What’s Love Gotta Do With It?

Beyond Agile: Crafting the Organisations of the Future

This is the final 2020 version of my presentation offered at a number of global conferences during the year, building on my previous articles on Agile Learning Organisations. I have further sharpened my views on business ethics and culture as the core “energies to fuel” responsible organisational transformation, and started to add more practical suggestions, e.g. in terms of performance management. This presentation was presented at the wonderful STRETCH Leadership and Management Summit — slides can be retrieved here and the recording is visible here. As always, I much appreciate any feedback or comments.

A Decade of Enlightened Leadership

Thank you very much indeed! It is a great pleasure to be here with you and a privilege to speak at such a wonderful conference in these historic times. And I am very happy to be here with so many leaders and managers, because I truly hope this will become a decade of more enlightened leadership.

I feel very strongly — and maybe you feel it as well, that in these days of anxiety, of big questions, of challenges and pressures, of risks and opportunities and of momentous redefinitions and tradeoffs like seldom before, organisations need guidance — and not only organisations but also our society at large. I believe as business leaders we have a unique opportunity — and also a responsibility — to step “beyond” ourselves, and also to support each other with lessons learned and new ideas, to shape a more sustainable future. Yet, I also feel that many of the topics we are discussing at our conference have been around for many years and I would suggest it is really time to get going. We’ve got our toes in the water and now we really need to pull through!

So, without further ado, let us dive into the wonderful world of business transformation. Our world is indeed becoming very complex and I would like to ponder with you about a conundrum that has kept me personally awake during the last ten years: How we can create organisations where work is truly meaningful and where we both enjoy our daily jobs and contribute to a sustainable future for our company, our sector and society at large?

• And I believe this is important. Whilst this so-called Fourth Industrial Revolution is literally “taking the world by its ears”, our organisations have collectively produced numerous outcomes that nobody really wanted — burnout and loneliness, inequality and hunger, and ecological collapse. And by some estimates, more than 7 trillion dollars are wasted every single year, globally, due to employee disengagement.
• And if that was not enough — whilst mankind is facing a historic inflection point, 56% of global citizens believe “capitalism does more harm than good”.
• Hence, we urgently need to take a step back and reflect, and I would like to share with you a few thoughts on three simple questions: Why are we really here? How can we evolve our organisations to achieve our true purpose? And who do we, each of us individually, need to become in order to make it work?

From Profit to Purpose

Interestingly, I very often encounter people who tell me very earnestly that they deeply desire to become more Agile or “Teal”, without ever really asking themselves the question why.

• That is not surprising, is it? We have created a seductively materialistic and individualistic narrative in our western society, where self-interested growth, productivity and stock prices have become ends in themselves.
• In a “pandemic of busyness” we have often succumbed to that hedonistic treadmill of money for money’s sake. People start to work ever longer hours to attain status, social acceptance and wealth, just to find out that it does not really make them happier.
• And in creating ever greater riches, arguably for far too few, we have often ignored ecologic externalities, just to discover that our mother planet is at the brink of bankruptcy and the collapse of global climate will threaten the livelihoods of millions.

So, what do we really believe in? What do we really stand for?

These questions are both existential and fundamental. We create organisations for a purpose, to achieve something together which individually we could not achieve. And I strongly believe that 50 years after Milton Friedman’s famous essay on business, both personal and organisational “success” must transcend a quest for money and shareholder value.

• As Colin Mayer maintained at the WEF this year, the true purpose of organisations is to “solve the planets problems, profitably”. It is not just about profit and endless growth, but also about an inclusive and sustainable economy for all stakeholders, and about becoming good ancestors for generations to come. Not just bigger, but better.
• And it’s not only about what we do, but also how we do it. In a world where traditional communities of churches and neighbourhoods have been eroded, where scientific management has filled gaps of meanings with a gospel of growth, and where work has become so central in our lives, I believe businesses have to step up. As Immanuel Kant warned us a century ago: “human beings must always be treated as an end in themselves, never as means”, never as cogs in a machine.
• Not as a question of marketing or charity, but as a matter of morality and justice. Exploitation and inequality are not economic laws, but inherent failures of our economic system. We must evolve societal and organisational success measures beyond GDP and Profit-Before-Tax.

