The Integral Economy Framework

Transformative efforts in companies require a lot more than changing behaviors on the surface. Nothing new. Without a deeper change, new behaviors by themselves won't last long. Nothing new again. A more enlightened approach calls for understanding the invisible forces, principles and assumptions driving companies. They originate from the principles and assumptions of the economy. The why of the economy, in turn, originates from how societies understand the meaning of business. Finally, the meaning of business originates from our understanding of our needs as humankind.

Let this iceberg help you adjust the course. It will tell you why transformations struggle. It will open up a space to lead the dialog on the necessary change. I call this iceberg The Integral Economy Framework.

The Integral Economy Framework helps understand the visible behaviors of companies as a result and a consequence of the deeper / hidden levels of logic that we have created based on our wisdom.

Every existing model of the economy can and should be evaluated using the Integral Economy Framework, first as its validation, second to ensure transparency of all levels of its logic, not just the level of Business Behaviors of companies. Only full transparency allows to assess coherence and intentions of a particular economy model.

Conclusions. A transformation is required on a much deeper level. This transformation is not about how we do things, aka "Speed & Value", but why we do things and what the meaning of the things we do is. 

Once you can see through stereotypical biases and get it right, there is no way back. Once the deep shift happens, it becomes easy to build on the deep change, help it bubble up and manifest itself in behaviors of companies.

Throughout this year, 2023, I speak and run workshops about Good Companies Economics, based on my book, about the most important transformation, the one which is closest to my heart.

Wroclaw, Poznan, London, Amsterdam and Warsaw. Next is Scotland, and then Copenhagen.

I am thankful to these who help me spread the news.

Role of Leadership Teams at Scale

The role and nature of leadership differs depending on the size of a company.

In small companies, everyone is a leader. People have direct access to the Source - the primal purpose of the company. Oftentimes, they were among the initial cohort that founded the company, or were hired as the first after co-founders. In such an environment, it is natural to be driven by purpose and play multiple roles. Thus, it is natural for everyone to be a leader and participate in the organic dynamics of peer leadership and situational leadership, stepping in and out of this role based on skills and interests. I call this leadership dynamic, an organic leadership.

This is by far my favorite environment, which mimics life dynamics very closely. Notice that in our lives we play multiple roles, e.g., fathers or mothers, husbands or wives, shoppers, chiefs, renovators, taxi drivers for kids, romantic lovers, etc. Also notice how we share the leadership role with our partners, neighbors, and local communities.





What about leadership in big companies, a.k.a. leadership at scale? To some extent, big companies can copy the blessed dynamics of organic leadership from their smaller cousins. The divide & conquer principle is a mechanism to achieve this via tribalization and delegation.

As long as big companies understand the natural beauty of organic leadership, and would like to copy the dynamics, there are limits to this copying. The vertical structure is a clear limitation. As long as organic leadership can blossom on a single level of an organizational structure, it is difficult to replicate it across levels. Leadership at scale enforces intentional leadership - senior managers need to assume they will not be able to interact with every individual and every team directly. The techniques and tools of communication need to take this landscape characteristic into account.

Hierarchy and structure introduce containerization and divisions, which define boundaries for organic leadership. The further up the hierarchy we take into account, the more pressure and ego are at play, and the more individuals are expected to impose their will and control to deliver the results expected by shareholders. Inevitable division between the powerful and the powerless starts to play a dominant role in defining the style of leadership.

In parallel, as another limitation of structuring, big organizations are simply addicted to imposing strict and narrow roles & responsibilities, fixing the scope of their expectations of individual contributors to be experts in one or few disciplines. This is already visible during recruitment processes, which are usually focused on hiring individuals possessing specialist skills ready to be exploited here and now. A talent-oriented approach to hiring is, in my experience, a myth. Conformance to the existing culture and leadership style is oftentimes a non-verbalized requirement.

All the circumstances above act as filters that narrow down and weaken the will and opportunities for individuals to use their organic leadership.

Accepting, for the sake of this discussion, that these aspects exist as a part of the reality of big companies, the question about the role of leadership in big companies remains relevant. Senior leadership teams still have a key role to play. It is a part of their responsibility towards each single individual who spends their irreversible time trying to contribute to a company.

In my opinion, the key role of leadership at scale is to tell a compelling story. A story of why it is important that we are all here and of what it enables in the future. The compelling story opens up and enables employees to build their identity as employees of a particular company.

Identity is one of the highest levels of the Dilts neurological levels model.

Employees driven by their identity are attracted to the goals of a company with unmatched strength. They are able to go through daily burdens and systemic crises much easier. In fact, to some extent, they are liberated from focusing on what’s not working and focusing on what needs to be done. Such reframing makes their lives easier and makes them see the meaningful goal and not the obstacles. The story enables them to grow.

