The Hames Report

Avoiding Economic Collapse

As we enter the final quarter of 2019 the world economic outlook remains sluggish. Increasingly, another financial crash looks likely. This should not come as a surprise. It is entirely predictable.

Since the crash of 2008, we have ignored the possibilities for fiscal reform of any kind, carrying on business-as-usual like nothing needs to change. Yet conditions are far worse now than they were in 2008. And while our knowledge is greater, wisdom still eludes us. Institutional and individual greed is as rampant as before. Yet none of the fundamentals of the global economy have been modified in any way, shape or form.

The principal driver of the industrial economy - an unrelenting cycle of desire and consumption, stimulated by a quest for growth with energy generated from coal, oil, and gas - shows few signs of abating. We are addicted to materialism, yearning for more and more stuff in the hope it will make us happy. Governments fixate on delivering a surplus even as their economies stagnate. But personal anxieties only seem to deepen.

Meanwhile, early impacts from global heating, together with government dithering, have yet to be factored into our consumer-driven society.

Official responses have been typically orthodox and tardy. Current interest rates are trending to zero. Debt levels are going through the roof. Bond yields have inverted. Monetary policy is increasingly political. Cash is hoarded in preference to being invested. Unemployment levels remain high. US-China tensions are damaging international trade, sanctions are ramping up tensions in the Middle East, and we still have the uncertain joys of Brexit to look forward to. What could possibly go wrong?

Neoliberal orthodoxy suggests we simply ride out the current cycle, there being no other recourse. This is how a modern economy works, so we had better get used to it. But with economic populism and protectionism on the rise, it is surely time to re-evaluate this framework - particularly in terms of how it might be tuned to narrow the gap between the ultra-wealthy and the poor, so as to meet the needs of the human family more effectively.

It is also time to broaden our comprehension beyond the field of economics. In so doing we should aim to situate the global economy as one critical element in a much larger socio-political structure, whose role is to both define and validate a higher moral purpose.

But wait. This is an obstacle in itself. The utopian imagination seems to be trapped, along with capitalism and industrialism, in a one-way future consisting only of growth. The rise of libertarianism too, and the dogma of private ownership (accompanied by the erosion of public ownership) plays into the hands of an impending catastrophe. And capitalism is at the heart of this crisis.

If we are bold enough to evaluate the global economy from a social design perspective, tracing the evolutionary path of economics over the past century or so, we arrive at an alarming conclusion. The two most fundamental pillars of capitalism are culpable for most of the economic volatility we are encountering today. This will get worse if appropriate remedies are not taken soon.

Remove these constraints, however, and it becomes hypothetically possible to avoid many of today's most irksome social problems. But it also means facing up to two embarrassing truths:

1. The Illusion of Unlimited Growth

The promise of endless economic growth is a fantasy. Moreover, this particular fantasy is increasingly incompatible with the need to tackle the various emergencies facing our civilization - particularly the collapse of our most life-critical ecosystems, and the ingrained graft and corruption to be found in almost every country today.

Regrettably, the proposition that growth can be decoupled from material consumption is also absurd. We know from recent research that once a certain point is reached, the benefits of economic growth start to level off in terms of mortality, nutrition, education, health, and even happiness. But if growth no longer offers the benefits it once did and is actually becoming a blight on society instead, viable alternatives should be found and tested.

The first step, it seems to me, would be to ensure that growth is tailored to local conditions rather than being blindly accepted as a universal objective.

Given that energy from resources is used to manufacture the goods and services we all use, one key measure should probably be energy consumption. The state of Singapore, for example, uses around 271 gigajoules of energy per capita annually. Australians consume around 234 gigajoules. In truth, far less growth is desirable in those two countries than in Nigeria, for example, where consumption is around 30 gigajoules, or Bangladesh at around 9 gigajoules. Yet governments of all persuasions constantly crave higher and higher levels of GDP. This is sheer folly.

The progressively malignant effects of growth-based societal development have created a clear need to look at some different options. These would have to replace the persistent accumulation of money, and the pursuit of growth at any cost, which is at the core of today's neoliberal philosophy.

One possibility often canvassed, is a post-growth world-system that puts health, vitality and well-being - including everything required to sustain these - at the centre of human activity. Only when public outrage forces governments to balance parochial sufficiency with the needs of humanity as a whole will that kind of bold strategy be embraced. This problem is usually ignored or treated as an inevitable consequence of the way we choose to exist and interact.

The notion that continuous unfettered growth is unnecessary is a tough nut to crack. Requiring almost a spiritual conversion to accommodate such heresy, most orthodox economists dismiss such an idea as being either irresponsible or impossible.

If changing our beliefs about growth is fraught, acknowledging the validity of my second truth is perhaps even harder.

2. The Evil of Avoidable Inequality

Boosted by technological innovation and private sector investment, laissez-faire capitalism brought untold wealth to many nations, dragging social progress in its wake. It has since led to inequality on a massive scale. In spite of that, we still cling to the aspiration of becoming wealthier tomorrow than we were yesterday.

The origins of inequality can be traced back to private ownership which began to take root and flourish in Europe during the late 15th century and rapidly spread around the world. Land previously publicly owned began to be divided up into privately owned assets. This generated a system of economic stratification that benefitted owners over operatives.

It is inconceivable that the way we organize and manage the global economy is based on merit. There is no evidence to suggest those who possess wealth are more ingenious, smarter, or deserving than the rest of us. In any scheme designed to separate those who own the means of production, from those employed purely for their labour, inequality is almost guaranteed. As a result, the wealth generated in our society is increasingly and unfairly concentrated among a privileged few - a majority of these in the most developed nations.

This concentration means the 26 richest billionaires own as many assets as the 3.8 billion people who make up the poorest half of the human population. The personal fortune of Jeff Bezos, the owner of Amazon and the world's richest man, at around $112 billion is equivalent to the entire health budget for Ethiopia -  a country of 105 million people. Meanwhile, tax systems that put a high burden on the poor mean public services are underfunded, stretching the gap between rich and poor while fueling public anger.

Inequality of income and wealth is not good for anyone. Even Henry Ford understood that the consolidation of wealth and capital in so few hands was both economically inefficient and socially disruptive.

There is no doubt that growing inequality is one of the biggest potential challenges the world is facing. Solutions ultimately depend on the contraction of economies in the developed world, downscaling both production and consumption globally. We also need to consider putting a cap on the accumulation of individual wealth and regulating corporate pay and rewards, while optimising happiness, health and well-being through various non-consumptive means.

There is sufficient slack in all developed economies to pursue such a path. Consuming less, while devoting more time to art, music, family, nature, culture, and community, doesn't seem too bad a deal to me if it means reducing the stress on systems never intended to cope with the demands of 7.676 billion people.

Unsurprisingly people are angry about inequality and unfairness when they see an ever-larger slice of the cake going to the rich, while the poor are expected to survive an age of austerity in the best way they can. Opening our minds to reinventing the global economy from first principles, will not please everyone of course. As Mahatma Gandhi said: Earth provides enough to satisfy every man's need, but not every man's greed.

 

Staring Down the Barrel

I have spent the past few months reviewing as many peer-reviewed analyses of our changing climate as I could get my hands on, from a broad variety of perspectives. I have also watched in the region of 60 videos. I am not a scientist, and much of the scientific literature is far too technical for me to fully grasp. And, for the purpose of this short briefing I have ignored what are still regarded as uncertainties - like the rate at which methane hydrates might be released, the impact of slow feedbacks, and the Albedo effect, for example. I thought it safer to draw my conclusions from evidence based on simple maths and physics.

I also reviewed opposing evidence by a relatively small number of climate deniers. Most of the arguments in their presentations are unscholarly, and some demonstrably misleading, in that they either ignore the available data, distort it, or just use it selectively to make a point that ultimately is academic.

So, setting aside existential fear-based denial, lack of knowledge, wilful deception and vested interests - taking into account that which we still do not know or fully understand, around 4%  of the scientific community still have concerns regarding the veracity of explicit claims made by their climate scientist colleagues, as well as unease voiced about the funding underpinning such climate research, and dismissing the ramblings of a few unhinged psychopaths - several critical themes have become abundantly obvious to me. None of this is fiction:

