Renewal Capability For Sustainable Growth V7


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Provides overview of bases for organizations capable of sustainable growth, development, change and renewal.

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Renewal Capability For Sustainable Growth V7

  1. 1. Building Renewal Capability for Sustainable Innovation & Growth © Dean Robb, Ph.D. 2008
  2. 2. Building Renewal Capability: Agenda • Opening Remarks / Background • Key Quotes • Key Paradigm Shifts • The Core Problem • Renewal Capability: The Cycle of Renewal • Renewal Capability: Key Attributes / Characteristics • Self-Renewing Organizations: Cultural Foundations • Leadership for Renewal: Managing Alignment and Differences • How We Get There • Institutions vs. Self-Renewing Organizations © Dean Robb, Ph.D. 2008
  3. 3. Opening Remarks • Brief history: How I got here • Purpose: Co-inquiry / co-learning • Model as transformative vision – a “new pair of glasses” • Practice emerges from in-sight – “seeing into” © Dean Robb, Ph.D. 2008
  4. 4. Key Quotes Foundations of Individual and Organizational Renewal © Dean Robb, Ph.D. 2008
  5. 5. Motivating Quotes “True creativity always involves a paradigm change, a transformation and a new way of perceiving.” - Nicholas Lore © Dean Robb, Ph.D. 2008
  6. 6. Motivating Quotes “To exist is to change, to change is to mature, to mature is to go on creating oneself endlessly.” -Henri Bergson © Dean Robb, Ph.D. 2008
  7. 7. Motivating Quotes "The intuitive mind is a sacred gift and the rational mind is a faithful servant. We have created a society that honors the servant and has forgotten the gift." - Albert Einstein © Dean Robb, Ph.D. 2008
  8. 8. Motivating Quotes “This, I believe, is the ultimate precept a theory of organization can give: not a manual for dictators of any denomination to more efficiently to subjugate human beings by the scientific application of Iron Laws, but a warning that the Leviathan of organization must not swallow the individual without sealing its own inevitable doom.” - L. V. Bertalanffy (1969) General Systems Theory © Dean Robb, Ph.D. 2008
  9. 9. Motivating Quotes Insanity is doing the same thing over and over again, expecting different results. -or- If you keep on doing what you’ve always done, you’ll keep on getting what you’ve always gotten. - Anonymous © Dean Robb, Ph.D. 2008
  10. 10. Paradigm Shifts: A Sea Change The Emergence of Renewal © Dean Robb, Ph.D. 2008
  11. 11. Shift in Worldview: Basic Assumptions Dying Paradigms Emerging Paradigms Mechanistic model Living, adaptive, evolutionary model Linear business growth Non-linear complex growth (Renewal) Business Growth = Business Growth = Strategy Execution + Strategy Execution Creative Renewal Stability / Continuity Continuous Adaptation Control Order; Coherence; Integrity Prediction Prediction + Emergence © Dean Robb, Ph.D. 2008
  12. 12. Shift in Worldview: The Social World Dying Paradigms Emerging Paradigms Parent-Child Adult-Adult Psychological Contract Psychological Contract Executives & Workforce Community of Shared (split) Purpose Authoritarian Leadership Collaborative Partnering Masculinity Integration of Feminine & Masculine Patriarchy No “archy” at all Mastery & Ego Continuous Learning & Humility © Dean Robb, Ph.D. 2008
  13. 13. Shift in Worldview: The Social World Dying Paradigms Emerging Paradigms Performance to Engagement & Specifications Contribution Compliance Commitment Command-and-Control Freedom + Accountability Conformity Conscious Community Institutional (Role-based) Post-institutional Relationships Business Intimacy The basic human need for Interdependence of emotional and spiritual Organizational and Individual growth is ignored: Growth “It’s not our problem” © Dean Robb, Ph.D. 2008
  14. 14. The Core Problem: The Usual Organizational Life-Cycle and The Myth of Linear Growth © Dean Robb, Ph.D. 2008
  15. 15. The Usual Organizational Life-Cycle Making It Becoming Getting An Organized Institution Launching The Closing Venture In Dreaming Dying The Dream © Dean Robb, Ph.D. 2008 (W. Bridges)
  16. 16. Making It Getting Becoming Organized a Cash Cow The Cycle of Launching Renewal Winding The Down Venture Dreaming Exit The Dream © Dean Robb, Ph.D. 2008
  17. 17. The Usual Progression Organization Institution © Dean Robb, Ph.D. 2008
