Saturday, January 24, 2009

Ralph Waldo Emerson on The Natural Organization

This is the first post in a series that will in a way set the backdrop and the inspirations of my thoughts on the Natural Organization. My intention is that it will show where I'm coming from and what the natural organization is all about. I might not necessary agree with everything that these thought leaders have written or said, but I believe they have found some insights that are "eternal truths" that appeal to the very core of the human heart. I will introduce one thought leader at a time, present a selection of quotations and add a few comments on how this applies or corresponds to the Natural Organization.

First "on stage" is Ralph Waldo Emerson, American philosopher, poet, intellectual, transcendentalist and abolitionist.

"Adopt the pace of nature: her secret is patience. "
The world is in a constant hurry. People want immediate results and corporations are short sighted and impatient. Someone said it in a different way; "People overestimate what they can achieve in a year, and greatly underestimate what they can achieve in five years".

"Every man has his own courage, and is betrayed because he seeks in himself the courage of other persons."
Trust in yourself. Believe that you are capable because you are. Don't look to others for leadership. Be a leader instead.

"Unless you try to do something beyond what you have already mastered, you will never grow"
This lesson should be applied to people and organizations both. Don't get caught in your safety zone. The safety in status quo is just an illusion.

"To laugh often and much; to win the respect of intelligent people and the affection of leave the world a better know even one life has breathed easier because you have lived. This is to have succeeded."
Goes back to my earlier post and Margaret J. Wheatley saying that we organize and lead in conflict to what life teaches. Business life is a sub-system of life. We can't have completely different measurements of success in business from "the real life". Yes, profits and turnover are valid measures, but not in themselves.

"All life is an experiment. The more experiments you make the better."
Learn, make mistakes, don't worry. Rework corporate cultures that are based on fear, punishment, intimidation and politics to one that supports learning, mistakes and curiosity.

"An ounce of action is worth a ton of theory"
Don't overdo planning, meetings, budgets, forecasts etc. Use the collective wisdom in our company, make a decision and go for it. No regrets. Just do it!

"Do not go where the path may lead, go instead where there is no path and leave a trail."
Imitation is part of the modern business life. We can't invent everything. But make sure to be unique in some way, dare to think differently and constantly challenge your mental models. If not you might be the next company that bites the dust because you did not understand that the world was changing.

"Enthusiasm is the mother of effort, and without it nothing great was ever achieved."
Enthusiasm differs from motivation. Usually we say that leaders motivate the employees. Why do employees need motivation? Why do leaders not need motivation? (think about that one) Motivation is extrinsic and enthusiasm is intrinsic. We get enthusiastic when we feel meaning in the work we do. Enthusiasm is closely connected to words like authentic, genuine, free, vision, values.

"As long as a man stands in his own way, everything seems to be in his way"
The reason for naming my coming book "The Natural Organization" is because it is a breaks from the traditional organization. I find the power hierarchies, politics, domination system and the struggle for control as unnatural. It has nothing to do with the rest of life and if you understand systems thinking and view business life as a sub-system of life it becomes apparent that our traditional organizations are abnormal.

I believe Emerson was speaking about how we limit ourselves by thinking negatively. In a broader perspective it can also be interpreted as how we limit ourselves and our organizations by negative thinking and also by restraining our natural strengths with formal rules. A good example is that many leaders view "the learning organization" as an illusion, an utopia. The reason for this is simply because they cannot think outside their own mental models, they are stuck in the industrial paradigm where an organization must be organized as a pyramid. Creativity requires freedom. Freedom breeds responsibility. Responsibility breeds leadership. By organizing our companies in a "natural way" we can set free the human capabilities that are so scarce in today's organizations.

"Nothing external to you has any power over you"
We create our own lives. No one but you can decide if you are going to be happy or sad. The "unnatural organizations" are trying to disturb this "universal law". The more they try the more people flee from these organizations.

"Each age, it is found, must write its own books; or rather, each generation for the next succeeding."
On my way Ralphie boy. :)

"This time, like all times, is a very good one, if we but know what to do with it."
Seems like the perfect ending. I have been writing about this before but it's well worth to do it again. Though times may seem harsh and the future bleak, I believe we can take advantage of the problems we see, use them as catalysts for change and rise to a new level. The Natural Organization is my way of articulating this future.

Do you have an Emerson quote that you think fit with the Natural organization? Please add your quote and your comment below.