• Nothing New: The Earth’s climate is constantly changing. Although life on our planet has survived large climate changes in the past, major destruction and the elimination of species, has been associated with at least five events where rapid heating was a major cause of a mass extinction. This is the story the scientific community has been trying to convey to governments for at least three decades. At times their communication has been perplexing and intentionally nonalarmist. But overall their message is crystal clear - laid out in thousands of peer-reviewed papers by reputable climate professionals. Continue to emit carbon dioxide at current levels, and the world will eventually become toxic to human life.
• Extinction Threshold: The generally-held scientific view is that 2°Celsius is the point at which mass extinctions have occurred in the past. Once that threshold is reached, the ensuing instability causes wind and ocean currents to slow, which causes seas to become stagnant. Instead of producing oxygen the oceans generate hydrogen sulphide gas. Food systems fail, and temperatures increase twice as fast as the global average. In our modern world this fact alone means millions will starve, creating many more millions of climate refugees, and the world economic system, already demonstrably fragile, will collapse.
• Carbon Dioxide: Scientists have consistently warned that we should not exceed 350 ppm [parts per million] of carbon dixoide in the atmosphere. In May 2018, across the entire month, we reached 410 ppm for the first time in over 800,000 years. Furthermore, this rate is now increasing exponentially. The level of 450 ppm equates to a rise of 2° On our present trajectory we are set to reach that level in around 10-15 years from now. By the year 2050 we could reach 550 ppm. This would probably bring about the breakdown of human society, unless immediate action is taken to prevent such a catastrophe. If you do not believe me just do the maths....
• Doing the Maths: Current temperatures are now acknowledged to be 1.2°Celsius higher than in pre-industrial times. An estimated further 0.6°Celsius is locked-in from already emitted carbon that has yet to impact temperatures. This increase will result in the arctic being ice-free in summer by 2028 and ice-free all the year round by 2040. That in itself will create an additional 0.5°degree of warming. That makes a total of 2.3° By 2040! Just 21 years from now. Remember this takes into account only fast feedback loops we currently model, not the slow feedback loops we are still trying to understand, which could precipitate much faster rates of warming.
• Mindful Uprising: In order to avert planetary devastation on a scale both unprecedented and overwhelming, we need immediate action on three fronts:

1. We need to rise up against political systems that remain in thrall to short-term commercial interests and economic growth at all costs.
2. We must demand that every politician places climate action at the forefront of their duties to secure the future of our species for generations to come.
3. We must now put our collective faith and resources into geoengineering and climate mitigation research.

In terms of the latter point I do not mean the widely-promoted delusion of “clean coal” – an idea irresponsibly promoted by old smokestack industries and their lobbyists, and an example of why we need a new socio-economic paradigm - so much as widespread deployment of extensive air capture technologies to remove carbon dioxide from the atmosphere, ocean fertilisation, carbon sequestration, afforestation, and solar management techniques, like the injection of aerosols into the stratosphere. This conclusion runs counter to everything I previously espoused. All of them carry some degree of risk. At this juncture the risk of inaction is greater still. In fact, we have nothing and everything to lose.

 

The Preventers

Over a lifetime of meeting people, facilitating search conferences, and curating conversations that matter, there is one human frailty I constantly encounter and that still irritates me. In an age when reciprocity creates value, cooperation is key to getting things done, and connections are critical, I am weary of the way so many people seem to go out of their way to block opportunities and prevent things from happening.

They are not necessarily individuals. They can be processes designed in such a way as to hinder or confound - expendable rules, bureaucratic minutiae, ambiguous contractual conditions, and even the kind of telephone games used by many business corporations these days. You know the kind of thing: Your call is important to us. Please hold the line and we will test your patience by transferring you from one set of instructions to the next without so much as bothering you with a single intervention from another human being! Press 1 for further information or 2 to hear these instructions yet again…

Whether they are people or processes I call them the preventers.[i] A preventer controls access to an individual or group of individuals, ensuring they are not disturbed or diverted from the task at hand, or channels behaviour a certain way. Sometimes these preventers are ordinary people going about their jobs as briefed, although they do not need to do it with such excessive smugness. At other times their need to offend is blatant. They get in the way, slow things down, and stop things happening, exhibiting prodigious ignorance, and a sense of self-importance that, in my experience, is utterly unwarranted.

The preventers are typically procurement personnel, personal assistants, political staffers, lobbyists, secretaries, editors, university admissions officers, advisers, bodyguards and various other aides-de-camp. But increasingly the real culprits are the celebrities, office-bearers, executives, directors, and business owners themselves.

Preventers are most clearly visible in contemporary politics which has descended into a desperate and dysfunctional state. Policies that do not obviously further the narrow interests of parliamentarians, by protecting their ideological base, building their empires, or stroking their egos, are disregarded. As a consequence governments of every persuasion routinely fail their citizens while ignoring the plight of future generations. There is no vision of what might be possible, no time for bipartisan reflection, nor coherent inquiry. Intellect, foresight and moral fortitude have been edged out in deference to a combatant media cycle that seethes rather than informs, and from which there is no escape.

Public life is conducted in a permanent state of fight or flight. This environment rewards conflict, real or manufactured. So politics dishes up conflict as a substitute for evidence-based policy, over and over again.[ii]

Let me explain my deeper concerns about the spread of these preventers with a few personal cases…

1. Ignorance. Two weeks ago I reached out to the Chief of Staff of a public official I had been trying to contact without much luck. I explained to her that there was a golden opportunity to bring a unique international event of potentially unparalleled significance to the city in which I live. I assumed that the Mayor would be keen to support this. But I was chastened by this Chief of Staff who told me that I should contact her again when my planning was more advanced. While I have no reason to doubt this particular gatekeeper’s knowledge or professionalism I am aggrieved that so many possibilities have been forestalled by this decision. The lesson? The degree of authority and self-regulation assumed by some gatekeepers can stall any proposal that does not immediately make sense within that person’s own limited frames of reference.
2. Convention. A few years ago I was asked to help a government department choose a consultant in the field of my expertise. This request came directly from the Department Secretary who was a close friend. I agreed to help and examined the Tender document at length. It was clear to me from the outset that the writing of the Tender document had been slanted in favour of a particular company that charges excessively for its services but is universally recognised as the most prestigious of the large consulting practices. When I pointed this out to the manager of procurement he promptly complained to the Secretary that I did not understand the sensitivities surrounding this assignment and should therefore step down. Not wanting to embarrass my friend I concurred. The consulting firm in question was awarded the contract. According to several sources the consultants caused immense cultural damage yet went on to win further Tenders in other departments with intact credentials. The lesson? The finest advice, and the most profound wisdom, is routinely denied to those most in need of it who defer instead to suppliers offering convenience, agreeable solutions and, by virtue of their repute, tacit insurance should anyone dare challenge their legitimacy.
3. Selfishness. Some time ago I reached out to a colleague in my own field of expertise using the popular LinkedIn site - inviting him to connect because of our mutual interests. He declined, given the fact that he did not know me and we had not been properly introduced. Only later did I discover that he had just seven contacts on LinkedIn and that these were all venture capitalists. Clearly this person does not appreciate the role social networks play in this day and age. Connecting with others in a spirit of generosity and reciprocity was a foreign idea to him and clearly not as important as following the rules. The lesson? Many people still do not comprehend or appreciate the benefits of social media when some form of financial advantage is not explicitly part of the impulse to connect.
4. Condescension. A few weeks ago I was contacted on social media by a 19-year-old man from Iran. It was evident from his message that he was quite well educated. It was also clear that he was not a troll trying to take advantage of the medium to defraud me of a few dollars. He had heard about me, had at least skimmed through my credentials, was clearly fascinated by the field of foresight, and wanted some career advice, which I was pleased to give him. He then sent me another message stating how surprised he was that I had replied to him in the first place. Apparently he had targeted quite a number of people with similar requests. They either ignored him or sent him a curt reply saying they were far too busy to bother answering at length. The lesson? In the communitarian small-world milieu of contemporary life there are still people who believe that others either exist to meet their needs or may as well not exist at all.
5. Narcissism. Last week, hoping to meet with someone I have long admired during my forthcoming visit to the US, I received a brief message to my inquiry. Apparently this particular individual had far more pressing engagements and was consequently too busy to see me. The lesson? I discovered that my work is of no consequence to this person and that he is either too lazy, too caught up in his own dramas, or too full of self-importance to meet for a few minutes, even though I am hardly ever in the US these days and will be within cooee distance of his office for a total of six days and nights!

The first two examples above are part of a well-documented occurrence – the agency dilemma. This arises when one individual is able to make decisions on behalf of, and that impact, other individuals. Common examples of this relationship in a collective sense include politicians and voters, corporate management and shareholders, or brokers and markets. The agency dilemma arises in situations where agents are explicitly motivated to act in their own best interests, rather than those who they represent. Take divorce proceedings, for example. At a time of such stressful sadness I might wonder whether my lawyer is recommending protracted legal proceedings because it is vital for my own well-being, and that of my dependents, or because it will generate additional income for his practice.

But my final three examples are part of a growing phenomenon that should also concern us. I call it the entitlement bubble – the retreat into a pathological form of narcissism that arises from pressures to comply with the established order even when that system is felt to be in a state of deterioration or collapse. These individuals consistently pretend to be more important than they are, often convincing themselves of their perfection, relative to others, and consequently entitled to favourable or special treatment.

I relate these five episodes merely to point out that the codes, instructions, processes, protocols and underlying assumptions we commonly use to engineer change, channel energy, secure advice, contract appropriate services, or simply get non-routine things done, often impede us, blinding us to the imperatives of systemic change and preventing beneficial relationships from forming. Indeed they may result in isolation, exploitation, an uninformed defense of contrived boundaries, and agenda-setting that is both trivial and misleading. Meanwhile the potential for great work, such as the collective invention of a more humanitarian worldview, is belittled.

Surely life should not be so difficult, particularly given the enabling technologies we have at our fingertips these days. Perhaps we are fooling ourselves by wasting time and money constructing rules that are not only inefficient but can lead to inertia and the squandering of resources. Perhaps all we really need are transparency, humility, and a less confining attitude to connecting and collaborating with each other.

