Senior leaders in mature businesses may know something is wrong. Their organisation is efficient, profitable and increasingly unable to move. What they lack is a language for what to do about it.
David Hurst has spent fifty years developing that language. In this episode of Arkaro Insights, the author of The New Ecology of Leadership and Crisis & Renewal joins Mark Blackwell to revisit his ecocycle framework in the age of AI. The result is a rare kind of conversation: theoretically deep, practically usable and honest about what generative AI can and cannot do for a mature organisation.
Executive summary
The ecocycle is a two-loop model of organisational life. A front loop of birth, growth, maturity and conservation, followed by a back loop of crisis, release and renewal.
Large language model AI belongs on the front loop, where patterns are stable and calculable. Natural human intelligence belongs on the back loop, where the map runs out and only a compass will do.
Many mature organisations sit in what Hurst calls the rigidity trap at the top of the front loop, brilliant at yesterday’s logic and vulnerable to today’s change.
Senior leaders must toggle between two postures: the engineer who optimises a known system and the gardener who creates conditions for an unknown future to emerge.
Odysseus in the Straits of Messina is the picture of adaptive space, steering between the rock of stability and the whirlpool of change, where you get torn apart.
The 4:30am steel delivery ride-along is a concrete instance of ecological rationality, a workable technique for any senior leader who wants to see what head office cannot.
Why the ecocycle matters now
Many leader see the same underlying problem. Their business was designed for one world, and the world has changed. Geopolitics, regulation, technology, climate, all move faster than the organisation can respond. The instinct is to look for a new operating model, a new tool, a new strategy document. Hurst suggests something different: begin by understanding the shape of the trajectory your organisation is on.
The ecocycle came out of his own experience of running a Canadian industrial distributor through the wreckage of a 1979 leveraged buyout, and out of his subsequent reading of the Canadian ecologist Buzz Holling on the adaptive cycle. Holling had studied forests, estuaries and other ecosystems, and had shown that they all follow a two-loop trajectory: a long front loop of birth, growth and maturation, and a shorter, faster back loop of release, reorganisation and renewal.
Applied to organisations, the front loop is the story of Western business as most of our audience knows it. Entrepreneurship, growth, scaling, structure, optimisation. The back loop is the story of what happens when that structure runs into a world it was not designed for, and either finds a way to renew itself or does not. It is, in Hurst’s phrase, a Daoist framework of two processes, each of which contains within it the seeds of the other.
Nothing lasts unless it is incessantly renewed – David Hurst
The two loops: front and back
The front loop begins with a small community of practice and trust, held together by shared passion. It is a place of improvisation, of what Henry Mintzberg calls bricolage: make a little, sell a little, make a little more. Steve Blank calls this a temporary organisation searching for a repeatable, scalable business model. The vast majority of ventures fail here. Those that succeed graduate into deliberate strategy, adopt Michael Porter’s value chain, scale up, and enter conservation.
At the top of the front loop sits the mature organisation. It is efficient, profitable, structured. It is also designed not to change, because its whole reason for existing is to preserve success. That is a rational design when tomorrow looks like today. It becomes brittle the moment the world begins to move.
The back loop begins with crisis. Hurst borrows his metaphors from the Hebrew Testament: wilderness, mountain, promised land. Wilderness is a place of confusion where it is easy to get lost and where many organisations spend years. Hurst notes wryly that General Motors spent forty years wandering in the wilderness before it went bankrupt in 2009. To get out of the wilderness, leaders must climb the mountain, which is the process of adaptive leadership: finding a view of what could come next, and building a shared sense of purpose that lets people act. Mission and purpose, in his experience, emerge from struggle and setback, not from external supply by a leader.
The critical point, and one Hurst returns to throughout the conversation, is that these are not sequential stages of a career. A working manager needs both loops in mind at the same time, and needs to know which loop the specific situation in front of them belongs to.
Where AI fits, and where it fails: the map and the compass
The single cleanest image from the conversation is the contrast between the map and the compass. The map is the front loop. It is the domain of stable patterns, known routes, calculable probabilities. Large language model AI is fabulously good at maps. It has been trained on a vast collection of yesterdays and can predict, with remarkable fidelity, what a stable pattern is likely to look like tomorrow.
The compass is the back loop. It is what you use when the map runs out, when the terrain is unfamiliar, when the pattern itself is changing. This is the domain of what Hurst calls ecological rationality, the human capacity to read a specific situation and find the affordances (action possibilities) that it offers. The philosopher J.J. Gibson coined the term for the way an animal reads its environment. Hurst applies it to the way an experienced manager reads a particular customer, a particular team, a particular moment.
Hurst is careful about his terminology. He talks about LLM AI, not AI in general. Other forms of AI, notably the active inference work associated with Karl Friston and Andy Clark, are attempting to build systems that work more like the human mind. That work has not yet gained traction, but it is where any serious progress towards genuine artificial general intelligence is likely to come from. Today’s generative tools are not headed there.
It’s forced us to reconsider what it means to be human. And it’s quite obvious that being human is much more than LLM AI can do – David Hurst
The rigidity trap: why mature organisations get stuck
The senior leader in the audience of this podcast is most likely running a business in conservation. Efficient, profitable, structured. Head office is a well-appointed place. When you were an entrepreneur, if you wanted resources you had to find a customer, because customers were the only people who had them. Now, if you want resources, you have to work through internal courtiers who guard access to a prince who allocates them. Your back is to the customer. Your face is to the boss.
That is the rigidity trap. It is not a failure of individual leaders. It is a normal, predictable trajectory that follows from success, exactly the same trajectory that mature forests follow when they become monocultures and can no longer regenerate. Hurst is emphatic that provided tomorrow is just like today, this is a fabulous place to be. And you will do fabulously well, for a while.
The signals that the world has stopped being stable are usually clear enough, if leaders look for them. A change of a customer, a change of a regulator, a change in the climate, a change in the political weather. What tends to be missing is not the signal, but a language for what to do about it. That is what the ecocycle provides.
Scylla and Charybdis: the adaptive space
For the manager caught between preserving success and preparing for renewal, Hurst reaches for Homer. Odysseus, sailing the Straits of Messina, has to navigate between two dangers: Scylla, the rock of stability where everyone gets eaten in restructurings and force reductions, and Charybdis, the whirlpool of change where organisations get torn apart. Steer too close to Scylla and the business dies of consolidation. Steer too close to Charybdis and it dies of chaos. The task is to hold the boat in the adaptive space between them.
