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There is an advance in social thinking underway that started after WW2 and is still rolling (with a few obvious setbacks around the world right now). This thinking is transforming IT, work, management, enterprises, government, and society. Its impact is far reaching enough to talk of it as a renaissance in thinking, a refresh or step change that comes only once or twice a century. This is not an exaggeration. The concepts that Teal Unicorn deals with, in advancing enterprise work and management (especially management), rise from an even deeper philosophical shift which we are not qualified to discuss in depth though we need to understand as much as we can.Here’s Rob from Teal Unicorn on this topic: (I shot this in one 18-minute take – it comes from my heart)
We see the new thinking everywhere, so this page points to a few models we know of, which all point to this renaissance, this flip, step-change, new age… Social thinking is crossing a boundary (and just in time, looking at world politics). Feminism, diversity, egality, socialism, empowerment, digital, virtual, complexity, networks, … so many powerful forces are at play.
And the roots run deep. As soon as Scientific Management appeared at the turn of last century, there was an immediate reaction promoting more humane thinking. The struggle for women’s rights is even older, as is the fight against slavery and for equal racial rights. The Twentieth Century saw the rise of social welfare, global collaboration, universal health care, foreign aid, pacifism and arms control, the Marshall Plan and the Peace Corps, human rights, the hippy movement, feminism, gay rights, environmentalism, corporate social responsibility (CSR) and multiple bottom lines, stakeholder capitalism, environment social and corporate governance (ESG), and many more developments all on the same trajectory of higher social consciousness. Organisations are increasingly expected to evolve, to keep up.
A related expectation is authenticity. From Ernst and Young no less:
We increasingly want authenticity from the organizations we work for, buy from, and invest in. We need to know what companies stand for, and why.
In the late 20th Century, it went without saying that corporations are weasels that say one thing and do another. After all, only the shareholders matter, everybody else needs to be diverted with sweet words. We laughed it off, like we did with men being sexist. Not any more. Organisations of all kinds need to match the walk to the talk. They need to stand for something real, and demonstrate it. The moment they fake it, they’re called out and respect is lost. Rio Tinto. KPMG.
This directly impacts work and management. Managers everywhere need to get this clear: the world is now driven by values over value. To have products aligned to all our stakeholders’ values, you must live those values. You can’t fake this. You will get called out. And the cognitive dissonance will damage your organisation. To win at this game, we must be a better organisation, embracing the values of our community.
For the practical application of these ideas, see our articles on S&T Happens
Friedmanism is stone dead. It gave us all the gross excesses of the last few decades, from Madoff to Trump. Get with the times.
Greed is not good. Your customers, partners, and staff all expect you to live values through your work, as do your owners, government, and society.
Forbes magazine called Freidmanism the world’s dumbest idea. Drucker and Keynes would agree.
The US Business Roundtable redefined the purpose of a corporation to “create long-term value, better serving everyone – investors, employees, communities, suppliers and customers”.
Same Roundtable in 1981: “the shareholder must receive a good return but the legitimate concerns of other constituencies also must have the appropriate attention.”
And then in 1999: “the principal objective of a business enterprise is to generate economic returns to its owners.”
McKinsey’s view: “There are reasons to believe this time is different. Climate change, inequality, and diversity and inclusion are major policy concerns. Public trust in institutions is at an all-time low, and many increasingly look to businesses as the key agents for change on major societal issues.”
The British Academy says (pdf) “the purpose of business is to solve the problems of people and planet profitably, and not profit from causing problems”.
Barron’s agrees. “The most obvious result of an excessive focus on shareholder value, she says, is rising income inequality”
Fortune: Only 7 percent of Fortune 500 CEOs believe their companies should “mainly focus on making profits and not be distracted by social goals.”
Bloomberg “ESG Drives a Stake Through Friedman’s Legacy.
The idea that companies should concentrate only on maximizing profits is losing ground to a broader concept of stakeholder interests.”
The Australian Financial Review said “The Friedman doctrine was right and wrong about the responsibility of business. For democratic capitalism to live up to its name, voters, not corporate interest, must set the rules of the game.”
The Financial Times , even! “Milton Friedman was wrong on the corporation… unbridled corporate power has been a factor behind the rise of populism, especially rightwing populism”
60 major corporations declare commitment to ESG at Davos 2020
Simon Sinek has joined the fray
(If you don’t know those sources, they are pillars of right-wing capitalism).
The Economist is skeptical. I always respect their view but this time they’re way off.
You can hear this “values over value” song everywhere now: (I’ll collect more…)
Fast Company says “It’s hard to sustain a great company in a deeply troubled society, to build a healthy corporate culture in a world where so many people struggle with discrimination, lack of access to healthcare, and a planet that keeps getting sicker”
The Blueprint for Better Business says “The business needs to be led by that purpose, seeing itself as a social organisation which cares about people and generates the profit necessary to sustain the pursuit of that purpose.”
Addressing racism sloanreview.mit.edu/article/organizations-cannot-a…
Management lessons of The True Believer
A 20th-century working-class philosopher has a lot to teach modern workers — and managers — about finding meaning in life, and on the job
HBR: Banks should only do well financially when their customers do well financially.
