Flourishing Individuals Producing Regenerative Enterprises
Only a Regenerative Enterprise Thrives Forever in the Face of Creative Destruction.
We are experiencing an inflection point in managing as conventional managing demonstrably fails and new methods and practices arise in its place. This explosion of new methods and practices—whether they be lean, agile, managing without managers, democratic management, Holacracy, customer centricity, beyond budgeting, or any of a host of new people-engaging, innovation-fostering, and wealth-generating practices – present not only tremendous opportunities, but also entail great risks. These new methods can not only introduce confusion, but they often fail to produce newly thriving companies.
Until now this revolution has lacked a comprehensive framework making sense of managing overall. At the same time, rampant technological advances, dematerialization and digitization, modularization, endless new discoveries, pervasive innovation, shifting societal demands on businesses, and truly seeking to engage people in disruptive innovation demands a whole new way of managing. No business or its offerings to customers can remain static even for a moment in today’s business environment.
Addressing this sea-change in the world of business enterprises requires a total rethinking of managing from the ground up. The regenerative managing framework we (Kim and Joe) invented over 10 years ago and present here does just that. It provides not only a comprehensive framework to guide rebuilding the managing of your enterprise, it also provides a lens through which to view and make sense of the revolution in managing going on at this moment all around you.
See managing again, as if for the first time, through this truly comprehensive, integrated, and harmonious framework that builds on the first principles of humanity and economic value creation. We designed this framework from the ground up to vitalize an enterprise in harmony with its flourishing contributors making it capable of thriving, not just in the present, but possibly forever.
We challenge you to look at the world around you through the lens of regenerative first principles. See today’s thriving companies exemplifying regenerative first principles at work. Employing this lens, you can also see the first principles they neglect to exercise. With your new understanding of just what a regenerative enterprise entails you will gain deep insights into how companies today are gaining and have a chance of sustaining their vitality as they thrive in dominating existing and create new markets never imagined before. You will see how a regenerative enterprise can persist in sustaining its vitality despite the world of rampant creative destruction the live in.
With a loss of faith in conventional managing, a recognition that heroic leadership does not endure, a lack of engagement in nearly seventy percent of employees, and enterprises failing to thrive in a highly competitive world, new practices are emerging and proliferating like never before.
Regenerative managing builds up the natural capability of people to create, innovate, and operate an enterprise to thrive in the present while re-creating it to thrive in the future.
In sharp contrast to thriving, we see many enterprises on a trajectory to fail. Looking at their way of managing from a regenerative perspective, you could say they manage to fail.
In accordance with the regenerative philosophy, to be considered effective, managing must go well beyond optimizing and scaling as it seeks to avoid enterprise degeneration. Managing must routinely discovery, innovate, regenerate, and operate in the face of persistent creative destruction to sustain enterprise vitality. Effective managing thus begins with an intent to vitalize—which when fully followed through makes an enterprise capable of thriving forever.
Only regenerative managing produces a thriving trajectory for an enterprise as a matter of routine.
In addressing managing’s challenge, we designing a whole new way of managing, a greenfield design, not one built up from anecdotes or anecdotally synthesized principles. or piecemeal foundation. With our objective approach – avoiding the deep-seated influences of conventional managing, interpreting correlation as causation and the survivorship bias of from past winners of the “thriving lottery” – we discovered a whole new basis for managing. The managing we discovered regenerates the enterprise with the same vitalizing forces of creative destruction occurring outside the enterprise. We therefore called our new way of managing regenerative managing—managing producing regenerative enterprises sustaining their vitality indefinitely to make them capable of thriving forever.
The Regenerative Enterprise
With the pervasive and persistent gales of creative destruction, every enterprise faces the challenge of ever-encroaching mediocrity and eventual failure. To thrive in a rapidly changing and ever-evolving world, an enterprise must learn to embrace the very forces managing has conventionally sought to fight against. To thrive indefinitely, an enterprise must mirror the ongoing creative destruction regenerating in its ecosystem and thereby become regenerative itself. Once learning to do this through regenerative managing, an enterprise can sustain its vitality indefinitely to thrive forever.
