- What do you associate with playing?
- What are your playgrounds?
- Why don’t we play (any) more?
- What does it take to un-learn playing; what, to re-learn it?
The digital transformation was one of the buzz words at this year’s World Economic Forum in January 2019. Walking the streets there were numerous signs for special events, receptions, panels, speeches or forums on the topic. All of them had in common that there was an atmosphere of excitement about the technological advances of the 21stcentury, the huge potentials and promised ahead of us. Or so it seemed.
Fact was that this appearance was deceiving and possibly misleading.
I had the privilege and honor of having been a member of the panel „The Art of New Business: Body, Mind and Soul of Digitization“ in the FQ Lounge. When asked about my opinion about the prospects of the digital transformation in my native country of Germany I cautiously mentioned that, first of all, not everyone is super excited about digitization. Indeed, I have observed that a lot of people (who knows, possibly the silent majority?) do have concerns and fears about the digital transformation. When I shared my observations I had expected that at the outset of my remark people in the audience would roll their eyes or shake their hands in disbelief about my skeptical opening statement. Interestingly, none of it happened. The opposite was the case. Indeed I sensed that the audience was relieved that finally there was a panelist who talked about their silent fears, the downsides of digital transformation in contrast to the many other events in Davos this week. I admit that the audience’s reaction surprised me. And at the same time it confirmed my impression that people hesitate or avoid speaking about their concerns and fears, at least in public. So, what’s true? Is digitization a blessing or a curse? My answer is that it can be both.
It is a fact that technology has brought, brings and will continue to bring many advancements that improve our well-being overall and offer huge business opportunities. On the other side, we will see lots and lots of jobs, businesses and even industries being eliminated or disappear. This is certainly one ingredient for being somewhat skeptical about the digital transformation. But we don’t even have to look so far into the future to identify an even more obvious drawback. Fact is that rates of disengaged workers, sick days and depression and burnout rates have been on the rise and have reached record numbers. A clear sign that the so lauded world of the digital age is not so bright after all. People complain about endless work, increased pressure and expectations at work. They are often either stuck in a hamster wheel or have become themselves addicted to the ever-accelerating race of infinite growth and corporate greed and cut-throat competition. They have become pawns in the grand chess game of modern business. They are functional, efficient, productive, and effective. And yet, they don’t behave or act like humans anymore but have become replaceable resources in a big machinery. Replaceable like machines because there is no space for burnouts, sickness or alike.
Corollary, the excitement about the digital transformation can and does co-exist with fears and concerns. Both are real, though not equally desirable or sustainable. I am convinced that fears and concerns cannot be resolved unless we take them seriously and deal with them. They have a common denominator. It’s the lack of humanness. In other words, being human often only matters in as much as a human resource, as one cost factor out of many. While resources in general and human resources in particular can be replaced the principal lack of appreciation of humanity at the core of our business activities sheds a long shadow on the wonderful promises and opportunities of the digital age.
In my 20+ years in professional project management I can say that projects rarely, if ever, fail because of faults in the products or some suboptimal processes. The number one cause of failure is ‘people’. Not because we make mistakes (of course, we do) but because we don’t recognize and value each other as who we are: human beings. Our personal motivations, visions and goals are appreciated only in as far as they benefit the project or product. There is no space for more, say, our belief systems, inner drives or purposes other than our relation to the jobs themselves. It’s like driving a car with a pulled handbrake and a weak battery. The human potential is left untouched. No wonder that so many projects still fail or struggle and are characterized by waste.
I have found that projects that create the space for individuals to uncover, explore, unleash their individual potentials and share it with fellow team mates turn into co-creation wonders that help delight customers, generate sustainable business value and develop happy and joyful workplaces while nurturing the thirst for continuous self-improvement. In other words, putting humanness at the core of business is the seed for mastering the challenges of the digital age and succeeding in the business world. It is time to acknowledge, explore and unfold our human potential to shape the present and future we truly want and need. Let’s be human in the digital age. Technology and digitization are welcome and valuable tools to serve this purpose and goal. Tools, but no more and no less.
