This article draws on a wide range of my work and projects over recent years. That includes corporate strategy; social policy; systems practice; complexity; and multi-sector partnerships. These domains don’t collide in creative ways nearly often enough, but right now I’m seeing an important set of patterns emerging across all of them.

I’d characterise it as the shift from transactional, to relational world views.

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By relational, I do not mean simply having better relationships with stakeholders. I mean recognising that we live and work in relationship: with people, places, ecosystems, institutions, supply chains, communities and time. It’s an important distinction.

We’re getting overfamiliar with the challenge. Our current models of business and government are struggling to keep up with increasing levels of growth and interconnectedness. We’re depleting our baseline capacity to respond to shocks as they occur, leading us more often into crisis (check out Indy Johar’s recent piece for more on this).

This is an invitation to think about how we can flip that script, through building new models of value creation that strengthen our foundations as we go.

We have an often-incomplete model of value creation

We’ve been taught to think of the way we create value in a fairly linear way. We source inputs (land; materials; people; data), we add a differentiating source of value (labour; process; technology; design), and we sell the result as a product, or service at a profit or a surplus to invest back into the business. These are the visible parts of our process, that feel manageable and measurable. However, they are by no means the full picture.

Beneath every act of value creation sits a less visible (or at least less countable) layer of conditions that make it all possible. Traditional strategy and economics treat these things as mostly contextual, or as externalities.

What if we were to acknowledge that they are not peripheral at all? What if we recognise them as fundamental to our system of value creation? Our value web.

There are efforts underway to encourage organisations to think this way. TCFD and TNFD are both driving an agenda to measure and report upon some of these things. It’s an important step, but measurement and harm reduction are only a part of the story. Maybe not even the most important part. The more powerful idea is that these things are actually sources of meaningful and enduring value.

We need to understand therefore that value is created not only through what an organisation does, but through the connected system of conditions that make it possible.

Some of the most powerful strategies already understand this.

Compounding value through the strategy flywheel

Jim Collins introduced the idea of the strategy flywheel in Good to Great. In short, it’s the idea that the best strategies are cumulative. They build through repeated effort in a consistent direction, turning small efforts into sustained growth. Each turn of the wheel builds greater momentum.

The exponential growth that we’ve seen in some of the biggest tech platforms around the world shows how powerful this can be. Every search that we run through Google improves the engine. Every time we share an opinion on Facebook or Instagram, we add to the content that draws other people in. Each new LinkedIn connection strengthens the network that keeps us coming back. Each interaction creates some value for the user, while also strengthening the value proposition of the product or service itself in the future.

It’s smart strategy, and it clearly works in certain ways. Those wheels are certainly spinning fast – the question is what is their momentum driving?

Flywheel strategies can be both extractive and regenerative

The flywheel works, but reasonable questions are being asked about how sustainable the big tech strategies are in the long run.

Amazon offers one of the clearest examples of a successful flywheel strategy. Lower prices and greater convenience attract more customers. More customers attract more sellers. More sellers increase selection. Greater volume improves the economics of logistics and technology infrastructure. Better efficiency supports lower prices, faster delivery and greater convenience, which attracts still more customers. The system compounds.

The model creates real value for customers and has built one of the most powerful businesses in the world.

The impact is more complicated though when we look at the seller side of the equation. Sellers help to build the marketplace but become increasingly dependent on the platform for access to customers. The platform becomes stronger as more participants join, but those participants have less control over the terms on which they participate.

The flywheel works. But, does each turn strengthen the wider ecosystem of sellers, suppliers, customers, and relationships? Or does it mostly strengthen the platform’s ability to capture more value from that ecosystem?

I’m going to say it’s a little bit from column A and a lot from column B. The limits of these strategies won’t show up immediately, because the costs sit elsewhere in the system and may show up some years in the future.

In the meantime, let’s explore what it would look like to really prioritise long-term system health.

Regeneration in practice

In agriculture, it’s fairly apparent that farmers are reliant on healthy ecosystems to produce food. Even so, a lot of modern farming practices have been organised around a simple input – process – output value chain. Seed and fertiliser in, crops out. The system thrived and spread because it can be highly productive, and has driven the ability of farming to keep up with rapidly growing populations globally. However, what has also become apparent in many areas is that with each cycle, the underlying health of the soil may be degraded.

Some tilling practices disturb soil structure and release stored carbon. Nutrients are extracted without being fully replenished. Biodiversity is reduced. Water retention declines. Over time, farms can become more reliant on higher levels of external input just to maintain similar levels of output.

Regenerative practices reorient the focus from maximising output to strengthening the health of growing conditions; in particular, soil health. This is through a variety of means from reducing soil disturbance, to maintaining groundcover, integrating grazing livestock carefully and restoring natural cycles. Each year the conditions for future growth are being strengthened.

Productivity is still the goal, but the means are very different. Profitability improves as input costs reduce, and maybe even more importantly, resilience is built back into fragile systems.

The next system shock, whether flood, drought, fire or heat, is always just around the corner. But healthier land, with stronger soil structure, deeper root systems, more moisture and greater biodiversity, is generally better able to absorb stress and return to productivity more quickly.

Human systems need healthy ‘soil’ too

This lesson matters for all strategies as we look ahead. Resource scarcity and system shocks are not the black swan events they may have been a few decades ago. The baseline for us is no longer stability, and so strategies that strengthen future conditions for growth are likely to prove more sustainable and resilient in the long run.

Organisations also have conditions that make value creation possible. Capability; infrastructure; relationships; partnerships; goodwill; trust; ecological health; natural resources; connection to community and place. Every one of these represents ‘soil’ for organisations. We sometimes take these things for granted until one day they’re not there anymore. I’ve seen how something like organisational trust can turn from an asset to a liability overnight.

Often these things show up as risks and externalities, if they show up at all. Things to pay attention to, to worry about and to account for. However, if we understand more explicitly the way they contribute to the value we create, we can reshape the way we do business to proactively strengthen them with each interaction.

From transactional, to relational

Tending to organisational soil health is the essence of what I mean when I talk about ‘relational strategy’. Relational strategy is not a softer name for traditional strategy and it’s not another name for good stakeholder engagement. It is about understanding relationship as part of the value-creating system. Instead of asking ‘what can we produce, deliver, or capture?’ we ask ‘what relationships and conditions make sustained value creation possible?’. The measure of success is not only the immediate profit that the work produces, but what new value the work makes more possible for next time.

When these become really powerful is when they are used to consciously drive regenerative outcomes – building resilience and sustainability even as they deliver results today.

This thinking builds on one of my favourite papers in this space already: Creating Shared Value, by Michael Porter and Mark Kramer (2011). Their paper challenged the idea that business value and social value were separate domains. Their core argument was that companies can enhance competitiveness, while advancing societal outcomes, through rethinking products and markets, value chains and local clusters. The next natural step is to look at how shared value creation compounds over time. A regenerative relational strategy asks not just whether commercial and social value can exist together, but whether each turn of the handle also enhances the conditions from which future value will grow.

[Image: Illustration of a regenerative flywheel cycle]

From less harm, to more life

Interface, a US-based office carpet manufacturer, is often cited as a great example of a shared value strategy in practice. It also usefully illustrates the opportunity for regenerative, relational strategy.

Interface didn’t just bolt sustainability onto their existing model. They fundamentally reshaped their business model, initially in an effort to reduce their carbon footprint to as close to zero as possible through innovation in materials, process, product and design.

As they neared net zero, they set themselves a more explicitly regenerative vision through their Climate Take Back strategy. The language they use is powerful:

“We need to stop thinking about how to merely limit the damage caused by climate change—and start thinking about how to create a climate fit for life.”

They have been successful – both in beating “Mission Zero” ahead of schedule, but also as a business that continues to thrive.
Their strategy today not only recognises and incorporates the natural systems they are dependent on, but also draws value from its strength and brand as a leader in sustainability, its relationships with suppliers, customers and employees, and its proven track record in sensing, adapting and responding to a changing environment.

The competitive edge of relationality

Porter’s work also tells us that good strategy should compete to be unique, rather than to be the ‘best’ in a given field. That’s relevant here because relationships can’t be created quickly from scratch.

Like neural pathways, relationships are strengthened over time by consistent activity, care and attention. This might seem like a downside, when so many of our drivers encourage fast, visible results. However, relationships that have been invested into and built up over time create sustainable competitive edge because they are so unique and hard to replicate. This is true for human relationships but also for relationships with our supply chains, our environments and the places where we operate.

When relationships are thin, transactional or depleted, value becomes harder to sustain. When they are strong, trusted and generative, value becomes easier to create, more resilient and harder to copy. In a world where products, platforms and processes can be copied quickly, the quality of an organisation’s relationships may become one of its most durable sources of value.

Fertile ground for regenerative relational strategy

Looking back to where we started, there is fertile soil for this thinking in almost every sector. I’ll share some linked examples here.

Government

Relational approaches are asking how different forms of commissioning (like in South Australia’s Child and Family Support system) move beyond thinking about just delivering services through transactional relationships with service providers. They are changing the nature of ecosystems, in ways that help us to solve complex challenges in new ways.

For purpose

Increasingly, organisations are realising the opportunity not only to respond to current need, but to coinvest in strengthening relationships between people, places and organisations and develop durable capability and infrastructure. For example:

• Australian Care Systems

• The Sunshine Project

Corporate

There is a significant opportunity still to develop relational strategies that look beyond short-term value and into long term conditions for sustainable growth. Especially as shock and volatility becomes the norm, strong relational infrastructure may become the defining characteristic of organisations that can ride the wave and adapt as they go.

• For Patagonia, sustainability isn’t the campaign, it’s the model.

• AIA Vitality is a health insurance program that rewards customers for healthy behaviours.

Small business and start up

Perhaps the greatest opportunity exists for organisations that are already growing up with more relational ways of working. The ability to remain agile and adaptive through building relational infrastructure and value networks, rather than aiming for traditional growth through scale may prove a significant source of strength.

Growing a relational world view

The opportunity before us is to explore new ways of creating shared value that are more fit for the times we find ourselves in. Ways that don’t treat the environment and social context as externalities, but recognise that they are where we will find many of our risks, opportunities, and unique forms of value creation. For certain, there is a set of capabilities, tools, and processes that will help us along the way but the real shift is in our mental models – our world view around how value is created, and how our purpose coexists alongside others and how we participate in the systems that make our work possible.

