Facing the challenge developing new leadership to purposefully unleash the energy locked within participating peoples.

ABSTRACT

This paper discusses creating NEW learning, NEW leadership, and NEW energy unleashed from people in organizational contexts. People (participants) become a new source of energy to develop and improve innovative capability of self, organizations, cultures and global systems. Key is in being successful is the full implementation of the Socio-Economic Equation, developing new leaders at every level to unleash human potential capable of innovating throughout the system. The paper shifts the quality of attention to generative learning in developing new leadership and uses a case developing grassroots leadership to demonstrate the realities involved.

1. INTRODUCTION

This paper strives to develop new understanding based on generative learning from innovative leadership practices in organization cultures, where individual's energy and capacity to learn has been purposefully unleashed. Ackoff (1984) finds that with understanding, in contrast to knowledge or information, one can design and create the future. Of late it becomes increasingly evident new understanding--understanding dependent on new learning is required to develop new leadership to purposefully unleash the energy locked within participating peoples.

First, the case developing "Grassroots Leadership" at Royal Dutch/Shell exemplifying generative learning in real time in a global organization culture is presented to provide some common background experience for readers as they examine the issues challenging leadership around the world today. Next there are three issues focused relevant to the unleashing challenge of new leadership: Tapping a Second Source of Learning, Managing the Complexity of Large Scale Change, and Assessing the Deep Levels of Knowing. Apart of these issues in practice are a number of other issues that need to be addressed. For example, success and sustainability when unleashing human potential becomes a priority using action research in systemic development engagements. These sections provide the support from relevant theoretical constructs and action research efforts opening the door to new understanding that can design and create a new future in current practice and beyond. Finally, the paper shifts the quality of attention to the generative learning gained through retrospective synthesis, concluding with implications for stepping into the future.

2. THE ROYAL DUTCH/SHELL CASE DEVELOPING "GRASSROOTS LEADERSHIP"

The example at Royal Dutch/Shell (Pascale, 1998) offers a powerful model of what leadership means--a recognition that commitment and creativity come from all parts and all levels of an organization. Steve Miller developed the grassroots approach at Royal Dutch/Shell to give the company an energy transfusion and to remind them that we could play at a more competitive level. Shell has always been a wholesaler. But every service station represents a commercial opportunity that any retailer would envy. The task in grassroots leadership was to tap the potential of that real estate, and the frontline troops were needed to pull it off.

The grassroots program developed was through bringing together six to eight person teams from a half dozen operating companies worldwide in an intense "retailing boot camp." One example, from Malaysia: In an effort to improve service-station revenues along major highways, a cross functional team that included a dealer, a union trucker, and four or five marketing executives were assembled. The first five day workshop introduced the model and the leadership skills the team would need to enlist coworkers back home, and prepared the participants to apply the new tools to a local market opportunity. That could mean improved performance at filling stations on the major roadways in Malaysia, or selling liquefied natural gas elsewhere in Asia.

Then the teams went home--while another group of teams rotated in. For the net sixty days, the first set of teams worked on developing business plans. Then they came back to boot camp for a peer-review challenge. At the end of the third workshop, each team sat with Steve Miller and his team in a "fishbowr' to review its business plan, while the other teams watched. The peer pressure and the learning were intense. At the end of that session, the teams went back for another 60 days to put their ideas into action. Then they came back for a follow-up to analyze both breakdowns and breakthroughs.

Grassroots leadership is working because Royal Dutch/Shell is seeing results around the world. For instance, our business in France was in terrible shape. We were in the red and losing market share. The advent of the hypermarkets had changed the game, and we weren't responding effectively to this new competitive threat. Fifty percent of our retail fuel market disappeared in two years! WE either had to find a way to become profitable and to grow, or we had to exit--because the way we were going, we couldn't stay in the game much longer. Sometime after, the marketing manager of the retail business in France wrote after just closing the books of that year: it recorded double-digit profitability, exceeded its growth target, and expects double-digit growth for the next year. More important, the manager reported that when he and his coworkers started to work on the problem, they were terrified. They didn't know how to solve it. Now they believe in themselves. As a result of this effort, they've got a whole new company. The truth is, it's scary as hell at the beginning. It's scary for me. It's scary for the team. But the track record has been incredible.

