05 Feb Bridge the Gap

We all feel a deepening gap dividing us.

Political leaders and the media deepen the divide. Political parties choose opposing sides to raise more money and power. News media continue to profit from adding fuel to the fire. They speak to extreme differences, for example, the very rich (top 1%) and very poor (10-15% below the poverty line). Together these extremes represent 11-16 percentage points of the 79% of Americans with low confidence in each other.

The gap in between represents the remaining 63-68% with low confidence in each other, isolating individuals and their willingness to share their efforts, energy, and rewards.

It wasn’t always like this.

Robert Putnam, social capital researcher and author of Bowling Alone: The Collapse and Revival of American Community shares data about the decline of participation in community organizations since the 1960’s. 

There is less data related to the consequences of low confidence in others in business. Few risk openly talking about being burned by others. Instead of “adult direct convos” (as Ryan Caldbeck calls them), these stories are hidden in whispers.Screen Shot 2021-01-28 at 10.38.27 AMThat’s what working in an office or co-working place feels like.

Just as community organization engagement is shrinking, employee engagement is low (hovering around 30%) reported by Gallup since 2000.

There is more than one way to engage. Recruiting college grads at Leo Burnett, I differentiated engagement types based on those who favored  courses which taught the one right formula for success vs. those who  preferred the challenge of new frontiers of knowledge and loved the hard work of creating an original analysis. The latter are the ‘special forces’ because they are rare and have an intense energy. They are more likely to choose to risk their time, knowledge, money, and identity – to be the one who will “run into the fire” of uncertainty in business. Because we mentor many, we know they often come out on the other side unrecognized and unpaid, or worse, see the rewards of their risk-taking going to someone else, eroding their engagement. Importantly, they aren’t the only ones who notice. Those who are happy “holding down the fort” while their more creative-minded peers explore new frontiers, become even more anxious about failing, holding back their engagement as well. 

Based on what working with others feels like, we aren’t surprised that employees tell GALLUP they prefer to work from home (even before the Covid crisis) and they a fair share of the profits.

This will take a new business practice. As Gallup CEO and Chairman, Jim Clifton who writes that “American leadership philosophy . . . simply doesn’t work anymore . . . (and) needs to historically transform the practice of management similar to the way Six Sigma and lean management improved processes in the 1980s.” in the 2017 Gallup State of the American Workplace, entitled “33% of US employees vs. 70% in the World’s Best Organizations are Engaged at Work.” 

Our vision is a business practice aimed at a higher standard of confidence in each other to renew the spirit of cooperation of the ‘Right Stuff’ generation. Those ‘special forces’ fused their individual knowledge and skills to create unprecedented innovation and economic prosperity, because, as leading consultant of that generation, Ken Blanchard, famously said “No one of us is smarter than all of us”. 

Correlating cooperation with growth and profit may not have a lot of data to support it. But Peter Turchin, a scientist with a research interest in understanding how human societies evolve, associates low inequality and high well-being with periods of economic growth and shared prosperity. He calls these ‘Integration phases’ because when the distribution of well-being is balanced, everyone cooperates.

WHAT HAS MOTIVATED HUMANS TO COOPERATE TO PRODUCE SHARED GROWTH?

Peter Turchin references Putnam’s article “The Strange Disappearance of Civic America” when he writes in  “The Strange Disappearance of Cooperation in America” that economic growth and innovation coincide with ‘Integration phases’ – when everyone cooperates. But there will be a lot of debate about how to get to cooperation from isolation, today. What motivates people to change their perspective? These curves are dynamic, changing relative to the perspective at the time, which isn’t clear unless you know history.

For example, the standard of “well-being” before electricity in 1845, the end of the first ‘Integrative phase,’ is very different from the beginning of the second phase in 1940 when nearly every home had electricity, as Robert J. Gordon discusses in The Rise and Fall of American Growth.

Inequality is also relative. During an economic downtime in an agricultural economy (the first ‘Integrative phase’), almost everyone could put some food on the table, but not in an industrial economy. During an economic boom in an industrial economy, you could make money even if you couldn’t read, but not in the knowledge economy which we are in.

The implication is that what leveled the playing field during previous phases won’t now. That’s why we need to dig deeper to understand what motivates cooperation.

The chart suggests that winning a war is a catalyst for the cooperation or “integrative phase,’ since both are preceded by winning the War of 1812 and WWII, respectively.

For example, WWII. Just when recovery from the Depression was starting to re-balance the distribution of well-being, the risk of losing national sovereignty to the enemy loomed, motivating all, from the “Rockefellers” to  the coal miners to cooperate to win the reward of ‘personal sovereignty’ over how to invest their money, knowledge, time, identity, and life’s legacy, for all.

The balanced distribution of the rewards of cooperation fueled risk-taking by all in innovation (peaking with Apollo). Economic growth continued to improve the balance of the distribution of well-being for 30 years, until the 1970’s.

After 1970, the spirit of cooperation eroded. The “greed is good” culture silently and slowly destroyed confidence in each other, inhibiting organic innovation and growth.

