Defining Sustainability

Before sharing what I found, let me define what sustainability means. Our current economic system is fundamentally linear in nature. It focuses on producing products and delivering them to the customer in the fastest and cheapest way possible. We extract resources from the Earth’s surface, turn them into goods, and then discharge back into nature the byproducts of this process as massive amounts of often highly toxic waste (which we call air, water, and soil pollution) or as solid, industrial, and hazardous waste (which we dispose of in landfills or burn in incinerators). After 200 years, this so-called “cradle to grave” production system has become firmly embedded in our psyches as the dominant paradigm.

However, there is an underlying problem with this model: It turns out that the Earth’s air, forests, oceans, soils, plants, and animals do not have the capacity to endlessly supply increasing amounts of resources, nor can nature absorb all of society’s pollution and waste. The field of sustainable development has emerged in response to the mounting ecological and social challenges stemming from the traditional economic paradigm. At its core, this new approach fundamentally transforms the linear model into a circular one — what design experts Bill McDonough and Michael Braungart call a “cradle to cradle” production scheme.

This revolutionary economic paradigm eliminates the concept of waste entirely, because goods and services are designed from the outset as feedstocks for future beneficial use. To achieve this outcome, companies harvest energy and raw materials without damaging nature or communities. Then, as McDonough and Braungart say in their book Cradle to Cradle: Remaking the Way We Make Things (North Point Press, 2002), “Products can either be composed of materials that biodegrade and become food for biological cycles, or of technical (sometimes toxic) materials that stay in closed-loop technical cycles, where they continually circulate as valuable nutrients for industry.”

Organizations such as Herman Miller Inc., an international producer of office furniture and services; Inter face Inc., one of the largest manufacturers of commercial floor coverings; and Henkel, a German company that makes a broad range of industrial, commercial, and consumer chemical products are adopting this “cradle to cradle” model. As a result, they are realizing major cost savings, reduced risks, and increased competitive advantage, along with significant social and environmental benefits. But unfortunately, few executives in other businesses grasp the fundamental paradigm shift that sustainable development requires. Blinded by long-held mental models, they fail to fundamentally alter the ways in which their organizations produce goods and services. They believe that sustainability simply involves better controls, marginal improvements, or other “efficiencies” within their existing, linear business model. These managers cling to the fallacy that traditional, hierarchical organizations can manage closed-loop, cradle-to-cradle systems.

Seven Sustainability Blunders

Thus, most organizations seeking to improve their management of environmental and socio-economic issues inevitably fall prey to one or more of seven key “sustainability blunders.” Becoming aware of how these blunders can undermine an organization’s efforts to mitigate its impact on the environment is the first step in creating a sustainable enterprise.

Blunder 1: Patriarchal Thinking That Leads to a False Sense of Security Organizations that struggle to adopt a more sustainable path invariably employ a patriarchal approach to governance. Employees do only what management orders, and the organization strictly follows government mandates. Employees and the organization as a whole seldom, if ever, go beyond the requirements of their “superiors.” No one meaningfully challenges the linear economic paradigm or mechanical organizational designs that control thinking. This is the most serious of the seven blunders, because it creates an addiction to the directives of higher authorities and an abdication of personal responsibility.

Blunder 2: A “Silo” Approach to Environmental and Socio-Economic Issues In most organizations, different functions, such as environmental and labor relations, are usually assigned to separate units. Executives see sustainability as yet another special program and don’t understand how it affects design, purchasing, production, and all other units. Because no single unit can identify all of the ways in which processes or products affect the environment or social welfare, the status quo is perpetuated.

Blunder 3: No Clear Vision of Sustainability

Organizations struggling to adopt a sustainable path usually lack clarity about what they are striving to achieve. Without a clear vision, they often assume that being in compliance with the law is the sole purpose of their policies. But compliance is a backward-oriented, negative vision focused on what not to do. It depresses human motivation. Sustainability is a forward-looking vision that excites people and elicits their full commitment and energy.

Blunder 4: Confusion over Cause and Effect

The prevailing mental models held by most executives lead them to focus on the symptoms, not the true sources, of sustainability challenges. Organizations spend millions to mitigate emissions and discharges, never recognizing that these are the results, not the causes, of their problems. Emissions and discharges stem from the ways processes and products are designed and the kinds of toxic materials, chemicals, and energy used to make them. Pollution controls temporarily mask these problems and keep organizations focused on managing effects rather than on designing out root causes.

Blunder 5: Lack of Information

People need a tremendous amount of clear and easily understood information to comprehend the downsides of the linear production paradigm and the benefits of the circular cradle-to-cradle approach. However, most organizations fail to communicate effectively about the need for and the purpose, strategies, and expected outcomes of their sustainability efforts. Trainings, sign postings, and a few scattered events are insufficient to convey what a commitment to sustainable development involves or why employees should participate.

Blunder 6: Insufficient Mechanisms for Learning

When employees are given limited opportunities to test new ideas, and when they receive few rewards for doing so, not much learning occurs. Organizations struggling to become sustainable rarely institute mechanisms that allow workers to continually test new ideas, expand their knowledge base, and learn how to overcome barriers to change.

Blunder 7: Failure to Institutionalize Sustainability

The ultimate success of a change initiative occurs when sustainability-based thinking, perspectives, and behaviors are embedded in everyday operating procedures, policies, and culture; for example, when an organization links bonuses, promotions, new hiring, and succession planning to performance on sustainability. However, few organizations have incorporated sustainability in their core policies and procedures. Until they do so, employees will remain unconvinced of their employers’ commitment to this crucial issue.

The Wheel of Change

Although one or more of the blunders occur in most organizations, a small but growing number of early adopters are leading the way toward sustainability by successfully changing their traditional production and organizational paradigms. Their leaders grasp that deep-rooted cultural transformation is necessary to overcome the resistance inherent to the profound changes necessary to achieve true sustainability. Here are the interventions that successful change leaders use to resolve each of the seven sustainability blunders:

Intervention 1: Change the Dominant Mindset Through the Imperative of Achieving Sustainability

The false sense of security that people feel when they are in compliance with regulations must be undermined before employees will open themselves to circular cradle-to-cradle thinking and action. Disrupting an organization’s controlling mental models is the first — and most important — step toward the development of new ways of operating. Little change will occur if this step is unsuccessful.

An enlightened leader in a small organization can sometimes alter the controlling mindset by simply talking with senior executives, employees, and stakeholders. Tom Kelly, president of Neil Kelly Co., Portland, Oregon’s largest home remodeling firm, introduced sustainability principles to his employees and asked if they would like to apply them in their work. The workers said “yes.” The firm went on to manufacture the first interior cabinets certified by the Forest Stewardship Council and received the first LEED construction certification in the Northwest from the U. S. Green Building Council for its new showroom.

However, most organizations seem to require a major crisis to spur action. Senior executives at IKEA, a global furniture manufacturer, became committed to sustainability only after the company experienced a series of high-profile environmental and labor crises. Ray Anderson, chairman and former CEO of Interface, one of the world’s largest producers of commercial floor covering, became a convert after customers began to ask about the firm’s environmental policies. In the vast majority of cases, a relentless and compelling message from senior executives is required to make the case that safety from legal challenges, social protest, financial losses, customer defection, or environmental crisis can be achieved only by adopting a new business model based on sustainability.

Intervention 2: Rearrange the Parts by Organizing Transition Teams

Once business-as-usual thinking has been shattered, the next step is to rearrange the parts of the current system. Doing so requires the involvement of people from every function, department, and level of the organization — and key external stakeholders — in analysis, planning, and implementation. This “shake-up” is important because planners and decision-makers often surround themselves with likeminded people, do not trust the unknown, or may feel threatened by change. Consequently, they handle problems in the same way time after time. Changing the composition of groups brings fresh perspectives and ideas to the table. New people can see problems that the old guard couldn’t. They can also suggest different solutions because they are unconstrained by the dominant cultural paradigms.

The leading sustainability organizations shake up the status quo by organizing sustainability “transition teams” that develop new goals, strategies, and implementation plans. Over time, the composition and nature of the teams will change as people go deep into the organization to flesh out problems, break old thought patterns and perspectives, and align practices with sustainability. For example, the initial team may assess company policies and procedures and complete an audit of overall environmental and social impacts. Subsequent teams may be organized to apply the new approach within each unit and function. The most important step each team must take is to get clear about what it is striving to achieve, the role each person will play, and the rules they will follow to accomplish their mission.

Herman Miller Inc. established the Environmental Quality Action Team (EQAT) to “help the corporation through the muddy waters of environmentalism.” Once the EQAT was clear on its mission, it formed nine subcommittees, including the Design for the Environment team, which focused on formulating sustainable products. This team produced the Ergon 3 office chair, which is made with 60-percent recycled content. Ninety-five percent of the materials in the chair can be recycled or reused. Other subcommittees have identified reductions in energy use and packaging that have saved the company millions of dollars.

Intervention 3: Change Goals by Crafting an Ideal Vision and Guiding Sustainability Principles

The third key leverage point for cultural change toward sustainability is to alter the organization’s goals. Change the goals, and different kinds of decisions and outcomes will result. Doing so requires a clear depiction of the new ends the organization seeks to achieve and guidelines for how decisions should be made to achieve them.

The leading organizations use “ends-planning” (sometimes called “backcasting”) to craft an exciting vision of how they will look and operate when they are a sustainable enterprise. Compelling visions are felt in the heart and understood in the mind. Organizations can then adopt principles that support the vision and provide a roadmap for decision-making; for example, by deciding to use materials that are extracted from nature in ways that do not degrade the surrounding ecosystem.

Herman Miller’s vision is “to become a sustainable business: manufacturing products without reducing the capacity of the environment to provide for future generations.” The company uses The Natural Step and Bill McDonough’s “Eco-effectiveness” principles (www.mcdonough.com) as the guiding frameworks for its sustainability initiative. Scandic Hotels adopted a vision of achieving environmental sustainability by “moving from resource wasting to resource caring.” This vision led them to realize that ecological sustainability is not a cost but a source of profits and competitive advantage.

Intervention 4: Restructure the Rules of Engagement by Adopting New Strategies

After the organization has adopted new purposes and goals, the next intervention involves altering the rules that determine how work gets done. Doing so involves developing new strategies, tactics, and implementation plans. The organization should come up with both operational and governance strategies in this process. The enterprise as a whole must answer four questions: (1) How sustainable are we now? To respond, you need baseline data describing where and how the organization’s processes and products currently affect the environment and social welfare. (2) How sustainable do we want to be in the future? Adopt clear goals and targets that clarify when the organization expects to achieve certain milestones. (3) How do we get there? Design operational and governance change strategies for achieving the goals and targets. (4) How do we measure progress? Adopt credible sustainability indicators and measurement systems to quantify progress toward goals and facilitate adjustments.

In the early 1990s, the Xerox Corporation adopted the vision of becoming “Waste Free.” The vision catalyzed profound changes in operations all the way back to the initial designs of major product lines. The strategies required decentralized decision-making, which helped to dramatically increase employee morale and commitment. By the end of 2001, the initiative had led to the reuse or recycling of the equivalent of 1.8 million printers and copiers. It also resulted in several billion dollars of cost savings, as well as dramatic improvements in all environmental areas.

Intervention 5: Shift Information Flows by Tirelessly Communicating the Need, Vision, and Strategies for Achieving Sustainability

Even when all other interventions have been successful, progress will stall without the consistent exchange of clear information about the need for the sustainability initiative and its purpose, strategies, and benefits. Effective communication engages people at an emotional level. Sustainability visions and strategies become internalized as people ponder what these changes will mean to them personally. Transparent communication opens the door to honest understanding and sharing.

The leaders at Interface instituted a comprehensive information and communication program to engage employees and stakeholders in sustainability efforts. Now, environmental issues are discussed at almost every staff meeting, in executive retreats, and via internal communications. Board chairman Ray Anderson says, “Sustainability has become the language of the company.”

Intervention 6: Correct Feedback Loops by Encouraging and Rewarding Learning and Innovation

Even with excellent strategies, obstacles will surface. To overcome the barriers to change, the organization must alter its feedback and learning mechanisms so that employees and stakeholders are continually expanding their skills, knowledge, and understanding. The adoption of new learning mechanisms leads to wholesale changes of traditional feedback systems that are oriented toward maintaining the status quo.

The leading organizations provide accurate feedback on progress and setbacks, and rewards for those willing to experiment and learn. Henkel adopted a strategy to differentiate itself from its competitors based on its ecological and social performance. The company believes that “Innovation is the key to sustainability.” To encourage innovation, the company gives out “Henkel Innovation Awards” to employees who develop sustainable new products. The award includes public recognition via press releases and in company newspapers. Henkel also keeps a database of successful ideas generated by employees that is available to its workers worldwide.

Intervention 7: Adjust the Parameters by Aligning Systems and Structures with Sustainability

Because internal systems, structures, policies, and procedures should not be altered until the right kind of thinking and behaviors have been identified and implemented, changing these parameters is the last step in the change process. At the same time, the effort never actually ends at this stage. Change toward sustainability is iterative. The “wheel of change” must continually roll forward. As new knowledge is generated and employees gain increased know-how and skills, the organization needs to continually incorporate new ways of thinking and acting into how it does business.

Patagonia, the U. S. retailer of outdoor gear and clothing, explicitly seeks to create a culture that values protection of the environment and of communities. Raises, bonuses, promotions, and succession planning all depend on the level of contribution employees make to the firm’s core values of environmental protection and social equity. IKEA has followed a similar course. Says Thomas Bergmark, Social Responsibility Manager, “No one has been promoted to the senior management level who does not have a strong commitment to these issues. Before we engaged in sustainability, there were managers who did not take environmental and social issues to heart. These managers are no longer at IKEA. We take great care to get the right people promoted.”

The “Wheel of Change Toward Sustainability” shows how the seven interventions interact to form a continuous reinforcing process of transformation toward sustainability.

Sustainable Governance

Many leaders have found that changes in governance provide the greatest overall leverage for facilitating the successful introduction of the interventions outlined above. What is governance? The Journal of Management and Governance says, “Governance . . . includes the modes of allocating decisions, control, and rewarding rights within and between economic organizations.” In other words, governance systems shape the way information is gathered and shared, decisions are made and enforced, and resources and wealth are distributed. These factors guide how people perceive the world around them, how they are motivated, and how they exercise their power and authority (see “Sustainable Governance Systems”).

The organizations leading the way toward sustainability tend to view all of the people that are affected by their operations — internal members as well as external stakeholders — as important parts of an interdependent system. Their leaders understand that every component of the system must be fully engaged and must function effectively for the whole to succeed. In order for this to be possible, power and authority must be skillfully distributed among employees and stakeholders through effective information-sharing, decision-making, and resource allocation mechanisms.

This model of governance is much more sustainable over time than a patriarchal approach, because as a natural output of the process, employees and other stakeholders have a high level of commitment and involvement. With the proper purpose, vision, and guiding principles, a new production model and organizational paradigm evolves that works to eliminate environmental and socio-economic problems and create business opportunities.

Sustainable governance systems have five dominate characteristics:

1. They follow a vision and an inviolate set of principles focused on conserving the environment and enhancing socioeconomic well-being. Every system has a purpose that is the property of the whole and not of any particular part or person. Sustainability holds equal — or greater — footing with the goals of profitability or shareholder value.

2. They continually produce and widely distribute information necessary for expanding the knowledge base and for measuring progress toward the core purposes. A system of feedback mechanisms produces and widely disseminates timely and credible environmental, social, and financial data to provide the information needed for continued learning and improvement.

3. They engage all those affected by the activities of the organization. Sustainable governance systems involve in planning and decision-making all those affected by the organization, including employees from all units and functions, as well as key stakeholders such as suppliers, investors, distributors, and community, environmental, and labor organizations.

4. They equitably share the resources and wealth generated by the organization. By spreading the return on investment among employees and stakeholders and by equitably distributing resources such as staff, time, and capital to internal units, leaders ensure that all participants give the enterprise their full engagement and support.

5. They provide people with the freedom and authority to act within an agreed-upon framework. Clearly defined, mutually agreed-upon goals, rules, roles, and responsibilities result in clear strategies and implementation plans. Power and authority are decentralized, and people have both the freedom and the responsibility to act.

None of the leading organizations I reviewed can be considered truly sustainable yet. Each is plagued by inconsistencies between their ideal vision and current practices. The early adopters acknowledge that they have just begun the journey to sustainability. But they have all implemented most, if not all, of these principles of governance. The organizations all describe and apply the principles in their own unique ways. But no matter how they are articulated or employed, these tenants provide the governance structure necessary for the long journey to sustainability.

