It worked.  In a few years, Bill Bain and his blue team prototyped a new fee model that enabled them to increase fees and deepen partnerships with clients. Unfortunately, Bain also decided that he should start his own firm.  In 1971, he left the company to start Bain & Company and took many of Boston Consulting Group’s top leadership with him.  

After spending seven years working in the strategy consulting industry, it’s impossible to imagine this kind of experiment taking place in those same firms.  Today’s top three strategy consulting firms, McKinsey, Bain, and Boston Consulting Group, are large organizations that haven’t seen a serious competitor in more than thirty years and are known more for scandals and 100-page PowerPoint “decks” than being the source of innovative and creative new ideas.  

During Bill Bain’s time at Boston Consulting Group and then at Bain & Company, however, strategy consulting firms were a central force in creating, shaping, and popularizing many of the most important business ideas of the 20th century.  

At some point, these firms became “too big to think” which occurred to me after I decided to leave the industry after nine years to work on my own in 2017.  Despite fewer resources and no “brand” to lean on, I’ve been able to unlock a level of creativity and idea generation as an independent researcher and writer of words on the internet that is ]beyond what I felt possible at any point in my previous path.  

How is this possible and what does it mean about where ideas might emerge in the future?

These Firms Were Generative and Important

If we look back at some of the ideas popularized in consulting firms, we might laugh.  Strategy is important!  Listen to your customers!  Pay attention to the “soft side” of organizational change!  Maximize shareholder value!

Yet until they emerged in the consulting-academic-industrial idea complex during the 1960s to 1980s, these ideas were not common knowledge.  These ideas also did not show up out of thin air either.  They were the product of unique cultures which put tremendous value on the discovery of new ideas.  The In Lords of Strategy, author Walter Kiechel III described McKinsey’s embrace of ideas in building a “knowledge culture” in the late 1970s:

As part of building the “knowledge culture,” its consultants began grinding out staff papers—often twenty pages long, based on experience with clients and internal debates, and some suitable for repurposing as Harvard Business Review articles. Within five years, they had turned out twenty-three, which bore titles such as “Strategic Market Segmentation,” “Competitive Cost Analysis,” and even “The Experience Curve as a Strategy Tool.

Again – these ideas sound obvious if you have some experience in the business world.  The phrase “shareholder value” probably doesn’t even incite a reaction in even the most cold-blooded CEO.  Yet from the 1960s to the 1980s, there was a hunger for new ideas in the business world and in society at large.  A great example of this is Milton Friedman’s multi-part “Free to Choose” series that aired to millions in the United States on television in 1980.  The series explored capitalism and markets and was enthusiastically consumed by people in the US and then millions more around the world throughout the decade. 

As company leaders turned these ideas into profits, finding and implementing better ideas became an organizing assumption in business.  The economist Tyler Cowen has made a convincing augment that spreading this assumption via consulting firms setting up shop abroad has been one of the best things that have happened for global growth and prosperity. 

One example of this happening in practice was Boston Consulting Group using “experience curve” work to help Texas Instruments (TI) change how it thought about planning for the future.  By modeling how learning effects would lower the costs of manufacturing electronics over time, they helped TI develop a plan to lower prices in an attempt to align with those savings such that they could capture a larger market share of the emerging personal calculator space.  Although this approach did lead to some price wars, TI was able to grow its calculator sales from 3 million to 45 million in only five years from 1971 to 1975.  This put the company in a position to invest in many other areas of the business, helping them tripe overall revenue in six years from 1973 to 1979.

It was exciting to be working at a consulting firm during this time.  There was so much low-hanging fruit and so many ideas to test.  If you were someone driven by the discovery of new ideas, working at a consulting firm likely wasn’t going to slow you down.

Now, that is no longer true.  Consulting firms have become too big to think.  As a former McKinsey consultant Rohit Krishnan argued to me, “first these firms did intellectual arbitrage, then data arbitrage, and now it’s mostly effort arbitrage.”

Instead of bringing new ideas into the business world, consultants now serve the role of effort-on-demand for executives who are trying to extract another 1% out of the business.  

And yet, I would admit that they are still some of the best places to work.  This raises a much deeper issue: if consulting firms are no longer great places to discover and generate new ideas, where can you go if you care about such a thing?  

The short answer is the internet and it’s something I explore.  But first, we need to understand the forces undermining creativity and idea generation in these institutions.

No space for weirdos

In 1974 Tom Peters landed a job at McKinsey & Company.  He had done a Ph.D. at Stanford in organizational behavior and was obsessed with how you could use statistical analysis to learn about the success of businesses.  For the next several years, Peters existed on the margins of the firm.  Here’s how he reflected on his experience in 2001: 

We were out in the San Francisco office, far, far away from McKinsey headquarters, tucked inside an office that never made any money but that was well-known for its weirdness. In fact, there were always people in other parts of McKinsey who would reach a point in their analyses where they would try to get us involved because they wanted us to do our “San Francisco thing.” We were the closest thing McKinsey had to hippies — hippies in black suits.

Peters was a weirdo, one who went on to write one of the most influential business books of all time.  That book, In Search of Excellence, sold more than 5 million books and helped to usher in a new way of thinking about how companies should improve.  

If Peters was hired into a consulting firm today, he wouldn’t last long.

As organizations grow, they inevitably add rules, structure, layers, and policies to manage the complexity.  This comes with many tradeoffs, many of which are worth it, but it’s quite hard to scale effectively while still cultivating an environment where weirdos can thrive.    

When Peters was at the firm in the late seventies, it has less than 500 people.  McKinsey now has about 30,000 people and adds the equivalent of Peter’s McKinsey every couple of months. There’s no agenda against allowing people like Peters to thrive, it’s just an unintended side effect of structure and scale.

In my last firm before working for myself, I spent almost two years working on a project that probably could have taken about a month.  What took so long?  The company was filled with countless high-ranking and important people, all of which had veto power to shut down any minor change.  The political scientist Francis Fukuyama called this a “vetocracy” – a system where no individual can gain enough power to make a decision.  

This is the key point.  No single person is deciding that creativity should be eradicated but as a byproduct of systems needed to manage large-scale enterprises, the result is the same.  

When Peters reflected back on writing his book, he said, “I had no idea what I was doing when I wrote Search. There was no carefully designed work plan. There was no theory that I was out to prove.” 

As consulting firms and other institutions have become bigger, individuals are nudged to stop being weird and to conform.  

The Slow Subtle Death Of Creativity

At the individual level, the nudge to stop being weird happens in subtle ways that are hard to see in the moment.

Early in my career, I worked in operations, spending time on manufacturing floors doing process engineering, and then as a strategy consultant helping companies implement design and operational improvement programs.  The most popular approach that almost everyone used was called “lean,” inspired by the systems invented at Toyota in the 20th century.  I became obsessed with this, reading almost every book I could find on the subject.  I was inspired by how Toyota’s approach started with genuine respect for people and an obsession with cultivating a culture that incentivized teamwork and problem-solving.  I had a desire to combine some of my experience working with front-line operators on manufacturing floors with this human-first approach.  Yet the executives we worked with often didn’t want to do the hard messy work of changing cultures.  So you give them tools, dashboards, and easy-to-understand systems that can be rolled out globally and tell yourself that one day, you will do it differently.

Of course, that day never comes.  You get raises and promotions and try to forget that you had that deeper impulse to try new ideas and to push boundaries.  

You Can Sell Everything As Long As It’s Top-Down Change

While working at Boston Consulting Group, leading a small research team on organizational transformation, I became fascinated by the ideas related to complex adaptive systems.  This is a way of thinking about organizations where you pay attention to what is happening at the lower levels of the organization and put more emphasis on competition, slack, and a healthy amount of chaos.

I wanted to inject these ideas into our models of what we were pitching to clients but wasn’t finding much interest around me.  Why change things that were working?  If you can sell $10 million using the existing approaches, why go deeper?

In terms of the firm’s continued growth, this made sense.  Consulting firms sell top-down solutions to senior executives because they can be sold for a lot of money and they also served the purpose of giving those executives a platform to channel their unbridled career ambitions.  Looking at organizations through the lens of complex adaptive systems would explicitly acknowledge that the people paying us were not as important as we made them seem.  

In other words, it would leave consulting firms without a business model.

And so almost anyone who decides to stay working in these firms or even leave to a similarly large company or other institutions decides that this is the way things have to be.  They give up what David Deutch argued was the significantly unique thing about humans, “our ability to create new explanations,” and decide that the payoffs from staying on a certain career track are better than the payoffs to following curiosity and possibility.

Exit To More Creative Pastures

It took me a damn long time to figure out that being in environments where I could channel a passion for ideas and my natural curiosity was vital for me.  

Luckily, the internet has given me a second space beyond traditional work to do this.  I started sharing my own writing while still employed in consulting.  First I wrote on quora and then with a little more courage, publicly on LinkedIn.  While I was terrified of being mocked by colleagues for doing this, no one said anything.  Instead, I befriended a wide range of people trapped like me – Chief Talent Officers, Partners at consulting firms, senior executives, founders, and many people in HR – all hungry for better explanations.   I wasn’t crazy.

Knowing these others existed inspired me to start exploring and finding my own path.  As I became a better writer and went deeper into the ideas I was curious about, I slowly started to realize the costs I had been paying on my path, which made it easy to become self-employed and not have the expectation that I needed to match my own salary.  The upsides in terms of who I might become were priceless

Right now there are millions of people in too big to think organizations who feel stifled and uninspired.  They want to explore ideas, experiment and create.  Some people might point to exceptional individuals that seem to make it work in these environments but for every person that is able to express themselves within too big to think institutions, there are undoubtedly dozens more that have given up or are on their way to doing so.  Most people have responsibilities and the enormous task of carving your own path just isn’t worth the risk of giving up a nice paycheck that affords a certain kind of life. 

Increasingly, there are offramps.  One example is Justin Murphy’s Indie Thinkers community, which is attempting to create a home for hyper-curious humans who want to explore specific topics and teach others on the internet, especially from Academic backgrounds.  Another is Dave Perell’s Write of Passage, which positions itself as a place to learn to write on the internet but I think is better thought of as the world’s best simulation of learning how to make friends, share ideas, create a business, and build a life on the internet.  Finally, Anna Gat’s Interintellect is a digital home for modern public intellectuals where people hold three-hour in-depth digital “salons” around new and old ideas. 

What do these three of these have in common? They were created by people who decided to exit traditional institutions in search of spaces where they could more actively unleash their creativity and pursuit of interesting ideas in their lives.

It took me a while to realize I was like them.

Death By A Thousand Cuts

In 2007 when I was graduating from college, I didn’t have a sense that I could do anything except work for a big company like every adult around me.  My first job was for General Electric. The job was fine but the GE that had been in the mix of generating interesting new ideas of the 1980s had ceased to exist.  

