Leading Questions

Parallel Structures of Networks of Relationships

One of the questions that I find continuing to dominate many of the conversations that I have with organizational leaders is the one related to how they should structure their business.

For example, yesterday in a conversation with a friend and client, we discussed the role of the administrative assistant in his business. Like many small businesses, this role has shifted from an essential one to a discretionary one. Many employment positions have gone away because the benefit does not match their cost.

The issue isn't whether the tasks that these people do are not valuable. The issue is whether the role as defined is.

This is a picture of the shift being taken in many places from a traditional hierarchical business structure to one that I call a parallel one. This parallel structure is a network of relationships.

As you can see by this chart, there are some real differences between the traditional approach to organizing a business, and one built around relationships.  This shift is hard for everyone who has spent their work life in a hierarchical structure.

In the traditional approach, a person is hired to fill a position. That position has a job description that outlines the specific tasks and responsibilities that they are to do. The employee's expectation is that is what their time at work will be like each day. Completing tasks that are assigned through the organizational design of the company. Responsibility is passed down to the employee,while authority is held at the top. This system worked well during an era of easy growth and social continuity.  It does so because the ultimate purpose of the organization is institutional integrity.

In a network of relationships parallel structure, the job description is also relational. It means that the individual's character and engagement with people is part of what makes them a valued employee. Some may think this has always been true. And that is correct. These parallel structures of relationships have always formed with a specific need emerges. But they were seen as temporary or adhoc, not a permanent part of the organization's structure.

What We Want

The greatest business failure of the past thirty years has not been scandals or financial collapses. It is the failure of business to understand the value of their employees. This failure originates in the structure of businesses.

If employees are functionaries in an administrative, production system, then their value is diminished, by let say at least 30%, and in some cases twice that.

If the business is organized to create order, then employees are hired to comply with that order. Institutional integrity becomes the goal of the organization.

However, in a network of relationships model, people bring much more to their work. This is what the team building movement has been teaching us for a generation. How people relate and work together is a key ingredient in an organization's success.

I suspect though that here again the value of the individual to company is still not perceived well.

If you were to sit down with every employee for coffee and talk about their lives, you would find what I am finding. There are three things that they want. Everyone says them differently, but they can be summarized simply. 

People want their lives and work to be Personally Meaningful, Socially Fulfilling and Make a Difference that Matters.

This is what we all want. We want the values that matter to us to be central in how we live. We want some kind of purpose for our lives. There needs to be a point to it.

We also want our relationships to be healthy and whole. We don't like conflict. We don't like to be manipulated, to be taken for granted, or to be used for someone's selfish purposes. We want to walk into work hopeful and excited about the opportunity to share my day with the people with whom I work.

We want to feel at the end of the day that we did something that made a difference. Listen to what people say when they talk about a good day. One where they accomplished something. They overcame a challenge or an obstacle and succeeded at it. Second, they did something for someone else that was appreciated. It made a difference. There was real satisfaction in helping solve person's problems. That's what we want.

The Circle of Impact Connection

The lesson for me when I began to see this picture emerge is how congruent it was to the three dimensions of leadership that I had identified as the Circle of Impact.

The three dimensions that command every leader's attention are Ideas, Relationships and Structure. We tend to segregate them, thinking that it is easier that way. Instead it creates confusion and greater complexity. That is why the four Connecting Ideas - Purpose or Mission, Values, Vision and Impact - are essential tools for helping link together the three dimensions.  And it begins by clarifying the Connecting Ideas.

The Circle of Impact applies to both kinds of structures, traditional and parallel, because this is a basic, fundamental understanding of all organizations, regardless of type. Every organization must address its ideology, its social context and how the business is structured to achieve impact. All of them. However, here's the difference.

The parallel structure, described above, is a Network of Relationships. Just like in a traditional hierarchical setting, this organizational structure requires attention to the Connecting Ideas, relationships and the organization of their work.

Networks of Relationships are formed around a Shared Mission and Shared Responsibility, where leadership, authority and responsibility to contribute are shared.

From this perspective of Shared Leadership, the responsibility of the individual is to take initiative to create impact. This is the most basic contribution of the team member. And because the group is organized as a network of relationships, their collaboration and communication is an essential focus of their relationships.

Three Contributions

Most of us have experienced team work where there was a genuine experience of coming together as a group of shared purpose and contribution. And most likely, we see these experiences as the exceptions in our lives.

Let's return to my conversation with my friend and client about the administrative staff person in his office.

How can this perspective about parallel structures, networks of relationships, shared mission, shared responsibility, shared leadership and impact fit into his traditional business structure?  

It begins with recognizing the each individual has latent potential waiting to be released. Everyone of us wants to work in an environment that is personally meaningful, socially fulfilling and makes a difference that matters. If that is so, then the first step is figuring out how those three personal goals become the basis for the contributions of each person.

As a result, each person contributes that which is personally meaningful. Each person contributes in their interpersonal interaction that which is socially fulfilling. And each person contributes out of their own talent, expertise and character of personal initiative those actions that create the impact that makes a difference that matters.

For each person to do this means that the social structure of the business must change. And this shift is based on what each person shares with the whole of the organization.

Here's the insight that is a key to understanding this organizational change. Because these networks of relationships are parallel structures, they can work along side of, and even within the traditional structures of hierarchy. In fact they always have. But rarely as a core strategy, but rather as a tactical approach to team work. 

