LOST IN TRANSITION?

WE NO LONGER LIVE IN THE BUSINESS WORLD WE KNEW. WAKE-UP! WE CAN ADAPT BUT WE HAVE TO HURRY TO PUT AN END TO A MASSIVE AND UNNECESSARY HUMAN SUFFERING^[1]

Just like our world, the business world is changing. Yet, most of our professional practices do not, failing to acknowledge the necessary transitions they have to face and often causing unnecessary human suffering [1]. We can still adapt but we have to hurry to wake up. We no longer live in the world we were born into. And it’s pretty much the same for boomers, X and Y generations, or millennials. In other words, all the generations that are currently working for and leading our societal and economic reality have no more landmarks. It could be the biggest challenge of the modern era or even the toughest ever encountered by mankind from its dawn. But if everyone understands what is happening and agreed on a vision for the future, we could collectively deliver useful foresight, not for our only leaders’ profit but for our common advantage. However, we have to hurry since the future is incoming unimaginably fast. This article is an urgent message to our leaders that seems to watch elsewhere while knowing that our common house [2] is burning [3].

This article is divided into two main parts. The first half will unveil the main challenges our businesses will face and the underlying dynamics.  The reader will understand that a combination of internal and external pressures will put companies to a critical and even existential test. The second part will give a look at the fastly incoming future (or the trends that are probably inevitable), consider if the status quo is an option, and finally look for practicable solutions to adapt.

What are the characteristics of the world that is now over and why is it vanishing?

Let’s have a look at the characteristics of the world that is now over. It is labeled by:

• asymmetrical and top-down information controlled by a few. By flowing alongside the hierarchical pyramid and its functional structures, information reinforces the formal authority of top managers.
• stability and predictability that gave us the feeling that we can budget, manage and control everything. The predictability is driven by some kind of linearity (time and money allocation are conceived also in a linear manner) in a one-dimensional cause-effect relation.
• limitation by the classical unities of drama. Unity of action, unity of place, and unity of time structure every planning activity, decision-making, and initiative.

Two forces have disrupted the world we knew:

• technology [4] has shortened and flattened the access to the information and considerably accelerated the rhythm of change. We live in a lasting digitalization era. Everything moves faster in a non-linear way since technology has truly enabled a holistic or systemic approach. The traditional organization chart structured by hierarchical and formal relations reveals  its bottlenecks for relevant information distribution and for informed decision-making.
• globalization [5] has entangled some very monolithic concepts we relied on. The Westphalian nation-state that leads to meaningful concepts like sovereignty, borders, or territoriality are now questioned. With the acceleration provided by technologies, regulations based on our dear 20th-century mindset are no more suited [6]. Globalization also means that the labor markets are interconnected and in competition, and so are the “talents”. In the end, our big organizations will be everywhere and anywhere with a lot of physical locations but no clear territoriality. Thus, the concept of workplace, which is a current focus due to the pandemic and its impact on our ways of working, will be less paramount than in the past.

These two shocks are leading to a series of major sociological changes. For instance, automatization and globalization will erase many jobs. The value of developing personal carriers will vanish in the next few years. The centrality of the work (or at least of salaried jobs) will be heavily questioned [7]. But we will expand on this point later. Digitalization and globalization have also introduced powerful social media. They are shaping their own reality that overlaps and, in some cases, replaces the existing economic and social reality. LinkedIn is now an indispensable aggregator of data between employees and managers between candidates and employers, between clients and suppliers. Facebook (now become Meta) and its unstoppable galaxy of services connect billions of people, provide virtual identities while gathering real data, offer marketplaces and even a virtual currency. Its activity has an impact on all levels of our connected lives and also on political elections. Could we even imagine the impacts of all of this in a decade? Only future specialists can have the foresight competencies to assess the impact of the interplay between globalization and technology (which have potentialities that will be increased tenfold). And even if we assist to a sort of large political rethink that advocates for a wide relocation of industrial activities, it’s unsure if that will change the course of this future galloping on the pureblood horse of technology. Technology has also upset our behaviors with crowdfunding, permanent fact-checking, apps that provide anti-bullshit tools (like Yuka). The public, whether they are customers or voters, are more informed than ever (and also more misinformed, but that is another story) so the request for more transparency and direct democracy is unstoppable. No need to underline also how hard it is to keep things private and that the boundaries between private and public (and between the inside and the outside for companies) are blurred. So will be the professional and personal identity in the future.