Robert Putnam’s new book The Upswing: How America Came Together a Century Ago and How We Can Do It Again.  echoes our observation of the degradation in workforce attitudes affecting engagement since 1970: 

. . . filled with the hope that the American Dream can be theirs through persistence and hard work, they often become disillusioned to find how great their competitive disadvantage is . . . American idealism increasingly gives way to cynicism about a rigged system. . . America’s rugged individuals struggle against the loss of identity, autonomy, and mastery as they are subsumed into the anonymous labor of hyper-consolidated corporate machines.  

Instead of leveraging human capital to grow organically, corporations since 1970 leveraged financial capital to grow bigger faster through acquisition, building empires, borderless corporations with a bigger market cap than most countries’ GDP. 

Now the risk of these organizations failing outweighs any one individual’s personal sovereignty. Even executive teams don’t have autonomy, forced to make trade-offs to maintain short term profits or keep activist investors happy. They are no more likely than their employees to leave a lasting legacy, as they both did during the post-WWII ‘Integration phase.’

Maybe that’s why executives and employees alike are leaving corporate America to become entrepreneurs.

Between 1980-2015, the number filing tax returns as sole proprietors grew 3 times to 25.2 Million, twice as much as total employment which grew 1.5 times to 141.8 Million. This trend is continuing with a record number of new business formations, post-Covid.

These new entrepreneurs are unaware of the risks they are taking.  85% of entrepreneurs don’t last beyond 15 years or more. The ones who survive do so by following “the formula” rather than realizing their mission. Even GOOGLE. In 1998 start-up GOOGLE leap frogged competitor search engine Yahoo! with a search algorithm unadulterated by advertiser bids to achieve the Co-founders’ mission to “organise the world’s information and make it universally accessible and useful.” But to deliver a return on investor capital they had to accept advertising. In 2014, Co-founder Larry Page admitted that their mission  had to change.  

A new business practice that promises “personal sovereignty” – the autonomy to capitalize on the time, knowledge, money individuals (employees and working partners) risk to collaborate for mutual benefit – emulates what motivated the “Rockefellers” to “coal miners” to engage and cooperate during the WWII “integration phase”. Chairman and CEO James Clifton points out, also in the introduction to the Gallup State of the American Workplace 2017:

If American companies were simply to double the number of engaged workers from one-third to two-thirds, spirited employees would reverse our seriously declining national productivity. 

We propose investing in experimenting in a new business management science to measure the effectiveness of tools to motivate cooperation with “personal sovereignty” to leverage human capital and engineer a resilient bridge to close the gap. The investment could be treated as an organic innovation alternative to acquisition.

A MODEL FOR COOPERATION MOTIVATED WITH ‘PERSONAL SOVEREIGNTY’

Safi Bahcall proposes three tactics to improve adoption of something new in his blog, “How to Win the Next War”: Measurement, Reward, and Special Forces.

The Special Forces are the “entrepreneurs” of the military. They see options others do not. They stretch their individual capabilities by partnering with others. They have pride in ownership in the outcome.

Unlike entrepreneurs, “personal” interests are governed by their “sponsor” – military leadership.  Military leadership identifies the high value options to explore and selects the elite on the ‘Special Forces’ team, with diverse knowledge and expertise and willingness to collaborate.

The military invests in preparing them, individually and as a team. The team practices improvising together to take advantage of their collective knowledge and experience.

AND the ‘Special Forces’ Team members have the right of “personal sovereignty” to make decisions in the field. Although they have pride of ownership, they have a clear “exit” – they know when to handover control and to move on to the next mission.

A NEW BUSINESS MANAGEMENT SCIENCE

COMRADITY Cooperation Laboratory (CO-Lab): Our purpose is to engineer a resilient bridge that closes the gaps in society by developing a new business science that motivates cooperation through ‘personal sovereignty’ .

The intent is for all CO-Lab participants to mutually benefit:

Content Partners Benefit through:

  1. Revenues: license educational content, paid live virtual interactive sessions, and opportunity for direct sales of books, subscriptions, etc.
  2. Product: professionally produced events and recordings which can be used for other paid content opportunities
  3. Data: co-own (anonymized) data specifically relevant to personal research
  4. Results: increase the value of their work by integrating with other assets that improve the outcome of all resources, as well as, long term resilience ratings to measure sustainability
  5. Publicity: Annual festival to celebrate the outcomes of cooperation.

Organizations Benefit through:

  1. Improved adoption and success of new initiatives because employee and partner cooperation is motivated by ‘personal sovereignty’ – a sense of ownership of the outcome.
  2. Diverse team development which can be engaged in the future to continue to adapt or begin new projects
  3. Long-term measurement of the balance of the resilience of stakeholder “skin in the game.”

Society Benefits:

  1. Improve the balance in the distribution of well-being among employees, partners (and their employees), and customers
  2. Improve the return on human capital

We’re curating an elite ‘Special Forces’ Team of scientists, researchers, and designers to integrate the work they are doing to develop a new business management science which grows profits through cooperation. These elite Team members have demonstrated an interest in developing the hypothesis that growing profit through cooperation will build a resilient bridge to close the gaps:

We invite business leaders interested in developing a business ‘Special Forces’ team to learn more by contacting us at 203-883-9255.

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katherine@comradity.com