For the fifth time we will be visiting the World Economic Forum in Davos. This year will be different and very special. Together with The Art of New we have organized two events entitled
January 20 & 21, 2019, 10 AM – 3 PM
Parsenn Ski Resort, Davos-Klosters, Switzerland
Join us for a day on the slopes and share your stories stories about digitization and existing scenarios people can relate to for hope and orientation. Once we are on a lift we start our dialogues and capture your stories on film or camera as input for our panel in the FQ Lounge on January 24, 2019 at 3 PM as well as social media channels.
Audience: Anyone interested in digitization channels.
Price: Free. But you have to buy your own ski pass and food.
Registration via Eventbrite.
January 24, 2019, 3 PM
FQ Lounge in the Panorama Hotel Promenade 80, 7270 Davos Platz, Switzerland
Digitization is changing how companies engage with their customers, organize work and, fundamentally, the way they do business. If the body of digitization is the output and generated value, the mind is the organization’s process and the way of work, and the soul is the values, at the heart is your why or purpose. Leaders share why culture and mindset are keys for digital transformations, and why people — rather than technology — will drive success.
Price: Free. But arrive early due to limited seating.
In our interview we talked about his latest book “The Age of Agile: How Smart Companies Are Transforming the Way Work Gets Done” (see my previous post about it) and his views on being human in the digital age. In this episode he explains why and how digitization can actually be an engine for co-creating joy. Corollary, there is or not need not be a dichotomy between being human and technology.
Watch and listen in by yourself and find out what Steve is saying.
As much as the title sounds like an oxymoron; it is not. The opposite is the case. I believe that being human in the digital age is ever more important and, thanks to technology, feasible.
No doubt digitization is “taking over our world”. At least, at first sight and from a traditional perspective. A perspective that tells us that we as humans are mere subjects in the big, big world and economy. We are ‘human resources’; we are a cost factor with which we can calculate. This is, more or less, a common understanding. It is based on an old paradigm depicting organizations and companies as machines that can be planned and controlled. This old Taylor’istic and mechanical paradigm has been the foundation for economic thinking for more than 100 years. It allowed us to get a better understanding of the economy and overall has served us well. However, in a world that is becoming more and more volatile, uncertain, complex and ambiguous the old paradigm has reached its limits. The old paradigm was a good fit and served as a helpful orientation in situations with little or no change. ‘Ceteris paribus’ is what economists call this. Well, you don’t have to hold a university degree to acknowledge that this old, mechanical and simplistic world is over.
The rapid digital transformation is overburdening people, companies and organizations, fueling fears of the future. New developments in technology, society, and environment are met with suspicion and skepticism. It seems that digitization is taking over our lives.
Traditional business models don’t provide answers to today’s challenges. Indeed, there is conclusive proofthat traditional management has been failing for a number of years now. The annual ‘The Shift Index’ report of the Deloitte’s Center for the Edge has revealed that
Reading these numbers can scare the heck out of you. It quickly raises the question, how will the future look like? And yet, this question is as misleading as it can be. Misleading because it puts us in the position of being victims of a future development. Instead, I want to reframe the question and ask, how do we want to live? An alternative question is, How do we want to shape our present and our future? I believe that this reframing makes a huge difference. We move from a passive to an active position, from being victims of volatile, uncertain, complex and ambiguous (vuca) world to being shapers of our world.
I am not saying that I am the world leading example. I, too, still fall victim to the old thinking. Why? Because I was raised this way and have been or let me being influenced by conventional thinking. Asking the questions, ‘How do I want to live? How do I want to shape my present and future?’, and being led by them is like an opening process. It opens doors of opportunities which are in my own sphere of influence. And it starts with me. Simple? Yes. Easy? Honestly, no. But then, this is life. It is full of surprises. This is the beauty and wonder of it. And I love it.
Trump’s economic policies are starkly different from his predecessors and deviates from mainstream economics and political thinking. Take, for example, his massive tax cuts for the corporate world or his initiated trade wars. Just by looking at recent economic numbers and the booming stock market his policies seem to pay off and open a new era of economic prosperity. But do they really?