Consulting was a dramatic improvement and when I joined McKinsey & Company at the age of 23, I joined a research office where I spent every day with a hyper-curious set of people specializing in a wide range of industries, geographies, and functions.  The lunchroom conversations were exciting and for the first time, I had the sense that I was exactly where I was supposed to be.

But eventually, most of us, including me, willingly sacrificed our curiosity in exchange for job opportunities, promotions, and the ability to keep going on impressive career paths.

This is how consulting firms and other organizations become too big to think.  There is no seriousness czar outlawing curiosity but the pressures of bureaucracy, long career paths, and large companies force those tradeoffs as part of how things work.

Eventually, the tradeoffs became too much for me and I hit eject on a path that made sense.  To some people, this seemed insane and probably still seems insane.  They are likely running the math that I’ve probably lit on fire more than a million dollars of income.  Yet my own calculus values my sense of aliveness and curiosity at a much higher billing rate than my consulting firms sold my man-hours. 

Yet when I made those first few friends through my writing, I gained confidence that a different path was possible.  In 2015, the paths to making a living outside of a traditional job were not quite as clear but more groundwork was being laid.  I followed a group of early adopters who had dared to carve their own path without the ease of social media, ubiquitous internet connection, and high-quality digital devices.  Over time, the costs of embarking on a path like mine will go lower and lower and we’ll get to a point where there will be a mass exodus of under-inspired curious humans from too big to think institutions.  

In the next twenty years, the most interesting ideas will emerge from people willing to carve new paths, join and invest in emerging institutions, share their ideas publicly, and those willing to find the others.  They will come from weirdos like me, writing directly to you, the lovely people of the internet.

The Shrinking Idea Dividend

If we are to buy my argument that consulting firms are “too big to think” we have to grapple with the fact that these firms are growing at impressive rates much faster than the rest of the economy.

I’d argue that the ideas that they helped generate in the second half of the 20th century laid the groundwork for their current success.  Because of how innovative and generative they were, they generated an enormous positive halo effect of trust and respect among the current generation of business leaders and that continues to pay a lucrative dividend.  Yet the reality on the ground is that they are no longer being hired for their ability to be innovative – they are increasingly doing non-strategic work, including implementation, data analytics, managing project management offices, and complex technology transformations.

It shouldn’t surprise us then that interest in the two most famous consulting firms, McKinsey & Company, and Boston Consulting Group has steadily declined as seen by google trend data for more than twenty years.

Today you are more likely to be able to recognize a McKinsey Partner that has spent time in jail than any specific idea that has come out of the firm in the last twenty years.

At one point, consulting firms really did have a corner on the best ideas.  They were tightly linked with Academia and other industry leaders who were shaping the beginnings of the modern industrial economy.  If you were a company and wanted the “best thinking” you hired a consulting firm.  

It took me a while to realize that despite talking a lot about ideas, consulting firms didn’t play a meaningful role in helping to generate them anymore.  Most of what we did in the industry was to repurpose ideas created decades ago or repackage ideas that were emerging out of the technology industry.  

As information has become hyper-available, you no longer hire a consulting firm for ideas or data processing leverage, you hire them to quickly tap into hyper-driven young people who want to spend long hours on certain problems with the information that is readily available.

Which leaves us with a question: where are ideas emerging?

While the digital has become increasingly important in our lives, people continue to discount the internet as a serious space for ideas.  From my vantage point, I’m increasingly blown away by the caliber of people who are deciding that they are willing to give up the safety, security, and prestige of impressive career paths in order to put their passion for ideas and creativity first.  

I’ve been able to tap into a dynamic exchange of ideas that is far more inspiring and energizing than I experienced inside the best consulting firms in the world.

Ideas have always emerged from individuals but as the industrial economy took over the world, we increasingly thought that it needed to happen within formal institutions.  This is no longer true.  Increasingly, the best ideas are formally or informally linked to digital communities, Venture Capital startup incubators, personal newsletters, or even emergent idea webs on Twitter.  If you want to seriously engage with ideas, getting tenure at HBS, becoming a partner at McKinsey, or working as a writer at Fortune is likely going to undermine that mission more than help.  

This is exactly what Tom Peters tells us even in his reflection on his career in consulting:

Don’t always bet on the little guy, but do always bet against headquarters. Because headquarters politics will invariably and inevitably “bland up” and then kill any worthwhile project.

A bet against headquarters is a bet against any firm that is too big to fail.

What will always be true is that ideas will always emerge in the same old way: out of the minds of creative individuals who like “finding things out” as curious human Richard Feynman once said. 

It’s up to you to figure out if you are one of those curious humans and decide whether or not you are in a place that’s too big to think or not.

Thanks to Malcolm Ocean and Rohit Krishnan for very useful edits to this piece!

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post Too Big To Think: Why Prestigious Institutions Stopped Generating Good Ideas appeared first on Boundless by Paul Millerd.

Our imagination about what happens in the business world has become disconnected with reality and it all starts with an accepted narrative about the unstoppable power of Fredrick Taylor’s ideas

The narrative goes like this: Fredrick Taylor introduced managers to analytical methods and tools that helped them to dramatically improve productivity; however these efforts also kick-started a non-stop line of efforts that led to the inevitable over-optimization of human labor.

This over-simplification of Taylor is part of a narrative that has become entrenched and feeds a broad movement that says organizations are broken. The story says that organizations might be efficient, but at enormous cost – they destroy autonomy, stifle creativity and at worst, are systems that enable widespread verbal and physical abuse. All starting with Taylor of course.

Yet, as I’ll show you, this story is wrong, misses the context of Taylor’s time and ignores that a hyper-optimized mindset towards work did not take hold until the emergence of the “career path” in the 1960s. This coincided with the rise of “knowledge work” and this shift turned work into a performance, distracting many from the real mission of any organization: survival.

Instead of seeing organizations as broken, a more accurate starting point is to think of them as complex systems and instead of broken, as fragile. As the scale of business gets bigger, the hidden fragility of many organizations puts employees, customers and society at risk.

To address this fragility, I want to look at organizations as “complex adaptive systems”, an idea that emerged from a field called Chaos Theory in the 1970s and 1980s. I want to push for a broader adoption of these principles and encourage a new generation of “chaos managers” to become interested in the survival and success of our institutions.  

I first learned about chaos theory 13 years ago and have been thinking about it ever since.  During the ten years I spent in the corporate world and as a management consultant, I couldn’t escape the feeling that something was missing.  This is my first attempt to fill that gap and to give many other frustrated managers and leaders an additional lens to help them think about helping their organizations thrive.  

This essay will explore the following:

• What we got wrong about Taylor
• How the idea of the “career path” turned workers into performers
• How organizations subsequently became complicated, not complex
• Why chaos theory does not lead to anarchy
• The implications of chaos theory on leadership
• An actionable five-part guide for the modern “chaos manager”

Taylor’s Promise & How Workers Become Performers

If you dig into Fredrick Taylor, you find a number of surprising things and I’m not talking about his 1881 US Open Doubles Tennis championship.  What I’m talking about is the historical context of his famous contribution, Scientific Management. 

Taylor saw his approach to business not as a set of tools, but as a paradigm shift away from the harsh worker versus manager divisions that were common at the time. His ambitions were quite profound as he felt that his approach would lead to “elimination of almost all causes for dispute and disagreement between them” and unlock “prosperity for the employee, coupled with prosperity for the employer.”

This is overlooked when modern work critics blame Taylor for the hyper-optimization of the modern workplace. They miss the fact that Taylor’s focus was on production workers and the union of workers and management as well as the adoption of his tools did not become widespread until the emergence of the knowledge worker.

These knowledge workers emerged 30 years after Taylors time after World War II and were distinct from production workers. While those who worked in manufacturing had a strong “class consciousness,” the new class of “white collar” workers were not really sure who they were:

White-collar workers rarely knew where they were, whom they should identify with. It was an enduring dilemma, rooted in what might be called a class unconsciousness, that would characterize the world of the office worker until the present day.

Despite attempts throughout the 20th century for labor movements to include these workers, knowledge workers were distinct because of their desire to distance themselves from organized blue-collar workers.  Instead of labor unions, they formed “associations” and increasingly saw themselves as aspiring business people rather than at tension with the owners of capital and leaders of organizations.  

The knowledge worker was not concerned with bargaining for rights.  Instead, they focused on managing a career, developing skills and acquiring achievements or “pursuit of consecutive progressive achievement” as Merriam-Webster puts it. It was only time before they became part of the elite.  

People saw themselves not as a part of an organization but as someone with a first-person account of achievements and contributions that could be carried from employer to employer. 

As the job morphed into a career, the worker shifted from someone merely doing their job to someone that needed to perform. 

Continuous Improvement & The “Theatre Of Work”

In the 1980s, new “schools” of business thinking like Total Quality Management, Six Sigma and Lean entered the scene.  The accepted narrative of this shift is that US companies needed new approaches to compete with Japanese companies.  There is some truth to that story, but it ignores the fact that these programs would not have been adopted with such enthusiasm without the fuel of career aspirations.  

Every aspirational leader attached their careers to these programs in the 1980’s, most notably Jack Welch.  In 1989, he gave an interview in which he detailed GE’s newly launched “work out” program:

We want 300,000 people with different career objectives, different family aspirations, different financial goals, to share directly in this company’s vision, the information, the decision-making process, and the rewards

For someone at GE, it was very clear that you would need to get involved in one of these programs if you hoped to progress at the company. By the end of the 1990’s every large company had similar programs and employees had figured out that to get ahead you needed to document your progress.

I got my first taste of this game in my first internship.  I spent the entire summer creating a proposal and then purchasing a foam board which helped our group organize some inventory we kept in a file cabinet.  While it didn’t appear that the parts were too hard to find in the file cabinet in the first place, by the end of the summer the project helped the group earn the next “level” in the company’s continuous improvement program.

Consultant and writer Tom Critchlow would argue that I was operating in the “theatre of work”:

Many people aspire to “silent success” at work – to do work that “speaks for itself”. Unfortunately this is the wrong move in the theatre of work. Instead we should aspire to the opposite – for knowledge work, the performance of the work is the work.

Continuous Improvement programs helped complete the shift of work into a performance and kept workers in a non-stop search for problems that need to be fixed.

The Organization, It’s Complicated

A Taylorist revolution this was not.  Instead of real productivity improvements there was an explosion of paperwork, reports and well-intended initiatives, many of which drove increasing complicatedness.

Today’s business leader sees almost every issue and activity through a complicated lens.  This lens sees all commercial issues and behavior as things that can be understood, measured and then documented or fixed in a process.  

Anyone who has worked in a large company has run into the complicated approach when they have to deal with their expenses.  Typically any expense above a certain amount must be approved and then you need to go through a formal process for reimbursement.  While this approach eliminates the chance that an employee will spend recklessly, it adds additional work for every single person in the company and may unnecessarily limit useful expenses.  However, when this kind of approach is implemented, it will also help the project leader show quantified savings that they can point to at their next performance review.  