This is not a new way of thinking and working. Relationality has been hard wired into humans for millennia. In many ways, what this opportunity represents is a chance to remember what feels forgotten – but which First Nations cultures the world over will remind us has never in fact gone away.

It’s not about going back in time, nor about forgetting what we have learned about the power of competition, markets and technology for enabling coordinated action and rapid progress.

It’s about using the tools already at our disposal, to shift from value capture to value cultivation. Ensuring that we can not only kick goals today, but that we’ll also be able to play the game better next season.

If this has piqued your interest and you’d like to think on it in your own context, these questions are a good place to start:

1. What value are we creating now?

2. What relationships and conditions make that possible?

3. What conditions might we be drawing down?

4. What conditions are we strengthening for the future?

5. What future value becomes possible because of this work?

Better yet, drop me a note and come have a chat!

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Coherence as practice

I’ve been through a whole lot of transformations, new strategies, updated values and purpose statements. Some mattered; others fizzled and died fast. One observation – when the organisation focuses hard on the launch event but not so much on the weeks and months that follow, it’s gonna be a fizzler.

Some strategies were only ever a document – cooked up by smart consultants based on data and the input of execs. They make sense, they’re informed by best practice and benchmarking, the modelling is good. They *should* work. BUT. Then reality happens. The ‘strategy’ gathers dust; it doesn’t live.

The thing that determines success is not the ‘right’ answer, it’s the organisation’s ability to change, adapt and chart a new course toward a meaningful destination.

Strategy is not static – it’s an ongoing process of seeking coherence.

Shift happens.

In the first of this series, I introduced the idea of the coherence premium, or coherence as strategic advantage. Organisations that are able to deliver on a coherent strategy are likely to outperform their peers. The challenge is that achieving coherence is difficult, and it can be fleeting.

It’s difficult because we’re designing for a complex environment, and as we know, no plan survives first contact. As soon as we hit reality, we start to understand the impact of all the variables we could not control for in our modelling – how our people would react; the limitations of our tech stack; the weather.

It’s fleeting because the world changes, and that creates change across every dimension of coherence I have introduced. Consumer behaviour shifts; regulations get introduced; competitors emerge; we change. The world shifts, while internal narratives remain in place.

Even internally, drift happens. Our strategy and operations drift away from purpose; teams drift toward optimising locally; individuals drift based on identity and incentives.

These shifts and drifts are not independent of one another – they remain connected, and if driven by coherent trends and forces that we’re not paying attention to, can tip rapidly in a direction not of our choosing.

Small, but consistent forces, unchecked, can drive significant drift over time.

Seeking coherence means actively creating space for dissonance

Given that we are working within a dynamic environment, the pursuit of coherence is necessarily a dynamic one in which we must be active participants. A good strategy therefore needs to be able to sense, learn and adapt as it goes. This is strategy as a verb and a practice, not as a noun or a deliverable. Set and forget is not an option.

This argument asks us to blur the lines between strategy and implementation. Strategy can’t be a disparate and disconnected domain that lives ‘over there’; we need to think about how to bring more strategic thinking and doing into our BAU. So, what are the capabilities and practices we need to build into our organisations to make this real? As a starting point, I’ll share a few domains which I think are important – you may well have more to add.

Horizon scanning and listening for weak signals. As I mentioned in my previous article, the seeds of our future are already planted. Are you and your organisation spending enough time noticing and making sense of the patterns you’re seeing and what they mean?

This isn’t necessarily a call to consult with more ‘futurists’. Firstly, because only we can really do the work of unpacking what we’re seeing and what it means for our industry, our organisation, our people. Secondly because it’s not enough for someone to come and share their wisdom once a year – we need to be constantly scanning, learning and adjusting our organisations based on what we see. Stafford Beer talks about this as ‘intelligence’, or system 4 of his viable system model in “Brain of the Firm”. It needs to be a part of our system, not outsourced to others.

Surfacing and checking assumptions. Whilst we do need the shorthand of assumptions to simplify our thinking and our models, we must be cautious of them anchoring us in place while the tide rushes on. We often operate under shared assumptions that we never name; e.g. that we understand a particular value in a particular way. We also need to acknowledge that times change, and old assumptions may no longer serve us; e.g. that an in-house technology stack gives us a competitive advantage.

We need ways to surface and name hidden assumptions and to test and evolve assumptions to keep pace with the world around us.

Creating organisations and teams where truth can be spoken and heard. If we are not receiving the right information and signals, we cannot understand the current state and make decisions appropriately. Harari talks about this extensively in Nexus, in which he identifies the conditions for truth telling as a crucial enabler of successfully self-correcting systems. When an institution (in Harari’s example, an authoritarian state like the USSR) is unable to digest bad news, its ability to stay relevant diminishes, leaving it only a matter of time until it self-destructs. I’d suggest the same is also true at less dramatic levels of systems – within teams, organisations, families.

Holding ideas in tension. Dissonance will help us to identify the work to be done, but doesn’t necessarily provide the answers. Whilst we explore this space, we need to be comfortable with the idea of holding space for competing ideas to coexist and for new directions and solutions to emerge.

What should become clear is that none of these domains are the result of initiatives to roll out. They are habits and capabilities to build and maintain over time, and will require constant attention and intention. These are what enable us to live coherence as a practice, not as a separate project.

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Nudging toward coherence - is it a duck?

Not all work on coherence needs to be grand, or formal – much of it happens in thoughtful, everyday acts. Some people tend to ‘see the system’, either consciously or not - my partner is a good example. In her work as a teacher there are always myriad things to attend to at any point in time. Things that are immediate and operational are often commandeering attention that might otherwise be put toward things that are more strategic. By seeing these vantage points as connected though, she’s able to overcome a false dichotomy to a degree. The way her colleagues describe it is that she has a vision for the way things could be. As she goes about her day, she’ll notice things that are not quite in alignment - ‘ducks’ that are not yet in a row. Each time, she’ll just nudge a duck here, and a duck there until one day toward the back end of term, it’ll be apparent all of a sudden that most of the ducks are now facing the same way. I can’t think of a better metaphor for a continuous practice of building coherence.

The hard bit is figuring out is which ducks you really need to pay attention to, and which ones you can just leave be. Questions like the following might be useful:

• Are we still clear on where we’re going and the North Star we’re navigating by?

• What direction are we travelling, and are we still tracking toward our North Star?

• Is what we’re doing still the best expression of why we exist?

• Does the way we are working reflect our values and beliefs?

• Does the story we tell about ourselves still match up to our reality and where we’re going?

• What tensions or dissonance are we experiencing, that might signal a need for adjustment?

Through these conversations we can identify the ducks that we might want to spend some effort nudging into line. Bringing them into regular conversations with ourselves and our teams can be a useful way to build a habit of the practice. This is really about remembering to observe, learn and adapt as we go.

If you prefer a slightly more structured approach than ‘duck hunting’, then Toby Lowe’s work on “Learning as Management Strategy” provides a great template. It was designed within the context of public service delivery and continues to be used successfully in this space, but I believe the model is equally appropriate for use elsewhere. This framework takes ‘purpose’ as the starting point that fuels an iterative process of engaging, understanding, experimenting and embedding change in a way that is both emergent and adaptive. The Human Learning Systems team have been very generous in creating and sharing a vast array of resources to support the approach, which are well worth checking out.

The work to be done

This framework attempts to bring together a range of ideas and evidence into an accessible format. Most of the ideas are not my own, but some of the connections are. Likely there are some significant gaps in my thinking, but I believe that the bringing together of these ideas is both useful and necessary. Like any model, its true value lies only in what it enables us to do. At the very least I hope the dimensions of coherence presented lead to some interesting or new ideas for others.

More work is required to develop tools and approaches that enable its practical application through things like assessment and diagnosis; sensing and learning; collaborating and partnering; leading and enabling. It’s work that should probably not be done independently and in the abstract. I warmly welcome input, feedback and collaboration opportunities to lean into practice.

In living what I am preaching, coherence remains less about getting it right — and more about staying in relationship with reality as it changes.

This is the fourth article in the series, and will get into the final of three dimensions of Coherence, that I laid out in the first (go read that now, if you haven’t yet). We’ve so far explored strategic and systemic coherence. This week, coherence is brought to you by the letter ‘T’, for ‘transitional’.

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Have you ever worked with an organisation and heard something along the lines of “You can’t use that word here – it has ‘history’.”, or “We tried that before. It didn’t go well.”? If you have, you already understand what “Transitional Coherence” is all about – it’s the thread that connects the past to the future, by way of the present. When the stories don’t quite match up, we know it.

• When a strategy is based off an outdated set of beliefs about how the world works;

• When the organisation has moved on and evolved but the stories it tells about itself are still the same;

• When we sugar-coat the present state and deny reality;

• When we paint a rosy picture of the future that ignores our murky past;

We feel it. When a story just doesn’t make sense, it can lose its power and fail to keep us engaged. We become cynical or we check out – this is transitional dissonance.

In a recent article, Indy Johar frames this challenge beautifully, as “The necessity for strategy to multi-solve“. At any moment, we are being asked to consider and solve simultaneously for:

• The failings, slights and injustices of the past

• The operational issues and lived experience of the present

• The need for a meaningful and possible future

Each one of these needs is significant in its own right. To solve everything, everywhere all at once feels an impossibility (though if you know how, please slide into my DMs). However, to ignore any one of them is to fail the test of integrity that we need, to be on board for the journey.

Otto Scharmer’s Theory U framework represents a similar set of ideas that includes recognising and letting go of past patterns; sensing and observing current reality; and envisioning what could emerge in the future. This is the work of creating transitional coherence, and it’s important at every level of the system.

Honouring the past, without getting stuck in it

We all carry baggage that can both weigh us down, and contain the stuff we need to move forward. Whether we’re talking about individuals, organisations or even civilisations. There’s a history that shapes the present and creates or shuts off possibilities for the future.

• If my phone company has treated me to excruciating, bureaucratic and ineffective customer service in the past, will I now believe their positioning as leading on customer-centricity?

• If we’re unable to tell a shared truth about our past as a country, can we be expected to look to a shared, equitable future together?

