when making key strategic
decisions.8
I do not oppose any of these movements; in fact I endorse all of them.
But I do not feel they will be very successful in bringing about the
fundamental change necessary for the 21st century. Each of these laudable
ideas fails to provide the necessary framework that will allow for wide-scale
adoption and a fundamental shift in worldviews. Within the worldview of
the Machine of Production, how can you possible achieve a Socially
Responsible corporation? Machines are not, in fact cannot be, socially or
26 The Living Organization
morally responsible. Until we change the fundamental paradigm, we
cannot get there. And to date the dominant justification for the changes in
behavior is a call to a higher purpose. “Do Good for Good’s sake and you
will profit.”
I believe this is true and there is a fair amount of anecdotal evidence
for it. But why, why does doing good produce results? This is the question
that calls for an answer. Organization leaders deserve to know that a new
model is based on sound principles and better explains the world around
them. Leaders have a right to expect a new model will provide the
necessary tools and enable them to achieve better results than the model
they currently use to produce success.
To date challenges to the “machine of production” paradigm rely on
anecdotal evidence. While much of the anecdotal evidence does imply
positive results as in books like Good to Great and Firms of Endearment, they
do not give a roadmap for success. They explain the attributes exhibited
by successful companies but do not explain why those attributes create
success. They simply ask each manager to do what others have done and
to take a leap of faith that such a course of action will produce better
results, eventually.
While I completely agree with their premise and their promise, the
promise alone will not shift the paradigm. Yes, I have been personally
swayed and accept as true their premise. This is because over the course of
my life, I have experienced the successes created by following those
principles outlined in their books. I also recognize that for those who have
not yet experienced the positive impact of these principles, accepting them
requires a leap of faith in the absence of a reasonable and rational
explanation of why it works. For most organizational leaders trying to
address today’s ever-complex challenges, the leap of faith is too great.
To quote from an August 23, 2010 article in the Wall Street Journal,
“The Case Against Corporate Social Responsibility,”
Can companies do well by doing good? Yes—sometimes.
But the idea that companies have a responsibility to act in the public interest and
will profit from doing so is fundamentally flawed.
Large companies now routinely claim that they aren’t in business just for the profits,
that they’re also intent on serving some larger social purpose. They trumpet their efforts
to produce healthier foods or more fuel-efficient vehicles, conserve energy and other
The Secret of Life 27
resources in their operations, or otherwise make the world a better place. Influential
institutions like the Academy of Management and the United Nations, among many
others, encourage companies to pursue such strategies.
It’s not surprising that this idea has won over so many people—it’s a very appealing
proposition. You can have your cake and eat it too!
But it’s an illusion, and a potentially dangerous one.
Very simply, in cases where private profits and public interests are
aligned, the idea of corporate social responsibility is irrelevant: Companies
that simply do everything they can to boost profits will end up increasing
social welfare. In circumstances in which profits and social welfare are in
direct opposition, an appeal to corporate social responsibility will almost
always be ineffective because executives are unlikely to act voluntarily in
the public interest and against shareholder interests.9
Nor should they unless, as the journalist states, acting in the social
good can in fact be shown to be good for the corporation. But does it have
to be one or the other? Will corporate responsibility always run counter to
the company’s core purpose? Or is there a model of the corporation that
demonstrates, in real and practical terms, that being a caring and
cooperative member of society does in fact produce the greatest return to
the investors? Is there a model that can reveal how these two objectives
can become complimentary instead of antagonistic partners to improve
productivity, profitability and new possibilities?
To begin to explain how our current machine paradigm limits our
ability to see beyond the conflicting options let’s look at the nature of
machines. Machines have no other purpose than to produce something in
the most efficient way possible. They don’t care what the result is so long
as it achieves that result efficiently and profitably. A machine is merely
programmed to do what it is told. That’s the fundamental problem with
our current business paradigm. We’ve allowed corporations to turn into
mindless machines that only do what the shareholders, the marketplace or
the market manipulators, the speculators and government regulators, tell
them to do. Since the 1980s, the only objective for most corporations has
been to maximize shareholder value. And this they’ve done, as all
machines do, as efficiently as possible.
But in our expanded worldview, where corporations are viewed as
living beings, we can see that the best results come not from outside our
28 The Living Organization
organizations but from deep within them. They have within them, from
their moment of creation or birth, some “purpose for being.” Like every
living being, The Living Organization® wants to see its purpose realized. It
wants to make its mark, fulfill its purpose and maximize its contributions
to the customers it serves. Living organisms, and organizations, are in a
relationship with their environment. They recognize that they depend on
their environment as much as their environment depends on them.
I was at a workshop at Esalen, a retreat center in the beautiful hills of
Big Sur CA, overlooking the Pacific Ocean. I was invited to present The
Living Organization® model to a group of Esalen managers who were
exploring the next stage for their organization. After our presentations,
they walked through their strategic visioning process using scenario
planning as a tool to help identify possible futures. I experienced a sort of
mechanical nature to the conversations as if they were going through the
motions but lacked that certain spark.
I invited them to take a look at the organization not from a mental
process but from a deep sense of connection with its long life. I invited
them to think of Esalen as a beautiful woman that had graced many
people over the years with her beauty and the magic of the location. And
this beautiful woman was now forty years old and longing for a new way to
contribute to the world. She was seeking a way to build on her gifts but
also recognized that she was moving into the next phase of her life. This
invitation changed the quality of the conversation and created new
possibilities for how they could move forward. It also brought out the
deep-felt passion of the management team and all the people associated
with Esalen. It brought the organization new life.
Viewing our organizations as living organisms frees us from the built-
in bias that arises from our limited view of corporate bodies as merely
machines of production. Viewing an organization as a living entity allows
us to draw from a broad range of disciplines, from physics, biology,
psychology, to the many diverse spiritual traditions. Therefore we can
draw on the deeper Perennial Wisdom that has guided our ability to live
effective and productive lives as human beings. These same wisdoms can
also guide our ability to lead our organizations’ actions to effectively and
productively contribute to the customers they serve and society as a whole.
The Secret of Life 29
What works for other living entities will work for The Living
Organization®.
Wisdom
of
manifestation
One of those perennial wisdoms is that life is composed of dual
opposites. For every up there must be a down, for black there is white. We
see it everywhere, left brain thinking paired with right brain thinking,
logic balanced with emotion, imagination in opposition to facts, and form
juxtaposed against spirit.
Mankind’s journey into a deeper understanding of how life works
gave birth to the Scientific Method, the reductionist approach of
Newtonian Physics. This is the societal framework on which Fredrick
Taylor based his Scientific Management, part of the foundation of our
current business paradigm. In this view, matter is separate from energy,
or said another way, the formed physical world of existence is separate
from the unformed world or the world of Spirit.
Then Einstein came along and shared his now famous equation
E=MC2 and changed everything. In this simple equation he points out
that matter and energy are not in opposition but in fact two sides of the
same coin. Matter is energy and energy is matter. He did not create the
equality of matter and energy, it was always equal. He simply expanded
our framework and opened the lens by which we viewed the world to
reveal this complimentary relationship between what until then seemed to
be polar opposites.
To understand how we can have greater impact on producing the
results we want, we must understand how the physical world and the non-
physical world are related. We must understand how the physical world
emanates from the unmanifested energy of the non-physical fields. This is
not new. It is, like Einstein, merely expanding the lens to reveal what is
already present in our world.
As we said earlier, it is the very nature of life that we are always
dealing with polarities; one cannot exist without the other. A coin is
composed of a head and a tail. Are these opposites? From a reductionist
perspective we can only see a tail or a head, one the opposite of the other.
But we all know that the coin needs both the head and the tail to exist. As
we expand our frame of reference from a mechanistic reductionist
30 The Living Organization
perspective to an organic holistic perspective, we begin to understand that
what were once opposites are in fact complements, two sides of the same
coin.
Just like the head and tail of the coin, complementary and balancing
forces create the life we experience. Our lives are created out of these
forces and are reflections of their cause and effect. Without opposites, life
itself would not exist. Without science, we would be living in a world of
confusion and chaos. Without spirit, we would be soul-less machines,
lacking art and beauty and the creative energy needed to manifest life and
the results we desire. Up-down, black-white, good-bad, science-spirit
brings about the balancing of opposites that creates the wholeness of life
like the head and the tail create the coin.
As with Einstein’s discovery, The Living Organization® is part of an
evolutionary journey. It builds on all that has come before and serves as a
way of widening our lens to reveal the forces that are already present and
impacting our efforts to create what we want. Life itself is a process of
creation and all living entities are creative beings. Creation is the process
of bringing something into form, manifesting from that which is not
manifested; form from spirit, a specific result from the field of infinite
possibilities.
Since everything is energy, we will continue our journey by
understanding the nature of the primary material, the source of all life –
energy.
31
CChhaapptteerr 33
“The
energy
of
the
mind
is
the
essence
of
life.”
Aristotle
It’s
all
about
Energy
The transition from employee to manager was not an easy one for me.
I realized that my success depended on not just my own efforts but those
of everyone around me and, in particular, on my ability to orchestrate a
whole new set of dynamic forces swirling around me which I couldn’t see
but surely felt.
I felt it in the way people reacted to me. There were times when I
would think I communicated a certain message but what they received was
very different. What was I sending that they were picking up that I didn’t
know I was sending? And why didn’t I know it?
I felt it in the way results happened. Many times the teams I led
produced results that were magical, like the ones at HP. Many other times
the results didn’t turn out nearly as expected. Yet it seemed to me I was
doing the same things in both situations. I wondered what else was going
on besides what I or my team was doing that yielded the results I got.
To help me through this struggle, I fell back on what I knew: my
early training as a systems engineer. I found that the same principles that
worked for scientifically analyzing and understanding complex physical
systems worked for analyzing organizational systems as well. The deeper I
delved into what was impacting my ability to accomplish my goals, the
more I began to recognize that I was dealing with various forms of energy.
I began to understand that creating results was all about energy and how
it flowed through the system.
32 The Living Organization
Results
are
energies
transformed
The earliest known discussion of energy can be traced to the concept
of “Vis Viva” or “living force” dating back to the Greek philosopher,
Thales of Miletus, c625-c545 BC. We have continued to advance our
understanding of the concept and properties of energy through the works
of scientists and philosophers such as Gottfried Leibniz, Sir Isaac Newton,
Thomas Young, William Rankin, Lord Kelvin, Albert Einstein, and many
others.
The core of our current understanding is that energy is never created
nor destroyed. Physicist and Nobel Laureate Richard Feynman described
the law of conservation of energy in a 1961 lecture by stating:
“There is a certain quantity, which we call energy, that does not
change in manifold changes which nature undergoes. That is a most
abstract idea, because it is a mathematical principle. It says that there is a
numerical quantity, which does not change when something happens. It is
not a description of a mechanism, or anything concrete; it is just a strange
fact that we can calculate some number, and when we finish watching
nature go through her tricks and calculate the number again, it is the
same.”10
The sum total of all energy within any system is constant no matter
what changes that system undergoes. As Einstein fully understood,
everything is energy transforming from one form into another. As his
predecessor Newton pointed out, energy can neither be created nor
destroyed. If everything is energy, which cannot be created or destroyed,
it stands to reason that creating results is a process of transforming energy
from one form into the form of our desired results.
Forms
of
Energy
Energy has a number of attributes which we experience in different
forms. Energy is visible to our five senses and also hidden from our senses.
Energy takes the form of potential energy (energy waiting to express) and
kinetic energy (energy expressing). Energy can take form or be in an
unformed state.
Some forms of energy are relatively easy to observe while others,
though known to exist, cannot be easily experienced through our five
senses. A flowing river, a light beam and solid forms of energy such as a
It’s All About Energy 33
table are all easily perceived. It is also easy to observe energy in motion in
the form of the actions of individuals and groups.
We can know some forms of energy because of the effect they have on
something we can observe. Electricity, magnetic fields, radiation, human
thoughts and even human motivations are examples of energy we cannot
directly detect with our physical senses but still accept them as being
present because we can witness their effects through secondary means.
Electricity and radiation can be measured through instruments. Magnetic
fields can be known by something as simple as observing patterns of
sprinkled iron filings. Human thoughts have been recorded by MRI
scanners as energy patterns and scientists can map out the regions of our
brains that are responsible for different types of thoughts.
There are also flows of energy that we cannot see or even measure but
accept, primarily because we experience their effects. Sensory perceptions,
thoughts and emotions are all forms of energy our bodies are processing.
We know energy enters our bodies through our five senses and is
processed though our nervous system and our mental faculties. We also
know there is a relationship between the energy generated by our
thoughts and the energy felt by us as emotions.
The felt senses we call experiences are also a form of energy though
they are not processed through our five physical senses. For example,
watching a sunset or a baby smile will create a sensation that is a specific
energy vibration. If we find ourselves in the presence of someone who is
angry, without seeing or hearing them our bodies still experience and are
affected by the energy they emanate. Even motivation is energy that flows
through each of us, driving and defining the behaviors that all can
observe.
Have you ever been in a group setting where there are unspoken
issues, “the elephant in the room?” It is not the issue itself that is the felt
experience but the energy that is being suppressed. Avoiding discussion of
the issue blocks the energy like water behind a dam, preventing the flow
of all energy and slowing work down. The minute the elephant in the
room is revealed and discussed, the energy is released. Independent of
the resolution of the original issue, the mere fact that the energy is again
flowing creates movement. Most people who have experienced this will say
34 The Living Organization
they felt a certain relief that they were now discussing the issue and almost
all reported an increase in energy because of this release.
From both physics and chemistry, we know that rocks at rest at the
top of the hill or fuel in a gas tank are forms of unseen potential energy.
Push the rock down a hill or compress the fuel in an engine and that
hidden potential quickly transforms into the kinetic energy that we can
observe. The same transformation of potential energy into kinetic energy
can be seen in the runner poised in the blocks at the start of the race. He
is potential energy that explodes into kinetic energy at the sound of the
gun. Our organizations are a combination of potential energy and kinetic
energy. We have a deep source of potential energy within each individual
and work group just waiting to be released into the activities that will
ultimately produce our desired results.
The
patterns
of
our
lives
Energy, and therefore life itself, is always in a constant state of motion.
Indeed, all life is in the process of transforming from one state of energy
to another. Since energy cannot be created or destroyed, one has to ask
the question: Where is the energy before it becomes formed? It must
reside somewhere, in a non-physical state, prior to it coming into form.
Einstein’s famous equation E=MC2 points out that energy waves and
particle matter are the same. Vibrating energy waves flow into electrons,
which flow together with protons to form atoms, atoms form molecules,
molecules form cells, and so on. And from this life itself is created. All
forms of life consist of energy patterns merging and mingling to form new
patterns, not unlike the patterns of rabbits, turtles, and dragons a child
(and some adults) can see in the moving, flowing clouds.
Just as clouds form from less dense, unformed water vapor into the
denser form that allow us to discern the various patterns, all energy moves
from less dense, unformed, subtle energy to the more dense formed
energy of our physical world. All energy continuously moves and morphs
from one pattern into another and then dissipates back into the
unmanifested field of energy. Whether the energy patterns are dense
enough to be observable or not, the energy is still present and potentially
impacting us.
It’s All About Energy 35
People
Are
Energy
Too
If matter emerges from energy, then people must also be a form of
energy. We can best be understood as patterns of energy that coalesce as
DNA, cells, organs, tissue, and muscle into our unique form and body. In
addition to energy fashioning itself into the form of our bodies, energy
runs through our bodies in other forms such as thoughts, desires,
emotions, and experience. We may not always think of these aspects of
ourselves as less dense forms of energy. But that is what they are.
We speak of an individual as exhibiting certain traits or behavior
patterns. These are also patterns of energy being expressed. Thoughts
and emotions are energy patterns, less obvious perhaps, but just as real.
Though they may not be observable in the physical world, they do exist
and to a large degree contribute to the creation of our physical world.
Allow yourself for a moment to feel love for someone. Allow that
feeling to rise in intensity and fill your whole body. Do this for a moment
and then begin to pay attention to your body. How would you describe
what you are feeling at this moment? Most people will respond with
feelings of calm, peace, warmth, and settlement.
Now take another moment and allow yourself to remember a time
when you were angry at someone or some situation. Bring that situation
to mind as fully as possible. Allow the anger to rise up within you to fill
your body as fully as you can. Again reflect on how your body feels. In
these situations most people would respond that the body is wound up as
tight as a drum, fuming, and red hot.
In each case your body is vibrating to a certain energy frequency.
Love is an energy vibration whereby all the component parts of the body’s
organization, muscles, and cells attune to and create the experience of
relaxation, calm, and peace. The opposite is true of anger, which is a
specific vibration that attunes all the bodily components to a different
frequency. These emotions and the states they produce are patterns of
energy.
I have used a similar exercise with groups in management training.
The biggest challenges most managers and executives have is keeping up
with the long list of tasks they have to work through. They have reports to
get in on time, performance reviews they have to do, customers they have
36 The Living Organization
to meet, meetings to attend, planning to finish, and the list goes on and
on. In my exercise I have them make a list of all the tasks they had to get
done within the next 5 – 10 days. The list was to start with “I have to –
__________________ by _________.” Then I have them pick a partner and
read their lists to each other. At the end I ask them to describe the feelings
they had in their bodies. Tired, heavy, burdened, and overwhelmed are
typical responses I get. Then I have them take the same list, change the
opening phrase from “I have to” to “I want to” or alternatively “I get to.” I
then have them read their list again to their partner and record the way
their bodies felt. Excited, energized, and uplifted are some of the common
responses.
The activities on both lists were the same. All that changed was two
words: “Have to” with “Want to.” Words are associated with beliefs. “Have
to” is associated with obligation, while “want to” is associated with choice.
Obligation carries a different energy frequency than the frequency of
choice and the experiences we have are directly related to these different
patterns of energy in our bodies.
Choice
lets
energy
flow
On a visit to the Santa Clara office of HP, the Area General Manager
and the Branch manager shared with me a challenge they were having
with a particular employee. Chris was part of the lease contract
administration group. He was extremely talented, very sharp, and was
creating wonderful programs that helped streamline the administrative
process. However, Chris was not carrying his load in terms of managing
the lease contracts. Every time they talked with him, he would promise to
do what was expected and did for a while but then would slack off again.
They tried everything they could to get him back on track and asked if I
would talk with Chris.
I asked Chris if he knew why we were getting together. He clearly
understood the problem. He explained to me that he really felt that what
he was doing, developing the software to make the process more efficient,
was making a great contribution to not only his department but also to the
overall region. I acknowledged the value of what he was doing and his
love for programming. I also told him that what he was doing was not the
job we hired him to do. That while he was working on developing the
It’s All About Energy 37
software, which would have a payback for the future, the day to day work
of administering the contracts was falling on the shoulders of his team
members.
“But in the long run it will reduce the workload of everyone,” he said.
“Yes, that is true,” I said, “and as with all things I have to balance the
long term against the short term. What you want to do falls into the
category of future investments.”
“But don’t you see how much of a difference I am making?”
“Yes, of course I do,” I said. “But that is not one of the choices I have
available for you. If we allow you to continue on as you are, then we will
have to hire someone else to do the work you were hired for, move you
into the IT department and adjust our priorities to pay for your efforts.
From the bigger picture, that is not an option I want to support.”
At first, I could see from his expression that he felt boxed in, trapped
and cornered. I followed up by acknowledging his love for programming.
“Chris, I can tell you really love to program and to use your talents to
improve organizational effectiveness. I think that is a real gift.
Unfortunately that is not an option I have available to you at this point.
What we have is the position we hired you to do and we all know you have
the talent to do it. What do you want to do?”
He thought for a moment and then shared how a friend of his had
offered him an opportunity to work with him in his startup, developing
software for their internal processes. As he described the position he
began to get really excited, his eyes lit up and he started to connect with
something he really loved. It was obvious there was a tremendous amount
of energy flowing.
“Chris,” I said, “you seem really excited about this opportunity. You
light up with such a sense of excitement and passion. Why don’t you take
that job?”
Again Chris was quiet for a moment and then he said, “You are right.
That is what excites me.” Chris decided to resign that day and take the
opportunity to do what he really wanted to do.
For months my managers tried hard to get Chris to do what they
needed him to do and tried all sorts of ways to motivate him to do it. What
they never did was make it Chris’s choice. A simple act of laying out the
options and offering the choice empowers employees more than any
38 The Living Organization
attempt to motivate desired behavior. Choice allows energy to flow and as
it is flowing, it can be directed towards the desired results. As discovered
in the earlier “Have To/Want To” exercise, feeling that you have to do
something blocks the flow of energy. And wishing you had a different
option than what is available will also block the flow of energy and slow
down or even prevent the creation of desired results.
Everything is energy! As these examples demonstrate, we are
constantly responding to energy with energy. One can consider life as
nothing but a mysterious dance of interacting and exchanging energy.
The
Dance
of
energy
It is not just the energy that flows within us that creates our
experience, it is the energy that surrounds us as well. Energy flows into
patterns or energy fields that are in relationship, constantly interacting
with each other. All entities in any relationship have the characteristic of
simultaneously impacting and being impacted by the interaction of those
entities.
When you interact with another person, you impact them and they
impact you, positively or negatively. As we breathe, we expel carbon
dioxide and take in oxygen. We interact with our environment, specifically
trees and plants that take in carbon dioxide and give off oxygen.
We live in a sea of different energy patterns and each pattern,
depending on the strength of the field, will have a direct impact on our
experience, especially if we are not aware of its influence.
One of my clients is a $25 million software company in Southern
California that had been struggling to better align the executive team.
While there was conflict among many of the team members, there was a
specific conflict between the VP of Marketing and the VP of Sales, which
was affecting the company’s ability to meet their growth strategies. During
one of my coaching meetings with the VP of Marketing, he shared his
most recent upset with the VP of Sales. The two of them met with the
CEO and both agreed to take on certain tasks and have them completed
by a certain date. The VP of Marketing saw signs that the VP of Sales
might miss that date and sent an email, copying the CEO, calling out the
VP of Sales for falling behind and predicting that the commitment would
not be met.
It’s All About Energy 39
The VP of Marketing had only been with the company a few months
and this behavior was not consistent with his normal style of team
interactions. I asked why he communicated that way he had. His answer
was, “We agreed to something and he was not going to come through.”
“Why did you do it in an email and copy the CEO?” I asked.
“It was a commitment we had agreed to in a meeting amongst the
three of us.”
“Are you guys on the same team?” I asked.
“Yes, of course we are,” he said.
“I don’t know about you,” I said. “But when I see a teammate getting
into trouble I don’t call him out in front of our boss in a formal medium
like an email. Instead I reach out to see if I can help. I usually pick up the
phone and call him and ask if he needs any help or if he thinks it will still
get done on time.”
The VP of Marketing stopped for a moment, reflected on his behavior
and said, “I don’t know why I did that. I know better.”
Why did he behave in a way that is contrary to what he knows? The
answer again is energy, in this case the collective energy field, or pattern,
of the organization’s culture. To give you a deeper insight, it was very
common for the executives to compete for the favor of the CEO to an
excessive degree in this culture. They took every opportunity to throw
members of their team under the bus if they could blame them and shine
in the eyes of the CEO. This was one of the reasons we were brought into
to the organization, to help transform their culture and the dynamics of
the executive team. It took less than three months for this new executive,
who in all of his previous positions had never acted this way, to take on
the energy pattern of the team and begin to behave just like everyone else.
This is but one example of the power of energy, of energy forces
impacting every organization’s ability to create results, energy forces that
all too often remain under the surface of leadership’s awareness. This
book and the ones to follow are intended to help you understand these
forces and how to work with them to your advantage.
Energy
patterns
that
create
are
alive
All of life is energy but not all energy is alive. A table is energy but a
table is not alive. Water is energy that takes many forms but not many
40 The Living Organization
people will say water is alive, though it has life-giving properties. Lava is
energy but it usually is not considered to be alive. It may change states in
relation to its environment from molten lava to solid lava but it is still lava.
Energy patterns that form living organisms not only have their own
energy transformed; they transform the energy of other energy fields.
They in essence create. Creation is what differentiates energy that is alive
from other forms of energy. Plants are alive, humans are alive and
organizations are alive.
Living energy patterns interact and co-create with their environment.
Plants take in carbon dioxide and turn that into oxygen, which they give
off for animals to breathe. They also absorb nutrients from the soil and
transform them into the sugars and fibers which animals take in to grow
muscles and fuel movement. Like plants, humans also take in many forms
of energy and transform them into other forms in continuing acts of
creation.
All living organisms create by transforming energy from one form
into another. All living organisms interact with their environment,
impacting and being impacted as the two co-create. As humans, however,
we have an additional energy field that is part of our creation process:
desire and intention. We choose what we want to create.
Energy at a rate of over 50,000 thoughts passes through our brains
every day11. We pay little attention to most of these energy patterns but a
select few catch our attention and are repeated over and over again. These
thoughts become slightly more coalesced in the form we call a belief.
When we charge the belief with the energy of emotion and continue to
flow more and more energy to it, that belief becomes our paradigm,
defining the way the world works for us. We also filter what we think is
possible to create by our belief systems, our worldviews. From this
paradigm we take action in response to our environment to manifest our
intentions and desires.
We are patterns of energy in relationship, flowing and interacting
with other patterns of energy, creating and evolving. This is how we create
our physical world experiences and the results we experience.
It’s All About Energy 41
The
Evolutionary
Flow
of
Energy
Evolution is a process in which life adds onto and expands that which
came before, where one life form joins with others to form more complex
life forms. It is from these interactions that life has evolved over many
millennia and from which a new form of life, “the organization,” continues
to evolve.
I will leave to the philosophers, scientists, theologians and others to
debate whether evolution occurs by intelligent design or by random acts of
nature. What we do know is that everywhere we look life evolves from
simple forms into more complex forms. Electrons bind with protons and
together they form atoms, the foundation of matter. Atoms come together
to form molecules, molecules form compounds, and so on.
In his book Biology of Beliefs, Bruce Lipton explains this from the point
of view of a microbiologist.
It shouldn’t be surprising that cells are so smart. Single-celled organisms were the
first life forms on this planet…initially only free-living, single celled organisms –
bacteria, algae and amoeba-like protozoa – populated the world.
Before 750 million years ago, these smart cells figured out how to get smarter when
the first multi-cellular organisms (plants, fish and later animals) appeared. Multi-
cellular life forms were initially loose communities or “colonies” of single-celled
organisms. At first, cellular communities consisted of tens and hundreds of cells. But the
evolutionary advantage of living in a community led to organizations comprised of
millions, billions and even trillions of socially interactive cells… While the cellular
communities appear as single entities to the naked eye – a mouse, a dog, a human – they
are, in fact, highly organized associations of millions and trillions of cells.
The evolutionary push for ever-bigger communities is simply a reflection of the
biological imperative to survive. The more awareness an organism has of its environment
the better its chances for survival. When cells band together they increase their chances
exponentially…
To survive at such high densities, the cells created structured
environments. These communities subdivided the workload with more
precision and effectiveness than the ever-changing organizational charts
that are a fact of life in big corporations.12
42 The Living Organization
Figure 2
It’s All About Energy 43
The nature of evolution is that fields of energy, taking the form of
living organisms, evolve to higher levels of complexity and sophistication.
All living forms are composed of energy fields that are in turn composed
of other energy fields. Organisms are composed of other organisms.
Certain organisms join together to serve a common objective, which in
turn creates a higher order and a more complex purpose and energy
pattern.
If we can accept that humans, the most advanced and complex form
of life on this planet, are comprised of countless individual organisms that
structure themselves like the organizational charts of a big corporation,
then isn’t it reasonable to also view corporations as highly evolved
complex living beings? In fact we can easily see the parallels between the
human body and the corporate body as shown in Figure 2 on the previous
page.
The individuals in an organization can be viewed as the basic cellular
building blocks of an organization, much like the cells in the human body.
Individuals of like mind join together with other individuals for a
common objective comprising another living organism we call a team.
These teams form the fundamental unit of the organization, which in
business we refer to as the “functional structure.” The functional
departments of sales, marketing, and engineering are analogous to the
various organs of the human body, such as the heart, liver, and lungs.
While the human body is a complex web of energy fields flowing and
interacting with each other, a human being is much more than just its
body. We think, feel, have experiences, pose intuitive insights and are self-
aware. We are aware of an inner self and the complex web of inner voices
that guide us through life, some of which are in opposition to each other.
We are also aware of our outer selves and our interactions with others.
The same is true for The Living Organization®. And it doesn’t stop there
If we use The Living Organization® as the starting point, we see that
markets consist of groups of such organisms – companies, competitors,
consumers – coming together to serve a common goal, all within a larger
entity or market. From there, markets form societies, societies form our
planet, and on it goes.
Like the Russian dolls that neatly fit one within the other, The Living
Organizations® carry within them other living organizations. They in fact
44 The Living Organization
demonstrate the fractal property of self-similarity; the rules of energy that
apply to one living organization apply to all living organizations. The laws,
rules, and methods that we will describe in this book apply equally to the
results created by an individual, a group, a team, a department, and to an
organization.
For the purposes of this book, we will stick with the single entity, The
Living Organization®, and show how applying the laws of energy provides
a new, more effective framework for breathing life back into any
organization.
45
CChhaapptteerr 44
“An
organization’s
ability
to
learn,
and
translate
that
learning
into
action
rapidly,
is
the
ultimate
competitive
advantage.”
Jack
Welch
The
Energy
of
Business
All companies and organizations are composed of a multitude of
individuals who form into groups to form an even more complex system.
All complex living systems, whether an individual or an organization,
consist of energy fields beyond the obvious ones that make up the physical
“body.” These subtler energy fields are the thoughts, beliefs, emotions,
passions and deeper purpose that guide the choices and behaviors of
living systems. As a living organization, your company must also carry
within it these subtler energy fields, including the energy of its Soulful
Purpose™ (which we will discuss in greater detail later).
All living things come into existence for specific reasons, to be an
expression of this deeper purpose. Pure randomness or accident does not
bring such a diverse array of energy patterns together to form a living
entity. The Soulful Purpose™ is a powerful force attracting the right
energy patterns to engage and realize its mission. An acorn is born to
become an oak, a liver cell serves to become part of the liver, heart cells
become part of a heart, and heart and liver become part of the body. Each
living entity has a unique reason for existing, a unique contribution to
make to something greater than itself.
The same is true for The Living Organization® as it attracts people to
it to serve its Soulful Purpose™ and realize its mission. There is an
attractive force that brings certain people to certain companies. We can
46 The Living Organization
see this most visibly in entrepreneurial start ups where the reason people
join that particular organization is because of the alignment with its
Soulful Purpose™. And like the way cells organize within the human body,
people come together to form teams, teams form departments, and
departments form companies. All come together to contribute their
individual and collective energy which is transformed into the collectively
desired results that serves something greater than itself.
Are you attracting the right people? Is your Soulful Purpose™ known
and felt? IS the reason you exist to serve something greater than yourself?
Is your organization a Living Organization®?
The
Flow
Energy flows on a defined path through every living organism. This
path is designed to maximize the transformation of energy from its source
into the form of its desired outcomes. Similarly there is a defined path of
energy flowing through an organization and the goal is to maximize the
transformation of energy from its source to its desired outcome.
The purpose of every company is to provide
products and services that are perceived as
valuable and are highly desired by the customers
they serve, as shown in Figure 3. Simply put, the
output of the business-system is the goods and
services that allow us to serve our customers.
