Global Recession, Organizational Depression?
by Jay Gary

Most of us have probably seen our organizations feel the direct results of the global recession. From 2008 to 2009 many university’s endowments sank like a stone. Administrators have been forced to downsize staff, cut back faculty travel and trim benefits all around. Jobs have been reshuffled and programs cut.

Having studied and worked with previous downsizing efforts, my first reaction was, “Oh no! Not another vicious cycle, ‘more bricks with less straw!’” Then a week later I had a conversation with a colleague. Rather than join my pity party, he challenged me to change my paradigm. Rather than presume academia as a whole was being tasked with making ‘bricks,’ he invited me to join him in the search for a new building material, metaphorically speaking. Rather than wallow in a ‘more bricks, less straw’ mentality, he challenged me to adopt a ‘new materials, less whine’ mentality.

From that day forward I began to think and speak in a different way about the global downturn. “Hello global recession, goodbye, organizational depression.”

Rather than see organizations’ change of fortunes as a zero-sum game, I began to consider how we might transform how we build our individual sectors. Rather than lean on international travel to network with leaders, recruit students and train communities, why not upgrade our team’s technology capacity to deliver virtual training and conduct collaborative work?

This past weekend the Master of Strategic Foresight did just that. It hosted its first virtual training. Through video conferencing, we were able to involve one of our graduate students to consult with a civic group in Bogota, Columbia, without having to jump on a plane to physically travel there. These new service learning projects will not replace a travel budget, but they will keep our teams globally engaged as learners, servants and consultants. They will also allow us to find new communities of practice and new students ready for global leadership, from the MBA to the PhD.

So rather than whine about meeting performance standards in a down economy, who are you working with to find a new building material?

To take this a step further, the next time you meet with your strategic team, ask them, “How viable is our brick and mortar business plan in an increasing virtual age?” “While we hold ground, are others leaping past us to create whole new delivery models in cyberspace?”

That is what has happened to huge parts of the newspaper industry, may they rest in peace. While their editors were meeting copy deadlines, the information highway disassembled the story from their front pages. Journalists now have to work in a converging media industry where their readers themselves are active content producers through Twitter, Facebook, and blogs.

The transformation of the newspaper industry is far from over. We have moved from step 1: consumers enjoying greater access to media through their computer, to step 2: consumers creating and sharing playlists through Tivo, iTunes, the DVR or Netflixs. Stan Joosten, of Global Business Network, envisions Step 3: consumer production of new media through reality shows, internet radio and YouTube; all reaching an early majority well before 2012. The days of the stand- alone big city newspaper appear to be numbered.

So how will you transform your organization, before the future makes you irrelevant? How will your core functions and core advantages survive the global tectonics that is shifting all our sectors today? How will you transform them into new capacities for a new day?

As you look toward the year 2025 and beyond, what does it mean for your organization to be smart?

To find a better mindset than “more bricks, less straw” will require us as leaders to understand the difference between organizational development and organizational transformation.

Organizational development (OD), or growing within present parameters, is the normal way we speak about change as managers. We talk about taking a company to market and beating the odds. We talk about improving productivity among our employees. This is all needed. Even TQM, or total quality management, falls under OD. OD is first-order change.

Organizational transformation (OT), on the other hand, is second-order change. Rather than solve problems in their present formulation, it is the search for a better paradigm. In their book Organizational Transformation, Levy and Merry define OT as “multi-dimensional, multi-level, qualitative, discontinuous, radical organizational change involving a paradigm shift” (1986, p. 5).

OD, or first-order change, might help newspaper publishers in Amman, Jordan sell more weekend subscriptions in the face of an eroding business model. By contrast, OT for The Jordan Times would develop a 24/7 consumer media platform for media and idea exchange throughout Jordanian society. OT, or a new media paradigm, would value two-way citizen discourse through social media. It would define new revenue streams built on the greatest disrupter of our time, the Personal Media Device—the successor to the cell-phone.

So where do we find new models that are prototyping the ‘new materials, less whine’ approach?

One of best OT leaders today is Rex Miller, the author of The Commercial Real Estate Revolution (2009). For years Rex worked in the custom furniture industry, while helping teams learn the new rules for a digital era, innovation and leadership. Eighteen months ago he gathered together a handful of construction industry leaders to consider the future of their industry.

What they discovered was what each of them knew separately, that their entire industry was broken. Seventy percent of all commercial building projects were over budget and late. Fifty percent of all building budgets were consumed in waste. This totaled $500 billion dollars a year. The building process had turned into an adversarial process between owners, architects, and builders.

Rex was able to create a national trust-based “Mindshift” process of stakeholders. They worked for over a year. Through OT thinking, they developed a future model of the building environment. The ‘mindshift’ they created is built around four principles and four tools. The principles are 1) trust-based teams, 2) early collaboration, 3) built-in sustainability, and 4) transformational leadership. Their tools are 1) “big” BIM, 2) integrating project delivery, 3) client-centered incentives, 4) off-site construction, and 9) workplace productivity.

Their collaborative team process now promises to save owners up to 25 percent and deliver “LEED® Platinum green buildings at the same cost as conventional construction, substantially improved schedules, and conflict-free projects” (Miller, p. xxiv).

So when you start your next work week, what are you going to do as an organizational leader? Will you just focus on OD, and seek to maximize efficiency within existing parameters? Or will you be like Rex Miller, focus on OT, and explore new maps of collaboration to build a new world?

Are you fed up with old provincialism and zero-sum games? Are you tired of the vicious cycles of violence and corruption which plague our institutions, from business, to healthcare, to education, and to government? Are you ready to lay aside the old mindset, the old rules of “more bricks, less straw”? And are you ready to embrace the global recession, not as a victim, but as an innovative leader?

If so, then I encourage you to embrace organizational transformation. Start asking your colleagues both within and outside your organization, “How can we work together to find new building materials?”

Bio:

Dr. Jay Gary is an assistant professor of global leadership and strategic foresight with Regent University, in Virginia Beach, VA, USA. Prior to this he spent more than two decades as a strategy consultant to non-profit, public and private enterprises, including two years on Middle East projects. He presently directs the Master of Strategic Foresight program for transformational leaders who want to reshape their sectors and recreate their organization.