Human Challenges

Capitalism 3.0

Claus Otto Scharmer, who is the creator of Theory U, started some research on how to transform capitalism in order to bring our system to the next level. He takes the article from Johnson discussed in my previous blog as a starting point. Johnson is dealing with one of two main factors which are blocking a real transformation: Power - the close ties between Wall Street and Federal Institutions. Scharmer deals with the other: Paradigm - how our thinking based on conventional economic thought is preventing us from asking some tough questions that could help us to identify the root issues of the economic crisis, how it is connected to the need for global transformation and how we can shape it in a more intentional way. His ideas can be found in his paper "Seven Acupuncture Points for Shifting Capitalism" which explores the underlying system of thought that has led to the current crisis and proposes ideas for a green, inclusive and intentional ecosystem economy.

In the first part of the paper Scharmer points out the evolutionary stages of capitalism based on the notion of capitalism 1.0, 2.0 and 3.0 that Peter Barnes suggested in his book "Capitalism 3.0" from 2006 and the works of the British historian Arnold Toybee. Scharmer comes up with the following:

This is the guideline what we should aim at, transform the current forms of Capitalism into Capitalism 3.0. Then Scharmer points out "Seven Acupuncture Points" which for him are practical leverage points that could shift the system from 2.0 to 3.0. The term emphasizes that the transformation requires a set of interrelated system interventions, no. 6 being related to Leadership: To reinvent leadership learning in order to facilitate "learning from the future as it emerges" rather than replicating the knowledge of the past. (please refer to Theory U for explanation of the wording). One essence for him is to move from the ideological either- or debate to a pragmatic both- and integration as part of an upgrade to 3.0.

These ideas are some of the most appealing I have heard about for some time and it nicely fits in my current mood of looking at things from an evolutionary stages standpoint and builds on my previous entries. In the context of Spiral Dynamics Scharmer shows a way how to move up the spiral.

Leadership Patterns

I want to follow-up on my last post about patterns in company culture connecting these to different Leadership styles. Hermann Küster did a deep dive into the work of Rooke/Torbert who published their research “Organizational Transformation as a Function of CEOs' Developmental Stage” already in 1998. They drew a first picture of six managerial styles and an associated developmental frame that culminated in the 2005 Harvard Business Review publication of “Seven Transformations of Leadership”. Hermann connected these to the concept of the Spiral Dynamic evolution steps as outlined before.

Similar to the approach on an organizational level this framework can be used to analyze where a leader stands and initiate a personal transformation to the next level always moving up the spiral as it is proven that leaders who operate based on a “Strategist” action logic are the most successful transformational leaders. Unfortunately in the research Rooke/Torbert did in 2005 there were only 4% of them. Knowing that progressively transforming organizations become most probably industry leaders this should be a concern. Interestingly Rooke/Torbert mention Scott McNealy, Sun's founder and former CEO, in their HBR article as belonging to the Expert type leaders which fits to my statement on the Sun culture that I made previously.

What companies can learn from Orchestras

Wow, this was really impressive! Just coming back from a presentation (no slides – just music!) with Christian Gansch a renown conductor, music producer, consultant and book author. In his books he points out what companies can learn from Orchestras. In his presentation he explained what a complex organization an orchestra is with a lot of departments and department managers. He gave insight in how it is managed by the conductor and how it is also managing itself.

To thrive for highest “customer satisfaction” all 120 pretty eccentric personalities of that orchestra need to stand and work together very closely and sensitively. This needs a lot of respect for one another, it needs tolerance to give in and acknowledge that for example if the Oboe realizes it cannot hold breath long enough when the violin plays a specific part that part needs to be played differently although it maybe more difficult for the violinists. After all listeners judge the whole sound of the orchestra and not just the Oboe.

The conductor also needs to value and respect each individual musician but also give each of them feed-back and not avoid conflict. In order to have a full harmony in the performance there might be conflict in the rehearsals (there are four of them in general and the last one traditionally is not interrupted by the conductor). On the other hand he needs to have a strong competence in perceiving the individual musicians to for example adapt some parts to a breath loosing singer who is not 100% on top that day. The latter reminded me of the leadership capabilities Scharmer is mentioning like listening, observing, sensing.

Overall this presentation was very inspiring, it came across with a lot of enthusiasm and passion. Here is an interview with Christian, unfortunately in German. Many thanks to HRD, Human Resources Development Consulting in Hamburg, who made this possible for their 20^th anniversary!

Leadership Institute

Already some time ago we finalized the Services Leadership Institute for EMEA. It was running over an entire fiscal year. Last July, together with the Business Sponsor of this Institute our Vice President for the Services Delivery organization who is one of my internal clients, we selected 15 Senior Managers who were regarded as potential successors of our current Directors. Our Directors had to present their candidates in individual interviews according to criteria we use to assess our leadership bench strength in each organization. For each criteria there had to be evidence from former achievements and behaviors the candidate had demonstrated in the past:

Performance Over Time

• Business & People Results Delivery

• Goals & Expectations

• Developing Others

• Values (Courage, Collaboration, Innovation, Integrity, Pace)

Future Potential

• Learning Agility

• Potential Next Moves

• Career Aspiration

• Ability of Development to Address Weaknesses

These two main elements would also be the X- and Y-axis in the 9 Box diagram we would do for the purpose of bench strength assessment in a Director's or Vice President's organization. There were also some more practical criteria like level of spoken English, accomplished the regular trainings from our Manager curriculum, etc.

The main idea to put an Institute in place was that we regularly did assess our talent and bench strength in the past, but we did not consciously build on the results to prepare people for the Director level. On the other hand we did not have lots of budget for this purpose. Therefor any action should be something that is done from the business for the business without involvement of too many external resources.

I was facilitating the design team and also parts of the face to face sessions, one Director from the business was working with us and playing the role of host in the sessions, facilitating the daily flow and additionally we had an external consultant supporting us with the design and acting as a coach for the participants.

The main element to enable the learning from this Institute were business projects. We selected 3 key business critical projects and for each of them a member of the leadership team as Sponsor who's responsibility was not only to drive the business result from the project but also to have participants focus on self learning, learning from each other, e.g. by creating an open feed-back culture. The learning strategy we developed was:

• Me learning about me,

• Sun/Me learning about Sun,

• Sun learning about Me.

3 face to face sessions at different locations in Europe were the framework around the business projects to which we invited top executives for discussions and presentations. People were given the opportunity to get visibility, network and learn from our leaders.

In retrospective it was not easy to sell the concept of self learning. We learned that expectations for some were very much in the direction of having a high level university class with pitches from well known professors. Nevertheless I believe that most participants took away something for their personal development, some feed-back, some further clarity on the 360 degree feed-back that they brought to the Institute and for sure an extended network of collegues and Executives. A first step for them having reflected their behavior to maybe change some of that to become more rounded leaders.