To achieve this result, you must transform
energy from a source into the goods and services you provide to the
customer. The source of energy, the starting point for the
transformational process, is the people who make up your company and
who give form and substance to the thoughts, ideas, and ambitions of the
organization. Each person is a source of energy.
Contrary to the view that people are interchangeable, every individual
in The Living Organization® has a unique set of gifts to contribute and a
special role to play. Just as no two snowflakes are alike, no two people are
alike. We have numerous traits that are similar, we have very similar skills,
but we will never be exactly the same. Each person brings a unique
perspective, insight and expression to the work they do, work that is the
transformation of energy in a process we call creation.
Figure 3
The Energy of Business 47
Figure 4
As shown in Figure 4, through the conscious, active release of energy
from people contributing to the common objective, we derive the major
energy source for the transformative process we call production.
If we expect to transform people’s energy into our desired output, we
must direct and focus their free-flowing energy toward a common
outcome. Getting a group of people together to be “active” would produce
a lot of energy but not necessarily a useful result. The transformation of
their efforts into the goods and services customers crave and value would
not occur. Active but unfocused groups produce undirected states of
diffused energy that soon dissipate.
Think of this like a beam of light. A standard light bulb releases
energy into the room that spreads in a highly diffused manner. This is
good if you want to illuminate the entire room. If your objective were to
use the light to cut through a wall, an ordinary light bulb is of little value.
However, when we focus the light energy into a laser beam, we transform
it into a concentrated form of energy which can easily cut through walls.
48 The Living Organization
Figure 5
Rarely do we find groups of people being active for activity’s sake, yet
almost everyone has an experience of a group of people doing things in
uncoordinated, diffused ways. For example, a multinational internet
security company asked us to help improve sales growth. We determined
that the sales team was extremely passionate and fully committed to
achieving their goals, but lacked structure to their efforts. There was a
tremendous amount of contributed energy but little in the way of
organizing their combined efforts. Territory assignments made no sense.
Sales people followed their leads as best they could. There was no well
designed sales process so each sales person created their own. Each had a
different definition of where they were in the sales process and a different
way of forecasting the likelihood of closing a sale. You can imagine the
chaos that swirled around not only the sales team, but the rest of the
organization as well. Sales people were in constant conflict over who
owned the opportunity. Engineering kept getting pulled into “critical”
sales opportunities and manufacturing could not forecast production
demands accurately their.
The Energy of Business 49
High levels of energy are critical but not sufficient. As the example
above illustrates without the structure of appropriately designed business
processes there will be a tremendous energy loss through the system.
Business processes are the energy waveguides coordinating the efforts, the
contribution energy, of our people as shown in Figure 5 on the previous
page.
In a complex system there are multiple groups of living entities whose
energy not only must be directed but integrated with each other’s energy
contribution. In our example above the sales efforts need to coordinate
with engineering and manufacturing. An organization is comprised of
individuals contributing their own energy and of individuals working
together as teams. These collaborative teams exchange energy with one
another to collectively achieve the organization’s goals.
Business processes also serve to integrate the different sources of
energy into one powerful force that can move mountains or cut through
walls. They are designed to integrate the flow of energy from the
marketing group so it is in phase with the flow of energy from sales.
Properly designed processes will mix sales energy with operations and
engineering until a total transformation takes place and the process
creates value. This is how energy flows through the system we call
business.
Though it often feels complex, you can keep everything in perspective
if you understand it simply as flows of energy that come from the efforts of
the people, guided and directed by a common purpose into a focused
source like a laser beam. The internal business processes guide the energy
flow of The Living Organization®, directing, aligning, integrating and
transforming the “people power” into the goods and services desired by
your customers.
However, processes cut both ways. They are critical to coordinating,
integrating and focusing energy and they have a tendency to get bloated
and inefficient. We have all dealt with organizations where the rules of
interaction override the purpose of the interaction. We call this
bureaucracy. We usually associate it with government agencies but our
companies can get bogged down in bureaucratic malaise as well. We have
rules for rules sake. Instead of people making decisions based on
situational conditions, they must follow the policy.
50 The Living Organization
Think of the last time you called customer support for help that
required some deviation from the standard procedure. All too often you
can forget getting any resolution. Even if you go up the chain to the
supervisor, the typical response is, “Sorry sir that is all we can do for you.”
If they are honest they will sometimes say, ‘Sorry sir, this is our policy and
we do not have the authority to do anything else.”
Sometimes our business process is adjusted to incorporate new
situations that have come up from time to time. New rules are laid on top
of existing rules and over time we end up with a series of workflow
processes and rules that makes no sense. We do what we do because that is
how it has always been done. This bloat generates a lot of friction and loss
of energy. Over the last three decades, many companies have attempted to
systematically reduce the loss of energy through the transformation
process. Programs such as Total Quality Management, Six Sigma and
Process Reengineering are all designed to streamline the business
processes used to guide the flow of energy, which reduces wasted energy.
The
Source
of
All
Energy:
Our
People
Maximizing the flow of energy through the system by reducing
energy loss has been the primary focus for organizations since the 1970s.
Some might argue since the beginning of the modern corporation.
However, little was done to address increasing the energy at its source, the
people who fuel the transformation process.
As organizations grow, they add people. This increases the supply of
energy available for the company to transform into the goods and services
for their customers. However, adding people is the least effective way to
increase the amount of energy available. Not only does it add costs such as
labor and overhead, it adds additional complexity since more people
require more coordination.
A better way to increase the amount of energy flowing through the
system is to significantly increase the amount of energy at the source, the
amount of energy contributed by each employee.
The unique quality of people, unlike other sources of energy, is that
the energy people can contribute is infinitely renewable. Humans have
demonstrated that their capacity to contribute energy does not deplete but
can be recharged very quickly. As an energy source, people exhibit
The Energy of Business 51
another unique quality: their ability to contribute energy can actually
expand. Individuals can grow their capacity to contribute increasing
amounts of energy.
This is a fascinating part of this new model – the primary source of
energy, the people within The Living Organization®, can increase their
capacity to draw on a nearly inexhaustible reserve of potential energy.
They are a conduit to an almost endless storehouse of energy, both
physical and mental, and a fountain of creative contributions to the life
and productivity of their collective, corporate body.
I have been involved with a variety of non-profits for over 20 years
and am currently the chairman of two of them. I have always been amazed
by how much energy people who volunteer for non-profits bring to their
efforts. Think about it. These are the same people who leave work drained
and exhausted, feeling the drudgery of their day-to-day efforts to eke out
a living. They leave work and head over to volunteer at their chosen non-
profit. Within the blink of an eye, they are transformed. They become
excited and filled with an energy that is enlivening. Where does that
energy come from? What magical source have they tapped into? Wouldn’t
you like to have your employees apply that same level of energy to their
work to create results for your corporation? In this book and the ones that
follow, you will learn how to create the conditions that open your
employee’s access to that deep well of energy.
We don’t know the limits of human development. We do know that
when people learn and grow, they expand their capability to access and
use energy to contribute to their success. Learning improves our skills,
which allows us to do our task more efficiently. Learning is the ability to
improve one’s effectiveness, the ability to get the desired results with the
least amount of effort. Growth is the ability to increase the amount of
energy a person has available to contribute. People as an energy source
are infinitely renewable, infinitely expandable, and can learn to apply
their energy highly efficiently.
We include “learning” as a critical component of the flow of energy in
our model in Figure 6 on the next page.
There is also, as you can observe in the model, a relationship between
contribution and learning. To learn something, we must accomplish
something we don’t already know how to do. It could be learning to do a
52 The Living Organization
brand new task or learning new ways to do a task we already do but want
to do better. In either case putting forth an effort towards a goal
(contributing our energy) is a prerequisite for learning to happen. As we
said, when we learn we have more energy to contribute to our efforts,
which creates the contribution-learning cycle.
Figure 6
Increasing the energy contribution of each employee is the same as
increasing employee productivity, a common goal in any organization.
Most efforts at productivity improvement have been oriented around
providing energy enhancers or leverage as opposed to creating a
contribution-learning cycle. For example, tools from the simplest
machinery to more complex computers and robotics all leverage the
efforts of each employee, providing greater output for the same amount of
energy contributed.
But too often leveraging energy with tools is where we stop. Learning
and growth represent more than just leveraging existing energy: they
represent an actual increase in the energy contributed. As we said earlier,
growth increases the amount of energy available to a person while
The Energy of Business 53
learning provides the improved skills to use that energy more effectively.
This combination of learning and growth has the multiplier effect of
making more energy available and using it more effectively. And if you
then add the leverage of tools you further multiply the increase of energy
flowing through the system. The end result: more gets done with less.
54
CChhaapptteerr 55
“Prosperity
should
never
be
an
end
in
itself,
but
merely
a
means
to
some
wholesome
purpose.”
Buddha
Profit:
The
Good,
Bad
and
Ugly
The
Need
for
Feedback
Every engineer knows that all systems require feedback to ensure that
they are operating properly. Every working system is designed with a
“feedback loop” to measure actual output, comparing that which is
created to what is desired. This allows the system, and those monitoring it,
to make necessary adjustments.
For business, this feedback loop is the financial system, shown in
Figure 7 on the next page, which we use to measure the successful
achievement of our goals. The financial system is a well-developed system
of metrics that provides insight into business performance. Using the
common, well-understood gauge of money, we have a tangible way to
measure success. If our business is out of balance and not performing in
accord with the marketplace, the gauge of our business system, our
“corporate checkbook” will get out of balance as well.
Proper use of financial metrics can provide critical feedback from the
market and insight into where corrections are needed.
Profit: The Good, Bad and Ugly 55
Figure 7
Without financial systems, companies would be rudderless: they could
not make the necessary adjustments to ensure the system is achieving the
desired outcomes.
Profit is the core metric providing feedback on the performance of the
system, the gauge we rely on to give us critical information on how well
the system is performing. But wait, you ask. We’ve been talking about the
transformation of energy from the source, our people, to the delivery of
goods and services to the market. How does money fit into energy
transformation?
Money is simply another form of energy. Think of how economists
view and work with money. They discuss the supply of money and the
velocity of money in much the same way a physicist will discuss the supply
of energy and the velocity of energy in the system they are studying. In
fact there is a school of economics known as thermoeconomics that uses
the same equations as thermodynamics to understand the economy.
56 The Living Organization
Thermoeconomics is based on the proposition that the role of energy
in evolution should be defined and understood through the second law of
thermodynamics. And such economic criteria as productivity, efficiency,
and especially the costs and benefits (or profitability) should be
understood as various mechanisms for capturing and utilizing available
energy. Thermoeconomists claim that human economic systems can be
modeled as thermodynamic systems.13
Remember, the first law of thermodynamics says that energy cannot
be created or destroyed. In the flow of business, we convert the energy of
the people into goods and services which are purchased by a customer,
who pays for it with a unit of energy we call money. This exchange of
energy, in the form of money, is used to pay our employees and vendors,
whose energy is converted into the energy that represents the goods and
services we sell to customers. The cycle repeats and is the flow that
energizes business.
Figure 8
Profit: The Good, Bad and Ugly 57
The
Nature
of
Profit
Although some consider profit “the root of all evil,” it is anything but
that. Profit is the foundational metric and a critically important
component of the feedback loop. It provides information on the state of
the balance between two other key metrics – revenue and expenses. Let’s
look at profit in a little more detail, specifically its two main components,
revenue and expenses, shown in Figure 8 on the previous page, and see
how when used properly they provide insight and feedback on system
performance towards its goal of serving customers and society.
As we said, selling your product is simply another transformation of
energy, the exchange of the product for payment. The sum of all such
conversions is the metric we call revenue. Revenue measures the
marketplace’s perceived value of our organization’s goods and services.
The higher the perceived value and the larger number of members of the
market that perceive that value, the more energy we receive and the more
our corporate body will grow.
The second component of the profit equation is expenses. Expenses
are simply the measure of how energy (primarily labor and materials) is
used in the transformation into goods and services. Expenses are an exact
measurement of how efficiently energy is transformed on into the
products and services the market perceives as valuable.
Profit is the metric that informs The Living Organization® about the
degree to which the market perceives value in the goods and services we
collectively produce in relationship to the energy consumed to produce
them. Profit equals the sum total of the perceived value of goods and
services less the energy consumed to produce those goods and services.
Without a proper gauge to provide the necessary feedback, a system
can get “out of whack,” oscillate out of control and eventually fail.
However, as important as profit and the rest of our financial system is to
the success of our business, it is only the feedback on the goal: it is not the
goal itself. When the focus turns to money as the goal, our decisions
become oriented towards the maximization of profits without realizing
what drives profit. We lose sight of why we are in business.
Obsessing over profit or viewing it as the Soulful Purpose™ of an
organization’s existence is not only misguided but dangerous. This is
58 The Living Organization
when profit, and dare I say capitalism itself, begins to be viewed as the
root of all our societies woes. The blind pursuit of profit, the desire to
achieve profit for its own sake, is what has caused most of the greatest
calamities we’ve experienced in business and society as a whole
(particularly the near collapse of our financial system in 2009). To achieve
profit at all costs, we employ the skills of financial engineers to adjust the
gauge rather than improve the performance of the operation, often at the
expense of the business itself and society at large.
Knowing I was a long term executive with Hewlett Packard, many
people ask me how I feel about what has happened to HP over the last few
years. I can only answer by expressing the great sadness I feel. While I
have not been involved with the company for over two decades, the
positive impact my time with HP has had on my life and many of the
lessons I learned have laid the foundation for my current success. Beyond
that, HP once stood for something and the employees felt the pride of
belonging to an organization that we considered one of the best
companies to work for. The HP Way meant something deep to all of us
who had the pleasure of working there.
The greatest sadness comes from realizing that its troubles stem from
the company losing its way. It lost connection with its soul, that which
made it the unique being that so many looked up to. How did that
happen? Since I was not with the company during those times, I can only
report from the outside. I observed that the company shifted from
standing for something deep and meaningful to defining itself purely by
profit. Carly Fiorina came in as CEO with her number one goal to grow
the company.
I remember their ad campaign featuring the old garage and the use
of the Tagline “Invent” as an attempt to reignite their original sense of
purpose and meaning, but it was all words and no meaning. The real
message was “we are going to grow for growth’s sake” and they did. Carly
put together a very large merger, which many felt was a disastrous
mistake and which led to a major boardroom battle. Carly won and the
merger happened. It wasn’t long before the company realized that she was
not getting the job done and replaced her.
In came Mark Hurd, who everyone thought would restore HP to its
original glory. At first it appeared he might actually do that. He improved
Profit: The Good, Bad and Ugly 59
the bottom line very quickly and from the outside, looking only at the
traditional metrics of profit, he appeared to be succeeding. Then the real
story emerged. From friends who were still close to the company, I
learned that Mark achieved this, in part, by cutting the R&D budget, the
very lifeblood that made HP great. Traditionally HP allocated 10% of its
annual budget to R&D, an investment that allowed it to fulfill its Soulful
Purpose™ of contributing advances in the fields it engaged in. “Making
valuable contributions to the fields we engaged in” was one of the core
principles in its stated objectives when I was with HP and the commitment
to R&D was the way we demonstrated that commitment. Under Mark, the
R&D budget was cut to less than 2%. He increased profits but what did he
sacrifice?
For me, watching the collapse of this once great icon is like watching
the fall from grace of many of our once great leaders, the lies of the
Watergate scandal leading to the resignation of President Nixon, the
steroid scandals that have brought down so many of our sports heroes,
and the many scandals we have experienced over the last decade in the
business community – Enron, Adelphia, Madoff, to name just a few. Is the
chase for profit for profit’s sake worth the price we pay as a society? I
think not.
How did we get here? If profit is the principal gauge of your firm’s
feedback loop and you as a manager don’t like the reading, you face two
alternatives. One, you can adjust the way you do things and change
course. Or you can adjust the gauge to receive the readings that make you
look good to the outside world.
The later might sound silly—indeed it is extremely silly and even
dangerous—but this is what many financial engineers have helped us do
over the past decade. It can take many forms. Off-balance-sheet financing
employed by Enron is one such manipulation that distorts the indication
shown on the profit meter. Another is the clever creation of credit default
swaps and other financial instruments that cloud our ability to obtain
accurate readings from the gauge. The many finance institutions that
created these clever financial engineering tools like Lehman Brothers,
Bear Stearns, and Goldman Sachs packaged groups of assets and
presented them as valuable. They did so by obfuscating the true
underlying value of the assets while giving a false sense of security to the
60 The Living Organization
asset. This financial engineering improved the reading on our financial
gauge without paying attention to improving the system being measured.
I do not want to imply that all financial engineering is bad. The very
practice began in a sincere attempt to help companies gain access to the
capital they needed to grow and serve their customers. After all the
financial structure of an organization helps firms find the optimal balance
among the many forms of energy they use..
The single most debilitating blow to our corporate society came when
we elevated profit over creating value for customers. This accelerated the
emergence of the dark side of business. “Greed is Good” became the
underlying theme although it was dressed in different clothes: maximizing
shareholder value. As a result, we directed the creative energy of financial
engineering towards adjusting the gauge over organizational engineering
to improve underlying performance.
Ensuring that the investors in a corporation receive a good return for
their investment has always been an important goal for every company.
Without a reasonable return, it would not be able to attract investors to
their company, depriving it of needed growth capital. In the early
eighties, the goal of an organization to “maximize shareholder value”
elevated the bottom line to almost deity status. This is often attributed to
Jack Welch, then CEO of General Electric Corporation, and his
presentation to GE shareholders at their annual meeting. Yet nowhere in
that presentation does Mr. Welch ever say that maximizing shareholder
value is the sole or even key goal for a company. In fact, in a March 2009
interview, Mr. Welch acknowledged that this idea was carried to extremes
when he said, “On the face of it, shareholder value is the dumbest idea in
the world. Shareholder value is a result, not a strategy.”14
Perhaps it was the investment community that decided that what Jack
said meant he was going to maximize shareholder value because that is
what served their purpose the best. Or perhaps it was just the time and
mood of our society that the investor, who by that point in time became
you and me and everyone who had 401ks and mutual funds, wanted to
see our returns grow no matter what.
There are far too many examples of the consequences of this shift in
focus. In 1986 Ivan Boesky was convicted of insider trading. In 1989
Michael Milken was convicted in the junk bond scandal and Charles
Profit: The Good, Bad and Ugly 61
Keating in the savings and loan debacle. In 2001 we had the Enron
scandal, in 2002 WorldCom and Tyco, 2008 brought the revelation of
Madoff’s Ponzi scheme and the collapse of the sub-prime market burst the
housing bubble and led to the great recession. I am not saying that such
misconduct is new to the world of business or any other area of society,
but it is striking how much has occurred since the 1980s when the focus
on maximizing shareholder value elevated profit from a metric that helps
guide our decisions to the ultimate and primary reason we are in business.
Over the last 30 years our society has moved its focus gradually but
steadily away from the vision of the founders of most of our corporations.
Many company founders understand that the true purpose, power and
importance of the company reside in its potential to make valued and
transformative contributions to society. Clearly it is not the purpose and
role of corporations to simply be profit machines.
This shift to maximizing profit as the end unto itself, as opposed to
seeing it as a measure for system feedback, is the fundamental reason why
the word corporation has such a negative connotation, why businesses and
the CEOs who lead them are viewed with such disdain by the media and
government, and why our society is struggling to right the “listing ship of
commerce.”
When I was an executive with Hewlett Packard we, like every
corporation, went through an annual review of our strategy and future
development plans. This review focused on what we could do to better
serve our customers as the primary objective. Profit goals were a critical
metric which we used as a way to know we were achieving our objectives
and generating the resources to fund our growth.
But read most strategic plans today and they will invariably have as
their number one objective, “grow revenues and profits.” And why
shouldn’t they? It is the dominant societal pattern and, as the ocean’s
current pushes the iceberg, the “profit motif current pushes us. It has
become the mantra of our society, “the bottom line of business is the
bottom line,” and who is going to argue against it. It is also very tangible
and easy to measure. Trying to articulate a sense of meaning and purpose
is much more difficult. We all fall prey to the power of the metric.
When I founded Quantum Leaders, I started by developing my plan
for growing the company. When people asked me, “What is your vision
62 The Living Organization
for Quantum Leaders?” I would invariably answer, “To see my company
become a $100 million consulting firm over the next 20 years.” Then a
dear friend asked me a frightening question, “What does it mean to
become a $100 million company?” It stopped me cold. What did it mean?
Was I looking to just have millions of dollars, more money than I
could possibly spend? Was it recognition, fame and glory that I sought?
Or was there some other underlying drive behind my desire to grow a
$100 million company?
Then I realized that the money goal was nothing more than an
indication of the degree by which we would make a difference in the
world. That’s when I understood that my company’s true goal was more
than merely becoming a $100 million company. It was to make a
difference, to articulate a new model that could transform businesses.
I knew that business was where many people spend the majority of
their time. If we could change the way business related to its role in
society, to its customers, and to its employees, we would make a very large
and very real difference. That’s what my life’s journey has revealed to me,
that is why I spent years developing and evolving this model and that is
what this first book is about.
Now when I am asked what the vision of Quantum Leaders is, I say,
“It is to transform business around the world into environments that
support and enhance the dignity of the human spirit as they collectively express this
spirit in service to society.”
63
CChhaapptteerr 66
“And
as
he
spoke
of
understanding,
I
looked
up
and
saw
the
rainbow
leap
with
flames
of
many
colors
over
me.”
Black
Elk
The
Rainbow
Within
Our new perspective for leaders views the organization as a living
system, directing the flows of energies within that body of people and
transforming their collective energy and effort into the products and
services brought to the marketplace.
Figure 9
64 The Living Organization
It follows, then, that two key components for success are to maximize
energy (goods that become revenue) flowing through this living system
while minimizing energy loss (expenses). That is, maximize profits. We
have presented this flow of energy as a single wave, uniform in nature.
Yet it would be more accurate to think of it like the energy of light,
that when passed through a prism is revealed to consist of a number of
different colors, each with its own unique wavelength and frequency.
Like light energy, the flow of organizational energy is a rainbow of
colors. Specifically, in Figure 9 on the previous page we see three separate
waves or fields of energy: Activity, Relationship, and Context, each with its
own discernable patterns, tones and operational frequencies.
Activity
-‐
the
Energy
of
Doing
So far we have described the
portion of the model that consists
of the flow of energy that lies
within the Activity Field. It is the
energy of action, the energy of
“what we do and how we do it.” It
is the energy that flows from
direct effort and the conversion of
potential energy into kinetic
energy or physical activity. This field is observable, quantifiable and
measurable. It follows closely the laws of cause and effect.
Activities tend to be described and executed in a linear, serial fashion
with one activity following another. The time dimension associated with
this field is close to immediate. When we take action, we see the results
immediately.
Since the results are close in time to our action, the corrective
feedback loop is also almost immediate. For example, when you place a
document in the copier and push start, you get immediate feedback about
the desired results. You will either get the desired copy or you will have to
make an adjustment such as remove a paper jam.
A more complex example is a factory line. In a canning factory, for
example, a packing machine loads all the cans onto a conveyor that boxes
The Rainbow Within 65
them for shipping. If a can gets stuck, the belt backs up and cans
eventually fall to the floor.
Observing this situation, an employee can, in a timely manner, stop
the line, remove the stuck can and make sure everything is boxed
accordingly. If you want to box more, you speed up the line or add more
belts. The relationship to what we do and the results we produce is
directly observable and measurable.
Some activities, such as creating a graphic design for someone else’s
approval, have a longer response time. Yet the feedback loop, the time
between action and result, is still close enough to allow for timely
adjustments until the desired outcome is accomplished.
The nature of information contained within the Activity field is linear
and sequenced in a straight cause and effect orientation. Accordingly, the
skills we need to receive, process and interpret this field’s information are
analytical or left brain skills. We usually measure a person’s ability to
succeed in these types of endeavors with such metrics as cognitive and
spatial intelligence or simple IQ tests.
Relationship
-‐
the
Energy
of
Interactions
If Activity is the energy of what we
do, Relationship is the energy of
whom we do it with, the energy of
our interactions. The Relationship
field contains the energy that
emanates from one person
interacting with the energy fields
of other people.
The dominant form of energy
exchange in this field of energy is communication. It includes both what
we say and how we say it. It appears to our brain as both a verbal and
non-verbal exchange. In the verbal aspect, the energy is observable and
processed through our senses, mostly our sense of hearing. In its non-
verbal form, it is not so easily identifiable and observable. Yet the
exchange of energy is still very real and present. We simply process the
non-verbal energy through means other than our five senses. This
information carries more weight in our decisions than the information
66 The Living Organization
processed through our senses. We discussed this in the section on
intuition and “gut feelings.”
Think about listening to a song. In every song, there are the lyrics
and music. The lyrics are the verbal communication, the energy of what
we hear that is processed by the language processing center in our brain.
The music, however, is not processed the same way. Most people
experience it through a feeling state, not the sense of touch but rather
something felt within the body, as if the vibration and rhythm of the music
resonates with and causes our bodies to vibrate at the same frequency. We
process non-verbal communication like this as something we feel in our
bodies.
As another example, think about a time when someone said
something to you that, though you heard the words, the meaning you
experienced was quite different. A common situation is when someone is
feeling upset, you ask them about it and they snap back, “I’m alright,
nothing’s wrong.” While you hear the words, you do not accept them as
true. In fact, you give preference to what you experience from the non-
verbal exchange of energy over the verbal exchange. If the words
contained within the message are in alignment with the music of the
message, then we experience the communication as authentic and
trustworthy. If they are not in tune with our expectations and experience,
however, we will always believe the non-verbal feeling state over the overt
meaning of the message.
Non-verbal communication occurs in all areas of business. In one on
one communication with your customers, employees, and suppliers as well
as in group settings, what you say and the non-verbal energy that carries
the music of your message determines whether the message is received as
authentic or dismissed as so much hype. Simply put, it is not lyrics but the
music that defines the message received.
The Relationship field is not time based. The energy flow is non-
linear in nature and does not follow discernable, cause-effect patterns.
Because it is non-linear, we must draw upon a different set of skills to
process and interpret this information. Instead of the left-brain, analytical
skills so prized in our current business models, Relationship energy is
processed by the right brain. Relationship energy requires our ability to
discern patterns of behavior, their underlying motivations, and experience
The Rainbow Within 67
empathy. We are fortunate that over the last few decades the work of
emotional intelligence experts helped define the skills and characteristics
required to process information from this type of energy.
Perhaps the most well known within the business community is the
work of Daniel Goleman. In 1995 he published the book, Emotional
Intelligence15. Goleman identified four specific skill domains: 1) the ability
to recognize and understand your own emotions, 2) the ability to manage
your emotions, 3) the ability to recognize and understand the emotions of
others, and 4) the ability to manage the emotions of others. Collectively
these four skills give us insight into and a map to improve a person’s
ability to work with their emotions and those of others. It is what
determines one’s ability to work with the energy of the Relationship field.
And as many have come to accept, success is often governed more by a
person’s EQ than their IQ. EQ assessments have become a standard part
of most organizations’ assessment and coaching toolboxes.
Relationship energy adds to the energy of effort, the energy of the
Activity field flowing through the organization. It has the ability to
multiply the sum of all the individual energy contributions.
68
CChhaapptteerr 77
“Coming
together
is
a
beginning;
keeping
together
is
progress;
working
together
is
success.”
Henry
Ford
Synergy
-‐
Multiplier
Effect
We have all heard the term synergy. It is often euphemistically
defined as two plus two equals five. This means we are experiencing the
dynamic increase of the energy in the Relationship field when two people
are attuned to the same energy frequency and the whole suddenly
becomes greater than the sum of the individual parts. As we all know from
our own observations and experiences, synergy is a powerful
phenomenon. It has a huge multiplier effect on the amount of energy
contributed by the collective in direct proportion to their level of
attunement. Unfortunately, it was not easy to create it in our old model of
thinking.
In our current model, we use the concepts of teamwork and
collaboration to spark synergistic energy within our organization. To
accomplish this, we stimulate better teamwork by changing processes,
which is an Activity field effort. Examples of these efforts are the
implantation of new tools such as Knowledge Systems, or through changes
in workflow to facilitate cross-functional team interactions. Both are
designed to stimulate better teamwork by changing processes. Both
however ignore the underlying nature of Relationship energy. In our
current thinking, we believe that Activity drives Relationships, when in
fact it is often the other way around.
An Orange County, California internet infrastructure client was
struggling with their lead conversion rate. They had developed a robust
Synergy – Multiplier Effect 69
marketing campaign to create greater awareness of the new offerings and
to generate additional leads, which they were getting. Yet the sales
organization was complaining that the quality of the leads they were
getting were poor and there was no mechanism to screen out the serious
leads from the “lookie-loos.” We helped create a new process for screening
the leads which included defining a set of criteria that determined a
qualified lead and integrated the communication of leads and lead follow
up with their Customer Relationship Management (CRM) system. We also
implemented a lead administration function to manage the lead
conversion and follow up process. As we tracked the expected progress of
this new set of processes, we found that after three months there was no
change in lead conversion rates. In fact, things were getting worse. The
sales force continued to complain that the leads were of no value and now
marketing was arguing that sales couldn’t close if they provided a lead that
was ready to buy.
The problem was clearly not a process issue. It was a relationship
issue. The VP of Sales did not believe in the marketing department’s
ability to attract good leads and had little respect for the VP of Marketing.
The VP of Marketing felt the VP of Sales was a terrible manager and
couldn’t organize a two-house paper route, let alone lead an international
sales organization. The beliefs each of the VPs held about each other
trickled down to their organizations. With the chaos spinning in the
Relationship field, no change in process or Activity energy would produce
positive results.
Once we cleaned up the relationship issues between these two vice
presidents and their departments, the lead generation process we put in
place increased their lead conversion rate by 57% and improved sales by
32%.
In most companies the Relationship issues are never addressed,
rather they try to make adjustments to the various processes or the metrics
to resolve these issues. When tool and process changes don’t work in the
Activity field, many leaders revert to the fallback position of using the
carrot and stick form of motivation. They begin to play with various forms
of incentive programs with the hope that this will resolve the Relationship
issues.
70 The Living Organization
The problem with this approach is that it is founded on the false
notion that external incentives drive behavior. This is only partially true.
Since incentives are based on metrics and metrics are part of the Activity
field, incentives can only work on activity field issues. In a corollary to the
age old phrase “you cannot legislate morality,” you cannot incentivize
relationships. When incentives are used to motivate behavior when
Relationship needs are not aligned, they are experienced as a form of
coercion. This can lead to an endless expenditure of Activity Energy (and
money) that will never deliver the desired results.
Why don’t incentives work? It’s like using a hammer to strike a deal
or forge an agreement rather than finding a way to tune into another’s
frequency and become simpatico with the other person’s inner thoughts
and feelings. Without aligning the energies of the Relationship field, you
not only lose the multiplier effect of synergy, you also consistently lose
energy through the system as conflict rides under the surface and causes
added turbulence to the flow.
Another approach that is often employed to resolve Relationship
turbulence is to simply tell those in Relationship chaos to get over it and
get the job done. Sometimes this works but not very often. What you
might get is a brief reprieve from the conflict, but it only goes
underground to resurface at a later time, and usually with more force or
with a never-ending round of low level sniping among the team. Either
way the energy flowing through the system is severely limited and the
speed of execution is significantly impacted.
Does this seem too “touchy feely” for you and your organization? Are
you convinced all that matters is the numbers and the rest will take care of
itself? Do you think it is a waste of time and money to open yourself and
the living organism that surrounds you to such flows of empathic energy?
