CREATING UNBOUNDED HUMAN ENERY IN YOUR BUSINESS
Introduction
My company is called Virtual Group Business Consultants. Virtual Group has been working with a more open, “virtual”, adaptive and emergent business model for 25 years. Over this period we have developed approaches more useful to business as it moves into the Post-industrial Age: breaking down silos, building connections and trust, opening communications and reducing complexity by removing unnecessary boundaries, barriers, rules, processes and top-down management.
We have found that human energy is the source of most of the power in organisations. Most of it is left at the door and as a result many organisations are a tiny fraction of their potential. Unbounded human energy is so important is not just to liberate buried human energy, even though this is worthwhile in its own right; it’s to increase organisational speed, knowledge and flexibility, by pushing decision making down to the frontline where it can make the most difference to the customer.
These are also the issues that I have explored in depth in my book: Cracking Great Leaders and the 21 Workshops I have developed and packaged for other consultants to use if they are trying to help their clients move from Industrial practises to Post-industrial practises.
This paper introduces these issues and points to solutions better suited to the Post-industrial Age.
We have found that human energy is the source of most of the power in organisations. Most of it is left at the door and as a result many organisations are a tiny fraction of their potential. Unbounded human energy is so important is not just to liberate buried human energy, even though this is worthwhile in its own right; it’s to increase organisational speed, knowledge and flexibility, by pushing decision making down to the frontline where it can make the most difference to the customer.
These are also the issues that I have explored in depth in my book: Cracking Great Leaders and the 21 Workshops I have developed and packaged for other consultants to use if they are trying to help their clients move from Industrial practises to Post-industrial practises.
This paper introduces these issues and points to solutions better suited to the Post-industrial Age.
What Happens When We Grow
Many organisations start with a small number of people who are enthusiastic about achieving an exciting vision, usually it’s to do with meeting a customer need or improving humanity. The vision is clear and the energy to achieve it is sky-high. Everyone understands how they contribute.
Then they grow bigger and decide to bring in management consulting advice. The consultants says: “You need more control, more structure and more rules. It’s too risky to let people run free; you’ll get chaos. Divisionalise!.” Unfortunately, as the picture shows, this makes it impossible for the people to even see the vision. And the managers of each Division start to compete with each other.
But it gets worse. Within each Division, people are further cut off from each other and the Vision by giving each person a narrowly specified job. Management says: “Of course we need jobs. How else can we hold people accountable?”
Each Division works like crazy on things that make sense to them but may not make sense to the organisation as a whole. Human Resources introduce work regulations and other processes. Strategy and Planning introduce Strategic Plans, Operational Plans and Budgets. Legal introduce laws and regulations. Procurement, Engineering, Marketing, Accounting and Senior Management get in on the act also. Before long, even if people could see the vision they are overwhelmed and don’t have the time or focus for it or the customer.
How to achieve Unbounded Energy with less Top-down Control
First the Theory
I want to give a tiny bit of theory because I have found that managers are sensible. They behave in ways that make sense in the world as they understand it. Therefore, before we can get managers to change their behaviours we need to get them to change the way they understand how the world works; that is, like the scientists say it does. So stick with it; the practical steps will follow.
For the last 30 years scientists have known something that very few managers know about - that there is a “sweet spot” at which all living systems have the ability to self-organise without any top-down control.
This sweet spot occurs near what scientists call the “edge of chaos” (or the edge of order, as I’d rather describe it) where the system is delicately poised between one steady state and another steady state. For example, the membrane around every living cell in your body is neither solid nor water. Rather it is a delicate balance between solid and water. It’s just solid enough to hold some sort of form and liquid enough to allow movement in and out of the cell so the cell can interact with its environment. This is the image we need for business, just solid enough to give some sort of form/meaning and open enough to its environment to allow movement (of people, ideas and information) in and out.
For the last 30 years scientists have known something that very few managers know about - that there is a “sweet spot” at which all living systems have the ability to self-organise without any top-down control.
This sweet spot occurs near what scientists call the “edge of chaos” (or the edge of order, as I’d rather describe it) where the system is delicately poised between one steady state and another steady state. For example, the membrane around every living cell in your body is neither solid nor water. Rather it is a delicate balance between solid and water. It’s just solid enough to hold some sort of form and liquid enough to allow movement in and out of the cell so the cell can interact with its environment. This is the image we need for business, just solid enough to give some sort of form/meaning and open enough to its environment to allow movement (of people, ideas and information) in and out.
