Tag -people centered

What is an organization based on people?

Innovation in organizational models has introduced new concepts and expressions in the language of business that specialized media have worked hard to make popular. However, all too often, the market and competition exercise an invisible pressure that pushes companies to hoard these new terms and wildly incorporate them into their discourse, believing that this way, they’ll project an innovative and avant-garde image of their organizations. The generalized habit of this practice ends up creating media noise, where a small minority is truly honoring innovation, and a great majority are pretending. So, how do you tell them apart?

Framework influences perception

I often fantasize about having a list of questions, or a checklist, for each innovation which would allow me, when in doubt, to separate the wheat from the chaff quickly. In this post, I set out to create one, with keys to differentiate those organizations that are truly based on people, and those which are not.

However, due to the scope of the concept company based on people, before drawing up that list, I’m going to go deeper into its meaning with a very daring exercise: exemplifying the process of adopting a concept from two opposing perspectives:

  1. From the traditional company point of view. That is, a manager operating from within a mental framework based on the current company model.
  2. From a new systemic point of view. That is, a person operating from within a mental framework with a wider perspective, where the company is one more element within a system in which in necessarily needs to collaborate and keep other actors in mind.

To do so, before digging into the assimilation process from the different mental frameworks, it’s necessary to understand the importance the framework itself has on how we process information. There are three fundamental truths regarding this:

  1. the existence of the framework itself. The mental structures that make up the framework through which we see reality are made up by our accumulated experiences and beliefs. Being aware of its existence allows us to relativize our understanding of reality, and, if necessary, change the framework. That is, it allows us to choose, and therefore makes us freer.
  2. the framework sets our way of feeling, seeing and doing. The beliefs and experiences that make up the framework influence how we perceive reality when we look through it. That is, it influences what we feel, think, and do when we’re interpreting a new situation.
  3. if we don’t choose our own framework, we unconsciously adopt the one that’s culturally accepted. It’s a truth that we all see the world through a framework. If we’re aware of that, we can build one based on our values and beliefs. But if we’re not, we’ll unconsciously adopt the one that’s socially accepted by those around us. That is, without knowing it, we’ll take on the beliefs of others as our own.

Now, let’s look at the influence of the framework on each of those cases.

The traditional perspective: accumulative improvement

Third point above, the unconscious adoption of a framework, is probably the most common and most interesting to analyze. If this is the case, the question to ask would probably be: what is the socially accepted framework through which we look at companies?

To answer that, we’ll have to go back to the end of the 19th century, when in a context of exploding population and demand growth, engineers Frederick Winslow Taylor and Henry Fayol introduced an innovative administration model for the time. Until then, it was believed that the worker was the one who had the most accumulated experience on the production line, and therefore he was trusted to organize the work as he saw fit. But under the pressure to increase production, this belief was discarded to make way for a new one in which the most efficient way was to simplify and specialize the tasks in order to reduce time and errors, and to also make it possible for more workers with fewer skills to take on the tasks that had now been defined and simplified.

Among other concepts, this process brought about the rise of the hierarchical organization, the division of work into departments, specialization, bonuses for reaching goals, the definition of the best practice of administration based on planning, organization, management, and control. Despite the fact that, in their origin, the principles that motivated these practices were praiseworthy and made sense back then, with time and especially with the evolution of the socio-economic context, they have become limiting, if not outright obsolete.

Therefore, the socially accepted mental framework that we look at companies through today was created over a century ago, in a context in which factories worked as closed systems, disconnected from the outside, where activity was organized based on a purely technical and economic vision, which turned companies into machine divided into pieces that labor (or handiwork) ensured worked.

It’s important to highlight that businessmen, managers, and people who are not aware of their company-minded framework face the analysis of the new concept based on people with all that baggage that comes with these beliefs and models that have been instilled in the collective unconsciousness over the past century. In that consciousness state, the adoption of this innovation is doomed to have to fit into the current model. That is, since the interpretation of the innovation has no meaning in this century-old model, it’s molded and adapted until it’s forced to be coherent with the current model, thereby corrupting the original concept and turning up the noise.

