Transformation Of Business

The evolution of consciousness, culture, and business form the foundations of the structures that will replace the crumbling old order

One of the articles in Business On A Small Planet (IC#41)
Originally published in Summer 1995 on page 52
Copyright (c)1995, 1997 by Context Institute

Willis Harman is a futurist, strategic planner, and former professor of engineering and economic systems at Stanford University. His recent books include Global Mind Change and Creative Work: The Constructive Role of Business in a Transforming Society.

Much of the news about the transformation of the global economy is bad news – people losing their jobs, companies running to low-wage countries, linear material and energy flows wasting and damaging the natural world. But there are some signs that this transformation may go deeper than many think – and that it may take us to a more sustainable form of business.

Sarah: What would you say is at the root of our culture’s way of doing business?

Willis: Well it seems to me that every society has some kind of an organizing myth; traditional societies had one, medieval society had one, we have one. Very central to our modern myth is the idea that it’s perfectly reasonable that the economy should be the paramount institution around which everything else revolves, and that economic logic and economic values should guide our decisions. This all seems so natural that we never think to question it, and yet there are profound reasons why we should question it.

The domination by the economy rests on these basic assumptions:

  • any organization must grow or die
  • the economy as a whole must grow exponentially
  • labor productivity must continue to increase
  • owners have the right to receive maximum return on their investments
  • unbridled competition is a good thing with a few minor exceptions.

But if you were to look at the goals that not only this society but any human society seems to aim toward, you would come up with a very different set:

  • we want a wholesome environment in which to raise our children
  • we want a good relationship with nature
  • we want to feel safe
  • we hold dear certain values like democracy, liberty, the rule of law, equity and justice and so on.

It turns out that if you look at the assumptions underlying our economic system – especially the ones regarding the prerogatives of ownership – and then you look at the goals we humans have about how we want to live our lives, there is no compatibility. The assumptions can never lead to the goals.

And yet this incompatibility passes unnoticed. I think that’s because the assumptions about economic progress seemed to work rather well during the time when you could equate material progress with general benefit. But that equation doesn’t work anymore. We now have a system that works to the benefit of the few and penalizes masses of people today and in the future.

Sarah: Are you suggesting that the legitimacy of our current system is eroding?

Willis: Well, first of all legitimacy is in the eyes of the perceiver. How do people come to perceive institutions as legitimate? Typically, it has been because either they are duly constituted, like a government that has a constitution or a business with a charter to do a specific thing, such as to build a canal. Or it can come from the fact that the institution embodies generally approved values and goals. It can come from various historical reasons, or from the fact that the outcomes of the institution – the products of its actions – are generally considered to be good.

The whole business system is losing its legitimacy on all of these counts. It never was duly constituted to do the things that it does. Corporate charters don’t give businesses the license to do the things worldwide that they do. Those are simply powers that developed and have not been challenged.

The economic and financial values that tend to predominate in business are not good for the planet, they are not good for future generations, they’re not good for us. So it does not have legitimacy on that count. Its products are sometimes questionable, the effects of its activities on the environment are often destructive, and its promotion of consumption goes counter to the need for long-term sustainability.

So we’re beginning to hear talk about the need for whole-system change. Of course to many people, that seems a pretty improbable thing. But then to many people, significant change within the corporation was an improbable thing not too long ago, and we’ve seen tremendous changes in that regard.

The reason whole-system change is not improbable is because of this factor of legitimacy. When I talk to business audiences about this, I sometimes ask this question: If you had been looking in the right places you could have seen, say in 1980 in the Soviet Union – the forces developing that eventually resulted in the withdrawal of legitimacy from world communism in 1991. Following this quiet withdrawal of legitimacy, the order quickly collapsed.

So the question now is, if the challenge to what you might call world capitalism (and by this I don’t mean small businesses, but the network of powerful corporations and financial institutions that has spread around the world and is not responsible to anybody) if the challenge to world capitalism in that sense were growing, would you notice? Would you be looking in the right place to see it, or would you be caught by surprise as most people were when world communism suddenly disappeared as a major force on the planet?