The edge of order is an important idea because right now the world of business is moving from one steady state (the Industrial Age) to another steady state (the Post-Industrial Age) and it is going through chaotic times. The old ways that most of us were trained for and practice no longer seem to work.
In the Industrial Age we could assume workplaces were based on mechanics organised into hierarchies based on silos with organisational charts and straight lines for organisational structure. This worked worked in the past when the environment was certain and the problems were simple. However, today most business environments are complex and most problems are wicked, in the sense that the solution is both technically difficult and there is no real consensus about how to fix them.
The Post-industrial assumptions understand workplaces are based on organics organised into closely networked living systems with natural shapes like spirals, bags, trees and curved lines for organisational structure. These assumptions helps managers think of their organisation in organic terms; more like a garden that they plant and tender rather than a machine that they can downsize, reorganise and reengineer. This is quite a different way of thinking about organisations.
The Post-industrial assumptions focus more on soft assets: relationships, culture, information, time and brand. Soft assets are abundant; today, soft assets make up about 80% of the market value in most organisations and become even stronger the more they are used. The Industrial assumptions focused on hard assets (balance sheet items) that are scarce and reduce as they are used; today hard assets make up only 20% of the market value of most organisations. This new understanding undermines the whole theory of Economics which is based on the allocation of scarce assets.
Science shows that close to chaos the system is subject to the ‘butterfly effect’ where small initial changes can lead to large systemwide changes. We have no way of predicting which flap of the butterfly’s wing will be noticed by the system and amplified systemwide therefore it makes sense to try many different approaches to change and closely monitor which ones are most successful. The idea is to ratchet-up by extending the successes and pulling back on the failures.
Also when this tipping point occurs, change is not gradual like a baby grows into an adult; it is fast and consuming, more like the transition from a cocoon to a butterfly. Inside the cocoon, the caterpillar does not slowly grow wings and change its shape, it dissolves into liquid that transforms into new cells that become the butterfly. When mega transitions occur, they quickly go through a similar messiness and helplessness. This is followed by a period of uncertainty in which new skills and habits are formed that put us on the new path.
Complexity science and Emergence
Complexity science is one of the major tools to understand the Post-industrial environment. Complexity tells us that organisations are more like organic (living) systems than mechanic systems. In organic systems it is not possible to understand the whole system by understanding the parts; because, the whole is far more than the parts. It is just like the human body which is far more than the individual organs that make it up. As the complexity scientists say: Dividing an elephant in half doesn’t produce two small elephants!
Emergence is the name Complexity scientists have given to how simple things can come together and organise themselves into an enormously complex systems. Examples include: human brains, the Internet, the economy, the ecosystem, and many animal behaviours like fish in schools and birds in flocks. Emergence is a powerful way of thinking about business.
For the conditions in a Post-industrial Age many managers, especially in hierarchies, make the system too ordered. They fiddle with top-down control, just as they'd fiddle with their car. They fiddle at centralising, cutting back or reengineering. They downsize, control and impose as though it was a mechanical system (rather than a living system). This takes so much organisational energy, there's none left to satisfy customers, and staff are too battered to care. The sad thing is, science is now showing that most of this activity is counter-productive and can only lead to failure. The paradox is that over-control leads to less order and less control leads to more order.
In the Industrial Age we could assume workplaces were based on mechanics organised into hierarchies based on silos with organisational charts and straight lines for organisational structure. This worked worked in the past when the environment was certain and the problems were simple. However, today most business environments are complex and most problems are wicked, in the sense that the solution is both technically difficult and there is no real consensus about how to fix them.
The Post-industrial assumptions understand workplaces are based on organics organised into closely networked living systems with natural shapes like spirals, bags, trees and curved lines for organisational structure. These assumptions helps managers think of their organisation in organic terms; more like a garden that they plant and tender rather than a machine that they can downsize, reorganise and reengineer. This is quite a different way of thinking about organisations.