At the same time, some exogen factors like time global warming, massive migration, increasing raw materials shortage exert additional pressure. This big picture may not have been strong enough to frighten the most resolute business leaders, but no doubt that the further description will create an unpleasant feeling of vertigo. Actually, the combination of these forces and major ecosystemic pressures have created a context of uncertainty, complexity, extreme volatility, and ambiguity [8] that sometimes seems to be pure randomness or even chaos. The first organizations to face and cope with this big disruption are our companies. In a second time, the democratic institutions and our public services will be challenged. Eventually, the not-for-profit sector will be impacted too.

Our organizations were designed to generate cosmos [9] and accumulate wealth. They are the most refined product of the former (by now outmoded) mindset and a direct byproduct of the classic economic theory. Consequently, they are at risk and, possibly beyond their resilience capacity.

The consequences are dramatic and expensive with hidden costs that are skyrocketing

The consequences will be dramatic. And nothing has prepared the acting leadership of our organizations for these challenges. Let’s see how the next future will look like with some examples:

• Loss of trust followed by a loss of authority toward leaders and institutions that will affect not only the relationship between top management and the workforce but also the customer relationship with a drop of EBITDA.
• a drop of employee loyalty with unforeseen resignation and absenteeism [10], and a consequent drift of HR costs that will be difficult to sustain. This will accentuate the drop of the EBITDA.
• shortage on the labor market with an exacerbated war for talents [11], unfilled strategic positions, increased risk of talent mismatch, and reduced employer attractiveness for all generations but particularly for Zs and Alphas). This will restrain the innovation capacity.
• job revolution with a massive extinction in the future due to automation and machine cognition that requires reskilling and upskilling and a better and smoother two-way knowledge transmission between generations,  subcultures, and domains. This will challenge deeply the HR function and some core processes and let a lot of companies unprepared.
• the decision-making process will be probably slower and slower since uncertainty and complexity will challenge many roadmaps, overload risk-management dashboards, with too many parameters. This profusion of data is too gigantic for old-fashioned analysis methods that don’t contemplate collective intelligence (or crowd-sourced ideas), agile method, and emergence as suitable alternatives.

In the end, the collective loss of meaning and purpose, the personal and professional identity crises combined with all these changes will exacerbate the existing levels of work-related suffering. It’s very plausible that this century will be the most challenging that our species, homo sapiens, ever encountered. Some experts say that we are on the edge of the precipice and are threatened by a societal collapse.

The good news is that there is strong evidence of the successful emergence of a new mindset. It seems that this paradigm could bring realistic and practicable solutions. At the same time, every civilization so far has collapsed by meeting environmental and social crises. We need to consider the signs of these incoming crises with attention. For some economists and business leaders, there is no doubt that we face a massive deoptimization in many sectors, according to the law of diminishing returns [12].

The main point of this first part is to underline that with all these economical and societal upheavals our businesses are put to a critical and even existential test. We assist to what we can name a shift of paradigm. Our beliefs are not helpful anymore in evaluating and reacting to the unthought. Even worse they are harmful when they produce a series of counterproductive and irrelevant decisions. A large part of the workforce suffering is the direct consequence of a misunderstanding (and sometimes a denial) of what is happening.

Anyway, we no longer live in a world we were born in and we should adapt now rather than wait for what will inevitably happen.

Will we accept this reality? Isn’t there an irrepressible need for a collective and vital call to action for leaders?  What will be the new normal? What will be the mindset lied behind the future? What are the resources we can leverage? It’s the purpose of this second part.

