Regenerative Companies Will Own the Future

Much of our current management logic erodes the greatness of workplaces

Published: Tuesday, June 21, 2016 - 16:54

Each generation experiences significant change due to innovations, disruptions, and shifting perspectives. These transform our ways of operating and organizing in business and beyond. Yet, it seems we’re now living in a particularly dynamic period, with metamorphic shifts that challenge what we do and the way we do it. Our sense of purpose is challenged every day, and wholly new ways of creating and delivering value are demanded of us.

More than half the world’s population is now younger than 30 years old. Two generations have grown up with the internet. It doesn’t take a degree in anthropology to notice that the world is very different today than it was 30 years ago.

Uber, the world’s largest ride-sharing company, owns no vehicles; Facebook, the world’s most popular media owner, creates no content; Alibaba, the most valuable retailer, has no inventory; Airbnb, the world’s largest accommodations provider, owns no real estate. The powers behind institutions and ownership are being challenged by the empowering effect of the network.

However, too many organizations today find themselves caught up in a top-down, hierarchic, KPI-obsessed, siloed, control-based, defensive, and reactive culture. This seriously undermines their ability to leverage the network effect, and it hampers their capacity to flourish in such transformational times.

Let’s be honest: Much of our current management logic erodes the greatness of our workplaces, turning them into places of drudgery, stress, political infighting, and ineffective bureaucracies. This stifles the natural creativity, innovation, collaboration, reciprocity, conviviality, and empathy we humans exude when allowed to be our natural selves.

What we consider “normal” business practice is often pathological. Our struggle to see beyond this pathology is largely due to outdated yet dominant approaches to business education, economics, and organizational management.

There is good news, though: The shift in logic that’s beginning to happen in our organizations represents an opening up to who we naturally are. It’s an emancipation from what’s become an enslaving logic.

Crossing the threshold

Companies that want to succeed in the future must shift certain elements within their cultures, moving away from negative shortsightedness toward inclusive empowerment:

Regenerative business

The word “regenerative” means creating the conditions conducive for life to continuously renew and flourish; it’s a shift from mechanistic logic to living-systems logic. Regenerative is the primary principle underpinning our firms of the future, where organizations help rather than hinder the evolutionary dynamic of life. This goes beyond traditional CSR initiatives as it is not primarily aimed at reducing negative impacts or “externalities” created by the current mindset; rather, it is a move to an entirely new mind-et, a new way of being and doing in business and beyond.

With this regenerative logic: externalities become opportunities for additional value creation; waste of one output becomes food for another; stakeholders become partners to engage with through authentic communications and reciprocating relations; linear thinking is replaced with systems thinking and circular economics; resources aren’t simply managed and controlled for short-term gain but perceived holistically in the wider context of the interrelational matrix of life. We retrain ourselves to think “out-of-the-box,” transcending the rigid framing of yesterday’s logic, in fact “the box” is no longer there at all, being replaced with interconnecting patterns of relations, where differing stakeholder perspectives and shifting contexts are appreciated for the diverse perspectives they provide while prototyping richer ways of creating and delivering value.

A living system

The metaphor of the machine served us well in the Industrial Age. The metaphor of the living system will serve us well in the early 21st century.

Regenerative business goes beyond new leadership techniques, sustainable product innovation, process reengineering, and craftingpurposeful mission statements and ethical values charters. Regenerative business is a fundamentally different logic, a timeless one that draws on the deep wisdom of life. It enriches us, our customers, and our stakeholders.

Whatever their sector or size, there are examples of organizations embarking on this shift. For instance, supermarket Thornton’s Budgens, online retailer Zappos, chemicals manufacturer Scott Bader, multimedia company Sounds True, Gore-Tex manufacturers Gore & Associates, design company Ideo, health provider Buurtzorg, and the global network of social-enterprise community centers Impact Hub, to name a few.

So what does regenerative business look and feel like in practice?

There’s a general shift away from controlling the siloes of business functions to widening our horizon to perceive the relations across our organization and ecosystem of stakeholders. Each of us takes personal responsibility for understanding the dynamics of relations in our sphere of influence, and seeks to enhance the potential value of these relationships, not in a win-win or win-lose way, but in a deeper, more authentic and heartfelt way. We strive to create and deliver value for life. This involves really listening and sharing with others to explore and understand the tensions of challenges and opportunities in our sphere of influence.

But while we’re focused on our area of responsibility, we’re also continually scanning the emerging landscape to read the future, sensing and responding to new information, opportunities, and challenges that arise. This is a far cry from the top-down machine mentality of many of today’s corporations, but it’s an essential shift if our firms are to flourish in the years ahead.

Disagreements, challenges, limitations, and misunderstandings act as crucibles for deeper exploration. There’s less struggle over the current situation and more striving toward improving our collective future through conversations, feedback, and ongoing dialogue between stakeholders. Divergence between different stakeholder groups and individuals is healthy: Diversity that creates differing viewpoints deepens what emerges. 

The entire undertaking of work becomes regenerative, and so our work helps enhance our experience of life in general.  We continuously learn to let go, embrace the new, fail and try again. We’re learning to be patient, to empathize, to listen, to open up, and move forward. The mission of this regenerative business is our human drive toward feeling more alive, more present, more creative, and more authentic.

In my latest book, Future Fit (Amazon Digital Services, 2016) specific qualities essential for forming our firms of the future are referred to as “ways of doing” underpinned and infused by “ways of being,” all framed with examples, tools, and techniques to help transform business today.

Detailed studies undertaken during 10-year periods by the Global LAMP Index compared the financial performance of regenerative companies with their mechanistic counterparts. Results consistently show that these living-systems principles create better financial returns and resilience.

This shift from mechanistic to regenerative business is at the vanguard not just of sustainable business, but the future of all business. Organizations that flourish amid the increasing complexity and volatility will be regenerative businesses that embrace a living-systems logic.

First published June 8, 2016, on the CSRwire blog.

About The Author

Giles Hutchins

Giles Hutchins blends a wealth of business strategy, operations, and transformation experience with pioneering new thought on leading, sustaining, and flourishing in volatile times while drawing on ancient wisdom traditions so that organizations can unlock their creative potential and thrive. Hutchins is a recognized thought leader, speaker, and adviser, applying 20 years of experience to his work at personal and organizational levels. He writes articles for a number of business networks and blogs at www.thenatureofbusiness.org. Hutchins is author of The Nature of Business (New Society Publishers, 2013) and The Illusion of Separation (Floris Books, 2015).