The End and The Beginning

Background Series: The Spectacle of the Real

Context: A Decade Later

The following was written in the Spring of 2011. It was a couple of years post-Great Recession. By this time, my consulting practice was in the last stages of its first iteration. It was also the beginning of the observations and thought process that ultimately led to my framework called the Two Global Forces. This post is a combination of two posts.

My perception of the world has matured during the past decade. The course of Progressivism and Capitalism that I write about here is not as simple as I make it out to be. Use this post as a point of reference for seeing the unfolding of the world we are in now.

Seeing what's coming

What if our past experience instead of illuminating the future, obscures it? What if the way we have always approached a problem, the conduct of a single day, or the organization of our work makes it more likely that we end up not accomplishing what we envision?

Working in planning processes over the years, I've concluded that people can see what they want, but fail to reach it because of how they go about it.  We can imagine the future, but not see the path that will take us there. This gap in our abilities is becoming more acute as the ways we have worked are becoming less effective.

From another perspective, we rarely see the end of something coming or the beginning of the next thing. We tend to see in retrospect.  Our aversion to change, I believe, is largely because we don't like surprises. We defend the past hoping that it is sustainable into the future, even if we see a better, different one. The past, even less than ideal, at least seems known and more certain, more secure, more stable, more predictable, and more comfortable, at one level.  It does not mean that it is satisfying or fulfilling, but it seems safer. 

As a result, instead of providing us with a sound basis for change, the past can inhibit us from achieving the vision that we see. Instead, we live by a set of cultural forms that must be defended against change. In other words, the form of the way we live and work remains the same even after its vitality has gone. 

Change That Has Come

What impresses me about our time is how fast change is happening, and how quickly things we thought were normative seem less relevant.

Ten years ago, websites were the rage. You weren't on the cutting edge of business without one. Today, Facebook, Twitter, LinkedIn and a host of other social media platforms are the norm for a business. Twenty years ago, CDs were the norm. Now, digital I-Tunes downloads. Thirty years ago, the Soviet Union was the West's nemesis, now militant Islam. Forty years ago, Vietnam and racial equality were the dominant issues of our time. Now we have an African-American President, and Howard Schultz wants Starbucks in Vietnam. Fifty years ago, President Kennedy was challenging the nation to go to the Moon within the decade. Today, the government is putting space exploration on the back burner as space travel is becoming privatized.

Could we have imagined these changes?  Possibly. We'd probably not be able to see how they'd happen. That is the curious thing about visions and visioning. We can imagine the end, but not the means.  The pathway to the future goes through today and tomorrow. Yet, we are captives of our past thinking and experiences.  They are the measure of what is possible and what can be done.

The End and the Beginning

I have been reflecting, in particular, on these thoughts over the past several months.  I've tried to step back without prejudice and identify what I see without reducing it down to a few simple categories. What I do see are the markers of change in three broad areas.

For one it is The Beginning of the End, for another The End of the Beginning, and for another, surprisingly, The Beginning of a long-delayed Beginning.

Some of this reflection was prompted by a conversation about a project event to take place later this year. It was a discussion about how businesses function. The contrast was between a focus of work as a set of tasks to be done and the importance of human interaction in meeting organizational goals. I realized coming out of that conversation that this project, for me, represented a turning point in human and organizational development. It provided a picture of the past and the future. The past is the Industrial model of business organization and the future of organizations as communities of leaders. That last phrase was what I envisioned a decade and a half ago when I began my consulting business. Only now, after all these years, do I see that simple idea beginning to have relevance for the way we live, work, organize and lead organizations.

What I see is:

The Beginning of the End of the Progressive ideal.

The End of the Beginning of the Capitalist model.

The Emergence of freedom and democracy on a global scale.

The first two, Progressivism and Capitalism, along with modern Science, are the principal products of the age of Enlightenment.

The Progressive ideal believed and still does by many of its advocates, that through government control of science and industry a free, equitable, and peaceful world could be achieved. Conceived during the 19th century as a belief that society could be perfected, and as a counter-balance to the industrialization taking place in Europe and the United States, it was a utopian belief in a well-order, controlled, uniform world.