  18. 18. The Myth of Continuous Linear Growth “The rules of The Game are quite simple: Report quarterly earnings that rise with the smooth predictability of a bunny slope. Treat yourself as a god for managing those smooth quarterly earnings. And pay yourself accordingly. When anybody suggests that you have made a strategic blunder, fold to those instincts and bury the mistake in divestitures and a series of restructuring charges. Mastering the Game can make you feel like a master of the universe. Then one day you wake up and realize the Game has mastered you.” - Bill George, former CEO of Medtronic, and current Director at Goldman Sachs, Target, Novartis, and the Harvard Business School © Dean Robb, Ph.D. 2008
  19. 19. The Real Growth Process: The Cycle of Renewal Task One: Task Two: Performance: Adaptation: Responding Effectively to a Responding Effectively to a Context Change in Contexts Growth: Alternating Cycles of Task One and Task Two © Dean Robb, Ph.D. 2008
  20. 20. Sustainable Growth: A Cyclical Process Performance Plateaus: • Strategy & Organization Aligned with Environment • High Performance Adaptive Change Periods: Desired: • Strategy & Organization Not Continuous Actual: Aligned with Environment Linear Cyclical Growth • Lower Performance Growth © Dean Robb, Ph.D. 2008
  21. 21. Organizational Renewal Capability: An Integration of Complements Performance: Adaptation: Disciplined Execution Creative Renewal • Value Delivery: Existing • Value Creation: New Strategy, Products, Services Strategies, Products, Services • Mastery of an Existing Game: • Learning/Creating New Games: Success within an existing Success adapting to changes in Company-Market configuration Company-Market configuration • Focus: Short-term performance • Focus: Long-term organic growth • Metrics: Efficiency, Productivity, • Metrics: Effectiveness, Market Consistency, Repeatability, Alignment, Customer Satisfaction, Quality, Cost Top-Line Growth © Dean Robb, Ph.D. 2008
  22. 22. The Self-Renewing Organization Renewal Capability Requires Two Complementary Sub-Systems © Dean Robb, Ph.D. 2008
  23. 23. Performance System • Focus: Short-term Task • Shared mission/vision, short-term strategy & goals • “Zone of Alignment” & Disciplined Execution • Structure: • Organizational structure, roles, responsibilities • Business, operational, management and support processes/ procedures • Management systems • Culture • Shared norms, values, patterns of relationship, ideology • Competencies • Capabilities that are focused on, developed, rewarded • (Mostly) focused on short-term, disciplined execution © Dean Robb, Ph.D. 2008
  24. 24. Adaptation System • Focus: Long-term Development • Deep Purpose: Source of meaning & vitality • Wellspring of sustainable innovation, entrepreneurship, adaptation and renewal • Domain of unaligned, unassimilated differences, unprocessed organizational memory • Structure: • Strategic, Product, Service, Process Innovation processes • Organizational learning & development processes • Personal & Interpersonal development processes • Culture • Values that foster innovation, growth, change • Competencies • Focused on developmental growth, adaptation, innovation • Untapped, latent (“invisible”) capabilities © Dean Robb, Ph.D. 2008
  25. 25. Uses for Adaptation System Performance • Improve System • Gain Performance Goal Achievement commitment System Alignment Rationality Closure Structure Focus Action Access Align • Learn • Renew vitality • Change Adaptation System • Innovate Differences Play Energy • Increase Commitment range of Learning • New options capabilities © Dean Robb, Ph.D. 2008
  26. 26. Renewal Capability Profile High 10 9 Q3: Q4: 8 Performance 7 Repeatable Renewable System: 6 Level of 5 Development 4 Q1: Q2: 3 2 Risky Responsive 1 1 2 3 4 5 6 7 8 9 10 Low High Adaptation System: Level of Development © Dean Robb, Ph.D. 2008
  27. 27. Self-Renewing Organizations: Underlying Competencies © Dean Robb, Ph.D. 2008
  28. 28. Integration of Competencies Performance Adaptation Task mastery Learning Aligning behavior Leveraging differences Problem-solving Creativity, Imagination Rational intelligence Emotional intelligence Planning & control Embracing the unexpected Detail focus Systemic focus © Dean Robb, Ph.D. 2008
  29. 29. Integration of Competencies Performance Adaptation Financials Spirit and Soul Execution Innovation Role Authentic Self Focus & Closure Options & Ambiguity Action Reflection © Dean Robb, Ph.D. 2008
  30. 30. Spectrum of Renewal Competencies Performance Competencies Leaders DIFFERENCES Adaptation Competencies © Dean Robb, Ph.D. 2008
  31. 31. Self-Renewing Organizations: Cultural Foundations © Dean Robb, Ph.D. 2008
  32. 32. Is Culture a Bunch of Touchy-feely BS? Lets Look at the DATA © Dean Robb, Ph.D. 2008
  33. 33. High-Performance Cultures Multi-Year High-Performance Low-Performance Harvard B-School Cultures Cultures Study Revenue Growth +682% +166% Net Income +756% +1% Growth Source: Corporate Culture and Performance, John Kotter © Dean Robb, Ph.D. 2008