Regenerative managing builds from an intent to vitalize. Following through on this intent makes and keeps an enterprise fit for its environment. This stands in stark contrast to conventional managing’s inherent intent to optimize. Optimization, with its pursuit of stability and scale, eventually and inevitably leads to enterprise degeneration. We soon came to realize that if an enterprise does not manage to thrive forever, it’s managing to fail eventually. Following our guiding light of discovering managing carrying out an intent to vitalize, we set our on our journey to discover and define regenerative managing.
We began our journey of discovery by employing interrogative inquiry to first define the object of managing – the enterprise. This commonly employed method of formulating the questions to develop an understanding of a matter has been employed since ancient Greek philosophers identified it in the first century BC. Following this method, we sought answers to why, who, what, when, where, how, and in what way an enterprise creates value to be self-vitalizing.
Asking and answering the seven regarding enterprise value creation leads the way to identifying the essential attributes of regenerative managing – its requirements to fulfill, its first principles to adhere to, and its imperatives to carry out.
This inquiry resulted in the formation of the overarching practices of regenerative managing to be manifested throughout all the practices of the enterprise. Long story short, regenerative managing comes down to carrying out its seven imperatives:
- Infuse meaning inspiring people, guiding the enterprise, and enriching humanity.
- Unleash potential to engage the fullest capability of each contributor.
- Embrace individual customers to offer each one just what they want, need, and desire.
- Liberate creativity to engender instinctual innovation throughout the enterprise.
- Orchestrate vitality to sustain value creation in the ever-emerging opportunities of the enterprise.
- Effect creative destruction to routinely, as a matter of course, regenerate the enterprise in sustaining its vitality.
- Achieve coherence throughout all practices tuned to circumstances sustaining the enterprise.
Regenerative Managing Overview
Managing Requirements, First Principles, and Imperatives
The Regenerative Managing Framework
An enterprise can only thrive when it creates distinctive value from its uniquenesses. Regenerative managing addresses how to initiate and sustain an enterprise’s perpetual creation of distinctive value. It begins with the overarching regenerative practices to be manifested in all the practices of the enterprise. To produce a regenerative enterprise, all its practices fulfill the requirements, adhere to the first principles, and carrying the imperatives of the overarching practices. [See a full chart of these below.]
Practicing in accord with these essential attributes of regeneration naturally forms a distinctive identity and realizes this identity in the value the enterprise creates. The guiding identity and value-creation domains constructs accompany the exercise of the regenerative practices to define both this identity and its realization by being enacted in the enterprise’s domains of value creation.
Keeping your managing practices in sync with circumstances to sustain enterprise vitality never ends. It requires clearly understanding circumstances as the source and means of enterprise value creation.
Identity describes the sources, the wellsprings of distinctive value creation. It characterizes the uniquenesses of the enterprise’s nature, qualities, beliefs, and attributes.
Domain describes the means, a field of action where the enterprise creates value. It illustrates the resources and capabilities, and their configuration, highlighting their uniquenesses, involved in creating distinctive value.
Both identity and domain reflect the current attributes and those the enterprise aspires to gain going forward.
- Identity begins with and builds around the enterprise’s sense of purpose answering why it’s in business.
- Essence of enterprise characterizes the ways it produces value, governs itself, its legal structure, and its ethos, its sensibilities at play in every decision it makes and action it takes.
- Nature of offerings speaks to what it creates in terms of types of offerings and customer value.
- Effects of heritage expresses where the enterprise has come from and how its past shapes its possibility going forward.
- Path of progression designates when it creates value in pursuit of its aim and goals.
- Body of values describe the beliefs and behaviors underlying the thoughts, actions, and decisions governing how value gets created.
- Finally, the way of managing describes in what way its managing becomes distinct, yet in accord with the essential regenerative attributes, in producing a distinctive enterprise.
Characterizing the domain entails mapping out the means an enterprise employs to create value.