The Capitalist model was born in a belief that each individual should be free to pursue their own economic welfare, and not be forced by government rules or economic servitude to do that which they choose not to do. It was the ideology that provided the basis of industrialization which has come prosperity for more people in history and the rise of the modern middle class.

Both the Progressive ideal and the Capitalist model have brought great benefits and liabilities to society. They form the two sides of virtually every divisive issue confronting the world today. They are quite similar, yet in very different ways. Both are organized around the control of power and wealth. Both have been institutionalized in the large, hierarchical organizations in Washington and on Wall Street, and in similar institutions throughout the world.

Over the past decade, the Progressive ideal and the Capitalist model have begun to show their age. The assumptions that underlie these ideologies are being challenged by forces of change that are beyond their control. Because the control of global forces of change is problematic and less realistic.

A principal assumption of the Enlightenment is that we can know what we need to know by analytical decision-making. In other words, by identifying the parts of a situation, we understand it, and therefore can design a strategic mechanism for controlling the outcome.  This analytical process works very well in the realm of the natural sciences, less so in the realm of the social sciences. To paraphrase novelist Walker Percy,

"Science can tell us how the brain functions, but not about the functioning of the mind."

At the beginning of this essay, I wrote of what I was seeing The Beginning of The End of the Progressive ideal and The End of the Beginning of the Capitalist model. Neither of these observations are a political statement. I am not a Democrat or a Republican. I am neither a Progressive nor a Libertarian. I find none of the current choices of political affiliation representative of my own perspective and values. I speak as an outlier, not an antagonist. 

I see these ideological movements as products of a different time in history. The assumptions and the way of thinking that brought these ideologies into prominence are now receding in relevance. The conditions that gave rise to these ideas over the past three hundred years are now giving way to new conditions.  If progressivism and capitalism are to survive, then their proponents must change.

Emergent Connection

These ideologies born in the age of Enlightenment share a reductive approach to knowledge. In other words, we gain knowledge and understanding by breaking things into parts. The assumption is that things are collections of discrete parts.  Yet, we know that in the natural sciences, the mixing of different chemical elements creates something new and different that cannot exist in any other way. Water is the most obvious example.

However, in the social realm, there is a shift toward emergent knowledge as the basis for understanding what is.  The emergent perspective sees connections and wholes rather than just parts. In a network of relationships, the value isn't one person, but rather the connections that one person has to other persons. 

Think of it as the difference between those radio ads selling lists of sales leads, and knowing the person who has a relationship with 100 of those buyers. The former is a list of contacts with names and addresses. It is a parts list.  The other is a picture of a network of connections that one person has. This second picture is the picture of the future, for it is a picture of relationships.

We see emerging forces all around us. Again, this is not a political statement, but an observation. One difference between the Tea Party demonstrations and the Union demonstrations of the past year is the difference between an emergent organization and a traditional hierarchical one. The Tea Party organization is intentionally decentralized in local communities. Unions are designed as centralized concentrations of power.  One body speaking for a host of organizations.

 The difference here is between a centralized and decentralized organizational structure, like that described in Ori Brafman and Rod Beckstrom's book, The Starfish and The Spider.

The centralized structure (the spider) is vulnerable at the top. Take down the leader, and the organization suffers a significant loss of prestige and power. The decentralized system (the starfish) is not vulnerable at the top, because there is none. In a decentralized system, no one expression controls the fortunes of the whole. The centralized is the industrialized model, and the decentralized, an emergent one.

The system that the Progressive ideal and the Capitalist model share is one of centralization. Operating separately from both are independent and small business entrepreneurs. The difference is between a hierarchy of control and a network of collaborative relationships.

The recent rebellions in the Middle East are also examples of this emergent model. The use of cell phones and internet technology to connect people in agile, less structured ways makes these rebellions possible, not necessarily successful, but possible. Their desire is for a freedom that they see provided and secured by democracy. When thousands of demonstrators filled the streets of Cairo seeking the end of a repressive regime, their impact is far greater than their numbers. We see a visual counterpoint of the difference between being a nation of free people and one living under an authoritarian government.

