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.”

Lead people, Manage process. Superperformance Proverb

The organization is an organism. Peter Senge

A Great Wind is Blowing

Knowledge and human capital are making a dramatic debut here at the onset of the new decade. 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 a 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 Internet 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 do it to people. Rather, he stated, “the task is to lead.” Lloyd Provost and his Quality colleagues at API propose that it is only processes that can be managed, and only then through the purposeful application of continual testing and learning, aided by the use of statistical control methods. Esther Dyson drew from the new science of complexity, in particular complex adaptive systems or “CAS” to characterize this impending transformation through a different lens. From this view the new management acts in a distributed way, akin to 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 “biophysics of optimization” signals a fundamental shift away from a mechanistic view and toward a view of organizations as living organisms.

Only a view of organizations as organic systems can accommodate the discovery of complementarity that is the source of Superperformance. Only a life science can explain it. Organisms and ecosystems evolve, self-organize, and emerge, machines do not. Superperforming Management and Leadership is about the productivity of knowledge, especially as it pertains to increasing customer value and driving unprecedented performance levels. Productivity of knowledge is driven by the inspiration and motivation of people. And people are inspired and motivated by the opportunity to contribute, the chance for personal growth and challenging work, relationships, real involvement in a shared vision, servant leadership, and much, much more.

Unless organizations can encourage intrinsic motivation and affirm these needs, they will not realize their full potential, and the promise of knowledge productivity will elude them. Human and knowledge capital are interdependent, they reinforce and amplify each other.

Nature shows us that as with any major evolutionary change, some learn and develop new capabilities while others resist and eventually die out. Some will achieve the high peaks of the new “fitness landscape” while others will sink into a deep valley where the old industrial age command-and-control methods simply do not work anymore.

The Revolution is here.

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

Superperformance occurs inside of a context. The classic industrial model of command and control underlying traditional management practice is not sustainable in the 21st century. A new organizational model is needed. Advancements in optimization knowledge and information technology—together with a revolution in social capital—provide executives an unprecedented opportunity to put in place a new superstructure and system of support. This new model must be one that creates the context for Superperformance—and its long-term sustainability. To achieve maximum fitness this system and structure must be agile, innovative, and resilient. It must facilitate the merger of process and culture. It must be based on a dynamic, not static view of organization.

This superstructure must be based on a living, complex adaptive systems view of organization—organism not machine.

Goodbye Taylorism, Hello Life Science.

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

Trouble Right Here

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

The Role of the CEO

(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.

The discovery of Superperformance introduces a shockingly simple, reliable approach to optimizing performance. This discovery identifies a steady state, a sweet spot described by complexity scientists as the location of maximum fitness in a system. This location refers to a balance point precariously perched between order and chaos. It is more of a continuously shifting space than a static location: a dynamic, energetic, catalytic space. It is the place where all new ideas, change and self-organization emerge. All of Superperformance occurs in this space – and what’s more, any system can be tuned to this higher level of organizational consciousness and operational performance.

This is why Agile is the new normal. Navigating in this zone is called surfing the edge of chaos. Here the tension between order and disorder is at the highest level possible. Too much chaos will marginalize or dilute an idea or project. Too much order is likewise unhealthy, giving rise to rigidity and stasis. Work groups, project communities, and entire organizations can leverage the edge of chaos to maximize performance and to find a way forward in these uncertain times. People in organizations are beginning to see that this disequilibrium is effective and important to organizational survival. Within this fitness state, people and projects self-organize and work achieves a flow state punctuated by agility, novelty and innovation. It may seem incredible or illogical, but superperformance is tied to tolerating and even encouraging this persistent disequilibrium.

This 21^st Century approach reinvents management and leadership and advocates for a shift away from a Machine View to an Organism View of organization. It is being applied by an increasing number of project teams, organizations, and communities to produce unprecedented customer outcomes, operational excellence, breakthrough innovation, joy in work, and shareholder return on investment.