In addition to the focus on governance, leading organizations are blessed with — or take explicit steps to develop — exemplary leadership at the top and throughout the enterprise. It is not possible to initiate or sustain the tremendous transformation required to become more sustainable without exceptional leadership. Thus, good governance and leadership are the two hallmarks of successful change toward sustainability.

Organizations that apply these interventions and make the transition to cradle-to-cradle production and systems-oriented organizational paradigms are certain to be the big winners in the future. Pressure will only increase from consumers, civic groups, and the financial markets for improved environmental and social performance. Executives who believe that these demands will fade or be deflated by shifts in environmental, public health, or labor laws may experience short-term relief from these pressures. In the long run, however, recalcitrant organizations will experience a backlash that may threaten their very existence. The successful leaders of the future will be those who have adopted a more sustainable model of conducting business.

Bob Doppelt is executive director of the Center for Watershed and Community Health, a sustainability research and technical assistance program affiliated with the Institute for a Sustainable Environment at the University of Oregon. Doppelt is also a principal with Factor 10 Inc., a sustainability change management consulting firm.

The post Overcoming the Seven Sustainability Blunders appeared first on The Systems Thinker.

In this changing world, it’s useful to think of leadership not as an immutable set of qualities but as an activity: the activity of engaging people to accomplish a common purpose. This process takes place within a particular social, political, economic, and technological environment — the features of which influence the effectiveness of certain styles and approaches to leadership. It is my contention that the environment has changed dramatically — in ways that I will describe more fully below — and that one of the new characteristics that leaders must adopt to be effective is that of vulnerability.

Vulnerability is not an attribute commonly associated with leadership. The word evokes images of weakness, fallibility, and defenselessness. Roget’s Interactive Thesaurus identifies nine synonyms for the word “vulnerability”: danger, dependence, exposure, infirmity, instability, jeopardy, liability, peril, and weakness. So why would anyone deliberately seek to be vulnerable? How can doing so possibly be necessary for leaders today? Isn’t living in the world dangerous and unstable enough without deliberately cultivating vulnerability? Before discussing these questions, let’s explore what I mean by “vulnerability” in the context of leadership.

The Discipline of Vulnerability

Pema Chödrön uses the metaphor of a room to describe how we often relate to the world. We create this room to suit us perfectly. It is the perfect temperature; the food is our favorite, as is the music. Only the people with whom we get along are allowed to enter this room. It is a wonderful environment, perfectly suited to us. But gradually the room turns into a prison as we become more and more afraid to venture out. The longer we stay in the room, the more threatening the outside So we take steps to for selves even more, padlocking the doors and shuttering the windows.

This is the position of too many leaders today. In a world full of perceived threats from all quarters, leaders tend to isolate themselves as they attempt to single-handedly eradicate all perils facing their organizations. In doing so, they cut themselves off from important sources of information and valuable relationships. In this new environment, the existing leadership paradigm — the “leader as hero” —  serves as a prison.

As Chödrön says, “Staying in this room is not productive of being a whole, healthy, sane, well-adjusted person. . . . It’s not productive of awe, wonder, curiosity, or inquisitiveness. It’s not productive of tolerance, and it breeds bigotry and racial hatred.” And then she adds, “Our life’s work is to learn to open the door.” Learning to open the door — for individuals, organizations, and even nations — involves cultivating vulnerability.

In The Fifth Discipline, Peter Senge writes: “Each of the five learning disciplines can be thought of on three distinct levels:

1. Practices, which are the things you do
2. Principles, which are guiding ideas and insights
3. Essences, which is the state of being of those with high levels of mastery in the discipline.”

Using this framework, and thinking of vulnerability as a discipline, its essence is a sense of unguardedness and willingness to be changed. Principles or guiding ideas that support the discipline of vulnerability might include openness, transparency, “not knowingness,” trust, and compassion. Openness is a sense of permeability, a receptivity to influences from outside “your room.” Transparency is essentially a willingness to invite scrutiny and critique. “Not knowingness” is a bit harder to describe. The Zen Buddhist phrase “beginner’s mind” captures this principle well, in that it encourages us to approach each situation with a spirit of curiosity combined with a lack of certainty. “Not knowingness” is another form of openness — the openness to new ideas and ways of seeing the world. Trust involves yet another kind of openness — the willingness to engage in relationship with the other.

“The other” can be parts of oneself, other people, a higher power, or a process. Finally, compassion entails an openness to the suffering of others and the desire to alleviate that suffering. Embracing vulnerability through the application of these principles can be strengthened through a myriad of practices, some of which will be described later in this article.

The Call for Change

Why is vulnerability particularly relevant as a leadership discipline now? First, people around the globe are increasingly aware of the interconnectedness of all existence. Even in the most isolated settings, developments in communications technology have made it possible for people to quickly and easily learn about events occurring in other parts of the world. Such awareness then influences what they consider to be their sphere of concern. At the same moment, I can be troubled by the performance of my local school system, the bombing of the U. N. headquarters in Iraq, and the continuing heat wave in Europe. Knowing about these events inevitably expands my consciousness.

The globalization of the economy also compels individuals and organizations to operate as part of a larger whole. Even remote areas feel the economic impact of events occurring in other regions. For example, some months following the bombing of the World Trade Center, my husband and I were riding in a taxi on the Caribbean island of Saint Lucia. The driver started talking about September 11th and what a terrible thing it had been. As an American, I assumed that he was expressing his condolences for the loss of life in the U. S. As it turned out, his primary concern was the effect on his local economy of the drop in air travel following the attacks. This incident is but a small example of the powerful web of economic interconnectedness that characterizes our time.

Additionally, we have become increasingly consciousness of the interconnectedness of systems that were once perceived and treated as substantially separate. For example, there is more and more evidence that the phenomenon of “urban sprawl” contributes to a diminished sense of community and environmental degradation. When people must get in their cars and drive in order to carry out their daily activities, they no longer

Although the “leader as hero” may never be completely replaced, we now have other models to guide our behavior.

casually encounter fellow community members and they contribute to environmental pollution. Other examples abound. It is too early to know whether our rising awareness in this area will lead to changes in practices, but further progress will certainly be aided by a stance of vulnerability.

A second condition that calls for leaders to adopt a stance of vulnerability is the tarnished credibility of many major institutions, including the media, the church, and the marketplace. This may be a “good news, bad news” occurrence, setting the stage for citizens to require their leaders to act with humility, transparency, and trustworthiness. At this writing, it is hard to know what direction society will take: a flurry of laws, litigation, reorganization, and regulations intended to prevent such violations from recurring, or a more fundamental revisiting of our basic expectations about social institutions and their leaders.

A third condition, which is a potentially positive development, is an emerging civic re-engagement movement that seems to be gaining momentum. One example is the powerful Internet-based citizen participation vehicle “Move On,” which aims to “bring ordinary people back into politics.” It currently has an international network of more than two million online activists, which has taken action on a variety of political and social issues since 1998. In addition, more and more opportunities exist for large numbers of citizens to engage in dialogue and offer their views on important public developments. One such example was the historic “Listening to the City” event held in July 2002, in which 5,000 New Yorkers offered comments on plans to redesign lower Manhattan, rebuild the World Trade Center, and create a memorial for the victims of the September 11th attacks.

As a facilitator of this session, I was profoundly impressed by both the skillfulness of the process and the quality of the results. This event required a stance of vulnerability from everyone involved. Those who commissioned the process remained open to being influenced and were willing to modify the outcome to reflect the needs expressed by participants during the day-long event. Those who attended the gathering demonstrated trust that their input would be taken seriously, even as they entered into the dialogue with self-described “New York cynicism.” Those who organized the process were flexible and willing to make changes in real time, for instance, when the majority of participants balked at taking part in one planned exercise. The gathering truly demonstrated the qualities of vulnerability described in this article and, indeed, had an impact on the course of the rebuilding process.

A final condition brings us back to the point made earlier: that desirable leadership attributes will be influenced by the environmental context. In order to help leaders to operate effectively in this complex, interdependent, and heterogeneous environment, scholars are articulating a new image of leadership. Recent books such as The Spirit of Leadership by Harrison Owen (Berrett Koehler, 1999), Leading Without Power by Max De Pree (Jossey-Bass, 1997), and Leading Quietly by Joseph Badaracco, Jr. (Harvard Business School Publishing, 2002) emphasize the relational, subtle, and even spiritual elements of modern leadership. Increasingly, the inner work of leadership is being linked to outer actions. Although the “leader as hero” may never be completely replaced, we now have other models to guide our behavior.

Taking Off the Armor

“You become what you practice most.” — Unknown

It is difficult to expect leaders who have not embraced the discipline of vulnerability throughout their careers to do so when the stakes are high. Instead, leaders must consistently cultivate this approach over the long term. Pema Chödrön writes, “When I was about 12, I read a Life magazine series, ‘Religions of the World.’ The article on Confucius said something like: ‘By the time you’re 50, if you’ve spent your life up until then taking the armor off . . . then you’ve established a pattern of mind that for the rest of your life, you won’t be able to stop. You’ll just keep taking the armor off. But if by the time you’re 50 you’ve become really good at keeping

that armor on . . . it’s going to be very hard to change.”

Regardless of our age or position in our organization, how might we start to “take off the armor”? We can begin with the principles of vulnerability outlined above: openness, transparency, “not knowingness,” trust, and compassion. For each of these guiding ideas there are numerous practices that run the gamut from audits to Zen. Below are examples of some that might support each of the principles (also see “The Principles of Vulnerability”).

Openness. A number of years ago, I attended a barbecue hosted by a local police officer, along with mutual friends. This was the first time we had met most of the people at this party. Early in the evening, our host began railing against the Puerto Ricans who had moved into his community in recent years. He described them as having caused an increase in crime, poverty, and teen pregnancy in the town. My first instinct was to react to aggressively defend the people he was maligning — but we were his guests and it did not seem appropriate. I was greatly conflicted: I felt as though his beliefs, his perspective, would seep into me and become a part of my identity if I didn’t mount a defense. But as a guest and a stranger, I did not feel it was polite to argue with him.

Instead, I tried to be open to his perspective. When I actually allowed myself to take in his point of view, I realized that police officers regularly encounter people at their worst. Given that, why would he have a different perspective about Puerto Ricans? Once I became vulnerable and considered his perspective, it changed me.

At that point, I began to pay attention to the ways in which my fear of being “colonized” by “the other” was causing me to become rigidly defensive of my own views. I started exploring various practices that enhance individual and collective openness. The Buddhist practice of tonglen, which means “exchanging oneself for the other,” is a powerful personal discipline for cultivating compassion and a sense of connection with others. Tonglen entails the deliberate “breathing in” of someone’s pain, anger, sadness, and negative energy and “breathing out” light, warmth, and positive energy directed toward that individual. I have found it to be especially helpful in countering the tendency to defend my own beliefs and reject those of other people.

There are also numerous exercises that encourage taking different perspectives, including the exercise called “Multiple Perspectives” described in The Fifth Discipline Fieldbook. The exercise, which is useful for teams working on a real problem, involves identifying each of the stakeholders and rotating among roles in order to see the issue from as many vantage points as possible. This exercise can benefit individual participants as well the team as a whole.

The June 2003 issue of Fast Company magazine features an organizational example of the power of taking multiple perspectives. The Dofasco Steel Company of Hamilton, Ontario, has distinguished itself because of its emphasis on the “triple bottom line” (society, the economy, and the environment) as well as its consistent profitability, in an industry where neither are typical. Former CEO John May berry says, “These things all bleed into each other. How do you get happy shareholders? Start with satisfied customers. How do you get satisfied customers? Start with happy employees. How do you please employees? Try not to wreck the community they live in.” When faced with seemingly incompatible goals, such as reducing energy consumption while still producing high-quality steel, the company creates innovative solutions by “constantly examining problems from all perspectives as we try to solve them. And often, an improvement in one area that might initially look bad for another stakeholder actually pushes you to come up with solutions that are better all around.”

Transparency.

Individuals and groups alike can practice transparency, the openness to scrutiny or critique. On an individual level, we can invite friends, family members, and colleagues to offer feedback about our behavior and its impact on them. We can also make ongoing efforts to align our purpose, values, and goals to result in more consistent actions. If others know what our values are and can observe a pattern of behavior consistent with those values, then the reasons for our actions are clearer than they might have been if we behaved in inconsistent and unaccountable ways. Any effort to bring to consciousness our own mental models and assumptions, along with the willingness to make those public, is practicing transparency.

For organizations, one powerful way of practicing transparency is by inviting scrutiny — feedback — from outside parties through external evaluations and audits. Recently, the food industry, spearheaded by the Food Marketing Institute and the National Council of Chain Restaurants, implemented an animal welfare initiative that is producing audits of eggs, milk, chicken, and pork producers and will eventually result in inspection of cattle and feed lots. In 1997, McDonald’s restaurant began a process that eventually required all of its meat producers to undergo animal welfare audits: In 2002, it conducted 50 such audits worldwide.

Other ways in which organizations can practice transparency include aligning vision, mission, values, goals, and practices and collectively uncovering assumptions and mental models. The Fifth Discipline Fieldbook and other resources describe a number of techniques for creating a shared vision and uncovering mental models. Although the techniques are well proven, they are most successful in environments in which there is already a fair amount of openness and trust.

For a variety of reasons, having the answers can be the most unhelpful thing a leader can do.

“Not Knowingness.” People in leadership roles are often expected to have all the answers. In fact, for a variety of reasons, having the answers can be the most unhelpful thing a leader can do: It allows others to avoid taking responsibility; it perpetuates the “leader-as-hero” myth; it suppresses creative thinking that can come from those on the margins; and it keeps others at a distance. “Not knowingness” requires especially rigorous practice because the pressure that leaders experience “to know” comes both from within and without.

Leaders who want to adopt this principle might find inspiration in the experiences of former Hewlett-Packard executive Greg Merton. In his article, “Leadership is Sourced by a Commitment to Personal Development” (Reflections, Fall 2002), he writes, “I am learning that a willingness to be vulnerable arises out of strength, not weakness. We protect ourselves out of fear, not confidence. And if we want those around us to learn, then we must be learning as well.”

The creation of the Grameen Bank in Bangladesh is an excellent example of “not knowingness.” Since the early 1980s, this bank has made a success of doing something no other bank has done: lending to the poor. In Reflections (Spring 2002), the leader of the bank, Muhammad Yunus, described its origins. Conditions in Bangladesh in the mid-1970s were horrific. As Yunus walked from his beautiful bungalow to the university where he was teaching economics, he would pass by people dying in the street. He realized that his economic theories were useless in the face of those conditions. He said, “I felt completely empty. . . . I realized I could help people as a human being, not an economist. So I decided to become a basic human being. I no longer carried any preconceived notions.”

Stimulated by this realization, he traveled into local villages to learn about poverty by listening to poor people themselves. He discovered that many of them earned a meager income by making things to sell but, in order to buy the raw materials, they had to borrow cash from a moneylender at high interest rates. Making these payments left them without enough money to live on. The people Yunus met were not victims or malingerers; they were motivated entrepreneurs who lacked resources. This learning became the foundation of the creation of Grameen Bank, which has grown to be an international model for microcredit banks, lending money to people with no collateral.

Trust. “Not knowingness” also involves a willingness to trust an unfolding process and to have a kind of faith, whether it is faith in other people, in oneself, in a deity, or merely in the integrity of the outcome. In A Path with Heart (Bantam Books, 1993), Jack Kornfield includes a wonderful story about Vinoba Bhave, who was Gandhi’s closest disciple and heir apparent. After Gandhi’s death, his followers tried to convince Vinoba to lead a nationwide convention to decide how to continue Gandhi’s work. With serious reservations, Vinoba agreed, but only on the condition that the conference be postponed for six months so he could walk there on foot, halfway across India.

In his travels, Vinoba discovered the same scenario in village after village: The people were poor and were unable to grow their own food because they owned no land. At first, he promised to talk to Prime Minister Nehru about passing a law to give land to the poor villagers. Upon reflection, he realized that such a law would be ineffective in addressing the problem because it would take years to pass and when it was finally put into place, corrupt governmental officials would siphon the land grants away before they ever reached the people. Sadly, he gathered a group of villagers together and told them his conclusion.

In response, one rich villager pledged to give some of his land to 16 families, each of whom needed five acres. This generous offer prompted others to follow suit in village after village as Vinoba traveled to the conference. During his journey, he stimulated the transfer of more than 2,200 acres of land to poor families. As a result, others joined the effort, which became known as the great Indian Land Reform Movement.

