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What Is The Most Effective Way To Achieve Organisational Change? New Research Results
Ever felt that the traditional approach to change doesn’t deliver the results you hoped? Wondered if there is a better way? Well interestingly Bradley Hasting and Gavin Schwarz[i] recently published a lengthy paper comparing the effectiveness of two different approaches to organisational development. One is the traditional mode, known as diagnostic, and the other a more recently developed approach, championed particularly by Bushe and Marshak[ii], known as dialogic….
Ever felt that the traditional approach to change doesn’t deliver the results you hoped? Wondered if there is a better way? Well interestingly Bradley Hasting and Gavin Schwarz[i] recently published a lengthy paper comparing the effectiveness of two different approaches to organisational development. One is the traditional mode, known as diagnostic, and the other a more recently developed approach, championed particularly by Bushe and Marshak[ii], known as dialogic.
Diagnostic vs Dialogic
The diagnostic mode is the traditional approach to change: gathering information, making a diagnosis, then planning and implementing an intervention. Diagnostic approaches are typically prescriptive and linear, recommending a sequential sets of activity. They are essentially a variant of Lewin’s orginal freeze, unfreeze, refreeze model of organisational development.
The dialogic mode refers to the large group, social constructionist approach to change like Appreciative Inquiry, Open Space and World Café. Dialogic processes follow newer theories of complexity science, suggesting that organizations are permanently in flux and change, and that the art of change is to help bottom level changes amplify and accumulate to become substantial changes over time.
The table below highlights the findings of the research. As you can see traditional, diagnostic methods alone didn’t do terribly well, reflecting in fact the commonly quoted figure that ‘70% of change efforts fail.’ Interestingly not only are dialogic approaches much more effective, but the most effective approach of all was to start with a diagnostic approach (that is to identify the topic and gather information) and then to oscillate with the dialogic approach. This approach delivered a 93% success rate – phenomenal!
How can we help organizations to reap the benefits of this joint approach?
Help is at hand: The Bushe Marshak Institute has published a unique series of dialogic OD guidance books. Each book is written by an expert in the field. I am very pleased to have been asked to contribute one on working with dialogic teams, as below
This book, distilled from my many years of helping organizations embrace dialogic approaches to change, such as appreciative inquiry, gives guidance from the point of entry through to setting up the first dialogic event. To take the planning group from their habitual diagnostic approach to something more dialogic, a lot needs to happen: this book explains what. The guidance is enlivened with a warts and all account of a less-than-prefect-but-we-got-there-in-the-end case-study.
My experience of working in this blended way fully supports Hastings and Schwarz’s findings. Many of my assignments have come off the back of diagnostic activity such as staff surveys or customer feedback or performance assessments. While these create the awareness of a need for change, they don’t always create excitement, energy and motivation for the possibilities of the future; rather the emphasis can be on fixing the problem. Instead, taking the diagnostic as a springboard, I work dialogically using Appreciative inquiry and other approaches to creating better futures in an empowered and participative way.
This book shares all the lessons I have learnt on how to help planning teams see the opportunity offered by more a dialogic approach, and grasp it, so opening up possibilities and exciting futures for their organizations.
Where can I learn more?
The Organizational Development Network is hosting a session on ‘Getting Ready for a Dialogic Intervention’ on Thursday October 7th at 1700 UK time. See details here
[i] Hastings and Schwarz (2021) Leading Change Processes for Success: A dynamic Application of Diagnostic and Dialogic Organisational Development. The Journal of Applied Behavioural Studies 1-29.
[ii] Bushe and Marshak (2015) Dialogic Organizational Development.Berrett-Koehler
Other Resources
Sarah Lewis is the owner and principal psychologist of Appreciating Change. She is author of ‘Co-Creating Planning Teams For Dialogic OD’, ‘Positive Psychology in Business’ ‘Positive Psychology at Work’ and ‘Positive Psychology and Change’ both published by Wiley. She is also the lead author of 'Appreciative Inquiry for Change Management'.
