The Emerging Culture Wars

Increasingly in the New Economy, the most important differentiator is proving to be corporate culture.

Research by Kotter and Heskett of Harvard Business School found that organizations with strong cultures had significantly higher performance than firms with rigid or weak cultures. The organizations with the strongest “adaptive” cultures saw their revenue grow four times faster, experienced job creation seven times faster, enjoyed stock prices that increased twelve times faster, and had 750% higher profit performance. Values guru Richard Barrett found that the return on assets and return on equity in companies with the best cultures was higher than the S&P 500 from 1991 through 1997. Malcolm Baldridge research on the comparative performance of winners against benchmark industry performance over a five-year period showed a statistically significant level of out-performance by as much as 34%.5  Denison Consultants found a similar relationship of outperformance in companies with strong cultures vs. companies with weak cultures over a 30 year period.  And in our own research, the hypothetical "Superperformance Fund" outperformed the S&P 500 by a margin of five to one over a 20 year period, from 1985 to 2005. 

Passion is always associated with Superperformance.  This is the energy that not only produces great returns, but sustains them! 

Organizations who want to be super must learn how to attract and energize hearts and minds. 

People look for organizations who share their values, and organizations that align their values with those of their people are going to win the emerging culture wars. 

Second Order Change

"When the manuscript for Out of the Crisis was circulating at MIT over 30 years ago we used to talk about the two hemispheres. Deming would refer to a process and a behavioral side to the thing, to optimization."
Paul Hertz, Ph.D., Deming Colleague

There is a second-order change in dimension when you go from Flatland to Sphereland.

Second order change is change that transforms a system entirely. Second order change is also defined as a critical phase transition. In a critical phase transition as the information, energy, or temperature passing through a system reaches a tipping point, the system experiences a period of perturbation, and then suddenly transformation, it has "escaped" to a new steady state.

It is the same simple experience as falling in love, first one state, then disequilibrium, then suddenly, out of time, a new state, a new "way of being." Same molecules, now transformed.

In the case of Machine View vs Organism View of organization, the change is a symmetry-breaking escape from a self-limiting paradigm of reality. The mechanistic paradigm of organization is giving way, to essentially, a quantum paradigm. The sweet spot of optimization is particle and wave and they go together.

Process and Passion, Tangible and Intangible.

The physics of optimization are quantum physics.

Deming as Servant Leader

W. Edwards Deming is the hero of many a Quality advocate. He learned from Shewhart the Control Chart and the Shewhart PDSA (Plan Do Study Act) Cycle that is the core of contemporary performance improvement science and practice. (See the new Deming videos.) Deming was clear about Leadership he did not equivocate. Did he have the experience of Superperformance? Certainly. He was the central champion and pioneer of the global quality movement that transformed Japanese manufacturing, and in more and more enlighted areas, is transforming organizations all over the world today. Superperformance is within anyone's reach.

On Leadership, Deming had this to say:

The aim of leadership should be to improve the performance of man and machine, to improve quality, to increase output and simultaneously to bring pride of workmanship to people. Put in a negative way, the aim of leadership is not to find failures of men, but to remove the causes of failure, to help people do a better job and with less effort.

Deming's position was that the job of the leader was to use their authority and the resources at their disposal, to make life easier and better for the people doing the work. Deming saw how western management was tethered to a business paradigm of sub-optimization.

Mechanistic management operates with the opposite paradigm. Deming describes the Biazarro World when he wrote:

Most acts of supervision in management ... instead of providing help to people, accomplish just the opposite.

Was Optimization guru Deming a robust model of Servant Leadership? Absolutely.

Study: Millenials Not Engaged

Human Resources consultant BlessingWhite recently published the results of an engagement pulse check across three generations around the world—baby boomers, Generation X and Millennials (also known as Gen Y). This was determined through a survey conducted between December 2007 and February 2008 and the results were sobering. Here are the top-line results:

Disengaged Employees Levels by Generation and Region

	Baby boomers (born 1946-1964)	Generation X (1965-1977)	Generation Y (1978-1990)
Australia & New Zealand	13%	24%	25%
China*	–	34	33
Continental Europe	18	20	28
India	16	12	14
North America	17	20	25
Southeast Asia	16	20	35
U.K. & Ireland	18	22	30

* There were too few survey responses for baby boomers in China to include.

