We live in an age of paradox, with every trend seemingly matched by a counter-trend.

These dynamics have helped to reshape the world well beyond the sphere of commerce alone. Our newspapers today are filled with momentous and as yet unanswered questions. Are we facing a terrifying “clash of civilizations”? Can China maintain its extraordinary growth as a major global power or will its internal political, social, economic, and environmental tensions lead to implosion? Is aging, polarizing Europe in terminal decline or on the brink of its next renaissance? Will technology standards globalize and converge, or regionalize and fragment? Will free trade continue to override growing protectionist instincts? Are we on the brink of a new flu pandemic and, if so, how severe will it be? How fast, and how dramatic, will climate change prove? With entirely new business models being forged by mighty upstarts like Google and eBay, do we even know where our competition lies? There are two additional twists that can be thrown into this mix. First, we live in an age of paradox, with every trend seemingly matched by a counter-trend. For example, the economy is becoming increasingly intangible as we sharpen our focus on services, experiences, and virtualization, yet the physical economy matters more and more with the need to update critical infrastructure. The Nobel prize-winning physicist Niels Bohr summed up this tension well when he wrote:, “The opposite of a correct statement is a false statement. The opposite of a profound truth may well be another profound truth.”

Second, information is ubiquitous and instantaneous. What is “known” is a diminishing source of competitive advantage, so successful futures will increasingly be forged through mastery of the unknown.

Yet paradox and the unknown are uncomfortable. Most of us have learned to present our bosses with answers and solutions, not questions and problems. But by adopting this approach and sticking to certain tried and tested strategies, we run the risk of using counterproductive coping mechanisms and ultimately moving backwards, rather than forwards. For example, we might try to:

• • Increase Control Through Centralization and Bureaucracy. Yet, was it really hard to predict that the formation of the U. S. Department of Homeland Security was unlikely to improve the effectiveness of any of the agencies swept under its monolithic umbrella?
  • Escape into “Busyness.”Are we becoming addicted to endless, relentless activity – empowered by the ubiquitous “Crackberries” and reinforced through constant, often unproductive meetings?All this motion seems to stem, at least in part, from a subconscious desire to avoid the discomfort of sitting in the mess and ambiguity of our times.
  • Rely on Metrics.But does boiling down the complexity of business realities into a few key numbers sometimes end up driving rather than measuring performance? As Einstein observed:, “Not everything that can be counted counts, and not everything that counts can be counted.”

• Look for Scapegoats. Do we too often apportion blame and punish others for failures that may have been inevitable?The highest-level victims of this syndrome have been CEOs – turnover at the top has never been higher as executives face intense pressure to achieve guaranteed short-term results in a volatile, uncertain world.

  The effect of all this is that uncertainty can prevent the very learning that it so profoundly requires. The western ideals of secular modernity are based upon core concepts of certainty, such as empiricism, rationality, objectivity, analysis, and measurement. These remain critical values, but they are only part of our future and must be integrated with ways of thinking that rely as heavily on intuition, collective insight, emotional and spiritual intelligence, morality, and wisdom. This will be a difficult journey, especially for the traditionally hard-headed world of business. But, provided they can embrace and understand uncertainty, corporations are well positioned to establish new paradigms of human organization and learning.

How might we proceed? Following are six concepts that every business should consider. Each requires consistent effort and commitment, but none involves rocket science or prohibitive expense.

Create a Dialogue Between Risk and Opportunity

Thirty years ago, it was commonplace for a company’s product development activity to be housed in silos that were insulated from sales and marketing groups. How could we have been so misguided? Yet most businesses replicate this error today by separating the functions of risk management from business innovation and development. Both activities are at the forefront of exploring uncertainty. Great opportunity can be found in the most “risky” areas, while new risks emerge from every innovative corporate endeavor. Bringing together the skills and focus of each of these disciplines in a new dialogue can help turn risk and uncertainty into a powerful source of advantage.