Long-term market performance indices and forecasts tell a different story. Shareholder buybacks and alike contribute nothing to building a solid foundation for future business success. They yield short-term benefits and the party is on. But, for how long? Where does it lead to? Has big money finally succeeded and overtaken economic and political thinking? How sustainable is this short-term growth? Who benefits, who loses? And, last but not least, what kind of answers does it provide to today’s global challenges that are becoming more and more volatile, uncertain, complex and ambiguous? What if Trump’s favored form of capitalism leads to a dead end?!
As explained in a previous post, I am more than skeptical about the outlook of traditional capitalism.
Fact is that traditional capitalism does not answer today’s challenges in a VUCA (volatile, uncertain, complex, ambiguous) world, widens the gap between rich and poor, exploits and threatens to destroy our environment and thus our own planet. What we need is a different, a new business paradigm that not only helps find solutions to today’s problems but can also serve as guidance to sustainable business in the 21stcentury.
In this article I explain why and how purpose-driven human business can make a huge difference. It differs significantly from the classical business paradigm. At the same time it has built-in bridges every business can cross to build a sustainable future.
„There is one and only one responsibility of business: to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.“
– Milton Friedman
No doubt, Milton Friedman and shareholder value theory has shaped Western business since the 1970s. It has led to tremendous wealth of companies as well as societies, even though the fruits of this growth have not been distributed equally.
And, Milton is still very much alive as Steve Denning points out in a Forbes article. He explains that “in 1990, an article in HBRby Michael Jensen and Kevin Murphy, gave shareholder value thinking a new push. The article, “CEO Incentives—It’s Not How Much You Pay, But How” suggested that CEOs were being paid like bureaucrats. Instead, they should be paid with significant amounts of stock so that their interests would be aligned with stockholders. Thereafter, the use of the phrase ‘maximize shareholder value’ exploded and CEOs became very entrepreneurial — but in their own cause,not necessarily their firm’s cause.”
Denning continues stating that “by 2017, shareholder value thinking was everywhere. Joseph Bower andLynn S. Paine reported in Harvard Business Reviewthat shareholder value thinking “is now pervasive in the financial community and much of the business world.” It had led to a set of behaviors by many actors on a wide range of topics, “from performance measurement and executive compensation to shareholder rights, the role of directors, and corporate responsibility.”
Acknowledging shareholder value thinking is prevalent in today’s business world, and a booming stock exchange market, what’s so wrong about it?! Why change a winning formula?!
„On the face of it, shareholder value is the dumbest idea in the world.“
– Jack Welch
Jack Welch, former CEO of General Electric, had been heralded as one of THE proponent of maximizing shareholder value. This is in contrast to what he has been preaching since he left GE, stating „On the face of it, shareholder value is the dumbest idea in the world.“ Welch also pointed out several times that „shareholder value is a result, not a strategy . . . Your main constituencies are your employees, your customers and your products.“
So far so good. But what about business performance in the market place?
According to the 2009 Shift Index of Deloitte’s Center for the Edge there is conclusive proof of failure of traditional management. Accordingly
Preserving the performance of a status quo may be laudable. Yet, it doesn’t secure lasting, sustainable business. The opposite is true. Mariana Mazzucato explains that „shareholder value theory – the destructive idea that companies should be run solely for the benefit of shareholders – has led to financialized businesses that do not invest in the areas that will lead to future growth or the invention of useful new products.“
In short, traditional businesses infiltrated by shareholder value theory not only ignores long-term perspectives, they also risk their own future existence. Myopia at its best.
In face of this evidence why do so many companies still stick to a business paradigm of the past?
There are lots of reasons for clinging to this pastime. Let’s have a look at two of them:
As long as this reasoning prevails, it is difficult to change anything until it may be too late. Alas, it is not that complicated at all. Let’s have a look at the opposite of the traditional business paradigm of short-term profits and shareholder value theory. It’s called purpose-driven business.
A purpose-driven business follows a compass that gives a clear direction for the future of the business. The compass also indicates where the business is coming from, i.e., why it is business in the first place. Both, the motivation and the vision of a business constitute the credo of its practice. I call this the MVP of a purpose-driven business whereas M stands for motivation, V for visionand P for practice.