- All means lie within humanity, whose enrichment provides the ultimate means and ends of why it creates value.
- Contributors are the people who the enterprise engages to create value, whether as employees, contractors, volunteers, and even, sometimes, customers.
- Customers paying for the offerings of the enterprise to fulfill their needs identifies what value the enterprise creates.
- Economies, with their possibility and opportunity, describes where an enterprise creates value.
- Ecosystems, enacted by enterprises, create value when an enterprise applies its knowledge to create value.
- Businesses describe how an enterprise creates and captures value.
- Lastly, the offerings of an enterprise define in what way they provide customers value through their functionality and representation.
Identity and domain define and describe the essential factors of the circumstances from which an enterprise creates value. They hold the key to harmonizing all the aspects of the enterprise, guiding its evolution, and integrating its capabilities.
Regenerative managing, in harmonizing the whole, organically regenerates and vitalizes an enterprise. Its practices discover, develop, sustain, and evolve the uniquenesses enabling an enterprise to perpetually create distinctive value for its customers. It focuses the energy and guides the evolution of an enterprise on a vitalizing path of progression.
Regenerative enterprise practices – whether strategic, tactical, day-to-day getting stuff done, operational, innovational, housekeeping, maintenance, or any other kind – collectively make up an ongoing cycle of identity formation and realization. In this virtuous cycle, they perform more than a hypothesis test of meaningful purpose. They perform an ongoing hypothesis test for all the essential factors underpinning distinctive value creation realized in the enterprise’s domain of value creation.
Looking Through the Regenerative Lens
Regenerative managing can serve as a lens for understanding and interpreting any company’s way of managing. With this lens you can see regenerative first principles at work in enterprises across the world. Though few if any enterprises fully embrace every first principle of regenerative managing, many embody one or more of them in their way of managing.
Mayo Clinic, possibly the world’s preeminent health care organization, founded in 1864, epitomizes many if not all regenerative managing’s essential attributes. It infuses meaning, putting the individual treatment of patients first through its integrated clinical practice, education, and research. It unleashes potential in its contributors, intrinsically engaging them in a highly collaborative pursuit of purpose. It embraces individual patients in line with its mission. It liberates creativity through extensive exploration of medical techniques and internal collaborations. It orchestrates vitality with its learning rapidly integrated into its practice of medicine. It effects creative destruction, continually replacing old methods with new methods of diagnosis, treatment, and care. And lastly it achieves coherence with its ever-evolving practices and circumstances.
Ecolab’s CEO Douglas Baker Jr recently oversaw broadening the company’s purpose to reenergize its contributors. He extended its mission “to make the world cleaner, safer and healthier – helping businesses succeed while protecting people and vital resources” with a vision to provide and protect “what is vital: clean water, safe food, and healthy environments.” This better reflects how he intends for Ecolab to make the world a better place. Baker notes how this refinement of purpose better inspires and guides Ecolab “As our teams widened their awareness of global issues, our pride has been enhanced.” In pursuit of this humanity enriching meaningful purpose Ecolab has grown to $58 billion in market value.
W. L. Gore & Associates, maker of GORE-TEX®, was founded on what are essentially regenerative first principles, by Bill and Vieve Gore in 1958 after seeing the oppressive effects of command and control from inside the bureaucracy at DuPont. In doing so, they eschewed conventional managing to build a way of managing satisfying workers innate needs by presuming people to be self-motivated and self-directed.
Gore also illustrates vitality orchestration in how power flows to value. Leaders at Gore only become and remain leaders if associates choose to follow them. If team members see greater value-creation opportunities elsewhere in the company, they can migrate to a different team or even form a new team of their own. In that way, the contributors themselves choose when, where, and how to create new value and customer offerings, as well as effect creative destruction.