Forge External Networks and Internal Communities of Practice

Most companies acknowledge the need for better processes to make sense of situations and more powerful antennae extracting critical signals from external noise. It is difficult, however, to develop such a function inhouse because we quickly become captives of our organization’s acceptable boundaries.” To achieve the necessary multiplicity of perspectives and insights, organizations are increasingly nurturing external networks of thought partners and sensors – people who are attuned to the deep trends they see in the world around them and can help translate them for specific organizations.

Informal, self-organizing “communities of practice” housed within organizations can also be powerful sources of knowledge and learning in the face of uncertainty. These communities perform much the same function as guilds did for craftsmen 500 years ago or open source communities do for software developers today. Provided the organization can support, nurture, and empower these “communities of practice” without destroying their vitality and integrity by over-formalizing them, these communities can help to ensure that unexpected issues encountered (and successful adaptations made) are socialized and adopted as widely and quickly as possible.

Test Strategies and Decisions Against Critical Uncertainties

Whenever we develop a strategy or make big decisions, we habitually reference our “official future” – an implicit set of beliefs about how the world works today and should in the future. Mounting uncertainty renders this approach increasingly hazardous. There is proven merit in stepping back and considering the critical uncertainties surrounding our choices. One very well established method is to develop a set of alternative “scenarios” of the future – coherent logical stories that set out credible and very different alternative. Through these, we systematically “stress-test” and, hence, improve our decisions. Additionally, we can develop a deeper understanding of critical uncertainties by improving our appreciation of interrelationships, causalities, and potential outcomes, and then contrasting and comparing these against our most important options and choices.

Develop “Masters of Uncertainty”

In the past decade, practitioners of quality management programs, such as Six Sigma, have become acknowledged enablers of the drive toward excellence. In the coming decade, they will be joined by a new and arguably even more powerful force let us call them “masters of uncertainty.” These will be leaders and talented contributors in our organizations who manifest a range of increasingly essential capabilities, which include the ability to:

• Stay relaxed in the face of overwhelming disorder, confusion, and ambiguity
• Seek out multiple and conflicting views, while being aware of one’s biases and blind spots
• Focus on the future, the emergent as well as the planned
• Embrace risk taking
• Learn rapidly from failure
• Be open, flexible, and even, on occasion, playful

These are not necessarily the attributes we associate with our current generation of leaders – but they will characterize the next generation. The good news is that the capabilities required for these leaders can be developed in our existing high-potential talent using a range of tools and techniques, such as learning journeys, simulations, scenario and systems training, job rotations, cross functional and even cross-company mentoring, storytelling experiences, and uncertainty coaching. Uncertain times will demand and reward untraditional talents – and we must invest in the next generation as soon as possible.

Intentionally Evolve As an Adaptive Organization Just like the elusive “learning organization,” no one has ever seen a truly “adaptive organization” in the wild. But we can certainly identify the hazy outlines of some vital characteristics of the responsive, enduring, and evolving business of the future. It should be:

• Externally oriented
• Flexible and nimble
• Patient but opportunistic
• Capable of balancing exploitation of the known with exploration of the unknown
• Visionary but open to corrective feedback
• Attentive to stakeholders
• Capable of balancing both economic and moral wisdom

The question today is not whether we can see this vision on the horizon – we all can – but whether we decide to move toward it with conviction and sustained attention, or hold back in fear that we may only be glimpsing a mirage.

Add an “Uncertainty Mapping” Dimension to Strategic Decision-Making

We should also learn to explicitly acknowledge uncertainty as a matter of habit. In every conversation of consequence, we should acquire the discipline of asking what important uncertainties are in play and challenge our beliefs and default positions.

Over time, we can also learn about our deeply embedded assumptions, and come to understand better and improve our decision-making habits. This is a readily achievable and remarkably important tool; indeed, there is probably no single greater contribution to the mastery of uncertainty. Finally, we must appreciate that there are very different forms and sources of uncertainty. In business, as in life, every important decision is actually a bet that we understand the context of our choice and that our sense of the future is reasonably accurate. In an increasingly uncertain world, the odds are lengthening against each and every bet, and the need for new thinking and better decision-making processes is growing. The ability to rise to this challenge will be the defining characteristic of the successful, adaptive organization of the future.