Kornfield writes, “All of this began from a spirit of listening, a caring for truth, and a compassionate beginner’s mind brought to an old and difficult situation.” I would add that it also came from a trust in an unfolding process. If Vinoba had proceeded with an agenda, clear goals, and a decisive vision of the future of the Gandhian movement, would the Indian Land Reform Movement ever have happened?

Compassion. Compassion is defined as “deep feeling for or understanding of misery and suffering and a desire to promote its alleviation.” It results from the act of “opening the door” discussed earlier in this article. The spiritual practice of tonglen is deliberately aimed at cultivating compassion.

Whether we use a spiritual or cognitive route to expand our perception of the interconnectedness of elements within systems, we cannot fail to experience a strengthened relationship with the other parts of that system: individuals, work groups, organizations, cultures, nature, and so on. Awareness of this relationship creates the groundwork for a compassionate response to the other. Peter Senge quotes Einstein on this topic:

“[The human being] experiences himself, his thoughts and feelings as something separated from the rest — a kind of optical delusion of our consciousness. This delusion is a kind of prison for us, restricting us to our personal desires and to affection for a few persons nearest to us. Our task must be to free ourselves from this prison by widening our circle of compassion to embrace all living creatures and the whole of nature in its beauty.”

The practice of systems thinking can enable us to see the interconnection between elements that had previously been perceived as separate. Systems diagrams can be a useful tool for cultivating this type of thinking. In a leadership course I was teaching for people with mental retardation and their workers, we used a rudimentary systems diagram to describe the relationship between the behavior of staff and clients in a group home. One of the residents understood the connection immediately: “So when staff yell at me, then I feel ashamed and that makes me mad and I yell back. The staff think I’m acting out and then they restrain me.” Through the practice of systems thinking, this participant, who had previously viewed interactions entirely from her own perspective, was able to take the perspective of others. This stimulated a thoughtful discussion about the ways in which the behavior of the staff and residents influenced each other, which helped to break down barriers between people in those two roles.

Perhaps a case study will be useful at this point. What follows is a real situation.

In the mid-1990s, a small town in a rural state experienced a series of violent events that challenged the community’s capacity to act compassionately toward individuals with mental illness. The incidents also challenged the state mental health department to operate with a stance of vulnerability rather than the usual defensive posture that is so prevalent in response to scandal. First, a man with a history of mental illness attacked members of a local religious order; two of these women subsequently died. The man knew these individuals and had grown up in the community. Several months later, another murder took place in the town; the alleged perpetrator was on a waiting list for mental health services. During the same year, in a nearby town, a resident of one of the state-run psychiatric facilities was murdered by her boyfriend.

Any one of these tragic events might have provoked a serious backlash against the mental health department and the people it served. The coincidence of three violent crimes happening within a short timeframe was a recipe for disaster. It would not have been surprising to find the system’s leaders engaging in defensive practices such as scapegoating, retreating, and retaliating. Instead, leaders within the system chose to stay focused on the circumstances of the people they served and the well-being of the community at large, a focus that necessitated a different set of responses than the conventional ones.

What did the department actually do? In the instance of the nuns’ murder, the department reached out to those people who had a stake in the unfolding events. First, officials asked themselves, “Who is going to be most affected by this horrible incident and its potential implications?” They contacted the head of the local chapter of AMI, a national education and advocacy group for people with psychiatric disabilities and their families. They also got in touch with the leader of the local mental patients’ advocacy movement, the mayor of the community, the head of the agency that served the perpetrator, and the Catholic diocese. This group of people from the community got together and said, “Our community has a reputation as a caring community, and we need to let people know we are not going to scapegoat people with mental illness or let this become a witch hunt. That’s not what this community is all about.”

Although the event and its aftermath were tragic and painful, the behavior of this community group, supported by leaders within the mental health department, prevented worse consequences. In fact, a reporter who had grown up in the community returned to his hometown shortly after the attack to see what the effects had been. Fully expecting a severe backlash against people with mental illness, what he found was very different. Four days after the incident, 1,000 citizens crowded into a church just down the street from the convent for a public prayer service. The town’s mayor urged them to pray for the family of the perpetrator. The state legislature later called for improved treatment of mental patients living in local communities. The nuns continued to pray for the man who had killed two of their own.

How does this example illustrate the discipline of vulnerability? Instead of padlocking the door, turning off the phones, and hunkering down in their “room,” the department heads acknowledged that they needed to work with other key stakeholders. They recognized that they were but one element of a larger system, and possibly not even the central or most relevant one. Instead of protecting and defending itself, the department reached out to others. Its message was, “We need you; we can’t do this alone.” Given that department leaders were besieged by lawsuits and attacks in the newspaper, actions that often lead people to feel defensive, it is all the more remarkable that they chose to respond in this way.

Further, the department proceeded with a sense of not knowing, a courageous stance for an institution expected to wield power, expertise, and accountability. Leaders focused on creating an expansive, long-term agenda, rather than on merely reacting to the crisis. This approach enabled the broader group of stakeholders to establish common ground. It would have been impossible for them to do so if the emphasis had been on defending the stakeholders’ individual actions regarding the specific incident. Instead of fortifying their “room,” these courageous folks opened the door and went out into the world, vulnerable and open to influence. This is a clear example of the discipline of vulnerability at work.

A Fresh Approach

I have attempted to describe some current conditions that call for a stance of vulnerability and to describe why vulnerability is a core leadership discipline for these times. Although it may not be the most accurate term for what I have tried to describe, it does have the advantage of freshness. Using “vulnerability” as a positive term, a condition to which leaders might aspire rather than eschew, invites reflection upon our existing assumptions about leadership. Because I also wanted to include some practical elements, I have attempted to touch on some of the ways in which an individual or collective might cultivate vulnerability. Anyone interested in further pursuing these practices will find ample information else-where. My main hope in writing this article is that it might contribute to our individual and collective capacity to “open the door” and venture out into the world.

The post Embracing Vulnerability:A Core Leadership Discipline for Our Times appeared first on The Systems Thinker.

I have also observed that the amount of trust that exists within a group of people greatly affects the results they can achieve together. A guest on a recent talk-radio show on financial investments demonstrated the impact of trust within the U. S. economy. A highly respected portfolio manager with 40 years of success in mutual fund investing, he remarked that, despite Alan Greenspan’s testimony before Congress that the economy is moving in a positive direction, the stock market is still slumping. Historically after recessions, markets recover first, followed by the rest of the economy; yet in our current situation, the economy is showing signs of recovery but the markets are still experiencing downward trends. Why? The guest attributed the slow market improvement to human factors. He asserted that, in response to gross misrepresentation of earnings and other mismanagement by top executives from companies such as Enron and Worldcom, many people now distrust large corporations and hesitate to invest in them. In other words, despite signs that our economy is getting back on track, trust — or lack of trust, in this case — appears to be significantly limiting the recovery of the markets and the economy as a whole.

As a result of my observations and conversations with others about this topic, I have been investigating how to build trust in organizations, particularly schools. I’ve looked at numerous studies that have attempted to define trust and explain how it works. While thought provoking, their findings leave me unsatisfied. One of the reasons I am not adequately convinced by many researchers arguments is that their approach to understanding trust tends to be deconstructivist.

They break apart the concept into many different components in order to analyze it, and the more they do, the less I understand and connect with it.

I have come to believe that we can better understand trust by looking at it as a system composed of many independent yet interrelated and interconnected factors, including but not limited to integrity, honesty, character, reliability, and competence. Because the power of trust lies in the synergy of these variables, building it requires us to understand their interplay in our relationships and in our organizations.

In a recent article, Peter Senge touched more deeply on this process when he discussed the importance of “holism,” a way of understanding the world whereby “the whole is enfolded into each element or part” (see “Creating the World Anew,” The Systems Thinker, V13N3). It is a way of seeing not only the interconnections among the parts and the whole, but also how they mutually evolve together. I believe trust is a concept to which holism applies: We cannot adequately understand and nurture its components without looking at the essence of the whole concept. In our attempts to break it into what appears to be its constituent parts, the “spirit” of trust no longer exists.

To illustrate, let’s try to isolate one of trust’s components, honesty. Although honesty is a positive trait for which we should strive, an honest person is not necessarily reliable or dependable, two other components of trust. Would we trust an honest but unreliable person? We might have confidence that that person will tell the truth, but we probably wouldn’t trust him or her to follow through with commitments. As Stephen Covey puts it, would we really trust an honest but incompetent surgeon to perform a major operation on us? This example hints at the complex nature of this seemingly simple characteristic.

Defining Trust

Let’s begin by defining trust. Webster’s Dictionary says trust is “firm reliance on the integrity, ability, or character of a person or thing” and “assured resting of the mind on the integrity, veracity, justice, friendship, or other sound principle of another person.” Stephen Covey defines it as “the balance between character and competence.” These definitions focus on a particular state of mind that one needs to be able to trust someone.

But if instead we think of trust as an underlying condition necessary to support all effective human interactions, then it becomes a foundational systemic structure. In this supporting role, trust is not visible in the traditional sense; like the wind, only its effects can be seen. For example, trust is absent if we think a relationship might jeopardize our personal or professional interests and well-being. Similarly, we can comfortably surmise that high levels of trust exist in organizations in which members feel a sense of community and connectedness.

To explore the idea of trust as an actual but intangible structure, let’s consider the iceberg metaphor. When you look at an iceberg, only the tip is visible; the greater mass lies out of sight below the surface. By looking “beneath the surface” of daily events in your organization, you can determine the structures that influence people’s behavior. If we apply this metaphor to understanding trust, the tip is our daily interactions in which we experience varying levels of trust or mistrust (see “The Iceberg Model of Trust” on p. 2). These interactions, a series of seemingly unrelated events, are the concrete results of an organization’s climate of trust, which exists in the patterns and structures “below the waterline.” One unpleasant encounter may not lead us to feel an overall sense of mistrust. But if the behavior continues over time, it’s likely to undermine relationships and erode trust throughout the organization. (Note that certain events, such as layoffs, are significant enough to be “trust busters” the first time they occur.)

Using the Trust Lens

So how do we notice patterns of behavior that support or undermine trust? By looking through a “trust lens.” In almost every interaction between people, a “trust transaction” takes place that transcends the actual event; that is, based on what occurs, levels of trust rise or fall. To determine the degree of trust being transacted during an interaction, you can take the following elements into consideration:

1. The history of interactions between individuals and/or groups (What has happened between them in the past?)
2. The literal meaning conveyed through the interaction (What words are being expressed?)
3. The inferential meaning conveyed through the interaction (What voice tones, facial expressions, and body language are being used?)
4. The result of the interaction (Did one party gain an advantage over or “hurt” the other in some manner?)

If we think of trust as an underlying condition necessary to support all effective human interactions, then it becomes a foundational systemic structure.

Knowing the history between two parties offers us the greatest insight in determining the level of trust transacted in a given encounter. Consider, for instance, how different your conclusions would be if you knew that two individuals you were observing had been best friends their entire lives or that two groups had previously experienced a significant conflict with each other.

Because we don’t always know the history, we can try to “read” the trust transaction at both the literal and inferential levels. At the literal level, we analyze the words and phrases being transmitted between the parties involved. In general, using deceptive, demeaning, and intimidating language diminishes trust, while communicating openly and honestly with what Covey calls “courage and consideration” builds it.

Observing literal transactions has its limits, though. According to numerous studies, the words we use make up only about 10 percent of what we communicate. It is at the inferential level — the voice tone, facial expression, and body language — where we do 90 percent of our communicating. Psychologist Gwyneth Doherty-Sneddon says that “language is seen as the primary vehicle” to transmit information and “non-verbal communication is primarily seen to transmit emotional information.” Thus, actively observing all aspects of an interaction and asking, “Do these behaviors convey trust or lack of trust?” is crucial in determining the degree of trust being transacted.

We have to be cautious, though, whenever we try to determine levels of trust, because we each bring to any situation our own set of assumptions about how the world works. Therefore, when we use a “trust lens,” we need to consider how our mental models are influencing our perceptions. A continual comparison between actual data and our assumptions will help us to discern whether we are making accurate judgments or whether we are overgeneralizing based on limited information.

How Trust Becomes a Structure

When a pattern of transactions occurs over a period of time, it creates a structure that becomes the “cultural norm”—a climate of trust or mistrust. In a reinforcing process, our behaviors strengthen the cultural norm, which strengthens the behaviors, and so on. For example, suppose a number of people in an organization behave dishonestly — perhaps by misrepresenting financial data — to help the organization “get ahead.” If the organization’s leaders fail to censure the dishonest conduct, the organization will assume that “this is how we do business.” In this way, isolated behaviors grow into a pattern of dishonesty. Likewise, when trustworthy behaviors, such as honest communication, competence, and integrity, are modeled and reinforced, they eventually become the cultural norm.

Another example is using standardized testing as the sole mechanism for assessing the quality of a school system, which may end up creating a culture steeped in cynicism and deceit. In order to maintain their school’s stature in the community and — in some cases, even it’s funding — some teachers might end up “teaching to the test,” basing their lesson plans on the test questions rather than on sound curriculum. And, in extreme cases, this emphasis on “making the grade” might even influence students to cheat, especially if passing the test is the only way to advance to the next grade or graduate.

The scenario seems like a “chicken and egg” syndrome: Did the structure cause the behaviors, or did the behaviors create the structure? I believe the answer is “yes” to both questions. We may blame lack of trust on the “system,” but we need to remember that, with or without intention, we create and reinforce that system through our behaviors.

LOW TRUST IN AN ORGANIZATION

If the lever is a district’s strategies for reaching its objective — helping every child reach his or her potential — then the position of the fulcrum reflects the level of trust within the organization. In a low-trust environment, the fulcrum is far away from the goal. People end up expending more effort to achieve the objective than they might otherwise in a high-trust environment.

In this sense, we might view trust as an example of what system dynamicists call “dynamic complexity,” because the effects of trustworthy or untrustworthy behaviors in an organization are not always closely related in time or space to when they actually happen. In fact, the impact is often felt much later. So to nurture trust, we need to practice the art of simultaneously “seeing the forest and the trees” — seeing the organizational culture and the individual behaviors within it.

Leveraging Trust

Activities such as mandated standardized testing, which attempt to solve a complex problem in one fell swoop, reflect the prevailing system of management in most organizations today. In a keynote address at the Systems Thinking and Dynamic Modeling Conference in June 2002, Peter Senge described the attributes of this type of organization:

• Culture of compliance
• Management by measurement
• Right and wrong answers
• Managing outcomes versus designing systems
• Uniformity
• Predictability and controllability
• Excessive competitiveness
• Loss of the whole (person, connections to others and to the world)

This management structure creates an environment that undermines trust and produces a, “Trust Death Spiral,” in which mistrust and low performance continually reinforce each other. In this setting, people may feel that they must do whatever necessary to get ahead or even survive in the organization. From a systems thinking perspective, to move away from this kind of management system and toward one that is fundamentally transformational and empowering in nature, we need to understand how an organization’s interrelationships, processes, patterns, and underlying structures influence individual and group behaviors — and how we can leverage trust to change those dynamics.

What does it mean to leverage trust? Archimedes, one of the world’s great mathematicians, claimed that he could transport the globe with a lever, saying, “Give me a place to stand on, and I will move the earth.” The principle of how a lever and fulcrum work together can help us understand how trust influences an organization’s ability to reach its goals.

A lever is a stiff beam that rotates about a point of support called a “fulcrum”; one end of the beam goes under an object to be moved. The purpose of this simple machine is to lift a heavy load using the minimum possible force. How much force you need depends on the length of the lever and where you place the fulcrum. Since it’s often not possible to change the length of the lever, to get the highest leverage, you need to focus on the position of the fulcrum. To minimize effort, place the fulcrum so that it’s close to the object and push on the other end. This is how a jack raises a car so we can change a tire. If the fulcrum is farther away from the object, you’ll need to apply greater force to the lever to lift it.

Low Trust. Let’s apply the metaphor of a lever and fulcrum to the organizational setting. If the lever is a district’s strategies for reaching its objective — helping every child reach his or her potential — then the position of the fulcrum reflects the level of trust within the organization. In a low-trust environment, the fulcrum is far away from the goal. People end up expending more effort to achieve the objective than they might otherwise in a high-trust environment. For instance, if administrators of a school district and its professional teacher organization mistrust each other, the district may spend more time settling disputes than fulfilling its true mission to educate children (see “Low Trust in an Organization” on p. 4).