Robert Kaplan on how companies can join with other firms, non-profits, and communities in positive-sum networks that create economic value while simultaneously addressing poverty, social exclusion, and environmental degradation
The government also cares www.theguardian.com/technology/2020/jul/27/califor…
Elizabeth Warren’s Accountable Capitalism Act
When More Is Not Better, book by Professor Roger Martin
Higher purpose at KPMG
McKinsey: in this crisis, stakeholder needs are already so acute that the opportunity for businesses to make an indelible mark with human support, empathy, and purpose is greater than it has ever been.
McKinsey again: when companies fully leverage their scale to benefit society, the impact can be extraordinary… Business has an opportunity, and an obligation, to engage on the urgent needs of our planet
And McKinsey on ESG (environmental, social, and governance): ESG links to cash flow in five important ways: (1) facilitating top-line growth, (2) reducing costs, (3) minimizing regulatory and legal interventions, (4) increasing employee productivity, and (5) optimizing investment and capital expenditures
Activist shareholder Cevian, managing $10B, will “use its vote at annual meetings to call out groups that did not include ESG metrics in executive pay packages by 2022” www.ft.com/content/7274cd38-c47c-4273-965a-3a23bd6…
BestBuy: noble purpose… at the intersection of four circles: what the world needs, what you are good at, how you believe you can make a positive difference in the world, and how you can make money
Mark Benioff of SalesForce www.nytimes.com/2019/10/14/opinion/benioff-salesfo…
Larry Fink of BlackRock www.blackrock.com/corporate/investor-relations/lar…
We are putting our money where our mouths are. fortune.com/2019/11/05/sustainability-marketing-co…
Banks care. “Canada’s six largest banks have all added ESG components to their chief executive officers’ compensation frameworks, putting them in a small minority of companies that tie executive pay to such measures.”
(How NOT to do it: Sloan Management Review with a cynical approach to focusing on stakeholders who create shareholder value)
Of course, the Empire strikes back. And predictably it is the red-neck IT tech bros leading the charge (with Musk and Bezos battling to be Emperor).
You don’t need to embrace a religion, or worse still the antiscience of the counter culture, in order to grow into these higher-level concepts. They’re the future of humanity. The future is already here, it is just not evenly distributed. We see it everywhere, it has been arriving for decades.
Some models that all indicate a phase change, a crossing of a boundary, a new age, are:
Game A / Game B Modelling changing social behaviour based on complexity theory.
Wilber’s Integral Theory (popularised by Laloux. Wilber et al used several different sets of colors, we use the one Laloux did. Don’t @ us.)
Graves’ first- and second-tier Graves, Wilber, and a umber of others collaborated. This was one of Graves’ contributions.
Theory X / Theory Y Two modes of management
Alpha and Beta management The same two modes of management, framed differently.
Values over value Friedmanism caused great harm to corporate ethics. It needs to be rejected.
The Age of Aquarius Slightly tongue in cheek, but even the hippies of the 60s saw The Times They Are a Changin’.
As well as many models which point to the concept of a flip, moving into a new phase, there is another concept that emerges everywhere: the reunification (in the West) of Science, Art, and Ethics – of truth, beauty, and goodness – which parted ways in the Enlightenment, when Truth rose above all. (Here is a great read on uniting science and art).
This comes out in
- New Age counter culture: alt med, organic food, anticapitalism, antiscience
- Tipu Ake ki te Ora Lifecycle
- Organic systems, holistic, Thriveability
- Spiral Dynamics from Graves, Cowan, Beck…
- Bring your whole self to work, diversity
- Tribal leadership five stages
- Ethical business
- B Lab: certified responsible corporates.
- Impact transparency
- The Open movement
- And one of my favourites, Humanocracy, the antithesis of bureaucracy.
We are not here to say any or all of these models are accurate. All models are wrong, some are useful. And there is a lot of bullshit peddled in their names, especially antiscience. In fact it is hard to find material about some of these models, e.g. Integral, that isn’t steeped in nonsense. The point is that it is evident that something big is going on across society, and overall it looks positive.
It is an optimistic view of human evolution, which is entirely justified based on historical data: humanity gets better. Across the world, organisations and societies are primarily competitive capitalist green with a few pioneering into teal, and a larger long tail spreading all the way back through orange and red to primal magenta (or grey, or whatever, models aren’t consistent). It is a rising bubble of social progress. Hans Rosling taught us to see the trends.
We embrace that view. We look at what it means to be a “small-a-agile” manager in these New Ways of Working and Managing in our new book, The agile Manager .
What did we miss? Any more?
[Update as the world goes into crisis:
The meaning we find in all this lies in what we make of it, what comes out of it. The crisis is going to be longer and deeper than most people have realised yet. We owe it to ourselves and our kids to ensure that the outcomes are a much better world than today.
We are already in this shift to a new enlightenment which has been running for decades. Perhaps all the negative energy will kick it along even faster.
This lockdown is only the overture. There will be waves of lockdown until infection or vaccine gets us to herd immunity.
Then there is going to be a severe depression. In fact we are in it. The USA is likely self-immolating right now, which will impact us all. We can only hope China rises to the occasion to help stabilise the global economy.
Then there is the political chaos of the US election. It won’t be normal, violence is likely.
Then there is the global catastrophe of Covid-19 in low-income crowded countries. And waiting in the wings for when we have dealt with all that, clinate change which is becoming uncomfortably real.
Our social capabilities will be sorely tested. It may not sound it, but I’m genuinely optimistic that a new phase in social consciousness will be forged in this fire. The Great Heave is already underway.
It’s tragic we have to go through this but life is cyclic, it seems inevitable. The result is often a stronger better society.]