Agile 2.0: Uniting Leaders to Craft the Organisations of The Future

Based on a previous presentation at Fintech 2020 - recording available here. Slides available here.

It is a great pleasure to be here with you and a privilege to speak to such a reputable audience in one of Europe’s leading business schools. I am very impressed by EDHEC’s extensive corporate partnerships as well as your global reach, both of which I strongly believe are key enablers to having true impact on the "way the world does business" today.

I have very tender memories of my own MBA at London Business School and of many passionate late-night discussions at the infamous "Windsor Castle" – the bar appropriately situated just outside LBS campus - and I even more fondly recollect the spirit of comradery and kinship in our class, and our joint growth as both students and individuals. I remain convinced until today that this is how we truly develop: in co-elevating communities of peers where there is honesty and trust and everybody commits to each other’s learning.

Hence, I immediately consented when Spencer invited me to join you – and I hope that in the next 90 minutes we will be able to reflect together on how we could possibly "put a little dent in the universe", as Steve Jobs once suggested. In order to spark the discussion I would like to offer you a few reflections on one of the most significant conundrums that has personally kept me awake often during the last ten years: how we can both do our daily jobs and also contribute to creating a more sustainable future for our company, our sector and society at large. How can we "save the world and still be home for dinner"? I believe this is important.

Whilst this so-called Fourth Industrial Revolution is literally “taking the world by its ears”, our organisations have collectively produced numerous outcomes that nobody really wanted —burnout and loneliness, inequality and hunger, and ecological collapse. And by some estimates, more than 7 trillion dollars are wasted every single year, globally, due to employee disengagement. So let me share with you a few thoughts on three simple questions: Why are we really here? How can we achieve our purpose? And who do we, each of us individually, need to become in order to make it work?

Interestingly, I very often encounter people who tell me very earnestly that they deeply desire to become more Agile or “Teal”, without ever really asking themselves the question why. That is not surprising, is it? We have created a seductively materialistic and individualistic narrative in our western society, where self-interested growth, productivity and stock prices have become ends in themselves. In a “pandemic of busyness” we have often succumbed to that hedonistic treadmill of money for money’s sake. People start to work ever longer hours to attain status, social acceptance and wealth, just to find out that it does not really make them happier. And in creating ever greater riches, arguably for far too few, we have often ignored ecologic externalities, just to discover that our mother planet is at the brink of bankruptcy and the collapse of global climate will threaten the livelihoods of millions. So, what do we really believe in? What do we really stand for?

These questions are both existential and fundamental. We create organisations for a purpose, to achieve something together which individually we could not achieve. And I strongly believe that 50 years after Milton Friedman’s famous essay on business, both personal and organisational “success” must transcend a quest for money and shareholder value.

• As Colin Mayer maintained at the WEF this year, the true purpose of organisations is to “solve the planets problems, profitably”. It is not just about profit and endless growth, but also about an inclusive and sustainable future for all stakeholders. Not just bigger, but better.
• Not as a question of marketing or charity, but as a matter of morality and justice. Exploitation and inequality are not economic laws, but inherent failures of our economic system. We must evolve societal and organisational success measures beyond GDP and PBT.
• And in a world where traditional communities of churches and neighbourhoods have been eroded, where scientific management has filled gaps of meanings with a gospel of growth, and where work has become so central in our lives, I believe businesses have to step up. As Immanuel Kant warned us a century ago: “human beings must always be treated as an end in themselves, never as means”, never as cogs in a machine. Today, we need human-centric organisations more than ever to provide a place of meaning and community, where people can grow and flourish, and attain a positive collective purpose, together.

I believe many people today agree with such an ambition, but struggle to understand how to make it happen. As a result, change is slow. And, whatever consultants might suggest, there are no simple answers – like people, every organisation is different. However, I strongly believe that we cannot continue as before. We live in an ever more complex world - facing ever-faster changes, advance in technology and data, shortening half-life of knowledge, and ever greater global interdependencies. In these New 20ies we need to let go of the illusion that work can be predicted or planned in detail.