This is a picture, not a solution. But it is a picture that senior leaders in mature businesses recognise instantly. It captures the daily judgement call about how much continuity to preserve and how much disruption to encourage, and it does so without collapsing into either the machine metaphor of pure engineering or the utopia metaphor of pure agility. The reference lands harder because of Christopher Nolan’s just-released Odyssey adaptation, which puts the same picture in front of a much wider audience.
From engineer to gardener
The core operating instruction that comes out of the framework is the toggle between two postures. The engineer designs and builds. Given a known problem in a known context, the engineer’s approach is the right one, and LLM AI is a powerful addition to the engineer’s toolkit. The gardener cultivates the conditions for growth without controlling the outcome. Given an unknown problem in an unstable context, the gardener’s approach is the right one, and this is a place where LLM AI cannot help.
Neither posture is better than the other. Neither is more sophisticated. Both are legitimate and both are necessary. The failure mode of mainstream Anglo-American management over the last sixty years, in Hurst’s view, has been to elevate the engineer and disregard the gardener. The result is organisations that are excellent at optimisation and hopeless at renewal.
The manager’s real job is to know, situation by situation, which posture the moment demands and to switch smoothly between them. Sometimes the toggle is slow, at the level of a year or a strategic cycle. Sometimes it is fast, at the level of a single meeting where you might discuss a structured operational issue in engineer mode and then move to an emergent question in gardener mode. Dr Iain McGilchrist‘s work on the divided brain, which Hurst has drawn on for decades, gives a neurological foundation for why humans are equipped to do this in the first place. Hurst himself has been living with the framework since 1984, when a Harvard Business Review article he wrote about the leveraged buyout turnaround, “Of Boxes, Bubbles and Effective Management”, laid out the same yin-yang tension in different vocabulary.
Ecological rationality in practice: the steel delivery story
The most concrete practitioner story of the conversation comes from Hurst’s time running a Canadian steel service centre. Once in a while, he would set his alarm for 4:30am, meet a driver at the yard, and go out on a steel delivery to a customer at six in the morning. Standing in the customer’s back yard at that hour, he could see what no head office report could ever show him. Whose competitors were queued up delivering to the same customer, and what they were delivering. Whether the customer’s production line was full or empty. Whether the workforce looked as if they might be about to strike. Whether the yard was well-run or in disarray. What was arriving, what was leaving, what was piling up.
This is ecological rationality made concrete. The affordances of the situation, the action possibilities, become visible only from a specific place at a specific time. No abstract dashboard can generate them, because they do not exist as data in any system. They exist in the world, and they only become available to a leader who deliberately puts themselves in the world where they live.
This is the fine-grained awareness of what’s actually happening, which allows you to adjust your top-down picture, which allows you to predict the world. – David Hurst
Every senior leader has some version of this available. A morning at a farm-gate. A shift on a production line. An afternoon in a distributor’s warehouse. A day in a formulator’s application lab. The specific place matters less than the discipline of going to it, on foot, at the hour when the work is actually happening.
What this means for leaders on Monday morning
Asked what senior leaders in mature businesses should do next week with their teams, Hurst declined to give a general answer. Any generic recommendation, he pointed out, is going to be true but useless. Cultivate psychological safety. The opposite is clearly nonsense, so everyone will nod, and nothing will change. The advice that actually helps is particular to this organisation, with these people, right here, right now.
The takeaway, then, is not a checklist. It is a discipline. The discipline is sense-making. Put effort into diagnosing where on the ecocycle your organisation actually sits, and where different parts of it sit, because a large business will have some units clearly on the front loop and others clearly on the back loop. Notice which posture, engineer or gardener, the situation in front of you demands. And when you are about to reach for a piece of context-free advice from a management text or from a generative AI tool, ask whether the advice is a map fit for the terrain, or whether the terrain requires a compass.
That is the work. It is the work that AI cannot do for you. And it is the work that, done well, makes AI genuinely useful in the parts of the business where it earns its place.
Listen to the full conversation
The full episode with David Hurst is available on YouTube (www.youtube.com/@arkaro) and on the Arkaro Insights podcast (arkaroinsights.buzzsprout.com), along with Apple Podcasts, Spotify and all major platforms.
About the speakers
David Hurst
David K. Hurst is a reflective practitioner, speaker, educator and writer on management. He spent twenty-five years as a senior operating executive, including a decade as Executive Vice-President of Federal Industries’ Metals Group in Canada, following the rescue of Hugh Russel Inc. after a leveraged buyout. He is the author of Crisis & Renewal (Harvard Business School Press, 1995) and The New Ecology of Leadership (Columbia Business School Publishing, 2012). He writes regularly at davidkhurst.com and on Medium.
Mark Blackwell
Mark Blackwell is the founder of Arkaro Ltd, a boutique B2B consultancy specialising in change management, innovation, integrated business planning and commercial excellence. Arkaro works with clients in agriculture, food and chemicals through a ‘do it with you’ philosophy that builds lasting capability alongside measurable performance improvement. Mark hosts the Arkaro Insights podcast.
Working through a rigidity trap of your own?
Arkaro’s four-step approach, understand, co-create, enable, sustain, is built for exactly the kind of adaptive work David Hurst describes. If the shape of the conversation resonates with what you are seeing in your own business, we would be glad to explore whether a first conversation might be useful.
Beyond the Tyranny of the Mid-Case, with Dr Pete Compo on the Emergent Approach to strategy in conditions of genuine uncertainty. Compo gives the practitioner method; Hurst gives the ecological theory underneath it.
The Hidden Power of Messy Teams, Dr Johnathan Cromwell on why teams that discover their problem over time achieve implementation rates of over 80 per cent, while those that clarify it early struggle to reach half of that.
Fusion Strategy, Professor Venkat Venkatraman on why the $75 trillion asset-heavy world is the real frontier of the intelligence age, and why bolting AI onto existing models is digital paint.
The Steam Engine Mistake, Harvard’s Professor Joseph Fuller on why 60 per cent of companies are set up to fail with AI, and what the J-curve really means.
Why Playing Games at Work Isn’t Childish, Scott Anthony on why most leaders are using AI as a forklift to move their thinking, and why the muscle that matters is built through experience.
