Excerpt from The Superpeforming CEO
From Chapter 14:  Distributed Being

If you look into nature, into these places of community, you will find an amazing degree of alignment; there is a beautiful, symmetrical pattern. No friction, no member out of alignment—the flow is seamless. These organisms all behave intelligently, even though their members are unaware of the big picture and there is no “central controller” to guide them. According to futurist and complexity author Kevin Kelly, they are out of control—a state he describes as “distributed being.” Since this is the preferred operating mode of complex biological forms that have thrived for millions of years, Kelly suggests that our own increasingly complex organizations will inevitably follow the same pattern. In the simplest terms, they solve problems by drawing on masses of relatively simple and locally autonomous agents, rather than a single, super-intelligent executive branch. They are bottom-up, self-organizing systems. In the language of complexity science, they are complex adaptive systems (CAS) displaying emergent features.

For organizations, reaching anywhere close to this level of performance is only possible in a decentralized environment. But decentralization of decision rights requires corresponding levels of personal responsibility.

Agile project teams are an excellent example.

George: “Birds flocking, fish schooling, bees swarming, all move effortlessly in the same direction, it is a more efficient way to forage and travel, the whole uses less energy to operate in this way. Somehow great teams and great organizations are able to operate as something approaching this ‘frictionless’ state. There is something extra–something invisible at work.

“Some companies become fossilized by centralizing all authority. This is suboptimal. Decisions have to be made as close to the customer as possible, at the lowest level of knowledge and skill. Organizations are patterns of relationships. Conversations are the heart and soul of organizational life. Conversations shape commitment to the organization and create a sense of what is possible. Like Buckminster Fuller’s trimtab on the rudder of a ship, conversations seem insignificant, but have tremendous hidden power. Conversations characterize everyday work life and negotiations between people in the organization and their customers. They determine the quality of service and the overall effectiveness of the company. In many organizations, conversations are negative and blocked or fall into otherwise destructive loops.

“Change cannot be imposed or controlled from the top or from the outside. It is better to work with people at all company levels to help them discover for themselves what is possible and what can be done better. This helps to facilitate new conversations, which often cross boundaries within organizations. By focusing on those conversations at the core of the organization, the greatest leverage can be created, for executives working on strategy, teams working on projects, the whole organization working on its next transformation, or any other critical business function. Systems, structures and processes all help the effective organization, but they count for little if the conversations and relationships are not real. Imposing command-and-control solutions to business problems, especially around knowledge work, has proven to be almost completely ineffective.”

Distributing Decision Rights, Management and Leadership

A life science of management and leadership exposes the obsolete industrial age Taylor paradigm that still to this day is limiting so much individual and organizational performance. The Taylor model is based on Descartes’ 400 year old clockwork universe and does not  integrate new science discoveries of the last 100 years, especially quantum mechanics and complexity science. By recasting organizations as  living, complex-adaptive systems, an organization’s full capacity for Superperformance can finally be unleashed.

The traditional view of organization—woven together through a systematic framework of production, decision support,  knowledge, and information systems— is based on the model of a well-oiled machine engineered to deliver maximum performance derived from pre-defined parameters and specifications. This industrial age model considers performance a derivative of external controls defined by the designers of organizational systems. They have given only marginal importance to the self-adaptive and emergent nature of organizational systems and the dynamic environments they inhabit. In other words, they are still far from operating with an immune system of distributed decision rights and with management and leadership capacity distributed everywhere, to the very edge of organizations. These bottom-up, agile characteristics of living, complex adaptive systems are precisely what is needed during times of rapid changing operating and knowledge environments, such as those that exist today.

Nested Hierarchies are Natural

From Organism View the self-referencing fractal pattern of system inside of system is apparent. The parts and their environments are continually co-evolving. From this view there is perfect parallel between organization and organism, which present as a set of nested structures, each inside of the next, like Russian dolls.

Organization                                 Organism

Economy                                             Ecosystem
↓
Industry                                              Species
↓
Organization                                       Organism
↓
Function                                              Organ
↓
Department                                         Tissue
↓
Work Team                                        Cell
↓
Individual                                           Organelle

From Organism View the entire global economy can be seen as a gigantic ecology of interdependent and continually interacting (work) cells, organs, and organizations engaged in the production, buying and selling of goods and services. And like any ecology it is self-organizing, not centrally controlled or coordinated.

Regardless of scale or level of complexity, there is a corresponding compartment at every tier of the organization/organism hierarchy. This is not just a novel coincidence—it is the natural expression of order that pervades all of life, from ecosystem to economy. It is simply the most efficient way to organize.