 

[i] A preventer is a mechanical device on a sailing vessel which limits the boom’s ability to swing unexpectedly across the boat due to an unplanned accidental jibe.

[ii] In the fight club of Australian politics, the public suffer the knockout blow - by Katherine Murphy, The Guardian, 19^th February, 2017

Peddling in Used Futures

This stunning 1991 Holden Torana has to be seen to be believed. Only 230,000 kilometres on the clock and running like new. Clutch sticks occasionally and 2nd gear inoperable most of the time. New tyres and brake pads also needed. Small persistent oil leak but super clean leather interior and bright orange custom trims. No scratches on bodywork. Only one owner. Genuine bargain for someone who appreciates character and is willing to overlook a few minor flaws. Ideal for a senior citizen.

I have no idea what your reaction would be to this sales pitch. Personally I am not gullible enough to venture anywhere near this car. The advert shrieks of a cast-off wreck that would not make it out of the parking lot. Yet of one thing we can be sure. It will sell. There are always buyers looking for good deals. Some might even be duped - beguiled by the shiny exterior but failing to look under the hood.

You can snigger. We all know someone who purchased a second hand car at some stage, only to find out that they had bought a lemon. Such disasters waiting to happen are commonplace in the field of management consulting - especially when it comes to helping an enterprise prepare for its future.

For example, it recently came to my attention that one of the most eminent management gurus in the field of people and culture (he still quaintly refers to this as the HR community by the way) is marketing his management consulting prowess in the field of future human resources strategy. The irony is that his advisory work and research capabilities are clearly predicated on a few obsolete assumptions about how large corporations work (or should work) today. They betray enormous gaps in comprehending how work and the workforce is changing, and likely to change still further, over the coming decade.

There is absolutely no public evidence to suggest he and his colleagues have any appreciation of how new economies, social media, peer production, knowledge commons, co-working environments, disruptive innovation, social entrepreneurship, real-time planning methods, digital platforms, impact investment, networked data, artificial intelligence, the blockchain, or a myriad other factors, will turn his current assumptions inside-out and upside-down, thereby rendering his prior experience, and therefore his advice, utterly irrelevant.

His pronouncements on the changing nature of work are naïve. He speaks of leadership as though it is an advanced form of management. He talks of organisational development as though it hinged on training, and appears to view talent management through the eyes of a third-rate Hollywood agent. And yet this man is a highly-regarded professor. An award winning international consultant. Author of over 200 articles and 25 books. An acknowledged global authority in his field. In reality he is little more than a dinosaur in a digital world.

He might not realise that of course. But neither do his clients. And so it is highly probable they will pay him hundreds of thousands of dollars to give them strategic advice about how to prepare for a future neither of them truly comprehend – advice that could so easily damage their capability, and dent their confidence, to conduct business in a world turned upside-down.

In other words his worldview is grounded in outmoded ideas and theories. Although he may have known what he was talking about a decade ago, he has become a used futures salesman. In another career, with a slightly modified spiel, he could easily be the author of my used car advertisement at the top of this piece. For in spite of the fact that his lexicon is old-fashioned – actually quite probably because it is old-fashioned - his combined expertise and gravitas will doubtless create an aura of proficiency that speaks to many. But purely because of their mutual ignorance.

Meanwhile seriously competent foresight practitioners with extensive knowledge of current patterns and future trends abound. People capable of accurately helping any business through the maze of innovations, new regulations, and mindblowing disruptions that are occurring in the broader business ecosystem. People who remain under-valued and under-utilised. Foresight practitioners who are disapassionate witnesses of the future today.

So let me pose a serious question. If you are the Chairman, CEO or a senior executive of a large commercial enterprise, operating in a fiercely competitive and complex business environment, faced with critical uncertainties, and in need of accurate strategic insights regarding the future of your workplace, who are you going to call? The equivalent of a used car salesman who happens to have an illustrious international reputation based upon prior knowledge? Or someone who really does understand the future?

The Nakedness of the Emperors

It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so - Mark Twain

We all know what leadership is don’t we? It’s common knowledge. We can identify leaders by their demeanour, the language they employ, the position they hold, their confidence and charisma, as well as the cut of their clothes. Also, let's face it, most of them are men. Too easy!

Wealthy and connected, these top executives, industrialists, celebrities and politicians are to be seen on television most nights of the week, beguiling us with their slick assurances, sedating any impulse we might have to question their entitlement to tell us what to do. Imperious, imposing, yet so often caught defending the indefensible, arguing an untenable case, deriding their competitors, or simply imploring us to vote for them in the next election, they nevertheless lead and we dutifully follow.

But is that really what happens? Or are we missing some other factors here? Personally I believe real leadership is a phenomenon that is in danger of going extinct. I will tell you why....

In the past we tended to associate leadership with visionary change and innovation. Sometimes change of that kind is disturbing and can be acutely uncomfortable. But psychologists tell us it is really the thought of having to change that scares us most - rather than change itself which is, after all, a natural and continuous part of being alive. We adapt all the time – consciously or not. Nevertheless, in the face of imposed change, especially when disinclined to face any hardships that might accompany variations to the humdrum coziness of our current existence, we seek less scary alternatives, and push back again those that seek to usher in change.

A majority of social scientists agree that one of the many ways members of a group, organisation or community can push back against (or delay) the “threats” posed by radical change, hoping to preserve a more comforting and relaxed life in the process, is to seize upon any distinctive lexicon associated with a new model and use this to give the impression that the espoused change is already acceptable and accepted. An illusion is thus formed, at least to the casual observer, that change has been willingly embraced when the opposite is actually true.

Since the 1950’s the praxis of leading has been misappropriated in service to the procedures and protocols of managing and organising. The story of how managers supervise, motivate and instruct their staff within the daily routines of organisational life, reveals a startling and sudden shift in thematic emphasis around this time - a shift reflected in the market for published books on business and management - that confused leadership (a social phenomenon involving many people) with management (a set of supervisory and resource allocation competencies deployed by individuals and work teams).

The blurring of leading with managing - two entirely opposing concepts - was particularly popular among HR and training professionals. This was no accident. In some ways it was to become a semi-conscious form of propaganda designed to capitalise on the high levels of industrial productivity following the end of the 2^nd World War. It was also convenient in keeping a fragile status quo intact so that the vital job of post-war reconstruction could be undertaken. Excellent management was demanded. And anything that could be co-opted into the discipline of management was. Including leadership!

The final nail in the coffin of genuine leadership became evident with the international success of a prescriptive management model called Situational Leadership published by Paul Hersey and Ken Blanchard in the late 1970’s. This overly-crude reinterpretation and dumbing down of leadership as a management tool was immediately taken up by the business schools and propagated by successive waves of trainers and consultants who saw the opportunity to make a quick buck.

But the vulgarisation of leadership in this manner was to have dire and unforeseen consequences for which we are still paying. For one thing it stamped out creative dissent and the imagination so badly needed by industry to stay ahead in a world where global competition was becoming intense. It took the idea of competitiveness and installed it inside the enterprise. Worse still it shone the spotlight on hierarchy by putting individual managers and their financial controllers, all of whom came equipped with a default "scarcity" mindset, on a pedestal. This inevitably slowed decision-making. By equating risk with financial management a culture of caution became ingrained to the extent that instrumental competence became the source for much management (and leadership) development.

One must also remember that all of this was happening at the same time continuous process improvement was fast becoming the favoured management fad – thus reinforcing a focus on statistical process control, precision, and discipline. And in spite of the fact that Dr. W. Edwards Deming – one of the doyens of Total Quality Management - made a case throughout his career for the reinstatement of genuine leadership, as distinct from management, his arguments were largely ignored, deliberately misunderstood, or fell on deaf ears.

Today, to all intents and purposes, the social experience of true leadership is at best irrelevant and usually a nuisance. More often than not is justified as a surrogate for advanced forms of people management in which the only protagonists are individual leaders and a chorus of followers. Meanwhile the gritty, audacious, persistent, if occasionally unpalatable, but ruthlessly inspiring adventures of true leaders have been lost in the catacombs of financial managerialism without so much as a simple ceremony to mourn their passing.

Apart from a few recognisable outliers like Steve Jobs, Mother Theresa, Nelson Mandela, Gandhi, Aung San Suu Kyi, Malala Yousafzai, Pope Francis and the Dalai Lama for example – unexceptional individuals who morphed into leaders by dint of their burning beliefs and sheer obstinacy, rather than the possession of any distinctive expertise - combined with conditions that were conducive to their emergence but over which they had little or no control, genuine leadership is a rare commodity these days.

This is a huge problem for humanity because genuine leadership, legitimately undertaken, is an imperative if we are to tackle the existential problems facing humanity. Sadly we have become lazy in our use of language and complicit in tolerating interpretations of leading and leadership that are insipid, erroneous, uninviting versions of their authentic spirit.

Thus, while people in positions of authority, and others able to wield power in one form or another, are designated leaders and persistently characterise themselves in this light, a fact which we then unconsciously reify by failing to challenge that silly notion, they often lack the humility, humanitarian ethos, empathy, collaborative instinct, integrity and resilience to participate in the socially beneficial experience of leadership phenomena.

