Some thoughts on Core Group Dynamics:

I took a walk in the dunes with a colleague of mine sometime. We talked about the difficulties he was having getting through some people in his organisation (members of the core group). He relayed me the story of a friend, who’s a biologist. This guy was observing a group of giant turtles on a forlorn island in the Pacific. Initially, he did not get far. Every time he wanted to come closer, they’d scurry off in to the water. Then, he started seeing who the leaders of the group were. So he got on his knees and hands and crouched down towards the group. Again no luck. He was getting pretty frustrated and thought about packing up. He watched them for another day and really looked for patterns in the group that maybe he’d failed to see previously. Suddenly, he noticed something. The animals he perceived as the leaders of the group all shared a habit: every now and then, they’d use a paw to scoop a bit of sand on their backs. He moved slowly towards the group and installed himself among them. And put a few scoops of sand on his back. And what do you know? He was in and could be among them without the group scurrying of into the water.

Our conclusion: if you want in, find out what the equivalent of that scoop of sand on your back is….

Quit sticking labels. Start thinking of your organisation as a bunch of people, not an org chart

It’s not about dividing the world in “suits” and “ponytails” It’s about truly accepting yourself and others as they are.

Do you want control (fear ‘n loathing) or to embrace change (love ‘n fun)?

True leaders endorse and enable leadership in others.

Are you going to adopt a wait-and-see-policy or are you going to do something?

Any market is contestible.

I am noticing that “The Market” is making a very serious attempt to bullshit itself collectively again, towards a bear market.

I think I am seeing a pattern, though.

All (investment) banks need to make fees, because if they don’t make fees, their balance sheet eventually goes awry and they go down in credit rating, so they can provide less credit, so their clients will go down, because they can’t feed their respective beasts. All advisors (lawyers, accountants, consultants,…) to banks need to make fees. Investors need to make money. But because credit is a good thing, a sizeable chunk of them effectively aren’t investors, but borrowers. They do not invest, they borrow ever more money against increasingly fewer assets.

So first, some of the smartest guys at the banks come up with something. In the mid nineties it was “on balance hyper leveraged corporate finance”. And everybody agreed for a while that this was a good, new thing. Since effectively that defied the laws of mathematics and a few others, something had to be done after a few years. So the smart guys came up with another smart thing. “Why don’t we put a spin on securitization?” they asked themselves. And spin it they did. Next to the on balance hyper leveraged corporate finance, they found ways to generate funds for off balance financing. To astounding levels.

And then everybody was really surprised that this did not work out. Not for Internet companies and a few years later, because the stakes were a little higher on that and they did possess or professed to possess something vaguely resembling assets, energy and infrastructure companies. And in the wake of it, the stock market saw a massive downturn. Which again, professedly, surprised the shoes off most of the smart guys mentioned earlier.

So for a while, everybody who might have lost his common sense temporarily, went back to what always worked: if you want a healthy economy, at the top, you need governments that keep the budget reasonably in check (think all you like about the Clinton administration, but this they did) and down below, companies that contribute to that economy by making more than they spend with a sane balance sheet and growing at a reasonable rate.

Not so our smart guys. Because the beasts must be fed. So they thought to themselves: “What can we do?” And they moved down the food chain. So over the past few years, they stuck to their deep held belief that credit is a good thing. So they started providing it literally, as one of them proudly described it “to anything that still had the semblance of a heartbeat in it.” No assets? No problem. No credit rating? No problem.

And again, they were somewhat surprised that the failure rate on that type of credit was significantly higher than on traditional consumer credit. “What can we do?” they asked themselves. “Aaah…”, said one of them: “remember the good old days of securitization?” “Yeah!” replied the others. And they went ahead and did it.

And now, they are beginning to see the end of the tenability of that position. Hence they start talking about a bear market. So they can blame the market and look for the next game.

My dad started his career as the deputy chief of the military police in the Royal Dutch Marine Corps. His superior was an old major, who believed in discipline and tough love. Sometimes a marine would get in trouble financially. He’d bail them out, personally. But he would also sit them down and took them through the following legendary standard conversation:

“Marine!”

“Yes, Sir, Major, Sir!”

“You smoke roll ups?”

“Yes, Sir.”

“Get out your cigarette paper”

“Yes, Sir”

“Give me one”

“Yes, Sir.”

“Notice there is a fold in the middle?”

“Yes, Sir.”

“That has a purpose. On the left, you scribble what you earn. On the right, you scribble what you spend. There must always be more on the left than on the right.”

“DO YOU GET THAT, MARINE?!?”

“YES, SIR MAJOR, SIR!”

