The Future of Leadership for Conscious Capitalism

24 Pages·2013·7.35 MB·English

The Future of Leadership for Conscious Capitalism
Barrett C. Brown, Ph.D. | MetaIntegral Associates
The Big Idea in 336 Words
We’ve never experienced a more demanding, achieve the promise of Conscious Capitalism. It unique-
fast-paced and complex leadership environment. ly cultivates the “consciousness” in Conscious Capital-
ism. Developed at Harvard, Stanford, Oxford, and other
To thrive as an organization in the 21st-century mar-
world-class institutions, it has become central to lead-
ketplace – and execute on the vision of Conscious
ership and high-performance development. Today
Capitalism – requires unprecedented leadership ca-
it is used within the elite US military and intelligence
pacity and delivery. Most leaders are in over their heads
communities, with Olympic and extreme athletes,
in the face of today’s challenges, unable to adapt and
and in a growing number of leading organizations.
evolve quickly enough. Many are failing as a result.
The second half of the paper describes the practices
This white paper first discusses the new science of ver- and perspectives of organizational leaders who have
tical learning and its central role in scaling and embed- accomplished considerable growth through verti-
ding Conscious Capitalism. Harvard’s Robert Kegan cal learning. They are among the top 5% of leaders
contends that vertical learning catalyzes a quantum that have developed crucial mental and emotional
increase in mental complexity. This radically improves capacities required to lead complex change.
a leader’s ability to navigate today’s highly com-
Studies show that leaders like these who under-
plex, ambiguous, and rapidly changing context, and
go significant vertical learning are far more likely to
cascade those new skills into the entire organization.
generate the organizational transformation required
Vertical learning has proven to unlock powerful yet for high-impact, large-scale Conscious Capitalism.
latent mental, emotional, and relational capacities that These individuals represent the future of leadership for
make leaders more effective across a variety of mis- Conscious Capitalism.
sion-critical domains. These include improved strategic
The paper concludes with 14 evidence-based and
and systemic thinking, change leadership, stakeholder
experimental practices you can do to accelerate your
relationship development, and conflict management.
own and others’ deep development, and provides
Vertical learning is a needed piece of the puzzle to considerable support resources to do so.
“Leadership remains the biggest challenge of all for 2013 and beyond.”
– World Economic Forum Global Agenda Outlook 2013
MetaIntegral Associates | The Future of Leadership 1
The Future of Leadership for
Conscious Capitalism
Who do we need to become literally more complex than their generate organizational transformation.6
to create the future we want? minds alone can handle. Executive They are at the leading edge of human
To deliver on the promise of mindset failure is one of the big- development and represent the future of
gest drivers for why executives fail.3 leadership for Conscious Capitalism.
Conscious Capitalism, what
Other studies cite a lack of sufficient
type of leaders do we need to
emotional intelligence amongst lead- How have these leaders developed such
be?
ers to respond to the relational de- significant capacities? Why are they far
mands of 21st century leadership.4 more likely than others to succeed at
Business leaders today face conditions
Finally, the rate of change in the business guiding their organizations into the most
of unprecedented complexity and in-
environment is recreating the playing impactful stages of Conscious Capital-
creasingly rapid change in the market.
field faster than ever. Despite how quick- ism? The answer to these questions lies
Concurrently, the intensity of many
ly shifts in technology, markets, and in a new science that has just begun to
economic, social, and environmental
politics seem to occur today, change may be harnessed: vertical learning.
challenges has overwhelmed society’s
in fact never be this slow again.5
capacity to respond effectively. While
we are winning in many areas – such Today’s Leadership
The bottom line: Most leaders are hitting
as poverty alleviation, global health, Crisis and Opportunity
a mental and emotional glass ceiling,
and literacy – we’re also losing heavily
unable to effectively navigate today’s
on mission critical issues such as green-
business environment. Yet concurrently,
58% of new executives hired from the
house gas emissions, unemployment, a perfect storm of increasing complexity, outside fail within 18 months.