In contrast, a complex lens would admit that cause and effect is not easily understood, there may be many solutions to a problem, and that even if you “fix” something, the process and related human behavior will continue to evolve and adapt. 

A good example of a complex lens is how Trader Joe’s thinks about customer service.  If you walk into a Trader Joe’s and ask an employee if you can try one of the items, they will take a box, open it, and let you try some, no questions asked.  This creates complexity and uncertain outcomes, but the employees also get a lot of interesting feedback that they can pass along to the people that buy products for the company.  

The best assessment of the creeping complicatedness in organizations is from Boston Consulting Group who studied the internal operations of more than 100 companies.  They found that the “amount of procedures, vertical layers, interface structures, coordination bodies, and decision approvals within organizations had increased by anywhere from 50% to 350% over a 15-year period.”  And in the top 20% most complicated organizations?  The managers in those organizations “spend 40% of their time writing reports and 30% to 60% of it in coordination meetings.”

The experience of sitting in “coordination” meetings is one of the most painful experiences for the modern worker and as many come to realize, is the stage of the theatre of work, where the most powerful people battle it out for having the most compelling narrative of what is really happening, complicatedness be damned.

The Early Excitement Of Chaos Theory

But what if this creeping complicatedness of our organizations increases the fragility of the organization? 

That is the conclusion of researchers who think organizations should be understood as “complex adaptive systems.”

In the 1970’s and 80’s a new field of research began to emerge called Chaos Theory. Scientists were looking at complex dynamic systems and trying to understand how they emerge and evolve. They drew inspiration from the natural world, looking at phenomena like how organisms grow in the wild, and how weather evolves. Eventually, they began applying the lessons to fields such as finance, biology, economics and eventually, organizations.

One of the fundamental implications of chaos theory is that small changes have the potential to have big effects within the system, whereas large changes are less likely to shift the underlying order of the system. This is because the organization is seen as a complex system rather than a fixed body. The individual behaviors and reactions of people within a complex system are unpredictable, but they are linked to one another. The feedback from each of those unpredictable actions will give feedback to others in the organizations and influence their subsequent decisions and reactions.

In the 1990s there was a lot of excitement around these ideas.  In 1999, Richard Pascale, a former management consultant and author, wrote about chaos theory in the MIT Sloan Management review, predicting that “the next point of inflection is about to unfold”.

However, Chaos Theory Has No Star

Alas, a new era did not unfold. The increased use of computers and connectivity coincided with globalization and growth of large businesses that paired well with change management frameworks like John Kotter’s 8-step “change management” approach. 

I first stumbled upon Pascale’s writing on chaos theory while leading research at BCG where I helped revamp their thinking on organizational change in the mid 2010s.  I thought that the Partners I was working with would share my excitement.

However, I quickly realized the problem.  Kotter’s approach puts the senior executive at the center of the story and the leader’s task is to force a change on a resistant organization.  To him, the business leader “defines what the future should look like, aligns people with that vision, and inspires them to make it happen despite the obstacles”

Chaos theory, in contrast, removes the senior executive from the center of the story and puts the system at the center.  That is exciting for people who enjoy thinking about complex systems, but isn’t likely to be profitable to a consulting firm which sells projects to senior executives.

I don’t deny that many of the people at senior levels of organizations do have useful experience and are probably better than most at figuring out the direction of the company.  However, it is worth considering why that seems to be the only way we believe modern organizations can be run.

Former CEO Luke Kanies gives us a rare glimpse into the awkward implications of large organizations.  He had the experience of growing up on a commune and then building a 500+ person company and really struggled with the tension between the belief in a free market and the reality of running a company as a top-down operation.  

We still live in a free market economy, but it’s not one Adam Smith would recognize. Instead of individual or small operators, ours is composed almost entirely of corporations. Really big corporations. And these companies use the same kind of central planning that we so despise in communist systems.

…We could see no way to have a system where the people doing the work built a plan for the organization. Even thinking about it now, my reaction is, “How would they know what my goals are?” That’s the kind of question you can only ask in an authoritarian state, not in a free market economy.

My goals became my company’s goals, and the only real way to ensure people worked toward them was for me to provide a plan.

We have no other playbooks for running large companies.  Top-down and complicated is the only way we know how to do it and this fact is worth acknowledging more openly.  Many corporations engage in culture PR, telling employees that they will be given the Dan Pink sandwich of autonomy, mastery, and purpose when the day-to-day reality is far from it. 

A first step towards adding new models to the toolbox like Chaos Theory has to be an admission that creating dynamic large organizations remains elusive, and the very few examples we have means that there is very little expertise on how to behave in new ways.  

Chaos Theory Is A New Lens On Business

It’s an open secret in modern organizations that most change efforts fail.  Kotter estimated in his book that upwards of 70% of change efforts fail and this has become one of the most repeated facts from consulting firms who unironically share this in the front of pitch decks which then go on to sell another top-down change program.

The best argument to immediately increase awareness of Chaos Theory is that it gives managers a way of understanding the reasons why these change programs fail.  

With a deeper understanding, managers can then use it as a lens to re-frame many of the activities which are traditionally seen as bad practices such as redundant activities and lack of processes.  While many of the implications of chaos theory are counterintuitive, Pascale offers four basic principles of “complex adaptive systems”:

1. They consist of many agents acting in parallel and are not hierarchically controlled
2. They continuously shuffle these building blocks and generate multiple levels of organization and structure 
3. They are subject to the second law of thermodynamics, exhibiting entropy and winding down over time unless replenished with energy. In this sense, complex adaptive systems are vulnerable to death. 
4. They have a capacity for pattern recognition and employ this to anticipate the future and learn to recognize the anticipation of seasonal change

Chaos theory posits that this is a natural state that emerges without central control.  Instead of letting things emerge, we do the exact opposite, we try to control organizations as much as possible.

This approach makes a lot of sense because organizations are run by humans who have a natural desire for control.  But consider the implications of operating in an organization which is a truly complex adaptive system, suggested by Professor Gary Grobman:

Complexity theory suggests that organizational managers promote bringing their organizations to the “edge of chaos” rather than troubleshooting, to trust workers to self-organize to solve problems, to encourage rather than banish informal communication networks, to “go with the flow” rather than script procedures, to build in some redundancy and slack resources and to induce a healthy level of tension and anxiety in the organization to promote creativity and maximize organizational effectiveness

This is terrifying for most managers and helping them grapple with inevitable insecurity and emotional challenges of embracing these methods is just as important as an understanding of the principles themselves.

“Eyes On, Hands-Off”: Chaos Does Not Mean Anarchy

“You can’t just let people do whatever they want.”  This is the most common pushback to the idea of chaos theory.  People mistake chaos theory as the first step on the road to anarchy.  Yet in the highest stakes arena, the military, they openly embrace many of the principles of chaos theory.  

A publication from the US Marine Corps published in 1996 titled “Command and Control” offers a view of a seemingly traditional view of leadership through a complex lens: “command and control is not the exclusive province of senior commanders and staff: effective command and control is the responsibility of all Marines.”  It goes on to detail command and control as “a complex system characterized by reciprocal action and feedback” that “provides the means to adapt to changing conditions.”

Here is General Stanley Mchrystal writing in his book “Team of Teams” which details how the military had to come up with a better approach to counteract the more “chaotic” and emergent activity of the terrorists they were fighting in the early 2000s:

The temptation to lead as a chess master, controlling each move of the organization, must give way to an approach as a gardener, enabling rather than directing. A gardening approach to leadership is anything but passive. The leader acts as an “Eyes-On, Hands-Off” enabler who creates and maintains an ecosystem in which the organization operates.

Notice how similar this is to Grobman’s conception of a chaos theory manager and how antithetical this is to Kotter’s definition of a leader.  This goes against the caricature of military organizations as top-down rigid hierarchies.  Unlike many companies today, military organizations have people who plan to have much longer tenures within the organization and are personally at risk if the organization becomes too fragile and complicated.

The Five Roles Of The Chaos Manager

A good way to think about chaos theory would be by thinking about how Jazz relates to most other music.  As Louis Armstrong said, “If you have to ask what jazz is, you’ll never know.”  Chaos Theory is similar.  It can’t be easily boiled down to easily understood scientific laws, great business book narratives, credentials or 8-step plans.  Similar to jazz, it is improvisational in nature.

Many people in the business world are hungry for a different way of thinking about change in modern organizations but don’t buy into the idea that organizations are “broken.”  They also don’t think that the solution to these problems is another complicated continuous improvement program or consulting firm transformation program.

Chaos theory can be the improvisational permission that leaders need to explore ways of leading and managing beyond simply what has been done for the last fifty years.  This can help to inspire a new generation of “chaos managers” that want to treat organizations as they are: living, dynamic systems.  

Fundamentally, the chaos manager thinks about five roles:

1. Emergence Architect: Increase the opportunity for changes that have large positive effects by engaging in more small experiments
2. Authority Aligner: Increasing the credibility of top-down leadership by focusing on personal authority in addition to positional authority.
3. Reality Sensemaker: Shift from the illusion of top-down control to better control though improved sensemaking, better feedback & making appropriate decisions at lower levels of the organization
4. Chaos Injector: Ensures that the organization is not stagnant and looks for ways to inject “energy” throughout the company
5. Survival Guide: Can increase the perceived credibility among employees, customers, society and shareholders by shifting organization’s mission to survival 

Role #1: Emergence Architect

The canonical example of chaos theory is the Butterfly effect. Far away in China, a butterfly flaps its wings. The tiny change in pressure it causes has cascading effects, causing whorls of wind, which in turn cause pressure disturbances of their own. These spirals of wind feedback further on themselves in a relentless positive cycle. Far away, a hurricane forms. The butterfly, oblivious, flies on.

The Butterfly effect occurs in all systems of sufficient complexity. It is characterised by two features:

1. Nonlinearity. Small changes in input (flap of wings in China) have big effects on outcomes (wind in the US)
2. Unpredictability. Because we can never know the precise nature of all inputs, and small changes in inputs lead to big changes in outcomes, we cannot forecast outcomes.

Both of these things are the enemy of the modern manager.  The modern manager spends their time convincing others that the future is both predictable and can be dictated by well-designed programs and initiatives. Yet over time this desire for predictability only ends in the inevitable path of stagnation.  

Yet not every company operates like this.  Amazon is a company both obsessed with long-term survival and a deep understanding that survival requires designing for complexity.  Here are three lesser known ways they design this:

#1 Designing for emergence of skills. From Bezos 2009 shareholder letter:

“Working backwards”  from customer needs can be contrasted with a “skills-forward” approach where existing skills and competencies are used to drive business opportunities. The skills-forward approach says, “We are really good at X. What else can we do with X?” That’s a useful and rewarding business approach. However, if used exclusively, the company employing it will never be driven to develop fresh skills.

#2 Accepting a stance of not knowing: From Bezos 2016 shareholder letter:

One area where I think we are especially distinctive is failure. I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment.