For example, Johnson & Johnson’s company credo is engraved in granite at the entry to company headquarters, which makes crystal clear that customers are first, then employees, and shareholders absolutely last.
Another example is Procter & Gamble which declares in its purpose statement: ‘We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper.’
On this token, a business that has forgotten or neglects its motivation or vision for short-term gains, such as maximizing daily stock prices, may just as well be digging its own grave in the long-run. It is anything but a purpose-driven business.
Facing the increasing number of challenges in our volatile, uncertain, complex and ambiguous (VUCA) world, Human Business addresses today’s challenges. It focuses on serving and delighting its customers, workforce, business, and society. And it does so holistically and puts us as humans in its center. That is, it constantly seeks ways and means to generate and add sustainable value to its customers, workforce, business, and society. From this perspective human business follows three elementary principles:
Having a customer focus is not new. Peter Drucker, father of management thinker, explains that
“There is only one valid definition of a business purpose: to create a customer.”
Alas, delighting a customer goes beyond creating or satisfying a customer. Delighting a customer implies that a business has a deep understanding of the needs, expectations and wishes of its customers and strives to fulfill and exceed them. It seeks to build customers for life. It reaches out to its customers, communicates with them, walks in their shoes and shows a sincere interest in them. There are no quick fixes for this approach. It is an attitude and belief system.
Employees are not resources like products. They are human beings and want to be treated as such. A human business understands and practices this. It shows
a sincere interest in the needs of their employees. It starts with a safe, secure and environmentally friendly work environment. For employees to follow a direction you have to set it, share it and let your employees contribute to it. Let them become a part of it.
Dov Seidman states that „working with passion is an engine that is unbelievable. A person with drive and passion does three times the job of another person. But it is not so much the quantity of the job; that is not the point. The point is that they draw crowds; they have followers; they push, and lead, and so achieve much more.“ (Dov Seidman (2011). “How: Why How We Do Anything Means Everything”, p.295, John Wiley & Sons)
Shareholder value is not identical to business value. Business value comprises short-, mid- and long-term business concerns, interests and investments. Business value is made up of a number of factors: the overall business performance and outlook, customer satisfaction ratings, market position, innovation performance, the skillset and turnover rate of the workforce, the attractiveness of the company as an employer of choice and many other factors.
Whereas the daily stock price is heavily influenced by quarterly results and a relative short time horizon into the future, business value is more than quarterly results. Jeff Bezos clarifies why holding a long-term perspective is so important: “If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that. Just by lengthening the time horizon, you can engage in endeavours that you could never otherwise pursue. At Amazon we like things to work in five to seven years. We’re willing to plant seeds, let them grow—and we’re very stubborn. We say we’re stubborn on vision and flexible on details.” (Source: “Jeff Bezos Owns the Web in More Ways Than You Think”. Interview with Steven Levy, www.wired.com. November 13, 2011.)
Last but not least, business value doesn’t only look at business numbers but includes corporate social responsibility, too. Klaus Schwab, founder and head of the World Economic Forum, explains that “corporate social responsibility is measured in terms of businesses improving conditions for their employees, shareholders, communities, and environment. But moral responsibility goes further, reflecting the need for corporations to address fundamental ethical issues such as inclusion, dignity, and equality.”
Klaus Schwab’s wide view on business value summarizes what it means when we say that human business is holistic and human-centered and focuses on generating and adding sustainable value to its customers, workforce, business, and society. It serves as a business compass that helps optimize daily operationsand build and sustain organizational excellence.
At Motivate2B and the Human Business Architects we are witnessing businesses that have made the transition to a human business. And, we too, follow the principles of human business by ourselves. What else can we do?! We walk the talk and invite you to do the same. Please join us and share your stories.
This is not another attack on Trump. Actually, I don’t really care too much about Trump. What I do care about are the implications of his policies, ideology, worldview, decisions, moods, and, believe it or not, at times his tweets. And yet, it is not about Trump as a person. Last week, former President Obama rightly stated that Trump is not the cause but a symptom for a lot of things that have gone array these days in business, society and the world. And, indeed, Trump is a strong symptom, an excellent and exemplary figure to represent capitalism of the old ages. The problem is, we no longer we live in the 19thor 20thcentury that were heavily shaped by traditional capitalism Trump loves so much.