“Good. Now get the fuck out of my office and don’t let me see you here again!”

Knowledge per sé is obsolete. The power to aggregate it takes over.

A great many people think they are thinking when they are merely
rearranging their prejudices.

William James 1842 - 1910

Rituals

This story was triggered by a man I saw doing something and then again, almost a year later. There had been time that had elapsed, yet the ritual he performed hadn’t changed.

Somewhere on a street in South-Kensington, there’s a car that’s always parked in the same spot. It’s an old Escort Estate, I’d say from the early Seventies. In the back there’s a cool box, as though it’s waiting to go off for a nice drive in the country. On the back seat you see old, yellow magazines from the Sixties. A clue that it never, or almost never, moves from its place is that there is also a can of touch up paint in the back. And apart from the fact that the car has been touched up here and there, it looks like it just came from the dealer. Every once in a while, a man in his late sixties, perhaps even early seventies, gets in. He’s dressed in a blazer and tie, but distinctly from the same era as the production date of the car. So are his glasses. After he gets in, he starts the engine, lets it run for a few minutes. After that, he switches it off, gets out, locks it and leaves.

As said, I saw it happen twice, with quite a long interval between it. Others informed me that it happened more frequently. It set off my imagination. Why did he do this? It was almost as if he was keeping everything in perfect order for the moment somebody came back to make the Sunday drive that the car seemed so well equipped for to make.

Would his wife have died? The pointed-ness and dignity with which he performed the ritual made me think that in a way, for whatever reason he was doing it, he was also doing it because it served as way to retain something that was already long gone. And to reconnect to that. Or hold on to it. Commemorate it.

When I thought about this, it dawned upon me that each and everyone of us has rituals we cling to, individually or as a group, for various reasons.

I think that we are, most of the time, unaware of the rituals we have, share and develop throughout life. Very often, we clash violently with our surroundings. That is to say, if we haven’t been so numbed that we even fail to see that we clash and are caught by surprise by an event that makes a big impact on our lives.

You have a huge argument with your boss and almost get fired. Initially you fail to see why. Your partner explodes at something you say or do. In first instance you can only look at this with disbelief. Almost as if you are watching a movie, rather than being part of what is unfolding at the moment itself. Another thing is that you cannot imagine that there is a good reason for blowing up about something as trivial as this. You suppress feeling of anger, bewilderment and wonder at how this came about and look for ways to appease this. Sometimes you succeed, at others, you don’t. You get drawn in and the room seems to burst with volcanic activity.
The interesting question here is of course, what the definition of success on this one is.

What rituals do you see in your life?
In the organisation you work in? Do they contribute to development or do they hold it back?

EVENTS

Wednesday, February 23, 2005

Club of Amsterdam
the Future of the Service Industry
Reception: 18:30-19:30, conference: 19:30-22:15

www.clubofamsterdam.com


On March 18th, Peter Senge will be hosting a collaborative session in the Efteling, in the Netherlands.

On March 24th, Art Kleiner will be in Holland for conducting a workshop on The Core Group.

Art of Hosting, 14 - 17 April, Cork, Ireland (Engage)

Art of Hosting, 2 - 4 May, The Netherlands (Engage)

How can we create safe learning spaces where strategic and meaningful conversations take place in order to create comprehensive and innovative solutions for the problems that our world, organisations and communities are facing today? How can leaders encourage collective intelligence and creativity to emerge? We offer the Art of Hosting that can help you to explore and develop your own competencies. We invite leaders, trainers, teachers, entrepreneurs, politicians, consultants, pioneers - people with the courage to let go of control in order to achieve better cooperation and results.

Contact me for more details: sjoorda@xs4all.nl

A few cool resources:

http://www.dialogonleadership.org/

Otto Scharmer's project that led to the book Presence with all the interviews with leading thinkers.

www.engage.nu

My friends at Engage. They rock and continue to push the envelope in leadership development

www.artkleiner.com

I enjoy Art. He has one of the greatest brains I know. I helped getting his latest book "The Core Group: Who Really Matters" translated and published in Dutch. Sample some of his thinking here.

www.fastcompany.com

Still a cool magazine.

www.oftheshire.org

Tim (of Engage fame) is one of the caretakers of this beautiful estate in Nova Scotia, Canada.

Models or lenses?

There are many models, certainly in management literature and practice. There are a lot of leaders who, in their eagerness to break through the mould and bring about change in organisations have done away with the use of models altogether.

To an extent, I welcome that approach, because all too often, models, like Powerpoint slides, are something people can hide behind. Or models and who has the glitziest one, become an objective in themselves.

