Addressing Current Insanity Starts with Silence
Axiom News spoke with Giles Hutchins about the Nature of Business, what brought him to this subject, and what gives him hope that ideas such as those he offers can in fact regenerate our economy and society.
What’s the commitment you hold that brought you to explore the subject you do in your book The Nature of Business?
Giles: From an early age I recognized that there was a significant problem with the way that we were behaving. Whether it was in seeing exhausts coming out of a car or sewage draining into the sea, things didn’t seem quite right and I hoped that we had a strategy up our sleeve and so went about trying to find what that strategy was.
And what I recognized as I got on with it was that the relationship between us, humanity, — or at least the prevalent paradigm of humanity — and nature was the root cause of the challenges that we face, so that whether it be AIDs or poverty, climate change, whatever, it all came back to that root cause.
So my love of nature, which I probably had from birth, combined with an understanding of business, as I was engaged with KPMG, then Atos a global IT firm and more recently in sustainable business, took me to looking at how we could go about creating a bridge between business and nature, which spawned the thinking of the book.
How can we move beyond this concept of just sustaining, doing less bad, to actually going into a place where we can be proud of what we do because it actually helps us thrive and it helps life on earth thrive?
Chaos and order in business?
We must win, beat competition, be the best. It’s a jungle out there, they say, we’re in a battle for survival. The law of the jungle: kill or be killed, every man for himself, survival of the strongest.
Simple, but wrong. What Darwin found was very different; as Kipling noted:
Now this is the Law of the Jungle — as old and as true as the sky;
And the Wolf that shall keep it may prosper, but the Wolf that shall break it must die.
As the creeper that girdles the tree-trunk the Law runneth forward and back —
For the strength of the Pack is the Wolf, and the strength of the Wolf is the Pack.
Rudyard Kipling, The Law of the Jungle (From The Jungle Book)
The law of the jungle in nature is all about a balance between seemingly opposing tensions/forces.
For instance, balancing competition and co-operation.
VISA, when it was launched, made the credit card sector successful precisely because it enabled the member banks to compete (for individual client business) and also co-operate (so that the whole system worked).
In nature we also find a balance of control and freedom, order and chaos, efficiency and diversity. Graham Boyd, in this guest blog for ‘The Nature of Business’, explores how this balancing act is relevant for organisations seeking to thrive in today’s increasingly volatile landscape.
Harmonise opposites in your company, and you’ll have a company extraordinarily able to adapt to change; able to stay on the road at high speed through tight corners.
Can your company do that? If you say no, as most do today, you likely have too much control, too much order, too much efficiency for today’s turbulent demands.
It’s only natural; as over human history we have evolved to thrive by imposing local order on our little bit of the environment we inhabit. More recently, we’ve been evolving to thrive in large, complex organisations for less than a century. Thriving here means balancing order and chaos, walking the line between them.
Dee Hock, founder of VISA, followed nature’s rules when he led the team that united thousands of different banks, each with their own credit card system, to form the VISA Corporation. He coined the word “chaordic” to describe an organisation that finds where chaos and order meet for the organisation’s particular business environment to ensure it thrives under the demands of the dynamic business context.
Tetrald, along with Graham Boyd, are now combining ‘chaordic’ organisational design with ‘holacracy’. Holacracy is a way of designing and running organisations. It adds even more muscle and agility to the chaordic organisation approach and seeks to replaces today’s top-down predict-and-control paradigm with a new way of distributing power and achieving control. It can be thought of as a new “operating system” which instills rapid evolution in the core processes of an organisation.
Key aspects of the chaordic organisation are:
- Crystal clarity on the highest need the organisation is choosing to serve.
- The purpose of our organisation, i.e. what you do to serve that need.
- The principles governing how individuals interact with each other.
- Strong culture and diverse people aligned through values and a sense of purpose
Applying chaordic principles can help an organisation adapt rapidly, learn by doing, and deal with complexity; ‘redesign for resilience’ in these volatile times. VISA, in the first decades, was similar to a natural ecosystem:
- No-one owned it. Membership brought rights and obligations of participation that could not be bought, sold nor transferred.