We resist looking into our past sometimes to avoid stories that bring embarrassment and pain. The danger is that we’re unable to move on authentically until we face them. What might be less obvious is that there’s equally as big a trap created through our past successes.

As a guy growing up in the UK through the 90s, I can tell you that deep down inside we knew it was time to let go of the stories of glory years of the 1966 World Cup.

Despite Skinner and Baddiel’s most fervent hopes, football wasn’t coming home and the rest of the world had moved on. Unrealistic expectations placed on team after team were remarkably unable to bring the past back to the future. 30 years of hurt never stopped us dreaming, but they maybe did stop us investing in a more reasonable long-term aspiration and strategy.

In our past lie trauma, successes, themes and patterns. Instead of either denying, or stubbornly living in them, we should seek to notice, acknowledge, accept, learn from, and let go of them, if they no longer serve us.

Knowing how we got here is often the key to understanding where, in fact, we are.

Seeing the present clearly

In many ways, this bit should be easy – it’s just about opening our eyes and observing, right? Well, yeah. But. Hands up who can look at the world without seeing it through your own eyes, or making sense of it through the stories you tell yourself and others? Hmm...

Understanding how the world really is has never been easy – it’s a truly complex beast. Today it feels harder than ever as multiple narratives strain to assert their dominance and shout for our attention.

The stories we tell about the way the world is, define the types of solution that we give priority and space to.

If we believe that our unaffordable housing is created by mass immigration we’ll give priority to solutions that ‘stop the boats’. If we believe that massive wealth inequality is driving up the price of all investment asset classes, then we’ll give priority to solutions which redistribute wealth more evenly. Both stories are playing loud and clear, and it’s not hard to see why different interest groups care so much about which one you believe.

On a smaller scale, how often have you come across ‘watermelon’ status reports? You know, those ones that are green on the outside, red in the middle? Sometimes our ability to see the present is clouded by the desire of some to hear only stories that paint today in a positive light, leaving us wide open to be hit square between the eyes by issues we should have seen coming.

To see clearly, we must be ready to challenge our own worldviews and assumptions; to seek counterfactual information; to create psychological safety and the conditions for authentic truth-telling.

Seeing today more clearly enables us to imagine more viable tomorrows.

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Orienting to the emerging future

Peter Drucker reckoned that “The best way to predict the future is to create it”. This line is often used as a rallying cry. I prefer to see it as a warning about the unpredictability of the future, and a call to act, and learn our way into it.

Too many powerful men have instead chosen to follow the idea to the extreme, wilfully ignoring every signal about the possible futures that are emerging, and instead pushing their own vision of the future onto the world through force of will.

But, men are not Gods. Most individuals’ visions for the future are far too narrow in their imagination to possibly be coherent with the way the world really is. This is the strategic equivalent of pushing a square peg through a round hole, smashing both in the process.

I’m not arguing against the need for a strong vision – I believe that to be absolutely crucial in giving us a direction to move in, and the energy to do so. What I am cautioning against is running forward with a naïve kind of excitement that hasn’t quite found its fit in the real world. What MGTaylor’s Seven Stages of the Creative Process would refer to as vision and intent, without the insight required to build strategies and solutions that are fit for purpose and for context.

The seeds of tomorrow are already planted. We don’t know which ones will grow most strongly, but we can pay attention to which ones we can see starting to take root. These are the weak signals that will ultimately shape the future. As we implement strategy and work toward a vision, some of these things will start to come into being more forcefully, and some will ask us to change our imagining of the future on the fly.

Scharmer talks about the need for “open mind, open heart, open will” in orienting to an emerging future. I’d agree that this is crucial if we are to remain able to sense the emerging future and design better solutions for it, based not only on where we want to go, but also where the system invites us to go.

The stories we tell

Strategy is best told as a story. One that acknowledges where we’ve been, that’s clear about where we are, and that creates excitement and possibility about where we go from here. A great story should take us somewhere unexpected, but it should also have integrity – a coherence both internally and with the world outside.

The energy transition space today is full of big stories – each asking us to believe change is possible and desirable. Threading the needle from past through present to the future in a believable way is easier said than done.

Organisations like BHP have a history that includes significant pollution, long-term ecological damage and the destruction of Indigenous lands. Today they are trying to tell a new story of a focus on sustainable practice, renewable resource development, and a different kind of relationship with First Nations communities. They describe an investment in technological innovation to address current-day operational issues and reduce environmental impacts, as well as a story for the future as they tie themselves into “Australia’s clean energy revolution”.

The legitimacy of this new story will be received cautiously or even cynically by many and will only truly be tested in hindsight; but certainly, acknowledging their failings in the past and in the present are a crucial starting point.

Stories are powerful – and can be harnessed both to heal and to harm

In talking about the use of ‘narrative’ and ‘story’, we touch on something both important and dangerous. As Yuval Noah Harari describes in both Sapiens and Homo Deus, humans have proven uniquely able to collaborate flexibly and at massive scale, due to our use of stories as a way of creating connection and community. Over the years this has been used for good, and for most definitely not good.

The stories that we share to describe our past, present and future are a subjective (as opposed to objective) reality. And as we have seen over the years, instead of creating a story for the future that accepts and acknowledges those of the past, some choose instead to try and rewrite our past to tell a different story; one that matches the future they advocate for. Whilst I understand their drive to create transitional coherence, I would advocate for a more honest and, frankly, simpler approach than gaslighting at a global scale.

Looking ahead

Everything we do carries the echoes of our past, the facts of our present, and the pull of our future. Transitional coherence is how we stitch them together.

In the last part of this series, we’ll explore how coherence becomes a practice, and how learning comes to life as a management strategy.

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[Image: ripples representing nested levels of system]

Systemic coherence is the throughline between who we are, the groups we belong to, the organisations we contribute to, and the world we inhabit. When these fall out alignment, the impact is detrimental for both people and the planet.

What I’m describing as systemic coherence appears elsewhere as ‘congruence’ or ‘values alignment’. I think of it as ‘systemic’, because it starts with the notion of the self as a system – that each of us are a complex mix of ideas, beliefs and experiences that interact with one another, evolve over time, and make us who we are. Extending from ‘self as system’, we find ourselves interacting in a variety of other systems at different levels of complexity – that includes our teams at work, our family at home, the communities we live in. Those groups then exist as a part of larger systems again – companies, collectives, cities, nations, humanity. And all of us exist within the wider context of a physical and living world.

[Image: nested layers of self, collective and ecosystem]

Otto Scharmer explores this to a degree through his work on “Theory U: Leading from the Future as It Emerges”, (2009), and later work at MIT’s Presencing Institute. He frames sustainable change as requiring a connected movement across levels of coherence including individual (self-to-self/inner), collective (self-to-other/social) and system (self-to-world/ecology). These three levels are a useful frame for us to explore.

Individual – Collective Coherence

As we move through the world, and engage in new contexts, a level of coherence at the level of values, beliefs, practices, and language is helpful for us to be able to engage meaningfully and productively. Many of us will know how it feels to show up to a party we’re not sure we should be at, where we maybe know one person and have no idea how much we have in common with the others.

[Image: awkward party guest, pop meme]

A natural priority for people is to find a shared cultural or values basis from which to enter into fleeting relationship. Next time you kinda want to roll your eyes at being asked “so... which team do you support”, or worse, “which school did you go to?”, feel free to reframe it as a vulnerable and relational human seeking a level of systemic coherence, and move on as rapidly as you can from there. (On which, if there is a faster transition from pop sports to systems wankery, I’m yet to encounter it.)

This clearly matters when it comes to the workplace. Back in 1987, Benjamin Schneider proposed the Attraction-Selection-Attrition (ASA) model, showing that individuals are drawn to organisations with good perceived values fit; organisations are more likely to select on that basis; and over time those who do not fit are more likely to leave. When there is a clear mismatch in values between self and team/organisation, the dissonance experienced both by the individual and the team becomes such a distracting factor that performance is going to take a hit, along with motivation and collaboration. Marxists likely don’t last long at JP Morgan.

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The search for coherence is a double-edged sword

The flip side of this is that whilst values fit may indeed drive productivity and retention gains, over time it can also create homogeneity, which is dangerous in other ways, leading to groupthink, status quo bias and a failure to innovate.

To clarify, then, the quest for coherence is not the same as a desire for ‘sameness’. If your organisation expects a 1:1 fit between your personal values and those of the team, you’re possibly in a cult, and might want to speak with someone about that.

[Image: the cult from the excellent and hilarious film, Hot Fuzz]

Coherence is really about reducing the friction that inevitably occurs when we try to fit within different contexts. Whilst as humans we are very able to adapt to fit in, the evidence suggests that the more we have to do this, the less energy we have remaining to work on productive things.

This does elicit a further line of enquiry about the role of dissonance. If homogeneity is bad, is a level of systemic dissonance healthy? I’d argue a strong yes to this. As I’ll explore further in Part 5, seeking coherence is an active and evolving process – it’s not about reaching an end state where everything neatly fits. Bringing new people into an organisation can be an opportunity to either give it a nudge in a particular direction, or maintain and reinforce a status quo.

This is something that early models of AI supported hiring processes have so far struggled to nail. The challenge is that such models so far tend to learn from past successful hires, under the assumption that what made us successful so far is the same as what will keep us successful in future. What we need is a more dynamic approach; the introduction of new signals that nudge us toward a different future.

Collective – Ecosystem Coherence

Whilst plenty of work has been done in the space of individual – team/organisation coherence, not nearly enough has been done at the level of ecosystems.

For many people today, the realities of climate change, cost of living, and struggling democracies feel much closer to home than they did through the noughties (are we still using that term?). Collectively we’re becoming a lot more conscious of the impacts major organisations have on the economy – whether that’s tobacco companies and their impact on health, mining’s impact on the environment, or tech bros’ impact on governments and economies.

Ultimately this introduces another source of dissonance for us – can I continue to fully show up every day if I see that my company and its lived purpose is a part of the problem? Gallup figures showing average employee engagement percentages in Australia hovering in the low 20s for the last decade or so, suggest that perhaps we can’t? Best practice organisations sit at around 70%, meaning that better is distinctly possible, and it’s a premium that most organisations are clearly missing out on. According to Forbes,

“A staggering 86% of Gen Z-ers see purpose as pivotal to their overall well-being and job satisfaction. This generation scrutinizes potential employers’ societal impact before applying for jobs, with 75% considering this a key factor in their decision-making process.”