Then consider your own experience with being part of a high performing
team.
Can you remember how it felt when everyone worked in harmony,
where conflicts among members didn’t exist, and everyone was focused on
the same goal? Remember how energized you were, how effortless the
team seemed to produce the desired outcome. It was as if something
magical was happening and the results you produced seemed to be far
above what anyone would have imagined.
Synergy – Multiplier Effect 71
What would it be like to have a whole organization operating like this?
Impossible you say. I think not. It is difficult, even challenging. But if it
can be achieved by single group, it can be achieved by every group. All we
need is the right model that allows us to replicate it. Does this mean you
have to become a touchy-feely leader? Perhaps it is time to put aside any
past prejudices and experience the world around you in ways you never
thought possible. Opening to such possibilities will produce results that go
beyond what you thought was possible for your organization. It will move
your organization to produce magical results like Apple, Whole Foods or
Trader Joes.
Synergy
Explained
No earlier model of management could explain the phenomenon we
call “synergy.” Our new model, with its deeper understanding of hidden
energy fields, solves this problem.
By understanding communications, verbal and non-verbal, as waves
of energy, then as we learned from physics, when two waves are in synch
their energies are amplified. When the waves are out of synch, they are
attenuated or diminished. It is really that simple. When two people
interact, their interactions will be either amplifying their energy or
attenuating it.
When people’s energies are in synch, this is referred to as being in
tune with each other or attunement. When two or more people are
attuned, we experience the magic of synergy. On the other hand, when
people are out of synch, their energies are attenuated. One of the
interactions that create people being out of synch is misunderstood
communication.
Misunderstandings take on many forms and have a number of root
causes. One might be as simple as miscommunication. I said one thing and
you assumed I meant something else. Or I used a certain word that had a
specific meaning to me and you heard what I said but not what I meant.
Interestingly enough, this happens to me quite often because of my
Brooklyn accent. I say “water” and many people hear it more like
“worda.” It creates some humorous times at home as my wife, who is from
Minnesota, tries to figure out just what the heck I’m saying and whether
or not we’re even speaking the same language!
72 The Living Organization
Misunderstandings can also assume deeper, more complex forms.
For example, the listener can clearly and correctly hear what is said but
the meaning received is nothing like the meaning intended by the person
communicating.
I was approached by the CEO of an Internet Marketing company in
California. The CEO was concerned by the degree of bickering among the
executive team. While some amount of conflict was OK the CEO was
concerned that it reached a point of significantly impairing the
organization’s results. From the very first round of interviews it was very
clear that this was more than simple bickering, this was a misaligned team.
This group of executives was not on the same page about anything. The
major conflict originally showed itself as differences between the
Engineering department and the Sales organization, mostly around the
prioritization of the product development roadmap. At first I thought the
issue would be resolved by a simple implementation of a product
prioritization process but it quickly became clear that the issue ran deeper
than that. The CTO seemed to think that the core purpose of the
company was to develop a robust technology platform that would enable a
range of offerings to the SMB (Small and Medium size Business) market.
The Sales Manager, and most of the rest of the organization, felt the core
purpose of the company was to provide marketing services to the SMB
market. The difference is subtle but it goes to the very core of what the
company was about and how it would allocate resources to achieve its core
mission.
How could such a rift exist? The CEO, explaining the mission of the
company, said it was to provide marketing services for the SMB market
and that their competitive advantage was their unique technology
platform that allowed them to scale the services with lower costs than the
competition.
A simple misunderstanding? Perhaps. It is easy to see how each side
could interpret the CEOs comments to support their preferred position.
The CEO, like so many other CEOs, thought that by creating common
goals (Activity field) the team will naturally pull together. It did not.
Without clearing out this misunderstanding, the Relationship field went
into chaos. This rift, this simple misunderstanding prevented the
Synergy – Multiplier Effect 73
organization from being able to execute on anything. It polarized the
organization into camps and nearly brought it down.
In The Living Organization® model, misunderstandings are forms of
energy loss from within the Relationship field. This energy loss can easily
become multi-tiered. The first level of loss we experience is in the simple
act of expending energy to clarify and correct misunderstandings. A
second level of energy loss will arise in terms of feelings towards the other
person, often feelings of hurt, anger, distrust or some other negative or
protective emotion. This directs energy away from our focus on creating
desired results and aims it towards protecting ourselves from hurt,
expressing our anger or frustration with the situation, or simply feeling
drained by it all. Remember how draining it can be to leave a meeting
where people are bickering over what seemed like petty details and
nothing got done? Clearly energy directed to Relationship turbulence is
energy not directed towards the desired outcomes.
In addition to losing energy in the Relationship field we also will lose
energy from the Activity field due to Relationship field turbulence. We
lose Activity energy when we redirect it from the creation of results to
actions required to correct the patterns of distrust. There is also the loss of
Activity energy because of the rework effort required to fix the mistakes
that happened because of the original misunderstanding.
Misunderstandings can produce what we engineers refer to as “a
cascading event” resulting in a colossal failure on our part to conserve
energy and direct it towards the desired outcomes.
Turning the energy loss from a situation into a systemic loss of energy
can further compound the problem. When we have a misunderstanding
that is associated with a person of authority, the feelings we acquire about
that leader are transferred to the organization as a whole. This takes the
form of organizational distrust that negatively affects all our future
interactions with everyone in that organization.
Communication misunderstandings at the organization level have a
doubly disastrous impact on the total energy flow throughout the system
since much more energy must be expended to correct the situation.
We can understand the impact of blocked communication flows to our
organization by drawing an analogy to the how the human body functions.
Think of the damage to the human body when you block the flow of
74 The Living Organization
energy between interacting organs. Parts of the body no longer function
as intended. Any blockage of energy shuts down vital systems and forces
the body to re-route the necessary flow of blood or energy, using up
precious reserves in the process of restoring order to the body. Similarly,
what starts off as a simple miscommunication can turn into major traumas
to your Living Organization®.
The good news is we can reverse the situation and go from
misunderstanding to attunement. Attunement is when the energy,
Relationship and Activity, flows effortlessly among all parts of the
organization, connecting and supporting each other. We have within us
the necessary mechanism and almost all of us have used it at one time or
another, though we may not have consciously known what we were doing.
Most people have experienced a situation where they are so attuned
to another that they can almost anticipate what the other is going to do.
We see this in married couples where one person can finish the sentences
of another or in-tune teammates where one player moves to where the
ball or puck suddenly is passed without a word passing between them.
The famous hockey player Wayne Gretsky was known for his ability to
know where the puck would be and somehow get there right before it
arrived. “Skate to where the puck will be, not where it is,” was how he
would explain it. In business, we see this when one member of the team
can anticipate the needs of the other team members. Ask them how they
knew “where the puck will be,” so they could have what was needed ready
without being asked and they will likely answer, “I just knew.”
In 1996, I joined a technology incubator as the President and General
Manager of one of their portfolio companies. I joined the firm at the same
time as Dave who headed up one of the other portfolio companies. About
six months into my tenure, I was visiting our research facility at the
University of British Columbia in Vancouver, Canada with Fred, the
Founder and CEO of the incubator. During dinner Fred reflected on the
difference between me and Dave.
“I don’t understand it,” he said.
“Understand what,” I asked?
“When I hired you and Dave, I was sure Dave would turn out the
better of the two. During the interview process you came across as a man
who knew his own points of view and I thought you would be difficult to
Synergy – Multiplier Effect 75
manage. Dave on the other hand was very clear that he understood he was
the Captain and I was the General. His role was to understand my
objectives and carry them out. Yet after just a short six months it seems
the reverse has happened. Dave leaves me nothing but nightmares. I tell
him what to do and he seems to do the opposite. It’s as if he doesn’t really
understand what I expect of him. You on the other hand seem to know
exactly what I expect. You have an uncanny ability to anticipate my every
move. You know when to bring an issue to my attention and when you
should just handle it. And it doesn’t seem to follow any pattern. You will
bring me a $200 issue and handle a $200,000 dollar issue on your own.
And the amazing thing is you are always right. It’s as if you are inside my
head and know my every thought. How do you do it?”
How did I do it? A simple answer is that for the first three months I
would watch and observe. I would ask Fred to explain why he was doing
what he was doing so I could discern the pattern of his thinking. I could
begin to see what was important to him and what wasn’t. This is the
beginning of achieving the state of attunement and it goes deeper. It goes
to the ability to allow my Relationship field to resonate with his, which
would allow me to pick up the energy pattern of his thinking.
It is clear from both these examples that some other form of
communication is occurring through a much richer and more effective
channel than mere verbal communication could explain. Heretofore this
could only be viewed as a mysterious force at work, but by recognizing it
as the transfer of energy, specifically Relationship energy, we can learn to
create it and utilize it to our advantage.
In the example above, with this level of attunement between the two
of us, we could operate much faster and much more effectively. The flow
of energy between us was such that we would energize each other. This
exchange of energy between us not only made us more effective, we found
that it also increased the energy flowing through the entire system.
Imagine what would happen to your Living Organization® if you could
create the same impact? How would that increase the effectiveness and the
value of your organization?
76
CChhaapptteerr 88
“It
takes
20
years
to
build
a
reputation
and
five
minutes
to
ruin
it.
If
you
think
about
that,
you’ll
do
things
differently.”
Warren
Buffett
Experience:
The
Driver
of
Perceived
Value
As mentioned earlier, a company’s revenue is a function of the
marketplace’s perceived value of its goods and services. And a component
of that perception is the experience they have with the products, the
people and the organization as a whole. It is the energy of experience,
another critical element of Relationship energy, which has the largest
impact on perceived value.
This is more than just your customer or client’s interaction with your
organization, though those interactions do have a significant impact on
the experience itself. The experience I’m talking about is the energy that
is actually felt by a customer. This energy takes the form of emotional and
psychic responses that gets burned into their brain as your “brand
experience.” It’s what they remember most about your product or service
and the emotional reason they seek it out or avoid it like the plague.
Experience is the energy that lies underneath the activities of
interaction with your people, processes, and products. It provides them
with an unseen but quite real jolt of energy that either repels or attracts
them to you. We can see this in a simple example of buying and enjoying a
cup of coffee.
Experience: The Driver of Perceived Value 77
When you want to buy a cup of coffee, you have many choices, which
can be simplified into two general categories. The first group includes
stores that offer other products along with the coffee like donut shops,
bagel shops, or convenience stores like 7-Eleven or AM-PM. It might even
be your neighborhood McDonalds. The second category would be the
dedicated coffee establishments like Starbucks, Peets Coffee, and the many
single store locations that focus on the coffee experience.
With both categories, you can get the same basic product, whether a
decaf mocha latte or a simple cup of black coffee. My wife and I often
frequent our local Chevron Miles on the Run Mini-Mart and make a 24 oz
cup of decaf coffee with chocolate syrup and steamed milk. What a
Starbucks “Venti decaf mocha with 2 pumps and no whip” for $4.75 costs
just $1.39 at our local Chevron station. Why would we pay over $3.35
more at Starbucks than at the local convenience store? The product,
coffee, varies little between the two locations. In fact, the value of the
coffee as a product, the commodity price, is $1.39. Why, then, is Starbucks
able to charge a higher premium for what is essentially the same product?
It is the “Starbucks Experience.” There is something seductive in what
Starbucks has created that keeps customers coming back for more. The
difference is in the feeling, the experience of being there.
The difficulty in understanding the nature of experience is that it is
not what a person or organization does that creates it, it is who they are
being as they are doing it. Yes, there is personal service when you walk
into Starbucks and order your coffee, but there is also an energy that
emanates from the baristas that serve you. They may say, “Good morning
Norman, your usual Venti decaf mocha this morning?” and it is the
energy they say it with that will create the experience. If they are truly
glad to see me, I will experience their caring. If they have learned to read
a script and their voice is bereft of any true feelings, I will experience that
I am dealing with a robotic machine and have a very different experience.
This creates the Starbucks Experience. When in Starbucks or similar
establishments, you receive much more than a cup of coffee. You are
buying the experience that Starbucks offers. The experience has the
additional value of $3.35.
Most of us make our buying choices based on criteria other than the
just the product we are buying and often are willing to pay more for that
78 The Living Organization
something extra. The Apple experience makes products with average
technical functionality stand out by creating an experience that is more
than the product design or the user interface. It is their whole experience
universe, from the buying experience to the support after sale and their
uncanny ability to reframe the business model for delivery of content.
What about Nordstrom, which set a new standard for the shopping
experience that transcended just the act of buying clothes? Or the
experience of shopping at Trader Joe’s where people experience the
attentive customer service, limited yet quality choices and a sense of
adventure. Or the way the Whole Foods mission of making the world a
healthier place is embraced by its employees, its suppliers, and its
customers, creating an experience of belonging to something more than
just shopping for groceries? Yes, products are important and so is price,
but not nearly as impactful as the experience the customers have.
The fact is, the experience of the brand plays a critical role in most
people’s buying decisions. We said brand experience, not branding or
brand image. Image can be manufactured and promoted. Experience of
the brand is the energy that is associated with the brand, the energy felt by
the customer. It is Relationship field energy, pure and simple. Image and
the act of branding is a form of Activity Field energy that is attuned to the
logical, rational mind. It is not what you say or do that counts. It is the
energy you project in what you say or do that creates the experience that
is felt. Experience is an emotional feeling that cannot be manufactured.
What is felt is the authentic nature of the organization. It is a separate
source of energy, which The Living Organization® can capture and
cultivate through conscious choices.
Years ago my wife had confronted me about my feelings towards
something she had done. I don’t recall the specifics of the issue but what I
remember so clearly was how I tried to convince her that it wasn’t true.
While all the words and arguments I had so carefully constructed should
have convinced her that what she was experiencing wasn’t accurate, it
didn’t work. I even tried hard to convince myself it was true. In the end
what I realized was she was picking up on my true, authentic feelings,
even if I wasn’t willing to acknowledge it, either to her or even to myself.
When I was willing to admit that what she was sensing was accurate we
could then resolve the real issues.
Experience: The Driver of Perceived Value 79
It is like our earlier example of a song with its interwoven music and
lyrics. The lyrics are what we say or do, but the energy of the music carries
the truth of our authentic feelings. The same is true for your organization.
You can spin your message any way you want; however, what the
customers will experience is your authentic being. This is the power of the
Relationship energy. It is a separate source of energy that The Living
Organization® can capture and cultivate through conscious choices.
Perception
produces
margin
In every Living Organization®, your cells (people) and organs (sales,
marketing, manufacturing, etc.) interact with Living Customers and other
Living Entities in the marketplace. Whether it is during the sales process
or the initial contact with a receptionist, there is an interaction and an
exchange of energy. Similar to the discussion on Synergy in the previous
chapter, this interaction and exchange will either amplify the energy and
create a positive experience or negate the energy, creating a negative
experience. Where the Relationship field’s Synergy energy adds to or
subtracts from the contribution energy, the field’s Experience energy adds
to or subtracts from the perceived value the customers place on your
goods and services. And perceived value, in the end, determines the
revenue you receive.
In order to survive at such high densities, the cells created structured
environments. These sophisticated communities subdivided the workload
with more precision and effectiveness than the ever-changing
organizational charts that are a fact of life in big corporations.16
In order to survive at such high densities, the cells created structured
environments. These sophisticated communities subdivided the workload
with more precision and effectiveness than the ever-changing
organizational charts that are a fact of life in big corporations.17
As a simple formula this would be expressed as R = PV = FV+EV,
where R is Revenue, PV is Perceived Value, FV is Functional Value and
EV is the value associated with the experience. Returning to our previous
example of buying coffee, the functional value would be the physical
product of coffee itself. The experience value would be the amount of
value the customer assigned to the quality of all the Relationship
80 The Living Organization
interactions. Starbucks gets an additional $3.35 per cup simply because of
the experience value.
As shown in Figure 10, adding Experience as a mutual exchange of
energy between the customer and the people of the organization expands
the model and furthers our efforts to uncover and understand the path to
creating the magical results we dream of.
Figure 10
81
CChhaapptteerr 99
Life
is
without
meaning.
You
bring
the
meaning
to
it.
The
meaning
of
life
is
whatever
you
ascribe
it
to
be.
Being
alive
is
the
meaning.
Joseph
Campbell
Where
the
Magic
Hides
Context
-‐
the
Energy
of
Meaning
and
Purpose
This is the energy that flows
from doing that which we desire
– following our passion. It is the
“why” of what we do, the field of
meaning and purpose. This field
of energy is mostly un-observable
to scientists today. However, its
presence is strongly felt. It is
what influences and even
determines what happens in the other two fields of energy: Activity and
Relationship. Context makes its presence known through felt experiences,
an energy we feel in our bodies such as the “team spirit” of a highly
functioning sports team or the “esprit de corps” of the elite military
organizations.
To further understand this sensory experience, think of walking into
a room with a high degree of tension. Nothing needs to be said, nor does
anything have to happen, yet the energy of tension can be felt: it is
palpable. It is at this level of “felt sense” that Context energy travels
through individuals and organizations.
82 The Living Organization
Within organizations, the Context field is often incorrectly referred to
as the culture of the organization. It is this but is also much more. Culture
is part of Context but not all of it. Context is certainly much more than the
“do’s and don’ts” we associate with the word culture in our society. It’s
even more than the mores and shared values we spend so much time
dissecting and diagramming.
It’s the sum total of all our shared stories, the mythology we make up
to explain our world to ourselves and to others. As such, it is not
something that we can easily observe or measure but it literally defines
“how we do things around here.” An organization and the individuals
within it cannot behave or operate in ways that are contrary to the
Context framework defining the organization.
One can visualize the power of the Context field if one thinks of it as a
container of water. The water takes the shape of the container, so in
essence the container defines the shape of the water. Similarly the Context
field serves to define the shape, the very nature of the organization. All
behaviors that occur at the Activity field and the feelings of the
Relationship field are likewise defined and limited by the Context field
container.
Ever notice how an organization takes on the personality of its leader?
I worked with a technology company whose founder and CEO had a
strong tendency to avoid conflict. In fact whenever he had to deliver
“unpleasant news” to someone, he usually had his VP of Human
Resources do it. This set the Context field energy into a certain pattern
and the culture of the organization as a collective operated with the same
conflict avoidance attributes. People would rarely be direct with one
another and the ability to effectively resolve differences and issues was
seriously diminished. To change this pattern we had to redefine the
stories that set the boundaries of this Context field container.
The Context Field contains energy associated with meaning and
purpose. It is the energy that drives what is known in today’s business
environment as engagement. When people operate with only Activity
Energy, their level of engagement is low; they are merely doing a job in
exchange for a paycheck. When what they do taps into their own personal
sense of meaning and purpose, they draw on a deeper pool of energy
from their own personal Context field.
Where the Magic Hides 83
At a management workshop I attended I heard the story of The
Three Bricklayers. A man walking down the street sees three bricklayers
building a wall. Curious how these men view their rather back-breaking
work, he approached each of them and asked, “What are you doing?” The
first bricklayer answered, “What does it look like I am doing? I am laying
bricks. I put the mortar down and then lay the brick. I do this every day,
all day long.” The second bricklayer answers, “I am laying bricks to build
the wall of this building.” The third bricklayer answers with a sense of
excitement, “Why, I am laying bricks to help build this cathedral to the
greater glory of god. It is such an honor to have such a wonderful job.”
When you give people a sense that their activities have a deep sense of
meaning and purpose, they will contribute a far greater amount of energy
to their efforts and will “come alive.” They become committed and
passionate and fully engaged in what they do. For people who are
committed and engaged by their passion, the act of doing actually gives
them energy. This is why we commonly refer to such individuals as fully
enlivened.
In an earlier chapter I referred to the energy that volunteers at non-
profits have access to and asked what it would be like if this energy was
available to your company? When I first joined HP in 1973 I joined the
Neely Sales Region as a Systems Engineer. I was with the company about
six months and I could already feel there was something unique about this
company that drew people to want to do more than just what was
expected, an attitude and energy that was in stark contrast to my previous
four years at Pratt & Whitney.
I remember attending my first region sales conference. I sat through
the regular meetings, presentations of new products, reviews of results,
and projections for the following year. I also remember a little sales
motivation game the Region Sales Manager had us partake in. He wanted
to stress the importance of keeping in contact with our customers. Of
course this was long before cell phones and pay phones were a common
tool for the road warrior. He had everyone come up and dip their hand in
a bucket of dimes and whatever you could take out you could keep.
Why did this simple exercise remain with me for all these years? For
one, I was not a salesperson. For another, I was brand new to the
organization. Yet, I was part of this team, a fully accepted member. And
84 The Living Organization
Neely wasn’t just any sales team, our region was the best of the best and I
was accepted into that elite club, not because of anything I did to prove
myself but simply because I was part of the team. This simple act created a
sense of pride, a sense of belonging, and a desire to contribute above and
beyond. There was no way I was going to let my team down.
Was it the simple game of grabbing a handful of dimes? Was it the fact
that I was accepted? Was it that special feeling I experienced just being
part of this organization, the sense of pride, the desire to serve customers
that seemed to be everywhere? Perhaps it was all of that and more. I do
know that the energy I gave during my tenure at HP was far greater than
at Pratt & Whitney. I was not the only one who was that committed and
passionate about what we did at HP. Not everyone was that engaged, but
there were a lot more engaged employees passionate about success than
not, a condition that is often the opposite in many companies.
The
Soul
of
the
Organization
My sense of engagement came from a sense of feeling that what I did
made a difference. I felt that HP was an organization where I could more
fully express what was important to me. I was able to tap into and express
my deeper sense of meaning and purpose.
So far we have been describing the organization as flows of energy.
One can correlate this to the physics or biology of a Living Organization®,
the nature of the different forms of energy and how they flow throughout
the organization. Drawing on the parallel between the corporate body and
the human body, we know that the human body can likewise be described
in terms of its physics and biology, or physiology. But we also know that
there is more to being human than merely our physiology. Similarly, there
is more to an organization than its physiology or physical makeup.
The hidden flow of thoughts, beliefs, and passions are part of the
subtext of living systems, whether individuals or your company. It stands
to reason that, like people who have a deep purpose and reason for doing
what they do, your company also carries within it the energy of its deeper
purpose, the very thing that animates it. The Context field is where this
most critical source of energy resides – its Soulful Purpose™ as show in
Figure 11 on the next page.
Where the Magic Hides 85
Figure 11
Your Company is a Living System that Directs the Flows of Energy, Transforming
them into Desired Results, Fulfilling Its Soulful Purpose™.
All living things come into being for specific and important reasons
defined by this deeper purpose. I don’t believe it is pure randomness that
brings such a variety of energy patterns together to form a particular
living entity, whether it is a cell, a human being or a company.
I believe that energies flow into specific patterns we call life forms for
a very specific reason, a reason that somehow serves Life itself. Whether
this purpose is programmed into us by what some will call God, the forces
of DNA, or the natural flow of an evolutionary impulse, I leave to others
to ponder. What I do know is that an acorn is born to become an oak, a
liver cell serves its Soulful Purpose™ best by becoming part of the liver,
heart cells become part of a heart, and heart and liver become part of the
body. Each living entity takes on a specific pattern of energy that allows it
86 The Living Organization
to effectively serve some purpose, giving that living entity a unique reason
for existing.
Often to accomplish this purpose a single entity draws together with
other similar “like minded” entities to form a collective that enables it to
better realize its purpose. Atoms form molecules, a collection of molecules
come together to form cells, cells form organs and collectively they form
the human body. People come together to form teams, teams come
together to form departments, and departments come together to form
your company. Each comes together based on a shared desire to serve a
common purpose and achieve a common result by pooling their genes,
efforts and energy together to transform that collective force into
collectively desired results.
The desired result we seek to accomplish emanates from the living
entity’s Soulful Purpose™. It is that Soulful Purpose™ that defines every
entity’s reason for being.
It is also an attracting and aligning force. I am attracted to become
part of an organization, a collective of other living entities, because of a
deep-felt sense, conscious or not, that this group will add to my ability to
achieve my personal Soulful Purpose™. To the degree my Soulful
Purpose™ is aligned with the Soulful Purpose™ of the organization I am
with, my actions will further the purpose of the organization as it in turn
furthers my purpose for being.
The Soulful Purpose™ is the core reason for our being and permeates
all other activities and relationships. It is our unique way of being in
service to the world and leaving behind a lasting legacy. It defines and
determines the contribution we are destined to make and how we will
make it. In the human form of energy, the Soulful Purpose™ helps define
from the beginning of our life whether we should become an engineer or
an artist, a dancer or a painter. In its business form, the organization’s
Soulful Purpose™ defines what role that particular company will play on
the stage of business, the unique contribution it will make to our
community as a whole and the market that company can best serve. The
Soulful Purpose™ expresses itself in the Activity field in the form of the
goods and services it provides to the customers it serves and in the
Relationship field in the people who are drawn to work for that company
or buy its products.
Where the Magic Hides 87
Access
the
Wisdom
Whereas Activity is linear in nature and Relationship is oriented
around patterns, the Context Field is holistic in nature. It is not something
that can easily be dissected or examined in pieces. Context most
commonly manifests itself in what may be called “the totality of
experience.” It is also the source of intuition, insights and wisdom.
It is the one field of energy that connects us to all other fields and
their associated patterns of energy. The illustration in Figure 12 will
provide a useful metaphor to help understand the nature of this
connective characteristic of the Context field.
While the iceberg is seen as a separate entity floating within the ocean,
we also know that the Iceberg comes from the ocean and is made of the
same material as the ocean, water. It is the ocean only in a different form.
Figure 12
88 The Living Organization
Like the iceberg we also are immersed in a field of energy that is the
same material only a different form. This field of energy has many names
sometimes referred to as life energy, chi, or our inner spiritual field of
energy. But I think of it simply as the infinite field from which everything
emanates.
Like the currents within the ocean that move the icebergs around
there is a flow to the energy of the Context field. I believe this flow directs
life towards evolution, towards expansion and growth.
There is a flow of energy that guides life to evolve to ever-higher life
forms, towards merging into more complex forms with increasing levels of
awareness and consciousness.
The waves of energy emanating from the iceberg in the illustration
are the waves of Relationship energy. It is the “communication” between
one energy source and another. It is the lyrics and music being shared
between two living entities. There is always information being transmitted
between living entities. In our metaphor it is the energy between two
icebergs as well as the iceberg and the collective field of the ocean.
That is not hard to visualize. Think of the communication you have
with another. The information you are about to share is an expression of
what you are experiencing, your personal Context. This could be an
experience of joy or sadness or it could simply be an experience of some
idea or concept you have. We can return once again to our song metaphor
and understand the metaphor at a deeper level. We know that what you
will express consists of the words and the music of your communication.
The words are the obvious part. They are what you say. The music is the
part of the message that carries the words across the medium, the Context
field that lies between the two of you. You can see that what we often refer
to as non-verbal communication is a lot more than simply body language.
It carries the deeper energy of your Context field, the deeper sense of
meaning and purpose.
I took a communication workshop where one of the exercises was to
communicate a certain feeling to my partner. The feeling was whispered
to me so my partner would have no idea what I was attempting to
communicate. In addition I could only use the phrase “fish jump high and
fly.” The feelings I needed to communicate were first upset, then anger
and finally love. I was amazed at how accurately my partner could pick up
Where the Magic Hides 89
on the emotions I was communicating. It’s as if the state of experience I
was holding was what she was also experiencing. I learnt that though we
depend so much on words it is never the words that carry the real
message. And it also taught me that my inner state, whether peaceful,
calm, agitated, loving or upset, is what is received in the communication
regardless of the words I used. The good news is that I have control over
my state of being.
It is the Context field energy that is the power of the music. It is the
energy that is defined by the vibration frequency the state of being I am
experiencing at the moment. And the more I can fully connect my
awareness to this state of being and authentically project it, the more
accurately it will be received. This is the real definition of authentic
communications. The words and the music are aligned and consistent.
What I am experiencing in the moment is what I authentically share.
We also know information is a form of energy. Ideas and thoughts are
simply another form of energy. A lot of information lies within our
Personal Context field but, unless we learn how to draw on it, it remains
below the surface of the ocean in our unconscious. In addition to what lies
within our Personal Context field, one can imagine the vast amounts of
information that lay within the Universal Context Field. Since we are all
swimming in the infinite Context field then it would follow that we all
have access to the information, the wisdom that lies within it, if only we
could learn to tap into it.
Because of its connective nature, Context provides us information and
insight about our environment that we do not have access to through our
normal information processing centers. The “gut feel” or “intuitive
insight” we often experience in our organizational life is really information
coming into our consciousness from the Context Field. This information is
what we often refer to as wisdom, the ability to understand our world at
deep levels, to see the interconnectedness of all things, and the
implications of our actions.
What makes collecting information from this field of energy different
from all others is that the information does not pass directly through our
senses and is not originally processed by the right or left hemisphere of
mental processing. Rather, it is sensed via our body. It manifests itself as
90 The Living Organization
“shivers up the spine” or “tingling in your toes” and you know you’re onto
something.
Research done by Michael Gershon, chairman of the Department of
Anatomy and Cell Biology at New York–Presbyterian Hospital/Columbia
University Medical Center,18 reveals that our digestive system contains
some 100 million neurons, more than either the spinal cord or the
peripheral nervous system. Emery Mayer, professor of physiology,
psychiatry and bio-behavioral sciences at the David Geffen School of
Medicine at the University of California, Los Angeles (UCLA), has
discovered that about 90 percent of the fibers in the primary visceral
nerve, the vagus, carry information from the gut to the brain and not the
other way around.19
The HeartMath Institute20 explored the physiological mechanisms by
which the heart, also a neurological processing center, communicates with
the brain. This path of communication significantly influences our brains
information processing. Some of the first modern psycho-physiological
researchers to examine the conversations between the heart and brain
were John and Beatrice Lacey. During 20 years of research in the 1960s
and ’70s, they observed that the heart communicates with the brain in
ways that significantly affect how we perceive and react to the world.
Further research by Dr. J. Andrew Armour, one of the early pioneers
in neurocardiology, introduced the concept of a functional “heart brain” in
1991. His work revealed that the heart has a complex intrinsic nervous
system that is sufficiently sophisticated to qualify as a “little brain” in its
own right. The heart’s brain is an intricate network of several types of
neurons, neurotransmitters, proteins, and support cells like those found
in the brain proper. Its elaborate circuitry enables it to act independently
of the cranial brain – to learn, remember, and even feel and sense21.
Whereas Activity Energy is processed by the left-brain and
Relationship Energy is processed by the right-brain, modern research
indicates that the body-brain, the heart-brain and gut-brain process
Context Energy.
In an article written by Dr. Otto Scharmer, a Senior Lecturer at MIT
and founding chair of the Presencing Institute, he states:
“I have spent the past 15 years observing, facilitating and co-leading
change projects in different sectors, systems and cultures. What strikes me
Where the Magic Hides 91
most about these experiences is that the basic problem is the same. It is
that leaders facing problems respond to them by pulling all of the usual
triggers. But more of the same will not be good enough. Leaders and
managers face issues that require them to slow down and even stop; and
then they need to start paying attention, listening, reaching out, listening
more, sensing what wants to happen and reflecting deeply and connecting
to an inner source of knowing.”22
I believe that there is a relationship between the three information-
processing centers of our body. The body-brain picks up information from
our surroundings – the “ocean” of the Context field. This information is
oriented towards a holistic sense, an experience of all that is around us.