The way I have learnt to work with models in the last few years, thanks to David Kantor, is twofold. In the traditional scientfic way: to clarify what I mean to others. Secondly, to work with models and constructing or clarifying my own, to deepen my understanding of what I stand for and how that defines my being, as an individual and a practioner in the field of organisational development.

As you do this work, you come to the realisation that they allow you to clarify for yourself, but much more practically, to others as well, what your lens for looking at the world is. And I have found that that is a great way for starting to do something that I think is crucial in achieving sustainable change: to build a common language in the best cases and if you do not succeed at that, to understand someone elses language, so you can honour your differences, rather than debate and fight, and build from there.

Do you have a notion of your model?
Do you "borrow" a favourite from others?
Who inspires you?
What constraints do you see working on your practice?

Some thoughts on generating change

I came across the following text a while ago:

“Corporations around the world now write checks for more than $50 billion a year in fees for “ change consulting”. Yet, consultants, academic surveys, and reports from the “changed” companies themselves indicate that a full 70% of these efforts fail. The reason ? We call it social reengineering, a contemporary variant of the machine model’s cause-and-effect thinking.[1]”

This makes me blush, but the conclusion is too simple, in my view. It is not just a lack of insight in the “soft” stuff that makes that a lot of efforts to change organizations fail. What I see as a real challenge is to contribute, from a practical perspective, to finding interventions that achieve a synthesis between the hard and the soft stuff and to capture those in methodology. To enable organizations to do what they derive their right of existence from in the current timeframe, in my view: creating real value, in balance, for their core stakeholders.

“I think you should try to work at different levels of interaction and dynamics. You can make the most wonderful plan and start communicating that from the top down, but the chances that people are going to change in a linear way, according to your plan is, well, close to zero. Because they’re people and not an algorithm or a production process. What I feel you need to do, next to helping to unleash the power of the imagination in leadership, is to give the people who need achieve the actual how the space and the tools to do their jobs from personal conviction and let them shape it themselves.

If you really want to create a place where people create maximum value together, you have to make sure that you connect business urgency with personal urgencies. Which means you need to clarify those first .So when you’re making strategy, you also need to look at the interpersonal dynamics in a team and making sure that they actually achieve their objectives. A strategy document is all too often an excuse to sit back comfortably and shout “But we have a clear strategy, don’t we?” And going through these processes, with or without the help of a consultancy firm, will “fix” 80% of the problems. But it is usually the conveniently neglected other 20% that holds the key to unleashing the real potential (and the root cause for the earlier 80%).

In as much as I can, I try to help reduce things to simple dilemmas, scenarios and solutions. Complexity is often maintained because it is a wonderful hiding space that stops people from doing things. Traditional consultants and management teams, I sometimes think, don’t mind contributing to this, because it enables them to stay where they are and in the consultants’ case, to bill another two months.

I believe in reasonably condensed interventions, if they are necessary, with a more cyclical monitoring process. Two objectives: finding unique value propositions for markets and customers and helping to remove the complexity that stops the team from going out there and making it happen. In addition to that, the transfer of capabilities and mirroring, which should lead to solutions that are self-sustainable, and above all, self propelling. With the latter I mean creating solutions and structures so that an organization is able to do it on its own and without the long term involvement of armies of external people. Creating a flywheel effect in growth.
[1] Fr: Surfing the edge of chaos.

Some of my favourite reading:

Business Dynamics, Systems thinking and modelling for a complex world, Sterman, 2001, Irwin/McGraw-Hill

Serious Play, Michael Schrage, HBS Press, 2000

Dialogue and the Art of Thinking Together, Bill Isaacs, Currency/Doubleday, 1999

Pschychosynthesis, Assagioli, Pyschosynthesis Research Foundation, 1965

Grammars of Creation, George Steiner, Faber & Faber, 2001

Creativity, Mihaly Csikszentmihaly, Harper Perennial, 1997

Fifth Discipline Fieldbook, Peter Senge et al., N. Brealey Publishers, 1998

The Dance of Change, Peter Senge et al., N. Brealey Publishers, 2000

The Irrational Executive, Psychoanalytical Studies in Management, M. Kets de Vries, Edit., Intl. University Press, 1986

Maslov on Management, A. Maslov et al. (posth.), Wiley, 1998

Struggling with the Demon, Essays on Individual and Organisational Irrationality, Psycosocial Press, 2000, Manfred Kets de Vries

Leading the Revolution, Gary Hamel, HBS Press, 2000

The Circle of Innovation, Tom Peters, First Vintage Editions, 1999

Creative Destruction, R. Foster & S. Kaplan, Currency/Doubleday, 2001

Vital Lies, Simple Truths, The Psychology of Self-Deception, Daniel Goleman, Bloomsbury 1997

Jamming - The Art & Discipline of Business Creativity, John Kao, HarperBusiness 1996

A book that I will enjoy reading:

Building the Bridge as You Walk on It: A Guide for
Leading Change (Jossey-Bass, 2004), Robert E. Quinn

This book explains why some change management initiatives succeed
while so many others do not. The book addresses three conditions that must
exist for successful change to occur:

• Leaders must change themselves before they can be
effective at leading change by example.