Even as the Progressive ideal and the Capitalist model decline, the impetus towards freedom and democracy grows. I heard recently that there are now more nations with democratic governments than at any time in history. 

Tahrir Square - Cairo - February 2011

Democracy that grows from a grassroots base is an emergent model. The impact is greater than the sum of its individual parts. In an emergent context, one person's actions can serve as a catalyst for thousands more. As the recent uprising in Tunisia shows when it was started by street merchant Mohamed Bouazizi when he set himself on fire to protest the abusive treatment by police of his vegetable cart business.

The Network is Emergent

In business, the emergent model has relevance. When a business perceives itself to be a structure of parts, processes, and outcomes, following upon the centralized industrial model, then it has a much more difficult time seeing the value that exists in the relational connections that exist both between people and within the structure itself. It is why so many businesses become siloed and turf battles ensue.

However, when a business sees itself as a network of interactive individuals, then the whole is greater than the sum of its parts. The result is higher levels of communication, collaboration, and coordination.

While the Progressive ideal and the Capitalist model are products of the age of Enlightenment, emergence, freedom and democracy are even older ideas finding new ground and relevance. 

In traditional business organizations, their relevance can be seen in two ways.

First, in the freedom of the individual to take responsibility through their own initiative.

This perspective harkens back to the ancient Greek democracies where Greek farmers and small business owners participated in the governance and protection of their city-state. For businesses to replicate such an ethos requires a shift in perspective from employees as functionaries of the tasks of the company to a recognition of the potential contribution that each person offers. It is in this sense that each person leads out of their own personal initiative to give their best to the company.

Second, in the emergence of businesses as human communities of shared responsibility.

The traditional approach has been to break down the organizational structures into discrete parts of tasks, responsibilities, and staffing of the organization. This traditional hierarchical approach worked in simpler times when businesses were less global, more homogeneous, and employees less well trained, and had the technology to advance their contributions beyond their individual position in the company.

Today, the environment of business has changed, as the context becomes more complex and change accelerates. Agility and responsiveness are not embedded in the structure, but in human choice and in relationships that amplify those shared choices to make a difference. It is the freedom to take initiative to act in concert with others that creates the conditions for successfully managing the challenging environment of business today. The result of a greater emphasis on relationships, interaction, and personal initiative. This change represents a shift in culture. One only has to select any page in the Zappos.com Culture Book to see the influence of genuine community upon the attitudes and behaviors of the company's workforce.

The Keys to Change

I began this post by saying that we rarely see the end of something coming or the beginning of something new. What I offer here has been germinating in my mind for the past three years. It is still not yet fully formed, and may never be. Yet, I am convinced that the changes that I see happening to mean that there is no going back to the halcyon days of the 1990s or even the 1950s.  Business organizations will not long succeed as mechanistic structures of human parts. Rather they must emerge into being communities of leaders, where individual initiative, community, and freedom are fundamental aspects of the company's culture

The keys to the future, in my mind, are fairly simple.

1. Leadership starts with individual employees' own personal initiative to make a difference.

Create space and grant permission for individual employees to take initiative to create new ways of working, new collaborative partnerships, and solve problems before they reach a crisis level.

2. Relationships are central to every organizational endeavor.

Create space for relationships to grow, and the fruit will be better communication, more collaboration between people and groups, and more efficient coordination of the work of the organization.

3. Open the organization to new ideas about its mission.

Identify the values that give purpose and meaning to the company's mission.  Organize around those values that unite people around a common purpose, which gives them the motivation to want to communicate better, collaborate more, and coordinate their work with others.  Openness is a form of freedom that releases the hidden and constrained potential that exists within every company.

We are now at the End of an era that is unprecedented in human history. The next era is Beginning, and each of us has the privilege and the opportunity to share in its development. It requires adapting to new ideas, and new ways of thinking, living and working. I welcome the change that is emerging because I find hope that a better world can be gained through its development.