APPRECIATING CHANGE CAN HELP
Appreciating Change is skilled and experienced at supporting leaders in working in this challenging, exciting and productive way with their organisations. Find out more by looking at how we help with Leadership, Culture change and with employee Engagement.
For further information on these alternative approaches to change, please contact us or phone 07973 782 715. A selection of strength card packs are available from our online store.
If you want to know more about implementing approaches and processes that positively affect people’s happiness, engagement, motivation, morale, productivity and work relationships, see Sarah’s positive psychology books.
More blog posts categorised as ‘Emergent Change’
Is Mindfulness the new opium of the masses?
This seems to be what Ronald Purser is suggesting in his book McMindfulness. It’s an interesting read with some impressive statistics about the size of the Mindfulness industry ($4 billion anyone?), an account of its development and some nice juicy gossip about some of the insiders.
This seems to be what Ronald Purser is suggesting in his book McMindfulness. It’s an interesting read with some impressive statistics about the size of the Mindfulness industry ($4 billion anyone?), an account of its development and some nice juicy gossip about some of the insiders.
What I want to pull out is the bare bones of his critique of the industry. It is perhaps important to note that he happily acknowledges that practicing mindfulness can have benefit. Indeed he himself is a practicing Buddhist. What he objects to is the argument that teaching people one by one to be mindful, stripped out from its spiritual trappings, will somehow make the world a better place. He describes this belief as ‘Magical thinking on steroids.’ Rather he suggests that mindfulness practice acts as a band-aid to help people survive the difficult work and societal conditions many live under in our neoliberal economies. Here’s the gist of the critique.
By decoupling the practice of mindfulness from its spiritual roots and home of Buddhism, the modern mindfulness industry has jettisoned the ethical dimension to the practice. This cultural appropriation and mutilation leaves, he suggests, nothing more than basic concentration training. There seems to be a fond belief that ‘ethical behaviour will arise ‘naturally’ from practice.’ He suggests there is no evidence as yet of this.
The faith that, as CEO’s practice mindfulness, there will be a trickle-down effect on the world, so it will become a better, kinder, nicer place is somewhat misplaced and not supported by any evidence. He says
‘Trickle-down mindfulness, like trickle-down economics, is a cover for the maintenance of power.’
There is a colourful, impressive-looking plethora of neuro-science brain pictures produced to support the pitch that this new improved stripped-down version of ‘pure mindfulness practice’ is strictly science-based; no dodgy dippy-hippy or God-embracing beliefs here, thank you, this is a strictly secular, science-backed methodology. The neuro-science, he argues, effectively obscures the very weak research base to support an argument of effectiveness.
As the mindfulness industry has grown, so have the overblown claims of what it can be good for, including that it is especially effective at reducing anxiety, depression and stress. One of the 0.25% of 18,00 odd studies that actually reached decent scientific research standards concluded, ‘that mindfulness was moderately effective at treating a variety of conditions, but no more effective than other active treatments such as drugs or exercise.’
Mindfulness is now a big business like many others and suffers from the same challenges of staying ethical in a monetary world. He favourably compares Kabat-Zinn’s business prowess to that of McDonalds.
The stripped downness of the technique, which is it’s USP and key selling point, renders it acontextual, which, amongst other things, means that the known counter-indicators aren’t always adhered too. Mindfulness training in contra-indicated for those who have suffered trauma or are suffering PTSD. Criteria for exclusion include depression, social anxiety, psychosis, and suicidal tendencies. Are all school groups screened? Does anyone check in work-place programme roll-outs?
This is all occurring in a context where ‘Stress has been pathologized..., and the burden of managing it outsourced to individuals.’ Mindfulness training holds the promise of helping people deal better with stress. This in itself is part of an interesting large debate emerging about the whole ‘Me Inc.’ culture where we are all encouraged to focus on shining up every aspect of our self-care to produce a better me. So we can work harder, faster, longer without burning up. He says
‘Mindfulness-based interventions fulfil this purpose by therapeutically optimising individuals to make them ‘mentally fit’, attentive and resilient so they may keep functioning within the system.’