High Trust. When the trust fulcrum is in a more advantageous position, most institutional actions can be directed toward fulfilling the organization’s mission. In the example above, if the school district works closely with its professional teacher organization to nurture a trusting, mutually beneficial relationship, it will likely not have to direct so much effort to managing that dynamic and can instead focus on educating children (see “High Trust in an Organization”).

Organizations that build systems and structures that nurture high trust and mutually beneficial relationships can trigger a “Trust Growth Spiral.” In this positive reinforcing process, trust and consequently high levels of performance mutually reinforce one another. Increased trust results in intangibles, such as confidence, pride, and ownership, which lay the psychological foundation for continued success, thereby inspiring even greater levels of trust.

Building Trust

In most organizations, the process of building trust consists of occasional events designed to promote teamwork. Many of us have participated in activities such as “supportive chair trust circles,” in which people simultaneously sit on the lap of the person behind them and support the person in front of them; eventually, the entire group is seated in a circle without the use of any props. In “trust falls,” one partner closes her eyes and falls backward, trusting that her partner will catch her before she hits the floor. While fun (unless your partner doesn’t catch you!), these exercises only tap the surface of what it takes to build trust in an organization.

Creating lasting trust is not a one-shot deal; it is an ongoing process that requires deep, long-term commitment from everyone involved. So how do we begin? Following are some examples of how my organization, the West Des Moines Community School District in Iowa, has sought to understand the systemic nature of trust and then work to create structures and engage in behaviors that enable it.
In 2000, the administrative staff development planning team, part of the Administrative Leadership Team (ALT), began to design a three-year leadership development program. We found that we value what the IABC Research Foundation has identified as five qualities that high-trust cultures generally acknowledge and reward:

• Competence (workers’ effectiveness)
• Openness and honesty (amount, accuracy, and sincerity of information shared)
• Concern for employees (exhibition of empathy, tolerance, and safety)
• Reliability (consistent and dependable actions)
• Identification (sharing of common goals, values, and beliefs)

To evaluate the levels of trust in our organization, the ALT disseminated a 16-question trust survey to all its members. The results revealed that, while the perceived level of trust was generally high, some items scored relatively low on the overall trust barometer. Based on those results, we initiated a four-session in-service training during the 2000-2001 school year. The sessions involved all building and district-level administrators and focused on identifying trustworthy and untrustworthy behaviors and their impact at the interpersonal and organizational levels. Feedback following each session was overwhelmingly positive. Results from a follow-up survey revealed an improvement in perceived levels of trust among ALT members.

HIGH TRUST IN AN ORGANIZATION

When the trust fulcrum is in an advantageous position, most institutional actions can be directed toward fulfilling the organization’s mission rather than dealing with interpersonal issues.

Here are some of the breakthroughs we have achieved through our efforts:

Building a Shared Vision. For several years, the district, with the vision and support of its superintendent, has embarked on building a learning community. One step in this process has been to develop a shared vision statement for the district through a series of collaborative processes with parents, students, staff, board of education members, and interested citizens. Through continued dialogue, the district generated a simple, yet powerful statement: “The West Des Moines Community School District will be a caring community of learners that knows and lifts every child. We will inspire joy in learning. Our schools will excel at preparing each student for his or her life journey.”

This shared vision is now guiding the district’s discussions, decisions, and future plans. It has:

• Provided the foundation for a major reorganization of the high school
• Caused the administration to seek to identify the students who do not feel “known or lifted” and to improve our services to them
• Influenced some conversations to focus on why and how we want students to experience joy in learning
• Brought forth community members who challenge the district to do better

In a nutshell, through a foundation of trust built through the development of our vision statement, avenues of communication are opening up.

Changing Our Mental Models.

In the early 1990s, the district’s school board created a policy that supports and encourages “participatory management.” This policy, which allows greater partnership and ownership in decision-making among all district stakeholders, has strongly influenced our mental models about how decisions should be made. At the event level, this policy demonstrates a belief in actively including those directly impacted by decisions in the process. Below the surface, the message is one of trust in the integrity, character, and competence of those once uninvolved, who now have a greater role in influencing policy.

Developing Personal Mastery.

The year-long trust-building workshop for members of the district’s administrative leadership team has brought trust and trustworthiness to the forefront of our consciousness and conversations. Our understanding of the gap between the current reality of our district’s trust climate and our future vision of a high-trust culture has inspired us to grow and learn as individuals and as a group.

Engaging in Team Learning.

Central office administration regularly conducts “maintenance” meetings with the leaders of our district’s professional and support organizations. These meetings provide opportunities for team learning through honest conversations. The conversations go beyond polite talk to deeper listening, engagement, and feedback. Using reflective skills has helped team members more effectively manage disagreement and resolve conflict.

Building Trust Informally.

Through the development of policies, practices, and cultural norms, an organization can make conscious efforts to build and maintain trust

In addition to formal organizational efforts to build trust, more informal interactions have also contributed to a high-trust climate. For example, recently, a confrontation between a teacher and student required an administrative response. Rather than the principal dictating how the teacher should handle the situation, the principal conducted a dialogue with the teacher based on the spirit of “knowing and lifting every child.” She helped the teacher recognize why the interaction did not align with the shared vision; turned the meeting into a learning opportunity; and indicated that she trusted the teacher to do the right thing. The teacher ultimately resolved the conflict with the student in a way that maintained a positive teacher-student relationship.

Benefits of a High-Trust Culture

When the level of trust in an organization is high, its influence is felt and observed at every level and in every aspect of its operations. High trust allows organization members to focus on their primary mission rather than taking precious time and energy to deal with the numerous crises that prevail in a low-trust environment. They can then focus their resources and energy to reach their goals.

For schools, “profit” is measured by student achievement. A multi-year study completed by University of Chicago professors Anthony S. Bryk and Barbara Schneider resulted in the book Trust in Schools: A Core Resource for Improvement (Russell Sage Foundation, 2002), which links higher student achievement with high levels of trust between teachers and principals and among the teaching staff. Bryk and Schneider go so far as to say that without trusting relationships, school improvement efforts are “doomed to fail.”

For all kinds of enterprises, trust is a high-leverage resource that sustains success and effectiveness. Through the development of policies, practices, and cultural norms, an organization can make conscious efforts to build and maintain trust. As an organization reaps the “profits” of a trusting culture, it simultaneously perpetuates, or sustains, trust as an important commodity unto itself.

Ultimately, trust involves developing and maintaining relationships. Today’s workplace requires effective, skilled, and compassionate transformational leaders — not just managers — who recognize the need for trust and who facilitate organizational change to create high-trust cultures. We can start this process by taking to heart the words of Edward Marshall, who said, “The answer to leading others to trust and high performance may be found by looking in the mirror and asking: Am I trustworthy?” Ensuring the answer to that question is “yes” may be the highest-leverage action we can take as leaders today.

Doug Stilwell has 22 years of experience in education. He is currently the principal of Crestview Elementary in the West Des Moines Community School District in Iowa. Doug is also a doctoral student in Educational Leadership at Drake University.

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What Is Human Dynamics?

Human Dynamics is a body of work that identifies and illuminates innate distinctions in the way people function as whole systems that include mental, emotional, and physical dimensions. It is the result of an ongoing investigation launched 24 years ago that has so far involved more than 80,000 people from over 25 cultures. From this research, we discovered that three universal principles – mental, emotional, and physical – combine in people in specific patterns characterized by distinctly different ways of processing information, learning, communicating, relating to others, solving problems, undertaking tasks, and, as a result, exercising leadership and contributing to groups or teams. These different “ways of being” appear to be so foundational in the human make-up that they can be seen the world over, identified at every age level (even in infancy), and observed in males and females equally. In other words, these distinctions are more fundamental to who we are and how we function than age, race, culture, or gender.

We have identified nine of these distinct human systems, or “personality dynamics.” Of these, five appear to be by far the most prevalent. The individuals representing these groups have characteristic gifts and affinities for certain ways of functioning. They flourish and contribute best under certain conditions. Most importantly, they have their own distinctive paths of development.

Being aware of and understanding these natural, inherent differences is significant for developing successful and effective human relationships of all kinds – for leading and partnering with others in the workplace, for developing loving and supportive family relationships, and for successful teaching and learning. When we don’t recognize and take into account these differences, we fall prey to misunderstanding others and misinterpreting their behavior; poor communication; less than optimum teamwork; and, in class and training settings, teaching approaches that do not “match” students’ specific learning processes. When we do understand the differences, the way is open for us to acknowledge and appreciate diverse ways of functioning; to see and adapt to others’ needs; and to relate, manage, and teach in ways that enable each group member to perform at his or her best. We are able to consciously utilize our own and others’ distinctive processes and capacities to achieve optimal individual and group performance.

The Three Principles

Let us first briefly explain what we mean when we refer to each of the three principles – mental, emotional, and physical. The Mental Principle is related to the mind. It is expressed in thinking, seeing things from a detached perspective, formulating a purpose or vision, seeing the overview, setting structure, and establishing principles and values.

The Emotional Principle is concerned with forming relationships. It is the subjective part of us that knows and values the world of feelings in ourselves and others; that needs and offers personal communication; and that relates, organizes, and collaborates. We express the Emotional Principle when we make new connections among diverse elements and exercise our creative imagination.

The Physical Principle is that part of us that is most down-to-earth and practical. It is expressed in making, doing, actualizing, and operationalizing. The Physical Principle has to do with the realm of the senses, rather than that of the mind or the emotions. It is concerned with understanding the operation of systems, both natural and human-made, and with creating effective systems of operation.

All of these dimensions are active in all people, but to varying degrees and in various combinations (see “The Mental, Emotional, and Physical Principles”).

It is also important to note that each of these principles is of equal value. They are all needed in the functioning and development of a whole and balanced person. We could also say that all are equally needed for the functioning of a whole and balanced organization.

At this point, pause and ask yourself, “With which of these principles am I most comfortable and familiar? Which do I express most easily and naturally? Could I benefit from some development or help with one of these areas?” As we shall see, individuals are generally more comfortable and familiar with two of the principles, while the third is often less known, developed, and utilized.

Mental, Emotional, and Physical Centering

While all of us have mental, emotional, and physical dimensions, we have discovered that people seem to be “wired” in such a way that one of these three principles is central in each individual’s functioning. People are “centered” mentally (rationally), emotionally (relationally), or physically (pragmatically) (see “Centering”).

Of course, each human system comprises a continual interplay of mental, emotional, and physical life. Nevertheless, each person is characterized by a central process that is specific and consistent. The principle at our core determines how we typically take in and process information.

Mentally centered people process information in a logical and sequential way. They are also characterized characterized by an innate detachment. They experience life as if they were standing on a hilltop, so they naturally maintain a birds-eye view on events and a long-term perspective.

Emotionally centered people, on the other hand, process information in a non-linear, associative, interactive way that incorporates feelings and intuition, rather than through a strictly rational process. This relatively spontaneous way of proceeding often results in the generation of new ideas and the exploration of new avenues of thought or action that might not have emerged through a more linear process. For emotionally centered people, engaging in dialogue with others is essential as a means of clarifying thoughts, feelings, and intuitions, as well as for establishing the sense of personal connection with others that makes life meaningful for them.

Finally, physically centered people process information in a systemic way – they gather and assimilate large amounts of data, and think in terms of the interconnections that make up whole systems of functioning. Because of their affinity for the systemic, they may be fascinated by the patterns they observe in the flow of events across time, from past to present and projected into the future, or they may have a keen interest in, and sense for, how things work mechanically.

Five Predominant Personality Dynamics

We have found that there are three variations on each of these major themes. Mentally centered people may be “mental-mental,” “mental-emotional,” or “mental-physical.” Emotionally centered people may be “emotional-mental,” “emotional-emotional,” or “emotional-physical.” And physically centered people may be “physical-mental,” “physical-emotional,” or “physical-physical,” making nine personality dynamics in all. Whereas the first principle indicates how one processes information, the second indicates what one processes – the kind of material that is the natural focus of attention. (This interaction will become clearer when we outline particular personality dynamics.)

CENTERING

While all of us have mental, emotional, and physical dimensions, people seem to be “wired” in such a way that one of these three principles is central in each individual’s functioning. People are “centered” mentally (rationally), emotionally (relationally), or physically (pragmatically).

Of these nine possible systems of functioning, we have found that five are by far the most prevalent – mental-physical, emotional-mental, emotional-physical, physical-mental, and physical-emotional. Any group of people – the members of a management or project team, a department, the students in a classroom, family members seated around the dinner table, a meeting of heads of state – will include some combination of these five different ways of being “wired,” with their distinctly different natural processes of learning, communicating, problem-solving, relating, developing, and so on.

Following are brief thumbnail sketches of each of these five most commonly encountered personality dynamics. These summaries provide a basic sense of their similarities and distinctions, and also of the misinterpretations of each that commonly arise as a result of their particular ways of functioning.

Mental-Physical. As we have already indicated, the thinking process of mental-physical people is linear, logical, and sequential (mental principle), and it is focused upon operations in the external world (physical principle) – as opposed to emotional data. Because of their “hilltop” perspective, they tend to focus on the long term and to think in relation to enduring principles and values. Because of their innate detachment, their emotional life is typically extremely even. Mental-physical people offer teams emotional stability, objectivity, and their gift for selecting and articulating what is essential – key points, principles, values, goals, and information. They value clarity; for this reason, they often prefer written communication. They are usually precise and meticulous in any task that they undertake.

Mental-physical people often ask the questions “Why?” and “What do you mean by…?” But they are frequently silent in groups, either because they feel no need to speak if others are saying what needs to be said, or because they think carefully before speaking and cannot find the space to participate if a process is less than orderly. Because of their natural detachment and reticence, and because they do not readily express their feelings, others may interpret mental physical people as being aloof, disengaged, uncaring, or unwilling to be approached. None of these interpretations is necessarily true. If you want to know how a mental-physical person is really thinking or feeling, just ask. Such questions will help him or her to connect and communicate.

Emotional-Mental. Emotional mental people process in a non-linear, associative way (emotional principle) the world of ideas (mental principle). They deeply enjoy a highly interactive brainstorming kind of communication, in which one idea triggers another, leading to the generation of new ways of thinking or acting. Emotional-mental people typically love movement and change. They are often innovators, drawn to the new and untried. They intuitively sense new possibilities in people, situations, and events, and endeavor to make them happen.

In undertaking new projects, emotional-mental people can move into action with the strong sense of a general direction to be taken, but with minimal data and little or no real prior planning. This experimental movement leads to new experiences, which suggest next steps that may be entirely unanticipated at the beginning. They repeat this process until they reach a satisfactory outcome.

Because emotional-mental people concentrate on the future, they typically recollect very little about the past. They do, however, remember data required for any project that is their current focus of attention – but only until the project is completed. Emotional-mental people usually have little awareness of physical signals from their bodies. They may be able to work long hours with great concentration because they are unaware that they are hungry or tired.

Others may misunderstand emotional-mental people as being either pushy or, because they will initiate movement with little or no prior planning, irresponsible. Instead, they are following their natural instinct to move things forward and light the fires of new endeavors, often relying on others to execute the details.

Emotional-Physical. Emotional-physical people also think in a non-linear, associative way (emotional principle), preferably through dialogue with others, but their focus is on the physical world (physical principle) – especially people! They experience constantly changing emotional responses to their environment and all the objects, people, and events in it. They are sensitive to others’ feelings and often can sense those feelings in their own bodies, even when others aren’t outwardly expressing them. This ability can be a gift, providing helpful information and insights; it can also be a burden, affecting the emotional physical person’s sense of well-being in negative circumstances, or creating confusion about whether feelings experienced are his or her own or those of someone else.

Emotional-physical people value personal connection and communication with others. They bring to teams both a high degree of creative thinking and a concern for creating harmony among group members. The quality of the group’s process is as important to them as the outcomes. However, they can only offer their full capacities if they feel comfortable and “safe.” If they feel threatened or judged in any way, they may withdraw and stay silent.

Emotional-physical people can relive emotion-laden events from the past as if they were occurring again in the present. Sometimes others judge them as “too sensitive,” “using too many words,” or insufficiently logical. The truth is that their sensitivity is a gift to be valued – they use it for understanding individuals and interpersonal situations. Their sometimes extensive communication results from their need to establish personal connections and to ensure that misunderstandings don’t arise. And their non-linear thinking has an emotional logic, frequently reflecting a “knowing” that they cannot rationally explain. Their intuitive gift is often a wasted resource in organizations.