Following this line of thought that does not reconsider the model, the interpretation of the concept based on people produces new terms and semantics that, from that perspective, make sense, but which have very little to do with their real meaning. For example, the area of Human Resources (the use of the word resources makes clear the mental framework), pushed by social progress, has acquired, in this context, ever more relevance, going from an administrative role to a more strategic one. However, despite having advanced in terms of training, the development of talent, benefits, etc., they’re all constrained by the traditional mental framework. And that’s how we end up with expressions like human capital, personnel, etc., which are nothing more than attempts to advance, but which are still synonyms born from the same technico-economic vision from the 19th century.

So, it’s clear, the improvements that can arise in this process are accumulative, and the value they add is limited by the model itself.

Systemic perspective: a radical change

The main virtue of the systemic perspective is being aware of the existence of the mental framework and its influence. It also understands that the company is in a symbiotic relationship with all the other systems, with which it must necessarily relate and cooperate; among these are other organizations, society, the planet, etc.

Of the awareness of the interdependence arise two new ideas:

  1. when going from an individual focus to a collective one which implies keeping in mind the interests of all the systems, the only possibility for understanding an organization is focusing on people, because in the end, everything is being done for their development and well-being.
  2. if the organization is not based on people, it turns into a parasitic system, because its objectives are no longer pursuing the sustainability of the whole. This instability will, sooner or later, bring the system collapse.

Bearing the above in mind, it’s not odd that, from a systemic mental framework, questions start being asked that give new meaning to organizations. Why are we creating this organization? What are the principles and values that will guide our activity? How are we going to be environmentally sustainable? How are we going to have a positive impact on society? What are the structures and practices that are best for maximizing people’s potential?

Unlike the traditional focus, where innovation is limited to adapting the concept to the established framework, in this case, all that is put up for close inspection:

  • what should the relationship between property and workers be like in order to encourage the development of the whole organization?
  • how do you divide the power in an organization to encourage the maximizing of people’s potential?
  • what organizational structure is ideal to get people to develop, collaborate, and communicate?
  • what should work spaces be like in order to favor authentic relationships between people?
  • what culture and practices help improve the commitment and creativity of people?

Each organization needs to find its own answers that are adapted to the singularity of the people who make it up and the goal being sought. However, thanks to the advances in neuroscience and psychology, what is ever clearer is that the structure of the current company, unaltered for over a century, is incompatible with the development of people and social, economic, and environmental sustainability. Furthermore, it doesn’t adequately meet market needs.

Although there is no magic recipe that works for all organizations, there have been advances regarding principles, values, and alternative practices that are aligned with the concept of an organization based on people. Some of the most important are:

  • systemic vision: Moving away from an EGO-system, which only seeks to benefit self-interest, towards an ECO-system, where all the related people and systems are born in mind to pursue the sustainability of the whole.
  • integral vision. In addition to the traditional economic and technical dimensions, we must also add the human one, which becomes the center of organizations. This implies bearing in mind the values, principles, and emotions of people and, because of this, placing great emphasis on the relationships between them.
  • autonomy. Power is democratized and therefore the hierarchies that structure them are eliminated. People manage themselves and are responsible for the commitments they take on with other people.
  • transcendence. People only try to make big changes that can be achieved only with the synergies obtained from combining the abilities of many people. They look for a meaning that transcends their abilities as an individual.
  • development. People need to feel that they are developing in every sense, and the organization becomes a space where this is not only possible, but encouraged. The more people develop, the better organizations, ecosystems, society, and the planet are.

Based on the above points, the following supporting practices can be derived:

  • transparency. Autonomy is not possible if there isn’t complete transparency of all the information an organization has with the people that make it up.
  • organizational decisions. When decisions are being made, all affected people need to take part in that decision-making process, since it is they who have the authority to do so. If strategic decisions need to be made, the whole organization will take part.
  • measurement. You can’t tell if you’re improving without measuring. Once the indicators that will measure the organization’s progress toward its goal are agreed on, they will be continuously measured and shared with everyone. This way, both the organization and its people will know where they’ve been, where they are, and where they’re going.

In addition to these practices, there are many others that allow all the effort of the people to align with the principles and values stated earlier. Unlike the traditional focus discussed in the first section, here the praxis is focused on creating and maintaining the best relationships possible between all the people in the organization.

Conclusions

As usually happens with every disruptive innovation, the term based on people requires a certain mental framework to be completely understood. Otherwise, the concept is reinterpreted to be coherent to the established model, and it loses its power to transform. In this case, the key to getting the right mental framework is consciousness.