In part the concept of leadership grafted surgically onto the more vital and living stem of management continues to be deliberately cultivated. Most conveniently it avoids disturbing the status quo, thus circumventing the ills we assume could be unleashed by having to deal with the unsettling and uncertain changes genuine leadership invariably brings in its wake. The idea such changes might also usher in new meanings and a revitalised purpose concerning what it means to be human (in an age already dubbed “the anthropocene” from the human-generated activities we casually impose on the Earth’s ecosystems and climate) in addition to profoundly exciting possibilities for a future that benefits everyone, is almost always never contemplated.

As a consequence the default position of our obsession with equating leadership with management is entirely negative. While we contend that we need more leaders, in addition to more compassionate leadership, we remain fearful of what might actually ensue that will cause us personal inconvenience, aggravation or loss.

The fact is we remain fearful of the changes genuine leaders might implement for one absurd reason: we have been constantly brainwashed into believing that such changes will diminish us in some form. If change hurts, is difficult to implement, feels strange or seems unnecessary, we work hard to repel it. And so we resort to various ploys in order to keep leadership at bay - sequestered in some latter-day Pandora’s box we dare not approach, let alone unlock, even if we had the key.

The vacuum thus created is rationalised away. On one hand we yearn for leadership - but reject it with the other hand.

As previously noted the most common trick is to equate leadership with management, thereby neutralising its potency for motivating even conscious evolution. But there are other deceits we can and do use. One is to qualify the term leadership in a variety of ways to create an illusion that leadership is indeed the subject and, exactly like management, can be coded, taught, bought, replicated and exploited. Situational leadership, transformational leadership, visionary leadership, strategic leadership, servant leadership, team leadership, transactional leadership, cross-cultural leadership, technical leadership and values-based leadership, for example, are all slightly dissimilar ways of approaching the vagaries of administering the human element in any organisation. They are based upon legitimate theories of supervision and control.

Even though the authors of these methods will abuse me, such well-known products and approaches have absolutely nothing to do with leadership per se yet everything to do with management. Leadership is an unruly savant. Dangerous and volatile it can not be taught, nor can it be pressed into well-ordered schemes, competencies, charters, inflexible protocols or politically correct frameworks.

Yet another ruse is to confuse the designation leader with a prerequisite for particular skills, knowledge or experience - a concept inherited from and applied in the context of management and enthusiastically promulgated by the head-hunting industry - or to equate a leader with anyone who has some form of executive authority in managing an enterprise, government department or political party. To anyone who is familiar with the current obsession with bland MBA graduates, all of whom seem to possess an actuarial mentality, this is laughable. That it is treated with such gravitas in the corridors of power should be a real cause for concern.

Whereas management is all about process performance, practical provisioning, and the confidence to configure and organise resources in ways that lead to the efficient execution of agreed plans within normative operating conditions – leadership was never intended to be about such activities. It is negligent to regard leadership purely as a way of imposing or inspiring change on others. It is so much more than that.

To be blunt leadership has nothing even remotely to do with management. And while we might find individuals who are capable of both managing and engaging in leadership, the latter should not be construed as an advanced control mechanism, even though this is implicit in the functional way "leadership development" is still perceived and advocated by a majority of large organisations.

Leadership should be an engaging, disruptive, audacious, playful and inventive state of being. An action-narrative with its own unique twists and turns. The capacity to engage in leading is not even something that individuals possess in isolation. In a very fundamental way the truest expressions of leadership are to be found in the mutually cooperative capacity of social systems to effect improvement to one or more aspects of the human condition for everyone’s advantage. Furthermore, while we often refer to an individual who facilitates such life-changing phenomena as the leader, the resulting experience of leadership is invariably a collaborative undertaking – the efforts of many rather than that of any one persona. In other words leadership is a social process and a collaborative experience.

When framed in this way it becomes obvious that management and leadership are the most unlikely of bedfellows. For while managers try to get the best out of the resources they possess to benefit a small group of designated stakeholders, leaders are part of a crowd, intent on making the world’s most life-critical systems work better for everyone.

Clearly the tensions embedded within these distinctions are palpable. They tug us in conflicting directions. In other words the two concepts are diametrically opposed to one another. For while management juggles within the dynamics exerted by current conditions, leadership seeks to escape those same forces in order to shape alternative possibilities. Indeed the idea of escape velocity - the energy required to overcome the gravitational pull of an overpowering present-to-past dynamic - is what fuels both the impulse and the capacity to lead and to engage in leadership.

Looking back on today’s so-called leaders it is easy to spot their nakedness. Unlike a solitary Icarus flying too close to the sun they fall to earth in the full glare of the media. Not having all the answers at their fingertips may account for their hesitation and their dented pride. Lacking the capacity to comprehend complex dynamics causes them to dither and procrastinate. Unable to communicate their deepest feelings without a script or an autocue reveals only empty husks of latent humanity. The truth is our emperors have no clothes. And in the end that makes us all vulnerable.

The Great Management Swindle

There are three things that can be said about human knowledge with total conviction. All of it is interpretation. Much of it is temporary. And a great deal of it is fallacy.

Management knowledge in particular has a habit of being shaped by errors of logic and flawed judgments that distort our comprehension of the impulses underpinning human performance. Management practices that may have come relatively close to the truth at some stage eventually lose their validity, occasionaly becoming absurdly irrelevant in a changed environment. There is no greater delusion in the entire management literature than that of high performing teams.

During the mid to late 20th century teams were all the rage. In every business school across Europe and the US it became de rigeur to extol the virtues of teams. Countless programs were devised around teams and teamwork including how to extract the best performance from team members. There was no hesitation in adopting the new credo. No doubts were entertained about the effectiveness of teamwork in spite of evidence suggesting not many teams generated even adequate results. The philosophy of Total Quality Management and associated methods were constructed around teams. Games were designed to prove that teams consistently produced more robust solutions to complicated problems than any individual could. Great companies invariably grew from the efforts of the executive leadership team - or so it was alleged. Panacea for some, a four-letter word for others, the notion of teamwork took off with all the force of a Formula 1 car leaving the starting grid in a business community constantly searching for the next big idea.

Of course working in teams was (indeed is) more than just a passing fad. In industries like manufacturing, for example, teams have been the most widespread operating unit since the invention of the production line. Teams, after all, imply employees pursue a common purpose, access a diverse range of expertise and skills, and work to optimise the potential of a process, project or enterprise. All good one might suppose.

But then a coalition of organisational psychologists and social scientists stepped in and conceived an entirely new function: that of the team facilitator. Large consulting firms were quick off the mark in responding to this potentially massive new market. If teamwork was to become in vogue they had at least to develop a value proposition facilitators could use without much thought. A compelling metaphor they could use to sell the concept was a given. And, boys being boys, many of whom had only recently graduated from the playground before joining the big firms, they latched onto a simple idea more convincing than any other. The sports team.

All the elements for a major fraud were now in place. One of the most blatantly false misinterpretations in the entire history of management science was created. By linking teamwork to group dynamics and the art of winning, a few social scientists, not to mention legions of consultants, conspired to define the product. Over time they would establish the character of teamwork; dictate its most important attributes; determine the optimal size, composition and behaviour of a team; and offer process roadmaps for every eventuality - from incremental improvement to problem solving, culture shaping and innovation. They were also quick to design psychographic instruments aimed at measuring the entire kit and caboodle - from each member's volition to a team's overall operational efficacy and supposed value to the enterprise.

At this stage to ignore the operational efficiencies obtainable from using teams was considered to be negligent management. Suddenly a huge variety of different groups posturing as teams burgeoned. They included cross-functional teams, leadership teams, policy teams, assurance teams, train-the-trainer teams, audit teams, executive teams, command teams, project teams, work teams, action teams, bootcamp teams, quality teams, advisory teams, multidisciplinary teams and, more recently, virtual teams and cross-border teams... The list was endless. And naturally each one of these types of team required its own architecture, ethos and toolkit. Consulting firms and their team facilitator clients were like pigs in mud. Teams were cool. Meanwhile the focus on teamwork also became the salvation of a human resources community badly in need of reinvention.

Very rapidly a new hypothesis about how best to organise and manage groups of employees had taken hold, twisting our understanding of operational effectiveness into impenetrable knots that seem almost impossible to disentangle. Teams acquired an air of grace. A dubious situation at best became even more entrenched as previous experience, observation and common sense were all made to fit the new trend.

Most of the theoretical background supporting this new generation of teams and team work came from just a few organisations, like the Tavistock Institute in London, as well as individuals like Meredith Belbin, David McClelland and Wilfred Bion.

Then in 1965 Bruce Tuckman advanced the theory of how the maturity required by teams to tackle progressively tougher problems followed a consistent path. Four elements were identified as the model growth path: forming, storming, norming and performing. Paul Hersey and Ken Blanchard later closely imitated Tuckman's formula in their model called Situational Leadership. At one stroke the knowledge base for effective teamwork and its management was impregnable. Like Hersey-Blanchard, Tuckman assumed that as a team developed its capabilities, so relationships and leadership style should change to suit the new circumstances. And because the improved maturity within a team supposedly took months of expert moderation, professional facilitators found their diaries crammed with engagements.