  34. 34. Adaptive Cultures Measured from Adaptive Non-Adaptive 1996 – 2004 Cultures Cultures Net Income Growth +989% -47% Net Income 11.5 1.7 Growth Index Stock Price Growth +204% +70% Crawford's Leadership & Culture Study of Fortune 500 companies © Dean Robb, Ph.D. 2008
  35. 35. High-Performance Cultures: Foundations • Discipline: Promotes Decisiveness, Standards of Excellence, Direct Accountability • Liberation: clear boundaries, combined with flexibility within • Proactive Performance Management: blocks obstructive behaviors; supports, reinforces, rewards constructive behaviors • Foundations: • Openness and Trust • Managed Differences • Simplicity, Flexibility with Sharp Focus (Implementation) • Play to People’s Strengths © Dean Robb, Ph.D. 2008
  36. 36. High-Performance Cultures: Leadership • Clear Articulation of a Strategic Framework • Mission, Vision, Values, Strategic Goals, “Critical Few” Measureable Priorities • Design & Take Accountability for Managing Service- Oriented, Flexible, Efficient Business Processes & Structures • Engage Their People, and Work Hard to Learn Their Strengths • Manage Talent Well and Encourage Ongoing Learning • Communicate Rigorously and Often © Dean Robb, Ph.D. 2008
  37. 37. Adaptive Cultures: Leadership • Encourage confidence and risk-taking • Mistakes proactively utilized for learning & growth – Hidden downside of Six Sigma: can engender perfectionistic (blaming/punishing, mistake- and risk-averse) culture • Leadership proactively leads change • Focus intensely on changing consumer needs • Facilitate change to meet needs of three constituencies: stockholders, consumers, and employees – Non-Adaptive cultures: cautious management that focuses on protecting its own interests • Focus on long-term growth – growth prioritized over short-term results © Dean Robb, Ph.D. 2008
  38. 38. Leadership for Innovation, Growth and Renewal: Managing Alignment and Diversity © Dean Robb, Ph.D. 2008
  39. 39. Adaptation Performance The Central Dilemma Alignment Market Internal Differences: Alignment: • Innovation, adaptation, • Disciplined execution renewal • Focus: Current performance • Focus: Long-term growth • Source: Aligned (shared) • Source: diversity, strategy, goals, people, differences, individuality structure, processes, • Typically untapped systems, culture, capabilities © Dean Robb, Ph.D. 2008
  40. 40. The Core Problem: The “3-C’s” Legacy Practices in Managing Alignment • Compliance – task execution (behavior) according to specs  Individual initiative & creativity threaten smooth-running “production machine” • Control – to ensure compliance, predictability, consistency  Surprises: “errors” to be rooted out  “Six Sigma” cultures: preoccupied with “error” elimination • Conformity: Performance excellence via so-called “strong cultures” Result: Repression of Internal Diversity and Differences © Dean Robb, Ph.D. 2008
  41. 41. The Core Problem “The Leviathan of organization must not swallow the individual without sealing its own inevitable doom.” - L. V. Bertalanffy, (1969) General Systems Theory © Dean Robb, Ph.D. 2008
  42. 42. Dynamics of Repression Activates oppositional energy & activity in the Adaptive System: • Energy & talent bound up in repressed differences – unavailable to the organization • Internally fragmented & oppositional system • Stagnation, demoralization, productivity loss • Potential for disruptive or dangerous eruptions Result: Repression & control yields loss of control; loss of resources for innovation, adaption, growth © Dean Robb, Ph.D. 2008
  43. 43. The Solution: “All Hands On Deck” “The person who figures out how to harness the collective genius of his or her organization is going to blow the competition away.” -- Walter Wriston, former Chairman/CEO Citicorp © Dean Robb, Ph.D. 2008
  44. 44. All Hands On Deck! A community of adult individuals with the talent, spirit, ideas and commitment to perform together at a high level, continually create new forms of value, and reinvent themselves as needed to adapt to situational change. © Dean Robb, Ph.D. 2008
  45. 45. High Cults Hierarchy Community: Fascist The New Frontier States Traditional Societies Diversity-in-Community Level of Group Belonging Governments Bureaucracies Communities of Practice Fatalist Individualist Societal Underworld: Large Metropolitan Centers “Falling Through the Cracks” Breakdown of standards Rejected Anomie Alcoholism / Addiction / Violence Instability / Chaos Totalitarian Militias Opportunism / Exploitation States Revolutions Low High Level of Diversity & Expression