We can see this is the way business define positions of employment. Instead of focused on contribution, the emphasis has always been task oriented. As result, the value of the employee is not realized, and it makes the case for reductions in force must easier to make.

The future belongs to these parallel structures. Let networks of relationships form. Let them take collective initiative to make a difference that matters, then new vitally and impact will emerge.

The End and The Beginning Redux

In March of 2011, I wrote a post called The End and The Beginning.  Here's an excerpt.

What I see is:

    The Beginning of the End of the Progressive ideal.

     The  End of the Beginning of the Capitalist model.

     The Emergence of freedom and democracy on a global scale.

The first two, Progressivism and Capitalism, along with modern Science, are the principal products of the age of Enlightenment.

The Progressive ideal believed, and still does by many of its advocates, that through government control of science and industry a free, equitable and peaceful world could be achieved. Conceived during the 19th century as a belief that society could be perfected, and as a counter-balance to the industrialization taking place in Europe and the United States, it was an utopian belief in a well-order, controlled, uniform world.

The Capitalist model was born in a belief that each individual should be free to pursue their own economic welfare, and not be forced by government rules or economic servitude to do that which they choose not to do. It was the ideology that provided the basis of the industrialization out which has come prosperity for more people in history and the rise of the modern middle class.

Both the Progressive ideal and the Capitalist model have brought great benefits and liabilities to society. They form the two sides of virtually every divisive issue confronting the world today. They are quite similar, yet in very different ways. Both are organized around the control of power and wealth. Both have been institutionalized in the large, hierarchical organizations in Washington and on Wall Street, and in similar institutions throughout the world.

Over the past decade, the Progressive ideal and the Capitalist model have begun to show their age. The assumptions that underlie these ideologies are being challenged by forces of change that are beyond their control. Because the control of global forces of change is problematic and less realistic.

I wrote this before the Occupy Wall Street movement began.

I have thought for a long time that there was an evolutionary cycle of institutional decline taking place. Some of this change was the result of out-dated organizational and leadership philosophies, and some of it the emergence of technologies that provide for a more boundary-less environment for communication and collaboration.

This change is an organic process that will ultimately transform or replace most organizations. While I still believe this to be true, I also see that there is a revolutionary cycle of institutional destruction taking place as well.

Read these two different views of the Occupy Wall Street movement. First, Naomi Wolfe's The Guardian article, The Shocking Truth about the Crackdown on Occupy. Then read Matthew Continetti's The Weekly Standard editorial, Anarachy in the USA.

If both are right, then what we are seeing is the rise of political violence on a broader scale in America than we have seen since the late 1960's / early 1970's.  I see parallels from my youth in this generation of young people who rush to join the protests, without really knowing what they hope to change. Their frustration is shared broadly.

A few times over the past few months, I have heard business people in differing contexts say something like, "I'm not making any investments in equipment, no acquisitions of companies, and no hiring until after next year's election."  The reason, instability, a lack of clarity about the rules. In effect, they don't know how their investments will be taxed. As a result, they are forced to sit and wait, contributing to a further erosion of jobs and economic sustainability for families and communities.

This fits with the trends picture presented by Charles Hugh Smith in his post The Future of Jobs. Look closely at the 5Ds at the end of this list.

Most cultural and economic trend changes begin on the margin and then spread slowly to the core, triggering waves of wider recognition along the way. Thus some of these long-wave trends may not yet be visible to the mainstream, and may remain on the margins for many years. Others are so mature that they may be primed for reversal.

The key here is to be aware of each of these, think on which are most likely to impact your current profession and how, and estimate when that impact is likely to be expressed so that you can position yourself wisely in advance:

1. Automation enabled by the Web…
2. The cost structure of the US economy—the system-wide cost of housing, food, energy, transport, education, health care, finance, debt, government, and defense/national security--is high and rising, even as productivity is lagging. …
3. The stress of operating a small business in a stagnant, over-indebted, high-cost basis economy is high, and owners find relief only by opting out and closing their doors. …
4. The Central State has been co-opted or captured by concentrations of private wealth and power to limit competition and divert the nation’s surplus to Elites within the key industries of finance, health care, education, government, and national security. ….
5. Financialization of the economy has incentivized unproductive speculation and malinvestment at the expense of productive investment. …
6. The U.S. economy has bifurcated into a two-tiered regulatory structure. Politically powerful industries such as finance, education, health care, oil/natural gas, and defense benefit from either loophole-riddled regulation or regulation that effectively erects walls that limit smaller competitors from challenging the dominant players. …
7. Selective globalization and political protection has created a two-tiered labor market in the US. …
8. Financialization and the two-tiered labor market have led to a two-tiered wealth structure in which the top 10%'s share of the nation’s wealth has outstripped not just the stagnant income and wealth of the lower 90%, but of productivity, the ultimate driver of national wealth.
   
