Gavin’s Friday Reads: How to Avoid a Climate Disaster by Bill Gates

“I was surprised when I learned that what sounded like a small increase in the global temperature – just one or two degrees Celsius, which is 1.9 to 3.6 degrees Fahrenheit – could actually cause a lot of trouble. But it is true: In climate terms, a change of just a few degrees is a big deal.  During the last ice age, the average temperature was just 6 degrees Celsius lower than it is today.  During the age of the dinosaurs, when the average temperature was perhaps 4 degrees Celsius higher than it is today, there were crocodiles living above the Arctic Circle.”

Bill Gates, How to Avoid a Climate Disaster

This was the most shocking thing I read in this book.  I had to stop and read it again.  Crocodiles swimming north of the arctic circle.  The vision of crocodiles comfortably swimming where polar bears still do now was a shock to me.  We are already responsible for a 1 degree Celsius rise in average temperature.  We are easily on track to hit crocodiles in the arctic range by the end of this century.

I have been fixated on fuel efficiency since the early 70’s.  Maybe it was because I turned 16 and got my driver’s licence in the middle of the 1973 Organization of Petroleum Exporting Countries (OPEC) oil embargo, during which gas prices nearly quadrupled.  With a new licence to drive and being the oldest child it became my responsibility to take the two family cars down to fill them up whenever they got below half a tank. 

For those of you who are too young to remember, fuel was in short supply.  To encourage saving fuel the law changed and, you were only allowed to fill up your car on certain days.  If your license plate ended in an even number then you could fill up on even numbered days and if it was odd numbered you could fill up on odd number days.  We were lucky enough to have several cars and license plates with odd and even numbers.

So I got to sit in long lines waiting for hours to fill up our cars.  One of our cars was a Ford Montego Wagon.  It was rated the lowest mileage car in the U.S. at the time.  It had a V8 450hp engine and got about 8 miles to the gallon.  It idled at a very high speed.  If you took your foot off the brake it would probably get to 35 mph without touching the accelerator.  Waiting in those lines for hours served to provide me with plenty of time to contemplate everything that was wrong with this picture.

My father also had a diesel Mercedes.  Not only did it get great mileage but he could pump fuel out of the home heating oil tank right into his car.  Most people don’t realize that #2 heating oil and diesel are the same thing.  This allowed my father to continue commuting to NYC from Greenwich Ct. every day without much inconvenience.

My first attempt at a more efficient vehicle was a three wheeled motorcycle I built in my college years out of a small Suzuki 60 cc dirt bike and a snowmobile frame.  Later on I bought a 1973 Porsche 914 and converted it to an electric car.  But lead acid batteries were quite heavy and due to all the lead I was moving around I only had a range of about 45 miles.  I had a 40 mile commute which was cutting it close so the car mostly sat in the driveway to be used on weekends.

By the late 80’s I was working at the family food business.  In the early 90’s bovine spongiform encephalopathy (BSE) hit England.  In England up until that time to provide cows with protein, cows were being fed leftover cow parts mixed into their feed.  Brains and nervous system parts contained these things called prions which infected the brains and nervous systems of the cows who were fed this.  (gross right?)  It turned out that these prions could then be passed on to people.  Anyway they had to stop this and find another source of protein for the cows.  One of the sources was soy protein from the U.S.  Soy contains a lot of oil though which was believed to be not so good for the cows so the oil was pressed out and left behind.  Due to the glut of soy oil, soy oil prices plummeted. 

Eventually the price of soy oil was the same as #2 heating oil.  I wondered if our #2 fuel oil fired boilers that created steam for food processing would run on soy oil.  I found some articles that suggested it would, so one Saturday we filled up a 55 gallon drum with soy oil and brought it to the boiler room.  We hooked it up and the boiler continued to run as though nothing had changed.  So we began to run our boiler on vegetable oil until the price of it got too high again.

That got me thinking though, the boiler ran on #2 fuel oil and vegetable oil.  Diesel cars would run on diesel and on #2 fuel oil.  So could a diesel car run on vegetable oil?  It was early internet dial up modem days but I checked online and sure enough found some Sweedish farmers who were pressing the oil out of their canola seeds and feeding the meal to their animals and the oil to their diesel,  tractors, Volvo’s and VW’s.  All I needed to do was heat the oil to 140F and it would have the same viscosity as diesel and the engine would run the same.  

I could not find a used diesel car so I bought a new VW Golf in 2001 and converted it straight away.  For the next 10 years I drove to work on vegetable oil, a renewable fuel!

At the same time that electric Porsche was sitting in the driveway because it’s battery range was so poor, so I also converted the Porsche 914 to vegetable oil.  I installed a Yanmar 40HP turbo Diesel in it and with that car I won the 2006 NESEA TourDeSol prize for most environmentally friendly and highest mileage bio fuel vehicle.

All this to say that I have been obsessing about energy efficiency and climate change for decades.  Not only in my cars, but at work, and at home as well.

Gavin Watson

I really enjoyed reading Bill Gates’s book.  As he says in the beginning he is a technical guy so when presented with a problem he immediately looks for a technical solution.  He is also an optimist, (as I am, at least as far as technology goes).  We have a lot of solutions at hand already.  Some are actually less expensive than the fossil fuel alternative.  Heat pumps are a good example of this.  In these cases it is really a matter of getting the word out.  In other areas there are promising technologies that we can probably use but it will take a bit more time and investment to get us there.  There are new breakthroughs in solar, wind, and especially in batteries that are coming out almost every day.

I am aware that I am an imperfect messenger on climate change.  The world is not exactly lacking in rich men with big ideas about what other people should do, or who think Technology can fix any problem.

Bill Gates, How to Avoid a Climate Disaster

On the other hand there are big issues to overcome in some areas like making cement and steel, and the ways we do manufacturing and agriculture.  According to Gates we need to get to ZERO net carbon emissions in the wealthier countries by 2050.  We are currently adding 51 billion tons of carbon to the atmosphere each year.  (Just like the volcanoes were adding carbon to the atmosphere back in the days of the dinosaurs)  A 50% reduction in the wealthier countries is going to be the easy part.  We have some relatively easy things we can do to get us there like electric cars and heat pumps and less sexy stuff like caulking air leaks and insulation.  

But as Gates says “this is going to be really hard”. We have developing countries who will want and deserve to have a similar standard of living.  That is a lot more people who will need a lot more energy.  Since we wealthier countries are responsible for getting us into this mess it only makes sense that the burden for getting us out of this should also start with us. We need to be investing in numerous potential solutions that might or might not work out.  The benefit to this investment is that the countries who figure it out will have technology and goods they can export.  The Danes invested a lot in wind energy early on and they are currently the world’s largest exporter of wind technology and equipment.  

This same race to higher levels of expertise is happening in solar and to an even higher level in batteries.  Battery competition is exploding and whoever wins this development race will have car makers and others banging on their doors.  

Despite Gate’s admission to being a technical guy, this is a very readable book written in a conversational voice.  I have listened to Bill Gates speak, and as I read this I can actually hear him talking to me as I read.   The book is a good blend of why we need to do this, what we need to do, and how it can be done.  He is also clear on the technology that we have and the technology we will need to develop.  He presents the large numbers like 51 Billion tons of CO2 in terms you can get your head around.  He is both practical and realistic.  A good blend of how hard it is going to be and also examples of similar large scale transformations we have already accomplished in a similar amount of time.  He is quite humble admitting he is part of the problem and he knows it.  He is also genuine about admitting that there is a lot we don’t know about climate change.

Of course what we don’t know could mean it might be better than we think but it could also be worse.  We only have one planet and the future of generations of humans for the next 10,000 years or longer depends on us in this generation getting this right.

Bill has a lot of experience working with governments around the world through the work he has done with Melinda at the Bill and Melinda Gates Foundation.  He understands the complexity of getting to consensus.

Global cooperation is notoriously difficult.  It is hard to get every country in the world to agree on anything – especially when you are asking them to incur some new cost.

Bill Gates, How to Avoid a Climate Disaster

The biggest problem we face is getting global consensus.  As a friend of mine says it is 90% attitude and 10% everything else.  As the wealthiest nation we need to get our attitude right and go first and set an example. This is the best way to get others to adjust their attitudes.