- Everything was self-organised, from the highest to the lowest levels.
- People had roles and accountabilities, not titles.
- Emergence by focusing on what works well enough to take the next step.
- All members free to form groups, to meet, to organise themselves in any way they choose.
- Whoever is best able to fulfil a role at that point in time does so. For example, when the first VISA mailshot ran into a failed envelope folding system. C-suite people were folding envelopes under the leadership of the mail sorting staff.
- No-one (not even the CEO) knows what every part is doing. Everyone knows what their specific purpose, their context and environment, what output their colleague needs as input, and everyone is fully empowered to do what it takes to achieve it.
We know a lot more about how to create chaordic organisations now, due to the experience (and mistakes) people like Dee Hock have made. If you want to learn from VISA’s mistakes read Dee’s book, “One from Many“. Also, look at www.holacracyone.org for more on holacracy if interested in this organisational design approach, or contact Graham Boyd who is active in this space. Graham says his biggest achievements have come from keeping chaos close:
Getting comfortable with continuous feelings of uncertainty and unpredictability is a life-long journey for me, yet a journey I thrive on as I continue to explore how organisations can become more adaptive in these volatile times.
For more on ‘business inspired by nature’ and to keep abreast of related topics in this space join the Face Book community here
The Bright Future of Business
Humanity was referred to by Andrew Marr in his last episode of the BBC series ‘History of The World’ not as ‘wise man’ homo-sapiens but rather ‘clever apes in a spot of bother’.
He surmises, having traversed through ancient civilizations and the history of man, that if humanity is to have any hope of anything resembling a successful future, we must either radically change our exploitation of natural resources or radically reduce our world population: we either radically adapt or substantially die.
Business leaders, world thinkers and innovators are calling for a ‘paradigm shift’ in our approach to economic and social life.
A paradigm is a constellation of concepts, values, perceptions and practices shared by a community, which forms a particular vision of reality.
Fritjof Capra
The social and scientific revolutions in modern, early modern and even ancient ages have left their legacies with the modern mind, and ultimately the ‘stories’ it unwittingly defaults to. For example, the early modern period, in the Renaissance and the Enlightenment, saw major revelations in scientific discovery and philosophy from Copernicus, Galileo, Newton, Descartes and Darwin, which greatly influenced the modern western view of the human in the wider cosmos and universe. Man became a powerful external actor, disconnected from the very fabric of the natural systems of which he had previously been a part. Interestingly, these events were both profoundly liberating for human societies and also enormously disenchanting. Read more…
The Business Ecosystem – from ‘separatedness’ to ‘interconnectedness’
All organisations operate within a community – an environment of interconnections. The age-old adage ‘no man is an island’ is the same for an organisation. In fact, just like an ecosystem in nature, the more diverse the relationships and resources an organisation makes use of, the more resilient it becomes. Life is all about continous communication and interaction with its environment. This is what drives adaptation for the most successful organisms – ditto for business.
The organisation is, in effect, surrounded by a semi-permeable membrane that provides a porous boundary between the internal organisation (where the internal stakeholders and resources reside, those directly employed or ‘owned’ by the organisation’s legal entity) and the outside organisation’s business environment of external stakeholders and resources that inter-relate with the organisation as separate entities.
Pioneers at the frontiers of business
Robert Safian, Editor of Fast Company, calls the new generation of entrepreneurs who thrive in these volatile times ‘Generation Flux’.
Anyone of any age can be Generation Flux, it is a mindset rather than an age-based demographic. For instance Wes Anderson, CEO of Box, exemplifies Generation Flux when he says:
‘The three-month road map is about the best horizon you can think about coherently’
In summary, the main characteristics of Generation Flux:
- Chaos seen as an opportunity rather than a challenge
- Embracing adaptability and flexibility
- Openness to learning from anywhere
- Decisiveness tempered by the knowledge that business life today can shift radically every three months
- No single model of leadership
- Doesn’t wait but reinvents
- Little fear of failure
There are of course challenges too:
- Free flowing information requires openness and trust
- Developing a ‘shared consciousness’
- Decision making at all levels, not just senior management
- Maintaining hierarchies while encouraging creativity and agility
- Finding time for reflection
Creating a Culture of Creativity
John Cleese, the famous comedian, often presents to business people about creativity and how to encourage more of it in today’s work place. John Cleese defines creativity as the ability to play, be childlike, explore ideas and be curious. We have two states of mind, he says, one that is ‘open’ and one that is ‘closed’:
Closed State: Active, impatient, pensive, very purposeful, not much humour, can get stressed – not creative but action-orientated.