9. … Looking farther out, there are emerging trends I call “the five Ds:” definancialization, delegitimization, deglobalization, decentralization and deceleration. …
10. Definancialization. Resistance to the political dominance of banks and Wall Street is rising, and the financial industry that thrived for the past three decades may contract to a much smaller footprint in the economy.
11. Delegitimization. The politically protected industries of government, education, health care, and national security are increasingly viewed as needlessly costly, top-heavy, inefficient, or failing. Supporting them with ever-increasing debt is widely viewed as irresponsible. Cultural faith in large-scale institutions as “solutions” is eroding, as is the confidence that a four-year college education is a key to financial security. 
12. Deglobalization. Though it appears that globalization reigns supreme, we can anticipate protectionism will increasingly be viewed as a just and practical bulwark against high unemployment and withering domestic industries. We can also anticipate global supply chains being disrupted by political turmoil or dislocations in the global energy supply chain; domestic suppliers will be increasingly valued as more trustworthy and secure than distant suppliers.
13. Decentralization. As faith in Federal and State policy erodes, local community institutions and enterprise will increasingly be viewed as more effective, responsive, adaptable, and less dysfunctional and parasitic than Federal and State institutions.
14. Deceleration. As debt and financialization cease being drivers of the economy and begin contracting, the entire economy will decelerate as over-indebtedness, systemic friction, institutional resistance to contraction (“the ratchet effect”), and political disunity are “sticky” and contentious.

So, a picture emerges that promises the economic and political environment to be more unstable and volatile over the coming year. I believe this requires us to make a change in our perspective about the way we view the evolutionary changes that are working in tandem and at time against the revolutionary changes of the past few months.

Understanding the Transition

Many of the people I am with on a daily basis feel a strong ambiguity towards institutions, like government, business and religion. Many of these institutions are failing, declining, or evaporating before our eyes. I don't need to go into the reasons why. It really doesn't matter that much because to a great degree, it is a function of the transition from one era to the next. I don't believe we can stop those changes. Our course of action is to be different. Here are some of the ways we can adapt to this changing social landscape.

1. Develop Parallel Structures that provide a buffer against the disintegration of legacy institutions. Creating parallel and redundant structures provides a greater margin of security against the shifts that are taking place. The thinking process behind this is to define the four Connecting Ideas of Mission, Values, Vision and Impact for your organization, and then answer, How do we create the structures that can fulfill the potential that resides in this ideas?

2. Develop Networks of Trust that provide a community of collaborators who stand with one another as economic conditions worsen. If society moves towards a more anarchic, violent place, then having a network of trust is essential for security and safety.

3. Develop a Long View / Big Picture that projects out how new ways of working can become sustainable.  Right now, using traditional plannng methods, it is very difficult to create a long range plan for development. Yet, without some clarity about the Big Picture, we are at the mercy of the current fashionable idea. Build a Long View / Big Picture around the Values that are most important to you and to those who are in your network of relationships. Strong values lived out in our relationships are an essential strength for being more adaptible in the face of revolutionary change.

4. Develop an Independent, Adaptable Mind that is able to discern the Big Picture in the moment of decision. Don't let someone else tell you what to think. Think for yourself. Do your own research. Read broadly. Think critically, with a view to understanding context, trends and what the Big Picture is. Engage in conversation, ask questions, change your mind, and build a network of people who are just as independently like minded.

5. Develop the Character of Resiliency that refuses to quit or fail, but continues to adapt and learn. This resiliency comes from an inner strength of courage and confidence that we can go through any difficult situation and remain true to ourselves. To be resilient requires us to see ourselves as more than the victim of current circumstances, but able to adapt and change to create the structures and relationships needed to advance forward.

6. Develop Traditions that Celebrate Values that unite people together as communities of shared mission and responsibility.  Of the four Connecting Ideas, Values is the only one that does not change. Our values are the glue that holds us together in times of crisis and stress. It is the core strength of every lasting institution. Those people and institutiosn that are able to change are the ones whose values are greater than its organizational structure.

7. Develop the Leadership of Personal Initiative in every social and organizational setting you touch. The attitudes and behaviors of entitlement and dependence, which have been nurtured by the institutions that are declining will not sustain society in the future. The freedom of the individual is the freedom to lead through their own personal initiative. The key is understanding that this initiative is the leadership of the future, as person who are free to act, join with others to create the parallel structures that are needed to replace the structures in decline.

The End and The Beginning Redux

I'm still convinced that we are witnessing the decline of Progressivism as a viable system for society. I'm also convinced that Capitalism as it has developed in the late 20th / early 21st century is not sustainable. I am more convinced than ever that individual freedom and the liberty of democracy are the trends that will carry us through the violence of the next generation. I say so because the era that is passing away before us will not go quietly. But go away, it will. That too I am firmly convinced.

When a Moral Crisis is a Leadership Crisis

The crisis at Penn State involving the sexual predation of young boys by a football coach brings a sad end to the career of Joe Paterno. While there is really nothing to say in defense of the assistant coach who is alleged to have commit these acts of perversion. I believe we can describe them this way.  As bad as it is, the greater crisis is one of leadership.

As I read and watched the coverage of this tragic situation, I can understand how all of this came to pass. I believe that it is perfectly explanable, though not excuseable.

While I know most people are reviled by the thought of a middle age man having sex with a 10 year boy, most people don't know what to do about it when confronted with the situation. The graduate assistant's actions is what most people who have never had any training in sexual boundaries within organizations would do. Go to your boss.

Until I became a Boy Scout leader, I did not know that any accusation of sexual abuse between an adult and a minor is required by law to be immediately communicated to law enforcement.  Prior to going through Youth Protection Training with the Boy Scouts, my understanding was that this is a matter for social services, not the police.

Joe Paterno, the Athletic Director and President Gordon Spanier should have know this. Either they didn't or if they did, they ignored it.

Once they discovered what this former coach had done, they should have addressed it directly with the families involved, and restricted the coach from any contact with the university, its programs and personnel.  This would be the case even if the first step is to contact law enforcement.