Therefore, I believe we all must ask ourselves: are we and our companies net contributors to a “quadruple bottom line”? Are we making a meaningful and measurable difference? Do we have processes in place to evaluate and balance major projects against our values? If not, let us take an action. Leaders must accept the accountability to foster the conversation about integrity and values in their companies - leadership is ethics. Maybe we should consider a “Hippocratic Oath” for management — managers and leaders cannot remain morally mute when our very existence on this planet is at stake.

Today, we need human-centric and eco-centric organisations more than ever to provide a place of meaning and community, where people can grow and flourish, and attain a positive collective purpose, together.

From Bureaucracy to Humanocracy

Actually, I do believe many people today agree with such an ambition, but struggle to understand how to evolve from where they are. As a result, change is slow. And, whatever consultants might sometimes suggest, there are no simple answers — like people, every organisation is different.

• However, I strongly believe that we cannot simply continue as before. We live in an ever more complex world — facing ever-faster changes, advances in technology and data, shortening half-life of knowledge, and ever greater global interdependencies.
• Some researchers maintain that “65% of the future professions of people entering primary school today do not even yet exist.
• So, in these New 20ies we must let go of the illusion that work can be predicted or planned in detail. As BCG suggested, the companies that will win in the 2020ies are those who can “compete on learning”.
• From a paradigm of “scalable efficiency” that has dominated our businesses since the industrial revolution we need to transition to a new world of “scalable learning” and development. From competitive to “adaptive advantage” and from closed systems to boundaryless ecosystems.

The simple truth is that our world has become too complex to be controlled through bureaucracy. We cannot “stand on a mountain top and preach strategy down the hills” to achieve successful execution. Hence, we need to revise how to create organisations that can do both — compete successfully and attain the purpose we desire. Those liberated organisations of the future must be able to create an environment where people can and want to make a difference, in order to harness ideas from everywhere. In order to thrive, we need to both embrace uncertainty and maximise human flourishing at work, rather than just driving efficiency and productivity.

From Domination to Dialogue

But how do we get there? In my experience, in order to enable self-organisation and organisational learning at scale and move towards a “teal paradigm”, we must have the courage to re-design work, adapting the context for our teams at multiple levels — in terms of structure and management processes, and organisational practices. Yet, above all, instead of moving the proverbial “deck chairs on the Titanic” and redrawing organisational charts, we need to consciously revise the distribution of information, knowledge and power.

• Existing systems often distort or suppress information. In the future, we will need to move information not just upwards, but everywhere — as the say at Viisi, “radical transparency” should prevail: “Everything is public unless its harmful”. So that strategy becomes a firm-wide conversation. Ambiguity and silence are the biggest enemies of integrity — why should our management meetings not be open to everybody?
• In terms of power and structure, central authority simply does not lend itself to decentralised experimentation and learning. At ING, we were one of the first banks to roll out Agile at scale, globally. And as we demonstrated, Agile can provide more flexibility within the pyramid, enabling self- organisation and cross-functional flows of information and decision-making. But I have also seen many agile implementations struggle because they never dealt with existing power or ownership structures.
• Following on from Agile, I believe we will see more “ambidextrous” organisations that can enable exploitation of the existing and exploration of the new, but it won’t stop there. We are already witnessing experiments with meshed and adaptive networks of teams, market-oriented ecosystems and micro enterprises, like at Haier, and interconnected circles in holacracy and sociocracy.
• In terms of management processes — organisational learning requires both order and freedom. Bill Torbert speaks of “liberating structures”, like principles, roles, routines, rituals, methodologies — to enable and host “generative dialogue” involving as many people as possible.
• Often ignored, learning also entails mechanisms to manage creative tensions and conflict — innovation at its core is “creative destruction” and if we just sweep disagreements under the carpet we will be ruined by our own empathy. We need “constructive impertinence” and a “healthy disrespect” for group think and bosses. However, by its very nature, total consensus would overwhelm complex systems and hence we need procedures to explicitly foster collaboration across diversity and attain not consensus, but consent.
• Finally, we must adapt sometimes anachronistic HR and finance practices. Support functions must become agile — but not just by organising in tribes and squads, but by adapting their support process to truly enable learning at scale. A lot of these processes carry “symbolic valence” and have huge contextual impact.