Open State: Less purposeful, more inclined to humour, more playful, curiosity for its own sake, not under time pressure to get a specific thing done – more creative.
To be effective, he says, we need to switch between a state of mind that is ‘open’ and creative and ‘closed’ and focused. The big challenge in today’s business environment John Cleese points to is that we often maintain tunnel vision when we need a wider view.
Neuroscientist Iain McGilchrist explores left-brain dominance in our Western culture. The left brain, according to McGilchrist’s findings, focuses on parts of the problem, decontextualising and abstracting the problem in a closed system. This, of course, helps us to analyse and find a solution to that problem. But this is a solution in its isolated closed system, not in a living, emergent, volatile business environment. The right brain is what interconnects, provides living world context, views things in an open system and develops a broad understanding. It is both the knowledge of the parts (left brain) and wisdom of the whole (right brain) that we need for complete and proper problem understanding and correct solution creation. To quote Einstein, “The intuitive mind is a sacred gift and the rational mind is a faithful servant”.For McGilchrist, “we have created a society that honours the servant but has forgotten the gift”.
Companies that mimic nature out-perform those that do not
Companies that mimic living systems have been gaining market share over more traditionally managed firms, which generally model themselves on mechanical systems.
Firms that mimic living systems have an existential awareness that they are living communities of people, committed to serving other people, and that they all depend on Nature for their sustenance. This fundamental recognition creates spontaneous demands within the firm to live harmoniously and respectfully with the larger living systems on which we all depend (biosphere, society, markets).
SoL (a leading business management organisation that explores the connection between organisational learning precepts and business success) published ‘Profit for Life’ a few years back by Jay Bragdon. Since this publication, SoL has been researching and tracking how certain organisations (ones that mimic living systems) perform against other more traditional organisations (mechanistic, short-term profit maximising, capital-centric organisations). In essence, this research explores the business paradigm of machine versus living, or as I refer to it in The Nature of Business as mechanistic firms of the past versus organic firms of the future.
Mechanistic, reductionist firms of the past >> Organic, emergent firms of the future
Northfield Information Services (a global consultancy advising many of the largest banks and asset managers) performed an in-depth analysis to assess these ‘living’ firms that mimic nature with the more traditional mechanistically-focused firms. This resulted in the Global Living Asset Management Performance (LAMP) Index®. For more detail on this please see ‘Companies that Mimic Life’ where the market returns of these organisations are researched and tabulated.
The conclusion drawn from the detailed research is that businesses that model based on living systems (businesses inspired by nature) gain market share and out-perform those that model on mechanistic systems. Leading organisations, it would seem, are adapting to the social and environmental damage caused by traditional business approaches.
So why aren’t all organisations becoming ‘inspired by nature’ why is it still only for the leading pioneers?
The barrier to adaptation is inertia. For over five centuries our prevalent approach to business (likewise for science and society) is rooted in empirical thought which flowered during the Enlightenment, yet inhibiting our evolution to further ‘enlightenment’. As SoL report:
‘Today, most leaders in business and finance – indeed most business schools – are so captivated by empiricism and its material successes that few dare to question its linear thinking assumptions.’
As Peter Drucker once insightfully said ‘in times of great turmoil, the danger lies not in the turmoil itself but facing it with yesterday’s logic’
Hence the prevailing business paradigm has sown the seeds of its own demise. The good news is many in business are ‘seeing the light’ and challenging yesterday’s logic. For instance, Paul Polman, CEO of Unilever, said recently:
‘Too many people think in terms of trade-offs that if you do something which is good for you, then it must be bad for someone else.