Steve Miller reports that there are several things that can be done: What you can do is feel for them, but not do it for them. You can let go of the old style of control. You need to give of yourself--to reach people you need to talk in the first person--talking in a very direct way. You need to make a personal connection. The important factor is reliability, its producing to specification, it's delivering to the Customer--being connected to people in the field is even more critical. The people in the field need all the support you can give them. They need a common understanding of where they're going, and they need a common understanding of the business. That's what drives execution. And it's what provides the discipline in a grassroots change program.

3. FACING THE NEW LEADERSHIP CHALLENGE SUCCESSFULLY

In his work Presencing: Learninq From the Future As It Emerqes Scharmer (2000) looks at the impact of the emerging new business environments--often referred to as the "new economy"--focusing the basic concepts of organizational learning and change. Scharmer states "leaders from around the world are facing a new kind of challenge; coping with the various waves of disruptive, revolutionary change that redefine the context of business." He points to three dimensions of change that leaders must recognize and cope with in order to learn in the future: 1) the rise of the internet based "new" economy, 2) the rise of new relational patterns, and 3) the increasing relevance of individual experience, awareness and consciousness. In order to operate successfully in this new global business environment, business leaders will need to master a new capacity: the capacity to sense, enact and embody the future as it emerges (Jaworski and Scharmer, 2000).

3.1 Tapping a Second Source of Learning

During the 1990s most organizational learning related activities focused on the incremental improvement of already existing processes. A decade later, we find that most leadership teams are facing a new set of business challenges that can rarely be successfully addressed with the traditional methods and concepts of organizational learning. We find that many leadership teams maybe "practicing action researchers;" however practicing without full knowledge and understanding of the potential of the new action science. Action research is an important process of learning to link action and knowledge through cooperative actions of both professional researchers and local problem owners.

An important insight gained from some of the more recent projects and from retrospective synthesis of the Case of "Grassroots Leadership" at Royal Dutch/Shell (herein noted) has led to the distinction between two different sources or processes of organizational learning based on reflecting on the experiences of the past (Type I) and a second source, one that is grounded in sensing and enacting emerging futures (Type II). Scharmer (2000) shows each of these processes are based on a different temporal source of learning and require leadership teams and local problem owners to work with fundamentally different learning cycles to succeed.

3.2 Managing the Complexity of Large Scale Change

When the goal is sustainable economic development in the company--as in the Royal Dutch/Shell case the crucial vitality needed is achieved by transforming the leadership dimension. Most large global organizations--strong in the past are characterized by being overstaffed, mismanaged, unstructured, unproductively led, and only organized according to outdated principles. Attempts to reorganize such institutions have demonstrated that new structural blueprints and technological upgrading are by themselves insufficient. The human factor must be included and addressed directly from the beginning.

The Socio-Economic Equation (Harris, 2001) focuses the importance of developing the human factor prior to any business goal strategizing, if innovative and different results are required. The Socio--Economic Equation is simply stated as: [[S.sub.ib.sup.3]] X [[E.sup.2]] = [I.sub.r.sup.Nth]. The "SOCIO-ECONOMIC EQUATION" capitalizes first on developing new energy from building the "social capital" of the participating people "[S.sub.ib.sup.3]"--through developing new leadership--capable of UNLEASHING HUMAN POTENTIAL which is accomplished by successfully sophisticating and managing individual's social interactions and networks in the enterprise first; but at the same time in the strategic direction defined by the enterprise. The equation notes the importance by the precedence of unleashing, and by raising the "unleashing" social capital building activity to the third power. Then, and only then is the new social interactive behaviors of participants focused (multiplied) by the STRATEGIC BUSINESS-ECONOMIC BEHAVIORAL ([E.sup.2]) model selected or in-use by the enterprise (in real time transactions) in order to produce INNOVATIVE RESULTS ([I.sub.r.sup.Nth]) endlessly.

