Competing with Competition and the Wisdom of Starlings

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Photograph from Flickr. See the incredible original gallery here

Once upon a time, in a land not-so-far-away, a gaggle of economists thought very hard about the best way to bring the greatest happiness to the greatest number of people. They came up with some pretty smart answers: Among other things, in an attempt to increase the level of innovation, they identified competition as a useful spur and set up a system that legally protected competition, and rewarded those that won.

Except – as with all economic models – the idea is based on an approximation of reality. And while that approximation might be quite close at one point in time, the longer the model stands, the further from reality the model is likely to go. And more than that, the longer a model stands, the more likely people are to treat means as ends in themselves. In this case, competition was identified as a way of bringing about the greatest happiness for the greatest number, not as a goal to be pursued for its own sake. This is exactly what Christopher Meyer and Julia Kirby argued earlier this year in the Harvard Business Review.

With all the focus on competition, policy makers and organisations have forgotten, or overlooked the value of collaboration. In his excellent TED talk, Don Tapscott outlines his vision for an open society, based on collaboration, sharing, transparency and empowerment.

While the potential benefits for business are massive (as Tapscott’s Gold Corp example demonstrates), there is a lot of work for businesses to do to get to a place where they can make a difference. Rick Lash has argued that businesses produce the behaviours they reward; and at the moment, they reward employees who work in silos and will turn the world upside down to achieve the objective they have been set. Lash argues that a totally different competence is needed to build a collaborative organisation – one that rewards teams forsaking their own objectives for the sake of the broader organisation. He offers the example of how Apple were able to develop the i pod far more quickly than Sony developed their MP3 Walkman, because they recognised the potential of the product for the company as a whole far outweighed the projects they were working on in individual functions. Beyond that, a collaborative organisation might genuinely commit time to crowd-sourcing and incentivise employees for proactively look to connect disparate strengths in the organisation. Most importantly, organisations would put their best ideas and their biggest problems in the public domain, acting as a focal point and moderator, rather than a secretive, cannibalising black box.

The shift in mindset is massive, the legal infrastructure for it to work is nearly non-existant; but it looks to be the right model – the means to our ends for our time. And it’s on its way (see the UK government’s brave decision to make all scientific papers free to view)! If we can build half the enthusiasm for collaboration that we have had for competition over the last century, the possibilities are massive.

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Sustainability in our time

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I read a piece this week using Neville Chamberlain’s “peace in our time” speech as an analogy for the “Future We Want” document that emerged from the Rio +20 Conference. It seems apt. The final paper at the summit suggested that “sustained development” (not the blue economy; not sustainable development; not even an end to fossil fuel subsidies) is the solution to climate change. That our political leaders met to find a solution to climate change and committed to the myopic course of action that has brought us into peril in the first place is the most shameful and dangerous abdication of collective political responsibility since failing to ask Hitler what he planned to do with all those Panzer tanks.

Many have pronounced a multilateral solution to climate change as dead. One of the more interesting developments at this summit was the increased engagement of big business. The profoundly disappointing efforts of government to produce anything relevant has re-focused many on the role of business in tackling climate change. So what might that role be?

Jeffry Sachs has quite concisely articulated the benefits and drawbacks of business’ current role in society; and it seems a sensible place to identify the particular areas business can engage in. First, the core strength of business over the past century has been in getting things done. Nobody is better placed today to create solutions to the climate challenge than organisations like Shell, Siemans and GE. Not only do they have the financial capital to make things happen, but they have some of the smartest, innovative minds in the world, and world class R&D processes designed to produce tangible results.

The most positive development in this space at Rio was the emergence of the Friends of Rio group, looking at multi-stakeholder collaboration and whole systems change. Combining business’ funding and delivery focus with Civil Society organisations’ values and experience with non-monetary deliverables, the possibilities are intriguing.

Secondly, there is the question of separating business from politics and stopping business from writing its own rules. In the words of Peter Bakker, we need to “change the way we think about business performance and align the business with the world we want to create”. At the moment, this charge is being led by an “enlightened few,” including the likes of Unilever and Puma. Businesses need to start thinking this way themselves and must be open to regulation in this space.