I think the book is great.  The details, the conversational tone, realism, practicality, and humility are all a good balance.  There are only two things that I think more time could be spent on.  The first is regenerative agriculture.  Not only do we need to modify our agricultural processes to emit less carbon as Gates suggests.  But we can also use agriculture to store carbon in the soil and improve farming at the same time.  This is something that is currently being done and it needs a lot more experimentation and research.

The other thing I would have added in are more creative ways we can conserve energy.  Conservation is not as sexy as solar panels and batteries but it is the first and most important thing.  There are a lot of opportunities in the details of how we live our lives that can make a big difference.  Gates does not expect us to be willing to change our lifestyle much and he may be right.  As a person who has modified and built his own vehicles out of frustration for what is available in the commercial market though I think that harnessing determination and creativity of all of us (especially young people) has a huge potential for positive impact.  I intend to continue to keep working hard on this issue.  People who are 18 years old now will be 50 in 2050.  I think we can expect big things from them.

Cheers for Friday,

Gavin Watson, Chair, Conscious Capitalism Connecticut Chapter

Gavin Watson & Associates


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Gavin’s Friday Reads: Blueprint by Nicholas A. Christakis

If you have been reading my book reviews, you may be experiencing a bit of deja vu.  A previous post was also titled “Blueprint,” but it was by Robert Plomin.  You can find that review here. I suggest reading both, because the ideas go together (and not just because alphabetically these two works would be next to each other on the bookshelf!)

Plomin’s book is about each individual’s set of genes responsible for our unique personalities.  In essence. Plomin’s thesis is that (identical twins aside) we are unique individuals primarily because of our genetically determined innate characteristics. Anyone who had kids close together raised by the same parents in the same household knows this; they are very different.

Genes do amazing things inside our bodies, but even more amazing to me is what they do outside of them. Genes affect not only the structure and function of our bodies; not only the structure and function of our minds and, hence, our behaviors; but also the structure and function of our societies.

Nicholas A. Christakis, Blueprint

Christakis’s book, on the other hand, is about how we are the same.  Christakis is a sociologist at Yale and writes about how our genetic coding ensures the ways in which we tend towards social sameness. His argument is that our evolutionary success came about because we were predisposed to express particular qualities and behaviors in groups.  

This resonates, because, as you may have heard me say before, we are group creatures.  Our success depends on our group more than we care to admit.  It has been this way for hundreds of thousands of years, and it is probably even more true today than it was 50,000 years ago.  We are not likely to survive long on our own… but as a group we do remarkably well.  

Our individual differences in skills and abilities are essential for our group’s survival.  At the same time our survival and the group’s survival depends on cohesiveness of the group.  As suggested in last week’s review of An Everyone Culture, there is no tension between individuals growing in skill and self knowledge and the group’s success; it is one and the same thing, inextricably tied together.

Christakis is focused on the things that keep us together.  He calls it “the Social Suite”.  At the core of all societies are 8 critical things.  They are:

1. The ability to have and recognize individual identity

2. Love for partners and offspring

3. Friendship

4. Social networks

5. Cooperation

6. In-group preference

7. Mild hierarchy (that is, relative egalitarianism)

8. Social learning and teaching

Early in the book, Christakis illustrates the importance of these things.  We can’t of course test an hypothesis by setting up a control group in a social setting.  However sometimes natural experiments occur, and we can study those.  

He compares many instances of groups of people who have been shipwrecked.  Some of the groups did remarkably well even under very adverse circumstances.  All or nearly all of the people survived and were eventually rescued even years after being shipwrecked.  They did so he argues because they modeled these eight essential things for optimal group performance.  Other groups in arguably better circumstances, some who were even shipwrecked on the same island at nearly the same time (almost a perfect controlled experiment), had very few or no survivors because they did not embody these essential principles.

Just musing on some of these items in the “social suite” above will probably make it sort of obvious. Groups with authoritarian leaders who were not concerned about the lowest ranked members in the group did much more poorly than those led by more egalitarian leadership of groups who treated members with equality.  Bonds of friendship and social learning were also important.  The more skills and abilities everyone has the better off the group will be.

The social suite offers a successful, time-tested strategy for group living. Sometimes, groups cannot coalesce to express the social suite.  Nevertheless, they do not have any viable alternative to it.

Nicholas A. Christakis, Blueprint

In other words, he argues that this is the only successful strategy there is, with success equated to survival. We must embody these things if we are going to survive as a group.  

If you were going to be shipwrecked tomorrow would you choose to be shipwrecked with the other people in your company?  If not there is work to be done.

Admittedly, this is pretty strong stuff! And of course, in our daily lives we are not in such dire circumstances as a shipwreck (hopefully!) Therefore, we can sometimes get away with poor performance.

Without the social suite, we may survive, but our performance will be miserable.  And we will feel miserable.  Does this sound familiar?

Autocratic self centered people in leadership positions…people reluctant to share what they know for fear that the organization will no longer need them and will boot them out…lack of compassion and friendship at work… lack of trust in, and care for the group…fear of getting cut from the payroll when the chips are down…sound like a workplace you know of?

Think about it – there is no better example of the “chips are down” than being shipwrecked!  Some groups took care of everyone, even the very sick and injured who were unlikely to ever be much help.  These groups did far better.  Other groups almost immediately left the sick and injured behind.  These groups failed catastrophically, even though their circumstances were in many ways better.

Just because we are lucky enough not to be shipwrecked does not mean that we should not be doing everything we can to improve our groups.

When I compare the “Social Suite” with the prosocial core design principles, I see the same theme emerging.  And wouldn’t you want these things in your shipwrecked group?

Prosocial Core Design Principles (Elinor Ostrom)

  • Strong group identity and understanding of purpose.
  • Fair distribution of costs and benefits.
  • Fair and inclusive decision-making.
  • Monitoring agreed-upon behaviors.
  • Graduated sanctions for misbehaviour.
  • Fast and fair conflict resolution.
  • Authority to self-govern.
  • Appropriate relations with other groups.

And wouldn’t you want these qualities in the members of your shipwrecked group?

If you are a leader in your company, it is your job to make sure your group is “coalescing” around the social suite and the prosocial design principles. Or to put it another way, if you are engaged in the embodiment of these things, you are a Leader.  That is what leadership is.

Cheers for Friday,

Gavin Watson, Chair, Conscious Capitalism Connecticut Chapter

Gavin Watson & Associates


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Bringing Purpose to Your Business

Purpose is more than a marketing tactic; it’s much more than a term thrown around at conferences. It is something that is so deeply embedded into our experience with a brand that it can drive individual and collective actions to create a better world. The feelings we get from being part of these interactions or even seeing them happen – feelings produced by our own brain chemicals – fulfill the deepest of human needs: connection, belonging, wellbeing, and meaning, to name a few.

So let’s explore what this can look like from both sides of the market.

Recruiting Talent

Research shows that monetary rewards only go so far. From the perspective of “where do I want to work?” Purpose – or meaningful work, is a more essential driver of employee engagement and therefore one of the key predictors for organizational success.  

The best human resources you can imagine are asking themselves questions like: Will this job give me the autonomy I seek, plus tools and support to get the job done right? Will my suggestions for improvement be taken seriously? Will I be able to look back and see tangible results for my efforts? You want to be sure that your organization appeals from that perspective.

Brands that can clearly articulate their purpose will attract employees who become deeply committed to one another and the company’s goals. They will, in turn, attract your greatest fans and lend discretionary time and energy to be brand ambassadors – on social media and in their daily lives. 

So your company brand purpose should:

  1. Describe the kinds of problems that you solve in terms that are immediately engaging and lead naturally to “calls to action”
  2. Define your value proposition as a set of high stakes: what good things will happen in the world if your business achieves its purpose? What bad things will happen if you don’t?
  3. Include all stakeholders.
  4. Make the old “vision, mission and values” more visceral
  5. Unite the head, hands and heart of your organization by connecting what you do and how you do it with WHY you do it and who benefits.

Finding Customers

Consumers are now in the position to push for social change with every purchase 

As we cruise the crowded marketplace, we make split-second decisions based on emotional connections associated with each brand. And every time we spend money, we are casting a vote for what kind of world we want to live in and leave to future generations. 

What does your brand say about you in these terms, compared to your competition?

When we consider the causes we are drawn to or inspired by – what makes them compelling? We find that brands do a good job when they draw people in. Enabling people to champion an underdog, for example, is an excellent strategy for animating purpose. So is filling a gap or providing visibility to an underserved group. 