And, most damningly of all, he argues that the academic-science mindfulness complex is a servant of neoliberalism. That rather than encouraging people to challenge overwork, underpay, or insecure, or dangerous work; or any other form of workplace stress, it instead helps people put up with it. Mindfulness advocates, he argues, are providing support to the status quo; he criticises this stance: ‘the political naïveté involved is stunning’. But its’ adherents believe it is an apolitical practice. He doesn’t explicit say this, but I read it as, in effect, it is tolerated, indeed positively embraced, by organizations because it supports the status quo.
What particularly interests me I suppose, is that some of these criticisms, if not all of them, can be extended to the whole positive psychology field.
I believe we have a moral obligation to recognize that we work in a political, economic and social context. I don’t believe big organizations or corporations to be inherently bad, but I do believe that the road to hell is paved with good intentions, and that very good people can, like the proverbial frog, find themselves doing very bad things if the conditions are right. We must be on our guard against a complacent belief that, because we believe ourselves to be good people, we are incapable of doing harm.
Other Resources
Sarah Lewis is the owner and principal psychologist of Appreciating Change. She is author of ‘Positive Psychology in Business’ ‘Positive Psychology at Work’ and ‘Positive Psychology and Change’ both published by Wiley. She is also the lead author of 'Appreciative Inquiry for Change Management'.
See more Thought Provoking and Book Review articles in the Knowledge Warehouse.
APPRECIATING CHANGE CAN HELP
Appreciating Change is skilled and experienced at supporting leaders in working in this challenging, exciting and productive way with their organisations. Find out more by looking at how we help with Leadership, Culture change and with employee Engagement.
For further information on these alternative approaches to change, please contact us or phone 07973 782 715. A selection of strength card packs are available from our online store.
If you want to know more about implementing approaches and processes that positively affect people’s happiness, engagement, motivation, morale, productivity and work relationships, see Sarah’s positive psychology books
What does ‘Evidence based practice’ mean for practitioners in the field?
Are you a practitioner, keen to practice in an evidence-based way but with little time to keep up with the research? Maybe you find scientific papers unreadable? Or perhaps you support the aim in principle, but find it hard to set up gold-standard science-based evaluations of your interventions with your clients? You are not alone.
Are you a practitioner, keen to practice in an evidence-based way but with little time to keep up with the research? Maybe you find scientific papers unreadable? Or perhaps you support the aim in principle, but find it hard to set up gold-standard science-based evaluations of your interventions with your clients? You are not alone.
Psychology, following medicine and other applied disciplines, has become very keen on the idea of evidence-based practice. And I’m all for it, in principle: it’s a hard idea to argue against. I religiously peruse the contents page of the academic journals that thud onto my doormat, rarely finding a title that gets my juices going. I thought the failing was mine, until I read Joanna Wilde’s book ‘The Social Psychology of Organizations’.
In this book she brilliantly explains how ‘scientific knowledge’ and ‘helping practice’ relate to each other. She suggests it is somewhat optimistic to hope that laboratory methods and facts can be just plonked down in the field and have positive impact; rather, there is a translation process involved if we are to get the best from the research.
Exploring this further Joanna mounts a spirited defence of the evidence-base that practitioners can call upon; an evidence base that is different, but no less valid, than the science evidence base.
We are not scientists, we have to problem solve not experiment
She offers a number of interesting ideas to help us be evidence-based in our practice in complex system fields.
She notices that we are in a subtly different business to science: we aren’t seeking primarily to establish knowledge, we are primarily seeking to help. We are working in a different context to different ends to scientists.
Given this, the intervention is judged by impact, and not by the facts it generates. This shifts the focus of the evaluation question subtly from ‘does it work?’ to ‘does it help?’