I anticipate that indeed that legitimacy challenge is going to mount, and when it gets to a certain size things will change much more rapidly than you would ordinarily expect them to change.

Sarah: If the economy as it is now configured is losing legitimacy, what is emerging to take its place?

Willis: The answer centers on the organizational change that is taking place in response to the changes in people over the last one or two generations. Clearly, people have been rediscovering their relationships to nature and rediscovering their spirituality. This is not necessarily happening in vast numbers yet, but nevertheless it’s expanding, and the fraction of the population involved tends to be the well-educated fraction – we have some survey data now that shows this.

These people are insisting on a different kind of work environment. Organizations of all types, especially corporations, are learning that in order to attract and hold the most creative people, they have to be a very different kind of organization than we saw, say, two generations ago. There are some obvious things about this type of organization: it’s less hierarchical, there’s more distributed power, more distributed autonomy.

There are also some other more subtle things. People are demanding more and more that the organizations they are involved with don’t just pay them a salary, but on the whole do some good for society. They’re critical of the actions of their own institutions.

I think one of the more significant books recently is by Peter Block, the book Stewardship (published by Berrett-Koehler, 1993). Block says that a sense of stewardship – the sense of guiding the whole enterprise – is spreading throughout the business world. This creates a more chaotic kind of organization, but nature’s chaotic, and out of that chaos comes a new kind of order.

As time goes on, we’re discovering that even if all the organizations in the world changed in this new paradigm direction, you would still have conditions worldwide going downhill. This is because the system as a whole has certain characteristics that these new-style organizations don’t fit into, just as people are developing some new characteristics that don’t fit into the old-style organizations.

Sarah: How do these new organizations help bring about the transformation of the whole?

Willis: The best analogy I’ve ever heard is that of a larva becoming an insect. As the caterpillar approaches the time of metamorphosis, certain cells within the caterpillar’s body begin to develop – biologists call these imaginal cells. These cells begin the process of building the various parts of the new organisms of the butterfly. The new parts expand and emerge, and the tissue in between disintegrates, and in a very smooth and non-disruptive way, the caterpillar becomes a butterfly.

I think something like that is happening in society with intentional communities, alternative economies, alternative technology groups and all sorts of movements and sub-movements. The feminist influence in this is very strong; I don’t know how to separate these feminist, ecological, and spiritual influences, but they represent a whole side of ourselves that we had set aside in our patriarchal society. Now they are emerging in force and creating all these little imaginal cells all over society. When the big structure comes down those cells will be there.

It isn’t as though there won’t be a lot of people hurt; there will be. But the wider the understanding of this rebirth process and why we have to go through it, the less we are going to be fearful about the labor pains and the more chance we have of a smooth and non-disruptive transition.

Sarah: How do you see the business system evolving as we go through this transition? In particular, what will it take to have a system in which you don’t win by shifting your costs on to others?

Willis: I think we are awakening to an awareness that in a very real sense we are cells in the body of the social organism, just as our individual cells are within our body. Our individual cells compete for nutrients, but at the same time they all work together, held together by a kind of common plan, conceptualization, or image.

Society also is both an organism and a collection of organisms. Each of those organisms also finds itself simultaneously in competition and at the same time in cooperation to create, maintain and guide the whole. So I’m part of this small community, but I’m also part of this bigger organism, and that in turn is part of a bigger one.

That’s the meaning of stewardship in a broader sense. When you are aware of being part of a larger whole, you just take responsibility for the impacts of your actions. If you pursue this concept of stewardship to the end, it implies a dramatic change in the whole system, including ownership patterns, the prerogatives of owners, stockholders, pension funds, and so on, and the ability of these powerful organizations to shape the world to their special advantage, to the disadvantage of almost all the people in the world.

Sarah: Do we humans have that capacity? We seem to have the capacity to care about our families and communities as we define them, but do we have the capacity to care enough about the whole – in this case the planet – to make choices that benefit the whole, even when we have something to lose by doing so?