  46. 46. High Traditional Corporations Renewable Enterprises Hierarchical Institutions Diversity-in-Community Conformist Monoculture Partnering/Mutuality Multicultural Level of Group Belonging Orthodoxy Low Innovation & Learning Heterodoxy Perpetuation of Status Quo High Innovation & Learning Non-Renewable Evolution Renewable Growth Economic Underworld: Individualist Trapped Opportunism & Exploitation Un/Underemployment Cultural fragmentation “McJobs” Low Organizational Learning Chaotic Turbulence Non-Renewable Non-Renewable Low High © Dean Robb, Ph.D. 2008 Level of Diversity & Expression
  47. 47. What’s the RESULT? • A Self-Renewing organization – that is highly adaptable to external market shifts, yet focused on and aligned behind a coherent business strategy • Because of the way it is led, a continually- renewable connection is forged between corporate strategy and the full capability, commitment, and innovation capacity of ALL your people. © Dean Robb, Ph.D. 2008
  48. 48. Touchy-feely BS? Lets Look at the DATA © Dean Robb, Ph.D. 2008
  49. 49. All Hands on Deck – ROI 60-100% employee 24.2% Total Shareholder engagement Return 49-60% employee 9.1% Total Shareholder engagement Return < 25% employee Negative Total Shareholder engagement Return Hewitt Associates Employee Engagement & Best Employer Database of 1500 Companies (2004) © Dean Robb, Ph.D. 2008
  50. 50. “Conformity is the Enemy of Growth” (JFK) Higher Proportion of Women 35% Higher Return on Senior Executives Equity -- Catalyst 34% Higher Total Return to Shareholders Geographic Areas with Significantly Higher Tech- Higher Concentrations of Driven Business Growth Gays & “Bohemians” Carnegie-Mellon economist To stay competitive, hire Richard Florida more non-conformists, gays, other minorities © Dean Robb, Ph.D. 2008
  51. 51. How We Get There Principles & Practices © Dean Robb, Ph.D. 2008
  52. 52. Why Traditional Diversity Won’t Work • Hierarchical Institutions: Traditional diversity initiatives attempt to “graft” integration of internal diversity onto the upper-left quadrant • Hierarchical Institutions were DESIGNED to: • Repress change, creativity and differences • Maintain and protect a relatively homogeneous in- group (senior execs) who retain all meaningful sources of power and influence What is required is a transformational change in the foundational design DNA of organized human systems!
  53. 53. Transformational Change: Adult-to-Adult Social Contract © Dean Robb, Ph.D. 2008
  54. 54. Relational Foundation: Partnering © Dean Robb, Ph.D. 2008
  55. 55. Renewal Capability Profile High 10 9 Q3: Q4: 8 Performance 7 Repeatable Renewable System: 6 Level of 5 Development 4 Q1: Q2: 3 2 Risky Responsive 1 1 2 3 4 5 6 7 8 9 10 Low High Adaptation System: Level of Development © Dean Robb, Ph.D. 2008
  56. 56. Improve Performance System: Strategic Options & Recommended Tactics Strategic Options: Audit Targets: Strategy & Structure: Strategy/Structure: • Clarify purpose & strategy • Current strategy implementation plan • Audit & implement improvements: • Value Delivery Capabilities: o Financial measures & controls o Key Functions, Teams o Operations o Business & Operational Processes o Product & service quality o Roles, Responsibilities • Define, document & improve core o Metrics business processes • Consumer-Centric organization • Clarify roles, responsibilities, boundaries, accountabilities People: People: • Leadership/Management practices: e.g. building commitment-based alignment, • Build Commitment-based engagement, accountability Alignment • High Performance Culture • Build Performance Competencies • Baseline Performance Competencies © Dean Robb, Ph.D. 2008
  57. 57. Improve Adaptation System: Strategic Options & Recommended Tactics Strategic Options: Audit Targets: Structure: Strategy/Structure: • Build/redesign Value-Creation • Value-Creation processes: new product processes – R&D, new product development, business model innovation development, new business • Key Functions: e.g. R&D, marketing models People: People: • Build Adaptive Relationship skills • Leadership/Management practices: e.g. leveraging differences, building safety & • Build Adaptation Competencies trust, supporting creativity, dealing with • Build Integrity-based processes to difficult problems/issues manage differences & issues • Adaptive Culture elements: e.g. • Build trust & safety creativity, learning, managing change, emotional intelligence, visioning • Develop expectations of how individuals, groups & organizations • Baseline Adaptation Competencies build & manage renewal • Adaptive Relationship skills © Dean Robb, Ph.D. 2008