The information is first processed by our Heart-brain as felt experiences
and is then passed to our right-brain where patterns are discerned. Those
patterns give form and meaning to our experiences. From there, the
information is presented to our left-brain, where it is sorted, catalogued
and filed away for future reference.
While further research would be needed to prove this hypothesis, it
serves as a working framework that enables us to engage all the
information processing centers of our bodies. The intent, of course, is to
give us greater access to more resources, allowing us to make even better
decisions.
What
gets
measured
gets
improved
As noted, we have learned how to assess our skills and abilities with
Activity Energy. A wide variety of tests, including cognitive skills test, IQ
tests, and motor coordination tests, help us determine our ability to use
logic and spatial orientation, the key skills for working with activity field
energy. Since the mid 90s, we have been introduced to the work of Daniel
Goleman and other researchers in the field of Emotional Intelligence.
Emotional Intelligence (EQ) assesses our ability to relate to others and
ourselves. It is one measure of our skills with Relationship energy.
The next frontier is to expand our ability to assess one’s skills with the
use of Context energy. There are already a number of attempts to
establish a tool that can assess our Spiritual Intelligence or SQ23.
Companies such as Nokia, Unilever, McKinsey, Shell, Coca-Cola, Hewlett
Packard, Merck Pharmaceuticals, Starbucks and the Co-operative Bank
92 The Living Organization
are increasingly using models for developing and measuring spiritual
intelligence in corporate settings24. At Quantum Leaders, we have been
utilizing the SQi Assessment from Deep Change25 with quite remarkable
results for organizations and their leaders in deepening their access to the
Context field wisdom.
Explaining
the
Unexplainable
We know that much of what happens in business cannot be explained
by our existing models, which are based on the machine paradigm. The
machine paradigm views everything through the lens of the Activity Field,
the field of what we do and how we do it. If it cannot be reduced to
actions, tasks and metrics, then it must be that woo-woo soft stuff. While
the soft side of business is acknowledged, it is also easily dismissed as not
as important as what we do or improving how we do it.
For the last half century, business has recognized that the machine
paradigm, which all of our current business models depend on, has had
many limitations. We have attempted to integrate into that paradigm the
ideas of psychologists to improve our overall success, but it never reached
the impact it should have.
Since the middle of the twentieth century we have introduced the
concepts of teams and collaboration, mission/vision/values, strategy
alignment, servant leadership, leadership versus management, and many
other advancements in management theory. These ideas have become
part of the management lexicon, but that seems to be as far as it has gone
in most companies. Rather than integrating and morphing the
fundamental machine paradigm, it became simply ideas bolted on top of
the machine. And the power of the existing system overshadowed any real
change. Even the newest ideas of Corporate Social Responsibility,
Conscious Capitalism and Shared Value,26 are forced to explain their
value using the machine paradigm framework. Even though there is a
large amount of evidence that these new ideas truly make a difference,
they struggle for wide scale adoption. This is because paradigms define
and frame our behaviors and decisions: any ideas outside the existing
paradigm have no ground for existence. These movements have to rely on
Where the Magic Hides 93
anecdotal evidence or “do good for goods sake and it will pay off,” as ways
to stimulate adoption and changes within the organization.
But the path of adoption of any new idea is long and difficult. And
adoption will only begin to happen when the existing paradigm can be
expanded to include new knowledge. When we cannot explain the results
we experience within our existing paradigm, it is basic human nature to
relegate it to luck, magic, the invisible hand, the ether, or the gods. Or we
dismiss it as the workings of the unconscious, something that is equally
beyond our control.
But then someone will come along and create a new model that better
explains what we are experiencing about how life works. With the aid of
these new models, we begin to understand that it is not merely the ether,
but the laws of quantum physics; it is not the wind gods, but the
interaction of physical laws. The evolving theories of psychology and
human behavior better reveal the forces of the unconscious and make
them available to us. Because of these new models, we now have more
control over our behaviors and we have expanded our awareness,
understanding and wisdom.
The Living Organization® is a new model for understanding all the
forces of business and commerce. Understanding the energy fields that
are at play, whether visible or not, helps us to make better decisions and
guide our organizations through turbulent waters churned up by the
forces under the surface of the visible Activity Field; the forces of
Relationship and Context.
What has heretofore been relegated to the unexplainable, the soft-side
of business, is now revealed to be very much part of the hard side of
business. The three energy fields interact with an interdependence that
creates the results we desire.
All
Results
Start
In
the
Context
Field
Back to basics, everything is energy and energy cannot be created or
destroyed. Therefore what we experience as the results in our lives is the
outcome of a process of transforming energy. The Context Field, the field
of infinite possibilities, is the source of all manifestation. It is within the
Context field that the journey of manifestation begins; the process of
94 The Living Organization
moving from the unformed to the formed, from the field of infinite
possibilities to the field of physical form.
Personal and collective context sets the boundary conditions of what is
possible, of what physical formations of energy can manifest. The meaning
and purpose we ascribe to life lies within the Context field, which defines
the boundaries of our world. It defines the shape of the container of our
life, the particular iceberg so to speak.
The first step in the formation process is the translation of meaning
and purpose into our values and our beliefs, which form our individual
and collective worldview, our paradigms. These in turn define the
boundaries of what is possible and what is not possible. Therefore the
boundaries we weave out of the Context field will quite literally define
what we can achieve and what we cannot. It will either propel us forward
or hold us back.
The
Dance
of
Energy
The three fields are in a constant flowing dance of interactions. For
example, we will ascribe meaning to what we observe in the physical world
of Activity which will impact our personal Context field and our Context
field will set the boundaries of what experiences will take form in the
physical world.
Eventually what we create will be the result of the activities we do, but
the activities we do are governed by the relationships we have and both
the activity and the relationships are governed by the context we hold.
If we just look at what we do, our activity, it might look something like
Figure 13.
Figure 13
Where the Magic Hides 95
But almost every activity we do involves interactions with others as in
Figure 14 below. One can view our activities as being held within a circle
of relationships. These relationships will either support our activities or
hinder our efforts.
Figure 14
Just as activity is held within a circle of relationship, both relationship
and activity is held within the container defined by the context field, as
shown in Figure 15.
Figure 15
A client in the information security industry needed to improve its
win ratio on competitive bids. This contract engineering organization had
gone through the process of redoing the proposal process and even hired
a proposal manager to oversee and mange each proposal through the
process. This however did not improve their win ratio. It was not until we
96 The Living Organization
identified the hidden forces restraining their success were they able to
improve their performance.
The specific issue was that their cultural context was rooted in a sole-
source bidding environment. In this environment, the key to success was
their ability to develop the most elegant technical solution to the
customer’s’ problems. This became a source of pride for the engineers and
became what the company was known for.
As they advanced, their environment changed and they found
themselves in more and more competitive situations. They were not
winning because culturally, the engineers could not bring themselves to
do anything less than the most elegant technical solution. They could not
propose a plan that required a tradeoff that would diminish the technical
solution so the proposal could stay within the budget constraints of the
customer. It violated their core belief about what the company stood for.
All the costs associated with the changes to the proposal process and
the salary of the proposal manager was lost, as were millions of dollars in
lost business opportunities. It was not because these process changes were
wrong, but because they were implemented without making the necessary
changes in the Context field to realign the framework that defines what is
possible, thereby allowing the needed process changes at the Activity level
to take hold. Once we had redefined the container of the Context field
their win-ration went from zero to 60% in two years.
It’s
All
a
Story
The pattern of our individual and collective container, our boundary
conditions, is defined quite literally by the stories we tell. We believe what
we believe because of the stories we tell ourselves about how life works.
Those beliefs define the results we can and cannot create.
One simple guideline to examine life and your own successes and
challenges is to know that everything outside of yourself is a reflection of
what is happening inside. I use this framework to examine my own life
and it often helps me discover things I am not conscious of as I do
business.
The year 2010 was financially challenging for me as it was for many.
In March I concluded an engagement with a large client, which left a
serious cash flow shortfall. No matter what I did and I did everything one
Where the Magic Hides 97
would do to create new business, nothing was happening. I was unable to
create the results I wanted.
Knowing that my outside world is a reflection of my inside world and
that activities and results are reflective of the Context field, I started
looking there. I began a process of uncovering and exploring the stories
embedded deep within my own personal Context, the stories that define
my boundaries of what is and is not possible. There were many that
related to money, value and worth and they carried a similar theme, a
distinct pattern: “I am so different in the way I see things and no one
appreciates it.”
Logically, I knew I was appreciated by my many clients and could
prove that I had contributed much value to them. But deep within my
unconscious there was a different story. I felt the value of my
contributions were never really good enough. I knew I had a lot of insight
and understanding, but I also had the story that others couldn’t possibly
understand me and couldn’t appreciate what I contributed. My behaviors
were unconsciously following my inner story. I would be tentative with my
insights, even apologetic for my point of view perhaps being different. It
was the inner story I held that was governing my behaviors and what
prospective clients experienced. With this worldview, is it any wonder that
prospective clients wouldn’t be attracted to me?
At the beginning of 2011, I began to weave a new story. I began to
shift the pattern of the old story and in doing so I shifted the pattern of
energy that defined my boundaries. The process is not one of judging my
story or even trying to change it by will and determination. That would be
like trying to tame a wild horse by whipping it back into a corner. Rather
it is a process of observing and acceptance. A process of becoming friends
with my story, acknowledging what part of it is true and how it has served
me to this point in my life. From this place of compassionate acceptance,
the energy is freed from this particular story pattern, releasing it to form a
new pattern, a new story.
I continue to be attentive to my inner stories, the ones that define my
world and my results. I continue to work with the energy flowing within
my Personal Context to reweave those stories to be consistent with what
serves me best today. While there is a part of this process that is
intellectual, an Activity field process, it mostly requires the skills of
98 The Living Organization
working with the Context field energy. Only by engaging the Context field
can we change the boundaries of what is possible.
This is a personal story and we all have them. But the same is true for
your organization. It also carries deep within the collective unconscious
the stories that define the Context boundaries of what is possible and what
is not. And the same process that has worked on the personal level also
works for the organization. It is a process of first observing and accepting
the collective stories. A process of acknowledging what part of it is true
and how it has served the organization to this point in its life. From a
place of compassionate acceptance, the energy will be released from the
old patterns and allowed to form the new patterns that will better support
what you want to create.
Once new stories redefine the boundaries of the Context field, there is
often a lag time before the results show up in the Activity field. This is why
change is often so difficult, for we are accustomed to the cause effect
relationship of the Activity field. But that often doesn’t apply to the
changes in the Context field.
Because of this it often requires a degree of courage, the courage to
follow your deeper calling and allow life to unfold in ways that are not
always predictable or within our control. I regularly explore my deeper
sense of purpose, my personal Soulful Purpose™ and I clearly hear that
the path I am on is the path I am meant to travel. This path remains my
guiding compass and without knowing what will unfold I am confident it
will yield results. I already sense my inner state of being is fundamentally
different, and it is showing up in my behaviors. I engage people with a
greater degree of confidence. I share my perspectives and insights with a
greater feeling that it really makes a difference. I have begun to have
more conversation with new prospects interested in my work.
As a lover of roses, I accept that roses bloom when the rose bush is
ready. I can prepare the soil, plant the bush, cultivate the roses, fertilize,
weed and water them, but I cannot tell the rose bush to bloom next
Tuesday at 3 PM. The same is true of life. I can weed, fertilize and water
the stories of my Context field and the roses of my life will bloom when
the roses bloom.
My client with the win ratio challenge changed its results by also
weaving a new story about the meaning and purpose of its organization.
Where the Magic Hides 99
When changing our processes does not create the results we want, we
must look at Relationship and Context field energy patterns.
The results we produce start with the stories that make up our
organization’s context boundaries. Reweaving the stories to produce the
required relationships and activities will produce the results we want. Our
next book will explore further the art of storytelling and the power of
reweaving of the boundaries of the Context Field.
100
CChhaapptteerr 1100
“You
cannot
continuously
improve
interdependent
systems
and
processes
until
you
progressively
perfect
interdependent,
interpersonal
relationships.”
Stephen
Covey
The
True
Nature
of
Business
We can now more fully understand the true nature of business. It is
more than a machine concerned with the efficient production of goods
and services to be sold to consumers. It is more than a printing machine
for making money. It is more than the simple organization of human
effort in a beehive of activity.
It is a living entity, a multi-dimensional being brought into life to
create and fulfill its Soulful Purpose™. It is a living creative being born to
make a unique contribution to society.
Business
in
3-‐D
For the last 150 years we have been following the Newtonian view of
business as a machine; a view systematized by the work of Frederick
Taylor and the many management theorists that have guided our
thinking. This is a simple, one-dimensional view of how we create results,
a view that directs our focus on the Activity field of process improvement,
metrics and quantifiable goals.
The True Nature of Business 101
Figure 16
Earlier we described business and the act of creating results as a three
dimensional dance of energy, as in Figure 16 above, of what we do and
how we do it, who we do it with, and the underlying sense of purpose for
why we do it: the Activity, Relationship and Context energy. It is the body,
mind, emotion, and spirit of business, of The Living Organization®.
The rules of engagement change when we see our organization as
living beings that are brought to life to create goods and services that
bring value to those they serve. Rather than the limited view of life as a
machine, we draw from the well of deeper wisdom of how life functions
and we can apply the universal understanding of man’s body and soul to
our previous, inaccurate, model of the “cold, lifeless corporation.”
In Figure 17 on the next page, we compare the attributes of The
Living Organization® with those of “a machine of production.”
Is it any wonder that organizations struggle to implement any real
changes in business? When the Context field boundaries are set to that of
the machine paradigm, no matter what we say or do, we will operate as if
we are running a machine. We might truly believe people are our most
important asset and we might say we are a learning organization, but the
action at the Activity will stay in the boundaries of the machine paradigm.
102 The Living Organization
Figure 17
When we take on the context of a Living Organization®, suddenly our
organization springs to life. We move from life as a set of tasks to life as
creation. We move from doing what we know we can do to doing that
which creates the future we sense is possible and desire to create. We
learn to cherish and nurture our organizations, to honor their purpose
and marvel at their creation. We commit ourselves more completely and
deeply to their survival, growth and lasting legacy.
We increase our ability to guide our organizations when we learn to
work with the energies that flow throughout them and tap into the
appropriate field for each challenge we face.
Creating results like those of Apple, Whole Foods and other Firms of
Endearment companies does not have to be left to magic. This new science
gives us the framework that allows us to release and guide the energy that
creates the magic. We move from the one-dimensional space of the
machine to the three-dimensional space of life and creation.
The True Nature of Business 103
A
Success
Story
One of my professional service clients is a 50-year-old company that
grew over the years through a combination of acquisitions and organic
growth. For the first 45 years, its acquisition strategy followed standard
rules. They evaluated what the target company did, looked at the financial
benefits to the company to ensure it would be accretive, and made sure
that the business processes were integrated post acquisition. They
experienced the same average success rate of most companies when it
comes to acquisitions. Some succeed. Most fail.
In 2001, the company began to transition from the founder to the
next generation of management. By 2005, the company was under the
leadership of the new CEO and his new executive team. They continued
the strategy of growth through acquisitions with one exception; over the
last six years they did seven acquisitions and all but one was successful. Six
out of seven successful acquisitions. What was different?
While they still followed all the traditional activities of fit to strategy,
accretive, and proper due diligence, they approached the process in a
totally different way. In addition to the traditional Activity field issues,
they focused on the Relationship field and the Context field.
They spend time understanding the Soulful Purpose™ of the target
company, why it exists, what creates meaning for the employees and their
customers. They understand the nature of the relationship the target has
with all of its stakeholders, employees, suppliers, customers, and investors,
not the nature of the transaction relationships but the nature of the
relationship: the quality of the interactions it has with its stakeholders.
Under the new management, an acquisition is more like an adoption
than a purchase. They are bringing a new member into their family and
they want to make sure the new member gets as much out of the
relationship as they will. They live within The Living Organization®
model, not the machine of production model.
The
Model
Applied
In The Living Organization® model, the journey starts from the
source, the people, and is transformed into the goods and services the
organization provides its community, the customers it serves.
104 The Living Organization
Figure 18
The people, individually and collectively, are the source and the
conduit for the energy of the Context Field. They contribute this energy
through efforts guided by the business processes, business models and
infrastructure of the organization, all to serve their customers. Financial
systems and other process metrics provide feedback on performance.
People, process, and customers are, always have been, and always will be,
three key domains of focus of every executive and CEO.
Another element that CEOs and executives focus on is – Leadership.
While not explicitly called out in this model, we must recognize that
leaders make up a distinct and important subset of the people. They
perform the critical role of stimulating, directing and coordinating the
flow of energy through the organization.
All the activities of a modern day corporation will fall into one of these
four domains, shown in Figure 18 above.
The fifth element, Financial, is the measuring system. It is the gauge
that allows us to determine the optimal balance between creating demand
for our products and services and fulfilling that demand, represented by
Revenue and Expenses.
Revenue is the measure by which the market values the goods and
services we provide. It is the gauge measuring the demand from our
customers and is associated with Customers and Products. Expenses are a
function of efficient and effective use of energy flowing through the
system and are therefore metrics associated with People and Process.
The ultimate determinant of an organization’s success is how well
these four domains – Leadership, People, Process and Customers – are
optimized and in balance with each other.
Our current paradigm, as I have stated throughout this book, is
outmoded in its ability to achieve this optimization and balance. All we can
see through the lens of our current paradigm is Activity related energy.
When a problem exists within our organization, the solutions we tend to
implement will typically be within the Activity Field alone.
The True Nature of Business 105
Figure 19
While Activity energy and the changes we make to affect it are an
important part of any solution, we must tap into the other two fields to
achieve results. To open the lens wider and view a broader, more effective
range of solutions, we must take into account how Relationship and
Context energies play into our current challenges and what they might
offer to provide a more complete and effective solution.
Let’s expand our view of these four domains of The Living
Organization® by looking at the kinds of issues each Energy Field
addresses within the four key domains of business: Leadership, People,
Process and Markets.
Activity
Figure 19 above shows the activity characteristics of each of the four
domains. In the domain of Leadership, Activity energy defines the
traditional role of management. This includes the functions of setting
goals and targets, planning what needs to be done and organizing the
work to get it done. It also includes the function of controlling the work,
which includes establishing the metrics that define success and guiding the
people’s behavior in the organization. This is the activity of making sure
that what needs to happen is happening.
Activity energy is the actual efforts of the people within the
organization. It is where all potential energy is converted into kinetic
energy, where the contribution energy is manifest. To be effective in the
conversion of potential energy into kinetic energy and to maximize the
contribution made by all, it is important to develop and improve
functional and technical skills of the individuals and the collective
organization. This is what determines how efficiently energy is converted
into performing the tasks necessary to create the results.
106 The Living Organization
Process is where we define the way the energy will flow throughout
the system. It is where we define the tasks that need to be done and the
order in which they should be accomplished. The goal of each Process is
to make the flow of energy as frictionless as possible so there is minimum
energy loss as the energy travels along its path to be transformed into
goods and services. It is where we determine and define the underlying
business model for the organization as a whole and the metrics that
provide appropriate feedback for the amount of energy flowing through
our organization, allowing us to monitor and improve our process. Over
the years we have spent a lot of time and developed a number of methods
and tools to help in the streamlining of business processes. Business
Process Reengineering, Total Quality Management’s Continuous Process
Improvement efforts, Lean Manufacturing and Six Sigma are some of
those tools.
The customer domain is where the actual Activity of exchange
between the company and the customer takes place. It is where the
parameters of success are determined. It is where we find out how well the
organization understands and provides solutions to the needs of the
customers they serve. This is where the organization decides what
products and services to provide to serve specific communities. It is where
the successful fulfillment of its goal can be measured, where value is
transformed into revenue.
Relationship
The Relationship field, in Figure 20, adds another layer of complexity
to the challenges and opportunities for creating the balance between
demand and fulfillment, between revenue and expenses.
Figure 20
The True Nature of Business 107
The key attribute for leaders in the Relationship Field is their ability
to build teams and foster collaboration among individuals and groups.
In the area of People, we are concerned with interpersonal skills and
each individual’s ability, as individuals and in collective groups, to
communicate effectively, listen to, and empathize with others.
To define the flow of energy through any system, we have to take into
account the interplay of energy flow from one component to another. We
not only focus on the energy flow within the various functions of sales,
marketing and operations, but we also pay attention to the way the energy
flows between and around those units. For Relationship in the Process
domain we are concerned with how the organization is designed to
facilitate effective communication and information exchange between and
among operational units.
The Relationship with the outside world focuses on our brand, our
reputation, our relationships with our customers and our suppliers and all
of the organization’s constituencies. It even includes our relationship with
our competitors, for they too play a key role in our failure or success.
Context
The Context field underlies all this as in Figure 21. It molds and
guides what happens in the other two fields of energy. It defines what is
and is not possible in the other two fields. It is one of the most critical
fields of energy to learn how to work with because it is the structure that
holds the other energy fields.
Figure 21
108 The Living Organization
To stimulate the energy of the Context Field, leaders need the skill of
inspiring and motivating others.
This is not a process of cajoling or manipulating but rather the ability
to reach deep within others and engage what is meaningful to each. It is
the ability to raise the level of passion, commitment and engagement in
others that creates the additional energy available to The Living
Organization® as a whole. This deeper sense of connection comes when
what is meaningful to them is connected to what is meaningful to the
organization. Their personal Context field energy is attuned to and
stimulated by the flow of energy from the organization’s Context field.
Leaders stimulate this connection by the stories they tell. Stories about
why the organization exists, stories about the difference the organization
makes, and stories about what is important around here all serve to set the
boundary conditions of the Context field. You can determine what an
organization’s Context is by listening to the collective telling of their
stories within the organization.
To maximize people’s ability to contribute the greatest flow of energy
requires developing their intrapersonal skills, as well as their interpersonal
and functional skills. This enhances everyone’s ability to gain a deeper
understanding of their internal drivers: what motivates and sparks their
passion. When individuals are capable of working for reasons other than
mere survival, their level of energy contribution goes up exponentially.
This correlates with Maslow’s Hierarchy of Needs in Figure 22 on the
next page. Maslow’s first level is physical and survival needs. This
correlates to the Activity field, the work that needs to be done to ensure
the organization can create and deliver its products and services, have
enough resources and know it will survive and sustain itself.
The second level of Maslow’s hierarchy addresses the social needs.
This is supported by the Relationship field of the organization’s
interactions with its customers, it suppliers, and even its competition. It
addresses the organization’s need to know where it fits in the social order
and its sense of connectedness.
The Context field relates to Maslow’s higher order needs of Self-
Actualization. It represents the organization’s need to be and do that
which it was “born to do,” to fulfill its Soulful Purpose™.
The True Nature of Business 109
The Context field is where we focus our building process to create the
culture that moves and engages people. Culture is “the way we do things
around here.” It’s reflective of the true, deeply held values of the
organization, which may be very different from the espoused values we
see hanging on the walls. This is the field from which the energy of the
Soulful Purpose™ arises to infuse and give life to the whole living body of
people we refer to as our corporation.
Communities of customers, like organizations, are also living entities
we call markets. Like all living entities the dynamic forces of the Context
field impact markets and the market’s Soulful Purposes™ drive the trends
and direction of market movements. The better organizations can
understand these dynamic Context field forces, the better they will sense
the markets’ directions and be able to provide solutions ahead of their
competition.
Figure 22
110
CChhaapptteerr 11 11
The
only
thing
we
know
about
the
future
is
that
it
will
be
different.
Trying
to
predict
the
future
is
like
trying
to
drive
down
a
country
road
at
night
with
no
lights
while
looking
out
the
back
window.
The
best
way
to
predict
the
future
is
to
create
it.
Peter
Drucker
Putting
it
all
Together
Here we are again, our annual strategy retreat. As we begin to file into the room,
each of us is filled with some excitement but mostly skepticism. How many of these have
we been to? At first we thought this was a great idea but after the last five years, I think
we have become somewhat jaded. They all seem to be the same. We start with a series of
exercises to create some sense that we are all a cohesive team, followed by the sharing of a
bunch of data, from which we are then led into a series of discussions to decide what our
strategy should be.
Okay, the exercises are fun and we do learn something about our teammates. The
review of the data does provide some useful insight and we do usually come up with some
good ideas about what direction will give us the maximum results. Perhaps the best of
these sessions is when the facilitator actually documents the results and produces a plan
with specific initiatives with people responsible for them. But in the end, it always ends
the same. We go back to our daily responsibilities and within the first quarter the plan is
almost forgotten, that is until a year later when we get together to plan our strategy for
the coming year. Then we realize how little we managed to get done since our last
strategy session.
This vignette illustrates a common theme we experience with clients,
independent of size or industry. In fact a number of studies show that 90%
of strategies are never implemented. Strategy planning is a lot like New
Year’s resolutions – great ideas, poor implementation.
Putting It All Together 111
The problem is that companies put most of their focus on defining the
right strategy and less attention to executing the strategy. Companies
decide which strategy will provide the most competitive advantage given
its unique strengths. They collect a lot of information about the market,
the competition, and the needs of the customer. Then they decide which
market positioning and branding to choose. They research the Voice of
the Customer to understand what their needs are and what products
would best satisfy them. They utilize strategy decision models such as
SWOT analysis, Scenario Planning, and Delphi Analysis to anticipate the
future. They use strategy-positioning tools such as Blue Ocean Strategy,
Porter’s Five Force Analysis, Environmental Scanning and War Gaming.
Missing in all of these methodologies is the need to execute the
strategy. Yes, it is critical to define the most effective strategic direction,
which when executed, will establish you as the leader in your industry.
But to state the obvious, a mediocre plan well executed will outperform an
outstanding plan poorly executed. We have seen over and over again very
brilliant plans poorly executed. In fact only 10% of companies know how
to execute well since 90% fail to execute on their stated objectives.
A
New
field
–
Strategy
Execution
I once heard David Norton share a conversation he had with Renee
Mauborgne, both giants in the field of strategy. David is co-author with
Robert Kaplan of the world-renowned book The Balanced Scorecard; and
Renee, with his co-author W. Chan Kim, wrote the international best
seller The Blue Ocean Strategy. Renee asked David why The Balanced
Scorecard is so much more popular, which took David by surprise.
“Renee,” David responded, “how can you ask that when you have sold
many more copies than we have?”
“Yes but wherever we go, The Balanced Scorecard is the most widely
used system for strategy.”
David thought a minute and then responded, “Renee, that is because
you are swimming in a red ocean of defining strategy, while we are in the
blue ocean of executing strategy.”27
Strategy is often thought of as a noun; we have a strategy, here is our
strategy, our plan. But strategy is really a verb, a set of actions to move the
organization to a new way of being. Strategy is execution; it is a process of
112 The Living Organization
executing a set of initiatives that will get you to a desired outcome. Like
the process of growth and development of individuals, growth and
development of an organization is determined by the contribution–
learning cycle we presented earlier in the book. Execution is synonymous
with developing the organization. It is the process of taking actions
designed to help the organization grow and develop to better serve the
customers within its defined communities. It requires the holistic
development of the organization to maximize the flow of all three fields of
energy: Activity, Relationship and Context.
Execution Management is a process of managing the set of actions
that will develop the organization’s ability to perform and create its
desired outcomes. As with many other processes such as project
management, new product development and quality, execution
management will be enhanced by a formal methodology. Without it, we
are left to trust in the unique abilities of one or two leaders who have over
time developed the intuitive ability to guide the organization through its
execution process. This is like the early days of managing projects when
successful project management required the skills of an “artisan” in
project management, or the days before the quality movement where high
quality was hit or miss. Both of the disciplines recognized the value of
formal process and defined skills that would ensure the organization can
systematically improve quality and ensure projects were accomplished on
time and on budget. The same is possible for creating an Execution
Focused Organization™.
Many studies have shown that organizations with a formal strategy
execution process in place dramatically outperform organizations without
one. In one study by IDC Research28, 75% of those companies rated “most
competitive” in their industry used a formal performance management
methodology, compared to only 43% who were rated least competitive. In
a similar study done by the Balanced Scorecard Collaborative Research, of
those companies that outperformed their competition 70% followed a
formal process and only 27% operated without a formal process29.
Strategy
Execution
3.0
How and why did strategy become part of our management
processes? Strategy can be traced back to the earliest days of military
Putting It All Together 113
operations. Sun Tzu’s book, The Art of War, which dates back to the second
century BC, is still considered by many as required reading for military
and corporate leaders. But strategy did not become a formal part of
leadership’s role until early in the 20th century.
The first formal strategic planning for business was the Harvard
Policy Model introduced in the 1920s. The main purpose was to help a
firm develop the best fit between itself and its environment, to develop the
best strategy for the firm. One of the major tools that came from this
model was the well-known SWOT analysis. This could be considered first
generation execution management.
Second generation execution management entered the scene around
1970 concurrent with the recognition of the importance of involving and
aligning all the people in the organization. Policy Deployment or Hoshin
Planning is a strategy management methodology based on the work of
Professor Kaoru Ishikawa in the late 1950s. It is designed to use the
collective thinking power of all employees to make their organization the
best in its field. Hoshin planning added the importance of “cascading
goals” throughout the organization to achieve focus, involvement and
accountability in the strategic planning process.
In Figure 23 on the next page we see a second contribution to the
strategy management methodology from The Quality Movement of 70s
and 80s. Management used the Deming Cycle as a decision process for
managing strategy implementation.
I consider the breakthroughs of Norton & Kaplan in The Balanced
Scorecard as the pinnacle of second generation execution management.
I began working with The Balanced Scorecard in early 1993, shortly
after it came out. Since I believed strongly that organizations are holistic
systems and “what we measured is what we got,” it seemed a natural fit.
As I worked with it though, I felt it was not addressing all of the forces
operating in support of or in opposition to an organization’s ability to
execute. While it was a significant breakthrough, it quickly revealed its
shortcomings to me.
I discovered that it was still rooted in the traditional left-brain, cause-
effect orientation of the Activity field. It focused on what an organization
does and how it does it. It did not include metrics for improving the
Relationship field or the Context field nor did the methodology have any
114 The Living Organization
explicit way to factor in the interdependent relationships of the three
fields.
As Sir Isaac Newton once said, “If I have seen a little further it is by
standing on the shoulders of giants.” I could only discover The Living
Organization®, The Arc Framework® and The Real Time Execution™
System (RTE-S™) because of the work that has come before. Those who
are familiar with The Balanced Scorecard (BSC) will have already noticed
similar elements in The Living Organization® model.
We kept the four major activities all businesses need to manage –
Financial, Customers, Process and People – and then advanced the body
of knowledge. By seeing an organization as a living entity driven by the
forces of Activity, Relationship and Context, we bring more of the process
of creating results under control.
For example, in the BSC model Learning & Growth lumps Human
Capital, Information Capital and Organization Capital together. In The
Living Organization® model, each element has its own place so companies
can properly evaluate and appropriately define and manage improvement
initiatives.
Figure 23
Putting It All Together 115
Management today orients itself towards one of three major schools of
thought when setting up a decision framework. These are:
Quality Management: “A management approach, centered on quality,
based on the participation of all organization members, aimed at long
term success through customer satisfaction and benefits to organization
members and society.30”
Shareholder Value: “The Shareholder’s money should be used to
earn a higher return than they could earn by investing in other assets with
the same amount of risk31.”
Performance Management: “A framework that translates an
organization’s strategy into a set of objectives and measures and aligns the
organization to them through its planning and control process32.”
