The Future of Business For
These Transformative Times
By Giles Hutchins
There is an old Chinese proverb that says, ‘In times of great winds, some build bunkers, others build windmills.’ We are living in these times of great winds. Winds of change are blowing through us challenging each and every organization. The now trendy managerial acronym VUCA (volatile, uncertain, complex and ambiguous) goes a long way in describing this business context we find ourselves in. We are not just dealing with transformation; we are dealing with unceasing transformation. Such times of uncertainty and volatility naturally invoke fear in us, yet it is a fearful clinging to the tried-and-tested status quo that will undermine our ability to adapt and evolve in these challenging times.
It is now quite apparent that many of our organizations and leaders are ill-equipped to deal with the situation ahead of us. For instance, the global business service provider IBM undertook an extensive survey of more than 1,500 CEOs from 60 countries and 33 industries worldwide and found that there is a significant ‘complexity gap’ in our leaders’ ability to deal with the volatile times ahead. This is a systemic problem with its roots in yesterday’s logic. Too many of today’s organizations find themselves caught up in a top-down, hierarchic, KPI-obsessed, siloed, control-based, defensive and reactive fire-fighting mind-set. It is this that undermines and erodes the greatness of our workplaces, turning them into places of drudgery, stress, political infighting and ineffective bureaucracies. This monocultural mechanistic mentality stifles the natural creativity, innovation, collaboration, reciprocity, conviviality and empathy we humans exude when allowed to be our natural selves. So often, we find ourselves bound to artificial constructs and interventions that seek to control and manage us, yet actually undermine our vitality and wellbeing and so end up undermining the viability and resilience of the organization.
Attempting to transform our ways of operating and organizing toward more human, resilient and flourishing businesses without addressing this flawed mind-set is like applying the preverbal Band-Aid to a systemic illness. In the words of Dawn Vance, Nike’s Director of Global Logistics, organizations have 3 options:
- Hit the wall;
- Optimise and delay hitting the wall; or
- Redesign for resilience’
The word ‘resilient’ here does not just mean the ability to ‘withstand’ change, as change upon change is what characterizes our future and we need to do far more than withstand, we need to adapt, flex and thrive in our transforming landscape. This is what Nassim Taleb means by his phrase ‘anti-fragile’ in his book of the same title. Anti-fragile organizations thrive in uncertainty. As Taleb notes, the tragedy of the top-down control-based logic inherent in so many of today’s organizations is that it deprives us of sensing and responding to change, it numbs us from dealing with uncertainty and so it fails us. In reality, our search for control closes us off from real life.
Another important aspect of what we mean by resilience here is longevity. By longevity we mean the ability to thrive over the long-term rather than mere short-term growth bubbles soon ending in collapse.
The extractive, short-termist, self-maximizing, control-based, ego-orientated logic haunting so many of today’s organizations has a history. Born out of a militarized mind and honed through the Industrial Age, bureaucracies emerged through economies of scale. Centralized management and control removed decision-making from the undertaking of work itself as hierarchies of managers became separated from workers. Along came the scientific management thinking of Taylorism, industrial and post-industrial productization, and the quantification-obsessed ethos of management-by-numbers. Add to this: the cultural norms of a patriarchal dominator logic (the accumulation of power through control over others); modern Western scientific-philosophy dominated by rationalism (a reductive atomizing, categorizing and organizing of the world into neatly definable objectified chunks); a scientific logic of anthropocentric materialism (the world around us is objectified and desacralized into ‘resources’ to be exploited for human betterment); a socio-economic logic heavily influenced by Social Darwinism (human self-agency is understood as innately selfish, life is seen as nothing more than a struggle for survival, and evolution a process of selfish ascendency where we either dominate or become dominated in a dog-eat-dog world). It is no small wonder we have ended up with the paradigm we have.
Enter the now urgent need to reinvent, reorganize and reconfigure our ways of creating and delivering value. In our hearts-and-souls we know that our work can be meaningful, creating value for ourselves, each other and the more-than-human world we form a part of.
The word ‘regenerative’ means creating the conditions conducive for life to continuously renew itself and flourish. The primary principle underpinning our firms of the future is ‘regenerative’, where organizations help rather than hinder the evolutionary dynamic of life. This goes beyond traditional CSR initiatives as it is not primarily aimed at reducing negative impacts or ‘externalities’ created by the current mind-set; rather, it is a move to an entirely new mind-set, a ‘new way’ of being and doing in business and beyond.