#3 Making reversible decisions at the lowest level:

Amazon pushes teams to escalate one-way door decisions – those that can’t be reversed and may have long-term consequences.  However, with “two-way” decisions, managers are coached to make these decisions themselves.  Here is how one manager at Amazon describes it:

Decision-making processes are evaluated for speed more than control. It’s not an excuse for poor decisions, but rather a reflection that the search for perfect information is normally fruitless and slow. Delegation of these decisions enables better rigor and time to be spent on fewer, more critical decisions…If teams escalate two-way door decisions due to a perceived lack of empowerment, use the escalations as opportunities to coach the teams

Bezos has noted that most large organizations default to seeing every decision as a one-way door that results in “slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention.”  Making quick decisions increases the chances of mistakes, but it also helps the company continue to operate as a complex “invention machine,” as he calls it, rather than another fragile, large company.

Role #2: Authority Aligner

Done well, command and control adds to our strength. Done poorly, it invites disaster, even against a weaker enemy – US Marines, “Command and Control”

Many organizations are not in fact the command and control hierarchies that they are portrayed to be. While there may be a clear formal hierarchy and a well-designed org chart of the people in the organization, anyone with more than a week’s experience in a modern organization knows that informal networks control how things actually get done and that improvisational behavior is part of most work.

The chaos manager is concerned with the credibility of the organization and ensures that positional authority is aligned with personal authority.  That the people in leadership are the ones people want to follow.  While the Marine Corps has a clear position hierarchy, they have a deep understanding of this idea. 

Companies undermine their credibility in two ways: 

1. Official authority doesn’t have associated responsibility for its actions
2. Personal authority doesn’t get recognized and integrated over time

The first condition results when there is a lack of “skin in the game.”  When people within the organization see that senior leaders pay no costs for mistakes and carry no responsibility for their decisions, the organization fills with a creeping nihilism rather than ideas and creativity.

The second condition exists in most companies because positional authority is so salient and easy to understand.  Personal authority is the credibility that people carry within the organization regardless of their rank within the company.  While these people often command the respect of their peers, they often grow disgruntled because their skills are not a perfect fit for climbing the corporate ladder or are overlooked by senior leaders.

Bridgewater Associates is one company that takes finding the people with personal authority seriously.  As Ray Dalio says,

In typical organizations, most decisions are made either autocratically, by a top-down leader, or democratically, where everyone shares their opinions and those opinions that have the most support are implemented. Both systems produce inferior decision making. That’s because the best decisions are made by an idea meritocracy

To cultivate an idea meritocracy, they developed an app called a “dot collector” which enables all employees to rate each other along many different dimensions, ranging from “knowledgeability” to communication style. Over time, the app builds up a picture of each employee’s “believability” on different issues. This enables Bridgewater to understand where expertise lies within the company in addition to the hierarchical authority easily understood on an org chart.

Role #3: Reality Sensemaker

In a complex system, what is the role of the leader? General McChrystal says leaders become “gardeners” and Professor Grobman suggests leaders learn how to “go with the flow.”  We might have a general sense of what they mean, but what should a leader do on a day to day basis?

The chaos manager engages in a continuous search for truth about the reality within the organization and sees the organization not as a stable system, but an adaptive network with dynamic relationships, interactions and rules.  Today’s reality is not tomorrow’s.

Edgar Schein helped popularize the idea of assessing corporate culture in the 1980’s.  While many people gravitate to his three-tiered culture framework, he saw the understanding of culture not as a top-down reality shaping initiative but as a deep inquiry into the “nature of humanity, human relationships, time, space, and the nature of reality and truth itself.”  

The chaos manager takes this search for truth seriously and knows that the fine balance of command and control can only be reached if they have an accurate map of reality.  The chaos manager does not have authority because of their position, but because of their ability to learn, listen and integrate.  The best leaders have the best map of reality.  

One of the best accounts we have of embracing this model is from Steve Miller, who became a “chaos manager” later in his career at Shell:

The scariest part is letting go. You don’t have the same kind of control that traditional leadership is used to. What you don’t realize until you do it is that you may, in fact, have more controls but in a different fashion. You get more feedback than before, you learn more than before, you know more through your own people about what’s going on in the marketplace and with customers than before. But you still have to let go of the old sense of control.

Role #4: Chaos Injector

In the forestry world, a “controlled burn” is an accepted practice of lowering the risk of fragility.  A “controlled burn” is a fire purposefully set with the goal of lowering the risk of more uncontrolled wildfires that put people and communities at risk.

The chaos manager knows that organizations are at risk if they become stagnant and similarly look for ways to unleash controlled burns within their organization.  These are often small and subtle design decisions that may lead to unexpected positive outcomes.  Three simple examples include:

1. Unplanned Interactions: Steve Jobs had this in mind when he designed Apple’s headquarters: their corridors were deliberately small so you had to bump into colleagues you didn’t directly work with. Increasing connectivity between key nodes in the organizational network allows for both ideas and people to collide.
2. Human Judgement Over Rules: At Ritz Carlton, where employees are given a budget to spend on making customers happy, no questions asked. This is inherently unpredictable — each guest is different, so management may not know what money is being spent on. But as customer demands change, the company does not have to develop 
3. Aligning Career Incentives: Many individuals do not have any incentive to think about the health of an entire organization.  One way to do this is to increase the connections between groups, such as making an engineering team responsible for the customer service demands for their product after launch.  This can shift teams out of their default modes of approaching and solving problems and work in new ways.

The chaos manager is always listening and looking for teams that are stuck within rigid rules and individuals with limited autonomy.  The chaos manager knows that they need to inject chaos to ignite the literal creative energy of individuals throughout the organization.

Role #5: Survival Guide

In Chaos Theory, the mission is clear: survival.

Right now many organizations have operated for decades in a simulated reality that is itself fragile and where plans don’t have to make sense, competition doesn’t matter and second-order effects can be safely ignored.  Before the Covid-19 pandemic, the US and UK were rated the top two countries in preparedness.  Why? Because they had done extensive planning and even run simulations.  They had plans.

But their plans were overly optimistic and focused on keeping morale high and the economy running.  Anchored to these plans, people were more interested in trying to make them happen rather than taking a more adaptive response.  The deeper problem is the absolute faith in plans in the first place.  If you think everything can be modeled on a spreadsheet, you start to lose touch with reality and stop orienting towards survival. In this case, human survival was at stake too.

Many people have given up on institutions.  Chaos theory is a lens that can help us escape this nihilistic view.  Yuval Levin has chronicled the role of institutions in our lives and believes “We lose faith in an institution when we no longer believe that it plays this ethical or formative role of teaching the people within it to be trustworthy.” 

As I have outlined, almost every incentive within modern organizations is conspiring to shift people’s attention away from the organization’s credibility and survival.  Company starts struggling? Just get another job.  Your initiative doesn’t really matter? So what, it looks good on a resume.  Employees suffer under the current paradigm?  Sorry buddy, it’s always been that way.

Levin suggests that we need to start asking “Given my role here, how should I behave?”  This is a nice sentiment, but I’m not sure most people are there yet.

Instead, Chaos Theory can integrate with the current paradigm and give current leaders the feeling that they are still doing something while we discover what works.  To the many business leaders and managers who are frustrated with the accepted reality of organizations, it gives them a framework to play and experiment to potentially find a way out.

I might be a bit crazy, but similar to Taylor’s belief that Scientific Management could help transcend the divide between workers and owners, I believe that an earnest attempt at applying the lessons of Chaos Theory can help to soften some of the broad disillusionment across the corporate world that any real change is possible and help people take pride in their roles, institutions and our systems.

Special thanks to Thomas Hollands who partnered with me on the many initial drafts and helped me shape the overall theme of this essay and Jeremy Finch, who created the illustrations. Also to Vinay Debrou, Michael Kueker, Greg Doctor, Mike Tannenbaum, and Tom Critchlow for reading drafts and helping to make it a lot better.

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post Integrating Chaos: Building Resilient Organizations with Chaos Theory appeared first on Boundless by Paul Millerd.

As Kroeber and Kluckhohn explored the history of the word, they found all roads pointing to Germany, where the word was emerging as “cultur”:

Kant, for instance, like most of his contemporaries, still spells the word Cultur, but uses it repeatedly, always with the meaning of cultivating or being cultured

It wasn’t until the late 1800’s that the word started to form into the modern form of the word, adopted by Anthropologists and other academics who were studying foreign cultures.

Sir Edward Tyler’s book Primitive Culture from 1870 is often marked as a shift toward the modern definition:

that complex whole which includes knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by man as a member of society

By the 1950s there were over 100 definitions of the word and that was before organizations started using the term.

In the 1980s, Edgar Schein’s research expanded the scope of the world to modern organizations and the way we talk about companies has never been the same.

“Culture” Is Confusing

In my ten years working in strategy consulting, there was no concept that fascinated me more than “corporate culture.”

As I explored the topic and related research my fascination shifted from the topic to the fact that almost every company talked about their culture but rarely employed a single person within the organization that understood what culture was, how it was formed and shaped, and how it related to the survival of the company.

Even as HR has been elevated to the C-Level, most “people leaders” remain relatively oblivious to powerful ideas about organizational culture formed in the 1980s. This is both the result of our obsession with the latest and greatest ideas and the lack of belief in the value of human resources by other functions and leaders.

It is also the result of a lack of coherence around a set of norms for what a “serious” human resources professional might look like. Part of this is excused by the fact that human resources emerged as a reaction to other trends such as the disappearance of unions and the need for companies to manage benefits and even in a darker way, as the way Stalin thought about centralized planning and productivity in the gulags of Russia.

As human resources moves beyond the history of “personnel management” and limited views of human capacity, it must begin to take itself more seriously. Just as advertisers likely would look down upon anyone that had failed to read Ogilvy, it should be seen as a similar failure to not have read Schein.

In the following essay, I hope to go deeper into some of Schein’s ideas and give you a framework and lens of thinking about organizational culture.

This essay is a perfect starting point for thinking about how Schein’s work can apply to your company or even better still (as you will see) thinking about how to shape your culture from the founding or early stages of your company. We’ll walk through the following:

1. How culture arises
2. Why the idea of a unified, single culture is wrong
3. A framework for thinking about culture (hint: it’s not actually a pyramid)
4. The two factors that shape how a culture solidified
5. The role of anxiety in learning and culture
6. The stages of cultural development
7. Identifying a “strong” culture
8. How to assess culture in your own company

How does organizational culture arise?

Edgar Schein’s 1984 article “Coming to a New Awareness of Organizational Culture” should be considered a must-read for anyone in the human resources function.

While I don’t suggest that his ideas are comprehensive, Schein is the best starting point for making sense of what we mean by culture in a business organization. Many other ideas such as Chaos Theory add much-needed nuance to modeling organizations, but Schein argues that we need to deeply understand a culture if we wish to shape it.

We need to not only understand what culture is but how it arises:

Many definitions simply settle for the notion that culture is a set of shared meanings that make it possible for members of a group to interpret and act upon their environment. I believe we must go beyond this definition: even if we knew an organization well enough to live in it, we would not necessarily know how its culture arose, how it came to be what it is, or how it could be changed if organizational survival were at stake.