Willis: I think we’re developing that capacity. Children have to develop their sense of ego, in part by pushing against the boundaries and against other people. When people have their own family, it seems perfectly natural that the ego should then take a new place.

But as you get older you realize that you are going to lose your family, you’re going to lose your physical body, you’re going to lose the whole works except the only thing that is really important. Then it’s perfectly natural to say "of course I’m the whole," and to realize that we are not separate from the people on the other side of the Earth, or from future generations, or from the animals and the trees.

I think the culture as a whole is evolving in a direction that makes it easier for us to grasp that picture. At one time, it was a dominant belief in western society that if you behaved pretty well here on this plane you’d go to heaven; that belief system held the society together in certain ways. Then we changed that belief and essentially said if you can trample on others and succeed then you’ll get the most toys in the end and you’ll win the game, and people behaved accordingly.

Now, the belief system is changing still again to a more holistic view in which inner wisdom plays a more central role and gets much more attention and respect.

Sarah: I see signs of the cultural evolution that you describe, but I also see lots of signs that the culture is evolving in the opposite direction.

Willis: You’ve got several things happening at once, as is typical of any change period in history. You’ve got the old order disintegrating, but not recognizing it yet. So one group of people is desperately trying to hold the whole thing together and patch it up, develop a new covenant or a new contract.

Then you’ve got another group that is typically pretty fearful saying, "Let’s go back to the old fundamentals when things really used to work." Of course things can never work that way again, so that group may at first be strong, but it’s bound to get weak in the long term.

And then you’ve got these imaginative cells growing and growing.

We’re just in the middle of this process, so all three of those groups are of sizable proportion now, and they’re all inter-weaving. If you look for signs of the continuing trend toward more growth, more technology, and all that, of course those signs are there. But if you look for signs of the total cultural change, you can find those too, although they’re much quieter and you have to look harder.

Sarah: Some people say that we won’t really make the shift in a large scale way until we come up against a wall, perhaps an ecological wall of some kind.

Willis: It seems to me that there are some long-term destructive forces, whether it’s damage to the Earth’s life support system or the destruction of the social order – which is leading to more and more people being marginalized, while a handful of people live high on the hog, and the middle class gets squeezed. In the long term, either environmental or social disintegration could cause everything to fall apart.

But I think people have an ability to look ahead and see what’s coming, and doing so leads them to question the legitimacy of things as they are. Then the change itself can actually be triggered by relatively small things, which if the overall social immune system were in good health, would be absorbed relatively easily. For example, a healthy system could take care of a bank failure, but since the immune system is not really functioning well, and the debt structure has become totally insane, a major bank failure could result in a collapse of the whole money system.

I think the way it’s actually going to happen is like the sort of thing you see in catastrophe theory: that some little thing triggers something else, which triggers something else. But a big factor in that collapse is going to be more and more people who look ahead and see that in the long run, the status quo is not going to work – something’s got to change. Many people are ready for the immediate trigger, whatever that might be.

Sarah: How can people who do look ahead and see that best prepare for this transformation?

Willis: I think people know instinctively how to do that. Once you begin to sense where we are in history, where we are in evolution, then your creative mind just leads you in the right direction. The key is to develop a trust in your deepest intuition or higher self or whatever name you give to it.

Because in our deep psyche we are cells in the whole organism; what we most deeply want is to be a part of that evolutionary thrust. That leads not so much to having specific goals or specific causes, but to operating from deep intuition and watching the feedback to see whether indeed you are in touch with the main wave.

And when you do, you find that really remarkable things happen and the most miraculous events take place. Other people look at that and explain it as good luck or intelligence, but you know in your own heart that it happened because somehow or other you learned that this deep trust is the only way to live.

You can reach Willis Harman at the Institute of Noetic Sciences, 475 Gate Five Road, Suite 300, Sausalito, CA 94965 415/331-5650.