During this time of great upheaval, opportunities for transformation are always at hand. More than ever before, customers select brands that align with their values. Show them that you care about the same things they do and together, your company and your customers will realize great potential. 

Examples of consumer-facing brands and the campaigns that highlight purpose by addressing important global issues and fighting societal ills:

So to sum it all up, Brands leading with a clear sense of purpose experience greater ease in talent recruitment, employee engagement and staff retention, higher productivity, and attract the right kind of customers.

Cheers,

Glen McDermott,

Executive Director, Conscious Capitalism Connecticut Chapter

Founder & CEO, Red Rock Branding

Feel free to schedule a consultation now to discuss how these ideas can apply to your organization! Contact Glen Now


Gavin’s Friday Reads: An Everyone Culture, by Robert Kagan & Lisa Laskow Lahey

This book is by two Harvard organizational psychologists who go out in the field to research what they call Deliberately Developmental Organizations – or DDOs. These are companies that invest much more time and energy in their people’s development than most companies. It is also their central focus every day. DDOs do this because they know that it is essential for the people and the company to grow. Focus on development is what has created their success.

There is no tension between investing in the growth of their people and being profitable. It is one and the same thing for these companies. “Decurion’s Christopher Forman says “We do not see a trade-off, and the moment we consider sacrificing one for the other, we recognize that we have lost both.”

Better Me + Better You = Better Us

Robert Kagan and Lisa Laskow Lahey, An Everyone Culture: Becoming a Deliberately Developmental Organization

Each of the companies used as examples in the book is a deliberate system that is all about growing people. Because the company focuses on this, as a consequence it also does extremely well.

If you ask someone in one of these companies whether they focus on the development of their people because it is the right thing to do or because they believe it is the best thing for the organization, people will look at you funny because for them it is a non-question. It’s both/and. The two go inextricably together.

There are engaging stories told about each of the companies in the book. I encourage you to read them. Each of the companies has unique ways in which it goes about consciously and deliberately engendering the development of everyone who works there. Even the leaders are not exempt from the process they have set up. 

The company’s other primary commitment—to radical transparency—goes much deeper than the glass office walls. Every meeting is recorded, and (unless proprietary client information is discussed) every recording is available to every member of the organization. Each office and meeting room is equipped with audio recording technology. For example, if your boss and your boss’s boss are discussing your performance and you weren’t invited to the meeting, the recording is available for you to review. And you don’t have to scour every audio file to find out whether you were the subject of a closed-door conversation. If your name came up, you’re likely to be given a heads-up, just so that you will review the file. In effect, there is no such thing as a closed-door conversation; everything is part of a “historical record of what is true.

Robert Kagan and Lisa Laskow Lahey, An Everyone Culture: Becoming a Deliberately Developmental Organization

Most of us are familiar with the concept of child development.  We know that children grow in capabilities. At one point, kids like to play Peek a Boo. It is because they have recently discovered what Piaget called “Object Permanence.” Before this stage, things are just there sometimes and not there other times. When our brains figure out that the thing is now somewhere else but still exists, that’s object permanence. We take great delight in covering our eyes and everything is gone and then uncovering our eyes and it is still there!  How exciting!

Adults can grow. Around the age of 25 our frontal cortex is nicely formed. The wiring of this part of our brains begins in our teenage years and takes until our early 20’s. Our brains develop so slowly precisely so that they can be wired for our particular societal norms. That’s an evolutionary adaptation for creatures living in complex societies. During these years we are being socialized into our culture’s environment by parents, friends, and teachers. This results in what Keagan and Lahey call the Socialized Mind.  This is the young person who may have just started working in their first job. They are working out what is expected of them and how to fit in.  Keagan and Lahey describe this using the terms: “Team Player, Faithful Follower, Aligning, Seeks Direction, Reliant”.

The next level that most of us get to is the self-authoring mind. At this level we become more conscious, we wake up and realize that we have been socialized into our world view and it is not really our own.  Sometimes this starts to happen when people are in their 40’s as a midlife crisis which gives us a kick. We go on a hero’s journey to discover meaning and purpose and create our own view of reality. This is called the Self Authoring Mind. This is a journey to discover our own one best way to understand the world.  We use this perspective to change our environment. These are the terms used to describe this stage: “Agenda driven, learns to lead, has their own compass, own framework, problem-solving, independent.” While having your own compass and framework is better than being unconscious of the societal framework you were living in it can be limiting. It can be hard for people at this stage to hear information contrary to their personally developed worldview.

A very few of us get to the stage Kegan and Lahey call the Self Transforming Mind.  At this stage the person becomes aware of the many many other frameworks out in the world and that many of them are more complete and may work as well or better. They begin to shrug off the limitations of their own self-authored framework and explore these other frameworks.  This is a journey to discover many best ways. They use a framework to examine the other world views and continuously recreate their own framework to better reflect what they are learning.  This stage is described in these terms: “Meta Leader, leads to learn, multi-frame, holds contradictions, problem-finding, interdependent.”

If you are fluent in Conscious Capitalism, you will have heard that an organization can’t progress beyond the consciousness level of its leader. The three levels above show how true this is. I am going to exaggerate the descriptions below just a bit to make it clearer. In reality, it is usually not so black and white.

At the level of the socialized mind a company leader may be just doing what they were taught in business school or as part of an MBA program. They are following the social norms for running a business checking off all the boxes on the ‘how to run a successful business list’ that they were taught. If a person is at a supervisory or manager level they will be acting just like their first manager or supervisor did. That is the model they are following.

Hopefully at some point they wake up. Maybe it is a midlife crisis. They get to their 40’s and they ask, is this all there is? Is making money what it is all about? Maybe they have been treating their people like they are just a resource and they have a conversion experience where they realize that each of these people is someone’s precious child. Just like their own son or daughter. They begin to rethink what they were taught and they “Self Author” their own world view based on their own values. Their company begins to run much better. More people are engaged in their work. The company has discovered values and possibly even a purpose beyond profit.

As time goes by some leaders who are now comfortable in their Self Authored world view become confident enough to feel safe (and even excited by) exploring alternative views. They realize that their Self Authored view, their secret sauce, that gave them success is now probably holding them and their companies back. They realize that the world is a lot more complex than they once thought. They realize that they must begin continually trying new things.  They find joy in exploring possibilities and encourage others in their organization to do so also. They go way beyond their once-accepted way of doing work. They encourage others in their organization to lead from wherever they are and explore their own leadership views. They seek to continually recreate a framework that can be used to understand the other frameworks. Their own drive comes from a deep desire to learn and they want everyone else in their companies to be learning and growing also. Ultimately, they understand that all of these realities are our own creations, and therefore we are free to create new, more beautiful ones for people to enjoy.

Keagan and Lahey do share evidence to suggest that the higher the level of development of the company leader (and therefore others in the company), the better the company’s performance will tend to be.

Of course, this book is just another framework with which to look at ourselves, our businesses, and the world. I think it is a useful one. It certainly rings true to me as a person who loves learning new ideas and seeing how they fit together with my current understanding.  

Also, it seems that many of us are operating at one level in one area of our lives and at a different level in a different area of our lives. It could be more a matter of how much of the time we spend thinking at a particular level. For me, this indicates that it may not be so much a stage of development (like Piaget’s object permanence) but a subjective worldview that is holding us back, particularly in our work lives. 

If you would like to listen to a podcast on a similar vein I would suggest the Conscious Capitalist podcasts https://www.theconsciouscapitalists.com/  especially #24 Values and Consciousness with Richard Barrett and #26 Leaders get the Organizations they deserve which explores the journey to Conscious Leadership.

Cheers for Friday,

Gavin Watson, Chair, Conscious Capitalism Connecticut Chapter

Gavin Watson & Associates


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Gavin’s Friday Reads: 25 Quotes from Books I’ve Read

If you’re anything like me, you have an ongoing list of quotes that you gather while reading. Today I’d like to share with you 25 quotes from a very long list. You may recognize a few of them if you been keeping up with my Friday Reads book recommendations. I hope you find them inspiring and thought provoking.

“Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”

Richard Branson

“Conscious managers exercise a minimum amount of control. Their role is not to control other people. It is to create the conditions that allow for more self-management.”

John Mackey & Raj Sisodia, Conscious Capitalism: Liberating the Heroic Spirit of Business

“Truly human leadership protects an organization from internal rivalries that can shatter a culture.  When we have to protect ourselves from each other, the whole organization suffers.  But when trust and cooperation thrive internally, we pull together and the organization grows stronger as a result.”