Tragic as the failure of the multinational process at Rio is; if the scale of the shortcomings is enough to force a “crowding in” effect from big business, Trade Unions and other non-traditional stakeholders, then perhaps all is not lost.

The Empathic Civilisation

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The above video triggered some interesting thoughts for me on the links between empathy and organisational change: Rifkin suggests here that “Empathy is our ability to show solidarity with each other” and that is it “grounded in our rooting for each other to flourish and be.”
There is a wealth of research in the field of evolutionary psychology suggesting empathy exists because it helps those that have it to survive. It is easy to imagine how an ability to put ourselves in each others’ shoes and root for each other has helped us to co-ordinate our interests, collaborate and organise. And it is easy to take this a step further and imagine how organised, collaborating, empathetic individuals gave themselves a load of advantages over others.

How does empathy work? By listening to each other, we can better understand each others motivations. This allows us to create knowledge, understanding and meaning that enables co-ordination of our actions. In other words, empathetic dialogue is all about historical/hermeneutic knowledge.

This is nothing new in itself. Iban Mayo was championing the idea of listening to employees and allowing them to engage in the change process as far back as the 1930s. The issue is that much recent literature still relies on Taylorist notions of rational managers identifying the correct path for change and overcoming resistance from employees who are attached to the status quo. There is an unspoken fear on the part of managers that allowing employees to design their own change will lead to off-the-wall suggestions, founded on employees’ rational pursuit of laziness and self interest.

But thinking of ourselves as empathetic first and rational second suggests there is a lot more give in the system. It suggests that in the face of external change, we are not inclined to steadfastly pursue our own self-interest, but that we are “soft-wired” to find a new way of working together.

So, assuming collaboration is still sensible in changed circumstances, people are pre-disposed to find a way to make it work. Facilitating an empathetic discussion will enable people to make sense of the change and build the hermeneutic knowledge they need to give their best in the new environment.

Letting go is always frightening for a manager, but thinking of employees as empathetic human beings is a very helpful first step.

Both Engagement and Change

Everyone loves employee engagement. It’s not only common sense, but repeatedly demonstrated in research that employees who are engaged perform better.

CIPD finds that high employee engagement is associated with a range of positive outcomes, including better performance, more innovation and higher retention rates. The Corporate Leadership Council reports that highly engaged employees work 57% harder and are nine times less likely to leave than highly unengaged employees. They also demonstrated that engaged organizations averaged 20.1% revenue growth over three years, compared to 8.1% growth in a control population.

And yet and yet and yet… When it comes to change, the text book goes out the window and all the value is forgotten. Accenture suggest that 57% of organisations experience a downturn in productivity during change initiatives.

Why? It is well accepted that the most powerful driver for engagement is employees finding meaning in their work. Thus engagement is fundamentally linked to an organisations core purpose and values. Any change which is perceived as a challenge to this purpose is liable to have a negative impact on engagement and performance.

For employees, organisational purpose and values are manifested every day – in how co-workers are treated, in how customers are served; in the factors considered when making any decision in the orgainsation.

When re-designing a process has an impact on these surface-level manifestations, it is highly likely that the change will also impact employees’ interpretation of organisational priorities and direction. Thus, while changes to organisational structure or personnel may be conceived to impact financial metrics, they can have unforeseen knock on effects on employees’ identification with organisational purpose and thus on their engagement.

So how to do better? Again, this is where co-creation of plans, strategies and meaning becomes so valuable. Rather than planning a change in a small team, then communicating the fait-accompli to the organisation at large, invite the whole system to contribute ideas and thoughts to the change. McKinsey offer some interesting examples of large organisations looking at this already. Letting go of control like this is incredibly hard to do – especially in a traditional, large, command and control organisation. Then again, 20.1% revenue growth over three years, compared to 8.1% is a devilishly persuasive argument.