Tuesday, January 20, 2009

OMFG! Finally! He's gone! To the bar!

George Bush

Don't miss the inaugerat, eeh the inageratu...inauguratu.. Ah, what the hell. Don't miss Obama tonight ok?!

Monday, January 19, 2009

Obama inauguration: Prepare for a grand vision

Big day tomorrow. Everywhere you look you get hit by headlines about the inauguration. Even the polar bears here in Sweden talk about it during coffee breaks (we use them as rickshaw drivers now when the oil prices are a bit steep).

Garr Reynolds (Presentation Zen) writes about Scott McCloud in his latest post. Scott, the only "cartoon guru" I have heard of, reasons about three types of vision in a presentation made on TED:
  1. Vision based on what one can not see (unseen and unknowable)
  2. Vision based on what has been proven (or has been seen)
  3. Vision based on what can be, what may be based on knowledge (but is not yet proven)

That immedieately got me thinking about Obama's speach tomorow. What will Obama's vision look like? I don't think the content will surprise us very much as the road is pretty much set already from the campaign. Words that come to mind are:

  • change
  • equality
  • freedom
  • hope
  • collaboration
  • future (education, environment)
  • transparency etc.

But how daring will Obama be? My hope is that he will be JFK bold and go for a vision based on what one can not see (no 1 above).

That's what we all need now in the financial turmoil that hangs over the US, and therefore over the whole world today. We need Obama to inspire people not only to hope, but to change their worldview in order to bring about a real change. Most of all Obama needs to inspire the business leaders of the world to live according to the words above.

If Obama can set the vision to inspire, let Scott McCloud show us all how to reach that vision;

  • Learn from everyone
  • Follow no one
  • Watch for patterns
  • Work like hell
You can bet Obama will do his part. The question is, will you?

Sunday, January 18, 2009

Business model innovation vs new business models: - organizational implications

"New ventures within established organizations are best created as separate units. In fact, they should be built as though they are startups coming together from scratch. "

Chris Trimble is making this conclusion when discussing the newspaper industry with regard to the print and online operations. He declares two reasons for his conclusion:

"First, new ventures face much greater uncertainty, and, as a result, everything that established companies think they know about planning and assessing business performance gets turned upside down. Second, major business model change simply does not happen without sharp organizational change."

I believe Chris is both right and wrong. Yes, new ventures face a higher risk. That is an obvious statement. A new venture It does not have a track record. No customers. No nothing. It's just an idea that we are trying to commercialize. Priorities are different in infancy compared to maturity, but a new venture is still a business and should be run like one.

I agree with Chris's second reason but I would state my conclusion slightly differently:
  • New ventures within established organizations are best created as separate units, if the venture is based on a new business model.
  • New ventures within established organizations should not be created as separate units, if the venture is based on business model innovation.
Why? Because when the company offers a new value proposition they need a new business model. A new business model equals new knowledge, new operations, new customers or new customer segments, new supply chain etc. Hence it makes perfect sense to set up the venture as a new unit or as a start-up company.

When the company "simply" make changes in the existing business model it's called business model innovation. The value proposition does not change, though different parts of the business model change. Creating a new organization for the business model innovation makes no business sense as it creates confusion for all parties involved, from employees to customers.

And here is the key, in my opinion, to understanding why the newspaper business is consolidating their print and online operations. They did not understand the principles discussed above. Instead of viewing the online operations as a new business model, they should have viewed it as a business model innovation, and have incorporated the new operations in their existing organizations. This way they would have saved tons of money by not having to re-organize their companies two times, first by starting up new venture organizations and later by consolidating these ventures into their regular operations.

Thursday, January 15, 2009

The recession as an opportunity to create a better world

Recessions are part of a cyclical change. But we seem to forget that. Peter Schiff's early warnings about overconsumption, debt, low savings and underproduction was ridiculed and laughed at. We can now see that Schiff was right. Good for his career. Bad for us. Or is it?

Umair Haque writes about the same overconsumption as Schiff. Haque goes a step further by stating that "We're addicted to consumption". This addiction is driven by the push marketing/sales culture in our present business paradigm, the industrial paradigm. A paradigm that is based on what Riane Eisler calls "dominator systems".

