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For all practical purposes, the year 1800 was the beginning of the Anthropocene, the age when mankind embarked upon the industrial revolution and great acceleration in economic and population growth began. Yet in a new theory (BioScience, 2018), some conservationists now say that the global demographic and economic trends that have resulted in unprecedented destruction of the environment over the last two centuries are now creating the conditions necessary for stabilization of human populations and a possible renaissance of nature.
Drawing reasonable inferences from current patterns, these conservationists suggest that a hundred years from now, the Earth’s population will be between 6 and 8 billion people (comparable to the 7 billion today), very few will live in extreme poverty, 70%–90% will live in towns and cities, and nearly all will participate in a globalized, market-based economy. Further, two centuries from now, the population could be half what it is today and the long-cherished goals of a world where people respect and care for nature may be realized, especially if we act now to foster this eventuality. This view has been called the “bottleneck to breakthrough” stance. Of course, one significant problem with this hopeful narrative is that it is unlikely that we will have 100 – 200 years to get this right before the global effects of the climate crisis abound.
Hopeful narratives have emerged in other quarters as well. Professor Adam Frank of the University of Rochester, writing recently in the Washington Post, suggests the need to reframe the debate surrounding the climate crisis, not to let us off the hook, but to offer a way forward beyond today’s entrenched positions. Currently, the scientific narrative describes humans as an apex species of sorts that has overrun the planet and caused significant degradation in the atmosphere (elevated CO2), hydrosphere (acidification of the oceans, sea-level rise, increased floods, and droughts), and biosphere (species extinction). A ‘blame’ narrative of this sort has generated push back and denial from various quarters, particularly among many business leaders and conservative politicians. Professor Frank noted that there is “a very different story we can tell, one that recognizes climate change not as a marker of shame but as a story of an astonishing success that has led humanity to a moment of great peril, yet also of profound possibility.”
The central point here is that climate change is the unintended result of our species’ thriving. In the new narrative, humans are not cast as a greedy scourge on the Earth but simply the latest experiment in “planetary-scale evolution.” It is natural that any species that flourished to this degree would have tapped readily-available fossil fuels on a large scale — and in so doing would have eventually degraded global ecosystems. While it took a century or two for the downside of carbon-based fuels to manifest itself fully, the argument goes, now that we have understood it, we must mobilize to change course quickly and move past this bottleneck.
We should realize that the world community has addressed a similar, albeit smaller, problem in the past. The ozone hole of the late 1980s was caused by a class of industrial chemicals called CFCs which destroyed ozone in the upper atmosphere. The solution was the adoption of the Montreal Protocol, signed by many nations of the world in 1989. Now, 30 years later, scientists know a lot more about the ozone layer and the ozone hole is getting smaller; it is expected to heal entirely by 2050. If global cooperation had not banned CFCs for the last 30 years, the ozone hole over Antarctica could be 40% greater by now.
Today’s global greenhouse gas problem is more difficult to solve due to the widespread use of fossil fuels as the basis for modern civilization. The climate bottleneck is the result of increasing CO2 and methane levels in the atmosphere derived from a wide variety of sources, but predominately from burning carbon-based fuels throughout the world. There are also strong vested interests (e.g., energy companies), whose business models could be hobbled if fossil fuels are phased out, or even significantly reduced.
Which brings us to an apparent crisis of legitimacy among today’s prominent institutions. For the first time in decades, their influence, their ability to lead, and even their right to exist, are being questioned. According to one of the world’s leading consulting firms (PwC 2019), the causes of this legitimacy crisis are related to five basic challenges affecting every part of the world:
- Trust: There is declining confidence in the prevailing institutions that make our systems work.