Six Months Later

I wrote the above before the Occupy Wall Street movement began.

I have thought for a long time that there was an evolutionary cycle of institutional decline taking place. Some of this change was the result of outdated organizational and leadership philosophies, and some of it was the emergence of technologies that provide for a more boundary-less environment for communication and collaboration.

This change is an organic process that will ultimately transform or replace most organizations. While I still believe this to be true, I also see that there is a revolutionary cycle of institutional destruction taking place as well.

Read these two different views of the Occupy Wall Street movement. First, Naomi Wolfe's The Guardian article, The Shocking Truth about the Crackdown on Occupy. Then read Matthew Continetti's The Weekly Standard editorial, Anarchy in the USA.

If both are right, then what we are seeing is the rise of political violence on a broader scale in America than we have seen since the late 1960s / early 1970s.  I see parallels from my youth in this generation of young people who rush to join the protests, without really knowing what they hope to change. Their frustration is shared broadly.

A few times over the past few months, I have heard business people in differing contexts say something like, "I'm not making any investments in equipment, no acquisitions of companies, and no hiring until after next year's election."  Their reason? Instability and a lack of clarity about the rules. In effect, they don't know how their investments will be taxed. As a result, they are forced to sit and wait, contributing to the further erosion of jobs and economic sustainability for families and communities.

This fits with the trends picture presented by Charles Hugh Smith (Link no longer active). Look closely at the 5Ds at the end of this list.

Most cultural and economic trend changes begin on the margin and then spread slowly to the core, triggering waves of wider recognition along the way. Thus some of these long-wave trends may not yet be visible to the mainstream and may remain on the margins for many years. Others are so mature that they may be primed for a reversal.

The key here is to be aware of each of these, think about which are most likely to impact your current profession and how, and estimate when that impact is likely to be expressed so that you can position yourself wisely in advance:

1. Automation enabled by the Web…

2. The cost structure of the US economy—the system-wide cost of housing, food, energy, transport, education, health care, finance, debt, government, and defense/national security--is high and rising, even as productivity is lagging. …

3. The stress of operating a small business in a stagnant, over-indebted, high-cost basis economy is high, and owners find relief only by opting out and closing their doors. …

4. The Central State has been co-opted or captured by concentrations of private wealth and power to limit competition and divert the nation’s surplus to Elites within the key industries of finance, health care, education, government, and national security. ….

5. Financialization of the economy has incentivized unproductive speculation and malinvestment at the expense of productive investment. …

6. The U.S. economy has bifurcated into a two-tiered regulatory structure. Politically powerful industries such as finance, education, health care, oil/natural gas, and defense benefit from either loophole-riddled regulation or regulation that effectively erects walls that limit smaller competitors from challenging the dominant players. …

7. Selective globalization and political protection has created a two-tiered labor market in the US. …

8. Financialization and the two-tiered labor market have led to a two-tiered wealth structure in which the top 10%'s share of the nation’s wealth has outstripped not just the stagnant income and wealth of the lower 90%, but of productivity, the ultimate driver of national wealth.

9. … Looking farther out, there are emerging trends I call “the five Ds:” definancialization, delegitimization, deglobalization, decentralization and deceleration. …

10. Definancialization. Resistance to the political dominance of banks and Wall Street is rising, and the financial industry that thrived for the past three decades may contract to a much smaller footprint in the economy.

11. Delegitimization. The politically protected industries of government, education, health care, and national security are increasingly viewed as needlessly costly, top-heavy, inefficient, or failing. Supporting them with ever-increasing debt is widely viewed as irresponsible. Cultural faith in large-scale institutions as “solutions” is eroding, as is the confidence that a four-year college education is a key to financial security. 

12. Deglobalization. Though it appears that globalization reigns supreme, we can anticipate protectionism will increasingly be viewed as a just and practical bulwark against high unemployment and withering domestic industries. We can also anticipate global supply chains being disrupted by political turmoil or dislocations in the global energy supply chain; domestic suppliers will be increasingly valued as more trustworthy and secure than distant suppliers.

