We may think we are capable of optimizing or controlling a system for a singular result, but when we do so, the unintended consequences rear up like the head of an angry dragon. This is hardly a new idea. The realization that success in one domain might lead to failure in the context of a larger system has been around for generations.
If you want proof, look back just a few short years to 2008. Scarce growth, the catastrophic failure of a host of old growth stalwarts in the forest of banking and financial services, and the warning bells of climate change rung by Mother Nature all crowded in, shouting as one. That which we thought we controlled was, in fact, operating according to an agenda unknown to us. We now realize that we are playing by another set of rules—unfamiliar ones which arise from a larger context than the simplistic tenets of shareholder maximization that have held sway for decades.
Our modern day expectation of control or hierarchy in the management of complex systems is giving way to panarchy, and we must endure the consequences of our false expectations and embrace the coming change.
Such adaptation is often slow, spanning multiple generations, a time horizon which feels decidedly closer to eons when compared with the short-term transactional cycles of automated tracking and reporting that dictate share-value in today’s stock exchanges. As we continue to bump up against this uncomfortable principle of panarchy, we begin to understand both the limits and consequences of the fundamental rules we have set for modern commerce. “The future,” as Yogi Berra once said, “ain’t what it used to be.”
As one corporate observer said, “Our business model is in mutation. What we once knew is no longer, but what will be is still unclear.” Our system is flipping from single-minded profit maximization into something else. Apart from the growing pains required for us to get there, we think that “something else” might be not only more sustainable but also infinitely preferable to the single-variable state we have known.
In forested lands, after the catastrophic trauma of a fire burns the ecosystem into unrecognizable charcoal, new plant and animal species quickly move into the newly created habitat. Similarly, we are starting to see all manner of strange new colonizers of the economic ecosystem: the Benefit Corporation and “B Corp” certification, Michael Porter’s shared value model, a host of books on the new capitalism, and even the somewhat minimalistic concept of CSR (Corporate and Social Responsibility)—an acronym that barely existed a decade ago.
Lasting success in a system governed by panarchy, the ecologist will tell us, comes through resilience—the capacity to adapt, which is heightened by balance, variability and diversity.
For a company, I think resilience has at least three essential characteristics:
A resilient company clearly exists for a broader and bigger reason than simple profit maximization for shareholders. We call this a Purpose, and it always involves doing something for others.
A resilient company is granted a social license to operate — in other words, its brand – by customers and employees alike, who then, in various ways, hold that business to account for its Purpose.
A resilient company possesses an identity—a culture as an organization—that reflects the desire of its employees to live out its Purpose consistent with its brand in a manner that is authentic. If the business is able to be authentic in this way, then customers and employees alike will bestow it with the mantle of integrity.
What does all that mean? Integrity is bestowed upon companies that have a culture encoded by Purpose which is consistent with brand expressed authentically. [Tweet This!]
These characteristics are never fully arrived at by a company; rather the pursuit of them initiates a journey involving continual maintenance and careful tending.
If you look for these elements of resilience, you will begin to recognize them coming to life all around us. In the coming weeks, we will explore each of them, but before we do, there are a few more forces reshaping our ecosystem of commerce that are worth exploring. Next week we will look at how the digital disturbance of social media is necessitating rapid and related change.