The industrial age represented the mechanical universe and the organizations were patterned after the dominator model:
  • fear-based
  • characterized by rigid hierarchies of domination
  • an ethos of conquest (including the “conquest of nature”)
  • a high degree of institutionalized or built-in violence
  • male domination
  • and contempt for “soft” or stereotypically feminine values
The industrial organization was made for another era, when control, efficiency, order and predictions were the foundations for success. Here is the paradox. The world we live in is completely different from the industrial age. Still, we rely on the same principles for organization today as we did 100 years ago.

The recession does not have to be the worst thing since "New Coke". Crisis also breeds opportunity (Business Week). Andrew Carnegie started building his empire 1873, in the beginning of a depression. Hewlett and Packard started their operations during the Great Depression. What is needed in order to capture the opportunities are courage and innovation.

I believe the world has an urgent need for two kinds of innovations;
  • organizational innovations that release us from the decaying industrial paradigm, and
  • business model innovations that focus on real value creation
I believe these two breeds of innovation are closely linked. Organizational innovation may not be a prerequisite for business model innovation, but it can certainly pave the way for radically new business models.

In order for this to happen we need courageous leaders. Leaders that are brave enough to pioneer the emerging paradigm, while their peers will ridicule and laugh at them. Just like Peter Schiff's "peers" did a year ago. But look who's laughing now.

My hope is that the recession will not just be misery, bailouts to preserve the old power structures and economic waste but that we will see pioneering leaders emerging, leading the way to a better future for mankind and our planet.

Wednesday, January 14, 2009

Nothing endures but change - Heraclitus 535-475 B.C.

There was more change last century than in all previous centuries, combined. Information has grown exponential. 100 years ago the problem was to get enough information. It was a scarce resource. Today we are overwhelmed with information and our problem is to find what's relevant to us. A recent estimation is that we will see more change in the next 14 years than we did in the entire last century. Holy cow! Can you imagine that?

This means that the information overload will be extreme. We have not yet begun to develop systems and structures for this information boom. Even more important, our organizations are not ready to handle it. People are not ready to handle it. Managers and leaders are not ready. As the level of change accelerates uncertainty will increase. A natural reaction is to try to increase control, which many companies are doing today, but that goes against nature so to speak.

Change is inevitable and the only way to deal with it is to "go with the flow". Another way of putting it is to have an agile, flexible organization that quickly reacts to the changes. It also means changing our values from control to adaptability, openness, transparency, trust and real empowerment. Here we come to the point I'm trying to make in my book; this is only possible by removing the dominant hierarchies as they are built for control and efficiency.

The structure cannot be ignored in organizational design as it puts limits on the content. The structure also states the rules of the game in the organization.

By building hierarchical organizations we immediately know who has power, who will make decisions and what people are supposed to do and not do. Great for control and efficiency.

If, and this is fundamental, the problems are simple. Research has shown that as problems get more complex hierarchical organizations lose both control and efficiency. So, that is why I talk about leaving the industrial paradigm once and for all in order to open up our thinking to the question that need to be addressed today; how do we design organizations that fit our present business environment and our present organizational purpose. Cause it's not about control and efficiency anymore. That's for sure.

A better world

There are more than a few things one could do to change the world. I will mainly focus on organization and leadership as I find that our organizations have not developed as fast as the rest of our society. The industrial paradigm still reigns and holds back the potential of our organizations. It stifles our creativity and obstructs natural dialogue which make learning organizations an illusion. This paradigm also sets the rules of the organizational game as one of masters & servants and makes our organizations plagued with power games, inequalities, unethical behavior and sad stories.

The industrial paradigm started in the mass production era. Organizations were thus built for control and efficiency. It made sense at the time.

300 years later. Same paradigm, different world. It’s about time we do something about this. I like to think that I have some knowledge about business models and strategy as I have been working in this area for many years and have an own company specializing in business model optimization. From this perspective it is absolutely critical to change leadership and organizations to fit the present demands.

I would not keep my stocks in a company that in 5-10 years has not completely changed from the dominant hierarchies of the industrial paradigm. I offer a different approach to organizing and leading companies and other organizations. I call it "The Natural Organization". Yes, it is a much more democratic and humane way, but at the core it's just common business sense. A company with an outdated business model and an organization from another era is just not gonna make it in our hypercompetitive world. Look at the auto industry. The banks. Old school. Industrial paradigm. I'm not so sure the crisis are about a recession. We might be witnessing a structural change. A transformation that is badly needed. Bailouts or not. A change will come. I can feel it in the wind.

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