Chapter 8 - Learning Through Reflection

The theory, workshop and stories, supply (we hope) ample material for refection. To make things easier, we have written a short summary of the central concepts taking us from mechanistic to transformational and on to complex approaches to leadership. Using this summary will help you decide many things not only about implications for your organization but also for yourself. What are the expectations people have of you and do they help you, as a leader, meet the constant challenges of a complex world?

The New Leader

Times have changed. We are experiencing more pressures and problems and find that old ways of managing no longer work. We hope that by introducing you to our favourite scholars, and adding our own experiences, has broadened organizational possibilities for you.

We believe that strategy, change and leadership go hand in hand, and use complexity theory to help guide us in this changing world we live in. We recognise that adapting to constant change, needs a new leadership style - one that we call Extraordinary Leadership. This style of leadership doesn't use Newtonian control from outside or above to manipulate, it works 'within' the organization, managing feedback loops and ensuring that they are rapid, comprehensive, and short cycled. Information and experiences are shared to create a continuing transformational system. Extraordinary Leaders know how to transform variables to create new opportunities, possibility, innovation etc. One could say they choose to take advantage of every unpredictable variable (external tension and uncertain variables such as people within the organizational system) rather than control them. If the organization ignores these variables however, there is of course risk involved, because amplifying effects can manifest negatively or positively. We argue, what greater risk is there than ignorance? Ignorance of the scientific evidence which supports that human systems are complex adaptive systems with rules that change? Ignorance of intangible assets? Ignorance of possibility? This is high risk.

Although we recognise that Mechanistic (Newtonian) Management gives us the license to operate and is intended to limit and control, we hope that we have demonstrated that it does not provide the leadership for organizations that exist in an environment which is far from certainty and agreement. At best, it provides management.

We have uncovered the pitfalls of mechanistic mindset in relation to infinite variability, by addressing the following traditional strategies: rules, regulations and procedures; defined rigid structures; rational problem solving processes and control; detailed plans and budgets; performance management from above; and bureaucratic structure.

The transformation edge, which lies far from certainty and agreement, can be viewed positively in light of complexity theory. It is the tension at this edge that drives us to new frontiers, and creative and innovative thinking. But how do we lead an organization to new possibilities from a management style which promotes limitation? Simply put, we can't.

Through observing behaviour of 'strange attractors' we can to some degree understand the natural pull that occurs when initial conditions are set in place, at the same time allowing amplifying effects to occur. Converting this to organizational language, we embrace the paradox of the certain/normal and the uncertain/extraordinary. We also understand that old paradigms need to be shattered for new ones to emerge, and we propose an approach based on values, which affects the whole of the organization regardless of whether the positioning is certain or uncertain.

From this values base, we have developed from our extensive research and experience, a guide to Extraordinary Leadership - a practical method for leaders. This is based on the premise that organizations want performance (not limitation) and that performance = direction + willingness. Without willingness, people will not deliver discretionary energy. So let's briefly take you on a medley of dances to review our journey.

Relationships - one needs to first respect intangibles in order to appreciate the value of relationship. We have much evidence to support that intangible assets make the difference between an outstanding organization and one that isn't. We cannot emphasise enough the importance of this. We need to go on a journey of discovery ourselves first, and then build relationships with others to effectively respond to the changing environment. A part of this development is the recognition and acceptance of tension and paradox, along with the recognition of variability not only of the people who form the organizations we are in, but also of the variability we face with customers, and the uncertainty in the world. We have seen how people self-organize in crisis situations, such as September 11. These show how tension can indeed be a positive thing, in that it forces people to stretch themselves.

Sharing information is fundamental to the non-linear feedback loops important to any system in the quest of sustainability. In order to gain valuable information, we rely on robust relationships, and in doing so need to value feeling equally with thinking. Communication is essential to information exchange and we hope that Argyris' 'espoused theory and theory in practice' adds to your understanding in this area and provides useful knowledge for development. Also, we hope that a connection has been made between emotional competencies and business success. Listening, feedback and acknowledgement, along with behaving in line with espoused values is so important. We see through attachment theory that people are different and variable in their relating style as well as personality, and so we need to adapt not only to the unpredictable world around us but also to those different from us.

We encourage communities of practice and networks, to share knowledge, drive strategies, generate new opportunities, solve problems, promote best practice, develop competencies, recruit and retain talent. We also encourage 'partnerships' featuring interdependency, rather than placing responsibility in the level above. We look at various forms of structure, and the deception of restructure. We see in many organizations, loosely coupled systems held together by organization culture and a sense of identity. We recognise and value the informal system in this sense.

As we move onto Extraordinary Leadership strategies, understanding that underlying all of these is the development of robust relationships, we make a case for each of the following: information; identity and purpose; vision and values; trust and support; double loop learning not blame; customer focus; personal responsibility; boundaries and guidelines; flexible budgets to guide; and performance management from a broad base.

We will briefly review our conclusions of these.

Information - crucial to organizations performing in an extraordinary way. It is the life blood of organizations, and needs to be readily accessible at all levels. The main functions of managers are facilitation, leadership and management of information (gathering, analyzing and feeding back).

Identity and purpose - alignment between the individual and the organization. Leaders need to provide challenging employment to gain passionate commitment. This leads to discretionary energy reflected in bottom line performance. In areas of uncertainty it is important to minimise external rules and allow control to come from within to enable flexible responses. Self-control through commitment is better than seeking compliance.