A lack of trust appears to be amongst the biggest drivers of widespread workplace apathy, contributing to an estimated $200bn+ hit to productivity in Australia. Authentically embedding prosocial purpose across a business in way that meaningfully registers for people could unlock significant productivity gains, and much more.

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Dissonance is something to lean into, not to avoid.

To be clear, human productivity and unrealised potential is something we should care greatly about... but the real-world impact we’re reacting to is something that we should care even more about.

At the macro level, today’s economies are simply not coherent with our environments – they are working at crossed purposes, under fundamentally different principles. Many organisational strategies function on the assumption that the environment is an externality, rather than the meaningful context that our organisations are nested within. Without significant correction, we’re well aware that the path we’re on is likely to be catastrophic.

The real danger isn’t the experience of dissonance – that could well be our catalyst to seek better. It’s pretending that the dissonance isn’t there.

Nudging into values alignment

Systemic coherence asks us to pay attention to the signals at every level of our life – self, team, organisation, world. The practice of noticing dissonance and seeking coherence gives us a way to think about nudging our organisations and systems to be more aligned both to the values inherent to us as relational humans, and to the principles that would keep our ecosystems healthy without us. For example, in natural systems:

• There is much more collaboration, mutual reliance and reciprocity than competition;

• Diversity creates resilience;

• Growth is part of a healthy cycle of birth, life, death, decay and regeneration

If we were to bring these ideas to our organisations and economies, how could they help shape a generation of business models that work with people and planet?

In the next article we’ll get into the final, and probably least explored, dimension of coherence – transitional coherence; the living connection between past, present, and future.

Why strategic coherence matters

In a previous article I talked about how ‘Purpose’ is often left as words languishing meaninglessly on a page for many organisations. Or rather how our documented, aspirational Purpose gets subsumed by a lurking, default purpose – e.g. to maximise returns for shareholders. My argument was (and is) that we need to flip the script, so that the role of purpose is not to legitimise profit, but that the role of profit is to enable purpose (profit is the fuel for the rocket, in Brad Bird’s words).

To simplify things a little, let’s imagine a stack that connects purpose (North Star) as a foundation, through successive layers of strategy (the route to get there), systems and structures (the vehicle), and practice (the act of driving).

Strategic coherence is the continuous act of aligning purpose, strategy, systems and practice. When an organisation’s Purpose pulls one way, and its strategy, systems or practice pull another, the effect can be destabilising. Staff feel it as confusion, cynicism or burnout. Customers feel it as disappointment, anger or broken trust.

What it looks like when we lose coherence

ANZ Bank, here in Australia, is currently facing into rectifying such a challenge. In 2015, ANZ set its purpose “to shape a world where people and communities thrive.” The broader strategy was defined around meeting customer needs and adapting to changing market conditions. However, over the last year or more, ANZ has been hit by a series of scandals, breaches and investigations, revealing some significant gaps in its systems, structures and corporate governance practices. This included failure to refund fees charged to dead customers, failing to respond to hardship notices and failing pay interest rates on savings. Whilst the bank has made meaningful progress in embedding sustainability practices, its operational failures have arguably had a bigger felt impact on its customers’ ability to ‘thrive’. The dissonance has led to a loss of trust, increasing costs, mounting fines and canceled executive bonuses. Realigning purpose, strategy and operations is the challenge now facing incoming CEO Nuno Matos.

In a very different context, through my work with The Possibility Partnership, I have seen strategic dissonance play out in another form. Many major NGOs have been formed with a very strong purpose orientation, seeking to contribute meaningfully to the lives of the people and communities they serve. At a practice level, I have witnessed that purpose embodied in the work of dedicated service delivery staff, committed to enabling their communities and clients to thrive. Dissonance however has crept into the strategic stack through the imposition of systems, structures and business models from the outside. Funding, typically from government sources, comes coupled with restrictive caveats, controls on how it can be spent, and on whom, and onerous reporting requirements. These systems and structures are designed to support control, accountability and defensibility for funders, but are often incoherent with the work that’s needed on the ground in community. In essence, staff on the ground are asked to do two jobs – one that is asked of them by funders, the other that is needed by communities. The outcome is too often burnout for staff and confusion for clients trying to navigate systems that were never designed for them.

We sometimes get it slightly more right

Let’s look at Patagonia – often cited as leading the way in purpose driven business. We can see that they aim to create coherence through the full stack.

• Purpose: “in business to save our home planet”.

• Strategy: to compete on durability, sustainability and return custom.

• Systems and structures: business model builds in premium pricing and long product lifecycles. Their ownership structure situates all company voting stock under a purpose-led trust.

• Practice: Their operations include reuse and repair options and paid employee activism,

As a result, Patagonia enjoy loyal customers, good margins, and strong employee engagement.

The coherence premium

When we get it right and (for however brief a moment), the strategy stack is coherent, each layer effectively supports and fuels the others, creating inherent value. In “Good Strategy, Bad Strategy” (2011), Richard Rumelt argues that a good strategy doesn’t just draw on existing strength; it creates strength through the coherence of its design. A tight alignment of diagnosis, guiding policy and coordinated actions is described as a differentiator and source of power – in large part because few organisations actually achieve it.

A year before Rumelt published his book, Leinwand and Mainardi made the case for “The Coherence Premium” in Harvard Business Review, showing that firms with a strong alignment between their capabilities, market positioning, and product portfolio consistently outperform their peers.

Purpose as a strategic anchor

Both arguments make the case for coherence creating advantage; both however also underplay the anchoring role of purpose. Without a clear and credible reason for being, coherence risks becoming efficient, but bland and directionless; if not totally amoral. The case for bringing purpose onto the playing field continues to be overlooked in the traditional realm of corporate strategy and business consulting, but it’s been coming right to the fore elsewhere.

Kania, Kramer & Senge (2018) and later, Leadbeater & Winhall (2020) published papers in the systems thinking space that I refer to and share often. Essentially the question they were each trying to answer, is “what does it take to unlock change in complex systems?” Each, put purpose and mindsets firmly in the frame as a crucial foundation and driver of transformation.

“Unlocking change in complex systems” feels more and more like an appropriate frame for designing effective strategy, and we are learning more all the time about how to do it. However, such wisdom in the systems change domain struggles to make its way across the road and into the halls of business, which must be to our collective detriment.

Interestingly, a lot of systems work originated in the corporate world and possibly had its heyday with Stafford Beer’s viable systems model in the 70s. Check out Dan Davies excellent book, “The Unaccountability Machine” for a more accessible dive into the world of management cybernetics. Since then, however, business leaders have sought simpler schools of thought, preferring approaches through which they can smash complexity into more convenient, manageable and MECE bite-size chunks and KPIs. That’s Mutually Exclusive, Collectively Exhaustive, for those of you who did not have the joy of an industrial consulting education. Unfortunately, as I’ve learned since then, the factors we can actively manage in this increasingly connected world are neither ME, nor CE.

Strategic coherence demands clarity, not control

If we learn anything from systems thinking and complexity science, it’s that we cannot hope to control everything, and it can be extremely detrimental to try. A recent article by Dennis Vergne sets this out beautifully.

“The more you tighten your grip, Tarkin, the more star systems will slip through your fingers” (Princess Leia – but shout out to Toby Lowe for reminding me of the reference!)

When purpose, strategy, systems and practice cohere, we don’t need to micromanage. People can act with autonomy and confidence in a way that is also agile and alert to the changing world and context around us. We’re free to learn and adapt, not just to follow the script.

Next time...

In the next article of the series, we’ll get into systemic coherence – the connections between self, the teams and communities we are a part of, and world in which we live and work.

As ever, I’d love to hear your reflections on this. Where do you see the signal weakening between purpose and practice? Where do you see the need for greater coherence?

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In a previous article (On Purpose), I explored how there is often significant misalignment between the stated purpose of an organisation and the way it acts day to day. If you haven’t checked it out yet, now is a great time! Such misalignment drives very real cognitive dissonance for people, which impacts on a raft of other things including trust, engagement and productivity. The dissonance doesn’t stop there, however. It’s one thing to feel like our work is out of whack with some notional corporate purpose that we were already a little cynical about anyway. It’s quite another thing to feel that what we do at work each day is somehow contributing to the major environmental and societal problems we’re now facing – problems which show up in other parts of our lives through things like the “cost-of-living crisis”, and increasingly extreme weather events. But this is exactly where we are.

This felt conflict sits at the heart of the AI conversation too. AI is such a powerful tool, whose application is currently not living up to its potential for good, but is instead exacerbating drought, driving polarisation on social media, and concentrating wealth and power into a very small number of hands. Each time I use it, I both love and hate it. I can’t help but feel a brotherly empathy for Homer Simpson, flipping from delight to despair and back again as he eats his delicious friend, Pinchy, after mistakenly giving him a nice warm bath. This is dissonance experienced live in the moment.

[GIF: Homer eating Pinchy. AKA me, using ChatGPT]

All this this creates a challenge – for the way we relate to our organisations, and for the way our organisations contribute to society in a broader sense. In response, through this series I’ll try to bring together the work of many people much smarter than I am to propose a way in which we might use a frame of ‘seeking coherence’ to expand our perspective on ‘doing strategy’. In this context I also propose purpose as a practical source of value and a driver of better strategy. It just so happens that I reckon encouraging a little more purpose might help to make a better world too.

A quick explainer on ‘purpose’. I use this world A LOT in this series, so I want to start by clarifying what I mean when I use it. My best explanation is that purpose defines a reason for being and doing. A purpose should connect to the real world in a way that defines how you intend it to be different through your existence and your actions. Brosch (2023) argues for a definition that “Corporate purpose is an organization’s reason for being, in terms of an objective beyond profit maximization to create value by contributing to the welfare of society and planet.” As we’ll see, such a broad, prosocial definition of purpose supports the creation of organisational value in different ways, and will serve as a helpful definition for us.

As a side note, when I capitalise Purpose mid-sentence, I’m likely referring to the one that you write on your website; when lower case, it’s the one you operate by. In an ideal world they would be the same.