  58. 58. Summary Comparison: Institution vs. Self-Renewing Organization © Dean Robb, Ph.D. 2008
  59. 59. Institution (Defended) Organization Change Process: Characteristics: Freeze – Unfreeze - • Difficulty letting go of Refreeze status quo Performance • Mission: short-term System financial performance • Difficulty with learning, change & development • Rigidity – High control – Low trust Untapped • Security is key driver Capabilities • Anxiety & grief repressed • Differences & alternatives Adaptation repressed System © Dean Robb, Ph.D. 2008
  60. 60. Self-Renewing Organization Change Process: Characteristics: Semi-Continuous • Community sustainability Flow overrides status quo • Mission: Service to a larger Performance system System • Focus on purpose, meaning • Balance of performance with learning, change • Safety & Trust Untapped • Emotion is acceptable Capabilities • Insecurity accepted as basic to life Adaptation • Differences prized System © Dean Robb, Ph.D. 2008
  61. 61. Addendum: Going Deeper © Dean Robb, Ph.D. 2008
  62. 62. Summary Comparison Performance System: Adaptation System: Primary Purpose Short-term results Long-term sustainability Primary Orientation Status Quo New Ideas & Directions Underlying Form Production machine Evolving life-form Visibility Visible, Manifest Somewhat invisible, latent Core Process(es) Consistent execution Innovation, learning, change Basis of Effectiveness Efficiency, Productivity, Creativity, Relaxation, Quality Redundancy Social Foundation Alignment Diversity Key Activity Tasks Relationships, meaning, emotion Orientation to change Planned Emergent Core Competencies Rational, analytical, concrete Inspirational, synthesis, visionary © Dean Robb, Ph.D. 2008
  63. 63. Self-Renewing Human Systems Organization Performance System: •Structure Performance Size of Channel: •System •Degree of collective •Roles & Tasks Domain differentiation (vs. •Shared goals, group merger) norms, perspectives Channel •Degree of Repression •Developed competencies Accessing Adaptation •“How things get Domain: done” •Visible 1) Use of “Negative •Aligned Capability” 2) Action Inquiry 3) Create a “Safe Adaptation System: Untapped Container – safety, •Latent capabilities Capabilities trust, interpersonal •Alternative boundaries perspectives 4) Access latent •Identity contents: •Meaning • Active Imagination •Archetypal contents Adaptation • Symbol •Shadow Domain • Group Self-Image •Invisible • Story •Unaligned • Dreams • Drawing © Dean Robb, Ph.D. 2008
  64. 64. Performance System: Dynamics • Provides order, structure and discipline necessary to deliver value, and integrate value creation • Balances: • Stability and the need for change • Environmental requirements with internal needs for growth and development • Problematic tendencies: • Narrowing of focus to short-term goals only • Defending/protecting status quo • Repressing differences, diversity, alternatives and growth • Institutionalization © Dean Robb, Ph.D. 2008
  65. 65. Performance System: Functionality and Alignment The Performance System is functional to the extent that: • The current Task Focus aligns with a genuine need in the environment • Task Structure, Competencies & Culture are aligned with the shared task • System members are authentically aligned with the Performance System and their role in it © Dean Robb, Ph.D. 2008
  66. 66. Adaptation System Dynamics • Source of innovation, vitality & renewal • Provides balancing corrective to the PS’ short-term tendencies • Seeks long-term growth of the organization (wholeness):  Fulfillment of deepest & highest purpose  Broadening of strategic & competence spectrum  Development of untapped potential  Integration of internal fragmentation, differences, shadow • Challenge: Mostly outside of day-to-day awareness © Dean Robb, Ph.D. 2008
  67. 67. The Cycle of Renewal PERFORMANCE (Making It) Business Model Strategy (Re)Build Products/Services AWARENESS + Supporting Organizational Components (Re)Focus ACCEPTANCE © Dean Robb, Ph.D. 2008
  68. 68. The Cycle of Renewal: Phases Performance: Create excellent results through tight alignment between the Performance Architecture and external & internal needs (Re)build: Awareness: • Redesign and rebuild the Sense that the current Performance Architecture to Performance Architecture no realign with changed needs longer meets external or • Work through emotional & internal needs political consequences (Re)focus: Acceptance: • Create a new direction for Work through emotional & the organization political resistance to change • Work through emotional & political consequences © Dean Robb, Ph.D. 2008