Simon Sinek, Leaders Eat Last

“The question is not how you can make better rules, but how can you support teams in finding the best solution.  How can you strengthen the possibilities of the team members so that they need the least amount of direction setting from above?”

Jos De Block

“When we see life as a journey of discovery, then we learn to deal more gracefully with the setbacks, the mistakes, and the roadblocks in our life.  We can start to grasp the spiritual insight that there are no mistakes, simply experiences that point us to a deeper truth about ourselves and the world.”

Frederic Laloux, Reinventing Organizations

“When success is measured solely in terms of money and recognition, when growth and the bottom line are the only thing that count, when the only successful life is the one that reaches the top, we are bound to experience a sense of emptiness in our lives.”

Frederic Laloux,  Reinventing Organizations

“When you force people into slots you get slot shaped contributions. You want to turn sheep into shepherds.”

Drew Williams

“If you create an environment where the people truly participate, you don’t need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.”

Herb Kelleher

“We need to put individuals before organizations. To do this we need to do the following:  1. Decentralize power whenever possible. 2. Emphasize community over hierarchy. 3. Ensure transparency in decision making. 4. Make leaders more accountable to the led. 5. Align rewards with contribution rather than with power or position. 6. Substitute peer review for top down review. 7. Steadily enlarge the scope of self-determination.”

Gary Hamel, What Matters Now

“Hierarchy of human capabilities at work. 1 obedience, 2 diligence, 3 expertise, 4 initiative, 5 creativity, 6 passion.  1, 2 and 3 can be rewarded externally by incentives or demands.  4, 5, and 6 are internally driven and can’t be demanded or required.  They are gifts that can’t be commanded.”

Gary Hamel, What Matters Now

“How many policies exist just to preserve the fiction that the higher ups are in control?  How many rules enforce standardization at the expense of initiative and passion while delivering few if any benefits?”

Gary Hamel, What Matters Now

“When you force people into slots you get slot shaped contributions. You want to turn sheep into shepherds.”

Drew Williams

“All human systems are self-organizing and naturally tend towards high performance provided the essential preconditions are present and sustained.”

Harrison Owen, Wave Rider

“High Performance is less a matter of doing something… but rather being fully and intentionally what we already are: a self-organizing system.”

Harrison Owen, Wave Rider

“Passion alone = flashy all sizzle and no steak.  Responsibility alone = simply boring.  Passion + Responsibility = Authentic Leadership.”

Harrison Owen, Wave Rider

“How Many policies exist just to preserve the fiction that the higher ups are in control?  How many rules enforce standardization at the expense of initiative and passion while delivering few if any benefits?”

Blair Vernon

The informal organization which does not appear on any organizational chart consists of the informal contacts among themselves that employees use to get things done.

Gary Dressier

“A good Game has 4 elements. 1. A clearly defined Goal. 2. Clear understanding of the rules. 3. a way to easily and quickly track progress towards the goal. 4players must opt in voluntarily.”

Jane McGonigal, Reality is Broken

Read my post on Reality is Broken.

“Let’s take golf to start.  As a golfer you have a clear goal: to get the ball in a series of very small holes, with fewer tries than anyone else.  If you weren’t playing a game you’d achieve this goal the most efficient way possible: you’d walk right up to the hole and drop the ball in with your hand.  What makes Golf a Game is that you willingly agree to stand really far away from each hole and swing at the ball with a club.  Golf is engaging exactly because you along with the other players have agreed to make the work more challenging than it has any reasonable right to be.”

Jane McGonigal, Reality is Broken
Read my post on Reality is Broken.

“The prevailing positive-psychology theory that we are the one and only source of our own happiness isn’t just a metaphor.  It is a biological fact.  Our brains and bodies produce neurochemicals and physiological sensations that we experience, in different quantities and combinations, as pleasure, enjoyment, satisfaction, ecstasy, contentment, love, and every other kind of happiness.  And positive psychologists have shown that we don’t have to wait for life to trigger these chemicals and sensations for us.  We can trigger them ourselves by… undertaking a difficult challenge… accomplishing something very hard for us…making someone laugh…or…being part of something larger than ourselves that has lasting significance beyond our individual lives.”

Jane McGonigal, Reality is Broken
Read my post on Reality is Broken.

“Playing a game is the voluntary attempt to overcome unnecessary obstacles.”

Bernard Suits

Everyone’s a manager here.  The job of managing includes planning, organizing, directing, staffing, and control, and everyone at Morning Star is expected to do all of these things.

Chris Rufer

It was a whole different business, nothing like I’d ever known, like night and day… Thirty seconds of play and I am on a whole new plane of being, all of my synapses wailing.

David Sudnow about playing the video game Breakout

“We have been conditioned to believe that the wrong things will make us lastingly happy.”

Sonia Lyubomirsky, The How of Happiness

Read my post on The How of Happiness.

Culture eats strategy for breakfast.

Peter Drucker

Cheers for Friday,

Gavin Watson, Chair, Conscious Capitalism Connecticut Chapter

Gavin Watson & Associates


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Gavin’s Friday Reads: Doughnut Economics By Kate Raworth

This is about a new way of thinking about economics.  

The traditional economic model is just a model of an economy floating in empty space. The Doughnut economic model recognizes that the economy exists within the earth’s boundaries and is reliant on life and the resources that the planet provides.  

If we exceed what the planet can sustainably provide and adsorb eventually we crash the whole system.  As she says we take and use (sometimes we use just once) and throw it away.  “There is no away”.  Generations in the future are going to look back on us and ask did we know?  Previous generations did not know and therefore could not have drawn a model like this but we know.

Kate Raworth describes her idea in the short video below.

Below is the structure of Doughnut Economics.

The outer rim of the doughnut symbolizes the outer edge of what we can take from our planet and return sustainably.  The red fields illustrate by how much we are exceeding the earth’s ability to support us.

The inside of the doughnut is about fairness.  It is about human needs for food, water, and other goods as well as education, equity, and political voice.  The inner ring symbolizes the minimum boundary below which we should not let other humans fall.  The red in these areas illustrates how much we are failing on this.

Doughnut Economics 7 ways to think like a 21 century economist:

1. Change the goal (it is not continual GDP growth)

2. See the big picture

3. Nuture Human Nature

4. Get savvy with systems

5. design to distribute

6. create to regenerate

7. Be agnostic about growth

This is about discarding the old very limiting economic reality that has been taught to so many students and is running so many of our governments, and imagining a new one with a new picture.  

As Lisa Feldman Barrett said in her book 71/2 lessons about the brain, our ability to imagine different realities and believe in them so they become the new reality is our “super power”.  “Superpowers work best when we know we have them”.  

If we start to think of our economy as a doughnut and we know we are creating the economy then we are all economists and changing our reality based on our beliefs and actions.

About 1 hour in to the video above, Raworth talks about companies.  She says she is not particularly interested in product packaging, or how the ingredients are sourced, or how the employees are paid, though that is important.  She is interested in the company design.  “How the company is designed matters.  This will determine if the company is regenerative or not.”  This is more of a systems thinking approach. In systems thinking the thing we get is shaped by the process we use to get there.  In this thinking we should focus on setting up the system (company) properly instead of the details.  This will make it more likely we achieve and even exceed our expectations.

5 design traits of a company:

1. A living Purpose bigger than themselves

2. The network your company lives in.  What are the values of the network?  Does it reinforce or pull from the purpose?

3. Governance  Who is in the room when decisions are made?

4. How is the company owned?  By a family, a VC capital group, financially motivated shareholders, or shareholders who love who you are, and share your purpose.

5. How is the company financed?  Is finance in service to the purpose?  By people or institutions who are committed to the same purpose and a fair return?  Or just a maximum return?

Obviously there are a lot of similarities with Conscious Capitalism.  A higher purpose, shareholders who care about and support the purpose, and a stakeholder view which includes the planetary ecosystem as even more than a stakeholder.  In this model it is the ecosystem in which the economy lives and is dependent on. 

Cities (Amsterdam and Brussels) and even some countries are beginning to play with the doughnut economic model.  In a complex system a solution can not be put in place through central control.  It needs to evolve through experimentation.  It happens by variation, selection, and replication of the things that work.  (Recognizing that what works in some cases may not work in others.)  We can learn from each other.