From Performance Management to Co-Governance and Co-Elevation

One process I believe requires special attention is Performance Management, as it is often the cornerstone of an outdated behaviourist worldview –

• Target Setting: rather than a top down cascade of numerous KPIs at the beginning of each year, trying to control the uncontrollable, we need to invest in bottom-up contracting, for individuals and teams, not only of what we do but also of how we work with each other. OKRs are a strategic and collaborative management approach, not simply a new MBO. In Finance, we need to evolve sometimes rigid financial mid-term planning and resource allocation processes towards “beyond budgeting”. And from annual goals we must move towards recurrent sprints.
• In terms of Performance Feedback: here, engagement needs to become continuous and facilitate self-reflection and peer coaching, and evolve from “feedback” towards strength-based “feed forwards”. Focus moves from individual high performers towards team dynamics. As Manfred Kets de Vries often remarks, “many leadership teams are dysfunctional”.
• For Performance Appraisals: we must revise and let go of those rankings and ratings! There is ample literature proving these simply do not work!
• Finally, leadership recruitment, development, promotion and reward must be highly based on ethical values and relational skills, not just conformity and ability to control. And in L&D we should explore peer-to-peer learning and transparent, skills-based compensation.

Of course, we must also digitise support processes, but above all we need to install the mechanisms and mindsets for agile co-creation, in order to truly serve our employees. And maybe this is eventually the moment to rename “Human Resources” — which as a name certainly does not appropriately reflect the value our HR colleagues can bring!

Yet, we will need to remain aware that we cannot just copy and paste “best” practices — as I said, every organisation is unique. Hence, more than providing simple answers it is critical to enable an environment where people can and do ask the right questions and collectively experiment and evolve.

Together, let us liberate our organisations! So that over time, they will become laboratories of ideas, integrating “action and inquiry” into everything we do, always sensing and exploring and experimenting whilst we are moving — in teams and in “peer communities” of learning.

Deliberately Developmental Organisations: From Agency to Activism

But there is more. In my experience, adapting the context does not necessarily mean that people will accept ownership. So how can we truly unleash the creativity of our people?

For decades, we have been trained to see humans as strictly rational consumers in economic markets. In our businesses, we have treated people like easily replaceable human “capital” or as exchangeable “resources” to be controlled. As a result, more than 75% of employees feel disengaged. Going forward, in order to build adaptive learning organisations, we truly must put people first. We must re-learn to cherish their uniqueness and design our organisations to fulfil their basic human needs: their sense of orientation, belonging, autonomy, self-esteem. True success is only when every human being at work has the ability to develop, use their creativity and have impact. When agency becomes activism.

This won’t be automatic. In a world where we are all ‘required’ to wear many different masks, our public identity has become disengaged from our inner life and it has become challenging just to ‘be’ with ourselves and with each other, resulting in dualism and tensions. In a recent survey, 76% of global executives reported they had difficulties in making connections with work team mates. Here, I would suggest that everything we call “mental health” is fundamentally related to interpersonal processes — “all problems are relationship problems”. Which also explains why we are seeing such an impact of the pandemic.

Therefore, in deliberately developmental organisations we deliberately invest in helping people to go below the proverbial iceberg, individually and collectively, and recognise their own biases and needs, anxieties, attachment styles, defense and copying mechanisms — to grow their ability to work with and care for others, to make conscious decisions, and to co-generate meaning and value in service of the community. Our “inner game is our outer game”. Or as Frederique Laloux says: “We can only go far into the “we” if we fully inhabit the “I””.

