Forms of Business and a Living Systems Approach
Sparked by a conversation the other day, it began to dawn on me that what we are seeing in our work to develop new forms of business is the move from a mechanistic to a systems view of business. Similar to many disciplines in the sciences, it is becoming clear that mechanical models for business are causing us to oversimplify things – taking a business out of its proper context in a complex living system.
Similar to the study of economics, in the past business would usually plan and operate under the assumption that all other things were basically equal or held constant ( eg. ceteris paribus). In addition, there has been an over simplification of the context, influences, and inputs of a business leading to a limited view of the stakeholders involved and the impact a business has on its community/environment.
So, now we need a paradigm shift in the forms of business we develop, such as trust-based businesses, that will allow and encourage a new awareness and capacity to operate. We need a new understanding about a business’s role in its:
Community – creating value for and with all its community of stakeholders. (As a Living System, those involved in the business must have a common understanding (purpose, objectives and principles) of the business’s multiple roles in, and with, the community/environment.)
A more mechanistic approach usually sees businesses focused on one primary goal – creating wealth (money) for a limited number of stakeholders (a machine for making money). This can lead to distant ownership and limited loyalty to the business resulting in:
- Short term thinking (impacting medium term sustainability).
- Disengaged employees (leading to high staff turnover, reduced commitment, and lack of adaptability and creativity).
- A lack of responsibility for the organisation’s actions and activities (negatively impacting customers, suppliers, the local community, the environment and society).
Ecosystem – managing its resources sustainably and, therefore, holding them in trust for the benefit of the community. (As a Living System a business must be materially and energetically open. It is clearly not separated from its environment and the resources it requires to sustain itself. This awareness brings the environment and resources, and their long term importance to the larger community, into the fundamentals of the business.)
A more mechanistic approach usually sees most resources and the environment as external to, or beyond the time horizon of, the business. This can often reduce the sense of responsibility and accountability for the sustainability of the resources.
Social dynamics – ensuring mutual support between each individual involved, the business as an entity, and the community as a whole – introducing trust, accountability and responsibility. (As a Living System a business must support its key internal and external relationships as networks and holarchies.)
A more mechanistic approach tends not to recognise the two way nature of communication and relationships. There is little awareness of the mutual support required to maintain stability within and between hierarchical levels. In business the relationships tend to be predominantly one way – expecting to achieve efficient operations through top down control. This leads to more rigid decision making processes and slower decisions – not decisions made at the optimal level between local knowledge and a wider focus (tactical and strategic).
Natural cycles – working with the natural cycles in business and life to allow for decline and regeneration of organisations. (As a Living System a business is constantly evolving and self-creating.)
A more mechanistic approach (to paraphrase Fritjof Capra, Hidden Connections) encourages all change in a business to be designed by management and imposed upon the organisation which tends to generate bureaucratic rigidity. There is no room for flexible adaptations, learning and evolution in the machine metaphor, and it is clear that organisations managed in strictly mechanistic ways cannot survive in today’s complex, knowledge-oriented and rapidy changing business environment.