On the whole human at work
The Brilliant but Limited Mind, Linden Thorp on why modern leadership has overinvested in the mind at the expense of the body, the breath and the wider nervous system.
Group Genius, Dr Keith Sawyer on the ten conditions for group flow, the state of peak collective performance that AI cannot produce but can undermine.
Junk Values: Why Corporate Values Fail, Erika Clegg on why three decades of recycled corporate values have failed, and what it takes to build values that guide real decisions.
If Not 70 Per Cent, Then What?, four pointers from Julie Hodges, Keith Driver, Dave Snowden and Deborah Rowland on what doing change better actually looks like.
Value Centric IBP, Dov Shenkman on why many businesses are brilliant at executing the wrong things, and what profit-as-a-result means for planning.
External resources and further reading
By David Hurst
The New Ecology of Leadership: Business Mastery in a Chaotic World (Columbia Business School Publishing, 2012)
Crisis & Renewal: Meeting the Challenge of Organizational Change (Harvard Business School Press, 1995)
Of Boxes, Bubbles and Effective Management (Harvard Business Review, 1984)
C.S. (Buzz) Holling and Lance Gunderson, Panarchy: Understanding Transformations in Human and Natural Systems
Iain McGilchrist, The Master and his Emissary: The Divided Brain and the Making of the Western World
Richard Nisbett, The Geography of Thought: How Asians and Westerners Think Differently
Gerd Gigerenzer, on fast and frugal heuristics and ecological rationality
Gary Klein, Sources of Power: How People Make Decisions (Naturalistic Decision Making)
Karl Friston and Andy Clark, on active inference and predictive processing as alternative foundations for AI
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In 2026, as AI reshapes management and volatility defines markets, innovation demands more than data or disruption – it’s about perceiving possibilities and acting on them amid chaos. Four concepts – sensemaking, predictive processing, affordances, and emergence – offer managers a practical framework to navigate this reality.
Perception Shapes Reality
Sensemaking, pioneered by the late Karl Weick, reminds us that reality isn’t just observed; it’s enacted through ongoing interpretation. Managers don’t analyze like detached scientists – they weave order from ambiguity using experiences, emotions, and context. This contrasts with the rationalist bias in business schools and explains why rigid planning often fails in dynamic environments.
Cognitive psychologist Gary Klein has shown how experienced practitioners make decisions under time pressure, uncertainty, unclear goals, high stakes, poorly defined procedures, dynamic conditions, etc. Under these circumstances they do not use the mainstream Rational Choice Model. Instead, they use what Klein calls the Naturalistic or Recognition-primed Decision Model. It’s about recognizing patterns derived from long and varied experiences to create expectancies, trigger sensitivity to cues, and suggest plausible goals and possible actions. The focus is on the way they assess the situation and judge it familiar, not on comparing options.
Fast Evaluations
Courses of action can be quickly evaluated by imagining how they will be carried out, not by formal analysis. Decision makers usually look for the first workable option they can find, not the best option. Since the first option they consider is usually workable, they do not have to generate a large set of options to be sure they get a good one. They generate and evaluate options, one at a time, and do not bother comparing advantages and disadvantages of alternatives. By imagining the option being carried out, they can spot weaknesses thereby making the option stronger. While conventional models select the best, without seeing how it can be improved., the emphasis is on being poised to act rather than being paralyzed until all evaluations have been completed.
Brains and Bodies Predict Ahead
This recognition-primed approach aligns with how our brains and bodies cope with the world. Neuroscientist Andy Clark’s predictive processing suggests that we constantly forecast outcomes, blending top-down models with bottom-up feedback to minimize surprise. In the realm of necessity (where AI excels with precise answers), we refine predictions. But in the domain of contingency – where judgment rules – we act to bend reality. This demands embodied experience that LLM AIs lack. From this activity action possibilities emerge
Action and Perception are tightly coupled
A good example of how action and perception are connected is from baseball. Outfielders in professional baseball (or cricket) catch most fly balls successfully. From the perspective of a physicist, it is ‘as-if’ they can calculate the velocity of the ball off the bat, predict its trajectory and run to the spot where it will land. We know they don’t actually do this. Instead, they use a gaze heuristic, maintaining a constant angle of gaze between their eyes and the ball. If the ball rises in their field of view, they run away from it, if it’s dropping, they run toward it. The constant process of adjustment, weaving together error detection through perception and error reduction through action allows them to be at the right place by the time the ball becomes catchable. That’s what innovative organizations do: they put themselves in the right place at the right time.
Seizing Action Opportunities
Ecologist J.J. Gibson’s affordances frame environments as landscapes of possibilities tailored to our goals. Innovation thrives on spotting these “adjacent possibles”—opportunities for bricolage or improvisation. Leaders who expand choices, rather than narrowing them, turn constraints into breakthroughs, much like startups pivoting amid scarcity.
When I ran a North American steel distribution company (traditionally regarded as a price-taking commodity business), I occasionally got up at 4:30 a.m. to ride in delivery trucks making their morning rounds with customers. It soon became apparent that the customers’ yards in the early morning were places and occasions when threats and opportunities became most visible. It was clear that our drivers were a valuable resource. From their unique vantage points, they could see how busy our customers were, what kinds of materials they were buying and from who. We could get early warning of strikes and slowdowns and by cultivating relations with yard bosses our drivers could get our trucks in and out faster. The solution was to treat the drivers, not as hired hands, but as the valuable sources of information that they were and engage them in the company conversation. Weekly lunchtime debriefs and the occasional distribution of football tickets via the drivers made all the difference. Affordances – action possibilities – emerge continually from processes like these.
Orchestrating Emergence
Emergence can’t be commanded, only fostered. New ventures start in passion and trust, scaling through repeatable models into power structures that risk stifling creativity. Discerning managers dwell in an “adaptive space”: oscillating in a yin-yang dynamic between abstraction and action, necessity and contingency, to avoid competency traps and sustain vitality.