They should have also disclosed to the public the situation, and demonstrated a no tolerance position regarding sexual abuse.  If they had taken these simple steps, Joe Paterno would be coaching his team this weekend.

The Real Leadership Problem

The problem though is that it seems that these Penn State officials were living in a bubble. Their perception of what they could manage was faulty. This is often the result of a leadership culture of insularity, born of arrogance and fear. Yes, both arrogance and fear. The arrogance that I can handle this, and the fear of being found wanting as a leader.

The Penn State Board of Trustees are the ultimate authority in this matter. Their governance of the university is insufficient. I believe that they have now discovered this. Their actions last night to fire Joe Paterno and president, Gordon Spanier were the right ones.  A review of the Board of Trustees actions over the past decade is also needed to determine how a situation like this could have gone unaddressed. 

Organizational Leaders are Moral Leaders

Here's the reality that we must all face. Being an able administrator does not mean you are a paragon of moral credibility.

Your character as a human being matters in the conduct of your service as a leader. If you think you can finesse the moral side of leadership, then you are mistaken.

Today, you should assume that nothing is hidden. Everything will be found out.That honesty and integrity are not marketing slogans, but personal performance strategies.

When confronted with a situation like this one at Penn State, you will be judged as much for the process you take to resolution as for the resolution itself. Therefore, it is best to develop processes of openness, integrity, fairness and action. If you are the Executive Director, Owner or CEO of an organization, then you need to begin right away to put into place procedures for managing this kind of situation. If you have them, review their appropriatness in light of this Penn State debacle.

It is also important that no one person be treated as more important than the integrity of the institution. After over 60 years of involvement in the world of Penn State, Joe Paterno is fired by a phone call, ending his tenure as the winningest college football coach. Not the way anyone thought his tenure would end like this.

It is a sad day in Happy Valley. They will recover. A price will be paid for the serious errors in judgment by the Penn State leadership. And we each have had the opportunity to learn that to separate ethical responsibility from leadership is a course that leads to destruction.

The Future of Trust

An interesting conversation is taking place about The Future of Money.  A global community is engaged in discovering  alternative ways of viewing the way commerce is conducted. They want to move economics beyond the transactional level to the social. What these bright innovators recognize is that trust must be at the center of all interactions in society. This is why I'm paying attention to this conversation.

This video captures the scope of this discussion.

The Future of Money from KS12 on Vimeo.

The video was produced as a part of a presentation that Venessa Miemis gave at the Sibos conference of the financial services industry in Europe. In her presentation she said,

There is a class of young, intelligent, creative, passionate people who have become disillusioned with the debt-based monetary system, and are busy creating new infrastructures, right now, that are allowing a commons-based peer-to-peer infrastructure to emerge - in parallel to what currently exists. And the foundation of this economy is based on trust, and on transparency, and on the ability of distributed networks to self-organize.

For the community concerned with the Future of Money to realize a financial system based on trust they will have to address the place of culture.

Social scientist Francis Fukuyama's book Trust: The Social Virtues and the Creation of Prosperity places trust at the center of cultures that prosper.

Trust is the expectation that arises within a community of regular, honest, and cooperative behavior, based on commmonly shared norms, on the part of other members of that community.

Fukuyama describes culture as an inherited ethical habit. 

Trust as an inherited ethical habit produces a culture that is predictable, open, honest and where mutuality is important.  The reciprocity aspect of trust is how it becomes a culture. It is shared and exchanged between people. It creates a value within the culture because trust elevates the possibilities that come from the relationship.

Trust, therefore, has a strategic, developmental, entreprenurial value upon which organizations and communities can create the future.

Over the past few months, I have been writing about the shift that I see taking place. You can download a compilation here.  I see this shift as moving us from a lower-level reality of self-focused individualism to a higher one of a shared community of responsibility and contribution.

This shift is necessary because the time of the imperial self is fading in the wake of its own exhaustion as an ideology and the growing complexity and interconnectedness of our global society. It isn't simply the idea of the influence and impact of one person upon the whole world. Rather, it is the need for higher-levels human interaction to fulfill the opportunities that are being presented each day.  We need each other precisely to fulfill our individual sense of calling to make a difference that matters. It is the matters part that drives us into social arrangements that require us to be better people. It is ironic that as the world shifts from the individual to the social, it is providing a better context for the development of human potential as a result.

At the heart of this shift in human history is the importance of trust as a core condition for human community 

What is the source of trust? 

Trust is an outcome of attitudes and behaviors that we share. When I trust you, it is based on my respect of you and an appreciation of who you are, in other words, of your dignity and value as a person. 

When a person lacks dignity and self-respect, I know that it will be hard from them to treat me with dignity and respect. As a result, it will be difficult for us to trust one another.

If trust is the outcome of mutual respect and dignity, then it is also a recognition of our interdependence upon one another. Our mutual respect means that we can see in the other person strengths and potential that is worth affirming and elevating. As a result at the heart of the experience of trust is the practice of honor.

Honor and Trust

When my Say Thanks Every Day: The Five Actions of Gratitude project first began my  perception of honor was that it was about recognizing the accomplishments of people. While I still see that, I've come to realize that there is more to it.

At first, I began to ask some questions

What is it that we are recognizing when we honor people at banquets, awards shows, etc?

We are recognizing their accomplishments, their contributions, their acheivements in life and to specific organizational and social contexts.

Why do we recognize these achievements of these people, and not others?