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Coherence in brief (through the universal language of snacks)

I wanted a way to illustrate both the simplicity and the complexity of the idea of coherence – I landed on food. Partially no doubt due to this section being drafted right before lunch. Still, some things just go together – there’s a fit, a coherence, that you can feel and taste. Mac and cheese, bacon and eggs, burger and fries. The whole is greater than the sum of the parts – new value is created in the combination.

[Image: Gooey, delicious mac ‘n’ cheese]

Going beyond the recipes, there are more lessons to be found on the menu. Whilst there is a simple internal coherence in bacon and eggs, it loses its appeal completely when set against the backdrop of personal belief systems that lead a person to choose vegetarianism or veganism (also see: Homer & Pinchy). To explore a different dimension, a hard day yesterday might have depleted my resilience, rendering me temporarily vulnerable to the allure of a huge bowl of mac and cheese - it doesn’t take much. However, as a balancing mechanism, I acknowledge that future me may not thank me for caving to that choice, especially if I’ve set myself the goal of dropping a couple of kilos before Summer.

Through these delightfully mundane examples, we can see that each time we introduce a new lens on a choice (values, goals, context), we create the potential to experience dissonance. That dissonance, if we acknowledge and act on it, is likely to encourage us to consider making a slightly different choice; one that helps us better align across multiple dimensions. This puts us actively in search of coherence.

3 Dimensions of Coherence

Just as the best eating experiences depend on balance, flow and proportion, so do our organisations. That’s where the quest for coherence becomes a strategic discipline.

[Image: a poorly drawn model of 3 dimensions of coherence as a Rubik’s cube]

In this series I am proposing three different dimensions of coherence that show up often in a strategy space. Like in a Rubik’s cube, they connect, stack and interact in myriad ways. I offer these as a starting point and a work in progress, to iterate and to build upon.

Each dimension draws on both my own experience of working in complexity and collaboration, and, more compellingly, on the work of many others. I’ll go into more detail in subsequent articles for those who like to geek deep, but here’s a sneak preview, with links if you’d like to explore for yourself.

1. Strategic coherence: How can our beliefs, strategies, business models and behaviours better align and reinforce one another?

   • Themes: Alignment, actions

   • Vantage Points: Why, what, how | Purpose, Strategy, business model, operations

   • Influences: Rumelt; Senge, Porter & Kramer; Leadbeater & Winhall; Leinwand and Mainardi

2. Systemic coherence: How do we find congruence between our own lives and experiences, the teams and communities we’re a part of, and the ecosystems we inhabit?

   • Themes: Congruence, relationships

   • Vantage Points: Self, collective, world | Individual, team, community, organisation, collective, ecosystems

   • Influences: Scharmer; Cable & Edwards; Schneider

3. Transitional coherence: How does our past help to explain where we are today, and what future pathways are available to us?

   • Themes: Integrity, narrative

   • Vantage Points: Past, present, future

   • Influences: Scharmer; Johar; Harari

Before we venture deeper into each of these dimensions in the following articles, it’s worth calling out a couple of crucial features of this model in the context of strategy.

Boundaries cannot be drawn at our front door

Firstly, that strategic thinking must not stop at the boundaries of our organisations – this is why the model considers both individuals, and the world at large. Historically, many have felt it reasonable to exclude from our thinking the environments and societies that we exist within, and to consider them ‘externalities’. Today the outside is knocking insistently on the front doors of our organisations and institutions and forcing its way in – there is no such thing as an ‘unrelated third party’ that can wear the cost of our actions. We need mental models that instead acknowledge and work with the connectedness of everything, and recognise that we are each as dependent on our environment as it is on us.

Secondly, once we acknowledge the existence and relevance of the real world in our strategy, we also notice that it is in a constant state of flux. Clearly, this creates a strong case for a shift away from static strategies that we revisit once every 4 or 5 years. Instead, we need to learn how to sense, learn and adapt as we go, in a dynamic dance with a tumultuous environment, rather than trying to steamroller a course that we set out upon before the world changed. It’s about a constant search for coherence, rather than it being a destination we can reach and stay at.

Navigating complexity by a North Star

The danger of recognising change as a constant companion, is that we flip to spending all our time reacting to it, rather actually getting somewhere.

(Purpose has rejoined the conversation...)

Purpose offers us a North Star, something to chart a course by, as the world changes around us. Whilst our North Star (both literally and figuratively) is not absolutely static, its directional relationship to us will change much more slowly than the turbulent landscapes we find ourselves navigating through. Without that distant goal to navigate by, all we can do is react to the present conditions and attempt to survive. With it, we can pursue coherence bit by bit, with a growing confidence that we’re still moving in the right direction.

[Image: A captain on stormy seas, navigating by a North Star]

We will explore all of this further in future articles, and unpack, amongst other things, how purpose can help to create meaningful value, differentiation and productivity – both within and outside the walls of our organisations.

For now, I’d love to know, how do these three dimensions resonate with you as a starting point? How are you working with them already?

I was child of the 80’s, and I still remember my excitement late that decade, when technology yielded what I deemed to be its most relevant achievement to date – Sonic the Hedgehog on the Sega Master System. Playing on consoles was a big part of my youth, back when monitoring screentime wasn’t a full-time job for parents. I’m pretty sure screentime wasn’t even a word yet – now MS Word doesn’t even squiggly underline it.

By my university days I’d moved onto the original Sony PlayStation (1995 release date for those interested), and was invested in a whole array of games from early GTA to Final Fantasy. The one that I keep getting reminded of recently though is Gran Turismo. At its time this was the most realistic driving racing game around. I suspect to go back to it now would be a little bit like watching the T-Rex in Jurassic Park again and remembering how terrifying it was once upon a time.

In Gran Turismo, your job was to race cars around simulations of famous tracks, win prize money, and invest that money to upgrade your car in various ways to enable you to win more races and ascend up the driver ranks. As a kid, as soon as I had a bit of money to spend it would go straight toward adding more speed to my car in whatever way I could – getting a more powerful engine, reducing weight, adding a turbo. And off the start line I’d jump ahead of the pack, like the winner I knew I was. Pretty quickly though, I’d discover that I was now spending more time spinning off the track and careening into barriers than racing, so that I wasn’t able to compete at all.

Back to the drawing board and I realised I had not kept things in balance – I had to retrospectively invest in the things I needed to keep the car on the road. In came better tyres, suspension, steering and braking systems, and downforce to help keep me on the track. Suddenly I was able to compete again, but I’d lost a lot of ground on the pack who had invested much more sensibly.

It’s slightly horrifying to acknowledge that we’re now 4 decades on, and I’m forced to admit that there are some recent technological developments that challenge even the mighty Master System in their relevance. The internet, for one in the mid 90s, enabled by a screeching magic box that took our landline telephone out of play; mobile phones (I got my first one as I left home for university in 1999); social media blew up in the early 2000s and now we have the emergence of our new AI overlords out of Silicon Valley and Hangzhou.

It seems to me that each time one of these new technologies emerges, we collectively lean into the drag racer spirit. We get wowed by the power now at our fingertips and just want to stomp on the gas. There are always other voices in the mix suggesting that perhaps we need to think about our steering and control systems. But they’re just not *fun*; they’re getting in the way of our progress. And besides, they’re not the ones with their hands on the control. Scream if you wanna go faster!

Now, I do love and use *most* of these technologies. It’s just that I think with a little care, and a little thought about getting the handling and the choice of direction right, they could be so much more.

Mobile phones help us to connect easier than ever before, to access services on the go, to navigate new spaces with GPS in your hand. Amazing! They also suck our attention away when they shouldn’t, they divert us from our real human relationships, and distract us from engaging in learning, and other important and productive activities. On average each of us now spends 4.5 hours a day looking at our phone and increasing numbers of us recognise it’s a problem we want to do something about.

Social media promised to democratise information sharing, to build community across spatial boundaries and strengthen personal relationships. It’s done a bit of this. It enables mass organising through movements like #MeToo and lets people like me publish articles at like this. It has also created disinformation pathways that have, and continue to destabilise and influence entire democracies; it thrives on fury and division; and it has fuelled the growth of effective monopolies with business models that drive huge wealth inequality. (I highly recommend Yanis Varoufakis’ Technofeudalism to get into this)

We are still doing almost nothing to stop and reverse these negative trends – and they continue to worsen.

Now we’re in an all too familiar conversation about AI. There’s no denying that it has the potential to do great things... BUT, as I write, it is *mostly* not doing these things. Because that is not what we choose. AI isn’t the problem here – we are. We’re in a car driven by reckless boy racers that is loaded with power and very little control. We’re racing away from the start line and it’s exhilarating, but we’re going to hit a corner before long.

This time it feels like it matters more. The problems we face feel that much more immediate. To stretch for every metaphor within reach, we’ve painted ourselves into a bit of a corner, and the dangling carrot of an AI deus ex machina to help us escape is very tempting. Maybe even necessary at this stage.

My Big 3 issues are healthy democracies, economic justice and environmental sustainability. They’re not tracking well right now, but let me introduce a little bit of Tigger to counter Eeyore that’s starting to show through...

• Full Fact in the UK uses AI and machine learning to improve and scale fact checking for politicians and media in real time

• Taiwan has revamped civic engagement through its vTaiwan initiative. Natural language processing helps to map public opinion on complex issues, and a digital platform helps bring together experts, public and politicians, leaning toward finding consensus instead of amplifying discord.

• Climate Change AI is a global non-profit network that connects researchers and policymakers to use AI for climate modelling, extreme-weather prediction, and decarbonisation planning.

These are exciting use cases, and there are many more out there. We need more of this, and we have all the resources we need to make that a reality. We are still in a position where we can put some guardrails in place and make some more strategic investments in the public good. However, we’re also being asked to trust in the tech bros and suspend regulation lest it slow down the car, and we lose the race.

If we believe that we can let things run now, and put in the regulations to make things better and fairer down the track, we have not been paying attention.

So sure, let’s invest in a faster car, but let’s also invest in what keeps us on the track. The above examples and many others can help light the way each of them is an example of:

• Technology that keeps humans in the loop and enables, rather than replaces participation

• Transparency, accountability and alignment with public goals

• Public-led investments, ownership and governance through governments and non-profit entities

Things like a human-rights basis, accountability for disinformation, algorithmic transparency, fair distribution of benefits, and ownership of data and creative rights need to be in the mix. And let’s also at least talk about what race we’re in, and what winning means – riches for some? Bigger economies? Longer lives? Healthy environments and democracies?