Amazon.com, created with Jeff Bezos’s distinctive way of managing currently thrives due to its practices reflective of regenerative first principles. It’s dedication to customer requirement fulfillment, customer centricity, and embrace of individual customers is outstanding. Amazon obsesses over customers. It constantly seeks out new ways of creating value in the way it orchestrates its learning and knowledge gained from continual explorations, persistent exploitation, and operational feedback. With an intimate understanding of each individual customer it works tirelessly to eliminate any customer sacrifice in selecting, ordering, paying for, and reviewing their purchases.
Haier Corporation, the multinational home appliance manufacturer based in Qingdao, China developed better and stronger value creation by obliterating conventional management roles. It’s CEO, Zhang Ruimin un-formed the existing organization and its conventions of managing by eliminating 10,000 management jobs. In this vacuum arose “a network of entrepreneurial ventures run by employees, whose compensation is based on the success of their products in the market.”
Ruimin, like regenerative managing’s first principles, recognizes empowerment plays no role in effective managing. He states that, “Nowadays, the management model in many enterprises is “empowerment,” but we are not empowering; we are returning all the power to the employees.” Haier calls its way of managing Rendanheyi, the epitome of customer-centric value creation, which refers to connecting employees with users. It intends to reduce the “distance between the organization and its end users to zero and moving as close as possible to a state of co-creation with the customer.” throughout the enterprise by tightly linking jobs and compensation to customer value creation. Ruimin changed the culture of Haier overnight.
Alibaba, founded in 1999 in Hangzhou, China by Jack Ma, grew to a market capitalization of $352 billion by the end of 2018. Specializing in e-commerce, retail, Internet, and digital technology, it continually grasps the possibility before it by liberating its creativity to continually create ever-greater value with persistent innovation.
Microsoft, with its current rejuvenation guided by Satya Nadella, has been remaking itself to become an innovative growth-oriented customer-centric enterprise. Nadella states, consistent with the regenerative imperative to embrace individual customers and limitless opportunity first principle, “Having a deep sense of customers’ unmet and unarticulated needs must drive our innovation.”
He also states, “We can’t let any organizational boundaries get in the way of innovation for our customers.” In addition, he sees companies as having an identity being “that collective purpose that a company represents.” And this purpose empowers “every person and every organization on the planet to achieve more.” Nadella clearly sees innovation as having no boundaries within Microsoft’s meaningful purpose, an essential ingredient for the growth-mindset culture he’s instilling in the company.
Nadella appears to be set on making Microsoft a regenerative enterprise: Infuse meaning. Check. Unleash potential. Check. Embrace the individual customer. Check. Liberate creativity. Check.
Fujifilm orchestrated its way from the shift in photographic technology from chemical film to digital images where Kodak failed to do so and filed for bankruptcy in 2012. It did this by creating a full new product line for hospitals and healthcare providers based on their expertise in photographic film, a market that evaporated with the advent of digital photography.
Apple, over the past two decades, exemplifies getting their identity, and its realization, right. It developed a strong understanding of the distinctive value it intended to create. It also boldly effected creative destruction, internally and in its enacted ecosystems, as it created offerings well beyond what its competitors or customers ever imagined at the time.
Apple’s complementary offerings of the iPhone, iTunes, iPod, curated app store, and browser capability were simply better offerings than what appeared to be unassailable competitors and intransigent industries at the time. The iPhone was not first by any means, but it creatively destroyed the Blackberry and Nokia offerings and business models as it captures nearly all the profits of the world-wide mobile phone industry flowed to Apple. With iTunes, Apple re-created the music industry. The focus and direction of Apple, guided by its identity, created a moat, or more like a wake, of innovation competitors failed to overcome for over a decade.
Spotify explicitly tailors its managing practices to circumstances. It sees the customization and evolution of practices as key to creating ever-greater value. “The so-called ‘Spotify Model’ is the result (or product) of a learning journey led by Spotify employees and partners in order to create a useful process to help them (not you) to achieve their own business needs (not yours). And yes, they are still learning and changing this continuously — actually, by the time you are reading this, they may have changed or completely replaced one of the practices that you’re pushing people to copy at your organization.”
