Ten days ago I flew to Switzerland for a mountaintop retreat with twenty thought leaders from around the world to ponder better ways to manage organizations.
On the flight over, I watched the film Inside Job, a documentary about the shenanigans that led to the financial meltdown fueled by the subprime mortgage bubble. The movie’s incendiary. There are lots of bad apples out there: self-serving financial engineers, ratings agencies, regulators, bankers, and more. Guilty, guilty, guilty.
As a graduate of the “West Point of Capitalism,” I’d been reluctant to condemn the system but Inside Job pushed me over the edge. Business is broken. Right before watching the movie, I read a series of Harvard Business Review articles by Roger Martin about the wrong-headedness of maximizing shareholder value. This slippery slope leads to short-term thinking, cooking the books, and screwing everyone up and down the chain except grossly overpaid CEOs. Chasing shareholder value is like trying to make your car go faster by rigging the speedometer.
Dissatisfied workers, pissed-off customers, and lousy returns on investment are the outcomes of a broken system. The current business environment is a breeding ground for Murphy’s Law. Nobody’s happy and rebellion is in the air.
Stoos is a tiny village atop a mountain about an hour south of Zurich. It’s a beautiful spot for getting away from it all. Four people — a Swiss professor, a Dutch entrepreneur and author, an American agile development coach living in Switzerland, and an American management author — realized that lots of us were talking about the same malaise with management independently. They invited us to convene on the mountain to find common ground — and a better framework for doing business.
After the two-day session in Stoos, I took the train south to Lugano, a perennially sunny town that couples Swiss efficiency and Italian verve (Mangiare!) on the shore of an Alpine lake. Fragments of the mountain top conversations rolled around in my head. My thoughts are still coming together.
Foremost is that the business world must shift its focus from things to people. Living things trump machines. Moreover, people are inherently social. We cannot thrive — or even survive — in isolation. Connections are vital to creating value. And how is that value created? By adapting to change — and that requires learning. Bottom-line: businesses are networks of learning individuals.
Financial success not the ultimate target. Chasing money for its own sake is wrong-headed and demoralizing. Drucker had it right: the purpose of business is to create and satisfy customers. People in sustainable organizations focus on doing this better and better, forever delivering more value to their customers. Do this right and the money will follow.
For several hundred years, the machine has been the metaphor for the organization. Management’s role was to make the machine work efficiently. People were cogs; managers controlled human resources as if they were interchangeable parts. Bosses did the thinking; workers were told to get the job done. It was as if workers lacked intelligence, emotion, and initiative. Shut up and do your job.
Machines work well when you need to do the same thing over and over. They’re not so hot when doing different things is required. Denser interconnections have transformed the world into one vast complex system. The past is no longer a guide to the future. Small things have enormous consequences. Logic breaks down. Shit happens. Everything’s different.
Organism, a living system. Source: http://tolweb.org/tree/learn/concepts/whatisphylogeny.html
These days it’s more productive to think of organizations as organisms. Managers become stewards of the living. Their role is to energize people, empower teams, foster continuous improvement, develop competence, leverage collective knowledge, coach workers, encourage collaboration, remove barriers to progress, and get rid of obsolete practices.
Living systems thrive on values that go far beyond the machine era’s dogged pursuit of efficiency through control. Living systems are networks. Optimal networks run on such values as respect for people, trust, continuous learning, transparency, openness, engagement, integrity, and meaning.
On the flight back to San Francisco, I watched Werner Herzog’s fabulous film about the 32,000 year old Chauvet Caves in Southern France. Herzog says the Caves are the place “where the modern human soul was awakened.” A review noted that the paintings “are exceptional not only for their age or their historical importance, but for their beauty and grace, the strange window they offer into the development of man’s ways of looking at the world through art.” The Stoos Gathering resonates the same chord. It’s all about the creativity of people.
Those of us who took part in the Stoos Gathering are sorting through what we came up with. The punchline is “learning networks of (diverse) people creating value,” but I imagine that will be refined. You can track where we’re at and join the conversation on our website and LinkedIn group.
Next I’m going to explore the implications for professional learning and working smarter.
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