(Balanced Scorecard falls into this category)
Just as the four perspectives first introduced in the Balanced
Scorecard are interdependent and one cannot take precedence over
another, these decision-making models are equally interdependent. It is a
mistake to assert that one is the dominant theme an organization should
adopt for success. All three, quality, value creation, and performance
management, are equally critical to the success of an organization. If you
choose one over the other you run the risk of focusing your efforts on
maximizing that dominant theme and potentially losing sight of the
importance of the other two. It would be like a doctor focusing only on
exercise and ignoring diet or lifestyle choices. In the long run if all three
decision frameworks are not properly managed as interdependent parts of
a whole system, the organization will sub-optimize its performance.
The Living Organization® model brings these perspectives into a
single model. By seeing all results as a process of the transformation of
energy, we integrate all activities to balance and maximize the flow of
energy. We simultaneously maximize the quality of products and service,
customer experience, employee experience, shareholder value, and our
relationship to the environment whose resources we use. No one element
can be out of balance if we are to achieve maximum results.
The final area we improved on is the inclusion of the three fields of
energy: Activity, Relationship, and Context. As we discussed in the
previous chapter, The ARC Framework® provides a way to identify the
116 The Living Organization
forces driving success and the forces hindering success. If we return to the
force field analysis discussed in Chapter 1, we can see in Figure 24 below
the benefit of identifying an organization’s strength and weakness in each
quadrant.
Whether you use force field analysis formally or not, you inherently
always look to maximize the driving forces and minimize or eliminate the
restraining forces.
This is the foundation of how strategic initiatives are decided. But
what if you are not aware of some forces? Does that mean they are not
operating?
Of course not, it only means that you cannot take any action to utilize
them or minimize their negative impact. The result is that you will spend
time and money to implement initiatives, usually Activity field initiatives,
only to miss your schedule and waste resources as the unseen forces
impede your progress.
Figure 24
Putting It All Together 117
Of course not, it only means that you cannot take any action to utilize
them or minimize their negative impact. The result is that you will spend
time and money to implement initiatives, usually Activity field initiatives,
only to miss your schedule and waste resources as the unseen forces
impede your progress.
Strategic
Planning
is
Dead
–
Long
Live
Strategy
Execution
We opened this chapter with the classical vignette of the traditional
strategic planning session. The current approach for defining where an
organization is going and how it will get there – the ubiquitous Strategic
Planning Offsite meeting – can no longer produce the desired result.
Figure 25
118 The Living Organization
Why? In our dynamically changing world, the environment at the end
of our planning horizon is not likely to be the same as the environment
when we did the planning. The world that was once fairly stable, the
world that gave rise to the strategic planning process, is not the world we
live in today. The chart in Figure 25 on the previous page summarizes
and illustrates many of those changes.
Clearly we operate in a world where the level of complexity has
increased, as has the reach of our interactions. Our markets are broader
and our customers are more sophisticated and demanding.
The speed of change has increased, as has the speed of
communication. Competition can spring up from the most unlikely
sources.
Who would have thought that Apple would compete with and
threaten the record industry?
For most of the last century, the standard practice was to set a
planning horizon, illustrated in Figure 26 below, usually 3 – 5 years, and
define the desired outcome for that point in time. Under traditional
wisdom you set your time horizon, you define your strategy plan, and
hold to it so that you can focus on executing. Then 3 to 5 years later you
redo the process.
Figure 26
Putting It All Together 119
This approach was extremely viable during the first half of the 20th
century primarily because the environment at the end of the planning
horizon would be very much like it was at the beginning. A relatively
stable environment provides an illusion of predictability and the ability to
control our destiny. It looks like we can decide what we want and how to
create it. By knowing how results were created in the past, we can pretty
much plan how to create results in the future. We can set our plans and
then execute them.
This began to break down during the latter half of the 20th century for
the reasons illustrated in the table. The first decade of the 21st century has
revealed very clearly that any such time-based approach to planning is no
longer viable. We can no longer rely on that predictability and its cousin,
control, to produce success.
Instead we need an approach that creates responsive interaction of
the organization with its environment; when the environment changes,
the organization changes naturally in response. Instead of predict and
control, we must learn how to sense and respond.
This is how all organisms live and thrive and The Living
Organization® model simply reflects how natural living organisms operate.
The diagram in Figure 27 shows the shift from a time based approach
to a more fluid and responsive real time approach of integrating planning
with execution.
Figure 27
120 The Living Organization
Start
with
a
Compass!
While I believe that Strategic Planning is dead, I do not believe that
setting a strategic direction is dead. The critical objective of all strategic
planning is to establish the direction the organization will head. Without a
clear understanding of where we are going, any path will get us there.
It is impossible in today’s world to give people a clear map of how to
get to the desired destination. For a map to work, the mapmakers need to
have a degree of certainty about the territory that will be navigated. With
the level of complexity and frequency of change happening in our world,
no one individual or even an entire executive team can be that prescient.
The only workable solution is to provide every cell in our living
system, the people of the organization, with a clear set of guidelines for
making decisions on a minute-by-minute basis. We call that framework the
Strategic CompassTM. It has three components for setting a Context: the
Soulful Purpose™, Vision of the Future and Core Values.
The original intent of Mission/Vision/Values was to achieve the very
thing we have been discussing. The idea was to have a well-defined
Mission/Vision/Value to deeply engage all employees, to energize and
motivate them and to have a force that draws them into the future like a
magnet. But most of the current efforts to achieve this have fallen far from
this goal. The major reason is that most companies develop
Mission/Vision/Values statements from an Activity perspective. Here are a
couple of representative samples of mission/vision statements.
“We supply technically innovative software and hardware solutions to the OEM
computer market that provide long-term benefits to our customers and our investors.”
“To become the number one produce store by selling the highest quality, freshest
farm produce, from farm to customer in under 24 hours on 75% of our range and with
98% customer satisfaction.”
“To be the best developer of accounting software and grow our revenue by $255
million over 5 years.”
Do you feel energized by such statements? Are these going to engage
you and draw out a deep sense of passion and commitment to the
organization’s mission? My guess is that for most of you the answer is no.
Statements like the ones above will never accomplish this. The simple
reason is these speak mostly about what you do, the Activity field energy.
This will generate some focus but only the energy of the Context field has
Putting It All Together 121
that magnetic, energizing quality. Inspiration is not an activity we do; it is
a connection with a deep meaningful reason for why we do what we do.
Certain companies have developed Mission/Vision/Values statements
that are truly energizing. They have a clear sense of why they exist at their
core. Their vision is a visual picture of what their world looks like as their
Soulful Purpose™ unfolds and is more fully realized. Their Core Values
are truly used to guide their behaviors. And they are not mere plaques on
the wall but are felt deep within the whole corporate body. It is the
“music” of the organization.
Soulful
PurposeTM
Understanding an organization’s Soulful Purpose™ is not a simple
matter of defining what we do and for whom. Rather it is connecting with
the very essence of why the organization has come into being. This is
somewhat easier to do during the startup phase. After an organization has
been around for 10, 20, 40 or 100 years, it is easy to lose sight of why it
exists.
One tool we use to help organizations discover their Soulful Purpose™
is to ask the “It’s a Wonderful Life” question. Many people have seen the
classic movie traditionally shown around Christmas in the United States. It
stars Jimmy Stewart, who feels his life is useless and meaningless. He is
shown by an angel what the world would be like if he was not in it. At the
end he discovers his life does have meaning and purpose and he knows
the unique gifts he is meant to bring.
Like people, all organizations have a unique meaning and purpose
that you can discover by asking the question, “What would the world be
missing if this organization didn’t exist?” The answer will emerge as a
series of stories that you want to capture. Do not try to create a “mission
statement” and do not turn the Soulful Purpose™ into a simple plaque to
be hung in the lobby of your organization. Rather capture and
communicate the richness that lies in the story that conveys why the
organization exits.
Context field is a high-energy field that is given form by the stories we
tell. Your Soulful Purpose™ is captured by the stories you and others
within your organization tell of how you contribute to your customers and
the way those stories move people. Here are a few examples.
122 The Living Organization
A company that developed flight control systems for the F-14 was having an all-
hands meeting. A pilot in full flight suit walks in and is introduced as a Navy pilot just
back from Iraq. The pilot shared how he was flying a mission over northern Iraq when
his plane was hit. He stood before all the employees today because of the work each one of
them did. If it wasn’t for how perfectly that company’s flight control systems worked, he
would never have made it back to the ship. He was alive today because of what they did
every day, each and every one of them.
An engineering services company that tests products to ensure they are performing
within specs does work for aerospace firms, the Department of Defense, the automotive
industry, and the telecommunications industry among others. In preparing for a
presentation to Boeing, the COO realized how many of the Boeing suppliers they have
supported. In fact he discovered that 80% of products used in the new Boeing 787
Dreamliner passed through their labs. As he visited each facility to share their strategic
direction, he shared this story. He then added, “You can rest assured that when you, your
family and friends fly on the new 787 Dreamliner, they will come home safely because of
the work each of you do.”
A friend of mine who used to work at Edwards Lifesciences shared this story with
me. Edwards sells heart stents among other medical devices. Stents are devices that are
used to keep collapsing vessels open to allow the flow of blood. To ensure that everyone in
the organization knew the real reason they existed, the CEO would periodically bring in
an individual who has one of their stents. As he toured the former heart patient through
the facility he would introduce him or her to the employees in various departments. Then
he would turn to each employee and say, “The work you do saved this person’s life. Never
think for one moment that what you do is not important or that you do not make a
difference.”
These examples are just a few among thousands out there. Every
organization exists to do more than make money, increase market share,
or be the best in their field. The do more than just sell goods or services to
customers. They make a difference. They have a Soulful Purpose™.
What’s yours?
The
Mission
Many think of the mission as the same as the purpose. Perhaps I am
splitting hairs but I think it is important to differentiate the Soulful
Purpose™ from the Mission of the organization. The Soulful Purpose™ is
Putting It All Together 123
the core reason an organization exists, this defines the unique
contribution it is meant to make and it is the foundation on which the
stories that define the meaning and purpose of organization are built.
Any particular purpose can be expressed in many different ways. For
example, I might have the sense of purpose to help green the planet. I
can choose many paths to contribute to this purpose. I can decide to join
in the efforts for reforestation of the planet’s rainforests. I can decide to
focus on the creation of urban greenbelts and parks. I can choose to build
nurseries that focus on helping people create private gardens. All of these
are viable expressions of the Soulful Purpose™ of greening our planet.
Each company not only has a particular Soulful Purpose™, it will also
choose a particular mission that allows it to express that purpose. Soulful
Purpose™ is why we are doing what we are doing and the Mission is how
we express our purpose.
Future
Vision
Once you clearly know why your organization exists and what
contribution it is meant to bring into the world, you can ask the question,
“What would the world look like in 3, 5 or 10 years if your Soulful
Purpose™ was more fully realized?” Again, this is different than the more
common vision statements that we see hanging on the walls of corporate
lobbies, the ones that say it is our vision to be the best, the biggest or the
leading company in our industry.
The future vision is a story, one that is imagined, dreamed, and
created out of a collective desire to see it become so. Remember,
everything is energy, the table is energy, the chair is energy, and your
computer is energy.
A tree is energy, you are energy, and your company is energy. The
difference between energy in the form of a living organism versus other
forms of energy is that living organisms transform energy – they create!
The difference between viewing your company as a Living Organization®
versus viewing it as a machine of production is that machines do not
create, they merely produce.
When organizations create as an expression of the Soulful Purpose™,
they experience a flow and ease to their efforts similar to the ease and flow
124 The Living Organization
individuals experience when they create the results they are meant to
create. It feels as if they are effortlessly manifesting magical results.
The future vision is the story of your Soulful Purpose™ unfolding.
When defining the picture of the future, it is useful to look at the whole
corporate body. You can approach this by asking, “When our Soulful
Purpose™ is more fully realized, what will customers experience, what will
our people experience, what is the nature of our leadership team, how will
we operate, and what will be the measurable results?” In other words
define each element of The Living Organization® – Leadership, People,
Process, Customers, in each of the three fields of energy – Activity,
Relationship, and Context.
Core
Values
Core Values are those deeply held beliefs that are inviolate. Though
behaviors may not always be in accordance with them (organizations are
only human after all), the organization is fully committed to stand behind
them. It is important to establish your Aspiration Core Values. This is
likely to be different from your actual lived core values and this is
absolutely perfect. As with the development and growth of individuals, an
organization must set its sights on what it aspires to become. It is in closing
the gap between what we aspire to and what we actually are that sets in
motion the process of transforming energy.
Since there is always a gap between aspired core values and lived core
values, the real question is not why a corporation behaved out of integrity
with its core values but rather what does it do when it discovers such
behavior. Do they rationalize the behaviors or do they move quickly to
regain alignment? By honestly observing and using our actual behaviors
as a mirror of who we are truly being, we create an opportunity to go to
the next stage of organizational development.
Like a person, an organization can become conscious. It starts by
defining what it wants to stand for and works to remain conscious of when
it is living in accordance with its beliefs and its core values and when it is
not. Just as a person grows and becomes conscious when they understand
what in their unconscious is driving them to behave inconsistently with
their core values, so too will an organization move from unconsciousness
to a conscious organization.
Putting It All Together 125
Such an organization is aware of why it is here and what it is meant to
contribute. It knows its purpose and how it is to serve. It lives to be in
service to all of its constituencies. It knows what it stands for and creatively
works with its environment to create a future consistent with its deeper
purpose. A conscious organization knows when it is not operating within
integrity and quickly realigns itself, using those moments as opportunities
to learn about and integrate more of its purpose.
Living a conscious life is consistent with achieving results.
Leadership’s role is to bring themselves and the organization into
alignment with their deeper purpose and core values on the path towards
its goals. This is the path to achieving the kind of magical results we
opened the book with. The key is having a system for creating the desired
results that reveals all the forces impacting success and allows appropriate
actions to be taken for each of those forces.
Alignment
is
the
key
Setting the direction is the first step. Without a compass, the
organization will wonder from opportunity to opportunity reacting
instead of creating. And once we know where we are going, then we must
get everyone to go in that direction. The whole organization must be
aligned so that everyone has the same line of sight in the same strategic
direction.
To better understand the power of alignment, let’s continue the
analogy that the corporate body operates in a similar fashion to the
human body. We know that over 90% of our behavioral responses to our
environment occur semi-autonomously. The nervous system determines
the body’s response to thousands upon thousands of simultaneous inputs
received from our environment. The brain (our body’s central decision
making center) has very little say about how our body responds most of
the time.
The fact that much of our organization’s behavior has become
unconscious is mostly a good thing; it has been incorporated in the semi-
autonomic nervous system of the corporate body. Imagine what life would
be like if all decisions had to first go to our brains for a decision before any
action could occur. There are thousands, perhaps millions of choices
126 The Living Organization
being made between the many functional parts of our bodies in one of the
most coordinated and collaborative team efforts one can imagine.
It’s a lot like learning to ride a bike. Eventually we become proficient
because most of the rules for riding and balancing have become part of
our unconscious, part of our semi-autonomic nervous system. This is what
allows an organization to operate with a high degree of efficiency. It is also
what makes changing the basic rules for how we operate so difficult and
why we have to make those rules conscious once again.
What we call resistance to change is really nothing more than energy
that has formed very strong flow patterns. Our organization only appears
to be resistant to change because these energy patterns usually remain
under the surface of what we pay attention to.
Think about what happens when you drive on the freeway at 65 mph.
How much of your conscious thought is focused on driving? What
percentage of your brain is coordinating your foot, which is pressing on
the pedal, or your arm which controls the steering wheel? Imagine the
vast number of data points supplied to the processor in your brain from
your eyes as they scan the environment around you. All this is going on
while our conscious thoughts are focused on everything but our driving. It
is quite amazing that we ever get to our destination, let alone get there
safely.
In the traditional approach to strategic execution, the CEO and
executive team participate in an offsite planning session where they
evaluate strengths, weaknesses, opportunities and threats, (the classic
SWOT analysis), set the future direction for the organization, and map
out specific action plans that they believe will achieve the desired results.
They then go back and communicate these well thought-out plans to the
rest of the organization with “marching orders” listing what the various
functional departments will do.
This approach puts a lot of emphasis on the executive team (the brain
of the corporate body), and forces it to remain heavily involved in decision
making. Starting with the planning process and carrying over into the
myriad day-to-day decisions, the executive team remains the dominant
decision maker. When the environment moved slower this was acceptable
but at today’s rate of change this no longer works. It is analogous to the
brain guiding every movement while driving a car. The driver would slow
Putting It All Together 127
down to the same speed as a student driver trying to get everything
coordinated.
Wouldn’t it be nice if our organizations could get us to our destination
with the same degree of semi-autonomous behavior as our bodies do while
driving a car? What if your corporate body could respond to a rapidly
changing environment with the speedy and accurate decisions that ensure
our ultimate success, much as the human body gets us to our destination?
The solution lies in understanding the nature of decision-making:
every decision is made within a specific context. When we face a choice, we
evaluate the various options against a defined set of criteria. We do this so
rapidly we are not aware of it but in fact every decision is made within a
defined context. This context holds three major pieces of information.
The first is what we came here to do (as best as we understand it at the
moment), which is the contribution we are uniquely gifted to make, our
Soulful Purpose™. The second is the values that define what we stand for,
which are the beliefs we hold so dear we could not possibly violate them.
The final component defines where we are going, the results of our
Soulful Purpose™ expressed. With these three key parameters, making a
choice is quick, easy and straightforward.
In the current approach to strategic planning, a well executed off-site
meeting will establish a Context for the organization that is strong and
powerful and will act as the compass for the executives as they move
forward. Unfortunately that is where it typically resides, with the
Executive Team. Little, if anything is ever done to infuse this core Context
throughout the organization. Instead, the executives usually communicate
only the “what and the how” of the plan (Activity), not the “where and
why (Context).”
Without the Context for sorting and evaluating input, the corporate
body will never be able to execute without continuous involvement from
the executives. Going back to our driving example, most organizations
today operate like student drivers who think about every move they make.
Or worse yet, everyone in the organization makes rapid decisions based
on a variety of contexts, none of them well aligned. Either way the
execution is slowed way down.
128 The Living Organization
To function at the speed of today’s business environment, the
corporate body must operate in a semi-autonomous fashion, much like the
human body.
This requires a different approach to strategic planning, with most
planning focusing on establishing a strong Context that goes beyond being
merely communicated: it is deeply infused throughout the corporate
nervous system. What is communicated goes beyond the usual “what and
the how” of the plan, and includes the deeper more meaningful “where
and why.”
When every individual (the living cells of the corporate body) is
infused with the right Context for making decisions, then like our bodies
when driving the car, they will respond in appropriate alignment and
make the right decisions.
The
title,
the
lyrics
and
the
music
We have stressed that the elements of The Strategic Compass™ are
not the simple mission, vision, values statements we have all become
familiar with. Yet at some time, the work of defining the elements of
Soulful Purpose™ Mission, Core Values and Future Vision will be reduced
to a set of statements that will be passed around the organization. It will be
up to the leaders to keep the impact of the Soulful Purpose™ alive in
people’s minds.
Remember that statements hung on the wall do not generate the
energy that creates passion, engagement and alignment, only the stories
that carry the Context Energy can do that. If we think of how songs
impact us, we can recognize how to have it all.
A song title does nothing to create the emotional connection we have
with a song. Neither do the lyrics alone, although they are much more
powerful than just the title. It is the combination of the music and the
lyrics that creates our emotional attachment to a song. So much so that
many years can go by without hearing the song and the minute we hear
the first few bars, we are immediately reconnected with the experience.
We can even hear someone mention the title of the song and our minds
will begin to replay it with its full emotional impact.
The stories we tell with the full range of emotions behind them are
the combination of the lyrics and the music. When our organization fully
Putting It All Together 129
embodies the story, then the title of the song will carry the full impact of
the song itself. The statements that will eventually be passed around and
hung on the office walls will evoke the song, the lyrics and music that are
represented by the title.
130
CChhaapptteerr 1122
“Our
experience
inside
organizations
has
taught
us
that
superior
strategy
execution
requires
a
system,
not
a
series
of
diverse
projects
performed
in
different
parts
of
the
organization.”
Robert
S
Kaplan
and
David
P.
Norton
Executing
in
Real
Time
All execution management systems rely on the basic formulas of
knowing where you are, defining where you want to go, and deciding on a
path to get there. As you move toward your desired goal, it is also
necessary to track your progress and make adjustments if you are
trending off target.
Real
Time
Execution
System™
(RTE-‐S™)
This is the same approach we use in the Real Time Execution
System™ (RTE-S™), the performance and execution management process
for The Living Organization®. It follows the “Plan – Do – Check – Act” of
Deming’s quality process discussed earlier.
In the RTE-S™ model shown in Figure 28 on the next page we have
six basic steps: Define, Assess, Decide, Perform, Evaluate and Align.
Unlike other systems, we place Define in the center of the action. This is
done for two reasons. First, it is not merely a step in a cyclical process but
rather it sets the direction and the context for all decisions. It is in essence
the Strategic Compass™. All other components of the system rely on this
compass as the center of all decisions and choices. Similarly Align is also
not a step in decision making as much as it is the boundary conditions
within which decisions are made.
Executing in Real Time 131
Figure 28
It’s
about
time
In our approach, we include time as a critical function of the process.
One of the beautiful aspects of business is that it is time based. When we
establish goals, we set a time frame for when the goal is to be
accomplished. When we calculate Return on Investment, time is an
important component of the equation. Time is an important component
for development as well. It sets in motion the change process that brings
about the challenges that invoke our development. Without time, there
would be no forward motion. Everything in business, and in life, is about
time.
The diagram in Figure 29 on the next page shows the six steps of the
Real Time Execution System™ along the time dimension. We see that our
circle is now represented by a wave function.
From this perspective we can further see the importance of the
Strategic Compass™. First, it sets the direction of the organization’s efforts.
132 The Living Organization
The Strategic Compass™ is the central vector around which energy flows.
The Soulful Purpose™, along with the Future Vision, directs the flow of all
Activity and energy transformation. It acts as wave-guides for the
transformation of energy. It sets the boundaries for the behaviors of all
the cells of the corporate body.
Also notice in this diagram that the frequency of the wave defines the
speed of execution. The rise time of the Assess segment is directly
proportional to the organization’s ability to accurately assess its position
relative to its environment. The Decide phase orients the organization to
what it will do in response to its environment; the more accurate the
assessment the more accurate the response. Perform is the act of releasing
the energy, transforming it into the desired outcome. As with all physical
systems, the amount of energy that can be released is a function of the
potential energy stored in the system. The amplitude represents the
amount of potential energy derived from drawing on all the forces of the
Relationship and Context fields and applying it to the Activity of the
Perform phase. Finally, the Evaluate phase sets the stage for the necessary
midcourse correction and triggers the next cycle.
Figure 29
Executing in Real Time 133
Alignment
The second benefit of a strong Strategic CompassTM is that it sets the
boundaries for behaviors and serves as the foundation for aligning the
organization and does it in a way that opens the creative forces of the
organization rather than shuts them down.
In the traditional approach to alignment, goals are established at the
top and cascade down to the rest of the organization. This top-down
process tells the people in the organization what is to be done and at times
even tells them how to do it. This has the side effect of constraining
individual and organizational creativity.
By establishing a Strategic Compass™, ingraining it within everyone as
part of their personal context, you create room for each individual to
respond to the challenges they face with the utmost freedom for creativity
while still retaining focused execution.
I once attended a workshop where the presenter told a story about
the U.S. Constitution. He explained that after much debate over the
framing of the constitution, the real power lay in the simplicity of the Bill
of Rights, the first ten amendments. Each one of them begins with
“Congress shall not…” The comment he made that day impressed me.
“Because it set the boundaries of what we could not do, everything else
was possible.” He went on to remind us that the last five commandments
of the 10 commandments also start with “thou shall not…”
It was easy for me to see how this applied to organizations. Rather
than set up a lot of procedures to tell people what they are supposed to do
and how they should act, what if we simply told them the boundaries that
they could not cross. That leaves a lot of room for them to decide how best
to accomplish what they were hired to accomplish. In other words, a
creative environment is best achieved when the boundaries are clear and
individuals are allowed to choose whatever approach they feel best
achieves the objectives that lie within the boundary.
Alignment surrounds the activity cycle of Assess-Decide-Perform-
Evaluate. Drawing strongly on the Strategic Compass™, alignment is the
process of establishing the boundary conditions within which freedom of
action is allowed. The key elements of alignment are:
134 The Living Organization
Goal Alignment – Goals are the metrics we use to inform us of our
progress and if we are on track to our desired results. Goal alignment
means that each business unit, functional department and individual’s
goals represent their contribution to the overall effort. This is achieved
through the alignment of each unit’s objectives, metrics and targets. Each
unit knows how their results contribute to The Living Organization® unit
it is part of starting with the individual moving up to the team(s) then to
the department and ultimately to the organization. This relates to Activity
field Alignment.
Infrastructure alignment – An organization is supported by many
systems that define how work gets done. These systems traditionally have
evolved from previous stages of the organization’s life cycle and can
become calcified. The often-heard comment “we do it this way because
that is the way it has always been done” is the symptom of an organization
whose infrastructure is now defining its behaviors rather than supporting
them. Infrastructure alignment is directly related to Relationship field
alignment.
Cultural Alignment – Perhaps the most important and often
overlooked component is the need to align the culture of the organization
with the strategy. Like infrastructure, culture evolves over time, carrying
with it the good and bad of previous stages of the company’s history.
Culture is the key element of the Context field; and as we will explain
below, all activity will be limited to only those actions supported by the
culture. This is the alignment related to the organization’s Context field.
Figure 30
Executing in Real Time 135
Commitment Alignment – The organization will execute its strategy in
direct proportion to the level of commitment the collective organization
holds. It is critical to determine the level of commitment and to keep
deepening it to accelerate the speed of execution. One of the strongest
ways to get commitment is to give people choice. Choice empowers
people. When they choose to commit to the Strategic Compass™, their
level of commitment will rise proportionately. So will their level of
engagement and passion. That is why Commitment Alignment is related
to the individual’s Context field.
Know
your
Place
All living creative organisms are in relationship with their
environment. They know their capabilities and the factors in the
environment that will impact their ability to create their desired outcome.
They operate in concert with their environment, drawing resources from
it and giving back to it to maintain balance. Organizations are no
different. The organizations that know their capabilities and their place
within the total ecosystem will, like all living beings, outperform those that
don’t. This is the purpose of the Assess phase of RTE-S™.
Using The ARC Framework® described in the previous chapter and
shown on the previous page in Figure 30 allows an organization to get a
richer picture of the capabilities they can draw on. It also allows them to
get a clearer picture of the environment they operate in and the deep
trends of the total ecosystem. It is the traditional SWOT analysis from
Execution 1.0 expanded to provide a more robust view of all the forces
impacting success.
What
to
do,
what
to
do?
Now that the organization is armed with information about its
environment and its own strengths and weaknesses, it can decide the next
course of action to move it closer to its desired outcomes. It can define a
roadmap for the next phase of Execution, how best to close the gap
between the desired state and the current state. The Decide phase
establishes strategic themes, the execution map, and strategic initiatives
and establishes the strategy investment (StratEx) budget.
136 The Living Organization
Figure 31
Developing the execution roadmap must take into account the
relationship of Activity, Relationship and Context fields as described
earlier.
The activities an organization can perform are within, and supported
by the Relationship and Context fields. An Activity that is outside those
fields cannot be accomplished no matter how much effort is applied
without first expanding the other two fields to include the new Activity.
This is one of the critical aspects that make RTE-S™ a management system
that will save time and money.
When defining the initiatives and their sequence of execution, it is
critical to take into account the interdependencies of the energy fields.
Recall the relationships of Activity, Relationship, and Context as we
discussed in Chapter 9 and shown again in Figure 31 above. If a desired
outcome requires a change in activity that is outside the Context Field
domain, then an explicit initiative to reweave the stories that define the
context boundaries must be a precedent or least a parallel initiative.
Appropriate resources must be allocated to this initiative to ensure its
successful completion. If this is overlooked, as it all too often is, the
company will waste time and money trying to implement a change in
activity that cannot be successfully implemented.
The outcome is a roadmap and a scorecard for guiding and managing
the execution. Like any roadmap, it provides the direction for the journey
and key mileposts along the way to ensure you stay on track to the
destination. The Execution Map™ shown in Figure 32 on the next page
Executing in Real Time 137
provides a framework for tying together all of the elements of the Real
Time Execution System™ and provides a map to navigate your journey.
The Strategic Compass™ sets the direction. The objectives for each of the
key domains provide the guideposts along the way.
The Execution Scorecard™ translates the map into a set of specific
initiatives to execute and also identifies responsibilities, metrics, targets
and required investments. The scorecard initiatives are the most likely
path as can be best determined at the beginning of the journey.
The Evaluate and Assess phases will ensure that the initiatives being
performed remain appropriate to the constantly changing environment.
Figure 32
138 The Living Organization
Get
ready
the
future
is
coming
Strategy is all about the future so strategy execution has to be more
than simply getting things done. Another way to view strategy is that it
prepares the organization to meet the demands of the future it is creating.
In other words, it is a developmental act.
Like the development of a person, we must pay attention to the skills
the organization has, which reflect its ability to perform in the Activity
field. We can also easily recognize the importance of the relationships it
has with all of its stakeholders, customers, suppliers, employees, investors,
etc. What may not be so obvious is the importance of determining the
organization’s collective Emotional Intelligence (EQ).
EQ has become a fairly common skill dimension when dealing with
individuals. It has been shown repeatedly that EQ is considerably more
important to an individual’s success then their knowledge or functional
skill set. Emotional Intelligence, described earlier in more detail, can be
summarized to cover four skill domains – Self-Awareness, Self-
Management, Social-Awareness, and Relationship-Management. You can
also evaluate the collective Emotional Intelligence of organizations along
the same four domains.
To illustrate, have you ever witnessed an organization respond to a
change in conditions in a way that resembles a childlike outburst, or go
into a collective state of depression when something significant happens?
A client in the food services industry brought me in because the
organization as a whole was not performing and there was no apparent
reason why it shouldn’t be. During the assessment phase I uncovered a
deep sense of grief pervading most of the executives and managers. Not
that anyone specifically stated this; rather it showed up in what they
weren’t saying and how they were talking. I saw the same signs an
individual exhibits when going through a death and mourning process.
It turned out that the organization had undergone significant re-
organization and everyone was experiencing the loss, the “death” of the
way things used to be. The first thing we did prior to the rest of the off-site
agenda was to conduct a mourning ceremony. It was a simple process.
Everyone lined up by his or her length of service and each one described
the way the organization was at the time the first joined the company. We
Executing in Real Time 139
went from the birth of the company to the current day. This process
allowed the collective to remember and honor what had come before, to
let it go, and then open to the creation of what was to come. Organizations
as collectives process emotions the same way an individual does.
As with emotional intelligence, which measures the skills of an
individual and an organization with Relationship energy, we need to
determine an individual’s and an organization’s ability to operate within
the Context field. Also discussed earlier, this is much interest in Spiritual
Intelligence, the ability to work with one’s sense of meaning and purpose.
Thanks to the work of Cindy Wigglesworth, we now have an assessment
instrument, the Spiritual Intelligence Inventory (SQi) that also determines
skills in four domains. For SQi those domains are – Self/Ego-Awareness,
Universal-Awareness, Self-Mastery, and Social-Mastery/Presence.
