David's Blog

The Ecology of Digital Transformation: Sense-Making in Silicon Valley

The “Cradle” of Silicon Valley – the Hewlett-Packard Garage at 367 Addison Avenue, Palo Alto (hpmuseum.net)

I have just returned from a week of “educating” in Palo Alto, where the third residency module of the 2022 De Groote EMBA Digital Transformation was taking place. Palo Alto is, of course, the epicentre of the great disruption known as “digital transformation”, the focus of this EMBA. The week consisted of formal “teaching” sessions combined with field trips to local enterprises and presentations from and meetings with local experts in a wide variety of topics.  For the excited EMBA candidates and the faculty it’s the highlight of the program. As one travels from the airport to Palo Alto itself, the highway is lined with buildings bearing the names of corporations that have featured so prominently in the revolution. Their names appear constantly on the business pages and they feature in business cases everywhere. As we turned into Page Mill Road on our way to the Stanford University Campus, I tried to remember why the name was so familiar. It was only when we passed the Hewlett-Packard head office that I realized that 1501 has been its long-time corporate address (since 1960!). Apparently inside the officially designated “Birthplace of Silicon Valley” the offices of the founders remain intact.

The Power of Context

Not only are Palo Alto and Stanford University the epicentre of the digital revolution, but California is also an example of the fire-dependent ecosystems on which my ecological sense-making framework is based. The Stanford Faculty Club, where the lectures are held is set in a lush garden. Through the twin double-doors, which were always open during our stay, one can see a pair of coastal redwoods (sequoia sempervirens) soaring above the garden canopy. They provide a wonderful “object lesson” for one of our strategy discussions that contrasts sequoias with banyans:

The strategy of sequoias is analogous to that of the giant enterprises of the industrial era that built large monolithic hierarchies, well-suited to pursuing the economies of scale, although often at the expense of quality. In the U.S. they flourished in the 20th Century until the 1980s when a new social technology – lean manufacturing – changed the trade-off between quantity and quality. Unlike the fire-resistant sequoias these giant industrial bureaucracies did not prove to be sempervirens – everlasting!

The strategy of the banyans, which is native to Pakistan and India (where it is the national tree), is analogous to that of network organizations like Google (Alphabet) and Facebook (Meta) that have been disrupting “legacy” organizations. The banyan is known colloquially as the “strangler fig”. Fruit-eating birds and bats spread its seeds far and wide, and they often fall on the branches and stems of other trees and buildings. Here, over time, they grow to “strangle” their hosts:

A Banyan Tree Growing on a Temple at Angor Wat (Pinterest)

Together with the sequoia, the banyan makes for a graphic metaphorical contrast between two fundamentally different ecological approaches to structure and strategy.

Bildung

Earlier in this post I put “teaching” in quotes because several years ago I realized that I couldn’t teach experienced managers anything in the formal sense of the word. The best I could do was to help them make sense of their experience, to organize and make explicit what they already knew, but didn’t know that they knew.  It is knowledge gained on the far side of experience. This is “education” in the original meaning of the word to “lead forth”, to help the participants recognize the unique value of their experience and the gifts they bring to the world. As such, it is closer to the German concept of bildung and its association with the bildungsroman – a narrative of growth and development in which a person learns the ways of the world and comes to terms with the need for both self-fulfillment and the social roles they must play. Bildung is intrinsically valuable, a process of cultivation, a journey without beginning or end in which people are stretched to their limits to realize their potential.

There is no direct English equivalent of bildung, a reflection, perhaps, of how instrumentally rational the Anglo-American worldview has become, with its preoccupation with techniques and methodologies. In his book, Return to Reason, philosopher Stephen Toulmin argued that ever since the European Enlightenment the concept of reason has been gradually diminished to that of rationality. Reason implies reasonableness and common sense derived from experience. Rationality, on the other hand, has a more formal, logical flavour to it. Reason is situational and context-dependent; rationality is abstract and context-free. Reason’s relevant narratives are always in tension with rationality’s rigorous arguments. According to Toulmin what was the Age of Reason has become the Age of Rationality and we have hardly noticed that it has happened and what has been lost in the process.

The relationship between reason and rationality is clearer in the German distinction between Vernunft (reason) and Verstand (intellect). According to Goethe “Vernunft is concerned with what is becoming…(it) rejoices in whatever evolves; Verstand wants to hold everything still so that it can utilize it.” Here is the tension between change and continuity that so preoccupied Peter Drucker throughout his long career. There is an ethical connotation to Vernunft that is missing from Verstand; reason is concerned with right and wrong, while rationality focuses only on true and false. These differences are echoed in Drucker’s contention that management is always a moral practice, not just a technical one.