And why not? It all sounded so plausible at the time. It was especially appealing to senior line managers who had little time to reflect on anything other than meeting their targets.

Hordes of consultants and legions of doyen facilitators designed their approach with Tuckman's sequence in mind - often convincing executive leaders to wait months for a team to mature to a point where it could be self-sufficient. Except that it hardly ever did - so reliant had teams become on wet-nursing from their preferred suppliers.

It is human nature to see what we want to see and believe what we want to believe. It is my belief that literally hundreds of thousands of executives are hoodwinked into trusting processes for team development that bear little relationship to reality. It is a commonplace deception and costs business millions of dollars each year.

Because I am unsure as to how effective Tuckman's sequence would be with geriatric and mentally-impaired groups or in a kindergarten I am unable to pronounce it sheer nonsense. But in a context where the urgent need to liberate the collective potential of intelligent and talented people is a critical performance factor, his theory makes no sense whatsoever in today's corporate environment. However well-intentioned, it is an overlay that can be a dangerous distraction.

Many times I have quietly despaired as benevolent facilitators, focusing above all on creating a feel-good factor so that the organisation returns to them again and again for security, err by fashioning a process based upon Tuckman's sequence. In every single case I have witnessed, and there have been many over the years, this process turned into a self-fulfilling prophecy, actually holding back and stunting organisational potential. This was invariably attributed by the facilitator to the relative immaturity of the teams they were working with and subsequently used as evidence of the need for even further team building and development.

Facilitators come in various shapes and sizes of course and it is not my intention to belittle the entire profession nor to label each and every single one of them deceitful. There are always a handful of true masters amidst the dross although most of these, in my experience, are women. Ironically it is the macho superstars of the facilitator circuit, smart people who really should know better, that can cause the most psychological damage to their clients. Offering not much more than palliative care to the all-but-lifeless body plugged into life support, they keep their clients anaesthetised through an entertaining narcissistic theatre.

A theory is only as good as its exceptions. And the theory proposed by Tuckman does not stand up to scrutiny outside of a very narrow spectrum. It reduces the most subtle interactions and relationships into a formulaic two-by-two matrix that grossly distorts reality and is actually utterly misleading.

Human performance is not absolute but relative - to context as well as the nature of the competition. This competitive factor is undoubtedly why sporting metaphors gained so much traction with business executives. They were effortlessly grasped and therefore eagerly adopted by those looking for a simple model with universal appeal.

But therein lies a paradox. Sport is actually a terrible metaphor for business. Sport is simple in terms of its context, intentions and rules. Social and organisational dynamics in the world of business, together with the global context in which these now come to life, are anything but simple. Business has few equivalents to any team sport. Even at its most basic, business is about much more than just winning or losing. Business organisations are schemas of prolonged subtlety and extreme complexity in comparison with sporting events. The goal isn't as simple as scoring more points against the competition. Nor should it be forgotten that games are conducted in impulsive bursts of energy rather than via protracted engagements with potentially millions of people, most of whom we will never actually meet.

The aptitudes required by today's executives are not in the least bit compatible with the fitness, timing, spatial and coordinative skills demanded from sports luminaries. Whereas the rules of any game are constant, business executives work within complex business ecosystems where the rules are constantly shifting. This is why following a formula, or a sequence of steps like Tuckman's, can hardly ever guarantee success. On the sports field a coach can dictate play. The sports team does not need to convene a debate to agree on their goal. In business such discussions are essential. However one looks at it the sporting analogy fails on every count.

There are alternatives of course. In recent years Fred Emery's Search Conference, Harrison Owen's Open Space and David Cooperrider's Appreciative Inquiry, for example, plus a host of others from World Cafe to unconferencing and meshworked co-design, have all used flexible processes to open up dialogue around complex, contentious or strategic issues with groups from between 10 to 1,000 people. Results from these processes are usually at least as beneficial as those generated by executive managers and often transcend the rather awkward, banal, propositions originating from so-called expert teams.

To be honest the most energising, satisfying and productive conversations in which I have personally participated were largely unstructured to the point of not even having an agreed agenda. The process needed no management - prior to, during, or following the dialogue. Leadership was shared. Engagement was unqualified while novelty ran deep. These electrifying and inspiring conversations typically started and finished without external intervention or guidance of any kind. The sole pre-requisite for such an experience is a group of intelligent individuals, each of whom is eager to contribute to a productive dialogue.

In many cases, with the possible exception of work teams solving quality issues on the factory floor, informal group meetings of this kind - where a program or a theme evolves as the creative outcome of a wide-ranging discussion rather than as a pre-determined input that constrains free-range thinking - are invariably preferable to formally-administered teams. They manifest confidence, achieve fascinating insights, explore a range of salient features, solve deeply ingrained problems with design thinking, and clarify what really matters when the strategic focus becomes too dispersed or diluted.

Corporate performance, whether it be success or failure, is incredibly difficult to quantify. Innumerable business books, case studies and articles claiming to provide a framework for business success are usually grossly oversimplified and inadequately researched. Misleading conclusions about a company's management competence and organisational performance can so easily be drawn from marginal or temporary factors where mere correlation is misconstrued as causality.

Perhaps it is time to start believing in ourselves. To trust what we see with our own eyes. To develop the confidence to work effectively together without the need for the many crutches and feeble metaphors that are a burden on an organisation's ability to think and reflect deeply for itself.

I often refer to the need for engineering escape velocity in an enterprise. By this I mean focusing the energy and commitment required to overcome the gravitational pull of past thinking and old practices. In this sense anything other than thrust must be payload - a drag on the system demanding that we acquire even greater amounts of thrust in order to change anything at all.

The formulae and facilitation we consistently use as substitutes for freedom of interaction and strategic thinking - a sop to those organisational psychologists and consultants still peering over our shoulders - are expendable in today's environment and a cost we can well do without. We should let go of them, trusting that we have all the talent, the commitment and the intelligence we need to accomplish what must be achieved without recourse to external facilitation and obsolete teamwork conventions. Let's grow up... Now!

 

A Carnival of Trivial Ideas

Compere: This week we proudly announce the winners of the 2013 Thinkers50 Awards. Break open the champagne, raise your glasses. Ladies and gentlemen the toast is the world's top 50 management thinkers - their inspiration and the valuable contributions they continue to make to our society.

Cynic: (Interrupting the proceedings) Excuse me. Did I hear you correctly? You mean to say that this gang of academics and consultants who earn their living from touting banal fictions concerning human enterprise, who trip over common sense and rebrand it as innovation, who help their clients manufacture growth via greed, are getting accolades? That's a bit rich. Is this some kind of joke? It's a hoax right?

Compere: Au contraire my tiresome friend. The world at large is indebted to these ideas pioneers. It would be pretty mean-spirited of you to deny the impact these celebrities have had on business today. Why our largest and most successful corporations would be totally different were it not for these gurus. You of all people should know that.

Cynic: Oh, I am not doubting their impact for one minute - just the nature of the results. From what I have seen the consequences from their ideas disrupt business, often pointlessly; connect only tenuously with the real world; perpetuate myths that are clearly flawed; and act as an intolerable burden on most of humanity - even in their own backyard. Besides, their popularity, though happily on the decline, is almost exclusively the result of gullible senior executives who are too lazy to think for themselves.

Compere: My, my. You are such a misanthropist. I don't see why I should even bother to argue with you. You appear to have such a jaundiced view of thought leadership! Can you not at least appreciate their originality and good intentions?

Cynic: Now I 'm convinced you are in jest. Thought leadership indeed! Show me the tiniest crumb of originality. Explain to me how any of these ideas help create a better world for anyone other than an elite group of fat cats. Tell me how they give hope and create a new sense of purpose for people living in rural Cambodia, Bolivia or Zaire - or Spain for that matter. As for their intentions, surely their only goal is to make more money - for themselves and their clients? I do not necessarily impugn such goals. Money makes the world go around, right? But let us be absolutely frank. Setting aside the few authentically innovative concepts that have revolutionised the field of management, like Deming's slant on Quality Control, for example, or Stafford Beer's Viable Systems Model, most new management ideas are either recycled fads or petty scams: designed to have a limited shelf life they hoodwink organisations into believing they must keep on changing, so as to keep on growing. But hello! The world does not need more growth. Nor does it need greater wealth - at least not in developed countries. The lack of genuine inventiveness displayed by these Top50 management thinkers is pitiful. They publish their claptrap because they need to satisfy the protocols of the academy. If they do not publish then they do not get promoted. But if they were in any other profession they would be held up to ridicule. Lacking any sense of a deeper social responsibility they enable the persistence of a monocultural business ethos, nearly always expressed in embarrassing cliches, that has lost all meaning - a belief system that has brought our civilisation to the brink of collapse. Perhaps a more relevant toast would be "to the successful extinction of humanitarian ideals in business!"

Compere: Bunkum. (Turns to audience, a few of whom are beginning to fidget uncomfortably in their seats) All this talk about civilisational collapse is just a scare tactic conjured up by socialist renegades and anarchists like yourself. You're unsettling our audience with such talk. I assume you also believe in all this commons guff, shared value and ethical capitalism? Now there's a fairy tale if ever there was one!