Physical-Mental. Physical-mental people think systemically (physical principle), with a focus on ideas, purposes, and structures (mental principle). They plan consciously, strategically, and systematically. They want to know the purpose of any endeavor and then create a logical step-by-step plan for achieving that purpose. They tend to have a conscious strategy for almost everything they do.

Physical-mental people value efficiency and create systems of operation to achieve it, then refine those systems to make them even more efficient and, if possible, broadly applicable. They like to use models, diagrams, and charts to assist their thinking or communicate their ideas. Physical-mental individuals gather considerable data as a basis for their planning and put it into logical structure quite quickly. They have a capacity for seeing patterns in varied data or in the flow of events, from which they make projections into the future and devise action plans.

Physical-mental people have a detailed memory for data in areas that interest them. In communicating with others, they are always looking for the action to be taken or problem to be solved. They like communication to be factual and organized.

A common misunderstanding about physical-mental people is that they do not care about people or their feelings. This misperception can occur because they may be so focused on results that they may sometimes fail to consider human factors in their planning. Also, they usually find it difficult to express personal feelings. They typically express their caring through their actions rather than their words.

Physical-Emotional. Physical-emotional people process in a systemic way (physical principle) the connections (emotional principle) among data, events, and people in order to comprehend or create whole systems of operation. Their natural process of thinking, planning, and learning is not systematic but organic. When approaching any new endeavor, they immerse themselves in gathering and absorbing data without initially sorting or prioritizing it. (Because for them everything is connected to everything else, they do not always know initially what might be relevant). They then assimilate, sort, and link all of this information in a process that may be as much unconsciously as consciously directed. This process, like digestion, takes its own time, until suddenly everything comes together in a highly detailed, systemic understanding of a situation, plan of action, or product. Because the entire process takes place internally, others may think that “nothing is going on,” when in fact very much is “going on,” though the person may not be able to clearly articulate what it is until the process is complete.

Physical-emotional people are sometimes labeled “slow” in a negative sense. In classrooms they may be categorized as “slow learners,” with the implication that they may not be as smart as other students who respond more quickly. They are not really slow at all, but rather thorough. Their organic process takes time, but they are typically able to assimilate and synthesize more data and comprehend and handle more complex situations than people of any other personality dynamic.

Physical-emotional people typically have a prodigious capacity to remember data. They can recollect events from even the distant past in which they were fully engaged in extraordinary sensory detail. Because physical-emotional people think and experience in terms of interconnections, they appreciate communication that provides “the whole story,” and they often convey information through detailed stories.

Distribution of Personality Dynamics

The personality dynamics that we have identified are not equally prevalent or evenly distributed. Of the five dynamics that we have described, mental-physical people are encountered most rarely – they seem to constitute no more than about 3 percent of the population. The great majority of the world’s people appear to be either emotionally or physically centered.

Anyone of any personality dynamic may be more or less intelligent, more or less compassionate, more or less contributive, more or less gifted.

It has been fascinating for us to experience over the years that in the Western cultures in which we, or the facilitators we have trained, have worked extensively (such as North America, Europe, South America, and Israel), we have found a slight majority of people to be emotionally centered and the rest to be physically centered. In Eastern countries in which we have worked, such as Malaysia, China, Singapore, and Japan, we have found by far the great majority of the people to be physically centered. These findings apply even to people of Asian descent whose families have lived in the West for many generations.

We have no explanation for the fact that the two physically centered personality dynamics seem to predominate in the East and the two emotionally centered ones in the West. We simply offer our findings. However, we emphasize that no value judgments adhere to this observation. All of the personality dynamics are equal in value. It is not “better” to be one more than another. Anyone of any personality dynamic may be more or less intelligent, more or less compassionate, more or less contributive, more or less gifted. What is different is how they “are,” think, experience, and go about things. Indeed, we can say that each needs the others for results that are optimal and whole.

Nature vs. Nurture

We have often been asked if we think that this distribution of personality dynamics could be the result of cultural influence. Our experience has led us to believe otherwise, for a number of reasons:

The cultural explanation does not account for the many physically centered people in the West or the emotionally centered people in the East.

If culture created the personality dynamics, then one would expect the many people of Asian background who have been assimilated over generations into Western cultures, and who are not part of an Asian community within the larger community, to show the characteristic processes of the majority in their adoptive cultures. However, we have not observed this to be the case. Although many Asian Americans, for instance, may have adopted more characteristically Western values, their foundational processes of handling information, learning, problem-solving, and so on remain those characteristic of physical centering.

We have come up with the same findings in following infants adopted from the East into families in the West in which both of the adoptive parents were emotionally centered. As these youngsters develop, they may exhibit their parents’ influences in some aspects of their outer behavior – for example, by being somewhat more expressive of their feelings and individually oriented than is typical of their Asian-raised counterparts – but their fundamental processes remain those we have described as characteristic of physical centering.

The evidence indicates, therefore, that while there is a continual interaction between any individual’s personality dynamic and the external environment, the latter neither determines the basic natural processes nor fundamentally alters them. It may influence what one thinks or learns, but not how one naturally thinks or learns.

We are led to assume, therefore, that the distinctions we have identified are inherent and genetically determined. This conclusion is reinforced by our findings that people almost always identify at least one parent as having the same personality dynamic as themselves or, if not, a grandparent.

Implications for the Workplace

These different ways of being and functioning are represented wherever people live, learn, and work together. They are present in every work environment, among management and project teams, in boardrooms and training rooms, in meetings with staff or potential clients, in conference calls with colleagues or strangers from around the globe, and, of course, in classrooms (see “Human Dynamics in Education”). It has been said that 90 percent of the difficulties that organizations face can be attributed to dysfunctional relationships among people. When people develop awareness and understanding of the different personality dynamics, much interpersonal misunderstanding and conflict is avoided. Also a groundwork is laid for developing optimal communication, teamwork, coaching, mentoring, and training. A shared base of understanding enables colleagues to work together more effectively and to consciously leverage one another’s gifts and capacities.

Sandra Seagal and David Horne are the founders and directors of Human Dynamics International, an organization that disseminates unique training programs in the fields of organizational development, education, healthcare, and cross-cultural bridge-building. They are also the founders and directors of the Human Dynamics Institute, which is engaged in original research into the personal, interpersonal, and transpersonal functioning and development of people. Sandra and David are coauthors of Human Dynamics: A New Framework for Understanding People and Realizing the Potential in Our Organizations (Pegasus Communications, 1997) and are working on a new book directed toward parents, teachers, and all who care about children. For more information, go to www.humandynamics.com.

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RIGOR VS. SUPPORT

The Facilitative Modeling approach for making important decisions combines high levels of analytical rigor with high levels of stakeholder support.

Common Decision-Making Approaches

Because of this level of complexity in all aspects of organizational life, organizations usually rely on what I refer to as the “shoot from-the-hip” approach for making important decisions. You’ve seen this technique if you’ve ever been in a team meeting in which a decision must be made today. Some members of the group toss out their ideas; most participants stay silent. Eventually, the team leader contributes his or her opinion, and everyone agrees. Decision made! Most meeting participants later bemoan the “poor” decision, claiming they won’t support it. The result? The new policy dies on the vine prior to implementation, leaving the organization the same as it was before.

In analyzing “shoot-from-the-hip” decisions, we observe that they lack strength in at least two major areas: analytical rigor and stakeholder support (see “Rigor vs. Support”). This isn’t a novel observation: Organizations have struggled with these two shortcomings for years and have devised various ways to overcome them.

1. The Technological Approach Before making a major decision, in order to increase the level of analytical rigor (or understanding of the issues), managers often rely on analysts and their toolkit — what I call the Technological Approach. Organizations adopting the Technological Approach generally do so because they’ve fallen victim to the mindset that they must find the perfect answer. The idea is that if you throw enough analysis at an issue, you can completely understand everything and uncover an ideal solution. These organizations think the answer must be found in the numbers.

To process the data they generate, organizations subscribing to the Technological Approach employ spreadsheets and statistical techniques. Some even build large simulation models to test nearly infinite possible scenarios. However, these tools can obscure the assumptions underlying the analysis. And because decision-makers aren’t privy to these hidden assumptions, they cannot compare them to their own mental models — so they do not trust the resulting recommendations. This lack of trust in the analysis is a major factor in why, although usually carefully applied, the Technological Approach rarely generates the support needed to lead to effective policy-making.

2. The Stakeholder Approach In contrast, proponents of a Stakeholder Approach often put technology aside and instead try to build knowledge and support through stakeholder involvement. Well-known techniques that follow this approach include Future Search, Open Space Technology, the World Café, various forms of dialogue — even some facilitated mapping sessions using causal loop diagrams and systems archetypes. These methodologies share an underlying mindset — by getting representation from different players in “the system,” everyone will gain a broader view of the problem at hand. Further, by allowing participants to express divergent perspectives in an unconstrained fashion, the Stakeholder Approach lets them formulate creative, systemic recommendations.

Whether trying to define the problem or to generate solutions, people applying these processes (if only implicitly) tend to follow a model of interaction described by Interaction Associates as the Open-Narrow-Close model. During the Open phase, participants get all of the data on the table while defining the problem; if they’re generating solutions, this is the stage in which creative solutions spring forth from the group’s collective wisdom. During the Narrow phase, contributors take an overwhelming list of choices (problems or solutions) and narrow them down to a few to consider further. During the Close phase, they actually choose which problems to tackle or solutions to implement and how to do so. Managers then often assign groups to each of the major action items identified during this stage and give them their blessing to “go forth and implement.”

The Stakeholder Approach includes processes that build broad support — unlike what often occurs in the Technological Approach. Plus, it helps those involved to see the system from a broad spatial and sometimes temporal perspective. These results are necessary and important for creating effective changes in any system.

A major weakness of the Stakeholder Approach, however, is that the processes used to narrow and choose

APPROACHES FOR IMPLEMENTING SYSTEMS THINKING

Facilitative Modeling serves as a middle ground between the Technological Approach and the Stakeholder Approach.

among the resulting divergent issues/strategies lack rigor and usually

rely on the assumption that, simply by having enough stakeholder representation, the group will make excellent decisions. But as Irving Janis learned by studying extremely poor decisions (such as the Bay of Pigs fiasco and the escalation of the Vietnam War, which he described in his book Groupthink), groups with very high average IQs can function well below expectations.

Barry Richmond of High Performance Systems, Inc. created a simple example called the Rookie-Pro exercise that also illustrates this point. Despite working with a much simpler human. resource system than that found in most organizations, only 10 to 15 percent of individuals can guess the system’s future behavior — even after lengthy discussion! So the assumption that the collective wisdom of the group will surface in a way that leads to optimal decision-making is tenuous at best.

In addition, the framework employed to guide team members in narrowing and choosing among different options doesn’t help to determine if elements of the proposed solutions need to be implemented at different times and in varying degrees. The result is that the organization often chooses to put the same amount of resources and effort into each action item. Nor does the Stakeholder Approach determine if the issues are interconnected — different groups may be separately implementing policies that should be done together or, even worse, are mutually exclusive.

Facilitative Modeling

The good news is that there is a way to both rigorously understand (or

even reduce) complexity and improve stakeholder support! Practitioners are often drawn to the field of systems thinking because of its promise to build collective understanding — to get everyone on the same page. Even so, these managers can be pulled between the Technological Approach (big simulation models created by experts) or the Stakeholder Approach (facilitated sessions using causal loop diagrams or systems archetypes). But there’s a middle ground — a large range of activities that I refer to as “Facilitative Modeling” — where tremendous power resides (see “Approaches for Implementing Systems Thinking”).

Facilitative Modeling is a Technological Approach, because it uses computer simulation and the scientific method to build understanding. It is also a Stakeholder Approach, because it requires the input of the important stakeholder groups, uses a common language so everyone can get on the same page, and creates small, simple, and easy-to-understand models. The models don’t generate the answer; rather they facilitate rigorous discussion. Facilitative Modeling usually culminates in a facilitated multi-stake-holder session in which the participants generate common understanding and make well-informed decisions.

Overview of the Process

In the Facilitative Modeling process, a group of stakeholders identifies and addresses an issue critical to their collective success. The issue is often one that has been resistant to organizational efforts to “fix” it. After choosing the area for exploration, the group sets the agenda for a facilitate

session. In preparation for that meeting, several individuals in the group serve as a modeling team and develop (alone or working with a modeler) a series of simple systems thinking simulation models that clearly articulate important components of the issue. These components may include the historical trend for that issue, the future implications if the trend continues, possible interventions, and the unintended consequences of some of these solutions. The models are deliberately kept small so that stakeholders will understand them and the development process remains manageable.

However, it’s not enough just to make models! In fact, building useful models is probably less than half of what makes a Facilitative Modeling initiative successful. The process requires the modeling team and perhaps others to create additional materials for the facilitated session, such as workbooks for tracking experiments and writing reflections, as well as CDs of the models for after the session. A facilitator and/or design team needs to carefully plan various aspects of the session, such as appropriate questions, suggested experiments to run on the model, and a mix of small and large group discussion.

The facilitated session represents the culmination of the process. During the gathering, teams of two to four people explore the models on computers. The session includes large group interludes and debriefs between exercises. And at the end of the session, participants discuss and agree on

next steps based on the insights that emerged during the event (see “The Facilitative Modeling Process”).

Facilitative Modeling in Action

Using the Facilitative Modeling Process outlined above, a nonprofit organization recently explored potential issues associated with implementing new funding policies. This organization was responsible for improving the health and welfare of the poor population in a community by giving funds to other local nonprofits to provide services. Originally, the organization had determined which organizations to fund and how much funding to supply by analyzing the services that the target organization would provide; in recent years, it had settled into just increasing the amount of funding incrementally over the previous year’s figure. To create more accountability among the local organizations and improve outcomes in the community, the nonprofit had decided to apply a performance driven approach to funding (that is, base funding on projected improvements to performance indicators and then renew the funding if the community experienced noticeable improvement in those areas).

Some members of the organization, as well as members of an important partner group, were concerned about the potential barriers to implementing this updated approach and were eager to understand possible unintended consequences that might result from the change. They agreed that a Facilitative Modeling approach would be an excellent way to surface and discuss these issues in a way that would give all stakeholders shared insight. In little more than five days of working with a facilitator and a few representatives from the organization and its partner, the team developed three small “conversational” models for a one-day facilitated session.

At the beginning of the session, the group adopted a set of ground rules to guide their interactions. Once participants agreed to the guidelines, they began by experimenting with the first model. The purpose of this initial simulation was to surface and discuss the potential dynamics associated with implementing the new funding approach. Allowing “sub groups” to work with the models at their own speed often increases their level of understanding. However, even those with some skill at reading stock and flow diagrams similar to the one shown here can be quickly overwhelmed by maps. The simulation included a function that let the sub groups slowly unfurl pieces of the map so that they more easily followed its logic (see “The First Map” on p. 5).

The map shown here represents one way to look at the different organizations affected by the nonprofit’s funding decisions. The language of stocks and flows is ideally suited for looking at this issue. The three stocks at the top of the diagram (the rectangles labeled “Resistant,” “Not Committed,” and “Committed”) represent groups of organizations. Currently, because the new approach has yet to be implemented, all organizations would belong in the “Not Committed” stock. Eventually, as the new funding approach is made into policy, organizations would begin to move into the “Committed” or “Resistant” stocks. Obviously, if possible, the funding group wanted to avoid any organizations becoming “Resistant.”

At the session, the individual groups discussed the meaning of each of the stocks. What does it mean to be “Committed”? “Resistant”? They mulled over the question, What number of “Resistant” organizations would pose a problem for the program as a whole? Can “Committed” organizations become “Resistant”? Is it realistic to assume (as the model does) that “Resistant” organizations never become “Committed”?

Talking about the diagram helped he sub groups, and eventually the entire group, reach consensus about how organizations might become committed or resistant to the changed funding policies. For many of the participants, it was the first time they had discussed the potential that some of their client organizations might resist the changes! By working with the model, the group was able to surface an unpleasant concept in a way that allowed them to grapple with its implications for their changed strategy.

They then entered different values into the model to experiment with how the funding organization might allocate its resources in the coming months. How much effort should they put into developing the performance-driven funding program? How much into explaining the program to the funded organizations? And how much of each should they do prior to officially announcing the program? After announcing it? In short, the group wrestled with the systemic or “chestration” (a concept developed by Barry Richmond) of resources the magnitude and timing of efforts required to successfully implement the strategy.