Schein gives us his definition of organizational culture at the start:

Organizational culture is the pattern of basic assumptions that a given group has invented, discovered, or developed in learning to cope with its problems of external adaptation and internal integration, and that has worked well enough to be considered valid, and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems.

Culture Is Found In Groups

It is common for companies to claim a collective company culture, but this is not a good way for thinking about culture. While there may be common cultural elements across a large company, the culture that we care about is found in specific teams of individuals.

He finds the group or team element important enough to define it as a “set of people:

1. who have been together long enough to have shared significant problems,

2. who have had opportunities to solve those problems and to observe the effects of their solutions

3. who have taken in new members. A group’s culture cannot be determined unless there is such a definable set of people with a shared history.”

Schein saw many people define a group of people based on a certain culture and felt that was a logical mistake.

Culture is a result of the behavior of individuals and not the other way around. There is no culture unless a group “owns” it.

Modeling Organizational Culture

Often shown as a pyramid, Schein’s original model was presented as three different layers. Cultural concepts can move between these two layers over time and are associated with different levels of awareness within the organization.

The three levels:

1. Artifacts: These are the “visible” symbols of the culture. It can include anything from clothing styles to posters on the wall to the volume of speech. Even if not understood, the artifacts that last are typically deeply tied to the underlying culture.
2. Values: These are the “espoused” values – often found on company websites and also the area which has the greatest chance of being disconnected from reality.
3. Basic Assumptions: These are the beliefs that people use to make day-to-day decisions within an organization. For example, an assumption may be that “it is best to speak up when I have a good idea.” Judging the assumptions and trade-offs people make on a day-to-day basis is often the quickest way to understand the “real” culture.

One of the biggest traps when analyzing a company is to look at the “artifacts” and make assumptions about the culture. You may walk into an office that has ping pong and foosball tables and think the culture embraces having fun during the workday. If you spent a week at the company and realize that everyone assumes you should wait until 6 pm to play any games, you’d realize the culture is something a bit different than your initial assessment.

In Schein’s framing, to look at the artifacts is to avoid looking at the “cultural essence” of the company.

How A Culture Solidifies

Schein said that the culture of a company emerges and solidifies in two ways:

1. Positive problem-solving processes
2. Anxiety avoidance

The first category is really how the company solves and reacts to problems. This is a big factor early in a company’s history as the company will typically face many challenges. How it solves those challenges will have a big impact on the future cultural DNA of the company.

This is mostly a good thing and if a company continues to grow, it is likely because its default way of thinking about and solving problems is scalable to larger and larger issues.

However, there is also a shadow side that emerges early in a company’s growth. This is what Schein calls “anxiety avoidance,” or behaviors that help groups to minimize anxiety. Common ways this shows up in a company is through the desire for order, consistency, and control, or ways of relating to others that minimize conflict.

Schein says that the behaviors that result from anxiety avoidance can be the “most stable”:

once a response is learned because it successfully avoids anxiety, it is likely to be repeated indefinitely

One common but frustrating behavior we see in companies is to have a “default to highest-ranking person’s opinion” assumption. This may have helped the company make decisions and avoid internal conflict early on in the company’s fight for survival but it may not be beneficial as the company scales.

Anxiety & Learning

To understand Schein and his model of corporate culture, it’s worth going a bit deeper into his ideas of anxiety and learning.

In the early 1990’s there was a lot of research on “learning organizations” and identifying ones that were better at adapting to change. I still think this is some of the best thinking that’s come out of organizational studies, but seems to have been lost to a lot of the energy around the internet and technology that took the business world in a more exciting direction.

Schein sees anxiety as a fundamental component of learning.

Anxiety inhibits learning, but anxiety is also necessary if learning is going to happen at all.

He deems these two kinds of anxieties “learning anxiety” and “survival anxiety.” Only survival anxiety can help us overcome learning anxiety.

“Learning anxiety” is familiar to most of us. When we start learning something new it brings up feelings of being an impostor and forces a reckoning with the fact that we may not have that much competence in a specific domain.

Further, learning risks us being pushed out of groups that matter to us. Anyone who has proposed a new way of doing something at work and has experienced a disproportionate response knows what I mean. It’s not that the idea is bad, people just don’t want to risk not belonging.

Schein believed the only way to overcome this tension was through “survival anxiety.” This is the feeling that if we don’t learn something new, we will not survive.

Threading the needle of creating survival anxiety that helps people orient in the right direction without creating too much fear is hard:

Most companies prefer to increase survival anxiety because that’s the easier way to go. And that, I think, is where organizations have it absolutely wrong. To the extent that our present managerial practices emphasize the stick over the carrot, companies are building in strong resistance to learning.

Shifting this dynamic is hard, if not impossible for a company with a solidified culture. It would involve leaders dramatically changing their own behavior before implementing any formal policies.

Schein is typically skeptical of managerial attempts to impose learning and finds many attempts end up being coercive:

Managers have to realize that it’s important not to put a value on learning per se because doing that can be dysfunctional. Consider something as ostensibly innocuous as the learning that is supposed to take place at the off-site meetings and Outward Bound programs that many companies now sponsor. These companies force their employees to climb trees all day and then reveal personal stuff to one another at night.

So yes, the group has learned something. But that learning was coerced, and the resulting new team may be dysfunctional because its members are not necessarily being true to themselves. In fact, there are occasions when individuals do the organization a huge favor by refusing to learn.

Schein is telling us that if an organization aspires to be an adaptive learning organization, it needs to have the humility to realize that it won’t be able to plan learning for its people.

Learning is not a top-down directive. It’s a messy process that may not take you in the expected directions.

Stages Of Culture

Schein says that learning and culture go hand in hand and are continuously being shaped:

culture is perpetually being formed in the sense that there is constantly some sort of learning going on about how to relate to the environment and manage internal affairs

However, the initial founding and early stages of a company are pivotal. During the period the behaviors and norms established by the company and especially the founder and key leaders will set the tone for the culture of the company for years.

Schein described this period as “clarification, articulation, and elaboration.”

At a certain point, the company reaches mid-life. This is when the company has stabilized with a number of learned “anxiety avoidance” and problem-solving behaviors.

At this stage, new employees join the company without a deeper understanding of the context of how the culture was formed. It is also at this stage that understanding that context is crucial if you wish to make a change.

In order to shift the culture, you will need to deeply understand what makes the culture stable and why. Schein notes that this period brings up a stressful strategic decision for many company leaders:

Whether the organization needs to enhance the diversity to remain flexible in the face of environmental turbulence, or to create a more homogeneous “strong” culture (as some advocate] becomes one of the toughest strategy decisions management confronts, especially if senior management is unaware of some of its own cultural assumptions

Finally, the culture reaches maturity or decline because either the market the company competes in is mature or the culture has become “excessively stable.” At this point, change may be all but impossible because of how deeply people are attached to the underlying assumptions

Such managed change will always be a painful process and will elicit strong resistance. Moreover, change may not even be possible without replacing the large numbers of people who wish to hold on to all of the original culture.

Strong Cultures

If we can define a culture of a company we can also define how strong the culture is. Schein’s definition of cultural strength is as follows:

The “strength” or “amount” of culture can be defined in terms of (1) the homogeneity and stability of group membership and (2) the length and intensity of shared experiences of the group.

If a company has had to navigate many crises for survival, the company will likely have formed a strong culture. Alternatively, if the company has not been around long and has had a relatively easy ride to success, it may have a weaker culture. This can set the company up for disaster when they scale and face their first large challenge.

It is important to realize that cultural strength does not mean effectiveness. You can have a strong culture that doesn’t serve you anymore. Think about Kodak which was known for having an incredible branding and marketing culture, but failed to adapt to the shifting digital photography landscape.

I’ve also written about my experience at McKinsey which I believe has both a strong and effective culture. At McKinsey, the first week of training gives us a clue of how seriously they take the culture.

Instead of learning tools and ways of working, we were taught the history of the firm, given a book by Marvin Bower, one of the most influential people in the firm’s history, and shown videos of people talking about the firm values. These values were then reinforced by sharing stories and direct references in the work.

McKinsey’s strong culture enables it to be incredibly successful in the current market environment, but that same culture means it is more at risk than other firms if that environment ever shifts.

Assessing Culture In Practice

Even Schein admits that “Organizational culture as defined here is difficult to study.” At its core, it is still about uncovering the underlying assumptions of behavior.

In my own experience, there is no substitute for time spent within the culture and a deep examination of the behaviors, practices, and beliefs. This means engaging in in-depth interviews, surveys, and observation at all levels of the organization.

Schein gives us four lenses to look at culture:

Four Ways To Assess Culture (Schein, 1984)
1. Analyzing the process and content of socialization of new members

2. Analyzing responses to critical incidents in the organization’s history

3. Analyzing beliefs values and assumptions of culture creators or carriers

4. Jointly exploring and analyzing with insiders the anomalies or puzzling features observed or uncovered in interviews

Taking a similar approach, I worked with a smaller company on a project to help them understand their own culture. It was surprising to me how everyone had a bit of understanding of the culture, but not a comprehensive view, and all struggled to answer the question “what is the culture?”

Instead, I asked questions like:

• What is a belief that people seem to hold here?
• What is a way of behaving that is rewarded here?
• How do people solve problems, especially when stressed?
• What is something that an outsider might say about your team?

From there you can start to piece together some of the common assumptions and begin to test them with people: “it seems that when X happens, people do Y, is this right?”

Through interviews and surveys, we identified six cultural characteristics and tried to define them as specifically as possible. Each of these was backed by a story or specific evidence. For example, “we do the right thing for clients even at short-term financial cost” was not just a boilerplate statement, it was actually backed up with several stories that “proved” the point.

This is much harder in large organizations, but you can still use the same general approach. In my time working at consulting firms, we would work with thousand-person organizations that may not have a single strong culture, but often have a few elements which seem to have been deeply embedded in the assumptions of most employees.

The danger is when company leaders want to identify a comprehensive culture for a large-scale organization. Instead, these leaders are usually better suited if they identify one or two values that do resonate as true for most employees and then embrace the fact that there will be several sub-cultures across the organization that cannot be controlled in a top-down manner.

No matter the level of the organization or type of organization, the best lens to understand culture is to understand the underlying mythos or stories of the firm. What are the stories you were told when you started? What are the stories that people tell you about how things are? How do you solve problems here?

If you’re interested in more ideas around culture, my friend Andrew runs a great site called Curious Lion – one of my favorite articles is his summary of Peter Senge’s book The Fifth Discipline.

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post Edgar Schein’s Anxiety & Assumptions: Powerful Ideas On Culture appeared first on Boundless by Paul Millerd.