and corruption. accelerating change, and near-constant – Harvard Business School Study, 20037
uncertainty is upon on us, and it’s here
There is increasing pressure for corpora- 89% of new management hires admit
to stay. To steward and scale Conscious
tions to take the lead in addressing the they don’t have the full set of skills or
Capitalism, and create the future we
knowledge required to do their jobs.
world’s woes. Yet most business leaders
want, we need masses of leaders to break
– Corporate Executive Board, 20058
and their teams are already in over their
through the glass ceiling into truly con-
heads. An IBM Global CEO Survey found
scious leadership. Practically, this means Only 30% of CEOs are confident they
that the great majority of CEOs expect we need more conscious leaders who are will have the talent needed to grow
that business complexity is going to in- able to cultivate high-impact innovation, their organization in the near future.
crease, and more than half doubt their build high-trust relationships across all – PWC Trends in Human Capital, 20129
ability to manage it.1 The sheer difficulty stakeholders, and consciously act with
Good leaders create 3x more economic
of keeping a corporation afloat in such deep courage. This document describes
value than poor leaders, and extraordi-
turbulent economic, political, and social how we can grow such leaders. nary leaders create significantly more
waters is beyond most leaders’ experi- economic value than all the rest.
ence and mental capacity. There are already leaders in business, – Zenger & Folkman’s study of 30,000
military, government and civil soci- leaders10
Research at the National Security Agen- ety who have achieved a level of de-
High-performers deliver 48% im-
cy supports what many experience in velopment beyond the glass ceiling.
proved performance over average
the field: Leaders have a significant gap Approximately 5% of leaders in the
performers in highly complex jobs.
between the complexity of the tasks they West operate with the mental and – Hunter, Schmidt, & Judiesch’s research
face and their own mental complexity.2 emotional capacity needed to manage across 59,000 jobs11
The tasks they are charged with are complex, systemic change and reliably
2 MetaIntegral Associates | The Future of Leadership
Vertical Learning: A Critical ing the strategy is leader development. complexity of mind and heart – is latent
Piece of the Puzzle in nearly everyone, but it needs a differ-
What kind of leaders do they need? He ent sort of leadership environment to be
We recently helped facilitate develop-
sketched their ideal leader as a high- unlocked. Vertical learning is a missing
ment of the European strategy for a divi-
ly-strategic thinker able to focus on piece of the puzzle to do precisely that.
sion of a $100B food and beverage com-
big problems and opportunities, a
pany. Once the executive team crafted it,
superb and inspiring communicator with
Vertical Learning: What Is It?
they realized that they lacked the leader-
excellent people skills, risk-oriented, and
ship capacity across the organization to deeply collaborative. Vertical learning is the transformation
effectively execute it. This is an increas- of how a leader thinks, feels, and makes
ingly common theme. The challenge is that to identify and sense of the world.12 It includes the de-
recruit high-performing leaders with velopment of both mental complexi-
Organizations today frequently architect
those qualities is slow, expensive and
ty and emotional intelligence. Vertical
highly-sophisticated strategies and then
unscalable. Growing them is the only
learning occurs naturally, but it can also
find that their people aren’t yet capable
viable, affordable, and sustainable
be accelerated by 3x–5x under the right
of turning that vision into reality. In an-
solution. But the advanced cognitive,
conditions.13 Increasing numbers of lead-
other case, we met with a top executive
emotional, and relational capacities that
ers and researchers have found that how
from a large international organization. organizations need for tomorrow’s lead-
Their freshly-minted 5-year global strat- ers aren’t developed through today’s we know is at least if not more important
egy drives transformative change across leadership approaches. than what we know.14 This is especially
30+ countries. He noted, though, that true when it comes to leading through
the biggest limiting factor to accomplish- Significant leadership potential – and complex change.
MetaIntegral Associates | The Future of Leadership 3
Vertical Learning vs. Horizontal Learning
Total Volume = 21st Century Conscious
Total Leadership Capacity Leadership Requires Vertical
+ Horizontal Learning
Vertical Learning = Mindset Transformation Horizontal Learning = Competence
Development
(cid:116)(cid:1) Improves how you think and how you interpret
any situation. (cid:116)(cid:1) Increases what you know and strengthens
(cid:116)(cid:1) Essential to address complex problems, cultivate technical expertise.
high-stakes relationships, and navigate rapidly (cid:116)(cid:1) Essential for using known techniques to solve
changing, uncertain circumstances. clearly defined problems
(cid:116)(cid:1) Develops your mental complexity and (cid:116)(cid:1) Develops functional knowledge, skills, and
emotional intelligence, literally upgrading behaviors that strengthen your leadership
your leadership operating system to be toolkit.
more wise and caring.