The group concluded that, in the first phase of development, they should apply most of their efforts to designing the new policy. Doing so builds the “Clarity of the Program,” which is useful in preventing “Doubts About the New Approach” down the road. They realized that they would need to allocate at least some resources in the first phase to working with the client groups and addressing their doubts about the change. This process would also help them to refine the approach (see “Implementation Timetable” on page 6). The next phase would require additional work with the other stakeholder groups to explain the program prior to release. The third and fourth phases would involve implementation; this is when the nonprofit’s staff members would spend most of their time addressing the doubts of the affected organizations.
The group realized that the exact numbers of organizations in each category wouldn’t be the same in real life as in the simulation, but that the stories described by the model were consistent with what they now expected might happen when overhauling their approach to funding. In keeping with the need for systemic orchestration the group concluded that their allocation of strategic resources must shift over time, depending on which phase they were in (for example, in the second phase, they would need to apply some resources to program development and even more to working with stakeholders).

Working with Subsequent Models

In Facilitative Modeling, each model tends to add to the understanding generated by previous ones. Because the performance-based funding approach would require implementing a new IT system, the second model helped participants explore how a funded organization would need to allocate resources in order to develop a new IT system and build its staff ’s capacity to use it. The third model served as the capstone exercise, because it required participants to explore how client organizations might allocate their resources across the following needs: providing services, building and maintaining the IT system, investing in staff skill development, and collaborating with partner organizations.

THE FIRST MAP

The three stocks at the top of the diagram (the rectangles labeled “Resistant,” “Not Committed,” and “Committed”) represent groups of organizations. As the new funding approach is made into policy, organizations would begin to move from the “Not Committed” stock into the “Committed” or “Resistant” stocks.

During the large-group debrief of the third model, the nonprofit’s senior director said that he didn’t like one dynamic that he experienced with the model. In all cases, after the funding change, the youth population’s sense of disconnection from the community initially worsened, even when the simulated strategies encouraged a majority of client agencies to be committed to the shift and to effectively implement performance-based approaches to providing services. When he experimented with the model, the director kept trying to avoid this “worse-before-better” dynamic. Through probing questions, the group learned that it wasn’t that he didn’t expect this behavior to happen, he just wished it wouldn’t!

IMPLEMENTATION TIMETABLE

By using the model to explore the magnitude and timing of efforts required to successfully implement the strategy, the group concluded that, in the first phase of development, they should focus on designing the new policy.

This revelation led to an interesting discussion of what is often an undiscussable in the public sector: that policies designed to improve social systems often take time before they lead to noticeable improvements and that there is often conspicuous degradation of performance in the interim. The director expressed that it was political suicide to admit that things might actually get worse before improving. Ultimately, through the facilitated discussion, he came to understand that regardless of whether he wanted to admit that such a dynamic might occur, it was inevitable, given the long delays before activities such as IT development and skill-building would have a positive effect on services. Through this admission, he and his staff were then able to explore options for mitigating the effects of this unavoidable dynamic.

Ultimately, the nonprofit’s staff left the session with useful insight in several areas. First, they all understood that some of their client organizations might resist the new approach. Second, they realized that it would be helpful for them to include those organizations in developing the program. Third, the group agreed that building staff skills was likely to be a more challenging impediment to successful implementation of the changed approach than developing the IT infrastructure. Finally, they accepted that systemwide implementation would require orchestrating a series of activities that, even in the best of circumstances, would cause a “worse-before-better” dynamic. All of these insights were just the beginnings of an ongoing dialogue, and all were facilitated by using small models to focus the conversation.

The Value of Facilitative Modeling

As shown in the example above, there is a powerful place for small models in a facilitated environment. The process used for developing good systems thinking models increases the rigor of the analysis and captures the benefits of a Technological Approach. At the same time, by keeping models small, Facilitative Modeling improves on the benefits of a Stakeholder Approach and increases the likelihood that all participants end up in alignment. Moreover, the Facilitative Modeling approach uses a language — stocks and flows — that is more representative of reality than other visual mapping languages. For this reason, the participants are able to discuss and come to a novel understanding of the assumptions built into the model. Running the simulation provides an essential test of the group’s understanding and facilitates further conversations about the likelihood of different results. The computer-generated “microworld” creates a safe environment for experimentation.

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With time and experience, some of those who are incubating the idea may become advocates for it themselves. Other incubators will lose interest and become apathetic again. Still others will resist the change and work to undermine it. Further, some advocates will retain their contagious enthusiasm for the idea, while others become disillusioned. If enough people become enthusiastic about the idea, we have a positive epidemic of change (see “Four Attitudes Toward Change”). (For an example of applying these ideas to a change effort, see “The ‘Infectious’ Spread of Change at Nortel Networks” by Carol Lorenz and Andrea Shapiro in The Systems Thinker, Vol. 11 No. 6.)

Motivating and Supporting Change

To apply the dynamics of the spread of epidemics to organizational change, we need to identify the factors that motivate and support change, so that acceptance of new ideas becomes contagious and spreads throughout the organization. By supporting conditions and behaviors analogous to those that produce the spread of disease, we can catalyze healthy epidemics of, enthusiasm for, and commitment to an organizational change.

Leaders play a key role in enabling this kind of change by providing people support and environmental support. People support includes explaining what to expect from the change, listening to concerns, and fostering contacts between advocates and others. Environmental support, which helps create the atmosphere for change, includes making the business case clear to all stakeholders, putting necessary infrastructure in place, and rewarding those who support the change (see “People and Environmental Support Interact” on page 3).

Lessons from public health teach us that whether or not a disease spreads depends not only on the virulence of a disease, but also on where it is happening and to whom. For example, by the time of New World exploration, measles and smallpox were still serious health threats in Europe but were no longer true plagues. However, those same diseases wiped out entire Native American villages, because measles and smallpox were new to those populations; they did not have the immunity that Europeans had developed over generations of living with the diseases. Likewise, cholera spreads quickly in areas without clean water supplies, but it is virtually unknown where people have ready access to clean water.

Analogously, the speed with which an idea or change initiative spreads in an organization depends not only on the innate value of the idea but on environmental factors, such as the amount and quality of contact its advocates have with people who are apathetic to it, the firm’s system of rewards and recognition, the type of leadership practiced, and the investment in infrastructures that support the change. A good idea could spread like wildfire in one environment but have no effect in another.

Leveraging Resistance

Just as people can develop resistance to a disease — sometimes even complete immunity to it — so too in organizations, people may push against or resist a change. Resistance to change typically manifests in several ways. People may express constructive concerns that a change is incomplete, too much of a cultural leap for the organization, misunderstood, inappropriate, or ill-timed. Resistance that stems from genuine concern can serve as an early warning system that helps the organization strengthen the initiative and avoid failure; it can spark exploration for better methods of implementation or improvement of the change effort itself. When constructive concerns are aired and acted on suitably, they become a source of innovation and enhance the likelihood of success.

On the other hand, if leaders and others in the organization interpret legitimate caution as a challenge to the effort or to management’s authority, then they lose an opportunity to learn and improve. Worse, if leaders try to push the project in the face of resistance or try to punish resisters for their stance, resisters will likely become more covert in their opposition, increasing their potential to undermine the effort.

One marketing director at a telecommunications company uses resistance to optimize her company’s change efforts. She sees it as her responsibility to intentionally question every organizational change that touches her department. Occasionally, this tactic backfires, and other managers label her a troublemaker. But her experience has shown that when she is honest, consistent, and constructive with her questions, the result is usually positive. Her inquiries often reveal problems with the change initiative or its implementation, and her feedback saves the company time and money and yields a stronger initiative — generally with a positive effect on her department and budget.

A more dangerous source of resistance stems from too much exposure in an organization to change initiatives that were touted as important innovations, never fully implemented, and ended up as mere slogans on T-shirts and coffee mugs. This kind of resistance can damage any future change initiatives — no matter how much they’re needed because employees now associate them with meaningless hype. Similarly, when changes are misrepresented, for example, with false claims of benefits to employees, an atmosphere of cynicism develops. Leaders can minimize this type of response by wisely selecting which organizational changes to undertake, presenting them honestly, and being prepared to fully sponsor them through to successful implementation (see “A Failed Change Effort” on page 4).

A third form of resistance comes from people’s fears that the change will result in the loss of their jobs, authority, influence, or bonuses. These possible outcomes lead them to perceive that the future is outside their control, a perception that can foment rumors and unrest among employees. The best ways to approach this source of resistance is to be candid with employees and share valid information. For instance, if a merger or reengineering effort will result in layoffs, spell out the reasons for the downsizing and the numbers of people affected as soon and as clearly as you can; otherwise, the rumor mill will portray the situation as worse than it actually is. Knowing the real picture and believing in its accuracy gives people a sense of control and helps alleviate fear and resistance.

Supporting Advocates

Most changes fail due to apathy; they are simply ignored to death. Empowering the people targeted for the change and cultivating the expertise, experience, and enthusiasm of the advocates among them can turn this apathy into energy.

No matter how important a new way of working may be or how enthusiastic its advocates are, without support from the top, the idea is unlikely to spread throughout the organization. When key leaders create

Most changes fail due to apathy; they are simply ignored to death.

a solid foundation for an initiative, with commensurate infrastructure, rewards, and recognition, and lead by example, people are much more likely to listen to the change advocates and take their experience seriously. Leadership’s role is to support, not to force compliance. A “do it or else” threat is not an endorsement of a change and does little to engender the kind of commitment that spreads under its own momentum.

Traditional linear thinking leads us to believe that large efforts lead to large effects. Experience with implementing change initiatives demonstrates that large efforts promoting a change can have frustratingly small effects. For example, a huge one-size-fits-all training course can have little — or even negative — impact despite the investment in energy and resources. Small, ongoing measures, such as initiating informal networks to support advocates, are proving to have much more significant and lasting effects in the long run.

The drivers of change are not static, and an organization may be faced with implementing several changes in a short time. Maintaining support for each change helps create mechanisms that can be applied again and again. Eventually this process can lead to a capability in change management; that is, the organization acquires the nimbleness to quickly implement new policies and actions that it needs to succeed.

Creating Critical Mass

Understanding and appreciating each individual’s change style can help leaders build a critical mass of support for their change initiative. According to Chris Musselwhite, an adult learning expert, people have one of three change styles that influence their attitudes toward change in general and toward a specific organizational initiative: originator, pragmatist, and conserver.

Originators are motivated by radical change that challenges the status quo and existing structure. They look for new and different ideas with potential for dramatic results. Pragmatists want to see problems solved in practical ways that reflect current demands. They focus on results and seek functional change. Conservers — if they have to make a change at all prefer incremental change, such as putting existing resources to better use. They seek to preserve the existing structure whenever possible.

The challenge to implementing any change idea is optimizing the strengths that each group brings to the table while minimizing their weaknesses so that they can work effectively together. The early advocates of a change idea are typically originators; they can see the broad possibilities of the change. But they may overlook the disruption that change can trigger and the harm to the existing structure that is serving the company well in many ways. Also, the broad terms in which they paint the possibilities do not appeal to the pragmatists, who need to ground the change in practical, no-nonsense applications that address current challenges. Conservers usually hold off adopting a change until they are fully convinced of its functionality.

One way to help all three groups maintain enthusiasm for a change is to create early wins, an idea outlined by John Kotter in his book Leading Change (Harvard Business School Press, 1996). Because a significant change takes time to put into operation, establishing an early win, such as a successful pilot program, can bring credibility to the effort while full implementation is in progress. Early wins that are explicitly measured, well rewarded, and broadly recognized help pragmatists see the value of the change initiative. Once a change does speak to a broad cross-section of originators and pragmatists, it will have gained a critical mass and, more importantly, cultivated the right mix of innovators and pragmatists who can influence the conservers and thus tip the change toward success.

Developing Advocate Skills

There is no substitute for expertise, experience, and enthusiasm when advocating for a change. People who make the best advocates are those who will be affected by the effort, who have experience with it, and who are respected by their peers for what they contribute to the product or service that the company produces. Experience with the change is key to influencing others’ perspectives because it allows advocates to explain the value

of the initiative in very concrete terms and to tell “stories” about the change that people can identify with. No matter how much experience and enthusiasm advocates have for a new way of operating and no matter how much they are respected for their expertise, to be truly effective, they must also be skilled at knowing how to spread the word. To this end, they need three important capabilities:

Experience with the change is key to influencing others’ perspectives.

1. Skilled conversation — to help advocates listen to the concerns of resisters and raise important issues to leaders and peers,
2. Fluency with the law of the few — to give them insight into whom to contact and encourage to join the advocate pool, and
3. Sensitivity to change styles — to allow them to tune their language to the style of the other person.

These skills are vital to creating the critical mass necessary to tip the organization toward a significant change.

Skilled Conversation. Skilled conversation involves creating a balance between inquiry and advocacy, listening well, and holding multiple perspectives to get a more complete picture of what the change entails. In The Fifth Discipline Fieldbook (Currency/Doubleday, 1994), Richard Ross and Charlotte Roberts describe the value of both advocacy and inquiry. To them, advocacy involves expressing a certain position convincingly, forcefully, and clearly; it requires presenting your own assumptions, distinguishing between data and opinion, and articulating the logic and reasoning behind your conclusions. In contrast, inquiry means seeking to understand another’s position by listening well and reflecting back what you heard, as well as seeking to understand the data and reasoning behind their conclusions and avoiding imposing your own interpretation on them.

Balancing advocacy and inquiry is especially important when dealing with apathy or resistance. Overt resisters often have legitimate concerns about the change or about management’s true commitment to it, and inquiry can be useful to understand those concerns and the assumptions behind them. On the other hand, an apathetic person is more likely to incubate an idea if a promoter uses advocacy to clearly state the case for change with all the underlying assumptions and reasoning.

Fluency with the Law of the Few. Knowing which people in the organization to get on board for a change is another key skill for spreading an idea quickly. In his book The Tipping Point (Little Brown & Company, 2000), Malcolm Gladwell discusses the “law of the few” in his description of factors affecting social change. He says that three different types of people — mavens, connectors, and sales people — can make the difference between an idea’s spreading or not. Mavens are the ones who always seem to know the important answers; they are the gurus to whom others consistently turn for advice and recommendations. Connectors are those excellent networkers who just seem to know everyone and can connect people from different groups who would otherwise remain segregated. Sales people have the ability to persuade, a skill they call upon when they really believe in something. According to Gladwell, it only takes a few people with these skills to make a huge difference in how, or if, an idea spreads — which is why it is important to get them into the advocate pool early in the change effort. Conversely, if these people are among the resisters, they can be deadly to the change initiative.

Sensitivity to Change Styles. Because early advocates tend to be originators, they need to be aware of their own and other people’s styles, whether they are originators, pragmatists, or conservers. To conquer apathy, they must meet each person where he or she is by seeking to understand the values of the pragmatists and conservers and using language and examples that speak to them. Otherwise, it may be difficult to convince others to even incubate the new idea.

Moving Forward

It is tempting to believe that we can make changes that are vital to our organizations by simply modifying organizational charts, improving processes, or adding new technologies. Although organizational change might include new structures, processes, or technology, it involves more than any of these alone or in combination. It is fundamentally a change in people. Organizations change when people entertain creative ideas and approaches about how to do their work.

Ideas can be contagious. When ideas offer new and better ways of working, we want to make them contagious. We can do this by turning the lessons from public health inside out. By leveraging the power of advocates of change, with proper support from management, we can make change initiatives both contagious and sustainable. Doing so can help us create a capacity for change that is a potent lever for future growth.

The post Applying Lessons from Public Health to Organizational Change appeared first on The Systems Thinker.

During the past decade or so, many management experts and pundits have referred to the “learning organization” as the singular prototype of the successful organization. This terminology has been interpreted as suggesting that organizations must conform to a certain set of characteristics, abilities, or disciplines in order to be successful. In this article, I offer and advocate for a view of “organizations as learning portfolios” that I believe more accurately reflects what organizations are and the diversity within them. By making this shift, we can design interventions to promote organizational improvements that recognize existing strengths and capabilities, and that support a pluralistic way to promote learning in and by organizations.

Many Ways and Styles of Learning

In recent years, the work of Howard Gardner on multiple intelligences and Daniel Goleman on emotional intelligence has shown that understanding competence requires more than just testing for IQ. Competence, intelligence, and learning are multidimensional concepts that cannot be determined with a single measure. Reliance on one kind of assessment simplifies reality and devalues forms and characteristics that deviate from social norms.

