2. The Power/Pressure Paradigm and Linearity

Why do so many organizations, like the General Motors of 1970-2010, fall short of the ideal and become Mesozoic? The causes range over a wide spectrum, from lack of authentic leadership resulting in a condition where, like a jellyfish, the organization has no ability to propel itself but is swept along by the currents, to the opposite condition, which is the domination of the company by Players who exert too much control and despite ample warnings drive the great ocean liner straight into the iceberg. Not enough authentic leadership; too much autocratic leadership. A lack of structure; too much structure. A lack of long-range planning; too rigid a belief in a preconceived plan. All are recipes for disaster.

To reveal the root causes of failure we need to first examine the external and internal forces that can shape an organization that is populated not by Masters but by Players and their unwitting Drones.


Pressure

It is axiomatic in capitalist societies that competition is good. Is this necessarily so in all cases? Certainly, no competition is a bad thing¾both state control and monopolies are inefficient, and reward the few at the expense of the many.

So if no competition is bad, and competition is good, then it only stands to reason that more competition can only be better. It provides consumers with more choice, and forces the producers to up their game.

The greater the competition, the greater the pressure. In the beginning, producers work better, and smarter to beat the competition. The problem starts when they run out of ways to improve their competitiveness, but the pressure within the system keeps growing. What happens next?

But sooner or later, out of sheer necessity, some of the competitors start bending or even breaking the rules. If these few are successful in avoiding detection, the others will be compelled to follow suit if they wish to avoid falling behind. Ultimately, the situation arises where Players and Drones alike are left with a simple choice - break the rules and risk the penalty, or stick to the straight and narrow, and go under.

For example, take the 2010 British Petroleum (BP) oil spill in the Gulf. This is very likely what lay behind the scenario that led to the disaster. The drilling company was ordered to increase capacity. Wishing to remain in business, they complied. The person at BP demanding the increase was no doubt under similar pressure, and this would then carry all the way up the line to the top. In the pressure-driven environment the ultimatum presented to all those in positions of authority is: do what it takes, or we will find someone else who will.

This paying forward of pressure cannot go on interminably. Sooner or later it comes up against an immovable object¾in this case Mother Nature herself. Singling out one of the links in the chain, and attempting to attribute blame to it is a complete waste of time. Once the decision to deep-sea drill was made, an irreversible chain of events was set in motion that could have but one final outcome - disaster. We cannot know which rig will be the one to fail, or when it will fail, but that some rig somewhere will cause a catastrophic failure is almost guaranteed.

We can improve technology, tighten regulations, but so long as the pressure keeps building and building we can only expect more of the same. What was deemed as an acceptable risk turned out to be unacceptable. How many other similar decisions have been made, where risks are high, corruption is systemic, under highly specialized conditions is involved just waiting to explode?


Control

The moment we think of the word "control," we think in terms of keeping something in check. The implied assumption is that the only way to keep things from going off course is that we must keep a close eye on the process every step of the way. Conventional thinking says that the easiest way to spot deviation is by comparing individual performance against an unchanging matrix. The only way to do this is to create a rigid structure into which individuals must fit, often by adaptation.

The problems with this approach are the following:

High Cost - If we wish to truly control a process we must build an extensive control system. This requires a significant initial investment, as well as a considerable commitment in time and resources in order to keep it current.

Catch-Up Mode - As the business environment shifts, there is inevitably going to be a lag while the system is catching up to changes in the market. This means that the company, instead of being ahead of the curve, is always in a catch-up mode. The tighter and more elaborate the control structure, the greater this lag is likely to be, and the greater the investment in continuously updating the process.

Contra-Selection - A restrictive command-control structure tends to attract certain types of individuals and repel others. It creates a conformist culture that promotes those who are either compliant in nature and can be relied upon to do as they are told, or those who are adept impression managers, skilled at corporate politics. Meanwhile, the organization experiences a brain drain, as those who are innovative, or stand out in any way, are crowded out of the work force.