For this reason they have set up this Doughnut Economics ACTION Lab for people to communicate what they are trying and how it is working.

Cheers for Friday,

Gavin Watson, Chair, Conscious Capitalism Connecticut Chapter

Gavin Watson & Associates


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Gavin’s Friday Reads: 7 1/2 Lessons About the Brain, Lisa Feldman Barrett

This is a small, very short, easily read book by one of the lead researchers in psychology and neuroscientists of our time.  I read all 130 pages in one morning and I am not a particularly fast reader.

I hope my short version of the 71/2 lessons below inspires you to get a copy and read it.

Lesson ½ “Our Brains are Not for Thinking”.  Evolution “gave us brains to manage the systems going on in our bodies, (body budgets) and foster our efficient survival in the world.  Our brains are prediction machines.  Based on past experience and our view of “reality” Our brains predict what will happen in our environment.  Predictions are designed to keep us alive and to save energy resources.  Our predictive brains find it annoying when we don’t finish the…

Lesson 1 “We Have One Brain Not Three”.  We don’t have a Lizard brain for survival, a mid brain for emotions and one logical brain to rule them all.  We just have one brain.  There is no tension between three fictitious ideas.  Emotion and reason are not separate things.

Lesson 2 “Our Brains are Networks”.  Not every cell is connected to every other.  That would create what she calls a meatloaf brain.  A homogeneous mass not capable of anything interesting.  Our brains are also not like swiss army knives.  They are not a fixed set of tools pre wired together in a particular way that can do a few different things.  Our brains are networks.  When we learn something new a network is created.  If we use it often it is strengthened.  If we don’t use it the connections fade away.  A process of “Tuning and Pruning”

Lesson 3 “Little Brains Wire Themselves to the World.”  Unlike most species we develop late.  The whole wiring process takes about 25 years.  This allows our brains the flexibility needed to wire themselves for the environment and societies we are born into.

Lesson 4 “Your Brain Predicts (almost) Everything You Do.”  This is one of its main functions.  Based on current circumstances and past experience our brains are continually predicting our environment and planning our next moves, even executing the next moves before the sensory data of the “real world” is processed.   “Your brain is designed to initiate your actions before you are aware of them.” Predicting and acting is almost always ahead of understanding.  Fighter pilots talk of the OODA loop.  Observe Orientate Decide Act.  This is a misconception.  It would take far too long and you would end up dead.  Our brains use a Predict, Begin to Act, Correct, Predict again, begin modified action, correct again….. continuous system.  The only thing remotely like deciding is the prior experience our brains are drawing from to make the predictions.  This is where we have agency (free will) over our behavior.  We can decide what we learn and how we want to perceive the world and gradually train ourselves to see it that way.  Is it a world of scarcity or of abundance?  Both beliefs are true.  Which one are we going to choose to train ourselves to see more clearly?  This is what the Dalai Lama calls “perspective”

Lesson 5 “Your Brain Secretly Works with Other Brains”  We are a group species.  We need and affect each other more than we know.  Ubuntu is the idea that we call each other into being, this is really very close to the mark.  Solitary confinement is really a slow form of capital punishment.  We regulate each other’s brains and “body budgets”.  “Have you lost someone close to you through a breakup or a death and felt you had lost part of yourself?  That’s because you did.  You lost a source of keeping your body systems in balance.”  “The price of personal freedom is personal responsibility for your impact on others.  The wiring of our brains guarantees it.”  IE the freedom to say whatever we want comes with the responsibility of the effect our speech has on others.  Because we are social creatures we will all enjoy the fruits of uplifting speech or the suffering due to harmful speech.

Lesson 6 “Brains Make More Than One Kind of Mind”  We are not all the same.  We have different personalities, and on top of that our brains construct themselves differently when we are raised in a different society.  This is why immersing ourselves in a different culture where we don’t know the first thing about that society’s norms (or language) is so difficult.  What was automatic in our own society now needs to be learned again.  Understanding each other is going to be more critical to the future survival of humanity.  As Abraham Lincoln said “I don’t like that man.  I must get to know him better.”

Lesson 7 “Our Brains Can Create Reality”  “Social reality can alter dramatically, in moments, if people simply change their minds.  In 1776 for example a collection of thirteen British colonies vanished and was replaced by the United States of America.”  This is a super power that only we humans have.  We can create money, towns, and states, democracy and human rights just by believing it is so.  And just as easily we can lose something valuable if we cease to believe in it.  “We have more responsibility for our reality than we might realize.”  “A superpower works best when you know you have it.”

Cheers for Friday,

Gavin Watson, Chair, Conscious Capitalism Connecticut Chapter

Gavin Watson & Associates


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Gavin’s Friday Reads: Reality is Broken by Jane McGonigal

Jane is a computer game designer.  Here is a link to one of her TED talks. It is definitely worth watching.

Her twin sister Kelly is a researcher in the field of positive psychology.  She also has several great TED talks.  Something in the genes they share…?

Jane’s first book “Reality is Broken” was published in 2011.  Why do so many people spend 10, 20, or even 40 hours a week, as much as a full time job, playing games online?  Going on quests to save the universe or whatever.  Why do people find these games this alternative reality so fulfilling and ”real” reality not so much?

Why is reality having trouble competing?  Afterall it is the real one right?

Most work lives have a lot of room for improvement.

What makes a good game?  How can we make reality more like a good game?

McGonigal makes a living designing good games.  She was one of the first people to design her own graduate degree in game science before it was a thing, so she knows her stuff.  

A good Game has 4 elements:

1. The Goal is the specific outcome that players will work to achieve.  It focuses their attention and continually orients their participation throughout the game.  The goal provides players a sense of purpose.

2.   The Rules place limitations on how players can achieve the goal.  By removing or limiting the obvious ways of getting to the goal, the rules push players to explore previously uncharted possibility spaces.  They unleash creativity and foster strategic thinking.

3.   The Feedback System tells players how close they are to achieving the goal.  It can take the form of points, levels, a score, or progress bar.  Or in its most basic form, the feedback system can be as simple as the player’s knowledge of an objective outcome: “The game is over when…”  Real time feedback serves as a promise to the players that the goal is definitely achievable, and it provides motivation to keep playing.

4.   Finally voluntary participation requires that everyone who is playing the game knowingly and willingly accepts the goal, the rules, and the feedback.  Knowingness establishes common ground for multiple people to play together. And the freedom to enter or leave a game at will ensures that intentionally stressful and challenging work is experienced as safe and pleasurable activity.

Compared to games, reality is unproductive.  Games give us clearer missions and more satisfying, hands on work.

Jane McGonigal, Reality is Broken

These are all key to a good game and you can probably already see how they can fit nicely into the work environment.  

Goals are easy, business and work are full of them. We need to make sure they have been clearly articulated and people have agreed that it is a worthy goal and they are reasonably clear on how they can help get us there. 

The rules of the game in business and our jobs are also usually fairly clear.  There are accounting rules that a business follows to make sure of our results when compared to other companies also playing the game.  If the goal is to make money then the accounting system is a good way to keep score.  If however the goal is human happiness, quality, or environmental impact we will need to find a different scorekeeping system.  Sometimes the rules are very few which can allow for a lot of creative ways to get to the goal.  What rules are there about how your job gets done?    

A quick way to track progress is easily found in a well run company.  There will be KPI’s (key performance indicators) that we can use to track progress towards the goal.  We need to make sure they are really related to the goal of course and not some unrelated stuff our boss wants to track.  The usual problem with KPI’s in most companies is that the “score” is not updated frequently enough.  Imagine playing a game online and then a month later getting a letter in the mail telling you your score or how you did relative to the other players.  Or worse yet it is an average of all your scores over the last month.  Annual review anyone?  Quarterly or monthly department performance report?  If you want motivation and engagement the feedback needs to be immediate.  When we score a goal we need to hear about it now.  When the zombies are overwhelming us we need that feedback right away.  This is why I set up a system in our company for production operators to find out how much profit we made on that batch they just finished as soon as they completed it.  Supervisors are no longer hassling me, they are coaching me on how I can get a higher score.

Here’s the thing we all miss at work.  Players need to opt in.  If I am making you “play” it is not a game.  You all know by now that I promote maximum autonomy for intrinsic motivation.  This is a good example of why that is important.  I did not make people play the game.  I just made it possible for people to get a score/feedback immediately and play the game if they wanted to.  