Elkay Manufacturing lives the value of its motto “We are in business forever.” This maker of sinks, fountains, and high-end plumbing founded in 1920 on Chicago’s north side, continues to thrive today as it successfully competes with Kohler, Moen, and Delta Faucet. CEO Tim Jahnke evidences several regenerative first principles in saying, “We honestly try to do what’s right for our brands, our people, our customers, and our suppliers.” The motto, he adds, “truthfully represents who we are.”
Many other companies also exemplify many essential regenerative attributes and are worthy of study. A short list includes Accenture, 3M, The Morning Star Company, Semco, GM recently under Mary Barra, and Netflix.
Take the Regenerative Managing Challenge
Take the regenerative managing challenge! Test your current way of managing against regenerative managing. The regenerative managing framework stands ready to guide re-inventing your way of managing. It serves as a framework for the innovation, re-thinking, and re-invention of managing. Look to employ its framework to assess, interpret, and understand your current, proposed, and possible new ways of managing.
Whether pursuing agile, lean, customer-centric methods, self-organization, or other means of managing – check your managing against regenerative managing’s essential attributes to expose any hurdles or gaps to gaining the full benefits of your new approach. Or simply look to adopt regenerative managing from the outset and begin creating practices befitting your circumstances to create distinctive value.
Regenerative managing holds out the promise that people can flourish, enterprises can thrive, and society can be enriched in the face of persistent creative destruction. And always keep this in mind: if you are not managing to thrive forever, you are managing to fail eventually.
Putting the regenerative managing framework to work, you can create your own thriving enterprise. You do this by tailoring your managing practices to fit your unique circumstances in accord with regenerative first principles and to carry out its seven imperatives. Developing and deploying regenerative managing practices begins with your adoption of the concepts of regenerative enterprises and managing, instilling an intent to vitalize, and embracing the regenerative imperatives as your comprehensive guide to managing. Making your enterprise regenerative, whether from the start or as a transformation, involves the simultaneous and complementary activities of developing and deploying regenerative practices, employing those practices to form identity, and doing the same to enact value creation based on your identity.
Fully regenerative enterprises practice all seven imperatives—unleash potential, infuse meaning, embrace the individual, liberate creativity, orchestrate vitality, effect creative destruction, and achieve coherence—all in accord with the first principles of regenerative managing.
But taking on all these imperatives at once would be imprudent for most enterprises. First, your strategy of managing must be in sync with your enterprise’s strategic needs and priorities.
If your enterprise’s most pressing need is a viable business model, begin with the imperative to effect creative destruction to address this critical issue. Or maybe your enterprise is not yet customer centric, which points to the possibility of focusing on embracing individual customers.
But in every case, the imperatives are interdependent and mutually reinforcing. So, until you address all of them, your enterprise will lack its full regenerative capability.
Just address becoming regenerative in a logical manner. For instance, don’t unleash the full potential of every contributor independent of infusing the meaning which aligns them.
Regenerative Managing Stands Unique
- It clearly states its premise for a regenerative enterprise.
- It discovers and builds upon first principles regarding people and value creation.
- It encompasses all dimensions of managing—all leadership, all management, all governance, and all other factors shaping the enterprise.
- It provides a comprehensive, integrated, and definitive framework from which to form your own practices tailored to the circumstances of your unique enterprise.
- It serves to make sense of the host of newly emerging practices, guide the re-invention and innovation of your way of managing, and provide the foundation for all managing practices you create, adopt, and deploy.
Look to regenerative managing to guide you through the most exciting time in the history of managing!
Continuing Your Exploration of Regenerative Managing
Hopefully, this introduction to regenerative managing has whetted your appetite for more information.
The Briefs & Expositions and Insights & Observations will be updated and expanded on a regular basis.
If you would like some assistance, we will be glad to talk with you.
Also, tune into and use the #regening and #regenerativemanaging hashtags.
And below find the synopsis regenerative managing’s aspects, requirements, first principles, and imperatives.
Synopsis of Regenerative Managing’s Aspects, Requirements, First Principles, and Imperatives.