For Drucker Forum leaders, this means redesigning organizations as porous ecosystems—decentralized, experimental, and purpose-driven. Ditch top-down control for facilitated emergence: empower frontline sensemaking, hunt affordances daily, and measure success by adaptive capacity, not just outputs. Consultants, Neel Doshi and Lindsay McGregor describe a yin-yang tension between tactical performance and adaptive performance. Tactical performance, assessed by conventional metrics, is often overused, suppressing initiative and curiosity, especially when performance reviews are tied to compensation. Adaptive performance is all about how well people respond when plans break down. It’s about experimentation and their ability to improvise under pressure. It’s about learning goals in a culture that encourages exploration and develops peripheral vision and resilience. It turns out that tech companies can learn from hotels and florists, financial service companies from barber shops and tattoo parlours.
In 2026’s unpredictable terrain, innovative managers don’t predict the future—they can shape it, moment by moment.
There is a contradiction at the heart of liberal democracy: while democracy requires social equality, the engine of capitalism creates both wealth and inequality. While direct democracy – the purest form – thrives only in small-scale, face-to-face communities, the interaction of capitalism and technology systematically produces large-scale enterprises and institutions, where people are separated in space and time. Coordination now takes rules and hierarchy, which, together with the accumulation of wealth, leads to the emergence of elites. Over time the interests of these elites will turn to rent-seeking and value extraction at the expense of value creation. Many will strive to retain power by blocking all efforts at its redistribution.
Add to this behavior of the elites the ‘creative destruction’ of technological change and the result is that the relationship between democracy and capitalism changes constantly as technology both creates and destroys, value creation morphs into value extraction and elites accumulate wealth and power. Social inequality grows. The constant dilemma for proponents of liberal democracy is how to harness the productive power of capitalism, while ensuring that its benefits are spread widely enough to maintain a sense of political participation and shared citizenship. It’s a bit like trying to design and manage a multi-dimensional game of snakes and ladders.
Addressing this tension, between democratic responsiveness and institutional stability, was the primary concern of the framers of the U.S. Constitution. They knew, as modern Americans are rediscovering, that when this effort succeeds the result is a resilient society and a robust middle class with a shared narrative of who they are. When the process fails the middle-class fragments and societies become unstable. Oligopolies flourish and elites become entrenched, while many members of the erstwhile middle-class join the ‘invisible class’, losing their stories and their identities: for them the game seems to become all snakes and no ladders. They will then turn to populist politicians and anyone else who promises to restore their lost narratives.
Plato and Aristotle in detail from Raphael’s School of Athens (1511). Plato points upward toward universal truths and his Theory of Forms, while his student Aristotle indicates that true reality lies lower in the particulars of practice and experience
What’s the relationship between management theory and management practice? Today I published a 3,000-word essay on the topic on Medium. Here’s a brief introduction:
The relationship between theory and practice has vexed management academics and practitioners alike for decades. Traditionally the Anglo-American approach has been to address it as a knowledge transfer problem. This approach was helped by making no distinction between the natural and human sciences. The assumption was that reality was ‘out there’ to be studied objectively and that the goal of knowledge, via the scientific method, was to learn more and more about its true nature. This perspective assigns a superior position to formal-technical ‘scientific’ knowledge and sees practical knowledge as an inferior derivative of it. This was a triumph for Plato’s views over those of Aristotle. Plato had contended that the knowledge of forms or universals was sufficient to understand reality. Aristotle, on the other hand, had argued that, while knowledge of forms was necessary, it was not sufficient: one also needed experience with particulars. He said that this explained why experienced practitioners with little theoretical knowledge often performed better than those who knew a lot of theory but had little experience.
Ever since the Enlightenment Plato’s ideas have dominated Anglo-American management thought but in recent years Aristotle’s views have been making a comeback. Management theory and management practice are increasingly seen as different types of knowledge, with different philosophical assumptions about reality and how we apprehend it. Theory and practice may appear to be in opposition and even as substitutes for each other, but their relationship is best seen as complementary. This complementary relationship becomes clear if one takes a sensemaking perspective which is where my Medium article begins….
My blog on this topic has just been published on the Drucker Forum here.
My biggest beef with mainstream Anglo-American management (‘Cartesian’ management, as I call it) is that it ignores context. It treats management as an amoral, technical practice, modelled on the natural sciences and often based on what John Dewey called the spectator theory of knowledge. This myth, that we are passive observers who can view the world objectively, lies at the root of our impoverished models of what it means to be human.
Cartesian management sanctions the stripping of apparently successful methodologies from the human contexts that made them successful and presenting them as abstract, context-free ‘principles’ that can be ‘applied’ by anybody in any situation. This disregards the importance of initial conditions and path-dependent nature of whatever happens in practice and perpetuates an illusion of rationality, predictability and control. Many academics and consultants like this approach, but it is anathema to effective managers.
Effective managers know that abstract principles cannot be applied to humans in the same way that they are in the natural sciences. If people are treated as objects – assets and resources – they respond badly. The best management frameworks are those that help managers make sense of the contexts that they are in. The frames direct their attentions and guide their conversations in their search for affordances, the action possibilities afforded by the particular situations in which they find themselves.
It is the ability of managers (a practical wisdom developed through experience) to find these affordances that makes or breaks their efforts. Context matters! This may be why many managers prefer to read history, biography and even fiction to management books. The former offer quasi-experiences that illustrate how other humans discovered action possibilities in the situations in which they found themselves.
Management academics and consultants persist with the Cartesian approach for at least two major reasons. Apart from allowing them to wrap themselves in the mantle of ‘science’, ignoring context broadens the markets and industries that they can address – one size fits all! The second advantage is that the Cartesian approach leaves the current power structure of the organization (and society) unchallenged. This allows a servants-of-power approach, especially in the business schools: “In other words, they say given your ends, whatever they may be, the study of administration will help you to achieve them. We offer you tools. Into the foundations of your choices we shall not inquire, for that would make us moralists rather than scientists.” Philip Selznick Leadership in Administration P 80.
Once again, this is anathema to effective managers trying to enable significant organizational change. They know that power structures that perpetuate the status quo and allow only incremental efficiency innovations are barriers to more radical experimentation. This does not imply a need for wholesale revolution, only continual renewal, as power is spread more widely and moves around the organization. This allows people to exercise responsibility and take action in the areas where they are best suited to do so.
Management cannot be treated as an amoral technical practice that deals only with means and leaves ends unaddressed. Rather, it is also a human inquiry, a moral practice that questions chosen ends and their good for both business and society. People are ends-in-themselves.