Identity bonds individuals with organizations, makes it easier to socialize, to feel needed, and, in the end, to contribute. Identity is born of a compelling story provided by a leadership team. If you are a leader, start your day contemplating what story you offer to the people you lead. How do you express the story, and most importantly, how do you live this story?

The task seems simple, yet it gets obscured easily without proper attention, reflection, and action. Maintaining your ability to be consistent and persistent in sticking to the story you share requires a dedicated effort. Make sure you devote proportionally relevant time to this task individually. Make sure you devote proportionally significant time to this task as a leadership team. Invite HR people into this conversation. Make it a habit. Etc, etc. I am sure you can handle the how and have plenty of your own ideas by now.

As an executive coach or advisor, make sure to prioritize maintaining the leadership story on the leader’s agenda. It has a higher chance of paying off in the long-term than many of operational activities you need to support, like performance optimization, urgent interventions, crises management, etc. Establishing the mechanism propelling a compelling story will make your work more fulfilling, not to mention - easier. I argue that a compelling story is a necessary condition in the journey of creating a healthy organization.



Photo by Michał Parzuchowski on Unsplash

This article was also published on my LinkedIn page.

The Good Companies Economics - 11 Paradigm Shifts within the Integral Economy Model

Why seeking redemption, or 'giving back', has been the mantra of successful business people while they should, and promisingly could, focus on changing the game!

Really, why is that? Why are so many successful business people blind to this option? Why does it take half of a human life to realize the simple truth that the only thing that matters is to Leave This Planet a Better Place? And why, even when conscious of that, do they pursue the wrong path?

I dedicated my Good Companies book to research this, and our other surprising blind spots, and irrational actions of business world today. I come back from this journey with an overwhelming load of evidence of our foolishness, but also as a new rebuilt me, with the reinforced agenda to change it! There are many calls for us to wake up and many aspects we need to revisit.

The alternative implementation of all the levels of the Integral Economy Model, or IEM in short, I present in #goodcompanies book, offers an alternative approach. Rooted in our deepest humankind needs of fulfillment by Leaving This World a Better Place, it restores the meaning of business and the economy as tools in hands of societies, as #transformation agents and as vehicles which will drive us to a meaningful future.

The roots of these otherwise irrational behaviors are located in our value systems, i.e. in the Mental Model of Humankind, in the Societal Meaning of Business, and in the Mental Model of Companies. In order to change the behaviors, we need to start transforming ourselves as humankind on these three invisible levels of the iceberg.

For example, we are trapped by our understanding of success, and by its relation to happiness, purpose and fulfillment in life. We are trapped by our understanding of the role of companies, business and the economy for societies. Also, we are trapped by our anxiety, a.k.a. the Civilizational Debt, caused by the pace of change on this planet. Yet, predominantly we are trapped by the belief of our impotence - that we are too small, and the system has been too dominant for us to change it.

The choices our grandfathers took when they were building their world are no longer helpful. It is time to contribute our generation's best and update these choices for the sake of the future generations.

Otti, thanks for the inspiration for this post in your post. p.s. Well-designed personas, I must say! - a medieval baron, a lawyer, and a businessman. A representative set indeed 😂

Two Transformation Intention Checks

I think we all deserve a dose of vaccination against glorification of "arbitrarily chosen shared values" as the pivotal transformation axis.

What resonates strongly with me in Otti's post are the two elements that open up space for trust and prove the intentions of originators of a transformation, namely

1. the need for redistribution of power and wealth, and
2. the goal of mitigation of the root causes vs taking the risk of reinforcing a rotten system

These two Intention Checks, as I decide to call them, are core to bear in mind, strive for, track and validate continuously when designing and leading a transformation.

These two Intention Checks are also promising candidates for becoming the pivotal transformation axis, and for becoming an explicit element of a transformation contract.

And also, these two are the litmus paper test, or smell sensors, of openness so necessary in organizations.

See also LI posts to read the whole discussion.

Myth Busters Series: VUCA SUCCs (sucks!)

I need to admit I have long felt uncomfortable with the VUCA world framing. At some point I discovered more people not quite happy with it. (e.g. see the post of Dr Claudia Gross here.)

Historically, the VUCA term was originally coined in geopolitical context to frame leadership theory during the post-cold-war era. Its first application was in the context of military leadership at United States Army War College. (Wikipedia will introduce you to the story best.)

But then VUCA was quickly adapted by management consultancies which transferred the term into the business world. Equally quickly it became a buzzword in the context of transformation, a buzzword aiming to create a sense of urgency for a change. 

I never felt comfortable with how VUCA is used in the business context. Here goes why.

First, it brings wrong metaphor of military leadership, battlefield, etc. Companies are not battlefields for me. The framing in consequence implies focus on operational context, which is important at a battlefield, while I believe companies currently need strategic awakening. All the effort to make companies operationally excellent forgets that it is direction of development that matters in the first place. Speed of operation will build up as a consequence of people's deep connection to the direction.