Because those we recognize represent the values that unite us a group.  They signal to others what it takes to be a fully functioning, contributing member of our society. In essence, our recognition is symbolic of our values and beliefs as a people.

What if we reverse the sequence? Instead of recognizing people after their accomplishments, what if we recognized them, or rather affirmed them, for their potential accomplishments. Why can't we honor the talents and abilities of people in order for them to recognize the opportunity they have to make a difference.

Consider this.

You walk into a room of strangers. You don't know them. They don't know you. You feel a bit intimidated by the experience. Who are these people? Are they important or invisible? Are they interesting or boring? You don't know. Do you wait for someone to start a conversation, or do you take the initiative? If you take the initiative, what are you going to talk about? You're nervous, so you talk about yourself. You try to impress them with your own importance so they think you are important. Yet we know this doesn't really work. We come across as self-important egotists.

If instead we approached this scenario from the perspective of honor, then we walk into the room with the expectation of honoring each person. This means that we must discover what it is that is worth honoring in them. We must, therefore, ask questions about them. And once we find out some noteworthy things, we honor them by affirming and envisioning how they can make a difference.

Since I shifted my perspective to honoring the potential in people, I find it is much easier to trust them. There is a bond that forms.This is so because as soon as I recognize their potential, I become a partner with them in realizing it. Here's an example.

A few weeks ago I was at a conference in the mountains of Virginia, at a beautiful place called Primland. One evening after dinner, we were sitting outside of the Lodge where there was a firepit. A young man named Josh came out to start the fire. We began to talk with Josh about the property, where he was from and what his aims in life were. He was a student at a local community college, and wanted to be a professional writer of poetry and short stories.

So, here is this nice young man, who expresses himself well, talking about his writing. I ask him if he has shown his writing to anyone. He tells us that his father knows a best selling novelist, and wants to connect them up with each other. Good idea. Life is made from connections. He hasn't done this because he doesn't think he can show his work to the novelist yet. He doesn't say it, but he doesn't want to be embarassed if it isn't any good.

Here's an opportunity to honor someone who has not become accoplished in life, but who has potential, and needs both encouragement and some guidance. To honor him, I offer my help to read and critique his writing so he can go see this novelist with the confidence that he has something to offer than can make a difference. A simple offer that requires him to accept and act for trust to be realized.

When we honor someone in this way, we show respect and we establish the basis for trust to be shared between one another. Of course there will be people who reject our honoring of them. But those who do accept it complete the connection required for trust to live in a relationship. Imagine a group or society where this is the practice of the community.

Honoring others is a pathway to trust. Now pair this with my post of a few weeks ago, Honor and the Lost Art of Diplomacy. Here's part of what I wrote.

To live with honor and to practice diplomacy in our daily lives is not easy. It is countercultural, even prophetic in its application to our world today. It means that while we may disagree with another person, we can also honor them with respect, even if their behavior is a demonstration of a lack of their own self-respect.

I understand, therefore, that as we enter this new Presidential election campaign season, that your candidate is dishonored when you treat his or her opponents and supporters with dishonor.

I understand that your reasons for not voting for your candidate's opponent are not the same as having positive reasons for voting for them.

I understand that while pollsters say that negative campaigning wins votes, that it also poisons the well of respect that is required for the diplomacy that civic leadership demands.

I understand that dishonor in any context easily finds it way into others. Consider carefully what kind of atmosphere you want in your social and organizational life. The line between politics and the rest of life and work is razor thin.

I understand that to be honorable and diplomatic does not mean you give up your values and principles. It means that you do not win by destroying the other person. You lose by dishonoring your own values.

To practice honor and trust in this way is transformational. It sets up conditions in organizations and communities where people can discover their true contribution to society, and form the relationships that are needed to realize that calling.

To look objectively upon our world is to see a world where trust, respect, honor and mutuality are in great demand. When we treat others with disrespect and dishonor, we act without dignity.  The effect is destructive and toxic. It divides, isolates and creates inequities, poverty and war. I'm no optimistic Pollyanna who believes that we should all just get along. I'm a realist in understanding the competitive ground upon which we walk each day. There is more to trust that just respect and honor.

The Trust Connection

Over a decade ago I first read Ron Burt's Structural Holes: The Social Structure of Competition. Then, I had a beginning confirmation of what I knew intuitively. That the person who is able to establish relationships of trust is the one who will have a greater competitive advantage in a disruptive, rapidly changing world. In the diagram here, Mr Blue has a competitive advantage over Mr. Green and Mr. Red. His advantage is in brokering a relationship between them.  His ability to connect them together advances each of their opportunities to make a difference.

From the Burt's introduction ...

My argument is that much of competitive behavior and its results can be understood in terms of player access of “holes” in the social structure of the competitive arena.  Players are connected to certain others, trusting of certain others, obligated to support certain others, dependent on exchange with certain others….the holes in social structure, or, more simply, structural holes, are disconnections or nonequivalencies between players in the arena.  Structural holes are entrepreneurial opportunities for information access, timing, referrals, and control.  ...

But their individuality is the key to understanding competition.  The substantive richness of competition lies in its imperfections, the jostling of specific players against one another, each looking for a way to make a difference.  In the substantive details of imperfect competition lie the defining parameters of competition.  They are the parameters of player individuality.  Competition is imperfect to the extent to which multiple players together dominate a market, is an insufficient answer.  The central question for imperfect competition is how players escape domination, whether it is domination by the market or domination by another player.