Our practice is client-centric, not knowledge-accumulation-centric. She suggests that practice is the process by which knowledge from one situation is converted into a different form designed to be effective for the particular situation at hand. The situation at hand often being a WICKED problem.
A WICKED problem is defined as ‘a complex problem that is evolving and can not be completely solved.’ WICKED problems offer a sharp contrast to the type of bounded problem required in scientific work. What works in one context may not work in another, and what can be tightly investigated in one context may not be trackable in another. The practice is specific to the context.
She notes that in contrast to conducting experiments, what practitioners do is
o Engage with WICKED problems, with an awareness of problem mutation
o Access and use a wide range of evidence from multiple sources
o Work in relationships
o Design interventions, monitoring emergence, enabling course correction
o Focus on the impact in context
She suggests that field knowledge is based on broad observation and ‘evidence by experience’. Our evidence base exists, but it extends beyond experimental results.
Some examples of ‘immediate and evolving (sources of ) evidence’ that are field specific include:
Emerging events in talk and context
Practitioner experience and authentic intuition
Stakeholder comments
In other words, we are cognisant of data emerging in the moment and attempt to form hypothesis of ‘what is going on here?’ against which we can select our possible next action.
We are not detached observers
This is a key difference: how we engage with and work with our clients is key to our practice. Scientists, on the other hand, generally work to keep themselves out of the science. We, or at least I, am well aware that I am monitoring the effectiveness of my practice almost on a moment to moment basis. In my head I have a set of criteria against which I am evaluating the conversation: is it moving productively forward? Is it enhancing or at least not damaging relationships? Are they ‘hearing’ what I’m saying? am I ‘getting’ what they are saying? And of course fundamentally ‘does this seem to be making a positive difference? Is it helping the situation?’
Sadly the answer to these questions isn’t always yes. But that’s ok because I can try something else. After all as Wilde so succinctly note, ‘Intervention practice requires the capacity to work in real time with uncertainty.’ And ‘For those of us that have built a career as practitioners, it is the dynamic nature of translating emerging knowledge into changing complex environments that makes the work engaging and rewarding.’ And all the while I’m building up my practice evidence base.
This isn’t to say that laboratory work isn’t valuable. It is and we need to be able to work with trust in the scientific disciples we draw from. But few of us have the time, patience or skill to critique the papers. To be honest, we rely on the academic refereed paper system to ensure that for us. We want to be able to take it and run with it. This sounds interesting, how can I apply it here? How might it help?
I love Joanna’s work and regard this book very highly. What I have presented here is a much simplified and reduced part of a much richer and more complex argument about the relationship between science and practice. If you are interested, I encourage you to invest in the book. It’s great.
Other Resources
Sarah Lewis is the owner and principal psychologist of Appreciating Change. She is author of ‘Positive Psychology in Business’ ‘Positive Psychology at Work’ and ‘Positive Psychology and Change’ both published by Wiley. She is also the lead author of 'Appreciative Inquiry for Change Management'.
See more Thought Provoking and Book Review articles in the Knowledge Warehouse.
APPRECIATING CHANGE CAN HELP
Appreciating Change is skilled and experienced at supporting leaders in working in this challenging, exciting and productive way with their organisations. Find out more by looking at how we help with Leadership, Culture change and with employee Engagement.
For further information on these alternative approaches to change, please contact us or phone 07973 782 715. A selection of strength card packs are available from our online store.
If you want to know more about implementing approaches and processes that positively affect people’s happiness, engagement, motivation, morale, productivity and work relationships, see Sarah’s positive psychology books
Love the money, hate the job? The effect of bulls**t jobs on happiness
Many of us have noticed a strange paradox but been unable to put a name to it. We believe that a job that doesn’t demand too much of us should mean we have plenty of energy left over for our real interests. Furthermore, we anticipate that if that job not only doesn’t demand much of us but also pays us very well, then we should experience happiness: we have beaten the system! We are being paid for doing practically nothing, what could be a better arrangement?