People like games and we are more or less competitive.  Once someone we know or another group starts playing, it is hard for others not to.  People are different. We like different types of games. We want to participate in different ways, so we need to provide different options.  You could play “Make the most good product in a shift”  or you could play “Highest yield batch”, “fastest changeover time” or “highest quality score”.  You can play “machine uptime”.  If you are tracking a thing you can make a game out of it.  We had objective measurements that everyone understood and gave feedback on these things every day.

We are just totally weird.  This is a quote from Bernard Suits who is a philosopher of gaming that McGonigal quotes in her book.

“Playing a game is the voluntary attempt to overcome unnecessary obstacles.”

Jane McGonigal, Reality is Broken

This is how McGonigal explains it:

       Let’s take golf to start.  As a golfer you have a clear goal: to get the ball in a series of very small holes, with fewer tries than anyone else.  If you weren’t playing a game you’d achieve this goal the most efficient way possible: you’d walk right up to the hole and drop the ball in with your hand.  What makes Golf a Game is that you willingly agree to stand really far away from each hole and swing at the ball with a club.  Golf is engaging exactly because you along with the other players have agreed to make the work more challenging than it has any reasonable right to be.”

Here is another quote from her book about the experience of a Sociologist who began playing a game.

  It was a whole different business, nothing like I’d ever known, like night and day… Thirty seconds of play and I am on a whole new plane of being, all of my synapses wailing.  Sociologist and Jazz pianist David Sudnow about playing the video game Breakout

So how do we make work more like a good game?  I will let Mcgonigal say it in her own words:

        The prevailing positive-psychology theory that we are the one and only source of our own happiness isn’t just a metaphor.  It is a biological fact.  Our brains and bodies produce neurochemicals and physiological sensations that we experience, in different quantities and combinations, as pleasure, enjoyment, satisfaction, ecstasy, contentment, love, and every other kind of happiness.  And positive psychologists have shown that we don’t have to wait for life to trigger these chemicals and sensations for us.  We can trigger them ourselves by… undertaking a difficult challenge… accomplishing something very hard for us…making someone laugh…or…being part of something larger than ourselves that has lasting significance beyond our individual lives.  Jane McGonigal  “Reality is Broken”

There can be more dimensions to the game of work.  Want to level up?  If you are a new operator (padawan) you will need to get training from someone more experienced.  (a Jedi Teacher)  When your Jedi teacher thinks you are ready to be a Jedi yourself another teacher observes you going through the process,  You also take a written test that you have been studying for on your own.  If you pass the written test and the practical exam you are now officially a Jedi operator you get a bonus for every question you got right on the test and your pay is increased.  Want to level up again?  Maybe you want to be a Jedi trainer?  The only way to level up is to successfully train a padawan.  You need to find a padawan to train.  

Maybe training others is not your thing.  You could work on becoming a Jedi Master.   What do you need to do to become a master?  You must be able to demonstrate that you can run all of the machines in your department and problem solve virtually anything that comes up.  When you think you are ready you apply and if three other masters recognize you as a fellow master you are in.

What if fixing a machine is not ‘a work order’ for an apprentice maintenance mechanic but a quest should you decide to accept the challenge?  How do you move from an apprentice mechanic, to journeyman, to master, to grandmaster?  

Many of our workplaces could use a more engaging environment.  Our planet also needs us to be more engaged.  The right conditions can get us there.

If you decide to implement some strategies to have more fun at work remember you are there to create the opportunity for people to accept a challenge.  You would probably do well to engage your people in a creative discussion on how you could transform the work environment. 

Devise your goals together, decide on the rules and the KPIs as a group. 

Just remember if you compel them in any way it is no longer a game.

Cheers for Friday,

Gavin Watson, Chair, Conscious Capitalism Connecticut Chapter

Gavin Watson & Associates


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Gavin’s Friday Reads: Beyond Budgeting by Jeremy Hope and Robin Fraser

This is going to be a combination book review and essay.  I want to bring together the concepts in this book and some current concepts about the human brain.

So first some biology background to set the stage.  Each of us is composed of billions of cells. 1.25 billion in our brains alone.  Our brains consume about 20% of the overall energy we burn each day.  This is the most expensive organ we have.  Nature does not allow this much expense unless it is doing something important.  What is it doing?

Most of us in western cultures will immediately leap to ‘rational thought’ being the work of the brain, but that is not true.  We have this big cerebral cortex where rational thought occurs right?  Wrong.  Our cerebral cortex is proportional for the size of our brain.  Elephants have a larger cerebral cortex than we do but it is proportional to their overall brain size.  Smaller primates have a cerebral cortex in proportion to their brain size.  The cerebral cortex is not exclusively for rational thought and we are only rationally thinking a small part of the time.  

So what are our brains doing?  In the words of neuroscientist Lisa Feldman Barrett, our brains are managing our “body budget” balance.  When our bodies are in balance it is called Allostasis.  This is why we have brains.  (a budget theme emerges)

Our brains are managing our energy deposits and expenses internally and with the external environment.

There is a lot going on inside our bodies.  We need to get glucose, protein, salts, hydration, and oxygen to every cell.  Our heart rate speeds up or slows down as needed.  We feel thirsty or satiated..  Our immune system needs to be on constant vigilance against intruders.  Our brains are helping our organs and cells to maintain this balance and according to Barrett there is a huge amount of stuff going on.  Most of this is going on beneath our conscious awareness and a good thing too, because it would be very distracting if we were aware of it. 

Communication within our bodies is not one way.  Our organs are communicating with our brains and back and forth.  Our brains are working in service to our bodies.  Helping to maintain balance in our interior world.

To maintain our body budgets efficiently our brains also work with the information from the external world as prediction machines. Being on high alert is biologically expensive but sometimes necessary. Feeling fatigued is a way our brains signal to us that resources are depleted and we need to slow down and conserve.

Our brains don’t think rationally ‘oh there is a rustling sound behind that bush it might be a lion or it might be the prey we have been tracking, which option is more likely? What should I do next? hmmm.  

This would take too long.  Approximately 0.5 – 1.5 seconds which is a lot of time.  If we thought rationally about this we would either miss our lunch or be someone else’s lunch.

Instead our brains were already continuously predicting (situationally dependent) scenarios, taking in information and comparing it to the scenarios our brains predicted, then based on the differences making new predictions, over and over.  All of this happens without us being aware.   Because of past experience (or shared experience passed down through language, ghost story around the campfire anyone?) we were already on the lookout for lions, zombies, or other dangers and opportunities (smores?).  In this type of situation our brains would have already boosted us with some adrenaline, (or in the case of smores our salivary glands have begun to run).

We are on alert (which is biologically expensive so we only do this when expedient).  We hear a sound and compare it to the sounds of threats we have been anticipating, or the prey we have been tracking.  If it is a close match based on past experience our brains immediately send action signals to our muscles to get us moving and boost our adrenaline further.  We feel this adrenaline boost.  In a different situation we might feel this very same adrenaline rush as an amorous feeling but in this situation we label it as fear or excited anticipation of the hunt.  Our rational selves catch up much later when we are either 50 yards away, yelling at the top of our lungs, and still running as fast as we can, or when we have run forward and already thrown our spear into our prey.

Notice we were predicting and looking for dangers and opportunities according to the situation.  If we were safe in our camp with our group around us, the same rustling sound would not have evoked the same response.

Our brains are prediction machines creating and matching concepts based on past experience to prime us for the most efficient response.  When our friend who was rustling the bush with a long stick jumps out and yells boo! Our brains without any rational thought at all, readjust our concept of current reality.

So our brains are here for budgeting purposes and to do that effectively in the external environment they are prediction machines.  What can we learn from our biology and apply to our company’s planning and budgeting processes and how we hold people accountable to meet those budgets?  A lot!

Notice our brains were managing two things.  Our internal body world and our external sensing and responding.

The internal world is a lot like a corporate budget.  We intend to consume X amount of capital (calories) this year, get this many hours of sleep, walk this many miles, produce this quantity of widgets, etc.  

Predicting the external environment is like a strategic plan in the moment.  

Are our corporate budgeting systems situationally dependent?  Are they flexible?  Do they respond quickly?  Are we constantly aware of our surroundings and comparing what we are sensing, to what we are anticipating?  Are we rapidly making adjustments and communicating changes based on new information?  Uuuh.. that would be a no.