In the case of Steve Miller at Royal Dutch/Shell he did several things to build social capital. For example, he let go of the old style of control. He gave of himself, talking in a very direct way--using the first person to make a personal connection, developing a trusted connection that can be built on in the future. This demonstrates the important factor of reliability--of producing to specification, in delivering to the customer--being connected to people in the field is critical. Miller points out that the people need all the support you can give them. Relative to support: "They need a common understanding of where they're going, and they need a common understanding of the business. That's what drives execution. And it's what provides the discipline in a ... change program."

It is reported that about 70% of all corporate re-engineering attempts fail. Many practitioners argue that these failures are usually connected to the fact that the underlying mental models used to develop the core processes did not change. Thus, change requires yet another approach--one that focuses on the mental models and cultural assumptions that guide action. It has been shown that companies that use dialogue to focus on shared mental models and cultural assumptions are more flexible in respect to other key variables like action, structure, and processes--focusing new mental models and deep taken-for-granted assumptions that may need to be removed. Clearly the strategy of Royal Dutch/Shell as noted showed provides considerable evidence, identifying the underlying mental models.

3.2 Accessing Deeper Levels of Knowing

Sustainable development depends on developing the nature and quality of human interactions in terms of functional networks. Allee's (2003; P.78) suggests that networks can be thought of as living systems, in essence a series of nodes and connectors that constantly change and develop. While Kelly (1998 points out that there are several types of connection--"object-to-object," "human-to-human," "object-to-human"--the focus of our work is on human-to-human social connections and object to human--the technology to human connection. Ackoff (1984) points out that management is "managing the interactions," not the person to get results. In the Royal Dutch/Shell case the interactions that were important to be managed were identified in the first retailing boot camp, providing the new leadership skills necessary to be successful enlisting coworkers back home, and prepared the participants to apply the new tools to a local market opportunity. This first boot camp focused on relationship-building; involving people building social capital and trust in the local--global setting, to achieve an innovatively transformed local market opportunity. Participants were capable of interacting successfully on a local/global dimension never before experienced. The focus on social capital building is most often overlooked, partially because it involves innumerous interactions between the locals and interveners, whoever they might be. Building social capital requires new tools--listening, languaging, and leadership practice (Scharmer, 2000)

3.4 Three Tools to USE in Developing the Process of Presencing

Tool 1 is LISTENING, it maps four different places from which any system can operate. While most organizations and individuals are pretty good at listening 1 (downloading), and many have mastered listening 2 (seeing), few organizations and groups are really skilled at listening 3 (inquiry), and rarely reach listening 4 (presencing).

Tool 2 is LANGUAGING. Many change processes fail because they are unable to sufficiently uncover the current and emerging realities of a system. Often, the quality of conversation is unable to capture the system's complexity. Without adequate dialogue, teams are unable to express their tacit, taken-for-granted assumptions about how the system really works or doesn't work.

Languaging is based on four generic stages or fields of languaging: Talking nice, Talking tough, Reflective dialogue, and Generative dialogue. Conversation moves through the four fields. In each quadrant, the speech acts differ in how they relate to the rules of the language game in which they operate. Rule-repeating (talking nice), rule-adapting (talking tough), rule-intuiting (reflective dialogue), and rule-generating speech acts (generative dialogue) produce different kinds of conversations, each of which allowing the conversational field to operate from a different place. It is obvious in the brief case report of Royal Dutch/Shell that on many occasions they were able to both reflective dialogue and to generative dialogue.

Tool 3 is LEADERSHIP PRACTICE. The third tool: leadership practice provides leaders with an opportunity to explore and nurture four interrelated and interwoven spaces of thought and action in leading, prior to actual acting in a leadership position in the real world.