While vertical learning focuses on the ty. That pattern recognition capacity is board members and speak into them in
how, traditional learning – or horizontal- the result of advanced mental abilities an emotionally savvy way. That sensitiv-
learning – targets what a leader knows. you’ve developed through vertical learn- ity to the nuanced emotional landscape
Horizontal learning represents the ing. There was a time when you couldn’t is the result of vertical learning that
knowledge and skills we acquire while do that, and now you can, but you like- strengthened your emotional intelli-
operating at the same level of cognitive, ly didn’t read about it in a book. It came gence. In this situation, horizontal learn-
emotional, and relational complexity. from the learned experience of seeing a ing could be the training you received on
Horizontal learning enables us to gain lot of data and training yourself to see how to lead effective due diligence on a
knowledge and build functional skills. patterns in them. Horizontal learning in company before an acquisition.
Vertical learning broadens our view and this case would be the technical knowl-
permanently heightens our awareness, edge that comes from reading an ana- Nearly all traditional leadership devel-
making us both wiser and more caring. lyst’s report of the environmental risks in opment is based on horizontal learning.
your supply chain. Yet vertical learning has quickly migrated
For example, when building a strategy, from research labs at Harvard, Stanford,
it’s critical that you can connect the dots Similarly, when leading a board meet- and Oxford to the heart of elite leader
across different data points and spot an ing it is essential to be able to sense the development programs. The Center for
emerging trend or market opportuni- unspoken, underlying concerns among Creative Leadership has cited it as the #1
4 MetaIntegral Associates | The Future of Leadership
future trend in leader development.16 It How Conscious is Your Own search involving tens of thousands of
is used heavily in some areas of the US Leadership? And Your Team? adults, among them thousands of lead-
military and intelligence communities, ers.20 Torbert describes eight levels of
One of the most widespread models of
with Olympic and extreme athletes, and
leader mindset development, each repre-
vertical learning for business application
in an increasing number of select organi-
senting increasingly complex mental and
was developed by management scientist
zations.
emotional capacities, each a new way
Bill Torbert, based upon research by Jane
These organizations use a combination Loevinger and Susanne Cook-Greuter.18 of seeing the world. He calls each level
of both vertical and horizontal learning, This eight-stage model is profiled in a an “action logic.” It’s not our ideal logic –
drawing from the best that both ap- highly-popular Harvard Business Review how we’d ideally like to think and behave
proaches have to offer. Mainstream busi- article called “Seven Transformations of – but what we actually think, feel and do.
ness publishers have highlighted verti- Leadership.”19 It describes how we tend to interpret our
cal learning in numerous publications.17 surroundings and behave when issues of
They point to it as essential for empower- The model is based upon 40 years of re- power and timing are at stake.
ing leaders to succeed in the future.
Eight transformations of leadership. See Appendix A for full descriptions of each, as related to Conscious Capitalism.15
MetaIntegral Associates | The Future of Leadership 5
85% of leaders in the West hold one of siderably more effective than their coun- Capitalism. One study of organization-
the first four action logics. The fifth action terparts.24 Harvard’s Robert Kegan calls it al change over four years in 10 compa-
logic (Redefining) is the fastest growing a quantum shift in mental complexity, a nies and non-profits showed that the
group and roughly corresponds with transformation of the underlying operat- complexity of the mindset of the CEO
Jim Collins’ Level 5 leaders from Good to ing system itself. This operating system and their lead consultants was the sin-
Great. It makes up 10% of the leadership shapes our thinking, feeling, and social gle largest driver concerning whether
population.21 relating. As it evolves in a leader, the or not the organization transformed.31
new mental, emotional, and relational The companies that had either a CEO or
Only 5% of leaders hold the most mature capacities that arise are the very abilities senior consultant who was at least at Lev-
action logics – levels 6-8 (Transform- needed to address complex challenges.25 el 6 (Transforming) were the most likely
ing, Alchemical, and Ironic). These rare Yet vertical learning not only upgrades to succeed in their complex change ini-
leaders offer significant insight into the a leader’s operating system, it rewires tiatives.