That’s not right and it comes from old thinking about the way the world works and what business is for: Milton Friedman’s optimisation of short-term profits.
We have to snap out of that old thinking and move to a new model.’
So what is the new model? A business inspired by & in harmony with nature. This is what is explored in ‘The Nature of Business’.
The attributes that are highlighted in the LAMP research of ‘companies that mimic life’ as out-performers in their respective markets strongly resonate with the firm of the future characteristics put forward in ‘The Nature of Business’:
• T hey are highly networked to facilitate feedback and information exchanges within the firm and without. Many of these networks are informal, self-organizing consortia of employees, suppliers, and customers. When you layer these networks over one another and the firm’s chain of command, you get a structure that looks much like a double helix.
• T hey manage by means (MBM), understanding that people and relationships are the primary means by which they build network capacity and create value. They strengthen and empower employees by practicing servant leadership. They also give employees decision-making authority in their areas of competence and hold them accountable for results.
• T hey optimize their use of physical resources by “closing the loop” so the waste of one process becomes food for another. In doing so, they aim for factor efficiencies by producing more value for customers with less input of energy and materials.
• T hey are exceptionally open in the ways they share information with employees and in their desire for stakeholder feedback. They know such openness builds trust, learning capacity and adaptability.
• T hey nurture the larger living systems of which they are a part (Nature, society, markets) because they understand the inherent connection of all life.
Now we know the problems with the old paradigm and we know what the new paradigm looks and feels like, the only challenge left is (admittedly quite a sizeable challenge) transforming old thinkers and doers from yesterday’s logic into prototyping for the future – inspired by nature. For that we need to transform business education (still inherently empirical and mechanistic), business leaders (the majority still short-termist and reductionist), business managers and employees (fortunately Gen Y seem more clued up about the transforming landscape but the reality is that the majority are still inured by the prevailing paradigm, having been educated that way). Hence, the vital importance of education – business education at a leadership, management and employee level – that is creative and forward-thinking, pushing boundaries and prototyping the future while challenging yesterday’s logic (not simply regurgitating past dogma). That is the challenge and also an immense opportunity for those in positions of influence within business education.
Fortunately, there are already good examples of business academia prototyping the future, for instance SoL mentioned above (associated with Harvard Business School & MIT) and Exeter University Business School’s One Planet MBA.
To explore ‘business inspired by nature’ further, join the Face Book community here
A personal thank you to Geraldine for connecting me with the good work of the LAMP research – after all we need research and ‘stats’ to win over mechanistic minds : – )
Can good business sense prevail? Let’s take a look…
Simon Robinson, a fellow colleague in the collaborative BCI: Biomimicry for Creative Innovation, had the opportunity recently to meet with Luís Norberto Paschoal, President of DPaschoal. DPaschoal is one of the largest auto repair organizations in Brazil, with more than 200 centres. Auto repair business may not be cool or hip (like Patagonia with Fortune Magazine recently called them “the coolest company on the planet”); yet, where there’s business there’s opportunity for good business sense – let’s take a look at this organization on the journey to being a ‘firm of the future’.
Luís Norberto joined the company in 1963, and as he says in those days they did not have the term sustainability. Sustainability in the early days was only about the planet and not in the broader sense. Luís Norberto met many interesting people in the 1970s and 1980s who he discussed the real meaning of sustainability with. Luis says bluntly:
You don’t need to be afraid of being selfish. And you don’t have to be altruistic. Be selfish but think about the future. Think long term.
For Luís Norberto sustainability means four things. You have to be
- Economically sustainable (able to invest in the long term)
- Industrially sustainable (you have to be systemically sustainable in relation to all your partners and industrial ecosystem)
- Marketing sustainable (avoiding green-wash marketing and being sure about your promises)
- Ecologically sustainable (do not destroy the future to protect the present, and do not destroy the present to protect the future)
Luís Norberto is very direct when he says that “tyres and shock absorbers are bad for the planet when you produce, bad for the planet when you transport, bad for the planet when you use, bad for the planet when you recycle. The whole chain is bad for the future.”