Second, I saw VUCA being used as a technique for creating an artificial sense of urgency by consultants and managements of organizations. And there is little worse than that - after a few times of using this technique employees grow cautious of the intentions behind the technique and grow immune to similar "change marketing" statements. They become untrustful and thus reserved to enrolling in successive transformation efforts.

Anyway, enough on the old VUCA. It's neither a good metaphor nor a good starting point.

What is true for me in the business context is the following: Simple, Unequivocal, Consistent and Certain (SUCC). Let me bust the myth of VUCA and demystify its individual components one by one while introducing their SUCC counterparts. 

Volatile? - Our efforts are rather persistent and Consistent - we have been very determined in implementing the technological layer between us and the natural environment. And yes, we have been consistently yet unconsciously suffering from the effects of this separation (see Awakening from the Meaning Crisis by John Vervaeke)

Uncertain? - our future is Certain - we are going to cause the extinction of humankind and the planet or at least cause irreversible changes to those.

Complex? - our world is pretty Simple. We are all, i.e. individuals, societies, governments and institutions, slaves of the economic system we have created, (see the lifetime works of Professor Stefano Zamagni), The economic model is based on our atavistic, reptile-level assumptions and principles. And yet we are not capable of changing it.

Ambiguity? - our world is Unequivocal. We have been destroying the planet and ourselves being stuck in the mental frame of exploitation. What also is unequivocal is our lack of capability to accept and understand the results of our actions. 

This bias in our collective understanding, the blind spot, the degenerated least common denominator of supremacy of humankind which we agree to be the cornerstone of the collective understanding, is exactly the root cause of why we have been hurting ourselves and everything around us.

All right, so how do we use the new SUCC acronym? I suggest we stop the destructive self-deception and replace the false VUCA business world framing with the VUCA SUCCs demystifier.

This is not to celebrate our SUCCess in this very focused and determined effort of our worst collective ego to exploit the world as a defense against the made-up threats of VUCA. What I mean is to stigmatize VUCA once and forever.

Stigmatize it with what calls us so strongly on individual level, with what everyone of us feels, senses and experiences through listening to our inner voice - how this VUCA journey SUCCs (sucks)!

From now on I am always going to use these two acronyms together - VUCA SUCCs.

#goodcompanies 

XP2023 Amsterdam conference Experience

I had a chance to participate in XP2023 conference in Amsterdam. It was a unique experience, that's why I am writing this blogpost.

Let me share it with you. XP2023 Amsterdam conference was an experience of slow food in a good restaurant versus fast-food I experienced at typical theater conferences. 

What I liked best was that the whole conference felt like a family gathering. Quite a big family :) 

I also liked the fact that speakers were present, available and approachable throughout the whole days. For example, I easily got a one-to-one time with Dave Snowden in the lobby, shared a table with Michael Hamman, and Scott Seivwright was sitting in the first row during my talk! How cool is that? 

Speakers actually participated in their tracks from the morning till the evening. And then they participated in afternoon meals and drinks, and all the chatting that was going on. It was so different from a typical conference experience where speakers are just speech delivery cogs in a bigger talk-delivery machine: come just before and disappear right after their talks. The presence of speakers contributed to the atmosphere of being collectively completely immersed in the flow of the track.

The presence of conference track owners was also a very positive experience. They owned and shaped their rooms. Their presence was starting in the mornings, often with a check-in with speakers, and they also stayed in the room throughout the day. There was no template they followed, everybody was herself or himself bringing their personal style, and open inclusive hearts, and auras into the room. As a consequence, each track had its own personalised atmosphere. 

And guess what, there were no headless chickens running around trying to fix something at the very last moment :) 

Honestly, there is a lot of inspiration in the work of the XP2023 team. I'd definitely try to recreate many aspects of this experience once I organize a similar event.

p.s. And this is Sabina and Torsten, Chairs of the Leadership track, collecting feedback from Janusz and myself on our conference experience. Yes, we do keep in touch!

UNMESS book by Morten Elvang

UNMESS book by Morten Elvang is the best piece on lean portfolio management I have read since the release of SAFe LPM.

I had a chance to read the book on my way back from #XP2023. I like it a lot. For precise language, for funny bits of dialog with the reader, for jargon vocabulary one can only learn in the field, for the 5 questions, 3 interactions, connections to #cynefin and for the dancing metaphor.

Introducing the Collaborative LPM, the author managed to cross the "framework / process feel" which is present in SAFe LPM and navigate me as a reader through Complex area of Cynefin. CLPM fits there naturally as it is aware of the nature of complexity in this quadrant and applies the style of action recommended by Cynefin. This is a powerful promise to me. I'd really like to see CLPM in action!