The Scientific and the Humanistic Modes of Inquiry
The core of the blog is the diagram, which captures some of my intellectual journey over the last forty years, as I tried to make sense of a major organizational transformation experience:
The contrast between the scientific and humanistic modes of inquiry has many precedents. Among my inspirations were the writings of psychologist Jerome Bruner, psychiatrist/philosopher Iain McGilchrist and many dual process theorists of cognition and emotion. Underpinning it all is the taijitu, the yin-yang symbol of complementary yet opposing forces that form a self-perpetuating cycle of the kinds found in complex ecosystems like forests and estuaries.
The “Cartesian Search for Truth” and the “Goethean Quest for Meaning” titles were inspired by the long debate on multiple topics between Anglo-American and Continental philosophers, particularly on the contrast between naturwissenschaft (natural sciences) and geisteswissenschaft (human sciences) (e.g. Dilthey).
The left column is effectively a summary of the current mainstream Anglo-American management canon. The right column is a ‘both…and’ addition to the left. Together they outline my conception of the next management canon. It is not a movement from one canon to a new one but a dynamic synthesis of the old and the new, the conservative and the radical. The dynamic has been described as a dance, but the ‘both…and’ nature of the humanistic perspective, means that it must always embrace and contain the ‘either/or’ scientific view.
In short, the Next Management Canon regards organizations as constantly emerging processes fashioned by humans: creatures of nature, with bodies and intentions, situated in time and space, culture and society, searching for identity and meaning and struggling for credibility and authority.
This is a summary of a longer article I have just posted on Medium to mark forty years since the publication of my first (and only) article in the Harvard Business Review. That article, Of Boxes, Bubbles and Effective Management, outlined the transformational experience our corporation had been through after it had been acquired in a wildly overleveraged buyout on the eve of a steep recession. We had gone insolvent almost overnight, but owed the bank so much money that it was their problem, not just ours.
I told the detailed story of what had happened, how we had muddled through, dealing with our challenges and what the implications of our eventual survival and success were for management. I approached this task by balancing a then-popular ‘hard’ management model with a ‘soft’ counterpart. This allowed a Taoist ‘yin-yang’ interpretation of our experience. For to me it seemed as if we had switched from a hard, ‘yang’ structure to a softer ‘yin’ process, although not in any unilateral, unconditional way. It had been like a figure-ground reversal with crisis as the catalyst. It was as if the conventional organizational hierarchy had been turned upside down:
The Taoist yin-yang symbol suggests that the ‘yang’ component never went away. Rather, it was held in abeyance for use only in situations that demanded it[1]. Whether you would need it or not all depended on the context.
My opening proposition in the article was, “Two models are better than one.” The bottom line after another four decades of experience, reading and research since then is that I don’t think that we can make much headway in management (or politics and the social sciences for that matter) unless we find a way to reconcile science with the humanities in a new synthesis. In the longer article I suggest that an ecological sensemaking framework shows the way ahead.
Why We Need Two Models
In The Witch Doctors: Making Sense of the Management Gurus (1996)[2] John Micklethwait (former editor-in-chief of The Economist, now of Bloomberg News) and Adrian Wooldridge (Former Schumpeter columnist for The Economist, now Bagehot columnist) identified four defects in management theory:
That it was constitutionally incapable of self-criticism.
Its terminology confuses rather than educates.
It rarely rises above common sense.
It is faddish and bedeviled by contradictions.
After declaring management theory “guilty” on all charges in various degrees, they went on to identify the root cause of the problem as an “intellectual confusion at the heart of management theory; it has become not so much a coherent discipline as a battleground between two radically opposed philosophies. Management theorists usually belong to one of two rival schools. Each of which is inspired by a different philosophy of nature; and management practice has oscillated wildly between these two positions.” They went on to identify the two schools as scientific management on the one hand and humanistic management on the other, concluding that, “This, in essence, is the debate between “hard” and “soft” management.”
We Are the Battleground
It’s time to identify this “intellectual confusion” as a feature of both humans and organizations, not a ‘bug’. It’s time to recognize that our fundamentally divided nature is the essence of our humanity and that it is the practical weaving together of apparently irreconcilable opposites that is the very warp and woof of our existence. The roots of this split are in the need for living creatures to be able, in real time, both to focus on a task at hand and to remain aware of peripheral threats, to live simultaneously in two ‘worlds’[i]. These two tasks must be performed together, yet they demand different kinds of attention and different contexts (the one individual and the other collective). The result is an asymmetrical split-brain architecture that goes a long way down the tree of phylogeny. This suggests that it must have significant survival benefits.
This split, this fundamental duality, spirals through our existence as individuals, families, communities, organizations and societies and throughout our history as a species. It has grown in complexity as our languages, cultures and institutions have grown more complex. Like the twin arms of a double helix it also coils through philosophy in general and the history of management thought in particular. Here the dualities are familiar: exploitation and exploration, calculation and judgement, individual and team, performance and learning, detachment and immersion, mechanical and organic and so on and on.
That’s why we need two models in a Taoist yin-yang relationship to understand organizational change and make sense of our experience.
Reconciliation in Ecology
There will always be a tension between the scientific and the humanistic, but there need not be a battle. We can render the tension creative rather than destructive if we can frame it in a higher-level understanding of the dynamics of life in a real world.
This will mean challenging the assumptions of mainstream Anglo-American management about the nature of reality and what is means to be human. These aren’t ‘wrong’ but have been pushed too far and taken into areas where they don’t belong. They claim to be universal when everything is dependent on context. They appeal to our systemizing mind, while ignoring the empathizing one.[ii] The mainstream doesn’t care. This is where a dual-process theory of cognition and emotion helps with its both…and approach, rather than either/or. It can embrace and contain the mainstream and keep it in its proper place.
This is how we can connect management practice, which is always singular and unique, with theory, which describes the world in terms of rules, generalizations and universals. It is how to approach the debate between ‘relevance’ and ‘rigour’ that has plagued the management academics for so long. It is to handle paradoxes and dilemmas like these that evolution has equipped us with bicameral minds, minds that can focus while still retaining peripheral awareness and ‘toggle’ rapidly between the two modes of perception. In management we can think of it is as instrumental search for truth (to earn a living) conducted within the quest for purpose (to live our lives).
Forty years ago I called the two worlds ‘boxes’ and ‘bubbles’. My recommendation to managers then was that “You have to find the bubble in the box and put the box in the bubble”. That is still good advice.