Consciousness is the sum of the knowledge that something exists and the attention we pay it. Specifically, it’s about being conscious of the collective, which forces us to modify our relationships with ourselves, with others, with society, and finally, with the planet. All these relationships have a two-way influence, which we must now pay adequate attention to.

Nevertheless, the process will be slow. Only when the most innovative organizations adopt this innovation and can show their notable improvement will other, more conservative organizations, take the same step. And so on and so forth until the innovation is completely adopted, at which time it will cease to be new and will become the established model. With the growth of a collective consciousness, organizations’ modus operandi will transform into the symbiotic coexistence with change, operated by and for people, which will end up being an unprecedented social advance.

The impact of this innovation is even greater, because it means innovating people themselves, as, in the end, we’re the only ones who can create innovation. What’s more, it arises from the growing demand of society, even more so in the younger generations, such as the millennials, who are already adapted to the current social context and are demanding a different way to live. This means that this innovation does not arise from a market demand, but from a social demand, with must greater implications that companies will progressively have to face.

Checklist for organizations based on people

Finally, below, I propose what I promised at the beginning of the post: a checklist to see if a company is really based on people. It’s easy to use. Ask for the concepts in the middle (gray column) and depending on the answers you will distinguish them.

The role of startups in the emerging paradigm

The current socioeconomic model is reaching its limits [1]. It’s beginning to break down, causing collateral damage that none of us wants, but which increasingly affect us. The planet has reached the limit of the CO2 that it can handle, causing a greenhouse effect and global warming. We’re reaching the limit of inequality, with just 1% of the population holding 90% of the world’s wealth, causing massive migration from less developed countries. The speculative economy is also reaching its limits, representing 7500% of the real economy, and negatively affecting it. Technology is more focused on reducing the symptoms rather than finding sustainable solutions to the problems they’re generating. We citizens are reaching the limit of consumerism, confusing it with happiness and wealth, causing unhappiness, superficiality, depression, and other conditions. And, unfortunately, governments can’t do anything to rise to these challenges because they’re still held back by the model, unable to transcend it and to find new approaches. In summary, we need a new, sustainable model that solves the current socioeconomic model’s problems.

We need to expand our vision

But where to start dealing with such a challenge? Many authors turn to systems theory to get the broadest view possible of what’s happening. Following this line, if we assume that the planet is a system, understanding how it works from this new prism can provide new keys that will help us in building a new model. For that, briefly, it’s enough to know that all systems are made up of components that are dynamically related for a common purpose. These relationships between components make up structures that are what provide an order to that system in order for it to fulfill its purpose. On the other hand, there is a set of processes that define the behavior of the system and regulate its life cycle. What’s more, systems have the peculiarity that when they’re created, new properties emerge from their component parts, suggesting a synergetic relationship where the whole is more than the sum of the parts.

From a composition point of view, if we analyze the components that make up systems, we’ll see that they’re actually subsystems. Also, if we get even more abstract, we’ll perceive that our system is actually an element in a more complex system. Therefore, if we examine any system, we’ll observe that it’s made up of its own subsystems that are in turn made up of even more subsystems. Therefore, like a matryoshka doll set, we can go from the scale of the solar system down to the subatomic particles of a flower on earth, following all the relationships that join them together.

If we apply the system theory to the current socioeconomic model, we’ll quickly come to three realizations:

  1. Everything is connected, meaning that every action in one system affects the other systems.
  2. The relationships between components make up structures that give order to the system.
  3. The systems provide more value than their individual components separately.

Our socioeconomic model is an ego-system

The main problem with the current socioeconomic model is that it does not take into account the impact of its actions on other systems, causing all those issues mentioned at the beginning. And who is responsible for this? Well, if we analyze it in terms of a system, we find that the components that make up the current socioeconomic model are people. And the structures that give order to the system are our relationship models. And what is the purpose of the system? What are the processes that define its behavior? Who defines them? In the current socioeconomic model, the processes are created by very small and well organized groups (lobbies), with their own interests, which they systematically impose on other groups that, due to their size and asymmetry, can’t effectively organize (citizens, consumers, etc.). This centralization of power ends up with a purpose that does not represent the common good, and, what’s worse, is generally unknown.