The point is clear. Like helping an individual grow, develop and
mature, preparing an organization for the future is a process of working
with all the skills associated with Activity, Relationship and Context. Like
an individual, if an organization’s development is stifled, it will limit how
much it can contribute and produce. When I coach individuals who want
to improve their lives, we define the needed functional skills that the new
desired lives would require. I also work with them to improve their
interpersonal skills so they could build the networks and relationships
they will need to support their new life. And I work with them on the
beliefs that might sabotage all of their other efforts if not properly
addressed. If this is required to significantly improve an individual’s life,
why would the same three domains of developmental effort not be
required for an organization?
Incrementing
or
Innovating
–
It
makes
a
difference
Does your strategic direction call for incremental improvement of
your current business or are you setting out on a new innovative approach
to serving your customers? There is a distinct difference between the two,
one that will significantly change the challenges of execution.
The best way to understand the difference is to think of your
organization as a simple manufacturing production line. A production line
is set up to produce a certain product and is optimized to produce that
product in the most efficient way possible. When it is time to produce a
140 The Living Organization
different product, the production line is stopped and retooled for the new
product.
Your company, like a production line, has been fine tuned to produce
the goods and services for the customers you serve. Every aspect of your
company from engineering to finance, from operations to sales has
evolved over time to make the production of the goods and services you
produce as optimal as possible. You have developed certain norms, rules,
metrics and even a culture that has created your success. Achieving your
operating objectives is akin to meeting production goals in the
“production line” metaphor.
If your plans call for little or no change to the basic way you are
operating, your strategy will simply call for incremental improvements of
your existing “production line.” You may add a new tool such as
implementing an ERP system, or improve the training of the people in
various departments, but your basic production line, the fundamental way
you operate, is not going to change. Strategy planning in this scenario is
an Incremental Strategy, strategies to improve on the existing way we do
business.
But let’s now look at a different type of strategy, an Innovation
Strategy. Examples of an Innovation Strategic Direction would be moving
up the value chain, serving different customers in a different way, offering
a higher value-added set of products and services, or moving from a
product oriented business to a service dominated business (or vice versa).
These changes in strategic direction require a shift in how you will do
business in the future. If, for example, you are moving from selling a
technical product to engineers to selling a solution to corporate
executives, you will likely be dealing with longer sales cycles, different
approaches to determining the product roadmap and different methods
for reaching the market. You might even be facing a different revenue
model. In essence the norms, rules, structures, and business models that
you have used to create success will all have to change.
In terms of our metaphor you will be retooling the organizational
“production line.” But unlike a manufacturing operation, you cannot
shut down the existing production line to retool it. Executing an
Innovation Strategy requires retooling the organization production line
while the existing production line is still operating.
Executing in Real Time 141
Who’s
changing
what?
Strategy is about improving the way things are being done; strategy is
about change. Whether it is incremental or innovative, as shown in Figure
33 below, managing strategy execution is managing change.
As the diagram shows, even incremental strategy has a slope to it,
meaning that some change management is going to be called for. To
increase performance over time, either path requires changes in how the
organization operates. Yet clearly, the change management process for an
innovative strategy will be much more significant than for an incremental
strategy.
For many companies, strategic plans are incremental in nature and
very close to operating plans. These are mostly plans to improve operating
effectiveness and extend the current business model. When you are
setting a strategic direction that is innovative, trying to manage the
strategy execution the same way will be devastating and unlikely to
succeed.
What determines an innovation strategy is the degree by which you
are making changes to the basic business model. This model is the norms,
rules, metrics and processes of how the organization produces its results33.
Figure 33
142 The Living Organization
Because Innovation strategy is changing the fundamental way “things
are done around here” it requires a different focus. Innovative Strategy
must take into account the forces within your organization that are
operating mostly under the surface at the unconscious level; the forces
that have established the existing boundaries that everyone has become
comfortable with. Where Incremental Strategy will likely deal with the
forces associated with the Activity Field, Innovation Strategy requires
reweaving the boundaries of the Context Field and redefining the
Relationship Field.
It is during the innovative shifts in strategy that the Context and
Relationship Fields have the most impact. If you remain unconscious to
them, they could very well work against you. However if you include
specific strategic initiatives to reframe them, they will carry you on a wave
of success.
To manage the execution of an Innovation Strategy, specific initiatives
with objective, metrics and targets must be identified. This provides the
ability to track what has heretofore been seen as the soft and mushy side of
business. It makes the soft side hard and measurable. Often slight changes
in the patterns of relationship energy and context energy, the energy that
defines our meaning and purpose, will create significant changes in
results.
What’s
your
horizon?
If strategy is a developmental process, then certain actions must be
included in this year’s efforts that will lay a foundation for what is
required in the future. A simple example is the difference between
business development and sales. We all know Sales is focused on getting
current period business, whether daily, monthly, quarterly, or annually.
Their focus is on finding opportunities and closing the business.
Business development, on the other hand, focuses on building
opportunities that will turn into sales in the future. For example, a client
in the education field wanted to establish a strong international presence
and set a strategic objective to increase their international business to
equal their domestic business. They had very little presence in
international markets nor did they have a lot of experience building
international channels. Their first strategic initiative was to hire a senior
Executing in Real Time 143
business development person who had international experience. They
gave that person a three-year charter to build relationships, develop
channels, and create a pipeline of opportunities. You can see how each
element of the charter builds on the previous.
There are three major time horizons, H1 is current activities we will
execute this year, H2 is an intermediate stage, what we will be working on
in two to three years, and H3 is the point in the future where we have
reached our desired new capability, typically three to five or more years.
To achieve the goals set for H3 (have international revenues equal
domestic revenues), we must set intermediate goals for H2 (develop the
channel and increase opportunities), and foundation laying goals for H1
(hire an international development person).
For most people this will seem obvious. I wish it were so. All too often
we experience companies that set goals for Horizon 3 and do not think
through what has to be changed to get them there. They believe too
strongly in the maxim, “Set the targets and the rest will take care of itself.”
While that is true for some people and for some organizations, it is not
true for everyone. Some people can figure it out on their own while others
cannot. Do not slip into the trap of thinking this is because of differences
in intelligence. It is a difference in developmental maturity.
Those individuals who are higher on the developmental scale tend to
operate well on their own. This might seem intuitive but what might not
be readily apparent is that a person who is higher in SQ skills and low in
functional abilities will be more capable of working with broadly defined
objectives and goals than a person with high functional skills but low SQ
skills. The same is true for an organization.
Proper preparation requires proper development and sequencing of
Activity, Relationship and Context. Remember the example above about
the desire to improve the win ratio. Before any Activity field changes can
take hold, change to the Context field was required. The Context field is
slowest of the three to change, with Relationship next and Activity the
quickest to change (assuming the other two support the change).
When developing the strategic initiatives to prepare the organization
for the future, one must assign to Horizon 1, 2 and 3 the appropriate
Activity, Relationship and Context goals and objectives and recognize their
interdependence.
144 The Living Organization
Put
your
money
where
your
mouth
is
It is one thing to establish a set of initiatives needed to prepare the
organization for the future but are you committing to them? Anything
that is going to get done requires a commitment and commitment is
demonstrated by the allocation of resources.
Ask any Human Resource executive about the strategic development
of people. How many times have you sat through a strategic planning
session where the objective is “ensure we develop our people, they are our
most important asset?” Then when budgets are established or expenses
are cut the first thing to go is the training and development budget.
It seems there is a common virus running through most corporations,
the viral infection of urgentitis. It seems we will always respond to what is
right in front of us, the “urgent and immediate,” at the expense of what is
important to prepare us for the future. And one of the side effects of this
virus is that it erases our memories so that we can’t understand why we
aren’t accomplishing our goals.
There are four critical steps for the Decide Phase:
Determine the strategic initiatives
Sequence the initiatives
Select the metrics and set the targets
Allocate the resources.
When it comes to allocating resources it is important that strategy
initiatives, especially horizon 2 and 3 initiatives, have a clearly established
budget. A concept that has evolved with the Balanced Scorecard approach
that we carry forward into RTE-S™ is the establishment of a StratEx
budget.
StratEx can be thought of similar to CapEx budgets. Most
organizations recognize that they need to establish a separate budget for
capital expenditures. This budget typically covers expenditures to acquire
new equipment and funds for the ongoing maintenance of existing capital.
Similarly a StratEx budget ensures that resources are allocated to
appropriate investments for strategy initiative execution. Without this, the
organization will quickly recognize that there is no commitment to
strategy and will revert to growth through “crisis of the day” management.
Executing in Real Time 145
The executive team will consider strategy as nothing more than a fun
weekend off-site that will produce nothing substantial.
Who
dreamed
this
up
anyway?
As we said, strategy is the process of creating the future. We can view
the future as a continuation of the past or as a creative act of deciding
what we want the future to be. We know from life that living entities are
oriented towards creation. It is what makes living entities different from
machines. We dream of what is possible and then set out to make it so.
Setting your vision of the future is setting into motion the realization of a
dream. Ask any entrepreneur when they started; they had a dream of
something they thought was possible when no one else did. It is the
process of dreaming and then following that dream that makes life that
much richer. This is true for you and it is true for your organization.
While we strongly believe the process of defining the future is a
creative process there is a role for looking to the past as part of the
process. By understanding the patterns of the past we can gain insight
into the momentum and direction of the energy flow as it moves towards
the future.
The foundational premise that everything is energy would dictate that
current reality is the energy that has evolved from the transformation of
the energy of the past. Trends are nothing more than energy momentum,
deep patterns that reveal which way things are heading. The more
momentum a trend has the stronger the energy pattern and the more
energy it will take to change it.
Most people recognize the concept of an idea that was ahead of its
time. The proper way to view this is that an idea at an early stage is a seed
planted in the energy field of existing patterns of behavior. If the seed is
hearty, it will attract more and more energy to it. As it does so, it begins to
create new patterns of energy, which translate into new behaviors on the
part of what is commonly called the innovators. If it demonstrates value, it
will collect more and more energy and at a certain point, the tipping
point, it will seem as if a new trend has emerged.
Understanding the trends of the past will help define how much
energy is required to transform the current reality into the dream of the
future you want to create. The future is never determined by the past.
146 The Living Organization
The past only dictates the amount of energy the dream for a better future
will require.
When deciding your strategic direction, you will choose a combination
of following existing trends and innovating new trends. The ratio of this
combination will depend on your Soulful Purpose™. If at your core you
are a technological innovator you will obviously tend to be heavier on the
side of innovating new trends. If you are a fast follower, you would be
more oriented towards existing trends.
What
did
you
assume?
Whichever role you choose, when it comes to selecting a set of
strategic initiatives you will be making decisions based on a set of
assumptions. Since strategy is about creating the future, all decisions will
be based on the assumptions you make about past trends and future
trends. It is extremely important to ensure that you capture all
assumptions. Too often we see organizations make decisions based on
assumptions that they think reflect reality.
As time goes on this reality bias will blind an organization to what is
really transpiring in their environment. This will slow down or worse yet,
eliminate the appropriate response to a changing environment. By
documenting and tracking assumptions and continually asking during the
Evaluate phase whether those assumptions are valid, an organization will
naturally become more responsive to a dynamically changing world. As
the saying goes, it is dangerous to drink one’s own Kool-Aid.
Lights,
Cameras,
Action
Now that we have determined the theme of the corporate story and
have outlined the script of the play, it is time to perform. It is time to get
on the stage of life and put into action what we have planned.
Like all good performances, the actors need to understand their roles
and how the play is intended to unfold. The process shifts to aligning the
organization for action. Rather than think of the play as a fully scripted
performance, think of it more like an improvisation performance.
Since today’s world is defined by the rapidity of changes we are
experiencing, we cannot define for our band of performers exactly what
they will face and how they should respond. Rather we want each member
Executing in Real Time 147
of our troupe to understand the role they play and to have the skill to
receive what the world offers and to respond in ways that move the play in
the right direction.
This is what improv performers do. At any point in time they have no
way of knowing what the other performers will say or do. They wait for
the story to unfold. When an action is offered, the actor will respond to it.
One of the key rules of improv is that you always accept the offer and the
action and add your piece to it. This moves the play forward and becomes
the next offer for another actor to step forward, accept, and add to.
I have had the great fortune that my wife, Jane, has spent over a
decade performing a type of improv called Playback Theater. It starts with
a member of the audience telling the outline of a story. The actors play
that story back from the outline. The improv process defines what actually
unfolds and that is almost always something magical.
I have come to see the same pattern applying to a corporation’s desire
to create its own future. The company has a story outline they want to
manifest. However, the actual path to planned result rarely follows the
expected path. Rather a natural fluid dance emerges between the
organization and the events it is called on to respond to. How it responds
makes all the difference in how the rest of the story unfolds. Learning the
skills of improv will enhance the ultimate performance of the organization
and create the same magic that emerges from a good improv
performance.
Being able to respond to whatever the environment offers frees the
creativity of the organization. Imagine if all the individual performers, the
potential thousands of individuals on the corporate stage, had these
abilities.
They would have the freedom to respond to the events that come
across their desks in their own unique and creative way. The overall
performance of the collective acting troupe will be a magical story of
fulfilling the organization’s Soulful Purpose™ in service to its customers.
Well,
how
did
you
do?
Peter Senge, in his 1990 book The Fifth Discipline brought the seminal
idea of the learning organization into the limelight. To quote from his
book, Senge says learning organizations are:
148 The Living Organization
…organizations where people continually expand their capacity to create the results
they truly desire, where new and expansive patterns of thinking are nurtured, where
collective aspiration is set free, and where people are continually learning to see the
whole together.
Arie de Geus, a follower of Senge, in his book The Living Company,
underscores the importance of a learning organization. In his role as head
of planning for Royal Dutch Shell, he explored why most companies die
before their time and why a few seem to be able to continue on for
hundreds of years. He defines a company as a living entity for its ability to
learn and adapt and for its people to learn and grow.
All living systems must learn so they can adapt to changing
environments or they will die. People also learn to adapt and they grow
and expand from their learning. It is in the very process of putting forth
their efforts to accomplish specific goals and desired results that creates
the opportunity for learning. As people learn, they increase their capacity
to contribute more energy.
Whether for a company or an individual, we can define the learning
process as try something, determine the outcome, compare the outcome
to the desired outcome and then determine what needs to be adjusted.
If this sounds similar to the process where we defined desired
outcomes, assessed where we are today, determined the gap and then
define initiatives to close the gap – it is. The process of determining a
strategy and the process of learning are identical. All of life can be seen as
a process of learning. Learning can also be viewed as expanding our
capacity and capabilities to accomplish our goals. If you recall The Living
Organization® model, there is the “contribution – learning loop.”
The learning process starts first with having a goal and not being able
to accomplish it. Does that sound odd – have a goal that you cannot
accomplish? Well if you could accomplish it then you would have nothing
to learn, would you? Learning requires having a desired outcome that you
do not yet know how to accomplish. You try the actions you think will best
achieve your desired outcome and compare the results of those actions to
your desired outcome. The likelihood of getting it right is low at first.
However, the process gives you new information you can use to adjust
your actions. You repeat. After a while you will achieve what you set out to
achieve.
Executing in Real Time 149
Does this sound simple? Good, because it is except for the fact that
most people are not willing to approach the achievement of the desired
outcome from this perspective. They believe they must know how to
accomplish the goal before they will set a goal. They have been caught up
in the tyranny of expertise. We do not encourage learning because we
expect people to already know.
In a conversation with one of our client companies, the founder
voiced concern over some of the actions of the new CEO. The founder
had groomed this younger individual to replace him. He fully believed he
was the right person to take over the firm and that the new CEO had all
the necessary skills. That is until one day the new CEO made a choice
different than the founder would have made. The founder saw the error
of this decision and was upset that the new CEO could not. I asked the
founder how old he was.
“I am 72.”
“And how long have you been CEO,” I asked.
“40 years.”
“And the new CEO, how old is he and how long has he been CEO?”
“54 and in the position 1 year,” he answered.
“And how smart were you when you started out and when you were
54?” I asked him.
“Oh, I guess he has to go through his own learning curve, doesn’t
he?”
In our drive to achieve results, we do not tolerate the learning
process, but that is exactly what is required for continual improvement
and continued growth. Growth by its very definition means I am more
than I was. Growth is the expansion of my abilities through learning. One
of Einstein’s many quotes states that insanity is the desire to get different
results while following the same process.
The Evaluate phase of the RTE-S™ process is the “contribution-
learning loop” for the organization. It is the critical element for actual
growth to occur. There are three specific areas that we recommend be
included during the evaluate phase: performance against defined
initiatives, behaviors against aspired core values, and key assumptions
made.
150 The Living Organization
How often should a company evaluate progress? Think of it in terms
of the discipline of program management, a methodology for managing a
large number of complex projects required to achieve an overall program
objective. Strategy execution has a similar challenge.
Each initiative will be similar to a specific project in a program. Each
initiative will have its own champion who will want to review progress
against its goals. The overall strategy will also have to be managed to
review the cross-initiative interactions, dependencies and timing. While
every company is unique, we find that regular, quarterly reviews are the
most effective. Just like a program has an identified individual, a Program
Manager, responsible for the oversight of the total program, we suggest
having an individual who is responsible for the oversight and coordination
of strategy execution. Depending on how large and complex your
organization is, you may choose to house that function internally or
choose to outsource that function to a firm that specializes in execution
management.
Who’s
leading
the
show?
In our model we specify a fifth key domain. In addition to People,
Process, Customers, and Financial, we include the domain of Leadership.
Leadership is more than just part of the people perspective. While leaders
are first and foremost people, they carry an additional set of required
skills in addition to the skills required of all people.
All people have the three skills identified in The ARC Framework® –
functional skills, interpersonal skills and intrapersonal skills; and
development of anyone requires the balanced development of all three
skills. This is true for leaders as well. In addition, there are three
requirements that are unique to leaders: management skills, team and
collaboration building, and inspiration and motivational abilities.
Much research over the last couple of decades has focused on
differentiating leadership from management. Unfortunately this is a false
dichotomy. Every leader is a manger and every manager is a leader. Both
require the same three skills. The only difference is that as you move up
through an organization, the skills get applied in different proportions. A
first line supervisor is likely to use more manage-the-process skills while a
CEO will draw more frequently on the ability to inspire and motivate. This
Executing in Real Time 151
doesn’t mean that a first line supervisor will not have to inspire and
motivate nor does it mean the CEO won’t have to manage elements of the
process.
I believe our definition of leadership is outdated. If you look up
leader in almost any dictionary you will get definitions like: the person in
charge that guides and commands the troops. It is the man or woman at
the top of the pyramid, the ultimate decision maker, the person who
would say “the buck stops here.”
Here is a different definition: a leader is a person who marshals
resources towards accomplishing a desired outcome. These resources are
people to contribute the energy, capital to enhance and leverage energy,
organization to guide the flow of energy, and the vision of the future: all
the elements required to manifest a desired outcome. We define a leader
as a master of manifestation.
One last fallacy is that leaders are born, not made. Having worked
with dozens of CEOs and many more leaders at all levels, I can tell you
that no leader is born a leader. The best leaders are the ones who have
learned along the way, usually from their failures. I shared my own story
of my first year in management, and it has been my experience that every
great leader has similar stories. The worst part of this fallacy is that the
higher up the organization one goes the less likely they are to be offered
any development support.
When I was at Hewlett Packard, it was an organization known for
holding managers responsible for the development of their people. Yet
this organization that pioneered many leadership development programs
and tools ignored the development of its executive teams. When I was
promoted to the executive ranks, I remember wondering why I hadn’t
gotten my regular performance review. One of my mentors and my closest
friend, who had been promoted to Region Service Manager 18 months
before me, enlightened me. “Management development, the HP-Way and
MBO is for the regular folks. When you get to the executive level it is
expected that you have already figured it out and you don’t need
development.”
Later in life, I was talking with a fellow board member about the
various individuals we might select for the CEO position. His comment
was, “A CEO should already know how to do the job. If the individual
152 The Living Organization
needs development than he is not the right person for the job.” I don’t
know about you but I don’t know of anyone that cannot improve. What
board of directors doesn’t want their CEO growing in capability with the
growth of the organization? Can the latter happen without the former?
Speaking
of
Boards
There has been much talk about boards of directors over the past
decade. The rules of governance have been changing both by legislation
and by serious self-reflection on the part of most boards. In the face of the
scandals of the early part of this century, we saw the introduction of the
Sarbanes-Oxley Act; and then as a result of the collapse of the financial
markets, board governance again came under new regulatory
requirements with the passage of the Dodd-Frank Act.
This has created a lot of conversations in governance circles, the
academic community, and among directors. We have seen new guidelines
come from the blue ribbon commissions of many governance
organizations, from investor advisory services to the various exchanges
and the SEC.
The last century has created an environment of compliance, where
directors try to keep up with new rules and regulations that have emerged
from these many agencies and work to ensure their governance practices
are in line with best practices. What has been lost in all of this is the
responsibility a board has to ensure that the company is growing and
developing.
It is well accepted that a board has a fiduciary responsibility to its
shareholders and I will not disagree. I will disagree with how this
responsibility has been interpreted.
The responsibility is to grow the value of the firm and by doing that it
will provide a return to those who invested in the firm. But what does it
mean to create value? Following the energy model, it is the creation of
goods and services perceived as valuable by customers and provided with
the least consumption of energy. A board’s role is to ensure the full
development of the organization, starting with being proper custodians of
its Soulful Purpose™, and to ensure that the organization is being true to
its purpose and that its purpose is contributing to something greater than
itself.
Executing in Real Time 153
It must oversee the selection of the mission by which the organization
will express its Soulful Purpose™. It must be vigilant that it is living by its
core values. The board should also ensure that the Future Vision is
stretching and challenging the organization to develop and grow so that is
it can continue to meet the changing demands and needs of the
communities of customers it serves.
The board should no longer rely solely on the CEO to ensure the
company is executing. The board should be actively engaged to ensure
that the journey to the future is also a journey of growth and
development, for the company and for the CEO. To accomplish this, the
board should embrace the discipline of a formal execution management
process.
Viewed this way, the board will naturally align with the spirit of many
of the regulations. Following the Strategic Compass™ will also create the
following of a moral compass. One cannot honor one’s Soulful Purpose™
without recognizing its meaning and contribution to something greater
than oneself. One cannot be part of a community and not honor the
relationships of that community.
One cannot fail to see the interdependence of all and will therefore
make decisions that benefit all stakeholders. And it will be as silly to focus
on the short-term gains as it would be to only consider the well being of
your children for the next year. When we see the organization as a living
being to nurture and develop, we will be concerned not just for this
quarter or this year but for the long term.
The board, along with the CEO and the executive team, makes up the
Leadership Team of the organization, the custodians of The Living
Organization®.
If the CEO and the executive team are the parents, the board can be
viewed as the grandparents, the wisdom council, the ones who can ensure
and guide the growth and well being of The Living Organization®.
The
Journey
of
Development
No one steps into a new set of skills simply by learning about it. It
takes time and practice to go from awareness to integrated skills. There
are well-defined stages of development. Think about any skill you have
learned, whether it is a sport like skiing or golf, an activity like learning to
154 The Living Organization
ride a bike or driving a car, or intellectual skills like learning algebra or
science. We always follow the same process. First is the awareness stage
where we discover the value of developing the new skill and we commit to
developing it. This is followed by the awkward phase where we are
clumsy, uncomfortable, and ineffective as we struggle with the skill. Next
we transition to the refinement phase where our practice is paying off, we
have the basics down and we continue to improve the skill. This leads us
to the Expert phase where doing the new skill is effortless and automatic.
The same is true for an organization’s ability to improve its process
skills. In fact there is a vast body of knowledge applying a developmental
model to organization process skill development. This body of knowledge
has been refined from the early days of the Quality movement with Phil
Crosby’s Quality Management Maturity Grid (QMMG) to the work of
Carnegie Mellon University’s Software Engineering Institute’s (SEI)
Capability Maturity Model (CMM®)34.
To help companies better approach the process of creating an
execution focused organization, we have developed the Execution
Maturity Development Model™ (EMDM™). It defines five stages of
development across a number of dimensions. The five stages are: Chaotic,
Reactive, Structured, Proactive, and Integrative. The dimensions are The
Arc Framework’s® Leadership, People, Process, Customers combined with
the four elements of the Strategic Compass™: Soulful Purpose™, Mission,
Core Values and Future Vision.
Everything is a journey, a journey of development. The organization
must develop as a collective to further its ability to meet the challenges of
the future it desires to create. Leaders must develop their abilities to
marshal the resources needed to manifest the desired results. The
individuals within the organization must develop, learn, and grow,
allowing for the full contribution of their unique gifts. And the board must
provide the wisdom to ensure it grows in a healthy and robust fashion.
155
CChhaapptteerr 1133
“As
human
beings,
our
greatness
lies
not
so
much
in
being
able
to
remake
the
world
-‐
that
is
the
myth
of
the
atomic
age
-‐
as
in
being
able
to
remake
ourselves.”
Mohandas
Gandhi
The
Journey
Continues
For over 100 years, the business world has transformed our lives. The
modern corporation has been the engine that has given us unprecedented
prosperity. We have developed as a society more in the last 150 years than
we have in the preceding 1,000 years. We have brought forth more
innovation, created greater opportunities and improved the overall
standard of living.
However, we now find the machine of production turning into a
machine of destruction. Where it once served to advance our society, it
now seems to be at the root of many of society’s ills. From Enron to the
recent collapse of our financial system, from environmental concerns to
lack of societal responsibility, the modern corporation is becoming the
center of evil in our world.
But the fault lies not in the inherent nature of the corporation but in
the development, or lack thereof, of the true nature of business.
Remember Edwin Lewis, Richard Geer’s character in the movie Pretty
Woman, who honed his business skills to win any deal no matter what it
took. He soon discovered that though he won the battle for the deal, along
the way he was losing the war for his soul.
Our businesses are living beings. They are not soulless machines that
are only concerned with maximizing production and shareholder value.
Yet that is what they have become. They have honed their ability to
156 The Living Organization
produce but lost their ability to contribute. But like Richard Geer’s
character, the story does not have to end here. There is another way.
Organizations are holistic, organic living beings. They are born to
grow and develop to fulfill their Soulful Purpose™, a purpose that
transcends the mere goal to produce goods and services, a purpose that
calls for the organization to make a contribution to the market it serves
and to the greater society.
The Living Organization® is not so much managed as it is guided and
nurtured. The goal is to continually increase its capacity and its creativity.
When an organization refocuses its attention to the realization and
fulfillment of its Soulful Purpose™, it naturally transforms and begins to
stand out from the crowd because of the magical results it produces.
Companies like Whole Foods, Apple, and Trader Joes are but a few that
demonstrate the magic of The Living Organization®. Examples such as
Hewlett Packard, Wal-Mart and Toyota, who were once magical
companies, show us that companies, like people, can also lose their way
and like the Edwin Lewis character, find it again.
To help you understand the nature of The Living Organization®, we
have shared the science behind the magic. We have explained how
outcomes are the result of effective flow and transformation of energy.
Even more significant, we revealed the nature of the three energy fields of
Activity, Relationship and the all-important Context field.
The Context field is the source from which all energy emanates. It
holds the key to intuitive insight and creativity. It is the ability to tap into
and draw from this field that stimulates individual and organizational
passion and engagement. The Context field is the source of all the magic.
The modern corporation has been on a long evolutionary journey
from its birth in the mid 19th century as the culmination of the industrial
revolution. The journey of the organization has been mirrored by the
journey of those who have led them. At the beginning, the leaders focused
on managing the organization to create an efficient machine. They found
ways to streamline and optimize the workflow, creating metrics that
provided the means to control the machine and the people who fueled it.
Control and predictability were the key elements of success.
Around the middle of the 20th century, they recognized “people are
our most important asset.” The focus for the last 50 plus years was on
Executing in Real Time 157
teamwork and collaboration. We found ways to motivate and incentivize
people to serve the machine better. Like assets, people were still
components of the great machine of business. And like Anakin Skywalker
of Star Wars fame, who chose to go over to the dark side and became the
evil Darth Vader, business has firmly planted their feet on the path
towards the soulless, money-first organization.
This soulless machine threatens to take over our world, even our
humanity. But the journey does not have to end here. There is another
way. There is the ability to breathe life back into our organizations, to
restore its soul and the soul of all those who are part of bringing it to life.
Our leadership teams can learn to work with Context energy to
discover and express the deeper purpose and meaning of their
organizations. They can learn to create a culture and values that set the
mold within the Context field that will guide the day-to-day behaviors and
decisions of everyone toward the fulfillment of the Soulful Purpose™.
They can learn the art of developing the whole person, supporting and
enhancing the dignity of the human spirit, building a community of
relationships that are bound together by a set of common ideals,
communities of people who give to the community and in return receive
from the community.
This is the new focus of organization leadership; set the context,
develop the people, build communities and be in service. Coincidentally
this is also the same role that has been at the heart of all spiritual leaders
from time immemorial. One can extrapolate that the CEO will be the
spiritual leaders of their communities in the 21st Century, a long way from
how we have thought of the corporate CEO in the 20th Century.
This effort will lead naturally to organizations whose focus is more
than winning and more than merely making money. We will create
organizations whose focus is to be of service to its customers and society.
Corporations that are Living Organizations® will naturally be socially
responsible citizens that contribute to the welfare of their community,
whether local or global.
This journey will not be easy. The power of the existing paradigm has
a lot of energy behind it. It has been fueled by over 100 years of success.
The financial community, which once served as a resource to support the
good works of the corporation, has taken control and has bent the
158 The Living Organization
organization to its bidding. It will not easily relinquish this control and its
demand for return on investment and quarterly profits that it sees as the
core purpose of any business.
The challenges are neither onerous nor impossible. More and more
leadership teams are stepping up and taking on these challenges. Though
learning to work with the three fields of energy, especially the Context
field, will at times feel awkward and perhaps even counter-intuitive, the
rewards will outshine the efforts.
This is a noble challenge, one that goes to the root of what our
corporations are (or should be). The modern business organization was
once the great engine that drove the growth in our society. It still holds
the promise of continuing its glorious contribution to the growth and
wellbeing of our society.
We can discover how to work with the power of the Context field and
nurture and enhance the organization’s Soulful Purpose™. We can learn
to weave the stories of creation and magically take us to a new world, a
whole new dimension of what’s possible. That’s the Holy Grail that awaits
anyone with the courage and conviction to find it.
159
“There
are
309
million
people
out
there
that
are
trying
to
improve
their
lot
in
life.
And
we’ve
got
a
system
that
allows
them
to
do
it.”
Warren
Buffett
Appendix
Business
as
the
Driving
Force
of
Society
For many years, society saw business as the great stimulator of
progress, the engine that fueled the great advances in technology and
living standards.
For instance, between 1760 and 1860, technological progress,
education, and an increasing stock of capital transformed England into
the workshop of the world. The Industrial Revolution set off a sustained
increase in real income in England and later in the rest of the Western
world35 that has continued through to the present. With each passing year
the rate has accelerated, giving the world standards of living far greater
than anyone could have imagined just 100 years ago.
John V. C. Nye describes this progress in an article published in the
Library of Economics and Liberty:
“Prior to the 17th century, most of the world not only took poverty for granted, but
also assumed that little could be done about it. Even the most optimistic early writers
could not imagine that more than a few percent of the population would ever be well off.