Eamonn Kelly is the CEO of Global Business Network (GBN) and a partner in the Monitor Group. He is also the author of Powerful Times: Rising to the Challenge of our Uncertain World (Wharton School Publishing, 2005). Eamonn will be a keynote speaker at this year’s Pegasus Conference.

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Despite this paradox, Margaret Wheatley, author, teacher, and radical thinker, has pursued the path of storytelling for more than three decades. In her most recent book, Finding Our Way: Leadership for an Uncertain Time (Berrett-Koehler, 2005), she richly articulates how the insights of modern science—as well as those from primal wisdom traditions, indigenous tribes, spiritual thought, and poets old and new—can usher in a new era of human and planetary health.

According to Wheatley, these insights are forcing us to question, and hopefully discard, a 300-year-old worldview that still dominates Western culture today. This outdated story emerged during the Industrial Age, when scientific discoveries gave rise to the idea that humankind could gain mastery over physical matter. Soon, the image of the universe as a grand, clocklike machine took hold, as well as the belief that we could engineer human beings, organizations, and life itself to perform however we directed them to.

Over time, the machine image has had a pernicious effect on how we think of ourselves and others. Wheatley explains, “When we conceived of ourselves as machines, we gave up most of what is essential to being human. We created ourselves devoid of spirit, will, passion, compassion, emotions, even intelligence….The imagery is so foreign to what we know and feel to be true about ourselves that it seems strange that we ever adopted this as an accurate description of being human. But we did, and we do.” One consequence of this imagery is that it has led us to believe that our “unpredictable behaviors, our passions, our independence, our creativity, our consciousness . . . are the problem rather than the blessing.”

The mechanistic story not only ignores the deep realities of human existence, says Wheatley, but makes exhausting demands on leaders. If people have no internal capacity for self-creation, self-organization, or self-correction, then leaders must constantly motivate, inspire, and organize them. In short, leaders are responsible for everything.

A New Story

The new story takes the burden off of leaders to run our organizations and puts it back where it belongs—on each of us. It offers a worldview in which creative self-expression and the embracing of systems of relationships are the organizing energies. It looks at humans and the organizations in which they work as living systems— with the capacity to move toward greater complexity and order as needed. And it offers the radical perspective that organization is a process, not a structure.

Explains Wheatley: “Self-organizing systems have what all leaders crave: the capacity to respond continuously to change. In these systems, change is the organizing force, not a problematic intrusion. Structures and solutions are temporary. Resources and people come together to create new initiatives, to respond to new regulations, to shift the organization’s processes. Leaders emerge from the needs of the moment. There are far fewer levels of management. Experimentation is the norm. Local solutions predominate but are kept local, not elevated to models for the whole organization. Involvement and participation constantly deepen. These organizations are experts at the process of change.”

Where can we find models of self-organizing systems? The author points to what happens when disaster strikes. Without planning, people and resources come together in coordinated, purposeful activity; leaders appear based on who is available and who has information; and everything happens quickly and efficiently. The World Wide Web is another example of a self-organizing network that forms around interests, the availability of information, and limitless access to other people. The tower-building termites of Africa and Australia offer a third example. They construct the largest, most intricate structures on earth proportionate to the size of the builders. Their engineering process is simple: They wander aimlessly, bump into each other, and react. By observing what others are doing and coordinating their own activities based on that information, these insects manage to make their arches meet in the middle.

The Role of Leaders

If blueprints and engineers aren’t necessary, what is the role of leaders in the living systems story? It is, Wheatley says, to foster the conditions that support self-organization. To meet that challenge, leaders first need to shift their thinking in three key areas:

Believe in the Goodness of People. Most leaders assume that employees work primarily for a self-serving reason: to make money. In reality, many people strongly desire to contribute to something beyond themselves that benefits others. Leaders who use participative, self-organizing approaches, in which they clearly communicate the organization’s purpose and real values, are amazed by the capacity, energy, creativity, and commitment of their employees to contribute to the enterprise.