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I talked to Alastair Humphreys after he had returned the previous night from a micro-adventure. It wasn’t a four year biking trip or a challenging long walk across the desert (he’s done that though!), but instead a short overnight camping trip with himself to re-connect with nature and his adventurous spirit. He helps others think about how they can design similar micro-adventures to find joy in the “5 to 9” rather than doing everything in service of the 9 to 5.

Alastair Humphreys is a British Adventurer and Author. He has been on expeditions all around the world, travelling through over 80 countries by bicycle, boat and on foot. He was named as one of National Geographic’s Adventurers of the year for 2012.

More recently Alastair has walked across southern India, rowed across the Atlantic Ocean, run six marathons through the Sahara desert, completed a crossing of Iceland, busked through Spain and participated in an expedition in the Arctic, close to the magnetic North Pole. He has trekked 1000 miles across the Empty Quarter desert and 120 miles round the M25 – one of his pioneering microadventures. He was named as one of National Geographic’s Adventurers of the year for 2012.

We talked about:

• His path after University
• Redefining success two years into a four year bike ride
• Walking across the desert
• Finding joy in “miro-adventures”
• His creative process
• His aspirations for his kids adventures
  

Links Mentioned:

• Alastair Humphries
• Subscribe to his newsletter “living adventurously”
• His new book: My Midsummer Morning: Rediscovering How to Live Adventurously Hardcover – May 30, 2019

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

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After attending a few corporate recruiting sessions, he didn’t take for granted that his path was to enter the corporate world. Twenty years later, he is still carving his own path and has recently returned from Koh Lanta, where he lived with his three children in Thailand for the last six months.

In the early 2000’s inspired by social networks like Myspace and the potential to bring people together online, he started Tribe Wanted, which was a “tourism experiment” to bring people together somewhere in the world. He and his business partner found an island for sale in Fiji and signed a three year lease. This experience taught him a lot about living in new ways, running a business and bringing people together. He described it as “doing a ten year MBA in six months.”

Ben has continued to bring people together throughout his career, combining eco-travel, community, career transition and learning. He has worked at the Escape school in London, which helps people “escape” the corporate world and shift to new careers. He has also started the Rebel Book Club which is a virtual and in-person book club group in England.

Last year, Ben and his wife decided to go on an adventure with their children and landed on Koh Lanta after some serendipitous discoveries of a co-working space and small school for international families on google maps. Here is what Ben wrote about the experience and whether he would do it again:

Despite the hard bits, the answer is definitely a ‘hell yeah’. It was a remarkable experience to have with our children when they were so young, and one we feel has made us closer as a family. Like all good travel journeys, doing something a little different helps your perspective. You get out of your bubble, you see how the world works somewhere else, you learn. As for Brexit, it seemed less important whilst we were away compared to more global social and environmental challenges. The evident impacts of mass tourism (plastic pollution), climate change (bleached reefs) and smartphone consumerism (every Thai child seems glued to their phone), has galvanised us to try and live and work with more awareness of the world than before.

Links Mentioned:

• Ben Keene’s site
• Rebel Book Club
• Tribe Wanted Fiji
• Right to Dream
• Escape The City
• Moving to Koh Lanta with three kids
• His experience after the six-months in Thailand
• The 100 year life (book)
• Curiosity Conversations with Paul

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

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Heather McGowan is the most thoughtful writer and speaker I follow on the future of work. She is able to connect the dots between work, culture, society and identity in a way that has captured the attention of many individuals, companies and universities around the world.

She credits much of her interdisciplinary mindset with her own University experience, saying that “every road points back to the Rhode Island School of Design.”  Contrary to how many students are now pressured to choose a professional identity, she reflected that during her educational experience she was “not trained to be anything” and instead taught to embrace a beginners mind, focusing whether or not she was asking the right questions.

She defines learning as “figuring out something you didn’t know before.”  While organizations claim to care about learning, many are not willing to embrace failure, letting people admit when wrong and be vulnerable.  She has worked with Universities to re-imagine their curriculums toa adapt to many of these changes, leading the strategic design of the Kanbar College of Design, Engineering, and Commerce at Jefferson, and working with Becker College to craft the “Agile Mindset” curriculum.  Even though much of her focus is on helping people think about work, she believes that because the Universities massified so much, we have lost touch with a liberal arts tradition in our academies and it’s an imperative to reimagine our liberal arts tradition to make it work for our modern world.

In the working world, she focuses on how we can think about learning and work in a more holistic way and often traces a lot of the challenges back to education.  She cites research from Gallup showing that: “while 74% of surveyed fifth-graders are engaged with school, just 32% of surveyed 11th-graders are engaged.”  Perhaps some of that disengagement is because people aren’t too excited about their job prospects. She worries that organizations in the short-term are still too focused on productivity, which depersonalizes the experience of work.  As work increasingly becomes specialized – she calls it “atomization” – she fears that we will increasingly only focused on “explicit knowledge” instead of the deeper tacit knowledge that makes us special.

Her advice for companies:

“If your lens on attracting talent is to create a box called the job, which is an artificial box and then figure out who best fits that box, that is defined as the rear-view mirror.  If you look out to your future, where are you going to get the best human potential, how are you going to attract it, how are you going to nurture it, how are you going to develop it?”

Heather’s career is a perfect example of the type of path and work that was not possible in the past.  Reflecting on her path she admits “this field just sort of emerged.” As her career has shifted more towards speaking, she has been able to design her life around learning.  Through her talks, she is able to get feedback and combined with her own curiosity, it helps her focus on what to learn next.

Ultimately, on the future of work, Heather remains an optimist:

I think if we focus on what humans do best…connecting to humans, and lighting the fire in a human by connecting to their motivational purpose…we’re going to see a huge boom in the future of work.

Some of my favorite articles of hers and links to learn more:

• What if the future of work starts with high school?
• Preparing students to lose their job
• Future of Work: Learning to manage
• Heather’s Work

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

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Richard Sheridan founded a company to end human suffering in the workplace.  That sounds grand, but he’s actually walking the walk and has been for over twenty years.  Coding became a passion for him at a young age but as he got older it became a “just” a job.  Throughout his 30’s he slowly lost interest in his work and instead of driving into the office would take joy rides around Ann Arbor.  Deep down, he knew that there must be a better way.

During this time, he was offered a promotion by a new leader at his company.  He didn’t really have a plan decided he would use this as an opportunity to quit.  When he delivered this news, his manager challenged him that it wasn’t the right decision.  That night he decided he would just put all his dreams on the table. He walked into the office the next day and told the CEO he would take the promotion on one condition.

I’m going to build the best damn software team Ann Arbor has ever seen, and I need your help.

He took the promotion and over the next four years, questioned everything he knew about building software.  Over time he started to find things that worked and contributed towards the kind of company he was proud to be building.  One of the things he questioned early on was the individual contributor model. Taking a page from Kent Beck’s book Extreme Programming, he implemented a pair-coding model, where two people work together on one computer.  His company has since expanded this to every function in the company and it is the kind of thinking that is still rare in today’s corporate world. However, decisions like this help him escape the traps that a lot of companies face with internal politics and power as they scale.  Hear about his own journey and the principles he uses to build a company centered around joy.

To find out more about Menlo Innovations, click here.

Books Mentioned

• Extreme Programming, Beck
• The Fifth Discipline, Senge
• Chief Joy Officer, Sheridan
• Joy, Inc. Sheridan
• Toyota Kata, Rother

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post Richard Sheridan On Building A Life And Company Filled With Joy appeared first on Boundless by Paul Millerd.

In these trainings, people do exercises that in the past might have been more typical of retreats that operated on the fringes or completely outside of corporate culture. The type of exercises that push people to be vulnerable, ask tough questions and look at their lives in a holistic way.

When you push people to ponder questions like “what is most important to you?” many wind up not putting their current job at the top of their list. One person reflected to me that a retreat exercise made them painfully aware of how 80-hour workweeks and non-stop travel made their ranking of family as the most important thing to them look quite hypocritical.

Being Fulfilled At Work Is Still A New Idea

Twelve years ago when I entered the working world, there wasn’t a collective sense that work should be a place to find meaning or passion. Work-life balance was the game and meaning was something to be found once you found that elusive balance. In 2007, google first landed in the best places to work ranking for the first time and in 2009, the Netflix Culture went viral. Company culture was the new hot topic of business culture.

This was amplified by the embrace of social media and for the first time, social media allowed us to “see” inside of companies both literally and figuratively.

What did offices look like? What were the ratings on Glassdoor? What did employees of X company go on to achieve on LinkedIn? How do companies share their story?

Google is perhaps the most obvious example of a company that embraced culture as a core competitive advantage and made it central to its story of success. It told its story through books like How Google Works and Work Rules!. Everyone wanted to work at a company like google.

However, most companies were not google and instead people found themselves questioning why their managers didn’t trust them with 20% time, let alone offering them free lunch and ping pong tables. Work was no longer a place to earn a living. It was a become a place for total and complete fulfillment. A recent survey found that 78% of workers now believe that “employers have a responsibility to keep employees mentally and physically well.” Think about that for a second. Placing responsibility for our mental and physical wellness on organizations that rarely are able to hire managers with the right skills.

Awkward Implementation Of Meaningful Work

Employers have taken responsibility for employee well-being, but early attempts have been based on the same stale approaches of the past. Business leaders have spent more time creating surveys to ask employees about their experience and translating human emotions into coded scoring rubrics than having actual conversations with them. HR leaders are more focused on making people feel good and fitting in with their HR peers by embracing the latest hot topic than realizing that meaning at work is “associated with mixed, uncomfortable, or even painful thoughts and feelings, not just a sense of unalloyed joy and happiness.”

From an average employee perspective, it looks like your company is giving a shit about you while at the same time, you actually feel more stressed, anxious and confused than ever. There are more more activities and initiatives you need to participate in that seem good on the surface, but don’t really solve any problems for you in terms of motivation, satisfaction or meaning.

I recently shared the above image showing the percent of employees being treated rudely by colleagues from a McKinsey study. A few years ago, I saw this and took it at face value: work is getting worse.

However, as former McKinsey and current freelance consultant Will Bachman commented, “could it be a measurement issue? Perhaps we are getting more sensitive to behavior that would previously be considered acceptable but is now considered insulting or rude? I’m not convinced this is the reason, but it is a hypothesis that should be considered.”

I think Bachman is spot on that we cannot rule out that hypotheses.

I also think Bachman is right. I think the increased attention to culture, engagement, satisfaction has undermined itself. I think many organizations would be better suited at being brutally honest to their people about their true goals or at least be more honest about knowing what it’s doing.

I’ve always respected the finance industry for its brazen ignorance of any new culture fad. There is never any illusion when you join an investment bank that you will be treated well. At least people know what they are getting into.

Yet I remain optimistic.

Is the disconnect between these expectations and reality making people miserable at work right now?

Probably.

But I’m also seeing the edges of a new conversation emerging. It’s not the surface level table-stakes conversation that many companies engage in now but a different conversation that has simmered below the surface for years. Frederic Laloux’s Reinventing Organizations was perhaps the first semi-radical treatise on work that caught some mainstream attention.