Traditional capitalism rewards those who seek short-term gains, maximize profits regardless of whether or not business generates value to customers, workforce, business or society. This capitalism treats humans and the environment as resources, cost factors and numbers in balance sheets. It thrives in an atmosphere of mistrust, tension, fierce cutthroat and winner-takes-all competition, selfishness and anxiety. Exploiting or polluting the environment is considered collateral damage and, hence, not evil. The dividing and widening gap between rich and poor is dismissed as a distraction that can be fixed – by the free market. While proponents of traditional capitalism don’t negate the fact the world is becoming ever more volatile, uncertain, complex and ambiguous they are not really concerned about it because they believe that the established business principles, processes and rules can handle these challenges, too. And, if there were a problem it is probably because some people, organizations or governments neglected these established principles.
I am not a critic of capitalism per se (how could I, having been trained as an economist?). Fact is that traditional capitalism leads to a dead-end, does not answer today’s challenges in a VUCA (volatile, uncertain, complex, ambiguous) world, widens the gap between rich and poor, exploits and threatens to destroy our environment and thus our own planet. This is not a call to end capitalism – this would this too simplistic. And it would be plain stupid for capitalism is a core element of business which we, people, need to survive and thrive. What we need is a different, a new business paradigm that not only helps find solutions to today’s problems but can also serve as guidance to sustainable business in the 21stcentury.
The good news is such business principles already exist. They constitute the Human Business Paradigm. These principles can serve as a new compass for doing business in the 21stcentury. Let me summarize its key principles:
2. The purpose of human business is to generate and add sustainable value to its customers, workforce, business, and society.
3. Human business promotes diversity in the workforce, reflecting an open society.
4. Human business advocates cross-functional and self-organizing teams.
5. Human business nourishes joy and happiness in its daily operation.
6. Human business practices and nurtures conscious leadership of enablement and empowerment.
7. Human business cultivates open and learning organizations that embrace change and thrive for continuous self-improvement of products and services, processes and people.
8. Human business provides and shares guidance for responding to rapid change in business and society.
9. Human business understands profits as a means to fulfill its business purposes; i.e., human business is purpose-driven and not profit-driven.
10. Human business advocates a circular economy, in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life.
Walking the Talk. Building a Human Economy
During the next couple of weeks I plan to dwell into each of these principles and share concrete stories of companies, organizations and projects that practice these principles. At Motivate2B and the Human Business Architects we walk the talk; and there are many other businesses that do so already. I invite you, too, to join us and share your stories.
I have worked in professional project management for quite a number of years. Over the last years, I have moved away from classical project management and one of its core activities: planning. There are a number of reasons for this. First of all, I believe that classical planning is rooted in fear for volatility, uncertainty, complexity and ambiguity. Or, planning is afraid of reality and life where volatility, uncertainty, complexity and ambiguity are central elements. Hence, classical planning is misguided and consequently often a waste of time and energy. Let me explain.
In classical project management we are expected to have a solid, validated project plan that lists major milestones, work packages and activities. Ideally, all work packages are linked with each other so that it becomes possible to predict the final delivery date of the project.
I have drafted numerous such project plans. And actually I enjoyed it for the most part. It gave me a sense of control and security. And the final plans looked great on paper. Alas, there were and are some major flaws with this: A plan is first of all a piece of paper. That’s it. No more, no less. Yes, of course, it can denote the important phases of a project and create the false impression that everything is under control. People tend to believe that a plan gives them security and certainty, reduces risks, prevents surprises and much more. Unfortunately, this is misguided and distracting from reality. Fact is that most project plans change the minute you “finish” them. President Eisenhower once said that a plan is worth nothing, planning is key. Well, I agree to some extent and add that planning is worth nothing if you don’t understand what’s behind it. I call it agile ‘planning’.
If you start planning because you want to overcome volatility, uncertainty, complexity, and ambiguity, STOP right there. Planning will not help you achieve this. Volatility, uncertainty, complexity, and ambiguity (VUCA) have nothing to do with planning. They are rooted in reality whereas planning is just a tool.