To bring us back to the life lessons of Gran Turismo, let’s remember that the race is not won down the starting straight – but it can be lost there. The track we’re on has corners coming up fast, and slamming on the brakes is also not a winning strategy. Investing in a vehicle that balances power and control? Maybe that is.

Crises are everywhere at the moment, aren’t they? So de rigueur. We’ve even had to start inventing new forms, like polycrisis - because a simple old singular crisis just isn’t enough for us anymore.

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Over the last week or two, crises have come up as a recurring theme for me and led to a significant amount of mulling.

Last week, I was part of a conversation on “The Transformative Power of Consortia” as a part of the Social Impact Summit in Sydney. One of the questions posed by the audience was around why we seem to be able to collaborate quite effectively in a crisis like COVID gave us, but not in the regular day-to-day. That had set a couple of mental balls rolling, when I joined Australia reMADE’s reading group, Reading to reMAKE. This month, we happened to be looking at a chapter out of Rebecca Solnit’s “A Paradise Built in Hell”. The writing asks us to look at the way our human natures often show up at times of crisis and lead to unexpected levels of cooperation, generosity and community-building.

All of this is also set for me against the backdrop of witnessing, at a distance, the impact and response to another once-in-a-lifetime flooding event in NSW’s Mid North Coast, just 6 years after the last.

(Photo Credit: Bree Katsamangos)

This has made a couple of things super clear for me… firstly, humanity and relationships really do come to the fore during a disaster – whilst the whole community was impacted by the floods, this didn’t prevent people showing up and grabbing a shovel to support the clean-up of their neighbours who may have been harder hit. Secondly, waiting for a crisis to spur us to action is not the way – disasters suck, and whilst some good might show up as a result, the human cost is immense. More than 800 homes have been lost in Taree this time around. Let’s not just wait for it to happen again, eh?

As the book club asked, do we really have to go through Hell, to find Paradise? The answer being something along the lines of “Maybe? It feels that way, but God, it would be nice if we didn’t, right?”.

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So, I’ve been spending a little time thinking about the difference that makes a difference when the shit hits the fan. These are the ideas that I keep coming back to.

1. We align our actions with the things that matter to us. When you or your neighbours’ home is at risk, or a family down the road is trapped on their second floor, the urgent and the important suddenly align. The project status report you were putting together for no-one to read suddenly doesn’t feel quite so critical anymore. For much of our lives – especially our work lives, we’re not actually operating based on our own sense of what matters. Artificial deadlines, standard methodologies, KPIs all play a role in telling us what we should spend our time doing. In an ideal world these things align and help us to enable the work that matters. However, when we employ surrogate priorities in this way, we risk losing connection to the purpose for doing them in the first place, leaving us ill-equipped to update and alter course when the world inevitably shifts around us. Crises make that world-shifting impossible to avoid.

2. We break the rules and follow our intuition. The status quo goes out the window when disaster strikes. We’re in the chaos window of Snowden’s Cynefin framework. We have permission, if not an obligation to act first and figure out later whether that was the very best thing to do, or whether it would be allowed on a normal day. On another day, maybe it’s OK to walk by something that doesn’t feel quite right. Maybe it’s OK to wait for whoever’s job it actually is. Maybe it’s OK not to listen to your gut that’s telling you to act. But that’s another day; today there isn’t anyone else, and there isn’t time to waste.

3. We pay attention to the cost of inaction. In a crisis, a failure to act can have sudden, direct and severe consequences, which are all too visible to us. We know that we can’t delay our response because it’ll be too late. If Doris over there drowns because we didn’t want to get our pants wet, well that’s on us. This tightly coupled and timely feedback isn’t always around to support our choices, making it too easy to put off until later what is difficult to do right now.

4. We work with new people, in new ways and challenge our assumptions about them. A striking part about many people’s stories of responding to crisis is the joy they’ve experienced from being thrown into engaging with people they wouldn’t normally engage with, in very human ways. We live disasters live, in real time, and not through a screen, which has already been filtered through others’ eyes, words and algorithms. We can’t continue believing our neighbours down the road are, in fact, the stereotype we’d boxed them into once we’ve engaged with them and discovered that we’re more like us, than not. We find ourselves wondering why we’d never tried to say hello before, and then 6 months later wonder if we ever will again. But at least for a moment we were connected in our humanity in a moment that mattered.

Why can’t we bring a little more of this into our everyday life? Up there are 4 simple ways we can do things a little differently, like today.

Look, I know the rules are there for a reason. I’m not advocating for complete anarchy here. I’m not about to start putting in the milk before the teabag or anything like that; I’m not an animal. But sometimes the rules are… well they’re a bit shit. Sometimes we know better, and we shouldn’t allow ourselves to settle for average because the ‘rules’ tell us so.

I’m also not saying we need to speak to every stranger on the street, although there is a guy in my suburb that does exactly that and it’s totally delightful, though doubtless hugely time consuming. Maybe we can’t ditch every report and KPI because we don’t find joy and fulfilment in them, but we can ask if they still serve a worthy purpose, and kill /change them if they don’t. We also can’t live our lives in permacrisis, just to remind ourselves to do the right thing – that state of heightened awareness and anxiety is by no means sustainable. But if we all bring just a little more of this stuff into our lives, maybe it doesn’t get us all the way to Paradise, but it’s hopefully a little step in the right direction, without waiting for Hell to rain down upon us first.

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This isn’t ONLY an excuse to share a photo of my suuuuper cute cats; that’s simply a pleasant bonus. Mostly I’m using this opportunity to pay homage to Matt and Gail Taylor for their work on the “3 Cat” model which I’ll bring to life a bit here, and use it to frame some thoughts about mental models. I’ll share a little more about the Taylors and their influence on me and my work at the end of this article if your curiosity has been piqued.

As a warning, this does go a little bit meta. The 3 Cat model is essentially a model about models. For me, why it matters is that all of us use mental models and physical models pretty much every single day, without even thinking about it. Most of the time this is great – it helps us get through a crazy world without questioning everything that we see. Sometimes though it’s important to bring a little more consciousness to the way we use models, without blindly sticking to them and reinforcing them. That’s what the 3 Cat model is all about, for me.

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So here’s a tale of 3 cats...

The first is a real cat. It exists in the world and does cat-like things. Some of those things we perceive, like the way Campbell (the ginger one) likes to look me directly in the eye, as he’s about to test whether gravity still works and nudge yet another item off my bedside table and onto the floor. Many of his real qualities we cannot perceive, like what he dreams about and what really motivates him besides meat snacks and ear scratches. The real cat is highly complex and made up of infinite characteristics that change and interact over time.

The second cat is a concept cat. The concept cat exists only in my head. This is the cat that contains only the things that matter to me about the real cat, that explain enough about what he does that I’m not spending all of my mental resources trying to understand everything I see. My concept cat is therefore somewhat simpler than the real cat that’s out there in the world (unless you buy into the Matrix theory of ‘reality’). You probably have your own concept cat that sits in your own head, which is probably informed by cats that aren’t Campbell and Cordelia (the silver and black one). I suspect it has similarities to my concept cat, but likely many differences too, because you’ve formed it out of the things that matter to you. We can also call this thing a mental model, and you’ll have your own mental models about everything else that exists in the world that you care about at all. Things like how the economy works; who you are; what makes a great Bolognese sauce; what a Trump supporter looks like. Already we can start to see the dangers of believing we have a cleared-eyed perspective on reality!

The third cat is a mechanical cat. A mechanical cat is brought into the world by your own hand or voice. Your mechanical cat might be a stuffed toy, that only pays attention to how the cat looks, or the softness of its fur. It might be a computer simulation that tries to capture how a cat behaves in different situations. It might be an anatomical description that describes in detail a cat’s physiology for use by a vet. In all of these cases, the mechanical cat will consist of even fewer attributes than your concept cat, as not everything you understand about it might be relevant for your model. Building the model though allows you to test what you think you know, and improve your understanding; it also allows you to share it with others who do not have direct access to your concept cat, and allows you to interact with it in ways that would not suit the real cats in your life – Cordelia, for example, is very much against the idea of sharing with you how her insides hang together, and prefers the use of anatomical models for the curious.

Mechanical cats (physical models) are created every time we make things that help us to understand the world in simpler ways. A contour map helps us to navigate a real-world environment we’ve never been to before by capturing only the important features we need to know about, like hills, valleys and roads. Excel sheets help us figure out what our business looks like in numbers. Stories help us share our concept cats with the world using words and pictures. These articles let me share my mental models with you.

Now we’ve met our 3 cats, the real magic comes in the interaction between them. In future articles I’ll unpack a few examples in a bit more detail both in terms of how this can be incredibly useful, and also at times rather dangerous. Our three cats can help to explain how we can learn (or choose not to learn) from experience; why economists (and many others) confuse the map for the terrain; the value of principles vs. rules; and the limitations of sandbox prototyping.

Image: An early representation of the model by MG Taylor… from 1982 and still holding strong.

Why I write (and why I should write more)

“All models are wrong, some are useful” – George Box

By definition, every one of our models is incomplete, and therefore, ‘wrong’. Wrong comes in degrees though, and ‘just a little wrong’ can still be pretty useful. As we were introduced to our three cats above, it should have been clear that real cat is unknowable in all of their glorious feline detail – and if you hadn’t clocked this yet, we’re not really just talking about cats here. We can never know the fullness of anything real. Not even ourselves. And if that isn’t a little humbling, I don’t know what is. So instead, we see the world through the lens of our own concepts and mental models, which are, as we said, *always* a little wrong. To me, the process of learning is in large part, about updating my own mental models to become a little less wrong than they used to be. That’s why I think writing about ideas is important, and also why I think it’s important to share – not because I think I’m right, but because I know I’m at least a little bit wrong.

The first act of writing is an active process of trying to capture the essence of the concept cats I have bounding about in my brain. In creating a piece of writing (in itself, a mechanical cat), or committing a model to paper, what I’m really doing is making choices about what aspects of my mental models I think are important, how they fit together and why that is important to me. The Taylors would talk of this as a ‘recreative’ process – that through the act of production, I’m not just copying an idea straight out of my head, I’m changing my relationship to it and giving it a new form. There’s value and learning in that already.