And yet, after an initial sense of triumph, it can slowly become apparent that the logic - lots of money for little work equals happiness and a fulfilled life - doesn’t work out. Instead we feel, well, that something isn’t right. That despite the income we aren’t happy at work.
Money for old rope - so why am I exhausted?
Many of us have noticed a strange paradox but been unable to put a name to it. We believe that a job that doesn’t demand too much of us should mean we have plenty of energy left over for our real interests. Furthermore, we anticipate that if that job not only doesn’t demand much of us but also pays us very well, then we should experience happiness: we have beaten the system! We are being paid for doing practically nothing, what could be a better arrangement?
And yet, after an initial sense of triumph, it can slowly become apparent that the logic - lots of money for little work equals happiness and a fulfilled life - doesn’t work out. Instead we feel, well, that something isn’t right. That despite the income we aren’t happy at work.
This leaves us caught in a trap: we feel we would be fools to leave such a great sinecure. And so we struggle on, wondering what is wrong with us that we can’t make the most of this; that after work we don’t spring into life as the artist, writer, dressmaker we know ourselves to be at heart; rather that we slump in front of the TV apparently exhausted after doing next to nothing all day. We grind through the endless days of non-work trying to look busy. We wonder why what should be great, and is the envy of friends slowing burning out in the caring professions, feels so awful, indeed, soul destroying. It seems there is a cost to taking the money without feeling we are really delivering value in return.
The Graeber hypothesis
David Graeber has put a name to this particular employment conundrum. He calls the jobs with these characteristics that produce these unexpected outcomes, ‘bull**t jobs’. A bullshit job is one that essentially has no meaning either to the job holder, nor, seemingly, to the wider world. It adds no perceptible value to life. As he says:
“Be honest: if your job didn't exist, would anybody miss it? Have you ever wondered why not? Up to 40% of us secretly believe our jobs probably aren't necessary. In other words: they are bulls**t jobs.”
This interesting book is highly recommended. It’s an easy with read with lots of quotes from those in bulls**t jobs. He goes on to offer an interesting analysis of the rise and proliferation of these jobs since the 1980s and the growing of the bulls**tisation of other, previously unaffected and otherwise meaningful jobs, such as teaching.
Thinking of ourselves as rational economic actors the trap we find ourselves in makes no sense, and so we can’t resolve it.
Your job should seem necessary, if only to you
However, it makes perfect sense from a positive psychology perspective. From work in this field we know that meaningfulness is important to engagement and wellbeing at work. We also know that the boundaries between work and outside work are highly permeable and how we are in one sphere of life will affect how we are in other spheres of life. In other words the draining effect of a bulls**t job will adversely affect our ability to be energised at other times.
Pondering this, I related David’s theory to a model about the value of work from Christopher Michaelson, who suggests that the value can be arranged across two dimensions. He argues that work can offer a high intrinsic value i.e. feel valuable in itself; it can have an instrumental value, such as being well paid. From these two values we can construct a landscape on which to place different jobs.
As you can see below I have had a go at locating where bulls**t jobs fit on this model e.g. high in instrumental value (well paid), low in intrinsic value (pointless). It appears they are located directly opposite to many caring jobs e.g. looking after the sick or vulnerable.
I am hopeful this understanding might help people caught in the trap of highly paid yet soul-destroying jobs. It helps make sense of the situation and facilitates a discussion about the kind of job that might be, not just bearable but actually engaging, and whether the cost of switching might be worth it
What do you think?
References
Graeber, D. (2018) Bullshit jobs: a theory. Allen Lane UK
Michaelson, C. (2013) The value(s) of work. In Froh, J. J., & Parks, A. C. (2013). Activities for teaching positive psychology: A guide for instructors. American Psychological Association.