future of leadership for Conscious Capi- their hardware and expands their leader-
talism. They have developed deep men- ship competency and capacity. It literally Leaders at Level 6 become able to take
tal, emotional, and relational capacities alters brain functioning and recreates a a systems view on reality, perceiving
to effectively lead complex, systemic leader’s worldview.26 the interdependent, dynamic nature of
change. They are the most likely of all systems. They learn to recognize and di-
leaders to reliably succeed in generating As leaders develop from Level 4 to Lev- rectly engage the core assumptions that
organizational transformations.22 el 5 (from the Achiever to the Redefin- underlie their own and other’s thinking.
ing action logic), important new ca- Such leaders gain the capacity to oper-
In order to lead an organization into the pacities arise. These include increased ate from multiple perspectives simulta-
most mature stages of Conscious Capital- cognitive functioning, strengthened neously and manage conflicting frames
ism, leaders will likely need to transform personal and interpersonal aware- and emotions concurrently. Individuals
their mindsets into these latest action ness, increased understanding of emo- at Level 6 and beyond also report deep
logics (at least level 6, Transforming).23 tions, and more accurate empathy.27 access to intuition that enables them to
The sheer complexity of having signifi- This increase in capacity – in turn – has more easily solve problems through cre-
cant systemic impact and delivering high been strongly linked to better leader- ative, non-linear thinking.
value to all stakeholders will demand ship.28 Specifically, leaders who have de-
the compelling mental and emotional veloped in this way tend to think more As a leader’s mindset develops further,
capacities of advanced action logics. In strategically, collaborate more, seek out into Levels 7 and 8 (the Alchemical and
the pages that follow I’ll give examples feedback more often, resolve conflicts
of how some highly-conscious leaders better, make greater efforts to develop
Assess Your Own
– who have already developed into the others, and are more likely to redefine
very latest stages – engage in their work. challenges so as to capitalize on connec- Leadership Level
First, let’s take a look at the real-world tions across them.29
Use Appendix A to estimate your
benefits of vertical learning for leaders.
Each later action-logic offers a leader own leadership level and that of key
team members. Where do you need
more choice, greater flexibility, more
The Concrete Benefits of to be to accomplish the vision and
transforming power, and additional
Vertical Learning long-term objectives of your orga-
methods for aligning actions with core
nization? To formally assess your
Studies of CEOs of industry-leading pub- values. As leaders shift into Level 6 (the
leadership level – or your team’s –
lic companies, mid-market executives, Transforming action logic), additional
see endnote 23. Appendix B des-
military cadets, and consultants all show powerful abilities come on board. These
cribes practices to cultivate vertical
that vertical learning cultivates a more are especially needed to address the learning.
complex mindset that makes leaders con- most complex challenges of Conscious
6 MetaIntegral Associates | The Future of Leadership
Warren Buffet’s
Conscious Leadership Development
Warren Buffet has developed through seven transformations of leadership
during his business career.30 The resulting development of his character direct-
ly influenced his success as a leader and investor. Over his career he shifted
from using unilateral power where he ensured he got what he wanted to mu-
tual power that ensured others got what they desired as well. He also shifted
from acting unilaterally and dominating subordinates for short-term gains to
investing in partnership over the long term. These are a few of the researched
examples that document his transformations in leadership.ess community.
Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Level 7
(Opportunist): (Diplomat): (Expert): (Achiever): (Redefining): (Transforming): (Alchemical):
Teenage years Early college Adopts Amazing “Go it alone” Excels in a Death of first
of opportu- years, socially Graham’s value success with period, explor- wide variety of wife, unwind-
nistic business awkward and investment Buffet Partner- ing having a businesses and ing of fortune,
ventures, emotionally approach. ship, gener- calmer life. investments, donating
cajoling others, immature. At- Many years of ating average Increasingly including a most of it
underperform- tempts to fit strong, exten- annual rate of involved in managerial to the Gates
ing in school, in with others sive use of log- return for in- community af- role that saves Foundation.
stealing. and build ic, mathemati- vestors of 24% fairs. Integrates Solomon in the Succession
confidence by cal intelligence, over 13 years. various rela- 1990s. plans, biogra-
studying and and a rational tionships and phy, increas-
practicing Dale temperament. interests to cre- ingly open
Carnegie mate- ate Berkshire communica-
rial. Hathaway. tion.
Ironic action logics) she becomes high- power, and leaders see the world in a differently, but they see and feel more
ly co mfortable navigating complexity raw way, unfiltered by mental models. than other leaders. They sense more
and paradox. She learns to transcend This leads to a deep acceptance of one- connections, nuances, perspectives, and
polarities and recognize the unity that self, others, and the moment, without possibilities. They are able to act with
underlies chaos. At these most mature the taint of judgment. This unitive per- greater wisdom and deeper care than
stages that science can measure, lon- spective is highly liberating and enables ever before, and this empowers them
ger and deeper periods of flow and leaders to adapt rapidly and catalyze to be able to reliably generate organiza-
even unitive consciousness arise. These transformative and radical change.32 tional transformation. It also strengthens
leaders at times experience everything their ability to effectively respond to the
as a continuous, uninterrupted flow of In sum, leaders who develop themselves complex, ambiguous, and sophisticated
perception not separate from them- into the later action logics (Levels 6–8) challenges of 21st century leadership.
selves. This non-dual view becomes have access to enhanced and highly-at-
the basis for decision-making and en- tuned mental, emotional, and relational For the first time in history we have
gagement. Any personal stories or be- capacities that others don’t. They not access to the science of vertical learning
liefs about the world tend to lose their only see and feel situations and people which can accelerate our mental, emo-
MetaIntegral Associates | The Future of Leadership 7
tional, and relational development up to complex, rapidly changing, and uncer- inspiration, focus, and strength. These
five times faster than normal. Conscious tain environments? This section discuss- leaders are profoundly connected to
Capitalism is a powerful vehicle to create es the leadership of a select group of se- their mission in life, to humanity, and all
the future we want, but it will need our nior executives and managers who were of life. To them, work is an extension of
latent capacities of mind and heart in assessed at some of the most complex their life’s calling. Nearly all of these lead-
order to truly flourish. The next section mindsets that science can measure.34 ers have a spiritual practice, and for them
describes the practices and approach of They all hold either a Transforming, their work is simply an expression of that
Alchemical or Ironic action logic (Levels practice. Work largely has a transpersonal
leaders who are already thriving in this
6, 7, or 8). These leaders work in global meaning for these leaders: they are doing
way.
corporations, international institutions, it for a cause far greater than themselves.
and small organizations. They engage Work is a way to deeply serve others, to
Conscious Leadership in Action
in complex leadership challenges with help transform society, and to alleviate
Integral to the Conscious Capitalism sophisticated and powerful perspectives suffering.
model (see next page) is conscious and practices.
Roger, for example, is a 39-year-old mul-
leadership. But what does the future
Conscious leadership based in these tinational executive, based in the UK,
of leadership for Conscious Capitalism
mindsets consists of four key areas: working for one of the largest food and
look like in action? What does a leader
beverage companies in the world ($60B+
with a highly-developed mindset and
(cid:37)(cid:3) Deep connection: These leaders have annual revenue, 250,000+ employees).
advanced capacities actually do? How
profound personal meaning about He has a background in chemical engi-
do they lead transformational change in
their work, and consistently make neering and geology, and is committed
decisions based upon it. to educational system reform. Roger was
The Bottom Line of (cid:37)(cid:3) Conscious & courageous action: With assessed with a Transforming action logic
deep trust in themselves, their team, (Level 6). The core purpose of his work is
Vertical Learning
and the process, these leaders dy- to bring humanity to the world of busi-
With vertical development, leaders namically steer, rapidly experiment, ness, help others to appreciate the pres-
perform better across a host of and shift leadership roles as needed. ent, and enable them to see the integral
mission-critical domains:33 (cid:37)(cid:3) Conscious vision & outlook: These role they have in each moment.