This is the focus of the structural hole argument – a theory of freedom instead of power, of negotiated instead of absolute control.  It is a description of the extent to which the social structure of a competitive arena creates entrepreneurial opportunities for certain players to affect the terms of their relationships.

Competition is one way of understanding the social relations of people.We see it most destructively in predatory business practices and divisive, dishonorable politicing.

Its complement is collaboration.  If at the heart of competition is the competitive advantage that one brings because the other person, then at the heart of collaboration is the recognition of the advantage that another person brings to an endeavor. The most enlightened industries are ones where members become collaborative competitors.

I venture here because trust is essential to both competition and collaboration.  Let's look at this expanded version of the diagram above.

Originally, Mr. Blue brokered a relationship between Mr. Green and Mr. Red. Now we see a network of relationships that is much different. Mr. Green now is the principal broker of relationships by simply bringing two rather than one new relationship into the network. As this network grows in complexity, the key to its healthy functioning is the quality of the relationship that exists.

Healthy competition strengthened by respect, trust and honor elevates the network beyond a transactional relationship, centered upon how to secure one's own benefits from the network. Instead, the network is transformed from a collection of individuals to a collaborative community that shares common values, goals and benefits.

The Future of Trust

Trust is developing as a strategic, emergent reality that transforms relationships of acquaintance into a communities of respect, honor and mutuality. It is the basis for the kind of economic system that is being explored by The Future of Money community. It is the kind of attitude and behavior that we should expect from elected leaders. It is what we should expect from ourselves.  This is the future of trust.

New Lessons on Life and Leadership from Harry Potter and the Deathly Hallows

The first installment of Harry Potter and the Deathly Hallows is out. It is a sober journey toward the inevitible ending confrontation with Lord Voldemort. I've written about Harry and friends in the past. I think my perception of Harry as heroic sufferer holds up. But now, the team of Ron, Hermione and Harry share it in equal measure.

Spoilers alert!

I knew that this Harry Potter film was different when at the beginnng of the film, Hermione cut her ties to her parents. It was sad and shocking in a way that the Dursley's departure from their home, and the sober atmosphere at Ron's house did not quite match. As a result, for me, she became the emotional center of this film. In the past, her intellect guided the boys through various challenges. Now her emotional connection to them both, to Harry as peer in the role of heroic sufferer, and to Ron as one another's deepest, closest friend, brings a gravitas that strengthens the story.

Hermione's heroism in the face of sadness at the abandonment of her parents as a way to save them, reminds me of two other film heroines for whom sadness sees to be at the heart of their character.

Lisbeth Salander,(played by Noomi Rapace) the Swedish punk-adorned hacker/researcher who in the Millennium series (The Girl with the Dragon Tatoo, The Girl who Played with Fire, The Girl who Kicked the Hornets Nest)finds herself in three movies at the center of a super secret government conspiracy of a group of men, who apart from their criminality are mysogynistic, sadistic, rapists, and pedofilic . Here's a woman whose strength in the face of violent suffering provides the emotional core to sustain the men and women who seek to bring to justice the men who had violated her so.

In the film, Winter's Bone, 17th year old Ree Dolly (played by Jennifer Lawrence), becomes the default mother and provider of her family as her backwoods meth dealing father disappears, and whose mother has lost all ability to face realty. Her resolution to care for her much younger brother and sister and save the family farm leads to a violent assault on her by the women of the family that killed her family. Sadness penetrates the tone of this movie about a young women is survives to care for you siblings and addled mother another day.

These women's sadness and their toughness and resilience in the face of violence and threat is why these films are worth watching. Their performances transcend the stories that surround their performances.

What does this latest Harry Potter film tell us about leadership?

First, that character is based in emotional resilience learned in practice. Not the caracuture of the British "stiff upper lip." Instead a realism that vanquishes false hope and fantasy to embrace the real. For Herminone, Ron and Harry, the real is larger than their own realities. Ron tells Harry that this battle is larger than his personal confrontation with Voldemort. Is not this true of all leadership? We are players who for a time may have center-stage but it is not ours alone.

Second insight we can garner from Deathly Hallows part 1 is that we don't always know where the answers are. We don't see enough to know. Something maybe in our hand, like a horcrux, and yet we don't know what to do with it. It maybe something we've sought for, and once we have it, we don't know what to do with it, even then. The answer is patience and persistence in looking for clues for the answer.

A third lesson is that with teams, you don't always know who will step forward to make the difference that matters. For this reason, openness and appreciation for the talent that each person brings is essential. Dobby, the house elf that had been freed from servitude by Harry Potter in Chamber of Secrets, returns to save the day, and to give his life.

I wish no one suffering. That said, suffering can serve to bring perspective to our lives.  The Harry Potter series shows us this. We all owe a debt of gratitude to J.K. Rowling and the film makers for giving us a story we can all share. My earlier comment dating back to the summer of 2007 appears in the extended entry.

A Dozen Thoughts on Thinking, Communicating and Relationships

Here are a dozen thoughts that were on my mind as a new week begins. 

1. Listening is not the same as waiting to speak. It isn't nodding your head. It is being able to restate what the person said so that they know that you were listening.

2. Context matters. Just because you are an expert about one thing, doesn't mean that you are an expert in how that one thing relates to all things. Where you stand, your perspective, is just that your perspective. Respect your perspective, don't worship it.

3. Other people's context matters. Being influenced by a wide diversity of perspectives, broadens and deepens your own perspective. Build relationships with the widest possible collection of people. Your network should represent your curiosity, not your insecurities.