Focus on Coherence, not Control. Typically, when an innovative solution emerges in one area, senior management rolls it out to the entire organization. But replication actually destroys local initiative because it denies everyone else’s creativity. Rather, leaders should share these success stories in order to spark people’s imagination and give them insight into what their own areas need. Eventually, tinkering on the local level will result in systemwide coherence.

Support Self-Organizing Responses. People don’t need intricate directions, timelines, plans, and organizational charts; they need information, access to one another, trust, and follow-through. Leaders can help by providing resources, creating connections across the organization, and fostering experimentation. They may not be able to direct employees into excellence, but leaders can engage them enough so that they want to do excellent work.

Part of the reason our organizations are troubled today, Wheatley explains, is that we’ve forgotten what people are capable of. For too long, we’ve forced workers into “roles and job descriptions,” telling them how to behave rather than allowing their creative, contributive, compassionate selves to emerge naturally. This type of reengineering brings out our worst nature and causes both employees and managers to suffer. By valuing human relationships, leaders can go a long way toward creating enduring organizations.

Tapping into Creativity

Another negative effect of the command-and-control mentality is that managers fail to appreciate employees’ personal initiative. People often complain that workers don’t follow instructions, no matter how clearly they’re given. Instead, they revise or tweak them in some way. Wheatley offers an interpretation of what’s going on. This seemingly resistant behavior actually reflects a principle of living systems: that each of us has “the unalienable freedom to create one’s life.” Simply put, people need to be involved in how they get work done, and they will somehow find a way to put their unique signature on any situation.

This freedom to create also reveals itself in what we notice. “We choose what disturbs us,” Wheatley says., “It’s not the volume or even the frequency of the message that gets our attention. If it’s meaningful to us, we notice it.” In other words, we become engaged when we find shared significance with someone or something. Leaders who want to leverage employees’ creative freedom focus on discovering what’s meaningful to them, not deciding meaning for them. They listen for diversity rather than expect agreement. They invite people to rethink, redesign, and restructure the organization. They stay alert to the change process, what they’re learning, and how their efforts are unfolding and emerging (see “Key Questions to Keep Asking”).

When leaders fail to invest in relationships with their employees, it often reflects their desire to maintain organizational flexibility—that is, the ability to let people go when times get hard. Wheatley condemns this behavior. She says, “There is only one prediction about the future that I feel confident to make. During this period of random and unpredictable change, any organization that distances itself from its employees and refuses to cultivate meaningful relationships with them is destined to fail. Those organizations who will succeed are those that evoke our greatest human capacities—our need to be in good relationships and our desire to contribute to something beyond ourselves.”

Enduring Organizations

Generous and inspiring, Finding Our Way covers so much ground that it can spark any reader’s interest. Building in ways similar to how living systems behave, the book’s essays are filled with profound wisdom and simple advice. From offering new approaches for facilitating knowledge management and supporting pioneering leaders to providing personal tips for starting the day off peacefully, Wheatley reaffirms her dedication to helping leaders fulfill what she believes is their real desire to create enduring organizations.

Using clear and abundant examples, she demonstrates how the timeless principles of developing trust, sharing information, engaging people’s creativity, and investing in relationships can serve as guideposts for finding our way in today’s uncertain times. As we implement these principles, the new story will take root and ignite an explosion of much-needed change.

Kali Saposnick is publications editor at Pegasus Communications.

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The Destructive Impact of Command and Control

The dominance of command and control is having devastating impacts. There has been a dramatic increase in worker disengagement; few organizations are succeeding at solving problems; and leaders are being scapegoated and fired.

Most people associate command and control leadership with the military. Years ago, I worked for the U. S. Army Chief of Staff. I, like most people, thought I’d see command and control leadership there. The great irony is that the military learned long ago that, if you want to win, you have to engage the intelligence of everyone involved in the battle. The Army had a visual reminder of this when, years ago, they developed new tanks and armored vehicles that traveled at unprecedented speeds of 50 miles an hour. When first used in battle during the first Gulf War, several times troops took off on their own, speeding across the desert at high speed. However, according to Army doctrine, tanks and armored vehicles must be accompanied by a third vehicle that literally is called the Command and Control Vehicle. This vehicle could only travel at 20 miles an hour. (They corrected this problem.)