"The research suggests that the more senior the employees, the more engaged they are," BlessingWhite CEO Christopher Rice said in a press release on the results. “Around the globe, senior executives are generally more engaged than frontline managers or individual contributors. Gen Y [Millennial] disengagement levels may reflect, to some extent, their low seniority since more baby boomers would predictably hold leadership roles. Increased engagement is an expected outcome from power and position.”

Disengaged workers can only become a larger and larger handicap for companies. India may have the answer for us. That’s because the exception to a general picture of disengagement among Millenials can be seen in India, where younger employees have higher levels of engagement compared with other regions.

Rice explained in the BlessingWhite press release. “This probably reflects the expanded opportunities as well as its young, fast-paced, knowledge-based economy. In fact, all generations in India are happier than employees in other regions.”

Millenials are our future. Often they bring a much healthier approach to work and the workplace than many older workers do. They are the first generation in history that will teach the generations before it how to make use of the next generation of technology, Web 2.0 and 3.0 tools.

We should see this global engagement survey as another wake-up call that the Knowledge Economy has arrived. Knowledge worker productivity is driven by personal engagement and commitment. Increasingly in the future, this will be the main responsibility of management. Motivation of knowledge workers requires that managers reframe their paradigms from command and control to servant leadership. Why?

Knowledge work is driven by intrinsic motivation. It is chosen.

The Super Pattern

Superperformers leverage passion and process to become everything they can be. We share this foundation of opposites with all of life in general. We inhabit a universe of chaos and order, left and right, male and female, expand and contract. Everyday we buy and sell, twist and turn, think and feel.

The ancient Chinese philosophy of yin-yang holds that everything in nature consists of opposite forces, which must remain in balance for life to thrive. The yin and yang are opposing forces that constantly shift, operating in continual conflict, but at the same time in need of each other for completion. These opposites drive each other towards creativity and excellence, while at the same time restraining the other to inspire harmony.

Twenty-first century physicists exploring the immutable forces of nature have come to the same conclusion. In referring to this inescapable influence, Nobel Physicist Niels Bohr’s famous complementarity principle described the paradox of the particle-wave duality encountered at the subatomic level of light. Bohr discovered that fundamentally, light consists of streams of particles (photons) that simultaneously behave like waves. Afterwards, Bohr saw evidence of complementarity everywhere. Not just subatomic particles, but all of reality, he insisted, fall under the sway of complementarity: “‘We have been forced to recognize that we must modify not only all our concepts of classical physics but even the ideas we use in everyday life . . .”

Superperformers leverage this same ubiquitous relationship. It is this interaction that is the nuclear reactor of Superperformance. This is the sweet spot. Superperformers have simply joined their tangible and intangible parts to “escape to a new level” of performance.

If there is a mechanics of optimization it must be a quantum mechanics.

Join us in Houston on March 6, 2009 for "Servant Leadership - The High Performance Link"

http://servantleadershipconference.com/
Servant Leadership-the High Performance Link, slated for March 6, 2009, will be held at the University Hilton at the University of Houston . This conference is a production of CEO Netweavers, the Greenleaf Center for Servant Leadership, and the International Society for Performance Improvement.
Its’ purpose is to shine the light on servant leadership at work, especially the powerful and unmistakable connection between true servant leadership in action and outperforming return on investment, operational excellence, and joy in work.
Along with a transformational conference experience, CEO Netweavers Houston will inaugurate the Servant Leadership in Action Award, to be announced and presented to a local servant leader as a conference highlight.
CEO Netweavers is a rapidly growing organization of CEOs and their trusted advisors dedicated to transforming organizations and enriching lives through application of the principles of servant leadership and the practice of netweaving.
The Greenleaf Center for Servant Leadership is an international non-profit organization founded by Robert Greenleaf in 1964. Its purpose is to promote the understanding and practice of servant leadership.
The International Society for Performance Improvement is the world’s preeminent performance improvement society.