Let's get back on track. (Confronts Cynic angrily) You have disrupted these proceedings long enough. Will you at least concede the veracity of the management ideas you seem to despise in context? We are mostly indifferent to the developing world here. Without exception all the greatest advances in management have come from the US or Europe. Countries like America, England, Germany and Sweden, for example, where the entire economy is based upon the implementation of these ideas, have benefitted massively from our Top50 thinkers.

Cynic: Indeed they have. And look where it's got them. Disaster capitalism spreads like wildfire in old empires already addicted to economic growth. Driven by a mix of scarcity and greed, the enduring impulse of most Western corporations in these countries remains the creation of obscene wealth for absurdly small numbers of people. And bugger the rest.

Compere: (Protesting) But they really are the best. We scoured the world to get this ranking you realise. Most executives in this room could not possibly agree with your reasoning. Are you a communist Sir?

Cynic: (Giggling hysterically) How do you have the effrontery to call your Top50 awards "the best management ideas in the world"? I had not realised Europe and the US had colluded to re-assign themselves as such. Where are the voices representing Brazil, China, Australia, Singapore, India, South East Asia or even Japan for God's sake - not to mention the entire continent of Africa? All the best ideas come from Harvard, Stanford and Oxford. Is that what you are asserting?

Compere: Don't be silly. There are no original management ideas coming out of the countries you name, with the possible exception of Indian academcs who have been educated in the US or the UK. They invariably copy ours. Africa? Brazil? Are you crazy? Let's be sensible please. Besides, the US is still pre-eminent in management innovation.

Cynic: Is that so? Tell me then why the US economy is moribund. Why is 80 per cent of the population living near poverty or below it? Why, with 3 per cent of the world's population, does this nation have almost 25 per cent of the world's convicted criminals? Explain to me why Western corporations domiciled in these nations are still attached to ideas that defy gravity. And how is it that I throw new management texts by your superstars in the trash after reading barely a few pages because they are so predictable and corny? I admit that in the late 20th century a few interesting notions were the drivers behind much corporate change. But in truth nothing really changed. Today, creativity and invention in corporate life has been replaced by the industrial military complex and the arrogance of Wall Street. These days America is lacking in transparency, collaboration, empathy, and even resourcefulness. Meanwhile these gurus you sanctify by putting them on a pedestal incite consultants, who then advise Boards, who then preside over a domestic economy in decline. America has had its heart ripped out and trampled on by policies aimed at favouring the wealthy and marginalising the poor. Even the middle class, the traditional engine of productivity, is suffering. What terrifies me even more is that America is still hell bent on the cultural colonisation of the developing world by exporting its corporate ideology of rampant growth, consumer excess and selfishness to the rest of us. And nobody is game enough to stop it.

Compere: Stop it. We have heard quite enough. By denigrating the winners of the 2013 Top50 Thinkers in this manner you are also belittling our advisors and sponsors. (Points to people sitting at the front table) That is petty and mean. I strongly suspect your unwise critique is driven by sheer envy. Furthermore....

Cynic: (Interrupting but choking back laughter) Come off it. On your website you state that these ideas have the power to change the world. When will that happen? Let's be candid for a change. I'm sure your sponsors and advisors cannot be as naive as you claim. I know where they work. Any fool can see they have vested interests in promoting the ideas of your so-called gurus - whether through books, academia, public speaking or consulting; the method matters not. Sales is the goal. So they are not innocent by any stretch of the imagination. Complicit actors in helping you conjure the illusion you are perpetrating, their role in decking out cognitive compost as intellectual treasure is undeniable. Don't pretend to be so shocked. You must be familiar with the children's fable of the Emperor's new clothes. Voila! When all is said and done your sponsors are just endorsing a carnival of trivia. Your Emperors are naked. I realise you are only the compere, but I'm not sure how you can keep a straight face at such blatant shenanigans! (Cannot control his laughter any longer)

Compere: Perhaps you had better leave before I have you ejected. You are a disgrace Sir!

Cynic: (Stumbling out, the tears streaming down his face) Perhaps I should at that!

With sincere apologies to any friends or colleagues likely to be offended by the caustic nature of this piece. Also to those few genuine thought leaders who are not charlatans, who recognise the truth when they hear it, and who are wise enough to reject what they think on a regular basis for fear of becoming too pompous and plain wrong!

 

Deadline 2015

Increasing evidence that markets are putting too high a value on fossil fuel reserves is alarming. Even the habitually conservative International Energy Agency recognises the risks a collapse in the value of coal, oil and gas assets would herald.

The math is irrefutable - except perhaps by those who deny the existence of global heating. Consider this. Fully two-thirds of known fossil fuel reserves must stay in the ground if we are to meet existing internationally-agreed targets to reduce carbon emissions and to restrict a rise in global temperatures to 2° celsius. This target, already probably impossible to achieve, is an attempt to avoid the threshold for unpredictable, yet almost certainly hazardous and potentially irreversible, changes to the climate and life as we know it on Earth.

In other words if international agreements hold firm these fossil fuel reserves will be worthless. Yet stock markets around the world seem comfortable inflating a carbon bubble worth trillions of dollars that could bring havoc in the form of yet another global crisis. Why would they risk so much? It is simple. They are gambling - betting on government procrastination and a probable failure to act.

The risks to health, the environment and to climate, vis-a-vis the extraction and burning of coal, oil and gas have been known for some time. They are not in dispute - at least if one assumes objective sources of information. Yet very few investors and even fewer regulators are addressing this issue with any degree of wisdom or foresight. Instead, stock markets bet on bureaucratic dithering. Mainstream media merely complicate matters in ways that range from the ignorant to the irresponsible. Meanwhile a gullible public pays far more attention to propaganda spun by large corporations whose commercial interests are of course best served by such nation state shilly-shallying and blatant political timidity.

One might reasonably ask what strategies these companies have in place for a gradual transition to renewable sources of energy. The truth is far removed from most PR messages that would have us believe the most fanciful of myths and fibs. Last year, for example, far from reducing efforts to develop fossil fuels, the top 200 global energy companies spent USD 674 billion to find and exploit further new resources - assets that could well end up as intrinsically worthless. This is either crazy recklessness or sheer stupidity. I cannot figure out which as yet. The sad irony is that a similar amount of funding, channeled through innovation, could pay for the bulk of a fairly rapid transition to a sustainable and clean global economy.

New estimates point to between 40 and 60 per cent of the market capitalisation of the world's oil and gas companies are at risk from this short-sighted folly. The last financial crisis, triggered by a non-viable banking system, was avoidable. The next one shares the same unmistakable characteristics and the same endemic problems. And yet we are doing little to prevent such a collapse occurring.

Business as usual is not an option for the fossil fuel industry in the longer term. I know that. You know that. We all know that. But try telling it to the CEOs, company directors and institutional investors who might recognise the risk but smugly trust they are smart enough to leap to safety and abandon the train before it plunges over the cliff. Early warning signs are never in short supply. The edge of the cliff is in sight. But in this case the warning signals are being totally ignored.

The deadline for action is 2015. This is the year when governments have vowed to strike a global deal to limit carbon emissions. But company strategists and fund managers need to take action now. If they wait until 2015 it will be too late. All bets will be off. Insurance companies, banks and superannuation funds all need to incorporate climate change and carbon risks into their investment plans. Few seem to be doing so - or even to understand the imperative of doing so.

On all the evidence my advice would be for fund managers to give serious consideration to pulling out of coal and unconventional extraction industries - such as oil from tar sands and gas from fracking. The risks are already too high. If we ignore the consequences, as we are often prone to do, our children and their offspring are going to inherit a terrible mess that could so easily have been avoided.

Riotous Fun & Speed

Organising as performance art

I want to write about two sublime examples of human beings at the peak of their abilities - individually and collectively. They know why they are doing what they do, pour joy and passion into how they do it, and attract undying and enduring loyalty from their devotees as a result. They are at the pinnacle of human achievement, never failing to enthral us each time they perform. The secret to their success is the insight that organising (of any kind) is a performance art and that risk is an integral part of that...

Then I want to pose the question: How can our business and government organisations be more like that - where dedicated allegiance to a higher purpose, liberated by mutual respect, trust and precision, takes us beyond what we thought humanly possible into an amplifying spiral of abundant value?

Mozart's gift was to write music that is perfection in its simplicity - astonishing at the level of craft, yet embracing a certain inevitability in its surface unfolding. Take any piece by this composer and listen to it performed by the Australian Chamber Orchestra - one of the most critically acclaimed ensembles in the world. In each intricate sound architecture there is not one note too many, nor one too few. Change a harmony and the work will be diminished. Displace a single phrase and the whole structure may fall. Yet the true genius of the man, if contemporary accounts hold credence, is that he wrote down such exquisite music as if it were already complete in his head. In effect Mozart composed the entire architecture of sound events, dynamics and relationships prior to committing it to paper.