Perhaps inspired by these books and/or seeing others reinventing the organizations and work in fundamental ways, there have been many new people in the last few years that are questioning our current culture and assumptions surrounding work.

• Jason Fried asking if it really has to be crazy at work
• Paul Jarvis making the case that a company of one is success
• Derek Thompson writing about post-work and cult of workism
• Joeclyn Glein making the case for us to hurry slowly
• David Whyte telling us to stop ignoring our heart at work
• Tony Tringas inventing new ways for people to bootstrap companies
• Andrew Taggart telling us we are all a bit mad and there is more to life than work

Many of the conversations I’ve had with people over the last couple of years also reveal that people are waking up. They are realizing that its quite insane to place responsibility for their happiness or well-being in the hands of an organization.

I’m optimistic and hopeful that many of these same people take ownership for their unhappiness and help to create a better future.

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post Are our expectations of work making us miserable? appeared first on Boundless by Paul Millerd.

Tash Walker is the founder of a firm and spends her Fridays making marmalade.

Before instituting a four-day workweek at her firm, The Mix, she barely had time for her relationships.  She decided to start doing research about different ways of working.  There had to be a better way than the default options of “Summer Fridays” and “flexible work,” that never seem to make less anxiety or stress-ridden.

In her research, she discovered many examples of Swedish companies embracing 4-day workweeks and also found that when they instituted it, they often helped improve productivity.  After bringing the option to her team at The Mix, they decided to do a three-month trial.  They didn’t even tell their clients.

The funny thing?  The clients didn’t even notice.  Even better, when they shared it with their clients – they weren’t offended.  They were curious to learn more and impressed that they had prioritized their people.  While many quickly reflex to “well that can’t work here,” Tash and her team went forward anyway and have shown that a 4-day work week can work and it can work in professional services – an industry where many take for granted the fact that you should always be available for your clients.

Beyond improving the lives of the people at the firm, they achieved some incredible results:

• Revenues up 57%
• Absenteeism down 75%
• Productivity stayed the same
• Doubled the number of clients
• Client referrals up 50%

Want to learn how to make this happen at your company?  You can download their “4-day week“ report which is one of the best reports I’ve seen on the future of work.

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

The post Tash Walker On Why Companies Should Adopt A 4-Day Workweek appeared first on Boundless by Paul Millerd.

Conversation #1: Macro Trends (consultancies, journalists, politicians)

This conversation is typified by looking at trends and then working backward to see what the implications are for people.  Terms like “fourth industrial revolution,” “the end of work,” “post-work,” “artificial intelligence,” and “robots” are used prolifically.  McKinsey writes in a report on the future of work:

Automation, digital platforms, and other innovations are changing the fundamental nature of work.

…and Quartz:

Automation, advanced manufacturing, AI, and the shift to e-commerce are dramatically changing the number and nature of work.

…and finally, The Brookings Institute:

Robots, artificial intelligence, and driverless cars are no longer things of the distant future.

These trends are positioned as irreversible and having an impact on people rather than something we should question at a fundamental level. This conversation tends to center not around individuals but “the workforce.”  Think tanks and consultancies produce charts showing the numbers of jobs that will be eliminated by AI or show the types of jobs and skills needed in the future.

For example, The World Economic Forum writes:

Creativity will become one of the top three skills workers will need. With the avalanche of new products, new technologies and new ways of working, workers are going to have to become more creative in order to benefit from these changes.

While it is fun to talk about the future, this conversation often falls short of the reality that many current jobs that require creativity and other “human skills” (teachers, social workers, retail workers) are still undervalued in our economy.

This conversation often lends itself to identifying policies to either reduce suffering or reduce inequality in the workforce or economy as a whole.  It often highlights long-term trends that do not appear to be shifting such as the decreasing labor share of income and increasing rent-seeking as a percentage of our economy.  Thought leaders propose work-related policies such as minimum wages, unemployment protection, health benefits, portable benefits, paid leave and other similar policies. For example, The Aspen Institute has proposed a $25 million innovation fund to experiment with new approaches for portable benefits.

While these are great in theory, they often only end up helping the types of people who already have good jobs and benefits in the economy.  When one digs deep into some of these issues and starts asking “why?”, especially in the US around why so many benefits are tied to employment, they are likely to end up in conversation #5 (see below) questioning some of the sacred cows of the modern workforce.

While many of the issues in this conversation are important, they are a bit distant from the reality on the ground.  The articles get a lot of clicks and are great for panels at conferences but hard for most people to understand what changes they should make when they show up to work the next day.

Examples:

• Politics: “The Future of Work” (US Senator Mark Werner)
• Consulting: McKinsey’s report on Technology, jobs and the future is probably one of the best reports on the subject; Jobs lost, jobs gained: What the future of work will mean for jobs, skills, and wages (McKinsey)
• The 10 Skills You Need to Thrive In The Fourth Industrial Revolution, World Economic Forum
• Journalists: “When Robots Take Our Jobs” (Washington Post)
• Think Tanks: Aspen Institute – $25 Million Portable Benefits Innovation Fund
• Books: Rise Of The Robots (Martin Ford); The Wealth Of Humans (Ryan Avent)
• Existential Questions on the Future of Work: 5 Part Series (Richard Arthur)

Conversation #2: The Gig Economy (Journalists, Companies, Consulting Firms, Talent Platforms)

Given media bias towards writing that gets clicks, this conversation tends to be geared towards the worst parts of the gig economy and perhaps misses some of the people who are benefiting from the increased freedom and flexibility of the gig economy.  McKinsey’s report mentioned previously highlighted this fact, showing that even independent workers “by necessity” into it were “as satisfied” or more satisfied than comparable traditional workers, with the exception of income security and level of income.  While I agree with the fact that lower incomes are not a great thing, it does appear that the gig economy is somewhat of a release valve for people to prioritize things that do matter to them like flexibility and independence.

Companies making money from the gig economy also tap into this conversation with mixed results.  Some of the material is transparent content with little usefulness, while others have been thoughtful additions to the conversation.  Talent platforms have added the most useful content to this discussion.  UpWork’s Freelancing In America report and Catalant’s Reimagining Work reports are a bit optimistic, but provide unique insight into the people using their platforms.

Nonetheless, the gig economy highlights a continued optimization of the productive class.  What makes it different in the context of the gig economy is that a movement from full-time work to gig work often means a lack of a sense of security, good health care coverage, and a consistent wage.  While this is great for someone with high earning potential, it is a disaster for people with lower wages.  These challenges are often framed within the context of the current economic system (pay higher wages, give more benefits), but I believe the true opportunity for transformation will come from looking backward and questioning our current employment paradigm as Marco Torregrossa, leader of the “freelance revolution” in Europe, has done, “We shouldn’t complain that Uber drivers don’t receive full-time benefits; we should reconsider why benefits and security come attached only to full-time jobs.”

This conversation also highlights a third way, if you will, showing the success that companies like Managed by Q and Hello Alfred are having by choosing not to use gig workers, investing in their people and culture instead and unlocking a value by using technology in all places except the optimization of their labor force.

Examples:

• Book: Gigged, Sarah Kessler
• Journalists: “Is The Gig Economy Working?” (New Yorker), “The Real Future Of Work” (Politico)
• The on-demand economy doesn’t have to imitate Uber to win (Sapone, Quartz@Work)
• “How the Platform Economy Gives Superpowers to Freelancers” (Medium)
• The Gig Economy And Alternative Work Arrangements (Gallup)
• “Managed by Q’s “good jobs strategy” is paying off for workers—and the company” (Quartz)
• “Uber, Lyft drivers actually earn less than minimum wage, MIT survey suggests” (USA Today) and Uber’s Response
• Content Marketing: “Future Workforce Report: Remote Work Is Set to Go Mainstream but Is Your Business Ready?” (Upwork) or “How To Invoice Clients Professionally (7 Steps)” (Bonsai)
• Talent Platforms: Catalant’s Report on The Future Of Work (disclaimer: I helped write the report) and Freelancing In America (UpWork)

Conversation #3: Evolving Organizational Ecosystem (Companies, Consulting Firms, Authors, Entrepreneurs)

Within the past ten years, the corporate world has stumbled upon the belief that “millennials” needed to be catered to.  While this makes sense as Millennials have become the largest percentage of our workforce, investing in people is not anything new.  Many companies have been screaming from the rooftop about how investing in people leads to higher returns for decades (see basecamp, Southwest, Atlassian, Trader Joe’s, Costco, Toyota).

I believe what has changed, however, is that social media has made it almost impossible to hide a bad culture and gives many an outlet to share the most egregious elements in public (LinkedIn, Facebook, Glassdoor, etc…).

While I was pretty optimistic at first, I am less optimistic now.  Companies are changing policies, launching new initiatives and creating new values, but are failing to take a deeper look at the underlying behaviors, beliefs, and assumptions of the organization.  What I have seen in my experience talking to leaders and working as a strategy consultant, was that many of these initiatives increase complexity and increase attention on bad elements of culture. It is often not much more than “Culture PR.”

One welcome addition to this conversation has been the tech industry’s willingness to invest in culture.  My cynical hypothesis of why this has happened is that software businesses lend themselves to high margins and high levels of automation.  This leaves many thoughtful educated people a lot of time to think about how to spend that cash to keep people motivated.  Google, basecamp, and Netflix have arguably done the most to advance this conversation, sharing their counterintuitive culture practices (self-nomination for promotions, maximum 32-hour work weeks, get rid of jobs that are not needed anymore.  Others like Gravity Payments have gained attention by raising minimum salaries to $70,000 a year.  Regardless of the impetus, all of these experiments are needed and a net benefit to workers.

There has also been an emerging conversation in the corporate world around corporate purpose.  This can get muddled very quickly if you start talking about individual purpose within the same context.  However, there has been a lot of evidence showing that purpose-driven organizations dramatically outperform other organizations.  However, outside of a few organizations with dramatic and clear long-term visions, it is often hard to find organizations that operate around a set of values beyond profitability.

Frederic Laloux wrote perhaps one of the most provocative elements of this discussion with his book Reinventing Organizations. In it he calls out this the hollowness of many corporate mission statements:

Executives, at least in my experience, don’t pause in a heated debate to turn to the company’s mission statement for guidance, asking, “What does our purpose require us to do?

He highlights organizations that have built companies around their people, rather than traditional ideas of how a company should be run.  In it, he talks about how these companies have something called an “evolutionary purpose”:

The evolutionary purpose is not the same as a vision statement. A vision statement usually reflects the ego-driven state of consciousness of the management team, who decide what they want the organization to be. The evolutionary purpose…reflects the deeper reason the organization exists

He gives examples of Buurtzorg (“Helping home-based patients become healthy and autonomous), Patagonia (“Use business to inspire and implement solutions to the environmental crisis”), or FAVI (“Two fundamental purposes: the first is to provide meaningful work in the area of Hallencourt, a rural area in northern France where good work is rare; the second is to give and receive love from clients”)

His book, if read in the context of many of the current practices of the business world, is revolutionary.  Hopefully one day it is just seen as business as usual.