Efficiency vs. Effectiveness - This type of environment can very often appear to be efficient because of the narrow and restrictive way in which productivity is defined. Everyone is terribly busy, but busy doing the wrong things.

Rigidity - The organization becomes very set in its ways as the supply chain becomes grooved within very narrowly defined parameters. This makes it difficult to accommodate the varied and changing requirements of consumers in today's market environment. The firm is then placed at a severe disadvantage in relation to more nimble and flexible competitors in the industry.

Silo Effect - The linear command control structure creates a silo effect through which communication generally travels from top down, and does not cross highly defined geographical functional boundaries. In a continuously changing environment, problems require a multifaceted approach involving the whole organization, not just the resources of a single unit that is highly defined both functionally and geographically.

Having established that this rigid structure is artificial, archaic, and requires a great investment in time and resources to maintain, why does it persist? Is there a dynamic within the organization, hidden beneath the surface, which holds this rigid structure in place?


Linearity vs. Relationship

The Power/Pressure Paradigm reflects the inevitable organic evolution that an organization populated by Players and Drones undergoes when subjected to competitive market forces. Instead of becoming flexible and resilient, the pressured Mesozoic organization becomes rigid and brittle. It references only itself and its past accomplishments. It recycles solutions to old problems. It is threatened by change. It sees progress not as evolutionary but as linear - a revenue graph that must always go up.

What is the alternative? When we study organizations populated by Masters - such as the Antwerp Diamond Exchange - they demonstrate a highly developed understanding of relationship. They see themselves and the world around them as a single integrated entity. In fact, the relationship paradigm would be as self-evident to them as the linear paradigm is to us.

The relationship paradigm is far more congruent with the way our minds work than is the linear paradigm. If we picture the world in terms of intersecting energy fields, it becomes immediately evident that the linear model simply no longer applies. There is a collection of theories developed in the various fields of science over the last century, referred to collectively as Chaos theory, which provides a much better fit.

Chaos theory posits that there exists a hidden pattern, beyond the perception of our senses, which guides the course of events. The world is viewed as a network of interconnected systems. Rather than being attached to one another in any kind of sequence, each one has a direct connection to all the others. Similarly, within each system all the constituent elements are fully integrated as well.

Change within the system is not sequential, but global. That is to say that instead of the domino effect predicted by the linear paradigm, change in any part of the system would instantaneously influence the entire system.

It is not unlike "flocking," which is the breathtaking effect demonstrated by birds when, in a flock of hundreds or even thousands of individuals, they wheel and glide in the sky as if they were one organism. This behavior is called herding in quadrupeds, and shoaling or schooling in fish. The behavior of schooling fish is not linear; indeed, if it were, the school's attempt to evade the predator would be pathetically slow and individuals could be easily picked off.

It is not unlike a parade of highly trained soldiers who move in lockstep as if they were one organism. But the soldiers are controlled by a commanding officer in a strict hierarchy. If the commanding officer were to be suddenly absent, chaos would result. Flocking birds require no commanding officer.

Each system has an inherent tolerance to change. It can absorb a certain magnitude of disturbance without losing its basic structural integrity. It does this by continuously compensating for change in one area with a series of adjustments in other parts of the system. It is analogous to a man riding a unicycle: the rider can absorb little inconsistencies in the terrain, or the odd gentle nudge, however should they be pushed sufficiently severely, they will lose their balance completely. Similarly, if the Mesozoic system is disrupted beyond a certain tolerance it will collapse.

The current economic crisis may be just this type of disturbance. To the extent that it has spread to engulf the whole world, impacting not just the North American financial sector but de-stabilizing the entire world economy, it may well have gone past the point where any corrective measure can avert a total meltdown. If this is the case we will find ourselves in a "too little, too late" scenario. Once a certain critical mass has been reached, that is to say, the structure of the system has been sufficiently compromised the process becomes irreversible. At this point, there is nothing to do but stand by and watch events unfold.

At the point of collapse, one of two things can happen. Either the system will spontaneously reorganize itself into a new system, which has a new set of dynamics, or it will simply disintegrate.