Eventually, by matching desires and competencies of individuals with meaningful activities we can enable “flow”, personal development, and ultimately happiness @ work. It crucially matters how people think about their lives: when people are happier, they “don’t just act smarter — they are smarter”. Yet, happiness, as Aristotle suggested, is not about pleasure, wealth, income, how many followers we have on twitter, or always getting everything we want — but it is about growth. It is about growing our character in a lifetime of personal development, the cultivation of those virtues and relationships that make us good human beings.

Organisational Culture: Cultivating Consciousness — From Fear to Love

This brings us to organisational culture. Let me ask you, do YOU feel you can truly bring your ideas to the front rows of your organisation? If not, you are not alone. Only 20% of people believe their opinion counts and 70% report new ideas are met with hostility!

As people often suggest, culture is “the way we do things around here”, which arguably is not very precise. For me personally, culture relates in particular to how we treat each other and what we truly care for. If we want to develop human-centric organisations, we need to actively foster an environment of psychological safety, openness, community and compassion where people truly commit to co-elevate. Culture is not just a poster on the cafeteria wall and, frankly, I have not seen many “strong” corporate cultures. So, do have a look at your own calendars and verify how many hours you are spending “on culture” with your team every month, especially in this new way of working!

The bottom line is that we have to become intentional and conscious about culture, not only inside the organisation but across our entire ecosystem, not only from the top but inclusively across all teams. We need to collectively create a space to revise and explicitly contract organisational culture. As they say, culture eats strategy for breakfast: if we fail to manage our culture, then our culture manages us. And “we become that breakfast”.

I strongly believe this requires a change in metaphor — instead of optimising organisations as “machines or behaviourist training grounds”, dividing information and power, specialising and ruling with carrots and sticks, we need to start acknowledging organisations as complex developmental systems, as “living organism”, with minds and hearts and souls. Where deep emotional bonds of community and trust prevail and where individuals and teams experience, learn and develop together — in service of a regenerative purpose. Where influence and authority are different from rank and position and where employees have freedom to experiment — where many more people become their “own CEOs”. From doing to being, from fear to love. More than in structures, methodologies or tools, the difference lies in core principles. In Humanocracies, “the business of business is people.”

Leadership: From Ego to Eco

This is where in my experience most of our organisations seem stuck. Why? I regret to say so, colleagues and friends, but I believe it is often because of us. Leaders create culture with every word they say and every move they make. Hence, the maturity of an organisation can never transcend the maturity and consciousness of its leadership. If greater consciousness doesn’t operate, a system does not possess the stability to let go of the past and transition to a new model.

• If our definition of success is “going up that ladder from VP to SVP to EVP”, hierarchy prevails. If we dominate others to uphold our own ego, people around us won’t flourish. If we seek to control an uncertain environment with ever more rigidity, self-organisation will perish. And, finally, if we try to shrink the complexity of the world to our own cognitive limits, we will fail.
• In a world of self-organisation, there is no place anymore for patriarchal Commanders in Chief who rule by positional power and dominance. Agile leaders focus on the why, not the how. Decisions are always made at the lowest possible level, close to the customer.
• Rather than telling people what to do, leaders today need to become experts in building, sensing, caring for and influencing organisational systems; in coaching individuals and teams; and in enabling that co-creation and emergence of shared purpose.
• In such a new world we need Chief Communicators who earn the respects of their people by making personal sacrifices to serve the collective good. And Chief Connectors who can create a “cultural force field of energy” — placing their needles like acupuncturists to facilitate the energy flows in an organisational body. Fostering psychological safety and trust; reinforcing transparency and embracing failure; role modelling gratitude, compassion and kindness.

Such a new “transpersonal” leadership paradigm is more than just EQ — it integrates intellectual, emotional and spiritual intelligence. Servant leaders “lead beyond the ego”, allowing time for awareness and reflection, rather than jumping into action. Letting go to become vulnerable “imperfectionists”, holding the space for others to attain self-mastery and meaning.

As John Quincy Adams once posited: “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.”