Book Review – Holocracy The Revolutionary Management System that Abolishes Hierarchy: Brian Robertson (Originally published in AI Practitioner)
Brief account of the book
The book has noble, honourable and inspiring intentions: it offers holocracy as a ‘new operating system’ for organizations that will create a ‘peer-to-peer distributed authority system’. This operating system creates empowered people who are clear about the boundaries of their authority, about what they can expect from others, and are able to be highly effective in their roles.
Why this book?
This book claims to offer an alternative way of organizing that breaks away from the command and control model or as Brain calls it ‘the predict and control’ model. This seemed sufficiently in line with our aspirations to warrant further investigation.
Brief account of the book
The book has noble, honourable and inspiring intentions: it offers holocracy as a ‘new operating system’ for organizations that will create a ‘peer-to-peer distributed authority system’. This operating system creates empowered people who are clear about the boundaries of their authority, about what they can expect from others, and are able to be highly effective in their roles.
In this model the organizing process itself becomes the ultimate power, more than any individual, and every individual can have a voice in designing and altering the process. It is a flat system of roles and links that delivers high autonomy. It is predicated on a system of roles (essentially disembodied job descriptions), decision-making circles (meetings by another name) and a process of links. It bravely attempts both to relieve leaders of the pressure of the demand of omnipotence, and to make it possible for weak signals of dysfunction, lack of alignment, gaps in accountability, missed opportunities etc. to be attended to promptly and effectively by empowered individuals. It offers a clear process for distinguishing working in the business from working on the business. It presents a view of strategy as ‘dynamic steering’ by simple rules or principles towards a general purpose. In this way it attempts to simulate evolutionary development processes and indeed sees itself as an evolutionary model.
Holocracy - Too much to ask?
Reading this book was an interesting experience. The book is a ‘how to’ book and it sets out the process model in great detail, describing the purpose of key facilitator roles and the process of key tactical and governance meetings (circles in the terminology of the model). It’s not hard to tell that the author and originator of this model has a software development background. My initial impression reading it was reminiscent of getting to grips with the complex board games of Allies and Axis that my sons and husband loved to play some years ago: a complex set of rules about the properties and powers of various pieces and cards subject to the rules of the dice. In the early stages as much time was spent consulting the rule-book as playing the game. As I read on I realised there was a strong binary flavour underpinning much of the process, an ‘if this then that’ logic driven by an implicit flow chart of binary decision-making. The author’s argument is that these tight constraints work to create an empowered freedom within them. However it is noticeable that much of the instruction reads ‘no discussion allowed’ as the process is strictly followed. In essence he is trying to programme out the negative aspects of the human element in this organizing process and to create an organisational process that functions effectively despite the emotional and relational wayward behaviour of people. This takes a lot of discipline on the part of all the players; which is to say it takes organizational energy.
The author is honest enough to point out that this new process doesn’t always ‘take’ in organizations despite various people’s interest, energy and support. He identifies that the key challenge, which is also at the heart of the model’s power, is the need for those with current power in the system to give it up. The author is of the opinion that after an initial period of painful discipline, the benefits will become clearer to all and the process will become more self-maintaining. It is clear that not all organizations make it over the hump. Similarly, while initially he took a whole-system ‘all or nothing’ approach to implementation, he has since softened his views and in this book he offers a chapter on holocracy-lite possibilities that offers guidance on how to implement parts of the process.
In summary
The book is well written, offering a clear and detailed explanation of the holocracy organizing process with a worked case study and anecdotes from experience used to illuminate how the various meetings and roles work.
My take on the model presented
This model is likely to appeal to those who have great faith in rationality and like highly structured, detailed and disciplined processes. In this sense it reads as very bureaucratic. It put me in mind of LEAN, another process that, in theory, makes perfect sense, however in practice often takes a lot of energy to maintain. Both demand great human discipline. Robertson is clear that the role of facilitator ‘requires that you override your instinct to be polite or ‘nice’ and that you cut people off if they speak out of turn’, amongst other skills and abilities. In this way it is trying to programme out the emotional irrational human decision-making influences such as ego, fear and group think, to create a less contaminated system of governance.