The Joseph Pelrine's Mentoring Codes

About a year ago Joseph Pelrine shared his thoughts and reflections on mentoring in this LI post. 

After a year I find myself coming back to it regularly. The mental frame is generous, developmental, and resonating. I copy it here to spread the word and, honestly, for easier reference for myself. In the same spirit of easy referencing I dared to coin the name for this frame.

So, ladies and gentlemen, without further due, here is the copy of the original post of Joseph. 

The Joseph Pelrine's Mentoring Codes 

Some thoughts on mentoring. During a recent conversation with a young friend, I was saddened and shocked to hear that they were looking for someone to mentor them, but all the people they asked demanded lots of money to do so (n.b. they work in a completely different field, so I can’t help them). 

I guess I’m stupid. I could have earned a lot of money from the people I’ve mentored. But I don’t work like that. For me, 

helping others is a social norm and a moral responsibility

My mentoring doesn’t come free of charge, though. I ask for 4 things from the people I mentor: 

1. Make me proud of you. Always strive to do your best. You won’t always succeed, but I’ll help you learn from your failures so that you get better. 

2. Don’t go dark on me. Stay in touch with me and let me know how you’re doing, especially if you’re not doing well. Sometimes we can pick up subtle clues to potential problems that will help us get better. 

3. Look for opportunities for us to work together. Even though I’m not asking you for any money, I don’t mind if your company or your client supports our work financially 

 

4. Pay forward. I’ve only gotten to where I am because my mentors gave freely of their knowledge, and only asked of me what I’m asking of you. As Edith Piaf (supposedly) once said: "when you've reached the top, send the elevator back down for the others".

p.s. Joseph has remained our guru since the dawn of resonate. 

Leadership and management by Henry Minzberg

I am throwing at you a few thoughts on leadership and management that I selected from the interview with Henry Minzberg. There is more in the interview and I encourage you to spend more time on it. 

Quotes:

The trouble with leadership is that it implies an individual. When you say leader, you do not mean a group, you do not mean a community, you don't mean several people, you mean someone. And it's hyper individualistic. And what we need is a community shift not leadership.

Leadership for me is also an intrinsic part of management. They are not separate. In order to manage you need to lead. In order to lead you have to manage. Managers who don't lead are boring. Leaders who do not manage don't know what's going on. So those two things are intricately tied together. But we need to get to the community shift - we need to get to this idea that organisations are great because people are truly pulling together. By paying CEO 300 times more than an employee you are not sending this message, you are sending an opposite message.

Years ago I used to go around giving talks about what’s wrong with MBA programs. And finally people started asking: what are you doing about this? And I used to answer I am an academic, I am not supposed to do anything about anything, I am only supposed to complain.

I maintain that MBAs train the wrong people in the wrong ways with the wrong consequences. The wrong people because at the beginning the assumption is they are going to create managers or leaders. Nobody has ever created a leader in a classroom. Nobody has ever created a manager in a classroom. Just as nobody ever created a swimmer in a classroom. You learn to swim in the water. And managers learn to swim by being managers. And only there they can be developed. So we need much more of an involvement and learning from experience.

To learn management, forget learning leadership, nobody learns leadership, start with people who understand management, and then emphasize not the science of management, of which there is little, but the art of management, and particularly the craft of management. Management is about experience. Sit around the table, share the experience, reflect on experience, and learn from each other.

Full material, thanks to Antoinette and Otti from goodorganisations.com is available on their website.


p.s. There is also an interesting continuation into how managers should approach their learning, based on example of strategy formulation following the leadership section which has a selection of beautiful and refreshing thoughts. E.g. Ikea strategy invention, analysis vs synthesis approach, etc. It starts right after the leadership section, approximately 1:30 hours into the interview.

ESG Transformation - making it work and be impactful

“Scratch the surface of most cynics and you find a frustrated idealist — someone who made the mistake of converting his ideals into expectations.”

― Peter Senge

Is ESG going to significantly impact #the-necessary-transformation or is it just #follow-the-herd reflex?

The story of Tariq Fancy is an example of what happens when one tries to start a transformation from a wrong starting point - from the frozen middle of beneficiaries of the current status quo... 

One player of a bigger game cannot simply start playing by some other rules of the game than the rest of the players during the game - all players need to start a new game based on the new set of goals and principles, and on a different pitch too. 

The necessary transformation needs to start from redefining the rules of the game on a deeper level. In my Good Companies book I advocate for the rules of the game to be derived from a meaning making system. We need to start from Humanity Purpose, and only then redefine the Societal Meaning of Business, and only then deriving the New Mental Model of the Economy, and only then we can expect different behaviours of companies.

Please find the reference to the original material @medium.com here:

The Secret Diary of a ‘Sustainable Investor’ — Part 1

By Tariq Fancy
August 2021