Photo Caption: Julian Wilson and Andrew Holm of Matt Black Systems designed 'fractalism' to engage employees and double their profit.
Almost unknowingly, business sits on the cusp of an awakening. No, it's not a spiritual awakening, although it might feel like that to employees feeling oppressed by overly controlling management. Instead, it's an awakening of dormant creativity not reachable using traditional management methods. Inspired by a compelling sense of purpose that accelerates profitability beyond imagination, it's more of a bridge from the past to create a future with greater hope. It's a shift in the purpose of business and its leadership role and value to society.
In Decision Making for Dummies, I shared the story of a colleague who'd worked with over a thousand companies. Eventually, he could accurately predict what they'd do next based on ingrained patterns of decision-making rationalized by, 'we know what we're doing' or 'this is the way things are done around here'. As executives red flag the risk of being unable to respond culturally to surprises, including technological, social disruptions, now is a good time to explore thinking differently. Use a wider lens to take in the bigger picture.
Widen the Frame
Chip and Dan Heath noted in Decisive: How to Make Better Choices in Life and Work, decision makers can get trapped into a narrow frame blocking foresight and alternatives to doing things differently given that the context has totally changed. To illustrate, the majority of companies center their 'Why' on the limited confines of making money (profit) as it's defining sense of purpose. It's not a compelling enough reason for employees to fully engage unless they fear for their personal survival, for the hard-core capitalist, it's been enough. Yet, for society as a whole, for the communities where companies operate, for the ecological systems that support the economy it's not enough. Nor it is enough to face the magnitude of major economic and social disruption originating from the obscure effects of climate change. Business decision-makers relying on a narrow frame, that profit is a good enough reason to exist, and that all is well, increase their risk by being blind to tech or social innovators who play by no rules save their own. The tables have turned 180 degrees.
Move to Purpose Driving Profit
Geoff MacDonald, former Global VP of HR for global giant Unilever says, "It's a switch from profit being the purpose for a company's existence, to purpose driving profit." Inherently it expands focus from purely on short-term results, to balancing short-term financial security with holding a longer view, which includes more than dominate global markets. The change in world-view expands 'me' to 'we', while attracting shareholders who see the merit, and inherent profitability and wider prosperity of being of service to society and the world we all live in.
An inspiring purpose isn't limited to serving as the economic engine for society. It must do more than that to extend beyond financial security and survival so that employees can fully engage and co-create solutions. Awakening the power of the human spirit to make radical jumps in performance needs a beacon, a compelling focus that gets you through the murky chaotic zones characteristic of companies adapting their business cultures to fit today's reality. Nothing about the past predicts what lies ahead.
Denial that the future is uncertain is no longer a viable strategy. Moving from denial and complacency to growth will take leadership that is divorced from authority. Sourced in each person, this kind of leadership values personal growth, learning, autonomy, meaningful connection between people, and seeing connections between seemingly unrelated things. Everything is connected. Absolutely everything. Yet, in efforts to keep the complex simple and controllable, it's been easier to adopt a narrow frame just to remain within familiar boundaries.
Explore Alternatives Ways to Organize Work: Free Trapped Initiative
Meet Julian Wilson and Andrew Holm from Matt Black Systems, a manufacturer of digital electronic components for the aerospace industry. Learning from a series of failed attempts at finding a better way of operating, they looked to Nature, then came up with something they call 'fractalism'. Each employee became a business 'cell' and was given the autonomy, skills and knowledge to run their own operation while sharing what is required for the company to keep its edge such as research and development. Custom software supports individual and strategic decisions.
From thirty employees the company shrank down to twelve, moving from small incremental increases in productivity to a leap of over 300%. Profit doubled and personal salaries doubled, in some cases significantly more, and the trend continues. Using data to understand the social system, Julian Wilson and Andrew Holm realized that when people aren't anxious about paying their bills, they focus on contributing. Walmart take note.
Companies are exploring alternative governance models like holacracy, sociocracy, and LiquidO. Adopting an off-the-shelf alternative without understanding how social interactions run your performance is not the way to adapt. Combining data with observation, experimentation, reflection and dialogue will help you wind up with an approach that fits.
Stop Throwing Away Money
Resources have been assumed to be in infinite supply to the point where landfills now hold more rare earth minerals than in all known global reserves, representing waste valued at $70 billion dollars. Telecom Sprint avoided $1 billion in costs by repurposing cell phones that still had all their functionality but weren't 'cool' anymore. It's a move that more and more companies can emulate in order to move beyond fixation on the bottom line to seizing possibilities only visible using a shift in perspective to see opportunities being overlooked.
Expand Awareness and Skills
Moving from the limits of profit to engaging employees and customers alike in the achievement of business goals demands:
- Make decisions as if you know nothing. No matter how much experience you have, the only way to navigate uncertainty is to keep asking questions - stay curious. Keep the mind open! Disrupt yourself.
- Look at your decisions to identify one core value that consistently inspires purpose and initiative in your company. Use it to align your strategic decisions. Novo Nordisk's is 'systemic health'.
- Reflect on the character and underlying beliefs in your company. What drives behavior? Is the focus still on profit and cutting costs? Or on serving a higher purpose?
Where is your company in the arc of transforming from limited to exponential growth?
Dawna Jones brings intelligent insights to transforming business leadership for a fast changing world. Rising above the noise of everyday routine, she offers original thinking so decision makers can see higher-level solutions that enable business to be better for the economy and for the world. Speaker and business innovator, she's the author of Decision Making for Dummies and known to be a tad nomadic. Connect with Dawna on Twitter @EPDawna_Jones or LinkedIn.
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