Servant Leadership is Super Leadership

Superperforming CEOs = Servant CEOs

It's a consistent, astonishing pattern.

Google’s Eric Schmidt, Berkshire Hathaway’s Warren Buffett, Harley Davidson's Richard Teerlink, SYSCO's John Baugh, SW Airlines' Herb Kelleher, IBM's Tom Watson, Medtronics’ Bill George, AIM's Ted Bauer, Sterling Bancshares' George Martinez and others - all of these can be described as men of uncommon humility and personal values. Most, if not all, could also be described as people of great faith. This begs a crucial question:

Is there a correlation between Servant Leadership and Superperformance?

In describing Servant Leadership, Robert Greenleaf wrote, " “The servant-leader is servant first… It begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. He or she is sharply different from the person who is leader first, perhaps because of the need to assuage an unusual power drive or to acquire material possessions. For such it will be a later choice to serve – after leadership is established. The leader-first and the servant-first are two extreme types.” (italics added)

“The difference manifests itself in the care taken by the servant-first to make sure that other people’s highest priority needs are being served. The best test, and difficult to administer, is: do those served grow as persons; do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants? And, what is the effect on the least privileged . . .will they benefit, or, at least, will they not be further deprived?”

Is it actually possible to possible to achieve (or sustain) Superperformance without a CEO with a fundamental love for people?

Superperformers are always Green

When I’m green I’m growing, when I’m ripe I’m rotting.

 

Ray Krok

 

 

The Diversity of Superperformance is Biodiversity

The diversity of Superperformance is a biodiversity. Biodiversity is not just different people. It is also different work methods, different work styles, different approaches, different ideas, different answers. Biodiversity if the diversity of optimization.

The Athlete Inside Us All

There is an athletic quality to Superperformance. Maximum fitness and peak performance are both associated with the qualities of an athlete. So too it is with organizations. The best organizations are athletic. They are both fit and well. Their fitness is reflected in their process and their wellness is reflected in their culture. Their fitness is a measure of their health. If your organization is struggling in either area it is being suboptimized. This is another reason that Servant Leadership is the pattern of Superpeforming CEO. Gregg Stocker's terrific book The Corporate Death Spiral outlines the 7 most destructive unhealthy habits of organizations. What are vital signs we should monitor continually?

Transformation to Superperformance

We cannot become what we need to be by remaining what we are.
Max DePree

Superperformance is available to all, but it requires transformation to a new state. This is the same kind of comprehensive change that occurs when water turns to ice. Transformational changes of this type abound throughout nature - the epidemic transmission of a virus, the critical mass of a runaway social trend, metamorphosis of a caterpillar into a butterfly, and even certain emotional changes, like the process of falling in love. The change is comprehensive and dramatic. This is called a phase transition, a state change that occurs without altering a system’s underlying chemical composition. Phase transitions are sudden, non-linear, and system-altering. The physics of a phase transition are analogous to transformational change in other systems, including social ones. In a phase transition, as the energy, temperature or information passing through the system increases, the current threshold is approached and crossed, provoking a sudden, discontinuous, system-level change. First the system is operating at one level, then suddenly, another. While transformation is typically an achieved state, the physical change occurs suddenly, triggered by a slight increase in energy, temperature or information, as in the proverbial straw that broke the camel’s back. At this critical juncture, the tipping point, the system reaches a high level of disequilibrium, then finally gives way, becoming fundamentally altered as it experiences transition to the new steady state. As with any phase transition, transformation is always associated with an increase in energy, information or temperature. During the development of the adult butterfly, for example, the chrysalis loses nearly half its weight. This shows that the experience of transformation consumes tremendous energy. In the same way, upshifting to Superperformance consumes tremendous energy instituting new habits while simultaneously surrendering old ones.

New adventure

CEO Netweavers, The Greenleaf Center for Servant Leadership, and the International Society for Performance Improvement are joining forces to shine the light on Servant Leadership and its association with outperformance. Join us on November 4, 2008 for this new adventure in optimization. www.servantleadershipconference.com