Hence, as BCG suggested, the companies that will win in the 2020ies are those who can “compete on learning”. From a paradigm of “scalable efficiency” that has dominated our businesses since the industrial revolution we need to transition to a new world of “scalable learning” and development. From competitive to “adaptive advantage” and from closed systems to boundaryless ecosystems.

The simple truth is that our world has become too complex to be controlled through bureaucracy. We cannot “stand on a mountain top and preach strategy down the hills” to achieve successful execution. Those liberated organisations of the future must be able to create an environment where people can and want to make a difference, in order to harness ideas from everywhere. Today, in order to thrive, we need to embrace uncertainty and maximise human flourishing at work, rather than just driving efficiency and productivity.

But how do we get there? In my experience, if we want to enable self-organisation and organisational learning at scale, we need to have the courage to re-design work, adapting the context for our teams at multiple levels, in terms of structure and management processes, and team dynamics.

Above all, we need to revise the distribution of information, knowledge and power. Existing systems often distort or suppress information. In the future, we need to move information not just upwards, but everywhere - as the say at Viisi, radical transparency should prevail: “Everything is public unless its harmful”. So that strategy becomes a firm-wide conversation.

• In terms of power, central authority does not lend itself to decentralised experimentation and learning. At ING, we were one of the first banks to roll out Agile at scale, globally. And as we demonstrated, Agile can provide more flexibility within the pyramid, enabling self- organisation and cross-functional flows of information and decision-making. But I have also seen many agile implementations struggle because they never dealt with existing power or ownership structures.
• In terms of management processes – organisational learning requires both order and freedom. Bill Torbert speaks of “liberating structures”, like principles, roles, routines, rituals, methodologies — to enable and host “generative dialogue” involving as many people as possible. And learning entails mechanisms to manage creative tensions— by its very nature, total consensus would overwhelm complex systems and we need procedures to enable collaboration across diversity and attain not consensus, but consent.
• Finally, we must adapt sometimes anachronistic HR and finance practices. Focus moves from individual high performers towards group dynamics. Performance management must facilitate self-reflection and peer coaching. And we need to evolve resource allocation “beyond annual budgeting”.

So that over time, our entire organisation will become laboratories of ideas, integrating “action and inquiry” into everything we do, always sensing and exploring and experimenting whilst we are moving — in teams and in “peer communities” of learning.

But there is more. In my experience, adapting the context does not mean that people will accept ownership. So how can we truly unleash the creativity of our people? For decades, we have been trained to see humans as strictly rational consumers in economic markets. In our businesses, we have treated people like easily replaceable human “capital” or as exchangeable “resources” to be controlled. As a result, more than 75% of employees feel disengaged. Going forward, we truly must put people first. We must re-learn to cherish their uniqueness and design our organisations to fulfil their basic human needs: their sense of orientation, belonging, autonomy, self-esteem. True success is only when every human being at work has the ability to develop, use their creativity and have impact. When agency becomes activism.

This won’t be automatic. In a world where we are ‘required’ to wear many different masks, our public identity has become disengaged from our inner life and it has become challenging just to ‘be’ with ourselves and with each other, resulting in dualism and tensions.

Therefore, in deliberately developmental organisations we must help individuals to recognise their own biases and needs, anxieties, attachment styles, defense and copying mechanisms —and to grow their ability to work with and care for others, and co-generate meaning and value in service of the community. Our “inner game is our outer game”. Or as Laloux says: “We can only go far into the “we” if we fully inhabit the “I””.

Instead of optimising organisations as “deterministic machines”, dividing information and power and specialising, we need to start acknowledging organisations as complex developmental systems, as “living organism” with minds and hearts and souls. Where deep emotional bonds of community and trust prevail and where individuals and teams experience and develop together. Where influence and authority are different from rank and position and where employees have freedom to experiment – where many more people become their “own CEOs”. More than in structures, methodologies or tools, the difference lies in core principles. In Humanocracies, “the business of business is people.”