• For change to cascade down through the organization,
groups and individuals within the organization
whose behaviors already embody the desired state must
engaged in the change process.

• People at the top of the organization need to tell a
story that resonates throughout the organization and
explains why change is necessary and what the role of
every employee will be.

Only when these three elements fall into place can
middle managers and frontline employees begin to
adopt the desired behaviors and bring the change to life.


States of Leadership

Building the Bridge as You Walk on It: A Guide for
Leading Change (Jossey-Bass, 2004), Robert E. Quinn
expands on the argument made in his previous book,
Deep Change: Discovering the Leader Within (Jossey-Bass,
1996), that significant organizational change doesn’t
happen unless the leader genuinely lives the changes he or
she is advocating.
Quinn, a professor at the University of Michigan Business School, describes
two states of leadership” that illuminate why so many leaders struggle
with change.

In what he calls the “normal state of leadership” — a state in which most
people operate most of the time — it is very difficult to
achieve change because the leader is too self-focused and
comfort-centered. Individuals in this state mostly consider
what is right for them personally, and they have
difficulty seeing the larger picture of what is right for the
organization. The preferred state for leading change is
what Quinn calls “the fundamental state of leadership.”

In this state, individuals are internally directed by a
strong sense of right and wrong, and are also externally
aware of the larger issues faced by the organization.

In Building the Bridge as You Walk on It, Quinn
identifies eight practices for achieving the personal
transformation that takes an individual from a “normal”
to a “fundamental” state of leadership.

These are:

Reflective action
authentic engagement
appreciative inquiry
grounded vision
adaptive confidence
detached interdependence
responsible freedom
tough love

The eight practices examined in Building the Bridge
as You Walk on It are, on one level, exercises to help leaders
maintain their integrity under situations of great
duress. On another level, they’re avenues to help leaders
engage individuals in reflecting on their own experiences
with change and in adopting new behaviors.
Each practice is explained at length, and with personal
stories.

“Authentic engagement,” for example, is
the ability to align intentions and motives with actions.
If leaders advocate change for the broader good of the
company but are not fully committed to seeing it
through, the contradiction will be apparent to others.
Quinn believes that authentic engagement requires leaders
to make a fundamental choice to live by principle,
even when faced with pain and sacrifice.
He tells the story of an executive famous within his
organization for turning around failing business units.
The executive was temporarily placed in a dying unit
with the promise of inheriting the top job at the company’s
largest business, regardless of his performance in the
interim position. For the first time, this executive found
he was ineffective at fixing a broken situation. Quinn
recounts asking the executive what he would do if the
job in the other business unit were not there waiting for
him. In response, the executive began to run through
the changes he would make. As a result of the conversation
with Quinn, he decided to excuse himself from
taking the other leadership position, and instead rededicated
himself to turning around the failing business
unit. The workers in the unit immediately saw the
change in his engagement and began to change their
own behaviors as well.

“Tough love” describes the leader’s ability to
encourage people in the organization to reach for a higher
standard while also holding them accountable for
meeting those standards. The prime example Quinn
gives is GE’s Jack Welch, an executive renowned for
pushing his team to reach for the highest standards of
performance, but having limited tolerance for those who
fell short. Testimonies from managers who reported
directly to Welch demonstrate that the first time someone
missed the bar, Welch provided considerable support
to help him or her shore up his or her skills and prevent
the person from repeating the mistake. Only if the
individual missed again — after receiving support —
were the consequences serious. Jack Welch left no doubt
that he believed in his subordinates’ abilities and backed
them. But at the same time, these executives knew that if
they could not live up to his expectations, they would be
let go. Quinn argues that supporting individuals as well
as holding them accountable for adopting new behaviors
is essential to motivating those individuals to challenge
themselves and improve their performance.

This is an adaptation of a review as it appeared in Strategy & Busines, no. 37, from the article “Best Business Books of 2004”, section on Change. See http://www.strategy-business.com/ for more. I am not associated with Booz Allen Hamilton or the magazine in any way. The magazine and its website are a great source for thought leadership on many themes, though!