Returning to the image of the unicycle, as seen from the vantage of a casual observer, the rider's fall will appear to be a progression of events, starting from the push, to wavering, to flailing, to falling. Nevertheless, in reality there was a specific point at which the balance was irrevocably broken, after which the fall became inevitable.

Let us now apply this same set of principles to the progression from thought to action. During the decision-making process, the course of action decided upon no longer falls within the realm of choice, but has become inevitability after a point of no return. In this sense, the actions we observe and react to are really the echoes of the decisions that have preceded them. It is similar to when we look up into the sky the stars we see may no longer actually exist, as the picture conveyed to us by our eyes is a depiction of something that took place millions of years ago.

The implication is that those who live in the linear paradigm with its emphasis on concrete reality are always finding themselves closing the barn door after the horses have left the stable. They create new regulations in response to events, rather than stopping and thinking about where things are likely to have moved in the interlude between when the event was initiated and when it came to our attention, as well the direction in which they are likely to move in the future.

Similarly, right and wrong cannot be determined in any prescriptive, way by referring to a fixed set of laws. Each situation will be the result of a unique combination of influences. Therefore, even when we allow for the existence of "good" or "evil," we cannot definitively determine such acts as murder or theft, to be categorically right, or wrong.

An illustration of this point comes from the book Les Misérables by Victor Hugo. The protagonist, Jean Valjean, an escaped convict, seeks refuge in the home of a priest. The priest treats him kindly, giving him food and lodging. In the night, the fugitive steals off, helping himself to pair of silver candlesticks belonging to the priest. Later the same night, the man is apprehended by the police who bring him back to the home of the priest. Upon asking the priest to identify the man who stole his property, he states that the candlesticks were given to the man as a gift. This gesture of kindness makes such a strong impression upon Val jean that it changes the course of his life.

Juxtaposed against the priest is a police inspector who hounds Val jean from the time of his escape from prison, determined to make him pay his rightful debt to society. The more good things Val jean does for others, the more he achieves, and the higher he rises in society, the greater the inspector's obsession with bringing him down becomes.

No application of linear logic could support the priest's actions. Valjean has repaid his kindness with theft. Probability would dictate that the convict would go on to commit still more crimes in the future. The priest's actions were guided by love and faith¾two qualities that lie outside the boundaries of the linear paradigm. There is no deductive process that rationally justifies kindness. There is no logical argument that supports faith.

In a world run by men such as the priest, there will be theft, sloppiness and chaos. In the Mesozoic world ruled by the inspectors, there will be order, crime will be contained, and justice will be meted out to those who deserve it. However, which world would we rather live in? Speaking for myself, I would far prefer a chaotic hell to a sterile heaven.

Linearity is the myth behind all the others. It defines our reality. It is the master key to the matrix. By unraveling it, by debunking it, exposing it as artificial constructs, instead of "the way it is," we can finally break loose from the matrix. Now, we can proceed to unravel all the other myths, which we have become attached to, and in so doing, start to think for ourselves.


The Challenges of the Post-Crisis World

Today's business environment is fast paced, chaotic, and unpredictable. The one constant confronting the senior management of any organization in the world today is continuous, unrelenting change. In order to respond to this environment every company requires the following:

1. A continuous and reliable flow of feedback from the marketplace that enables management to address current market needs as well as anticipate future trends.

2. A flexible supply chain that can accommodate and anticipate continuously changing needs.

3. A committed, flexible, innovative work force that is in tune with the outer environment.

4. An effective, informal information network that is able to apply know-how and information from different functional and geographical areas to specific challenges confronting the company.



The current Control-Pressure Paradigm (CPP) fails all the criteria outlined above. Later in the book in the section on the Circle Square Pattern (CSP) we will examine how and why that is the case. But first let us explore a certain social dynamic, one that exists in every social environment, is mentioned in the Book of Genesis, yet seems to slip below the radar.

This is the dynamic between the Players and the Masters.

This dynamic does not take place within a vacuum. It exists within a broader context. This context includes culture and the times we live in. This takes us to our next topic - the Cult of Marketing.