Regenerative managing's foundation forms from the ideas and studies of organizational scientists and economic researchers.
We then knit together regenerative managing based on this foundation with our own insights and those gleaned from business, management, and leadership authors.
In the end, the fully formed regenerative managing framework serves to make sense of the emerging managing renaissance.
Regenerative Managing Builds on the Ideas and Insights of Many Experts
This is hardly an exhaustive accounting for those whose works have influence regenerative managing, but it will grow more complete over time.
I give Peter F. Drucker credit for kicking off the now long-emerging managing renaissance with The Practice of Management published in 1954.
With this book, Drucker provided the first comprehensive definition of the discipline of management. In this seminal work he addressed unleashing worker potential when he called for managers to view people as human resources rather than as human resources.
He drove home the point further by identifying the need for enterprises to employ the “whole man not an economic subsection thereof,” "fulfillment of status and function in his job and through his work," "justice through equal opportunities for advancement," and that "work be meaningful and that it be serious."
The innate needs first principle comes from human psychology researchers Edward L. Deci and Richard M. Ryan. In their classic article for Psychological Inquiry, “The ‘What’ and ‘Why’ of Goal Pursuits: Human Needs and the Self-Determination of Behavior.”
They reveal that human beings fundamentally possess three innate needs:
- autonomy, the freedom of self-regulated action;
- competence, growing personal effectiveness in a rewarding pursuit; and
- relatedness, a sense of belonging with security in one’s interrelationships.
Deci & Ryan further show that people whose innate needs are fulfilled become intrinsically motivated and therefore fully engage in their work. This intrinsic motivation, in turn, unleashes a person’s fullest potential.
From James G. March's "Exploration and Exploitation in Organizational Learning" comes the framework for the learning essential to enterprise vitalization.
There are powerful forces which naturally pull organizations towards
exploitation of old certainties and away from
exploration of new possibilities.
Organizations must actively manage to achieve equilibrium between exploration and exploitation to develop and sustain a competitive advantage.
March's models reveal how organizational learning works - what makes it effective with exogenous turbulence and a varying number of competitors.
Learning is something to be strategically planned and controlled to enhance the evolutionary capability of the organization. The management of learning produces the returns to knowledge that produce the performance characteristics of the organization that make it competitive in its particular environment and context. For example, in a highly competitive environment, returns to changes in knowledge are greater if it increases the variability of the organizations realized performance than if it increases the expected value (average) of the realized performance.
From Laurence Ackerman, Identity Is Destiny: Leadership and the Roots of Value Creation recognizes identity to be at the core of enterprise value creation and organization. Ackerman identifies eight laws of identity and application to enterprise value creation.
- Law of Being
- Law of Individuality
- Law of Constancy
- Law of Will
- Law of Possibility
- Law of Relationship
- Law of Comprehension
- Law of the Cycle
Regenerative managing requires an enterprise have an explicit and coherent identity that guides the enterprise.
From James H. Gilmore and B. Joseph Pine II, Authenticity provides the enterprise Identity Framework with its five elements:
- Sense of Purpose: Why your enterprise exists.
- Body of Values: How your enterprise manifests its identity.
- Effects of Heritage: Where and when your enterprise became what it is today.
- Essence of Enterprise: What your enterprise is at its core.
- Nature of Offerings: What your enterprise offers to its customers.
This framework provides the basis for enterprise identity discovery and development. Identity weighs heavily in every imperative of regenerative managing as each one requires a unifying authenticity to fuel innovation and value creation of the enterprise.
Customer Value Creation
From B. Joseph Pine II and James H. Gilmore's The Experience Economy comes the Progression of Economic Value framework that distinguishes the five types of economic offerings and their associated types of customers.
This framework aids in explicitly defining just what type of offering your enterprise intends to deliver to its customers and thus what type of value you intend your enterprise to create.
The five distinctions between economic offerings are:
- Commodities extracted and sold by traders into a market.
- Goods made by manufacturers and sold to a user.
- Services delivered by a provider to a client.
- Experiences staged by a stager and revealed to a guest.
- Transformations guided by an elicitor to change an aspirant.
Each of these distinctions characterize the competitive position and pricing possibility of offerings in satisfying the wants, needs, and desires of customers.
Business Value Creation
From B. Joseph Pine II's Mass Customization comes the Offering-Process Matrix framework that distinguishes between the four fundamental ways of creating value depending on the circumstances of a business.
- Invention describes the circumstance where both the offering and the process to produce the offering are dynamic. This occurs when new possibilities exist to satisfy customer needs and the methods of producing the offerings are not well established. The earliest of PCs fit this circumstance.
- Mass Production describes when both the offering and the process to produce the offering are stable. In this kind of situation scale and volume call for mass production to efficiently satisfy mass markets. Consider this the likely step of a business whose new offering, recently invented, stabilizes while demand rapidly rises. PCs, once their design stabilized called for mass production to lower costs and generate greater demand.
- Continuous Improvement often follows on the heels of mass production as the producer of the offering makes a stable production process dynamic by increasing its flexibility yet maintaining its mass production efficiencies in the face of varying demand and increasing variety of the offering. This happened with the demand for PC as they grew in popularity.
- Mass Customization then becomes the logical next step, when the demand for offering variety becomes dynamic and outstrips the process capability to produce it efficiently. This situation calls for the modularization of the product in order to mass produce its components while mass assembling unique combinations of those components in a highly reliable stable process. This is precisely the niche Dell Computer filled when it started offering customers the opportunity to configure their PC to their particular needs while receiving it in short lead-times at mass produced costs.
Each of these circumstances of value creation calls for a different business capability and ecosystem configuration. Just as offering innovation never ceases, neither does business model or ecosystem evolution ever cease.
The key to the Offering-Process Matrix in fact is embracing renewal, going from Mass Customization back to Invention when facing a capability failure. This exploration renews the capabilities of the enterprise, helping in its regeneration.