For traditional leaders who have risen the corporate chain by being in control, this is a difficult challenge: “what brought us here, won’t bring us there.”

So how can we transcend? What’s that breakthrough? Like I’m sure many of you, I’ve spent most of my career trying to become a “good” leader. Yet, nevertheless, if I am honest, for a long time, “being right” was probably often more important than to accept uncertainty and to deeply listen and learn.

I still don’t have all the answers, but in my personal experience, progression requires vertical development, facing our own shadows and our emotions, letting go of restrictive mental models, hearing our “soul knocking at the ego’s door”. Responsible leaders, says Manfred Kets de Vries, are not only born — but “twice born” through painful individuation — where every victory of the self feels like a “defeat for the ego” — until we can compassionately see all the facets of an interconnected whole.

Consciousness is Love

But, above all, I believe we need to take time to reflect and tap into what really matters to us. Feeling how everything is profoundly connected. Loving ourselves and others for mutual growth. Serving all life beyond the confines of our own ego.

Similar to adopting a new metaphor for our organisations, we need to reframe the meaning of our own world. Accessing that unique essence of who we are and what we stand for allows us to let go of fears and the desire to control.

As Mark Twain once said: “The two most important days in your life are the day you are born and the day you find out why.” And I can assure you: once you fully commit yourself to serve a greater purpose — magically, synchronously the world outside you changes, too.

And, suddenly, leadership is not a tribe of special individuals with special traits, and not even a role, but about letting go of authority and unleashing the unique potential in everyone. About people no longer being victims of circumstances, but thriving in the creation of new possibilities. About learning together how to shape a more responsible future.

Ultimately, leadership is a distributed and regenerative capability, an “eco-centric” flow of energy — what we, collectively, are able to bring to life. Not by top-down transformation or big bang organisational restructuring, but evolutionary through networks of teams and continual co-creation everywhere.

Beyond Agile… Towards Teal

Concluding, I would like to offer you a final reflection. It took myself many years to acknowledge that sus­tainable organisational transformation is only possible through concurrent individual trans­formation. We are the system.

Yet that also means that we all have that power — and I believe the responsibility — to transform our organisations and our relationships from who we are and how we show up. We can all spark the liberation of our organisations — gradually crafting the structures, processes, and cultures needed to attain an environment for individual development and the evolution of an emergent collective purpose.

Together, we can compose a new unifying narrative to overcome the limitations of the social materialism we have today. Where work has dignity and success is not only about money, but compassion, community and character.

Yet, I also had to learn that true purpose is not only beautiful poetry, but also about what we are personally willing to give up, or to struggle and suffer for. As St. Augustine once said: “Hope has two beautiful daughters; their names are Anger and Courage. Anger at the way things are, and Courage to see that they do not remain as they are.”

So, I do hope some of you are inspired to seize this historic moment to revise your bearings. The evolution of technology and data poses both critical opportunities and daunting challenges. The current pandemic lays bare the frailty of our social contract and the economic lockdowns shine a glaring light on existing inequalities — and even creates new ones. And my heart goes out to those seriously impacted by COVID in their lives, careers, and health.

Today is an important time for all of us to occupy those “front rows of our lives” and make conscious choices. As I said at the beginning: we have our toes in the water, and we need to start pulling through. Not as a controllers, but as servants to a greater cause, not with a perfect plan, but starting somewhere and adapting and evolving whilst we go…. You cannot think yourself into a new way of acting — you must act yourself into a new way of thinking!

A big thank you to all those who have stimulated and influenced my journey to date and to Felho’ and the whole craft hub team and partners for organizing this wonderful virtual summit. And, of course, to all you participants — please do connect and continue the conversation.

Let us together roll up our sleeves and jointly reimagine our organisations for positive impact. Let us grow beyond ourselves and overcome our fears to bring more love into this world, at a moment where it is desperately needed. Let us spark a Fifth Revolution to recover better, recover stronger, recover together!

We are not leaders, because we rule. We are leaders, because we truly care. If not us, then who, if not now, then when.