The world we will live into and its characteristics: a faster, kinder, and relieving ecosystem.

The world we will shortly live into (or at least we will undoubtedly enter in the next decade) have four main characteristics:

• A horizontalized shared knowledge and democratized data profusion that will drive a more shared and distributed authority [13]. Any top-down decision-making will gradually fade away in favor of a sort of “co-design from within”. Individuals will ask for more emancipation [14] and teams will be empowered. Micro-management will be considered as a vexatious demeanor. Middle managers will reposition themselves as coaches and supportive leaders or vanish. Tasking and resource allocation will be driven horizontally following the line of the best available competence and rigorous opportunity evaluation. This will drastically reduce the high viscosity of the information and decision flow. The internal controlling and quality teams will be downsized and relegated to keeping the book of the best practices rather than elaborating internal compliance rules.
• Networks will be the main map of our organization and replace the old-fashioned organizational chart (and its derivates like matrix). The network will empower the project mode, provide agility and collective intelligence. Formal teams could also fade away in favor of informal, more transversal, and transdisciplinary networks with companies becoming networks of networks.  Networks cut through barriers so our organizations will become more efficient and resilient because un-siloed. They will be able to be in direct connection with their stakeholders and their clients to deliver more value. The network is also an answer to the fact that our company will need to weave a great number of skills that won’t fit in a single job description or under the hat of one person. If 'the mouton à cinq pattes' is hard to find, the sheep, even augmented [15], will never get 8 or 10 legs. Only collective intelligence can deliver this quasi-infinite multicompetence that will be needed. The job description [16] in itself will also disappear in favor of a massive job crafting mainly driven by three questions “do you have enough time, do you have the required skills or can you upskill them, and do you really want to commit?”.
• Only purposeful and meaningful vision will obtain commitment, thus only purpose-driven businesses will survive. The purpose-driven economy is already incoming. B-Corp label [17], legal forms like benefit corps in some US States and Italy [18], or mission company (“entreprise à mission” in French [19]) are booming. Supported by the theory of stakeholder capitalism, these models consist in balancing the interest of shareholders and our desperate need to create accumulation. Generally speaking, this massive movement toward new forms of capitalism and legal forms is driven but the positive societal impact, and the searchfor a more meaningful contribution for the communities. It also invites the abandonment of a linear vision and to the adoption of the logic of the circular economy.
• Getting ready for the future to emerge [20] and prototyping everything will be the new way to deliver value. Since planning is no longer efficient to follow a high-paced rhythm and to find the most innovative solution, we will have to mobilize collective intelligence thanks to the aforementioned networks, to the fluid structures based on authority and information distribution, and to the crowd-sourced ideas (the Swarm Intelligence). Leveraging networks and crowdsourcing will help our organizations to let emerge the incoming future (products, services, internal organization, and even culture). Prototyping is a more agile way to test and learn since adaptation is an ongoing and embedded process.

Combining these characteristics (data profusion, networks, purpose and prototyping) will result into a holistic and ecosystemic business world more oriented towards producing a positive impact rather than towards accumulating money. The outcome of this change of mindset could be incredibly positive not only for mankind but also for the business itself. Let’s imagine a workplace able to provide self-realization to every employee and deliver generative abundance for its ecosystem and its stakeholders (including of course shareholders). Generative abundance is a core concept of the mindset that KINDNESSforBusiness advocates for. Generative abundance is available only when accepting the interdependence of the actors subsumed in the ecosystem.

Of course, these characteristics can emerge only if trust and KINDNESS are embedded everywhere.