What is even more extraordinary, from an organisational perspective, is that the tiniest and most subtle alterations in expression, including spontaneous nuances of tuning, timbre, tempo and dynamics, can be accommodated within the score, allowing Richard Tognetti and his players in the Australian Chamber Orchestra, to add their own vitality to the music with no loss of authenticity. We still hear it as Mozart. This is an astonishing example of creative synergy at work in spite of a 300 year gap between invention and realisation.

A Ferrari Scudera Formula 1 racing car is similarly engineered for perfection. Using sophisticated computer modelling, carbon composites and instant recalibration, each car is fabricated to be as fast and as agile as possible, within an established set of rules from which the team must not deviate, in pursuit of a ruthlessly self-evident goal.

Here impulsiveness and unplanned interpretations are excluded. There is no room for error when a pit stop, involving the fitting of four new tyres and a meticulous refuelling, can take less than 3 seconds when there are competitors trying to exit the pit lane ahead of you. How is that possible? The answer is precision. Every aspect of the car's performance, every component from chassis, tyres and engine to aerodynamics and transmission, plus every facet of a team working harmoniously as one, must combine in a performance that is as near flawless as humanly possible, from beginning to end.

Most company Boards would like to believe their staff capable of working together in ways where well-rehearsed practices lead to inspiring results and legions of loyal customers. Most would yearn for the impeccable speed, agility and synchronicity achieved by Ferrari's motor racing team. And many would give anything for the joyous vitality and inventive culture of the ACO.

But what would this take in practical terms? Is it simply too fanciful a proposition to be considered in the cut-and-thrust world of business? Certainly not. There are no industries more competitive than motor racing or the arts. Is there wisdom in these two examples that could be applied to the benefit of almost any enterprise? Undoubtedly. More pertinently, if that is the case, what are the most crucial lessons, and how might we use them to create organisations that verge on optimum effectiveness, are exciting places to be, and that generate socially beneficial, culturally desirable and economically efficient outcomes for many?

We could start by noting a significant divergence between the two examples, differences that are often ignored, glossed over, or misunderstood by executives who use sporting or musical metaphors without a great deal of thought as to their relevance in a particular situation.

Mozart's music is a complex adaptive system. Its genesis arose from a creative impulse over 300 years ago that continues to morph over time. Here is a dynamic system within which an infinite variety of purposes co-exist and require aligning, where there is zero organisational redundancy, and where many tiny, spontaneous, nuances can be incorporated in real-time without any loss of effectiveness. Indeed these tiny changes may enhance the overall performance without in any way, shape or form, detracting from the embedded aesthetic structure. These changes can even intensify our experience of the piece. In live concert music there can never be a performance which exactly replicates another. Actually that is the point. Generally speaking artists embrace spontaneity and shun predictability.

The Ferrari racing team is also a complex adaptive system of a different kind. Here there can be no unintended variety. Surprises introduce unacceptable risks and hazards. Instead predictability is deliberately sought and variation, of any kind, is the enemy. There is a single dominant goal - to finish the race intact, quickly, and faster than the other cars. To that end each element must fit perfectly into the overall schema in ways that support two individuals - Fernando Alonso and Felipe Massa - by giving them the best possible chance of achieving the desired result. Meanwhile repetitive practice is considered to be the most effective means for enabling the team to function as a single, finely-tuned unit.

So what lessons can be learned and applied from these examples? How can we re-envisage the task of organising in ways that aspire to create systemic vitality and viability as a platform to launch enterprise brilliance? There are fundamentally two strategic leverage points within human systems that can alter energetics in ways that lead to improved performance and outcomes. They are (i) designing the whole enterprise, including its teleology, for abundance, and (ii) configuring people, ideas and relationships, to consciously unleash entrepreneurial energy. Liberated people are the alchemy of change.

Designing for Abundance

There are several aspects of resilient design worthy of reflection. Most importantly for those who work in business is the need to comprehend that many of the factors which constrain business excellence are precisely those used to liberate it in other domains. Here are the most notable of these factors translated into corporate terms:

1. Take the business ecosystem into account

Most executives are taught to focus just on their part of the business. Many can not even entertain a whole-of-enterprise mindset so fixated are they on improving their own patch. In this day and age such conventions are genuinely perilous.

Instead of always trying to optimise enterprise revenue, profits, value and productivity, efforts that almost invariably lead to unacceptable trade-offs at the expense of some other parties - particularly staff and customers - the business ecosystem, of which any enterprise is just one part, must also be considered by all those in strategic roles. Indeed envisaging the business ecosystem as it is supposed to function (in other words its ideal state) should be a daily practice for every strategic mind within the business. Without this knowledge, regularly updated, people will act unilaterally and blindly, market opportunities may be missed, operational risks will escalate and even the most resilient strategy will start to unravel.

But for this ideal state to be apparent, some kind of visual depiction of the system, in conjunction with a simple narrative explaining why specific performance outputs are desired, is vital. Many business organisations believe ensuring process capability will result in effective organisational performance. It will not. There are two reasons. Firstly, processes that are optimal in closed environments, can cause unforseen tensions and even functional crashes when interacting with other optimal processes in the broader ecosystem. Secondly, focusing purely on process detracts from a deeper understanding of an enterprise's unique role in the broader community and this, too, will constrain performance. It is the interface (of relationships, alignments and flows) between processes that matter, as well as how these blend to generate shared value. This is a simple fact of life and yet it is mostly ignored. The moral is to understand and embed your higher purpose in the business. Always start with this design in mind - just as Mozart did during his lifetime and just as Ferrari team manager Stefano Domenicali does today.

2. Viability before excellence

An organisation must be viable before it can excel. Viability infuses an enterprise with the potential for brilliance. Comprising both strategic and operational clarity constantly revitalised by relevant system-wide information, processed and conveyed in real-time among its members, a viable enterprise works seamlessly and silently to achieve its espoused purpose. Free flows of strategic intelligence across the enterprise are vital.

Without it members of the enterprise may well act in ways that are undesirable. If the string section of the orchestra is playing Mozart's Piano Concerto No: 23 and the wind section is playing Concerto No: 24 the result will be an excruciating cacophony - although the individual playing may still be technically true in both instances. It is only information provided by the Manager of the orchestra that prevents such silly occurrences. Yet this kind of absurdity occurs in companies all of the time when the higher level purpose, roles and activities are not made abundantly clear. The lesson is to ensure viability through assuring economies of flow and an environment that is transparent rather than closed to such information.

3. Improving productivity can be misguided

Attempting to maximise the productivity of the workforce in orchestras and racing teams, or indeed in any service-based enterprise, can backfire. In organisational systems there are two levers that can lead to improvement. The first focuses on identifying and then developing those capabilities, inherent or to be acquired, that are likely to bring success. The second attends to, or removes, any factors (sometimes referred to as system constraints) that are resulting in failure or poor performance.

Both of these levers require a profound knowledge of the system - a detailed forensic diagnosis, including why the system functions as it does - before actions aimed at improving productivity can be successfully implemented. This is especially the case when a few minor modifications are proposed.

As circumstances and external conditions are fluid and demand constant adjustment and recalibration, the foundations for performance excellence, especially continuity and viability, must be achieved and sustained in other ways. In the Ferrari team each member is responsible for a specific set of tasks and outcomes. In order to achieve these outcomes the team comprises exactly the right number of people; each of them a single point of accountability. This clarity of task removes indecision and uncertainty, particularly in moments of danger, while enhancing consistency.

The lesson is to approach strategic design from a whole-of-system altitude and to focus on what practically matters - not on abstractions, invalid assumptions, or theories.

People are the alchemy of change

Highly-committed, highly-skilled, smart and talented people, working together at the very edge of their capability and potential, are essential for peak systemic performance and for the transformation of any business. Depending upon the requirements of the score, an orchestra comprises just the right number of professional musicians with the requisite degree of innate talent and honed skills. The Ferrari team, too, will have not one person too many, nor too few, for that would put the entire operation in jeopardy. In any human enterprise there are a few critical imperatives to keep in mind:

1. We rarely exceed our own expectations

Putting a cap on what might be possible, by setting targets or insisting on a particular course of action (excluding unethical conduct of course) does not work well in the context of striving for excellence. It can even make life more dangerous than it needs to be in when imposed on a Ferrari racing team. This is why an expression of what is possible must remain forever open and fluid; while an explicit covenant of what is not acceptable must be evident and actively enforced. Only then can we surprise ourselves and others by lifting performance to unthinkable levels, taking us beyond what was previously thought possible. The lesson is to unshackle team potential rather than stifling it.

2. Individual contributions matter

Mozart's music remains an idea on paper until it is brought to life by the 18 musicians who are the Australian Chamber Orchestra. Likewise, a Ferrari race car can be seen as an impeccable combination of engineering know-how and competitive aesthetics. But it must be driven to its limits in order to realise the intentions underlying its design.

Assuming an organisation has the most appropriate talent available to it - smart, self-motivated, willing to learn, collaborate and adapt - people must be given the means whereby they can excel. Often this entails removing a raft of rules and regulations that are superfluous and can stifle innovation, without putting at risk the viability of the whole. It also means ensuring just the right number of people are working in the business on just the right activities. No more and no less. This is the enabling energy we call leadership. It is the role of Richard Tognetti in the Australian Chamber Orchestra, Stefano Domenicali in Ferrari, and the directors in any business enterprise.