In many ways this model seems aligned to Appreciative Inquiry and co-creative ways of thinking. For example it is more wedded to biological than mechanical metaphors, it prioritises adaptability over predictability, and it is focused on releasing collective intelligence within a leader-ful organization. However, it seems to work against human nature, or human psychology, rather than with it. It is this constant fight against core features of human systems that, in my opinion, is at the heart of the gap between the promise of these kinds of models and the frequent experience of the lived reality.
However, I do think it offers a real, well thought out, and to some extend tried and tested alternative to our current creaking-under-the-strain-in-the-modern-era command and control organisational model. It will be interesting to see to what extent it is adapted across the organizational domain and I would love to hear from anyone who has either direct experience of working in an organization based on this model, or who has attended training on it.
Other Resources
Much more about organisational change can be found in Sarah’s new book Positive Psychology and Change
Sarah Lewis is the owner and principal psychologist of Appreciating Change. She is author of ‘Positive Psychology at Work’ and ‘Positive Psychology for Change’ both published by Wiley. She is also the lead author of 'Appreciative Inquiry for Change Management'.
See more Book Reviews and other Emergent Change, Leadership Skills and Organisational Development Strategy articles in the Knowledge Warehouse.
APPRECIATING CHANGE CAN HELP
Appreciating Change is skilled and experienced at supporting leaders in working in this challenging, exciting and productive way with their organizations. Find out more by looking at how we help with Leadership, Culture change and with employee Engagement.
For further information on these alternative approaches to change, please contact us or phone 07973 782 715. A selection of strength card packs are available from our online store.
Book Review – Firms of Endearment: How World-Class Companies PROFIT from Passion and Purpose, by Raj Sisodia, David Wolfe, Jag Sheth (Originally published in AI Practitioner)
Brief Account of the book
The book is based on two rounds of research undertaken by the authors in collaboration with their MBA students. They identified the organizations initially by asking the question ‘Tell us about some companies you love. Not just like but love.’
Why this book?
I went to the World Appreciative Inquiry Congress in Orlando USA last year where this book was positively recommended by various luminaries such as David Cooperrider. After I heard about it for the third time, I thought I would investigate.
Brief Account of the book
The book is based on two rounds of research undertaken by the authors in collaboration with their MBA students. They identified the organizations initially by asking the question ‘Tell us about some companies you love. Not just like but love.’ They evaluated the suggested organisations against some criteria and produced an initial batch of 18 companies that qualified, expanded to 62 in the current edition. The headline criteria are that, to qualify as a firm of endearment, the company or organisation must be passionate about doing good while doing well, and must be equally committed to doing well by all its shareholders e.g. partners, investors, customers, society and employees. In addition there must be evidence that they live these values.
The headline news is that when they then compared the performance of these Firms of Endearment against the Good to Great companies and the Standard and Poor top 500, they outperformed them against the market by 4 to 6 times as much. In other words while Good to Great and top 500 companies outperformed the market, the Firms of Endearment, particularly the American ones, outperformed the market even more, by a 6 – to – 1 ratio (p. 20). So of course the question is chicken or egg? Interestingly, much later in the book, a model is presented that suggests that initially a company has to ‘establish a strong market position and a predictable stream of profits’ before it can then it can advance up a hierarchy equivalent to Maslow’s hierarchy of needs. At stage two of this ‘Kyosei’ hierarchy ‘managers and workers cooperate’, at stage three the organization ‘extends cooperation to customers, suppliers, communities and even competitors’ and finally at stages 4 and 5, gets to address global imbalances and help governments solve global problems (p.157).