Firstly, Trust in the people and trust in the aforementioned processes. For those who are still on the door sill, coming from the “command and control” mindset, trusting so widely may seem like a leap of faith. But faith has nothing to do with this transformation -and it will be more relevant to say evolution after the detailed argumentation developed in this article. Thousands and Thousands of entrepreneurs, business owners, top managers, inspiring leaders have already paved the way. Fear and status quo are the only lethal enemies of our businesses in those days. KINDNESS, in the way we understand it here, is about human-centricity and building more humane, meaningful, and safe workplaces. Know your colleagues, listen to them, but also know yourself, listen to yourself is the only simple but most powerful advice. Attractiveness for talents, emancipation, collective intelligence, and innovation are key for the future and any lack of trust or KINDNESS is a crippling and prohibitive weakness.

An interesting byproduct of this change will be that the new ways of working and workplaces will be a lot more entertaining and fun because they will remove a lot of pressure and suffering [21].  And here we are, building a virtuous circle.

The resources we can develop and leverage

The first resource lies in awareness and comprehension of the new mindset [22]. The awareness of the aforementioned issues that our businesses are already facing and will have to tackle in the next future is already pretty high. This is very positive. Millions of people have already understood that we are in transition toward a new mindset and are trying to understand it, some are more ahead and have already leveraged it to create a lasting competitive edge. Actually, leading companies like Harley Davidson, Gore inc, Patagonia, and their illuminated leaders paved our way decades ago, sharing their information and wisdom with us. The adoption curve is still relatively flat but according to the number of companies that adopt new legal forms and after the pandemic, it is beginning to follow the ascendant slope of the Pareto diagram. In order to facilitate a further comprehension of the mindset, KINDNESSforBusiness provides a lot of free content. The main one is the manifesto [23].

Companies will have to develop other resources.

There is a set of new skills to be developed in every single team:
• leadership skills: amplifying the impact, inspiring people and stakeholders (leading by example and from within), developing unique narratives, creating safe and sane workplaces, and transforming tensions into opportunities able to develop the organization to the next level of equilibrium.
• transformative skill: with a deep comprehension of systemic approach and knowledge regarding the interactions between personal beliefs, culture, individual and collective practices.
• facilitating skills: if emancipation is a goal, no doubt that it has to be sustained through processes of project management et decision-making. Great internal facilitators are key to getting through these new processes but also feeling safe enough to try and also to fail under their KIND watch.
• Integration and inclusion skills: they are useful not only to recruit but also to leverage collective intelligence and to create internal and transversal communities
• communication skills: on this field, the ability to not only create unique storytelling but also to talk the KINDNESS walk is crucial.

There are many ways to develop these skills. The most common and quick way is to recruit new team members able to provide them internally. But this is a strategy that is affordable only for big organizations and is relatively tricky to execute. The war for talents is already there and these soft skills are even less common than technical ones which have consolidated training stream. Upskilling employees to develop internally these competencies seems to be a far better option. Not only for the aforementioned reasons but also because it is more consistent with the new mindset. Remember that this paradigm teaches us that creating is better than accumulating, that having a "test and learn" approach is better than wanting things to be done immediately and perfectly, that trusting the humane potential is better than buying it, and so on. Of course, there is another option that is almost never considered. You can borrow these skills. Not through external advisors but by asking for help within the ecosystem you are developing. Why not exchanging high-skilled workers between companies for a while? Why not an experimental training shared between partners?

Of course, skills are not enough. Processes and practices are also needed. KINDNESSforBusiness is currently working on a list of practices useful for companies which will be soon available on our website.

Conclusion: The status quo is your enemy, keep on moving

Since we no longer live in the world we were born into, you need to be aware of the very few strategies you can adopt. If the incoming future has something frightened for you, you may dream to flee away and it is perfectly understandable. If it appeals to you, you may dream to be radical (“let’s hack the system” or “let’s rebel against the system”, for instance). Radicality is often seductive when facing existential challenges. According to the new mindset whose goal is to have a positive impact all around and to create generative abundance, these strategies will abandon a lot of our colleagues, friends, and family members alone in the dark, probably with some suffering. Therefore it's very unsure that there are good strategies (and in most cases, avoiding attitudes and exaggerated optimism are counterproductive).