The Post-industrial assumptions focus more on soft assets: relationships, culture, information, time and brand. Soft assets are abundant; today, soft assets make up about 80% of the market value in most organisations and become even stronger the more they are used. The Industrial assumptions focused on hard assets (balance sheet items) that are scarce and reduce as they are used; today hard assets make up only 20% of the market value of most organisations. This new understanding undermines the whole theory of Economics which is based on the allocation of scarce assets.
Science shows that close to chaos the system is subject to the ‘butterfly effect’ where small initial changes can lead to large systemwide changes. We have no way of predicting which flap of the butterfly’s wing will be noticed by the system and amplified systemwide therefore it makes sense to try many different approaches to change and closely monitor which ones are most successful. The idea is to ratchet-up by extending the successes and pulling back on the failures.
Also when this tipping point occurs, change is not gradual like a baby grows into an adult; it is fast and consuming, more like the transition from a cocoon to a butterfly. Inside the cocoon, the caterpillar does not slowly grow wings and change its shape, it dissolves into liquid that transforms into new cells that become the butterfly. When mega transitions occur, they quickly go through a similar messiness and helplessness. This is followed by a period of uncertainty in which new skills and habits are formed that put us on the new path.
Complexity science and Emergence
Complexity science is one of the major tools to understand the Post-industrial environment. Complexity tells us that organisations are more like organic (living) systems than mechanic systems. In organic systems it is not possible to understand the whole system by understanding the parts; because, the whole is far more than the parts. It is just like the human body which is far more than the individual organs that make it up. As the complexity scientists say: Dividing an elephant in half doesn’t produce two small elephants!
Emergence is the name Complexity scientists have given to how simple things can come together and organise themselves into an enormously complex systems. Examples include: human brains, the Internet, the economy, the ecosystem, and many animal behaviours like fish in schools and birds in flocks. Emergence is a powerful way of thinking about business.
For the conditions in a Post-industrial Age many managers, especially in hierarchies, make the system too ordered. They fiddle with top-down control, just as they'd fiddle with their car. They fiddle at centralising, cutting back or reengineering. They downsize, control and impose as though it was a mechanical system (rather than a living system). This takes so much organisational energy, there's none left to satisfy customers, and staff are too battered to care. The sad thing is, science is now showing that most of this activity is counter-productive and can only lead to failure. The paradox is that over-control leads to less order and less control leads to more order.
When too much order doesn’t work (and it won’t because it can’t) managers flip to the opposite extreme and the system becomes too disordered and behaves like mob-rule. A great deal of energy is wasted fighting turf battles and trying to survive and protect against unruly behaviour.
I’m sure you have seen this mad waltz. Round and round they go, flip-flopping from centralisation to decentralisation. It’s a never-ending, soul-destroying, energy-sapping dance; and it’s totally unnecessary.
If managers want to reach the sweet spot and achieve unbounded energy, all they need to do is understand and trust the laws of living systems, establish a powerful vision, then replace the excessive controls with three or four simple rules that everyone agrees to follow. When they do, their organisation will self-organise at the sweet spot where all the human energy is available to the organisation.
If managers want to reach the sweet spot and achieve unbounded energy, all they need to do is understand and trust the laws of living systems, establish a powerful vision, then replace the excessive controls with three or four simple rules that everyone agrees to follow. When they do, their organisation will self-organise at the sweet spot where all the human energy is available to the organisation.
Managers who don't understand the power of emergence run a BIG risk because bigness is no longer a formula for success. We used to be able to assume that big fish would eat small fish.
But today, through emergence, small fish can eat big fish. Examples include: Wikipedia eating Britannica. Linux eating Microsoft. Firefox eating Explorer.
Now the practical
The Nine Areas
Now lets get practical. There are nine management area we work with (see the chart below).
All nine areas are closely related to each other. The aim is to first set the Vision and the Value Proposition and then to ensure that all the nine areas are aligned so that they are pushing in the same direction. If any are not aligned they will become barriers to achieving the Value Proposition and the organisation will not achieve its potential. For example if the organisation is trying to be Customer Intimate and the processes are not aligned to this Value Proposition employees will find it’s almost impossible to be focused on customers because the processes, technology, structure etc., will stop them from achieving it.