Making a fixed promise that is subject to high levels of uncertainty and then requiring people to meet that promise at all costs is like putting the performance cart before the horse. The result is likely to be the distortion of profitability over time and, in exceptional circumstances, outright fraud.

JEREMY HOPE, BEYOND BUDGETING

Our companies spend a lot of time doing strategic planning and budgeting.  An offsite strategic plan can take management a week to complete.  A lot of time before the meeting is spent gathering info on customers, the competition, the marketplace and other possible variables. Outside experts and consultants are hired.  (McKinsey Associates) Reports are generated that are ‘supposed to be’ read before the meeting.  

The plan gets hashed out. People getting paid hundreds of dollars an hour sitting around and guessing.

It then takes even more time and internal marketing to communicate this plan to everyone.  We then hold fast to it come hell or high water.

Budgeting takes the full time and attention of the accounting department.  What happened last year, did you meet the budget you ‘agreed’ to under pressure?  What cuts can you make (what can we pressure you into agreeing to) this year?  The old negotiation process with the managers and the games that get played.  The monthly or quarterly budget reviews to keep people on track. The elegant elaborately crafted excuses.  The old “It would have worked out except for this one time thing” argument.

These are expensive processes to run.  We do it every year so the expense is compounded again and again.  There is also a human cost to budgeting.  Running all these games and holding people accountable for things that are not really under their control is demoralizing.  No one enjoys any of it. It encourages unethical behavior. (Enron)

In “Beyond Budgeting” Hope and Fraser point out all these problems.  They also present solutions and examples of companies like Handlesbanken, who have gone “beyond budgeting” a long time ago.  I am not going to go through these examples.  If you want to read detailed examples about these companies’ journeys, please pick up the book.  It is an easy read.

I will share their conclusions.  From page 198 of 208. “In the long term, the objective is to reduce complexity and allow front-line people to use the knowledge at their disposal to make effective decisions.”  

P 199: “The finance people who were previously under pressure to produce monthly accounts and explain variances are now able to spend more time understanding and supporting the needs of hard-pressed front line managers.”    

Organizations need to be “adaptive” and “decentralized”

Essentially self organizing self directed teams are the way to go.  Oh and that is exactly what we humans are really good at when obstacles are removed. It’s how we ran at Watson.

For people at the front lines to make good decisions they need to know the overall intent of the company.  Both in the long term (company Purpose) and in the shorter term (how we intend to enact the purpose and intent today in our subgroup)  This serves the same function as the strategic plan but we don’t need to do it every year because it does not change very much over time.

We know what happened last year, month, week, yesterday, and we use that to generate predictions on what is likely to happen today, this week, this month, next month, and the rest of this year.  This is like the brain using past experience to generate concepts of our present situation and use that to predict the future.  The future will be different from the predictions but it is still more effective to have a prediction and make adjustments continually as we go along.



Sales and marketing keep us informed about what is happening in the external world.  This customer is launching this new product and discontinuing that one.  This market segment is expanding rapidly and that one is contracting.  This is not a once a year thing. This is continuous whenever ‘significant’ new information comes in.  Just like our neurons synapsing or not, a few bits of minor info may not cause information to pass through the synapse but a big piece of information, or a lot of little ones, will tip the balance and information jumps the synapse and moves along the channel.  

People everywhere in the company need access to actionable information.  The new job of accounting is to gather and provide this relevant information on the functioning of the internal systems not to “hold people accountable” but so that people can make adjustments to their shared view of the current state of the company and their smaller part of it, and make good decisions quickly.

How this looks day to day. 

We needed to get actionable information to production employees.  I wanted them to know how much an hour of time on a machine was worth.  

I took all of the expenses for a department and tallied them up.  I took a proportion of the total overhead relative to that department’s size and added the department cost and the overhead cost together.  I divided that total by the number of machines in that department and the number of hours each machine ran.  I shared the cost per hour per machine with everyone. 

We set up a stand alone computer system (using Microsoft Access and Excel) so that anyone could enter in the formula code, the time used, and quantity of the product they had just made.  The computer then pulled up the raw material costs and took into consideration the time it took, the cost of that machine per hour, and based on the average selling price of that product over the last few months told the operator right then how much ‘profit’ we had just made.

With this information operators could experiment with things they could do to improve their numbers.  Teams of operators made some amazing improvements just because we shared this information openly.  Initially accounting was appalled that I was sharing profit information with the people making the product.  Accounting thought this needed to be secret info, for management eyes only.  This shows a decided lack of trust.  Eventually they mostly got over it.

What we found out is that we were selling some products at a loss.  No matter what an operator did there was no way to make money on it.  We made pricing and accounting aware of this.  We also found some products that were fabulously profitable.  We shared this information also.  Frequently it was much easier to make a great product awesome than to make a bad product marginally less worse.

Now (just like in our brains) information is going both ways.  Management is learning from the production floor.  Management’s job is starting to tilt towards support of operations instead of exclusively the other way around.

We held open process improvement meetings.  We used these to dive deep into a process to see if there were things we could improve.  Information from previous production runs from the data the operators entered into the system was examined.  If we adjusted the temperature could we run it faster?  Operators, supervisors and R&D normally participated in these meetings.  

Sometimes purchasing or accounting would join us.  Sometimes a particular supplier’s raw material ran better than another vendor’s material and this was a chance to let purchasing know, and quantify the effect.  Hopefully they would buy more of the good stuff.

In one case a raw material came in three packaging types depending on the supplier.  It came in bags, boxes and small drums.  (sounds like Christmas in Whoville) Purchasing was aware of the cost from each supplier.  

What they did not know was that bags were cut open and loaded into the equipment easily, boxes were a bit more difficult and the drums were by far the worst. About 25% of the production time was just opening bags and loading the batch.  The drums took three times longer.  The drums had twisted wire closures on them sealed with lead seals pressed onto the wires.  QA very sensibly did not want the risk of lead seals falling into a batch of food product.  Therefore when loading drums of raw material we had to first cut off and discard all of the lead seals and wires outside the production room.  Only when QA had inspected them could we bring them into the production room to open the drums and load the product.  This more than tripled the loading time.  Purchasing and accounting were unaware of this.  The cheapest raw material (which was the budget purchasing was being held accountable for) was really the most expensive when we took the loading time into the overall equation.

In a normal company purchasing would have gotten in budgeting trouble for buying the more expensive material.  Production would have got in trouble for reallocating people from the sanitation department to help open the drums.  But when viewed as a system, accounting was all behind buying the more “expensive” material because it paid for itself in time saved.  

When new information from sales about increases or decreases to requirements or marketing info about changes in the market place came to light we would hold “Open Space Meetings” to share that information with everyone and act on it.  The information was shared and we gathered ideas on how to adjust to the new information and people went ahead and just made the changes.  (No internal marketing expense or delay in distributing the new strategic plan. People created the plan so they already knew what it was and were already doing it.)

“Fostering relationships across the organization is seen as the important element in creating coordinated actions. A strong commitment to a common set of values provides the framework for this process. Everyone thinks about the customer. Product”

JEREMY HOPE, BEYOND BUDGETING

Before we ran a series of batches of a product a team of operators and supervisors would gather and review the information and lessons learned from previous runs and talk about what we wanted to try differently this time.

In summary;

How often does the plan or the budget ever work out?  Traditional budgeting and strategic planning is energy and resource intensive and provides little benefit and a lot of downside.  It is dispiriting, demotivating, and can lead to unethical behavior.  (BTW bonuses are also demotivating)

We would be a lot better off to take lessons from the efficient brain operations that evolution gave us.  

Based on our company’s purpose or intent:

Management’s job is to help everyone in the organization (all the cells in the body) to maintain a body budget balance (allostasis).   Management does this by freely and continually sharing information from the internal world of the company and the external environment with everyone.

Everyone in the company is responsible for sensing and responding to what is happening in the local external and internal environment and communicating their observations and intended responses with each other as needed.   

One last thought

Everyone is also responsible for each other.  As Barret says, as a social species, “we regulate each other’s bodies”.  The best thing for a human to maintain a “body budget” balance (Allostasis) is another human.  Someone we can depend on and an occasional high five or a  hug can do wonders.  Potentially the worst thing for a human for maintaining a “body budget” is another human who disrespects us and is only acting in their self interest.  

Our companies are only as strong as our people are.  We need to maintain the health of the human system.  Management sets the tone for this but all of us are responsible for it.

