Free flight or free fall?

The other day I came across a powerful metaphor. Capitalism is like an experimental aircraft launched from a very tall cliff. We assumed our model was aerodynamic and our flight controlled only because the ground was so far distant. We couldn’t see we were actually in free fall. Now the ground is rising rapidly and the truth is self-evident. It never was sustainable. It never did fly.

Transcendence

There’s something wrong with the game we’ve chosen to play, the economic engine we’ve built that now drives us. It doesn’t give us satisfaction, a sense of community, or hope. A few profit exorbitantly but I suspect even their lives are lacking in the same fundamental ways as those of us with less. And the vast majority are struggling to find food, water, shelter and warmth. There’s something wrong with such inequality.

There’s something wrong with the values we’ve adopted. Maybe it was an inevitable evolutionary outcome. I certainly don’t want to impose another moral imperative on our overburdened conscience, another thing we should or shouldn’t do for the greater good. Maybe it was unavoidable. We’re here because we had to be here but maybe we’re outgrowing our immaturity. Maybe a new order of complexity is emerging that will embrace and transcend our history. Maybe we will become something something new, something different, something better.

Denying the possibility of transcendence denies the possibility of change. Far to much is changing these days to deny. Our core values are changing, what we hold close to our hearts. Even acknowledgement of the need for heart and humanity in the workplace is changing, that place were the metaphor of the machine is still venerated.

It’s time we surrendered the machine as the image of God. It doesn’t work for humanity any more than it works for the universe.  Our lives aren’t toothed gears turning in a clockwork mechanism. The places we work shouldn’t grind our spirit between metal teeth.

Work should express our common humanity, our community, our selves. It isn’t ultimately about profit. That’s just the way we keep score. There are better ways.

There’s something deeply important about work that we’ve perverted. I feel it even if I don’t have the words to explain. It feels powerful.

Work is far more than just making a living. It’s meaning, community, purpose but the purpose most of us serve is pitiful. It isn’t worth our loyalty or our lives. We only have this one life and to squander it seems shameful.

Can we rebuild our economy upon shared values that reflect our common humanity and the diversity of life on the planet?  It seems possible to me, not through an effort of will but through the emergence of a new paradigm, a new democracy, new values that benefit the whole rather the the few. Impossibly idealistic? Perhaps if you believe the future can only duplicate the past but who would have thought the Arab Spring possible?

Passion & Responsibility

I’ve adopted a new motto (with acknowledgement to Lori Kane): Do more of what you like, less of what you don’t. It may seem simplistic, even solipsistic, but it has profound implications.

People tend to take responsibility for what they’re passionate about. Conversely, they’ll ignore what disinterests them even if they’re responsible for it. That’s as certain as water flowing downhill. Ignoring that simple fact is like ignoring gravity.

Do more of what you like, less of what you don’t. That works personally, professionally, it even works for managers. It aligns passion with purpose. It engages the imagination. It precipitates flow—that magical focus that defies time and fatigue and even the sense of self as you’re completely absorbed in the work.

Do more of what you like, less of what you don’t. It may seem silly, even selfish, but it’s more productive to align a worker’s passion with their work than their disinterest. Over 75% of the American workforce is disengaged from their work, more or less. That’s a statistic that’s going to bite American companies like a pit bull. Maybe if American companies knew more about their employees they could harness the power of passion rather than merely parading it like a political slogan at a national convention.

And what about the work no one is passionate about? There may be less of that than expected; for the work that’s truly orphaned, maybe we should take another look whether it’s really necessary.

The Coming Paradigm

I believe we’ve entered the vortex of a paradigm shift. We’ll emerge with a new order of complexity, a new understanding of our place in the world, or not at all.

Whatever the result, it’s the end of business as usual. It’s the end of a privileged few profiting at the expense of many. It’s the end of rapacious policies to benefit stockholders, one country despoiling another or companies without loyalty to any country despoiling all.

The paradigm shift that is upon us isn’t about adoption of lofty principles and worthy goals. It’s about evolutionary necessity. Survival, pure and simple. And hope.

We’ve come to the end of the capitalist dream of wealth earned on the backs of others and hoarded by a few. That economy prompted us to go far but it will take us no further. The birth of every paradigm contains the seeds of it’s self-destruction. We’ve come to the end of the old paradigm but we don’t yet clearly see the next, the new level of complexity that will incorporate and transcend it.