As you move down the chart the nine areas become more concrete and easier to put in place. In our experience, Organisation Structure is relatively easy to change, but it is seldom the most important problem or the place to start. Unfortunately, even the best managers are tempted to start with the easy areas, at the bottom of the chart first.
When they restructure it often destroys trust and communications that have taken years to build. When restructuring doesn’t work, and it seldom does, these managers turn their attention to a new computer system (Technical Structure). This diverts attention even further away from the customer and the Values. Then, if they have time, they may start process improvement (Process Structure) before they leave and another CEO comes in and starts the whole process again.
Our approach is to start with the Vision and the Value Proposition then focus on the areas at the top of the chart: individual beliefs, political power and organisational culture; those most closely associated with connections, communications and consciousness.
As you move down the chart the nine areas become more concrete and easier to put in place. In our experience, Organisation Structure is relatively easy to change, but it is seldom the most important problem or the place to start. Unfortunately, even the best managers are tempted to start with the easy areas, at the bottom of the chart first.
When they restructure it often destroys trust and communications that have taken years to build. When restructuring doesn’t work, and it seldom does, these managers turn their attention to a new computer system (Technical Structure). This diverts attention even further away from the customer and the Values. Then, if they have time, they may start process improvement (Process Structure) before they leave and another CEO comes in and starts the whole process again.
Our approach is to start with the Vision and the Value Proposition then focus on the areas at the top of the chart: individual beliefs, political power and organisational culture; those most closely associated with connections, communications and consciousness.
Remembering the Vision
Usually the first step towards unbounded human energy is remembering the vision that originally excited the founders.
In 1992 when I left the Bank of New Zealand to establish Virtual Group one of the first things I did was to get a new business card. It read: "Change Agent.” Back then, I really believed that change was what mattered. I saw it as necessary for growing and progressing. I now think I was wrong. As I've got older and wiser I've come to realise that far more important than change, is to understand what is constant. The real power lies in what is unchanging, what is always the same, what is the essence of the thing. Often this means understanding, rediscovering and honouring the original purpose and dreams of the founders.
For example, over the last 25 years as we struggled with the daily challenges of making Virtual Group work, sometimes we complicated our dream, sometimes we even forgot it. Whenever this happened the power of unbounded human energy fell away until we realised what was happening and refocused on the original dream of "Liberating Human Energy at Work" and “Wisdom Without Walls”.
In 1992 when I left the Bank of New Zealand to establish Virtual Group one of the first things I did was to get a new business card. It read: "Change Agent.” Back then, I really believed that change was what mattered. I saw it as necessary for growing and progressing. I now think I was wrong. As I've got older and wiser I've come to realise that far more important than change, is to understand what is constant. The real power lies in what is unchanging, what is always the same, what is the essence of the thing. Often this means understanding, rediscovering and honouring the original purpose and dreams of the founders.
For example, over the last 25 years as we struggled with the daily challenges of making Virtual Group work, sometimes we complicated our dream, sometimes we even forgot it. Whenever this happened the power of unbounded human energy fell away until we realised what was happening and refocused on the original dream of "Liberating Human Energy at Work" and “Wisdom Without Walls”.
Barriers of the Mind
The second step is usually to help managers rethink culture and individual beliefs. I have found that the biggest barriers to unbounded human energy are barriers of the mind. There is some madness within the human mind that makes us want to break things up, put walls around them and put them in separate categories even when there is no need to. We do this even though scientists tell us that we are far more connected than most of us believe.
"A human being is a part of the whole called the 'universe,' a part limited in time and space. He experiences himself, his thoughts and feelings, as something separated from the rest, a kind of optical delusion of 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 all its beauty. Nobody is able to achieve this completely, but the striving for such achievement is in itself part of the liberation and a foundation for inner security." ALBERT EINSTEIN
Cultures based on love, truth and beauty make more business sense. It shows through in your brand and customer service.
The main thing required is to change some outdated assumptions made by leaders:
"A human being is a part of the whole called the 'universe,' a part limited in time and space. He experiences himself, his thoughts and feelings, as something separated from the rest, a kind of optical delusion of 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 all its beauty. Nobody is able to achieve this completely, but the striving for such achievement is in itself part of the liberation and a foundation for inner security." ALBERT EINSTEIN
Cultures based on love, truth and beauty make more business sense. It shows through in your brand and customer service.