Examples:

• Crisis At Work: Why Organizations Undermine Human Potential (me, again)
• Company Examples: Netflix Culture, “Basecamp’s CEO Limits Himself to 40-Hour Workweeks–and He Thinks You Should Too” (Inc.), “Inside Atlassian: building a culture of innovation“
• Thought Leaders: Jacob Morgan’s Work at The Future Organization and his podcast The Future Of Work Podcast; John Hagel’s Center For The Edge
• “Here’s What Really Happened at That Company That Set a $70,000 Minimum Wage” (Inc.)
• Google’s re:work collection of practices, research, and ideas
• Books: Daniel Pink’s Drive, Laszlo Bock’s Work Rules!
• Consulting: Deloitte’s 2018 Human Capital Trends
• Conferences: Culture Amp’s Putting Culture First

Conversation #4: Personal Transformation (Freelancers, Entrepreneurs, Educators)

This conversation is about the individual.  Not just the person as “worker,” but the person as a person.  This conversation is founded on rebellion and the loudest voice in this space is probably Seth Godin, who urges people to “make a ruckus.”

Godin describes his life as a series of “projects” and has been carving his own path for decades.  He sees his role as helping to “shift the culture” and has helped people develop new mental models through his books, writing, podcasts, and courses.  In his book Linchpin, he boldly challenges our modern conception of work, “The educated, hardworking masses are still doing what they’re told, but they’re no longer getting what they deserve.“

It also includes people like Tiago Forte, who writes about the opportunities that highly-skilled freelancers have in this economy by diversifying their activity and depending on different revenue sources. He argues that “full-stack freelancers” often have the ability to capture a lot of the value previously captured by institutions:

Full-Stack Freelancers respond to technology as an opportunity, not a threat. They leverage software-as-a-service and online platforms to vertically integrate a “full stack” of capabilities, instead of focusing on one narrow function. This allows them to capture a much greater percentage of the value they create, instead of giving it away to gatekeepers and distribution bottlenecks.

This conversation also includes “The Future Of Learning,” which is a broad discussion ranging from MOOCs, alternative education institutions to boot camps and academies that are reacting to the needs of people that need to continually reinvent themselves in the world.  Godin’s altMBA is a prime example of this.  In a 30-day program, he helps people “level up” their skills and mindset through a hands-on action and intensive feedback and support from a committed community.  Future of work thought leader Heather McGowan captures the mindset shift that people taking advantage of Godin’s altMBA have already embraced: “we need to stop thinking of the professional you want to be (end state) and focus on the skills you want to acquire (continuous). Instead of focusing on learning as something that happens in the first 22 years of your life, it is instead something that never ends.

Forte also writes about the emergence of “Short Tiny Exclusive Virtual Experiences” (STEVEs) with he sees at the next (an improved) iteration of the MOOC and online course platforms.  Essentially “bootcamps as personality-driven brands.”  Or put more simply, on-demand learning from people you want to learn from.  Better tools such as Zoom and slack recently enabled me to pilot my first digital learning experience (Solopreneur Shift) and the future looks promising, especially with tools such as VR and AR that will continue to eliminate barriers and threaten the current learning establishment.

This conversation also includes people that are creating new ways of living, including digital nomads, remote workers, the FIRE (financially independent, retire early) community, vagabonds, and the work by professors at Stanford around “designing your life” with design principles. While people living alternative lifestyles have always existed, I would argue that social media has lowered the walls to seeing inside different ways of life.  Part of why I became a digital nomad myself was realizing that it seemed pretty achievable based on the many people I saw embracing the model online.

Digital nomads are perhaps the ultimate expression of the “personal transformation” conversation.  They often combine the opportunities of the gig economy and technology with the ability to learn and grow while traveling.  Companies like Remote Year have popped up to tap into this market (and countless similar companies such as Hacker Paradise, Wifi Tribe and more).  These companies are offering realistic alternatives to a “traditional path” through their networks of remote job opportunities and offering their own curriculums and communities.

Which leads us to conversation #5…

Examples

• Seth Godin’s Akimbo Podcast, Linchpin (book), altMBA & Bootstrapper’s Workshop
• Remote Year: Travel & Work Abroad
• Gig Economy, Diane Mulcahy
• Unbundling Work: Learning To Thrive In Disruptive Times (Gary Bolles)
• Preparing Students To Lose Their Jobs (McGowan)
• 10 Surprising Benefits Of Self-Employment (yours truly)
• Financially Independent, Retire Early (FIRE): Mr. Money Mustache Blog
• Designing Your Life: Book and TED Talks
• Podcasts: Life Skills That Matter & Boundless: The Human Side Of Work
• The Rise Of The Full-Stack Freelancer (Tiago Forte); The Future of Online Learning: STEVEs (Short Tiny Exclusive Virtual Experiences) by (Tiago Forte)
• The creator of WordPress shares his secret to running the ultimate remote workplace (Quartz)
• A Field Guide For Independent Strategy Consultants (Tom Critchlow)

Conversation #5: Fundamental Questions (Philosophers, Academics, Freelancers)

In contrast to conversation #1, this conversation looks deeper and questions our fundamental assumptions about work and life and challenges our belief that we need to have a “future of work” that is more or less similar to what we have now.  This conversation can be framed beautifully by a set of questions offered by long-time self-employed entrepreneur Nita Baum:

1. Why do we work today?
2. Given that the goods and utilities we need to survive and thrive are abundant, what is the purpose of work?
3. What does this say about how our resources are and could be distributed more equitably?
4. Could the purpose of work be to make us more individually and collectively whole- in material ways, in well-being and in a way that is conscious of the individual and the collective to the exclusion of neither?
5. If so, how would this shift our patterns of consumption and production?

These are tough questions, but luckily ones philosophers have been grappling with for a long time.

One of the best examples of this conversation is the one Andrew Taggart has brought to life.  He is a Practical Philosopher who argues that “There may be no greater vexation in our time than the question of how to make a living in a manner that accords with leading a good life”   He has brought back to life a discussion “Total Work,” an idea first proposed by Josef Pieper in 1948 in his work, “Leisure: The Basis Of Culture.”  Taggart argues that total work is stronger than ever and “eradicates the forms of playful contemplation concerned with our asking, pondering and answering the most basic questions of existence.“ He pushes us further and argues that we make a dangerous mistake when we put “making a living” ahead of the question of “what is a life worth living” (see podcast for full discussion).

When Pieper published Leisure he argued that work was consuming life and threatened philosophical traditions of contemplation and a certain type of leisure.  He argues that because work is becoming central in our lives, we fail to imagine any type of leisure beyond anything that is beyond a break from work.

In 1951, Alan Watts argued in The Wisdom Of Insecurity that our working world turns us into cogs in a machine:

Thus the working inhabitants of a modern city are people who live inside a machine to be batted around by its wheels. They spend their days in activities which largely boil down to counting and measuring, living in a world of rationalized abstraction which has little relation to or harmony with the great biological rhythms and processes.

More recently there are philosophers like Andre Gorz, who in Reclaiming Work (written in 1999), challenges us with the line “real work is no longer what we do when at work”  by showing that when a parent decides to stay at home with children, they are deciding “not to work,” yet what is taking care of children, if not work?  He says this comes from a limiting mindset around how we define work:

it has to be a job, a profession: that is to say, the deployment of institutionally certified skills according to approved procedures.

There is a long tradition of questioning the fundamental questions around work, labor and how to live.  It may be a mistake to think this time is different.  In 1964, a report on the “Triple Revolution” was put forward to President Johnson as a way to figure out what to do when all the jobs disappeared.  More than fifty years later, the jobs are still here and we still have an economy that fundamentally assumes that one should work to earn a living.  However, given the transparency of how bad this situation is for most people (see the fact that only 37% of Americans are employed in full-time jobs), we may in fact, be ready for a new conversation.

Professor David Graeber has said that those jobs should have disappeared and that a range of different political, cultural and historical factors have meant that we have created scores of “Bullshit Jobs” to make the economy look like it is still operating as designed.  He first proposed this idea in a viral essay in 2013 that turned into a recerntly published book.  He defines a “bullshit job” as:

A bullshit job is a form of paid employment that is so completely pointless, unnecessary, or pernicious that even the employee cannot justify its existence even though, as part of the conditions of employment, the employee feels obliged that this is not the case.

Graeber estimates that almost 50% of our economy is “bullshit” and explores how this came to be from a systemic lens, looking at things such as how time became something that could be transacted (“the idea that one person’s time can belong to someone else is actually quite peculiar”), how we value some labor over others (“typically involve work that needs to be done and is clearly of benefit to society; its just that the workers who do them are paid and treated badly”), and how the labor theory of value once ascribed to by Lincoln (“labor is prior to and independent of capital”) was demolished by Carnegie’s “gospel of wealth” and the shareholder value movement of the 1970’s.

We may be in a situation where many people, as Jean-Paul Sartre would say, are operating in “bad faith.”  That is, they have adopted a set of values they don’t really believe in as a way to deny their own freedom.  When I was in business school, there was a general belief that the system was rigged and that shareholder value probably wasn’t the best idea.  “But what are you going to do about it?” people would say.  Philosophers would urge us to reconcile this gap in our beliefs and our actions and to find pursuits that are more in consonance with who we are.

Some of these ideas are being talked about, but they are often dismissed as “the way things are.”  Some people are putting skin in the game, such as Scott Santens, who has crowdsourced his own basic income while also being an ardent supporter of the idea.  He advances this conversation by using his own experience and research to bring alive some of the fundamental flaws of how we think about work, money and survival and how we think our connection to each other and place in the world.

Examples:

• Andrew Taggart: If work dominated your every moment would life be worth living? (Aeon), Total Work Newsletter, The 70-hour and four-day work weeks are both rooted in Christian philosophy (Quartz @ Work), “I’m An Anticareerist And You Should Be One Too” (Medium)
• What is Anti-Careerism? (Anti-Careerist)
• Leisure, The Basis Of Culture (Brain Pickings)
• Universal Basic Income: Scott Santens, Andrew Yang (Presidential Candidate) and Chris Hughes
• Post-work: the radical idea of a world without jobs (The Guardian)
• “What if you got $1,000 just for being alive?” (Vox)
• Bullshit Jobs, David Graeber / Longform Article (Strike, 2013)
• Reclaiming Work: Beyond The Wage-Based Society (Gorz)
• Wisdom Of Insecurity, Alan Watts

41k+ Sold! (Top 1% Book) The Pathless Path is Paul's book about walking away from a "perfect" job with a promising future and starting over again. Through painstaking experiments, living in different countries, and a deep dive into the history of our work beliefs, Paul pieces together a set of ideas and principles that guide him from unfulfilled and burned out to what he calls "the pathless path" - a new story for thinking about work in our lives. Learn More & Buy The Book Here

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