The table, “A Dual-Process, Ecological View of Management”, expands on this idea by showing some of the key management polarities in a different format: an individual, instrumental search for explanation (right side) conducted within a collective, existential quest for purpose (left side). The central barrier between the left and righthand columns is permeable with infinity loop/adaptive cycle connectors to emphasize the nature of the ‘dancing’ ecological balance between the two that plays out in space and time. At the organizational level the challenge for managers is to toggle between the two modes as the situation demands, keeping the enterprise in the adaptive space, the ‘Goldilocks Zone’, between the extremes.
The journey continues….
[1] People at Gore & Associates call this ‘hierarchy-on-demand’, when the formal hierarchy, instead of being permanent, becomes contingent on the situation.
[2]The Witch Doctors was updated by Adrian Wooldridge in Masters of Management (2011). The major conclusions were unchanged.
[i] McGilchrist, I., (2009), The Master and his Emissary: The Divided Brain and the Making of the Western World, Yale University Press, New Haven, CT.
[ii] Baron-Cohen, S., (2009), “Autism: The Empathizing-Systemizing (E-S) Theory” The Year in Cognitive Science, Ann. N.Y. Acad. Sci. 1156: 68-80.
The ancient Greeks had many concepts of time but believed that two were particularly important. The first was sequential, or chronological, time, the relentless beat of time measured today by watches and calendars. In Greek mythology the personification of time was known as Chronos, familiar to us as Father Time. The abstract, labeled time of past and future—chronos—is captured in our words “chronicle” and “chronometer.” One can also think of it as managerial time, more prosaically as the time of “one damn thing after another,” the linear time of reports and budgets, of histories and forecasts.
The second kind of time for the Greeks was kairos, recalling the youngest of Zeus’s immortal sons. This is the time of seasons, of goals and intentions, of activity and opportunity, which the Romans called occasio. It is the time of now; the infinitely fine-grained, perpetual, thin moment of now in which we all live. The time is always now. Youngest sons always seem to be less encumbered than their older siblings, and, when personified, Kairos is depicted as a young man with wings on his feet and his back that allow him to follow a jinking, butterfly course, crisscrossing Chronos’s linear track. He carries a set of scales in one hand and a knife in the other, ready to cut the thread of time. His head is bald except for a long hank of hair on his forehead. The idea was that if you saw Kairos—opportunity—fluttering toward you, you could seize him by the forelock, but if he got past you, it would be impossible to grab his smooth head from behind.
One can think of kairos as the time of leaders. Effective leaders, in deed and in word, are always pointing out the significance of the moment, the present time, and the opportunities it represents. If the logic of management is all about the maintenance of focus (vertical thinking), then leadership is about the restoration of peripheral vision (horizontal thinking, the ability to make creative connections across fields).
Few have expressed the task better than Mary Parker Follett:
“In business we are always passing from one significant moment to another significant moment, and the leader’s task is pre-eminently to understand the moment of passing . . . it mean[s] far more than meeting the next situation . . . it mean[s] making the next situation.” (Dynamic Administration, emphasis in the original)
Ellen Langer suggests that the ability to situate oneself in the present is the essence of mindfulness, the ability to shake oneself free from the categories of thought derived from the past and to draw novel distinctions. “When we are mindless,” Langer writes, “our behavior is rule and routine governed; when we are mindful, rules and routines may guide our behavior rather than predetermine it.” Being in the present is essential to this. She quotes Saint Augustine, who might be describing the intersection of the two kinds of time: “The present, therefore, has several dimensions . . . the present of things past, the present of things present, and the present of things future.” (Mindfulness)
Today we call them memory, attention, and expectation, but we rarely think of them as aspects of the present.”
The Role of History
From the study of history, managers should feel as if they and their organizations are travelers flowing in a great stream of time, propelled by the past but with many possibilities ahead. Just as is the case when running a real river, one does not succeed by trying to fight the dynamics of the current. One makes progress by using the natural forces in the stream to take one where one wants to go.
The use of history to understand the dynamics of the turbulent stream in this way is well captured in this quote from political scientist Richard Neustadt and historian Ernest May:
“Thinking of time [as a stream] . . . appears . . . to have three components. One is the recognition that the future has no place to come from except from the past, hence the past has predictive value. Another element is recognition that what matters for the future in the present is departures from the past, alterations, changes, which prospectively or actually divert familiar flows from accustomed channels, thus affecting the predictive value and much else besides. A third component is continuous comparison, an almost constant oscillation from present to future to past and back, heedful of prospective changes, concerned to expedite, limit, guide, counter, or accept it as the fruits of such comparison suggest.” (Thinking in Time)
History has predictive value not because the future will be like the past but because some things will continue, habits will endure, and humans will tend to behave in the future much as they have behaved in the past, given similar contexts. Thus, the best use of history is to help sensitize managers to detecting contexts—patterns and changes in patterns—and to hone their contextual intelligence, the practical wisdom and judgment that helps them to anticipate and to adapt. Another name for it is sensemaking.
We cannot predict the future, but we can interpret the past to help us understand the present and anticipate the future. It is the constant oscillation, the constant Janus-like comparison between present and past, present and future that allows effective leaders to continually point out the significance of the moment. It is the moment when chronos and kairos, inevitability and opportunity, come together.
This blog is excerpted from my book, The New Ecology of Leadership: Business Mastery in a Chaotic World, Columbia University Press, New York, NY, 2012. The discussion of Chronos and Kairos is based on Elliott Jaques, The Form of Time.
Charles Dickens’ classic, A Christmas Carol, was first published on December 19, 1843. So it’s close enough to roll this blog out again. Happy Holidays to all!