The main thing required is to change some outdated assumptions made by leaders:
- People have weakness that need to be managed. Actually everyone has a genius factor that leaders need to dis-cover and amplify.
- People can't be trusted. Actually people can be trusted if you trust them.
- People need to be controlled. Actually people need to be free.
- Control leads to more order. Actually control leads to less order.
- People are separate from each other. Actually we are far more closely connected than most people believe.
- Taking is the way to success. Actually giving is the way to success.
- We live in a world of scarce resources. Actually mostly we live in a world of plenty, with unlimited knowledge, creativity, relationships, and thinking.
Achieving unbounded energy is far more than just removing barriers (organisational towers, restrictive jobs and square wheels) that previously sapped energy and made people frustrated, angry and internally competitive, but it is a necessary part. We also need a process to help people focus on the positive, identify their genius and understand the power within themselves. It is about the release of human spirit that comes when people understand their genius and use it to work on something of meaning and importance, committing body, head, heart and soul to the vision.
Once the organisation is opened up, people, information and resources flow more freely through pervious walls into overlapping centres of excellence. People start to talk where no one had talked before. Communication and trust build as people connect and are able to work together. Energy, communication and trust become even stronger when people who were previously cut off from each other in jobs, work on common issues in larger project teams. Internal competition is replaced by internal collaboration.
To achieve unbounded human energy managers need to develop an eye that looks between. Instead of seeing the following chart as just two separate faces (say Bruce and Peter), they also need to see the space in between. This space is not empty space, it is full of energy, trust (or lack of it) and communication (or lack of it).
Once the organisation is opened up, people, information and resources flow more freely through pervious walls into overlapping centres of excellence. People start to talk where no one had talked before. Communication and trust build as people connect and are able to work together. Energy, communication and trust become even stronger when people who were previously cut off from each other in jobs, work on common issues in larger project teams. Internal competition is replaced by internal collaboration.
To achieve unbounded human energy managers need to develop an eye that looks between. Instead of seeing the following chart as just two separate faces (say Bruce and Peter), they also need to see the space in between. This space is not empty space, it is full of energy, trust (or lack of it) and communication (or lack of it).
Organisational structure
Third, managers need to change the way they think about the organisation structure to ensure it works in a Post-industrial world where self-organisation occurs without top-down control. Instead of towers with thick impervious walls and silos of power we need beanbags.
Towers are run like Stalin ran the USSR. They are command structures, highly centralised, rigid and tall. They are made up of equally rigid and tall silos called Divisions (how I hate that word). When the environment changes rigid, tall structures are fundamentally unstable... apt to fall over. And, like Russia, when it happens they fall fast.
Towers are run like Stalin ran the USSR. They are command structures, highly centralised, rigid and tall. They are made up of equally rigid and tall silos called Divisions (how I hate that word). When the environment changes rigid, tall structures are fundamentally unstable... apt to fall over. And, like Russia, when it happens they fall fast.
People in towers tend to be separate from each other with little connection or communication. The walls around the organisation (and between the individual Divisions) are thick, rigid and impervious. Within each Division people usually work hard, but because they are separate from the organisation as a whole, separate from other Divisions, and have lost sight of the vision, they tend to work to maximise the results of their Division rather than the results of the organisation as a whole.
Beanbags fit exactly to the shape of the environment no matter how much it changes. The bits inside are free to move wherever they want and as a result the structure as a whole becomes far more stable and fits minutely into its environment.
Beanbags fit exactly to the shape of the environment no matter how much it changes. The bits inside are free to move wherever they want and as a result the structure as a whole becomes far more stable and fits minutely into its environment.
People in Beanbags tend to be connected to each other with open communication and collaboration between those who are important to getting the work done. The walls around the organisation (and the individual Centres of Excellence) are open, pervious, and overlapping so people can move in and out as required to do the work. Also the feedback loop is far stronger.
Narrowly defined jobs are the enemy of unbounded energy. In towers, work is divided up into narrowly defined jobs (eg Input Clerk). When people leave, managers try to find someone to fill the job, like a mechanic tries to find a spare part when a component needs replacing. Unfortunately people are not all the same size or shape as a spare part and the replacement may not fit snugly into the job. Unbounded energy comes when work is divided into larger projects (eg Development of Product A) that several people with complementary skills can work on together so each person works to their strengths and no one works to their weaknesses.