- Asymmetry: The wealth disparity and the erosion of the middle class
- Disruption: Abrupt technological changes and their destructive effects
- Age: Demographic pressures are being experienced as the average life span of human beings increases and the birth rate falls
- Populism: The growing rejection of the status quo, with associated nationalism and global fracturing
Because of their role in maintaining the status quo, many existing organizations have been linked to the multiple crises that we are now facing. But if we take the more hopeful view, we are currently viewing the world only from an uncomfortable bottleneck. Where organizations have contributed to such problems, organizations can solve them. But hold on, this is not just a legitimacy crisis for large organizations, even small and medium-sized organizations can be viewed as illegitimate if they ignore a global crisis. The future is likely to be path-dependent, and a positive path is certainly not a foregone conclusion. Organizations large and small need to act together to ensure that we emerge from the bottleneck into a world that continues to be viable.
If you are a manager, you may find yourself trying to justify your stance on global issues to your stakeholders. We must all ask ourselves whether we are part of the problem or part of the solution. It’s a question of legitimacy, especially during a crisis. If you find yourself in this situation, let me suggest that a new management approach offers a way forward toward a new sense of legitimacy for your organization.
The basic idea of traditional management is that each organization, in line with its capabilities, seeks to transform inputs into outputs in an efficient manner. This two-level, input to output model has been the basis for a vast constellation of organizations in business, government, and nonprofits sectors, but the downside of this approach is in full view today: (1) natural systems have been significantly degraded as the tragedy of the global commons is writ large, and (2) workers have little motivation and agency to address external issues through innovation. Yet we can no longer ignore the negative externalities that are occurring in the global commons. The traditional management model means that the health of the environment continues to be ratcheted down because each individual organization has little concern for its net impact on the environment. The fault is in the traditional input to output model that is organization-centric and views efficiency as the highest good. Fortunately, the traditional management model is socially constructed and can be changed. But first, let’s examine the traditional model more closely – it is composed of two levels.
Level 1 (input narrative). The practice of management has a rich history that began hundreds of years ago. As early as the year 1397, the Medici Family of Florence Italy utilized double-entry booking to set up rudimentary banks across Europe. It was Luca Pacioli who first described double-entry bookkeeping in his text of 1495, and the practice is now a central tenet of accounting in modern organizations. The purpose of accounting is to maintain solvency and determine profit (or surplus) for the period under review. Accounting is about input management and produces a Level-1 narrative that describes how well an organization is doing in financial terms. It focuses on profit (or surplus), a narrative that has been deeply embedded in our culture since its beginning over 500 years ago. While the level-1 narrative surrounding the management of inputs is necessary, it is insufficient to provide responsible management decision support well into the future.
Level 2 (output narrative). The management narrative at level 2 is about the efficient production of outputs, which was described by Frederick Winslow Taylor in his 1911 book, Scientific Management. In output production, sensemaking is based on what is directly within management’s control. Inputs at level 1 are converted into outputs at level 2 by a process. The traditional approach is organization-centric, largely concerned with how the organization can achieve its output objectives in an efficient manner. At level 2, the highest good is efficiency. Many of the well-known management techniques, such as management by objectives, reengineering, Six Sigma, agile teams, and OKRs are primarily about output management and associated improvements in efficiency. While a level 2 narrative surrounding the production of outputs is necessary, it is not sufficient to provide responsible management decision support well into the future.
This podcast has advocated a new approach to management called Management by Positive Organizational Effectiveness. It adds two additional levels to the traditional model in order to focus on external effectiveness rather than internal efficiency, thus providing a more holistic view of the health of the organization and its environment. It is based on an input to outcome model, where four levels of narrative are stacked one on top of the other to fully address the categories of results that are relevant (inputs, outputs, outcomes, impacts). The ‘positive’ feature of Positive Organizational Effectiveness indicates that the organization will engage in self-regulation through the use of positive values in all that it does. Today I want to ask you to consider adding to your narrative stack to fully address the needs of the future.