The most recent surveys I’ve seen estimate that over 75% of the American workforce is disengaged from their work, more or less. Some so much more that they’re actively sabotaging their company to justify their disengagement. That, I think, is symptomatic of massive forces at play like the breaking of the northern ice at the end of winter. Our entire horizon is heaving and cracking and reshaping itself into a new terrain. No one can predict what it will look like. It’s not that we currently lack sufficient knowledge or computing power to calculate the topography of that landscape. It’s simply not predictable. Period.

We’ve exhausted the value of capitalism as practiced during the last few centuries. In a cost/benefit analysis the trend line of benefit has been steadily declining while costs have been rising. The streams have crossed with disastrous results. Despair is epidemic, disengagement the result. What’s needed is hope to replace our despair, passion to replace our disengagement, meaning to replace the soulless grind of making more for fewer. What’s needed is a new religion if you also understand religion as a passionate belief in something more meaningful than our own advantage, something more transcendent, inspiring, encompassing.

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There is no ring-master, only the evolving circus, each act simultaneously influencing and influenced by all the others.

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What’s needed isn’t something we can architect, manufacture, market and sell. It’s not something we can proselytize or legislate. Ironically, what’s needed most is something we least control.

Certainly, there are things we can do individually and collectively to midwife the birth of the new paradigm, to keep faith with our own conscience, but what’s coming is out of our control. It has always been out of our control. We are the participants, the performers in this three-ring circus, not the ring-master. There is no ring-master, only the evolving circus, each act simultaneously influencing and influenced by all the others. It’s an endlessly entertaining show but it’s not our show exclusively. We may not even be top billing on the next paradigm’s billboard.

I’m actually more hopeful than I have been, ever. (Raised in an evangelical family, the apocalypse was rather the point of my parent’s faith or the justification, at least.) I see a way forward that might include us despite the horrendous challenges confronting humanity, most of our own making. I don’t know the path but I’ve become a believer in Ken Wilbur’s vision that evolution is the creation of increasingly complex systems that  transcend but embrace what went before. Where we find ourselves—on the edge of enormous change—is less the result of moral lapse that inevitability. We are here because we had to be here. And where we go from here isn’t in our control.

Robinson Jeffers was a dour poet but a clear-sighted man. He wrote, “At the end of an age there must be sacrifice to renew beauty.” There will be much that’s lost in the transition but hopefully, more that’s gained.

Surprise ending

I’ve been reading Albert-Lazlo Barabasi’s book Linked and was surprised by the ending. More exactly, I was surprised that it ended.

I’d been led to the book by a convoluted path and a sincere, if ambitious, desire to save the world. My assumption is that things aren’t going well for the planet or ourselves. Something obviously need be done.

Capitalism in the single most powerful engine for change we’ve ever invented, besides religion, but it’s helped get us into our current crisis—the one where social and ecological apocalypse looms. To rephrase Einstein, we can’t solve our problems by using the same institutions we used when we created them. Looking for tools to help reinvent capitalism led me to Barabasi and Linked by way of complexity theory.

Be patient for a moment for an extended aside. This is a game changer. Not everything in human experience is complex but it may be. Human involvement may ensure complexity. The really interesting thing about complex adaptive systems is they’re unpredictable. You can’t reduce the system to its component parts and predict their trajectory like billiard balls. There are too many variables continually interacting—coevolving—to permit predictability. You simply can’t get there from here.

Magic has been loosed upon the world by science. Magic is ultimately unknowable, unpredictable, uncontrollable. If we can’t predict the future, we can’t control it. This may not be the scientific explanation of complexity but I think it may be what impacts us most. We don’t own the future but we have a responsibility for participating, for showing up.

That responsibility led me to Barabasi’s book. Network theory may be a way of understanding complexity and a tool for leveraging complex systems such as capitalism. More specifically in my case, leveraging Microsoft.

Microsoft may be among the most enlightened global corporations, most involved in corporate social responsibility, and most experienced in changing the world but it needs to change its corporate DNA—the fundamental way it defines its own success—in order to contribute to the change needed in the world. That’s an ambition worth embracing.