And, this is where most of our organisations seem stuck. Why? I regret to say so, colleagues and friends, but I believe it is often because of us. The maturity of an organisation can never transcend the maturity and consciousness of its leadership. If greater consciousness doesn’t operate, a system does not possess the stability to let go of the past and transition to a new model. If our definition of success is going up that ladder from VP to SVP to EVP, hierarchy prevails. If we dominate others to uphold our own ego, people around us won’t flourish. If we seek to control an uncertain environment with ever more rigidity, self-organisation will perish. And, finally, if we try to shrink the complexity of the world to our own cognitive limits, we will fail. In a world of self-organisation, there is no place anymore for patriarchal Commanders in Chief who rule by positional power and dominance.

• Agile leaders focus on the why, not the how. Decisions are always made at the lowest possible level, close to the customer.
• Rather than telling people what to do, leaders today need to become experts in building, sensing, caring for and influencing organisational systems; coaching individuals and teams; and enabling co-creation and emergence of shared purpose.
• In such a new world we need Chief Communicators who earn the respects of their people by making personal sacrifices to serve the collective good. And Chief Connectors who can create a cultural force field of energy - Placing their needles like acupuncturists to facilitate the energy flows in an organisational body. Fostering psychological safety and trust; Reinforcing transparency and embracing failure; role modelling gratitude, compassion and kindness.

Such a new “transpersonal” leadership paradigm is more than just EQ — it integrates intellectual, emotional and spiritual intelligence. Servant leaders “lead beyond the ego”, allowing time for awareness and reflection, rather than jumping into action. Letting go to become vulnerable “imperfectionists”. Holding the space for others to attain self-mastery and meaning.

For traditional leaders who have risen the corporate chain by being in control, this is a difficult challenge: “what brought us here, won’t bring us there.”

So how can we transcend? What’s that breakthrough? I've spent most of my career trying to become a "good" leader. Yet, nevertheless, for a long time, “being right” was often more important than to accept uncertainty and to deeply listen and learn. I still don’t have all the answers, but in my personal experience, progression requires vertical development, facing our own shadows and our emotions, letting go of restrictive mental models, hearing our “soul knocking at the ego’s door”. Responsible leaders, says Manfred Kets de Vries, are not only born – but “twice born” through painful individuation - where every victory of the self feels like a “defeat for the ego” - until we can compassionately see all the facets of an interconnected whole.

And above all, I believe we need to take time to reflect and tap into what really matters to us. Feeling how everything is profoundly connected. Loving ourselves and others for mutual growth. Serving all life beyond the confines of our own ego. Accessing that essence of we are and what we stand for allows us to let go of fears and the desire to control. And I can assure you: once you fully commit yourself to serve a greater purpose - magically, synchronously the world outside you changes, too.

Suddenly, leadership is not a tribe of special individuals with special traits, and not even a role, but about letting go of authority and unleashing the unique potential in everyone. About people no longer being victims of circumstances, but thriving in the creation of new possibilities. About learning together how to shape a more responsible future. Ultimately, leadership is a distributed and regenerative capability, an “eco-centric” flow of energy - what we, collectively, are able to bring to life. Not by top-down transformation or big bang organisational restructuring, but evolutionary through networks of teams and continual co-creation everywhere.

Concluding, I want to offer you a final reflection. It took myself many years to acknowledge that sus­tainable organisational transformation is only possible through concurrent individual trans­formation. We are the system. Yet that also means that we all have the power - and the responsibility - to reshape our relationships and organisations from who we are and how we show up. We can all spark the liberation of our organisations – gradually crafting the structures, processes, and cultures needed to attain an environment for individual development and the evolution of an emergent collective purpose. And, together, we can compose a new unifying cultural narrative to overcome the limitations of the social materialism we have today. Where success is not only about money, but compassion, community and character.

Hence, I hope I will inspire some of you to seize this historic moment to revise your bearings. Today is a time when we have to occupy the “front rows of our lives” and make choices. The current pandemic lays bare the frailty of our social contract and the economic lockdowns shine a glaring light on existing inequalities — and even create new ones.