You can also think that there is too much uncertainty, too much complexity and that the pioneers will explore this unknown territory and map it out for you. In the past, it could have been a quite good strategy. "Patience and time do more than strength or rage" taught us La Fontaine in the fable of the lion and the rat. If you are not convinced that this status of uncertainty, complexity, and apparent randomness will be permanent after what we shared about globalization and digitalization, it is fair enough. If you feel no anxiety, you should stick to this strategy, and thus, wait, observe and decide. You may be right.

But what if the status quo were our enemy? “Good is the enemy of the great” once said Voltaire. Do you want to create a more humane workplace? Do you want to be a force for good? Do you want to embrace this emerging mindset, which we call KINDNESS, or at least the possibility of its existence? Start your journey now and take action. And remember that you are not alone, you are not a fool. You are a visionary, an inspiring leader, able to lead by example… and the people around you deserve your positive impact.

Notes

[1] An informed reader probably already knows a lot about the nosedive of engagement in our organizations (whatever the size of them), the distrust towards institutions and the rising cost of absenteeism, and professional diseases linked to stress or mobbing. The COVID pandemic has accelerated a rethink about the ways of working and many employees reconsider the value of having a job and how to get a better life balance. In October the US press published articles entitled “striketober”, with tens of thousands of American workers who have been on strike for several weeks in fall 2021. Articles also mentioned the “big resignation”. Also known, as the “big quit” the phenomenon has already its Wikipedia page. In March and April 2021, in the US, more than 22 millions people resigned. The quit rate has exceeded 8%, almost four times more than the highest record score since the Great Recession of the 1930s. The care and wealth sectors are deprived of millions of workers all around the world because many of them resigned. Germany and UK are currently living a critical shortage of truck drivers. According to the OIT experts, these facts are unprecedented because massive and transversal to a great number of sectors and countries.

[2] Economy comes from ancient Greek οἰκονομία (oikonomía), based on oikos ‘house, patrimony (and also legacy)’ + nemein ‘administration’. But for the ancient greeks, oikos is a very extensive concept not limitate to the family. With modern frontiers that are ever more blurred, the oikos should undoubtedly be extended to the community.

[3] Paraphrase of the statement of a former French president, Jacques Chirac, during the IVth World Summit on Sustainable Development (WSSD) of Johannesburg, in September 2002: "Our house is burning down and we're blind to it. Nature, mutilated and overexploited, can no longer regenerate and we refuse to admit it. Humanity is suffering. It is suffering from poor development, in both the North and the South, and we stand indifferent. The earth and humankind are in danger and we are all responsible."

[4] When writing “technology”, It will be tedious for the reader to enumerate them exhaustively since we all experience the impact of many of them in our daily life and it will distract the reader from the real purpose of this article. But no doubt that cyberspace, virtual reality, machine cognition (or artificial intelligence if you prefer), an increase of data, data treatment velocity (Moore’s law) and increase bandwidth have already created a cascade of changes.

[5] Some experts say that the worldwide economy will now meet the 4th stage of globalization (or globalization 4.0), which will mainly embrace the service sector. So far this sector has been relatively spared by offshoring strategies and it makes no doubt that millions of knowledge workers will be hit by the irrepressible wave.

[6] For instance, the concept of permanent establishment that is the basis of our international fiscality is born just after World War I but is now outmoded and the reform of the international tax system finalized in October 2021 at the OECD is an attempt to remedy this situation. When a client buys a service accepting a dematerialized contract with a remote subbranch of an international company, territoriality and nationality are no more accurate criteria to define where to pay taxes.

[7] Remember that work is an essential element of socialization and at the individual level a determining vector of self-realization.

[8] We refer to the VUCA scenario here.

[9] Cosmos is the contrary of chaos. Both concepts derive from early Greek cosmology. Chaos occurs in the Theogony of Hesiod. But the modern meaning of the word is derived from Ovid, who saw Chaos as the original disordered and formless mass, from which the maker of the Cosmos produced the ordered universe.

