Friday, August 04, 2006

The Three Disciplines of Sustainable Management

Ron Nahser, Ph.D

Running a successful business, as we all know, requires discipline. But recently, during the social hour of a glittering black-tie event for San Francisco business leaders, it occurred to me that running an enterprise that is both successful and sustainable might require an altogether different kind of discipline.

When my host at the event introduced me to one of the attendees as provost of Presidio School of Management, I half-jokingly asked him if he had an MBA…or would be interested in pursuing one. He looked me directly in the eye and replied with a wry smile: "I have my USMC (Marines) degree and that taught me discipline, which is all I needed to learn to be successful in business."

The Marines and other branches of the military rightly rely on their command-and-control, hierarchical style of discipline to execute their missions. But do the best, most innovative ideas always come from the top down? Dick Gray, the founder of Presidio School of Management, learned a slightly different approach to leadership at Naval Officer Training School: "Vigilance, Forehandedness, and Common Sense." Vigilance to even tiny alterations in circumstance; proactive, forehanded strategies to meeting new challenges; and common sense in implementing these strategies given the current context.

As it happens, this three-pronged approach to military leadership is not too different from what I believe are the key principles of successful, sustainable business management. At Presidio School of Management, we call it "Systems Thinking, Integration and Communication, and Active Experience."

Everything Is Connected

In the field of sustainability, true vigilance is impossible without recognizing the essentially integrated nature of the world we live in. As Randy Hayes, head of Rainforest Action Network, puts it: "If I had just one sentence to utter it would be: 'Everything is connected to everything else.'" This is known in management circles as "systems thinking." Here is how we at Presidio define it:

Systems Thinking. Looking at areas, issues or problems as a whole -- sometimes called whole-systems thinking -- is often omitted from, and even discouraged by, the highly specialized, finance-centered model of business in general. (This is particularly true in business education.)

The result of this approach is that yesterday's solutions have a way of becoming today's problems. In the words of the 1999 State of the World report, education has increasingly taught "disconnection." And in business this has meant focus totally on the goal of maximizing return in the short term to just one group: stockholders.

So, in our view, the need is not so much for specialists who can isolate issues as it is for "connectionalists" who can think creatively about the way that things, numbers and people, relate to one another.

Meeting the Sustainability Challenge

The other two disciplines serve to put systems thinking into practice. The first step toward "forehanded" action is an adequate understanding and effective internal communication of the business challenges that must be addressed.

Integration and Communication of Knowledge. Every decent business plan an organization writes contains all the elements of management: marketing, finance, accounting, economics and organization design and operations. These lay out the strategy and systems thinking leads to incorporating the integrated bottom line and including all stakeholders in the strategy to successfully and sustainably engaging the marketplace.

The ability to recognize and articulate those connections, in tangible, narrative language as business plans and commitments and promises in the world, leads to action.

There is another, deeper, benefit for managers creating and developing their business plan: It provides the opportunity to uncover, define, articulate and test their calling -- the work they sense they need to do -- engaging others and leading toward their goals, and all of our goals, of furthering a more humane, sustainability world.

Pulling It All Together

The third discipline begins the practice of sustainability, rooted in the day-to-day experience that helps inform practical strategy:

Active Experience. Our foundation tenet is that learning -- the stance of curiosity and challenging assumptions -- is an active experience whose quality depends in large measure on the learner's active participation --- intellectually, physically, intuitively, and ethically. We believe that goal-directed action, mutually agreed upon, is more motivating and more potent than random or scattered action. The same is true of self-directed action; as opposed to authority-directed action (here we differ from the military model, narrowly understood).

Therefore, we believe that pragmatic inquiry and learning -- the process of disciplined reflection and action based on experience -- is far more effective and lasting than learning from experience alone (inductive reasoning) or reflection in the abstract (deductive reasoning). It is this continuous, testing movement between experience and assumptions (called "abductive reasoning"), which leads to genuine education and authentic action. The result is managers who are what we call "Pragmatic Idealists."

These three disciplines lie at the heart of Presidio's educational philosophy. We believe in discipline, just like the Marines do. But perhaps a more flexible approach is most appropriate for responding to the constantly evolving challenges of running a successful -- and sustainable -- business. That's why my friend with his "USMC" degree might profit from an introduction to the three disciplines of sustainable management.

Ron Nahser, Ph.D., is provost of Presidio School of Management, former chairman, president, and CEO of The Nahser Agency of Chicago. Author of Learning to Read the Signs: Reclaiming Pragmatism in Business, he has developed a consultative business model that has been used by 3-M, Levi-Strauss, Time, Inc., Stanford University Business School, and many other organizations.

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