We also challenge customers about where decisions are made in the organisation. When we arrive we find nearly every important decision is made by Tops. After our challenge we find that most decisions can be made by Bottoms or Middles; far closer to the customer and far more quickly and effectively than before.
Narrowly defined jobs are the enemy of unbounded energy. In towers, work is divided up into narrowly defined jobs (eg Input Clerk). When people leave, managers try to find someone to fill the job, like a mechanic tries to find a spare part when a component needs replacing. Unfortunately people are not all the same size or shape as a spare part and the replacement may not fit snugly into the job. Unbounded energy comes when work is divided into larger projects (eg Development of Product A) that several people with complementary skills can work on together so each person works to their strengths and no one works to their weaknesses.
We also challenge customers about where decisions are made in the organisation. When we arrive we find nearly every important decision is made by Tops. After our challenge we find that most decisions can be made by Bottoms or Middles; far closer to the customer and far more quickly and effectively than before.
Process Structure
Fourth, managers need to rethink processes. Processes are vitally important to achieving results in organisations; however to be successful they need to be designed from start to finish to serve the customer.
Too often processes, rules and procedures are introduced by people within a Division to try to maximise the performance of the Division without any thought of the impact on the customer or the organisation as a whole. Sometimes they are even introduced to make work and make the Divisional person look important. These rules, procedures and processes sometimes work against each other and are so detrimental to the whole that people feel like they are riding a cycle with square wheels. Once processes are introduced they tend to take on a life of their own and continue well after their use-by-date.
Too often processes, rules and procedures are introduced by people within a Division to try to maximise the performance of the Division without any thought of the impact on the customer or the organisation as a whole. Sometimes they are even introduced to make work and make the Divisional person look important. These rules, procedures and processes sometimes work against each other and are so detrimental to the whole that people feel like they are riding a cycle with square wheels. Once processes are introduced they tend to take on a life of their own and continue well after their use-by-date.
Managers need to simplify, improve and speed up each process to ensure that it is necessary, adds value to the customer and makes work easier. Many managers fail to understand that even removing a few steps in a process reduces effort exponentially. When people get rid of the square wheels they have time for each other and the customer. The aim is to Shorten, Streamline, Speedup, Simplify, and Standardise.
Is this the Way You Want to Work?
Self-organisation works because it liberates unbounded human energy. When it is achieved even large organisations work with the clarity and passion of the original founders. The vision is clear and the energy to achieve it is sky-high. The approach works because it works with nature according to our new scientific understanding of the way the world works. Is it the way you work?
Over the last 25 years Virtual Group has developed a system-wide business model built on assumptions more useful in the Post-industrial world. We have found that people work with unbounded energy in an open system with all unnecessary rules and structures removed, with support from a new type of leadership, technology and culture. Today we have specialists working with Boards, senior managers and front-line people. We are experts in liberating human energy, breaking down silos, building connections and trust, opening communications and reducing complexity by removing unnecessary boundaries, barriers, rules, processes and top-down management.
We know how to do business in a changing world. Today many of our clients want to work in a more “virtual-way”, including bottom-up, emergent business processes to support self-organisation and self-management that liberates human energy at work. This has become a major part of our work.
For more information
Bruce Holland
Virtual Group Business Consultants Limited
www.virtual.co.nz
+6421620456
Over the last 25 years Virtual Group has developed a system-wide business model built on assumptions more useful in the Post-industrial world. We have found that people work with unbounded energy in an open system with all unnecessary rules and structures removed, with support from a new type of leadership, technology and culture. Today we have specialists working with Boards, senior managers and front-line people. We are experts in liberating human energy, breaking down silos, building connections and trust, opening communications and reducing complexity by removing unnecessary boundaries, barriers, rules, processes and top-down management.
We know how to do business in a changing world. Today many of our clients want to work in a more “virtual-way”, including bottom-up, emergent business processes to support self-organisation and self-management that liberates human energy at work. This has become a major part of our work.
For more information
Bruce Holland
Virtual Group Business Consultants Limited
www.virtual.co.nz
+6421620456