“Culture eats strategy for breakfast!”  Spend your time on culture and when that is done (and it is never ever done) then when you have retired, if it’s your thing, spend time doing a traditional budget, just for fun, as a game, nothing serious, just to see how it works out.  (how could you take it a traditional budget process seriously in a complex world) 

Lisa Feldman Barrett interview.  This is almost 2 hours long and in my view, well worth every minute of it.  In the first half they get the concepts sorted out, in the second half they have a great conversation with some deep personal reflection and sharing.

Cheers for Friday,

Gavin Watson, Chair, Conscious Capitalism Connecticut Chapter

Gavin Watson & Associates


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Gavin’s Friday Reads: Open Space Technology by Harrison Owen

How can we facilitate more meetings that don’t, for lack of a better term, suck? A solution lies between the covers of this book. Open Space technology is a gift to the world, and one I have brought inside of US manufacturing plants to engage employees and solve thorny problems. But let’s back up.

I am sure you have been to at least one or possibly two 🙂  long boring meetings where nothing really gets done and you wished that you did not have to be there. These meetings have a pre-set agenda designed to constrain the discussion and avoid emotionally charged issues. Unfortunately, those tend to be the issues we really need to talk about.  It is not unusual for the boss to simply want to dictate what occurs, and the meeting becomes a way to “perform” getting everyone’s buy-in.  Weeks or months later, it will be as if nothing has changed.

The reason most meetings fail to provide maximum benefit is that they are not aligned with our internal human operating system.

It turns out, humans don’t like to be told what to do or how to do it. Instead, we want to choose who we are going to be working with.  As a team, we prefer to figure things out for ourselves.  We also believe – and latest entrepreneurial science will back this claim up – that those closest to the work know better than management what the real issues and pain points are and are generally well-equipped to get them sorted. 

Open Space Meetings are like meetings from another planet. A completely new breath of fresh air in which the agenda emerges during the course of the meeting. Participants hold space together in order to express their views candidly to build up the intelligence in the room so that complex issues can not only get addressed, but solved.This is not for the faint of heart, (or control obsessed) but it works and feels amazing to be a part of.  ·        ·        Open Space meetings work because, as Owen tells us, “human systems are self-organizing and naturally tend towards high performance provided the essential preconditions are present and sustained.” The technology or facilitation-style he invented serves to unleash human beings’ natural drive to self-organize effectively.

To further illustrate the contrast, let’s look at how the typical business meeting scenario unfolds.  



Suppose you, the CEO of a company, see a problem that needs to be addressed.  It involves several departments so you will need to schedule a meeting and write up an agenda.  You will need to decide who to invite to the meeting.  Manager X,  Manager Y, HR, Accounting etc….  You probably already know what the outcome is that you want.  The purpose of the meeting is really just to get everyone on board and agreeing with your strategy. Meanwhile, there is a lot of time and energy wasted among these so-called team members jockeying for position and not wanting to lose ground, power or face in the organization. This creates covert obstacles to change. 

Whereas, this is how an Open Space meeting unfolds instead:

Maybe you are the CEO or, if you have a Conscious Culture, you can be anyone in any position in the company who senses there is a problem/opportunity that needs to be addressed. Rather than researching and preparing all the information ahead of time, you call a meeting to discuss the emerging situation.  Anyone in the effected department(s) or any other group in the company (internal stakeholders) may self-select to opt in if they feel they have something to contribute.   If you are a Conscious company and the issue is large enough you could invite other stakeholders outside the company.  Your key suppliers or customers for example might want to help if you extend the invitation.

The goal is to get people together to figure it out. You post the problem/opportunity and you post a time, and location for a meeting.  That’s it!

Whoever comes are the right people.  Whenever it starts is the right time  Whatever happens is the only thing that could have happened.”

HARRISON OWEN, OPEN SPACE TECHNOLOGY

When the time comes around, people gather at the location.  People were not told to be there. They were invited to come if they wanted to.  Maybe some people that you didn’t even think of show up.  This is a group that has a common interest.  People who don’t care won’t show up.

When people get there they will find a room – or virtual equivalent – with a circle of chairs.  It’s a circle – in spirit and in form – because it is non hierarchical.  Everyone has equal opportunity to contribute.

In the middle of the circle is a small table with some paper and markers on it.

On one side of the room there is a wall space.  This wall has a grid showing times on the vertical and places on the horizontal axis.

When you think it feels like the right time to start, you stand in the middle of the circle and reiterate the problem or opportunity that brought everyone here.

You invite people, if they like, to come to the center of the circle and take a piece of paper and write down an idea they have related to the problem (or more than one if they have several ideas each on a separate sheet).  They then stand in front of the group, and briefly state the idea and they go post it somewhere on the grid on the wall.

Each of these posts on the wall represents a meeting on that idea in time and space.

This process continues with some people briefly sharing their idea and posting it until no one else is standing up to do it.

When this is done we take a break and during this break people peruse the wall of ideas which Owen calls the “Market Place”.  They can grab a pen and sign up on that sheet for a session that they want to participate in.

Then the small meetings start.  During these small meetings someone takes notes on what was discussed and decided.  These notes are posted on another wall the “NewsRoom”  People who were not able to attend a session can read the notes there.  

Notice the group itself created the agenda and the group self organized into smaller groups to effectively talk about things that those people really care about.



There is only one law.  “The law of two feet”.  If you are in a meeting and you feel you are not contributing or not as interested as you thought, you can use your “two feet” and go join another meeting or discover some other soul in the hall and have your own spontaneous meeting.

We held Open Space meetings at my family’s former company on a regular basis. If something new came up that we needed to work on, we added another one. 

One meeting was about the fact that we were close to capacity in one department and sales was predicting significant new business.  We posted an Open Space meeting about this.   Around 20 people from that department and other departments came to the meeting.  Sales spoke for a few minutes sketching out the opportunity and answered questions to clarify what they needed more of.

We then started the meeting.   

Around 10 people brought up ideas.  Some were about ways to speed up the manufacturing process,  some were about ways to change over products more quickly.  Some were about clarifying the directions on the batch sheets.  Some were about parts and tools.  Some were about raw materials.  Some were about doing some steps concurrently instead of sequentially.  Some were about improvements we could make to the equipment.

Few of these people were managers or supervisors.  They were the people who did the work each day.  They split into groups.  R&D people self selected to go to the meetings that involved changing processing directions.  QA people naturally went to the meetings that were about cleaning faster and more effectively between products.  

At the end of the day we had lots of actionable items on to do lists and lots of decisions already made.  

“I find that my intuition basically closes down, or at least functions less than optimally, when I am trying to follow an argument or make sense (analyze) some particular situation.  It is not that analysis or logic are wrong, bad, or not to be used. But they definitely get in the way of the intuition.  … represent a level of complexity that boggles my mind. …I know I will never reach my goal by thought and analysis.”

HARRISON OWEN, OPEN SPACE TECHNOLOGY

Just think about the difference.  Everyone who came wanted to be there.  The group generated its own agenda in just a few minutes, held meetings, made decisions and got stuff done.  No one directed anyone.  Instead of one person doing the thinking and directing everyone else, everyone is thinking and collaborating together, coming up with many more ideas than any individual ever could and then just going ahead and doing it.  Everyone is now highly engaged to see it get done and keep the gains they made.

That’s where Open Space officially ends.

For us the process continued 

We then switched to a self managing, modified Scrum process.  (Scrum is a highly productive way of running projects. More about that in another post!)

The “To do lists” that were self generated during the Open Space meeting were on large poster size Post It paper.  We posted these lists in the hallway outside the department that needed more capacity.  People were encouraged to get a teammate or two and pick an item on one of the lists and sign up on that sheet to get it done.  When it was done they just wrote DONE! next to the item.  This was a way to make it easy to see who was working on what so you could join them if you wanted or what things still needed doing that you could take on.  It also made it easy for me to see who was doing what so I could help remove obstacles for them.

In case you are wondering, there were plenty of improvements made and we had no trouble meeting the new customer’s needs.  

I look forward to hearing from people who have also used Open Space Technology, particularly as I work on ways to deliver this in a virtual environment, for the benefit of remote and hybrid (partially remote and partially co-located) teams. 

Cheers for Friday,

Gavin Watson, Chair, Conscious Capitalism Connecticut Chapter

Gavin Watson & Associates


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