Growth, if it could have been measured, was at most only a percent or two per decade.
“Yet the last few centuries have seen unprecedented growth. In the most successful
countries, the average citizen now enjoys a material standard of living that would have
made the greatest king of two hundred years ago turn green with envy…
“Even for the poorer areas, the so-called Third World, we find that per capita
economic growth, improvements in life expectancy and declines in mortality from disease
and malnutrition outstripped the performance of the most advanced nations of Europe,
Britain, and France, during the Industrial Revolution of 1760–1860…
“What is unusual about the developed world since the 1700s is that… overall
improvements in material prosperity seemed so modest that even contemporaries such as
160 The Living Organization
Adam Smith did not appear to notice that they were living through what historians
would later label the Industrial Revolution.
“Eventually, the changes were so dramatic that everyone could see that the daily
lives of even the common laborers of Britain, France, Germany, and the United States
had been greatly transformed.
“The reason for this transformation was the accumulation of capital, which
was due in turn to technological improvement and to the fact that these societies
had large doses of economic freedom [Emphasis added]. The twentieth century saw
this transformation spread to a large part of the world.”36
Economic freedom allowed resources to move to where they could
produce the most good. Economic freedom created opportunities for
individuals to improve their conditions and advance their positions.
Economic freedom was, and is, the foundation of our Capitalist System.
How
Capitalism’s
Reputation
Changed
Many now see this engine of growth that advanced society, once the
cornerstone of economic development in the Western World, as the root
cause of our current problems. People blame greed and the self-serving
nature of Big Business for everything from the Great Recession to global
warming to blatant disregard for the proper use of planetary resources.
True, Capitalism has always had its faults and its detractors. From
Charles Dickens’ Cokestown to William Blake’s “satanic mills,” authors
have portrayed Capitalism as having a disturbing dark side that creates
serious social problems such as child labor, unsafe working conditions,
and abusive labor practices as a byproduct of progress. Government
agencies responded to these problems with regulations like the minimum
wage and child labor laws and the landmark Occupational Safety and
Hazards Act of 1970.
As with all evolution, Capitalism took on many of the attributes of
what came before. Though it replaced the old aristocratic society in which
a small number of people controlled power and wealth and a large
number of people had no power and little wealth, it exhibited many
similar attributes. Yes, the aristocratic societies of kings and monarchs
were overthrown and disappeared, only to be replaced by the owners and
leaders of corporations and small businesses. The powerless many became
their employees, were paid poorly, and again had little power over their
Appendix 161
lives. Many considered the corporations’ employment practices
oppressive.
This inequity created the reactive philosophies of Karl Marx and his
followers, who believed that government had to exert centralized control
as the only effective way to tame the dark-side of the free market
economy.
In the struggle that followed, the Western World rejected this solution
in favor of maximum individual freedom tempered only by certain
regulatory controls. We still struggle to find the right mix of freedom and
regulation, relying on a web of opposing forces, unions versus
management, Democratic labor versus Republican Big Business, which
seems never to agree on the proper balance.
The old model of Capitalism, while advancing society and creating
great opportunities, favored the strong, the rich, and the powerful. But
that has changed. Today, more and more, even the major beneficiaries of
the Capitalist system, the corporations and their owners, are floundering
or failing.
General Motors is a shadow of its former self, alive because the
Federal government gave it billions of dollars. Other pillars of our
financial system, such as Lehman Brothers and Bear Stearns, no longer
exist. The days of the “imperial CEO” are ending and many individuals
who invested their financial future in the Capitalist system lost 50% or
more of their wealth when the financial markets crashed.
Countries such as Greece, Iceland and the once fast growing Ireland
now face financial ruin. The United States, the most Capitalist of
countries, is experiencing the greatest recession since the Great
Depression because we continue to rely on decision-making models that
are out of date and no longer effective.
Businesses are experiencing a constant onslaught of new technologies
that change every aspect of the way we design, manufacture, sell and
distribute products and services. The frequency of change is accelerating,
adding further pressure to produce effective results and accelerating the
rate of failure.
In the last ten years, we’ve had the dot-com crash, the fall of Enron,
WorldCom, and Arthur Anderson, the collapse of the housing bubble, and
the near collapse of our financial system. Once again, the government
162 The Living Organization
responds with governmental regulations ranging from Sarbanes-Oxley to
the recent passage of the Dodd-Frank Reform Act, the greatest financial
reform since the 1930s. This seems to paint Capitalism as the bad boy and
has led to calls to reform the practices and foundation of business itself.
The
Evolution
of
Business
The Industrial Revolution transformed the Western World. We
transitioned from agricultural communities whose beliefs and activities
revolved around the limiting cycles of nature to a society based upon logic
and reason with rationally structured organizations. We went from
dominantly individual contributions, the artisans, to collective
organizations. This transition unleashed a tremendous amount of hidden
energy that led to the rapid growth we have experienced over the last 100
years.
The original small organizations this transition produced evolved,
requiring ever greater supplies of natural resources and capital to
flourish. Eventually the first stock holding companies formed, bringing in
a growing number of shareholders who gradually replaced the company
founder and his family as the owners. Unlike the founders, who are
personally involved and emotionally invested in the success of the
enterprise, these new “owners” were distant from the company. Their
only interest was to achieve a fair return on their investment. They left the
management of the firm to a new group of players: the professional
manager.
These new organizational leaders were not owners; they were agents
of the owners whose jobs depended on the success of their enterprise.
Therefore they needed models and techniques that would increase their
chance of success. They knew that if they failed, the absentee owners
would find someone who could succeed. The professional manager’s
search for efficient operations laid the foundation for our modern
business principles and practices. It also paved the way for many of today’s
problems as well.
The
Limitations
of
Worldviews
At any point in time, the range of solutions available to us is limited by
our assumptions and worldviews. These become the lenses by which we
Appendix 163
see, interpret and understand the world around us. They help us survive
and make sense out of our world. They also handicap us, for with their
limited field of vision they invariably overlook important pieces of the
puzzle.
We have all heard the phrase “perception is reality.” The flip side is
also true: “reality is defined by our perception.” Worldviews are such an
integral part of the environment we live in that they become part of us in
ways we often don’t understand. To fully understand our current
worldview and the business model it created, we must understand the
environment from which it sprang.
The world of the early 20th century was not, relatively speaking, very
complex. Although conditions changed more rapidly than in the 19th
century, we still didn’t need sophisticated models to help us survive or
adapt. In one generation, we might encounter three or four systemic
changes such as the advent of flight, radio, and television that significantly
altered the way we lived. We believed that we could, with a fair degree of
confidence, predict the outcome of our decisions. Life appeared to follow
a linear path of cause and effect that we as individuals and corporations
could easily understand and follow. If we followed the right rules, our
decisions would produce the outcomes we desired and we could
predictably plan for the future.
The dominant scientific view of the day, laid down in the 17th century
by the father of modern science, Sir Isaac Newton, supported this belief in
predictability. In the Newtonian world, everything was linear, predictable
and controllable. Newton perceived the universe as a machine that
operated according to principles that could be dissected, explained and
repeated. We found those truths to be self-evident and soothing so we
integrated them into the design and operation of every one of our
organizations.
The
Organization
as
Machine
It logically followed, then, that when corporations appeared in the
late 19th and early 20th centuries, they would form around the dominant
scientific and mechanistic principles as those accepted by society. For
instance, Frederick Taylor used the Newtonian assumption of an “orderly
world” to create his now famous theory of Scientific Management. Like
164 The Living Organization
Newton’s universe, Taylor viewed business as a well-oiled machine whose
only goal was to optimize the flow of activity to create maximum efficiency.
Higher efficiency meant fewer wasted resources, which translated into
higher production and profits. Precise, direct and simple.
Taylor’s paradigm became the guiding principle for corporate
organization and structure and is still used today. It viewed the
organization as a simple cause-and-effect machine in which everything
could be described, predicted, and controlled. In this model, leadership
was based on the mastery of such mechanical skills as planning, organizing
and controlling the activities of the enterprise.
In my early training as a manager it became clear that my role was all
about leading the group I was responsible for. Leading meant taking the
set of objectives given to us by those above me, who got the goals from
those above them, and organizing my team to achieve those goals as
efficiently as possible. I was the one who decided how the work would get
done and who would do it. It was also my job to monitor and control the
efforts of those that reported to me to make sure they were doing what the
company expected. Workflow analysis, measures of output and efficiency
studies to improve productivity were some of the tools I employed. While
following this path provided some degree of success, I could sense these
tools alone would not drive the level of performance I felt lay buried
within my groups.
Until the middle of the 20th century, this control-oriented model
served us well. It allowed us to tame nature and to transition from a
dominantly agrarian society to a dominantly industrial society based on
science and machines. It enabled the organization to use a predominantly
low skill work force. It worked perfectly in an environment where change
was slow enough that the world seemed orderly and predictable.
The incessant drive for efficiency ignored the various components of
the machine. People were just another cog in the wheel of production that
leaders plugged into the equation. Like other “machine parts,” they were
interchangeable. Leaders calculated cost by measuring how many men
were needed to complete an assignment based upon the average number
of widgets the average worker could produce.
We set our targeted revenue and worked backwards to determine the
number of transactions it would take to achieve it. We added up the
Appendix 165
average transactions per employee, factored in a desired productivity goal,
calculated the manpower required, and adjusted accordingly. This
provided a straightforward, simple formula for success.
This simple, effective but impersonal paradigm began to break down
in the middle of the 20th century as the environment evolved, revealing its
shortcomings.
The
Impact
of
World
War
II
As devastating as World War II was, it also had a positive impact on
our society. Prior to the war, the country was still recovering from the
Great Depression. The wartime economy achieved what all the New Deal
programs could not: full employment. In 1940, 8 million Americans were
out of work. After we entered the war, unemployment vanished. Even
women joined the new production system, performing jobs once reserved
for men. “Rosie the Riveter” became a popular American icon and image
of progress37
The demands of wartime production required changes in factory
operations that introduced new, more complex production techniques.
Suddenly companies were no longer concerned with local markets. By
1943, half of all production went overseas,38 requiring companies to
acquire new skills and capabilities to address these new global markets.
When the war ended, the transformative changes continued. To avoid
repeating the mistakes made after the First World War, when servicemen
came home to find no jobs, few educational opportunities, and a housing
crunch, Congress passed the Servicemen’s Readjustment Act in 1944. The
G. I. Bill (as it was popularly known) committed billions of federal dollars
to support housing, education, health benefits, and job training for
returning soldiers.39
In addition, unions asserted themselves with a wave of strikes that
swept the nation. In 1946, for example, 400,000 miners struck not once,
but twice. In all, 4.6 million workers struck at one time or another during
that year. The power of the unions grew so strong that the Federal
Government enacted the Taft-Hartley Act of 1947 to curb them40. This
changed the face of the post-war workforce and the way managers
managed it.
166 The Living Organization
Our
Changing
Worldview
Not only did the war change our society, it also challenged our
underlying worldview. The devastation wrought by the atomic bomb
made the world aware of new scientific theories that revealed hidden
forces that challenged the limiting theories of Newton’s Classical Physics
with its linear cause and effect relationships.
We entered the strange new world of Quantum Physics, which
reframed our understanding of how the universe worked. The previous
worldview of the “clockwork universe” fell to counter-intuitive concepts
such as the Uncertainty Principle and Chaos Theory. The idea that the
world was predictable and controllable lost ground.
For example, the Non-Locality principles of Quantum Physics
stipulated that spatially separated systems could instantly influence each
other no matter how far apart they were. A system on one end of the
universe could affect one on the other side as if no time or distance
separated them. How could fundamental barriers like time and distance
no longer matter?
Another mind-bending theory of Quantum Physics was that quantum
particles existed in more than one state at the same time. This concept,
Superposition, claims that until we measure the state of the particle, it
exists in all possible states simultaneously. The measurement itself limits
the object to a single possibility. It reminds me of the question asked in my
very first philosophy class, “If a tree falls in the woods and no one is there
to hear it, how do we know it really fell?”
Changes from another field of science further altered our underlying
assumptions. Psychology shifted away from the dominant Freudian view
that followed the medical model of symptom, illness and cure. It no longer
followed that symptoms could be traced back to a single causal illness, that
psychology could be determined by the same cause and effect logic of
Taylor’s Scientific Management and the Newtonian worldview.
In contrast, the middle of the 20th century saw the emergence of
Humanistic Psychology. Psychologists like Carl Rogers and Abraham
Maslow cared less about what made us psychologically sick than what
made us psychologically stronger. They felt that humans had an innate
ability to move from a state of mere survival to a highly evolved, self-
Appendix 167
actualized state of being, a magical transformation that awaited all who
worked hard enough to achieve it. This new view of human potential had
a tremendous impact on how leaders would eventually view their
employees.
Pushed by both the fields of physics and psychology, the business
world rapidly underwent similar transformations. We witnessed changes
in production methods, the nature of the workforce, and the birth of new
corporate forms. The multi-national corporation emerged with its
increased complexity and decreased predictability. Unions became as
much a part of the power structure of the corporation as the once all-
powerful CEO. And the workforce that returned from the war was
different from the workforce that left.
Society changed. Internal organizational processes got harder to
understand. A more complex world and changing workforce dynamics
put enormous pressure on the old paradigm. As our business
environment became more complex, the need to organize and control
every aspect of operations pushed the new professional managers to their
limits.
In the early days of the 20th century, we had a relatively unskilled
work force and relatively simple production methods. It was relatively
easy for managers to decide what to do and for workers to do what they
were told. However, by the 1950’s this was no longer the case. The
increased complexity of production made it difficult, if not impossible, for
a small group of executives to make all the decisions needed to address
the many situations that could arise. In addition, the growth of multi-
national corporations made it physically impractical for corporate
executives to monitor every action of their far-flung enterprises.
Forces like these required that decisions be delegated to lower levels
of the organization. Under this new system, mid-level managers and the
workers they led suddenly had to make adjustments to work flow without
any direction from above. This created flexibility and rapid responses to
unanticipated situations, which was not possible in our old “top down”
command and control structure. Employees had to be trusted to make the
right decisions; they could no longer simply be cogs in a machine that did
what they were told.
168 The Living Organization
Many new jobs required a new level of sophistication and technical
training that no longer made it feasible to swap out poorly performing
labor units with better performing replacements. People were no longer
interchangeable parts and individual performance could no longer be
governed by a fixed set of rules and procedures that would automatically
optimize returns and guarantee results. No longer a simple machine, our
larger more sophisticated corporations took on a life of their own.
This forced the organization to focus even more on the role of their
people and how they were developed and treated. They could no longer
ignore the human factor. Treating people as interchangeable parts
overlooked the unique set of gifts and talents each person possessed and it
overlooked the obvious fact that not everyone worked or acted the same
when plugged into the production process.
The
Emergence
of
the
Humanistic
View
With the changes in worldviews and changing dynamics within the
workforce, shouldn’t the old rules for creating success in business change
as well? Wouldn’t the models for running companies change to keep up
with the rapidly changing environment?
The sad reality was that much stayed the same. Even though
unprecedented changes impacted their world order, management still
clung to the Efficient-Machine approach of Frederick Taylor. They were
still required to identify and eliminate blockages in workflow that created
inefficiencies. They still had to determine the required amount of labor
using established labor planning methods based upon the calculation of
the average work per employee. The increasingly removed corporate level
still used all of these “old school” methods and practices. Even with added
complexity and changes in the environment, our corporate leaders
continued to see their organizations as a machine they could master,
providing them with a continued, but false, sense of comfort and control.
While viewing organizations as machines still worked on some level, it
became clear that we needed a new model. If management wanted to get
more out of their organizations, they would have to delve into the hidden
world of the human psyche.
I was fortunate to develop my leadership skills in the computer
industry during the 70s and 80s and especially at Hewlett Packard.
Appendix 169
During this time the industry was entering its heyday of accelerated
growth. To address the needs of this hyper growth many companies like
Xerox, IBM, Digital Equipment Corp and Hewlett Packard adopted
leading edge management principles to give them a competitive edge.
Management began to recognize that they could not fully explain the
new challenges and forces by the simple, cause and effect paradigm of the
“great machine of production.” They could no longer ignore the human
factor and the variations in performance it brought.
Therefore they explored what made people tick, what motivated their
behaviors and what maximized the way they meshed together as a team.
They had to identify and understand the forces that could decrease
individual performance, disrupt team effectiveness, or create a blockage in
the system, which led to a new focus on “people as our most important
asset.”
My management training programs embraced the teachings of
humanistic psychology to better motivate employees and increase
performance. Psychological theories such as Herzberg’s Motivator-
Hygiene theory, Maslow’s Hierarchy of Needs and McGregor’s Theory X /
Theory Y became part of every manager’s toolbox. I remember taking a
class along with my peers and our boss, the Region Sales Manager, from
Maxwell Maltz, author of Psycho-Cybernetics. In this class we learned
techniques of self-hypnosis to reprogram our beliefs so that we could
overcome our own limiting beliefs and hence perform at a higher level.
These new theories and frameworks served to re-orient how we
viewed organizations and organizational leadership. Douglas McGregor’s
1960 Theory X/Theory Y Management Styles model stated that two very
different attitudes to workforce motivation existed. Theory X managers
believed that employees were inherently lazy, disliked work, and would
willingly avoid it if they could. They assumed that managers had to closely
supervise employees and implement strict controls to ensure that people
did what was expected.
In contrast, McGregor offered a new model: Theory Y managers who
assumed that people were self-motivated, enjoyed work and could exercise
self-control. I found this orientation to management to be consistent with
my own experiences. The people who worked for me were not inherently
lazy; they seemed to exhibit lazy behaviors as a result of the environment
170 The Living Organization
they were in. The so-called lazy behavior was a revolt against an
environment that prevented them from doing what they loved. There was
more to leading my team than just making them more efficient. I began
embracing the new management theories of the humanistic psychologists.
I saw a lot of similarity between McGregor’s works and those of
Maslow. Theory Y was consistent with Maslow’s view that people had a
natural impulse to move up a Needs Hierarchy, shown in Figure 34
below, from basic survival to self-actualization.
Theories like these assumed that people naturally wanted to perform
their best to reach their unrealized potential. If they did not perform well,
it was not because they were lazy but because other factors got in the way.
Accordingly, companies needed to provide the right environmental
conditions and incentives under which employees could and would
willingly work and succeed.
For McGregor, Maslow’s needs could be grouped into lower order
needs (Theory X) and higher order needs (Theory Y) and both could be
used for motivation. Further studies also indicated that if an organization
moved people up the hierarchy towards the higher order needs,
performance would greatly increase.
Figure 34
Appendix 171
One such study was Frederick Herzberg’s Motivation-Hygiene theory
which argued that people were motivated by two different sets of factors:
Motivating and Hygiene Factors. Motivating Factors would stimulate the
desire to perform better, including achievement, recognition,
responsibility, challenge, growth, and promotion. In contrast, Hygiene
Factors only motivated when Motivating Factors were absent. Their
absence could de-motivate but their presence did nothing to stimulate the
desire to perform better. Hygiene Factors included pay and benefits,
supervision, status, and working conditions.
Hygiene Factors correlated to Maslow’s lower order needs and
formed the basis for motivation by Theory X management styles, while
Motivating Factors correlated with higher order needs and became the
motivating focus for Theory Y managers.
This push for increased performance created a huge demand for
books based on the theories of the new Humanist psychologists.
Herzberg’s 1968 article One More Time, How Do You Motivate Employees? had
sold 1.2 million copies by 1987 and was the most requested article from
the Harvard Business Review.41 This demand for new approaches to
management spawned the growing field of Organizational Development
(OD) consultants who suddenly appeared to help develop methods for
improving the worker’s performance. Major companies allocated
significant amounts of time and money to team building, employee
development, pay-for-performance systems, motivation systems, and
formal management training programs, all in the hope of better
understanding and more effectively managing the key components at the
heart of their machine’s performance, those unpredictable parts we call
people.
I began to incorporate many of these practices into my management
repertoire. I took people through team building trainings where we would
learn models of communication and that we all had certain behavioral and
communication style preferences and that not everyone used the same
styles. We practiced communicating with styles different from our own.
Over the years I attended and even led many of these workshops. While
they created great experiences and even some significant “aha” moments
of insight and awareness, they didn’t make a huge impact in the long run.
We went to the offsite and returned on Monday morning to the same old
172 The Living Organization
patterns of behavior. So we would try another team building model, this
time with different human behavior patterns. I have done the Disc
instrument, Meyers Briggs, 16PF, Herrmann’s Whole Brain model and
countless others. And those are just for personality and behavioral styles.
The same is true for the variety of sales models, interviewing models,
performance management systems, change management, and all the rest.
One would think that with all of the evidence presented by the field of
psychology, the evolving worldview offered by physicists, and the massive
number of methods, processes and models provided by the OD folks this
new focus on the “soft side of business” would change the foundational
paradigm for good. But that didn’t happen.
After years of proclaiming that, “Our people are our most important
assets,” companies still treated people as an instrument to be tuned
instead of a person to be nurtured, developed and led. While hundreds of
millions of dollars were spent on organizational development efforts and
CEOs proclaimed the importance of people, training budgets were still cut
first when times were hard. Although Herzberg developed his theory over
50 years ago and Maslow wrote his seminal work in 1943, Daniel Pink’s
latest best seller Drive42 and Chip Conley’s book Peak43 still remind us that
people are not motivated by money but by a sense of purpose and
meaning
What happened? Why so little progress over the past 50 years? Why
do managers still make critical decisions based solely on “that which can be
measured?”
Like so many of my peers, I too found that something was missing. It
was often hard to justify the expenses for such activities. I felt deeply that
my people were the key to my success, but something else was happening,
an almost invisible force that seemed to override all my efforts to truly
empower my people. Yet at times I did manage to overcome this force as
witnessed by the results I created.
In my job as Regional Administrative Manager for Hewlett Packard, I
inherited what the company considered to be the worst performing
administrative organization of the four U.S. sales regions. When I took
over the helm of this listing ship in December 1982 the organization was
just completing its five-star internal audit. This was an internal audit at the
level of investigative depth that an external audit firm would perform. I
Appendix 173
was on the job no more the 45 days when we received the audit report. It
consisted of a 39-page management letter. Being new to audit reports, my
initial reaction when I read it was, “Great. They have done the deep dive
and given me a wealth of information on areas to improve. The next
morning, when I arrived in my office, Phil, the regional General Manager,
came into my office and shared a personal note he had received from
John Young, then CEO of HP. It said,
Phil, I read with interest your region’s audit report and I am sure you will agree
with me that we do not want to see this repeated.
Respectfully,
John
Phil looked at me and said, “I do not ever want to receive another
note from John like that!” He turned and left my office, leaving me with a
clear understanding that I had inherited a nightmare. I soon learned that
most management letters are less than a page long. Two pages meant you
were not performing very well. This one contained 39 pages of concerns
that I now had to deal with.
Within three years our regional administration team was considered
the best performing organization not only in the U.S. but throughout the
world. Admin managers from Australia, the Netherlands, France,
England, and Germany visited us to see what we had accomplished. They
all wanted to know what I had done that they were missing. We all used
the same trainings, the same management tools and methods and yet
somehow my results were far superior to the rest. Why? This is a question
I couldn’t answer myself. I would like to think I was just better at leading
than they were, but I knew my peers and they were equally as talented in
many ways, and in some ways I felt they were superior to me. I came to
understand many years later that I had unconsciously broken through the
barrier of the existing paradigm. I began to use a different model.
The highly acclaimed idea that “people are our most important asset”
hints at why so many of my peers weren’t able to accomplish the same
results. Society and the dictionary generally define an asset as “as a
valuable item to be owned.” This is like thinking of employees as property,
more like “slave labor” than “free-thinking, creative individuals.” We may
174 The Living Organization
rationally recognize that people are not parts of a machine but we are still
guided by language that emanates from a model created for a different
time and different circumstances, a world that no longer exists. For some
reason I was guided by a different model. I had broken the spell of the
corporation as a machine and created results that to my peers and bosses
looked like magic.
Humanism
Isn’t
Enough
The Humanist phase of business evolution revealed the shortcomings
of the dominant mythos, the mechanistic view of life. It altered our
perception enough for us to realize that at the heart of every great
company was a human component. It helped to explain some of the
success of companies like HP when they lived the HP WAY or Toyota
when they were committed to Total Quality with every part of their being.
However, it also opened a Pandora’s Box of unseen and seemingly
uncontrollable forces that were still at work in our corporate
organizations.
The Humanistic approach should have moved the business
community away from the mechanistic model and brought us closer to a
more organic vision of corporate structures and systems. That did not
happen.
There are two explanations for this failure to change. The first is the
enduring power of any existing paradigm. Newton’s first law of motion
reminds us of the power of momentum: An object at rest stays at rest and an
object in motion stays in motion with the same speed and in the same direction unless
acted upon by an unbalanced force. The forces that worked to maintain the
existing paradigm overwhelmed any attempt to change it.
Adding to this natural momentum is the inability of the Humanistic
perspective to fully explain all of the hidden forces that affect corporate
performance and thus provide a way to work with those forces. People are
unpredictable and inconsistent. While the Humanistic movement
convinced us that people were critical to success, it did nothing to change
the underlying paradigms.
The world is changing at an ever-increasing rate. What used to occur
in 10 – 20 years cycles now occurs in 3 – 5 year cycles. The world moved
from dominantly local and regional to increasingly national and
Appendix 175
international in reach. The simple gave way to the complex. What was
long seen as predictable and controllable now appeared random and
chaotic.
What happens when people feel out of control? For Maslow, they
return to their lower order needs of survival and psychological well-being.
They seek consistency, security and predictability, all the things promised
by our old friend Scientific Management. The simplicity of the machine
was too hard to give up, particularly when compared to the alternative
complexity of a team of freethinking individuals. With a machine,
everything could be measured, predicted and controlled. Not so with
people.
Our original corporate system was designed to conform to our
mechanistic view of the world. Business as a big machine was only
concerned with production, which is measured by revenues and profits.
This made making money the core purpose of our collective enterprise.
The world of business became a race for financial returns, taking our once
great engine of progress deep into a dark, hollow hole.
In 1981, Jack Welch, then CEO of GE, gave a speech at New York’s
Pierre Hotel, “Growing Fast in a Slow-Growth Economy.” In it, Mr. Welch
outlined his belief that companies must sell underperforming businesses
and aggressively cut costs in order to deliver consistent increases in profit
that would keep ahead of global economic growth. “GE,” he told analysts,
“will be the locomotive pulling the GNP, not the caboose following it.”
Though Mr. Welch says that he never said that maximizing shareholder
value was the number one goal of the corporation, (he believed strongly
that serving customers was the true focus of a corporation), this speech is
often acknowledged as the dawn of the obsession with shareholder value.44
For whatever reason, the financial world, the business community,
and society at large began chanting the mantra of “maximize shareholder
value.” This began the final transformation of Capitalism from a
contributing force in society to its darker impulses. Business was now on
its knees, bowing before the deity of the almighty dollar. Nothing else
mattered.
Everything was measured by financial return. A new breed of
engineer emerged: the financial engineer whose only purpose was the
creation of financial wealth by whatever means possible. Using clever ways
176 The Living Organization
of reporting the numbers, they would often obfuscate the real
performance of our corporations, making the results appear better than
they truly were. They could package up a portfolio of assets and
reapportion the risk across new types of securities, making an investment
appear less risky and more valuable than it truly was. This is precisely
what led to the financial meltdown of so many home based derivatives in
2009 and the near collapse of our entire financial system.
As a consultant I worked with a new CEO who was in his position for
two years when he reached out to me for assistance. His predecessor was
the founder of the company who at the age of 92 had passed away at his
desk. This founder was admired for his passion for the products the
company produced but was also considered a capricious tyrannical leader
(the words of the employees, not mine).
The new CEO was committed to changing the culture and
empowering his employees. He was a senior executive at one of the large
beverage companies and had been through all the proper management
training programs. He believed in Management by Objectives and setting
a motivating goal that will stimulate outstanding performance. He
committed to the board that he would grow the company from $50
million in revenues to over $100 million in five years. This became the
single goal for his team and the organization. His attempts to implement a
new culture and to empower the people were rooted in the underlying
desire to improve the machine’s ability to increase the production of
profits. The result? He failed.
Like the company, our overall business community was no longer a
machine driving progress but simply a printing press for money, a
machine designed to produce more goods for more consumers in the
endless race to expand market share and profits. It was wealth for wealth’s
sake. Our whole society fell under the spell of this hypnotic vision. Where
business people once talked about improving people lives and putting a
“chicken in every pot,” money became an end in itself. This endless cycle
of consumption and growth become the obsession of every professional
manager and made us all slaves to the great money machine.
The Humanistic approach also fell prey to this addiction. If it couldn’t
be measured and reported, if it couldn’t be directly related to growth in
shareholder value, it had no merit. Managers were required to justify
Appendix 177
every decision in terms of return on investment, even the non-tangible
benefits of developing people or building a culture of innovation. But as
we now know, when everything is reduced to just dollars, it is difficult to
invest in the intangible, unscientific creative processes that ultimately drive
success.
Though the pull of the old always makes new ideas difficult to accept,
it alone does not explain why the machine view was not more widely
discarded. If the Humanistic approach truly held the value it professed, if
it had been able to fully explain the world around us and produce the
predictable results we still craved, then it would have overcome the
resistance inherent in change. But history indicates that it neither failed
nor succeeded. It shifted our focus away from an almost pure orientation
to the machine and provided us with a greater understanding of the one
part of our machine which we still couldn’t fully understand, control or
predict: people.
The Humanist model stressed the importance of people within
organizations and increased the attention we paid to employee motivation
and satisfaction. This paradigm evolved in tandem with science, which was
moving away from the certainty of Newtonian physics to Quantum Physics
and Chaos Theory. There was a growing recognition that organizations
were more than linear machines or simple sets of processes and workflows.
Instead, they were increasingly viewed as complex, non-linear, adaptive
systems. Organizations were suddenly systems that could actually learn
and grow.
For all its contributions, the Humanistic Model that emerged in the
1960’s was never able to shift the underlying paradigm by which all
decisions are made. We still believe in the dominant paradigm of the
machine and its drive for measurable results even though we knew from
the Humanist’s theories that people were inherently difficult to measure
or predict. We still do not know how to translate human benefits into
machine metrics like return on investment to aid in making decisions.
The reason for the failure of the Humanistic paradigm to significantly
shift our underlying paradigm was precisely because it could not and did
not provide a substantive platform for new decision-making. It extolled
certain benefits but couldn’t explain them. It told us that unseen forces
were at work but did not explore them. Without a deeper understanding
178 The Living Organization
of the underlying forces that produced the results, management had to
take a leap of faith that things like “corporate culture,” “human
development” and “core values” created any real or tangible benefit to the
bottom line.
At HP I knew my results came about because of the team I had. But
there was something more than just the competence of the team. As a
collective we operated at a higher level than the mere sum of the talents of
the team. This team operated as if they were one unit. Even though they
were geographically spread throughout the sales region, they were highly
aligned and there seemed to be an energy that each member of the team
drew from as if the collective added energy to each individual.
We know that when teams are “hitting on all cylinders” there is a
sudden burst of energy we call Synergy, something almost everyone has
experienced at one time or another. That is what I unconsciously created
with my team at HP, a phenomenon in which the whole was greater than
its parts, where 2 + 2 suddenly equaled 5. Anyone interacting with my
team could feel this heightened energy and could see it in the results we
produced. But how do you explain it, much less harness its energy, for
your own purposes? Can you create synergy with the same
straightforward ease that you can realign the flow of work through the
factory? We had the words to name it but not the understanding of how it
worked that would enable us to create it. There are also many other areas
that contribute to success that the Humanistic Model left unexplained.