Sidenote – this is value that you lose when you ask AI to write for you.

Sharing is learning

The next act is to share; to give your ideas to others and ask them to compare them to whatever concept cats are basking in their brains, informed by their own experiences. In the best of worlds they might tell me what they like, where they differ. They might share back their own concepts of the world, so that together we might create a new version of this thinking that maybe brings us closer to understanding more of the real world out there. This exchange of ideas is crucial as we try to learn collectively about the complex ways the world works – but danger lurks here too. Matt and Gail would refer to this as “two-catting”... in this case we’re bouncing between our concept cats and mechanical cats; modelling our ideas and testing them with others against their concepts in a way that helps us to rapidly improve and iterate our thinking. Great until you realise the third cat, the real cat, is out there possibly staring in through the window, and we’re now ignoring it.

Without reference back to the real world we run the risk of convincing ourselves that our ideas are in fact reality. Especially if the people we’re choosing to share with already think the same as we do. It’s easy to see how cozy little nooks on the internet can help give rise to so much stereotyping, prejudice, pseudoscience and the rest of it. The problem is that the affirmation feels good.

So the third act is to connect ideas to reality – to actually do something with them. Hopefully in safer ways than this. Finding ways to give a little reality check to our ideas is critical in breaking closed loop thinking, but challenging at a very personal level. The evidence that could back up your great story could just as easily point to gaping holes in it. Putting your ideas into practice in the real world is scarier still – if they don’t pan out the way you hope, where does that leave you? Sitting there with nothing but a dead cat?

The good news is that when you’re proved wrong, your concept cat doesn’t die – it changes, if you let it. It evolves into new forms with a better fit to reality. This is in fact what you should hope for when you put an idea out there – when you discover you’re wrong about something, that’s when learning and growth happens. That’s the dream.

Wouldn’t it be horribly boring if you were right all the time?

A footnote on the Taylors.

In their own words, in the 1970s, Gail and Matt Taylor moved to Boulder, Colorado to start a new business based on a unique way of working. Both, by this time, had over 20 years work experience - Gail in education, Matt in architecture - their focus, in 1979, was on creativity, the environment that stimulates it, and why individuals and organizations where not using - to greater individual and social advantage - the many alternatives that were available to them.

Through MG Taylor Corporation, these two introduced a whole new way of working and collaborating that found a global footprint, initially through Capgemini, Ernst & Young. Since then, their work has spread and found life in a huge array of other companies and contexts – including each of the Big 4, and far beyond. I first came across their work when I joined Capgemini in London in 2011, and it turned on its head what I thought I had learned as a grad about change management. Their work informs mine to this day. The real genius I think was in their development of a set of axioms and a series of models that captured their complex ideas in ways that created possibilities, rather than a set of rules that restricts them. This in itself might need to be another essay for another time!

Sadly, Gail passed away in late 2023 but her, and Matt’s legacy will be going strong for a long while yet.

I can’t help but notice as I scroll through LinkedIn, Substack and other such places that we could often do with taking a leaf out of their books. I don’t even touch Facebook these days for the same reason – everything has become a battle of beliefs (on which, the world of chemtrails, flat Earth, and reptilian overlords remains strong). Division, in a wild twist of the plot, has become the one feature that seems to unite our online experience.

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I don’t know about you, and it may be my algorithms talking, but my feeds seem to be full of Trump and AI. Every single day. It’s a heady cocktail I really don’t need in my life but there we are. There are deeply entrenched points of view on both sides of these barbed wire fences. Fighting out of the Red corner, we have a die-hard MAGA crew who believe Trump is the strongman genius we need right now to challenge the institutions that are failing us all; and in the blue corner, a group who see him as a bumbling moron intent on lining his own pockets and dragging world democracy down in the process. On Channel 2, we have AI, that by some is being heralded as the next big thing that will ignite the productivity void in our economy, help us solve some of society’s most important problems, and improve all of our lives; arguing the other way is a group who are pretty confident it’s another big tech money grab being forced on us in ways that strip us of humanity, take livelihoods from creatives, and speed up our journey toward climate catastrophe through its wild use of energy and water. It seems to me the more we have these arguments, the further they move from reality, and the further we retreat from being able to make sense of anything together.

To put it lightly, it’s the last thing we need right now. It really is the best of times for some; gold prices are at an all-time high, and 3 men in the US own more wealth than the bottom 50% of the entire country. On the other hand, impending climate doom; rapidly growing levels of inequality and struggling democratic systems are throwing something of a wet blanket over the party for many of us. Such a drag, right?! Feels to me that it’s getting kinda important that we can move beyond arguing about who’s right on things, because it seems to me that by doing so, we all become just… wrong.

Do you remember “The Dress”?

Here’s a reminder.

It wasn’t only the original poster that was, in her words, “freaking the f- out”; the whole of the internet seemed to lose its mind. Whole threads of conversation emerged with camps on both the “It’s blue and black, morons”, and the “If you’re not seeing white and gold there’s something deeply wring with you” sides. And things got MEAN. About a dress. Boy, 2015 was a crazy time. Eventually though, we started to find a way to cut through the noise. And we cut through it in ways that provided a surprisingly meta explanation. What we each saw was informed by our own experience and context. If we are more used to seeing things in low illumination, we see it as white/gold (often night owls lean this way); if we expect good illumination, we see it as blue and black (enter the early risers). Now, it’s true, there ‘kind of’ is a correct answer… the original dress was blue and black. But that misses the point – the folks screaming ‘blue and black’ were no more valuable in the arguments than the white/gold crew. It was the folks who recognized that there was truth in the experiences of both sides of the argument who found the opportunity to discover something new and cut through the noise while contributing to our understanding of the world. (Dive into this more with a socks ‘n’ Crocs expansion here.)

For those of you who enjoy a more classical argument, we can go back to the 1704, when Isaac Newton published his work “Opticks” suggesting that light was composed of tiny particles moving through space. It wasn’t until 1801 that Thomas Young demonstrated that it actually acted like a wave. Problem solved. Until Einstein entered the conversation, sweeping up a Nobel Prize in 1921, for explaining the nature of photons and fighting back for good old team particle. Today the best answer seems to be that ‘it’s kinda both’. Score one for Old El Paso girl. And once again it’s not the most important part of the debate… in exploring the duality of light, Einstein opened one of the doors into the world of quantum mechanics, giving us, amongst other things, the entire computing industry and the possibility of AI.

Back to dangerous territory…

I was hesitant to include this bit, but we’re here now… so while we’re back on AI, maybe let’s start to acknowledge that AI is neither good, or bad; it’s both. It offers us opportunities to do things we never thought possible AND if we’re not careful, it will hasten our climate crisis and dehumanize society and work.

“In for a penny, in for a pound”, as they say… seeing as we’re wading into this, let’s bring Trump back into the picture too. Cards on the table, I dislike pretty much everything about him and what he stands for, and reckon he poses a real and present danger to the progress we’ve made in so many areas, socially and environmentally, and he’s likely to drive inequality to even more extreme levels in the US and around the world. I would love to be wrong about this. AND I have to acknowledge that he’s on to something that people care about… our systems and institutions aren’t serving a lot of people well, our political class have lost touch with real people, life for the average young person is harder than it was for their parents, and neither the left nor right of politics seem to have the answer. That’s what we could be talking about.

And onwards to safer ground…

The reality is that things worth talking about are not black or white. They’re not even grey. They’re black AND white AND grey. Sometimes blue and gold too. There is more that the other side gets right, than wrong; there are more things that we all care about, than things we disagree about; and while we simply argue the differences, we’re missing the opportunity to learn something new. The sooner we accept that, the sooner we can stop hurling things from our side of the fence, meet in the middle, and start working on the things we all care about together.

Next time you feel yourself preparing to dig in, and make the case that this time surely will change the mind of the idiot you’re contradicting, channel your inner Dickens, Einstein, or Old El Paso girl (I’m Old El Paso girl all the way, BTW, if that wasn’t clear), and ask yourself “¿Por qué no los dos?”

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Many years working in corporate consulting, collaboration and transformation exposed me to a significant array of strategies, goals and purpose statements. One of the things that stood out to me was how many strategies were built around the idea of becoming ‘the biggest’ or ‘the best’ in a given field.

Those goals always grated on me, though I couldn’t necessarily put my finger on why. They just left me with a sense of... meh. It isn’t just the baked in idea of competition – to a point, competition is natural and healthy – it was just a general sense of... futility, maybe? A feeling that through such a raison d’etre you’re entering into a never-ending fight, mano-a-mano, with other similar organisations who also want to be the biggest or the best in that very same way, in that very same field. And whilst that might get you up in the morning (some people just love the fight); it probably won’t be enough to get the rest of your people up. I can tell you that from experience; but if you need convincing, you just know that Harvard Business Review is there to tell you that “When the company’s purpose is activated and aligned with employees personally, employees are 77% more likely to be engaged at work, and report 87% higher intent to stay”.

Contrast against the likes of Nike and Patagonia. You don’t have to love these companies, but at least it’s easier to get excited by Nike's mission, “Bring Inspiration and Innovation to every athlete in the world” or Patagonia, who are “... in business to save our home planet”. You just get the feeling that those organisations know what they are about.

And so, naturally, I started thinking about trees.

Take a walk through a thriving and abundant forest (seriously, do it; you’ll feel just a little better), and think about what makes it that way. Big trees are a significant part of the story, and who doesn’t love a really, really big tree? You don’t need to be into hugging them, but they look awesome, and they also provide a heap of useful services into the forest ecosystem, like shelter for animals and birds and microclimate regulation. On the other hand, they also intercept a bunch of light that other plants might like, and they compete at scale for nutrients and water. As awesome as they are, trees alone create a pretty bleak landscape. Early approaches to commercial forestry created plantations with trees of the same type lined up in regimented order, with blocks all growing together to enable efficient harvesting of wood supplies. For the first cycle or two, it paid off… foresters were able to efficiently grow huge quantities of building materials, with less effort than logging in natural forested areas would allow. However, after that, problems started to arise.

A lack of biodiversity, soil degradation and myriad other factors led to deteriorating growing conditions, meaning each harvest started becoming poorer and poorer, and ultimately, unsustainable.