For example, in his theory of multiple intelligences, Gardner identifies seven types of intelligence, including spatial intelligence, musical intelligence, and mathematical intelligence. Goleman measures EIQ (emotional intelligence quotient) by considering levels of emotional self-awareness, empathy, and self-control, among other indicators. More recently, in his book, A Mind at a Time (Touchstone Books, 2003), Mel Levine explains the functioning of eight different systems of learning, such as attention control, memory, and sequential ordering.

Much as individuals learn in different ways, so too do organizations (see “Learning Characteristics of Organizations”). To some extent these differences are a function of the diverse environments in which organizations operate. For example, what and how organizations in stable environments with established products like ketchup or cement learn will be very different from what happens in industries that are volatile and involve new products or evolving technologies, such as nuclear power or computer hardware. Companies in stable environments improve performance primarily through their own operating experience. In volatile environments, organizations must look outside their boundaries to learn about changes in customer needs or expectations and shifts in competitor capabilities.

Diverse learning styles also occur as a result of an organization’s history, culture, size, and age. New, entrepreneurial firms are apt to learn differently from larger, established corporations. The former tend to gain knowledge about leading-edge products or technologies, while the latter focus on improving existing ones. These differences create opportunities for up-and-coming firms to take market share away from industry leaders, as Apple did from IBM in the 1970s and 1980s. Different learning styles do not reflect how well an organization is learning or how strategic, but they do shape what the organization is learning and how that learning is taking place.

Although an organization can have a dominant learning style, when we look closer, we often find some variation between departments and functions. As a whole, a complex organization is bound to support numerous learning practices that reflect different learning styles. These practices and styles constitute the raw elements of an organization’s “learning portfolio.”

Learning Portfolios

I use the phrase “learning portfolio” to represent the notion that multiple learning activities take place concurrently within any organization. Each form of learning makes a unique contribution to the organization’s knowledge base. The view of “organizations as learning portfolios” has significant implications for the design of interventions to promote learning and change. Instead of viewing organizations as monolithic and then prescribing singular learning practices that are universally viewed as optimal (that is, “best practices”), leaders can choose from a range of learning activities, each targeted at different objectives, and manage them to maximize impact. Some firms may make heavy investments in R&D (learning through knowledge generation), while others may prefer investing in benchmarking (learning through the acquisition of knowledge from others). Companies can also divide their resources and allocate them among several forms of learning.

An “organization as a learning portfolio” reflects a capability that has evolved and grown as the organization’s culture has matured. To use that capability for competitive advantage, organizational members must first recognize the elements that shape and comprise it. Identifying current capabilities provides a starting point for strategic action to change, augment, or enhance a style or portfolio of styles. Rather than presume no existing competence and the need to build it from the bottom up, managers work with and from what already exists. By focusing on the positive, this approach is consistent with techniques of Appreciative Inquiry (for more information about AI, see Bernard Mohr and Jane Magruder Watkins, The Essentials of Appreciative Inquiry: A Roadmap for Creating Positive Futures, Pegasus Communications,2002). It contrasts with prescriptive techniques in which organizations that do not have specific competencies are regarded as failing. “The Learning Portfolio” shows how learning practices, orientations, and profiles comprise a complete organization wide portfolio.

Companies with a large portfolio of learning practices are apt to have multiple competencies and a greater capacity to adapt to change than companies that rely on a single approach to learning. By focusing on a company’s learning portfolio in its entirety, learning advocates can reorient themselves from wondering whether the company has the correct learning practices or styles to considering their complementarity. Also, instead of focusing on individual activities, they can take a systemic view to consider synergistic possibilities between different elements in the learning portfolio.

For example, many learning advocates suggest that double-loop or transformative learning is preferable to single or corrective, incremental learning. Yet in the control room of a nuclear power plant, a transformative learning style is apt to lead to disastrous consequences, as was the case with the nuclear accident at Chernobyl. In that specific context, corrective learning is the appropriate style. However, it would be entirely appropriate and strategically advantageous for a company that runs a nuclear power plant to operate an equipment R&D lab where employees practiced transformative learning. In the context of the entire firm, the styles are complementary.

Recognizing the presence of multiple styles within a company can also explain some intergroup conflicts and barriers to learning. If different parts of a company learn in different ways, then it is highly unlikely that knowledge will be efficiently transferred across functional or group boundaries. Once we recognize such barriers, we can manage them as a potential source of diversity and competitive advantage.

Analyzing Learning Portfolios

Analyzing an organization’s learning portfolio requires creating an inventory of the learning practices and profiles that exist throughout the enterprise. There are several ways to conduct such an inventory. A simple approach is to list the resources that promote learning either directly or indirectly and to specify how such resources are used. Another approach is to interview staff members to identify those firm-sponsored activities or practices that promote both individual and collective learning. A more elaborate approach is to use a diagnostic instrument to profile learning styles and orientations (for an example of a diagnostic instrument, see DiBella, Learning Practices: Assessment and Action for Organizational Improvement, Prentice-Hall, 2001).

Despite the time lags or uncertainty about the return from investing in learning, managers must consider learning a long term asset rather than a liability.

A second issue in analyzing a firm’s learning portfolio pertains to the relatedness of the actual items in the inventory – to what extent are the learning practices and styles complementary, in conflict, or redundant? This question moves the analysis beyond the mere identification and enumeration of practices to examine how the learning activities and practices fit together across the organization in meaningful patterns. Such an analysis considers whether practices are similar or contribute in some unique way to the creation or acquisition of knowledge.

A third issue about learning portfolios is the extent to which current practices or styles align with or match learning needs and work demands. Consider a team or organization that is in a new industry where innovation is critical to success. If its learning style emphasizes practices that support incremental learning and formal dissemination of knowledge, then the content of what is being learned and the speed at which that learning is being applied are not apt to be as helpful to the firm’s competitiveness as practices that support transformative learning and informal networks.

In another scenario, if a firm wants to emphasize teamwork, then it should give more support to learning practices that promote group rather than individual learning. For example, instead of sending individual employees out to professional development conferences or programs, managers could send teams of employees or they could allocate learning resources to team-building exercises that replicate current work conditions. So, in the airline industry, members of a cockpit flight crew could train together on a simulator. That learning practice would complement any formal training given to individual members who need to stay current in flight technology.

Managing Learning Portfolios

The idea that a firm’s learning portfolio might be misaligned with its learning needs or competitive demands raises the question of portfolio management. How can a firm manage its portfolio for maximum advantage? What criteria should it follow in making portfolio management decisions? How would a managed learning portfolio differ from an unmanaged one? These questions suggest that instead of blindly supporting learning practices or not supporting them at all, companies should actively allocate the resources within their portfolio in such a way so as to maximize their impact. Even when resources are constrained, despite the time lags or uncertainty about the return from investing in learning, managers must consider learning a long-term asset rather than a liability.

As such, managing a learning portfolio requires a sensitivity and appreciation for the outcomes of resource allocation. In most business environments, outcomes or outputs are traditionally examined in light of inputs. Return on investment, or ROI, has been a key measure that reflects the ratio of outputs to inputs. As businesspeople attempt to maximize the return on their investments, they make management decisions using ROI as a guiding indicator.

However, using ROI as a singular criterion for making management or investment decisions, especially around learning, is a limiting approach. To determine the value of outputs and expected returns requires managers to make assumptions about the future, and these assumptions often turn out to be invalid. They also involve linear predictions that an investment (usually financial resources) will be converted into some measurable amount of inputs (material, labor, process technology), which will lead to an expected set of outputs (products, services, benefits). Over time, unanticipated events or circumstances can thwart this process, such as when the cost of material or labor increases or when competitors come out with a product that lowers the value of others on the market. Consequently, many management decisions are based on projections that turn out to be inaccurate.

This problem is especially prevalent with projecting the return from learning investments, because the period during which the outcomes from learning are realized can be quite lengthy. The longer the period of returns gained from an investment, the more tenuous our level of commitment to the process tends to be. The usefulness of learning also pertains to its timeliness. When employees learn something in a formal training program, such as how to use new software, it’s often because they expect to use those skills right away. In that scenario, the benefits and outcomes from learning have immediate value. On the other hand, employees sometimes learn behaviors – such as how to deal with angry customers or aggressive competitors — that they hope they never have to use. If they never have to use such behaviors, does that mean those skills have no value and were not worth the initial learning investment? Of course not, but what criteria should we use to make decisions about investing in learning practices that lead to uncertain outcomes?

Another difficulty in using ROI as a criterion to manage learning investments is that it only takes into account tangible assets or returns.

When an employee learns a new skill, a team learns how to work better together, or a firm develops a new process technology, nothing tangible is created, but obviously the learning has produced something of value. When managers take the customary route of basing investment decisions and allocating resources only to practices that generate immediate, tangible results — and hence promise a higher ROI — they neglect to account for several important characteristics — and benefits — of learning.

The idea of a firm as a learning portfolio produces a view of learning and organizations that is fundamentally different from the prescriptive vision of the “learning organization.”

An alternative approach to managing learning investments is based on value creation and analysis. Rather than starting with the investment and determining the value of the outputs generated by that investment, the analyst starts downstream with the customers’ perception of value and then traces the sources of that value. All firms and organizations create value for their customers or clients through their products or services. Our customers pay for what they value or appreciate. The essential question then is, What is the value we create or provide our customers? Then we work backward (or upstream) to ask, What skills, behaviors, and/or knowledge generate that value and then, most critically, how did we as individuals, teams, or an organization learn or acquire those skills, behaviors, or knowledge? Different learning activities create different value, so, using this technique, we can identify their contributions relative to one another and relative to their cost.

Once we know the relative contributions to value creation of different learning processes, we can reallocate resources to maximize the return from the learning portfolio as a whole. In fact, research has shown that many firms mismanage their portfolios (see “The Teaching Firm: Where Productive Work and Learning Converge,” Education Development Center, 1998). Companies tend to allocate the majority of their learning resources to formal learning activities, like classroom training, not recognizing that people learn much of what they do to create value from informal learning activities. If that’s the case with your organization, then it’s past time to adjust your allocations to maximize value creation (see “Four Steps to Managing Learning Portfolios”).

Learning Portfolios vs. Learning Organizations

The idea of a firm, company, school, or government agency as a learning portfolio produces a view of learning and organizations that is fundamentally different from the prescriptive vision of the “learning organization.” Instead of focusing on some future state to be attained through managerial action and executive leadership, any desire to enhance an organization’s learning must focus on understanding the organization as it exists now. Instead of perceiving an organization as some unified, homogeneous, or monolithic entity that does or does not learn, we view learning as innate to all organizations but allow for its different manifestations. Instead of focusing on the dilemmas “Why don’t organizations learn?” or “How do we build ‘learning organizations’?” the central questions become “What do organizations learn?” “In how many different ways do they do so?” and “How can they learn in the most effective manner?”

The learning portfolio concept also provides a bridge from the knowledge that is generated and used in our organizations to processes of learning. After all, if knowledge is in the notes, it’s learning that makes the music. The result is different research questions and avenues and approaches for interventions than before. For example, What types of knowledge are valued across an organization’s portfolio and how is that knowledge aligned with its strategic direction? What are the diverse ways in which knowledge is acquired, disseminated, and used? How do various forms or styles of learning across an organization conflict or complement one another? Finally, how are resources allocated within the portfolio and how might they be reallocated to increase a firm’s return on its learning investments?

As theorists and practitioners struggle to make their organizations more adaptable and more competitive than before, the call to learning will endure. Until a proven formula for learning is found or generated, alternative paradigms will be needed to explore what does or does not help executives make their organizations learn. Thinking about organizations as learning portfolios broadens the view about how “learning” and “organizations” can best be glued together.

Anthony DiBella (ajdibella@orgtransitions.com) is a consultant and thought leader in organizational learning and change management. This article is based on “Organizations As Learning Portfolios” by Anthony J. DiBella as published in The Handbook of Organizational Learning and Knowledge Management, Blackwell, 2003.

For Further Reading

Brown, J. S. and Duguid, P. The Social Life of Information. Harvard Business School Press, 2000.

DiBella, A. J. and Nevis, E. C. How Organizations Learn: An Integrated Strategy for Building Learning Capability. Jossey-Bass, 1998.

The post Managing Organizations As Learning Portfolios appeared first on The Systems Thinker.

1) Working on a range of actions to achieve some long-term outcome, for example, “in order to reduce urban poverty, we are going to start a microlending program, provide mentors to young people, and advertise to external investors,”

or

2) Implementing a policy that they believe will have broad, positive effects, for example, “by improving the efficiency of energy use, we can reduce air pollution, save money for businesses, and reduce greenhouse gas emissions.”

They look to systems thinking for some specific help in addressing questions such as, How can our team test our thinking about the best way to achieve our goals? How can we strengthen our strategy and achieve more success with less energy? And how can we avoid unintended consequences or “push-back” from the system?

To help a group respond to those queries, we lead them through a structured process that we are calling “action-to-outcome” mapping. We have found this approach particularly useful in situations where a team has already chosen a set of actions intended to achieve specific outcomes within an uncertain environment. This process can stand alone or lead to a more expansive effort to map, understand, and formally model the system in which the group is operating.

While we have used several variations, the core of our action-to-outcome mapping process involves five steps:

1. Exploring the existing causal theory,
2. Adding feedback,
3. Uncovering critical mindsets,
4. Accounting for external forces, and
5. Looking for opportunities for learning and action.

1. Exploring the Existing Causal Theory. The existing causal theory is the set of assumptions — explicit or implicit — that group members have about how their actions will lead to desired outcomes. The first step in the mapping process is to articulate those actions and outcomes and create a map connecting the two. By creating this kind of diagram, the group maps out the chain of cause-and-effect that would need to happen to achieve the desired outcome.

WATER CONSERVATION EFFORTS

This simplified causal map shows a proposed water conservation strategy in a particular region, including actions, intermediate indicators of success, and longer-term outcomes. Intermediate indicators are critical in situations where progress toward the ultimate goal happens very slowly and is influenced by many factors.

For example, “Water Conservation Efforts” shows a simplified causal map of a water conservation strategy in a particular region. In this case, the group was considering various actions to improve water management. Team members figured that writing and sharing case studies of urban water utilities with successful water conservation programs would encourage local utilities to follow suit. They hoped these companies would use conservation technologies to reduce water use and create a host of long-term benefits such as higher water levels in rivers.

We have also found it important to identify intermediate indicators that the group can use to measure progress. These are short-term changes in the system that show if the effort is on track. In the example described above, because water levels in rivers are difficult to connect to conservation efforts, the group’s intermediate indicator was “Per-Capita Water Use.” Such indicators are critical in situations where progress toward the ultimate goal happens very slowly and is influenced by many factors.

Reflection questions: Looking at the set of assumptions that link actions to outcomes, what causal connections do you have confidence in? Which are the most uncertain or unknown? Considering these questions helps target the rest of the discussion and identifies research that might be useful to improve the group’s confidence in the overall strategy.

2. Adding Feedback. By starting with the simple, one-way causal chain created in the first step, we can begin to identify important reinforcing or balancing feedback loops that the group’s actions may trigger. We start by looking for ways that the actions or results may get amplified through reinforcing loops. For example, as shown in the reinforcing loop in “Water Conservation Efforts,” success in a water conservation program could lead to public awareness of that success and positive word of mouth in the community, building public support and boosting the water utility effort even more. We then look for ways to strengthen that loop, for example, by writing editorials to the local newspaper to build the public’s awareness of the effectiveness of the water conservation program.

It is equally important to understand how the system can resist change or push back on the group’s effort through balancing loops. The balancing loop in “Water Conservation Efforts” shows how endeavors to introduce water conservation technologies in the Southwest of the United States were undermined by their own success. The implementation of conservation technologies for landscaping, indoor plumbing, and industry actually reduced water use. But because water availability was the primary limit to residential construction, reduced withdrawals meant that there was more water available to supply new development. New homes boosted the number of total water users, consuming most of the saved water and increasing total water use. This “compensating feedback” undid the positive effects of the overall effort and frustrated many advocates for water conservation.

Thus, the mapping revealed not only a possible problem that the team needs to address in the strategy, but also an important disconnect between the intermediate indicators — the amount of water saved through conservation efforts—and the long-term goal of improved stream flow and ecosystem health. In the Southwest, leaders have started to advocate for dedicating some fraction of saved water to increasing water levels in rivers.

Reflection questions: Are there any reinforcing loops that would amplify the effects of your actions? Can they be strengthened? Are there any balancing loops that cause the system to resist your efforts? Can they be weakened? Are there any feedback processes that are already trying to shift the system in the same direction that you are? Can you build on these?