In this situation, in which we the people are not aware of the purpose of the systems nor the negative consequences it produces, we live in a kind of nebulous flow that takes us surreptitiously towards a destination we do not choose. In this progression, we do not make decisions consciously, but we inevitably make them unconsciously. Or, as happens in this case, the decision-maker is the collective unconsciousness, accepting what the model prescribes, which means following a route set out by the lobbies. The result is that this unconsciousness creates hidden dynamics that come to be materialized in reality as negative consequences, such as those mentioned before. The big problem that underlies this situation is that, since we’re not aware that we’re connected, we don’t think about the complexity of the relationships between systems or their impact. All this leads to a conclusion that has to be faced sooner or later, and that is that the people responsible for the negative consequences of the current socioeconomic model are the unconscious people. And if we don’t do something soon, the system will collapse in order to re-arrange itself once again.

The current alienating situation

But how did we get here? This is actually a normal situation in the process of social evolution. Experts say that social progress is the result of the interaction between the social challenges that arise and the solutions to them. When social powers can’t give creative responses to challenges, there is a replacement of structures, where new ones substitute the obsolete ones. These changes never happen gradually, but rather usually abruptly. That is to say, the system balances itself out when the common purpose does not represent the vast majority. And we are now in that precise moment, with challenges that the current socioeconomic model cannot solve, and wherein new structures are emerging.

The structures that need to be modernized, that is, the ways that we related to one another until now, are the fruit of several social evolution processes that are heavily marked by the industrial revolution. A clear example of that is education. Schools and universities are designed to produce people who respond to the needs of companies, rather than to the needs of society. That’s why there’s so much emphasis placed on learning scientific subjects to the detriment of the arts or humanities, where people who possess deep knowledge of one specific subject while having a limited view of society and relationships.

These people will then go into companies where the best will rise through the ranks to accumulate status and money, the symbols of success of this model. Those who are less well adapted to the companies’ demands will have to settle for dedicating a set number of hours a day to doing a job the management wants in exchange for a salary to live on. The companies themselves compete amongst themselves for shares in markets that quickly get saturated, without bearing in mind the collateral effects of this on the planet or on society. All of these attitudes have something in common: an egocentric viewpoint that prioritizes the benefit of the individual, or the company, forgetting the remaining components of the system. And this inertia will continue until the consequences of the model affect the most developed countries. While the secondary effects occur far away in space and time, we will continue on, immobile and unconscious, accepting the alienating and egocentric character of our modus vivendi as normal. That is, we’ll continue living in the nebulous flow.

A new vision: startups as change makers

So what’s the solution? The solution is a socioeconomic model with a systemic viewpoint, that bears in mind all the components of the system and their relationships. That is, how we relate with ourselves, with others, with the community we live in, and with the planet. Only by keeping everything in mind will we be able to transcend the current socioeconomic model, correcting the collateral effects and building a model that guarantees the common good and sustainability.

However, to build this new world, we have to wake up. We have to look up and be aware that we belong to a system in which we necessarily have to relate with one another, and collaborate with others to make the system sustainable. Unfortunately, this process only occurs in one of two ways: either people go through a life experience which forces them to look deep inside themselves, which almost always brings with it a complete reordering of values which then leads one to search for alternatives to the current model; or, they received an alternative-style education and/or possess a special sensibility and insight that allows them to perceive this new paradigm intuitively. The rest will only be mobilized when the first create a new model that makes the old one obsolete or the system collapses.

In this sense, many of us entrepreneurs want to create a culture that favors autonomy, evolution, and the purpose of the people who make up our startup. Nevertheless, if we’re able to widen our horizons, we can achieve so much more. We can participate in this change, and build a socioeconomic model that’s fairer and more sustainable. To get it, we must transcend the status quo and design a new company paradigm with a systemic viewpoint. If we do this, the startups we create today will be the organizations of the future, with projects specialized in different domains and oriented to the common good. Professionals will be conscious people who will choose these organizations according to their purpose and values, and they will get involved with them by collaborating and contributing value, while at the same time developing their skills and vocation. They will be sustainable systems, truly based on people who relate completely naturally will other systems to create synergies. Bur for that, we must first face the biggest challenge of them all, evolving the way we relate; that is, evolving the human race. And there is no doubt in my mind that this is the most disruptive innovation possible, because, in the end, it’s the one that leads to all the rest.

Notes

1. Authors Otto Scharmer and Katrin Kaufer describe, in great detail, what they call version 3.0 of the socioeconomic model. In this paragraph, I briefly highlight the most relevant points.