* SEEING and SENSING outside the boundaries of their organization

* RETREATING and REFLECTING in an elevated space for thinking, to enhance the quality of thinking together, specifically to advance SENSING and PRESENCING

* INCUBATING and DESIGNING BUSINESS SOLUTIONS helping entrepreneurs turn their ideas into powerful innovations and embodied actions.

* INSTITUTING HIGH LEVEL SOCIAL LEARNING and UNLEARNING to discover and interpret "assumptions" that are blocking successful performance--otherwise, the culture may not be changed. This one is particularly important in democratizing in developing countries. Gharajedaghi (1999) talks of "dismantling the second order machine," that is discovering and reinterpreting the assumptions of the past, that are blocking current implementations and change. The interim periods of up to six weeks provided ample opportunity to practice and to try out new leadership practices for Royal Dutch/Shell boot camp teams. It was also useful to have teams participating to support the team members in local practice and try out of the new leadership practices.

Finally, there are three factors that leaders need to cultivate to act successfully: Persistence, Imagination, and Hope. In terms of persistence, perseverance and resolve are 90% of the battle if you want to accomplish anything of worth. Imagination is necessary to innovate. Albert Einstein said: "Imagination is more important than knowledge. Knowledge is limited. Imagination encircles the world." Hope is especially critical in uncertain times, for hope arouses as nothing else can arouse, a passion for the possible. Leaders need to practice using these factors in their organizational and system efforts.

4. SHIFTING THE QUALITY OF ATTENTION TO GENERATIVE LEARNING, TO PRESENCING

In presencing, the sequence of seeing, sensing, presencing, envisioning, enacting and embodying gives a surface description of the process at issue. The subtle shifts in the quality of attention identified in six points #1 suspension, #2 redirection, #3 letting go, #4 crystallizing, #5 bringing forth, and #6 embedding) may be considered the gates that allow one to cross the boundary from one cognitive space to another. For example, in order to see, one first has to suspend assumptions; in order to move from seeing to sensing, one first has to redirect one's focus of attention; and so on aiding the use of Presencing.

It is important to think about and practice shifting the quality of attention through these six gates to aid Type II learning and to let go of the sole use of Type I learning--learning only from past experience. But even more importantly in developing people as an energizing resource in the economy. Presencing is an energizing mode, stimulating people that participate--producing a new excitement developing themselves as a resource. Reviewing the order of presentation in the S-E Equation reveals the first focus is on the socio interactive factors ([S.sub.ib.sup.3]) experienced in the organization in employee interactions. The equation recognizes a sense of urgency in presenting it first, and also in raising the value of the social interactions by cubing the component. That is, increasing the value of this component by raising it to the third power, and in using the time necessary to raise the value in practice. It is necessary to significantly raise the value of purposeful employee interactions in an organization if one wants to achieve innovative results. In this instance, it is necessary to understanding that no longer will suboptimization produce wealth; innovation is the basis of wealth production in the new global economy (Kelly, 1996). These social interactions in organizations are basically those involved in building social capital--trust, shared values, mutual understanding and connectivity in relationships. Knowledge cannot flourish where there is no trust. The fertile soil of good relationships allows bountiful harvests of creativity, innovation and learning. Whenever we put business processes before people, we lose these emotive aspects of organizational intelligence. Understanding organizations as living systems means putting people back into the picture as intelligent agents of action, fully capable of organizing in ways that support the vitality of the firm as well as personal success (Allee, 2003, p.236). Retrospectively, one realizes that the interactions of employees have never been focused appropriately by either managers or leaders in an organization--despite the reality that most organizations mouth: "Employees are our most important resource!"