Management gurus have drawn lessons on leadership from diverse sources, ranging from the practices of Attila the Hun to the fictional events in Star Trek. Yet they seem to have missed one of the finest accounts of transformation and change familiar to us all. It is Charles Dickens’ best-loved story, A Christmas Carol. He said that he himself laughed and cried over it more than anything else he wrote, and it can still have that effect on us today. For there is a little bit (perhaps more than a little) of Ebenezer Scrooge in each of us and Dickens’ penetrating observation of the condition of our “shut-up hearts” is as relevant now as it was 179 years ago. As everyone knows, it is the story of personal renewal, of the conversion of a grasping, joyless taskmaster into a public benefactor and caring friend. Dickens also outlines a process of change, which many modern organizations might try to follow. Indeed, as a story of personal and organizational transformation, it reports results that would delight any change consultant. Of course Scrooge had three consultants…
Scrooge’s transformation begins in crisis, with the disturbing appearance of the ghost of his former partner, Joseph Marley, seven years after his death. It seems that real change often demands a crisis – a manifest failure of the status quo – to smash the constraints, imagined or real, that bind people and their organizations. Shocked out of his comfortable routines and intellectual self-assurance, Scrooge is prepared for the visions to be shown him of the Past, Present and Future. For change in behaviour takes experience, not just exposure to ideas, and Scrooge has to be immersed in each of these dimensions of time if he is to be changed. He must relive the past, truly experience the present and anticipate the future.
In his visit to the Past Scrooge sees himself as the lonely young boy he once was: neglected by his family and bullied at school, but full of imaginative ideas and youthful enthusiasms. He sees his beloved sister Fan and old values and aspirations are reawakened. Following the chronology of events, he revisits the firm where he was apprenticed under his first master, Mr. Fezziwig. Here he experiences once again the excitement and warmth of that small community at the office Christmas party. When the Spirit disparages Fezziwig’s contribution and the small expenditure involved, Scrooge defends his former boss with powerful insight into the role he plays: “He has the power to render us happy or unhappy, to make our service light or burdensome, a pleasure or a toil. Say that his power lies in words and looks, in things so slight and insignificant that it is impossible to count ‘em up; what then? The happiness he gives us is quite as great as if it cost a fortune.” And the sudden recollection of this old role model makes Scrooge strangely thoughtful.
The sustaining power and warmth of community wherever it is to be found is the central theme of Scrooge’s experience of the Present. He sees the family of his poor clerk, Bob Cratchit, busily preparing for Christmas dinner. Bob Cratchit has few material possessions, but he has a rich life with his family, all of whom care deeply for each other. Dressed in their threadbare best, each member of the family has their own special role to play in the great ceremony. Scrooge is right there with them, participating in every activity. All his senses are alive again: the smell of goose and applesauce, sage and onion, and the steamy aroma of the pudding. After dinner, as the family sits in a circle round the hearth drinking each others’ health, he hears Tiny Tim, physically crippled but spiritually whole, give his brave blessing. The joy of community continues at his nephew’s house, his nephew who is now the only connection left with his dead sister. Indeed, the story is now about the development and sustenance of relationships. The small group entertains itself with music, song and games in which Scrooge takes part. Once again he feels at first hand what it is like to belong among a community of friends.
The Spirit of Christmas Future comes to Scrooge hooded and silent, part of the darkness, reflecting its mysterious, unfathomable nature. The future that Scrooge sees is a jumble of events, a series of scenes (we would call them scenarios today) in no particular order, and yet he has more control here than he had in either the Past or the Present. He is able to move about, to explore and to ask the Spirit to wait a while. It gradually becomes clear to him that the Future he is seeing is not something that inevitably will be: it is something that may be. The Future can be changed. And with the realization of what he needs to do to change and through an effort of sheer Will, Scrooge succeeds for the briefest of moments in grasping the spectral hand of the Future. “I will live in the Past, the Present and the Future”, he cries “The Spirits of all Three shall strive within me. I will not shut out the lessons that teach.”
At the end of A Christmas Carol then, we begin to understand our own condition. To have a shut-up heart is to be stuck in Time, to be chained on the treadmill of the Present, without an appreciation of Past and Future. It is to be locked up with our own concerns; senseless and separated from the community of others. It is to be obsessed with superficialities and abstractions, for our spirits, like Marley’s, never to rove beyond the narrow limits of our “money-changing holes”. We also gain insight into the nature of leadership and even of how change consultants might help the process. Leadership is about the recreation of community, about reconnecting the narratives of people’s lives: giving meaning to the past, explaining the present and supplying guidance for the future. The best leaders are continually aware of their place in time: they are always dealing with endings and beginnings. Too often, as managers, we just seem to muddle along in the middle.
There are crises a-plenty in our organizations and institutions today: but the message of A Christmas Carol is that in crisis there is opportunity. It is a sobering thought, but in that realization there is redemption. As Dickens put it, “Best and happiest of all, the Time before him was his own, to make amends in!” And so, as Tiny Tim observed, God bless Us, Every One!
Why does so much management advice sound reasonable but turn out to be of little value? Most readers will know what I mean. Take the following guidance on how companies can ‘accelerate their agile transformation’:
Create a C-suite with an agile mindset
Hire and develop the right mix of talent
Foster an agile-friendly culture and organizational structure
What’s not to like? Well, that’s the problem. The first test of any management advice is to ask, “Is the opposite also true?” If not, then the statement is a simple truism like each of those above. Clearly one wouldn’t want a C-suite with an anti-agile mindset nor a firm with the wrong mix of talent and so on.
Nevertheless, some truisms bear restating because they deal with priorities – necessary conditions – without which change efforts may fail. So, we should look at this advice more closely. The problem is that each of the sentences is a linguistic trick. It starts with a verb, which makes it sound like an action, but it’s really an achievement, a desirable outcome. This is why one can’t disagree with them. They are like cut flowers: the spectacular result of a creative process but not its cause. They are emblems of success, outputs not inputs. To be truly helpful these generic ‘whats’ will have to be turned into specific ‘hows’ – how to ‘create a C-suite with an agile mindset’ in this organization, in our situation, with these people, right here, right now. And that’s where things get difficult. Every organization is different: history and context matter. Priorities will differ and what works in one situation may not work in another. And in the end it will turn out that the cluster of attitudes we call an ‘agile mindset’, like so many other ‘success factors’, is itself an emergent property, a consequence of a successful change effort, not its cause.
Many writers gloss over these problems by treating corporations as if they were rational decision-makers, actors in their own right, with clear goals. Companies are said to have ‘found ways to infuse a higher-purpose calling into their culture’, they ‘leverage their core capabilities to enter new growth markets’ and ‘unleash the creative abilities of their people’. Personifying corporations as actors in their own right may be useful for headlines but it’s unhelpful when we are trying to understand cause-and-effect in complex systems. When The New York Times publishes a report that “Boeing Fired Its Leader” its journalists are using writers’ shorthand to report the outcome of a complex process, not to describe the decision of a lone actor.