Coming back to that rich and abundant forest we were talking about before; trees are important, but it’s actually the million and one other things going on in that ecosystem that keep it thriving. Here’s a picture of the beautiful Otways Forest for inspiration (it’s one of my favourites).

Trees young and old thrive side by side, while others die gracefully and decompose, feeding organic matter and new habitats back into the system. A variety of shrubs, grasses and other ground cover help reduce soil erosion and keep water in the soil. Diverse plant species create habitat for diverse forms of animal, bird and insect life. And what goes on beneath the surface is even wilder.

One of my favourite discoveries in recent years is mycelium. I should clarify, that’s just my discovery of it… clever people have known about it for much longer. To give my non-sciency version, mycelium are the roots of fungus in various forms that thread through the soil, intertwining with each other and the roots of trees and plants, making big old networks that can do cool things like transfer water and nutrients between trees, and to some extent enable them to ‘communicate’ with one another. These fungi are so interconnected that you can no longer say whether they are many organisms still, or now just one.

My takeaway from this – healthy ecosystems typically have high levels of diversity and connectivity, with new and old growth side by side, with each inhabitant striking a balance between competition and collaboration, so that the whole picture is one of abundance and resilience.

Big can be beautiful, if delivered with purpose

Before I get too wrapped up in this delightful metaphorical side-quest, let’s use this to reframe the core discussion we started with. Do you want to be fighting for dominance in a battle with lookalike businesses, competing for the same resources and crowding out new growth in a depleting landscape? Or, would you prefer to find your niche in a diverse and healthy ecosystem that you both benefit from and contribute back to?

In case you need to be reassured, even Mike Porter would advise you to focus on being unique, rather than competing to be ‘the best’, every single time.

To hark back to my previous article On Purpose, exploring this topic brings us back to the question of ‘what’s your real reason for existing?’. Growing, and being big is not a bad thing, but being big for the sake of ‘winning’ wholly misses the point. Large business often talk about their role in providing stable infrastructure, opportunities for people to grow and to progress and many other benefits (think trees that provide habitats for animals and root structures that help lock soil in place). And that’s great and often true – but it too often comes as an afterthought and self-justification rather than a driver of strategy. Which means that these “ecosystem services” are the first things to drop off the plan when times get hard… we stop investing in training and development, we fire more than we hire, we pull back from making contributions to others. Like profits, growth might be an enabler of your purpose, but it shouldn’t be the goal. If growth feels important, ask why. What is the growth for, and how will it help you deliver on your purpose? Egos need to be checked at the door.

Do we default to connect or compete?

My second reflection is maybe a more profound one about the broader operating environment we find ourselves in. It’s hard to look around and suggest that today’s way of doing business is contributing to a healthy and thriving ecosystem. I can’t help but wonder if part of this is because our setting on the compete vs collaborate dial creates a self-reinforcing feedback loop that flares in times of resource scarcity. When things get hard, our tendency both as leaders and as businesses (and increasingly, countries) is to look inward, to control what we can, batten down the hatches, hoard what resources we have, and ride out the storm. When things get hard in nature on the other hand, that’s when communication and connectivity go through the roof. If a tree is being attacked by a pest or disease it will sometimes send out a signal through that mycelium network to warn other trees so that they can defend themselves, for example by producing chemicals that are harmful to the invaders. If a sapling is struggling for resources, that network can also share resources from the larger trees to enable it to grow, because new growth is necessary to create a healthier system for all. I can’t help thinking there are a whole raft of lessons in there for us folks who, let’s face it, are still in the infancy of figuring out how to really run institutions at scale, without them running us.

So, how might our organisations look different, if we built them with a view to being part of a thriving and connected ecosystem, rather than in pure competition with others?

Which brings me back to the start. Stop trying to be the biggest tree in the forest. Be more like fungus.

Some final food for thought…

I’ll wrap by sharing a few more questions that this has made pop off in my head. Would love to know what is firing in yours…

• Are we striving to be unique, or defining ourselves by comparison to others?

• In what ways does a healthier system create greater sustainability for my organisation and how can I maximise this positive feedback loop?

• What are the contributions my organisation provides into the ecosystem that it is a part of, and how do they form a part of our purpose, strategy and operating model?

• How could more open communication and sharing of resources help us in detecting threats and identifying opportunities?

• How can we make it easier to partner and collaborate with others in areas that they are uniquely good at?

• How could we think about career pathways and opportunities for our people to grow, that don’t rely on growing our own organisation indefinitely?

• How can we invest in relationships now, that build resilience and create avenues of support for when times get hard?

P.s. If you want to go really deep down the rabbit hole, just go ahead and follow the little white mycelium rabbit through Google. It’s the future.

https://www.arup.com/projects/foresta/

https://www.afr.com/technology/7-ways-mycelium-could-change-our-world-20220915-p5bicd

“You keep using that word. I do not think it means what you think it means.” Inigo Montoya, The Princess Bride.

We’re not doing things on Purpose

I remember sitting in a conference hall, listening to some of the most esteemed Non-Executive Directors from a variety of industries sharing their insights on good governance and board leadership. One of the panelists commented that “Absolutely, purpose is important, but sometimes we just don’t have the luxury of prioritising it”, and others nodded along, sagely. Of course, the commercials must come first! Around the same time, I was involved in a different conversation with a team of strategy consultants working on a corporate strategy refresh - when I asked how they were looking to embed purpose in the new strategy they just looked puzzled. “The purpose is still the purpose; we’re here to talk about strategy, which is a different thing”. They went on to talk about capabilities, growth and competitors. And I groaned... hopefully just with my internal voice, but my poker face isn’t great.

I’m pretty sure this isn’t just my experience. Multiple surveys by the likes of EY, Deloitte and McKinsey will tell us things like “71% of employees think their leaders still ‘always’ or ‘often’ make critical decisions solely based on financial considerations such as profit, costs and growth.” And let’s be clear, this is not just a commercial sector issue; without naming names, a recent discussion in a government context uncovered that one of the strongest drivers of decision making in a government context is often “to maintain a defensible position and manage risk” - not, as you may have been hoping, to create better outcomes for more people.

And so, I got to thinking... have I just got the wrong end of the stick on what the word ‘purpose’ means? I had to doublecheck myself, but fortunately Collins Dictionary had my back - ‘purpose’ really is “the reason for which anything is done”. And yet. We’ve created a space in corporate land where we have these things that we call ‘Purpose’, which we seem to feel exist quite separate from both governance and strategy.

It feels to me like we’re missing a trick. How can we make good decisions or decide which actions to take unless we are clear on the why, and what our ultimate goal is? Wouldn’t a purpose-led approach make decision-making so much clearer? And of course it does... amongst others, the Harvard Business Review will tell us that clarity of purpose leads to better prioritisation of actions and more effective decisions. Not to mention that people have pretty well-tuned bullshit radars – when we say one thing and do another, they know. And they don’t like it.

Guided by a ‘lurking purpose’?

So what’s going on? Why make life harder for ourselves by clouding the basis for good decision making? My belief is that there almost always is a ‘why’, a purpose, that shapes the things that we do – but sometimes it lurks beneath the surface of the more palatable Purpose we put on our websites. Since Milton Friedman offered that “The social responsibility of business is to increase its profits”, we seem to have taken that idea and internalised it in everything we do, to the extent that maybe we really do believe that to focus on anything else besides profit is bad business, if not downright unethical. Meanwhile government has its own baggage, collected through decades of Whitehall tradition, New Public Management approaches and an increasingly fraught relationship with media and information systems – today, to prioritise anything other than managing risk and efficiency can feel a little bit too ‘edgy’. And so, a modern notion of corporate purpose sits uneasily alongside a set of hand-me-down purposes that have been encoded into strategy, management and governance practice over generations. Perhaps we really are centering purpose within our operating models... it’s just that sometimes it’s not really what our website says our Purpose is.

Fuel for the rocket

Now, I’m not arguing that we need to throw out goals of making money, and keeping our reputations safe – those things are totally important. I like how Brad Bird of Pixar puts it, “Speaking personally, I want my films to make money, but money is just fuel for the rocket. What I really want to do is to go somewhere. I don't want to just collect more fuel.” The same goes for brand and reputation.

What I am arguing is that we can be both bolder, and more authentic in thinking and talking about what our purpose is, and we can work much harder to make sure we embed it in our strategies and decisions. It’s a mindset shift more than anything, which to be fair, is easier said than done. Not least because we, and strategy consultants across the land, have been taught to do strategy, management and governance in a way that takes a universal goal of maximising profit/surplus as a given. It’s what leads to puzzled faces on consultant faces when you ask how purpose drives the strategy.

This is where I think we have a lot to learn from the social sector. For the last 5 or 6 years I have shifted the focus of my work from corporate and government worlds and towards social impact. In many ways the work is the same – people working in complex contexts are trying to organise work to solve important problems. What is different is the context and the available set of tools. My NFP and social impact colleagues will immediately recognise the ubiquity of a “Theory of Change” in systems work. This is a way in which we can articulate the change we want to see in the world, and the role our organisation or initiative will play in contributing toward that change. We can then start to align activities, investments, capabilities and resources against the priorities that will help us to work toward our vision. Essentially theory of change is a strategy tool that allows us to keep purpose central and situated in a real-world context. And it’s been strangely absent as a notion in corporate spaces.

Reclaiming Purpose

So why does this all matter? Our current strategy processes work fine, no? Eehh. The World Bank reckons that global poverty reduction has slowed to a standstill; improvements in shared prosperity have stalled, and climate change poses a fundamental risk to poverty and inequality reduction. Whoops! The point is that businesses and governments both have the potential to change the world in positive ways. And we need that. Whilst we remain slaves to lurking purposes, we’re going to keep nudging things in the wrong direction.

My plea is that we need to think more intentionally about how our Purpose shows up every day, and stop using outdated models of strategy and governance that confine Purpose to a ‘nice to have’. Sure, it’s a change, and change is hard, but it’s not risky – we’ve all seen enough articles that tell us that purpose-aligned businesses have better employee engagement, innovate more and outperform on revenue growth. However, let’s be really clear; that *shouldn’t* be the reason we align to purpose. The headline we should really be shouting about is that “Purpose-aligned businesses actually stand a chance of successfully delivering on their Purpose”... and that matters.