This is an edited excerpt from the book "Future Fit" by Giles Hutchins, published by the Future Fit Leadership Academy.
An old Chinese proverb says, "In times of great winds, some build bunkers, others build windmills." We are living in these times of great winds. Winds of change are blowing through us, challenging each and every organisation. The now-trendy managerial acronym VUCA (volatile, uncertain, complex and ambiguous) goes a long way in describing this business context we find ourselves in. We are not just dealing with transformation; we are dealing with unceasing transformation. Such times of uncertainty and volatility naturally invoke fear in us, yet it is a fearful clinging to the tried-and-tested status quo that will undermine our ability to adapt and evolve in these challenging times.
It is now quite apparent that many of our organisations and leaders are ill-equipped to deal with the situation ahead of us. For instance, the global business service provider IBM undertook an extensive survey of more than 1,500 CEOs from 60 countries and 33 industries worldwide and found a significant "complexity gap" in our leaders’ ability to deal with the volatile times ahead. This is a systemic problem with roots in yesterday’s logic.
Too many of today’s organisations find themselves caught up in a top-down, hierarchic, KPI-obsessed, siloed, control-based, defensive and reactive fire-fighting mind-set. This undermines and erodes the greatness of our workplaces, turning them into places of drudgery, stress, political infighting and ineffective bureaucracies. This monocultural mechanistic mentality stifles the natural creativity, innovation, collaboration, reciprocity, conviviality and empathy we humans exude when allowed to be our natural selves. So often, we find ourselves bound to artificial constructs and interventions that seek to control and manage us, yet actually undermine our vitality and wellbeing and so end up undermining the viability and resilience of the organization.
Attempting to transform our ways of operating and organising toward more human, resilient and flourishing businesses without addressing this flawed mind-set is like applying the preverbal Band-Aid to a systemic illness. In the words of Dawn Vance, Nike’s director of global logistics:
Organisations have 3 options:
- Hit the wall;
- Optimise and delay hitting the wall; or
- Redesign for resilience
The word "resilient" here does not just mean the ability to withstand change, as change upon change is what characterises our future and we need to do far more than withstand: We need to adapt, flex and thrive in our transforming landscape. Another important aspect of what we mean by resilience is longevity, the ability to thrive over the long-term rather than mere short-term growth bubbles soon ending in collapse.
Born out of a militarised mind and honed through the Industrial Age, bureaucracies emerged through economies of scale. Centralised management and control removed decision-making from the undertaking of work itself as hierarchies of managers became separated from workers. Along came the scientific management thinking of Taylorism, industrial and post-industrial productisation, and the quantification-obsessed ethos of management-by-numbers.
Enter the now-urgent need to reinvent, reorganise and reconfigure our ways of creating and delivering value. In our hearts and souls we know that our work can be meaningful, creating value for ourselves, each other and the world.
Regenerative means creating the conditions conducive for life to continuously renew itself and flourish. The primary principle underpinning our firms of the future is regenerative, where organisations help rather than hinder the evolutionary dynamic of life. This goes beyond traditional CSR initiatives as it is not primarily aimed at reducing negative impacts or externalities created by the current mind-set; rather, it is a move to an entirely new mind-set, a new way of being and doing in business and beyond.
With regenerative logic, externalities become opportunities for additional value creation; waste of one output becomes food for another; stakeholders become partners to engage with through authentic communications and reciprocating relations; linear-thinking is replaced with systems-thinking and circular economics; resources are not simply managed and controlled for short-term gain but perceived holistically in the wider context of the inter-relational matrix of life.
We re-train ourselves to think out-of-the-box, transcending the rigid framing of yesterday’s logic. In fact "the box" is no longer there at all, being replaced with interconnecting patterns of relations, where differing stakeholder perspectives and shifting contexts are appreciated for the diverse perspectives they provide while prototyping richer ways of creating and delivering value.
The metaphor of the machine served us well in the Industrial Age; the metaphor of the living system serves us well in the early 21st century.
Living systems thrive through relationships. We can allow the boundaries of our siloes within, across and between our organisations to permeate more readily upon realising that the life-blood of our agility, creativity and resilience flows through our relations. Whereas the machine-mentality encouraged a hardening of boundaries in order to atomise, control, protect and maximize, regenerative systems-thinking encourages a permeating of boundaries for collaboration, shared value and co-innovation.
Regenerative business goes beyond new leadership techniques, sustainable product innovation, process re-engineering and the crafting of purposeful mission statements and ethical values charters. Regenerative business is a fundamentally different logic, a timeless logic, drawing on the deep wisdom of life.
The good news is that business can take inspiration from living systems all around us.
The firm of the future
The good news is that business can take inspiration from living systems all around us. Many organisations have been doing this successfully for some time already through various approaches: biomimetic product design, biophilic workplaces, closed-loop economics, industrial ecology, wild leadership quests, deep nature immersions and so forth. Yet regenerative business goes beyond a superficial mimicking of living systems or temporary escapades through nature quests, as it seeks an entire reframing of the business model within regenerative "living" logic, embedded at all levels of organising and operating.
Detailed studies have been undertaken by the Global LAMP Index over 10-year periods, comparing the financial performance of organisations embracing living systems principles with their mechanistic counterparts. They consistently show that these living systems principles make for better financial returns and longer term financial resilience. Joseph Bragdon from the Global LAMP Index notes, "As an investment manager I have discovered that the more companies model themselves on living systems (as distinct from mechanistic systems) and the deeper they go into aligning themselves with life, the more creative and profitable they become."
Regenerative business is about operating in ways that contribute, replenish and evolve within the evolution of life. It provokes a whole raft of practical challenges and opportunities for our innovative minds to create value-based solutions. It also provokes a deep philosophical, yet no less practical inquiry, into who we truly are, what our deeper sense of purpose is, and to whom our organizations seek to serve.
In short, a firm of the future serves Life. In doing so, it enriches ourselves and our customers and wider stakeholder ecosystem. To materially benefit our customers while damaging the fabric of life for others is a hallmark of the firm of the past and its old logic. Such short-termism is no longer a viable business proposition for the firm of the future.