The big point - 'Age Of Transcendance'
In attempting to explain the rise of the Firm of Endearment as a successful business model, they suggest it is part of a wider C21st zeitgeist, prompted in part by an ageing population experiencing the psychological process of ‘generativity’ which is ‘the disposition of older people to help incoming generations prepare for their time of stewardship of the common good’ (p xiii-xiv). Many of these ageing baby boomers are also of course in senior and influential positions in business life. They also believe that the world is experiencing a strong search for meaning which is driving people to look beyond the relationship of an organization to their purse to a relationship that speaks to their hearts, their passions, and their values. This is described as ‘A transition from material want to meaning want.’ (p. xxvii). The authors describe this as the emergence of the ‘Age of Transcendence’, suggesting that in this new age, organizations will need to connect with six specific senses: design, story, symphony, empathy, play and meaning, to engage and influence their stakeholders. All of which are asserted to have deep roots in the brain’s right hemisphere and all of which of course resonate with Appreciative Inquiry. There is a suggestion that we are moving from a ‘having’ society to a ‘being’ society. One can’t help noticing this resonates rather with our straitened and benighted times where there is less ‘having’ to be had.
The book draws on its 60+ exemplar organizations to illuminate the various features of a Firm of Endearment and how they are expressed differently with the various stakeholders. For example it recounts how Costco implements practices that reduce staff turnover, increase per person productivity and create good efficiencies that create a virtuous circle that allows the organization to both pay better wages and generate more income per person than rivals in the same industry (p.35). Wegman is quoted to illustrate that high quality, highly motivated staff can result in a doubling of margin per square foot against the industry average, a gain which more than offsets their proportionally greater wage bill (p. 61).
In Summary
There is no doubt the authors have identified an interesting group of organizations. A key question is whether, as argued, they are harbingers of a new age, or whether they are outlier organizations of a type that have always existed. The book itself starts well but for this reader became progressively less interesting.
My take on this book
I can see why David and others got excited about this book. It is centred on answering a great AI question ‘How are we going to make this company an instrument of service to society even as we fulfil our obligation to build shareholder wealth?’ (p.3) and gives good, quantified answers to that question. The evidence that organizations can be good and do well is very convincing and valuable. The authors have clearly contributed immensely to the business case for Appreciative Inquiry.
The text is clearly located in idea that ‘Business is by far the greatest value creator in the world’ (p. xv) and argues that we need to ‘Understand the power of capitalism to transform our world for the better’ (xvi). This belief underpins the ‘Business as an Agent of World Benefit’ Appreciative Inquiry project.
However the book proceeds as if a concern for the common welfare is a new phenomena, with no reference to, for example, the Quaker run businesses or model factory towns of the 19th and 20th Century. I could also take issue with the unintended sexism of calling older women ‘postmenopausal’ while older men are referred to, somewhat more graciously, as ‘grandfathers’ (p. xxviii). Similarly the first time the female personal pronoun pops up is in relation to a hypothetical customer (p.7); none of the experts or CEO’s quoted to this point (or at all according to memory but not rigorously checked) are female.
This book offers support to the Appreciative Inquiry project. It will also give you case study stories for your presentations. In addition there are some great statistics in here but you have to dig through a lot to find them. I confess I didn’t finish the book.
Other Resources
Much more about the links between creating positive workplaces and enhanced productivity and profitability can be found in Sarah’s new book Positive Psychology and Change
Sarah Lewis is the owner and principal psychologist of Appreciating Change. She is author of ‘Positive Psychology at Work’ and ‘Positive Psychology for Change’ both published by Wiley. She is also the lead author of 'Appreciative Inquiry for Change Management', by Kogan Page, the second edition is out in September.
See more Book Reviews and other Leadership Skills and Positive Psychology articles in the Knowledge Warehouse.
APPRECIATING CHANGE CAN HELP
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As humans we have been domesticating animals for tens of thousands of years, taming wolves for protection, horses for transportation and livestock for food. Our relationship with domesticated animals began for these kinds of practical reasons, however when we consider the definition and purpose of the pets we know and love today, it is drastically different.