leaders draw upon both intuitive
(cid:116)(cid:1) Think strategically intelligence and sophisticated tools Roger is fundamentally committed to
(cid:116)(cid:1) Think systemically like integral theory and whole sys- bringing greater consciousness to the
(cid:116)(cid:1) Think contextually tems thinking to make sense of the workplace and each person he interacts
(cid:116)(cid:1) Decision-making world. with. When he designs strategy and new
(cid:116)(cid:1) Lead transformational change (cid:37)(cid:3) Self-transformation: Through vertical change initiatives, he grounds himself
(cid:116)(cid:1) Inspire vision and horizontal learning, stopping consistently in this life purpose. If what
(cid:116)(cid:1) Build relationships subtle self-sabotage, and support- he is doing doesn’t align with his pur-
(cid:116)(cid:1) Collaborate ing their stakeholders to develop, pose, then he adjusts and redesigns until
(cid:116)(cid:1) Create innovative solutions these leaders take the reins of their it does. This enables him to stay deeply
(cid:116)(cid:1) Tolerate ambiguity own evolution. committed and on-task, even during
(cid:116)(cid:1) Resolve conflicts highly-challenging, ambiguous, and rap-

(cid:116)(cid:1) Develop themselves and others idly changing situations.
Deep Connection
(cid:116)(cid:1) Facilitate learning
(cid:116)(cid:1) Reframe challenges The highly-conscious leaders in this Luz has an even deeper connection with
(cid:116)(cid:1) Seek out feedback study thrive on deep connection. They her work. She is a 36-year-old executive,
draw upon a clear inner purpose for their based in France, who founded an orga-
8 MetaIntegral Associates | The Future of Leadership
the moment with other people and in
the environment. This consistent free-
dom from her mental model, inner critic,
and other stories gives her a powerful
capacity to rapidly and radically shift her
opinion, actions, and even the design of
a sophisticated project.
In sum, these conscious leaders ground
themselves in transpersonal – even spiri-
tual – meaning when they do their work.
They design and engage in transforma-
tional change initiatives in their organi-
zations from a place of deep connection
nization that works across Latin America options, she first senses into what the with themselves, the people they work
and Africa on transformational environ- next evolutionary step is for the people with, the broader world, and – for some
mental and social change. Luz holds a and organization involved, and then – with consciousness itself. From this pro-
profoundly different mindset than the chooses a path that supports develop- found perspective, they then take action.
vast majority of leaders. It results in a ment in those areas. If the situation isn’t
comprehensive and highly-nuanced ap- supporting the evolution of the people
Conscious & Courageous Action
proach to leading complex change. She and organizations she is working with,
was assessed with an Ironic action logic then she works to create the conditions At the heart of conscious and courageous
(Level 8): a highly-complex and extreme- so that it will. Due to this deep perspec- action for these leaders is trust and com-
ly rare mindset. This mindset leads to her tive, Luz is rarely constrained by her be- fort with ambiguity. They are extremely
seeing the world, other people, and all liefs, mental model, and personal “stuff.” open to not knowing, and generally com-
situations as facets of a unified whole. She’s consistently capable of dropping fortable with the uncertainties of design-
Each passing moment is seen as a contin- all those “stories” and then paying very ing transformational change initiatives.
uous flow of ever-changing experience. close attention to what is happening in They profoundly trust themselves, their
As a result, Luz doesn’t think of herself
as being in service to someone or some-
thing else. Rather, she is in service as con-
sciousness itself, as that unified whole.
Her leadership choices and actions are
based upon her perception that there is
no absolute boundary between herself,
other people, and the world around her
– they are all connected.
When Luz designs complex, transforma-
tional change initiatives, she first anchors
herself in a state of “oneness” and uses
that perspective and the information
she gets from it to shape her work and
guide decisions. When she considers her
MetaIntegral Associates | The Future of Leadership 9