Barabasi’s book gave me some intriguing clues if not a roadmap but the ending surprised me. Reading the electronic version of Linked on Kindle, I knew I was about half way through. In fact, 67% of the way. The Kindle provides an exact ratio of what you’ve read to what there is to read. At 67% I ran smack into the notes. Frankly I would have preferred the notes incorporated into the body of the book, especially since they comprised a third of the content, rather than exiled to the appendix. They would have made for some interesting digressions.

This is only a footnote In my quest to reinvent capitalism. It won’t appear in the appendix.

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Transforming Capitalism through Presence

Waking Up the Workplace

In previous generations work life and personal life were strictly segregated. One domain wasn’t allowed to intrude into another. It was considered a tasteless faux pas to bring your personality to work. Now work has intruded into the home. We’re all connected to our jobs wherever, whenever. There’s a corollary to the loss of boundaries that’s becoming obvious—we’re bringing our personal goals and aspirations into the workplace. We’re requiring that our work align with our Work—our calling, our contribution to the larger community, the greater good. We’re demanding that our companies contribute rather than merely profit.

As one in a series of interviews titled Walking Up the Workplace Dr. Otto Scharmer talks about the future of capitalism, the profound interdependence of systemic change in the way we do business and personal transformation, and the critical importance of personal purpose to a company’s success. Dr. Scharmer is a Senior Lecturer at MIT and the author of Theory U: Leading from the Future as It Emerges.

Others in the series include Barret Brown on “Conscious Leadership in Action: Research from the Trenches,” Rand Stagen “Leaders Get the Organizations They Deserve,” and Brian Johnson speaking about “Consciousness is our Greatest Asset.”

Highly recommended and especially pertinent to the goals of Net Impact.

Technorati Tags: Capitalism,transformation,presence,Otto Scharmer,Theory U,Rand Stagen,Barrett BrownBrown,Brian Johnson,Waking Up the Workplace

Net Impact

Monday night, after hours, amid chardonnay and finger sandwiches, Microsoft quietly launched the first corporate chapter of Net Impact. Net Impact was started by a group of MBA students who wanted to change the world through business. It’s evolved into numerous student and professional chapters but never before a corporate chapter.

I’m rather proud of the fact that I’m a plank owner. It’s an old concept from the Navy dating back to the days of wooden ships and iron men. A plank owner was a member of the first crew to take a ship to sea.

Perhaps it really wasn’t as momentous as it seems to me. It may be the first corporate chapter of Net Impact, certainly not the last. The non-profit’s goal coincides neatly with mine: Redefine profitability, save the world. Maybe it’s glib but it’s catchy and contains a seed of the truth even if ringed round about by a thicket of caveats.

How we define value determines our behavior. How we define profitability determines whether we continue squandering irreplaceable resources with no exit strategy in sight or build a sustainable business model, a sustainable world.

Can a company change the world? It’s a fair question to ask. The answer may impact us all.

Go Big or Go Home

There were around 20 of us gathered in a space that could accommodate 200, the Emerald Auditorium. We were there to talk about networking at Microsoft. The room was like a medical lecture hall with rows of seats descending to the lectern. The public address system was reverberating in a reinforcing feedback loop that gave the speaker’s voice the authority of God.

I’m told that Microsoft, more than most, is a company where things happen because of relationships and networks. That may seem surprising since Microsoft has the persona of a company driven by data, by logic and calculation, but it explains much that might otherwise be inexplicable corporate behavior.

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An understanding of systems dynamics is also an understanding of network effects.

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After 5 years working at Microsoft, I was there to understand how the company works. Admittedly, I’m rather late to the party but a number of things had to happen before I became interested. I had to get religion. Not belief in a set of rules that return infinite punishment for finite sins but belief in a cause greater than myself. That’s not so easy to come by at my age.

It’s my personal goal—my religion—to help Microsoft change the way we measure profitability. That’s an audacious goal, I know, but hell—go big or go home. Most were attending the lecture to understand how to advance their career. I was there to understand how to leverage the system.

System folk often talk about leverage. One definition is a point that can exert more influence than would seem warranted by its hierarchical position. I’m a project manager within online advertising at Microsoft, a lowly position without much authority but because of the highly matrixed nature of Microsoft’s organization and decision making, I can exert influence beyond my authority given sufficient passion, persistence, and attention to the network of relationships.