Vision and Values - the act of creating a desirable future and how we would like to be with each other. Values are shared norms and beliefs that govern how we interact. Tension arises when people behave differently to the values and these are a major cause of mistrust. Managing by values from within rather than external rules is far more effective and provides the self-control to meet infinite number of unpredicted situations. Managing by values also includes consequences for those who display values contrary to agreed values. As stated earlier in the book, Meg Wheatley claims that if information is the centre stage, then vision is the field around it - a field that permeates the organization, rather than a destination. Executive managers need to share their vision without enforcing it on their employees. It is necessary for teams to create their own vision and values and structures and processes need to be in line with them.

Trust and Support - people need to feel valued. Since the mechanistic model sees people as machines, we can expect poor results. We must acknowledge that when we employ people we get a pair of hands plus a mind that includes the emotional part - commonly known as the heart. Mutual trust is the essence of a high performing organization. Robust relationships lead to open & honest communication that leads to trust over time. If there is no trust, then only 'safe' information will be shared. This leads to poor problem solving and decision-making, then sub-optimal performance and a blame culture develops.

Double Loop Learning and Not Blame - blame culture is very destructive to organizations - people withhold information that causes cover-ups. It also kills trust, improvement and creativity and eventually damages relationships. Blame culture leads to victim behaviour where people demonstrate a lack of personal responsibility.

Learning from mistakes encourages people to experiment and innovate. Double loop learning goes beyond solving the symptoms and problems; it changes the nature of the problem. For innovation to occur we need to reward those willing to take risks and promote learning that is built on potentials and innovative thinking.

Customer Focus - lying in the area of close to certainty and agreement is customer needs. However, tension arises because flexible approaches are needed to provide them. In other words, extraordinary leadership is necessary to deliver certainty to customers. It is important to put customer goals in front of organizational or personal goals. Yet, employees are often faced with a decision 'Do I serve my customers or do I serve my organizational masters?' Organizations need to promote behaviour congruent with the messages delivered. Relationships between customers and people in organizations need to be developed at all levels (not just marketing and sales). Partnerships rather than power relationships are needed in the modern organization.

Personal Responsibility - Peter Block, cited earlier, proposes that there are four core elements in a hierarchical organization:

1. Submission to Authority - control of our work is in the hands of those above - submission. Consequence - dependency and release from personal responsibility leading to co-dependent behaviour.
2. Denial of Self-Expression - denial of feelings, in turn, leads to denial of discretionary energy.
3. Sacrifice for Unnamed Future Rewards - a psychological contract in that sacrifice incurs obligation. That obligation used to be a secure future. In today's uncertain world this contract is violated - secure futures can't be promised.
4. Belief That the Above are Just - to do so promotes dependency. It says that external control is needed to focus on common goals.

Although there is some support for external control we can't ignore the probability of unpredictable events. Added to this, paradox is created in the mechanistic world - maintaining control and authority and denying self-expression drives people to fight against the very things they are trying to control. So in the end we don't have control at all - it is a fantasy, an illusion. The alternate belief to achieve maximum performance is that ultimate control comes from within. For many, however, the wish to maintain control is much stronger than the wish for performance. This relationship satisfies both parties - the managers who want control and the subordinates who want to avoid responsibility. Our goal is to have all members believe and act as they would if it were their own business and to take personal responsibility for how it operates.

Extraordinary Leadership defines success in terms of contribution and service. Managers need to offer jobs with meaning, opportunity to learn, and a chance to grow. This places a primary focus on intangible rewards with a need to be genuine, direct and definite.

Boundaries and Guidelines - Some rules do lie close to certainty and agreement since legislative obligations must be met. Specifically, the laws that relate to taxation, environmental parameters, industrial relations, employment, and corporate governance are examples of boundary issues. All these areas need support using mechanistic management. But some rules made from yesterday's experience may lead to dysfunctional behaviour and inappropriate responses to ever changing current issues. In these cases, instead of rules set in stone, guidelines can be developed (and renegotiated when necessary) to allow flexibility and personal judgment when faced with situations far from certainty and agreement. Shared values are the glue that holds the system together.

Flexible Budgets to Guide - don't let budgets rule you. Budgets are often related to negative behaviour e.g. controlling spending, rather than building business. Instead use broad plans and guiding budgets. Budgeting and planning processes are of little use with the unexpected. Also we can put a dollar value on budgets but not customer value.

Performance Management from a Broad Base - traditional performance management is top down. Performance management from a broad base should include customers, peers, bosses and members of the team - and not just focused on individual but include teams. Today doesn't look like yesterday, so comparisons with the past may be meaningless, as there are too many confounding variables to consider them valid or reliable. We need measures that focus on ways of achieving performance that are congruent with the values approach. Systems such as promotion based on shared knowledge not individual knowledge need to support values of broad-based performance.

In summary, we must decide whether the performance management process is individually based or team based. We must understand whether the organization is close to certainty or far from certainty and consider its impact on the performance management process. Last, we must decide the mix of qualitative and quantitative measures of performance. The choices made will impact the organizations in the pursuit of its vision and its values.

Chapter 9 provides a possible lens through which we may understand why the journey along the path of extraordinary leadership may be difficult for people.

Extraordinary leadership takes us on a journey of exciting possibilities and potentials. We have collected some case stories beginning with Chapter 10 from a variety of industries that show the potential rewards of changing the way in which we see the world of work.