What do the dying industrial era and the emerging new world views have to learn from each other?

The above image is called the two-loop model. It is used extensively by the Berkana Institute but is based on work that has been around a long time.  The model suggests that the old industrial era model of doing business is dying and has been for several decades. Simultaneously, the new paradigm for doing business is rising.  We are past the cross over point.

Talking with leaders of conglomerates of rising entrepreneurs in mining, bio tech and fin tech I hear the question – “What can we learn from the old paradigm (highly structured, highly controlled, conglomerates) that is useful in the new paradigm, with its rising systems of entrepreneurs, networking globally, constantly innovating and operating with different power values?”

Most of my career was helping the old corporate giants to loosen up their rules and controls so that their people could flourish, think more creatively and more strategically. For the past decade I have worked more closely with rising entrepreneurs – full of energy, enthusiasm and new ideas.  I do not think the differentiation between the old and the new is so clean cut.

When I look at the values operating in companies such as Amazon, Tesla and Facebook I wonder if the new tech giants haven’t just recreated themselves along old paradigm principles.  They look freer flowing and creative, yet the way they treat and affect people has come in for strong criticism globally. Despite this criticism, they have become models for business success. The fact that they operated for years outside normal taxation and regulation requirements gave them a huge head start to accumulate cash reserves (In 2021 the big 5, Apple, Microsoft, Alphabet, Amazon  and Facebook had cash reserves between them of $588bn) and become dominant in their fields of influence.  Using AI, they can, and do, have huge control over their staff and increasingly over their users.

So what about the emerging companies (usually fueled by tech) who have less facility to dodge tax and regulation?  How do they transform from entrepreneurial start-ups into bigger companies? How do highly networked global organizations build structure while maintaining the creativity of their staff and some human ethical standards?

Here I must leave the world of classic business theory and delve into the world of developmental psychology. Generally our go-get-em entrepreneurs are filled with youthful vigor and often idealism.  This gives them huge energy and focus. In the documentary “Social Dilemma” tech industry insiders reveal the cost of this youthful vigor on society as a whole – with rises in youth suicide, self-harm and mental illness. 

The human brain develops in stages. What would be called “wisdom” rarely develops in the first half of life unless we are faced with huge (and apparently insurmountable) challenges or rock bottoms.  Then facing our own frailties, failures, and inadequacies, we can choose to let go of our one-eyed youthful focus, leave conventional thinking imitations and expand our human consciousness.  When we do that, we are said to go up the levels of adult brain development. Gratefully around 35% of the adult population do this. The decisions we make and how we implement them depends on our perspective which is in turn a function of our adult brain development.

We do not see the world as it is, we see the world as we are.

How a network of entrepreneurs or an entrepreneurial conglomerate develops is a function of how the leaders of that network or conglomerate think. The learning I take from my years of working with the boards and the tops teams of global giants is that the radical change that business leaders now face daily demands higher levels of thinking. These levels of thinking can be developed by anyone at any age, if they have enough incentive and sufficient support to do so.  What I learnt from the emerging entrepreneurs is that early success can lead to great arrogance which can be a huge block to developing wisdom. While the cost of this may personally be small (at least in the beginning) the social cost can be high.  Thankfully for those who choose to develop their levels of adult brain development the reward is massive.

Not only do they learn to think way more strategically, handle change more skillfully and face reality with greater ease, BUT they also increase in personal happiness and wellbeing and have the grace to bring others with them.

When it comes to structure and control of emerging networks, AI is a huge blessing. Not so much because it controls, but because it can provide immediate information so that mature people can self-regulate, and leaders can get instantaneous information on how everybody is travelling.  This information can be used to control but anyone with wisdom knows that highly controlled people are less free to think, and contribute at the level of heart, soul, action and thought. A dispirited organisation (especially one with huge cash reserves) can wield great power, but I doubt it brings anyone great happiness or serenity, whereas a wise use of AI coupled with an organization filled with people growing into higher levels of adult brain development – not only makes massive profits but does so in a way that can make the world a better place and the people in that organization more comfortable with themselves (in all their human fallibility) and each other.

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Written by Margot Cairnes.

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