In my last book El sentido compartido (published in Spanish, sorry!!), I introduce a systemic model based on six system levers: vision, co-creation, innovation, power, performance and business culture. I´m also proposing several systemic rules, such as:
- The first three levers help the system getting open to environment, which enables it to learn and to adapt. On the other hand, the three last levers move the system towards a closing movement, which means protecting the system through power, performance and business culture.
- Leading means proposing processes for managing an unstable equilibrium among the six levers. Social complexity means that many individual need to be involved and engaged in this process. It can´t be performed just by a few.
- There is a kind of collusion between power, business performance and business culture: performance reinforce power, which shapes the business culture.
- In general terms, good performance organizations tend to reduce contradiction over time, even though they still communicating about diversity. Contradiction is a very counter-intuitive concept: reducing contradiction might be good for improving system performance…but over a period of time the system performance falls down.
- The system might be already submerged in a systemic crisis, although most of the signals perceived by those getting the power are considered as irrelevant. In the 2014 SOL Global Forum, Lord David Owen called this symptom “hubris” or narcissism of leaders. If nothing is done to transform system levers balance, the next step after the systemic crisis is system collapsing.
- Contradiction reduction, through a “cultural shaping process” is what makes the systemic crisis invisible, specially to leaders. No one is telling to leaders what´s going wrong as leaders are isolated.
- Culture change is not happening through traditional “cultural change” process, but to co-creation for re-generating and re-engaging people in a fresh shared vision that trigger to innovation.
Deutsche Bank systemic crisis
I want to take the example of Deutsche Bank (DB), the largest German bank. DB has been in a systemic crisis for several years, mostly due to collusion between power, culture and performance. It´s been proven now that a portion of their past benefits were coming from market fraud practices (i.e. manipulating interest rates); 2015 first quarter profits were 50% below expected.
Leaders in general, including banking industry leaders, cumulate a lot of power, which is a way to develop the “hubris” symptom; little by little they become isolated from the rest of the organization. This is the critical reason for having a coach. Most often, leaders claim not having time to allocate to her own development, which again is an “hubris” symptom.
In a highly vertical structure, such as DB, there is a progressive reduction of contradiction, most often labeled as “cultural shaping”. DB is been wasting time the last few years; because they did nothing, they will need now to reduce the gap between their brand image and their cultural identity.