In fact, throughout the entire text of  Darwin’s Origin of Species, the only illustration called for was the picture of a nested hierarchy.

Nested Hierarchy from Darwin's Origin of Species

The pattern of Superperforming CEO is a pattern of Servant Leadership. This may well be the best-kept secret of our business generation. Robert Greenleaf is credited with being the founder of the modern servant leadership movement.

In describing the origin of his inspiration he wrote: “The idea of the servant as leader came out of reading Herman Hesse’s Journey to the East. In this story, we see a band of men on a mythical journey… The central figure of the story is Leo, who accompanies the party as the servant who does their menial chores, but who also sustains them with his spirit and his song. He is a person of extraordinary presence. All goes well until Leo disappears. Then the group falls into disarray and the journey is abandoned. They cannot make it without the servant Leo. The narrator, one of the party, after some years of wandering, finds Leo and is taken into the Order that had sponsored the journey. There he discovers that Leo, whom he had known first as servant, was in fact the titular head of the Order, its guiding spirit, a great and noble leader.”

While Robert Greenleaf was the progenitor of the modern servant leadership movement, this understanding has been with us for thousands of years.  Servant leadership is a frequent theme throughout all of history and is common to most religious or cultural movements. There are numerous references to being a servant in the Hebrew texts of the Bible, in the Koran and in the writings of Buddha. Certainly the teachings of Christ are a classic reference.

It seems important to notice that the very last object lesson Jesus taught his disciples was an obvious illustration of servant leadership, in the washing of the feet: “When he had finished washing their feet, he put on his clothes and returned to his place. “Do you understand what I have done for you?” he asked them. “You call me ‘Teacher’ and ‘Lord,’ and rightly so, for that is what I am. Now that I, your Lord and Teacher, have washed your feet, you also should wash one another’s feet. I have set you an example that you should do as I have done for you.” John 13:12-13:15

Lao Tzu, father of Taoism and author of the Tao Te Ching, which gave us the Chinese complementarity philosophy of Yin-Yang, wrote: “The highest type of ruler is one of whose existence the people are barely aware. Next comes one whom they love and praise. Next comes one whom they fear. Next comes one whom they despise and defy. When you are lacking in faith, Others will be unfaithful to you. The Sage is self-effacing and scanty of words. When his task is accomplished and things have been completed, All the people say, ‘We ourselves have achieved it!”

Many great contemporary leaders, from Mother Teresa to Gandhi to Martin Luther King to Geroge Washington to Sir Ernest Shackleton qualify as Servant Leaders.

What is the contrast to Servant Leadership? In these words Greenleaf distinguishes Servant Leadership from its antithesis,“Selfish Leadership”: “The servant-leader is servant first… Becoming a servant-leader begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. That person is sharply different from one who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material possession. The leader-first and the servant-first are two extreme types. The difference manifests itself in the care taken by the servant first to make sure that other people’s highest priority needs are being served. The best test, and the most difficult to administer, is this: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants?”

Jesus also pointed to this elemental contrast, “You know how leadership is done in the world around you. The leaders lord it over others and use their authority against them and then they call themselves ‘Benefactors.’  Don’t do it that way!  Instead, whoever wants to become great among you must be your servant…” Matthew 20:25-26

(From Creating and Sustaining Superperfomance by Barbara Brown, Examiner.com)

A Better Leadership Paradigm

Superperforming Corporate Culture is the magic elixir – the antidote for the industrial age command-and-control paradigm. Below is a mountain of evidence associating revolutionary corporate culture with outperforming return on investment, from an upcoming Corpus Optima white paper:

A study of 200 blue-chip enterprises in 22 industries over an 11 year period by Kotter and Heskett of Harvard Business School found that organizations with strong cultures had significantly higher performance than firms with rigid or weak cultures. The organizations with the strongest “adaptive” cultures saw their revenue grow four times faster, experienced job creation seven times faster, enjoyed stock prices that increased twelve times faster, and had 750 percent higher profit performance.Values guru Richard Barrett found that the return on assets and return on equity in companies with the best cultures was higher than the S&P 500 from 1991 through 1997.⁷ NIST research on the comparative performance of Malcolm Baldrige award winners against benchmark industry performance over a five-year period showed a statistically significant level of out-performance of as much as 34 percent.