Let us together roll up our sleeves and jointly reimagine our organisation for positive impact. Let us spark a "Fifth Revolution" to recover better, recover stronger, recover together! We are not leaders, because we rule. We are leaders, because we truly care. If not us, then who, if not now, then when. Thank you very much, stay safe and take care.

PS: Some further food for thought - as requested during the session by the Class

• Humanocracy: Humanocracy: Creating Organizations As Amazing As the People Inside Them - Gary Hamel, Michele Zanini [2020], Video: https://sergiocaredda.eu/inspiration/video/humanocracy-a-video-with-gary-hamel-and-julian-birkinshaw/
• Leadership: A Critical Text – Simon Western [2007]; Leading Without Authority: Why You Don’t Need To Be In Charge to Inspire Others and Make Change Happen – Keith Ferrazzi [2020]
• Reinventing (Teal) Organisations: Frederic Laloux, https://www.reinventingorganizations.com/, https://www.reinventingorganizations.com/video-series.html; Corporate Rebels: Make work more fun – Minnaar [2020]
• Theory U: Scharmer/Kaufer, Leading from the Emerging Future: From Ego-System to Eco-System [2013], https://www.presencing.org/aboutus/theory-u, https://www.edx.org/course/ulab-leading-from-the-emerging-future
• Beyond Budgeting: The Little Book of Beyond Budgeting: A New Operating System for Organisations: What it is and Why it Works – Morlidge [2017]
• Regenerative Business: No More Feedback: Cultivate Consciousness at Work – Carol Sanford [2020]; Humankind: A Hopeful History - Rutger Bregman [2020]; The Necessary Revolution: How Individuals And Organizations Are Working Together to Create a Sustainable World – Peter Senge [2008]
• Sociocracy: Many Voices One Song: Shared Power with Sociocracy - Ted J. Rau / Jerry Koch-Gonzalez, https://sociocracy30.org/_res/practical-guide/S3-practical-guide.pdf
• Self-Managing Organisations: Amy Edmondson /Michael Lee https://www.researchgate.net/publication/319550780_Self-managing_organizations_Exploring_the_limits_of_less-hierarchical_organizing
• Organisational Development “Paradigms”: Bryan Ungard – Why paradigms and development matter. Lessons from the DDO trenches, https://www.peoplerev.com/past_events/why-paradigms-and-development-matter-lessons-from-the-ddo-trenches2/
• Performance Management (R)Evolution: Lindsay McGregor - Build High Performing Cultures With the Science of Total Motivation, https://www.plywrk.com/post/the-n-gage-2020-summary-the-amazing-talks-recordings
• Performance Management & Why Feedback Fails: Marcus Buckingham, The Feedback Fallacy, https://hbr.org/2019/03/the-feedback-fallacy
• Deliberately Developmental Organisation (DDO): An Everyone Culture: Becoming a Deliberately Developmental Organization – Robert Kegan [2016]; Next Jump video https://www.youtube.com/watch?v=rHnNRKU1tVM&ab_channel=NextJump
• Stakeholder Capitalism: Doughnut Economics - Kate Raworth [2017]; Petriglieri, Are Our Management Theories Outdated? https://hbr.org/2020/06/are-our-management-theories-outdated
• Servant Leadership: https://www.researchgate.net/publication/326729984_Servant_Leadership_A_systematic_review_and_call_for_future_research
• Personal Development: Finding Meaning in the Second Half of Life – James Hollis [2006], Synchronicity: The Inner Path of Leadership - Joseph Jaworski [2011], Leading Beyond the Ego: How to Become a Transpersonal Leader – John Knights [2018]; Action Inquiry: The Secret of Timely and Transforming Leadership – Bill Torbert [2004]; https://amara.fi/warren-buffetts-and-your-own-seven-transformations-of-leadership/; King Warrior Magician Lover: Rediscovering the Archetypes of the Mature Masculine - Moore/Gillette [1992]
• Executive Coaching: The Leader on the Couch: A Clinical Approach to Changing People and Organizations - Kets de Vries [2006]
• Letting go of leadership: https://medium.com/@otti.vogt/letting-go-of-leadership-92d9e83d6b2a