What Is To Be Done? Grow Your Own Flowers!
Peter Drucker contended that a every business had two tasks: the one administrative, the other entrepreneurial. Administration is needed to make the today’s business effective (efficiency is a minimum condition) and entrepreneurship is needed to create tomorrow’s business. These are the twin elements of performance.
Unfortunately, these two activities demand different logics, the one analytic and the other integrative. Administrative logic is that of the engineer: breaking down complicated mechanisms into their elements, identify causes and optimizing the parts to improve the whole. Or perhaps it that of the plumber: clearing blockages and stopping leaks. Whatever the metaphor, it is an analytic process and it has been the default approach for Anglo-American managers for the past seventy years. It is necessary but not sufficient. Used on its own, it has been the root cause of a lot of true-but-useless management advice that ignores history and context.
For the logic of entrepreneurship is integrative, synthesizing rather than analytic. It is more like that of a gardener than a plumber, someone who brings together people and resources: selecting people for their growth potential and the contributions they can make and then creating and maintaining the conditions in which they can grow, individually and collectively. It’s about anticipating effects through pattern recognition developed through experience from the past, mixed with a vision of future. Gone are the clarity and certainty of administration to be replaced by the confusion and uncertainty of innovation.
The twin logics are often described as scientific management and humanistic management respectively, but the relationship between them has been a vexed one. As recently as a decade ago Adrian Wooldridge, Bagehot columnist for The Economist, described it as a ‘battleground’ between hard and soft management. Paradoxically, successful entrepreneurial activities have plenty of vision, leavened with strict observance to detail and process There is a complex dynamic between contradictory, yet interdependent processes. The result is dilemmas that have to be lived, rather than problems to be solved. With dilemmas, opposites are always true, depending on the context. To plan for the future we have to know the past.
Thus the practice of management is all about sense-making, using the integrative powers of narrative to make sense of the situation in which the enterprise finds itself, what the people know and can do and the actions the situation demands. It is about creating the conditions for emergence. It’s about helping individuals understand their own stories, make meaning from their experiences and anticipating what might happen.
Ancient Wisdom
This blog began with some simple truisms so it’s fitting that it should end with some profound truths. This is the wisdom from the past that, it sometimes seems, we have to keep on discovering and rediscovering through experience:
Over a century ago, management pioneer Mary Parker Follett (1868-1933), one of Drucker’s greatest resources wrote:
“The skillful leader then does not rely on personal force; he (sic) controls his group not by dominating it but by expressing it. He stimulates what is best in us; he unifies and concentrates what we feel only gropingly and scatteringly, but he never gets away from the current of which we and he are both an integral part. He is a leader who gives form to the inchoate energy in every man. The person who influences me most is not he who does great deeds but he who makes me feel that I can do great deeds.” (The New State, 1918)
And 1,500 years before Follett, Lao Tzu, the semi-legendary author of the Tao Te Ching, wrote something like this:
Over forty years ago I went through a management experience that changed my life and career path. The firm I was working for was taken over in a leveraged buy-out that went spectacularly wrong. For the next four years we managed through chaos to a new order, transforming people in the process. The HBR article I wrote and subsequent book became “best sellers” and set me off on a decades-long quest to understand what had happened to us and why.
Now, forty years later, I think I have a better idea of what the real issues are. It all begins with the acknowledgement that the tensions between scientific and humanistic management are part of a much deeper set of dualities that spiral throughout our existence as individuals, families, communities, organizations and societies. They have grown in complexity as our cultures and our institutions have grown more complex. They coil through philosophy in general and the history of management thought in particular. Here the dualities are familiar; exploitation vs. exploration, calculation vs. judgement, individual vs. team, performance vs. learning, detachment vs. immersion and so on and on.
To grapple with the tensions – the dilemmas and the paradoxes that underly them – it is helpful to adopt a dual-process approach to cognition. Such frameworks have been around since the beginning of recorded history, but they are more prevalent in Eastern thought e.g. Taoist philosophy, than they are in the West. This is starting to change e.g. Daniel Kahneman in his 2011 book Thinking, Fast and Slow. He, together with some other cognitive scientists, call them System 1 and System 2. System 1 a.k.a. ‘intuition’ is unconscious. It works fast, effortlessly and associatively and it is often emotionally charged. System 2 a.k.a. ‘reasoning’ is slower, conscious, effortful and deliberately controlled. It often follows rules.
Kahneman set out to show the flaws in System 1 and developed what has been called the heuristics and biases (HB) approach. It has been widely embraced by mainstream Anglo-American management thinkers, who are devoted to the Rational Choice Model and System 2. The HB approach has been criticized by people like Gerd Gigerenzer, who demonstrate the power of System 1 to make “fast frugal” decision under conditions of uncertainty. More recently I have learned of Gary Klein’s work on Naturalistic Decision Making (NDM) that throws light on what we mean by intuition. Klein has studied how experts (firefighters, emergency room personnel etc.) make decisions under conditions of time pressure, high stakes, inadequate information and uncertainty. He found that they do not identify options, evaluate outcomes and use rational choice models. Instead, they used their experience (personal and vicarious) to recognize patterns, simulate the results of actions and then act. Interestingly Kahneman and Klein wrote a paper together titled “Failure to Disagree”. In it they agreed that HB seemed to work as better approach in laboratory situations dealing with toy problems, while NDM was better in practice handling real ones.
In short, when you are trying to make sense of people, enterprises and management, history and context matter!
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.
In 2026, as AI reshapes management and volatility defines markets, innovation demands more than data or disruption – it’s about perceiving possibilities and acting on them amid chaos. Four concepts – sensemaking, predictive processing, affordances, and emergence – offer managers a practical framework to navigate this reality.
The contrast between the scientific and humanistic modes of inquiry has many precedents. Among my inspirations were the writings of psychologist Jerome Bruner, psychiatrist/philosopher Iain McGilchrist and many dual process theorists of cognition and emotion. Underpinning it all is the taijitu, the yin-yang symbol of complementary yet opposing forces that form a self-perpetuating cycle of the kinds found in complex ecosystems like forests and estuaries.
The Taoist yin-yang symbol suggests that the ‘yang’ component never went away. Rather, it was held in abeyance for use only in situations that demanded it