Because German thinkers made the separation between reason and rationality so clear, they were also concerned with the complex relationship between the two. Sometimes Vernunft was seen as superior, at other times Verstand was on top. Kant’s view was that the relationship was reciprocal: reason gave something to rationality and rationality unpacked it before handing it back for further processing. Reason contained rationality, giving it a foundation below and a regulatory roof over its head – a “home” in which it could dwell.  I suspect that Toulmin would argue that it is the loss of this dwelling that has resulted in a footloose rationality with imperial ambitions that has done so much damage to organizations, institutions and societies – not because it is “wrong” but because it incomplete and it has been misapplied.

A Sense-making Framework

Hannah Arendt contended that Verstand (intellect) was associated with the search for truth, while Vernunft was all about the quest for meaning and that humans need them both. My Ecology of Organizing course (titled formally as Organizational Behaviour for Decision-making) is all about the making of meaning. As such, it consists of a sense-making framework that uses analogical inquiry, rather than the analytical thinking that pervades MBA courses in general. The ecological framework, based on Canadian ecologist C.S. “Buzz” Holling’s work on the adaptive cycle and the multilevel panarchy frameworks, does not abstract organizations and people from time, space and scale, the key elements of context. Rather, it acts as a theory of context that an inquirer uses as a preliminary screen to help form their expectations, sensitize them to the relevant cues and suggest plausible goals and actions. The framework also acts as a storehouse of models that categorize and methodologies that prescribe, suggesting which ones might be useful and when. I hope that, like the banyan tree, the sense-making framework, while rooted in practice, supplies a philosophical roof over the head of intellect. This is what Goethe contended Vernunft gave to Verstand. It creates for managers a new sense-making narrative that embraces and contains instrumental rationality and keeps it and its related technologies, such as artificial intelligence, in their proper places as servants and not as masters.

The Ecology of Organizing: A Management Course for the 21st Century

For the past six years or so I have been teaching what I call the “ecology of organizing” on masters-level programs at both McGill University in Montreal and the DeGroote School of Business at McMaster University in Ontario. Here is my latest curriculum outline:

This course is a non-traditional one, based on systemic thinking, complexity theory, and a dual-process approach to understanding (embodied) human cognition. The analogies are organic and ecological and the primary polarities are between the logico-scientific and narrative approaches to understanding the process of organizing in complex social systems. Science takes things apart to see how they work, narrative puts things together to see what they mean. The philosophical underpinnings are pragmatic (is it helpful?) rather than positivist (is it true?). As such, the course is often critical of conventional management thinking and constantly questions the nature of the evidence on which managers base (or at least justify) their decisions. It becomes clear that management is not just a technical practice, preoccupied with meeting corporate goals, but also a moral practice concerned with assessing the worthiness of those goals, both for the enterprise and for society. The result is an anticipatory, sense-making framework that allows you to approach organizations as if they were created by people with bodies and intentions, situated in time and space, culture and society, searching for identity and meaning and struggling for credibility and authority. In short, history matters and context matters.

The overall objective is to develop the participants’ capacity to make meaning from their experiences.

Upon completion of this course, participants will be able to:

  • Use multiple perspectives (lenses) to appreciate complex adaptive socio-technical systems and the complex (wicked) problems that can emerge from them.
  • Recognize systems dynamics across multiple levels: the organization, its contexts (industries, markets) and its components (technology, products, teams and individuals).
  • Come away with an ecological framework that allows them to discern the situation in any organization and sort out what kinds of people with what habits and experiences might be able to contribute and what tools and techniques might be helpful.
  • Grapple with the generative tensions between exploitation and exploration, technical problems and adaptive challenges, management and leadership, detachment and immersion, the individual and the group, conflict and cooperation, continuity and change, plumbing and poetry…. and what it takes to navigate among them.
  • Understand the difference between experience-based Naturalistic Decision Making (Recognition-Primed Decision-making) and the Rational Choice (Heuristics and Biases) model. The former, in combination with a sense-making framework, gives one a bearing on where the enterprise is in time, space and scale. This helps form expectations and sensitize one to relevant cues, while suggesting plausible goals and possible actions.
  • View organizations as nests of dynamic cooperative activities that have evolved to handle uncertainty, not as command-and-control machines. From this perspective, strategy, leadership and organizing are all emergent entrepreneurial activities, embracing awareness, insight, discovery, judgement, persuasion, practice and learning.

Social Renewal: The Story of the Quakers and the First Industrial Revolution

“Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained . . . infancy is perpetual. Those who cannot remember the past are condemned to repeat it.” George Santayana

I have just published a lengthy piece in Medium about social renewal and the role of the Quakers in the First Industrial Revolution. It is an extended and enhanced revision of material that first appeared in Chapter 4 of my book, Crisis & Renewal: Meeting the Challenge of Organizational Change (Harvard Business School Press, 1995/2002). It is based on a trip I made to Iron Bridge, Shropshire in the early 1990s.