I’ve always been leery of networking and smoozing. Personal ambition never seemed sufficient justification for the agony of mixers and cocktail parties. Frankly, I’d rather endure a root canal. Now that I have religion, I see the value of building networks to serve a greater cause, a network that connects an increasing number of nodes where ideas can leap across distance like electricity across neurons.

I’m thinking about commissioning a bumper sticker: Paradigm shifts happen. Look at the Mid-East, dictatorships falling like dominoes. Who would have thought that possible? If the people of Egypt can reinvent themselves as a democracy, what’s to keep Microsoft from reinventing capitalism?

Is Capitalism broken?

The return on assets for US companies has steadily declined to less than a quarter that of 1965 levels while worker productivity has increased.
by Charles Thrasher

Deloitte Touche Tohmatsu Limited is the largest private professional services organization in the world—not your typical bunch of red-eyed radicals brandishing copies of Das Kapital—and yet their 2010 Shift Index, a report on macroeconomic trends, suggests that Capitalism as practiced in the last 40 years isn’t working as expected. The most powerful engine for change ever invented may be broken.

Deloitte’s Center for the Edge reports a precipitous decline in Return on Assets (ROA) for American companies during the period 1965-2010. During the same time worker productivity has increased, the value of a worker’s pay has remained flat. But not for everyone. Between 1965 and 2007 the ratio of employee to executive compensation has increased from 1:24 to 1:275. Something is decidedly wrong.

As well, the life expectancy of a Fortune 500 company is now fifteen years, declining toward five. There is a widening gap between winners and losers but even winners are barely maintaining their previous performance levels. Losers are falling out of the sky trailing a plume of smoke. They even have a name for it: topple rate, the rate at which big companies lose their market leadership. The topple rate has more than doubled. It’s getting increasingly precarious at the top.

What does it all mean? The dust hasn’t settled sufficiently to provide a definitive answer but it’s apparent that we’re in crisis. Where there’s crisis, there’s also opportunity. This may be the opportunity to reinvent the way we do business, to reinvent our entire economy, to serve the welfare of the whole rather than just the few.

Creating Shared Value

How can capitalism be reinvented to solve the catastrophic problems it’s created?

by Charles Thrasher

It’s the most effective engine for change we’ve ever invented but it can be reasonably argued that capitalism has been instrumental in creating the very challenges that now threaten our continued survival: climate change, the impending energy crisis, even over-population. How do we change our focus from short-tem stock prices, valuing profits over people, and deferring costs to future generations? Porter and Kramer have an idea.

To be fair, it’s not their idea alone. Michael Porter and Mark Kramer are the principles of FSG, a global social impact consulting firm. Is ironic that they describe themselves as global since they’re all about local. They’re also all about moving social responsibility from the periphery of corporate consciousness to the core, the living, beating hear of capitalism—profit.

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What if doing good paid well?

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Right now corporate social responsibility (CSR) is a side show, a tired pony trotted out by the PR flacks to prove to the skeptical public that we’re not rapacious capitalists while we continue to practice capitalism rapaciously. The public isn’t buying it. They haven’t been as suspicious of corporate motives since the time of the robber barons. The fact that they think even less of politicians isn’t reassuring. Porter and Kramer hope to reshape capitalism in its relationship to society by speaking to the dog, in the language of the dog, about what matters to the dog. In a word—profits.

Traditionally government has imposed regulations upon business as a proxy for a corporate conscience. Companies resist the imposition, learn ways to avoid it, a game that demands everyone’s attention but no one wins. In the language of the dog, someone’s trying to steal the bone.

Typically CSR has been an onerous obligation imposed either by government regulation or corporate image. What if it could be made profitable? What if doing good paid well? The idea is succinctly summarized in a paper by Michael Porter and Mark Kramer titled “Creating Shared Value” available in PDF format from FSG.org (free registration required) or whacked into bite-sized pages at the Harvard Business Review’s site.

The heart of their argument is that markets are defined by societal as well as economic needs. The competitiveness of companies and the communities around them are intertwined. Community costs associated with a product shouldn’t be externalized but counted in the company’s profit and loss sheet. The most obvious example is pollution produced as a byproduct where the cost of cleanup is a burden on the community.

Shared value is defined as the policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economics and social conditions in the communities in which they operate. The calculation is benefits related to costs, not just benefits alone. And cost isn’t just to the company but also harm to the community.

There may be a glimmer of hope.