[10] Since the case of resignation was also underlined in note 1, the interest of the reader is called on the reality of absenteeism in many countries. For instance, in France, the absenteeism rate increased by about +20% in 2020, from 4.18% to 5.04%. More than a third of employees have taken at least one sick day in 2020, according to the study made by Willis Towers Watson. In Switzerland, known for its high productivity pro capita, the average number of days of absence per employee, according to the Federal Office of Statistics, is 8.3. In francs, the direct annual cost of absenteeism for a company with about 60 employees is 160'000 according to the association Health Promotion Switzerland, to which are added indirect annual costs estimated at 320'000 francs. In Switzerland, the average number of days of absence per employee, according to the Federal Office of Statistics, is 8.3. The annual cost of absenteeism for the Swiss economy is 4.2 billion francs, according to a study of the State Secretariat for Economic Affairs.

[11] More than half of the companies whatever their size already are facing this issue.

[12] The law of diminishing returns (also known as the law of diminishing marginal productivity) states that in productive processes, increasing a factor of production by one unit, while holding all others production factors constant, will at some point return a lower unit of output per incremental unit of input (source: Wikipedia).

[13] Authority here refers to both formal authority and authoritativeness understood as acknowledged competence, knowledge or excellence.

[14] This requirement will obviously have an almost political shade even within companies, but the reader should receive a definition that is more easily usable in a work context. Emancipation differs from empowerment by going a step further. Empowerment consists in increasing the decision-making autonomy of one's subordinates and their capacity for initiative. Emancipation consists in making them feel legitimate to act, to decide but also to make mistakes. It is also to help them, in their quest for meaning, to realize themselves.

[15] Augmented here refers to both augmented humanity and augmented reality.

[16] A traditional position will be divided between diverse roles, with a multidimensional value.

[17] B-corp is a certification, based on a compliance survey named “B Impact Assessment” and provided by national B-Labs. It’s only available for for-profit organizations. According to the website of this worldwide organization, its community includes over 4,000 B Corps in 70 countries and 150 industries, and over 100,000 companies manage their impact with the B Impact Assessment and the SDG Action Manager. (source: https://bcorporation.net/about-b-lab, October 2021).

[18] This legal form created in 2017 in Italy knows a success that is not denied with more than 400 new or old companies under this status (source: https://www.societabenefit.net/elenco-delle-societa-benefit, October 2021).

[19] So far Danone, a leading company in the food sector, is the biggest French company (quoted on the CAC 40) to have chosen this new legal form, created in 2019. France has more than 200 companies under this status (September 2021).

[20] This sentence is directly inspired by the U-Theory design by O. Scharmer, senior lecturer at the Sloan School of Management, Massachusetts Institute of Technology (MIT), and co-founder of the Presencing Institute.

[21] A lot of researches have demonstrated a strong correlation between happiness and performance.

[22] The reader can find a detailed article from the same author https://www.kindnessforbusiness.org/the-emerging-mindset-compared-to-the-current-one-a-rethink-of-what-is-realy-human-centric/

[23] https://www.kindnessforbusiness.org/manifesto/

Small but useful bibliography

Don E. Beck and Christopher C. Cowan, Spiral Dynamics: Mastering Values, Leadership and Change, Blackwell Publishers (1996).

Isabelle Chappuis and Gabriele Rizzo, HR Futures 2030:  a design for future-ready human ressources, ed. Routledge (2022)

Alex Edmans, Grow the Pie, how great companies deliver both purpose and profit, Cambridge University Press (2020)

Gary Hamel, The Future of Management, Harvard Business Review Press (2007).

Gary Hamel and Michele Zanini, Humanocracy, Creating Organizations as Amazing as the People Inside them (2020)

Otto Scharmer, Leading from the Emerging Future: From Ego-System to Eco-System Economies, Berrett-Koehler Publishers (2016)

Ken Wilber, A Theory of Everything, An Integral Vision for Business, Politics, Science and Spirituality, Shambhala edition (2000).