4. Real world experience matters. But it doesn't mean that you understand your experience. If you are not testing your ideas against experience, and your experience against other people's ideas, how can you say you are an expert? It is safer to think of yourself as a one learner among billions rather than the one expert among them.

5. IMHO isn't. Saying, "Here's what I think. What about you?" is.

6. Asking questions isn't doubting, but learning. Questions reveal truth. Questions reveal whether someone's ideas are clear, coherent, intellectually honest and have some connection to the way the world actually works. Develop strong BS filters by learning to ask hard questions.

7. Be careful of people who prohibit questions because you don't understand their "system."

8. Thinking something doesn't mean you know it. Just because a thought is in your head, doesn't mean you understand it, can explain it or apply it to someone's context. The quickest way to discover whether you understand your thoughts is to say them out loud. Verbalizing ideas is the shortest route to understanding what you really think. 

9. Practice reveals character. Before opening your mouth, and revealing how poorly thought out your ideas are, write them down, stand in front of a mirror and say them, or find someone who will listen and give you honest advice.

10. Never give a new presentation in front of an audience of strangers. Find someone who will listen and critique it first. Fix, then practice, practice, practice.

11. People's experience with you is more important than your ideas. Reverse that. Your ideas are only as good as the emotional experience that people have with them. Integrity and authenticity, not manipulation, are the keys to aligning your ideas with your audience's emotions. You must know your own emotions related to your ideas if you want to elicit authentic emotions from your audience.

12. Be your own BEST critic, not worst. Think for yourself. Don't be an expert on one thing. Be an expert of how many things are connected to your one thing. Don't accept someone's "informed" opinion as "completely and absolutely the last word." Read, study, ask questions, form your opinions, test them, practice them, write them down, speak about them from the heart and do this everyday.  In the end, you won't know more than anyone else. However, you will know what you don't know, and that will make the difference that matters.

Just Knowing You Are In Transition Doesn't Mean Much

For many of us the past 12-18 months has been a time of transition.

We recognize that the context of our businesses has changed. As a result, we have been making changes.

I visualize this change as a transition from what I was before to what I will be in the future.

When we enter a Transition Point, we recognize that something is awry. Our performance is down. Our markets are drying up. Our work is much harder, more stressful.

It isn't enough to know this. It isn't enough to say "Well, we are in a recession." It isn't enough to believe that things will get better. It isn't enough just to know you are in transition.

When we enter a Transition Point, just waiting for things to get better doesn't work. There are reasons why we are here. Some are the result of our decisions and actions. Others are simply changes in external circumstances, like an economic recession or technological innovation.

It doesn't matter why we are in a Transition Point. It really doesn't matter that you understand it. What does matter is what you are going to do about it.

Once we decide to make changes, we enter the Transition Space between Transition Points.

There are some principles to follow in this Transition Space.

1. It is a time of stopping and beginning. We stop doing some of the things that we been doing, even ones that we are good at and in which we find great comfort and affirmation. Why? Because they root us in a past performance that no longer is there for us. We must develop new approaches, new skills, acquire a new attitude about who we are and what we have to offer people.

2. It is not a time of waiting, but of patience and persistence. To wait for times to get better is to lose ground every day. But being faster doesn't necessarily translate into faster arrival at a higher performance level. When new things are begun, it takes time for them to reach maturity. It takes time for your market to recognize that you are different, and for them to change their perception of what you have to offer. So, instead of waiting for things to get better, we work with great patience and persistence to make each day a step forward. We are totally committed, and we look for ways to improve and change every day. When we are patient and persistent, our resilience to the hardships that comes with change also grows. If you can remain optimistic and resilient in the midst of this great transition, then you'll find the success you seek.

3. It is a time of change which changes us as people. The test of transition is of our potential. If you and your business are going to get through a time of transition, it will be because you began to tap into aspects of your potential that has been dormant in the past. To realize your potential means you have to become the person who has the capacity for impact that your potential represents. If this means you move to a different community, change the way you dress or leave behind some relationships, then you must do it. For times of change are times of opportunity, times to lay aside the encumbrances and constraints of our past life and grow into our next one. Very few people are willing to do this. 

These are lessons that I've learned over the past few months. My friend and colleague, Chip Madera says, "We don't get better by accident." We don't grow through times of transition by accident either. The question is whether you'll be satisfied just to know why you are in transition, or are you willing make it an opportunity for transforming your life and work to reach the potential that lies hidden and waiting for release.

Alignment

The professional service provider who does not want to be commoditized in today's marketplace must develop a new quality and character in their business.

This is not the quality of the movement for efficiency. We can be extraordinarily efficient and still become commoditized. We are talking about a different kind of quality.

The old quality was focused on business systems; the new quality on relationships and networks.

The quality of networks is built upon the action that results from our influence. Just knowing people isn't enough. It is what happens because of our relationship that matters.

This is a character issue. Not character in the moral sense of right and wrong, legal or illegal.

It is character in the sense of what you stand for, and the content of your actions. 

I am talking about what it means to be trusted.

We build a network to establish trust with a widely dispersed, diverse collection of people and groups. People's trust in us is measured both by what they think of us, and what they do in response to our relationship with them.

As a result, we must think differently about how we approach the development of our businesses and organizations.

Thinking differently is to learn to think dynamically, to align the three dimensions that command the attention of every leader of an organization.

Our Purpose needs to be align with the work we do, and the social and organizational structures where we do it.