13. Decentralization. As faith in Federal and State policy erodes, local community institutions and enterprise will increasingly be viewed as more effective, responsive, adaptable, and less dysfunctional and parasitic than Federal and State institutions.

14. Deceleration. As debt and financialization cease being drivers of the economy and begin contracting, the entire economy will decelerate as over-indebtedness, systemic friction, institutional resistance to contraction (“the ratchet effect”), and political disunity are “sticky” and contentious.

So, a picture emerges that promises the economic and political environment to be more unstable and volatile over the coming year. I believe this requires us to make a change in our perspective about the way we view the evolutionary changes that are working in tandem and at time against the revolutionary changes of the past few months.

Understanding the Transition

Many of the people I am with on a daily basis feel a strong ambiguity towards institutions, like government, business, and religion. Many of these institutions are failing, declining, or evaporating before our eyes. I don't need to go into the reasons why. It really doesn't matter that much because to a great degree, it is a function of the transition from one era to the next. I don't believe we can stop those changes. Our course of action is to be different. Here are some of the ways we can adapt to this changing social landscape.

1. Develop Parallel Structures that provide a buffer against the disintegration of legacy institutions.

Creating parallel and redundant structures provides a greater margin of security against the shifts that are taking place. The thinking process behind this is to define the four Connecting Ideas of Mission, Values, Vision, and Impact for your organization, and then answer, How do we create the structures that can fulfill the potential that resides in these ideas?

2. Develop Networks of Trust that provide a community of collaborators who stand with one another as economic conditions worsen.

If society moves towards a more anarchic, violent place, then having a network of trust is essential for security and safety.

3. Develop a Long View / Big Picture that projects out how new ways of working can become sustainable. 

Right now, using traditional planning methods, it is very difficult to create a long-range plan for development. Yet, without some clarity about the Big Picture, we are at the mercy of the current fashionable idea. Build a Long View / Big Picture around the Values that are most important to you and to those who are in your network of relationships. Strong values lived out in our relationships are an essential strength for being more adaptable in the face of revolutionary change.

4. Develop an Independent, Adaptable Mind that is able to discern the Big Picture in the moment of decision.

Don't let someone else tell you what to think. Think for yourself. Do your own research. Read broadly. Think critically, with a view to understanding context, trends, and the Big Picture. Engage in conversation, ask questions, change your mind, and build a network of people who are just as independently like-minded.

5. Develop the Character of Resiliency that refuses to quit or fail, but continues to adapt and learn.

This resiliency comes from an inner strength of courage and confidence that we can go through any difficult situation and remain true to ourselves. To be resilient requires us to see ourselves as more than the victim of current circumstances, but able to adapt and change to create the structures and relationships needed to advance forward.

6. Develop Traditions that Celebrate Values that unite people together as communities of shared mission and responsibility. 

Of the four Connecting Ideas, Values are the only one that does not change. Our values are the glue that holds us together in times of crisis and stress. It is the core strength of every lasting institution. Those people and institutions that are able to change are the ones whose values are greater than their organizational structure.

7. Develop the Leadership of Personal Initiative in every social and organizational setting you touch.

The attitudes and behaviors of entitlement and dependence, which have been nurtured by the institutions that are declining will not sustain society in the future. The freedom of the individual is the freedom to lead through their own personal initiative. The key is understanding that this initiative is the leadership of the future, as people who are free to act, join with others to create the parallel structures that are needed to replace the structures in decline.

The End and The Beginning Redux

I'm still convinced that we are witnessing the decline of Progressivism as a viable system for society. I'm also convinced that Capitalism as it has developed in the late 20th / early 21st century is not sustainable. I am more convinced than ever that individual freedom and the liberty of democracy are the trends that will carry us through the violence of the next generation. I say so because the era that is passing away before us will not go quietly. But go away, it will. That too I am firmly convinced.