Examining 950 businesses across sectors, Denison Consulting also found a correlation between strong culture and the bottom line. Such cultural traits as involvement, consistency, adaptability and mission were positively linked to operational performance measures, including return on investment, product development, sales growth, market share, quality and employee satisfaction. One Denison study found that the average return on equity for organizations with the lowest culture scores was six percent, while the average return on equity for organizations with the highest culture scores was 21 percent. Hospital Corporation of America (HCA) recently found that its 12 highest financially performing hospitals were also its 12 highest culturally performing hospitals, enjoying an employee engagement ratio of 5.68, as compared to an average of 2.44 for the entire system (173 hospitals) and 1.83 for its lowest performing hospitals. HCA also found a steadily decreasing employee turnover rate of 16.6 percent for the highest performers versus a steadily increasing turnover rate of 23.3 percent for the lowest performers.

In a 2005 article, Eric J. Sanders and Robert A Cooke, Ph.D., from Human Synergistics/Center for Applied Research, Inc., revealed more convincing findings on how “culture change initiatives can lead to real financial returns.” They found:

• Strong correlations between constructive (as apposed to defensive) cultures and business success (i.e., higher earnings/sales ratios and lower volatility).
• Retail stores with more constructive cultures showed stronger growth in revenue and higher revenue than their defensive-culture sister stores.
• Newspapers with constructive cultures had higher satisfaction, more cooperation and teamwork, lower stress, better readership, and higher profit.
• A large university medical center, over a 4-year period, was able to move its culture from defensive to constructive through leadership development and an organization-wide emphasis on culture change resulting in improved research, education and patient care performance, a 50% increase in budget, and movement from $40 million deficit to a $7 million surplus.
• A large liquid manufacturing company gained strong financial returns on their investment to redirect culture (beginning in 1996) and for eight years has reported increases in revenues, earnings before interest, taxes and amortization (EBITA), and net profit after taxes (NPAT, before significant or abnormal items).

And finally, in our own research, the Superperformance Fund, comprised of 10 organizations demonstrating not only process but also cultural out-performance, outperformed the S&P 500 over a 20 year period by a margin of five to one!

At the launch of The Superperforming CEO Book Tour & Seminar in Houston last week, Superperforming CEO George Martinez,  in “An Uncommon View” and Complexity Guru Chris Welsh in “Escape from Flatland” both shared brilliant illustrations about the experience of a paradigm shift.  Both referred to Superperformance as the discovery of a true advance in contemporary business thinking and optimization practice.

Coincidentally stumbled upon this article which furthers the story of Galileo’s invention of the telescope and its groundbreaking implications.

http://bit.ly/3pZ2mK

In the same way, the view of organization as organism (not machine) supplants the century-old Taylor model and points to the incontrovertible need for a new guiding science for organizations – we need a life science not a machine science – it must be a science of management and leadership together.  The new biophysics of optimization – Superperformance science – weds biology and physics (nonequilibrium thermodynamics) to inform the transformation of flow and the emergence of culture.

The article includes a wonderful quote by physics pioneer Max Plank, “”A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die.”

The new optimization science of management & leadership – of complementarity – control  & liberation, will surely become implicit knowledge one day.

Knowledge and human capital have made a dramatic debut in the millennium
economy. Together they signal a critical shift in organizational life to something
new and different, especially when it comes to dealing with people. The best of
any company’s knowledge and human capital walks out the door, everyday, at
5:00PM. These two forms of capital are intangible; they have not been a part of
the traditional balance sheet. Capturing and increasing the value of these capital
assets requires a new set of skills. As many have noted, in the information age
“knowledge workers” have the leverage. And they carry their means of
production with them wherever they go.

The result is that management as a professional discipline is on the verge on a
major transformation. While management’s famous guru Peter Drucker insisted
that management is the organization’s single most important “organ,” he also
declared it is not possible to manage people. Rather, he stated, “the task is to
lead.” Lloyd Provost and his contemporaries at API teach us that it is only
processes that can be managed, and only then through the purposeful application
of continual testing and learning. Esther Dyson drew from the new science of
complexity, especially in the area of complex adaptive systems, (“CAS”) to
characterize this impending transformation through a different lens. The new
management acts in a distributed way, as an “immunity,” a capacity that
everyone can (and should) participate in and practice.

Superperforming management and leadership co-joins improvement and
complexity science to create a new approach that leverages both process and
culture together. This incredible new paradigm signals a fundamental shift away
from a mechanistic view and towards a view of organizations as living
organisms.

1 Simple Formula, 8 Simple Rules, One Billion Great Results

In this groundbreaking new book, Dave Guerra proposes a stunningly simple way through today’s complex world of work, introducing us to a new management science, showing how Superperformance springs from the intersection of an organization’s process and its passion. Guerra proposes a simple formula:

Process x Culture = Superperformance.

This book is about the phenomenal year-after-year success of companies who consistently apply this formula. It is about the simple rules that have enabled companies like Toyota, Southwest Airlines, Microsoft, Harley Davidson and others to achieve and sustain super results year after year.