Levels 3 & 4 (outcome & impact narratives). Level 3 outcomes occur outside the organization in the external environment. In this expanded model, a results chain connects inputs to outputs on the supply side, then outcomes to Impacts on the demand side. If the chain breaks, it is normally at the interface between supply and demand, that is when trying to convert outputs to outcomes. Expected external outcomes do not materialize unless demand-side actors are first attracted to investigate the available outputs. Meaningful outcomes are verified by the observation of the behaviors of uptake, adoption or use on the part of demand-side actors in response to the outputs on offer. The outcomes at level 3 are inherently meaningful because they signify actual benefit exchanges between the organization and its environment. A key point is that they can be observed directly in the field. Careful reporting of the level 3 narrative surrounding demand-side outcomes is a valid way to provide responsible management decision support based on immediate feedback. Over time, a level 4 impact narrative will also emerge, based upon longer-term effects as expected outcomes accumulate and spread throughout the environment.
A focus on level 3 and level 4 narratives offers significant benefits for projects, programs, and organizations more generally, as well as the wider world. It provides meaningful and timely evidence for decision support while sustaining or improving the health of the organization and its environment as a holistic system. This approach offers demand-side validation of an organization’s portfolio of offerings (whether in business, government or nonprofit) and thus provides verification of organizational effectiveness (the highest level of performance) by direct observation in the field. This is the first approach to do so.
Traditional management practice at level 1 and level 2 can be characterized as “managing for outputs, valuing efficiency as the highest good.” Very little meaning is derived from the successful delivery of outputs alone, however, because the process remains largely disconnected from considerations of environmental context and environmental response. The new approach advocated here at level 3 and level 4 can be characterized as “managing for meaningful outcomes, valuing positive organizational effectiveness as the highest good.” It offers a better way to manage by creating a path to more effective organizations, a more meaningful technology for human accomplishment, and a better world.
From our current vantage point (i.e., within the climate bottleneck), it is easy to believe that the world is spinning out of control due to the expanding complexity of global systems and the inability of control mechanisms to keep up. A more hopeful narrative is more likely, however, if organizations strive for Positive Organizational Effectiveness. The reason is that the new model includes self-regulating and self-managing mechanisms that serve to moderate global systems. The first law of cybernetics (Ashby’s law of requisite variety) states that to successfully control a system, the control technology must be able to address the full variety of states found in the system. The traditional 2-level input-output model offers no meaningful support for global system control beyond the organization itself. It is guided only by level 1 and level 2 narratives, which lack meaning on the global front. Let’s call it ‘last-century technology’ that has created the imperiled world we now live in. It ignores the health of the surrounding environment because it is an inward-looking model that ignores external environmental effects. It treats human labor as a cost because it is only concerned with efficiency. On the other hand, a focus on level 3 and level 4 narratives serves to improve the health of both the organization and its external environment. If a significant number of organizations were operated in this way, the health of global systems could be ratcheted up over time.
In today’s episode, I have tried to show how we may be viewing today’s adverse situation from the limited vantage point of the climate bottleneck. Yet we cannot stand idly by in hopes of a breakthrough just over the horizon. Let’s all take steps in our own way to be sure that a more sustainable world arrives without fail. The spread of Management by Positive Organizational Effectiveness can offer a new sense of legitimacy and effectiveness to organizations enlisting in the struggle.
Charles G. Chandler, Ph.D.
References:
Sanderson, Eric, Joseph Walston, and John Robinson. 2018. “From Bottleneck to Breakthrough: Urbanization and the Future of Biodiversity Conservation.” BioScience, June 2018: 412-426.
Blakemore, Erin. 2016. “The Ozone Hole Was Super Scary, So What Happened To It?” Smithsonian.com. January 13, 2016.
Frank, Adam. 2019. “Reframing climate change as a story of human evolutionary success.“ Washington Post. October 15, 2019.
Chandler, C.G. 2017. Become Truly Great: Serve the Common Good through Management by Positive Organizational Effectiveness. Powell, OH: AAE.
Sheppard, Blair & Ceri-Ann Droog. “A crisis of legitimacy.” Leadership: 96, June 5, 2019. PWC, Autumn 2019.