3. Practice and rehearsal are essential

Individual skills and collective proficiency must remain in an advanced state of vibrancy in order to achieve excellence while avoiding potential hazards. Although esteem and self-confidence must never be allowed to falter, hubris must not take over. It is the ever-present comprehension that a small error can lead to catastrophe that keeps performers on their toes, to the extent that their attentiveness does not lapse, even for one moment. The lesson is the need to gradually raise the stakes by increasing performance expectations over time so as to avoid drift, disinterest and demotivation.

4. Variation is always present

In the context of provisioning for system improvement, variation is always going to be an issue. As we have noted in our two examples, variation differs in type and impact. Encouraged at some level within the orchestra, it cannot be tolerated in Formula 1 racing. The tendency in business organisations is to adopt practices that ignore the variation inherent in the demand for services and to usher in excessive controls instead. Unfortunately this has the reverse effect of what is intended. Forcing workers to meet a range of non-critical standards leads to them using their ingenuity to meet the standards - which is not the same as fulfilling customer needs.

Where operational control is put entirely in the hands of managers - the conductor in the case of the ACO - creativity will stall while performance will become stale and second-rate. The lesson is to avoid codifying method. Reinforcing management control over a talented team is discouraging and invariably dampens performance. It also leads every team member with a hammer to see every problem as a nail.

Co-incidentally the same lesson applies to fools who use tools that are entirely unsuitable for the task in hand - like the widespread use of "lean manufacturing" tools in service organisations where "waste" is not the same as in manufacturing environments, and where duplication - undesirable in manufacturing - can be a vital part of fulfilling customer needs in a service enterprise. The questions we should ask in these situations are: Who invented this tool? What problem were they trying to solve? Do we have the same problem here?

On time and timing

In addition to the lessons we can learn from companies like Ferrari and the ACO, both of whom organise themselves in ways that enable optimal performance, two important elements I have not yet mentioned have to do with time (and timing) and design philosophy.

It is pretty obvious that both the Australian Chamber Orchestra and Ferrari Scudera are acutely aware of time and how they can use it to their advantage, in a variety of ways, but invariably matched to the conditions in which they are operating from one moment to the next. It is the essence of their business after all. They know that planning requires a far more measured tempo than preparation. Practice takes that up a gear. But performance is on a different plane altogether. For when the lights flash green, or the baton descends in the spotlight, the situation becomes electric. Everyone is on edge as time blurs and the ordinary is transformed into the extraordinary.

Neither the race nor the concert can go on indefinitely of course. If our life lacks variety, particularly if we constantly work in performance mode, with all the tensions, physical stresses and high levels of concentration that entails, we quickly become worn-out through exhaustion. Such a frenetic pace is impossible to sustain for lengthy periods.

The opposite is also enervating. Contrary to conventional wisdom, many organisations suffer from change fatigue not because of the speed of change per se but because of frequent changes in direction or management whims, and the feelings of futility and tedium arising from these.

Changing the timing and pace of various activities helps to sustain high levels of performance. Bursts of concentrated activity can trigger innovation while providing a degree of focus that companies who insist on regulated, undeviating routines can never experience. Anticipation, too, is a great motivator. Indeed in some cases, anticipating an event can be more pleasurable than the event itself. Knowing that, why do so many organisations remove all sense of anticipation from their consciousness of time and timing?

The capacity to mix up the pace of change is often missing in organisations that insist on adhering to old-fashioned management controls as their rationale for managing risk. This is sad, not just because our conscious use of time is the epitome of artistic and sporting endeavour, and therefore one of the pinnacles of human achievement, but because shrewd timing can sharpen attention, increase morale, and sustain high levels of performance for indefinite periods.

Yeeha Yahoo!

Although I have a reputation for being incredibly serious, people who know me well appreciate my wacky sense of humour. I smile a lot - mostly at my own antics. Staying centered, not taking oneself too seriously, and laughing at life's follies are all good for one's state of mind, we are constantly assured. My initial motive, I am pretty sure, was part of a conscious effort to survive the brutality of the British public school system with my sanity intact! Close friends believe it may have partially worked.

I am especially amused by whimsy - recipes that go badly wrong for no apparent reason, my young son's dexterity with his iPad, dog owners who shadow their pets armed with a plastic bag and a shovel, tourists gazing intently at maps, and singers who remain enthusiastically oblivious to the fact they are tone deaf, for example.

And then, of course, there is organisational lunacy, which is in a class of its own. All organisations spawn quirkiness, some of which can be hugely entertaining. Ricky Gervais's popular television hit The Office is proof of that. With few modifications this show even worked in the US. There are so many things about corporate life that crack me up. But none more so than some of the daft decisions made from time to time by people who should know better.

I invariably collapse in uncontainable giggles when I see voluminous reports on a company's cultural climate, for which the leadership team possibly paid millions of dollars, comprising all manner of impressive charts and statistics - yet not a single wise or truthful word. Or when a Board finds a new CEO they trust will work miracles, anouncing as much to all and sundry and promising zillions in profits to shareholders, only to realise a few months down the track that their superstar is human. Or again, when a new CEO assures everyone they can "fix the problem" (insert your own problem topic here) by recycling a cherished strategy that may have worked once upon a time, or by using the latest management fad as if it were a panacea for any old issue. "Look over your shoulder. Pay attention. Do you see what everyone else is doing? Okay. Duplicate that then, losers!"

All three cases are examples of lazy management - an inability or reluctance to think through the consequences. And all three are hilarious if you happen to be watching from the sidelines.

But pure whimsy can often slide into a theatre of the absurd when it comes to the clashing of egos in the world of international business. For example, it amazes me how swiftly self-styled business doyens will leap into the fray to cast doubt on each others' wisdom in recitals of mind-numbing triteness. But when an entrepreneurial CEO breaks free from the gang with painstakingly considered ideas about how to turn around poor company performance, howls of derision fill the airwaves. If the CEO also happens to be a young woman, beautiful and smart, ridicule can be viciously withering.

This was recently the case when Richard Branson, middle-aged marketing wizz-kid, entrepreneur extraordinaire and author of Screw Business as Usual, uncharacteristically weighed into a debate about recent changes in Yahoo ushered in by Marissa Mayer, the CEO of some 8 months standing, who was previously a high-flying executive in Google.

Mayer is an engineer and inventor credited with several patents in artificial intelligence and interface design. She is one hell of a smart cookie - wealthy, attractive and internet-savvy. During her short incumbency she has been panned for her fashion sense, her youth, her ambitions and her lack of "real" leadership experience - whatever that means. She has also been censured for providing free meals for her staff, for accepting the CEO's job when she was pregnant, for declining maternity leave, and then for bringing her baby to work. I must admit to finding all of this hysterically funny. But it has its serious side too.

As far as I can tell there seem to be three main reasons for the passive aggression shown to Mayer. The fact she is a woman, bucking sacred orthodoxies, and getting results others could not achieve.

1. The fact Mayer is a woman, and something of a celebrity too, challenges one of the few male bastions still relatively intact - leadership of a Fortune 500 company. The rare blend of technical brilliance, charm and dedication to her work also seems to have offended many feminists.

2. Mayer's commitment, carefully considered, to instigating a number of management changes that were long overdue, and of which a majority of the staff approve (such as abolishing the work-from-home policy which had been partly responsible for deteriorating levels of morale) led to an international outcry and managed to offend those people like Richard Branson who stand for novelty and seem to reject as regressive any policy deemed by them to be uncool. But it was a courageous decision - one that took fierce determination to push through and to sustain.

3. After some initial uncertainty and even anger from some employees, Mayer's overall strategy - aimed at boosting company loyalty, revitalising products, and putting innovation through collaboration back on the agenda - appears to be working. While many commentators viewed Yahoo as a poisoned chalice, business performance seems to have taken a turn for the better and morale is dramatically improving. Some commentators, hoping to be able to point to the rise and fall of Mayer, clearly find this unpalatable. We can probably put that down to jealousy or envy.

Actually many problems at Yahoo had been obvious for some time and clearly needed fresh thinking to be resolved. The company failed to spot the two foremost trends on the internet: social networking and mobile communications. Its home page and email services are relics, used mainly by people who never bother to change their habits. It ceded its crown as the biggest seller of display ads to Facebook and Google. Its stock price was falling....

But these are all explicitly business-related issues. Meanwhile, within the workforce, the culture had become dysfunctional. Motivation was absent. Bad habits had become widespread. A majority of employees assumed the company was on its last legs and had lost any desire to help change that perception. Mayer seems to comprehend what many other CEOs do not.  Addressing cultural forces like these are fundamental in providing a platform for business renewal. The two are inextricably linked.

A recent internal survey found that 95 per cent of employees were now optimistic about the company's future, a 32 per cent rise from the previous survey. Resumes have begun arriving from employees at competitors, which rarely happened in the past.

Mayer is the fifth CEO at Yahoo in five years. The previous four were clueless. They had no firm understanding of the internet and their appreciation of organisational culture was even less. Personally I believe Mayer's appointment will prove to be a stroke of brilliance. Only time will tell.