5. DEVELOPING NEW LEADERSHIP TO UNLEASH HUMAN POTENTIAL

Old or existent leadership tends to "direct" human interaction, rather than unleash human potential. Gharajedaghi (1999) points out that the third generation of systems thinking (design) responds to the triple challenge of interdependence, self-organization, and choice in the context of the sociocultural system. Further, that social systems can be organized either by default or by design. In default, the beliefs, assumptions, and expectations that underlie the system go unexamined. In design, the beliefs, assumptions, and expectations are made explicit being constantly monitored and examined. This is why design along with participation, iteration, and second-order learning, is at the core of emerging leadership using a system methodology. If leaders are not fully aware of triple challenge and how to work with it in design of the organization, they will not be successful. Designing for interdependence, self-organization, and choice is creating the platform for unleashing.

The bottom line is that business is about exchanges and transactions that happen between real people. Even when real people never see each other or speak directly, only real people can make decisions and initiate action. Relationships unleash decisions and initiate action--in many cases, innovative in character. When business is viewed as a linear process, a set of functions, or simply material transactions, it not only diminishes the role of people, it makes invisible the all-important human relationships. The value network focus puts people back into the business model in such a way that they can see who they need to be in relationship with and what their responsibility is in that relationship. This is exactly what Steve Miller did in the Royal Dutch/Shell case.

6. IMPLICATIONS FOR THE FUTURE

This paper recognizes how grassroots leadership at Royal Dutch/Shell considered the complex perspective of three separate, but related issues: Tapping a Second Source of Learning, Managing the Complexity of Large Scale Change, and Accessing the Deep Levels of Knowing. Scharmer (2000) discusses two ways that a sound methodology may be instructed: 1) in better understanding and use of Primary Knowing (Presencing, p.15), and 2) in recognizing and using subtle shifts in the quality of attention to change levels (p.22). One must first understand the new learning identified here and then experience it, before designing practice for involved others. This exercise is prerequisite and makes the new learning useable in the context of complex change in any project. Royal Dutch/Shell worked these shifts out in the retailing boot camp before going into the field to plan and then to practice.

While this may seem quite simple to state, putting it into practice requires much concerted effort and healthy interaction, quickly confronting variations that will not work for all involved in the whole. This means that in the beginning it is very slow going. However, it is best to go slow to go fast later on. .Building relationships and models for joint cooperation and decision making take time initially, but pay off handsomely in the longer run.

In conclusion, the whole approach is challenging to actualize. It is essentially managing complexity on several levels locally and globally attempting to develop an organizational breathing cycle around large scale change--something, that there is often a good deal of resistance to in both the local problem owner and in action researcher camps. One needs to realize that change is the name of the game for everyone, whether actively involved or not. Probably the most important attitude change is to get people excited about learning from the future and about changing, so that the excitement energizes change rewarding those involved and decreases resistance to change, unleashing still more human potential.

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Author Profile:

Dr. Marilyn E Harris earned her Ph.D. at The University of Michigan in Ann Arbor, where she spent a decade in applied action research at the Institute for Social Research. She has balanced her professional life between academia and management consulting, heading her own consulting firm and holding adjunct faculty appointments in the College of Business Administration and College of Extended Learning at Central Michigan University, as well as Visiting Professorships abroad.

Dr. Beverly Jones earned her Ph. D. at The Union Institute and University. She holds an Assistant Professorship in Management at Kettering University in Flint, Michigan. Dr. Jones brings a host of manufacturing experience and knowledge from her work at General Motors Corporation.

Sandra L. Sell-lee received her Masters Degree in Communications from the University of Colorado at Boulder, and is a Certified Professional Coach [CPC] serving in Human Resources Organizational Development at Boeing Commercial Airplanes [BCA] in Renton, Washington. She is a professional coach at The Boeing Leadership Center and travels widely consulting and coaching for BCA.

Dr. Guilan Wang is the Director of International Education at Central Michigan University. She has over ten years of progressively responsible experience in the field of international education, with expertise in both academic and non-academic international program development, coordination, administration, research and evaluation; and in teaching Chinese studies, higher education administration, international economics, and English as a Second Language. She has published widely in application research.