Our Values need to be align with our relationships and in our networks.

Our Vision for Impact needs to be aligned with both our Purpose and our Values in order to have a chance of making a difference that matters.

To align all three is to live in the dynamic of the three dimensions. This is not a linear process of development, but one of attention to all three in coordination. 

Begin wherever the pressure point is at any given time.

If business has stopped knocking on your door, it could be that all three of these dimensions are no longer aligned.

Your sense of Purpose may not be aligned with what you do in your business.

Your Values may not be actively lived out in your relationships with people. They may simply see you as a commodity business rather than a trusted advisor.

You may have no Vision of the Impact of your business upon your Relationships or on the Social and Organizational settings where you are involved.

Is this a complicated process? Yes, it can be.

However, once you learn to see this dynamic at work, then it becomes a simple, yet sophisticated picture of where you are. It is a perspective that gives you a competitive advantage.

The future of our businesses is not simply by focusing on the efficiency of our Social and Organizational Structures.

The character of our thinking - our ability to think dynamically - and the character of our relationships - the alignment of what we believe in - is the future.

You are replaceable ... You do realize that, don't you?

Michael Klein writes,

“[B]y the time you realize you’re in trouble, it’s too late to save yourself. Unless you’re running scared all the time, you’re gone.” – Bill Gates

Realizing that you are replaceable is hard for individuals and organizations to come to terms with. Yet, the reality is that 99.9% of the time we are completely interchangeable. Accepting this is the first step to increasing your odds of success.

When businesses (industries) fail it’s because they ignored the fact they were replaceable.

This is largely true because we are becoming commodities.

In a conversation last week with Ty Hallock and Duncan Work, I referred to Ron Burt's theory of structural holes. Burt's idea is that the person who knows two people who do not know each other has a competitive advantage over the other two.  Duncan pointed out that is probably less so today as networks have grown through the mediums of Facebook, LinkedIn and Twitter.

I believe Duncan is correct, and the implication is as I wrote about here, that crowdsourcing is a function of the commoditization of professional services. In other words, we are all replaceable by someone who can provide the same or better services at a lower price.

Where then do we find competitive advantage that makes us irreplaceable? 

That is one of the questions of the day. 

My own sense is that it comes from two sources.

One is in the future development of networks. There is a tug-of-war taking place between the value and importance of quantity versus quality in networks. You may have ten thousand Twitter followers. Can you get 10% of them to buy a book? Can you get a hundred to donate to a charity? Can you get them to do anything? That is the difference between quantity and quality.

If you can convert followers to actors, then you have a competitive advantage over the person who has ten times the numbers, but not the influence to make a difference.

Two is in the character of the networks. Proximity, which is the same thing as numbers, doesn't mean you have a competitive advantage. The character of a network goes beyond the numbers to the values that unite a network to action.  Outside of network talk, we'd see this as collaboration. A network that collaborates is a network whose character is more like a community than a phone system. 

I'm convinced that it is the second of these sources of competitive advantage that will dictate whether you are a commodity or a valued service.

In other words, if you are no different than the next guy or gal, then you have no competitive advantage. From now on, it is the character of the individual and the network which will dictate value.

Anyone can do what you do. What is it that you bring to the table that others don't or can't? If you don't know, then you are fast descending into a commodity business. 

Take some time to think about this dilemma.

What is it that distinguishes you as a person that makes your service and your connections more valuable that other person?

I'll be back in a couple days to address this question.

The Recession is a Game Changer

Do you need proof that the world has changed with this recession?

Check out Tom Peter's list, Recession46: Forty-six “Secrets” and “Clever Strategies” For Dealing with the Recession of 2008-XXXX.

He starts by stating the obvious.

You come to work earlier.
You leave work later.
You work harder.
You may well work for less; and, if so, you adapt to the untoward circumstances with a smile—even if it kills you inside.
You volunteer to do more.
You dig deep, deeper, deepest—and always bring a good attitude to work.
You fake it if your good attitude flags.
You literally practice your “game face” in the mirror in the morning, and in the loo mid-morning.
You give new meaning to the idea and intensive practice of “visible management.”
You take better than usual care of yourself and encourage others to do the same— physical well-being significantly impacts mental well-being and response to stress.
You shrug off shit that flows downhill in your direction—buy a shovel or a “pre-worn” raincoat on eBay.
You try to forget about “the good old days”—nostalgia is self-destructive
(And bores others.)
You buck yourself up with the thought that “this too shall pass”—but then remind yourself that it might not pass any time soon, and so you re-dedicate yourself to making the absolute best of what you have now.
You work the phones and then work the phones some more—and stay in touch with and on the mind of positively everyone.
You frequently invent breaks from routine, including “weird” ones — “changeups” prevent wallowing and bring a fresh perspective.
You eschew all forms of personal excess.
You simplify.
You sweat the details as never before.
You sweat the details as never before.
You sweat the details as never before.
You raise to the sky and maintain at all costs the Standards of Excellence by which you unfailingly and unflinchingly evaluate your own performance.

In effect, you need two plans going forward. You need a new business plan. And you need a personal development plan.

Even as government becomes an increasingly intrusive part of our lives, we are more independent than ever before. The social support structure of family and community are not what they once were. Which means that if you do not have an attitude and the behaviors to be resilient and adaptive, then you are going to have a hard time coping with the changes that are taking place.

Read Tom Peters whole list. Copy it. Reflect on it. Factor it into your personal development plan.

HT: Dan Pink