3. Uncovering Critical Mindsets. People make decisions by evaluating information and incentives through the lens of their own assumptions and goals. Therefore, good strategies for changing systems must address both structures and mindsets in ways that reinforce each other. We have found it helpful to uncover relevant mental models in action-to-outcome mapping sessions by asking two questions:

• What are some assumptions that impede your actions from achieving the desired outcomes? (For example, “Water conservation means wimpy showers and half-flushed toilets!”)
• What are the mindsets that support your actions? (For example, “Wasting water is bad.”)

In the case of water use, many people hold the powerful mindset that “conservation is depravation.” The water policy movement thus worked to distance itself from “conservation” and instead spoke of improved “efficiency” in their marketing efforts.

Reflection questions: Are there ways to strengthen the supporting mindsets? Weaken the impeding ones?

4. Accounting for External Forces. Next we ask the group to think of other forces that may have an impact on outcomes. By doing so, we ensure that they work on the most important factor that may help or hurt their initiative. For example, in the water case, if overall environmental health is the goal of the water conservation effort, then the analysis in step 2 suggests that addressing regional population growth might be a high-leverage area to target. Other forces include agricultural water use, the policies of other regions, and global climate change. This listing of external forces, while sobering, helps the group see how its actions fit into a larger picture and prompts members to consider how they might influence any of the external factors. This step offers the chance to evaluate strategy with the widest possible lens.

Reflection questions: Should you be trying to influence any of the external forces that might affect your outcomes? If an external force seems to overwhelm your actions, is there a different set of actions you could take that could be more effective?

5. Looking for Opportunities for Learning and Action. Throughout the session, we keep running lists of questions and insights. The final step is to review the two lists and other notes to see what questions have cropped up and what potential supporting actions, new areas of focus, and further exploration are needed.

Our experience with the action-to-outcome process is that it helps an intact team explicitly map its thinking about how various actions will lead to desired outcomes, while taking into account the important feedback effects that can accelerate or slow progress. One client said that this methodology “sort of backs into system dynamics” by beginning with a team’s current strategies rather than with the behavior of the system. While action-to-outcome mapping does little to initially address the dynamic complexity in the system or uncover root-cause drivers of problems, it is effective in:

• Surfacing a team’s assumptions;
• Maintaining a focus on strategy;
• Explicitly including feedback and multiple effects in strategic thinking;
• Building causal maps when you don’t have extensive experience in diagramming.

Having seen groups use action-to-outcome mapping to improve their strategies on challenges ranging from urban sprawl to sustainable agriculture to air quality to inner-city poverty gives us hope that systems thinking can fulfill its promise of helping overcome the complex challenges of creating a more sustainable world.

Andrew Jones (apjones@sustainer.org) and Don Seville (dseville@sustainer.org) are project managers at Sustainability Institute, a consulting, training, and research center focused on social, economic, and environmental issues. 

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History of the Indicators Project

The Boston Indicators Project was conceived in 1997 by the Boston Foundation and the City of Boston, in partnership with the Metropolitan Area Planning Council and other public agencies, local universities, and community organizations. In large and small gatherings that eventually involved over a thousand residents, experts, and leaders, the Project created a framework of objectives and indicators of progress that reflect shared community values. The Project’s first report, The Wisdom of Our Choices: Boston’s Indicators of Change, Progress and Sustainability, was released in 2000 with goals and measures in 10 sectors: civic health; cultural life and the arts; economy; education; environment; housing; public health; public safety; technology; and transportation. These 10 sectors encompassed 71 indicators and 150 measures. Scheduled to continue until 2030, with an updated report due every two years, the Project is designed to stimulate long-term thinking, creative goal setting, and collaborative action.

While it was intuitively obvious that the variables measured by the indicators in the 2000 report were interrelated, the Indicators team was seeking a way to communicate the interrelationships across sectors, the ways they were connected, and how strong the connections were. To address these challenges, the group’s first step was to work with two students in Jim Hines’s system dynamics class at MIT, Brendan Miller and Osamu Uehara, during the 2001 spring semester to construct causal loop diagrams and computer models showing important relationships across several key areas.

That summer, Miller worked with the team at the Boston Foundation, led by Charlotte Kahn and Geeta Pradhan, to develop an introduction to systems thinking for sector experts, civic and community leaders, and activist residents. After several pilot sessions with presentations of hard-to-read “spaghetti diagrams” and broad abstractions, the team decided to stop trying to explicitly teach systems thinking. Instead, they facilitated participants’ direct experience of systems thinking through:

• Identifying trends shaping the region, using intuitive behavior-overtime graphs;
• Identifying the probable drivers behind the trends;
• Depicting connections visually, using causal loop diagramming; and
• Brainstorming high-leverage strategies to affect the trend drivers based on the systems structure the group explored during this process.

This approach proved highly successful and was used in small groups at a major civic convening of 400 participants. The next step was a two day scenario-planning workshop with a diverse group of 60 participants sponsored and facilitated by the Waitt Family Foundation. There, participants identified key trends and their secondary and tertiary implications, creating a clear sense of possible futures for the metropolitan Boston region.

Still, the goal of incorporating systems thinking into the next Boston Indicators Report remained a challenge. In the spring of 2002, the Project team began to work with two local systems thinkers, Dan Aronson and Phil Clawson. The team identified its goals as:

• Creating ways to identify and communicate connections across indicators;
• Weaving the results into a coherent story, emphasizing patterns of relationships across sectors based on hard data; and
• Telling the story in a compelling way to stimulate greater understanding of the usefulness of the Boston Indicators Project and the power of a systems approach to analysis and community problem solving.

Weaving a Coherent Story

The team approached issues facing Boston from many angles (e.g., economic, social, and environmental) and at different levels (e.g., a high-level picture of the forces shaping the region as well as more detailed pictures of particular sectors). With the help of Dan and Phil, they created causal loop diagrams for each level. For example, “Factors Affecting Boston’s Attractiveness” shows, at a high level, some of the reinforcing and balancing loops driven by residents’ decisions to remain in or leave the region. During this process, the team built on the work of the scenario-planning workshop participants, who had pinpointed certain trends. For example, in exploring data showing the outflow of young people from the Boston area, the team connected an economic issue (the high cost of living driven by housing costs) and a socio-political one (the dearth of minority representation among the region’s business and elected leadership) as two key factors in “stay/leave” decisions made by young adults in Greater Boston.

Eventually, a core set of issues emerged that began to tell a connected story of where Greater Boston is headed economically, culturally, socially, and environmentally. The story describes a key asset in the region: innovation. What Metro Boston lacks in oil, coal, or cornfields it makes up for in intellectual and financial capital. As the birthplace of innovations ranging from the first public library to the first digital computer, Boston’s role as a hotbed of innovation can be traced to three sources: a strong institutional and physical infrastructure, a culture and practice of innovation, and high-quality human capital. The combination of these factors gives Boston its competitive edge and has helped the city reinvent its physical and social landscape and its economy many times in response to emerging challenges and opportunities.

The team then identified the loss of human capital — in particular, a drop-off in the number of young adult workers — as a challenge to sustaining the area’s success in producing innovation. Between 1990 and 2000, Boston, the metro region, and Massachusetts lost a greater percentage of a critically important age cohort — 20 to 34-year-olds — than their high-tech counterparts elsewhere in the country. This trend does not bode well for economic growth in an innovation economy.

The report has stimulated dialogue about how to keep Greater Boston attractive as well as how to preserve its competitive edge by lowering the cost of housing, promoting more diverse leadership structures, and supporting a livable, culturally vital environment.

The team asked the question: Why did Greater Boston lose this human capital, even during the boom economy of the 1990s? Part of the answer, the team surmised, is that young people with aspirations, innovative ideas, and marketable talents and skills have many options for where to live — and, for some reason, they are choosing to live and work elsewhere. But why? The team focused on factors that had emerged in the project’s earlier convenings, such as the scenario-planning workshops, that might be influencing the decisions of young people. These included Boston’s high cost of living relative to salaries, driven by dramatically rising housing costs; its traditionally limited opportunities for emerging leaders in business and electoral politics, particularly new leaders of color and women; and its cultural vitality, educational quality, and environmental amenities (including the weather). The Indicators Project had also found that the population of young people had grown in comparable regions between 1990 and 2000. For instance, regions such as Austin, Raleigh-Durham, and Seattle had increased their share of young people, presumably because of their greater attractiveness along these dimensions.

Looking to the Future

The final 2002 Indicators Report intentionally did not make recommendations about how to change the conditions that threaten to deplete Greater Boston of its innovators; instead, it identified key areas that local leaders need to address in order to reverse the trends. As a result, the report has stimulated dialogue about how to keep Greater Boston attractive to homegrown talent, newcomers, and recruits as well as how to preserve its competitive edge by lowering the cost of housing, promoting more diverse leadership structures, and supporting a livable, culturally vital environment that appeals to talented young workers, emerging leaders, the “creative class,” and innovators.

In a way, the Boston Indicators Project was the perfect type of project for a facilitated systems thinking process. The task of making a complex system understandable and enabling stakeholders to identify key issues was well suited to the strengths of the discipline.

In 2004, the next edition of the Boston Indicators Report will be released. It will include not only facts and trends but a description of a high-leverage civic agenda shaped by the Project’s growing number of participants. The systemic perspective now embedded in the Project will help to lay the groundwork for a constructive outcomes-oriented dialogue. Systems thinking will be used to identify key leverage points and practical, powerful, systemic strategies for shared civic action.

The Boston Foundation’s Boston Indicators Report 2002, Creativity and Innovation: A Bridge to the Future, is now available as an interactive, searchable web site at www.bostonindicators.org.

Daniel Aronson (daronson@fourprofit.com) is managing director of Four Profit Inc. (www.fourprofit.com), a consulting firm helping organizations improve all four bottom lines: financial, people, environment, and community.

Charlotte Kahn is the director of the Boston Community Building Network. Geeta Pradhan is the director of the New Economy Initiative at the Boston Foundation. Together, they coordinated the Boston Indicators Project and coauthored the Boston Indicators Reports 2000 and 2002.

Phil Clawson is the managing director of Community Matters Group (www.communitymattersgroup.com), a consulting firm that helps organizations maximize the good they can do in their communities while returning real value.

Brendan Miller (bmiller@meristemgroup.org) is a partner with the Meristem Group, providing leadership and systems thinking training and consultation to organizations from around the globe working for the public interest.

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Two Generations of Knowledge Management

While many of us were just grasping what the term knowledge management means, innovators at the Knowledge Management Consortium International (KMCI), the organization that McElroy heads and for which I serve as a board member, were already creating a new and improved iteration of the concept. Although some people may be tempted to dismiss this advance as being simply a case of old wine in new bottles, McElroy draws a bold line in the sand between these two distinctly different versions of knowledge management (KM). He explains how first-generation KM approaches are largely based on the notion that organizations are machines; from this perspective, knowledge and information are close cousins in that both are effectively managed through the use of technology. Practitioners of second-generation KM, on the other hand, adopt a more organic view; they regard information as a distant precursor to knowledge and view social processes as more critical than technology for creating new knowledge.

First-generation KM is based on the assumption that knowledge is a well-defined commodity that can be easily used by people throughout a company and that the main task of KM initiatives is to leverage the use of existing knowledge by sharing it freely throughout an organization. Technology becomes valued as an efficient means to accomplish this goal. Therefore, first-generation KM approaches typically focus on the use of technology to collect, analyze, and store data — especially best practices — that organizations can use to improve performance. For instance, a company’s sales force may use wireless systems to capture insights and lessons learned about customer buying patterns and competitor strategies. They then channel this information to someone within the organization who will organize it, conduct meta-data analyses to draw overarching conclusions, and place the results into a computer database. Such databases are then made available to employees through corporate intranets. Employees may access information such as lists of handy selling tips for approaching customers with certain profiles and strategies for increasing sales that have been developed and used successfully by other members of the sales force. Some of these database systems use “Yellow Pages” directories and expertise profiling to help practitioners connect with those colleagues who have demonstrated successes.

Although such tools are technologically impressive, they tend to focus on identifying isolated elements of knowledge, out of their natural context, and fail to address the fundamental process by which knowledge is created in individuals and groups. Second-generation KM seeks to address this shortcoming. The notion that sharing tips about how a colleague successfully achieved a sale presumes that others can effectively use a similar strategy without changing what they believe, how they think, or how they perceive selling situations. Such an approach reduces selling from an art that is developed over years of experience to a form of behavioral mimicry.

The Knowledge Life Cycle

Whether or not you subscribe to the increasingly popular view that first-generation KM has already proven to be ineffective, McElroy gives compelling reasons to consider switching to second-generation KM. He addresses how (1) organizational learning is linked to KM, (2) knowledge drives innovation, (3) complexity and systems thinking are related to KM, and (4) corporate policies can be an important lever for creating knowledge and innovation (see “10 Key Principles of Second-Generation Knowledge Management” on p. 8). For example, in first-generation KM schemes, such as those that focus on creating formal mechanisms for sharing best practices, knowledge is driven by what we might call “supply-side considerations.” That is, the mere availability of new knowledge is assumed to be sufficient reason to distribute it to employees throughout the organization — regardless of whether they are satisfied with the knowledge they are currently using or even have the capability to use this new material. According to McElroy, second-generation KM approaches are primarily demand-driven. A good example is what human resource professionals call “just-in-time” training (JITT). Through JITT, employees can access training when they believe they need it to solve problems that concern them, rather than attend management-mandated workshops that may or may not provide them with timely information.

In addition, according to the KMCI knowledge life-cycle model that McElroy presents, high-quality knowledge evolves over time through dialogue within communities of practitioners who are committed to understanding what works best. Technological fixes, such as the one described above, are not a substitute for nurturing the essential social processes that contribute to developing new knowledge — they are an adjunct. It is this idea that McElroy tries to impress upon advocates of first-generation KM, who portray computer-based fixes as a main feature of KM rather than as a tool for facilitating it. Because of this limited view of KM’s applicability, it is not surprising that many executives have become skeptical of the discipline’s promise for delivering sustainable competitive advantage.

Knowledge-Friendly Policies

In its essence, The New Knowledge Management espouses the perspective that managers cannot directly manage many critical organizational processes, such as knowledge creation, but they can influence them by judiciously altering certain factors. Xerox’s Palo Alto Research Center (PARC) is one enterprise that has organized knowledge management processes around people’s natural behaviors. For example, because workers tend to congregate around coffee pots, the company has installed white boards and markers in those areas to assist people in capturing the knowledge that emerges through informal conversations. In addition, because studies at Xerox revealed that people also tend to engage in conversations in stairways, the company facilitated this process by widening those areas so coworkers can remain on the stairs and chat while others still have room to pass by.

Likewise, McElroy argues that corporate policies often unintentionally stifle knowledge creation by favoring efficiency, and that managers should scrutinize and modify processes to be “knowledge-friendly.” In the latter portion of the book, in his description of the Policy Synchronization Method (PSM), he alludes to some key policy levers for systematically redesigning organizations to facilitate knowledge processing and innovation. PSM helps managers do a baseline diagnostic assessment of the effectiveness of current knowledge-processing systems and then alter policies and processes to yield greater innovation in how knowledge is created.

The importance of this naturalistic view of husbanding organizational processes, as opposed to managing them, cannot be overstated. The simplistic industrial engineering notions of Fredrick W. Taylor and others once served the prevailing Newtonian/ Cartesian mental models of managers well, but that era is over. Today, managers are killing organizations by sacrificing innovation to the god of efficiency. We shouldn’t be surprised to learn that stagnant, ineffective processes are traceable to an organization’s failure to create new knowledge, or that the solution lies in finding innovative ways to harness people’s talents, or intellectual capital, rather than in installing new hardware and software. Historically, tools and technology have always worked best when used to augment people’s know-how and understanding. While technologies can often replace people in simple, routine situations, they can’t generate innovation in complex, dynamic environments — that’s where the real value of second-generation KM is most apparent.

Does McElroy find the ultimate answer for achieving high organizational performance? Probably not. But in this writer’s opinion, he convincingly points toward a direction where it may be found, when many other so called knowledge management gurus remain bewitched by the lure of first-generation KM solutions. Second-generation KM — and McElroy’s book — provide a viable conceptual framework for effectively linking KM to systems thinking and organizational learning. In doing so, it offers a promising way for us to create and sustain organizational success.

Steven Cavaleri, Ph. D., (cavaleri@ccsu.edu) is professor of management at Central Connecticut State University in New Britain, Connecticut. He also serves as editor of the journal The Learning Organization.

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