With this regenerative logic: externalities become opportunities for additional value creation; waste of one output becomes food for another; stakeholders become partners to engage with through authentic communications and reciprocating relations; linear-thinking is replaced with systems-thinking and circular economics; resources are not simply managed and controlled for short-term gain but perceived holistically in the wider context of the inter-relational matrix of life. We re-train ourselves to think ‘out-of-the-box’, transcending the rigid framing of yesterday’s logic, in fact ‘the box’ is no longer there at all, being replaced with interconnecting patterns of relations, where differing stakeholder perspectives and shifting contexts are appreciated for the diverse perspectives they provide while prototyping richer ways of creating and delivering value.
The metaphor of the machine served us well in the Industrial Age; the metaphor of the living system serves us well in the early 21st Century.
Living systems thrive through relationships. We can allow the boundaries of our siloes within, across and between our organizations to permeate more readily upon realizing that the life-blood of our agility, creativity and resilience flows through our relations. Whereas the machine-mentality encouraged a hardening of boundaries in order to atomize, control, protect and maximize (leading to siloed mentality, group-think, them-and-us separations, etc.) regenerative systems-thinking encourages a permeating of boundaries for collaboration, shared value and co-innovation (while still respecting security, safety, local customs, and differing cultural values and ownership approaches).
Regenerative business goes beyond new leadership techniques, sustainable product innovation, process re-engineering, and the crafting of purposeful mission statements and ethical values charters. Regenerative business is a fundamentally different logic, a timeless logic, drawing on the deep wisdom of life.
The good news is that business can take inspiration from living systems all around us. Many organizations have been doing this successfully for some time already through various approaches such as biomimetic product design, biophilic workplaces, closed-loop economics, industrial ecology, wild leadership quests, deep nature immersions, and so forth. Yet regenerative business goes beyond a superficial mimicking of living systems or temporary escapades through nature quests, as it seeks an entire reframing of the business model within regenerative ‘living’ logic, embedded at all levels of organizing and operating.
Detailed studies have been undertaken by the Global LAMP Index over ten year periods, comparing the financial performance of organizations embracing living systems principles with their mechanistic counterparts, consistently showing that these living systems principles make for better financial returns and longer term financial resilience. Joseph Bragdon from the Global LAMP Index notes, ‘As an investment manager I have discovered that the more companies model themselves on living systems (as distinct from mechanistic systems) and the deeper they go into aligning themselves with life, the more creative and profitable they become.’
Regenerative business is about operating in ways that contribute, replenish and evolve within the evolution of life: business that is not just copying living systems logic but deeply embodying this logic, finding harmony within the rhythms, flows and evolutionary currents of the natural systems we call ‘Life’. It provokes a whole raft of practical challenges and opportunities for our innovative minds to create value-based solutions for, and it also provokes a deep philosophical yet no less practical inquiry into who we truly are, what our deeper sense of purpose is, and to whom our organizations seek to serve?
In short, a firm of the future serves Life; in-so-doing it enriches ourselves and our customers and wider stakeholder ecosystem. To materially benefit our customers while damaging the fabric of life for others is a hallmark of the firm of the past and its old logic; such short-termism is no longer a viable business proposition for the firm of the future.
Hence, Future Fit Leadership is about empowering, empathizing, ‘sensing into’, encouraging interconnections, embracing continuous learning and feedback, fostering reciprocating partnerships, and a conscious culture that stimulates diversity, authenticity, and purposeful work. Ecological-type approaches become central in the organizational thinking. There’s also a continuing quest into how to create the broader conditions conducive for not just our organization but the wider ecosystem to thrive. In learning to become future-fit, we learn to become stewards for life itself.
About The Author
Giles Hutchins is a thought leader, speaker and adviser on the future of business. Recently, Global Sustainability Director for Atos, and previously a management consultant with KPMG, he has helped transform a wide range of organizations (corporate, third sector, public sector and start-up) and is author of the books The Nature of Business and The Illusion of Separation. His latest book is Future Fit. Giles Hutchins blogs at www.thenatureofbusiness.org and is Chairman of The Future Fit Leadership Academy www.ffla.co
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