I take an ecological perspective of enterprises, political, social and commercial. They are conceived in passion, born in communities of trust and practice, grow through the application of reason and mature in power. Here they tend to get stuck, which sets them up for crisis and destruction, but with the possibility of renewal. An ecological framework does notabstract people from time, space and scale, the essential dimensions of context, but places them within the larger social and political narratives. Context matters, history matters and stories matter.

Unless we understand the context in which social renewals take place, we cannot hope to understand what we need to do today to renew our economic, social and political enterprises. The story of the Quakers, their emergence and innovativeness,  growth and success, maturity and decline, is both inspirational and cautionary.

I hope that you find it thought provoking….

Cuttlefish Spurting Out Ink: English and the Projection of Power

An Octopus Squirting Ink

The Guardian reported today that a massive leak from a whistleblower in the private bank, Credit Suisse, had exposed the hidden wealth of clients who are involved in torture, drug trafficking, money laundering, corruption and other crimes.

The bank responded, “Credit Suisse strongly rejects the allegations and inferences about the bank’s purported business practices. The matters presented are predominantly historical, in some cases dating back as far as the 1960s, including at a time where laws, practices and expectations of financial institutions were very different from where they are now…. Furthermore, the accounts of these matters are based on partial, selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct. While Credit Suisse cannot comment on potential client relationships, we can confirm that actions have been taken in line with applicable policies and regulatory requirements at the relevant times, and that related issues have already been addressed.”

This sounds like, “We use to do this, but we don’t do it anymore because the laws have changed.” There is no mention of the morality of their actions.

English as a Two-Tier Language

It’s interesting to note Credit Suisse’s use of the English vocabulary to distance itself from its actions. Ever since the Norman invasion of 1066, English has been a two-tiered language. Before that date everyone spoke Anglo-Saxon, Germanic English. For three hundred years after the Norman conquest of England the nobility and the upper class (court, church and army) spoke French. They were eventually anglicized, and a Latin-based English vocabulary entered the language.

Anglo-Saxon English is the language of intimacy—relationships, emotion, and commitment; we use it predominantly in face-to-face communication. Latin English is the language of distance—formality, thought, and erudition. It is the language of power.

This two-tiered nature of our language explains many curiosities in English. We call farm animals cows, calves, and sheep (from the Germanic Kuh, Kalb, and Schaf) because their herders were Anglo-Saxon. However, we eat beef, veal, and mutton (from the French boeuf, veau, and mouton) because the people who ate them originally were Normans.

The words for the members of the nuclear family—mother, father, sister, brother, son, daughter—are all Germanic, as are the words expressing various relationships: before, after, under, on, in, to, of, for, and. All our swearwords are Germanic in origin, and their popularity seems to stem from their unique ability to express activities of the body. Here are some key contrasts between the two layers of language:

Anglo-Saxon English Latin English
visceral cerebral
profane sacred
monosyllabic polysyllabic
low caste high caste
concrete abstract
action thought

As a result, many things can be said in English using either the Germanic or Romance (Latin English) vocabularies. The plainness and directness of words of Germanic origin are also obvious in business English:

Anglo-Saxon English Latin English
do execute
hire employ
fire terminate
start initiate
drill exercise
skill competence

When executives and corporations are trying to finesse their actions, they often use the Romance version of English because it makes them sound knowledgeable. Skilled professionals, particularly lawyers and doctors, have typically used Latin English to separate themselves from the “common folk.” Surgeons refer to the parts of the body by their Latin anatomical names: this makes for precision in description and also helps distance the surgeon from the person who “owns” the body part. Legal language produces a similar effect by enhancing the dispassionate rationality of the judicial process. Mainstream management academics use it to make themselves seem erudite and sophisticated. It may be the main reason why so much of their writing is unintelligible to management practitioners! Although practitioners in large organizations will find themselves using a higher-flown vocabulary when they communicate ‘upward’ to get resources than when they talk ‘downward’ to get action.

As in the case of Credit Suisse, Latin English can also be used to distance actors from their actions: President Clinton’s lawyer in the Lewinsky affair stated during the Senate impeachment proceedings that his client was prepared to “accept the obloquy” (from the Latin word obloquium, meaning “talk against”) due to him because of his behavior. It sounded almost like an award of some kind! Similarly, the military does not drop bombs but “delivers ordnance”; troops don’t kill women and children but “cause collateral damage.”

George Orwell understood the use of this “inflated” style of language better than anyone, “A mass of Latin words falls upon the facts like soft snow, blurring the outline and covering up all the details. The great enemy of clear language is insincerity. When there is a gap between one’s real and one’s declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish spurting out ink.” (Politics and the English Language 1945/46)

 

Podcast “Lead Like a Gardener: An Ecological Approach to Wicked Problems

Last week I did a podcast with Toby Corballis of Wicked Problems. Toby is an agile business transformation specialist based in The Hague in the Netherlands. I had been attracted to his site by his earlier excellent interview with Keith Grint and felt it would be a great opportunity to discuss an ecological approach to wicked problems.

We had a really good discussion and you can see the video here.