How about harnessing creativity? Who would not want their
employees to apply creative ideas to the challenges they faced? Yet with all
the creativity programs out there and our desire for “outside the box
thinking,” we still have not succeeded in understanding how or why this
magic takes place. Nor have we learned how to create cultures where
creative out-of-the box thinking is the norm. Why?
Intuitive insights are also a key component in manifesting magical
results. Where does this “sixth sense” come from and how can we tap into
its power on a regular basis? It appears to be an ephemeral force that can’t
be counted upon to regularly produce results. Sometimes it works and
other times it doesn’t. When an executive’s only justification for a certain
decision is, “I have a gut feel about this one,” are we more likely to listen
to his instincts or reject them in favor of a more rational approach?
Appendix 179
The Humanist paradigm failed to explain these common experiences
and the power behind them. It failed to provide us with a formula to re-
create these experiences at will. In short, it never explained the unseen
forces at work that created the magical results that some companies like
Apple, Southwest, Whole Foods and others regularly seem to attain. Nor
can we explain why companies who have broken out of the pack and
moved from good to great, fall from grace, companies like Enron, once
considered the darling of Wall Street only to be the poster child for all that
is wrong with business, and even my own beloved Hewlett-Packard, once
considered the model of a company that had it right but which has been
plagued with scandals of its own over the last decade.
Although we cannot explain or measure these magical forces, we
know that some unseen power can have an incredible impact on the
results we tangibly feel and measure. What if we could find a new model
and a better understanding of these forces that is based on sound
principles and does not require a complete leap of faith to put them into
practice?
To find that “missing link” or the next stage in our evolutionary
development, we’ve got to stop thinking of these hidden forces as
mysteries and start thinking of them in scientific terms. We must learn to
work with and release the latent energy that lies hidden and untapped
within every organization, energy that, once released, will propel our
corporations to new levels of achievement and performance. For that, we
need a new way of understanding our world, a new paradigm that goes
below our surface understanding to reveal the hidden forces at work in
our world.
The
Leadership
Challenge
With each passing year and each passing crisis, today’s new
generation of leaders are experiencing the limitations of our existing
business models and the devastating emptiness of many enterprises. They
sense the need for something more, something drastically different. But
few will change based solely on a leap of faith.
All change comes with uncertainty and a degree of risk. To embrace a
new worldview, today’s leaders need to know that the difficult changes
being called for and the uneasy experience in venturing into the unknown
180 The Living Organization
will produce better results than they are experiencing today. They cannot
be expected to make the changes based predominantly on the moral plea
of “doing good in the world.” Corporate Social Responsibility, Stakeholder
Model, and other newly proposed models often set doing good above
making a profit. At times it can even appear to oppose making profits, a
message that invariably rings hollow to most corporate leaders and limits
the adoption of these models. Organization leaders need a new model that
better explains the world around them, one based on sound principles
and science. One that provides them the necessary tools and empowers
them to achieve better results than the model they currently use.
What would it take to create such a new model? Is there a scientific
system that can explain the unseen forces of synergy and magical results
to us in terms we can all understand and use? Such a model would
ultimately have to explain the process of manifestation. It would reveal all
the forces at work in our business and our world and how we can tap into
and harness them to manifest the results we want to create. It could even
show us how to spark our corporate creativity and breathe new life into
our soulless machines.
181
Book
References
When I look back on what has impacted and influenced me, bringing
me to the perspectives I write about, there have been many experiences
and many books that served as guides on my journey. My interest in how
we, as humans, create brought me to explore many fields from physics to
psychology, from science to spirituality and from management theories to
Perennial Wisdoms.
There is no way I can include all of the material I think would be
appropriate reading but I have included those pieces that have served to
influence me the most and those I believe add to and enhance the
conversation I started in this book.
Some of the books on this list may seem odd to some of you as
reference for a book on business and organizations. For me practically
everything on this list has served, in some form or fashion, to deepen my
understanding of how organizations create results. They have merged and
morphed so much with each other that is difficult to compartmentalize.
Yet I have attempted to organize them so you as the reader can have a
sense of the type of books they are.
There is one individual whose work I want to call out. It is the work of
W. Brugh Joy. Brugh served as a very special guide for my personal
journey over the last seven years. He opened gateways for me to explore
and deepen my understanding into the Mystery of Life. Though he
passed away in December of 2010, it is clear that his work lives on through
me.
Browse the list and allow yourself to open to the books that call to
you. Then go read them and see what new gates will open for you. Enjoy.
182 The Living Organization
Changing
the
Business
Paradigm
Firms Of Endearment by Raj Sisodia, David Wolfe, Jaq Sheth
The Living Organization by Lane Tracy
Be the Solution by Michael Strong and John Mackey
Managing in the Twenty-first Century by Satinder Dhima and Jerry
Biberman
Let My People Go Surfing by Yves Chouinard
Origins of Wealth by Eric Beinhocker
Stakeholder Theory by Edward Freeman
Conscious Business by Fred Kofman
Liberating the Corporate Soul by Richard Barrett
SuperCorp by Rosabeth Moss Kanter
Wired to Care by Dev Patnail
Megatrends 2010 by Patricia Auburdene
Megatrend by John Naisbitt
Global Mind Change by Willis Harman
Future Shock by Alvin Toffler
Communicating
Everyone Communicates Few Connect by John Maxwell
Fierce Conversations by Susan Scott
Appreciative Inquiry by David L. Cooperrider and Diana Whitney
Getting to Yes by Roger Fischer and Scott Brown
Leading our Loud by Terry Pearce
The Leader’s Guide to Storytelling by Stephen Denning
Deepening
Our
Understanding
The Living Organization: Spirituality in the Workplace by William A.
Guillory Ph.D
Start with Why by Simon Sinek
Drive by Daniel Pink
Built to Last by Jim Collins
Good to Great by Jim Collins
Presence by Peter Senge, C. Otto Scharmer, Joseph Jaworski and Betty
Sue Flowers
Fifth Discipline by Peter Senge
Book References 183
The Living Company by Arie De Geus
The Three Laws of Performance by Zaffron and Logan
Corporate Culture and Performance by John P. Kotter and James L.
Heskett
The Seven Arts of Change by David Shaner
Working for Good by Jeff Klein
Strategy
Execution by Larry Cossidy, Ram Charan and Charles Burck
Balanced Scorecard by Robert S. Kaplan and David P. Norton
The Art of War by Sen Tzu and Ralph D. Sawyer
On Competition by Michael Porter
Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne
Lords of Strategy by Walter Kiechel
Beyond Strategic Vision by Michael Cowley and Ellen Domb
Market
Forces
Crossing the Chasm by Geoffrey A. Moore
Diffusion of Innovation by Everett M. Roger
The Innovators Dilemma by Clayton Christianson
The Experience Economy by Joseph Pine II and James Gilmore
It’s Not what you Sell, It’s what you Stand For by Roy Spence
Discovering the Soul of Service by Leonard L. Berry
The Myth of Excellence by Fred Crawford and Ryan Mathews
Tipping Point by Malcolm Gladwell
Leadership
Leading the Living Organization by Lane Tracey
Peak by Chip Conley
Tribal Leadership by David Logan, John King and Halee Fischer-
Wright
Passion and Purpose by John Mackey
Leading with Soul by Lee G. Bolman and Terrence E. Deal
Edgewalkers by Judi Neal
The Servant by James C. Hunter
The Corporate Mystic by Gay Hendricks
184 The Living Organization
7 Habits of Highly Effective People by Stephen Covey
The 8th Habit by Stephen Covey
One Minute Manager by Ken Blanchard
Now Discover Your Strengths by Marcus Buckingham and Donald O.
Clifton
Leader Effectiveness Training by Dr. Thomas Gordon
As One by Michael Baghai and James Quigley
The Leadership Challenge by James M. Kouzes and Barry Z. Posner
Leadership in an Era of Economic Uncertainty by Ram Charan
Deeper
Leadership
Appreciative Leadership by Diane Whitney
Getting Naked by Patrick Lencioni
The Mindful Leader by Michael Carroll
Leadership and the New Science by Margaret Wheatley
Inspirational Leadership by Lance H. K. Secretan
Conscious Leadership by Chutisa Bowman, and Steven Bowman
Unleashing Genius by Paul Walker
Authentic Leadership by Bill George
Mojo by Marshal Goldsmith
Are You Ready to Succeed by Srikumar Rao
Better Under Pressure by Justin Menkes
The Human Side of Enterprise by Douglas McGregor
Servant Leadership by Robert K. Greenleaf and Larry C/ Spears
Psychology
Man and His Symbols by Carl G. Jung
The Undiscovered Self by Carl G. Jung
The Portable Jung by Carl G. Jung, Joseph Campbell and R. F. C. Hull
Ego and Archetype by Edward Edinger
Anatomy of the Psyche by Edward Edinger
Creation of Consciousness by Edward Edinger
Positivity by Barbara Fredrickson
The Hero with a Thousand Faces by Joseph Campbell
The Power of Myth by Joseph Campbell
Emotional Intelligence by Daniel Goleman
Book References 185
Learned Optimism by Martin P. Seligman
Religion Values and Peak Experiences by Abraham Maslow
The Farther Reaches of Human Nature by Abraham Maslow
I’m Ok – You’re OK by Thomas A. Harris
Psycho-Cybernetics by Maxwell Maltz
Flow by Mihaly Csikzentmihalyi
Please Understand Me by David Keirsey and Marilyn Bates
Lessons
from
Martial
Arts
The Book of Five Rings by Maiyamoto Musashi and Thomas Cleary
The Art of Peace by Morihei Ueshiba, Lloyd James and John Stevens
A Life in Aikido by Kisshomaru Ueshiba and Moriteru Ueshiba
Man’s Search for Meaning by Viktor Frankl
Spirituality
in
Business
Appreciative Intelligence by Tojo Thatchenkery and Carol Metzker
Spiritual Intelligence by Danah Zohar
The Workplace & Spirituality by Joan Marques, Satinder Dhiman,
Richard King
God Goes to Work by Tom Zender
One by Lance H. K. Secretan
Purpose by Nikos Mourkogiannis
The Hungry Spirit by Charles Handy
Love and Profit by James Autry
Spiritual
Fiction
Siddhartha by Hermann Hesse
Steppenwolf by Hermann Hesse and Basil Creighton
Demian by Hermann Hesse
Stanger in a Strange Land by Robert Heinlein
His Dark Materials Trilogy by Philip Murrya
Star Wars Trilogy by George Lucas
The Lord of the Rings Trilogy by J.R.R. Tolkien
Conversations with God by Neale Donald Walsch
Way of the Peaceful Warrior by Dan Millman
The Celestine Prophecy by James Redfield
186 The Living Organization
Traditional
Faith
Paths
The Teachings of the Compassionate Buddha by E.A. Burtt
The Analects of Confucius by Arthur Waley
The Four Nobel Truths and other books by HH The Dalai Lama
Tao Te Ching by Lao Tzu
The Upanishads
The Bhagavad-Gita
The Torah
The New Testament
“Metaphysical”
Physics
The Hidden Connection by Fritjof Capra
Dancing Wu Li Masters by Gary Zukav
Tao of Physics by Fritjof Capra
The Seat of the Soul by Gary Zukav
Personal
Growth
Think and Grow Rich by Napoleon Hill
The Road Less Travelled by M. Scott Peck
The Different Drum by M. Scott Peck
The Happiness Advantage by Shawn Achor
The Purpose Driven Life by Rick Warren
Illuminata by Marianne Williamson
You Can Heal Your Life by Louise Hay
Invisible Acts of Power by Caroline Myss
Be Here Now by Ram Dass
The Power of Now by Eckhart Tolle
Living in the Light by Shakti Gawain
Awakening to the Spirit World by Sandra Ingerman and Hank
Wesselman
Illumination by Alberto Villoldo
Fire in the Belly by Sam Keen
Knights Without Armor by Aaron R. Kipnis
Joy’s Way by W. Brugh Joy
Avalanche by W. Brugh Joy
187
Endnotes
Chapter 1
1 “Appeal of iPad 2 Is a Matter of Emotions,” By David Pogue, New York
Times, Published: March 9, 2011
2 Arthur C. Clarke, “Profiles of The Future”, 1961 (Clarke’s third law)
3 See the appendix for a brief history of the evolution of business and the
models that have supported its growth.
4 http://blogs.forrester.com/sarah_rotman_epps/10-07-22-
apple_ipad_sales_why_tablets_are_even_bigger_we_thought
5 http://en.wikipedia.org/wiki/Force_field_analysis and
http://en.wikipedia.org/wiki/Kurt_Lewin
6 Adam Smith, The Wealth of Nations, Book IV, chapter II, paragraph IX
Chapter 2
7 http://en.wikipedia.org/wiki/Invisible_hand
8 For more information about CSR visit www.csrwire.com. For Stakeholder vs.
Shareholder visit
http://www.valuebasedmanagement.net/faq_shareholder_stakeholder_persp
ective.html and for Conscious Leadership and the broader movement of
Conscious Capitalism visit http://www.cc-institute.com/cci/
9
http://online.wsj.com/article_email/SB1000142405274870333800457523011266
4504890-lMyQjAxMTAwMDIwMzEyNDMyWj.html
Chapter 3
10 Feynman, Richard (1964). The Feynman Lectures on Physics; Volume 1. U.S.A:
Addison Wesley.
11 For more details see
http://wiki.answers.com/Q/How_many_thoughts_do_people_have_each_day#i
xzz1IgbkE9KT
12 Bruce H. Lipton, “The Biology of Belief,” pg 9, Published by Hay House,
2008
188 Endnotes
Chapter 5
13 http://en.wikipedia.org/wiki/Thermoeconomics
14 “Welch condemns share price focus”, Financial Times, March 12, 2009
Chapter 6
15 “Emotional Intelligence: Why It Can Matter More Than IQ,” Daniel
Goleman, Bantam Books, October 1995
16 Bruce H. Lipton, “The Biology of Belief,” pg 9, Published by Hay House,
2008
17 Bruce H. Lipton, “The Biology of Belief,” pg 9, Published by Hay House,
2008
Chapter 9
18 Michael Gershon, author of the 1998 book The Second Brain (HarperCollins).
19 Scientific America, February 12, 2010
http://www.scientificamerican.com/article.cfm?id=gut-second-brain
20 Institute of HeartMath® http://www.heartmath.org/research/science-of-
the-heart.html
21 Neurocardiology, edited by Dr. Armour and Dr. Jeffrey Ardell
22 “The Blind Spot of Economic Thought: Seven Acupuncture Points for
Shifting Capitalism 2.0 to 3.0, Otto Scharmer, Paper Prepared for presentation
at the Roundtable on Transforming Capitalism to Create a Regenerative
Society, MIT, June 8-9, 2009
23 Danah Zohar and Ian Marshall, SQ: Ultimate intelligence and Cindy
Wigglesworth’s, “Spiritual intelligence Assessment”
24 http://en.wikipedia.org/wiki/Spiritual_intelligence
25 For more information on this assessment tool visit
http://deepchange.com/discover_skills/index
26 For more information on these movements visit:
http://en.wikipedia.org/wiki/Corporate_social_responsibility for Corporate
Social Responsibility, http://www.consciouscapitalism.org/ for Conscious
Capitalism and http://hbr.org/2011/01/the-big-idea-creating-shared-
value/ar/1 for an article By Michael Porter on the concept of Shared Value
Chapter 11
27 Excerpted from a Webinar by David Norton and Robert Kaplan, “An
introduction to Execution Premium Process,” © Palladium Group 2010.
28 Improving Organization Decision-Making through Pervasive Business
Intelligence, 2009)
29 BSCol Research of 243 performance management professionals drawn from
BSCol Online Community, march 2006)
30 ISO 8402, 1994
31 Rappaport, Creating Shareholder Value,” 1986
32This quote came from The Balanced Scorecard Master-Class™, given by
David Norton and Palladium group, October 2010. I modified it from their use
189
as a definition for Balanced Scorecard to be more inclusive of performance
management systems in general. While I believe theirs to be the most advanced
there are others. Hoshin Planning is but one example.
Chapter 12
33 For a more detailed description of Business Model refer to Harvard Business
Review Article “Reinventing Your Business Model,” by Mark W. Johnson,
Clayton M. Christensen, and Henning Kagermann, Reprint R0812C
34 http://en.wikipedia.org/wiki/Capability_Maturity_Model
Appendix
35
http://www.econlib.org/library/Enc/IndustrialRevolutionandtheStandardof
Living.html
36
http://www.econlib.org/library/Enc/StandardsofLivingandModernEconomi
cGrowth.html
37 http://us.history.wisc.edu/hist102/lectures/lecture21.html
38
http://wiki.answers.com/Q/How_did_World_War_2_affect_the_US_econom
y
39 http://en.wikipedia.org/wiki/G.I._Bill
40 http://us.history.wisc.edu/hist102/lectures/lecture22.html
41 Herzberg, F.I. 1987, ‘One more time: How do you motivate employees?’
Harvard Business Review, Sep/Oct87, Vol. 65 Issue 5, p109-120 (note: the reference
to sales numbers is in the abstract written by the editors.)
42 “Drive: The Surprising Truth About What Motivates Us,” Daniel H. Pink,
Riverhead Hardcover, December 2009
43 “Peak: How Great Companies Get Their Mojo from Maslow,” Chip Conley,
Jossey-Bass, September 2007
44 http://en.wikipedia.org/wiki/Shareholder_value – and also –
http://www.ft.com/cms/s/0/294ff1f2-‐0f27-‐11de-‐ba10-‐
0000779fd2ac.html?nclick_check=1
190
Index
7-‐Eleven,
77
Activity
Field,
1,
3,
viii,
9,
18,
23,
34,
36,
48,
64,
65,
67,
68,
69,
70,
72,
73,
74,
76,
78,
81,
82,
83,
86,
87,
90,
91,
92,
93,
94,
95,
96,
97,
98,
99,
100,
101,
103,
104,
105,
106,
108,
112,
113,
114,
115,
116,
117,
120,
124,
127,
132,
133,
134,
136,
138,
139,
142,
143,
153,
156,
162,
164,
172
Adelphia,
59
Alignment,
viii,
18,
46,
66,
92,
124,
125,
128,
133,
134,
135
Amazon,
12
Apple,
11,
12,
13,
15,
16,
19,
24,
71,
78,
102,
118,
156,
179
iPad,
11,
15,
187
iPhone,
11,
15
Arc
Framework,
114,
154
Armour,
Dr.
J.
Andrew,
90,
188
Arthur
Anderson,
161
Balanced
Scorecard,
111,
112,
113,
114,
115,
144,
183,
189
Bear
Stearns,
11,
59,
161
Bernanke,
Ben,
18
Blake,
William,
160
Blue
Ocean
Strategy,
111,
183
BMW,
12
Boeing,
122
Boesky,
Ivan,
60
Capability
Maturity
Model,
154
Capitalism,
vii,
ix,
1,
3,
14,
15,
16,
19,
58,
92,
160,
161,
162,
175,
187,
188
CarMax,
12
Caterpillar,
12
Chaos
Theory,
166,
177
Clark,
Arthur
C.,
13,
187
Coca-‐Cola,
91
Collins,
Jim,
24,
182
Commerce
Bank,
12
Commitment
Alignment,
135
Container
Store,
12,
19
Context
Field,
1,
3,
v,
viii,
64,
81,
82,
84,
87,
88,
89,
90,
91,
93,
94,
95,
96,
97,
98,
99,
101,
102,
103,
104,
105,
107,
108,
109,
112,
113,
114,
115,
120,
121,
124,
127,
128,
130,
132,
133,
134,
135,
136,
139,
142,
143,
156,
157,
158
Core
Values,
viii,
2,
120,
121,
124,
125,
128,
149,
153,
154,
178
Corporate
Social
Responsibility,
25,
26,
92,
180,
188
191
Corporation,
2,
1,
15,
22,
25,
27,
43,
50,
51,
60,
61,
101,
104,
109,
124,
147,
155,
156,
157,
167,
174,
175
Costco,
12
Creation,
i,
iii,
vii,
13,
15,
16,
28,
30,
35,
38,
40,
46,
59,
73,
102,
115,
123,
139,
145,
152,
158,
175,
184
Crosby,
Phil,
154
Cultural
Alignment,
134
Customers,
1,
2,
3,
6,
7,
9,
10,
12,
25,
28,
35,
46,
47,
49,
50,
56,
57,
60,
61,
62,
66,
77,
78,
79,
83,
84,
86,
103,
104,
106,
107,
108,
109,
112,
114,
118,
120,
121,
122,
124,
138,
139,
140,
147,
150,
152,
153,
154,
157,
175
de
Geus,
Arie,
148
Delphi
Analysis,
111
Deming
Cycle,
113
Dickens,
Charles,
160
Disc,
172
Dodd-‐Frank
Act,
152
eBay,
12
Economic
Freedom,
160
Edwards
Lifesciences,
122
Einstein,
Albert,
14,
21,
29,
30,
32,
34,
149
Emotional
Intelligence,
67,
91,
138,
184,
188
Enron,
59,
61,
155,
161,
179
Environmental
Scanning,
111
Epps,
Sarah
Rotman,
15
Esalen,
2,
28
Evolution,
3,
iv,
vii,
ix,
2,
10,
13,
20,
30,
41,
43,
56,
85,
88,
156,
160,
162,
174,
179,
187
Execution
Management,
112,
113,
130,
150,
153
Execution
Maturity
Development
Model,
154
Execution
Scorecard,
137
Experience,
3,
4,
v,
vi,
viii,
9,
19,
24,
30,
32,
33,
35,
38,
40,
48,
66,
70,
71,
73,
76,
77,
78,
79,
80,
81,
87,
88,
89,
91,
93,
110,
115,
123,
124,
128,
130,
142,
143,
151,
179,
183
Federal
Reserve
Bank,
18
Feynman,
Richard,
32
Financial,
3,
9,
18,
54,
55,
57,
58,
59,
60,
103,
104,
114,
150,
152,
155,
157,
161,
175,
188
Fiorina,
Carly,
58
Firms
of
Endearment,
12,
26,
102
Five
Force
Analysis,
111
Force
Field
analysis,
16
Future
Vision,
v,
vi,
viii,
24,
61,
62,
92,
120,
121,
123,
124,
128,
132,
145,
151,
153,
154,
163,
174,
176,
183
General
Electric
Corporation,
60
General
Motors,
11,
15,
24,
161
Gershon,
Michael,
90,
188
Goal
Alignment,
134
Goldman
Sachs,
59
Goleman,
Daniel,
67,
91,
184,
188
Google,
12
Great
Depression,
161,
165
Great
Recession,
160
Gretsky,
Wayne,
74
Harley-‐Davidson,
12
Harvard
Policy
Model,
113
Heart-‐brain,
90,
91
HeartMath
Institute,
90
Herzberg,
Frederick,
169,
171,
172,
189
Hewlett
Packard,
6,
21,
24,
31,
36,
58,
61,
83,
84,
91,
151,
156,
168,
172,
174,
178
Honda,
12
Hoshin
Planning,
113,
189
Human
Capital,
114
Humanism,
ix,
166,
168,
169,
170,
171,
174,
176,
177,
178,
179
Hurd,
Mark,
58
IBM,
24,
169
IDEO,
12
IKEA,
12
Improv,
147
Industrial
Revolution,
15,
156,
159,
160,
162
Information
Capital,
114
Innovation
Strategy,
140,
142
Invisible
hand,
18,
24,
93
JetBlue,
12
Jobs,
Steve,
12,
24
Johnson
&
Johnson,
12
Jung,
Carl,
19
Kaplan,
Robert,
111,
113,
130,
183,
188
Keating,
Charles,
61
Knowledge
Systems,
68
Leadership,
4,
v,
ix,
8,
22,
25,
39,
92,
103,
104,
105,
113,
124,
125,
150,
151,
153,
154,
157,
158,
164,
168,
169,
179,
183,
184,
187
Lehman
Brothers,
11,
15,
59,
161
Lewin,
Kurt,
16
Living
Customers,
79
Living
Entities,
79
Living
Organization,
1,
2,
3,
4,
i,
ii,
iii,
vi,
vii,
2,
3,
8,
9,
21,
22,
23,
24,
28,
29,
30,
43,
44,
45,
46,
49,
51,
57,
73,
74,
75,
78,
79,
84,
93,
101,
102,
103,
105,
108,
114,
115,
119,
123,
124,
130,
134,
148,
153,
156,
157,
182,
183
Lord
Kelvin,
32
Machine,
1,
ix,
1,
2,
9,
12,
15,
22,
23,
25,
26,
27,
64,
77,
92,
100,
101,
102,
103,
123,
155,
156,
157,
163,
164,
167,
168,
169,
171,
174,
175,
176,
177
Madoff,
Bernard,
59,
61
Magic,
3,
vii,
viii,
4,
8,
12,
13,
14,
16,
18,
19,
21,
22,
23,
24,
28,
31,
51,
70,
71,
80,
81,
93,
102,
124,
125,
147,
156,
167,
174,
178,
179,
180
Maltz,
Maxwell,
169,
185
Management,
4,
3,
6,
7,
9,
10,
21,
22,
28,
35,
71,
83,
92,
100,
103,
105,
112,
113,
115,
136,
141,
144,
150,
151,
161,
162,
168,
169,
171,
173,
176,
178,
181,
188,
189
Maslow,
1,
108,
166,
169,
170,
171,
172,
175,
185,
189
193
Mauborgne,
Renee,
111,
183
Maxwell,
James
Clerk,
18,
24,
169,
182,
185
Mayer,
Emery,
90
McDonalds,
77
McGinnis,
Bill,
v,
14
McGregor,
Douglas,
169,
170,
184
McKinsey,
91
Merck
Pharmaceuticals,
91
Meyers
Briggs,
172
Microsoft,
19
Milken,
Michael,
60
Mission,
viii,
7,
45,
72,
78,
92,
120,
121,
122,
123,
128,
153,
154
National
Technical
Systems,
v,
14
New
Balance,
12
New
Deal,
165
New
York
Times,
1,
18,
187
Newton,
Isaac,
32,
114,
163,
164,
166,
174
Physics,
25,
29,
177
Nokia,
91
Nordstrom,
78
Norton,
David,
111,
113,
130,
183,
188,
189
Nye,
John
V.
C.,
159
Organization
Capital,
114
Patagonia,
1,
12
Peets,
77
Performance
Management,
115
Planning
Horizon,
118,
119
Pratt
&
Whitney,
5,
6,
83,
84
Process
Reengineering,
50,
106
Profit,
viii,
3,
25,
26,
51,
54,
55,
57,
58,
59,
60,
61,
175,
180,
185
Quality
Management
Maturity
Grid,
154
Quality
Movement,
113
Quantum
Leaders,
ii,
vi,
7,
61,
62,
92
Quantum
Physics,
18,
93,
166,
177
Rankin,
William,
32
Real Time Execution System,
ii,
viii,
9,
114,
130,
131,
135,
136,
137,
144,
149
align,
130
assess,
130,
132,
133,
135,
137
decide,
130,
132,
133,
135,
144
define,
130
evaluate,
130,
132,
133,
137,
146,
149
perform,
130,
132,
133
Reductionist,
29
REI,
12
Relationship
Field,
2,
3,
v,
viii,
2,
5,
28,
29,
33,
38,
40,
51,
57,
64,
65,
66,
67,
68,
69,
70,
72,
73,
74,
75,
76,
78,
79,
81,
82,
86,
87,
88,
90,
91,
93,
95,
98,
99,
101,
103,
105,
106,
107,
108,
112,
113,
114,
115,
124,
132,
134,
135,
136,
138,
139,
142,
143,
156
Sarbanes-‐Oxley,
152,
162
Scenario
Planning,
111
Scharmer,
Dr.
Otto,
90,
182,
188
Scientific
Management,
29,
163,
166,
175
Scientific
Method,
29
Senge,
Peter,
147,
148,
182
Shared
Value,
92,
188
Shareholder
Value,
12,
27,
60,
61,
115,
155,
175,
176
Shell,
91,
148
Sisodia,
Raj,
12,
182
Six
Sigma,
50,
106
Smith,
Adam,
1,
18,
24,
160,
187
Social
Psychology,
16
Soulful
Purpose,
2,
ii,
v,
viii,
45,
46,
57,
59,
84,
85,
86,
98,
100,
103,
108,
109,
120,
121,
122,
123,
124,
127,
128,
132,
146,
147,
152,
153,
154,
156,
157,
158
Southwest,
12,
179
Spiritual
Intelligence,
4,
91,
139,
185
Starbucks,
12,
77,
80,
91
Strategic
Compass,
ii,
120,
128,
130,
131,
133,
135,
137,
153,
154
Strategic
Planning,
viii,
16,
113,
117,
118,
120,
127,
128,
144
Strategy,
viii,
60,
61,
92,
103,
110,
111,
112,
113,
115,
117,
118,
130,
134,
135,
138,
140,
141,
142,
144,
145,
146,
148,
150,
183
Strategy
Execution,
viii,
111,
112,
117,
130,
138,
141,
150
Sun
Tzu,
113
Synergy,
viii,
9,
24,
68,
70,
71,
79,
178,
180
Taylor,
Frederick,
100,
163,
168
Thales
of
Miletus,
32
Timberland,
12
Total
Quality
Management,
50,
106
Toyota,
12,
156,
174
Trader
Joe’s,
12,
78
Tyco,
61
Uncertainty
Principle,
166
Unilever,
91
UPS,
12
Wall
Street
Journal,
26
War
Gaming,
111
Watts,
Alan,
5
Wegmans,
12
Welch,
Jack,
45,
60,
175,
188
Whole
Foods
Market,
1,
2,
12,
19,
71,
78,
102,
156,
179
Wigglesworth,
Cindy,
4,
139,
188
Young,
Thomas,
32
195
About
the
Author
Throughout his professional career
as a Chief Executive Officer, Corporate
Director, and Advisor to CEOs, Norman
Wolfe has successfully guided
corporations through major transitions
leading to substantial growth, market
expansion and enhanced financial
performance. Currently, he is the
Chairman and CEO of Quantum
Leaders, a leading edge consulting
company guiding boards and CEOs to
improve strategy execution.
Norman’s lifelong passion has been
to understand how we, as individuals
and organizations, create results and
manifest our destiny. This passion is brought to life through his own
Soulful Purpose™ to transform organizations to support and enhance the
dignity of the human spirit in the process of serving their community.
The Living Organization® Trilogy is the part of that journey.
Norman travels the country speaking and training organizations and
leaders on The Living Organization® and the way to transform
organizations from machines of production to dynamic, creative living
organizations. His company, Quantum Leaders Consulting provides
tools, assessments, training and implementation support to companies
wanting to become Living Organizations®. To have Norman speak at your
next event, please visit his website www.normanwolfe.com. For training,
consulting or implementation support, visit www.quantumleaders.com.
Norman currently resides in Irvine, CA with his wife Jane and their
two Bichon dogs. He is also an Ordained Interfaith Minister offering
spiritual guidance and insightful dialogue. He welcomes feedback and
conversation and can be reached at nwolfe@quantumleaders.com.
9780983531012-frontcover
9780983531012-backcover
9780983531012-spine
9780983531012-interior