For me, this is a familiar image people in the organization ready and willing to do good work, wanting to contribute their ideas, and ready to take responsibility, and leaders holding them back, insisting that they wait for decisions or instructions. The result is dispirited employees and leaders wondering why no one takes responsibility or gets engaged anymore. In these troubled, uncertain times, we don’t need more command and control; we need better means to engage everyone’s intelligence in solving challenges and crises as they arise.

We Know How to Create Smart, Resilient Organizations

We do know how to create workplaces that are flexible, smart, and resilient. We have known for more than half a century that engaging people and relying on self-managed teams is far more productive than any other form of organizing. In fact, productivity gains in self-managed work environments are at minimum 35 percent higher than in traditionally managed organizations. And workers know this to be true when they insist that they can make smarter decisions than those delivered from on high.

With so much evidence supporting the benefits of participation, why isn’t every organization using self-managed teams to cope with turbulence? Instead, organizations increasingly are cluttered with control mechanisms that paralyze employees and leaders alike. Where have all these policies, procedures, protocols, laws, and regulations come from? And why do we keep creating more, even as we suffer from the terrible consequences of over-control?

Even though worker capacity and motivation are destroyed when leaders choose power over productivity, it appears that bosses would rather be in control than have the organization work well. And this drive for power is supported by the belief that the higher the risk, the more necessary it is to hold power tightly. What’s so dangerous about this belief is that just the opposite is true. Successful organizations, including the military, have learned that the higher the risk, the more necessary it is to engage everyone’s commitment and intelligence. When leaders hold onto power and refuse to distribute decision-making, they create slow, unwieldy, Byzantine systems that only increase risk and irresponsibility. We never effectively control people or situations by these means; we only succeed in preventing intelligent, fast responses.

The personal impact on leaders’ morale and health is also devastating. When leaders take back power, when they act as heroes and saviors, they end up exhausted, overwhelmed, and deeply stressed. It is simply not possible to solve single handedly the organization’s problems there are just too many of them! One leader who led a high-risk chemical plant spent three years creating a highly motivated, self-organizing workforce. He described it this way: “Instead of just me worrying about the plant, I now have nine hundred people worrying. And coming up with solutions I never could have imagined.”

Sometimes leaders fail to involve staff out of some warped notion of kindness. They don’t include people or share their worries because they don’t want to add to their stress. But such well-meaning leaders only create more problems. When leaders fail to engage people in finding solutions to problems that affect them, staff don’t thank the leader for not sharing the burden. Instead, they withdraw, criticize, worry, and gossip. They interpret the leader’s exercise of power as a sign that he or she doesn’t trust them or their capacities.

Assessing Changes in Your Leadership

With no time to reflect on how they might be changing, with no time to contemplate whether their present leadership is creating an effective and resilient organization, too many leaders drift into command and control, wondering why nothing seems to be working, angry that no one seems motivated any more. If you are feeling stressed and pressured, please know that this is how most leaders feel these days. Yet it is important that you take time to notice how your own leadership style has changed in response to the pressures of this uncertain time. Otherwise, you may end up disappointed and frustrated, leaving a legacy of failure rather than of real results.

Some Questions to Think About

Here are questions to help you notice if your leadership is slipping into command and control mode. If you feel courageous, circulate these questions and talk about them with staff.

1. What’s changed in the way you make decisions? Have you come to rely on the same group of advisors? Do you try to engage those who have a stake in the decision?
2. What’s happening to staff motivation? How does it compare to a few years ago?
3. How often do you find yourself invoking rules, policies, or regulations to get staff to do something?
4. How often do you respond to a problem by developing a new policy?
5. What information are you no longer sharing with staff? Where are you more transparent?
6. What’s the level of trust in your organization right now? How does this compare to two to three years ago?
7. When people make mistakes, what happens? Are staff encouraged to learn from their experience? Or is there a search for someone to blame?
8. What’s the level of risk-taking in the organization? How does this compare to two to three years ago?
9. How often have you reorganized in the past few years? What have you learned from that?
10. How’s your personal energy and motivation these days? How does this compare to a few years ago?

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