Many years ago he had to decide whether or not to carry on with the business. In the end he decided that if he does not continue the company, someone else will fill the gap and sell tyres, so why not do the best possible. And so the company has the philosophy of selling the customer a tyre only when it is really required, and not to try and sell tyres when the old tyres have plenty of life left in them. Luis puts it simply by saying:
It is a crime to sell someone a new tyre 5000 miles before the right moment.
Yet this philosophy in business seems to fly in the face of the current prevailing approach and mindset in business today. DPaschoal seeks to educate its employees so they can educate their customers and suppliers to encourage a healthy business ecosystem to thrive.
Can big business transform to a new paradigm?
Deloitte recently released a fascinating publication titled Toward Zero Impact Growth. Taking the general premise that our economy is bumping up against some hard limits in terms of resource availability, climate impact and a context of growing population their postulation is that the global economy and business in particular needs to change – and fast.
Leon Richards of Good Talent explores this.
Of particular interest, Richards notes, is the work that Anneke & Ralph have done around mapping the current position of a number of high profile companies on that path of transformation. Some solid analysis using a robust trajectory model developed by Volans clearly highlights where these organisations have got to and what still needs to be done.
What struck Richards from these results was the relative slow pace of progress toward maturity on this scale for many of these businesses. The fact that most of them seem to be battling at an “enterprise level” of development highlights the difficulty for most companies to break free of the myopia around their own business confines and parameters. The implications of truly embedding sustainable business practice mean engaging in change right the way up and down an organisational value chain. This barrier between internal and external or as the model articulates it “Enterprise” and “Ecosystem” seems to be a big jump.
There looks like a rich seam of research could be done here, looking through a sustainability lens at the difficulties incumbent organisations face when attempting to make this internal to external shift. Organisational structures, employee capacities, leadership, innovation, collaboration will all weigh heavily on the eventual success of shifting to another state of operation for a business. We all know the penalties businesses face for not changing, history is littered with their ghosts.
During a lecture last week at the LSE, Giles Hutchins made a bold prediction from his latest book The Nature of Business, he said that by 2020 at least 50% of organisations in business today would be gone. Why was he so sure of this prediction? Hutchins felt that current trilemma we are experiencing, financial, environment and social are just the beginning of a rapid transformation to new operating paradigm for everything everywhere including business. Jack Welch, of GE fame stated that for a business, “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” Perhaps this is what we are experiencing right now – change but on a scale and at a pace not experienced before.
Can incumbent brands and businesses transform to a new paradigm and do so quickly? Richards thinks the changing environment may be too turbulent for most big businesses to adequately adapt to, while Hutchins points to some brands already on the road to transformation e.g. Nike, Google, Akzo Nobel, Toyota, Interface. If most can not, then is this going to mean a catastrophic breakdown of life as we know it? Perhaps not.
The answer to how business operates within a new sustainable paradigm tomorrow may lie at the periphery of what exists today. Outside of the behemoth brands and multinational corporates exists a whole eco-system of smaller companies, typically relatively young who don’t need to change because they have consciously embedded this new paradigm in their DNA from the very start.
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For the original and full post please see The Good Talent Blog
When we consciously connect with our inner selves and the world around us, we gain ‘presence’ and awareness takes over from thinking. An enhanced state of consciousness gradually flows into all we do. The creative power of life comes through in our actions and interactions. There is a stillness and alertness in us that brings a joy of being while doing. As a consequence, our actions and interactions in business and beyond have a ‘rightness’ resonating in them.
Re-connecting with ourselves and the world around us can be a struggle, especially with our hectic schedules. And yet, if we can take time out and find the space to re-connect it can greatly benefit us, as only when we consciously connect can we really undertake actions with our full potential.
In the words of Confucius,
He who is in harmony with nature hits the mark without effort and apprehends the truth without thinking.
Is that a goal worth striving for?
The mind and ego have a deep seated habit of seeking the fullness of life in the future ignoring the only true point of access to fullness – the present moment.
It reminds me of a phrase someone kindly passed on to me ‘the present will always seem insufficient, until we are sufficiently present’.
The Nature of Business 