If you want to get a grasp on volatility, uncertainty, complexity, and ambiguity understand their nature, what causes them. And find out why they bother you in the first place. Given that they are core elements and characteristics of reality you may as well ask yourself what bothers you about reality. In other words, find out what bothers you, period. What’s your problem? Or, if you like to phrase it more positively, what motivates you?
Contrast this to your vision of an ideal situation and see the gap between the problem (or motivation) and your vision. If this gap really bothers you, causes some form of pain, think about concrete steps how to get from point A to point B. This is what you could call agile ‘planning’. It is different from classical planning as it addresses the groundwork or foundation of our activities.
Planning without acknowledging and accepting your motivation and vision is just a shallow distraction from reality and a futile activity as it ignores reality, your reality.
An agile approach to ‘planning’ does not erase volatility, uncertainty, complexity, and ambiguity. This is not its purpose. It accepts them as a matter of fact. And it embraces them and explores ways and means to work with them to get closer to your vision or at least your interim goals. This is the opposite of fear. It is working and playing with joy. Doing so introduces lightness, creativity and inspiration to your “planning”. It sparks life into your planning process. You don’t generate a product or service in one bug shot but you develop and deliver it in small, iterative increments. Just as you don’t reach your vision in one big step but in several smaller steps, one at a time.
Contrast this with classical planning that is guided by fear and the urge for control and certainty. Life and reality are not static, lifeless machines that can be easily replicated. Life is ever changing, complex, uncertain, and ambiguous. Corollary, agile ‘planning’ ought to reflect life. It can become a game, a dance, an art and thus an element of the art of new business.
This is to let you know that Steve Denning and his partners are offering an amazing array of Agile leadership and management gifts will be available this week for early purchasers of Steve Denning’s new book, ‘The Age of Agile: How Smart Companies Are Transforming the Way Work Gets Done’. The list of gifts of gifts is here: http://stevedenning.com/Workshops/launch2018.aspx and the gifts will become available tomorrow, Thursday February 8 at 4pm US EST. Some gifts are in limited quantities and are likely to go quickly. Check it out. You won’t be disappointed!
There are 41 gifts, some worth thousands of dollars, and you get access to all of them. For instance, Richard Sheridan of Menlo Innovations is offering places at his famous five-day deep dive at Menlo Innovations, worth $3,650, Professor Rita McGrath and many other well-known figures from the Agile community are offering consultations, workshops, books, videos, articles and other tools. Myself I offer a presentation and an initial one-hour consultation about and for Agile MVP’s. In this presentation and consultation I share my experiences about what it takes to set up Agile projects for success, namely motivation, vision and Agile practice for the project, the team and the business. In addition to the presentation I share a free template ready for immediate use. Places will be limited.
And even if you cannot (or don’t want to) secure any of these free give-aways, you will still get so much out of Steve’s new book. It’s not another about Agile. It explains why Agile is a new business paradigm and how you can embrace it and succeed.
Good luck, happy reading and lots of joy practicing and being Agile,
When was the last time you were really happy, filled with joy, when time ceased to exist and you were fully present, when you experience a flow-state?
If you are like most people I wouldn’t be surprised if this has been awhile. The question is why you are not experiencing such wonderful moments more often, live in your flow on a daily basis, letting it become your new normal.
If you are interested in exploring experiencing what it takes to unravel this potential, I am inviting you to a number of events during the next couple of months. These “workshops” will take place in the mountains. The first event will be November 11 and 12, 2017 at the Pitztal Glacier in Austria. Another event will be held in Davos-Klosters (Switzerland) during the week of January 21-26, 2018 (running parallel to the Open Forum of the 2018 Annual Meeting of the World Economic Forum).
The events will be open to anyone interesting in exploring how you enter your flow state at will. The “workshop” will be on skis or snowboard. For this purpose you should be an intermediate or advanced skier or snowboarder. A professional instructor and guide will accompany the workshop. More detailed information will be posted in due time. Alternatively, you can contact me directly (info (at) thomasjuli.com).
Today is a great day!